Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 03, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | LFTD PARTNERS INC. | |
Entity Central Index Key | 0001391135 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2022 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 14,102,578 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-52102 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 87-0479286 | |
Entity Address Address Line 1 | 14155 Pine Island Drive | |
Entity Address City Or Town | Jacksonville | |
Entity Address State Or Province | FL | |
Entity Address Postal Zip Code | 32224 | |
City Area Code | 847 | |
Local Phone Number | 915-2446 | |
Security 12b Title | Common Stock, $0.001 par value | |
Trading Symbol | LIFD | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and Cash Equivalents | $ 3,751,144 | $ 1,602,731 |
Dividend Receivable from Bendistillery, Inc. | 0 | 2,495 |
Prepaid Expenses | 2,842,047 | 4,262,237 |
Accounts Receivable, net of allowance of $162,392 in 2022 and $239,101 in 2021 | 3,029,258 | 3,461,499 |
Inventory | 10,049,245 | 3,809,944 |
Other Current Assets | 7,254 | 13,790 |
Total Current Assets | 19,678,947 | 13,152,696 |
Goodwill | 22,292,767 | 22,292,767 |
Investment in Ablis | 399,200 | 399,200 |
Investment in Bendistillery and Bend Spirits | 1,497,000 | 1,497,000 |
Net Deferred Tax Asset | 0 | 331,551 |
Fixed Assets, less accumulated depreciation of $135,669 in 2022 and $77,967 in 2021 | 460,808 | 433,213 |
Intangible Assets, less accumulated amortization of $3,751 in 2022 and $3,058 in 2021 | 693 | 1,386 |
Security and State Licensing Deposits | 17,800 | 6,900 |
Finance Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $184,408 in 2022 and $252,876 in 2021 | 1,296,000 | 1,227,532 |
Operating Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $40,857 in 2022 and $6,807 in 2021 | 266,625 | 76,412 |
Total Assets | 45,909,840 | 39,418,657 |
Current Liabilities | ||
Finance Lease Liability Current | 18,017 | 1,262,260 |
Operating Lease Liability Current | 66,049 | 26,047 |
Deferred Revenue | 633,729 | 2,174,393 |
Note Payable to Related Party Nicholas S. Warrender | 458,335 | 0 |
Income Tax Payable | 985,932 | 1,242,974 |
Management Bonuses Payable - Related Party | ||
Management Bonus Payable - Related Party - Payable to William C. Jacobs | 0 | 500,000 |
Management Bonus Payable - Related Party - Payable to Gerard M. Jacobs | 0 | 441,562 |
Management Bonuses Payable - Related Party Current | 0 | 941,562 |
Company-Wide Management Bonus Pool | 2,121,532 | 1,556,055 |
Accounts Payable and Accrued Expenses | 5,138,910 | 4,671,382 |
Accounts Payable - Related Party | 950 | 4,607 |
Interest Payable - Related Party | ||
Interest - Payable to William C. Jacobs | 0 | 4,000 |
Interest - Payable to Gerard M. Jacobs | 0 | 9,269 |
Interest Payable - Related Party Current | 0 | 13,269 |
Preferred Stock Dividends Payable | ||
Series A Convertible Preferred Stock Dividends Payable | 2,435 | 11,926 |
Series B Convertible Preferred Stock Dividends Payable | 4,771 | 1,796 |
Preferred Stock Dividends Payable Current | 7,206 | 13,722 |
Total Current Liabilities | 9,394,627 | 11,906,270 |
Non-Current Liabilities | ||
Finance Lease Liability | 1,362,020 | 0 |
Operating Lease Liability | 202,714 | 50,583 |
Net Deferred Tax Liability | 60,051 | 0 |
Notes Payable - Related Party | ||
Notes Payable - Payable to Nicholas S. Warrender | 1,374,999 | 0 |
Total Non-Current Liabilities | 2,999,783 | 50,583 |
Total Liabilities | 12,394,410 | 11,956,853 |
Commitments and Contingencies | 0 | 0 |
Shareholders' Equity | ||
Preferred Stock Value | 45 | 46 |
Common Stock, $0.001 par value; 100,000,000 shares authorized; 14,102,578 shares issued and outstanding at June 30, 2022, and 14,027,578 shares issued and outstanding at December 31, 2021 | 14,103 | 14,028 |
Additional Paid-in Capital | 38,762,260 | 38,862,333 |
Accumulated Deficit | (5,260,977) | (11,414,602) |
Total Shareholders' Equity | 33,515,430 | 27,461,804 |
Total Liabilities and Shareholders' Equity | $ 45,909,840 | $ 39,418,657 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts Receivable, Allowance | $ 162,392 | $ 239,101 |
Accumulated Depreciation | 135,669 | 77,967 |
Accumulated Amortization | 3,751 | 3,058 |
Right-of-use Asset Amortization | 184,408 | 252,876 |
Right-of-use Asset Amortization Operating Lease | $ 40,857 | $ 6,807 |
Preferred Stock, Par Or Stated Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Par Or Stated Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 14,102,578 | 14,027,578 |
Common Stock, Shares Outstanding | 14,102,578 | 14,027,578 |
Series A Convertible Preferred Stock | ||
Preferred Stock, Par Or Stated Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 400,000 | 400,000 |
Preferred Stock, Shares Issued | 4,500 | 5,750 |
Preferred Stock, Shares Outstanding | 4,500 | 5,750 |
Series B Convertible Preferred Stock | ||
Preferred Stock, Par Or Stated Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 40,000 | 40,000 |
Preferred Stock, Shares Outstanding | 40,000 | 40,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net Sales | $ 16,776,502 | $ 6,695,144 | $ 34,865,379 | $ 10,048,414 |
Cost of Goods Sold | 8,713,590 | 3,035,630 | 18,817,483 | 4,743,152 |
Gross Profit | 8,062,912 | 3,659,515 | 16,047,896 | 5,305,262 |
Operating Expenses: | ||||
Payroll, Consulting and Independent Contractor Expenses | 1,811,678 | 791,000 | 3,665,829 | 1,098,524 |
Accrual for Company-Wide Management Bonus Pool | 1,152,162 | 816,388 | 2,121,532 | 1,159,335 |
Professional Fees | 203,402 | 133,892 | 320,629 | 226,925 |
Bank Charges and Merchant Fees | 132,470 | 118,055 | 265,507 | 184,625 |
Advertising and Marketing | 110,797 | 98,133 | 216,397 | 150,160 |
Bad Debt Expense | (311,209) | 19,196 | (63,209) | 20,173 |
Depreciation and Amortization | 6,706 | 26,215 | 9,409 | 67,998 |
Other Operating Expenses | 528,608 | 99,773 | 911,070 | 180,167 |
Total Operating Expenses | 3,634,615 | 2,102,652 | 7,447,164 | 3,087,907 |
Income From Operations | 4,428,297 | 1,556,863 | 8,600,733 | 2,217,355 |
Other Income/(Expenses) | ||||
Income/(Loss) From 50% membership interest in SmplyLifted LLC (FR3SH) | 0 | (43,330) | 0 | (50,541) |
Income from SmplyLifted for WCJ Labor | 0 | 769 | 0 | 1,841 |
Interest Expense | (26,928) | (35,398) | (58,658) | (71,745) |
Warehouse Buildout Credits | 0 | 600 | 0 | 1,200 |
Penalties | 222 | 0 | 1,730 | 450 |
Gain on Forgiveness of Debt | 0 | 151,147 | 5,026 | 151,147 |
Settlement Income/Gain on Settlement | 108,570 | 0 | 108,570 | 0 |
Gain(Loss) on Disposal of Fixed Assets | 0 | (4,750) | 0 | (4,750) |
Loss on Deposits | 0 | (30,000) | 0 | (30,000) |
Interest Income | 521 | 253 | 1,013 | 455 |
Total Other Income/(Expenses) | 82,385 | 39,291 | 54,220 | (2,843) |
Income Before Provision for Income Taxes | 4,510,682 | 1,596,154 | 8,654,953 | 2,214,512 |
Provision for Income Taxes | (1,291,222) | 0 | (2,490,700) | 0 |
Net Income Attributable to LFTD Partners Inc. common stockholders | $ 3,219,460 | $ 1,596,154 | $ 6,164,253 | $ 2,214,512 |
Basic Net Income per Common Share | $ 0.23 | $ 0.14 | $ 0.44 | $ 0.24 |
Diluted Net Income per Common Share | $ 0.20 | $ 0.11 | $ 0.39 | $ 0.17 |
Weighted average number of common shares outstanding: | ||||
Basic | 14,099,007 | 11,042,657 | 14,058,517 | 9,259,696 |
Diluted | 15,906,205 | 14,381,105 | 15,865,715 | 12,598,144 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) | Total | Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Dec. 31, 2020 | 166,150 | 6,485,236 | 36,000 | |||
Balance, amount at Dec. 31, 2020 | $ 21,618,720 | $ 166 | $ 6,485 | $ (34,200) | $ 38,787,444 | $ (17,141,175) |
Series A Preferred Stock dividend payable | (24,855) | (24,855) | ||||
Series B Preferred Stock dividend payable | (3,316) | (3,316) | ||||
LIFD's January 8, 2021 purchase of 36,000 shares of common stock at $0.95 per share, for a total of $34,200, from an unrelated shareholder, shares | 36,000 | |||||
LIFD's January 8, 2021 purchase of 36,000 shares of common stock at $0.95 per share, for a total of $34,200, from an unrelated shareholder, amount | (34,200) | $ (34,200) | ||||
Conversions of Series A Convertible Preferred Stock to Common Stock, shares | (32,900) | 3,290,000 | ||||
Conversions of Series A Convertible Preferred Stock to Common Stock, amount | 0 | $ (33) | $ 3,290 | (3,257) | ||
Conversions of Series B Convertible Preferred Stock to Common Stock, shares | (60,000) | 60,000 | ||||
Conversions of Series B Convertible Preferred Stock to Common Stock, amount | 0 | $ (60) | $ 60 | |||
Net Income | 618,359 | 618,359 | ||||
Balance, shares at Mar. 31, 2021 | 73,250 | 9,835,236 | 72,000 | |||
Balance, amount at Mar. 31, 2021 | 22,174,708 | $ 73 | $ 9,835 | $ (68,400) | 38,784,187 | (16,550,988) |
Balance, shares at Dec. 31, 2020 | 166,150 | 6,485,236 | 36,000 | |||
Balance, amount at Dec. 31, 2020 | 21,618,720 | $ 166 | $ 6,485 | $ (34,200) | 38,787,444 | (17,141,175) |
Net Income | 2,214,512 | |||||
Balance, shares at Jun. 30, 2021 | 45,750 | 12,728,326 | 72,000 | |||
Balance, amount at Jun. 30, 2021 | 23,742,866 | $ 46 | $ 12,728 | $ (68,400) | 38,788,342 | (14,989,850) |
Balance, shares at Mar. 31, 2021 | 73,250 | 9,835,236 | 72,000 | |||
Balance, amount at Mar. 31, 2021 | 22,174,708 | $ 73 | $ 9,835 | $ (68,400) | 38,784,187 | (16,550,988) |
Series A Preferred Stock dividend payable | (33,521) | (33,521) | ||||
Series B Preferred Stock dividend payable | (1,496) | (1,496) | ||||
Conversions of Series A Convertible Preferred Stock to Common Stock, shares | (27,500) | 2,750,000 | ||||
Conversions of Series A Convertible Preferred Stock to Common Stock, amount | 0 | $ (28) | $ 2,750 | (2,723) | ||
Net Income | 1,596,154 | 1,596,154 | ||||
Exercise of warrants, shares | 143,090 | |||||
Exercise of warrants, amount | 7,021 | $ 143 | 6,878 | |||
Balance, shares at Jun. 30, 2021 | 45,750 | 12,728,326 | 72,000 | |||
Balance, amount at Jun. 30, 2021 | 23,742,866 | $ 46 | $ 12,728 | $ (68,400) | 38,788,342 | (14,989,850) |
Balance, shares at Dec. 31, 2021 | 45,750 | 14,027,576 | ||||
Balance, amount at Dec. 31, 2021 | 27,461,804 | $ 46 | $ 14,028 | 0 | 38,862,333 | (11,414,602) |
Series A Preferred Stock dividend payable | (4,253) | (4,253) | ||||
Series B Preferred Stock dividend payable | (1,476) | (1,476) | ||||
Net Income | 2,944,793 | 2,944,793 | ||||
Issuance of Common Stock, shares | 50,000 | |||||
Issuance of Common Stock, amount | 50,000 | $ 50 | 49,950 | |||
Repurchase and cancellation of Common Stock, shares | (100,000) | |||||
Repurchase and cancellation of Common Stock, amount | (150,000) | $ (100) | (149,900) | |||
Balance, shares at Mar. 31, 2022 | 45,750 | 13,977,576 | ||||
Balance, amount at Mar. 31, 2022 | 30,300,868 | $ 46 | $ 13,978 | 0 | 38,762,383 | (8,475,539) |
Balance, shares at Dec. 31, 2021 | 45,750 | 14,027,576 | ||||
Balance, amount at Dec. 31, 2021 | 27,461,804 | $ 46 | $ 14,028 | 0 | 38,862,333 | (11,414,602) |
Net Income | 6,164,253 | |||||
Balance, shares at Jun. 30, 2022 | 44,500 | 14,102,576 | ||||
Balance, amount at Jun. 30, 2022 | 33,515,430 | $ 45 | $ 14,103 | 0 | 38,762,260 | (5,260,977) |
Balance, shares at Mar. 31, 2022 | 45,750 | 13,977,576 | ||||
Balance, amount at Mar. 31, 2022 | 30,300,868 | $ 46 | $ 13,978 | 0 | 38,762,383 | (8,475,539) |
Series A Preferred Stock dividend payable | (3,403) | (3,403) | ||||
Series B Preferred Stock dividend payable | (1,496) | (1,496) | ||||
Conversions of Series A Convertible Preferred Stock to Common Stock, shares | (1,250) | 125,000 | ||||
Conversions of Series A Convertible Preferred Stock to Common Stock, amount | 0 | $ (1) | $ 125 | (124) | ||
Net Income | 3,219,460 | 3,219,460 | ||||
Repurchase and cancellation of Common Stock, amount | 0 | |||||
Issuance of Common Stock | 0 | |||||
Balance, shares at Jun. 30, 2022 | 44,500 | 14,102,576 | ||||
Balance, amount at Jun. 30, 2022 | $ 33,515,430 | $ 45 | $ 14,103 | $ 0 | $ 38,762,260 | $ (5,260,977) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows From Operating Activities | ||
Net Income | $ 6,164,253 | $ 2,214,512 |
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities: | ||
Lifted Made's Portion of SmplyLifted's Net Loss | 0 | 50,541 |
Bad Debt Expense | (63,209) | 20,173 |
Depreciation and Amortization | 83,069 | 67,998 |
Gain on Forgiveness of Debt | (5,026) | (151,147) |
Loss (Gain) on Disposal of Fixed Assets | 0 | 4,750 |
Loss on Deposits | 0 | 30,000 |
Spoiled and Written Off Inventory | 799,465 | 188,766 |
Deferred Income Taxes | 391,602 | 0 |
Effect on Cash of Changes in Operating Assets and Liabilities | ||
Accounts Receivable | 495,451 | (387,179) |
Prepaid Expenses | 1,420,190 | (1,223,981) |
Dividend Receivable from Bendistillery, Inc. | 2,495 | 2,495 |
Income Tax Receivable | 0 | 4,239 |
Income Tax Payable | (257,042) | 0 |
Management Bonuses Payable | (941,562) | 0 |
Company-wide Management Bonus Pool | 565,477 | 0 |
Interest Receivable | 0 | 1,797 |
Inventory | (7,038,765) | (741,603) |
Other Current Assets | (4,360) | (10,365) |
Trade Accounts Payable and Accrued Expenses | 472,554 | 2,202,523 |
Accounts Payable and Interest Payable to Related Parties | (16,926) | 43,964 |
Change in Finance & Operating Lease Liabilities | 95,633 | 4,439 |
Deferred Revenue | (1,540,664) | 18,802 |
Net Cash Provided by (Used in) Operating Activities | 529,492 | 2,340,725 |
Cash Flows From Investing Activities | ||
Reduction of CBD Lion Note Receivable | 0 | 15,318 |
Net Purchase of Fixed Assets | (85,297) | (227,743) |
Loans to SmplyLifted LLC | 0 | (93,750) |
Net Cash Used in Investing Activities | (85,297) | (306,175) |
Cash Flows From Financing Activities | ||
Proceeds from Exercise of Warrants | 0 | 7,021 |
Issuance of Common Stock | 50,000 | 0 |
Payments of Dividends to Series A Convertible Preferred Stockholders | (17,147) | (199,186) |
Payments of Dividends to Series B Convertible Preferred Stockholders | 0 | (5,844) |
Financing Cost - Net Proceeds from Borrowing Under Notes Payable to Related Party - Nick Warrender | 1,833,334 | 0 |
Purchase of Shares of Common Stock | (150,000) | (34,200) |
Repayment of Finance Lease Liability | (11,970) | (12,364) |
Net Cash Provided By (Used In) Financing Activities | 1,704,217 | (244,573) |
Net Increase/(Decrease) in Cash | 2,148,413 | 1,789,976 |
Cash and Cash Equivalents at Beginning of Period | 1,602,731 | 439,080 |
Cash and Cash Equivalents at End of Period | 3,751,144 | 2,229,056 |
Supplemental Cash Flow Information | ||
Cash Paid For Interest | 71,927 | 0 |
Cash Paid For Income Taxes | 2,287,469 | 0 |
Non-Cash Activities: | ||
Right-of-Use assets acquired from inception of Finance Leases | 0 | 1,480,408 |
Right-of-Use assets acquired from inception of Operating Leases | 224,264 | |
Conversion of Series A and Series B Preferred Stock to Common Stock | $ 125 | $ 6,100 |
Cashless exercise of Warrants | 136 |
DESCRIPTION OF THE BUSINESS OF
DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC | 6 Months Ended |
Jun. 30, 2022 | |
DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC | |
Description Of The Business Of Lftd Partners Inc. | NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. Description of the Business of LFTD Partners Inc. – On May 18, 2021, the Company amended its articles of incorporation with the State of Nevada to change its name to LFTD Partners Inc. from Acquired Sales Corp. In connection with the name change to LFTD Partners Inc., the Company filed a required notification with the Financial Industry Regulatory Authority, Inc. (“FINRA”), a self-regulatory organization that is involved with the coordination of the clearing, settling and processing of transactions in equity securities, including our common stock. The Company’s name change notification to FINRA included a request for a new stock trading symbol, LSFP, from AQSP, which was granted. On March 15, 2022, the Company changed its stock trading symbol to LIFD. After acquiring, operating and then selling businesses involved in the defense sector, our business is currently involved in developing, manufacturing and selling a wide variety of branded products containing hemp-derived cannabinoids (e.g. delta-8-THC, delta-9-THC, delta-10-THC, THCV, HHC, HHCO, THCO, CBDA, CBC, CBG, CBN, and CBD), and non-hemp-derived psychedelic products. We are interested in acquiring rapidly growing, profitable companies that are also involved in manufacturing and selling branded products containing hemp-derived cannabinoids, and in acquiring companies that manufacture and sell branded products containing kratom, kava and non-hemp-derived psychedelic products (a “Canna-Infused Products Company”). Management of the Company is open-minded to the concept of also acquiring operating businesses and/or assets involving products containing marijuana, distilled spirits, beer, wine, and real estate. In addition, management of the Company is open-minded to the concept of acquiring all or a portion of one or more operating businesses and/or assets that are considered to be “essential” businesses which are unlikely to be shut down by the government during pandemics such as COVID-19. From time to time, we engage in discussions with potential acquisition targets. On February 24, 2020, we acquired 100% of the ownership interests in one Canna-Infused Products Company called Lifted Liquids, Inc. d/b/a Lifted Made (formerly Warrender Enterprise Inc. d/b/a Lifted Liquids) (www.LiftedMade.com), Kenosha, Wisconsin (“Lifted Made” or “Lifted”). On April 30, 2019, we also closed on the acquisition of 4.99% of the common stock of each of CBD-infused beverages maker Ablis Holding Company (“Ablis”) (www.AblisCBD.com), and of distilled spirits manufacturers Bendistillery Inc. (“Bendistillery”) and Bend Spirits, Inc. (“Bend Spirits”), all located in Bend, Oregon. Prior to February 9, 2022, Lifted Made had a 50% membership interest in SmplyLifted LLC, which sells tobacco-free nicotine pouches under the brand name FR3SH (www.GETFR3SH.com). On February 9, 2022, Lifted Made sold its 50% membership interest in SmplyLifted LLC to Corner Vapory LLC, an affiliate of Nicholas S. Warrender (“NWarrender”), CEO of Lifted, for $1, plus ninety-nine percent (99%) of any and all payments and other consideration received or owed to Corner Vapory LLC in regard to SmplyLifted’s existing inventory of FR3SH brand tobacco-free nicotine pouches. Lifted has the option to re-purchase the 50% membership interest in SmplyLifted LLC from Corner Vapory LLC for $1,000 in cash at any time on or before December 31, 2032. Merger Related Promissory Note On February 24, 2020, we acquired Lifted as a wholly-owned subsidiary for cash and stock paid to Lifted’s then owner NWarrender. The $7,500,000 money component of the purchase consideration was paid to NWarrender in the form of $3,750,000 in cash at closing and a $3,750,000 promissory note that accrued interest at the rate of 2% per annum (“$3.75M Note”). The $3.75M Note was secured by (a) a first lien security interest in all of the assets of the Company and Lifted; and (b) a pledge of: (i) all of the capital stock of Lifted; (ii) all of the common stock of Bendistillery, Bend Spirits and Ablis that is owned by the Company; and (iii) all of the capital stock of any other entity owned by the Company, Lifted or any of their subsidiaries, pursuant to a Collateral Stock Pledge Agreement between NWarrender, as Secured Party, and the Company and Lifted, as Pledgors. On December 30, 2021, the Company repaid all principal and interest due under the $3.75 M Note. NWarrender kept $1,000,000 of the repayment of the $3.75M Note, plus accrued interest, and on January 3, 2022, reloaned $2,750,000 to LIFD and Lifted (collectively “Payors”) at the rate of 2.5% (the “$2.75M Note”). The $2.75M Note payable jointly by the Company and Lifted to NWarrender was secured by a perfected first lien security interest (the “Security Interest”) that encumbers all of the assets of the Company and Lifted. The Company was obligated to pay off the principal of the $2.75M Note in five semi-annual payments to NWarrender of $458,333 and a sixth and final semi-annual payment to NWarrender of $458,335, in each case plus accrued interest, starting on June 30, 2022. On June 7, 2022, LFTD Partners prepaid $916,666 of the principal of the $2.75 M Note, and $29,384 of related accrued interest through that date, which left $1,833,334 remaining principal on the $2.75M Note. On July 5, 2022, we entered into an agreement (“Acceleration Agreement”) with NWarrender. Under the terms of the Acceleration Agreement, we were obligated to repay the remaining principal balance as follows: $1,374,999 on or before December 31, 2022, and $458,335 on or before December 31, 2024. Then, on July 8, 2022, we prepaid $916,666, along with accrued interest, and then, as described in NOTE 16 – SUBSEQUENT EVENTS, Obligation to Purchase Headquarters Building Toward the end of 2020, NWarrender, through his assigned entity 95th Holdings, LLC, purchased a building located at 5511 95th Avenue in Kenosha, Wisconsin (“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 95th Holdings, LLC, the parties agreed that our wholly owned subsidiary 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 an agreement with Warrender on December 30, 2021, the parties agreed to set the purchase price for the 5511 Building at $1,375,000. Prior to the Acceleration Agreement, Lifted had an obligation to complete the purchase of the 5511 Building on or before December 31, 2022. Pursuant to the Acceleration Agreement, the deadline to purchase the 5511 Building has been extended by one year to December 31, 2023. In addition, the Acceleration Agreement contains a provision that if we raise $5,000,000 of debt or equity capital, then Lifted or our designee shall purchase the 5511 Building from 95th Holdings, LLC at the agreed upon $1,375,000 purchase price within two days. Sublease For Commuter Employees On July 6, 2022, Lifted entered into a sublease for office space in Chicago, Illinois located at 2701-09 West Fulton PH, Chicago, Illinois 60612. The sublease costs $3,000 per month, plus supplemental lease related charges such as real estate taxes and common expenses of the property that we anticipate will be commercially typical costs. The sublease is retroactively effective as of June 1, 2022 and for a five-month term that extends to through October 31, 2022. The purpose of the sublease is to make available office space for the members of Lifted’s sales team who live in Chicago. These salespeople were spending significant time in their cars commuting from Chicago to Kenosha. The sublessor is one of our affiliates, Bill McLaughlin, Lifted’s Chief Strategy Officer. The sublease is structured so that Mr. McLaughlin's lease payment obligations to the landlord are passed on to Lifted on a dollar-for-dollar basis, such that Mr. McLaughlin does not realize a cashflow profit or loss from the sublease. Termination of Letter of Intent relating to the proposed acquisition by the Company of Savage Enterprises, Premier Greens LLC and MKRC Holdings, LLC On December 15, 2021, the Company, our Chairman and CEO Gerard M. Jacobs (“GJacobs”), our President and CFO William C. “Jake” Jacobs (“WJacobs”), and our Vice Chairman and COO NWarrender, Savage Enterprises, a Wyoming corporation (“Savage”), Premier Greens LLC, a California limited liability company (“Premier Greens”), MKRC Holdings, LLC, a Wyoming limited liability company (“MKRC”), Christopher G. Wheeler (“Wheeler”), and Matt Winters (“Winters”), mutually stipulated to terminate the Letter of Intent dated June 15, 2021 that set out the Company’s possible acquisition of Savage, Premier Greens and MKRC. Termination of Letter of Intent relating to the proposed acquisition by the Company of Fresh Farms E-Liquid, LLC On December 16, 2021, the Company, Fresh Farms E-Liquid, LLC, a California limited liability company (“Fresh Farms”), Anthony J. Devincentis (“Devincentis”), Jakob M. Audino (“Audino”), Forrest F. Town (“Town”), John Z. Petti (“Petti”), GJacobs, NWarrender, WJacobs, Wheeler and Winters mutually stipulated to terminate the Letter of Intent dated September 1, 2021 that set out the Company’s possible acquisition of Fresh Farms. Capital Raise Cash on hand is currently limited, so in order to close future acquisitions, and potentially also in order to pay other corporate obligations such as certain bonuses, our company-wide bonus pool, and/or income taxes, it may be necessary for us to raise substantial additional capital, and no guarantee or assurance can be made that such capital can be raised on acceptable terms, if at all. We are currently exploring the possibility of raising $5 million or more through some combination of debt and equity offerings in order to purchase for $1.375 million the building located at 5511 95 th |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Basis Of Presentation And Significant Accounting Policies | NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Consolidated Financial Statements Use of Estimates Cash and Cash Equivalents Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820 defines fair value, establishes a framework for measuring fair value under 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 – Level 2 – Level 3 – Ablis Holding Company, Bendistillery Inc. and Bend Spirits, Inc. are not publicly traded, and as such their financial instruments are 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. Accounts Receivable Inventory June 30, 2022 December 31, 2021 Raw Goods $ 3,607,668 $ 2,927,727 Finished Goods $ 6,441,576 $ 882,217 Total Inventory $ 10,049,245 $ 3,809,944 Monthly overhead costs such as payments for rent, utilities, insurance, and indirect labor are allocated to finished goods based on the estimated percentage cost toward the finished goods. Depreciation expense related to certain machinery and equipment is also allocated to finished goods. At June 30, 2022, $97,574 of overhead costs were allocated to finished goods. In comparison, during the quarter ended June 30, 2021, $24,979 of overhead costs were allocated to finished goods. During the quarter ended June 30, 2022, $238,048 of obsolete and spoiled inventory was written off. In comparison, during the quarter ended June 30, 2021, $150,115 of obsolete and spoiled inventory was written off. The process of determining obsolete inventory during the quarter involved: 1) Identifying raw goods that would no longer be used in the manufacture of finished goods; 2) Identifying finished goods that would no longer be sold or that are slow moving; and 3) Valuing and expensing raw and finished goods that would no longer be sold. Fixed Assets 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 indication of impairment, management then 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. The fair value is estimated using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks. Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions. Long-lived assets held for sale are recorded at the lower of their carrying amount or fair value less cost to sell. Security Deposits th The Company has paid security deposits for its leased facilities located at 8920 58 th th th The Company has also paid a security deposit for office space located at 2701-09 West Fulton PH, Chicago, Illinois 60612. The Company had paid a security deposit to its lessor for the Company’s former office, manufacturing and warehouse space in Zion, IL, that was rented on a month-to-month basis from June 1, 2021 through November 2021. The security deposit was written off at December 31, 2021. State Licensing Deposits Revenue The majority of the Company’s sales are of branded products goods to distributors, wholesalers, and end consumers. A minority of the Company’s sales are of raw goods to manufacturers, distributors and wholesalers. The majority of the Company’s sales are to distributors, followed by the Company’s sales to wholesalers, and then the Company’s sales to end consumers. Distributors primarily sell Lifted’s products to vape and smoke shops, stores specializing in cannabinoid-infused products, convenience stores, gas stations, health food stores, and other outlets. 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 are to customers are recorded as a reduction to gross sales. Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience. 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 sent 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 sent to the customer. The Company will also send 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 mail the mistakenly ordered product back to the Company, and the Company will mail 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. As of June 30, 2022, the Company recorded a sales allowance of $71,484 for future discounts/refunds and product returns based on historical discounts/refunds . Disaggregation of Revenue During the quarter ended June 30, 2022, approximately 99.9% of the Company’s sales occurred inside of the United States of America. During the quarter ended June 30, 2021, nearly all of the Company’s sales occurred inside of the United States of America as well. The Company has considered providing disaggregation of revenue by information regularly reviewed by the chief operating decision maker for evaluating the financial performance of operating segments, such as type of good, geographical region, market or type of customer, type of contract, contract duration, timing of transfer of goods, and sales channels. Due to the rapidly evolving nature of our industry, the Company is constantly launching new products to stay ahead of trends, finding new sales channels, initiating new distribution networks and modifying the prices of its products. Shown below is a table showing the approximate disaggregation of historical revenue: Type of Sale For the three months ended June 30, 2022 % of Net Sales For the three months ended June 30, 2021 % of Net Sales For the six months ended June 30, 2022 % of Net Sales For the six months ended June 30, 2021 % of Net Sales Net sales of raw materials to customers $ 13,250 0.1 % $ 39,039 0.6 % $ 18,632 0.1 % $ 49,735 0.5 % Net sales of products to private label clients - 0.0 % 1,269,983 19.0 % 84,142 0.2 % 2,028,123 20.2 % Net sales of products to wholesalers 1,945,785 11.6 % 974,726 14.6 % 4,420,993 12.7 % 1,586,767 15.8 % Net sales of products to distributors 14,350,448 85.5 % 4,057,683 60.6 % 27,739,730 79.6 % 5,786,478 57.6 % Net sales of products to end consumers 467,019 2.8 % 353,714 5.3 % 2,601,882 7.5 % 597,312 5.9 % Net Sales $ 16,776,502 100.0 % $ 6,695,144 100.0 % $ 34,865,379 100.0 % $ 10,048,414 100.0 % Deferred Revenue Amounts received from a customer before the purchased product is shipped to the customer is 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. Accounts receivable includes amounts associated with partially shipped orders, for which the unshipped portion is a contract asset. Contract assets represent invoiced but unfulfilled performance obligations. The table shown below represents the composition of deferred revenue between contract assets (invoiced but unfulfilled performance obligations) and deposits from customers from unfulfilled orders as of June 30, 2022 and December 31, 2021. June 30, 2022 December 31, 2021 Contract Assets (invoiced but unfulfilled performance obligations) $ 633,729 $ 1,650,258 Deposits from customers for unfulfilled orders $ - $ 524,135 Total Deferred Revenue $ 633,729 $ 2,174,393 Cost of Goods Sold Operating Expenses Income Taxes Basic and Diluted Earnings (Loss) Per Common Share For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Income/(Loss) $ 3,219,460 $ 1,596,154 $ 6,164,253 $ 2,214,512 Weighted average number of common shares outstanding: Basic 14,099,007 11,042,657 14,058,517 9,259,696 Diluted 15,906,205 14,381,105 15,865,715 12,598,144 Basic Net Income (Loss) per Common Share $ 0.23 $ 0.14 $ 0.44 $ 0.24 Diluted Net Income (Loss) per Common Share $ 0.20 $ 0.11 $ 0.39 $ 0.17 As of June 30, 2022, in addition to our outstanding common stock, we have issued (a) options to purchase 1,076,698 shares of common stock at $2.00 per share, (b) warrants to purchase 155,500 shares of common stock at $1.00 per share, (d) rights to purchase warrants to purchase 100,000 shares of common stock at $1.85 per share, and (e) warrants to purchase 2,295,000 shares of common stock at $5.00 per share. Regarding the aforementioned warrants to purchase 2,295,000 shares of our common stock at an exercise price of $5.00 per share: of the total, warrants to purchase 1,650,000 shares of our common stock are vested, while the remaining warrants to purchase 645,000 shares of our common stock are not vested and are subject to certain conditions and requirements. At June 30, 2022, the Company had Series A Preferred Stock outstanding convertible into 450,000 shares of common stock; these are included in the diluted earnings calculation. Also at June 30, 2022, the Company had Series B Preferred Stock outstanding convertible into 40,000 shares of common stock; these are not included in the diluted earnings calculation because the exercise price ($5.00/share) was higher than the stock closing price at June 30, 2022 ($4.00/share). In comparison, as of June 30, 2021, in addition to our outstanding common stock, there were (a) options to purchase 1,151,698 shares of common stock at $2.00 per share, (b) warrants to purchase 205,500 shares of common stock at $1 per share, (d) rights to purchase warrants to purchase 2,625,000 shares of common stock at between $0.01 and $1.85 per share, (e) financing warrants to purchase 31,250 shares of common stock at $0.03 per share, and (f) warrants to purchase 2,295,000 shares of common stock at $5.00 per share. Regarding the aforementioned rights to purchase warrants to purchase 2,625,000 shares of common stock at between $0.01 and $1.85 per share: as of June 30, 2021, of these, rights to purchase warrants to purchase 1.25 million shares of our common stock are not vested and are not exercisable until a performance contingency is met. Regarding the aforementioned warrants to purchase 2,295,000 shares of our common stock at an exercise price of $5.00 per share: as of June 30, 2021, of the total, warrants to purchase 1,650,000 shares of our common stock are vested, while the remaining warrants to purchase 645,000 shares of our common stock are not vested and are subject to certain conditions and requirements. Also outstanding at June 30, 2021, the Company had Series A Preferred Stock outstanding convertible into 575,000 shares of common stock; these are included in the diluted earnings calculation. At June 30, 2021, the Company also had Series B Preferred Stock outstanding convertible into 40,000 shares of common stock; these are also included in the diluted earnings calculation. Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes On August 5, 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) The Company is researching what other pronouncements may be applicable to the Company’s accounting and whether or not any other pronouncements should be adopted. Advertising and Marketing Expenses Compensated Absences Off-Balance Sheet Arrangements Reclassifications |
SELECTED QUARTERLY FINANCIAL IN
SELECTED QUARTERLY FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 2022 | |
SELECTED QUARTERLY FINANCIAL INFORMATION | |
Selected Quarterly Financial Information | NOTE 3 – SELECTED QUARTERLY FINANCIAL INFORMATION LFTD PARTNERS INC. AND SUBSIDIARY LIFTED LIQUIDS, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) For the Three Months Ended June 30, 2022 For the Three Months Ended March 31, 2022 For the Three Months Ended December 31, 2021 For the Three Months Ended September 30, 2021 For the Three Months Ended June 30, 2021 For the Three Months Ended March 31, 2021 For the Three Months Ended December 31, 2020 For the Three Months Ended September 30, 2020 Net Sales $ 16,776,502 $ 18,088,877 $ 12,787,566 $ 8,820,952 $ 6,695,144 $ 3,353,270 $ 2,196,518 $ 1,509,437 Cost of Goods Sold 8,713,590 10,103,893 6,252,549 4,720,057 3,035,630 1,707,523 1,312,946 878,327 Gross Profit 8,062,912 7,984,984 6,535,017 4,100,895 3,659,515 1,645,747 883,572 631,110 Operating Expenses: Payroll, Consulting and Independent Contractor Expenses 1,811,678 1,854,151 1,719,305 803,796 791,000 307,524 211,851 275,149 Accrual for Company-Wide Management Bonus Pool 1,152,162 969,370 - 400,000 816,388 342,947 - - Management Bonuses - - 650,000 - - - - - Professional Fees 203,402 117,226 133,300 139,526 133,892 93,033 80,810 50,235 Bank Charges and Merchant Fees 132,470 133,036 103,647 104,485 118,055 66,570 27,824 14,702 Advertising and Marketing 110,797 105,601 100,446 86,438 98,133 52,027 22,384 26,670 Bad Debt Expense (311,209 ) 248,000 299,000 61,449 19,196 977 2,915 94,251 Depreciation and Amortization 6,706 2,703 5,805 16,344 26,215 41,783 5,245 5,092 Other Operating Expenses 528,608 382,462 278,024 170,820 99,773 80,394 56,902 51,289 Total Operating Expenses 3,634,615 3,812,549 3,289,526 1,782,858 2,102,652 985,254 407,931 517,388 Income From Operations 4,428,297 4,172,436 3,245,491 2,318,037 1,556,863 660,493 475,641 113,722 Other Income/(Expenses) Income/(Loss) From 50% membership interest in SmplyLifted LLC (FR3SH) - - (100,172 ) (44,858 ) (43,330 ) (7,211 ) (4,429 ) - Impairment of Investment in SimplyLifted - - (388,727 ) - - - - - Income from SmplyLifted for WCJ Labor - - 144 313 769 1,072 - - Loss on Lease Modification - - (1,445 ) - - - - - Interest Expense (26,928 ) (31,731 ) (35,314 ) (35,368 ) (35,398 ) (36,347 ) (19,281 ) (19,281 ) Dividend Income - - 2,495 - - - 2,495 - Warehouse Buildout Credits - - - - 600 600 600 600 Penalties 222 (1,952 ) (5,434 ) (2,162 ) - (450 ) - - Gain on Forgiveness of Debt - 5,026 521 - 151,147 - 81,272 - Settlement Income/Gain on Settlement 108,570 - - - - - 12,500 - Gain/(Loss) on Disposal of Fixed Assets - - - - (4,750 ) - - - Loss on Deposits - - (1,600 ) - (30,000 ) - - - Interest Income 521 491 694 217 253 202 733 782 Total Other Income/(Expenses) 82,385 (28,165 ) (528,837 ) (81,859 ) 39,292 (42,134 ) 73,890 (17,899 ) Income Before Provision for Income Taxes 4,510,682 4,144,270 2,716,654 2,236,178 1,596,154 618,359 549,531 95,823 Provision for Income Taxes (1,291,222 ) (1,199,478 ) (1,367,362 ) - - - - - Net Income Attributable to LFTD Partners Inc. common stockholders $ 3,219,460 $ 2,944,793 $ 1,349,292 $ 2,236,178 $ 1,596,154 $ 618,359 $ 549,531 $ 95,823 Earnings Per Common Share Attributable to LFTD Partners Inc. common shareholders: Basic $ 0.23 $ 0.21 $ 0.10 $ 0.17 $ 0.14 $ 0.08 $ 0.06 $ 0.01 Diluted $ 0.20 $ 0.18 $ 0.08 $ 0.14 $ 0.11 $ 0.04 $ 0.02 $ 0.01 Weighted average number of common shares outstanding Basic 14,099,007 14,017,578 14,005,567 13,015,717 11,042,657 7,456,925 6,463,301 6,460,236 Diluted 15,906,205 15,924,776 15,962,765 16,257,915 14,381,105 16,084,794 16,040,170 6,460,236 |
RECEIPT OF LOANS UNDER THE ECON
RECEIPT OF LOANS UNDER THE ECONOMIC INJURY DISASTER LOAN PROGRAM AND THE PAYCHECK PROTECTION PROGRAM | 6 Months Ended |
Jun. 30, 2022 | |
RECEIPT OF LOANS UNDER THE ECONOMIC INJURY DISASTER LOAN PROGRAM AND THE PAYCHECK PROTECTION PROGRAM | |
Receipt Of Loans Under The Economic Injury Disaster Loan Program And The Paycheck Protection Program | NOTE 4 – RECEIPT OF LOANS UNDER THE ECONOMIC INJURY DISASTER LOAN PROGRAM AND THE PAYCHECK PROTECTION PROGRAM Lifted also applied for and received a loan (the “PPP Loan”) under the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted March 27, 2020. The PPP Loan was issued by BMO Harris Bank (the “Lender”) in the aggregate principal amount of $149,622.50 and evidenced by a promissory note (the “Note”), dated April 14, 2020 issued by Lifted to the Lender. On April 20, 2021, the entire PPP Loan ($149,622) and the interest payable on the PPP Loan ($1,525) was forgiven by the SBA, and a related gain on forgiveness of debt in the amount of $151,147 was recorded. In accordance with its terms, the Note was originally scheduled to mature on April 14, 2022 and bore interest at a rate of 1.00% per annum, payable monthly commencing on November 14, 2020, following an initial deferral period as specified under the PPP. In addition, the Note could be prepaid by Lifted at any time prior to its original maturity with no prepayment penalties. Proceeds from the PPP Loan were available to Lifted to fund designated expenses, including certain payroll costs and other permitted expenses, in accordance with the PPP. Under the terms of the PPP, up to the entire amount of principal and accrued interest of the PPP Loan could be forgiven to the extent that at least 75% of the PPP Loan proceeds are used for qualifying expenses as described in the CARES Act and applicable implementing guidance issued by the SBA under the PPP. As of March 31, 2021, Lifted had an accrual of $1,443 for the interest on the PPP Loan. During the three months ended June 30, 2021, interest of $82 was accrued prior to the forgiveness of the Loan. |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 6 Months Ended |
Jun. 30, 2022 | |
RISKS AND UNCERTAINTIES | |
Risks And Uncertainties | NOTE 5 - RISKS AND UNCERTAINTIES Going Concern – The Company’s investments in Ablis, Bendistillery and Bend Spirits made the Company a minority owner of these companies. As a minority owner, the Company is not able to recognize any portion of Ablis’, Bendistillery’s or Bend Spirits’ revenues or earnings in the Company’s financial statements. The Company monitors its investments in Ablis, Bendistillery and Bend Spirits, and from time to time and will evaluate whether there has been a potential impairment of value. The COVID-19 pandemic and its ramifications, combined with the expenses and potential liabilities associated with litigation involving Lifted, combined with the regulatory risks and uncertainties associated with the cannabinoid-infused products, vaping and nicotine products industries, combined with the risks associated with internet hacking or sabotage, combined with the risks of employee and/or independent contractor disloyalty or theft of Company information and opportunities, have created significant adverse risks to the Company, which have caused substantial doubt about the Company’s ability to continue as a going concern. Prior to the Acceleration Agreement, Lifted had an obligation to complete the purchase of the 5511 Building on or before December 31, 2022. Pursuant to the Acceleration Agreement, the deadline to purchase the 5511 Building has been extended by one year to December 31, 2023. In addition, the Acceleration Agreement contains a provision that if we raise $5,000,000 of debt or equity capital, then Lifted or our designee shall purchase the Property from 95th Holdings, LLC at the agreed upon $1,375,000 purchase price within two days. The Company is also accruing 3% annual dividends on its Series A and Series B Convertible Preferred Stock. Also, on February 14, 2022, NWarrender, GJacobs and WJacobs (together the “Parties”) and LFTD Partners, entered into an agreement (the “Amended Omnibus Agreement”) that amends in part the Agreement dated as of December 30, 2021 entered into by and among LFTD Partners Inc., the Parties, Lifted Liquids, Inc. d/b/a Lifted Made and 95th Holdings, LLC (the “Omnibus Agreement”). The Amended Omnibus Agreement (1) terminates the right for the Parties to receive bonus compensation in regard to 2021 that is in excess of the Modified 2021 Bonus Pool Amount of $1,556,055 set out in the Omnibus Agreement; (2) places a cap on the 2022 company-wide bonus pool such that 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 $0.56 per share; and (3) the $500,000 of additional bonus set out in the Omnibus Agreement, is now allocated and defined as a retention bonus of $166,667 to each of NWarrender, GJacobs and WJacobs to be paid at the end of 2022 so long as each respective executive has not earlier resigned from LFTD Partners. Moreover, LFTD Partners agrees and covenants that the Chairman of the Compensation Committee is authorized to negotiate and agree on behalf of LFTD Partners in regard to a 2023 supplemental retention bonus for NWarrender, GJacobs and WJacobs (in addition to the company-wide Bonus Pool), and if and only if the amount of such 2023 supplemental retention bonus is mutually agreed upon in writing among the Chairman of the Compensation Committee, NWarrender, GJacobs and WJacobs, then one-third of such 2023 supplemental retention bonus shall be paid by LFTD Partners to each of NWarrender, GJacobs and WJacobs on or before March 15, 2024, provided that such officer shall not have earlier resigned as an officer of LFTD Partners. During 2022, Lifted for the first time hired an outside laboratory to conduct research and development on a potential new, non-hemp-derived psychedelic product (the “New Psychedelic Product”) for a total of $19,800. As of today, such research and development of the New Psychedelic Product has been put on hold and is being evaluated. There is no guarantee whether this research and development will be successful in generating the New Psychedelic Product that can be sold, or if it can be sold, that it will be successful. In addition, factors that could materially affect future operating results include, but are not limited to, changes to laws and regulations, especially those related to hemp-derived delta-8-THC, delta-9-THC, delta-10-THC, THCV, HHC, HHCO, THCO, CBDA, CBC, CBG, CBN, CBD, other hemp-derived cannabinoids, nicotine products, kratom, psychedelic products, vaping, vendor concentration risk, customer concentration risk, customer credit risk, and counterparty risk. The Company maintains levels of cash in a bank deposit account that, at times, may exceed federally insured limits. The Company has not experienced any losses in such account and it believes 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 and the dividends accruing on the Company’s preferred stock. As a result, there is substantial doubt that the Company will be able to continue as a going concern. Bankruptcy of the Company at some point in the future is a possibility. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company currently has one revenue-generating subsidiary, Lifted. If and to the extent that the revenue generated by Lifted is not adequate to pay the Company’s operating expenses and the dividends accruing on its preferred stock, then Company management plans to sustain the Company as a going concern by taking the following actions: (1) acquiring and/or developing additional profitable businesses that will create positive income from operations; and/or (2) completing private placements of the Company’s common stock and/or preferred stock. Management believes that by taking these actions, the Company will be provided with sufficient future operations and cash flow to continue as a going concern. However, there can be no assurances or guarantees whatsoever that the Company will be successful in consummating such actions on acceptable terms, if at all. Moreover, any such actions can be expected to result in substantial dilution to the existing shareholders of the Company. Customer Concentration Risk Vendor Dependence The loss of Lifted’s relationships with these customers and vendors could have a material adverse effect on Lifted’s business. |
THE COMPANYS INVESTMENTS
THE COMPANYS INVESTMENTS | 6 Months Ended |
Jun. 30, 2022 | |
THE COMPANYS INVESTMENTS | |
The Companys Investments | NOTE 6 – THE COMPANY’S INVESTMENTS The Company’s Investments in Ablis, Bendistillery and Bend Spirits On April 30, 2019, the Company purchased 4.99% of the common stock of each of Ablis Holding Company, Bendistillery Inc., and Bend Spirits, Inc. for an aggregate purchase price of $1,896,200. Under US Generally Accepted Accounting Principles (“GAAP”), the Company uses the cost method to account for our minority equity ownership interests in businesses in which the Company owns less than 20% of equity ownership, and have no substantial influence over the management of the businesses. Under the cost method of accounting, the Company reports the historical costs of the investments as assets on its balance sheet. However, US GAAP does not permit the consolidation of its financial statements with the financial statements of companies in which the Company owns minority equity ownership interests. As such, the Company’s investments in Ablis, Bendistillery and Bend Spirits made the Company a minority owner of these companies. As a minority owner, the Company will not be able to recognize any portion of Ablis’, Bendistillery’s or Bend Spirits’ revenues or earnings in the Company’s financial statements. US GAAP also requires the Company to record these types of investments 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. As such, the Company will not be allowed to consolidate into its financial statements any portion of the revenues, earnings or assets of companies in which it owns minority equity ownership interests such as Ablis, Bendistillery and Bend Spirits. Moreover, even if there is evidence that the fair market values of the investments have increased above their historical costs, US GAAP does not allow increasing the recorded values of the investments. Under US GAAP, the only adjustments that may be made to the historical costs of the investments are write downs of the values of the investments, which must be made if there is evidence that the fair market values of the investments have declined to below the recorded historical costs. 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. Up to the date of this report on Form 10-Q, none of the above the above factors have been applicable to the Company’s investments. The qualitative assessments at the end of quarters one, two and three are done via conference or video calls with the management teams of Ablis, Bendistillery and Bend Spirits. The qualitative assessment at the end of quarter four 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. On July 21, 2022, a video conference meeting of the board of directors and management of Ablis, Bendistillery and Bend Spirits, and GJacobs and WJacobs was held. During this meeting, the management of Ablis, Bendistillery and Bend Spirits discussed the performance of Ablis, Bendistillery and Bend Spirits during the three months ended June 30, 2022. Based upon the financial and non-financial information that was shared with LFTD Partners during that conference call, the management of LFTD Partners believes that no impairment of the value of Bendistillery, Bend Spirits or Ablis is warranted at this point in time. The information that was shared by the management of Ablis included, among other things: positive cash flow, positive growth in sales, net profit and new product launches. The information that was shared by the management of Bendistillery and Bend Spirits included, among other things: increased revenue of Bendistillery from the second quarter of 2021 to the second quarter of 2022, and existing markets and new markets opening up, and the building up of inventory. The Company’s Investment in Lifted Made 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 but is subject to annual impairment testing unless circumstances dictate more frequent assessments. 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. Goodwill impairment testing is a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess. 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. Changes in assumptions and estimates could cause the Company to perform an impairment test prior to scheduled annual impairment tests. The Company performed its annual fair value assessment at December 31, 2021 on the goodwill recognized as part of the acquisition of Lifted, and determined that no impairment was necessary. The factors that led the Company to this conclusion include, among other things: continued growth in sales and profitability year-over-year, the launch of first-to-market, ground-breaking new products, the addition of more and more wholesalers and distributors nationwide, increased sales to wholesalers and end consumers, the continued growth of Lifted’s flagship brand Urb Finest Flowers, and continued positive publicity of Lifted. The Company’s Investment in SmplyLifted LLC On September 22, 2020, LFTD Partners Inc. and Lifted Made and privately-held SMPLSTC, Costa Mesa, CA (www.SMPLSTCBD.com) formed an equally-owned new entity called SmplyLifted LLC, which sold tobacco-free nicotine pouches in several flavors and nicotine strengths under the brand name FR3SH (www.GETFR3SH.com). Lifted had a 50% membership interest in SmplyLifted LLC. The other 50% of SmplyLifted is owned by SMPLSTC LLC and its principals, who are located in Costa Mesa, California. Under US GAAP, the Company used the equity method to account for its 50% membership interest in SmplyLifted. Under the equity method of accounting, the Company recorded its share (50%) of SmplyLifted’s earnings (or losses) as income (or losses) on the Consolidated Statements of Operations. The Company recorded its initial investment in SmplyLifted, which was $200,000, as an asset at historical cost. Under the equity method, the investment’s value was periodically adjusted to reflect the changes in value due to Lifted’s share in SmplyLifted’s income or losses. During the year ended December 31, 2020, the Company recognized a loss of $4,429 from its 50% membership interest in SmplyLifted, and wrote down the value of its investment in SmplyLifted to $195,571. During the year ended December 31, 2021, the Company recognized a loss of $195,571 from its 50% membership interest in SmplyLifted. At December 31, 2021, Lifted Made wrote off its receivables from SmplyLifted, and its loans to SmplyLifted, which totaled $388,727. On February 9, 2022, Lifted Made signed an Agreement to sell its 50% membership interest in SmplyLifted LLC to Corner Vapory LLC, an affiliate of NWarrender, CEO of Lifted, for $1, plus ninety-nine percent (99%) of any and all payments and other consideration received or owed to Corner Vapory LLC in regard to SmplyLifted’s existing inventory of FR3SH brand tobacco-free nicotine pouches. Lifted has the option to re-purchase the 50% membership interest in SmplyLifted LLC from Corner Vapory LLC for $1,000 in cash at any time on or before December 31, 2032. |
PROPERTY AND EQUIPMENT NET
PROPERTY AND EQUIPMENT NET | 6 Months Ended |
Jun. 30, 2022 | |
PROPERTY AND EQUIPMENT NET | |
Property And Equipment Net | NOTE 7 – PROPERTY AND EQUIPMENT, NET Property and Equipment consist of the following: Asset Class June 30, 2022 December 31, 2021 Machinery & Equipment $ 266,742 $ 258,533 Leasehold Improvements $ 171,294 $ 152,985 Trade Show Booths $ 23,488 $ 23,488 Vehicles $ 75,047 $ 22,309 Computer Equipment $ 7,312 $ 7,312 Furniture & Fixtures $ 52,594 $ 46,553 Sub-total: $ 596,476 $ 511,180 Less: accumulated depreciation $ (135,669 ) $ (77,967 ) $ 460,808 $ 433,213 The useful lives of the Company’s fixed assets by asset class are as follows: Asset Class Estimated Useful Life Machinery & Equipment 60 months Leasehold Improvements 60 months Trade Show Booths 36 months Vehicles 60 months Computer Equipment 60 months Furniture & Fixtures 60 months Depreciation expense of $16,402 and $31,575 was recognized during the three and six months ended June 30, 2022. In comparison, depreciation expense of $13,461 and $42,490 was recognized during the three and six months ended June 30, 2021, respectively. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 6 Months Ended |
Jun. 30, 2022 | |
NOTES RECEIVABLE | |
Notes Receivable | NOTE 8 – NOTES RECEIVABLE SmplyLifted LLC At March 31, 2021, the Company had made shortfall loans to SmplyLifted LLC totaling $387,500, used primarily for the purchase of inventory. As of March 31, 2021, imputed interest receivable on the loans totaled $149. At December 31, 2021, the Company had made interest-free loans to SmplyLifted LLC totaling $387,500, used primarily for the purchase of inventory. As of December 31, 2021, imputed interest receivable on the loans totaled $580. As described above, at December 31, 2021, these notes and related interest receivable were written off. |
INTANGIBLE ASSETS NET
INTANGIBLE ASSETS NET | 6 Months Ended |
Jun. 30, 2022 | |
INTANGIBLE ASSETS NET | |
Intangible Assets Net | NOTE 9 – INTANGIBLE ASSETS, NET www.LiftedMade.com Website The cost of developing Lifted’s website, www.LiftedMade.com, is being amortized over 32 months, and $347 and $693 in amortization related to the website was recognized during the three and six months ended June 30, 2022. In comparison, $417 and $834 in amortization related to the website was recognized during the three and six months ended June 30, 2021. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2022 | |
RELATED PARTY TRANSACTIONS | |
Related Party Transactions | NOTE 10 – RELATED PARTY TRANSACTIONS Sublease For Commuter Employees On July 6, 2022, our wholly owned subsidiary Lifted entered into a sublease for office space in Chicago, Illinois located at 2701-09 West Fulton PH, Chicago, Illinois 60612. The sublease costs $3,000 per month, plus supplemental lease related charges such as real estate taxes and common expenses of the property that we anticipate will be commercially typical costs. The sublease is retroactively effective as of June 1, 2022 and for a five-month term that extends to through October 31, 2022. The purpose of the sublease is to make available office space for the members of Lifted Made's sales team who live in Chicago. These salespeople were spending significant time in their cars commuting from Chicago to Kenosha. The sublessor is one of our affiliates, Bill McLaughlin, Lifted’s Chief Strategy Officer. The sublease is structured so that Mr. McLaughlin's lease payment obligations to the landlord are passed on to Lifted on a dollar-for-dollar basis, such that Mr. McLaughlin does not realize a cashflow profit or loss from the sublease. Shipping Costs Lifted has shared a shipping account with a company operated by NWarrender’s father, Robert T. Warrender II, who is also an employee of Lifted and a member of the board of directors of LFTD Partners Inc. Lifted did this in an effort to reduce shipping costs, as the shipper gave a price discount based on volume. Lifted reimbursed Robert T. Warrender II’s company for the cost of shipping. During the six months ended June 30, 2022, Robert T. Warrender II’s company refunded Lifted a net amount of $7,377. In comparison, during the quarter ended June 30, 2021, Lifted reimbursed Robert T. Warrender II’s company $32,536 in shipping costs. Robert T. Warrender II In January 2022, Lifted hired Robert T. Warrender II, NWarrender’s father, as an employee. Robert T. Warrender II is also a Director of LFTD Partners Inc. During the three and six months ended June 30, 2022, $13,846 and $23,077 in wages were paid to Robert T. Warrender II. $950 in expense reimbursements were owed to Robert T. Warrender II as of June 30, 2022. Robert T. Warrender III During the three and six months ended June 30, 2022, $20,961 and $54,384 in sales commissions were paid to Robert T. Warrender III, who is NWarrender’s brother, and Director Robert T. Warrender II’s son. In comparison, during the three and six months ended June 30, 2021, $15,410 and $17,482 in sales commissions were paid to Robert T. Warrender III. Vincent J. Mesolella During the quarter ended March 31, 2022, Lead Outside Director Vincent J. Mesolella was paid $40,000 of the Modified 2021 Bonus Pool Amount. During each of the first and second quarters of 2022, Mr. Mesolella also received his $4,000 quarterly director fee. Joshua A. Bloom During the quarter ended March 31, 2022, Dr. Joshua A. Bloom, Director, was paid $20,000 of the Modified 2021 Bonus Pool Amount. During each of the first and second quarters of 2022, Dr. Bloom also received his $4,000 quarterly director fee. Richard E. Morrissy During each of the first and second quarters of 2022, Richard E. Morrissy, Director, received his $4,000 quarterly director fee. James S. Jacobs During each of the first and second quarters of 2022, Dr. James S. Jacobs, Director, received his $4,000 quarterly director fee. Kevin J. Rocio During each of the first and second quarters of 2022, Kevin J. Rocio, Director, received his $4,000 quarterly director fee. Gerard M. Jacobs The Compensation Agreement contemplated an aggregate of $350,000 being paid by the Company to GJacobs and WJacobs upon the closing of the Company’s acquisition of Lifted and an aggregate of $350,000 being paid by the Company to GJacobs and WJacobs upon December 1, 2020, but such payments were not timely made, and pursuant to the Amendment No. 1 such aggregate of $700,000 of compensation was deferred and made due and payable by the Company to GJacobs and WJacobs together with interest accrued at the rate of 2% annually commencing January 1, 2021, upon demand by GJacobs and WJacobs, and through the date of the Omnibus Agreement only $58,439 of such deferred compensation had been paid to GJacobs (the remaining unpaid deferred compensation together with accrued interest is hereby referred to as the “Deferred Compensation”). Pursuant to the Omnibus Agreement, the Deferred Compensation was paid by the Company to GJacobs and WJacobs in January 2022. During the quarter ended March 31, 2022, Gerard M. Jacobs was also paid $143,713 of the Modified 2021 Bonus Pool Amount. On April 29, 2021, the Company paid Gerard M. Jacobs a portion ($50,000) of the bonus payable to Gerard M. Jacobs in regard to the closing of the acquisition of Lifted. As of June 30, 2021, there was total interest of $4,789 payable to Gerard M. Jacobs. William C. “Jake” Jacobs As described above, the Compensation Agreement contemplated an aggregate of $350,000 being paid by the Company to GJacobs and WJacobs upon the closing of the Company’s acquisition of Lifted and an aggregate of $350,000 being paid by the Company to GJacobs and WJacobs upon December 1, 2020, but such payments were not timely made, and pursuant to the Amendment No. 1 such aggregate of $700,000 of compensation was deferred and made due and payable by the Company to GJacobs and WJacobs together with interest accrued at the rate of 2% annually commencing January 1, 2021, upon demand by GJacobs and WJacobs, and through the date of the Omnibus Agreement only $58,439 of such deferred compensation had been paid to GJacobs (the remaining unpaid deferred compensation together with accrued interest is hereby referred to as the “Deferred Compensation”). Pursuant to the Omnibus Agreement, the Deferred Compensation was paid by the Company to GJacobs and WJacobs in January 2022. Moreover, pursuant to the Omnibus Agreement and simultaneously with such payment of the Deferred Compensation as set out above, the Company paid WJacobs a bonus of $300,000 in January 2022. During the quarter ended March 31, 2022, William C. Jacobs was also paid $152,341 of the Modified 2021 Bonus Pool Amount. As of June 30, 2021, there was total interest of $1,984 payable to William C. “Jake” Jacobs. At March 31, 2021, $2,681 in income tax previously erroneously paid by William C. Jacobs to the Illinois Department of Revenue during the year ended December 31, 2021, and refunded back to Lifted by the Illinois Department of Revenue in January 2021, was payable by Lifted to William C. Jacobs. This amount was repaid during the quarter ended June 30, 2021. Nicholas S. Warrender On February 24, 2020 we closed on the acquisition of 100% of the ownership of CBD-infused products maker Warrender Enterprise Inc. d/b/a Lifted Made (formerly d/b/a Lifted Liquids) of Zion, Illinois (the “Merger”), for consideration of (1) $3,750,000 in cash, (2) $3,750,000 in the form of a secured promissory note accruing interest of 2% per year, (3) 3,900,455 shares of unregistered common stock of the Company (the “Stock Consideration”), (4) 645,000 shares of unregistered common stock of the Company that constitute deferred contingent compensation to be issued and delivered to certain persons specified by NWarrender in a schedule delivered by NWarrender to the Company at the closing of the Merger (the “Deferred Contingent Stock”), and (5) warrants to purchase an aggregate of 1,820,000 shares of unregistered common stock of the Company at an exercise price of $5.00 per share that will be issued and delivered to certain persons specified by NWarrender in a schedule delivered by NWarrender to the Company at the closing of the Merger (the “Warrants”). On December 30, 2021, LIFD repaid all principal and interest due under the $3.75 M Note between NWarrender and LIFD dated February 24, 2020 that was a portion of the Merger Consideration paid by LIFD to NWarrender under the Merger Agreement. Pursuant to the terms of that promissory note, the unpaid balance of the note accrued interest at the rate of 2% per annum. On December 30, 2021, NWarrender kept $1,000,000 of the repayment, plus accrued interest, and on January 3, 2022, reloaned $2,750,000 back to LIFD at the rate of 2.5% (the “$2.75M Note”). Prior to July 25, 2022 the $2.75 M Note payable jointly by the Company and Lifted to NWarrender was secured by a perfected first lien security interest (the “Security Interest”) that encumbered all of the assets of the Company and Lifted. The Company was obligated to pay off the principal of the $2.75 M Note in five semi-annual payments to NWarrender of $458,333 and a sixth and final semi-annual payment to NWarrender of $458,335, in each case plus accrued interest, starting on June 30, 2022. On June 7, 2022, LFTD Partners prepaid $916,666 of the principal of the $2.75M Note, and $29,384 of related accrued interest through that date, which left $1,833,334 remaining principal on the $2.75M Note. On July 5, 2022, we entered into an agreement (“Acceleration Agreement”) with NWarrender. Under the terms of the Acceleration Agreement, we were obligated to repay the remaining principal balance as follows: $1,374,999 on or before December 31, 2022, and $458,335 on or before December 31, 2024. Then, on July 8, 2022, we prepaid $916,666, along with accrued interest, and then, as described in NOTE 16 – SUBSEQUENT EVENTS, In comparison, as of June 30, 2021, in addition to the $3.75M Note owed to NWarrender, there was also related interest payable of $101,301 owed to NWarrender. Bonus During the quarter ended March 31, 2022, NWarrender was also paid $680,000 of the Modified 2021 Bonus Pool Amount. Obligation to Purchase Headquarters Building Toward the end of 2020, NWarrender, through his assigned entity 95th Holdings, LLC, purchased a building located at 5511 95th Avenue in Kenosha, Wisconsin (“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 95th Holdings, LLC, the parties agreed that our wholly owned subsidiary 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 an agreement with Warrender on December 30, 2021, the parties agreed to set the purchase price for the 5511 Building at $1,375,000. Prior to the Acceleration Agreement, Lifted had an obligation to complete the purchase of the 5511 Building on or before December 31, 2022. Pursuant to the Acceleration Agreement, the deadline to purchase the 5511 Building has been extended by one year to December 31, 2023. In addition, the Acceleration Agreement contains a provision that if we raise $5,000,000 of debt or equity capital, then Lifted or our designee shall purchase the 5511 Building from 95th Holdings, LLC at the agreed upon $1,375,000 purchase price within two days. SmplyLifted LLC On a quarterly basis, SmplyLifted LLC reimbursed Lifted for WJacobs’ time as the Chief Financial Officer at WJacobs’ hourly rate. As of June 30, 2021, SmplyLifted LLC owed $769 to Lifted as reimbursement for WJacobs’ time as the Chief Financial Officer. On February 2, 2021, Lifted owed SmplyLifted $450; on February 10, 2021, Lifted paid SmplyLifted the $450. As of March 31, 2021, Lifted owed SmplyLifted $9,719. Between April 1, 2021 and April 5, 2021, Lifted paid SmplyLifted the $9,719. Corner Vapory LLC NWarrender is a 50% owner in Corner Vapory LLC. Corner Vapory LLC owns a vape shop (called Corner Vapory), and Canna Vita, a CBD shop, both located in Kenosha, Wisconsin. The other owners of Corner Vapory LLC consist of Lifted’s Director of Operations and his wife. During the three and six months ended June 30, 2022, Corner Vapory LLC purchased $24,873 and $31,104, respectively, worth of products from Lifted, and Lifted recorded a receivable of $24,873 from Corner Vapory as of June 30, 2022. In comparison, during the three and six months ended June 30, 2021, Corner Vapory LLC purchased $12,036 and $14,834 worth of products from Lifted, and Lifted recorded a receivable of $909 from Corner Vapory LLC as of June 30, 2021. 95th Holdings, LLC From June 1, 2018 through June 1, 2021, Lifted rented 3,300 square feet of space located in Zion, Illinois, for manufacturing, warehousing and office space. From June 1, 2021 through November 2021, Lifted leased such space on a month-to-month basis. From May 2020 until April 1, 2021, Lifted also temporarily used additional space located adjacent to its rented space in Zion, Illinois, and made payments in lieu of rent therefor. Lifted’s rented space in Zion, Illinois, was not adequate in light of various issues including zoning uncertainties, lack of air conditioning, and small size. As such, on December 18, 2020, Lifted as tenant entered into a Lease Agreement (the “Lease) with 95 th th Lifted constructed improvements including a clean room, and gradually moved into the Kenosha Premises over the course of the first quarter of 2021. Under the terms of the “triple-net” Lease, starting on January 1, 2021, Lifted leased approximately 11,238 square feet at the Premises at $6.13 per square foot per year in base rent ($68,888.94 in 2021), which is subject to a 2% increase in base rent each year, plus certain operating expenses and taxes. The Lease will continue until midnight on the fifth Under the terms of the lease, the tenant, Lifted, has the option to purchase the property at any time prior to December 31, 2025, and in any event, Lifted is obligated to purchase the property on or before that date. Pursuant to the Lease, in all cases Lifted’s purchase price for the Premises shall be in an amount equal to the greater of: (1) the fair market value of the Premises at the time Lifted purchases the Premises; or (2) any remaining principal balance of any purchase-money mortgage for the Premises existing at the time of the closing of Lifted’s purchase, plus the corresponding amount identified in the Additional Purchase Price Schedule attached as Exhibit B to the Lease, which is an additional amount ranging between $300,000 and $375,000 based on the number of years that have passed between the commencement of the Lease and the purchase of the Premises by Lifted. Landlord is an entity owned by NWarrender, the Company’s Vice Chairman and COO, the CEO of Lifted, and the largest stockholder of the Company as beneficial owner of 3,900,455 common stock shares. Due to the potential conflict of interest, the terms and conditions of the Lease were negotiated on behalf of Lifted by Vincent J. Mesolella, the Lead Outside Director of the Company. Landlord and Lifted were represented by their own independent legal counsel in connection with the Lease. Under the terms of the Lease, NWarrender is able to benefit through his entity 95 th During the quarter ended June 30, 2022, Lifted paid $17,567 in rent to 95 th th Under the terms of the Omnibus Agreement, Lifted is obligated to purchase the Premises from Landlord on or before December 31, 2022 for a fixed purchase price of $1,375,000. Pursuant to the terms of the Acceleration Agreement, the purchase date has been delayed until on or before December 31, 2023. Liquid Event Marketing Liquid Event Marketing is a company owned by Lifted’s Director of Operations, who was hired by Lifted on March 29, 2021. During the quarter and six months ended June 30, 2022, Lifted purchased $6,470 of services from Liquid Event Marketing, and no amounts were payable to Liquid Event Marketing as of June 30, 2022. In comparison, during the quarter ended June 30, 2021, Lifted paid Liquid Event Marketing $54,829 for the purchase and installation of fixed assets and other services. There was a payable of $26,465 owed by Lifted to Liquid Event Marketing at June 30, 2021. As of June 30, 2021, there were also expense reimbursements totaling $7,966 owed by Lifted to Lifted’s Director of Operations. During the quarter ended March 31, 2021, Lifted paid Liquid Event Marketing $118,612 for the purchase of fixed assets, the installation of fixed assets, and other services. There was no payable owed by Lifted to Liquid Event Marketing at March 31, 2021. |
SHAREHOLDERS EQUITY
SHAREHOLDERS EQUITY | 6 Months Ended |
Jun. 30, 2022 | |
SHAREHOLDERS EQUITY | |
Shareholders Equity | NOTE 11 – SHAREHOLDERS’ EQUITY Issuance of Series A Convertible Preferred Stock The Company has authorized 400,000 shares of its Series A Convertible Preferred Stock. Each share of Series A Convertible Preferred Stock may be converted into 100 shares of common stock. The Series A Convertible Preferred Stock accrues dividends at the rate of 3% annually. The accrued Series A Convertible Preferred Stock dividends are cumulative. The Series A Convertible Preferred Stock dividends shall cease to accrue at such time as the Company’s Common Stock has closed at $3.00 per share or higher for 20 consecutive trading days after the first date that the Series A Registration Statement is effective, and there have been, on average, at least 25,000 shares traded on each of those 20 consecutive trading days. The Series A Convertible Preferred Stock have no voting rights. The holders of the Series A Convertible Preferred Stock shall have voluntary conversion rights. Shares of Series A Convertible Preferred Stock are subject to mandatory conversion (in the discretion of the Company) at such time as the Company’s common stock has closed at $5.00 per share or higher for 20 consecutive trading days after the first date that the Series A Registration Statement is effective, and there have been, on average, at least 50,000 shares traded on each of those 20 consecutive trading days. Between February 27, 2019 and May 13, 2019, the Company accepted subscriptions from accredited investors to purchase 66,150 shares of newly issued Series A Preferred Stock for an aggregate purchase price of $6,615,000 in cash. These 66,150 shares of Series A Preferred Stock are convertible at the option of the holders into 6,615,000 shares of newly issued common stock of the Company, or $1.00 per share of common stock of the Company. The Series A Preferred Stock will receive an annual 3% dividend, and will be subject to mandatory conversion, under terms and conditions set forth in the Certificate of Designation of the Series A Preferred Stock. On August 2, 2019, the Company filed a Form S-1 Registration Statement covering the shares of newly issued common stock of the Company into which the Series A Convertible Preferred Stock can be converted. On July 6, 2020, the Company filed with the SEC an amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series A Preferred Stock may be converted. On December 10, 2020, the Company filed with the SEC a second amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series A Preferred Stock may be converted. On June 2, 2021, the Company filed with the SEC a third amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series A Preferred Stock may be converted. On July 2, 2021, the Company filed with the SEC a fourth amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series A Preferred Stock may be converted. On July 26, 2021, the Company filed with the SEC a fifth amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series A Preferred Stock may be converted. On August 19, 2021, the Company filed with the SEC a sixth amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series A Preferred Stock may be converted. The Registration Statement was approved deemed effective by the SEC on August 26, 2021. As of June 30, 2022, 61,650 shares of Series A Preferred Stock have been converted into a total of 6,165,000 shares of common stock of the Company, which leaves 4,500 shares of Series A Preferred Stock currently outstanding. As of June 30, 2022 and December 31, 2021, the Company has accrued a liability of $2,435 and $11,926, respectively, as dividends payable to holders of the Series A Convertible Preferred Stock. The Company fully intends on paying the annual dividends to the holders of the Series A Convertible Preferred Stock, and as such, the Company has accrued the liability on the Series A Convertible Preferred Stock. During the three and six months ended June 30, 2022, a total of $14,147 and $17,147, respectively, of cash dividends were paid to the Series A Convertible Preferred Stock holders. In comparison, during the three and six months ended June 30, 2021, a total of $99,462 and $199,186, respectively, of cash dividends were paid to the Series A Convertible Preferred Stock holders. All of the issuances of securities described above were restricted share issuances and deemed to be exempt from registration in reliance on Rule 506 of Regulation D and/or Section 4(2) of the Securities Act as transactions by an issuer not involving a public offering. Each investor represented that they were accredited investors, as defined in Rule 501 of Regulation D and, there was no general solicitation or general advertising used to market the securities. We made available to each investor disclosure of all aspects of our business, including providing the investor with press releases, access to our auditors, and other financial, business, and corporate information. All securities issued were restricted with an appropriate restrictive legend on certificates for notes and warrants issued stating that the securities (and underlying shares) have not been registered under the Securities Act and cannot be sold or otherwise transferred without an effective registration or an exemption therefrom. Issuance of Series B Convertible Preferred Stock The Company has authorized 5,000,000 shares of its Series B Convertible Preferred Stock. Each share of Series B Convertible Preferred Stock may be converted into one shares of common stock. The Series B Convertible Preferred Stock accrues dividends at the rate of 3% annually. The accrued Series B Convertible Preferred Stock dividends are cumulative. The Series B Convertible Preferred Stock dividends shall cease to accrue at such time as the Company’s Common Stock has closed at $7.00 per share or higher for 20 consecutive trading days after the first date that the Series B Registration Statement is effective, and there have been, on average, at least 25,000 shares traded on each of those 20 consecutive trading days. The Series B Convertible Preferred Stock have no voting rights. The holders of the Series B Convertible Preferred Stock shall have voluntary conversion rights. Shares of Series B Convertible Preferred Stock are subject to mandatory conversion (in the discretion of the Company) at such time as the Company’s common stock has closed at $9.00 per share or higher for 20 consecutive trading days after the first date that the Series B Registration Statement is effective, and there have been, on average, at least 50,000 shares traded on each of those 20 consecutive trading days. Between July 24, 2019 and December 5, 2019, the Company accepted subscriptions from accredited investors to purchase 100,000 shares of newly issued Series B Preferred Stock for an aggregate purchase price of $500,000 in cash. These 100,000 shares of Series B Preferred Stock are convertible at the option of the holder into 100,000 shares of newly issued common stock of the Company. The Series B Preferred Stock will receive an annual 3% dividend, and will be subject to mandatory conversion, under terms and conditions set forth in the Certificate of Designation of the Series B Preferred Stock. On August 2, 2019, the Company filed a Form S-1 Registration Statement covering the shares of newly issued common stock of the Company into which the Series B Convertible Preferred Stock can be converted. On July 6, 2020, the Company filed with the SEC an amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series B Preferred Stock may be converted. On December 10, 2020, the Company filed with the SEC a second amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series B Preferred Stock may be converted. On June 2, 2021, the Company filed with the SEC a third amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series B Preferred Stock may be converted. On July 2, 2021, the Company filed with the SEC a fourth amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series B Preferred Stock may be converted. On July 26, 2021, the Company filed with the SEC a fifth amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series B Preferred Stock may be converted. On August 19, 2021, the Company filed with the SEC a sixth amended Registration Statement on Form S-1/A covering 30% of the common stock shares into which the Series B Preferred Stock may be converted. The Registration Statement was approved deemed effective by the SEC on August 26, 2021. As of June 30, 2022, 60,000 shares of Series B Preferred Stock have been converted into a total of 60,000 shares of common stock of the Company, which leaves 40,000 shares of Series B Preferred Stock currently outstanding. As of June 30, 2022 and December 31, 2021, the Company has accrued a liability of $4,771 and $1,796, respectively as dividends payable to holders of the Series B Convertible Preferred Stock. The Company fully intends on paying the annual dividends to the holders of the Series B Convertible Preferred Stock, and as such, the Company has accrued the liability on the Series B Convertible Preferred Stock. During the three and six months ended June 30, 2022, no cash dividends were paid to the Series B Convertible Preferred Stock holders. In comparison, during the three and six months ended June 30, 2021, a total of $0 and $5,844, respectively, of cash dividends were paid to the Series B Convertible Preferred Stock holders. All of the issuances of securities described above were restricted share issuances and deemed to be exempt from registration in reliance on Rule 506 of Regulation D and/or Section 4(2) of the Securities Act as transactions by an issuer not involving a public offering. Each investor represented that they were accredited investors, as defined in Rule 501 of Regulation D and, there was no general solicitation or general advertising used to market the securities. We made available to each investor disclosure of all aspects of our business, including providing the investor with press releases, access to our auditors, and other financial, business, and corporate information. All securities issued were restricted with an appropriate restrictive legend on certificates for notes and warrants issued stating that the securities (and underlying shares) have not been registered under the Securities Act and cannot be sold or otherwise transferred without an effective registration or an exemption therefrom. Share-Based Compensation No share-based compensation expense was recognized during the three or six months ended June 30, 2022 or June 30, 2021. The following is a summary of share-based compensation, stock option and warrant activity as of June 30, 2022 and changes during the quarter then ended: Weighted-Average Weighted-Average Remaining Contractual Aggregate Intrinsic Shares Exercise Price Term (Years) Value Exercisable Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants Outstanding, April 1, 2022 4,877,198 $ 3.34 2.81 $ 5,264,178 Exercisable Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants Outstanding, June 30, 2022 2,882,198 $ 3.55 2.55 $ 2,834,897 Outstanding Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants, June 30, 2022 3,627,198 $ 3.85 2.57 $ 2,834,897 Stock Buy-back Transactions with a Non-Affiliate Stockholder and Retirement of 72,000 Shares of Common Stock Held in Treasury On November 24, 2020, LFTD Partners purchased 36,000 shares of common stock of the Company from a non-affiliate stockholder in a private transaction for $0.95 per share for a total of $34,200. These shares were held in treasury until August 31, 2021, which is when the Company retired them. The retirement of these shares was accounted for under the cost method of accounting. On January 8, 2021, LFTD Partners Inc. purchased 36,000 shares of common stock of the Company from a non-affiliate stockholder in a private transaction for $0.95 per share for a total of $34,200. These shares were held in treasury until August 31, 2021, which is when the Company retired them. The retirement of these shares was accounted for under the cost method of accounting. Exercise of Warrant by a Non-Affiliated Entity On February 19, 2022, an entity non-affiliated with the Company exercised an option to purchase 50,000 shares of unregistered common stock of the Company at an exercise price of $1.00 per share, which the entity paid. Stock Buy-back Transactions with a Non-Affiliate Stockholder Stock and Retirement of 100,000 Shares of Common Stock On March 1, 2022, LFTD Partners signed an agreement to purchase a total of 100,000 shares of common stock of the Company from a non-affiliate stockholder in a private transaction for $1.50 per share for a total purchase price of $150,000. On March 8, 2022, all 100,000 shares were transferred to the Company and immediately cancelled. Conversion of Series A Preferred Stock by a Non-Affiliated Shareholder On April 1, 2022, a non-affiliated shareholder of the Company converted his 1,000 shares of Series A Preferred Stock into 100,000 shares of unregistered common stock of the Company. Conversion of Series A Preferred Stock by a Non-Affiliated Shareholder On April 14, 2022, a non-affiliated shareholder of the Company converted 250 shares of his Series A Preferred Stock into 25,000 shares of unregistered common stock of the Company. |
CONTINGENT CONTRACTUAL OBLIGATI
CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS | 6 Months Ended |
Jun. 30, 2022 | |
CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS | |
Contingent Contractual Obligations And Commercial Commitments | NOTE 12 – CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS Operating and Finance Lease Right-of-Use Assets Lifted does not own any physical properties. Lease of Building Located at 5511 95th Ave, Kenosha, Wisconsin On December 18, 2020, Lifted as tenant entered into a Lease Agreement (the “Lease) with 95th Holdings, LLC (“Landlord”) for office, laboratory and warehouse space in a building located at 5511 95 th Landlord is an entity owned directly or indirectly by NWarrender, the Company’s Vice Chairman and COO, the CEO of Lifted, and the largest stockholder of the Company as the beneficial owner of 3,900,455 shares of common stock of the Company. Due to the potential conflict of interest, the terms and conditions of the Lease were negotiated on behalf of Lifted by Vincent J. Mesolella, the Lead Outside Director of the Company. Landlord and Lifted were represented by their own independent legal counsel in connection with the Lease. Under the terms of the Lease, NWarrender is able to benefit through his ownership of Landlord by Landlord’s receiving rent and eventually selling the Premises to Lifted. Lifted constructed improvements to the Premises including a clean room, and gradually moved into the Premises over the course of the first quarter of 2021. Under the terms of the “triple-net” Lease, starting on January 1, 2021, Lifted leased approximately 11,238 square feet at the Premises at $6.13 per square foot per year in base rent ($68,888.94 in 2021), which is subject to a 2% increase in base rent each year, plus certain operating expenses and taxes. The Lease will continue until midnight on the fifth Under the terms of the Omnibus Agreement, Lifted was obligated to purchase the Premises from Landlord on or before December 31, 2022 for a fixed purchase price of $1,375,000. As a result, as of December 31, 2021, the Company modified its methodology for accounting of this finance lease (the “Modification Date”), such that the only liability recognized as of December 31, 2021 was a current (within one year) liability, and there was no long-term liability recognized. An immaterial loss on lease modification of $1,446 was also recognized as of the Modification Date. The Finance Lease Right-of-Use Asset value was reduced to reflect the fixed purchase price agreed to under the Omnibus Agreement. Pursuant to the Acceleration Agreement, Lifted’s obligation to purchase the Premises from Landlord was delayed to on or before December 31, 2023. Prior to the signing of the Acceleration Agreement, the Finance Lease Right-of-Use Asset was to be amortized over its useful life (39 years) on a prospective basis from the Modification Date. That is, the Finance Lease Right-of-Use Asset was previously amortized over the lease term, but given mandatory purchase by December 31, 2022, the Finance Lease Right-of-Use Asset will be amortized over 39 years starting on the Modification Date. As a result of the signing of the Acceleration Agreement, the accounting for the Finance Lease Right-of-Use Asset will be adjusted accordingly. Lease of Space Located at 8920 58th Place, Suite 850, Kenosha, Wisconsin On September 23, 2021, Lifted entered into a Lease Agreement (the “58 th th th The term of the 58 th th th Under the terms of the 58 th th Rent Schedule Date Base Monthly Rent 10/01/2021 – 09/30/2022 $ 2,395.84 10/01/2022 – 09/30/2023 $ 2,467.72 10/01/2023 – 09/30/2024 $ 2,541.75 Lease of Space Located at 8910 58th Place, Suites 600 and 700, Kenosha, Wisconsin On November 17, 2021, Lifted entered into a lease agreement with TI for office and warehouse space located at 8910 58th Place, Suites 600 & 700, Kenosha, WI 53144 (the “Second 58 th th The term of the Second 58 th th th th Under the terms of the Second 58 th Rent Schedule Date Base Monthly Rent 01/01/2022 – 12/31/2022 $ 4,000.00 01/01/2023 – 12/31/2023 $ 4,120.00 01/01/2024 – 12/31/2024 $ 4,243.60 01/01/2025 – 12/31/2025 $ 4,370.91 01/01/2026 – 12/31/2026 $ 4,502.34 Lease of Space Located at 9560 58th Place Suite 360, Kenosha, Wisconsin On May 31, 2022, Lifted entered into another lease agreement with TI for office and warehouse space located at 9560 58th Place, Suite 360, Kenosha, WI 53144 (the “Third 58 th th The term of the Third 58 th th th Under the terms of the Third 58 th Rent Schedule Date Base Monthly Rent 07/01/2022 – 06/30/2023 $ 5,493.25 07/01/2023 – 06/30/2024 $ 5,630.58 07/01/2024 – 06/30/2025 $ 5,771.35 07/01/2025 – 06/30/2026 $ 5,915.63 07/01/2026 – 06/30/2027 $ 6,063.52 Sublease of Space Located at 2701-09 West Fulton PH, Chicago, Illinois 60612 On July 6, 2022, Lifted entered into a sublease for office space in Chicago, Illinois located at 2701-09 West Fulton PH, Chicago, Illinois 60612. The sublease costs $3,000 per month, plus supplemental lease related charges such as real estate taxes and common expenses of the property that we anticipate will be commercially typical costs. The sublease is retroactively effective as of June 1, 2022 and for a five-month term that extends to through October 31, 2022. The purpose of the sublease is to make available office space for the members of Lifted’s sales team who live in Chicago. These salespeople were spending significant time in their cars commuting from Chicago to Kenosha. The sublessor is one of our affiliates, Bill McLaughlin, Lifted’s Chief Strategy Officer. The sublease is structured so that Mr. McLaughlin's lease payment obligations to the landlord are passed on to Lifted on a dollar-for-dollar basis, such that Mr. McLaughlin does not realize a cashflow profit or loss from the sublease. Lease of Space in Zion, Illinois From June 1, 2018 through June 1, 2021, Lifted rented 3,300 square feet of space located in Zion, Illinois, for manufacturing, warehousing and office space. From June 1, 2021 through November 2021, Lifted leased such space on a month-to-month basis. From May 2020 until April 1, 2021, Lifted also temporarily used additional space located adjacent to its rented space in Zion, Illinois, and made payments in lieu of rent therefor. Third Party Facilities From time to time, the Company maintains inventory at third party copacker facilities around the USA. Balance Sheet Classification of Operating Lease Assets and Liabilities Asset Balance Sheet Line June 30 , 2022 Operating Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $40,857 Non-Current Assets $ 266,625 Liability Balance Sheet Line June 30 , 2022 Operating Lease Liabilities Current Liabilities $ 66,049 Non-Current Liabilities $ 202,714 Balance Sheet Classification of Finance Lease Assets and Liabilities Asset Balance Sheet Line June 30 , 2022 Finance Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $277,549 Non-Current Assets $ 1,296,000 Liability Balance Sheet Line March 31, 2022 Finance Lease Liabilities Current Liabilities $ (18,017 ) Non-Current Liabilities $ 1,362,020 Lease Costs The table below summarizes the components of lease costs for the following periods: Lease Cost: Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 Finance lease expense: Amortization of Right-of-Use Assets $ 12,337 $ 12,337 Interest on lease liabilities 11,232 $ 13,224 Operating lease expense 20,147 $ 3,200 Total $ 43,716 $ 28,761 Lease Cost: Six Months Ended June 30, 2022 Six Months Ended June 30, 2021 Finance lease expense: Amortization of Right-of-Use Assets $ 24,673 $ 24,673 Interest on lease liabilities 22,521 $ 26,485 Operating lease expense 40,295 $ 8,000 Total $ 87,489 $ 59,158 As described in Note 1, a portion of monthly overhead costs such as lease expense are allocated to finished goods. For example, monthly overhead costs such as payments for rent, utilities, insurance, and indirect labor are allocated to finished goods based on the estimated percentage cost toward the finished goods. Depreciation expense related to certain machinery and equipment is also allocated to finished goods. Maturity Analysis as of June 30, 2022: Finance Operating 2022 $ 35,133 $ 71,550 2023 1,445,970 146,018 2024 - 142,211 2025 - 122,573 2026 - 125,903 Thereafter - 36,381 Total 1,481,103 644,636 Less: Present value discount (137,099 ) (85,858 ) Lease liability $ 1,344,004 $ 558,778 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. Bonus to Lifted’s Chief Strategy Officer Lifted’s Chief Strategy Officer hired on July 1, 2021 has developed and implemented certain important strategies which have assisted Lifted’s efforts to increase its production, fulfillment and sales capabilities. This employee’s two-year agreement with Lifted entitles such Chief Strategy Officer to be paid an annual salary of $180,000 plus a bonus equal to 5% of total net sales for Lifted in excess of $6,000,000 per quarter. At June 30, 2022, the bonus payable to the Chief Strategy Officer totaled $538,825. This bonus is accrued for in the Accrued Liabilities account on the Consolidated Balance Sheets. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 6 Months Ended |
Jun. 30, 2022 | |
LEGAL PROCEEDINGS | |
Legal Proceedings | NOTE 13 – LEGAL PROCEEDINGS The Company The Company Lifted currently is involved in two pending lawsuits, as the plaintiff: (1) Lifted Liquids, Inc. v. Girish GPO, Inc., Girish Ray, and the Law Offices of Saul Roffe – (2) Lifted Liquids, Inc. v. Asad Awawdeh and Habib Cash and Carry SD, Inc. – Lifted currently is involved in one pending lawsuit, as the defendant: (1) Martha, Edgar v. Lifted Liquids – On February 1, 2022, Lifted entered into a settlement agreement that was mutually acceptable to the parties which has resolved the following lawsuit: (1) Lifted Liquids, Inc. v. Monkey Bones Distribution LLC (United States Circuit Court for Kenosha County of the State of Wisconsin; Civil Case No. 2021 CV 001196). In December 2021, our wholly-owned subsidiary Lifted sued distributor Monkey Bones Distribution, LLC for breach of contract for its failure to pay funds due under the agreement between the parties. In February 2022, the parties settled the litigation and agreed to mutual releases and dismissal of the lawsuit in exchange for $36,100.28 paid by Monkey Bones to Lifted Liquids and 15,000 custom gray scale empty disposable devices delivered to Monkey Bones by Lifted Liquids. The parties performed the settlement agreement and the matter was dismissed on February 3, 2022. |
COMPANY WIDE MANAGEMENT BONUS P
COMPANY WIDE MANAGEMENT BONUS POOL | 6 Months Ended |
Jun. 30, 2022 | |
COMPANY WIDE MANAGEMENT BONUS POOL | |
Company Wide Management Bonus Pool | NOTE 14 – COMPANY-WIDE MANAGEMENT BONUS POOL Pursuant to the employment agreements entered into between the Company and its three principal executives GJacobs, WJacobs and NWarrender 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. The company-wide Bonus Pool for 2021 was $1,559,334 (the “Modified 2021 Bonus Pool Amount”), which was the aggregate amount that was accrued for in LIFD’s financial statements covering the period from January 1, 2021 through September 30, 2021. The Modified 2021 Bonus Pool Amount was distributed during the quarter ended March 31, 2022. 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 $0.56 per share. As of June 30, 2022, the Company reported a company-wide bonus pool liability for 2022 of $2,121,532. In comparison, as of December 31, 2021, the Company reported a company-wide bonus pool accrual of $1,556,055. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
INCOME TAXES | |
Income Taxes | NOTE 15 – INCOME TAXES On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act reduced the U.S. federal statutory tax rate, broadened the corporate tax base through the elimination or reduction of deductions, exclusions, and credits, limited the ability of U.S. corporations to deduct interest expense, and transitioned to a territorial tax system which allows for the repatriation of foreign earnings to the U.S. with a 100% federal dividends received deduction prospectively. In addition, the Tax Act required a one-time transitional tax on foreign cash equivalents and previously unremitted earnings. Several of the new provisions enacted as part of the Tax Act require clarification and guidance from the U.S. Internal Revenue Service (“IRS”) and Treasury Department. These or other changes in U.S. tax laws could impact our profits, effective tax rate, and cash flows. Significant components on the Company’s income tax provision (benefit) for continuing operations is as follows: For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Current Domestic-Federal $ 798,829 $ - $ 1,381,447 $ - Domestic-State 382,298 - 661,123 - Texas Franchise Tax 13,948 56,528 Foreign - - - - 1,195,074 - 2,099,098 - Deferred Domestic-Federal $ 71,563 - 302,155 - Domestic-State $ 24,585 - 89,446 - Foreign - - - - 96,148 - 391,601 - Total Provision (Benefit) for Income Taxes $ 1,291,222 $ - $ 2,490,700 $ - 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 generally accepted accounting principles. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company’s tax returns are subject to examination for the years ended December 31, 2016 through 2021. A reconciliation of the amount of tax provision (benefit) computed using the U.S. federal statutory income tax rate to the provision (benefit) for income taxes on continuing operations is as follows: For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Domestic-Federal $ 947,243 $ 335,192 $ 1,817,540 $ 465,048 State tax benefit, net of federal benefit 282,842 96,459 624,409 133,828 Non-deductible expenses 4,609 3,085 6,581 4,200 Texas franchise tax 56,528 56,528 - Revision of prior years' deferred tax assets - - - - Change in estimated future income tax rates - - (131,918 ) - Change in valuation allowance - (434,737 ) 117,560 (603,075 ) Total Provision (Benefit) for Income Taxes $ 1,291,222 $ - $ 2,490,700 $ - Deferred tax assets and liabilities as of June 30, 2022 and December 31, 2021 were as follows: June 30, December 31, 2022 2021 Deferred Tax Assets: Stock-based compensation $ 2,831,970 $ 2,714,410 Accrued Related Party Expenses - 259,463 Impairment of SmplyLifted Note and Other Receivables - 105,124 Allowance for Doubtful Accounts 45,818 64,661 Other 13,396 8,725 Less: Valuation allowance (2,831,970 ) (2,714,410 ) Total Deferred Tax Assets 59,214 437,973 Deferred Tax Liabilities: Depreciation & Amortization (119,265 ) (105,143 ) Other - (1,279 ) Total Deferred Tax Liabilities (119,265 ) (106,422 ) Net Deferred Tax (Liabilities) Assets $ (60,051 ) $ 331,551 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2022 | |
SUBSEQUENT EVENTS | |
Subsequent Events | 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 and has noted the following subsequent events for disclosure purposes: Acceleration Agreement Prepayment of Remaining Secured Debt On July 5, 2022, we entered into an agreement (“Acceleration Agreement”) with NWarrender. Under the terms of the Acceleration Agreement, we were obligated to repay the remaining principal balance as follows: $1,374,999 on or before December 31, 2022, and $458,335 on or before December 31, 2024. Then, on July 8, 2022, we prepaid $916,666, along with accrued interest, and then, on July 25, 2022, we prepaid the remaining principal balance of $916,668 and accrued interest in full. The interest paid on July 8, 2022 and July 25, 2022 totaled $1,597. In conjunction with the full and final repayment of the $2.75M Note, the related security interest in all of the assets of the Company and Lifted to NWarrender was terminated. Obligation to Purchase Headquarters Building Toward the end of 2020, NWarrender, through his assigned entity 95th Holdings, LLC, purchased a building located at 5511 95th Avenue in Kenosha, Wisconsin (“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 95th Holdings, LLC, the parties agreed that our wholly owned subsidiary 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 an agreement with Warrender on December 30, 2021, the parties agreed to set the purchase price for the 5511 Building at $1,375,000. Prior to the Acceleration Agreement, Lifted had an obligation to complete the purchase of the 5511 Building on or before December 31, 2022. Pursuant to the Acceleration Agreement, the deadline to purchase the 5511 Building has been extended by one year to December 31, 2023. In addition, the Acceleration Agreement contains a provision that if we raise $5,000,000 of debt or equity capital, then Lifted or our designee shall purchase the 5511 Building from 95th Holdings, LLC at the agreed upon $1,375,000 purchase price within two days. Lease of Space Located at 9560 58th Place Suite 360, Kenosha, Wisconsin On May 31, 2022, Lifted entered into another lease agreement with TI for office and warehouse space located at 9560 58th Place, Suite 360, Kenosha, WI 53144 (the “Third 58 th th The term of the Third 58 th th th Under the terms of the Third 58 th Rent Schedule Date Base Monthly Rent 07/01/2022 – 06/30/2023 $ 5,493.25 07/01/2023 – 06/30/2024 $ 5,630.58 07/01/2024 – 06/30/2025 $ 5,771.35 07/01/2025 – 06/30/2026 $ 5,915.63 07/01/2026 – 06/30/2027 $ 6,063.52 Sublease of Space Located at 2701-09 West Fulton PH, Chicago, Illinois 60612 On July 6, 2022, Lifted entered into a sublease for office space in Chicago, Illinois located at 2701-09 West Fulton PH, Chicago, Illinois 60612. The sublease costs $3,000 per month, plus supplemental lease related charges such as real estate taxes and common expenses of the property that we anticipate will be commercially typical costs. The sublease is retroactively effective as of June 1, 2022 and for a five-month term that extends to through October 31, 2022. The purpose of the sublease is to make available office space for the members of Lifted’s sales team who live in Chicago. These salespeople were spending significant time in their cars commuting from Chicago to Kenosha. The sublessor is one of our affiliates, Bill McLaughlin, Lifted’s Chief Strategy Officer. The sublease is structured so that Mr. McLaughlin's lease payment obligations to the landlord are passed on to Lifted on a dollar-for-dollar basis, such that Mr. McLaughlin does not realize a cashflow profit or loss from the sublease. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | |
Consolidated Financial Statements | Consolidated Financial Statements |
Use Of Estimates | Use of Estimates |
Cash And Cash Equivalents | Cash and Cash Equivalents |
Fair Value Of Financial Instruments | Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820 defines fair value, establishes a framework for measuring fair value under 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 – Level 2 – Level 3 – Ablis Holding Company, Bendistillery Inc. and Bend Spirits, Inc. are not publicly traded, and as such their financial instruments are 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. |
Accounts Receivable | Accounts Receivable |
Inventory | Inventory June 30, 2022 December 31, 2021 Raw Goods $ 3,607,668 $ 2,927,727 Finished Goods $ 6,441,576 $ 882,217 Total Inventory $ 10,049,245 $ 3,809,944 Monthly overhead costs such as payments for rent, utilities, insurance, and indirect labor are allocated to finished goods based on the estimated percentage cost toward the finished goods. Depreciation expense related to certain machinery and equipment is also allocated to finished goods. At June 30, 2022, $97,574 of overhead costs were allocated to finished goods. In comparison, during the quarter ended June 30, 2021, $24,979 of overhead costs were allocated to finished goods. During the quarter ended June 30, 2022, $238,048 of obsolete and spoiled inventory was written off. In comparison, during the quarter ended June 30, 2021, $150,115 of obsolete and spoiled inventory was written off. The process of determining obsolete inventory during the quarter involved: 1) Identifying raw goods that would no longer be used in the manufacture of finished goods; 2) Identifying finished goods that would no longer be sold or that are slow moving; and 3) Valuing and expensing raw and finished goods that would no longer be sold. |
Fixed Assets | Fixed Assets 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 indication of impairment, management then 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. The fair value is estimated using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks. Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions. Long-lived assets held for sale are recorded at the lower of their carrying amount or fair value less cost to sell. |
Security Deposit | Security Deposits th The Company has paid security deposits for its leased facilities located at 8920 58 th th th The Company has also paid a security deposit for office space located at 2701-09 West Fulton PH, Chicago, Illinois 60612. The Company had paid a security deposit to its lessor for the Company’s former office, manufacturing and warehouse space in Zion, IL, that was rented on a month-to-month basis from June 1, 2021 through November 2021. The security deposit was written off at December 31, 2021. |
State Licensing Deposits | State Licensing Deposits |
Revenue | Revenue The majority of the Company’s sales are of branded products goods to distributors, wholesalers, and end consumers. A minority of the Company’s sales are of raw goods to manufacturers, distributors and wholesalers. The majority of the Company’s sales are to distributors, followed by the Company’s sales to wholesalers, and then the Company’s sales to end consumers. Distributors primarily sell Lifted’s products to vape and smoke shops, stores specializing in cannabinoid-infused products, convenience stores, gas stations, health food stores, and other outlets. 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 are to customers are recorded as a reduction to gross sales. Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience. 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 sent 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 sent to the customer. The Company will also send 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 mail the mistakenly ordered product back to the Company, and the Company will mail 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. As of June 30, 2022, the Company recorded a sales allowance of $71,484 for future discounts/refunds and product returns based on historical discounts/refunds . Disaggregation of Revenue During the quarter ended June 30, 2022, approximately 99.9% of the Company’s sales occurred inside of the United States of America. During the quarter ended June 30, 2021, nearly all of the Company’s sales occurred inside of the United States of America as well. The Company has considered providing disaggregation of revenue by information regularly reviewed by the chief operating decision maker for evaluating the financial performance of operating segments, such as type of good, geographical region, market or type of customer, type of contract, contract duration, timing of transfer of goods, and sales channels. Due to the rapidly evolving nature of our industry, the Company is constantly launching new products to stay ahead of trends, finding new sales channels, initiating new distribution networks and modifying the prices of its products. Shown below is a table showing the approximate disaggregation of historical revenue: Type of Sale For the three months ended June 30, 2022 % of Net Sales For the three months ended June 30, 2021 % of Net Sales For the six months ended June 30, 2022 % of Net Sales For the six months ended June 30, 2021 % of Net Sales Net sales of raw materials to customers $ 13,250 0.1 % $ 39,039 0.6 % $ 18,632 0.1 % $ 49,735 0.5 % Net sales of products to private label clients - 0.0 % 1,269,983 19.0 % 84,142 0.2 % 2,028,123 20.2 % Net sales of products to wholesalers 1,945,785 11.6 % 974,726 14.6 % 4,420,993 12.7 % 1,586,767 15.8 % Net sales of products to distributors 14,350,448 85.5 % 4,057,683 60.6 % 27,739,730 79.6 % 5,786,478 57.6 % Net sales of products to end consumers 467,019 2.8 % 353,714 5.3 % 2,601,882 7.5 % 597,312 5.9 % Net Sales $ 16,776,502 100.0 % $ 6,695,144 100.0 % $ 34,865,379 100.0 % $ 10,048,414 100.0 % |
Deferred Revenue | Amounts received from a customer before the purchased product is shipped to the customer is 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. Accounts receivable includes amounts associated with partially shipped orders, for which the unshipped portion is a contract asset. Contract assets represent invoiced but unfulfilled performance obligations. The table shown below represents the composition of deferred revenue between contract assets (invoiced but unfulfilled performance obligations) and deposits from customers from unfulfilled orders as of June 30, 2022 and December 31, 2021. June 30, 2022 December 31, 2021 Contract Assets (invoiced but unfulfilled performance obligations) $ 633,729 $ 1,650,258 Deposits from customers for unfulfilled orders $ - $ 524,135 Total Deferred Revenue $ 633,729 $ 2,174,393 |
Cost Of Goods Sold | Cost of Goods Sold |
Operating Expenses | Operating Expenses |
Income Taxes | Income Taxes |
Basic And Diluted Earnings (loss) Per Common Share | Basic and Diluted Earnings (Loss) Per Common Share For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Income/(Loss) $ 3,219,460 $ 1,596,154 $ 6,164,253 $ 2,214,512 Weighted average number of common shares outstanding: Basic 14,099,007 11,042,657 14,058,517 9,259,696 Diluted 15,906,205 14,381,105 15,865,715 12,598,144 Basic Net Income (Loss) per Common Share $ 0.23 $ 0.14 $ 0.44 $ 0.24 Diluted Net Income (Loss) per Common Share $ 0.20 $ 0.11 $ 0.39 $ 0.17 As of June 30, 2022, in addition to our outstanding common stock, we have issued (a) options to purchase 1,076,698 shares of common stock at $2.00 per share, (b) warrants to purchase 155,500 shares of common stock at $1.00 per share, (d) rights to purchase warrants to purchase 100,000 shares of common stock at $1.85 per share, and (e) warrants to purchase 2,295,000 shares of common stock at $5.00 per share. Regarding the aforementioned warrants to purchase 2,295,000 shares of our common stock at an exercise price of $5.00 per share: of the total, warrants to purchase 1,650,000 shares of our common stock are vested, while the remaining warrants to purchase 645,000 shares of our common stock are not vested and are subject to certain conditions and requirements. At June 30, 2022, the Company had Series A Preferred Stock outstanding convertible into 450,000 shares of common stock; these are included in the diluted earnings calculation. Also at June 30, 2022, the Company had Series B Preferred Stock outstanding convertible into 40,000 shares of common stock; these are not included in the diluted earnings calculation because the exercise price ($5.00/share) was higher than the stock closing price at June 30, 2022 ($4.00/share). In comparison, as of June 30, 2021, in addition to our outstanding common stock, there were (a) options to purchase 1,151,698 shares of common stock at $2.00 per share, (b) warrants to purchase 205,500 shares of common stock at $1 per share, (d) rights to purchase warrants to purchase 2,625,000 shares of common stock at between $0.01 and $1.85 per share, (e) financing warrants to purchase 31,250 shares of common stock at $0.03 per share, and (f) warrants to purchase 2,295,000 shares of common stock at $5.00 per share. Regarding the aforementioned rights to purchase warrants to purchase 2,625,000 shares of common stock at between $0.01 and $1.85 per share: as of June 30, 2021, of these, rights to purchase warrants to purchase 1.25 million shares of our common stock are not vested and are not exercisable until a performance contingency is met. Regarding the aforementioned warrants to purchase 2,295,000 shares of our common stock at an exercise price of $5.00 per share: as of June 30, 2021, of the total, warrants to purchase 1,650,000 shares of our common stock are vested, while the remaining warrants to purchase 645,000 shares of our common stock are not vested and are subject to certain conditions and requirements. Also outstanding at June 30, 2021, the Company had Series A Preferred Stock outstanding convertible into 575,000 shares of common stock; these are included in the diluted earnings calculation. At June 30, 2021, the Company also had Series B Preferred Stock outstanding convertible into 40,000 shares of common stock; these are also included in the diluted earnings calculation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes On August 5, 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) The Company is researching what other pronouncements may be applicable to the Company’s accounting and whether or not any other pronouncements should be adopted. |
Advertising And Marketing Expenses | Advertising and Marketing Expenses |
Compensated Absences | Compensated Absences |
Off Balance Sheet Arrangements | Off-Balance Sheet Arrangements |
Reclassifications | Reclassifications |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | |
Schedule Of Inventory | June 30, 2022 December 31, 2021 Raw Goods $ 3,607,668 $ 2,927,727 Finished Goods $ 6,441,576 $ 882,217 Total Inventory $ 10,049,245 $ 3,809,944 |
Schedule Of Historical Revenue | Type of Sale For the three months ended June 30, 2022 % of Net Sales For the three months ended June 30, 2021 % of Net Sales For the six months ended June 30, 2022 % of Net Sales For the six months ended June 30, 2021 % of Net Sales Net sales of raw materials to customers $ 13,250 0.1 % $ 39,039 0.6 % $ 18,632 0.1 % $ 49,735 0.5 % Net sales of products to private label clients - 0.0 % 1,269,983 19.0 % 84,142 0.2 % 2,028,123 20.2 % Net sales of products to wholesalers 1,945,785 11.6 % 974,726 14.6 % 4,420,993 12.7 % 1,586,767 15.8 % Net sales of products to distributors 14,350,448 85.5 % 4,057,683 60.6 % 27,739,730 79.6 % 5,786,478 57.6 % Net sales of products to end consumers 467,019 2.8 % 353,714 5.3 % 2,601,882 7.5 % 597,312 5.9 % Net Sales $ 16,776,502 100.0 % $ 6,695,144 100.0 % $ 34,865,379 100.0 % $ 10,048,414 100.0 % |
Schedule Of Deferred Revenue | June 30, 2022 December 31, 2021 Contract Assets (invoiced but unfulfilled performance obligations) $ 633,729 $ 1,650,258 Deposits from customers for unfulfilled orders $ - $ 524,135 Total Deferred Revenue $ 633,729 $ 2,174,393 |
Schedule Of Earnings Per Share, Basic And Diluted | For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Income/(Loss) $ 3,219,460 $ 1,596,154 $ 6,164,253 $ 2,214,512 Weighted average number of common shares outstanding: Basic 14,099,007 11,042,657 14,058,517 9,259,696 Diluted 15,906,205 14,381,105 15,865,715 12,598,144 Basic Net Income (Loss) per Common Share $ 0.23 $ 0.14 $ 0.44 $ 0.24 Diluted Net Income (Loss) per Common Share $ 0.20 $ 0.11 $ 0.39 $ 0.17 |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL INFORMATION Quarterly Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Quarterly Financial Information | LFTD PARTNERS INC. AND SUBSIDIARY LIFTED LIQUIDS, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) For the Three Months Ended June 30, 2022 For the Three Months Ended March 31, 2022 For the Three Months Ended December 31, 2021 For the Three Months Ended September 30, 2021 For the Three Months Ended June 30, 2021 For the Three Months Ended March 31, 2021 For the Three Months Ended December 31, 2020 For the Three Months Ended September 30, 2020 Net Sales $ 16,776,502 $ 18,088,877 $ 12,787,566 $ 8,820,952 $ 6,695,144 $ 3,353,270 $ 2,196,518 $ 1,509,437 Cost of Goods Sold 8,713,590 10,103,893 6,252,549 4,720,057 3,035,630 1,707,523 1,312,946 878,327 Gross Profit 8,062,912 7,984,984 6,535,017 4,100,895 3,659,515 1,645,747 883,572 631,110 Operating Expenses: Payroll, Consulting and Independent Contractor Expenses 1,811,678 1,854,151 1,719,305 803,796 791,000 307,524 211,851 275,149 Accrual for Company-Wide Management Bonus Pool 1,152,162 969,370 - 400,000 816,388 342,947 - - Management Bonuses - - 650,000 - - - - - Professional Fees 203,402 117,226 133,300 139,526 133,892 93,033 80,810 50,235 Bank Charges and Merchant Fees 132,470 133,036 103,647 104,485 118,055 66,570 27,824 14,702 Advertising and Marketing 110,797 105,601 100,446 86,438 98,133 52,027 22,384 26,670 Bad Debt Expense (311,209 ) 248,000 299,000 61,449 19,196 977 2,915 94,251 Depreciation and Amortization 6,706 2,703 5,805 16,344 26,215 41,783 5,245 5,092 Other Operating Expenses 528,608 382,462 278,024 170,820 99,773 80,394 56,902 51,289 Total Operating Expenses 3,634,615 3,812,549 3,289,526 1,782,858 2,102,652 985,254 407,931 517,388 Income From Operations 4,428,297 4,172,436 3,245,491 2,318,037 1,556,863 660,493 475,641 113,722 Other Income/(Expenses) Income/(Loss) From 50% membership interest in SmplyLifted LLC (FR3SH) - - (100,172 ) (44,858 ) (43,330 ) (7,211 ) (4,429 ) - Impairment of Investment in SimplyLifted - - (388,727 ) - - - - - Income from SmplyLifted for WCJ Labor - - 144 313 769 1,072 - - Loss on Lease Modification - - (1,445 ) - - - - - Interest Expense (26,928 ) (31,731 ) (35,314 ) (35,368 ) (35,398 ) (36,347 ) (19,281 ) (19,281 ) Dividend Income - - 2,495 - - - 2,495 - Warehouse Buildout Credits - - - - 600 600 600 600 Penalties 222 (1,952 ) (5,434 ) (2,162 ) - (450 ) - - Gain on Forgiveness of Debt - 5,026 521 - 151,147 - 81,272 - Settlement Income/Gain on Settlement 108,570 - - - - - 12,500 - Gain/(Loss) on Disposal of Fixed Assets - - - - (4,750 ) - - - Loss on Deposits - - (1,600 ) - (30,000 ) - - - Interest Income 521 491 694 217 253 202 733 782 Total Other Income/(Expenses) 82,385 (28,165 ) (528,837 ) (81,859 ) 39,292 (42,134 ) 73,890 (17,899 ) Income Before Provision for Income Taxes 4,510,682 4,144,270 2,716,654 2,236,178 1,596,154 618,359 549,531 95,823 Provision for Income Taxes (1,291,222 ) (1,199,478 ) (1,367,362 ) - - - - - Net Income Attributable to LFTD Partners Inc. common stockholders $ 3,219,460 $ 2,944,793 $ 1,349,292 $ 2,236,178 $ 1,596,154 $ 618,359 $ 549,531 $ 95,823 Earnings Per Common Share Attributable to LFTD Partners Inc. common shareholders: Basic $ 0.23 $ 0.21 $ 0.10 $ 0.17 $ 0.14 $ 0.08 $ 0.06 $ 0.01 Diluted $ 0.20 $ 0.18 $ 0.08 $ 0.14 $ 0.11 $ 0.04 $ 0.02 $ 0.01 Weighted average number of common shares outstanding Basic 14,099,007 14,017,578 14,005,567 13,015,717 11,042,657 7,456,925 6,463,301 6,460,236 Diluted 15,906,205 15,924,776 15,962,765 16,257,915 14,381,105 16,084,794 16,040,170 6,460,236 |
PROPERTY AND EQUIPMENT NET (Tab
PROPERTY AND EQUIPMENT NET (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
PROPERTY AND EQUIPMENT NET (Tables) | |
Schedule Of Property And Equipment | Asset Class June 30, 2022 December 31, 2021 Machinery & Equipment $ 266,742 $ 258,533 Leasehold Improvements $ 171,294 $ 152,985 Trade Show Booths $ 23,488 $ 23,488 Vehicles $ 75,047 $ 22,309 Computer Equipment $ 7,312 $ 7,312 Furniture & Fixtures $ 52,594 $ 46,553 Sub-total: $ 596,476 $ 511,180 Less: accumulated depreciation $ (135,669 ) $ (77,967 ) $ 460,808 $ 433,213 |
Schedule Of Estimated Useful Lives | Asset Class Estimated Useful Life Machinery & Equipment 60 months Leasehold Improvements 60 months Trade Show Booths 36 months Vehicles 60 months Computer Equipment 60 months Furniture & Fixtures 60 months |
SHAREHOLDERS EQUITY (Tables)
SHAREHOLDERS EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | |
Schedule Of Share-based Compensation, Stock Options And Warrant Activity | Weighted-Average Weighted-Average Remaining Contractual Aggregate Intrinsic Shares Exercise Price Term (Years) Value Exercisable Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants Outstanding, April 1, 2022 4,877,198 $ 3.34 2.81 $ 5,264,178 Exercisable Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants Outstanding, June 30, 2022 2,882,198 $ 3.55 2.55 $ 2,834,897 Outstanding Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants, June 30, 2022 3,627,198 $ 3.85 2.57 $ 2,834,897 |
CONTINGENT CONTRACTUAL OBLIGA_2
CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS (Tables) | |
Rent Schedule | Date Base Monthly Rent 10/01/2021 – 09/30/2022 $ 2,395.84 10/01/2022 – 09/30/2023 $ 2,467.72 10/01/2023 – 09/30/2024 $ 2,541.75 Date Base Monthly Rent 01/01/2022 – 12/31/2022 $ 4,000.00 01/01/2023 – 12/31/2023 $ 4,120.00 01/01/2024 – 12/31/2024 $ 4,243.60 01/01/2025 – 12/31/2025 $ 4,370.91 01/01/2026 – 12/31/2026 $ 4,502.34 Rent Schedule Date Base Monthly Rent 07/01/2022 – 06/30/2023 $ 5,493.25 07/01/2023 – 06/30/2024 $ 5,630.58 07/01/2024 – 06/30/2025 $ 5,771.35 07/01/2025 – 06/30/2026 $ 5,915.63 07/01/2026 – 06/30/2027 $ 6,063.52 |
Schedule Of Operating Lease Assets And Liabilities | Asset Balance Sheet Line June 30 , 2022 Operating Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $40,857 Non-Current Assets $ 266,625 Liability Balance Sheet Line June 30 , 2022 Operating Lease Liabilities Current Liabilities $ 66,049 Non-Current Liabilities $ 202,714 Asset Balance Sheet Line June 30 , 2022 Finance Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $277,549 Non-Current Assets $ 1,296,000 Liability Balance Sheet Line March 31, 2022 Finance Lease Liabilities Current Liabilities $ (18,017 ) Non-Current Liabilities $ 1,362,020 |
Schedule Of Lease Cost | Lease Cost: Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 Finance lease expense: Amortization of Right-of-Use Assets $ 12,337 $ 12,337 Interest on lease liabilities 11,232 $ 13,224 Operating lease expense 20,147 $ 3,200 Total $ 43,716 $ 28,761 Lease Cost: Six Months Ended June 30, 2022 Six Months Ended June 30, 2021 Finance lease expense: Amortization of Right-of-Use Assets $ 24,673 $ 24,673 Interest on lease liabilities 22,521 $ 26,485 Operating lease expense 40,295 $ 8,000 Total $ 87,489 $ 59,158 |
Schedule Of Lease Liability | Finance Operating 2022 $ 35,133 $ 71,550 2023 1,445,970 146,018 2024 - 142,211 2025 - 122,573 2026 - 125,903 Thereafter - 36,381 Total 1,481,103 644,636 Less: Present value discount (137,099 ) (85,858 ) Lease liability $ 1,344,004 $ 558,778 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
INCOME TAXES | |
Schedule Of Provision For Income Taxes | For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Current Domestic-Federal $ 798,829 $ - $ 1,381,447 $ - Domestic-State 382,298 - 661,123 - Texas Franchise Tax 13,948 56,528 Foreign - - - - 1,195,074 - 2,099,098 - Deferred Domestic-Federal $ 71,563 - 302,155 - Domestic-State $ 24,585 - 89,446 - Foreign - - - - 96,148 - 391,601 - Total Provision (Benefit) for Income Taxes $ 1,291,222 $ - $ 2,490,700 $ - For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Domestic-Federal $ 947,243 $ 335,192 $ 1,817,540 $ 465,048 State tax benefit, net of federal benefit 282,842 96,459 624,409 133,828 Non-deductible expenses 4,609 3,085 6,581 4,200 Texas franchise tax 56,528 56,528 - Revision of prior years' deferred tax assets - - - - Change in estimated future income tax rates - - (131,918 ) - Change in valuation allowance - (434,737 ) 117,560 (603,075 ) Total Provision (Benefit) for Income Taxes $ 1,291,222 $ - $ 2,490,700 $ - |
Schedule Of Deferred Tax Assets | June 30, December 31, 2022 2021 Deferred Tax Assets: Stock-based compensation $ 2,831,970 $ 2,714,410 Accrued Related Party Expenses - 259,463 Impairment of SmplyLifted Note and Other Receivables - 105,124 Allowance for Doubtful Accounts 45,818 64,661 Other 13,396 8,725 Less: Valuation allowance (2,831,970 ) (2,714,410 ) Total Deferred Tax Assets 59,214 437,973 Deferred Tax Liabilities: Depreciation & Amortization (119,265 ) (105,143 ) Other - (1,279 ) Total Deferred Tax Liabilities (119,265 ) (106,422 ) Net Deferred Tax (Liabilities) Assets $ (60,051 ) $ 331,551 |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
SUBSEQUENT EVENTS | |
Schedule of Subsequent Event | Date Base Monthly Rent 07/01/2022 – 06/30/2023 $ 5,493.25 07/01/2023 – 06/30/2024 $ 5,630.58 07/01/2024 – 06/30/2025 $ 5,771.35 07/01/2025 – 06/30/2026 $ 5,915.63 07/01/2026 – 06/30/2027 $ 6,063.52 |
DESCRIPTION OF THE BUSINESS O_2
DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||
Jul. 06, 2022 | Jul. 05, 2022 | Jun. 07, 2022 | Feb. 09, 2022 | Jan. 03, 2022 | Jul. 25, 2022 | Dec. 30, 2021 | Feb. 24, 2020 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 01, 2022 | Dec. 31, 2021 | May 18, 2021 | Apr. 09, 2019 | |
Repayment of principal and interest due amount | $ 3,750,000 | ||||||||||||||
Debt And Equity Offerings | $ 5,000,000 | ||||||||||||||
Repayment Of Promissory Note | $ 941,562 | $ 0 | |||||||||||||
NWarrender [Member] | |||||||||||||||
Total purchase consideration | $ 7,500,000 | ||||||||||||||
Cash payment | 3,750,000 | ||||||||||||||
Promissory note issued | $ 3,750,000 | ||||||||||||||
Interest rate | 2% | ||||||||||||||
Promissory note description | The $3.75M Note was secured by (a) a first lien security interest in all of the assets of the Company and Lifted; and (b) a pledge of: (i) all of the capital stock of Lifted; (ii) all of the common stock of Bendistillery, Bend Spirits and Ablis that is owned by the Company; and (iii) all of the capital stock of any other entity owned by the Company, Lifted or any of their subsidiaries, pursuant to a Collateral Stock Pledge Agreement between NWarrender, as Secured Party, and the Company and Lifted, as Pledgors. | ||||||||||||||
Purchase price of building | $ 1,375,000 | ||||||||||||||
Interest paid | $ 101,301 | 82,603 | |||||||||||||
NWarrender [Member] | Subsequent Event [Member] | |||||||||||||||
Acceleration agreement description | Under the terms of the Acceleration Agreement, we were obligated to repay the remaining principal balance as follows: $1,374,999 on or before December 31, 2022, and $458,335 on or before December 31, 2024. Then, on July 8, 2022, we prepaid $916,666, along with accrued interest | ||||||||||||||
LFTD PARTNERS INC [Member] | |||||||||||||||
Promissory Note | $ 3,750,000 | 3,750,000 | $ 3,750,000 | ||||||||||||
Payment of accrued interest | $ 29,384 | ||||||||||||||
Repayment Of Promissory Note | 1,000,000 | ||||||||||||||
Reloaned Of Promissory Note | 2,750,000 | ||||||||||||||
Principal Promissory Note | $ 1,833,334 | $ 2,750,000 | |||||||||||||
Description Security Interest | The $2,750,000 Promissory Note payable jointly by the Company and Lifted to NWarrender is secured by a perfected first lien security interest (the “Security Interest”) that encumbers all of the assets of the Company and Lifted | ||||||||||||||
Description Pay Off | The Company was obligated to pay off the principal of the $2.75M Note in five semi-annual payments to NWarrender of $458,333 and a sixth and final semi-annual payment to NWarrender of $458,335, in each case plus accrued interest, starting on June 30, 2022 | ||||||||||||||
Purchase Of Building | $ 1,375,000 | ||||||||||||||
Ownership Interests | 2.50% | 100% | 4.99% | ||||||||||||
Description Membership Interest | Prior to February 9, 2022, Lifted Made had a 50% membership interest in SmplyLifted LLC, which sells tobacco-free nicotine pouches under the brand name FR3SH (www.GETFR3SH.com). On February 9, 2022, Lifted Made sold its 50% membership interest in SmplyLifted LLC to Corner Vapory LLC, an affiliate of Nicholas S. Warrender (“NWarrender”), CEO of Lifted, for $1, plus ninety-nine percent (99%) of any and all payments and other consideration received or owed to Corner Vapory LLC in regard to SmplyLifted’s existing inventory of FR3SH brand tobacco-free nicotine pouches. Lifted has the option to re-purchase the 50% membership interest in SmplyLifted LLC from Corner Vapory LLC for $1,000 in cash at any time on or before December 31, 2032. | ||||||||||||||
Promissory Note Amount | $ 5,000,000 | ||||||||||||||
LFTD PARTNERS INC [Member] | Subsequent Event [Member] | |||||||||||||||
Repayment of promissory note | $ 916,668 | ||||||||||||||
Interest paid | $ 1,597 | ||||||||||||||
Sublease costs | $ 3,000 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) | ||
Raw Goods | $ 3,607,668 | $ 2,927,727 |
Finished Goods | 6,441,576 | 882,217 |
Total Inventory | $ 10,049,245 | $ 3,809,944 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | |
Percentage Of Net Sales | 100% | 100% | 100% | 100% | ||||||
Net Sales | $ 16,776,502 | $ 18,088,877 | $ 12,787,566 | $ 8,820,952 | $ 6,695,144 | $ 3,353,270 | $ 2,196,518 | $ 1,509,437 | $ 34,865,379 | $ 10,048,414 |
Customer [Member] | ||||||||||
Percentage Of Net Sales | 0.10% | 0.60% | 0.10% | 0.50% | ||||||
Net Sales | $ 13,250 | $ 39,039 | $ 18,632 | $ 49,735 | ||||||
Private Label Clients [Member] | ||||||||||
Percentage Of Net Sales | 0% | 19% | 0.20% | 20.20% | ||||||
Net Sales | $ 0 | $ 1,269,983 | $ 84,142 | $ 2,028,123 | ||||||
Wholesalers [Member] | ||||||||||
Percentage Of Net Sales | 11.60% | 14.60% | 12.70% | 15.80% | ||||||
Net Sales | $ 1,945,785 | $ 974,726 | $ 4,420,993 | $ 1,586,767 | ||||||
Distributors [Member] | ||||||||||
Percentage Of Net Sales | 85.50% | 60.60% | 79.60% | 57.60% | ||||||
Net Sales | $ 14,350,448 | $ 4,057,683 | $ 27,739,730 | $ 5,786,478 | ||||||
End Consumers [Member] | ||||||||||
Percentage Of Net Sales | 2.80% | 5.30% | 7.50% | 5.90% | ||||||
Net Sales | $ 467,019 | $ 353,714 | $ 2,601,882 | $ 597,312 |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) | ||
Contract Assets (invoiced But Unfulfilled Performance Obligations) | $ 633,729 | $ 1,650,258 |
Deposits From Customers For Unfulfilled Orders | 0 | 524,135 |
Total Deferred Revenue | $ 633,729 | $ 2,174,393 |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | |
DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. (Details Narrative) | ||||||||||
Net Income | $ 3,219,460 | $ 2,944,793 | $ 1,349,292 | $ 2,236,178 | $ 1,596,154 | $ 618,359 | $ 549,531 | $ 95,823 | $ 6,164,253 | $ 2,214,512 |
Weighted Average Number Of Basic Share Outstanding | 14,099,007 | 14,017,578 | 14,005,567 | 13,015,717 | 11,042,657 | 7,456,925 | 6,463,301 | 6,460,236 | 14,058,517 | 9,259,696 |
Weighted Average Number Of Diluted Shares Outstanding | 15,906,205 | 15,924,776 | 15,962,765 | 16,257,915 | 14,381,105 | 16,084,794 | 16,040,170 | 6,460,236 | 15,865,715 | 12,598,144 |
Basic Net Income/loss Per Share | $ 0.23 | $ 0.21 | $ 0.10 | $ 0.17 | $ 0.14 | $ 0.08 | $ 0.06 | $ 0.01 | $ 0.44 | $ 0.24 |
Diluted Net Income/loss Per Share | $ 0.20 | $ 0.18 | $ 0.08 | $ 0.14 | $ 0.11 | $ 0.04 | $ 0.02 | $ 0.01 | $ 0.39 | $ 0.17 |
BASIS OF PRESENTATION AND SIG_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | |
Issued Common Stock | 14,102,578 | 14,027,578 | 14,102,578 | |||||||
Allowances For Bad Debts | $ 162,392 | $ 239,101 | $ 162,392 | |||||||
Operating Expense | $ 3,634,615 | $ 3,812,549 | $ 3,289,526 | $ 1,782,858 | $ 2,102,652 | $ 985,254 | $ 407,931 | $ 517,388 | $ 7,447,164 | $ 3,087,907 |
Series B Preferred Stock | ||||||||||
A Preferred Stock Outstanding Convertible Into Common Stock | 40,000 | 40,000 | ||||||||
Exercise Price | $ 5 | $ 5 | ||||||||
Stock Closing Price | $ 4 | $ 4 | ||||||||
Series A Preferred Stock [Member] | ||||||||||
Aggregate Purchase Price | 500,000 | |||||||||
Issued Common Stock | 645,000 | |||||||||
A Preferred Stock Outstanding Convertible Into Common Stock | 575,000 | 1,650,000 | 575,000 | |||||||
Stock Option | ||||||||||
Options To Purchase | 1,076,698 | 1,151,698 | ||||||||
Common Stock Per Share | $ 2 | |||||||||
Stock Option | Minimum [Member] | ||||||||||
Ercisable | $ 0.01 | |||||||||
Stock Option | Maximum [Member] | ||||||||||
Ercisable | $ 2 | |||||||||
Warrant One [Member] | ||||||||||
Common Stock Per Share | $ 1 | |||||||||
Warrant To Purchase | 155,500 | 2,625,000 | ||||||||
Ercisable Maximum | $ 1.85 | |||||||||
Ercisable Minimum | 0.01 | |||||||||
Warrant Two [Member] | ||||||||||
Common Stock Per Share | $ 1.85 | $ 5 | ||||||||
Warrant To Purchase | 100,000 | 2,295,000 | ||||||||
Warrant Three [Member] | ||||||||||
Common Stock Per Share | $ 5 | $ 5 | ||||||||
Warrant To Purchase | 2,295,000 | 450,000 | ||||||||
Warrant Four [Member] | ||||||||||
Common Stock Per Share | $ 1.85 | |||||||||
Warrant To Purchase | 1,350,000 | 1,250,000 | ||||||||
Aforementioned Warrants | 2,295,000 | |||||||||
Common Stock Per Share One | $ 5 | |||||||||
Ercisable | $ 5 | |||||||||
Financing Warrant | ||||||||||
Warrant To Purchase | 31,250 | |||||||||
Ercisable | $ 0.03 | |||||||||
Lifted Merger Agreement [Member] | ||||||||||
Promissory Note | $ 2,750,000 | $ 2,750,000 | ||||||||
Preferred Stock | ||||||||||
Warrant To Purchase | 1,650,000 | |||||||||
Fdic Limit | 250,000 | $ 250,000 | $ 250,000 | |||||||
Allowances For Bad Debts | 162,392 | 239,101 | 162,392 | |||||||
Fixed Assets Capitalized | 2,500 | 2,500 | ||||||||
Fixed Assets Expensed | $ 2,500 | 2,500 | ||||||||
Packaging Materials | 561,417 | |||||||||
Inventory Write Down | 238,048 | $ 150,115 | ||||||||
Sale allownace | 71,484 | |||||||||
Cost of goods sold | 238,048 | 150,115 | ||||||||
Advertising Cost | $ 110,797 | $ 98,133 | 216,397 | 150,160 | ||||||
Operating Expense | 3,634,615 | 2,102,652 | ||||||||
Pto Accrual | 22,300 | |||||||||
Overhead Cost | $ 97,574 | $ 24,979 | ||||||||
Remaining Warrants To Purchase | 645,000 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL INFORMATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | |
SELECTED QUARTERLY FINANCIAL INFORMATION (Details) | ||||||||||
Net Sales | $ 16,776,502 | $ 18,088,877 | $ 12,787,566 | $ 8,820,952 | $ 6,695,144 | $ 3,353,270 | $ 2,196,518 | $ 1,509,437 | $ 34,865,379 | $ 10,048,414 |
Cost Of Goods Sold | 8,713,590 | 10,103,893 | 6,252,549 | 4,720,057 | 3,035,630 | 1,707,523 | 1,312,946 | 878,327 | 18,817,483 | 4,743,152 |
Gross Profit | 8,062,912 | 7,984,984 | 6,535,017 | 4,100,895 | 3,659,515 | 1,645,747 | 883,572 | 631,110 | 16,047,896 | 5,305,262 |
Operating Expenses: | ||||||||||
Payroll, Consulting And Independent Contractor Expenses | 1,811,678 | 1,854,151 | 1,719,305 | 803,796 | 791,000 | 307,524 | 211,851 | 275,149 | 3,665,829 | 1,098,524 |
Accrual For Company-wide Management Bonus Pool | 1,152,162 | 969,370 | 0 | 400,000 | 816,388 | 342,947 | 0 | 0 | ||
Management Bonuses | 0 | 0 | 650,000 | 0 | 0 | 0 | 0 | 0 | ||
Professional Fees | 203,402 | 117,226 | 133,300 | 139,526 | 133,892 | 93,033 | 80,810 | 50,235 | 320,629 | 226,925 |
Bank Charges And Merchant Fees | 132,470 | 133,036 | 103,647 | 104,485 | 118,055 | 66,570 | 27,824 | 14,702 | 265,507 | 184,625 |
Advertising And Marketing | 110,797 | 105,601 | 100,446 | 86,438 | 98,133 | 52,027 | 22,384 | 26,670 | 216,397 | 150,160 |
Bad Debt Expense | (311,209) | 248,000 | 299,000 | 61,449 | 19,196 | 977 | 2,915 | 94,251 | (63,209) | 20,173 |
Depreciation And Amortization | 6,706 | 2,703 | 5,805 | 16,344 | 26,215 | 41,783 | 5,245 | 5,092 | 9,409 | 67,998 |
Other Operating Expenses | 528,608 | 382,462 | 278,024 | 170,820 | 99,773 | 80,394 | 56,902 | 51,289 | ||
Total Operating Expenses | 3,634,615 | 3,812,549 | 3,289,526 | 1,782,858 | 2,102,652 | 985,254 | 407,931 | 517,388 | 7,447,164 | 3,087,907 |
Income From Operations | 4,428,297 | 4,172,436 | 3,245,491 | 2,318,037 | 1,556,863 | 660,493 | 475,641 | 113,722 | 8,600,733 | 2,217,355 |
Other Income/(expenses) | ||||||||||
Income/(loss) From 50% Membership Interest In Smplylifted Llc (fr3sh) | 0 | 0 | (100,172) | (44,858) | (43,330) | (7,211) | (4,429) | 0 | 0 | (50,541) |
Impairment Of Investment In Smplylifted | 0 | 0 | (388,727) | 0 | 0 | 0 | 0 | 0 | ||
Income From Smplylifted For Wcj Labor | 0 | 0 | 144 | 313 | 769 | 1,072 | 0 | 0 | 0 | 1,841 |
Loss On Lease Modification | 0 | 0 | (1,445) | 0 | 0 | 0 | 0 | 0 | ||
Interest Expense | (26,928) | (31,731) | (35,314) | (35,368) | (35,398) | (36,347) | (19,281) | (19,281) | (58,658) | (71,745) |
Dividend Income | 0 | 0 | 2,495 | 0 | 0 | 0 | 2,495 | 0 | ||
Warehouse Buildout Credits | 0 | 0 | 0 | 0 | 600 | 600 | 600 | 600 | 0 | 1,200 |
Penalties | 222 | (1,952) | (5,434) | (2,162) | 0 | (450) | 0 | 0 | 1,730 | 450 |
Gain On Forgiveness Of Debt | 0 | 5,026 | 521 | 0 | 151,147 | 0 | 81,272 | 0 | 5,026 | 151,147 |
Settlement Income/gain On Settlement | 108,570 | 0 | 0 | 0 | 0 | 0 | 12,500 | 0 | ||
Gain(loss) On Disposal Of Fixed Assets | 0 | 0 | 0 | 0 | (4,750) | 0 | 0 | 0 | 0 | (4,750) |
Loss On Deposits | 0 | 0 | (1,600) | 0 | (30,000) | 0 | 0 | 0 | 0 | (30,000) |
Interest Income | 521 | 491 | 694 | 217 | 253 | 202 | 733 | 782 | ||
Total Other Income/(expenses) | 82,385 | (28,165) | (528,837) | (81,859) | 39,292 | (42,134) | 73,890 | (17,899) | ||
Income/(loss) Before Provision For Income Taxes | 4,510,682 | 4,144,270 | 2,716,654 | 2,236,178 | 1,596,154 | 618,359 | 549,531 | 95,823 | ||
Provision For Income Taxes | (1,291,222) | (1,199,478) | (1,367,362) | 0 | 0 | 0 | 0 | 0 | ||
Net Income | $ 3,219,460 | $ 2,944,793 | $ 1,349,292 | $ 2,236,178 | $ 1,596,154 | $ 618,359 | $ 549,531 | $ 95,823 | $ 6,164,253 | $ 2,214,512 |
Basic Net Income (loss) Per Common Share | $ 0.23 | $ 0.21 | $ 0.10 | $ 0.17 | $ 0.14 | $ 0.08 | $ 0.06 | $ 0.01 | $ 0.44 | $ 0.24 |
Diluted Net Income (loss) Per Common Share | $ 0.20 | $ 0.18 | $ 0.08 | $ 0.14 | $ 0.11 | $ 0.04 | $ 0.02 | $ 0.01 | $ 0.39 | $ 0.17 |
Weighted Average Number Of Common Shares Outstanding: | ||||||||||
Basic | 14,099,007 | 14,017,578 | 14,005,567 | 13,015,717 | 11,042,657 | 7,456,925 | 6,463,301 | 6,460,236 | 14,058,517 | 9,259,696 |
Diluted | 15,906,205 | 15,924,776 | 15,962,765 | 16,257,915 | 14,381,105 | 16,084,794 | 16,040,170 | 6,460,236 | 15,865,715 | 12,598,144 |
RECEIPT OF LOANS UNDER THE EC_2
RECEIPT OF LOANS UNDER THE ECONOMIC INJURY DISASTER LOAN PROGRAM AND THE PAYCHECK PROTECTION PROGRAM (Details Narative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Apr. 14, 2020 | Apr. 20, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Mar. 31, 2021 | |
Accrued Interest | $ 1,443 | ||||
Forgiveness Of The Loan | $ 82 | ||||
Interest Payable On The Ppp Loan | $ (1,525) | ||||
Ppp Loan | $ (149,622) | ||||
Gain On The Forgiveness | $ 151,147 | ||||
BMO Harris Bank [Member] | |||||
Principal Amount | $ 149,622 | ||||
Maturity Date | Apr. 14, 2022 | ||||
Interest Rate | 1% |
RISKS AND UNCERTAINTIES (Detail
RISKS AND UNCERTAINTIES (Details Narrative) - USD ($) | 6 Months Ended | 10 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2020 | Feb. 14, 2022 | Dec. 31, 2021 | |
Debt | $ 5,000,000 | ||||
Purchase property | 1,375,000 | ||||
Research and development | 19,800 | ||||
Accumulated Deficit | (5,260,977) | $ (11,414,602) | |||
Accrued Bonus | $ 2,121,532 | $ 1,556,055 | $ 1,556,055 | ||
Diluted Earnings Per Share Of Common Stock | $ 0.56 | ||||
Cost Of Research And Development | $ 100,000 | ||||
Five Vendors [Member] | Supplies [Member] | |||||
Concentration Risk, Percentage | 73% | 74% | 74% | ||
No Customers [Member] | Sales [Member] | |||||
Concentration Risk, Percentage | 50% | 32% | 8% | ||
Nicholas S Warrender [Member] | |||||
Financial Obligations | $ 2,750,000 | ||||
Promisssory Note | $ 2,750,000 | ||||
Promissory Note Accruing Interest Percentage | 2.50% | ||||
Omnibus Agreement [Member] | Nicholas S Warrender [Member] | |||||
Accrued Bonus | $ 16,575 | ||||
Prefered Stock, Dividend Rate | 3% | ||||
Obligation To Purchase | $ 1,375,000 | ||||
Additional Bonus | 500,000 | ||||
GJacobs [Member] | |||||
Accrued Bonus | 166,667 | ||||
WJacobs [Member] | |||||
Accrued Bonus | $ 166,667 |
THE COMPANYS INVESTMENTS (Detai
THE COMPANYS INVESTMENTS (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 09, 2022 | Sep. 22, 2020 | Apr. 30, 2019 | |
SmplyLifted LLC | ||||||
Investment | $ 200,000 | $ 195,571 | ||||
Loss | $ 195,571 | $ 195,571 | $ 4,429 | |||
Ownership Interests | 50% | 50% | 50% | 50% | 50% | |
Receivables | $ 388,727 | |||||
Cash | $ 1,000 | |||||
Lifted Amount For Agreement | $ 1 | |||||
Payment Percentage | 99% | |||||
Bendistillery | ||||||
Ownership Interests | 4.99% | |||||
Purchse Price | $ 1,896,200 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Gross Property And Equipment | $ 596,476 | $ 511,180 |
Less: Accumulated Depreciation | (135,669) | (77,967) |
Net Property And Equipment | 460,808 | 433,213 |
Leasehold Improvements [Member] | ||
Gross Property And Equipment | 171,294 | 152,985 |
Trade Show Booth [Member] | ||
Gross Property And Equipment | 23,488 | 23,488 |
Vehicles [Member] | ||
Gross Property And Equipment | 75,047 | 22,309 |
Computer Equipment [Member] | ||
Gross Property And Equipment | 7,312 | 7,312 |
Furniture and Fixtures [Member] | ||
Gross Property And Equipment | 52,594 | 46,553 |
Machinery and Equipment [Member] | ||
Gross Property And Equipment | $ 266,742 | $ 258,533 |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Details 1) | 6 Months Ended |
Jun. 30, 2022 | |
Leasehold Improvements [Member] | |
Estimated Useful Life | 60 years |
Trade Show Booth [Member] | |
Estimated Useful Life | 36 years |
Vehicles [Member] | |
Estimated Useful Life | 60 years |
Computer Equipment [Member] | |
Estimated Useful Life | 60 years |
Furniture and Fixtures [Member] | |
Estimated Useful Life | 60 years |
Machinery and Equipment [Member] | |
Estimated Useful Life | 60 years |
PROPERTY AND EQUIPMENT, NET (_3
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
PROPERTY AND EQUIPMENT NET (Tables) | ||||
Depreciation Expense | $ 16,402 | $ 13,461 | $ 31,575 | $ 42,490 |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) - USD ($) | Dec. 31, 2021 | Mar. 31, 2021 |
DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. (Details Narrative) | ||
Imputed Interest Receivable | $ 580 | $ 149 |
Loan To Smplylifted Llc | $ 387,500 | $ 387,500 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
INTANGIBLE ASSETS, NET (Details Narrative) | ||||
Amortization Expenses | $ 347 | $ 417 | $ 693 | $ 834 |
Finite-lived Intangible Asset, Useful Life | 32 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||
Jun. 07, 2022 USD ($) | Jan. 03, 2022 USD ($) | Dec. 30, 2021 USD ($) | Feb. 29, 2020 USD ($) shares | Jun. 30, 2022 USD ($) integer $ / shares | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) integer $ / shares shares | Jun. 30, 2021 USD ($) | Mar. 31, 2022 $ / shares | Feb. 14, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 01, 2021 integer | Apr. 05, 2021 USD ($) | Feb. 10, 2021 USD ($) | Feb. 02, 2021 USD ($) | Jan. 01, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 01, 2020 USD ($) | Feb. 24, 2020 USD ($) $ / shares | |
Repaid Promissory Note | $ 3,750,000 | ||||||||||||||||||
Sublease costs | $ 3,000 | ||||||||||||||||||
Purchase property | 1,375,000 | ||||||||||||||||||
Bonus Payable | $ 2,121,532 | $ 2,121,532 | $ 1,556,055 | $ 1,556,055 | |||||||||||||||
Exercise Price | $ / shares | $ 3.55 | $ 3.55 | $ 3.34 | ||||||||||||||||
Vincent J Mesolella | |||||||||||||||||||
Payment For Commission | $ 40,000 | ||||||||||||||||||
Director Fees Received | 4,000 | ||||||||||||||||||
Gerard M. Jacobs | |||||||||||||||||||
Payment For Commission | $ 143,713 | ||||||||||||||||||
Interest Payable | 4,789 | ||||||||||||||||||
Accrued Interest Rate | 2% | ||||||||||||||||||
Deferred Compensation | $ 58,439 | ||||||||||||||||||
Bonus Payable | $ 350,000 | ||||||||||||||||||
Prepaid Consulting Fee | $ 350,000 | ||||||||||||||||||
Joshua A. Bloom | |||||||||||||||||||
Payment For Commission | 20,000 | ||||||||||||||||||
Director Fees Received | 4,000 | ||||||||||||||||||
Richard E. Morrissy | |||||||||||||||||||
Director Fees Received | 4,000 | ||||||||||||||||||
James S. Jacobs | |||||||||||||||||||
Director Fees Received | 4,000 | ||||||||||||||||||
Kevin J. Rocio | |||||||||||||||||||
Director Fees Received | 4,000 | ||||||||||||||||||
Robert T Warrender III [Member] | |||||||||||||||||||
Payment For Commission | $ 20,961 | $ 15,410 | $ 54,384 | 17,482 | |||||||||||||||
William C Jacobs | |||||||||||||||||||
Payment For Commission | 152,341 | ||||||||||||||||||
Interest Payable | 1,984 | ||||||||||||||||||
Accrued Interest Rate | 2% | ||||||||||||||||||
Deferred Compensation | $ 58,439 | ||||||||||||||||||
Bonus Payable | 300,000 | ||||||||||||||||||
Prepaid Consulting Fee | $ 350,000 | ||||||||||||||||||
NintyFiveHoldingsLLC [Member] | |||||||||||||||||||
Purchase Price | $ 68,888 | ||||||||||||||||||
Rented Space | integer | 11,238 | 11,238 | 3,300 | ||||||||||||||||
Rented Space Per Foot | 6.13 | ||||||||||||||||||
Increase In Base Rent | 2% | ||||||||||||||||||
Beneficial Common Stock | shares | 3,900,455 | ||||||||||||||||||
Lifted Paid Rent | $ 17,567 | 17,222 | |||||||||||||||||
Property taxes | 2,383 | ||||||||||||||||||
Corner Vapory | |||||||||||||||||||
Purchase | $ 24,873 | 12,036 | 31,104 | 14,834 | |||||||||||||||
Receivable | 24,873 | 909 | |||||||||||||||||
Robert T Warrender II [Member] | |||||||||||||||||||
Wages Paid | 13,846 | 23,077 | |||||||||||||||||
Reimbursements expense | 950 | 950 | |||||||||||||||||
Shipping Costs | 7,377 | 32,536 | |||||||||||||||||
Liquid Event Marketing [Member] | |||||||||||||||||||
Purchase property | 118,612 | ||||||||||||||||||
Payment To Related Party | 26,465 | 26,465 | |||||||||||||||||
Total | $ 7,966 | 7,966 | |||||||||||||||||
Purchase services | 6,470 | 6,470 | $ 54,829 | ||||||||||||||||
NWarrender [Member] | |||||||||||||||||||
Prepayment of promissory note | $ 916,666 | ||||||||||||||||||
Promissory note secured | $ 375,000,000,000 | ||||||||||||||||||
Promissory Note Payable | 2,750,000 | 2,750,000 | |||||||||||||||||
Promissory Note Pay Off Principal | 2,750,000 | 2,750,000 | |||||||||||||||||
Five Semi Annual Payments | 458,333 | 458,333 | |||||||||||||||||
Final Semi-annual Payment | 458,335 | 458,335 | |||||||||||||||||
Accrued Interest Payable | 29,384 | 16,575 | 16,575 | ||||||||||||||||
Promissory Note | 3,750,000 | 3,750,000 | |||||||||||||||||
Equity capital | 5,000,000 | 5,000,000 | |||||||||||||||||
Purchase property | 1,375,000 | ||||||||||||||||||
Payment For Commission | 680,000 | ||||||||||||||||||
Interest Payable | 101,301 | 82,603 | |||||||||||||||||
Accrued Interest Rate | 2% | ||||||||||||||||||
Principal Amount | 2,750,000 | $ 3,750,000 | |||||||||||||||||
Remaining Amount | 1,833,334,000,000 | ||||||||||||||||||
Remaining principal balance | 1,374,999,000,000 | ||||||||||||||||||
NWarrender [Member] | December 31 2024 [Member] | |||||||||||||||||||
Remaining principal balance | 458,335,000,000 | ||||||||||||||||||
NWarrender [Member] | July 8, 2022 [Member] | |||||||||||||||||||
Prepayment of promissory note | 916,666 | ||||||||||||||||||
NWarrender [Member] | July 25 2022 [Member] | |||||||||||||||||||
Total amount | 1,597 | ||||||||||||||||||
Repayment of promissory note | $ 916,668 | ||||||||||||||||||
SmplyLifted LLC | |||||||||||||||||||
Reimbursement | 769 | 769 | |||||||||||||||||
Due To Related Party | $ 9,719 | $ 9,719 | $ 450 | ||||||||||||||||
Payment To Related Party | $ 9,719 | $ 450 | |||||||||||||||||
Warrender Enterprise | |||||||||||||||||||
Exercise Price | $ / shares | $ 5 | ||||||||||||||||||
Warrants Issued | shares | 1,820,000 | ||||||||||||||||||
Re-loan | $ 2,750,000 | ||||||||||||||||||
Cash Consideration | $ 3,750,000 | ||||||||||||||||||
Stock Consideration | shares | 3,900,455 | ||||||||||||||||||
Warrender Enterprise | Unregistered common stock | |||||||||||||||||||
Stock Consideration | shares | 645,000 | ||||||||||||||||||
Warrender Enterprise | Secured Promissory Note | |||||||||||||||||||
Cash Consideration | $ 3,750,000 |
SHAREHOLDERS EQUITY (Details)
SHAREHOLDERS EQUITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2022 | Jun. 30, 2022 | |
SHAREHOLDERS EQUITY (Details) | ||
Share-based Compensation Arrangement By Share-based Payment Award, Options, Exercisable, Number | 4,877,198 | 2,882,198 |
Share-based Compensation Arrangement By Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 3.34 | $ 3.55 |
Share-based Compensation Arrangement By Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 2 years 9 months 21 days | 2 years 6 months 18 days |
Share-based Compensation Arrangement By Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 5,264,178 | $ 2,834,897 |
Share-based Compensation Arrangement By Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 3.85 | |
Share-based Compensation Arrangement By Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 2 years 6 months 25 days | |
Share-based Compensation Arrangement By Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 2,834,897 | |
Outstanding Options Rights To Purchase Warrants To Purchase Common Stock And Financing Warrant | 3,627,198 |
SHAREHOLDERS EQUITY (Details Na
SHAREHOLDERS EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | ||||||||||
Mar. 02, 2022 | Jan. 08, 2021 | Feb. 19, 2022 | Nov. 24, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | May 13, 2019 | Dec. 05, 2019 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 08, 2022 | Mar. 01, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | |
Stock Issued During Period, Value, New Issues | $ 125 | $ 6,100 | ||||||||||||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||||
Accrued Liability | $ 1,443 | |||||||||||||
Nonaffiliate Stockholder | ||||||||||||||
Share Price | $ 0.95 | $ 1 | $ 0.95 | $ 1.50 | ||||||||||
Stock Repurchased During Period, Shares | 100,000 | 36,000 | 36,000 | |||||||||||
Stock Repurchased During Period, Amount | $ 150,000 | $ 34,200 | $ 34,200 | |||||||||||
Option To Purchase Shares Of Unregistered Common Stock | 500,000 | |||||||||||||
Shares Transferred, Immediately Cancelled | 100,000 | |||||||||||||
Series B Preferred Stock | ||||||||||||||
Share Price | $ 9 | $ 9 | ||||||||||||
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||
Preferred Stock Terms Of Conversion | As of June 30, 2022, 60,000 shares of Series B Preferred Stock have been converted into a total of 60,000 shares of common stock of the Company, which leaves 40,000 shares of Series B Preferred Stock currently outstanding. | |||||||||||||
Accrued Liability | $ 4,771 | $ 4,771 | $ 1,796 | |||||||||||
Dividends, Cash | $ 0 | $ 0 | $ 0 | 5,844 | ||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Share Price | $ 5 | $ 5 | ||||||||||||
Preferred Stock, Shares Authorized | 400,000 | 400,000 | ||||||||||||
Preferred Stock, Voting Rights | As of June 30, 2022, 60,000 shares of Series B Preferred Stock have been converted into a total of 60,000 shares of common stock of the Company, which leaves 40,000 shares of Series B Preferred Stock currently outstanding. | |||||||||||||
Preferred Stock Terms Of Conversion | As of March 31, 2022, 60,400 shares of Series A Preferred Stock have been converted into a total of 6,040,000 shares of common stock of the Company, which leaves 5,750 shares of Series A Preferred Stock currently outstanding. | |||||||||||||
Accrued Liability | $ 2,435 | $ 2,435 | $ 11,926 | |||||||||||
Dividends, Cash | $ 14,147 | $ 99,462 | $ 17,147 | $ 199,186 | ||||||||||
Accredited Investors | Series B Preferred Stock | ||||||||||||||
Annual Dividend Percentage | 3% | 30% | ||||||||||||
Share Price | $ 7 | $ 7 | ||||||||||||
Stock Issued During Period, Shares, New Issues | 100,000 | |||||||||||||
Stock Issued During Period, Value, New Issues | $ 500,000 | |||||||||||||
Number Of Preffered Stock Converted Into Common Stock | 100,000 | |||||||||||||
Convertible Preferred Stock, Shares Reserved For Future Issuance | 100,000 | |||||||||||||
Accredited Investors | Series A Preferred Stock [Member] | ||||||||||||||
Annual Dividend Percentage | 3% | 30% | ||||||||||||
Share Price | $ 3 | $ 3 | ||||||||||||
Stock Issued During Period, Shares, New Issues | 66,150 | |||||||||||||
Stock Issued During Period, Value, New Issues | $ 6,615,000 | |||||||||||||
Number Of Preffered Stock Converted Into Common Stock | 66,150 | |||||||||||||
Convertible Preferred Stock, Shares Reserved For Future Issuance | 6,615,000 | |||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 1 |
CONTINGENT CONTRACTUAL OBLIGA_3
CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS Schedule of Operating Lease Assets and Liabilities (Details) - USD ($) | 12 Months Ended | ||||||||||||
Jun. 30, 2027 | Dec. 31, 2026 | Jun. 30, 2026 | Dec. 31, 2025 | Jun. 30, 2025 | Dec. 31, 2024 | Sep. 30, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |
DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. (Details Narrative) | |||||||||||||
Base Monthly Rent | $ 6,063 | $ 4,502 | $ 5,915 | $ 4,370 | $ 5,771 | $ 4,243 | $ 2,541 | $ 5,630 | $ 4,120 | $ 2,467 | $ 5,493 | $ 4,000 | $ 2,395 |
CONTINGENT CONTRACTUAL OBLIGA_4
CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS Schedule of Operating Lease Assets and Liabilities (Details 1) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. (Details Narrative) | ||
Operating Lease Right Of Use Asset | $ 266,625 | $ 76,412 |
Operating Lease Liability Current | 66,049 | 26,047 |
Operating Lease Liability Noncurrent | 202,714 | 50,583 |
Finance Lease Right Of Use Asset | 1,296,000 | |
Finance Lease Liability Current | 18,017 | 1,262,260 |
Finance Lease Liability | $ 1,362,020 | $ 0 |
CONTINGENT CONTRACTUAL OBLIGA_5
CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS Schedule of Operating Lease Assets and Liabilities (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. (Details Narrative) | ||||
Amortization Of Right Of Use Assets | $ 12,337 | $ 12,337 | $ 24,673 | $ 24,673 |
Interest On Lease Liabilities | 11,232 | 13,224 | 22,521 | 26,485 |
Operatingleaseexpense | 20,147 | 3,200 | 40,295 | 8,000 |
Finance Lease Expense | $ 43,716 | $ 28,761 | $ 87,489 | $ 59,158 |
CONTINGENT CONTRACTUAL OBLIGA_6
CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS Schedule of Operating Lease Assets and Liabilities (Details 3) | Jun. 30, 2022 USD ($) |
DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. (Details Narrative) | |
Finance Lease Liability Payments Due Year Two | $ 35,133 |
Finance Lease Liability Payments Due Year Three | 1,445,970 |
Finance Lease Liability Payments Due Year Four | 0 |
Finance Lease Liability Payments Due Year Five | 0 |
Finance Lease Liability Payments Due Next Six Months | 0 |
Financeleaseliabilitypaymentsdueafteryearfive | 0 |
Finance Lease Liability Payments Due | 1,481,103 |
Finance Lease Liability Discount Excess Amount | 137,099 |
Finance Lease Liability | 1,344,004 |
Lessee Operating Lease Liability Payments Due Year Two | 71,550 |
Lessee Operating Lease Liability Payments Due Year Three | 146,018 |
Lessee Operating Lease Liability Payments Due Year Four | 142,211 |
Lessee Operating Lease Liability Payments Due Year Five | 122,573 |
Lessee Operating Lease Liability Payments Due Next Six Months | 125,903 |
Operating Lease Liability Payments Due After Year Five | 36,381 |
Lessee Operating Lease Liability Paymentsdue | 644,636 |
Lessee Operating Lease Liability Discounted Excess Amount | (85,858) |
Operating Lease Liability | $ 558,778 |
CONTINGENT CONTRACTUAL OBLIGA_7
CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS (Details Narrative) | Jul. 06, 2022 USD ($) | Jul. 01, 2022 ft² USD ($) | Jun. 30, 2022 USD ($) ft² shares | Feb. 14, 2022 USD ($) | Jan. 01, 2022 ft² USD ($) | Dec. 31, 2021 USD ($) | Oct. 01, 2021 ft² USD ($) | Jul. 01, 2021 USD ($) | Jun. 01, 2021 ft² | Jan. 01, 2021 USD ($) |
Fixed Purchase Price | $ 1,375,000 | |||||||||
Immaterial Loss On Lease Modification | 1,446 | |||||||||
Shares Of Common Stock | shares | 3,900,455 | |||||||||
Increase In Base Rent (percentage) | 2% | 3% | ||||||||
Lease Area | ft² | 6,132 | 11,238 | 8,000 | 5,000 | 3,300 | |||||
Premises Rent, Per Square | 10.75 | 6.13 | 6 | 5.75 | ||||||
Base Rent, Amount | $ 68,888 | |||||||||
Sublease costs | $ 3,000 | |||||||||
Accrued Bonuses, Current | $ 2,121,532 | $ 1,556,055 | $ 1,556,055 | |||||||
Chief Strategy Officer [Member] | ||||||||||
Bonus Equal | 5% | |||||||||
Accrued Bonuses, Current | $ 538,825 | |||||||||
Net Sales | $ 6,000,000 | |||||||||
Salary | $ 180,000 |
LEGAL PROCEEDINGS (Details Narr
LEGAL PROCEEDINGS (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Lifted Liquids, Inc. [Member] | ||
Agreement releases and dismissal | $ 36,100 | |
Saul Roffe [Member] | ||
Settlement Cost | 30,000 | |
Lifted Liquids | 15,000 | |
Damage Recover | 14,569 | |
Martha Edgar V Lifted Liquids [Member] | ||
Settlement Cost | 5,000 | $ 5,000 |
Awawdeh And Habib [Member] | ||
Settlement Cost | $ 98,000 |
COMPANY WIDE MANAGEMENT BONUS_2
COMPANY WIDE MANAGEMENT BONUS POOL (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2022 | Feb. 14, 2022 | Dec. 31, 2021 | |
COMPANY WIDE MANAGEMENT BONUS POOL (Details Narrative) | |||
Annual Bonus | $ 1,559,334 | ||
Accrued Bonuses, Current | $ 2,121,532 | $ 1,556,055 | $ 1,556,055 |
Diluted Earnings Per Share | $ 0.56 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Current | ||||
Domestic-federal | $ 798,829 | $ 0 | $ 1,381,447 | $ 0 |
Domestic-state | 382,298 | 0 | 661,123 | 0 |
Texas Franchise Tax | 13,948 | 56,528 | ||
Foreign | 0 | 0 | 0 | 0 |
Total | 1,195,074 | 0 | 2,099,098 | 0 |
Deferred | ||||
Domestic-federal | 71,563 | 0 | 302,155 | 0 |
Domestic-state | 24,585 | 0 | 89,446 | 0 |
Foreign | 0 | 0 | 0 | 0 |
Total | 96,148 | 0 | 391,601 | 0 |
Total Provision (benefit) For Income Taxes | $ 1,291,222 | $ 0 | $ 2,490,700 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
INCOME TAXES | ||||
Domestic Federal | $ 947,243 | $ 335,192 | $ 1,817,540 | $ 465,048 |
State Tax Benefit, Net Of Federal Benefit | 282,842 | 96,459 | 624,409 | 133,828 |
Non-deductible Expenses | 4,609 | 3,085 | 6,581 | 4,200 |
Texas franchise tax | 56,528 | 56,528 | 0 | |
Revision of prior years' deferred tax assets | 0 | 0 | 0 | 0 |
Change In Estimated Future Income Tax Rates | 0 | 0 | (131,918) | 0 |
Change In Valuation Allowance | 0 | (434,737) | 117,560 | (603,075) |
Total Provision (benefit) For Income Taxes | $ 1,291,222 | $ 0 | $ 2,490,700 | $ 0 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Deferred Tax Assets | ||
Stock-based Compensation | $ 2,831,970 | $ 2,714,410 |
Accrued Related Party Expenses | 0 | 259,463 |
Impairment Of Smplylifted Note And Other Receivables | 0 | 105,124 |
Allowance For Doubtful Accounts | 45,818 | 64,661 |
Other | 13,396 | 8,725 |
Less: Valuation Allowance | (2,831,970) | (2,714,410) |
Total Deferred Tax Assets | 59,214 | 437,973 |
Deferred Tax Liabilities: | ||
Depreciation & Amortization | (119,265) | (105,143) |
Other | 0 | (1,279) |
Total Deferred Tax Liabilities | (119,265) | (106,422) |
Net Deferred Tax (Liabilities) Assets | $ (60,051) | $ 331,551 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 1 Months Ended |
Dec. 22, 2017 | |
INCOME TAXES | |
Federal Dividends | 100% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] | 1 Months Ended |
Jul. 25, 2022 USD ($) | |
Year One [Member] | |
Base rent | $ 5,493 |
Year Two [Member] | |
Base rent | 5,630 |
Year Three [Member] | |
Base rent | 5,771 |
Year Four [Member] | |
Base rent | 5,915 |
Year Five [Member] | |
Base rent | $ 6,063 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | 1 Months Ended | |||||
Jul. 05, 2022 | Dec. 31, 2024 | Dec. 31, 2022 | Jul. 25, 2022 | Jul. 08, 2022 | Jul. 06, 2022 | |
Principal balance | $ 458,335 | $ 1,374,999 | ||||
Total interest payment | $ 1,597 | |||||
Purchase price of building | 1,375,000 | |||||
Accrued interest | 916,668 | |||||
Notes payble | $ 2,750,000 | |||||
Description of purchase agreement | Pursuant to the Acceleration Agreement, the deadline to purchase the 5511 Building has been extended by one year to December 31, 2023. In addition, the Acceleration Agreement contains a provision that if we raise $5,000,000 of debt or equity capital, then Lifted or our designee shall purchase the 5511 Building from 95th Holdings, LLC at the agreed upon $1,375,000 purchase price within two days. | |||||
Sublease cost | $ 3,000 | |||||
Company prepayment | $ 916,666 |