Lftd Partners Inc 10-Q for FY2026 Q2

Lftd Partners Inc. (LIFD)

10-Q 2026-08-14 For: 2026-06-30

Added on August 15, 2026

About this 10-Q

Lftd Partners Inc filed this 10-Q on August 14, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).

Headline figures

Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.71M; down 15.7% from $10.33M a year earlier
Net loss: $1.44M; compared with a net loss of $268.95K a year earlier
Diluted EPS: -$0.10; compared with -$0.02 a year earlier

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Common Stock, $0.001 par value		LIFD		None
Title of each class		Trading symbol(s)		Name of exchange on which registered

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

PART I — FINANCIAL INFORMATION
	Use of Names	3
	Currency	3
	Cautionary Note Regarding Forward-Looking Statements	3
ITEM 1.	FINANCIAL STATEMENTS	F-1
	CONSOLIDATED BALANCE SHEETS, JUNE 30, 2026 (UNAUDITED) AND DECEMBER 31, 2025 (AUDITED)	F-1
	CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025 (UNAUDITED)	F-2
	CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025 (UNAUDITED)	F-3
	CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025 (UNAUDITED)	F-4
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	F-5
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12
ITEM 4.	CONTROLS AND PROCEDURES	12
PART II — OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	15
ITEM 1A.	RISK FACTORS	15
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	15
ITEM 3.	DEFAULTS UNDER SENIOR SECURITIES	15
ITEM 4.	MINE SAFETY DISCLOSURES	15
ITEM 5.	OTHER INFORMATION	15
ITEM 6.	EXHIBITS	16
	SIGNATURES	17

	June 30, 2026 (Unaudited)			December 31, 2025 (Audited)
ASSETS
Current Assets
Cash and Cash Equivalents	$	1,504,297		$	1,767,123
Prepaid Expenses		175,237			348,667
Accounts Receivable, net of allowance of $1,207,367 in 2026 and $1,269,590 in 2025		2,915,373			2,531,524
Inventory, net of allowance of $6,596,096 in 2026 and $0 in 2025		3,459,768			10,957,823
Current Portion of Settlement Asset and Receivables		25,000			24,910
Assets Held for Sale		1,294,211			-
Other Current Assets		5,939			61,000
Total Current Assets		9,379,826			15,691,047
Investment in Bendistillery		-			99,800
Net Deferred Tax Asset		1,145,302			269,802
Fixed Assets, less accumulated depreciation of $1,304,885 in 2026 and $1,608,543 in 2025		643,021			2,273,377
Security and State Licensing Deposits and Bonds		53,830			50,183
Operating Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $591,243 in 2026 and $457,742 in 2025		804,929			888,339
Total Assets	$	12,026,907		$	19,272,548
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Operating Lease Liability	$	300,219		$	257,708
Deferred Revenue		335,984			1,380,049
Income Tax Payable		206,754			155,184
Accounts Payable and Accrued Expenses		2,757,476			3,326,650
Accounts Payable - Related Party		4,962			5,304
Note Payable - Related Party		-			3,846
Preferred Stock Dividends Payable		6,318			7,124
Notes Payable to Surety Bank		31,923			22,282
Interest Payable to Surety Bank		3,949			4,264
Total Current Liabilities		3,647,586			5,162,410
Non-Current Liabilities
Operating Lease Liability		555,444			680,280
Note Payable to Surety Bank		796,551			797,597
Total Non-Current Liabilities		1,351,994			1,477,877
Total Liabilities		4,999,580			6,640,288
Commitments and Contingencies		-			-
Shareholders' Equity
Preferred Stock, $0.001 par value; 10,000,000 total shares authorized; out of which two Series of Preferred Stock are authorized and outstanding, as follows:
Series A Convertible Preferred Stock: 400,000 shares authorized, and: 2,500 shares issued and outstanding at June 30, 2026 2,500 shares issued and outstanding at December 31, 2025		3			3
Series B Convertible Preferred Stock: 5,000,000 shares authorized, and: 40,000 shares issued and outstanding at June 30, 2026 40,000 shares issued and outstanding at December 31, 2025		40			40
Common Stock, $0.001 par value; 100,000,000 shares authorized, and: 14,822,678 shares issued and outstanding at June 30, 2026 14,822,678 shares issued and outstanding at December 31, 2025		14,823			14,823
Additional Paid-in Capital		40,986,553			40,986,553
142,000 shares of Deferred Contingent Stock issuable upon instruction by the respective Deferred Contingent Stock Recipients at June 30, 2026 and December 31, 2025		470,730			470,730
Accumulated Deficit		(34,444,821	)		(28,839,889	)
Total Shareholders' Equity		7,027,327			12,632,260
Total Liabilities and Shareholders' Equity	$	12,026,907		$	19,272,548

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025
Net Sales	$	8,705,194		$	10,325,336		$	17,863,400		$	19,449,186
Cost of Goods Sold		8,053,961			7,078,942			18,918,247			13,985,399
Gross Profit		651,233			3,246,394			(1,054,847	)		5,463,787
Operating Expenses
Payroll Expense		1,092,119			1,196,704			2,410,900			2,496,274
Professional Fees		133,612			132,380			216,614			435,684
Bank Charges and Merchant Fees		132,453			132,358			289,569			282,866
Advertising and Marketing		490,770			531,873			832,171			947,445
Bad Debt (Recovery)/Expense		(249,829	)		649,637			(623	)		245,768
Impairment of Hemp-Specific Fixed Assets		64,628			-			208,049			-
Depreciation and Amortization		47,047			62,512			109,937			124,777
Collab Commission and Royalty Expense		-			5,742			-			72,840
Other Operating Expenses		467,588			644,828			970,952			1,296,159
Total Operating Expenses		2,178,388			3,356,034			5,037,569			5,901,813
Loss From Operations		(1,527,155	)		(109,640	)		(6,092,416	)		(438,026	)
Other Income/(Expenses)
Impairment of Investment in Bendistillery		(99,800	)		-			(99,800	)		-
Interest Income		7,916			19,098			15,864			51,982
Interest Expense		(21,760	)		(77,474	)		(42,976	)		(157,467	)
Theft Expense		-			(350,000	)		-			(350,000	)
Settlement Income		-			177,500			-			177,500
Settlement Costs		-			-			(100,000	)		-
Debt Financing Expenses		(799	)		(2,773	)		(24,991	)		(5,515	)
Penalties		(2,104	)		(1,670	)		(3,604	)		(1,683	)
Gain/(Loss) on Disposal of Fixed Assets		(1,250	)		-			(12,126	)		-
Loss on Deposits		-			(500	)		-			(5,000	)
Gain on Forgiveness of Debt		-			21,681			-			21,681
Total Other Income/(Expenses)		(117,797	)		(214,138	)		(267,633	)		(268,502	)
Loss Before Provision for Income Taxes		(1,644,952	)		(323,778	)		(6,360,049	)		(706,528	)
Benefit/(Provision) for Income Taxes		206,662			54,828			761,810			134,536
Net Loss	$	(1,438,290	)	$	(268,950	)	$	(5,598,239	)	$	(571,992	)
Less: Accrued Preferred Stock Dividends		(3,367	)		(3,366	)		(6,694	)		(6,697	)
Net Loss Attributable to Common Stockholders	$	(1,441,657	)	$	(272,316	)	$	(5,604,933	)	$	(578,689	)

Earnings/(Loss) Per Common Share Attributable to Common Stockholders
Basic	$	(0.10	)	$	(0.02	)	$	(0.38	)	$	(0.04	)
Diluted	$	(0.10	)	$	(0.02	)	$	(0.38	)	$	(0.04	)

Weighted average number of common shares outstanding
Basic		14,822,678			14,822,678			14,822,678			14,822,678
Diluted		14,822,678			14,822,678			14,822,678			14,822,678

									Additional		Deferred					Total
	Preferred Stock				Common Stock				Paid-in		Contingent Stock		Accumulated			Shareholders'
	Shares		Amount		Shares		Amount		Capital		to be Issued		Deficit			Equity
Balance, December 31, 2024		42,500	$	43		14,822,678	$	14,823	$	40,986,553	$	470,730	$	(3,967,708	)		37,504,441
Series A Preferred Stock dividend payable														(1,851	)		(1,851	)
Series B Preferred Stock dividend payable														(1,480	)		(1,480	)
Net Loss														(303,042	)		(303,042	)
Balance, March 31, 2025		42,500	$	43		14,822,678	$	14,823	$	40,986,553	$	470,730	$	(4,274,080	)		37,198,068
Series A Preferred Stock dividend payable														(1,870	)		(1,870	)
Series B Preferred Stock dividend payable														(1,496	)		(1,496	)
Net Loss														(268,950	)		(268,950	)
Balance, June 30, 2025		42,500	$	43		14,822,678	$	14,823	$	40,986,553	$	470,730		(4,546,395	)		36,925,753

Balance, December 31, 2025		42,500	$	43		14,822,678	$	14,823	$	40,986,553	$	470,730		(28,839,889	)		12,632,260
Series A Preferred Stock dividend payable														(1,849	)		(1,849	)
Series B Preferred Stock dividend payable														(1,478	)		(1,478	)
Net Loss														(4,159,949	)		(4,159,949	)
Balance, March 31, 2026		42,500	$	43		14,822,678	$	14,823	$	40,986,553	$	470,730	$	(33,003,164	)		8,468,984
Series A Preferred Stock dividend payable														(1,871	)		(1,871	)
Series B Preferred Stock dividend payable														(1,496	)		(1,496	)
Net Loss														(1,438,290	)		(1,438,290	)
Balance, June 30, 2026		42,500	$	43		14,822,678	$	14,823	$	40,986,553	$	470,730	$	(34,444,821	)		7,027,327

	(1)	During 2026, Lifted has streamlined its operations by laying off a large number of employees and independent contractors. Lifted’s total workforce, including both employees and independent contractors, at one time was close to 200 people, but has been streamlined via layoffs down to approximately 77 people. Significant additional layoffs are highly likely if either or both of Lifted’ two major lines of business are seriously disrupted or eliminated. Such layoffs are highly likely to include people with valuable skills, experience and relationships without which Lifted’s future operations and revenues would be materially adversely affected.

	(2)	On July 22, 2026, Lifted entered into a binding agreement to sell its real property located at 5511 95th Avenue, Kenosha, Wisconsin for a purchase price of $1,500,000. The transaction is subject to customary closing conditions and is expected to close on September 16, 2026. If the transaction is completed, Lifted expects to use the net sale proceeds to repay the outstanding mortgage loan with Surety Bank, including the $836,358 principal balance as of June 30, 2026, accrued interest, and any applicable prepayment penalty. The remaining proceeds are expected to be added to Lifted’s working capital.

	(3)	Faced with these very serious risks to Lifted’s two major lines of business, LFTD Partners perceives an urgent need to diversify Lifted’s and LFTD Partners’ business away from intoxicating hemp-derived products and 7-OH products.

	a.	In the case of Lifted, the management of Lifted plans to manufacture and sell hemp-free gummies in multiple flavors under a new brand, and is exploring the possibility of manufacturing and selling, or purchasing and re-selling, other hemp-free and kratom-free products that may appeal to consumers whose access to intoxicating hemp-derived products and to 7-OH products have been reduced or eliminated as described above.

	b.	In the case of LFTD Partners, in June 2026, the Board of Directors of the Company voted unanimously to authorize the CEO of the Company to identify, negotiate and sign contracts to acquire multifamily housing properties and/or laundromats, and in that connection to hire investment bankers and raise capital to support those acquisitions. Pursuant to that resolution, the CEO of the Company, working in conjunction with our President and CFO, have been conducting due diligence investigations of many apartment buildings and laundromats, and have made written and oral offers pursuant to which newly formed subsidiaries of the Company would acquire multiple apartment buildings along the East Coast of Florida. To date, none of these offers have resulted in any legally binding agreements, but these efforts are continuing. No guarantee or assurance can be given that any apartment buildings or laundromats will be acquired by the Company, nor on any particular pricing, terms and conditions.

		It is unclear at this point in time how much debt and/or equity can be dedicated or raised by the Company for acquisitions of apartment buildings or laundromats. The Company has engaged, and is continuing to engage, in discussions with certain banks, investment banks and other potential sources of capital for this purpose. No guarantee or assurance can be given that the Company’s capital raising efforts to purchase apartment buildings and/or laundromats will be successful. The Company’s challenges in raising capital relate to several factors, including: potential investors’ and lenders’ skepticism regarding the future of Lifted’s intoxicating hemp-derived and 7-OH products; the fact that the Company’s common stock is not currently traded on NASDAQ or on another national exchange; and the low trading volume of the Company’s stock on the OTCQB Venture Market. Also, the Company’s limited cash on hand and Lifted’s need to devote its limited cash on hand to its expansion opportunities in the hemp-derived THC beverages industry, the hemp-free gummies industry, and other new consumer products have made acquisitions of apartment buildings that require significant equity components of the purchase price difficult. Consequently, the Company is focusing a significant portion of its due diligence efforts on properties that include seller financing or assumable debt.

	1.	The CECL Model applies to financing receivables measured at amortized cost, which includes trade accounts receivable.
	2.	An entity will recognize an allowance for credit losses that results in the financial statements reflecting the net amount expected to be collected from the financial asset.
	3.	The allowance represents the portion of the amortized cost basis that an entity does not expect to collect due to credit over the asset’s contractual life, considering past events, current conditions and reasonable and supportable forecasts of future economic conditions.

	1)	The ordered item breaks, melts, or separates in transit to the customer. In this case, the Company will replace the broken, melted or separated item at no cost to the customer.
	2)	The Company shipped the wrong item to the customer. In this case, the Company will allow the customer to keep, at no cost to the customer, the item that was mistakenly shipped to the customer. The Company will also ship the correct product to the customer, at no cost to the customer.
	3)	The customer ordered the wrong product. In this case, the customer, at his/her own expense, must ship the mistakenly ordered product back to the Company, and the Company will ship the correct product to the customer.
	4)	The ordered item is recalled. In a situation where product is recalled, the Company will offer a replacement, credit, or refund.

	June 30, 2026			December 31, 2025
Raw Goods	$	5,422,051		$	5,906,501
Finished Goods		4,633,813			5,051,322
Inventory Reserve (Allowance)		(6,596,096	)		-
Total Inventory	$	3,459,768		$	10,957,823

	1)	Identifying raw goods that would no longer be used in the manufacture of finished goods;
	2)	Identifying expired and unusable raw goods;
	3)	Identifying finished goods that would no longer be sold or that are slow moving;
	4)	Identifying finished goods that are expired or that will expire within a month after reported period end; and
	5)	Valuing and expensing raw and finished goods that would no longer be sold.

	a)	That Extrax would not remit 50% of its monthly gross revenue to Lifted, starting with April 2025;
	b)	Lifted would not make any more loans to Extrax; and
	c)	For any future purchase of inventory from Lifted, Extrax would pay Lifted in full upon receipt of an invoice from Lifted (“July Agreement”)

	a.	It engages in business activities from which it may recognize revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity).
	b.	Its operating results are regularly reviewed by the public entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance.
	c.	Its discrete financial information is available.”

	a.	Macroeconomic conditions such as a deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets
	b.	Industry and market considerations such as a deterioration in the environment in which an entity operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for an entity’s products or services, or a regulatory or political development
	c.	Cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows
	d.	Overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods
	e.	Other relevant entity-specific events such as changes in management, key personnel, strategy, or customers; contemplation of bankruptcy; or litigation
	f.	Events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more-likely-than-not expectation of selling or disposing of all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit
	g.	If applicable, a sustained decrease in share price (considered in both absolute terms and relative to peers).

	For the Three Months Ended								For the Six Months Ended
	June 30,								June 30,
Type of Sale	2026				2025				2026				2025
Net sales of raw materials to customers	$	78,297	1	%	$	141,537	1	%	$	326,145	2	%	$	141,537	1	%
Net sales of products to private label clients		360,824	4	%		301,020	3	%		1,148,016	6	%		490,126	3	%
Net sales of products to wholesalers		961,794	11	%		1,425,985	14	%		2,088,751	12	%		3,293,809	17	%
Net sales of products to distributors		6,101,547	70	%		7,390,299	72	%		11,885,579	67	%		13,419,356	69	%
Net sales of products to end consumers		1,202,731	14	%		1,066,496	10	%		2,414,909	14	%		2,104,358	11	%
Net Sales	$	8,705,194	100	%	$	10,325,336	100	%	$	17,863,400	100	%	$	19,449,186	100	%

	1)	The elimination of half or more of Lifted’s sales. Sales of hemp-derived products made up approximately 44% and 49% of Lifted’s sales during the three and six months ended June 30, 2026, respectively, and 52% of Lifted’s sales during the year ended December 31, 2025; thus, the Act could eliminate approximately half or more of the Company’s revenue;

	2)	Goodwill impairment charges. As a result of LFTD Partners’ acquisition of Lifted, LFTD Partners recognized goodwill of $22,292,767 (“Lifted Goodwill”). As a result of Lifted’s purchase of assets of hemp-derived products maker Oculus CRS, LLC, and merger with Oculus CHS Management Corp., LFTD Partners recognized goodwill of $800,027 (“Oculus Goodwill”). The Act necessitated the calculation and recording of an impairment charge on the Lifted Goodwill and Oculus Goodwill. As of December 31, 2025, LFTD Partners recorded a goodwill impairment charge on the Lifted Goodwill and Oculus Goodwill, reducing the carrying value of both to $0.

	3)	An investment impairment charge. The Act necessitated the calculation and recording of an impairment of LFTD Partners’ investment in hemp-derived beverage and products maker Ablis. On April 30, 2019, LFTD Partners purchased 4.99% of the common stock of Ablis for $399,200. As of December 31, 2025, LFTD Partners recorded an impairment charge on its investment in Ablis, reducing the carrying value of the investment to $0.

	4)	Inventory reserve (allowance) against, or significant write offs of, inventory. The Act will most likely negatively impact the pricing of hemp-derived products, the availability and price of raw goods, and production forecasting and sales, which may lead to the recording of an inventory reserve (allowance) against, or write offs of, our hemp-derived inventory each quarter end leading up to November 12, 2026. Moreover, any hemp-derived products in inventory on November 12, 2026 will have to be written off. An allowance of $5,007,427 was taken against Lifted’s hemp-derived inventory as of June 30, 2026.

	5)	Significant write offs of accounts receivable. The Act will have a material adverse effect on the wholesalers and distributors that sell our products. In turn, these wholesalers and distributors may disregard their payment terms and not pay us for the product that they have purchased, causing us to have to correspondingly increase our allowance for doubtful accounts, and eventually write off the accounts receivable.

	6)	Impairments of, or losses on the disposition of, hemp-related fixed assets. The Act is expected to materially reduce or eliminate the utility and marketability of fixed assets used primarily in the manufacture of hemp-derived products. As a result, we may be required to record impairment charges on these assets, and any efforts to sell such assets may result in significant losses due to limited demand or substantial price discounts. During the three and six months ended June 30, 2026, impairments of hemp-specific fixed assets of $64,628 and $208,049, respectively, were recognized.

	7)	Sales of fixed or other assets to fund ongoing operations. If the Act materially reduces our revenue from hemp-derived products, our cash flow may be insufficient to support ongoing operating expenses. In that event, we may be required to sell fixed assets or other assets to generate liquidity, which could occur at unfavorable prices and materially adversely affect our financial condition.

	8)	Workforce reductions and termination of contractor relationships. If the Act materially reduces demand for our hemp-derived products, we may be required to reduce our workforce and terminate relationships with independent contractors. Such actions could disrupt our operations, result in restructuring costs, and adversely affect our ability to operate or pursue future business opportunities. On June 30, 2026, Lifted announced a strategic restructuring to reduce its operating costs as part of its ongoing efforts to align its cost structure with the evolving regulatory environment affecting portions of the hemp-derived and kratom-derived products. As part of this initiative, between June 12-26, 2026, Lifted reduced its workforce from approximately 100 employees and independent contractors to 77. The restructuring is expected to reduce Lifted’s future operating expenses by approximately $736,000 per year.

	9)	Reduced interest in our Company and in our common stock from investors, potential financing sources, and potential merger candidates. Just the passing of the Act has significantly reduced interest in our Company and in our common stock from investors, potential financing sources, and potential merger candidates, because the Act calls into question our Company’s short-term and long-term financial and operational viability, growth prospects, liquidity, and potential for listing on a national stock exchange; and if the Act is not replaced, impacted or amended by subsequent acts of Congress prior to November 12, 2026, then these negative impacts on our Company and our common stock are likely to even further intensify.

Asset Class	June 30, 2026			December 31, 2025
Building	$	-		$	805,545
Land		-			430,754
Machinery & Equipment, net of accumulated impairment on hemp-specific fixed assets of $99,948 in 2026 and $0 in 2025		1,459,626			1,566,661
Furniture & Fixtures		138,184			138,184
Computer Equipment		21,510			21,510
Building & Leasehold Improvements		184,704			640,499
Vehicles		95,401			64,309
Trade Show Booths, net of accumulated impairment on hemp-specific fixed assets of $108,101 in 2026 and $0 in 2025		48,481			214,457
Sub-total:	$	1,947,906		$	3,881,920

Less: Accumulated Depreciation		(1,304,885	)		(1,608,543	)
	$	643,021		$	2,273,377

Asset Class		Estimated Useful Life
Building		39 years
Land		Indefinite
Machinery & Equipment		60 months
Building Improvements		60 months
Leasehold Improvements		The shorter of the length of the lease or 60 months
Trade Show Booths		36 months
Vehicles		60 months
Computer Equipment		60 months
Furniture & Fixtures		60 months

Assets held for sale at June 30, 2026	Carrying amount
Building, net	$	752,186
Land		430,754
Building improvements, net		111,271
Total assets held for sale	$	1,294,211

	Finance		Operating
2026		-		183,099
2027		-		375,879
2028		-		299,234
2029		-		119,967
Thereafter		-		-
Total		-		978,180
Less: Present value discount		-		(122,517	)
Lease liability	$	-	$	855,663

	June 30, 2026			December 31, 2025
Weighted Average remaining lease term (years)		2.69			3.23
Weighted Average Discount rate		9.61	%		9.68	%

	For the Three Months Ended June 30,
Lease Cost:	2026		2025
Finance lease expense:
Amortization of Right-of-Use Assets	$	-	$	-
Interest on lease liabilities		-		-
Operating lease expense		89,930		83,424
Total	$	89,930	$	83,424

	For the Six Months Ended June 30,
Lease Cost:	2026		2025
Finance lease expense:
Amortization of Right-of-Use Assets	$	-	$	-
Interest on lease liabilities		-		-
Operating lease expense		177,692		166,849
Total	$	177,692	$	166,849

Asset		Balance Sheet Line		June 30, 2026
Operating Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $591,243		Non-Current Assets		$	804,929

Liability	Balance Sheet Line	June 30, 2026
Operating Lease Liabilities	Current Liabilities	$	300,219
	Non-Current Liabilities		555,444

	(1)	Lifted Liquids, Inc. v RanCo, LLC

		On September 9, 2025, the Company had filed an action to recover approximately $354,000 in damages resulting from Defendant’s failure to pay for products. The matter had been filed in Federal Court in California. On October 31, 2025, the matter was voluntarily dismissed without prejudice. On April 2, 2026, the complaint was refiled and the Company has moved for a default judgment based on Defendant’s failure to respond.

	(2)	Lifted Liquids, Inc. v. Buckbee Seed Company LLC

		On May 29, 2026, Lifted Liquids, Inc. filed a complaint against Buckbee Seed Company LLC in the Circuit Court of the 17th Judicial Circuit, Winnebago County, Illinois, alleging breach of contract arising from Defendant’s failure to pay for products purchased from Lifted. The complaint seeks recovery of approximately $29,397 in unpaid invoices, together with applicable interest, costs, and other relief deemed appropriate by the Court. Defendant has been served but has not appeared in the action. The Company intends to file a motion for default judgment.

	(3)	MoHemp Trade Association, Lifted Liquids, Inc. and MNG 2005, Inc. vs. Mike Kehoe, Catherine Hanaway and Sarah Wilson

		On July 16, 2026, the Company, together with the MoHemp Trade Association and MNG 2005, Inc., filed a lawsuit in the United States District Court for the Western District of Missouri against Missouri Governor Mike Kehoe, Attorney General Catherine Hanaway, and Sarah Wilson, Director of the Missouri Department of Health and Senior Services, challenging the constitutionality and enforceability of Missouri House Bill 2641. The complaint alleges, among other things, that certain provisions of the statute are preempted by federal law, violate the Dormant Commerce Clause, and are unconstitutionally vague under the Due Process Clause. The plaintiffs seek declaratory and injunctive relief to prevent enforcement of the challenged provisions before they become effective. The litigation is in its preliminary stages, and the Company is unable to predict the ultimate outcome or reasonably estimate any potential loss or recovery associated with the matter.

	(4)	Delta Beverages, Inc., et al. v. Canepa, et al.

		As described in NOTE 16 – SUBSEQUENT EVENTS, on July 30, 2026, Lifted and other parties filed an action in the United States District Court for the Northern District of Ohio challenging the constitutionality of certain provisions of Ohio Senate Bill 56. The complaint seeks declaratory and injunctive relief, and the plaintiffs simultaneously moved for a temporary restraining order to prohibit enforcement of the challenged provisions during the pendency of the litigation. The litigation is in its preliminary stages, and the Company is unable to predict the ultimate outcome.

	(5)	Monti, et al. v. Garcia, et al.

		As described in NOTE 16 – SUBSEQUENT EVENTS, on July 31, 2026, Lifted, together with Thomas Monti and The Happy Cactus Apothecary LLC, filed a complaint in the United States District Court for the Southern District of Texas challenging the legality of certain reinstated Schedule I definitions adopted by the Texas Department of State Health Services relating to hemp-derived cannabinoids. The complaint seeks declaratory and injunctive relief, alleging, among other things, that the challenged definitions are preempted by federal law and violate the Due Process and Commerce Clauses of the United States Constitution. Concurrent with the complaint, the plaintiffs filed an emergency motion for a temporary restraining order and expedited preliminary injunction seeking to enjoin enforcement of the challenged definitions while the litigation is pending. The litigation is in its preliminary stages, and the Company is unable to predict the ultimate outcome.

	June 30,			December 31,
	2026			2025
Deferred Tax Assets:
Operating Loss Carry forwards	$	1,560		$	8,169
Stock-Based Compensation		2,810,058			2,742,007
Sales Allowances		93,522			91,257
Provision for Credit Losses Extrax NM Loans		112,717			109,987
Inventory Reserve (Allowance)		1,762,513			-
Accrued Related Party Expenses		2,651			1,383
Interest Carryforward		-			65,675
Allowance for Doubtful Accounts		322,616			331,026
Lease Liabilities		16,898			16,205
Investment Impairments		506,675			468,384
Fixed Asset Impairments		55,592			-
Less: Valuation allowance		(4,366,299	)		(3,320,378	)
Total Deferred Tax Assets		1,318,504			513,715

Deferred Tax Liabilities:
Depreciation & Amortization		(173,202	)		(243,913	)
Total Deferred Tax Liabilities		(173,202	)		(243,913	)

Net Deferred Tax Assets/(Liabilities)	$	1,145,302		$	269,802

	June 30, 2026			December 31, 2025

Business Loan	$	836,358		$	852,755
Total principal amount		836,358			852,755
Less: Unamortized debt financing costs		(7,885	)		(32,876	)
Less: Current portion of Surety Bank note		(31,923	)		(22,282	)
Non-Current portion of Surety Bank note	$	796,551		$	797,597

2026	$	59,166
2027		118,332
2028		860,088
Thereafter		-
Total		1,037,586
Less: Interest portion		(201,227	)
Total principal amount	$	836,358

	For the Six Months Ended June 30,
	2026			2025
Net Cash Provided By/(Used in) Operating Activities	$	(96,085	)	$	86,143
Net Cash Used in Investing Activities		(138,998	)		(84,551	)
Net Cash Used In Financing Activities		(27,743	)		(32,487	)

	June 30, 2026		December 31, 2025
Current Assets	$	9,379,826	$	15,691,047
Current Liabilities		3,647,586		5,162,410
Working Capital		5,732,240		10,528,637

	(1)	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of an issuer;

	(2)	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and

	(3)	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material adverse effect on the financial statements.

	(1)	There existed a lack of segregation of duties in regard to the Company’s financial reporting, procedures for depositing of funds, procedures for cash disbursements, procedures for checkbook entries, period close procedures, and procedures for financial statement preparation.

	(2)	There are not effective policies and procedures in place to provide adequate, independent oversight over financial reporting, timely preparation, and review of accounting records, and there is a lack of segregation of duties.