lftp_10q.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 000-52520

LFTD PARTNERS INC.

(Exact name of registrant as specified in its charter)

Nevada

87-0479286

(State or other jurisdiction of incorporation

or organization)

(I.R.S. Employer

Identification Number)

14155 Pine Island Drive, Jacksonville, FL 32224

(Address of principal executive offices)

(847) 915-2446

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12 of the Act:

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

Indicate by checkmark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS

As of November 13, 2026, there were 14,822,678 shares of the registrant’s common stock outstanding.

LFTD PARTNERS INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2026

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
	Use of Names	3
	Currency	3
	Cautionary Note Regarding Forward-Looking Statements	3
ITEM 1.	FINANCIAL STATEMENTS	F-1
	CONSOLIDATED BALANCE SHEETS, SEPTEMBER 30, 2026 (UNAUDITED) AND DECEMBER 31, 2025 (AUDITED)	F-1
	CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025 (UNAUDITED)	F-2
	CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025 (UNAUDITED)	F-3
	CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 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

Table of Contents

PART I — FINANCIAL INFORMATION

Use of Names

In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “we,” “us,” “our,” “Company,” “Corporation” or “LFTD Partners” refer to LFTD Partners Inc. together with its wholly owned subsidiary Lifted Liquids, Inc. d/b/a Lifted Made (“Lifted”), d/b/a Urb Finest Flowers (“Urb”), d/b/a Highlandia and d/b/a LM Nutra.

Currency

Unless otherwise indicated, all references to “$” in this document refer to United States dollars.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations and forecasts of future events. All statements other than statements of current or historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding the Company’s future financial position, planned acquisitions, prospects of our industries or our prospects, plans, performance, operations, business strategy, budgets, projected costs, capital spending, sources of liquidity and financing sources, and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “anticipate,” “foresee,” “project,” “forecast,” “could”, “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” or the negative of these terms or variations of them or similar terms or expressions of similar meaning, as they relate to the Company. Furthermore, forward-looking statements may be included in various filings that we make with the Securities and Exchange Commission (the “SEC”), and in press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are based on the Company’s current plans, and the Company’s actual future activities and results of operations may be materially different from those set forth in the forward-looking statements.

These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These known and unknown risks and uncertainties include, without limitation, the risk factors described in sections “SUMMARY OF RISK FACTORS”, “ITEM 1A. RISK FACTORS”, and “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and the consolidated financial statements and the related notes included elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) filed with the SEC on April 1, 2026, and within this Quarterly Report on Form 10-Q sections “ITEM 1A. RISK FACTORS” and “ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS”, and the consolidated financial statements and the related notes included elsewhere, and in our other SEC public filings, which can be read at www.sec.gov. These matters cumulatively raise substantial doubt about the Company’s ability to continue as a going concern. Therefore, these forward-looking statements are not guarantees or promises of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. As a result, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any of these forward-looking statements.

Any or all of the forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events occurring after the date hereof. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this Quarterly Report on Form 10-Q.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in our 2025 Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to our anticipated revenues and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this document, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. We undertake no obligation to further update any such statement, or the risk factors described in sections “SUMMARY OF RISK FACTORS”, “ITEM 1A. RISK FACTORS”, and “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and the consolidated financial statements and the related notes included elsewhere in our 2025 Form 10-K, and within this Quarterly Report on Form 10-Q sections “ITEM 1A. RISK FACTORS” and “ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS”, and the consolidated financial statements and the related notes included elsewhere, and in our other SEC public filings, which can be read at www.sec.gov, to reflect new information, the occurrence of future events or circumstances or otherwise. None of the statements contained herein have been approved by the Food and Drug Administration, and none of the products manufactured or sold by the Company are intended to diagnose, treat, cure or prevent any disease.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS

LFTD PARTNERS INC.

CONSOLIDATED BALANCE SHEETS

	September 30, 2026			December 31, 2025
	(Unaudited)			(Audited)
ASSETS
Current Assets
Cash and Cash Equivalents	$	2,485,987		$	1,767,123
Prepaid Expenses, net of Prepaid Inventory Allowance on Hemp or Hemp-Related Goods of $253,586		105,742			348,667
Accounts Receivable, net of allowance of $2,062,481 in 2026 and $1,269,590 in 2025		1,839,757			2,531,524
Inventory, net of allowance of $5,062,613 in 2026 and $0 in 2025		2,363,988			10,957,823
Current Portion of Settlement Asset and Receivables, net of allowance of $25,000 in 2026 and $0 in 2025		135			24,910
Other Current Assets		6,393			61,000
Total Current Assets		6,802,002			15,691,047
Investment in Bendistillery		-			99,800
Net Deferred Tax Asset		129,591			269,802
Fixed Assets, less accumulated depreciation of $1,369,708 in 2026 and $1,608,543 in 2025		598,017			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 $661,177 in 2026 and $457,742 in 2025		734,994			888,339
Intangible Assets		5,023			-
Total Assets	$	8,323,457		$	19,272,548
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Operating Lease Liability	$	310,315		$	257,708
Deferred Revenue		493,155			1,380,049
Income Tax Payable		9,362			155,184
Accounts Payable and Accrued Expenses		3,346,624			3,326,650
Accounts Payable - Related Party		510			5,304
Note Payable - Related Party		-			3,846
Preferred Stock Dividends Payable		5,221			7,124
Note Payable to Surety Bank		-			22,282
Interest Payable to Surety Bank		-			4,264
Total Current Liabilities		4,165,187			5,162,410
Non-Current Liabilities
Operating Lease Liability		473,794			680,280
Note Payable to Surety Bank		-			797,597
Total Non-Current Liabilities		473,794			1,477,877
Total Liabilities		4,638,981			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:		3			3
2,500 shares issued and outstanding at September 30, 2026
2,500 shares issued and outstanding at December 31, 2025
Series B Convertible Preferred Stock: 5,000,000 shares authorized, and:		40			40
40,000 shares issued and outstanding at September 30, 2026
40,000 shares issued and outstanding at December 31, 2025
Common Stock, $0.001 par value; 100,000,000 shares authorized, and:		14,823			14,823
14,822,678 shares issued and outstanding at September 30, 2026
14,822,678 shares issued and outstanding at December 31, 2025
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 September 30, 2026 and December 31, 2025		470,730			470,730
Accumulated Deficit		(37,787,673	)		(28,839,889	)
Total Shareholders' Equity		3,684,475			12,632,260
Total Liabilities and Shareholders' Equity	$	8,323,457		$	19,272,548

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

F-1

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LFTD PARTNERS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2026			2025			2026			2025
Net Sales	$	4,808,812		$	9,056,742		$	22,672,212		$	28,505,928
Cost of Goods Sold		4,166,954			4,899,247			23,085,201			18,884,646
Gross Profit		641,858			4,157,495			(412,989	)		9,621,282
Operating Expenses
Payroll Expense		1,070,534			1,169,117			3,481,434			3,665,391
Professional Fees		137,817			132,424			354,431			568,108
Bank Charges and Merchant Fees		134,025			159,042			423,594			441,908
Advertising and Marketing		578,284			426,573			1,410,455			1,374,018
Provision for Credit Losses – Settlement Receivables		25,000			-			25,000			-
Bad Debt Expense		864,376			418,918			863,753			664,686
Impairment of Hemp-Specific Fixed Assets		-			-			208,049			-
Depreciation and Amortization		22,299			62,161			132,236			186,938
Collab Commission and Royalty Expense		-			33,899			-			106,739
Other Operating Expenses		443,363			442,570			1,414,315			1,738,729
Total Operating Expenses		3,275,698			2,844,704			8,313,267			8,746,517
Income/(Loss) From Operations		(2,633,840	)		1,312,791			(8,726,256	)		874,765
Other Income/(Expenses)
Impairment of Investment in Bendistillery		-			-			(99,800	)		-
Interest Income		6,930			23,695			22,794			75,677
Interest Expense		(20,837	)		(73,481	)		(63,813	)		(230,948	)
Loss From Inventory Theft		-			(358,072	)		-			(358,072	)
Theft Expense		-			-			-			(350,000	)
Settlement Income		-			-			-			177,500
Settlement Costs		-			-			(100,000	)		-
Debt Financing Expenses		(799	)		(32,803	)		(25,790	)		(38,318	)
Loss on Debt Extinguishment		(16,209	)		-			(16,209	)		-
Penalties		(1,023	)		(1,316	)		(4,627	)		(2,999	)
Gain/(Loss) on Disposal of Assets Held for Sale and Other Fixed Assets		143,468			-			131,342			-
Loss on Deposits		-			-			-			(5,000	)
Gain on Forgiveness of Debt		-			-			-			21,681
Total Other Income/(Expenses)		111,530			(441,977	)		(156,103	)		(710,479	)
Income/(Loss) Before Provision for Income Taxes		(2,522,310	)		870,814			(8,882,359	)		164,286
Benefit/(Provision) for Income Taxes		(817,139	)		(236,557	)		(55,329	)		(102,021	)
Net Income/(Loss)	$	(3,339,449	)	$	634,257		$	(8,937,688	)	$	62,265
Less: Accrued Preferred Stock Dividends		(3,403	)		(3,403	)		(10,097	)		(10,099	)
Net Income/(Loss) Attributable to Common Stockholders	$	(3,342,852	)	$	630,854		$	(8,947,785	)	$	52,166

Earnings/(Loss) Per Common Share Attributable to Common Stockholders
Basic	$	(0.23	)	$	0.04		$	(0.60	)	$	0.00
Diluted	$	(0.23	)	$	0.04		$	(0.60	)	$	0.00

Weighted average number of common shares outstanding
Basic		14,822,678			14,822,678			14,822,678			14,822,678
Diluted		14,822,678			14,964,678			14,822,678			14,964,678

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

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LFTD PARTNERS INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

(UNAUDITED)

									Additional		Deferred Contingent Stock					Total
	Preferred Stock				Common Stock				Paid-in		to be		Accumulated			Shareholders'
	Shares		Amount		Shares		Amount		Capital		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
Series A Preferred Stock dividend payable														(1,890	)		(1,890	)
Series B Preferred Stock dividend payable														(1,513	)		(1,513	)
Net Income														634,257			634,257
Balance, September 30, 2025		42,500	$	43		14,822,678	$	14,823	$	40,986,553	$	470,730	$	(3,915,542	)	$	37,556,607

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
Series A Preferred Stock dividend payable														(1,890	)		(1,890	)
Series B Preferred Stock dividend payable														(1,513	)		(1,513	)
Net Loss														(3,339,449	)		(3,339,449	)
Balance, September 30, 2026		42,500	$	43		14,822,678	$	14,823	$	40,986,553	$	470,730	$	(37,787,673	)	$	3,684,475

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

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LFTD PARTNERS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended
	September 30,
	2026			2025
Cash Flows From Operating Activities
Net Income/(Loss)	$	(8,937,688	)	$	62,265
Adjustments to Reconcile Net Income/(Loss) to Net Cash Provided by/(Used in) Operating Activities
Impairment of Investment in Bendistillery		99,800			-
Provision for Credit Losses – Settlement Receivables		25,000			-
Sales Allowance		-			45,982
Spoiled and Written Off Inventory		2,356,706			769,104
Inventory Reserve Expense		5,316,198			-
Bad Debt Expense		863,753			664,686
Impairment of Hemp-Specific Fixed Assets		208,049			-
Depreciation and Amortization		336,182			416,196
Loss From Inventory Theft		-			358,072
Settlement Income		-			(177,500	)
Debt Financing Expenses		25,790			38,318
Loss on Debt Extinguishment		16,209			-
Loss/(Gain) on Disposal of Assets Held for Sale and Other Fixed Assets		(131,342	)		-
Loss on Deposits		-			5,000
Gain on Forgiveness of Debt		-			(21,681	)
Deferred Income Taxes		140,211			(52,539	)
Effect on Cash of Changes in Operating Assets and Liabilities
Prepaid Expenses		242,925			1,339,432
Accounts Receivable		(171,986	)		(659,929	)
Inventory		920,931			(1,888,260	)
Change in Right Of Use Asset		153,344			171,305
Change in Receivable Loans from Extrax NM		-			(57,392	)
Other Assets		(10,040	)		4,447
Income Tax Receivable and Payable, net		(145,822	)		796,389
Collab Commissions and Royalties Payable		-			(36,288	)
Deferred Revenue		(886,894	)		217,873
Accounts Payable and Accrued Expenses		15,711			(1,657,457	)
Accounts Payable and Interest Payable to Related Parties		(4,794	)		904
Change in Settlement Asset and Receivables		(225	)		612,090
Change in Operating Lease Liabilities		(153,880	)		(165,829	)
Net Cash Provided By Operating Activities		278,139			785,188
Cash Flows From Investing Activities
Purchases of Fixed Assets		(125,032	)		(87,082	)
Proceeds from Sale of Assets Held for Sale and Other Fixed Assets, Net of Selling Costs		1,448,503			-
Purchase of Intangible Asset		(5,023	)
Net Cash Provided by/(Used in) Investing Activities		1,318,448			(87,082	)
Cash Flows From Financing Activities
Proceeds from Related Party Note		-			350,000
Payments on Related Party Note		(3,846	)		(211,538	)
Payments on Surety Bank Loans		(861,878	)		(1,050,849	)
Payments of Dividends to Preferred Stockholders		(12,000	)		(12,002	)
Net Cash Used In Financing Activities		(877,723	)		(924,389	)
Net Increase/(Decrease) in Cash		718,864			(226,283	)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period		1,767,123			3,146,947
Cash, Cash Equivalents and Restricted Cash at End of Period	$	2,485,987		$	2,920,664

	For the Nine Months Ended
	September 30,
	2026		2025
Supplemental Cash Flow Information
Cash Paid For Interest	$	68,077	$	236,440
Cash Paid/(Received) For Income Taxes		54,288		(670,333	)

Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets
Cash and Cash Equivalents	$	2,485,987	$	1,920,664
Restricted Cash		-		1,000,000
Total Cash, Cash Equivalents and Restricted Cash at End of Period	$	2,485,987	$	2,920,664

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

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LFTD PARTNERS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC.

LFTD Partners Inc., Jacksonville, Florida, was organized under the laws of the State of Nevada on January 2, 1986. We were a former shell company, primarily engaged in identifying, structuring, and seeking to execute acquisitions of all or a portion of one or more operating businesses. Between 2011 and 2013, we acquired and operated several businesses linked to the defense industry. In 2018, we shifted focus to the cannabis industry where we have operated since. Shares of the Company’s common stock are listed for trading on the OTCQB Venture Market under the symbol “LIFD”.

LFTD Partners is the parent corporation of Lifted Liquids, Inc. d/b/a Lifted Made, d/b/a Urb Finest Flowers, d/b/a Highlandia and d/b/a LM Nutra, Kenosha, Wisconsin (“Lifted Made” or “Lifted”), which manufactures and sells hemp-derived and other psychoactive products under its Urb Finest Flowers (“Urb”) brand (www.urb.shop) and other brands, hemp-derived beverages under the Highlandia brand (www.Highlandia.com), and hemp-free health and wellness gummies under its Mielos brand (www.mielos.com). Lifted also has plans to manufacture and sell hemp-free gummies in multiple flavors under a new brand. Lifted also manufactures and sells hemp-derived and hemp-free products to private label clients, and licenses the Urb brand name to Extrax NM LLC in New Mexico for use on marijuana products. LFTD Partners also owns a 4.99% non-controlling equity interest in hemp-derived beverage and products maker Ablis (www.Ablis.shop), and in craft distiller Bendistillery, Inc. (www.Bendistillery.com), both located in Bend, Oregon.

LFTD Partners is completely dependent upon revenue from Lifted to stay in business and to remain solvent. If Lifted’s revenue were to be seriously disrupted, LFTD Partners would face severe financial difficulties including a potential bankruptcy.

At this point in time, Lifted’s remaining major line of business—intoxicating hemp-derived products—is at severe risk of serious disruption and potential elimination. During the third quarter of 2026, Lifted discontinued its other former major line of business—products containing kratom-derived 7-hydroxymitragynine, MGM-15, and other kratom-derived compounds (collectively, “7-OH”).

In November 2025, Section 781 of Public Law 119-37 enacted changes to the federal definition of hemp (the “Federal Hemp Restrictions”) that would cause many intoxicating hemp-derived products to no longer qualify as hemp and instead be treated as marijuana under federal law. These changes include restrictions on intermediate and final hemp-derived cannabinoid products containing cannabinoids that “are not capable of being naturally produced by a Cannabis sativa L. plant”; a total THC limit of 0.3% on a dry weight basis, including THCA; a limit of 0.4 milligrams per container of final hemp-derived cannabinoid products for the combined total of THC and other cannabinoids with similar effects; and restrictions on products containing cannabinoids that can occur naturally in the cannabis plant but “were synthesized or manufactured outside the plant.”

These changes were originally scheduled to take effect on November 12, 2026. On September 2, 2026, the President signed into law H.R. 6500, the “Continuing Appropriations and Extensions Act, 2027,” enacted as Public Law 119-103. Section 2019 of that law postponed, until December 11, 2026, the application of the 0.3% total THC limit, including THCA; the 0.4-milligram per-container limit for final hemp-derived cannabinoid products; and the exclusion from the definition of hemp of intermediate and final hemp-derived cannabinoid products containing cannabinoids that the cannabis plant can naturally produce but that “were synthesized or manufactured outside the plant.” However, the exclusion of intermediate and final hemp-derived cannabinoid products containing cannabinoids that cannot naturally be produced by the cannabis plant remains scheduled to take effect on November 12, 2026, at which time those products would no longer qualify as hemp and would instead be treated as marijuana under federal law. Even if the Federal Hemp Restrictions are further delayed, modified or repealed, numerous states have enacted laws restricting or prohibiting sales of intoxicating hemp-derived products.

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Pursuant to a temporary scheduling order issued by the U.S. Drug Enforcement Administration (“DEA”) and published in the Federal Register on August 26, 2026, mitragynine pseudoindoxyl, MGM-15 and MGM-16, including certain related forms, were temporarily placed in Schedule I of the Controlled Substances Act, effective August 26, 2026. On October 14, 2026, the DEA published a new notice of intent proposing to temporarily place 7-hydroxymitragynine and mitragynine pseudoindoxyl in Schedule I when either substance alone, or their combined amount when both are present, exceeds specified thresholds. As of the date of this report, the proposed temporary scheduling order had not been issued, and the August 26, 2026 temporary scheduling order remained in effect.

In July 2026, in response to federal regulatory developments and uncertainty affecting 7-OH, Lifted ceased all sales of 7-OH, relinquished all ownership, possession and control of its remaining 7-OH inventory to a third party, and wrote off that inventory against the previously recorded inventory reserve.

The Federal Hemp Restrictions also threaten to materially disrupt or eliminate Lifted’s remaining major line of business. Lifted has experienced slowing sales activity and slower collection of accounts receivable in response to regulatory uncertainty and changing market conditions and has reduced its remaining inventory of certain affected hemp-derived products. If Lifted’s remaining major line of business is materially disrupted or eliminated, Lifted’s operating results, liquidity and cash flows would be materially adversely affected. Consequently, Lifted could experience significant liquidity constraints that could impair its ability to satisfy payroll, debt service, accounts payable, rent, insurance, taxes, professional fees, and other operating obligations as they become due. If the Company is unable to offset these revenue declines through cost reductions, asset sales, financing transactions, or diversification initiatives, management believes that the Company could become insolvent and may be required to seek protection under applicable bankruptcy laws.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements. To address these conditions, management and the boards of directors of Lifted and LFTD Partners have implemented, and continue to evaluate, the following initiatives to preserve liquidity, reduce operating costs, monetize assets and diversify the Company’s operations, although there can be no assurance that these initiatives will be completed successfully or will be sufficient to alleviate the substantial doubt regarding the Company’s ability to continue as a going concern:

(1)

During 2026, Lifted reduced its workforce, including employees and independent contractors, from nearly 200 at its peak to approximately 68 as of the date of this report. Significant additional workforce reductions may be necessary if Lifted’s remaining major line of business is seriously disrupted or eliminated. Such reductions could involve personnel with valuable skills, experience and relationships, which could materially adversely affect Lifted’s future operations and revenues.

(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 sale closed on September 29, 2026. At closing, Lifted used $841,110 of the sale proceeds to satisfy the Business Loan, consisting of all outstanding principal and accrued interest and a $9,100 prepayment penalty. Upon payment, the Business Loan was satisfied in full and terminated, and Surety Bank’s first-priority mortgage on the property was released. The Company has no remaining bank debt outstanding. The remaining net sale proceeds were added to Lifted’s working capital.

(3)

Given the discontinuation of Lifted’s 7-OH business and the serious regulatory risks confronting its remaining major line of business, LFTD Partners believes there is an urgent need for Lifted and LFTD Partners to diversify away from intoxicating hemp-derived products and 7-OH.

In the case of Lifted, management 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 reselling, other hemp-free and kratom-free products that may appeal to consumers whose access to intoxicating hemp-derived products and 7-OH has been reduced or eliminated as described above.

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	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 conducted 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’ concerns regarding the future of Lifted’s intoxicating hemp-derived business and the discontinuation of its 7-OH business; 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, because the Company has limited cash and Lifted must devote available capital to expansion opportunities in hemp-derived THC beverages, hemp-free gummies and other new consumer products, it has been difficult to pursue apartment-building acquisitions requiring significant equity contributions. Consequently, the Company is focusing a significant portion of its due diligence efforts on properties that include seller financing or assumable debt.

		If and when the Company is successful in acquiring one or more apartment buildings and/or laundromats, the CEO of the Company has been authorized by our Board of Directors to implement a change in the Company’s name and trading ticker symbol, in order to highlight the Company’s diversification away from its historical reliance on intoxicating hemp-derived products and 7-OH. There can be no assurance that the Company will successfully diversify or do so within any particular timeframe.

Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

Our principal headquarters are located at 14155 Pine Island Drive, Jacksonville, Florida 32224. Our telephone number is (847) 915-2446. Our corporate website address is www.LFTDPartners.com.

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Consolidated Financial Statements – The accompanying unaudited interim consolidated financial statements include the accounts of LFTD Partners and its wholly owned subsidiaries. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements and, accordingly, certain information, footnotes and disclosures normally included in the annual financial statements, prepared in accordance with US GAAP, have been condensed or omitted in accordance with SEC rules and regulations. As part of the consolidation, all intercompany transactions have been eliminated. The financial data presented herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Certain previously reported amounts have been reclassified between line items to conform to the current period presentation. Results of interim periods should not be considered indicative of the results for the full year. These unaudited interim consolidated financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited consolidated financial statements. Actual results could differ from these estimates.

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Use of Estimates – The preparation of financial statements in conformity with US GAAP typically requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. Key estimates in these financial statements include, but are not limited to, inventory allowance, prepaid inventory allowance, allowance for doubtful accounts, sales allowance, estimated useful lives of fixed assets, impairment of fixed assets, impairment of investments, and valuation allowance on deferred income tax assets.

Cash and Cash Equivalents – Cash and cash equivalents as of the reported period ends include cash on-hand. The Company considers all highly liquid investments with an original maturity date within 90 days to be cash equivalents. Cash equivalents are carried at cost. The Company maintains its cash balance at a credit-worthy financial institution that is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits at this bank exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk.

Fair Value of Financial Instruments – The historical carrying amount of the financial instruments, which principally include cash, trade receivables, historical accounts payable and accrued expenses, approximates fair value due to the relative short maturity of such instruments.

Accounting Standards Codification (“ASC”) 820 defines fair value, establishes a framework for measuring fair value under US GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair-value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Accounting for Investments

The Company’s Investment in Lifted

The financial statements of LFTD Partners are consolidated with Lifted’s, since Lifted is a wholly owned subsidiary of LFTD Partners.

The Federal Hemp Restrictions (described in NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC.) necessitated the calculation and recording of an impairment charge on the Lifted Goodwill (defined below) and Oculus Goodwill (defined below). Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

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NOTE 4 – THE COMPANY’S INVESTMENTS

The Company’s Investment in Lifted

The Company’s Investments in Ablis and Bendistillery

The Company’s investments in Ablis and Bendistillery are recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company owns less than 20% of the equity ownership of each of these entities and has no substantial influence over the management of the businesses. In accordance with US GAAP, the Company does not consolidate its financial statements with those of Ablis and Bendistillery.

At each reporting period, the Company makes a qualitative assessment considering impairment indicators to evaluate whether its investments are impaired. Factors that the Company would consider indicators of impairment include: (1) a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee, (2) a significant adverse change in the regulatory, economic, or technological environment of the investee, (3) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates, (4) a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of that investment, and (5) factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants, if any.

The qualitative assessments at the end of first, second and third quarters are done via conference calls with the management teams of Ablis and Bendistillery. The qualitative assessment at the end of the fourth quarter relating to these entities also includes review of their respective financial statements that have been reviewed by a third-party accounting firm. At that time, the Company performs an annual impairment assessment. The reviewed financial statements of these companies are not audited, and the Company is not active in the management of these companies, and except for these companies’ quarterly meetings with the management of the Company, the Company’s assessment of these companies is inherently limited to infrequent and relatively brief conversations with officers of these companies and to reviews of those reviewed financial statements.

The Federal Hemp Restrictions necessitated the calculation and recording of an impairment of LFTD Partners’ investment in Ablis, from $399,200 to $0 as of December 31, 2025. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 4 – THE COMPANY’S INVESTMENTS

The Company’s Investments in Ablis and Bendistillery

Regarding LFTD Partners investment in Bendistillery: for a number of reasons, as of December 31, 2025, LFTD Partners recorded an impairment charge on its investment in Bendistillery, reducing the carrying value of LFTD Partners’ investment in Bendistillery to $99,800. Then, due primarily to regulatory challenges faced by Bendistillery, as of June 30, 2026, LFTD Partners recorded an impairment charge on its remaining investment in Bendistillery, reducing the carrying value of its investment in Bendistillery to $0. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 4 – THE COMPANY’S INVESTMENTS

The Company’s Investments in Ablis and Bendistillery

Prepaid Expenses – Prepaid expenses relate primarily to advance payments made for purchases of inventory; prepaid inventory is reclassified as inventory when the purchased items are received by the Company. Other expenses, such as prepaid health and dental insurance, among others, are also recognized as prepaid expenses when advance payments are made for services that will be performed in periods subsequent to the balance sheet date. Prepaids for these other expenses are recognized as expenses ratably over the applicable service period. Due to uncertainty regarding when certain hemp-related items will be received and, for raw materials, the additional time required to convert those materials into finished goods before the applicable Federal Hemp Restrictions take effect, management recorded an allowance against hemp-related prepaid inventory as of September 30, 2026. The allowance reflects management’s estimate of amounts that may not be recoverable through the receipt, production and sale of the related products before the applicable restrictions take effect.

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Accounts Receivable – The Company evaluates the collectability of its trade accounts receivable based on a number of factors. Management of the Company reviews and discusses all outstanding customer trade balances as of reporting period end. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded (the “Allowance for Doubtful Accounts”), which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. Management also considers industry-specific factors which may impact customers’ ability to meet their financial obligations to the Company.

In addition to specific customer identification of potential bad debts, management takes into consideration Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses, which is codified as Accounting Standards Codification Topic 326, adds to US GAAP the current expected credit loss model (“CECL Model”), which is a measurement model based on expected losses rather than incurred losses. Under the CECL Model, an entity recognizes its estimate of expected losses as an allowance. The Company has considered the applicable guidance in ASU 2016-13. Key aspects of the CECL Model include the following:

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

Accounting Standards Update 2025-05 (“Update”) to ASC Topic 326 is effective for periods beginning after December 15, 2025. The amendments in this Update provide a practical expedient under which an entity assumes that current conditions as of the balance sheet date do not change for the remaining life of the current trade receivables, thereby eliminating the requirement to identify, analyze, and document macroeconomic data as part of developing a reasonable and supportable forecast when estimating expected credit losses.

LFTD Partners elects the practical expedient, starting with its financial statements for the year ended December 31, 2025, to assume balance sheet date conditions do not change for the remaining life of current trade receivables.

In performing its CECL Model Analysis, management calculates the ratio of write offs to sales made to wholesalers and distributors for the trailing three-year period (the “Bad Debt Loss Rate”). The Bad Debt Loss Rate is then multiplied by sales made to wholesalers and distributors during the trailing twelve months (the “Bad Debt Calc”). The Bad Debt Calc is compared to the total accounts receivable that is older than 90 days as of reported period end; for conservatism, whichever is larger is considered the Allowance for Doubtful Accounts as of reported period end. The Company’s position is that the Company’s conservative approach toward the treatment of Allowance for Doubtful Accounts provides sufficient coverage in relation to potential credit losses from outstanding invoice write-offs. Accounts receivable of $1,839,757, net of $2,062,481 allowance for doubtful accounts, were outstanding at September 30, 2026. In comparison, accounts receivable of $2,531,524, net of $1,269,590 allowance for doubtful accounts, were outstanding at December 31, 2025.

The Company records an allowance for sales for estimated future discounts and refunds related to products sold prior to the reporting period end that are expected to be credited or refunded to customers. The allowance represents management’s estimate of consideration to which the Company does not expect to be entitled and is recorded as a reduction of net sales. A sales allowance of $700,000 and $350,000 was reported as of September 30, 2026 and December 31, 2025, respectively.

Adjustments to the allowance for sales, whether increases or decreases, are recorded as adjustments to net sales in the Consolidated Statements of Operations, with a corresponding adjustment to the Return Liability within Accounts Payable and Accrued Expenses on the Consolidated Balance Sheets. In periods prior to December 31, 2025, the allowance was presented as a contra accounts receivable account; however, the Company has reclassified the balance to a Return Liability to more appropriately reflect the nature of the obligation under ASC 606.

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A primary impetus for the need of a sales allowance is because the regulatory landscape at the municipal, state and federal levels in which Lifted operates is unstable and unpredictable. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

Moreover, sometimes in the past, when employees of federal, state and local regulatory agencies and/or law enforcement have made statements and/or issue correspondence that claim or imply that certain products that Lifted sells are unsafe or illegal, or should be banned, these statements and correspondence, and industry publications and/or news media coverage of such statements and correspondence, have triggered confusion, uncertainty or alarm among the distributors, retailers and consumers who purchase our products, and consequently have resulted in returns of our products. On a case-by-case basis, the Company has credited or refunded the customer for returns. In many cases, the Company has been able to re-sell the returned products to other distributors, retailers and consumers. In anticipation of making discretionary concessions and issuing credits for certain returned products, management records a sales allowance.

Described below are some of the reasons why a customer may want to return an ordered item, and how the Company responds in each situation:

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

Impact of Delayed Customer Payments on Cash Flow – The Company’s ability to generate sufficient operating cash flow is directly affected by the timing and collectability of its accounts receivable. A significant portion of the Company’s revenue comes from wholesale and distributor sales, which often involve extended payment terms. As a result, delays in customer payments can have a material impact on cash flow, liquidity, and working capital availability. Fluctuations in cash collections can impact the Company’s ability to meet short-term obligations, fund inventory purchases, and invest in growth initiatives. Prolonged delays in accounts receivable collection could necessitate further adjustments to working capital management strategies, including modifications to vendor payment schedules, securing additional financing, or reevaluating sales terms to improve cash flow predictability. Management assesses the impact of delayed customer payments on overall liquidity and considers credit risk and allowance for doubtful accounts, in an effort to provide some safeguard against potential cash flow disruptions. However, if economic conditions deteriorate or customer creditworthiness declines further, additional measures may be required to preserve liquidity and operational stability.

Customer Concentration Risk – As of each September 30, 2026 and 2025, one customer represented more than 10% of gross accounts receivable.

Inventory – Inventory is stated at the lower of cost and net realizable value. Cost of raw materials is determined using an average-cost method. Cost of finished goods is determined using bill-of-material calculations that include raw material and labor costs, together with allocated manufacturing overhead. Net realizable value represents the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The determination of net realizable value requires significant judgment and is based on information available at the measurement date, expected business plans and market conditions, including anticipated shrinkage, inventory age, future demand, expected selling prices, and the regulatory environment and related challenges affecting the industries in which the Company operates.

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As a result, the actual amount received on sale could differ from the estimated value of inventory. Periodic reviews are performed on the inventory balance. Inventory consisted of the following at September 30, 2026 and December 31, 2025:

	September 30, 2026			December 31, 2025
Raw Goods	$	4,061,828		$	5,906,501
Finished Goods		3,364,773			5,051,322
Inventory Allowance		(5,062,613	)		-
Total Inventory	$	2,363,988		$	10,957,823

Certain overhead costs, including facility leases, utilities, insurance, indirect labor and depreciation on certain machinery and equipment, are allocated to finished goods based on the estimated percentage cost toward the finished goods. Finished goods inventory included allocated overhead costs of $299,866 and $373,269 as of September 30, 2026 and December 31, 2025, respectively.

Inventory Allowance

The Company records an inventory allowance when the carrying value of inventory exceeds its estimated net realizable value. In determining the appropriate allowance, management considers, among other factors, historical and current sales, months’ supply of inventory, expected customer demand, expected production needs, historical raw material usage, inventory aging and expiration dates, obsolescence, expected selling prices, and regulatory developments affecting the Company’s products.

As of September 30, 2026, Lifted’s total inventory allowance was $5,062,613, consisting of $4,991,182 related to hemp-derived or hemp-related inventory and $71,431 related to other inventory. No inventory reserve was recorded against Lifted’s hemp-derived inventory as of December 31, 2025 because, based on the information then available, management believed that recording such a reserve would have been premature.

Regarding Lifted’s hemp-derived inventory, federal legislation enacted in November 2025 will cause many intoxicating hemp-derived products to no longer qualify as hemp and instead be treated as marijuana under federal law. Subsequent legislation postponed, until December 11, 2026, the application of certain restrictions, including new THC limits and restrictions on products containing cannabinoids that can naturally be produced by the cannabis plant but were synthesized or manufactured outside the plant. However, restrictions on products containing cannabinoids that cannot naturally be produced by the cannabis plant remain scheduled to take effect on November 12, 2026. Numerous states also restrict or prohibit sales of intoxicating hemp-derived products. Management considered these regulatory developments, together with expected demand, historical sales and usage, expected production needs, inventory aging and expiration dates, and other relevant factors, in determining the reserve recorded against Lifted’s hemp-derived inventory as of September 30, 2026. The Company cannot predict whether the federal restrictions will take effect as scheduled or will be delayed, modified or repealed, or what demand for hemp-derived products will be during the fourth quarter of 2026.

Regarding Lifted’s kratom-derived inventory, regulatory developments affecting 7-hydroxymitragynine and related kratom-derived products caused the Company to record an inventory allowance of $341,014 as of March 31, 2026 and to increase the allowance to a $1,434,458 inventory reserve as of June 30, 2026. In July 2026, Lifted ceased all sales of 7-OH, relinquished all ownership, possession and control of its remaining 7-OH inventory to a third party, and wrote off that inventory against the previously recorded inventory allowance. Accordingly, as of September 30, 2026, Lifted held no 7-OH inventory and no related inventory reserve remained. For more information, reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

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NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC.

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

Cost of Goods Sold – Cost of goods sold primarily consists of the costs of raw goods utilized in the manufacture of products, direct labor, co-packing fees, freight and shipping charges, and certain quality control costs, such as lab testing costs.

Spoiled and obsolete inventory that is written off is a component of cost of goods sold. During the quarter ended September 30, 2026, $2,060,328 of obsolete and spoiled inventory was written off. During the quarter ended September 30, 2025, the Company recognized a net benefit of $11,826 related to the write off of obsolete and spoiled inventory as a result of the reversal of a write off of $185,781 of certain packaging in the second quarter of 2025; the second quarter 2025 write off was reversed in the third quarter of 2025 because the packaging was expected to be used in production. During the nine months ended September 30, 2026, and 2025, $2,356,706 and $769,104 of obsolete and spoiled inventory was written off, respectively.

The process of determining obsolete or spoiled inventory involves:

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

Inventory reserve expense is a component of cost of goods sold. During the three months ended September 30, 2026, inventory reserve activity resulted in a net credit to cost of goods sold of $1,279,897. During the three months ended September 30, 2025, there was no inventory reserve activity. During the nine months ended September 30, 2026 and 2025, $5,316,198 and $0 of inventory reserve expense was reported, respectively.

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Inventory

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

Fixed Assets – Fixed assets (property and equipment) are stated at cost. Fixed assets costing less than $2,500 are expensed as incurred, while fixed assets costing $2,500 or more are capitalized. Depreciation of machinery and equipment, furniture and fixtures, building improvements, leasehold improvements, computer equipment, vehicles and trade show booths is calculated using the straight-line method over the assets’ estimated useful lives. Prior to its classification as held for sale on June 16, 2026, Lifted’s former main operations building located at 5511 95th Avenue, Kenosha, Wisconsin (the “5511 Building”) was depreciated on the same basis. Depreciation of the 5511 Building ceased upon its classification as held for sale, and the building was sold on September 29, 2026. Normal repairs and maintenance are expensed as incurred, while expenditures that materially increase an asset’s value or extend its useful life are capitalized. Upon disposition of an asset, its cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in net income.

Management regularly reviews property and equipment and other long-lived assets for possible impairment. This review occurs annually, or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If there is an indication of impairment, management prepares an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. Fair value is determined using valuation techniques appropriate under the circumstances and consistent with ASC 820. Estimates of future cash flows and fair value involve significant management judgment and are based on information available at the time the estimates are made.

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During the first quarter of 2026, management performed an ASC 360 recoverability test of Lifted’s hemp-specific fixed assets by comparing their carrying amount as of March 31, 2026 to projected undiscounted cash flows through mid-November 2026. The cash flow projection was based on first-quarter 2026 results annualized through mid-November and assumed that Lifted’s hemp-derived product sales would cease beginning November 12, 2026, which was the scheduled effective date of the Federal Hemp Restrictions at the time of the analysis. The projected undiscounted cash flows were less than the carrying amount of the hemp-specific fixed assets. At the time of the analysis, management could not predict whether the Federal Hemp Restrictions would take effect as scheduled or would be delayed, modified or repealed, the level of future demand for hemp-derived products, or the proceeds that might be realized from a sale of the affected assets. Given these uncertainties, management recorded an impairment charge equal to 50% of the net book value of the hemp-specific fixed assets, or $143,421, as of March 31, 2026.

During the second quarter of 2026, management performed an updated ASC 360 recoverability test of Lifted’s hemp-specific fixed assets using information available as of June 30, 2026. The cash flow projection was based on results for the six months ended June 30, 2026 annualized through mid-November and assumed that Lifted’s hemp-derived product sales would cease beginning November 12, 2026, which was the scheduled effective date of the Federal Hemp Restrictions at the time of the analysis. The projected undiscounted cash flows were less than the carrying amount of the hemp-specific fixed assets. Based on the updated analysis, the Company fully impaired certain hemp-specific fixed assets and recognized an additional impairment charge of $64,628 during the second quarter of 2026. Following this charge, a pre-roll machine (the “Pre-Roll Machine”) with a carrying amount of approximately $59,266 was the only hemp-specific fixed asset with a remaining positive carrying amount. The cumulative impairment recognized on hemp-specific fixed assets was $208,049 as of June 30, 2026.

On September 2, 2026, H.R. 6500 was enacted as Public Law 119-103, postponing until December 11, 2026 certain Federal Hemp Restrictions, including new THC limits and restrictions on intermediate and final hemp-derived cannabinoid products containing cannabinoids that can naturally be produced by the cannabis plant but were synthesized or manufactured outside the plant. Restrictions on products containing cannabinoids that cannot naturally be produced by the cannabis plant remain scheduled to take effect on November 12, 2026.

As of September 30, 2026, after giving effect to the impairment charges recognized during the first and second quarters of 2026 and depreciation recorded during the third quarter, the Pre-Roll Machine, with a carrying amount of approximately $51,535, was the only hemp-specific fixed asset with a remaining positive carrying amount. Management estimated that the machine could be sold for an amount exceeding its carrying amount. Accordingly, the Company did not recognize an additional impairment charge during the third quarter of 2026.

The Company may be required to record additional impairment charges on its hemp-specific fixed assets, and any efforts to sell such assets may result in significant losses due to limited demand or substantial price discounts. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC.

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

Assets Held for Sale – The Company classifies a long-lived asset or disposal group as held for sale in the period in which all applicable criteria under ASC 360 are met. Assets classified as held for sale are presented separately from property and equipment and measured at the lower of their carrying amount or fair value less cost to sell. Depreciation ceases upon classification as held for sale. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 6 - ASSETS HELD FOR SALE

Revenue – The Company recognizes revenue in accordance with ASC 606. The majority of the Company’s sales are of branded products to distributors, followed by the Company’s sales to wholesalers, and then the Company’s sales to end consumers. A minority of the Company’s sales are of raw goods to manufacturers, distributors and wholesalers. Distributors primarily sell Lifted’s products to vape and smoke shops, stores specializing in hemp-derived products, convenience stores, health food stores, and other outlets. Lifted extends terms selectively to certain distributors and wholesalers. End consumers do not have payment terms and pay at the time of purchase. During the three months ended September 30, 2026, no customer accounted for more than 10% of the Company’s revenue. One customer accounted for more than 10% of the Company’s revenue during each of the nine months ended September 30, 2026 and the three and nine months ended September 30, 2025. 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.

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The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers. Discounts and rebates provided to customers are recorded as a reduction to gross sales. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

License Fee – On June 1, 2023, Lifted and Extrax NM LLC (“ENM”) entered into an Agreement (the “ENM Agreement”). Pursuant to the ENM Agreement, (1) Lifted will sell certain devices/objects to ENM, and Lifted will loan certain amounts to ENM, and (2) ENM will manufacture and exclusively sell Urb-branded marijuana products to licensed marijuana dispensaries located in New Mexico. ENM shall pay over to Lifted one-half of the gross sales proceeds, excluding only governmentally-imposed taxes, received by ENM from product sales, which payments shall be allocated and applied as follows: firstly, to repay Lifted for its loans to ENM; secondly, to pay to Lifted mutually agreed upon amounts for said devices/objects sold by Lifted to ENM; and thirdly, to pay to Lifted a license fee (the “License Fee”). The License Fee shall be calculated as an amount equal to (a) one-half of the gross sales proceeds paid to Lifted, minus (b) the loan repayment(s) and the amounts paid for said devices/objects sold by Lifted to ENM. License Fee is included in Net Sales, if any.

The ENM Agreement is for an Initial Term of 60 months, provided that if the aggregate product sales during the Initial Term are $10,000,000 or more, then the term of the ENM agreement will automatically renew for a Renewal Term of 60 months (and similarly in regard to Renewal Terms).

Lifted and ENM each shall have the right to terminate the ENM Agreement in specified circumstances, including in the event that its CEO determines in good faith, and provides evidence to other party proving, that the business being conducted pursuant to the terms and conditions of the ENM Agreement is no longer profitable for such company.

In July 2025, the Parties agreed:

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

Then, as of September 30, 2025, Lifted and ENM signed an Agreement pursuant to which ENM has acknowledged that it owes Lifted a total $421,835 in loans, and is obligated to pay Lifted a total of $102,686 in invoices; provided that the Agreement acknowledges that the repayment dates for those loans and invoices are uncertain, and that Lifted and ENM intend to restructure their deal no later than December 31, 2025, in a writing to be mutually agreed upon by Bobby Hallock on behalf of ENM and by Nicholas S. Warrender (“NWarrender”) on behalf of Lifted, so that, among other things, such loans and invoices are to be repaid by Extrax to Lifted over time using just Lifted’s share of the free cash flow generated by ENM’s operations under such restructured deal.

Because no restructuring of the deal occurred by December 31, 2025, and because the loans receivable from ENM are subject to allowance considerations under ASC 326, the Company determined that an allowance against the outstanding loans (“Provision for Credit Losses – Extrax NM Loans”) was necessary as of December 31, 2025. As such, as of December 31, 2025, the loans receivable from ENM (a non-current asset) total $421,835, and a Provision for Credit Losses – Extrax NM Loans for the same amount is recorded. The loans are non-interest bearing.

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No License Fee was reported during the nine months ended September 30, 2026 or 2025.

ENM also owed Lifted a total of $105,244 and $102,686 of invoices as of September 30, 2026 and December 31, 2025, respectively. There is an allowance recorded against the $102,686 of receivable invoices as of September 30, 2026 and December 31, 2025, respectively, because they were all older than 90 days, and the Company’s policy is to record an allowance for doubtful accounts for accounts receivable older than 90 days.

Segment Disclosures

The financial statements of LFTD Partners are consolidated with Lifted’s, since Lifted is a wholly owned subsidiary of LFTD Partners. All of the Company’s sales are generated by the Company’s wholly owned subsidiary Lifted; LFTD Partners as an entity by itself generates no sales.

Pursuant to ASC 280-10-50-1: “an operating segment is a component of a public entity that has all of the following characteristics:

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

Based on the similarities and shared resources of our production and related product portfolio, the Company views its operations and manages its business as one operating and one reporting segment. The Company’s CODM is NWarrender. Due to the rapidly evolving nature of the Company’s industry, NWarrender leads the Company’s efforts to launch new products to stay ahead of trends, find new sales channels, and modify sales strategies. Consumer demands, changes to regulations, proposed legislation, regulatory developments, resource needs for Lifted’s various brands, new product and diversification opportunities are some of the factors that are considered by NWarrender when determining how to allocate the Company’s resources for operations and business development.

The primary financial metrics reviewed by the CODM are revenue, cash, accounts receivable, inventory, cost of goods sold and operating expenses, as presented in the consolidated financial statements. Other segment items include interest income and expense, debt-related expenses, gains on fixed assets, and income tax benefit or provision, as presented in the consolidated statement of operations; these items are included in arriving at total segment net income/(loss) but are not the primary measures the CODM uses to evaluate operations or allocate resources. Since the Company has only one reportable segment, the segment amounts agree to the corresponding consolidated financial statement amounts.

Shown below are tables showing the approximate disaggregation of historical revenue:

	For the Three Months Ended								For the Nine Months Ended
	September 30,								September 30,
Revenue Category	2026				2025				2026				2025
Net sales of raw materials to customers	$	42,791	1	%	$	67,644	1	%	$	368,936	2	%	$	209,180	1	%
Net sales of products to private label clients		380,929	8	%		388,916	4	%		1,528,944	7	%		879,042	3	%
Net sales of products to wholesalers		530,870	11	%		1,131,999	12	%		2,619,621	12	%		4,425,808	16	%
Net sales of products to distributors		3,051,710	63	%		6,431,051	71	%		14,937,289	66	%		19,850,408	70	%
Net sales of products to end consumers		802,512	17	%		1,037,132	11	%		3,217,421	14	%		3,141,490	11	%
Net Revenue	$	4,808,812	100	%	$	9,056,742	100	%	$	22,672,212	100	%	$	28,505,928	100	%

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	For the Three Months Ended								For the Nine Months Ended
	September 30,								September 30,
Product Type	2026				2025				2026				2025
Beverage	$	163,945	3	%	$	-	0	%	$	489,601	2	%	$	-	0	%
Vapes		637,552	13	%		986,450	11	%		1,872,694	8	%		4,230,929	15	%
Edibles		3,698,829	77	%		7,549,197	83	%		19,186,189	85	%		22,395,667	79	%
Flower		133,424	3	%		275,139	3	%		640,970	3	%		831,386	3	%
Cartridges		108,839	2	%		240,525	3	%		399,403	2	%		1,007,001	4	%
Other		66,223	1	%		5,430	0	%		83,356	0	%		40,944	0	%
Net Sales	$	4,808,812	100	%	$	9,056,742	100	%	$	22,672,212	100	%	$	28,505,928	100	%

	For the Three Months Ended								For the Nine Months Ended
	September 30,								September 30,
Hemp vs Non-Hemp Product Sales	2026				2025				2026				2025
Hemp products	$	2,919,323	61	%	$	4,292,084	47	%	$	11,645,133	51	%	$	14,399,535	51	%
Non-hemp products		1,889,489	39	%		4,764,658	53	%		11,027,079	49	%		14,106,393	49	%
Net Sales	$	4,808,812	100	%	$	9,056,742	100	%	$	22,672,212	100	%	$	28,505,928	100	%

	For the Three Months Ended								For the Nine Months Ended
	September 30,								September 30,
Geographic Market	2026				2025				2026				2025
United States	$	4,808,812	100	%	$	9,054,889	100	%	$	22,672,212	100	%	$	28,504,075	100	%
International		-	0	%		1,853	0	%	$	-	0	%		1,853	0	%
Net Sales	$	4,808,812	100	%	$	9,056,742	100	%	$	22,672,212	100	%	$	28,505,928	100	%

Deferred Revenue – Deferred revenue consists of amounts received or invoiced for product orders before shipment and unrecognized compensation related to certain other services. For product sales, amounts received before shipment are recorded as deferred revenue. If payment has not been received, the Company records an accounts receivable for the invoiced amount but does not recognize revenue until the order is fully shipped. Compensation related to other services is recognized as revenue when earned under the applicable contractual arrangements. Any such compensation that has not yet been earned is recorded as deferred revenue.

At September 30, 2026, total deferred revenue was $493,155, consisting of $476,060 related to unfulfilled product orders, and $17,094 of unearned compensation related to certain other services. All deferred revenue as of September 30, 2026 is expected to be recognized as revenue in 2026. At December 31, 2025, total deferred revenue was $1,380,049, all of which related to unfulfilled product orders, and was recognized as revenue in the first quarter of 2026. Deposits from customers on unfulfilled product orders totaled $61,241 and $393,501 as of September 30, 2026 and December 31, 2025, respectively.

The decrease in deferred revenue from December 31, 2025 to September 30, 2026 was primarily attributable to the fulfillment of orders that were unfulfilled at December 31, 2025 and recognition of the related revenue during the nine months ended September 30, 2026, partially offset by new orders and other amounts for which the applicable revenue recognition criteria had not been satisfied as of September 30, 2026.

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Earnings/(Loss) Per Common Share Attributable to Common Stockholders – Basic earnings/(loss) per common share attributable to common stockholders is calculated by dividing net income/(loss), less accrued preferred stock dividends, by the weighted-average number of common shares outstanding during the period. Diluted earnings/(loss) per common share attributable to common stockholders is calculated by dividing net income/(loss), less accrued preferred stock dividends, by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. When dilutive, the incremental potential common shares issuable upon exercise of stock options and warrants, convertible preferred stock and any issuable Deferred Contingent Stock are determined by the treasury stock method. The following table summarizes the calculations of basic and diluted earnings/(loss) per common share for the three and nine months ended September 30, 2026 and 2025:

	For the Three Months Ended							For the Nine Months Ended
	September 30,							September 30,
	2026			2025				2026			2025
Net Income/(Loss)	$	(3,339,449	)	$	634,257		Net Income/(Loss)	$	(8,937,688	)	$	62,265
Less: Accrued Preferred Stock Dividends		(3,403	)		(3,403	)	Less: Accrued Preferred Stock Dividends		(10,097	)		(10,099	)
Net Income/(Loss) Attributable to Common Stockholders	$	(3,342,852	)	$	630,854		Net Income/(Loss) Attributable to Common Stockholders	$	(8,947,785	)	$	52,166

Weighted average number of common shares outstanding							Weighted average number of common shares outstanding
Basic		14,822,678			14,822,678		Basic		14,822,678			14,822,678
Diluted		14,822,678			14,964,678		Diluted		14,822,678			14,964,678

Earnings/(Loss) Per Common Share Attributable to Common Stockholders							Earnings/(Loss) Per Common Share Attributable to Common Stockholders
Basic	$	(0.23	)	$	0.04		Basic	$	(0.60	)	$	0.00
Diluted	$	(0.23	)	$	0.04		Diluted	$	(0.60	)	$	0.00

Recent Accounting Pronouncements – In September 2025, the FASB issued Accounting Standards Update 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments establish a probable-to-complete recognition threshold for capitalizing internal-use software costs, incorporate website-development-cost guidance into Subtopic 350-40, and supersede Subtopic 350-50. The amendments are effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual periods, with early adoption permitted. The Company early adopted ASU 2025-06 effective January 1, 2026 using the prospective transition method. Accordingly, the amended guidance is applied to new software and website-development costs incurred on or after January 1, 2026, including costs associated with projects in progress on that date. The adoption did not result in an adjustment to beginning retained earnings or any change to amounts recognized in the Company’s consolidated financial statements.

On December 14, 2023, the FASB issued a final standard on improvements to income tax disclosures, ASU 2023-09, Improvements to Income Tax Disclosures. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. For public business entities, the new requirements became effective for annual periods beginning after December 15, 2024, and as such the guidance was adopted by the Company in its 2025 year-end financial statements.

In addition, in November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026. The Company is currently evaluating the impact, if any, that the updated standard will have on the consolidated financial statements.

In July 2025, the FASB issued Accounting Standards Update 2025-05 to Financial Instruments – Credit Losses (Topic 326) (“Update”). The amendments in this Update provide a practical expedient under which an entity assumes that current conditions as of the balance sheet date do not change for the remaining life of the current trade receivables, thereby eliminating the requirement to identify, analyze, and document macroeconomic data as part of developing a reasonable and supportable forecast when estimating expected credit losses. LFTD Partners elected the practical expedient, starting with its financial statements for the year ended December 31, 2025, to assume balance sheet date conditions do not change for the remaining life of current trade receivables.

Off-Balance Sheet Arrangements – The Company has no off-balance sheet arrangements.

Reclassifications – Some items from the prior period have been reclassified within the financial statements to conform with the current presentation. These reclassifications had no effect on previously reported net income/(loss), total assets, total liabilities, or stockholders’ equity.

Business Combinations – The Company accounts for its acquisitions under ASC Topic 805, Business Combinations and Reorganizations (“ASC Topic 805”). ASC Topic 805 provides guidance on how the acquirer recognizes and measures the consideration transferred, identifiable assets acquired, liabilities assumed, non-controlling interests, and goodwill acquired in a business combination. ASC Topic 805 also expands required disclosures surrounding the nature and financial effects of business combinations. Acquisition costs are expensed as incurred.

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When the Company acquires a business, we allocate the purchase price to the assets acquired and liabilities assumed in the transaction at their respective estimated fair values. We record any premium over the fair value of net assets acquired as goodwill. The allocation of the purchase price involves judgments and estimates both in characterizing the assets and in determining their fair value. We use all available information to make these fair value determinations and engage independent valuation specialists to assist in the fair value determination of the acquired long-lived assets.

Accounting for Goodwill – Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers.

Goodwill is not amortized. Goodwill is tested at least annually for impairment at the report unit level. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount.

Impairment of goodwill is the condition that exists when the carrying amount of a reporting unit that includes goodwill exceeds its fair value. A goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. However, an entity shall consider the related income tax effect from any tax deductible goodwill, if applicable, when measuring the goodwill impairment loss.

An entity may first assess qualitative factors, to determine whether it is necessary to perform the quantitative goodwill impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any).

An entity may assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill.

An entity has an unconditional option to bypass the qualitative assessment described in the preceding paragraph for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period.

In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, an entity shall assess relevant events and circumstances. Examples of such events and circumstances include the following:

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

If, after assessing the totality of events or circumstances such as those described in the preceding paragraph, an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary.

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If, after assessing the totality of events or circumstances such as those described previously, an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity shall perform the quantitative goodwill impairment test.

The examples included above are not all-inclusive, and an entity shall consider other relevant events and circumstances that affect the fair value or carrying amount of a reporting unit in determining whether to perform the quantitative goodwill impairment test. An entity shall consider the extent to which each of the adverse events and circumstances identified could affect the comparison of a reporting unit’s fair value with its carrying amount. An entity should place more weight on the events and circumstances that most affect a reporting unit’s fair value or the carrying amount of its net assets. An entity also should consider positive and mitigating events and circumstances that may affect its determination of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity has a recent fair value calculation for a reporting unit, it also should include as a factor in its consideration the difference between the fair value and the carrying amount in reaching its conclusion about whether to perform the quantitative goodwill impairment test.

An entity shall evaluate, on the basis of the weight of evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. None of the individual examples of events and circumstances included above are intended to represent standalone events or circumstances that necessarily require an entity to perform the quantitative goodwill impairment test. Also, the existence of positive and mitigating events and circumstances is not intended to represent a rebuttable presumption that an entity should not perform the quantitative goodwill impairment test.

The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. In estimating the fair value of a reporting unit, a valuation technique based on multiples of earnings or revenue or a similar performance measure may be used if that technique is consistent with the objective of measuring fair value. Use of multiples of earnings or revenue in determining the fair value of a reporting unit may be appropriate, for example, when the fair value of an entity that has comparable operations and economic characteristics is observable and the relevant multiples of the comparable entity are known. Conversely, use of multiples would not be appropriate in situations in which the operations or activities of an entity for which the multiples are known are not of a comparable nature, scope, or size as the reporting unit for which fair value is being estimated.

If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Additionally, an entity shall consider the income tax effect from any tax deductible goodwill on the carrying amount of the reporting unit, if applicable, when measuring the goodwill impairment loss.

Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans, and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future.

Goodwill impairment charges on the Lifted Goodwill (defined below) and Oculus Goodwill (defined below) were recorded as of December 31, 2025; reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

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NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

The Company currently has one revenue-generating subsidiary, Lifted. Prior to the acquisition of Lifted on February 24, 2020, the Company had no sources of revenue, and the Company had a history of recurring losses, which has resulted in an accumulated deficit of $37,787,673 as of September 30, 2026. 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 and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 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 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, and these plans are not considered sufficient to alleviate substantial doubt about the Company’s ability to continue as a going concern. Moreover, any such actions can be expected to result in substantial dilution to the existing shareholders of the Company.

The Company’s investments in Ablis and Bendistillery made the Company a minority owner of these companies. As a minority owner, the Company is not able to recognize any portion of Ablis’ or Bendistillery’s revenues or earnings in the Company’s financial statements. The Company monitors its investments in Ablis and Bendistillery and from time to time will evaluate whether there has been a potential impairment of value, which there was as of December 31, 2025 and as of June 30, 2026. Reference is made to the following section for more information about the impairment charges recorded against the Company’s investments in Ablis and Bendistillery as of December 31, 2025 and June 30, 2026:

NOTE 4 – THE COMPANY’S INVESTMENTS

The Company’s Investments in Ablis and Bendistillery

The Company currently is paying dividends on outstanding Series A Preferred Stock and Series B Preferred Stock at the rate of 3% per year, among other ongoing financial obligations. Prior to the Business Loan Payoff, the Company was also making payments of interest and principal on its Business Loan. As extensively discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”), in this Quarterly Report on Form 10-Q, and in the Company’s other SEC filings, the Company is subject to a wide variety of Risk Factors including substantial legal and regulatory risks. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

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PART I — FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements

The legal and regulatory risks facing the Company’s business are particularly acute at this point in time, in at least the following respects:

On November 12, 2025, President Trump signed into law H.R. 5371, the “Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026,” enacted as Public Law 119-37. Section 781 of that law enacted the Federal Hemp Restrictions described in NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. The Company cannot predict whether those restrictions will take effect as scheduled or will be delayed, modified or repealed. Then, on September 2, 2026, President Trump signed into law H.R. 6500, the “Continuing Appropriations and Extensions Act, 2027,” enacted as Public Law 119-103. Section 2019 of that law postponed until December 11, 2026 certain Federal Hemp Restrictions, including new THC limits and restrictions on intermediate and final hemp-derived cannabinoid products containing cannabinoids that can naturally be produced by the cannabis plant but were synthesized or manufactured outside the plant. However, restrictions on intermediate and final hemp-derived cannabinoid products containing cannabinoids that cannot naturally be produced by the cannabis plant remain scheduled to take effect on November 12, 2026. Unless further delayed, modified or repealed, these restrictions are expected to materially adversely affect the Company’s business and financial condition and the price of the Company’s common stock. Certain effects of the Federal Hemp Restrictions have already been reflected in the Company’s financial statements, while others may arise as the applicable restrictions take effect, as described below:

	1)	The elimination of half or more of Lifted’s sales. Sales of hemp-derived products made up approximately 61% and 51% of Lifted’s sales during the three and nine months ended September 30, 2026, respectively, and 52% of Lifted’s sales during the year ended December 31, 2025; thus, the Federal Hemp Restrictions 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 Federal Hemp Restrictions 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 Federal Hemp Restrictions 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 allowance against, or significant write offs of, inventory. The Federal Hemp Restrictions 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 allowance against, or write offs of, our hemp-derived inventory each quarter end leading up to the applicable effective dates of the Federal Hemp Restrictions. Beginning November 12, 2026, intermediate and final hemp-derived cannabinoid products containing cannabinoids that cannot naturally be produced by the cannabis plant are scheduled to no longer qualify as hemp and instead be treated as marijuana under federal law. Additional restrictions, including new THC limits and restrictions on products containing cannabinoids that can naturally be produced by the cannabis plant but were synthesized or manufactured outside the plant, are scheduled to take effect on December 11, 2026. These restrictions may render affected inventory unsaleable or reduce its recoverable value, potentially requiring additional inventory reserves or write-offs. An inventory allowance of $4,991,182 was recorded against Lifted’s hemp-derived inventory as of September 30, 2026.

	5)	Allowance against prepaid inventory. Due to uncertainty regarding when certain hemp-related items will be received and, for raw materials, the additional time required to convert those materials into finished goods before the applicable Federal Hemp Restrictions take effect, management recorded an allowance against hemp-related prepaid inventory as of September 30, 2026. The allowance reflects management’s estimate of amounts that may not be recoverable through the receipt, production and sale of the related products before the applicable restrictions take effect.

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	6)	Significant write offs of accounts receivable. The Federal Hemp Restrictions 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.

	7)	Impairments of, or losses on the disposition of, hemp-related fixed assets. The Federal Hemp Restrictions are 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 nine months ended September 30, 2026, impairments of hemp-specific fixed assets of $0 and $208,049, respectively, were recognized.

	8)	Sales of fixed or other assets to fund ongoing operations. If the Federal Hemp Restrictions materially reduce 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.

	9)	Workforce reductions and termination of contractor relationships. If the Federal Hemp Restrictions materially reduce 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. At the time, the restructuring was expected to reduce Lifted’s future operating expenses by approximately $736,000 per year. As of the date of this report, the Company’s workforce is approximately 68.

	10)	Reduced interest in our Company and in our common stock from investors, potential financing sources, and potential merger candidates. Just the enactment of the Federal Hemp Restrictions has significantly reduced interest in our Company and in our common stock from investors, potential financing sources, and potential merger candidates, because the Federal Hemp Restrictions call 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. If the applicable Federal Hemp Restrictions take effect as scheduled on November 12, 2026 and December 11, 2026 without further delay, modification or repeal, these adverse effects on investor interest, access to financing, potential merger opportunities and the market price of the Company’s common stock could further intensify.

Additional factors that could materially adversely affect the Company’s future operating results include, but are not limited to: other changes to federal laws and regulations; any new rule proposed by the federal Drug Enforcement Administration that might attempt to classify certain hemp-derived products as controlled substances; and any other federal or state laws and regulations prohibiting or restricting hemp-derived, kratom-derived, or other psychoactive products and/or vaping.

On July 29, 2025, during a joint press conference, the FDA announced that it had recommended to the DEA that 7-hydroxymitragynine, a concentrated alkaloid derived from the kratom plant (and one of the kratom-derived compounds included within the previously defined term “7-OH”), be classified as a Schedule I controlled substance under the Controlled Substances Act (“CSA”). Since that time, the FDA and the DEA have continued to express concerns regarding products containing 7-hydroxymitragynine. In July 2026, HHS initiated a Request for Information regarding proposed scheduling thresholds for 7-hydroxymitragynine, and the DEA issued two notices of intent to issue temporary scheduling orders, which were published in the Federal Register. The first proposal would temporarily place 7-hydroxymitragynine into Schedule I when present above specified concentration or dosage thresholds in botanical kratom and certain processed products. The second would place mitragynine pseudoindoxyl, MGM-15, and MGM-16 into Schedule I without concentration thresholds. Under the standard rulemaking process, the DEA generally would publish a proposed rule, provide an opportunity for public comment, and subsequently issue a final rule. Alternatively, the CSA authorizes the DEA to issue a temporary scheduling order if it determines that a substance presents an imminent hazard to public safety, which could become effective upon publication in the Federal Register and generally remain in effect for up to two years, subject to extension while permanent scheduling proceedings are pending. Based on these developments, the Company recorded an inventory reserve of $1,434,458 against its kratom-derived inventory as of June 30, 2026.

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There is also a risk that the Company potentially might be accused of selling products containing ingredients that might be considered an analog of a controlled substance.

The Company is also subject to vendor concentration risk, customer concentration risk, customer credit risk, and counterparty risk. A limited number of customers have historically made up a significant portion of the Company’s sales. Also, historically, the Company has purchased raw goods and finished goods from a limited number of suppliers. The loss of Lifted’s relationships with these customers and vendors could have a material adverse effect on Lifted’s business.

The Company maintains levels of cash bank accounts that typically exceed federally insured limits. The Company has not experienced any losses in such accounts and it believes that it is not exposed to any significant credit risk on cash.

No assurance or guarantee whatsoever can be given that the cash flows or net income of the Company’s wholly owned subsidiary Lifted will be sufficient to enable the Company to pay all of its operating expenses, dividends on its preferred stock, future company-wide management bonus pool payments, and other financial obligations.

As a result of all of the foregoing described factors, there is substantial doubt that the Company will be able to continue as a going concern.

Risks Associated With the Use of Artificial Intelligence

Our use of artificial intelligence technologies could result in errors in our operations, tax filings, or financial reporting, or expose confidential information. We have begun using artificial intelligence (“AI”) tools to assist personnel with certain business activities. AI-generated information may be inaccurate, incomplete, outdated, or presented with unwarranted confidence. If our personnel rely on such information without adequate review, we could make errors in product development, production planning, quality-related decisions, marketing materials, customer communications, or our assessment of laws and regulations applicable to our products. Such errors could result in production delays, mislabeled or noncompliant products, customer or regulatory claims, recalls, increased costs, or damage to our brands.

AI tools may also be used to assist with accounting and tax research, analyses, estimates, the preparation and review of tax returns and supporting workpapers, and the preparation of financial reports and other disclosures. These activities require professional judgment and verification of underlying facts, calculations, and applicable requirements. An error that is not identified through our review processes could result in an incorrect tax return or tax position, additional taxes, interest or penalties, a misstatement in our financial statements, or an inaccurate or untimely disclosure. Such an error could also require amended tax returns, a correction or restatement of our financial statements, or additional expense to investigate and remediate the issue.

In addition, entering Company, employee, customer, supplier, or other confidential information into third-party AI tools could result in its unauthorized use or disclosure. AI-generated materials may also give rise to intellectual property, privacy, or other legal claims. We may not be able to identify every error or prevent every improper use of these tools. Any of these events could materially adversely affect our business, financial condition, results of operations, or reputation. The foregoing risks may have a material adverse effect on our Company and the trading price of our common stock.

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NOTE 4 – THE COMPANY’S INVESTMENTS

The Company’s Investment in Lifted

As a result of LFTD Partners’ acquisition of Lifted, LFTD Partners recognized goodwill of $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”). At December 31, 2025, the Company performed its annual goodwill impairment assessment, and determined that an impairment was necessary. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

The Federal Hemp Restrictions necessitated the calculation and recording of an impairment charge on the Lifted Goodwill and Oculus Goodwill. As of December 31, 2025, LFTD Partners recorded a goodwill impairment charge on the Lifted Goodwill and Oculus Goodwill, reducing the carrying value of both to $0. In its goodwill impairment analysis, the Company took both an income approach and market approach to determining the fair value of the reporting unit.

The Company’s Investments in Ablis and Bendistillery

On April 30, 2019, the Company purchased 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. In the second quarter of 2025, Bend Spirits was merged into Bendistillery for operational efficiency.

The Federal Hemp Restrictions necessitated the calculation and recording of an impairment of LFTD Partners’ investment in 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 LFTD Partners’ investment in Ablis to $0.

Regarding LFTD Partners investment in Bendistillery: distillers such as Bendistillery are navigating a tougher, more complex environment than they did even a few years ago. Liquor companies today are balancing category decline, stricter rules, and higher costs while trying to stay culturally relevant. Consequently, as of December 31, 2025, LFTD Partners recorded an impairment charge on its investment in Bendistillery, reducing the carrying value of LFTD Partners’ investment in Bendistillery to $99,800. Then, due to various challenges faced by Bendistillery, as of June 30, 2026, LFTD Partners recorded another impairment charge on its investment in Bendistillery, reducing the carrying value of its investment to $0.

Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

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NOTE 5 – PROPERTY AND EQUIPMENT, NET

Property and Equipment (Fixed Assets) consist of the following:

Asset Class	September 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		1,444,338			1,566,661
Furniture & Fixtures		132,196			138,184
Computer Equipment		26,884			21,510
Building & Leasehold Improvements		220,425			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:	$	1,967,725		$	3,881,920

Less: Accumulated Depreciation		(1,369,708	)		(1,608,543	)
	$	598,017		$	2,273,377

The useful lives of the Company’s property and equipment by asset class are as follows:

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

Hemp-Specific Impairment Charges

The Company recognized impairment charges of $143,421 and $64,628 against its hemp-specific fixed assets during the first and second quarters of 2026, respectively, bringing the cumulative impairment recognized on hemp-specific fixed assets to $208,049 as of June 30, 2026. No impairment charge on hemp-specific fixed assets was recognized during the three months ended September 30, 2026. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Fixed Assets

NOTE 3 – RISKS AND UNCERTAINTIES

Going Concern

In the Consolidated Statements of Operations, depreciation expense is consolidated with amortization expense. Depreciation expense related to machinery and equipment and depreciation expense related to the 5511 Building totaling $58,916 and $203,946 for the three and nine months ended September 30, 2026, was allocated as overhead to finished goods as of September 30, 2026. After this allocation, depreciation expense of $22,299 and $132,236 was recognized during the three and nine months ended September 30, 2026.

Comparatively, depreciation expense related to machinery and equipment and depreciation expense related to the 5511 Building, totaling $75,311 for the three months ended September 30, 2025, and $229,259 for the nine months ended September 30, 2025, were allocated as overhead to finished goods as of September 30, 2025. After this allocation, depreciation expense of $62,161 and $186,938, respectively, was recognized during the three and nine months ended September 30, 2025.

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NOTE 6 – ASSETS HELD FOR SALE

Sale of 5511 Building

On June 16, 2026, the Board of Directors authorized management, as part of the Company’s downsizing and cash-conservation plan, to proceed with a plan to sell the 5511 Building. As of that date, the property was available for immediate sale in its present condition and was being actively marketed at a price management considered reasonable in relation to its fair value. Based on the Board’s authorization, the active marketing efforts, management’s intent to accept a reasonable offer, and the absence of any known circumstances indicating that a sale could not be completed within one year, management concluded that the sale was probable and that all criteria in ASC 360-10-45-9 were met on June 16, 2026. This conclusion was subsequently corroborated by the binding purchase agreement executed on July 22, 2026, for a sale price of $1,500,000, with closing expected on September 16, 2026, subject to customary closing conditions. Accordingly, the property was classified as held for sale effective June 16, 2026 and measured at the lower of its carrying amount or fair value less cost to sell. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 15 – DEBT

Payoff of Business Loan

On September 29, 2026, Lifted completed the sale of the 5511 Building, including its land, improvements and certain machinery and equipment and personal property to Ad Real Estate Group LLC (the “Buyer”), pursuant to the Commercial Offer to Purchase made July 21, 2026 and executed July 22, 2026 by and between Lifted and the Buyer (the “Agreement”), which was previously reported by the Company in a Current Report on Form 8-K filed with the Securities and Exchange Commission on July 24, 2026. The sale price for the 5511 Building was $1,500,000 in cash. At closing, Lifted conveyed title to the 5511 Building to the Buyer by warranty deed. The purchase price was determined by arm’s length negotiation between Lifted and the Buyer. Neither the Company nor Lifted has any material relationship with the Buyer, other than in respect of the Agreement and the transactions contemplated thereby.

The 5511 Building is an approximately 11,238 square foot building that Lifted purchased on December 14, 2023 for $1,375,000, and that had served as Lifted’s principal operations facility, used for office space, manufacturing and storage. The 5511 Building was the only real property owned by the Company and its subsidiaries.

Of the $1,500,000 sale price, $841,110 was applied at the closing to pay off the Business Loan. The balance of the purchase price was reduced by a brokerage commission of $45,000 payable to the listing broker, Wisconsin real estate transfer tax of $4,500, prorated real estate taxes of $12,823 credited to the Buyer, title, escrow and closing charges of $3,697, and other customary closing costs. After the foregoing payments, prorations and closing costs, the net cash proceeds to Lifted from the sale were $592,485.

Following the sale of the 5511 Building including its land, improvements and certain machinery and equipment and personal property to Buyer, Lifted has consolidated the operations previously conducted at the 5511 Building into its existing leased facilities in Kenosha, Wisconsin. The Company used the net proceeds remaining after the payoff of the Business Loan for working capital and general corporate purposes.

The Company reported a gain on disposal of the 5511 Building, including its land, improvements and certain machinery and equipment, of $141,768.

Immediately prior to the sale of the 5511 Building, assets held for sale consisted of the following:

Assets held for sale as of September 28, 2026	Carrying Amount
Building, net	$	753,046
Land		430,754
Building improvements, net		113,874
Total assets held for sale	$	1,297,674

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NOTE 7 – INTANGIBLE ASSETS, NET

Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Recent Accounting Pronouncements

Business Combinations

Accounting for Goodwill

NOTE 4 – THE COMPANY’S INVESTMENTS

The Company’s Investment in Lifted

Domain and Website-Development Costs

During the nine months ended September 30, 2026, the Company acquired an internet domain for $5,023. The domain is accounted for separately from website-development costs under ASC 350-30, Intangibles—Goodwill and Other—General Intangibles Other Than Goodwill. The Company determined that the domain has an indefinite useful life because no legal, contractual, regulatory, technological, competitive, economic, or other factor presently limits the period over which the domain is expected to contribute to the Company’s cash flows. Accordingly, the domain is not amortized. The Company reassesses the indefinite-life classification each reporting period and tests the domain for impairment annually during the fourth quarter and whenever events or changes in circumstances indicate that impairment may exist.

As of September 30, 2026, the domain had a gross and net carrying amount of $5,023, with no accumulated amortization or impairment. Based on its qualitative impairment assessment, the Company concluded that it was not more likely than not that the fair value of the domain was less than its carrying amount. Accordingly, no impairment loss was recognized.

The Company applies ASC 350-40, as amended by ASU 2025-06, to website-development costs. As of September 30, 2026, the recognition threshold for the website had not been met because significant development uncertainty remained. Accordingly, costs incurred to develop the website were expensed as incurred, and no website-development asset or related amortization was recorded. No material qualifying direct-development costs related to the Highlandia website were identified for capitalization during the nine months ended September 30, 2026.

NOTE 8 – RELATED PARTY TRANSACTIONS

Ablis

During the three and nine months ended September 30, 2026, Lifted sold $0 and $4,215 worth of finished goods to Ablis, respectively. In comparison, during the three and nine months ended September 30, 2025, Lifted sold $0 and $5,038 worth of finished goods to Ablis, respectively.

Outside Director Fees

Each of the Company’s outside directors, including Mr. Vincent Mesolella, Dr. Joshua Bloom, Ms. Sharial Howard, Dr. James Jacobs, and Mr. Kevin Rocio, receive quarterly director fees of $4,000. Prior to his resignation from the Company’s Board of Directors on June 14, 2026, Mr. Richard Morrissy also received a quarterly director fee of $4,000. Dr. Jacobs is the brother of CEO Gerard M. Jacobs (“GJacobs”) and the uncle of President and CFO William Jacobs (“WJacobs”).

Lease and Purchase of 5511 95th Avenue, Kenosha, Wisconsin 53144

Toward the end of 2020, NWarrender, through his assigned entity 95th Holdings, LLC (“Holdings”), purchased the building located at 5511 95th Avenue, Kenosha, Wisconsin 53144 (“5511 Building”) that was immediately leased to us to conduct our expanded operations. The 5511 Building includes office, laboratory and warehouse space. As part of the lease agreement with Holdings, the parties agreed that Lifted would eventually purchase the 5511 Building. The purchase price for the 5511 Building was originally subject to variation based on a formula agreed upon by the parties. Pursuant to the Omnibus Agreement with NWarrender on December 30, 2021, Lifted was obligated to purchase the 5511 Building from Holdings on or before December 31, 2022 for a fixed purchase price of $1,375,000.

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Pursuant to an Acceleration Agreement, the deadline to purchase the 5511 Building was extended by one year to December 31, 2023. In addition, the Acceleration Agreement contained a provision that if the Company raised $5,000,000 of debt or equity capital, then Lifted or our designee would be obligated to purchase the 5511 Building from Holdings at the agreed upon $1,375,000 purchase price within two days.

On December 14, 2023, LFTD Partners and Lifted (together the “Borrower”), jointly borrowed a total of $3,910,000 from Surety Bank, of DeLand, Florida (“Lender”), and simultaneously Lifted purchased the 5511 Building from Holdings for $1,375,000 as previously agreed upon. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 15 – DEBT

Laurie Warrender

On December 30, 2024, Laurie Warrender, NWarrender’s mother, was hired as an employee of Lifted, as a consultant and advisor to NWarrender, with a salary of $5,000 per month. As of September 30, 2026 and December 31, 2025, the Company reported expense reimbursements payable to Ms. Warrender totaling $510 and $5,304, respectively.

William Jacobs

At the closing of the acquisition of Lifted, 645,000 shares of unregistered common stock of the Company were designated as contingent deferred compensation (the “Deferred Contingent Stock”) to certain persons specified by NWarrender in a schedule delivered by him to the Company at the closing of the Merger (the “Deferred Contingent Stock Recipients”). Now that certain conditions and requirements have been met, starting on February 24, 2023, the Deferred Contingent Stock has begun to be issued to certain Deferred Contingent Stock Recipients who have instructed the Company to issue to them their respective, earned Deferred Contingent Stock. Through September 30, 2026 and December 31, 2025, 503,000 shares of Deferred Contingent Stock have been issued to certain Deferred Contingent Stock Recipients, including 200,000 shares of Deferred Contingent Stock to WJacobs.

Related Party Note

On April 1, 2025, the Company converted $350,000 of its cash into USD Coin (USDC), a digital stablecoin pegged to the U.S. dollar. Shortly thereafter, the digital wallet containing the USDC was compromised by an unauthorized and unknown third party, resulting in the theft of the full amount. The Company promptly reported the incident to the U.S. Federal Bureau of Investigation and continues to cooperate fully in the ongoing investigation. The Company’s outside law firm is also advising the Company regarding the matter. At this time, the Company is doubtful whether any of the stolen funds will be recovered. On April 22, 2025, the Company borrowed $350,000 from Beachin Company, an affiliate of the Company’s CEO and CFO (the “Related Party Note”). The $350,000 loan did not bear interest, and was repaid by the Company using funds that otherwise would have been paid to the Company’s CEO and CFO in the form of salary or bonuses pursuant to their employment agreements with the Company.

Sale of Real Property

On July 22, 2026, Lifted entered into a binding agreement to sell its real property located at 5511 95th Avenue, Kenosha, Wisconsin for a purchase price of $1,500,000. The transaction was subject to customary closing conditions and closed on September 29, 2026. Lifted’s listing agents with @properties are the Company’s director Kevin Rocio and Jake Hansen. In connection with the sale, the Company paid a $45,000 commission, equal to 3% of the sale price, to Lifted’s listing agents. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 6 - ASSETS HELD FOR SALE

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NOTE 9 – SHAREHOLDERS’ EQUITY AND STOCK BASED COMPENSATION

Issuance of Series A Convertible Preferred Stock

The Company has authorized 400,000 shares of its Series A Convertible Preferred Stock, each convertible into 100 shares of common stock. The Series A Preferred Stock accrues cumulative dividends at 3% annually and has no voting rights. The shares are voluntarily convertible by the holder and are subject to mandatory conversion at the Company’s option upon the satisfaction of specified trading price and volume thresholds. As of September 30, 2026 and December 31, 2025, 63,650 shares of Series A Preferred Stock had been converted into 6,365,000 shares of common stock. No conversions occurred during the three or nine months ended September 30, 2026, or 2025. As of September 30, 2026 and December 31, 2025, 2,500 shares remain outstanding, convertible into 250,000 shares of common stock. Accrued dividends payable were $3,438 as of September 30, 2026, and $5,328 at December 31, 2025. During the three and nine months ended September 30, 2026, a total of $0 and $7,500, respectively, of cash dividends were paid to the Series A Convertible Preferred Stock holders. In comparison, during the three and nine months ended September 30, 2025, a total of $0 and $7,500, respectively, of cash dividends were paid to the Series A Convertible Preferred Stock holders.

Issuance of Series B Convertible Preferred Stock

The Company has authorized 5,000,000 shares of its Series B Convertible Preferred Stock, each convertible into one share of common stock. The Series B Preferred Stock accrues cumulative dividends at 3% annually and has no voting rights. The shares are voluntarily convertible by the holder and are subject to mandatory conversion at the Company’s option upon the satisfaction of specified trading price and volume thresholds. As of September 30, 2026 and December 31, 2025, 60,000 shares of Series B Preferred Stock had been converted into 60,000 shares of common stock. No conversions occurred during the three or nine months ended September 30, 2026, or 2025. As of September 30, 2026 and December 31, 2025, 40,000 shares remain outstanding, convertible into 40,000 shares of common stock. Accrued dividends payable were $1,784 as of September 30, 2026, and $1,796 at December 31, 2025. During the three and nine months ended September 30, 2026, a total of $4,500 and $4,500, respectively, of cash dividends were paid to the Series B Convertible Preferred Stock holders. In comparison, during the three and nine months ended September 30, 2025, a total of $4,500 and $4,500, respectively, of cash dividends were paid to the Series B Convertible Preferred Stock holders.

Share-Based Compensation

In connection with the acquisition of Lifted, 645,000 shares of unregistered common stock were designated as contingent deferred compensation (the “Deferred Contingent Stock”) to individuals identified at closing. Beginning February 24, 2023, shares were issued to recipients as the applicable conditions were satisfied. Due to the restricted nature and limited marketability of the Company’s common stock, third-party valuation firms were engaged to determine appropriate discounts for financial reporting and tax purposes using the Finnerty Protective Put Model. For financial reporting purposes, a 22% discount for lack of marketability was applied to the 645,000 shares as of February 24, 2023, resulting in recognition of $2,138,175 of stock-based compensation expense. For tax reporting purposes, discounts ranging from 23% to 31% were applied to shares issued during 2023, and a 27% discount was applied to the 93,000 shares issued on September 21, 2023. As of September 30, 2026 and 2025, 142,000 shares of Deferred Contingent Stock remained issuable upon recipient instruction.

Options and Warrants

As of September 30, 2026 and December 31, 2025, the Company did not have any options or warrants outstanding.

Other Agreements

In connection with the Company’s acquisition of Lifted (the “Lifted Merger”), pursuant to the Lifted Merger Agreement, the Company entered into several material agreements with CEO Gerard M. Jacobs (“GJacobs”), COO Nicholas S. Warrender (“NWarrender”) and President and CFO William Jacobs (“WJacobs”).

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Registration Rights Agreement

Pursuant to a Registration Rights Agreement, NWarrender was granted demand and piggyback registration rights with respect to the 3,900,455 shares of the Company’s common stock received as stock consideration in connection with the Company’s acquisition of Lifted. Subject to certain limitations, NWarrender may request registration of all or a portion of such shares beginning on the 120th day following the merger closing. The Company is required to file a registration statement within ten days of receiving such a request but may defer the filing or effectiveness for up to 180 days under specified circumstances. The registration rights terminate when no registrable shares remain outstanding.

Stockholders Agreement

At the closing of the Lifted Merger, NWarrender, GJacobs, and WJacobs entered into a Stockholders Agreement under which they agreed to vote all shares of Company common stock now or hereafter held by them in accordance with unanimous agreement among the three on certain corporate matters, including the election and removal of directors, amendments to charter documents, compensation decisions, acquisitions and divestitures, and capital raising activities.

Executive Employment Agreements

Concurrent with the Lifted Merger closing, the Company entered into five-year, automatically renewing Executive Employment Agreements with NWarrender (Vice Chairman, Chief Operating Officer of the Company, and Chief Executive Officer of Lifted), GJacobs (Chairman, Chief Executive Officer, and Secretary), and WJacobs (President, Chief Financial Officer, and Treasurer).

NOTE 10 – LEASES

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842) (“ASU 2016-02”). The amended guidance, which was effective for the Company on January 1, 2019, requires the recognition of lease assets and lease liabilities on the balance sheet for those leases with terms in excess of 12 months and currently classified as operating leases. Leases with an initial term of one year or less are not recorded on the balance sheet; lease expense for these types of leases are recognized on a straight-line basis over the lease term. Options to extend or terminate a lease are not included in the determination of the right-of-use asset or lease liability unless it is reasonably certain to be exercised. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. Lifted adopted ASU 2016-02 using the modified retrospective approach, electing the package of practical expedients.

The Company currently has operating leases for its leased facilities located at 8910 58^th Place, Suites 100, 600 and 700, Kenosha, WI 53144 and 5732 95^th Avenue, Suites 100-400, Kenosha, WI 53144. These facilities are used for manufacturing, packaging, storage and office space in Kenosha, Wisconsin. The Company has paid security deposits for these leases. From time to time, the Company maintains inventory at third party facilities around the USA.

The following table is the maturity analysis of the Company’s operating leases as of the reported period end:

	Finance		Operating
2026		-		91,550
2027		-		375,879
2028		-		299,234
2029		-		119,967
Thereafter		-		-
Total		-		886,630
Less: Present value discount		-		(102,522	)
Lease liability	$	-	$	784,109

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Weighted Average Discount Rate

In calculating the right-of-use assets and liabilities, the Company uses a discount rate based on a published range of conventional commercial mortgage interest rates corresponding to the life of each lease. The Company uses the higher end of the range due to the Company’s limited credit history and the riskiness of the industries in which the Company operates.

	September 30, 2026			December 31, 2025
Weighted Average remaining lease term (years)		2.45			3.23
Weighted Average Discount rate		9.63	%		9.68	%

Lease Costs

The table below summarizes the components of lease costs for the following periods:

	For the Three Months Ended September 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 Nine Months Ended September 30,
Lease Cost:	2026		2025
Finance lease expense:
Amortization of Right-of-Use Assets	$	-	$	-
Interest on lease liabilities		-		-
Operating lease expense		267,622		250,273
Total	$	267,622	$	250,273

Balance Sheet Classification of Operating Lease Assets and Liabilities

Asset		Balance Sheet Line		September 30, 2026
Operating Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $661,177		Non-Current Assets		$	734,994

Liability	Balance Sheet Line	September 30, 2026
Operating Lease Liabilities	Current Liabilities	$	310,315
	Non-Current Liabilities		473,794

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Allocation of a Portion of Lease Expense to Finished Goods

Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Inventory

Other Deposits and Bonds

The majority of the Company’s security deposit for the lease of 789 Tech Center Drive, Unit C, Durango, Colorado 81301 was returned to the Company in the second quarter of 2025 after the termination of the lease. The Company’s security deposit for its former sublease of the space located at 2701-09 West Fulton PH, Chicago, Illinois 60612 was written off in the second quarter of 2025. The Company is required to, and has, paid bonds and deposits to various state departments and vendors for licenses and utilities, respectively.

NOTE 11 - CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

Potential Issuance of Warrants to Purchase Shares of Common Stock of the Company

The Compensation Committee of the Company’s Board of Directors may, from time to time, recommend that certain warrants to purchase shares of common stock of the Company should be issued to new or current members of the Company’s Board of Directors, to officers and employees of the Company and its subsidiaries, or to members of any advisory board or consultants to the Company.

Compensation of Lifted’s Chief Strategy Officer

Lifted entered into an agreement with its Chief Strategy Officer (the “CSO”), effective as of April 1, 2025, pursuant to which, in addition to his base compensation of $10,000 every two weeks plus health insurance coverage, the CSO receives (1) a royalty on certain gummies manufactured by Lifted of between $0.005 and $0.01 (“Gummy Royalty”), and (2) certain quarterly and annual bonuses based upon Lifted’s quarterly and annual collected revenues on certain sales exceeding targets of $9,000,000 and $58,000,000 (collectively, “Bonuses”), respectively.

Effective August 31, 2026, Lifted’s CSO resigned. As part of the resignation, the former CSO and NWarrender orally agreed that the CSO would be entitled to the Gummy Royalty through December 31, 2026, but that Bonuses calculations would terminate as of the resignation date. The two also agreed that the former CSO would be paid $14,000 for work he performed in September 2026 (which he was paid). The former CSO may bill the Company $10,000 per month starting in October 2026 (“Monthly Bill”); however, the Company is not obligated to pay the Monthly Bill if the Company is not satisfied with the work performed during the respective month billed.

Company-Wide Management Bonus Pool

Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 13 – COMPANY-WIDE MANAGEMENT BONUS POOL

Other Contingent Contractual Obligations and Commercial Commitments

Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 8 – RELATED PARTY TRANSACTIONS

NOTE 12 – LEGAL PROCEEDINGS

The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. Except for income tax contingencies, the Company records accruals for contingencies to the extent that management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred.

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Lifted currently is involved in one pending lawsuit, as the defendant:

(1)

Jessie Hooks v. Lifted Made, URB Cannabis, Barry Hollingsworth, Gerard Jacobs, Nicholas Warrender, and Pharmlabs, LLC – Plaintiff had filed suit against the Company, three of its officers, and a testing company in the United States District Court for the Eastern District of Wisconsin alleging that Plaintiff bought 3-4 of the Company’s products, that some of the Company’s products exceeded legal limitations for hemp, and that all of the Defendants misrepresented the nature of the products. In his Amended Complaint, plaintiff asserted seven causes of action including civil RICO claims and alleged the existence of 1,000 “John Doe” defendants. The Company contended that this lawsuit was without merit and is vigorously defending the action. On February 6, 2025, the Court ordered that the RICO claims were dismissed with prejudice, and the other claims were also dismissed. The Court noted that the RICO claims were “borderline frivolous”. The Court further dismissed all claims against the individual defendants. On March 6, 2025, Plaintiff filed a second amended complaint alleging that the Company misrepresented various products. The Company filed a motion to dismiss the amended complaint. On February 23, 2026, the court orally announced that it was granting the motion to dismiss and dismissed the case with prejudice. On March 30, 2026, Plaintiff appealed the dismissal to the United States Court of Appeals for the Seventh Circuit. Briefing has been completed, and oral argument occurred on October 27, 2026.

Lifted currently is involved in three pending lawsuits, as the plaintiff:

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

	On September 9, 2025, Lifted filed an action against RanCo, LLC in the United States District Court for the Central District of California to recover damages resulting from RanCo’s failure to pay for products purchased from Lifted. That action was voluntarily dismissed without prejudice on October 31, 2025, and Lifted refiled the complaint on April 2, 2026. RanCo failed to appear or otherwise respond, and Lifted moved for a default judgment. On September 8, 2026, the court granted Lifted’s motion in part and awarded Lifted damages of $304,475 on its claims for breach of contract, action for the price, and account stated. The court denied Lifted’s claim for unjust enrichment and its request for attorneys’ fees. Pursuant to the court’s direction, Lifted has submitted a proposed judgment consistent with its order. From an accounting perspective, the accounts receivable from Ranco, LLC were fully reserved for in allowance for doubtful accounts after they became older than 90 days, as the Company’s policy is to record an allowance for doubtful accounts for accounts receivable older than 90 days.

(2)		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. As described in NOTE 16 – SUBSEQUENT EVENTS, on November 4, 2026, Judge M. Douglas Harpool granted the defendants’ motion to dismiss.

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

		On July 30, 2026, Lifted and other parties filed an action in the United States District Court for the Northern District of Ohio challenging the constitutionality of certain provisions of Ohio Senate Bill 56. The complaint sought declaratory and injunctive relief. The plaintiffs were granted a preliminary injunction permitting them to sell their hemp-based products in Ohio. The State of Ohio appealed the issuance of the preliminary injunction; that appeal is currently pending before the US Court of Appeals for the Sixth Circuit. The preliminary injunction was partially stayed during the pendency of that appeal. Despite the appeal, the litigation is still in its preliminary stages, and the Company is unable to predict the ultimate outcome.

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Monti, et al. v. Garcia, et al.

On July 31, 2026, Lifted, together with Thomas Monti and The Happy Cactus Apothecary LLC, filed a complaint in the United States District Court for the Southern District of Texas challenging the legality of certain reinstated Schedule I definitions adopted by the Texas Department of State Health Services relating to hemp-derived cannabinoids. The complaint seeks declaratory and injunctive relief, alleging, among other things, that the challenged definitions are preempted by federal law and violate the Due Process and Commerce Clauses of the United States Constitution. Concurrent with the complaint, the plaintiffs filed an emergency motion for a temporary restraining order and expedited preliminary injunction seeking to enjoin enforcement of the challenged definitions while the litigation is pending. The litigation is in its preliminary stages, and the Company is unable to predict the ultimate outcome. On or about September 16, 2026, Lifted was no longer a party to this case.

Settlement Agreement with Buckbee Seed Company LLC

On May 29, 2026, Lifted 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 sought recovery of approximately $29,397 in unpaid invoices, together with applicable interest, costs, and other relief deemed appropriate by the Court. On September 3, 2026, the parties entered into a settlement agreement, without either party admitting liability or wrongdoing, pursuant to which Buckbee agreed to pay Lifted $20,000 and return approximately $6,000 of unused products. Between September 14, 2026 and October 5, 2026, Buckbee met its obligations under the settlement agreement, the parties released the claims covered by the settlement agreement and the matter will be dismissed with prejudice.

Settlement Agreement with Sergio Hernandez and Josue Hernandez

Plaintiffs had sued the Company as representatives of a putative class action case in the United States District Court for the Northern District of Illinois. The Complaint alleges that Plaintiffs bought the Company’s vape cartridge products and that the delta-9-THC cannabinoid content of those products was underreported. The Complaint alleges that the Company fraudulently misrepresented the nature of the products, breached an implied warranty, and was unjustly enriched. The Parties have engaged in settlement discussions to resolve the matter without the need to incur further expenses and attorney’s fees. On February 12, 2026, the parties settled the litigation and agreed to mutual releases and dismissal of the Hernandez v Lifted Liquids lawsuit with prejudice in exchange for Lifted paying $100,000 over time, with the final payment of $10,000 due on or before August 31, 2026. In the settlement agreement, the parties acknowledged that there has been no evidence that any of Lifted’s officers, directors, employees or agents acted improperly or was engaged in any deceptive conduct. The Company met its settlement obligations in August 2026.

Lifted Liquids, Inc. v. Asad Awawdeh and Habib Cash and Carry SD, Inc.

The Company filed an action seeking to recover approximately $98,000 in damages resulting from Defendants’ failure to pay for product they ordered. The matter was filed in California. The Company has received a judgment by default and is considering enforcement action.

Settlement Agreement with Former Insurance Carrier

On or about October 2, 2025, Lifted compromised and settled a dispute with one of its former insurance carriers, on terms agreeable to the parties.

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Settlement Agreement with Chris Hillseth Enterprises Corporation and Ameri-Kal LLC

The Company had filed an action seeking to recover amounts paid for equipment that did not work as represented. On or about April 28, 2025, the parties resolved the matter via a signed settlement agreement, pursuant to which the Company will recoup a total of $177,500 that will be paid by Defendants to the Company in installments over a period of six months. Defendants met their settlement obligations in September 2025.

Dismissal of Loree Perry, Individually and on Behalf of All Others Similarly Situated v. Sheikhani Group, et al

Plaintiff added the Company and four of its officers to a putative class action case against a Texas retailer, several cannabis industry manufacturers, testing companies, and related individuals in the United States District Court for the Eastern District of Texas. The Amended Complaint alleges that Plaintiff bought two of the Company’s vape cartridge products and that the delta-9-THC cannabinoid content of those and additional unspecified “many” of the Company’s other products was underreported. The Amended Complaint alleges that all of the Defendants misrepresent the nature of their products and are intentionally engaging in ongoing illegal sales. The Amended Complaint asserts seven causes of action including a civil RICO claim and alleges the existence of 1,000 “John Doe” defendants. The Company contends that this lawsuit is without merit and filed a motion to dismiss. On March 8, 2025, Plaintiff voluntarily dismissed the complaint without prejudice to refiling it at a later date.

Settlement Agreement with Girish GPO, Inc.

On November 9, 2023, Lifted entered into a settlement agreement that was mutually acceptable to the parties which has resolved the following lawsuit: Lifted Liquids, Inc. v. Girish GPO, Inc., Girish Ray, and the Law Offices of Saul Roffe. The Company had filed an action in a case styled “Lifted Liquids, Inc. v. Girish GPO, Inc., Girish Ray, and the Law Offices of Saul Roffe” seeking to recover $30,000 that was to be held in escrow by the Law Offices of Saul Roffe. The Company also sought approximately $14,569 in damages resulting from Girish GPO’s failure to pay for product it ordered and that the Company delivered. The Company has obtained a $30,000 default judgment against the Law Offices of Saul Roffe and is attempting to collect on the judgment. The action against Girish GPO has been resolved with the Girish defendants agreeing to pay the Company $34,000 over time. The Company has filed a citation to discover the assets of the defendants. As of September 2026, the Company has recorded a $25,000 allowance against the $25,000 still owed by Girish GPO to the Company under the settlement agreement.

Settlement Agreement With Dev Distribution, LLC

On October 9, 2023, Lifted entered into a settlement agreement that was mutually acceptable to the parties which has resolved the following lawsuit: Lifted Liquids, Inc. v. DEV Distribution, LLC, No, DC-22-15080. In October 2022, Lifted filed an action against Dev Distribution LLC (“Dev”), a vendor who had failed to deliver certain products that Lifted had purchased for $263,938. Dev filed a counterclaim alleging breach of contract. In October 2023, the parties settled the litigation and agreed to mutual releases and dismissal of the lawsuit in exchange for Dev paying $230,000 and providing certain equipment and product.

Amendment to Settlement With Dev Distribution, LLC

On April 1, 2024, the Company entered into an Addendum to Settlement Agreement and Mutual Release (“Addendum”) with Dev. Under the Addendum, the total consideration to be paid by Dev has been increased from $230,000 to $240,000, and the end date of the monthly settlement payment schedule (“Monthly Payments”) has been extended from the earlier of May 1, 2024 or the closing date of Dev’s sale of its assets, of the sale of some or all of the membership interests owned by its current members, or of obtaining a loan or other cash infusion (a “Cash Event”), to the earlier of April 10, 2025, or the date of a Cash Event. Similar to the original Settlement Agreement and Mutual General Release, in the event of a Cash Event, Dev shall be obligated to contemporaneously pay Lifted $240,000 less any Monthly Payments made by Dev to Lifted up to the point of such Cash Event. Dev met its settlement obligations in April 2025.

Claims of Portion, Inc.

As disclosed in NOTE 16 – SUBSEQUENT EVENTS, on or about October 6, 2026, Lifted received a letter from Portion, Inc. appearing to claim that Lifted had infringed upon certain patents. The products at issue were manufactured by a third party pursuant to the manufacturer’s proprietary formulas.

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NOTE 13 – COMPANY-WIDE MANAGEMENT BONUS POOL

Pursuant to the employment agreements entered into between the Company and its three principal executives GJacobs, WJacobs and NWarrender (individually, “Executive”), the Company is obligated to compensate management of the Company via a management bonus pool.

For each fiscal year during the Employment Term, the Executive shall be eligible to be considered for an annual bonus (the “Annual Bonus”) as part of a Company-wide management bonus pool arrangement. During the fourth quarter of each year, the Chairman of the Compensation Committee of the Board (the “Compensation Committee”) shall recommend in writing a consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) target (each, a “Target”) for the following year (the “Target Year”), which Target must be approved in writing by each of the following for as long as he remains employed by the Company: GJacobs, WJacobs, and NWarrender (collectively, and with respect to each for only as long as he is an employee of the Company, the “Executive Management Group”). If the Chairman of the Compensation Committee does not recommend in writing a Target for a Target Year that is approved in writing by all of the members of the Executive Management Group prior to the commencement of the Target Year, then the Target for the Target Year shall be equal to the actual consolidated EBITDA of the Company and its subsidiaries during the then-current year (i.e., the year preceding the Target Year) as certified in writing by the Company’s outside firm of independent certified public accountants. If the actual consolidated EBITDA of the Company and its subsidiaries during the Target Year as certified in writing by the Company’s outside firm of independent certified public accountants exceeds the Target (the amount by which the actual consolidated EBITDA of the Company and its subsidiaries during the Target Year as certified in writing by the Company’s outside firm of independent certified public accountants exceeds the Target, the “Excess Amount”), then cash equal to 33% of the Excess Amount shall be set aside by the Company as a cash management bonus pool (the “Bonus Pool”), and the amount of the Bonus Pool shall be allocated and paid out by the Company as bonuses or fees to the officers of the Company and its subsidiaries (and potentially, to directors or third parties who have significantly helped the Company and its subsidiaries during the Target Year), with the amount to be paid to each payee, including the amount of any Annual Bonus to be paid to the Executive, to be determined by unanimous written agreement of the Executive Management Group, in their sole discretion. The Executive expressly agrees and acknowledges that the amount of the Annual Bonus (if any) allocated and paid to the Executive as so determined by unanimous written agreement of the Executive Management Group shall be final, non-appealable, and binding upon the Executive, regardless of whether the Executive receives any Annual Bonus, and regardless of whether any Annual Bonus received by the Executive is higher or lower than any other person’s bonus, under any and all circumstances whatsoever. The Company shall pay the Executive the Annual Bonus, if any, no later than March 15^th of the year following the applicable Target Year. In the event that there is funding for the Bonus Pool but the Executive Management Group does not reach a unanimous decision on Bonus allocations, then no annual bonus shall be paid. The Annual Bonus Pool would then be placed in escrow and the Executive Management Group would mediate.

Pursuant to the Amended Omnibus Agreement, the 2022 company-wide bonus pool shall not be allowed to be accrued or paid by LIFD if and to the extent that doing so would decrease LIFD’s 2022 diluted earnings per share of common stock below $0.56 per share. As of September 30, 2022, the Company did not meet the diluted earnings per share of common stock requirement of $0.42 per share ($0.56 x 3/4), and as a result, the Company eliminated the company-wide bonus pool accrual of $2,121,532, which had been accrued through June 30, 2022. During the fourth quarter of 2022 and the first quarter of 2023, the Company did pay bonuses totaling $466,668 to certain members of the management team of Lifted; however, none of this $466,668 went to GJacobs, WJacobs or NWarrender, and it is accounted for as Company-Wide Management Bonus Pool expense on the Consolidated Statements of Operations. This $466,668 will be deducted from future company-wide bonus pools on a dollar-for-dollar basis. The Company did not report any company-wide bonus pool expense during the three and nine months ended September 30, 2026 or 2025.

NOTE 14 – INCOME TAXES

Provisions for income taxes are based on taxes payable or refundable for the current year and deferred income taxes. Deferred income taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements and on tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance is provided against deferred income tax assets when it is not more likely than not that the deferred income tax assets will be realized.

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Significant components of the Company’s income tax provision (benefit) for continuing operations are as follows:

	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2026			2025		2026			2025
Current
Domestic-Federal	$	(133,866	)	$	115,168	$	(81,735	)	$	106,120
Domestic-State		(64,224	)		30,208		(10,497	)		28,491
Franchise taxes		(440	)		8,795		7,390			19,950
Foreign		-			-		-			-
		(198,531	)		154,170		(84,842	)		154,560
Deferred
Domestic-Federal		775,470			32,288		113,172			(85,573	)
Domestic-State		240,199			50,099		26,998			33,034
Foreign		-			-		-			-
		1,015,670			82,387		140,171			(52,539	)
Total Provision/(Benefit) for Income Taxes	$	817,139		$	236,557	$	55,329		$	102,021

The Company currently believes that all significant filing positions are highly certain and that all of its significant income tax filing positions and deductions would be sustained upon audit. Therefore, the Company has no significant reserves for uncertain tax positions and no adjustments to such reserves were required by US GAAP. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes.

A reconciliation of the amount of tax provision (benefit) computed using the U.S. federal statutory income tax rate to the provision for income taxes on continuing operations is as follows:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2026			2025			2026			2025

Domestic-Federal	$	(529,584	)	$	181,072		$	(1,866,839	)	$	30,359
State taxes, net of federal benefit		(151,011	)		42,343			(515,289	)		7,172
Non-deductible expenses		14,780			9,327			39,055			38,743
Franchise taxes		(481	)		8,795			7,349			19,950
Prior-year income tax adjustments – current and deferred		(134,194	)		6,498			(183,323	)		7,068
Change in estimated future income tax rates		(10,424	)		(7,178	)		(97,450	)		56,846
Change in valuation allowance		1,618,672			6,034			2,664,593			(47,781	)
Other		9,380			(10,335	)		7,232			(10,336	)
Total Provision/(Benefit) for Income Taxes	$	817,139		$	236,557		$	55,329		$	102,021

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Deferred tax assets and liabilities as of September 30, 2026 and December 31, 2025 were as follows:

	September 30,			December 31,
	2026			2025
Deferred Tax Assets:
Operating Loss Carry forwards	$	674,666		$	8,169
Stock-Based Compensation		2,818,041			2,742,007
Sales Allowances		187,576			91,257
Provision for Credit Losses – Extrax NM Loans		113,037			109,987
Provision for Credit Losses – Settlement Receivables		6,699			-
Inventory Allowance		1,356,601			-
Prepaid Inventory Allowance		67,952			-
Accrued Related Party Expenses		136			1,383
Interest Carryforward		10,992			65,675
Allowance for Doubtful Accounts		552,672			331,026
Lease Liabilities		16,511			16,205
Charitable Contribution Carryforward		-			-
Investment Impairments		508,115			468,384
Fixed Asset Impairments		55,750			-
Less: Valuation allowance		(5,984,971	)		(3,320,378	)
Total Deferred Tax Assets		383,777			513,715

Deferred Tax Liabilities:
Depreciation & Amortization		(217,344	)		(243,913	)
Federal tax effect of state NOL carryforwards		(36,843	)		-
Total Deferred Tax Liabilities		(254,187	)		(243,913	)

Net Deferred Tax Assets/(Liabilities)	$	129,591		$	269,802

NOTE 15 – DEBT

Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 6 – ASSETS HELD FOR SALE

Sale of 5511 Building

Payoff of Business Loan

On September 29, 2026, in connection with the closing of the sale of the 5511 Building, the Company repaid in full all amounts outstanding under the Business Loan that Surety Bank of DeLand, Florida (“Surety Bank”) made to the Company on December 14, 2023 (“Business Loan Payoff”). The net proceeds of the Business Loan had been used by Lifted to pay a portion of the purchase price of the 5511 Building. Prior to the Business Loan Payoff, the Business Loan was evidenced by a Business Loan Agreement and a promissory note, bore interest at a fixed rate of 10% per annum, was scheduled to mature in December 2028, and was secured by a first priority mortgage on the 5511 Building. The payoff amount was $841,110, consisting of all outstanding principal and accrued interest and a $9,100 prepayment penalty. The Business Loan Payoff was funded from the sale proceeds at closing. Upon payment, the Business Loan was satisfied in full and terminated, and Surety Bank’s first priority mortgage was released, and the Company had no bank debt outstanding.

Background

On December 14, 2023, LFTD Partners and Lifted (together the “Borrower”), jointly borrowed a total of $3,910,000 from Surety Bank (“Lender”). The Lender made two five-year loans to the Borrower, as joint borrowers: (1) a working capital loan of $3,000,000 at 9.5% fixed annual interest (“Working Capital Loan”), and (2) a $910,000 loan at 10% fixed annual interest (the “Business Loan”), the net proceeds of which were used by Lifted to pay a portion of the $1,375,000 purchase price of the 5511 Building. Prior to the WCL Payoff, the two loans had been cross collateralized by a first lien mortgage on the 5511 Building, and by a first lien security interest in all of the other assets owned by LIFD and Lifted, in favor of Surety Bank.

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Prior to the WCL Payoff, the Board of Directors of the Company had authorized management of the Company to explore the sale of the 5511 Building, and, if the 5511 Building is sold, to apply the net proceeds of such sale, firstly to the full repayment of the Business Loan, and secondly to the partial repayment of the Working Capital Loan. Simultaneously with such authorization, the Board of Directors of the Company had authorized management of the Company to apply certain tax refunds expected to be received by the Company, plus certain cash on hand held by the Company, to the partial or full repayment of the Working Capital Loan. Pursuant to this authorization, during the third quarter ended September 30, 2025, the Working Capital Loan was paid down $592,050 using certain tax refunds received by the Company. On November 20, 2025, Borrower paid off the principal balance and accrued interest on the Working Capital Loan, which totaled $1,411,125, with no prepayment penalty (“WCL Payoff”). Following the WCL Payoff, Lender also agreed to immediately waive the covenants of the Business Loan Agreement regarding maintaining a minimum 1.50x debt service coverage ratio, and a $1,000,000 minimum deposit account balance (“Loan Term Changes”).

The Working Capital Loan had been evidenced by a credit agreement, promissory note, security agreement, collateral assignment agreement, and pledge agreement. The Working Capital Loan was to mature on December 14, 2028, and was subject to prepayment penalties declining from 3% to 1% over three years and included restrictive covenants prohibiting, without lender consent, additional liens, changes in Lifted’s ownership, mergers, stock buybacks, and other actions. The Working Capital Loan had been secured by all of the Company’s business personal property and intellectual property and included a cross-default with the Business Loan.

Prior to the Business Loan Payoff, the Business Loan bore interest at a fixed annual rate of 10%, and prior to the Loan Term Changes, required a minimum 1.50x debt service coverage ratio (waived for 2024), as well as maintaining a $1,000,000 minimum deposit balance with the lender for the life of the Business Loan, which matured on December 14, 2028.

Prior to the Business Loan Payoff, the Business Loan had been secured by a first priority mortgage on the 5511 Building, along with a first priority security interest on all furniture, equipment, inventory, intangibles and fixtures, and other collateral, and also contained late payment penalties.

Prior to the Business Loan Payoff, WCL Payoff and Loan Term Changes, any default under these agreements could have resulted in the lender seizing the pledged collateral, including equity in key subsidiaries, intellectual property, and real estate, which could have a catastrophic impact on the Company.

The following presents the Business Loan in the Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025:

	September 30, 2026		December 31, 2025

Business Loan	$	-	$	852,755
Total principal amount		-		852,755
Less: Unamortized debt financing costs		-		(32,876	)
Less: Current portion of Surety Bank note		-		(22,282	)
Non-Current portion of Surety Bank note	$	-	$	797,597

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.

Claims of Portion, Inc.

On or about October 6, 2026, Lifted received a letter from Portion, Inc. appearing to claim that Lifted had infringed upon certain patents. The products at issue were manufactured by a third party pursuant to the manufacturer’s proprietary formulas.

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

Regarding the case MoHemp Trade Association, Lifted Liquids, Inc. and MNG 2005, Inc. vs. Mike Kehoe, Catherine Hanaway and Sarah Wilson, on November 4, 2026, Judge M. Douglas Harpool granted the defendants’ motion to dismiss.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this Quarterly Report on Form 10-Q, references to the “Company,” “LFTD Partners,” “LIFD,” “Lifted,” “Highlandia”, “we,” “our” or “us” refer to LFTD Partners Inc. and Lifted, unless the context otherwise indicates.

The following Management’s Discussion and Analysis (“MD&A”) section includes a discussion of our results of operations, liquidity and financial condition and certain factors that may affect our future results. This MD&A should be read in conjunction with the Company’s risk factors, consolidated financial statements and related, accompanying notes that appear elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following MD&A contains forward-looking statements and forward-looking information, as defined under applicable United States securities laws, that reflect our plans, estimates and beliefs. MD&A of our financial condition and results of operations is provided as a supplement to the accompanying financial statements and related notes to help provide an understanding of our financial condition, the changes in our financial condition and the results of operations.

As a result of many factors, the Company’s actual results may differ materially from those anticipated in these forward-looking statements and information. The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$”).

Cautionary Note Regarding Forward-Looking Statements

Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

PART I – FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements

PART II – OTHER INFORMATION

ITEM 1A. RISK FACTORS

Overview

The legal and regulatory risks facing the Company’s business are particularly acute at this point in time. In particular, reference is hereby made to the description of the business of LFTD Partners Inc., and to risks and uncertainties therewith, in the following sections, which are hereby incorporated by reference thereto:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC.

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

Liquidity and Capital Resources

On February 24, 2020, the Company acquired 100% of the ownership interests of Lifted. All of the Company’s sales are generated by the Company’s wholly owned subsidiary Lifted; LFTD Partners by itself generates no sales. We also do not recognize any revenue or earnings from our investments in Bendistillery and Ablis. Prior to its dissolution in May 2026, LFTD Partners’ other wholly owned subsidiary, Highlandia Inc., did not generate any sales.

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Subject to the risks and uncertainties described in NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC. and NOTE 3 - RISKS AND UNCERTAINTIES, the Company’s cash needs for working capital, capital expenditures, growth opportunities, the payments of Series A and Series B Preferred Stock dividends, and other obligations, are expected to be met with current cash on hand and cash flows provided by operating activities. There can be no assurance that these sources will be sufficient.

The Company’s ability to generate sufficient operating cash flow is directly affected by the timing and collectability of its accounts receivable. A significant portion of the Company’s revenue comes from wholesale and distributor sales, which often involve extended payment terms. As a result, delays in customer payments can have a material impact on cash flow, liquidity, and working capital availability. Fluctuations in cash collections can impact the Company’s ability to meet short-term obligations, fund inventory purchases, and invest in growth initiatives. Prolonged delays in accounts receivable collection could necessitate further adjustments to working capital management strategies, including modifications to vendor payment schedules, securing additional financing, or reevaluating sales terms to improve cash flow predictability. Management assesses the impact of delayed customer payments on overall liquidity and considers credit risk and allowance for doubtful accounts, in an effort to provide some safeguard against potential cash flow disruptions. However, if economic conditions deteriorate or customer creditworthiness declines further, additional measures may be required to preserve liquidity and operational stability.

The Company has a history of losses as evidenced by the accumulated deficit at September 30, 2026 of $37,787,673. We plan to sustain the Company as a going concern by taking the following actions: (1) continuing to operate Lifted; (2) acquiring and/or developing profitable businesses that will create positive income from operations; and/or (3) completing private placements of our common stock and/or preferred stock. We believe that by taking these actions, we will be provided with sufficient future operations and cash flow to continue as a going concern. However, there can be no assurance that we will be successful in consummating such actions on acceptable terms, if at all. Moreover, many of such actions can be expected to result in substantial dilution to the existing shareholders of the Company.

The following table summarizes our Company’s cash flows for the nine months ended September 30, 2026 and 2025:

	For the Nine Months Ended September 30,
	2026			2025
Net Cash Provided By Operating Activities	$	278,139		$	785,188
Net Cash Provided by/(Used in) Investing Activities		1,318,448			(87,082	)
Net Cash Used In Financing Activities		(877,723	)		(924,389	)

Cash Flows From Operating Activities

Net cash provided by operating activities was $278,139 for the nine months ended September 30, 2026, consisting of a net loss of $8,937,688, offset by net non-cash expenses of $9,256,557, with net changes in operating assets and liabilities using cash of $40,729. Non-cash expenses were primarily related to inventory reserve expense of $5,316,198, and spoiled and written off inventory of $2,356,706. Changes in operating assets and liabilities primarily included cash provided by a $920,931 decrease in inventory, partially offset by a $886,894 decrease in deferred revenue and a $171,986 increase in accounts receivable.

In comparison, net cash provided by operating activities was $785,188 during the nine months ended September 30, 2025; this resulted from net income of $62,265 increased by net, non-cash expenses of $2,045,638 and reduced by net operating assets and liabilities of $1,322,715. Non-cash expenses were primarily related to spoiled and written off inventory of $769,104, bad debt expense of $664,686, and Loss From Inventory Theft of $358,072.

Cash Flows From Investing Activities

Net cash provided by investing activities was $1,318,448 during the nine months ended September 30, 2026, driven primarily by $1,448,503 of proceeds from the sale of assets held for sale and other fixed assets, net of selling costs, partially offset by $125,032 of purchases of fixed assets and $5,023 for the purchase of an intangible asset. In comparison, net cash used in investing activities was $87,082 during the nine months ended September 30, 2025, driven by purchases of fixed assets.

Cash Flows From Financing Activities

During the nine months ended September 30, 2026, net cash used in financing activities was $877,723, consisting of $861,878 of payments on the Business Loan, including the payoff, $12,000 of dividends paid to preferred stockholders, and $3,846 of payments on a related-party note. In comparison, during the nine months ended September 30, 2025, net cash used in financing activities was $924,389, primarily consisting of payments on the Surety Bank loans of $1,050,849 and payments on the Related Party Note (defined below) of $211,538, offset by proceeds of $350,000 from the Related Party Note.

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During the nine months ended September 30, 2026, net cash increased by $718,864, and we had $2,485,987 of unrestricted cash at September 30, 2026. During the nine months ended September 30, 2025, net cash decreased by $226,283, and we had $1,920,664 of unrestricted cash at September 30, 2025.

Comparison of the Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025

The following table summarizes our Company’s current assets, current liabilities and working capital as of September 30, 2026 and December 31, 2025.

	September 30, 2026		December 31, 2025
Current Assets	$	6,802,002	$	15,691,047
Current Liabilities		4,165,187		5,162,410
Working Capital		2,636,814		10,528,637

A primary driver for the change in current assets and current liabilities from period-over-period was the sale of the 5511 Building and Business Loan Payoff on September 29, 2026. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 6 – ASSETS HELD FOR SALE

Sale of 5511 Building

NOTE 15 – DEBT

Payoff of Business Loan

As of September 30, 2026, we reported prepaid expenses of $105,742, primarily consisting of prepaid health insurance of $39,596 and prepaid inventory of $30,679, net of allowance of $253,586. In comparison, as of December 31, 2025, we reported prepaid expenses of $348,667, primarily consisting of prepaid inventory of $272,968. A primary driver for the change in prepaid expenses is that at September 30, 2026, an allowance of $253,586 was recorded against the Company’s prepaid inventory. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Prepaid Expenses

Accounts receivable of $1,839,757, net of $2,062,481 allowance for doubtful accounts, were outstanding as of September 30, 2026. In comparison, accounts receivable of $2,531,524, net of $1,269,590 allowance for doubtful accounts, were outstanding as of December 31, 2025.

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Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Accounts Receivable

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

Inventory is stated at the lower of cost and net realizable value. Inventory consisted of the following at September 30, 2026 and December 31, 2025:

	September 30, 2026			December 31, 2025
Raw Goods	$	4,061,828		$	5,906,501
Finished Goods		3,364,773			5,051,322
Inventory Allowance		(5,062,613	)		-
Total Inventory	$	2,363,988		$	10,957,823

Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Inventory

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

The Federal Hemp Restrictions necessitated the calculation and recording of an impairment charge on the Lifted Goodwill and Oculus Goodwill. As of December 31, 2025, LFTD Partners recorded a goodwill impairment charge on the Lifted Goodwill and Oculus Goodwill, reducing the carrying value of both to $0. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 4 – THE COMPANY’S INVESTMENTS

The Company’s Investment in Lifted

The Company recorded impairment charges against its investments in Ablis and Bendistillery and wrote down its investment in Ablis to $0 and its investment in Bendistillery to $99,800, as of December 31, 2025. Then, as of June 30, 2026, the Company recorded another impairment charge on its investment in Bendistillery, reducing the carrying value of its investment to $0. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 4 – THE COMPANY’S INVESTMENTS

The Company’s Investments in Ablis and Bendistillery

Net fixed assets as of September 30, 2026 and December 31, 2025 were $598,017 and $2,273,377, respectively. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Fixed Assets

Assets Held for Sale

NOTE 6 – ASSETS HELD FOR SALE

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

As of September 30, 2026, current liabilities of $4,165,187 primarily consisted of accounts payable and accrued expenses of $3,346,624 and deferred revenue of $493,155. In comparison, as of December 31, 2025, current liabilities of $5,162,410 primarily consisted of accounts payable and accrued expenses of $3,326,650 and deferred revenue of $1,380,049.

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Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Deferred Revenue

As of September 30, 2026, non-current liabilities of $473,794 consisted entirely of operating lease liability. In comparison, as of December 31, 2025, non-current liabilities of $1,477,877 consisted of the non-current portion of the Business Loan of $797,597, and operating lease liability of $680,280.

In prior years, the Company’s payables have been greater than its cash on hand. Prior to the Company’s acquisition of Lifted, the Company had inconsistent income-generating ability and was therefore reliant on raising money from loans or stock sales. The Company had an accumulated deficit of $37,787,673 and $28,839,889 as of September 30, 2026 and December 31, 2025, respectively.

Comparison of Operations for the Three and Nine Months Ended September 30, 2026 to September 30, 2025

Net sales during the three and nine months ended September 30, 2026 were $4,808,812 and $22,672,212, respectively, compared to net sales during the three and nine months ended September 30, 2025 of $9,056,742 and $28,505,928, respectively. Some of the business challenges that we face include, but are not limited to: the adoption or proposal of federal and state legislation and regulations that prohibit or more tightly regulate intoxicating hemp-derived and kratom-derived products, including in significant markets for Lifted, such as in Florida, Texas, Illinois, Missouri and California; greater competition in the marketplace for branded hemp-derived and psychoactive products that are similar to those that Lifted sells; more distributors creating their own brands and selling their own branded products at a lower price than Lifted’s products; increased competition for products containing more milligrams of cannabinoids or active ingredients per unit at a lower price point; and other competing brands paying distributors and wholesalers more than what Lifted is willing to pay (if anything), for valuable shelf space. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Revenue

License Fee

During the year ended December 31, 2025, Lifted launched certain initiatives in order to attempt to increase net sales and decrease operating expenses, including: laying off certain employees and independent contractors in Kenosha and Durango; restructuring its sales team; consolidating operations; developing the marketing of Lifted’s brands and products; and increasing spending on marketing and advertising, and digital marketing.

On June 30, 2026, Lifted announced a strategic restructuring to reduce its operating costs as part of its ongoing efforts to align its cost structure with the evolving regulatory environment affecting portions of the hemp-derived and kratom-derived products. As part of this initiative, between June 12-26, 2026, Lifted reduced its workforce from approximately 100 employees and independent contractors to 77. At the time, the restructuring was expected to reduce Lifted’s future operating expenses by approximately $736,000 per year. As of the date of this report, the Company’s workforce is approximately 68. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

Cost of Goods Sold

Cost of goods sold during the three and nine months ended September 30, 2026 was $4,166,954 and $23,085,201, respectively, compared to cost of goods sold during the three and nine months ended September 30, 2025 of $4,899,247 and $18,884,646, respectively.

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Lifted’s industry, and customer preferences, are constantly and quickly evolving. The regulatory landscape at the municipal, state and federal levels in which Lifted operates is unstable and unpredictable. Consequently, Lifted finds it extremely difficult to predict future sales of its products and to anticipate raw goods needs for future production.

These factors caused Lifted to record valuation allowances against its inventory and prepaid inventory. The allowances are presented as reductions of inventory and prepaid inventory, respectively, on the consolidated balance sheets, while the related expense or reversal is recognized as a component of cost of goods sold in the consolidated statements of operations. During the three months ended September 30, 2026, inventory reserve activity resulted in a net credit to cost of goods sold of $1,279,897. During the three months ended September 30, 2025, there was no inventory reserve activity. During the nine months ended September 30, 2026 and 2025, the Company recognized inventory reserve expense of $5,316,198 and $0, respectively. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Inventory

Cost of Goods Sold

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

Segment Disclosures

Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Segment Disclosures

Operating Expenses

Operating expenses include accounts such as payroll expense, professional fees, bank charges and merchant fees, advertising and marketing, provision for credit losses – settlement receivables, bad debt (recovery)/expense, impairment of hemp-specific fixed assets, depreciation and amortization, collaboration commission and royalty expense, and other operating expenses. Total operating expenses during the three months ended September 30, 2026 were $3,275,698 compared to $2,844,704 during the three months ended September 30, 2025. This $430,994 increase was primarily due to a $445,458 increase in bad debt expense. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Accounts Receivable

Total operating expenses during the nine months ended September 30, 2026 were $8,313,267, compared to $8,746,517 during the nine months ended September 30, 2025. This $433,250 decline was primarily due to a $324,414 reduction in other operating expenses.

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Payroll Expense

Payroll Expense includes sales commissions paid to independent contractors. If the Federal Hemp Restrictions materially reduce 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.

Payroll expense during the three and nine months ended September 30, 2026 was $1,070,534 and $3,481,434, respectively, compared to payroll expense during the three and nine months ended September 30, 2025 of $1,169,117 and $3,665,391, respectively. In March 2025, an Employee Retention Tax Credit (“ERC”) of $22,357 related to the second quarter of 2020 was recovered. The $22,357 ERC was accounted for as a reduction in payroll expenses in the first quarter of 2025.

Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 3 - RISKS AND UNCERTAINTIES

Going Concern

NOTE 11 - CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

Compensation of Lifted’s Chief Strategy Officer

Advertising and Marketing Expenses

Advertising and marketing costs are expensed as incurred. Advertising and marketing expenses primarily relate to search engine optimization, marketing campaigns, trade shows, digital marketing, and promotional expenses. Lifted has been engaging with third party specialists to increase its presence in the direct-to-consumer space. Advertising and marketing expenses during the three and nine months ended September 30, 2026 were $578,284 and $1,410,455, respectively, compared to advertising and marketing expenses during the three and nine months ended September 30, 2025 of $426,573 and $1,374,018, respectively.

Provision for Credit Losses – Settlement Receivables

As of September 2026, the Company has recorded a $25,000 allowance against the $25,000 still owed by Girish GPO to the Company under the settlement agreement. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 12 – LEGAL PROCEEDINGS

Settlement Agreement with Girish GPO, Inc.

Provision for Credit Losses – Extrax NM Loans

Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

License Fee

Bad Debt (Recovery)/Expense

Bad debt expense during the three and nine months ended September 30, 2026 was $864,376 and $863,753, respectively, compared to bad debt expense during the three and nine months ended September 30, 2025 of $418,918 and $664,686, respectively. Bad debt expense stems from the change in the Company’s allowance for doubtful accounts, which stems from the Company’s CECL Model analysis. The delay in Lifted’s receipt of payments from certain customers – primarily distributors – has increasingly become an issue for Lifted. Certain customers have become slower to pay Lifted for products purchased (“Slow Paying Customers”), and the Slow Paying Customers disregard payment terms. Management believes that some Slow Paying Customers may be delaying payments to Lifted because of their own accounts receivable collection issues, which may in part be caused by the regulatory uncertainty over the industries in which Lifted participates. The Company has an accounting protocol which effectively causes the Company to recognize an allowance for doubtful accounts for all invoices older than 90 days. Consequently, the delay in Lifted’s receipt of payments from certain customers has a direct impact on the Company’s net receivables, net income, and earnings per share. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Accounts Receivable

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Collaboration Commission and Royalty Expense

Collaboration commission and royalty expense during the three and nine months ended September 30, 2026 was $0, compared to collaboration commission and royalty expense during the three and nine months ended September 30, 2025 of $33,899 and $106,739, respectively. The change in collaboration commission and royalty expense primarily stems from decreased sales of the products covered by respective collaborations. Lifted has been de-emphasizing its collaboration efforts with outside brands due to the collaborations’ lack of traction in sales. As of December 31, 2025, the only Manufacturing, Sales and Marketing Agreement still in effect was that between Lifted and Diamond Supply Co.; none were in effect as of September 30, 2026.

Other Operating Expenses

Other operating expenses include, for example, software expenses, travel, insurance expense, rent expense, repairs and maintenance, state license and filing fees, excise and sales tax expense, health benefits, warehouse and lab expenses below the Company’s capitalization threshold, and other expenses.

Other operating expenses during the three months ended September 30, 2026 totaled $443,363 compared to $442,570 during the three months ended September 30, 2025.

Other operating expenses during the nine months ended September 30, 2026 totaled $1,414,315, compared to $1,738,729 during the nine months ended September 30, 2025. This $324,414 decline was primarily due to a $129,433 reduction in warehouse and lab expenses, a $127,635 reduction in travel expense, a $82,969 reduction in excise and sale tax expense, and a $36,107 reduction in insurance expense.

Other Income/(Expenses)

Net other income during the three months ended September 30, 2026 was $111,530, driven primarily by the Gain on Disposal of Assets Held for Sale and Other Fixed Assets of $143,468, comprised of $141,768 from the gain on the sale of the 5511 Building, including its land, improvements and certain machinery and equipment, and $1,700 from the gain of the sale of other furniture and fixtures. Net other expenses during the nine months ended September 30, 2026 were $156,103, primarily driven by settlement costs of $100,000 and the $99,800 impairment of the Company’s investment in Bendistillery. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 12 – LEGAL PROCEEDINGS

Settlement Agreement with Sergio Hernandez and Josue Hernandez

NOTE 4 – THE COMPANY’S INVESTMENTS

The Company’s Investments in Ablis and Bendistillery

In comparison, during the quarter ended September 30, 2025, net other expenses of $441,977 primarily consisted of $358,072 of Loss From Inventory Theft. In July 2025, $335,460 worth of finished goods were stolen off of Lifted’s third-party shipper's truck just after leaving Lifted's co-packer's facility in Orange County, California. The thieves were apprehended by authorities, and Lifted filed an insurance claim with the shipping company's insurance company. Lifted’s co-packer credited Lifted $40,000. On November 6, 2025, Lifted executed a Property Damage-Liability Release with the insurance carrier of the shipping company, in exchange for the insurance company paying $250,000. Also included in Loss From Inventory Theft for the quarter ended September 30, 2025 is $11,507 worth of finished goods that were stolen in September 2025 in transit to a customer. During the nine months ended September 30, 2025, net other expenses of $710,479 primarily consisted of $358,072 of Loss From Inventory Theft, Theft Expense of $350,000 and Interest Expense of $230,948 offset by Settlement Income of $177,500 and Interest Income of $75,677.

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Net Income/(Loss)

Net loss during the three and nine months ended September 30, 2026 was $3,339,449 and $8,937,688, respectively, compared to net income during the three and nine months ended September 30, 2025 of $634,257 and $62,265, respectively. Prior to the Loan Term Changes, the Business Loan required that Borrower maintained a minimum 1.50x Debt Service Coverage Ratio (“DSCR”) based on Borrower’s annual corporate tax return. The DSCR was to be tested annually, beginning with the 2023 return. The DSCR was to be calculated as EBIDA (earnings before interest, depreciation, and amortization) divided by contractual annual debt service payments. Borrower met the DSCR requirement contained in the Business Loan for the year ended December 31, 2023. Surety Bank agreed to waive any claim of default based on Borrower’s 2024 DSCR. On September 29, 2026, in connection with the closing of the sale of the 5511 Building, the Company repaid in full all amounts outstanding under the Business Loan made to it by Surety Bank (“Business Loan Payoff”) on December 14, 2023, the net proceeds of which had been used by Lifted to pay a portion of the purchase price of the 5511 Building. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 15 – DEBT

Payoff of Business Loan

Off-Balance Sheet Arrangements

As of reported period end, the Company had no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are discussed in NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES of the consolidated financial statements accompanying this Quarterly Report on Form 10-Q.

Tax Provision

Please refer to NOTE 14 – INCOME TAXES for information about the Company’s tax provision.

Other Matters

We may be subject to other legal proceedings, claims, and litigation arising in the ordinary course of business in addition to the matters discussed in NOTE 12 – LEGAL PROCEEDINGS. We intend to vigorously pursue and defend such litigation. Although the outcome of these other matters is currently not determinable, our management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on our Company’s financial position, results of operations, or cash flows.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Our Chief Financial Officer, WJacobs, evaluated the effectiveness of the Company’s disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, WJacobs concluded that because of the material weakness in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of September 30, 2026.

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(b) Management’s report on internal control over financial reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. “Internal Control Over Financial Reporting” is defined in Exchange Act Rules 13a-15(f) and 15d-15(f) as a process designed by, or under the supervision of, an issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by an issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. It includes those policies and procedures that:

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

	(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.

During September 2026, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2026 based on the framework set forth in the report entitled Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation, management concluded that our internal control over financial reporting as of September 30, 2026 was not effective. Management identified the following material weaknesses as of September 30, 2026:

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

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

Management is continually working to improve the effectiveness of our internal control over financial reporting. Our actions have included the following to improve controls over our financial statement preparation and reporting process:

(1)

We have enhanced certain resources available within our accounting team. We hired a Chief Financial Officer of Lifted who is specifically responsible for overseeing the financial reporting processes of Lifted. From time to time, we have also engaged a licensed, external certified public accountant who advises and assists us with various aspects of the financial reporting process, including at our direction, objectively reviewing work product significant to the closing of our financial statements.

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	(2)	We have enhanced the use of specialist involvement in complex, non-routine, and technical areas of accounting, valuation, new accounting standards adoption, and tax matters. These specialists include the licensed, external certified public accountant referred to above, a tax firm, and a valuation firm.

	(3)	We are in the process of implementing tools to manage the structure of our financial closing processes. These tools include: (a) formalizing checklists designed to ensure accounting requirements and account reconciliations are completed and (b) formalizing required work instructions for completing and objectively reviewing financial closing work product, account reconciliations and analyses, which includes documenting preparer and reviewer responsibilities and signoffs.

	(4)	We are archiving, in an access-restricted retention domain, documentation critical to supporting our financial reporting, including financial closing work product, account reconciliations and analyses, supporting documents and agreements, accounting technical memoranda, and other documentation supporting complex, non-routine accounting and valuation matters. Starting with the April 2024 expense reports, all LFTD Partners and Lifted employee expense reports are also stored online in this access-restricted retention domain. We have made this documentation transparent and accessible to our registered public accounting firm, other advisers, and to our lead independent director, Mr. Vincent J. Mesolella.

	(5)	From time to time, we have engaged a third-party consulting firm with expertise in corporate governance, internal controls, risk management, and assurance. This firm has been engaged to assist management with remediating internal control deficiencies and designing and implementing controls over our financial processes and reporting.

	(6)	Providing copies of LFTD Partners’ and Lifted’s bank statements to Mr. Mesolella. Starting with LFTD Partners’ April 2024 bank statements, the LFTD Partners bank statements and bank reconciliations are stored online in an access-restricted retention domain, in the same location as where Lifted’s bank statements and bank reconciliations are stored. Previously, our Chief Financial Officer, WJacobs, emailed copies of LFTD Partners and Lifted’s bank statements to Mr. Mesolella monthly. WJacobs engages with Mr. Mesolella, as needed, to address any questions or concerns.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include, but are not limited to, that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

The Company is actively engaged in a comprehensive effort to remediate its material weaknesses in our internal control over financial reporting, but additional work is required, and no guarantee or assurance can be given as to when such work will be completed.

This Quarterly Report on Form 10-Q does not include an attestation report of our registered public accounting firm regarding internal controls over financial reporting.

Notwithstanding the existence of the material weaknesses as described above, we believe that the consolidated financial statements in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with US GAAP.

(c) Changes in internal control over financial reporting

Our Chief Executive Officer and Chief Financial Officer have concluded that there were no significant changes in our internal controls over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(d) Inherent Limitations on Control Systems

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Description of Legal Proceedings

Lifted currently is involved in various legal proceedings, both as the defendant and as the plaintiff. Please refer to NOTE 12 – LEGAL PROCEEDINGS for more information.

ITEM 1A. RISK FACTORS

The Risk Factors identified under the sections “SUMMARY OF RISK FACTORS”, “ITEM 1A. RISK FACTORS”, and “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and the consolidated financial statements and the related notes included elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) filed with the SEC on April 1, 2026, and in our subsequent quarterly filings on Form 10-Q, continue to apply. In addition, investors should consider the risk factors and disclosures in the following section, which are hereby incorporated by reference thereto:

NOTE 3 - RISKS AND UNCERTAINTIES

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:

NOTE 9 – SHAREHOLDERS’ EQUITY AND STOCK BASED COMPENSATION

Issuance of Series A Convertible Preferred Stock

Issuance of Series B Convertible Preferred Stock

Share-Based Compensation

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None; not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

None; not applicable.

ITEM 5. OTHER INFORMATION

During the nine months ended September 30, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted, modified, or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408(c) of Regulation S-K.

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ITEM 6. EXHIBITS

The following Exhibits have been previously filed in the below referenced filings or have been attached hereto, and in any case, as is stated on the cover of this Report, all of the below Exhibits are incorporated herein by reference.

10.53		Compensation Agreement between Acquired Sales Corp., Gerard M. Jacobs and William C. "Jake" Jacobs dated as of June 19, 2019
10.58		Lease Agreement - 5511 95th Avenue, Kenosha, WI 53144
10.61		Lease Agreement - 8920 58th Place, Suite 850, Kenosha, WI 53144
10.62		Lease Agreement - 8910 58th Place, Suites 600 and 700, Kenosha, WI 53144
10.67		Omnibus Agreement dated December 30, 2021 between LFTD Partners Inc. Nicholas S. Warrender, 95th Holdings, LLC, Gerard M. Jacobs and William C. “Jake” Jacobs
10.68		Amended Omnibus Agreement dated February 14, 2022 between LFTD Partners Inc. Nicholas S. Warrender, Gerard M. Jacobs and William C. “Jake” Jacobs
10.69		Lease Agreement - 9560 58th Place, Suite 360, Kenosha, WI 53144
10.70		Acceleration Agreement
10.71		Commercial Sublease – 2701-09 West Fulton PH, Chicago, IL 60612
10.72		Lease Agreement - 5732 95th Ave, Suites 200 and 300, Kenosha, WI 53144
10.72.1		Manufacturing, Sales and Marketing Agreement – Cali Sweets, LLC
10.73		Manufacturing, Sales and Marketing Agreement – Diamond Supply Co.
10.74		Agreement and Plan of Merger - Oculus CHS Management Corp.
10.75		Hagan Sanchez Employment Agreement
10.76		Chase Sanchez Employment Agreement
10.77		Assignment and Assumption of Lease and Landlord Consent and Lease Agreement – Aztec New Mexico
10.78		Manufacturing, Sales and Marketing Agreement – DreamFields Brands Inc. d/b/a Jeeter
10.79		Finders Agreement – Florence Mirsky
10.80		Credit Agreement
10.81		Promissory Note ($3,000,000 Loan)
10.82		Security Agreement
10.83		Collateral Assignment Agreement
10.84		Pledge Agreement
10.85		Business Loan Agreement
10.86		Promissory Note ($910,000 Loan)
10.87		Mortgage
10.88		Assignment of Rents, Leases, and Security Deposits
10.89		Lease of 789 Tech Center Drive, Unit C, Durango, Colorado 81301
10.90		Second Amendment to Lease of 8910 58th Place, Suites 600 and 700, Kenosha, Wisconsin 53144
10.91		Jeeter Termination Agreement
10.65		Letter of Intent – TMD Ventures, LLC
10.66		Letter of Intent – Sustainable Growers, LLC, Buckbee Seed Co
10.67		Letter of Intent – Sustainable Properties, LLC – Real Property Purchase
10.68		Letter of Intent – Sustainable Innovations Inc. (SI) and certain subsidiaries
10.69		Letter of Intent – Boards of Directors and Executives
99.1		Letter from LFTD Partners Inc. dated April 11, 2025, terminating Letters of Intent with Sustainable parties.
10.92		Third Amendment to Lease Agreement - 5732 95^th Avenue, Suite 400, Kenosha, Wisconsin 53144
10.93		Fourth Amendment to Lease Agreement - 5732 95^th Avenue, Suite 400, Kenosha, Wisconsin 53144
10.94		Commercial Offer to Purchase, made July 21, 2026 and executed July 22, 2026, by and between Lifted Liquids, Inc. and Ad Real Estate Group LLC, with respect to the real property located at 5511 95th Avenue, Kenosha, Wisconsin 53144.

The following exhibits are filed with this Quarterly Report on Form 10-Q:

31.1		Certification of principal executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of principal accounting officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.SCH		XBRL Taxonomy Extension Schema Document.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.