Lftd Partners Inc

Welcome to Lifted Partners Earnings Conference Call to discuss the third quarter of 2023. This call is being recorded. At this time, all participants are in a listen-only mode. If you've joined via the webcast and would like to ask a question during this presentation, please click on the Ask a Question box on the left side of your screen, type in your question, and hit Submit. Teleconference participants, please hit Star 1 on your telephone keypad to ask a question. I will now hand the conference over to Jerry Jacobs, the Chairman and CEO of Lifted Partners, Inc. Please go ahead.

Good morning, and welcome to Lifted Partners, Inc.' 's earnings conference call to discuss the third quarter of 2023. Our earnings press release and financial statements for the third quarter of 2023 have been filed with the SEC, and links to both can be found on our website, www.lftdpartners.com. Paul Cecala, On today's call we will share some comments on our quarterly performance and we will answer some questions at the end of the call. Paul Cecala, A replay of this call will be available for an extended period of time accessible through the investor section of our website. Paul Cecala, Here's the safe harbor notice some of the statements that we will make today regarding our business operations and financial performance. including words such as may, might, would, should, could, potentially, hope, believe, expect, project, and similar verbiage are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially, so listeners should not place undue reliance upon such statements. For more information, please refer to the risk factors discussed in our most recent Form 10-K filed with the SEC. We undertake no obligation to update these forward-looking statements. Lifted Partners 2023 consolidated net revenues were solid at $13.1 million, up from $11.2 million last year, with 4 cents in basic earnings per share. So once again, Lifted Partners has continued its impressive profile as being one of the few, if not the only publicly traded company in the cannabis industry that has no debt and is profitable on a gap basis. In this call, I'm going to comment on four topics, collaborations, regulatory issues, financing, and product write-offs. First, regarding collaborations, Our subsidiary, Lifted Made, has already entered into product collaborations with marijuana companies Jeter and Xtrax New Mexico. During Q3 2023, Lifted Made has been approached by multiple other publicly traded and privately held marijuana companies regarding potential product collaborations. We are in intensive discussions in this regard. Second, regarding regulatory developments, The so-called federal farm bill is reauthorized every five years. The current farm bill expired on September 30th, 2023, and the US Congress is currently drafting a successor bill. The impact of this successor bill on the hemp industry remains to be seen. Our company is also potentially impacted by future rules and regulations that could be issued by the DEA or the FDA and by future state laws and regulations. We are actively supporting the education and lobbying efforts of the American Healthy Alternatives Association and the efforts of many other stakeholders in the multi-billion dollar US hemp industry. At the current time, it is unclear whether a successor farm bill can be finalized by the Congress until sometime after the end of the year. Third, regarding financing, Our company is continuing to devote a significant portion of our cash flow to raw materials, product design and packaging, personnel, equipment, inventory build, sales, and fulfillment to support Lifted Maid's ongoing efforts on behalf of our herb brand and our product collaborations with Cali Sweets, Diamond Supply Company, Jeter, and Extract New Mexico. and other collaborations and product extensions that are in our portfolio and pipeline. Our company would like to have additional working capital to support these efforts, and also we have contractually agreed to purchase Lifted's headquarters building in Kenosha for $1.375 million no later than the end of 2023. Our preference is to raise capital in the form of first land secured debt at a reasonable interest rate and without covenants that could interfere with our growth initiatives. We are currently optimistic that we can obtain loans from a commercial bank on terms that we view as attractive in the very near future. Finally, regarding product write-offs, prior to Q4 2022, Lifted Made was purchasing gummies from out-of-state third parties. This was not an optimal situation, both from a cost of production standpoint but also because Lifted Made believed that higher quality gummies could be more quickly formulated and manufactured in-house. Lifted Made purchased its first gummy manufacturing machine, and with the assistance of consultants, Lifted Made began manufacturing gummies in-house during Q4 2022. This initiative has been highly successful, and Lifted Made has purchased two additional and larger gummy manufacturing machines since. But as Jake will discuss in more detail later during Q3 2023, we made the decision to write off $489,000 worth of gummies that were being held in Lifted Maid's inventory, which had been manufactured by third parties prior to Lifted Maid entering the gummy manufacturing business. And which either did not have the same quality as the gummies currently being manufactured by Lifted Maid, and or which had formulations that were not favored by LiftedMaid's customer base. The result of this write-off was to decrease our Q3 2023 earnings per share by approximately two cents per share. At this point, I'll turn the presentation over to Nick Warnder, our vice president, vice chairman, and chief operating officer, and the founder and CEO of our wholly owned subsidiary, LiftedMaid.

Thank you, Jerry, and good morning, everyone. Lyft has grown rapidly since we went public by merging with Lyft partners. Despite the pandemic and numerous regulatory challenges that have been put in our way, we generated 5.3 million of sales in 2020, 31.6 million in sales in 2021, and achieved 57.4 million in sales in 2022. Our headcount has grown from less than 10 employees to about 220 today. Our operations have grown from 3,500 square feet in Zion, Illinois, to a total of over 45,000 square feet in five locations in Kenosha, Wisconsin, one location in Chicago, Illinois, and one location in Aztec, New Mexico. Our profitability on a gap-based earnings per share basis during 12 of the past 13 quarters is something that few other publicly traded companies in the cannabis industry have come close to achieving. We have carefully deployed our limited capital to pay off all of our debt and to significantly expand our raw materials, equipment, processing capabilities, and finished inventory. During Q3 2023 and this quarter, we have rolled out many new product SKUs, including as part of our collaborations with Cali Suites, Diamond Supply Company, and Jeter. We're very excited about our most recently signed agreement with Extracts New Mexico which is the first time that Listed is collaborating with a marijuana company. That will be manufacturing herb-branded licensed marijuana products. During the past week, Extracts New Mexico has began selling herb-branded marijuana disposable vapes and cartridges to affiliated and unaffiliated marijuana dispensaries in New Mexico, with revenues to be split equally between Listed and Extracts. So far, the published reviews of these new products have been fantastic, and we are very optimistic about their sales and profit potential. And if these products sell as expected, then we plan to explore similar deals in other states which have legalized marijuana. In addition to exploring additional product collaborations with several other publicly traded and privately held marijuana companies, we are focused on trying to increase production for third parties using our existing gummy machines that have production capacity of around 25 million gummies per month. We also still plan to obtain the necessary CGMP and NSF certifications and approvals that would allow Lifted to begin manufacturing gummies in Kenosha that do not contain any THC or cannabinoids that can be sold into general health and wellness industries. And we're very excited about the potential opportunity for that. Finally, we're exploring the possibility of expanding our operations into Colorado, which would allow Lifted to participate in the Burgoyne THCA products business, which would currently be illegal for Lifted to pursue in Wisconsin or New Mexico. All of these collaborations and initiatives make us excited and very optimistic about our company's future. At this point, I will turn the presentation over to Jake Jacobs, our president and chief financial officer.