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LEGAL PROCEEDINGS

12 Months Ended

Dec. 31, 2022

NOTE 12 – LEGAL PROCEEDINGS

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

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

	(1)	Lifted Liquids, Inc. v. Girish GPO, Inc., Girish Ray, and the Law Offices of Saul Roffe – The Company has 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. The Company is also requesting 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 default judgment against the Law Offices of Saul Roffe and is attempting to collect on the judgment. The action against Girish GPO is in the discovery phase and the Company intends to continue pursuing the action and recover its damages.
	(2)	Lifted Liquids, Inc. v. Asad Awawdeh and Habib Cash and Carry SD, Inc. – The Company has filed an action seeking to recover approximately $98,000 in damages resulting from Defendants’ failure to pay for product they ordered. The matter has been filed in California and the Company intends to pursue the action and recover its damages.
	(3)	Lifted Liquids, Inc. v. DEV Distribution, LLC, No, DC-22-15080 – In October 2022, Lifted filed an action against Dev Distribution LLC, a vendor who failed to deliver certain products that Lifted has purchased and paid $263,938 for. The case is pending in the State of Texas 14th Civil District Court of Dallas County and is in its early stages. Lifted has amended the complaint to seek the return of its molds and its packaging materials as well as other damages as a result of the vendor's actions.

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

(1)

Martha, Edgar v. Lifted Liquids – Edgar Martha, who worked as an independent contractor in Lifted’s production facility, has sued Lifted in regard to an alleged chemical burn. Mr. Martha has expressed to Lifted’s attorney that Mr. Martha is inclined to settle the case for $5,000. However, there can be no assurance or guarantee that the case can be settled for $5,000, as the medical bills in the case are significant and Mr. Martha’s medical insurance carrier has refused coverage.

On February 1, 2022, Lifted entered into a settlement agreement that was mutually acceptable to the parties which has resolved the following lawsuit:

(1)

Lifted Liquids, Inc. v. Monkey Bones Distribution LLC (United States Circuit Court for Kenosha County of the State of Wisconsin; Civil Case No. 2021 CV 001196).

In December 2021, our wholly-owned subsidiary Lifted sued distributor Monkey Bones Distribution, LLC for breach of contract for its failure to pay funds due under the agreement between the parties. In February 2022, the parties settled the litigation and agreed to mutual releases and dismissal of the lawsuit in exchange for $36,100.28 paid by Monkey Bones to Lifted Liquids and 15,000 custom gray scale empty disposable devices delivered to Monkey Bones by Lifted Liquids. The parties performed the settlement agreement and the matter was dismissed on February 3, 2022.