CNFN 10-Q
CFN Enterprises Inc. (CNFN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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For the quarterly period ended | |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT | |
For the transition period from ________ to ________
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip code)
(
(Registrant's Telephone Number, including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has 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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, 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 ¨ |
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
The number of shares outstanding of the registrant’s Common Stock, $0.001 par value per share, as of August 26, 2026 was
When used in this quarterly report, the terms “CFN Enterprises,” “the Company,” “we,” “our,” and “us” refer to CFN Enterprises Inc., a Delaware corporation, and its consolidated subsidiaries, unless the context indicates otherwise.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
This quarterly report on Form 10-Q contains certain forward-looking statements. Forward-looking statements may include our statements regarding our goals, beliefs, strategies, objectives, plans, including product and service developments, future financial conditions, results or projections or current expectations. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. For example, when we discuss our expectations for 2026, our expectations for revenue sources, costs of revenue and expenses going forward, and that we will continue to pursue strategic transactions and opportunities, we are using forward-looking statements. These statements are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements. These factors include, but are not limited to, our ability to implement our strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. The business and operations of CFN Enterprises Inc. are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this report. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under “Item 1A. Risk Factors” contained in our annual report on Form 10-K as filed with the Securities and Exchange Commission, or the SEC, on April 15, 2026. Readers are also urged to carefully review and consider the various disclosures we have made in this report and in our annual report on Form 10-K.
CFN ENTERPRISES INC.
INDEX
PART I - FINANCIAL INFORMATION: |
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Item 1. Financial Statements and accompanying Notes to the Financial Statements (Unaudited) | 2 |
Item 2. Management’s Discussion and Analysis of Financial Position and Results of Operations | 23 |
27 | |
PART II - OTHER INFORMATION: |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 28 |
28 | |
29 | |
30 |
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CFN ENTERPRISES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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| June 30, |
| December 31, |
| 2026 |
| 2025 | |
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| (Unaudited) |
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ASSETS |
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Current assets: |
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Cash |
| $ |
| $ |
Accounts receivable, net |
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Inventories, net |
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Current assets of discontinued operations |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Right of use asset |
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Other assets |
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Total assets |
| $ |
| $ |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current liabilities: |
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Accounts payable |
| $ |
| $ |
Accrued liabilities |
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Due to related party |
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Current portion of notes payable |
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Due to seller |
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Loan payable |
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Current portion of right of use liability |
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Current liabilities of discontinued operations |
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Total current liabilities |
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Right of use liability |
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Long-term note payable, net of current portion and discounts |
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Total liabilities |
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Commitments and contingencies |
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Stockholders' deficit: |
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Series A preferred stock, $ |
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Series B preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Non-controlling interests |
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Accumulated deficit |
| ( |
| ( |
Total stockholders' deficit |
| ( |
| ( |
Total liabilities and stockholders' deficit |
| $ |
| $ |
See accompanying notes to the unaudited condensed consolidated financial statements
2
CFN ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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| Three Months Ended |
| Six Months Ended | ||||
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| June 30, |
| June 30, | ||||
| 2026 |
| 2025 |
| 2026 |
| 2025 | |
Net revenues |
| $ |
| $ |
| $ |
| $ |
Cost of revenue |
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Gross profit |
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Operating expenses: |
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Selling, general and administrative |
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Total operating expenses |
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Loss from operations |
| ( |
| ( |
| ( |
| ( |
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Other income (expense): |
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Interest expense |
| ( |
| ( |
| ( |
| ( |
Loss on conversion of accrued interest |
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| ( | ||
Other income |
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Total other expense, net |
| ( |
| ( |
| ( |
| ( |
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Provision for income taxes |
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Net loss |
| ( |
| ( |
| ( |
| ( |
Preferred stock interest |
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Net loss from continuing operations |
| ( |
| ( |
| ( |
| ( |
Net income (loss) from discontinued operations, net of tax |
| ( |
| ( |
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| ( | |
Net loss |
| $( |
| $( |
| $( |
| $( |
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Net loss per share attributable common stockholders: |
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Net loss from continuing operations |
| $( |
| $( |
| $( |
| $( |
Net income (loss) from discontinued operations, net of taxes |
| $( |
| $( |
| $ |
| $( |
Net loss per share |
| $( |
| $( |
| $( |
| $( |
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Weighted average common shares outstanding - |
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See accompanying notes to the unaudited condensed consolidated financial statements
3
CFN ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
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| Series A |
| Series B |
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| Additional |
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| Non- |
| Total | ||||||
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| Preferred Stock |
| Preferred Stock |
| Common Stock |
| Paid-in |
| Accumulated |
| controlling |
| Stockholders' | ||||||
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Interest |
| Deficit | |
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Balance at December 31,2024 |
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| $ |
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| $ |
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| $ |
| $ |
| $( |
| $- |
| $( | |||
Preferred stock interest |
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| ( |
| - |
| ( | |||||||
Net loss |
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| ( |
| - |
| ( | |||||||
Balance at March 31, 2025 |
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| ( |
| - |
| ( | |||||||
Conversion of accrued interest into shares |
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| - |
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Preferred stock interest |
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| ( |
| - |
| ( | |||||||
Net loss |
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| ( |
| - |
| ( | |||||||
Balance at June 30, 2025 |
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| $ |
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| $ |
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| $ |
| $ |
| $( |
| $- |
| $( | |||
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Balance at December 31, 2025 |
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| ( |
| 60,000 |
| ( | |||||||
Issuance of common stock for services |
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| - |
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Preferred stock interest |
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| ( |
| - |
| ( | |||||||
Net loss |
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| ( |
| - |
| ( | |||||||
Balance at March 31, 2026 |
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| ( |
| 60,000 |
| ( | |||||||
Issuance of common stock for services |
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| - |
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Issuance of common stock for preferred interest |
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Warrants issued with promissory notes |
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| - |
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Warrant issued to officers |
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| - |
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Preferred stock interest |
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| ( |
| - |
| ( | |||||||
Net loss |
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| ( |
| - |
| ( | |||||||
Balance at June 30, 2026 |
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| $ |
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| $ |
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| $ |
| $ |
| $( |
| $60,000 |
| $( | |||
See accompanying notes to the unaudited condensed consolidated financial statements
4
CFN ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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| Six Months Ended | ||
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| June 30, | ||
| 2026 |
| 2025 | |
Cash flows from operating activities: |
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Net loss from continuing operations |
| $( |
| $( |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
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Depreciation and amortization |
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Amortization of right of use asset |
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Amortization of debt discount |
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Inventory write off |
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Stock based compensation |
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Loss on conversion of debt |
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Bad debt expense |
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Changes in operating assets and liabilities: |
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Accounts receivable, net |
| ( |
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Inventories, net |
| ( |
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Other assets |
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| ( | |
Accounts payable and accrued liabilities |
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| ( | |
Right of use liability, net |
| ( |
| ( |
Net cash used in operating activities from continuing operations |
| ( |
| ( |
Net cash provided by operating activities from discontinued operations |
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Net cash (used in) provided by operating activities |
| ( |
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Cash flows from investing activities: |
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Purchase of property and equipment, net |
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Net cash used in investing activities from continuing operations |
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Net cash used in investing activities from discontinued operations |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Due to related party |
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Repayments of notes |
| ( |
| ( |
Proceeds from notes |
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Net cash provided by (used in) financing activities from continuing operations |
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| ( | |
Net cash used in financing activities from discontinued operations |
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| ( | |
Net cash used provided by (used in) financing activities |
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| ( | |
Net change in cash and cash equivalents |
| ( |
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Cash at beginning of period |
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Cash at end of period |
| $ |
| $ |
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Supplemental disclosure of cash flow information: |
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Cash paid for income taxes |
| $ |
| $ |
Cash paid for interest |
| $ |
| $ |
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Supplemental disclosure of non-cash investing and financing activities: |
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Accrual of preferred stock interest |
| $ |
| $ |
Modification fee and conversion of accrued interest into shares |
| $ |
| $ |
Issuance of common stock for preferred interest |
| $ |
| $ |
Warrants issued with promissory notes |
| $28,132 |
| $- |
See accompanying notes to the unaudited condensed consolidated financial statements
5
CFN ENTERPRISES INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
CFN Enterprises Inc. (“CFN,” the “Company,” “we,” or “us”) is a Delaware corporation. The Company operates a wine and beverage platform, together with its historical sponsored content and marketing business. The Company’s common stock is quoted on the OTCQB Venture Market under the symbol “CNFN.”
On May 15, 2019, the Company entered into an asset purchase agreement with Emerging Growth, LLC pursuant to which the Company acquired certain assets related to its sponsored content and marketing business (the “CFN Business”) for a purchase price consisting of $
On July 1, 2023, the Company and its wholly owned subsidiary, Ranco LLC (“Ranco”), entered into an asset purchase agreement with RAN CoPacking Solutions LLC, acquiring assets for co-packing and white label manufacturing services. See Note 12 – Discontinued Operations for additional information regarding the subsequent discontinuation of Ranco’s operations.
On July 1, 2025, the Company completed the acquisition of J Street Capital Partners, LLC, a Florida limited liability company (“J Street”). See Note 3 – Asset Acquisitions.
On November 3, 2025, the Company, through J Street, completed the acquisition of Prestige Worldwide Wine Company, LLC, a California limited liability company (“Prestige”). See Note 3 – Asset Acquisitions.
In October 2025, J Street participated in the formation of a joint venture, Interstice Cellars LLC. See Note 9 – Non-Controlling Interests.
Going Concern
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12 months as of the date these financial statements are issued.
The Company had a working capital deficit of $
Management’s plan to continue as a going concern includes raising capital in the form of debt or equity, growing the J Street and Prestige wine and beverage businesses, managing and reducing operating and overhead costs, and continuing to pursue strategic transactions and opportunities.
These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. The Company is also pursuing discounted settlement of discontinued obligations.
6
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements include the results of operations of the Company and its subsidiaries: CNP Operating, LLC, a Delaware limited liability company; Ranco LLC, a Delaware limited liability company (classified as a discontinued operation – see Note 12); J Street Capital Partners, LLC, a Florida limited liability company; Prestige Worldwide Wine Company, LLC, a California limited liability company (from November 3, 2025); and Interstice Cellars LLC, a Delaware limited liability company (from October 2025). All intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation. The non-controlling interests in Interstice Cellars LLC are reported as a separate component of stockholders’ deficit.
These unaudited condensed financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. These unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the years ended December 31, 2025 and 2024, which are included in the Company’s December 31, 2025 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on April 15, 2026. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation of these may be determined in that context. The results of operations for the period ended June 30, 2026 are not necessarily indicative of results for the entire year ending December 31, 2026.
Reverse Stock Split
On July 11, 2025, the Company effected a 1-for-10 reverse stock split of its common stock. No fractional shares were issued, and any fractional shares were rounded up to the nearest whole share. The reverse stock split did not affect the number of authorized shares or the par value of the common stock. All share and per-share amounts in these unaudited condensed consolidated financial statements have been retroactively adjusted to reflect the reverse stock split for all periods presented.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions about collection of accounts receivable, useful life of fixed assets and intangible assets, borrowing rate considered for operating lease right-of-use asset and related operating lease liability, assumptions used in Black-Scholes valuation methods, and the valuation allowance recorded against deferred tax assets.
Segment Reporting
Following the classification of Ranco LLC as a discontinued operation in the fourth quarter of 2025, the Company operates under one continuing operating segment. Prior period segment information has been retrospectively adjusted to exclude the discontinued Ranco operations. See Note 12 – Discontinued Operations and Note 14 – Segment Reporting.
Cash and Cash Equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased to be cash equivalents. The Company has no restricted cash as of June 30, 2026 and December 31, 2025.
7
Accounts Receivable
The Company’s accounts receivable for the CFN Business are due from customers relating to contracts to provide investor relation services. For the wine and beverage operations conducted through J Street and Prestige, accounts receivable are due from customers for products sold and services provided. Collateral is currently not required. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers’ payment history and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance.
Inventory
The Company’s inventory from continuing operations consists of wine and related products acquired pursuant to the Prestige acquisition, and the Interstice Cellars joint venture. Inventory includes finished goods (bottled wine and case goods) and work-in-progress (bulk wine in various stages of production being procured from third-party vendors by Prestige). The inventory is valued at the lower of cost (specific identification) or estimated net realizable value. As of June 30, 2026, inventory from continuing operations was $
Property and Equipment
Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives of five years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized.
Intangible Assets
Intangible assets consist of trademarks, licenses and intellectual property acquired in the J Street and Prestige acquisitions and are amortized on a straight-line basis over their estimated useful lives of five years. Intangible assets, net of accumulated amortization, were $297,843 and $331,325 at June 30, 2026 and December 31, 2025, respectively.
Concentrations of Credit Risk
The Company is subject to concentrations of credit risk primarily from cash and accounts receivable. The Company’s cash accounts are held at financial institutions and are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. From time to time, the Company’s bank balances may exceed the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company periodically evaluates the credit quality of the financial institutions in which it holds deposits.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606. The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable.
8
CFN Business
Revenue is generated from the sale of promotional service packages to customers, recognized over time as work is performed.
Wine and Beverage Business (J Street / Prestige)
J Street generates revenue through the sale of wine and other alcoholic beverages. Revenue is recognized at the point in time when products are shipped to customers. Prestige generates revenue through winemaking consulting services, recognized as services are performed. During the three and six months ended June 30, 2026, the Company recognized $38,373 and $121,980, respectively, of wine and beverage revenue from product sales. There was no wine and beverage revenue in the comparative prior-year periods.
Disaggregation of Revenue
| Three Months Ended |
| Six Months Ended | ||||
| June 30, |
| June 30, | ||||
2026 |
| 2025 |
| 2026 |
| 2025 | |
Product sales - wine | $ |
| $ |
| $ |
| $ |
Sponsored content services |
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$ |
| $ |
| $ |
| $ | |
Cost of Revenue
Cost of revenue includes direct labor and materials. Cost of revenue also includes inbound and outbound shipping, freight and delivery costs, and the finished cost of products sold for the wine and beverage operations.
Shipping and Handling Fees and Costs
Amounts billed to customers for shipping and handling fees are presented in revenue. Costs incurred for shipping and handling are included in cost of revenue.
Fair Value of Financial Instruments
The Company accounts for assets and liabilities measured at fair value on a recurring basis in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1 – Observable inputs such as quoted market prices in active markets for identical assets or liabilities; Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data; Level 3 – Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
The carrying value of cash, accounts receivable, accounts payable, accrued expenses, due to related party and other current monetary assets and liabilities approximate their fair value due to the short-term maturity of these items. The Company’s notes payable approximate their fair value due to the market rate of interest on the notes.
9
Asset Acquisitions
The Company evaluates each acquisition of assets or a business under the framework provided by ASC 805. When substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, or when the acquired set of activities and assets does not include a substantive process, the transaction is accounted for as an asset acquisition under ASC 805-50. Under the asset acquisition model, the cost of the acquisition is allocated to the identifiable assets acquired and liabilities assumed on a relative fair value basis at the acquisition date, no goodwill is recognized and transaction costs are capitalized as part of the cost of the acquired assets. See Note 3.
Discontinued Operations
The Company accounts for discontinued operations in accordance with ASC 205-20, Presentation of Financial Statements—Discontinued Operations. A component is reported as a discontinued operation when (i) it has been disposed of or is classified as held for sale, and (ii) the disposal represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results. When a component is classified as a discontinued operation, the results of operations, financial position and cash flows of the component are reported separately from continuing operations for all periods presented. See Note 12.
Impairment of Long-Lived Assets
In accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.
Advertising
The Company expenses advertising costs as incurred.
Leases
The Company adopted ASU 2016-02, Leases (Topic 842) using the modified retrospective method. ROU assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term, using a rate which approximates the Company’s incremental borrowing rate of 10%.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period. Equity instruments issued to non-employees for services are measured at the grant-date fair value of the equity instruments issued. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures.
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company assesses the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.
10
Basic and Diluted Earnings (Loss) Per Share
Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. As of June 30, 2026, the Company had
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40), which requires public business entities to provide disaggregated disclosures of certain expense categories on the face of the income statement or in the notes. The required expense categories include purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion and amortization recognized as part of oil- and gas-producing activities. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its disclosures.
In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, which provides illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements under Topic 718. The standard is effective for fiscal years beginning after December 15, 2024 and interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.
NOTE 3: ASSET ACQUISITIONS
J Street Capital Partners, LLC
On May 29, 2025, the Company entered into a Securities Purchase Agreement to acquire 100% of the equity interests of J Street Capital Partners, LLC, a Florida limited liability company. The acquisition closed on July 1, 2025. In connection with the acquisition, the Company issued
The Company evaluated the acquisition under ASC 805-10-55-5A through 55-9 (the “screen test”) and concluded the transaction should be accounted for as an asset acquisition under ASC 805-50 rather than a business combination. Under ASC 805-50-30-1, the cost of an asset acquisition is the consideration transferred, measured at the acquisition date. No goodwill is recognized in an asset acquisition. The purchase price was allocated to the identifiable assets acquired on a relative fair value basis as follows: inventories $
Prestige Worldwide Wine Company, LLC
On November 3, 2025, the Company, through its wholly owned subsidiary J Street, acquired 100% of the issued and outstanding membership interests of Prestige Worldwide Wine Company, LLC, a California limited liability company, pursuant to a Securities Purchase Agreement. In connection with the acquisition, the Company issued 150,000 shares of its common stock with a fair value of $322,500. The Company evaluated the acquisition under ASC 805 and concluded the transaction should be accounted for as an asset acquisition under ASC 805-50. The purchase price was allocated entirely to intangible assets (customer relationships and brand) of $322,500. The intangible assets are being amortized on a straight-line basis over their estimated useful life of five years.
11
NOTE 4: DUE TO SELLER
RAN CoPacking Solutions LLC
Pursuant to the Asset Purchase Agreement, the Company owes the seller of RAN CoPacking Solutions LLC $
NOTE 5: PROPERTY AND EQUIPMENT
Property and equipment, net, consists of the following:
| June 30, |
| December 31, |
2026 |
| 2025 | |
Machinery & equipment | $ |
| $ |
Furniture and equipment and leasehold improvements |
| ||
| |||
Less: Accumulated depreciation | ( |
| ( |
$ |
| $ |
Depreciation expense for the three and six months ended June 30, 2026 and 2025 from continuing operations was not material.
NOTE 6: INTANGIBLE ASSETS
Intangible assets, net, consist of the trademarks and licenses acquired in the J Street acquisition and the customer relationships and brand acquired in the Prestige acquisition (See Note 3). Intangible assets are amortized on a straight-line basis over their estimated useful life of five years.
Useful |
| Gross Carrying |
| Accumulated |
| Net Carrying |
Life |
| Amount |
| Amortization |
| Amount |
Trademarks and licenses (J Street) | 5 years | $ |
| $( |
| $ |
Customer relationships and brand (Prestige) | 5 years |
| ( |
| ||
Total intangible assets |
| $ |
| $( |
| $ |
Amortization expense was approximately $
Estimated future amortization expense for the next five years is as follows:
Year Ending December 31, |
| Amount |
2026 |
| $ |
2027 |
| |
2028 |
| |
2029 |
| |
2030 |
| |
Total |
| $ |
12
NOTE 7: NOTES PAYABLE
The following is a summary of the Company’s notes payable from continuing operations as of June 30, 2026 and December 31, 2025. Notes payable related to the discontinued operations of Ranco LLC ($
On September 10, 2019, the Company entered into a promissory note payable whereby the Company borrowed $
On October 28, 2019, the Company’s subsidiary CNP Operating entered into a promissory note payable with Complete Business Solutions Group, Inc. (“CBSG”) whereby the Company borrowed $
On September 30, 2019, the Company’s subsidiary CNP Operating entered into a promissory note payable with Eagle Six Consultants, Inc. (“Eagle”) whereby the Company borrowed $
On May 12, 2021, the Company’s subsidiary CNP Operating restructured the CBSG note payable of $
On June 24, 2020, the Company entered into a Loan Authorization and Agreement with the U.S. Small Business Administration (“SBA”) under which the Company borrowed $
On October 19, 2021, the Company borrowed $
13
On November 19, 2020, the Company’s subsidiary CNP Operating purchased equipment for $
In November 2020 and 2022, the Company’s subsidiary CNP Operating, LLC purchased equipment totaling $
2026 Promissory Notes
On May 5, 2026, the Company issued a 12% promissory note to a third party (the “May 5 Lender”) in the principal amount of $
On May 20, 2026, the Company issued a 12% convertible promissory note to a third party in the principal amount of $
The relative fair value of the warrants issued with the 2026 promissory notes of $
Ranco Notes (Discontinued Operations)
On May 8, 2023, the Company entered into a promissory note with two lenders for aggregate proceeds of $
On July 1, 2023, the Company entered into a promissory note with two lenders for aggregate proceeds of $
On July 1, 2023, the May and July notes were rolled over to Ranco, LLC for an aggregate of $
14
Future Maturities
Future scheduled maturities of long-term debt from continuing operations are as follows:
|
| December 31, |
2026 |
| $ |
2027 |
| |
2028 |
| |
2029 |
| |
Thereafter |
| |
|
| $ |
Obligations Under Preferred Stock
On June 20, 2019, existing debtholders were issued an aggregate of 500 shares of Series A Preferred Stock, each with a stated value per share of $1,000, as conversion of $500,000 worth of outstanding promissory notes. The Series A Preferred Stock bears interest at 12% per annum, and is convertible into the Company’s common stock at the election of the holder at a conversion price per share to be mutually agreed between the Company and the holder in the future, and is redeemable at the Company’s option following the third year after issuance, without voting rights or a liquidation preference.
On June 20, 2019, the Company issued 3,000 shares of Series B Preferred Stock, each with a stated value of $1,000 per share, to Emerging Growth, LLC as part of the purchase of the CFN Business. The aggregate fair value of $687,000 was recorded as part of the acquisition price of the net assets acquired from Emerging Growth, LLC. The Series B Preferred Stock originally bore interest at 6% per annum and is convertible into the Company’s common stock at the election of Emerging Growth, LLC at a conversion price per share to be mutually agreed between the Company and Emerging Growth, LLC in the future, without voting rights or a liquidation preference, except with respect to accrued penalty interest. On August 14, 2025, following negotiation with Emerging Growth, LLC, the Company filed a Certificate of Amendment to its Certificate of Designation of Series B Preferred Stock to increase the dividend rate from 6% per annum to 12% per annum, effective August 1, 2025.
NOTE 8: STOCKHOLDERS’ DEFICIT
Common Stock
The Company is authorized to issue
During the three months ended June 30, 2026, the Company issued
Preferred Stock
The Company is authorized to issue
15
For the three months ended June 30, 2026 and 2025, the Company incurred $
Warrants
During the six months ended June 30, 2026, the Company issued immediately exercisable five-year warrants to purchase an aggregate of 80,000 shares of common stock at an exercise price of $0.50 per share to lenders in connection with the issuance of the 2026 promissory notes. The relative fair value of these warrants of $28,132 was recorded as a debt discount and additional paid-in capital and is being amortized to interest expense over the term of the related notes. See Note 7.
On May 20, 2026, the Company issued immediately exercisable ten-year warrants to purchase up to 500,000 shares of common stock at an exercise price of $0.50 per share to each of Brian Ross, the Company's President and Chief Executive Officer and a director, and Mario Marsillo Jr., the Company's Chief Business Officer and a director, in consideration of each executive officer's and director's services to the Company and in connection with their continuing deferral of compensation. The aggregate fair value of these warrants of $900,000 was recorded as stock-based compensation expense within general and administrative expenses for the three and six months ended June 30, 2026. See Note 11.
Details of warrants outstanding as of June 30, 2026 as follows:
|
|
|
|
| Weighted-Average |
|
|
| Weighted- |
| Remaining |
|
|
| Average |
| Contractual Life |
| Warrants |
| Exercise Price |
| (Years) |
Outstanding at December 31, 2025 |
| $ |
| ||
Granted |
|
| |||
Forfeited |
|
| - | ||
Outstanding at June 30, 2026 |
| $ |
| ||
|
|
|
|
|
|
Vested and expected to vest at June 30, 2026 |
| $ |
| ||
Exercisable at June 30, 2026 |
| $ |
|
As of June 30, 2026, all outstanding warrants were fully vested and there was no remaining unrecorded compensation expense.
NOTE 9: NON-CONTROLLING INTERESTS
In October 2025, J Street Capital Partners, LLC, the Company’s wholly owned subsidiary, participated in the formation of Interstice Cellars LLC (“Interstice”), a Delaware limited liability company formed to operate as a developer and retailer of specialty wines. J Street serves as the managing member and holds a 51% membership interest, having contributed $165,000 in capital. The remaining 49% membership interest is held by two unaffiliated members:
The Company’s consolidated variable interest entities had no revenues, expenses, or other profit and loss activity during the six months ended June 30, 2026. Accordingly, no net income or loss was allocated to the non-controlling interests for the period.
Under the Interstice LLC operating agreement, distributions are made equally among the three members (33.33% each), which differs from the capital contribution and ownership percentages. The managing member (J Street) has exclusive authority over all business decisions. The non-managing members have no right to participate in management and their transfer of membership interests is restricted without the consent of the managing member. The LLC has an indefinite term.
16
The following table summarizes the activity in non-controlling interests for the six months ended June 30, 2026:
Balance at December 31, 2025 |
| $ |
Capital contributions from non-controlling interest members |
| |
Net income (loss) attributable to non-controlling interests |
| - |
Balance at June 30, 2026 |
| $ |
NOTE 10: LEASES
On April 1, 2023, Emerging Growth LLC entered into a modification of the existing lease agreement for its premises in Whitefish, Montana commencing April 11, 2023, for a period of five years at a rate of $3,750 per month, which lease contains an option for the Company to renew the lease for a period of one additional year at a monthly rent subject to a 3% increase. In connection with this lease, the Company recorded a ROU asset and liability of $
In connection with the Ranco acquisition, the Company agreed to assume the Seller’s lease for property related to the Purchased Assets in Los Angeles, California, consisting of approximately 46,000 square feet of space. The Ranco operating lease agreement commenced on July 1, 2022 and expires on July 31, 2027. The lease requires monthly base rent payments of $
In May 2025, the Company entered into a lease for office space in Las Vegas, Nevada. The lease expired in May 2026 and had a monthly base rent of $
The following is a summary of related assets and liabilities for all non-cancellable operating leases from continuing operations:
| June 30, |
| December 31, |
2026 |
| 2025 | |
Operating leases |
|
|
|
Assets |
|
|
|
Right of use asset | $ |
| $ |
|
|
|
|
Liabilities |
|
|
|
Current portion of right of use liability | $ |
| $ |
Right of use liability |
| ||
Total operating lease liabilities | $ |
| $ |
|
|
|
|
Weighted average remaining lease term (years) |
| ||
Weighted average discount rate |
|
17
Future minimum lease payments under non-cancellable operating leases from continuing operations are as follows:
| Operating |
Period Ended December 31, | Leases |
2026 | $ |
2027 | |
2028 | |
Total lease payments | |
Less imputed interest | ( |
Total lease obligations | |
Less current lease obligations | ( |
Long-term lease obligations | $ |
NOTE 11: RELATED PARTY TRANSACTIONS
As of June 30, 2026 and December 31, 2025, amounts due to related parties were approximately $
During the year ended December 31, 2025, Ranco LLC purchased products aggregating approximately $
Prestige was acquired from Thomas Hinde, who serves as a consultant to the Company under a winemaking services arrangement entered into in connection with the Prestige acquisition. Amounts payable to Mr. Hinde under the consulting arrangement were not material at June 30, 2026.
On May 20, 2026, the Company issued ten-year warrants to purchase up to 500,000 shares of common stock at an exercise price of $0.50 per share to each of Brian Ross, the Company's President and Chief Executive Officer and a director, and Mario Marsillo Jr., the Company's Chief Business Officer and a director, in consideration of each executive officer's and director's services to the Company and in connection with their continuing deferral of compensation. See Note 8.
NOTE 12: DISCONTINUED OPERATIONS
Background and Triggering Event
On July 1, 2023, the Company, through its wholly owned subsidiary Ranco LLC, acquired assets from RAN CoPacking Solutions LLC to operate a co-packing and white-label manufacturing business for the hemp and wellness industries. Ranco’s services included third-party logistics, storage and order fulfilment, custom packaging and hardware solutions, and media and design services. On the same date, Ranco entered into a five-year exclusive Packwoods Private Label Services and Intellectual Property Licensing Agreement providing rights to manufacture, package, distribute, and sell hemp-based inhalable and edible products, nicotine-based vaporizer products, and related branded packaging materials.
Following the passage of H.R. 5371 – the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 – which bans intoxicating hemp-derived consumable products nationally effective November 12, 2026, management evaluated the long-term viability of Ranco’s operations. On November 19, 2025, the Company’s Board of Directors formally approved a plan to discontinue the operations of Ranco LLC, with an expected wind-down and exit from the business by December 31, 2025.
18
Discontinued Operations Classification
Ranco LLC operated as a separate legal entity and wholly owned subsidiary with clearly distinguishable operations, assets, revenues, expenses and cash flows, and represented a distinct line of business significantly impacted by adverse regulatory changes. The Board-approved decision to discontinue Ranco represents a strategic shift that has a major effect on the Company’s operations and financial results. Accordingly, Ranco qualifies for discontinued operations accounting under ASC 205-20 beginning as of November 19, 2025.
Held-for-Sale Analysis – Abandonment Classification
The Company considered whether the long-lived assets of Ranco should be classified as “held for sale” under ASC 360-10-45-9. Management concluded that the criteria for held-for-sale classification were not met as of June 30, 2026 because: (i) although management committed to a plan to explore strategic alternatives, no binding sale agreement has been reached; (ii) the assets are not available for immediate sale in their present condition due to the wind-down status and regulatory uncertainty under H.R. 5371; (iii) no active marketing program to locate a buyer had been initiated; (iv) a sale within twelve months is not probable given the national ban on intoxicating hemp-derived products; and (v) no asking price has been established and no formal marketing has commenced.
Accordingly, the disposition of Ranco is classified as an abandonment under ASC 205-20-45-1(b) rather than a held-for-sale transaction. Under the abandonment model, assets are carried at their historical carrying values (no lower-of-cost-or-fair-value-less-costs-to-sell adjustment is required), and the assets are not presented as “held for sale” on the balance sheet.
Retrospective Reclassification of Prior Periods
In accordance with ASC 205-20, the Company has retrospectively reclassified the prior-period comparative financial statements to present Ranco’s results as discontinued operations, as follows:
Condensed Consolidated Statements of Operations: Results of Ranco for all prior periods presented have been reclassified from continuing operations to discontinued operations. Revenues and expenses previously included in continuing operations line items have been removed. Total net loss for each period remains unchanged.
Condensed Consolidated Statements of Cash Flows: Prior-period cash flows attributable to Ranco have been reclassified and presented separately as cash flows from discontinued operations within operating, investing and financing activities.
Condensed Consolidated Balance Sheets: No retrospective reclassification is required for prior-period balance sheets. Assets and liabilities of Ranco are presented separately as of June 30, 2026 and December 31, 2025. All Ranco liabilities – including amounts previously classified as long-term (notes payable and right-of-use liabilities) – have been classified as current liabilities of discontinued operations, as there is no ongoing business basis supporting long-term classification under the abandonment model.
Earnings (Loss) Per Share: Prior-period EPS amounts have been recast to separately present income (loss) per share from continuing operations and discontinued operations.
19
Results of Discontinued Operations
The following table presents the results of Ranco’s discontinued operations for the three and six months ended June 30, 2026 and 2025.
|
| Three Months Ended |
| Six Months Ended | ||||
|
| June 30, |
| June 30, | ||||
| 2026 |
| 2025 |
| 2026 |
| 2025 | |
Net revenues |
| $ |
| $ |
| $ |
| $ |
Cost of revenue |
|
|
|
| ||||
Gross profit (loss) |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
|
| ||||
Total operating expenses |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
Loss from discontinued operations |
| ( |
| ( |
| ( |
| ( |
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Other income |
|
|
|
| ||||
Total other expense, net |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
|
| ||||
Net income (loss) from discontinued operations, net of tax |
| $( |
| $( |
| $ |
| $( |
Net income (loss) per common share - basic and diluted |
| $( |
| $( |
| $ |
| $( |
Weighted average common shares outstanding |
|
|
|
| ||||
The change from a net loss from discontinued operations of $
Assets and Liabilities of Discontinued Operations
The following table presents the major classes of assets and liabilities of Ranco included in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025. As discussed above, all Ranco liabilities have been classified as current under the abandonment model.
|
| June 30, |
| December 31, |
| 2026 |
| 2025 | |
Current assets of discontinued operations: |
|
|
|
|
Cash |
| $ |
| $ |
Total current assets of discontinued operations |
| $ |
| $ |
|
|
|
|
|
Current liabilities of discontinued operations: |
|
|
|
|
Accounts payable |
|
| ||
Accrued liabilities |
|
| ||
Right of use liability (reclassified to current) |
|
| ||
Notes payable (reclassified to current) |
|
| ||
Total current liabilities of discontinued operations |
| $ |
| $ |
The notes payable of $
20
Cash Flows from Discontinued Operations
The following table presents the cash flows of Ranco for the six months ended June 30, 2026 and 2025. These amounts represent Ranco’s own cash flows and are presented on a different basis from the unaudited condensed consolidated statements of cash flows, which reflect the cash flows of continuing operations only and include cash transferred from Ranco as a single line within operating activities. Ranco’s cash is reported within current assets of discontinued operations on the unaudited condensed consolidated balance sheets and is excluded from cash on the face of those statements.
|
| Six Months Ended | ||
|
| June 30, | ||
| 2026 |
| 2025 | |
Net cash provided by operating activities |
| $ |
| $ |
Net cash used in investing activities |
| $ |
| $( |
Net cash provided by (used in) financing activities |
| $ |
| $( |
During the six months ended June 30, 2026, net income from discontinued operations was $
NOTE 13: COMMITMENTS AND CONTINGENCIES
Legal Proceedings
From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company is not presently a party to any legal proceedings that it currently believes, if determined adversely to the Company, would individually or taken together have a material adverse effect on the Company’s business, operating results, financial condition or cash flows.
Guarantee of Ranco Notes
The Company has guaranteed the Ranco Notes (aggregate outstanding balance of $
NOTE 14: SEGMENT REPORTING
Following the classification of Ranco LLC as a discontinued operation in the fourth quarter of 2025, the Company has one reportable segment for the three and six months ended June 30, 2026 consisting of the CFN/Wine segment, which includes the operations of J Street, Prestige, Interstice Cellars, the CFN Media business, and CNP Operating.
Prior to the discontinued operations classification, the Company had three operating segments: Ranco-Legacy, Ranco-AGP, and CFN (which included the CFN Media business, J Street, and CNP Operating). The historical segment results for the Ranco-Legacy and Ranco-AGP segments are now presented within discontinued operations.
21
As the Company operates in a single reportable segment, the segment financial information is the same as the consolidated financial statements for continuing operations. The following table summarizes key financial data for the Company's single reportable segment:
|
| Three Months Ended |
| Six Months Ended | ||||
|
| June 30, |
| June 30, | ||||
| 2026 |
| 2025 |
| 2026 |
| 2025 | |
Net revenues |
| $ |
| $ |
| $ |
| $ |
Cost of revenue |
|
|
|
| ||||
Gross profit |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
|
| ||||
Loss from operations |
| ( |
| ( |
| ( |
| ( |
|
|
|
|
|
|
|
|
|
Interest expense |
| ( |
| ( |
| ( |
| ( |
Loss on conversion of accrued interest |
|
| ( |
|
| ( | ||
Other income |
|
|
|
| ||||
Total other expense, net |
| ( |
| ( |
| ( |
| ( |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
|
| ||||
Net loss from continuing operations |
| $( |
| $( |
| $( |
| $( |
|
| June 30, |
| December 31, |
|
| 2026 |
| 2025 |
Total assets |
| $ |
| $ |
NOTE 15: SUBSEQUENT EVENTS
On July 1, 2026, the Company issued a 12% convertible promissory note to a third party in the principal amount of $100,000. Interest accrues at 12% per annum and is payable quarterly on each of June 1, September 1, December 1 and March 1, at the holder’s option in cash or in shares of common stock. The note matures on June 30, 2028 and may be prepaid in whole or in part at any time without penalty. At any time on or after July 1, 2027 and prior to maturity, the outstanding principal is convertible at the holder’s option into shares of common stock at a conversion price of $1.00 per share. In connection with the issuance of the note, the Company issued the lender a five-year common stock purchase warrant to purchase up to 100,000 shares of common stock exercisable at $1.00 per share.
On August 24, 2026, the Company issued a 12% convertible promissory note to a third party in the principal amount of $50,000. Interest accrues at 12% per annum and is payable quarterly on each of June 1, September 1, December 1 and March 1, at the holder’s option in cash or in shares of common stock. The note matures on August 23, 2028 and may be prepaid in whole or in part at any time without penalty. At any time on or after July 1, 2027 and prior to maturity, the outstanding principal is convertible at the holder’s option into shares of common stock at a conversion price of $1.00 per share. In connection with the issuance of the note, the Company issued the lender a five-year common stock purchase warrant to purchase up to 50,000 shares of common stock exercisable at $1.00 per share.
On August 24, 2026, the Company issued to Emerging Growth LLC an aggregate of 333,333 shares of common stock in lieu of $120,000 of interest payable through August 31, 2026 pursuant to the terms of the Series B Preferred Stock.
On August 25, 2026, the Company issued 80,000 shares of common stock for services at an aggregate fair value of $28,800.
The Company has evaluated subsequent events through the date these unaudited condensed consolidated financial statements were issued.
22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2025. Certain statements in this discussion and elsewhere in this report constitute forward-looking statements. See “Cautionary Statement Regarding Forward Looking Information” elsewhere in this report. Because this discussion involves risk and uncertainties, our actual results may differ materially from those anticipated in these forward-looking statements.
Overview
CFN Enterprises Inc. operates a wine and beverage platform together with its sponsored content and marketing business, or the CFN Business. Our continuing operations consist of (i) the wine and beverage operations conducted through J Street Capital Partners, LLC, Prestige Worldwide Wine Company, LLC and Interstice Cellars LLC, and (ii) the CFN Business. We will continue to pursue strategic transactions and opportunities.
Wine and Beverage Platform
On July 1, 2025, the Company completed the acquisition of J Street Capital Partners, LLC, a Florida limited liability company. J Street has historically been engaged in the import and wholesale distribution of wines and alcoholic beverages in various U.S. states, including Nevada, New York, New Jersey, Florida and California, with customers including bars, restaurants, casinos and hotels.
On November 3, 2025, the Company, through its wholly owned subsidiary J Street, completed the acquisition of Prestige Worldwide Wine Company, LLC, a California limited liability company. Prestige is a winemaking consulting company that provides winemaking services to third parties. The acquired assets include global wine-related trademarks, intellectual property, proprietary wine formulations and distributor and customer relationships.
In October 2025, J Street participated in the formation of Interstice Cellars LLC, a Delaware limited liability company formed to operate as a developer and retailer of specialty wines. J Street serves as the managing member and holds a 51% membership interest. The remaining 49% is held by two unaffiliated members. The Company consolidates Interstice and records a non-controlling interest for the 49% not owned by J Street.
CFN Business
The CFN Business generates revenue through sponsored content, including articles, press releases, videos, podcasts, advertisements and other media, email advertisements and other marketing campaigns run on behalf of public and private companies in the cannabis industry, helping them reach accredited, retail and institutional investors. Most revenue is generated through contracts involving a monthly cash payment over service periods generally ranging from three to six months.
Discontinued Operations – Ranco LLC
During the fourth quarter of 2025, we discontinued the operations of our wholly owned subsidiary Ranco LLC, which had operated a white-label manufacturing and co-packing business for the hemp and wellness industries. Following the passage of H.R. 5371, which bans intoxicating hemp-derived consumable products nationally effective November 12, 2026, our Board of Directors formally approved a plan to discontinue and wind down Ranco’s operations on November 19, 2025. Ranco is presented as a discontinued operation in our unaudited condensed consolidated financial statements for all periods presented. See Note 12 to the unaudited condensed consolidated financial statements.
23
Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025
The following are the results of our continuing operations for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025:
| Three Months Ended |
|
|
|
| ||
| June 30, |
|
|
|
| ||
| 2026 |
| 2025 |
| Change |
| % Change |
|
|
|
|
|
|
|
|
Net revenues | $48,598 |
| $6,302 |
| $42,296 |
| 671% |
Cost of revenue | 31,852 |
| 100 |
| 31,752 |
| 31752% |
Gross profit | 16,746 |
| 6,202 |
| 10,544 |
| 170% |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative | 1,349,714 |
| 337,955 |
| 1,011,759 |
| 299% |
Total operating expenses | 1,349,714 |
| 337,955 |
| 1,011,759 |
| 299% |
|
|
|
|
|
|
|
|
Loss from operations | (1,332,968) |
| (331,753) |
| (1,001,215) |
| 302% |
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
Interest expense | (58,196) |
| (54,248) |
| (3,948) |
| 7% |
Loss on conversion of accrued interest | - |
| (60,000) |
| 60,000 |
| -100% |
Other income | 28,318 |
| - |
| 28,318 |
| 100% |
Total other expense, net | (29,878) |
| (114,248) |
| 84,370 |
| -74% |
|
|
|
|
|
|
|
|
Provision for income taxes | - |
| - |
| - |
|
|
Net loss | (1,362,846) |
| (446,001) |
| (916,845) |
| 206% |
Preferred stock interest | 105,000 |
| 60,000 |
| 45,000 |
| 75% |
Net loss from continuing operations | (1,467,846) |
| (506,001) |
| (961,845) |
| 190% |
Net loss from discontinued operations, net of tax | (16,559) |
| (1,847,855) |
| 1,831,296 |
| -99% |
Net loss | (1,484,405) |
| (2,353,856) |
| 869,451 |
| -37% |
The following are the results of our continuing operations for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025:
| Six Months Ended |
|
|
|
| ||
| June 30, |
|
|
|
| ||
| 2026 |
| 2025 |
| Change |
| % Change |
|
|
|
|
|
|
|
|
Net revenues | $136,515 |
| $8,585 |
| $127,930 |
| 1490% |
Cost of revenue | 89,099 |
| 352 |
| 88,747 |
| 25212% |
Gross profit | 47,416 |
| 8,233 |
| 39,183 |
| 476% |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative | 2,576,228 |
| 801,886 |
| 1,774,342 |
| 221% |
Total operating expenses | 2,576,228 |
| 801,886 |
| 1,774,342 |
| 221% |
|
|
|
|
|
|
|
|
Loss from operations | (2,528,812) |
| (793,653) |
| (1,735,159) |
| 219% |
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
Interest expense | (113,304) |
| (108,496) |
| (4,808) |
| 4% |
Loss on conversion of accrued interest | - |
| (60,000) |
| 60,000 |
| -100% |
Other income | 44,936 |
| - |
| 44,936 |
| 100% |
Total other expense, net | (68,368) |
| (168,496) |
| 100,128 |
| -59% |
|
|
|
|
|
|
|
|
Provision for income taxes | - |
| - |
| - |
|
|
Net loss | (2,597,180) |
| (962,149) |
| (1,635,031) |
| 170% |
Preferred stock interest | 210,000 |
| 120,000 |
| 90,000 |
| 75% |
Net loss from continuing operations | (2,807,180) |
| (1,082,149) |
| (1,725,031) |
| 159% |
Net loss from discontinued operations, net of tax | 43,816 |
| (3,835,317) |
| 3,879,133 |
| -101% |
Net loss | (2,763,364) |
| (4,917,466) |
| 2,154,102 |
| -44% |
24
Net Revenues
Net revenues from continuing operations were $48,598 for the three months ended June 30, 2026, compared to $6,302 for the three months ended June 30, 2025, an increase of $42,296. For the six months ended June 30, 2026, net revenues from continuing operations were $136,515, compared to $8,585 for the six months ended June 30, 2025, an increase of $127,930. The increases were primarily attributable to the addition of the wine and beverage operations following the acquisitions of J Street on July 1, 2025 and Prestige on November 3, 2025, which generated product sales of $38,373 and $121,980 during the three and six months ended June 30, 2026, respectively. Revenues from these operations consist primarily of wholesale wine and beverage sales to licensed retailers, wholesalers and other licensed entities, as well as winemaking consulting services provided through Prestige. The CFN Business generated sponsored content services revenue of $10,225 and $14,535 during the three and six months ended June 30, 2026, respectively, as the Company’s focus has shifted toward the integration and commercialization of the wine and beverage platform.
Cost of Revenue
Cost of revenue from continuing operations was $31,852 for the three months ended June 30, 2026, compared to $100 for the three months ended June 30, 2025. For the six months ended June 30, 2026, cost of revenue was $89,099, compared to $352 for the six months ended June 30, 2025. The increase in both periods was primarily attributable to the cost of wine and beverage products sold following the acquisitions of J Street and Prestige.
Selling, General and Administrative Expenses
Selling, general and administrative expenses from continuing operations were $1,349,714 for the three months ended June 30, 2026, compared to $337,955 for the three months ended June 30, 2025, an increase of $1,011,759. For the six months ended June 30, 2026, selling, general and administrative expenses were $2,576,228, compared to $801,886 for the six months ended June 30, 2025, an increase of $1,774,342. The increases were primarily attributable to non-cash stock-based compensation of $1,417,800 for the six months ended June 30, 2026, which included $900,000 relating to warrants issued to officers in May 2026 and $517,800 relating to shares of common stock issued for services, an inventory write-off of $413,250 recorded during the six months ended June 30, 2026, and increased personnel, professional and public company costs associated with the expansion of the wine and beverage platform.
Loss from Operations
Loss from continuing operations was $1,332,968 for the three months ended June 30, 2026, compared to $331,753 for the three months ended June 30, 2025. For the six months ended June 30, 2026, loss from continuing operations was $2,528,812, compared to $793,653 for the six months ended June 30, 2025. The increases in loss from operations were attributable to the increases in operating expenses described above, partially offset by higher gross profit.
Other Income (Expense)
Total other expense, net, from continuing operations was $29,878 for the three months ended June 30, 2026, compared to $114,248 for the three months ended June 30, 2025. For the six months ended June 30, 2026, total other expense, net, was $68,368, compared to $168,496 for the six months ended June 30, 2025. The decreases were primarily attributable to a $60,000 loss on conversion of accrued interest recognized in the 2025 periods and to other income of $28,318 and $44,936 recognized during the three and six months ended June 30, 2026, respectively, partially offset by higher interest expense of $58,196 and $113,304 for the three and six months ended June 30, 2026, respectively.
Provision for Income Taxes
There was no provision for income taxes for the three and six months ended June 30, 2026 and 2025.
25
Net Loss from Continuing Operations
Net loss from continuing operations attributable to common stockholders, after preferred stock interest of $105,000 and $60,000 for the three months ended June 30, 2026 and 2025, respectively, was $1,467,846 and $506,001 for the three months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026 and 2025, net loss from continuing operations attributable to common stockholders, after preferred stock interest of $210,000 and $120,000, respectively, was $2,807,180 and $1,082,149, respectively.
Discontinued Operations
Net loss from discontinued operations, net of tax, was approximately $16,559 for the three months ended June 30, 2026, compared to a net loss of approximately $1,847,855 for the three months ended June 30, 2025. For the six months ended June 30, 2026, net income from discontinued operations, net of tax, was approximately $43,816, compared to a net loss of approximately $3,835,317 for the six months ended June 30, 2025. The change reflects the wind-down of Ranco’s operations following the November 2025 Board-approved plan to discontinue Ranco, and, for the six-month period, other income recognized in connection with the wind-down. See Note 12 to the unaudited condensed consolidated financial statements.
Net Loss
Net loss for the three months ended June 30, 2026 was $1,484,405, compared to $2,353,856 for the three months ended June 30, 2025. Net loss for the six months ended June 30, 2026 was $2,763,364, compared to $4,917,466 for the six months ended June 30, 2025. The decreases in net loss were primarily attributable to the substantial reduction in losses from discontinued operations, partially offset by increased operating expenses from continuing operations.
Liquidity, Capital Resources and Going Concern
As of June 30, 2026, we had cash of $76,068, a working capital deficit of $24,788,849, and an accumulated deficit of $88,530,825. For the six months ended June 30, 2026, we incurred a net loss of $2,763,364 and used $333,247 of cash in operating activities from continuing operations.
Our resources are limited. As we implement our growth strategy, poor strategic design or execution could impact negatively our operations and our cash flows. We expect that our expenses will continue to increase as we continue to integrate and commercialize the wine and beverage operations and continue the wind-down of Ranco.
We have a history of losses and negative cash flows from operations. Our operations have been financed primarily through proceeds from the issuance of equity, borrowing money through the issuance of promissory notes and use of a credit facility. We may continue to incur losses in the future.
These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued. Management’s plans to address these conditions include the continued integration and commercialization of the J Street, Prestige and Interstice Cellars businesses, the pursuit of additional debt or equity financing, and the wind-down of Ranco’s discontinued operations. There can be no assurance that management’s plans will be successful. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Cash Flows
The following is a summary of our cash flows for the six months ended June 30, 2026 and 2025:
|
| Six Months Ended | ||
|
| June 30, | ||
|
| 2026 |
| 2025 |
Net cash (used in) provided by operating activities |
| $(223,497) |
| $1,580,821 |
Net cash used in investing activities |
| $- |
| $(101,745) |
Net cash provided by (used in) financing activities |
| $101,614 |
| $(57,386) |
26
Cash Used in Operating Activities
Net cash used in operating activities from continuing operations was $333,247 during the six months ended June 30, 2026, and cash transferred from discontinued operations was $109,750, resulting in total net cash used in operating activities of $223,497. During the six months ended June 30, 2025, net cash used in operating activities from continuing operations was $1,319,703 and cash transferred from discontinued operations was $2,900,524, resulting in total net cash provided by operating activities of $1,580,821.
Cash Used in Investing Activities
There was no cash used in or provided by investing activities from continuing operations during the six months ended June 30, 2026 or 2025. Net cash used in investing activities during the six months ended June 30, 2025 was $101,745, consisting of purchases of property and equipment by Ranco, which are reflected within discontinued operations and are excluded from the cash flows of continuing operations.
Cash Provided by Financing Activities
Net cash provided by financing activities during the six months ended June 30, 2026 was $101,614, reflecting $106,000 of proceeds from the issuance of promissory notes, partially offset by repayment of notes of $4,386. The promissory notes were issued with warrants, and $28,132 of warrant value was recorded as a non-cash item. Net cash used in financing activities during the six months ended June 30, 2025 was $57,386, reflecting $4,386 of repayment of notes from continuing operations and $53,000 used in financing activities of discontinued operations.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. For a discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year ended December 31, 2025.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 2 – Summary of Significant Accounting Policies to the unaudited condensed consolidated financial statements.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer, who is our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our principal executive officer and principal financial officer concluded that as of June 30, 2026, our disclosure controls and procedures were not effective.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
27
PART II - OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended June 30, 2026, the Company issued an aggregate of 120,000 shares of common stock for services at an aggregate fair value of $108,000 and 470,000 shares of common stock in satisfaction of accrued preferred stock interest at an aggregate fair value of $423,000. The shares were issued in private transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act, as transactions not involving a public offering.
During the three months ended June 30, 2026, the Company issued an aggregate of 80,000 immediately exercisable five-year warrants to purchase shares of common stock at an exercise price of $0.50 per share. The warrants were issued in private transactions exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, as transactions not involving a public offering.
During the three months ended June 30, 2026, the Company issued an aggregate of 500,000 immediately exercisable ten-year warrants to purchase shares of common stock at an exercise price of $0.50 per share to Brian Ross, the Company’s President and Chief Executive Officer and a director, and Mario Marsillo Jr., the Company’s Chief Business Officer and a director, in consideration of each executive officer’s and director’s services to the Company and in connection with their continuing deferral of compensation . The warrants were issued in private transactions exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, as transactions not involving a public offering.
Item 5. Other Information
Given the timing of the events, the following information is included in this Form 10-Q pursuant to Item 3.02 Unregistered Sales of Equity Securities” of Form 8-K in lieu of filing a Form 8-K.
On July 1, 2026, the Company issued a five-year common stock purchase warrant to purchase up to 100,000 shares of common stock exercisable at $1.00 per share in connection with the 12% promissory note issued on July 1, 2026. The warrant is exercisable at any time following the issue date of July 1, 2026 through the fifth anniversary thereof and contains customary anti-dilution adjustments for stock dividends, stock splits and combinations, and reorganization, consolidation, merger and similar transactions. The warrant was issued in a private transaction exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, as a transaction not involving a public offering.
On August 24, 2026, the Company issued a five-year common stock purchase warrant to purchase up to 50,000 shares of common stock exercisable at $1.00 per share in connection with the 12% promissory note issued on August 24, 2026. The warrant is exercisable at any time following the issue date of August 24, 2026 through the fifth anniversary thereof and contains customary anti-dilution adjustments for stock dividends, stock splits and combinations, and reorganization, consolidation, merger and similar transactions. The warrant was issued in a private transaction exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, as a transaction not involving a public offering.
On August 24, 2026, the Company issued to Emerging Growth LLC an aggregate of 333,333 shares of common stock in lieu of $120,000 of interest payable through August 31, 2026 pursuant to the terms of the Series B Preferred Stock. The shares were issued in a private transaction exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, as a transaction not involving a public offering.
On August 25, 2026, the Company issued 80,000 shares of common stock for services at an aggregate fair value of $28,800. The shares were issued in a private transaction exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, as a transaction not involving a public offering.
28
Item 6. Exhibits
Exhibit No. |
| Description |
31.1* |
| |
32.1** |
| |
101.INS* |
| Inline XBRL Instance Document. |
101.SCH* |
| Inline XBRL Taxonomy Extension Schema Document. |
101.CAL* |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF* |
| Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB* |
| Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE* |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104* |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Filed herewith.
** Furnished herewith.
29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CFN ENTERPRISES INC.
Date: August 26, 2026 | By: | /s/ Brian Ross |
|
| Brian Ross |
|
| Chief Executive Officer |
|
| (Principal Executive Officer and |
30