CNFN 10-Q
CFN Enterprises Inc. (CNFN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
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 November 19, 2025 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 2025, 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, 2025. 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
Item 1. Financial Statements
CFN ENTERPRISES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
| September 30, |
| December 31, |
|
|
|
|
|
|
| 2025 |
| 2024 | |
|
|
|
|
|
|
|
| (Unaudited) |
|
|
ASSETS |
|
|
|
| ||||||
Current assets: |
|
|
|
| ||||||
|
| Cash |
| $ |
| $ | ||||
|
| Accounts receivable, net |
|
| ||||||
|
| Inventories, net |
|
| ||||||
|
|
|
| Total current assets |
|
| ||||
Property and equipment, net |
|
| ||||||||
Intangible assets, net |
|
| ||||||||
Right of use asset |
|
| ||||||||
Deposits |
|
| ||||||||
Other assets |
|
| ||||||||
|
|
|
| Total assets |
| $ |
| $ | ||
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
| ||||||
Current liabilities: |
|
|
|
| ||||||
|
| Accounts payable |
| $ |
| $ | ||||
|
| Accrued liabilities |
|
| ||||||
|
| Due to related party |
|
| ||||||
|
| Deferred revenue |
|
| ||||||
|
| Current portion of notes payable |
|
| ||||||
|
| Due to seller |
|
| ||||||
|
| Contingent consideration |
|
| ||||||
|
| Current portion of right of use liability |
|
| ||||||
|
|
|
| Total current liabilities |
|
| ||||
Right of use liability |
|
| ||||||||
Long-term note payable, net of current portion and discounts |
|
| ||||||||
|
|
|
| Total liabilities |
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit: |
|
|
|
| ||||||
| Series A preferred stock, $ |
|
| |||||||
| Series B preferred stock, $ |
|
| |||||||
| Common stock, $ |
|
| |||||||
| Additional paid-in capital |
|
| |||||||
| Accumulated deficit |
| ( |
| ( | |||||
|
|
|
| Total stockholders' deficit |
| ( |
| ( | ||
|
|
|
| Total liabilities and stockholders' deficit |
| $ |
| $ | ||
See accompanying notes to the unaudited condensed consolidated financial statements
1
CFN ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
| Three Months Ended |
| Nine Months Ended | ||||||
|
| September 30, |
| September 30, | ||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | |||
Net revenues |
| $ |
| $ |
| $ |
| $ | ||
Cost of revenue |
|
|
|
| ||||||
|
| Gross profit |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| |
Operating expenses: |
|
|
|
|
|
|
|
| ||
| Selling, general and administrative |
|
|
|
| |||||
|
| Total operating expenses |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| |
Income (loss) from operations |
| ( |
|
| ( |
| ||||
|
|
|
|
|
|
|
|
|
| |
Other income (expense): |
|
|
|
|
|
|
|
| ||
| Interest expense |
| ( |
| ( |
| ( |
| ( | |
| Other income |
|
|
|
| |||||
| Interest income |
|
|
|
| |||||
| Loss on conversion of accrued interest |
|
|
| ( |
| ||||
|
| Total other expense, net |
| ( |
| ( |
| ( |
| ( |
|
|
|
|
|
|
|
|
|
| |
Provision for income taxes |
|
|
|
| ||||||
Net income (loss) |
| $( |
| $ |
| $( |
| $( | ||
Preferred stock interest |
|
|
|
| ||||||
Net income (loss) available to common shareholders |
| $( |
| $ |
| $( |
| $( | ||
|
|
|
|
|
|
|
|
|
| |
Net income (loss) per common share - basic and diluted |
| $( |
| $ |
| $( |
| $( | ||
Weighted average common shares outstanding - basic and diluted |
|
|
|
| ||||||
See accompanying notes to the unaudited condensed consolidated financial statements
2
CFN ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
| Series A |
| Series B |
|
|
| Additional |
|
|
| Total | ||||||
|
|
|
|
|
|
|
| Preferred Stock |
| Preferred Stock |
| Common Stock |
| Paid-in |
| Accumulated |
| Stockholders' | ||||||
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2023 |
|
| $ |
|
| $ |
|
| $ |
| $ |
| $( |
| $( | |||||||||
Contributed capital |
|
|
|
|
|
|
|
|
| |||||||||||||||
Preferred stock interest |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Net loss |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Balances at March 31, 2024 |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Contributed capital |
|
|
|
|
|
|
|
|
| |||||||||||||||
Preferred stock interest |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Net loss |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Balances at June 30, 2024 |
|
| $ |
|
| $ |
|
| $ |
| $ |
| $( |
| $( | |||||||||
Contributed capital |
|
|
|
|
|
|
|
|
| |||||||||||||||
Preferred stock interest |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Net loss |
|
|
|
|
|
|
|
|
| |||||||||||||||
Balances at September 30, 2024 |
|
| $ |
|
| $ |
|
| $ |
| $ |
| $( |
| $( | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2024 |
|
| $ |
|
| $ |
|
| $ |
| $ |
| $( |
| $( | |||||||||
Preferred stock interest |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Net loss |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Balances at March 31, 2025 |
|
|
|
|
|
|
| $ |
| ( |
| ( | ||||||||||||
Conversion of accrued interest into shares |
|
|
|
|
|
|
|
|
| |||||||||||||||
Preferred stock interest |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Net loss |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Balances at June 30, 2025 |
|
| $ |
|
| $ |
|
| $ |
| $ |
| $( |
| $( | |||||||||
Issuance of common stock pursuant to assets acquisition |
|
|
|
|
|
|
|
|
| |||||||||||||||
Effect of reverse stock split |
|
|
|
|
|
|
|
|
| |||||||||||||||
Preferred stock interest |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Net loss |
|
|
|
|
|
|
|
| ( |
| ( | |||||||||||||
Balances at September 30, 2025 |
|
| $ |
|
| $ |
|
| $ |
| $ |
| $( |
| $( | |||||||||
See accompanying notes to the unaudited condensed consolidated financial statements
3
CFN ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
| Nine Months Ended | ||
|
|
|
|
|
|
|
| September 30, | ||
|
|
|
|
|
|
| 2025 |
| 2024 | |
Cash flows from operating activities: |
|
|
|
|
| |||||
Net loss |
|
| $( |
| $( | |||||
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
| |||||
|
| Depreciation and amortization |
|
| ||||||
|
| Amortization of right of use asset |
|
| ||||||
|
| Bad debt expense |
|
| ||||||
|
| Amortization of debt discount |
|
| ||||||
|
| Inventory reserve expense |
|
|
| |||||
|
| Loss on conversion of accrued interest |
|
|
| |||||
| Changes in operating assets and liabilities: |
|
|
|
|
| ||||
|
|
| Accounts receivable, net |
| ( |
| ( | |||
|
|
| Inventories, net |
|
| ( | ||||
|
|
| Other assets |
| ( |
| ||||
|
|
| Accounts payable and accrued expenses |
|
| |||||
|
|
| Deferred revenue |
| ( |
| ( | |||
|
|
| Right of use liability, net |
| ( |
| ( | |||
|
| Net cash provided by (used in) operating activities |
|
| ( |
| ||||
Cash flows from investing activities: |
|
|
|
| ||||||
Purchase of property and equipment, net |
|
| ( |
| ( | |||||
|
| Net cash used in investing activities |
| ( |
| ( | ||||
Cash flows from financing activities: |
|
|
|
| ||||||
Repayments of notes |
|
| ( |
| ( | |||||
Contributed capital |
|
|
| |||||||
| Net cash used in financing activities |
|
| ( |
| ( | ||||
Net change in cash and cash equivalents |
| ( |
| |||||||
Cash and restricted cash at beginning of period |
|
| ||||||||
Cash and restricted cash at end of period |
| $ |
| $ | ||||||
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash and restricted cash: |
|
|
|
| ||||||
| Cash at beginning of period |
| $ |
| $ | |||||
| Restricted cash at beginning of period |
|
| |||||||
| Cash and restricted cash at beginning of period |
| $ |
| $ | |||||
|
|
|
|
|
|
|
|
|
|
|
| Cash at end of period |
| $ |
| $ | |||||
| Restricted cash at end of period |
|
| |||||||
| Cash and restricted cash at end of period |
| $ |
| $ | |||||
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
| ||||||
Cash paid for income taxes |
| $ |
| $ | ||||||
Cash paid for interest |
| $ |
| $ | ||||||
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
| ||||||
Accrual of preferred stock interest |
|
| $ |
| $ | |||||
Modification fee and conversion of accrued interest into shares |
|
| $ |
| $ | |||||
Issuance of common stock pursuant to assets acquisition |
|
| $ |
| $ | |||||
Property and equipment acquired through accounts payable |
|
| $ |
| $ | |||||
See accompanying notes to the unaudited condensed consolidated financial statements
4
CFN ENTERPRISES INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
Organization
CFN Enterprises Inc., formerly known as Accelerize Inc., or the Company, is a Delaware corporation incorporated on November 22, 2005. Effective October 22, 2019, the Company filed a certificate of amendment to its certificate of incorporation with the Secretary of State of the State of Delaware to change its corporate name to CFN Enterprises Inc.
On May 15, 2019, the Company entered into an asset purchase agreement or the Emerging Growth Agreement with Emerging Growth, LLC, or Emerging Growth, pursuant to which the Company acquired certain assets from Emerging Growth related to its sponsored content and marketing business for a purchase price consideration consisting of $
On July 1, 2023, the Company and its wholly owned subsidiary, Ranco LLC, a Delaware limited liability company, or Ranco, entered into an asset purchase agreement, or the Ranco Agreement, with RAN CoPacking Solutions LLC, a California limited liability company, or the Seller and the members of the Seller (collectively, the Founders). The assets of the Seller acquired by Ranco consist of assets for co-packing and white label manufacturing services, including comprehensive solutions for third party logistics (3PL) related areas such as storage, order fulfillment, solutions for custom packaging and hardware needs for many different industries, and media and design services, along with strategic marketing support, to help clients establish and enhance their brand presence in the market, or the Purchased Assets.
Also on July 1, 2023, Ranco entered into the Packwoods Private Label Services and Intellectual Property Licensing Agreement, or the Licensing Agreement, with PW Industries LLC, a Wyoming limited liability company, or PW, RS Distributions LLC, a Delaware limited liability company, or RS, and Packaging Innovations LLC, a Wyoming limited liability company, or PI, and together with PW and RS, the Licensors, for the exclusive manufacturing, packaging and distribution of, and wholesale and retail sales of a variety hemp-based inhalable (pre-roll and vaporizer), edible products, and disposable nicotine-related inhalable vaporizer products, and the purchase of packaging materials to be used with Packwoods-branded cannabis products (containing more than 0.3% delta-9 THC by weight) and the distribution of those packaging materials to licensed cannabis manufacturers designated by PW, using the Licensor’s licensed property for a 5 year exclusive term, subject to certain exclusions.
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, or J Street, and the owner of all of the equity interests of J Street, or the J Street Seller, whereby the Company will acquire 100% of J Street from the J Street Seller. J Street is an importer and wholesaler of wines and alcoholic beverages which currently distributes its products to Nevada, New York, New Jersey, Florida and California and its customers include bars, restaurants, casinos and hotels. The acquisition of J Street closed on July 1, 2025 and in connection with the acquisition, the Company issued 150,000 shares of the Company’s common stock to the J Street Seller.
The Company’s current operations consist of the sponsored content and marketing business, or the CFN Business, from the assets acquired pursuant to the Emerging Growth Agreement, and business of Ranco, or the Ranco Business, and the business of J Street, or the J Street Business.
Going Concern
The accompanying 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 $
5
Management’s plan to continue as a going concern includes raising capital in the form of debt or equity, growing the CFN Business, growing the Ranco Business, growing the newly acquired J Street Business managing and reducing operating and overhead costs and continuing to pursue strategic transactions and opportunities including launching an e-commerce network focused on the sale of general wellness cannabidiol, or CBD, products.
These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These 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.
Basis of Presentation and Consolidation
The accompanying consolidated financial statements include the results of operations of the Company and its subsidiaries CNP Operating, a Delaware limited liability company, CNP of Wyoming, LLC, a Colorado limited liability company, Ranco, LLC, a Delaware limited liability company, and J Street Capital Partners, LLC, a Florida limited liability company. All intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation.
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, 2024 and 2023, which are included in the Company’s December 31, 2024 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on April 15, 2025. 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 September 30, 2025 are not necessarily indicative of results for the entire year ending December 31, 2025.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Stock split
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, and assumptions used in Black-Scholes valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.
Segment Reporting
The Company operates under three reporting segments.
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. As of September 30, 2025, the Company had no restricted cash balance. Consequently, there are no amounts included as restricted cash in the total cash and cash equivalents presented on the accompanying unaudited condensed consolidated statement of cash flows.
Accounts Receivable
The Company’s account receivables for the CFN Business are due from customers relating to contracts to provide investor relation services for the CFN Business. For the Ranco Business, accounts receivables are due from customers for products sold and manufacturing, packing and labeling services provided. Collateral is currently not required. The Company also maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make payments. The Company
6
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. The allowance for doubtful accounts as of September 30, 2025 and December 31, 2024 amounted to $
Inventory
The Company’s inventory consists of finished goods acquired for its Ranco business, as well as wine inventory acquired pursuant to the J Street acquisition. The inventory is valued at the lower of cost (specific identification) or estimated net realizable value. As of September 30, 2025, the Company valued the inventory at $
Concentration of Credit Risks
The Company is subject to concentrations of credit risk primarily from cash and cash equivalents and accounts receivable.
The Company’s cash and restricted cash accounts are held at a financial institution and are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to $
Concentrations
The Company had
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC, 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation.
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. Payment terms vary by client and the services offered.
CFN Business
Subsequent to the closing of the Emerging Growth Agreement on June 20, 2019, the Company’s revenue is generated from the sale of promotional service packages to its customers ranging from 3 to 6 months. The Company offers different packages tailored to the type and stage of the potential customer, such as public companies looking to increase their shareholder base, as well as private companies potentially looking to go public and attract capital and publicity. The services provided by the Company include advertising, publishing of interviews and articles across its network and featuring of client content on its newsletters and social media. The packages all have fixed prices that are billed monthly over the terms of the agreement in even amounts. The Company recognizes revenue for its performance obligation associated with its contracts with customers over time as work is performed, which is deemed to occur evenly throughout the duration of the contract. This also reflects the pattern in which costs are incurred on performing the contracts. To the extent revenue recognized on contracts at each period end exceeds collections, the amounts are reflected as accounts receivable. To the extent collections on contracts at each period end exceeds revenue recognized, the amounts are reflected as deferred revenue.
Ranco Business
The Company performs services including white label manufacturing and co-packing for customers. Customers will drop off their product and the Company will perform the services via their employees and contractors. When the services are complete, the Company has satisfied its performance obligations. Revenue is recognized at this point in time.
7
The Company will order products that are manufactured overseas, such as custom boxes, packaging and hardware. These products are generally shipped from overseas to the customer. When these products are shipped out from the manufacturer, the Company has satisfied its performance obligations. Revenue is recognized at this point in time.
Lastly, the Company provides certain shipping and third party logistics services for customers. Once the products have arrived from overseas to the Company’s warehouse, the Company has satisfied its performance obligations which was the underlying shipping and logistics services. Revenue is recognized at this point in time.
J Street Business
J Street will commence generating revenue via the sale of wine and other alcoholic beverages to customers including bars, restaurants, casinos and hotels. When these products are shipped out, the Company has satisfied its performance obligations. Revenue is recognized at this point in time. J Street had nominal revenues in the third quarter of 2025.
Disaggregation of Revenue
The following is a disaggregation of revenue for the three months and nine months ended September 30, 2025 and 2024 respectively:
|
| Three Months Ended |
| Nine Months Ended | ||||
|
| September 30, |
| September 30, | ||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | |
Services (CFN and Ranco services) |
| $ |
| $ |
| $ |
| $ |
Products |
|
|
|
| ||||
Shipping and logistics |
|
|
|
| ||||
| $ |
| $ |
| $ |
| $ | |
Contract Liabilities
In some instances, customers provide payment before the Company has satisfied its performance obligations. These amounts are recorded to deferred revenue. As of September 30, 2025 and December 31, 2024, the Company had $
Cost of Revenue
Cost of revenue includes direct labor and materials. Cost of revenues also includes inbound and outbound shipping, freight and delivery costs. During the nine months ended September 30, 2025, the Company had $
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, or 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 below:
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. |
8
The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, deferred revenue and due to related party 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.
The Company’s contingent consideration recorded in connection with the Ranco acquisition (see Note 3) is a Level 3 liability. The liability is valued using a probability weighted analysis of the respective earn out provisions.
Business Combinations
The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.
Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination.
Impairment
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.
Contingent Consideration
The Company records a contingent consideration liability relating to earn the Company’s shares included in its acquisition agreements. The estimated fair value of the contingent consideration is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument.
The Company estimates and records the acquisition date fair value of contingent consideration as part of purchase price consideration for acquisitions. Additionally, each reporting period, the Company estimates changes in the fair value of contingent consideration and recognizes any change in fair in the consolidated statement of operations. The estimate of the fair value of contingent consideration requires very subjective assumptions to be made of future operating results, discount rates and probabilities assigned to various potential operating result scenarios. Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and, therefore, materially affect the Company’s future financial results. The contingent consideration liability is to be settled with the issuance of shares of common stock once contingent provisions set forth in respective acquisition agreements have been achieved. Upon achievement of contingent provisions, respective liabilities are relieved and offset by increases to common stock and additional paid-in capital in the stockholders’ equity section of the Company’s consolidated balance sheets.
Ranco Earnout
The Ranco Agreement contains an earn out provision providing for the issuance of (i) 800,000 shares of Company common stock to be issued upon Ranco achieving $19 million in gross revenue attributable to the Purchased Assets and a net profit of $3.9 million within the twelve month period beginning three months from the closing of the Acquisition, or the First Earnout Period, and (ii) 800,000 shares of Company common stock to be issued upon Ranco achieving $29 million in gross revenue attributable to the Purchased Assets and a net profit of $5.9 million within the twelve month period beginning on the day immediately following the end of the First Earnout Period. The conditions for both the First and Second Earnout Period were not met, and no such shares were issued.
The Company utilized a probability weighted scenario based on the earnout provisions above and determined the fair value of the contingent consideration was $
9
Advertising
The Company expenses advertising costs as incurred. Advertising expenses for the three months ended September 30, 2025 and 2024 amounted to $
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.
Basic and Diluted Earnings 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. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method). As of September 30, 2025, the Company had
Share-Based Payments
The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation, or 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.
The Company has elected to use the Black-Scholes option-pricing model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
Leases
The Company adopted Accounting Standards Update No. 2016-02, Leases (“Topic 842”) using the modified retrospective method. This accounting standard requires a lessee to recognize an asset and liability for most leases on its balance sheet.
Under Topic 842, the Company determines if an arrangement is a lease at inception. Right of use, or ROU, assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement and leases with an initial term of 12 months or less are not included in lease liabilities or ROU asset. As most leases do not provide an implicit rate, a rate which approximates the Company’s incremental borrowing rate is used, based on the information available at commencement date, in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred. Lease agreements generally do not contain residual value guarantees or restrictive covenants. Over the lease term, the Company uses the effective interest rate method to account for the lease liability as lease payments are made and the ROU asset is amortized in a manner that results in straight-line expense recognition.
NOTE 3: DUE TO SELLER
RAN CoPacking Solutions LLC
The Company evaluated the Ranco Agreement pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations.
10
Total fair value of the preliminary purchase price consideration as of July 1, 2023 was determined as follows:
Cash (due to seller) |
| $ |
Common stock |
| |
Contingent consideration |
| |
Purchase price consideration |
| $ |
On July 1, 2023, the Company issued
Pursuant to the Asset Purchase Agreement, the Company owes the Seller $
In accordance with the Earn Out provisions per the Asset Purchase Agreement, the Company determined an initial fair value of $
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. The acquisition closed on July 1, 2025. In connection with the acquisition, the Company issued
J Street was historically 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. The Company intends to restructure J Street’s activities and integrate the acquired assets into its existing operations rather than continue J Street’s prior operations, which were minimal at the time of acquisition.
The assets acquired primarily consisted of inventory, export and distribution licenses, and intellectual property (trademarks and formulations). No workforce, operating platform, or other substantive processes were acquired. There is no continuation of J Street’s standalone operations after the transaction. The Company’s intent is to repurpose the assets acquired as part of a broader restructuring strategy, and utilize CFN and Ranco’s relationships to commercialize the underlying inventory and licenses obtained. Lastly, substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. As such, the transaction did not meet the definition of a business under ASC 805, Business Combinations, and has been accounted for as an asset acquisition under ASC 805-50.
The fair value of the consideration transferred was determined based on the market price of the Company’s common stock on the acquisition date:
Common stock ( | $ |
Purchase price consideration | $ |
The purchase price was allocated to the identifiable assets acquired based on their relative fair values as follows:
Inventories | $ |
Trademarks and Licenses | |
Purchase price consideration | $ |
NOTE 4: PROPERTY AND EQUIPMENT
The Company’s property and equipment relating to continuing operations consisted of the following:
| September 30, |
| December 31, |
2025 |
| 2024 | |
Machinery & equipment | $ |
| $ |
Furniture and equipment and leasehold improvements |
| ||
Tradeshow booth |
| ||
| |||
Less: Accumulated depreciation | ( |
| ( |
$ |
| $ |
11
Depreciation expense for the three months ended September 30, 2025 and 2024 amounted to $
NOTE 5: NOTES PAYABLE
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, LLC 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, LLC entered into a promissory note payable with Eagle Six Consultants, Inc. (“Eagle”) whereby the Company borrowed $
On June 24, 2020, the Company entered into a Loan Authorization and Agreement with the SBA under which the Company borrowed $
On May 12, 2021, the Company’s subsidiary CNP Operating, LLC restructured the CSBG note payable of $
On November 19, 2020, the Company’s subsidiary CNP Operating, LLC purchased equipment for $
On October 19, 2021, the Company borrowed $
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 $
12
On July 1, 2023, the May and July notes were rolled over to Ranco, LLC for an aggregate of $
The Company had three other notes payable with an aggregate outstanding balance of $65,767 at September 30, 2025.
Future scheduled maturities of long-term debt are as follows:
|
|
|
|
| September 30, |
2026 |
|
|
|
| |
2027 |
|
|
|
| |
2028 |
|
|
|
| |
2029 |
|
|
|
| |
Thereafter |
|
|
|
| |
|
|
|
|
|
The aggregate current portion of long-term debt as of September 30, 2025 amounted is $
NOTE 6: STOCKHOLDERS’ DEFICIT
Common Stock
On April 10, 2025, the Company and the holder of the $500,000 promissory note dated September 10, 2019 reached an agreement to extend the maturity date of the note until December 31, 2027. In connection with the extension, the Company issued 60,000 shares of its common stock to the noteholder in consideration of the extension and in lieu of $
In July 2025, the Company issued
Preferred Stock
The Company is authorized to issue
For the nine months ending September 30, 2025 and 2024, the Company incurred $
On August 14, 2025, following negotiation with Emerging Growth, LLC, the holder of all 3,000 shares of the Company’s Series B Preferred Stock, the Company filed a Certificate of Amendment to its Certificate of Designation of Series B Preferred Stock with the Secretary of State of the State of Delaware pursuant to which the Certificate of Designation of Series B Preferred Stock was amended to increase the dividend rate of 6% per annum on the Series B Preferred Stock to 12% per annum, effective August 1, 2025.
Warrants
The following summarizes the Company’s warrant activity for the nine months ended September 30, 2025:
|
|
|
|
| Weighted-Average |
|
|
|
|
| Remaining |
|
|
| Weighted |
| Contractual |
| Warrants |
| Exercise Price |
| (Years) |
Outstanding at December 31, 2024 |
| $ |
| ||
Granted |
|
| |||
Forfeited |
|
| - | ||
Outstanding at September 30, 2025 |
| $ |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
Vested and expected to vest at September 30, 2025 |
| $ |
| ||
Exercisable at September 30, 2025 |
| $ |
|
13
As of September 30, 2025, all outstanding warrants were fully vested and there was no remaining unrecorded compensation expense.
Options
The Company had a Stock Option Plan, or the Plan, under which the total number of shares of capital stock of the Company that may be subject to options under the Plan was 150,000 shares of Common Stock from either authorized but unissued shares or treasury shares. The Plan expired on December 14, 2016.
As of September 30, 2025, there were no outstanding options.
NOTE 7: 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 $
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 expires in May 2026 and has a monthly base rent of $
The following is a summary of related liabilities for all non-cancelable operating leases:
| September 30, |
| December 31, |
2025 |
| 2024 | |
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 |
|
NOTE 8: RELATED PARTY TRANSACTIONS
As of September 30, 2025 and December 31, 2024, there was $
During the nine months ended September 30, 2025, Ranco LLC purchased products aggregating $
During the nine months ended September 30, 2024, the executives of Ranco paid payroll to certain employees totalling $
14
executives themselves and were recognized as contributed capital into the Company. The amounts are not liable by the Company (Ranco LLC and CFN Enterprises, Inc.) for repayment.
NOTE 9: 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.
NOTE 10: SEGMENT REPORTING
During the nine months ended September 30, 2025 and 2024, the Company had three operating segments including:
·CFN, which is comprised of the CFN Business, the J Street Business and CNP Operating, LLC;
·Ranco-AGP, which consists of the related party transactions with AGP Holdings LLC (see Note 8); and
·Ranco-Legacy, which consists of the rest of the Company’s Ranco subsidiary operations.
Factors used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance. The Company’s operating segments have been broken out based on similar economic and other qualitative criteria.
Financial statement information by operating segment for the three and nine months ended September 30, 2025 is presented below:
| Three Months Ended September 30, 2025 |
| Nine Months Ended September 30, 2025 | ||||||||||||
Asset | Ranco-Legacy |
| Ranco-AGP |
| CFN |
| Consolidated |
| Ranco-Legacy |
| Ranco-AGP |
| CFN |
| Consolidated |
Total Assets | $ |
| $ |
| $ |
| $ |
| $ |
| $ |
| $ |
| $ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ranco-Legacy |
| Ranco-AGP |
| CFN |
| Consolidated |
| Ranco-Legacy |
| Ranco-AGP |
| CFN |
| Consolidated | |
Net revenues | $ |
| $ |
| $ |
| $ |
| $ |
| $ |
| $ |
| $ |
Cost of revenue |
|
|
|
|
|
|
| ||||||||
Gross profit |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
|
|
|
|
| ||||||||
Total operating expenses |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| - |
Income (loss) from operations | ( |
|
| ( |
| ( |
| ( |
|
| ( |
| ( | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense | ( |
|
| ( |
| ( |
| ( |
|
| ( |
| ( | ||
Other income |
|
|
|
|
|
|
| ||||||||
Loss on conversion of accrued interest |
|
|
|
|
|
| ( |
| ( | ||||||
Total other income (expense), net | ( |
|
| ( |
| ( |
|
|
| ( |
| ( | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
|
|
|
|
| ||||||||
Net income (loss) | $( |
| $ |
| $( |
| $( |
| $( |
| $ |
| $( |
| $( |
Preferred stock interest |
|
|
|
|
|
|
| ||||||||
Net income (loss) available to common shareholders | $( |
| $ |
| $( |
| $( |
| $( |
| $ |
| $( |
| $( |
15
Financial statement information by operating segment for the three and nine months ended September 30, 2024 is presented below:
| Three Months Ended September 30, 2024 |
| Nine Months Ended September 30, 2024 | ||||||||||||
Assets | Ranco-Legacy |
| Ranco-AGP |
| CFN |
| Consolidated |
| Ranco-Legacy |
| Ranco-AGP |
| CFN |
| Consolidated |
Total Assets | $ |
| $ |
| $ |
| $ |
| $ |
| $ |
| $ |
| $ |
Ranco-Legacy |
| Ranco-AGP |
| CFN |
| Consolidated |
| Ranco-Legacy |
| Ranco-AGP |
| CFN |
| Consolidated | |
Net revenues | $ |
| $ |
| $ |
| $ |
| $ |
| $ |
| $ |
| $ |
Cost of revenue |
|
|
|
|
|
|
| ||||||||
Gross profit |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
|
|
|
|
| ||||||||
Total operating expenses |
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| - |
Income (loss) from operations |
|
| ( |
|
|
|
| ( |
| ||||||
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense | ( |
|
| ( |
| ( |
| ( |
|
| ( |
| ( | ||
Interest income |
|
|
|
|
|
|
| ||||||||
Total other income (expense), net | ( |
|
| ( |
| ( |
| ( |
|
| ( |
| ( | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
|
|
|
|
| ||||||||
Net income (loss) | $ |
| $ |
| $( |
| $ |
| $ |
| $ |
| $( |
| $( |
Preferred stock interest |
|
|
|
|
|
|
| ||||||||
Net income (loss) available to common shareholders | $ |
| $ |
| $( |
| $ |
| $ |
| $ |
| $( |
| $( |
NOTE 11: SUBSEQUENT EVENTS
On November 3, 2025, the Company, through its wholly owned subsidiary, J Street Capital Partners, LLC (“J Street”), entered into and closed upon the transactions pursuant to a Securities Purchase Agreement, or the Prestige Agreement, with Thomas Hinde, the sole member of Prestige Worldwide Wine Company, LLC, or Prestige, a California limited liability company. Pursuant to the Prestige Agreement, J Street acquired 100% of the issued and outstanding membership interests of Prestige in exchange for the issuance of 150,000 shares of the Company’s common stock. As a result of the transaction, Prestige became a wholly owned subsidiary of J Street. In connection with the acquisition of Prestige, the Company also entered into a Consulting Agreement with Wine Trends Marketing, LLC, and a Lock-Up/Leak-Out Agreement with Mr. Hinde, each effective as of the closing date.
Management has evaluated subsequent events through November 19, 2025, the date the consolidated financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in these financial statements.
16
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, 2024. 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
We own and operate a cannabis industry focused sponsored content and marketing business, or the CFN Business, and a white label manufacturing and co-packing business, or the Ranco Business. Our ongoing operations currently consist primarily of the CFN Business and the Ranco Business and we will continue to pursue strategic transactions and opportunities. We are currently in the process of launching an e-commerce network focused on the sale of general wellness CBD products.
On July 1, 2023, the Company, through its wholly owned subsidiary, RANCO, LLC, a Delaware limited liability company, or Ranco, acquired assets from RAN CoPacking Solutions LLC, a California limited liability company, or the Acquisition which consists of assets for co-packing and white label manufacturing services, including comprehensive solutions for third party logistics (3PL) related areas such as storage, order fulfillment, solutions for custom packaging and hardware needs for many different industries, and media and design services, along with strategic marketing support, to help clients establish and enhance their brand presence in the market. Also on July 1, 2023, Ranco entered into the Packwoods Private Label Services and Intellectual Property Licensing Agreement, or the Licensing Agreement, with PW Industries LLC, a Wyoming limited liability company, or PW, RS Distributions LLC, a Delaware limited liability company, or RS, and Packaging Innovations LLC, a Wyoming limited liability company, or PI, and together with PW and RS, the Licensors, for the exclusive manufacturing, packaging and distribution of, and wholesale and retail sales of a variety hemp-based inhalable (pre-roll and vaporizer), edible products, and disposable mitragynine -related inhalable vaporizer products, and the purchase of packaging materials to be used with Packwoods-branded cannabis products (containing more than 0.3% delta-9 THC by weight) and the distribution of those packaging materials to licensed cannabis manufacturers designated by PW, using the Licensor’s licensed property for a 5 year exclusive term, subject to certain exclusions.
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.
Ranco performs services including white label manufacturing and co-packing for customers. Customers will drop off their product and the Company will perform the services via their employees and contractors. Ranco will also order products that are manufactured overseas, such as custom boxes, packaging and hardware. In 2025, the Company began ordering mitragynine-related bulk raw materials from a related party, which arrangement was terminated on October 1, 2025. These products are generally shipped from overseas to the customer. Lastly, Ranco provides certain shipping and third party logistics services for customers.
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, or J Street, and the owner of all of the equity interests of J Street, or the J Street Seller, whereby the Company will acquire 100% of J Street from the J Street Seller. J Street is an importer and wholesaler of wines and alcoholic beverages which currently distributes its products to Nevada, New York, New Jersey, Florida and California and its customers include bars, restaurants, casinos and hotels. The acquisition of J Street closed on July 1, 2025 and in connection with the acquisition, the Company issued 150,000 shares of the Company’s common stock to the J Street Seller. The Company’s intent is to repurpose the assets acquired as part of a broader restructuring strategy, and utilize CFN and Ranco’s relationships to commercialize the underlying inventory and licenses obtained.
17
Results of Operations for the Three Months Ended September 30, 2025 and 2024
The following are the results of our operations for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024:
|
|
|
|
|
|
| Three Months Ended |
|
|
|
| ||
|
|
|
|
|
|
| September 30, |
|
|
|
| ||
|
|
|
|
|
|
| 2025 |
| 2024 |
| Change |
| % Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
|
| $6,645,241 |
| $6,771,741 |
| $(126,500) |
| -2% | |||
Cost of revenue |
|
|
| 4,945,708 |
| 2,394,994 |
| 2,550,714 |
| 107% | |||
|
| Gross profit | 1,699,533 |
| 4,376,747 |
| (2,677,214) |
| -61% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
| |||
| Selling, general and administrative | 2,076,573 |
| 2,740,385 |
| (663,812) |
| -24% | |||||
|
| Total operating expenses | 2,076,573 |
| 2,740,385 |
| (663,812) |
| -24% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
|
| (377,040) |
| 1,636,362 |
| (2,013,402) |
| -123% | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
| |||
| Interest expense |
|
|
| (56,756) |
| (663,513) |
| 606,757 |
| -91% | ||
| Other income | - |
| - |
| - |
| - | |||||
| Interest income |
|
|
| - |
| 51 |
| (51) |
| -100% | ||
| Loss on conversion of accrued interest |
|
|
| - |
| - |
| - |
| - | ||
|
| Total other expense, net | (56,756) |
| (663,462) |
| 606,706 |
| -91% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
| - |
| - |
| - |
|
| |||
Net income (loss) |
|
|
| $(433,796) |
| $972,900 |
| $(1,406,696) |
| -145% | |||
Net Revenues
The Company’s revenues from the CFN Business are generated from the sale of promotional service packages to customers ranging from 3 to 6 months. The Company offers different packages tailored to the type and stage of the potential customer, such as public companies looking to increase their shareholder base, as well as private companies potentially looking to go public and attract capital and publicity. Ranco performs services including white label manufacturing and co-packing for customers. Customers will drop off their product and the Company will perform the services via their employees and contractors. When the services are complete, the Company has satisfied its performance obligations. Revenue is recognized at this point in time. Ranco will order products that are manufactured overseas, such as custom boxes, packaging and hardware. These products are generally shipped from overseas to the customer. When these products are shipped out from the manufacturer, the Company has satisfied its performance obligations. Revenue is recognized at this point in time. Lastly, Ranco provides certain shipping and third party logistics services for customers. When the services are complete, the Company has satisfied its performance obligations. Revenue is recognized at this point in time.
During the three and nine months ended September 30, 2025, Ranco LLC purchased products from AGP Holdings LLC, an entity wholly owned by Allen Park, the Company’s Chief Operating Officer and Controller, on arm’s length terms. The products consist of mitragynine-related bulk raw material, which is then sold by the Company to third party customers. On October 1, 2025, this arrangement was terminated by the Company.
Revenues decreased by $126,500 to $6,645,241 for the three months ended September 30, 2025, compared to $6,771,741 in the corresponding fiscal period in 2024. The decrease was primarily due to lower Ranco sales volumes compared to the prior-year period, driven by reduced customer demand and timing of shipments.
During the three months ended September 30, 2025, the Company realized $0 of campaign revenue compared to $16,000 in 2024. The decrease was primarily due to a shift in efforts during the period to the Ranco Business.
The Company’s revenue for the period September 30, 2025 and 2024 also included $12,826 and $27,976 respectively, relating to sales of product from its e-commerce network focused on the sale of general wellness CBD products.
18
Cost of Revenue
The costs of revenue for the CFN Business consist primarily of labor, fees paid for production of content for clients and the costs of placement of the content on various platforms. Cost of revenue also includes products sold, shipping costs and direct labor in the Ranco Business, both legacy Ranco products and Ranco AGP products.
Cost of revenue increased by $2,550,714 to $4,945,708for the three months ended September 30, 2025, compared to $2,394,994 in the corresponding fiscal period in 2024. The increase was primarily attributable to higher product purchases and related fulfillment costs.
Operating Expenses
The decrease in operating expenses for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily attributable to lower rent and lease expenses, reduced royalty payments, and decreased legal fees.
Other Income/Expense
Other expenses during the three months ended September 30, 2025, primarily consisted of interest expense related to notes payable. The significant decrease compared to the corresponding period in 2024 was mainly due to lower interest expense as a result of debt amortization.
Results of Operations for the Nine Months Ended September 30, 2025 and 2024
The following are the results of our operations for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024:
|
|
|
|
|
|
| Nine Months Ended |
|
|
|
| ||
|
|
|
|
|
|
| September 30, |
|
|
|
| ||
|
|
|
|
|
|
| 2025 |
| 2024 |
| Change |
| % Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues | $31,222,344 |
| $16,510,295 |
| $14,712,049 |
| 89% | ||||||
Cost of revenue | 29,146,530 |
| 9,424,830 |
| 19,721,700 |
| 209% | ||||||
|
| Gross profit | 2,075,814 |
| 7,085,465 |
| (5,009,651) |
| -71% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
| ||||||
| Selling, general and administrative | 7,116,741 |
| 5,907,128 |
| 1,209,613 |
| 20% | |||||
|
| Total operating expenses | 7,116,741 |
| 5,907,128 |
| 1,209,613 |
| 20% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
| (5,040,927) |
| 1,178,337 |
| (6,219,264) |
| -528% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
| ||||||
| Interest expense |
| (165,252) |
| (2,104,548) |
| 1,939,296 |
| -92% | ||||
| Other income | 34,917 |
| - |
| 34,917 |
|
| |||||
| Interest income |
| - |
| 202 |
| (202) |
| -100% | ||||
| Loss on conversion of accrued interest |
| (60,000) |
| - |
| (60,000) |
|
| ||||
|
| Total other expense, net | (190,335) |
| (2,104,346) |
| 1,914,011 |
| -91% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes | - |
| - |
| - |
|
| ||||||
Net loss | $(5,231,262) |
| $(926,009) |
| $(4,305,253) |
| 465% | ||||||
Net Revenues
The Company’s revenues from the CFN Business are generated from the sale of promotional service packages to customers ranging from 3 to 6 months. The Company offers different packages tailored to the type and stage of the potential customer, such as public companies looking to increase their shareholder base, as well as private companies potentially looking to go public and attract capital and publicity. Ranco performs services including white label manufacturing and co-packing for customers. Customers will drop off their product and the Company will perform the services via their employees and contractors. When the services are complete, the Company has satisfied its performance obligations. Revenue is recognized at this point in time. Ranco will order products that are manufactured overseas, such as custom boxes, packaging and hardware. These products are generally shipped from overseas to the customer. When these products are shipped out from the manufacturer, the Company has satisfied its performance obligations. Revenue is recognized at this point in time. Lastly, Ranco provides certain shipping and third party logistics services for customers. When the services are complete, the Company has satisfied its performance obligations. Revenue is recognized at this point in time.
19
During the three and nine months ended September 30, 2025, Ranco LLC purchased products from AGP Holdings LLC, an entity wholly owned by Allen Park, the Company’s Chief Operating Officer and Controller, on arm’s length terms. The products consist of mitragynine -related bulk raw material, which is then sold by the Company to third party customers.
Revenues increased by $14,712,049 to $31,222,344 for the nine months ended September 30, 2025, compared to $16,510,295 in the corresponding fiscal period in 2024. The increase was primarily due to the Company’s Ranco AGP business. In 2025, the Company began ordering bulk raw materials from a related party and had $18,139,930 in sales to customers pertaining to the AGP products. On October 1, 2025, this arrangement was terminated by the Company.
During the nine months ended September 30, 2025, the Company realized $0 of campaign revenue compared to $54,500 in 2023. The decrease was primarily due to a shift in efforts during the period to the Ranco Business.
The Company’s revenue for the period September 30, 2025 and 2024 also included $21,411 and $39,535, respectively, relating to sales of product from its e-commerce network focused on the sale of general wellness CBD products.
Cost of Revenue
The costs of revenue for the CFN Business consist primarily of labor, fees paid for production of content for clients and the costs of placement of the content on various platforms. Cost of revenue also includes products sold, shipping costs and direct labor in the Ranco Business.
Cost of revenue increased by $19,721,700 to $29,146,530 for the nine months ended September 30, 2025, compared to $9,424,830 in the corresponding fiscal period in 2024. The increase was a result of the corresponding increase in Ranco’s revenue, specifically the ordering bulk raw materials per the AGP business.
Operating Expenses
The Company’s operating expenses for the nine months ended September 30, 2025 were higher than those in the corresponding period in 2024 due to increased headcount and more significant operations of Ranco in 2025.
Other Income/Expense
Other income/expenses during the nine months ended September 30, 2025 were due to interest expense related to notes payable and loss on conversion of accrued interest.
Liquidity, Capital Resources and Going Concern
As of September 30, 2025, we had $102,324 in unrestricted cash and $7,550,716 in notes payable.
The Company had a working capital deficit of $24,352,182 and an accumulated deficit of $84,393,485 as of September 30, 2025. The Company also had a net loss of $5,231,262 for the nine months ended September 30, 2025.
Management’s plan to continue as a going concern includes raising capital in the form of debt or equity, growing its existing business acquired under the Ranco Agreement, growing the J Street Business, managing and reducing operating and overhead costs and continuing to pursue strategic transactions and opportunities including launching an e-commerce network focused on the sale of general wellness CBD, products.
These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These 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.
Cash Flows
The following is a summary of our cash flows from operating, investing and financing activities for the nine months ended September 30, 2025:
|
|
|
|
|
|
|
| Nine Months Ended | ||
|
|
|
|
|
|
|
| September 30, | ||
|
|
|
|
|
|
|
| 2025 |
| 2024 |
Net cash (used in) provided by operating activities |
| $(40,361) |
| $312,722 | ||||||
Net cash used in investing activities |
| $(151,570) |
| $(39,300) | ||||||
Net cash used in financing activities |
| $(79,579) |
| $(108,912) | ||||||
20
Net cash used in operating activities was $(40,361) during the nine months ended September 30, 2025, compared to cash provided by operating activities of $312,722 during the same period in 2024. The increase in cash used in operating activities was primarily due to a higher net loss in 2025.
Net cash used in investing activities during the nine months ended September 30, 2025 consisted of the purchase of property and equipment.
Net cash used in financing activities during the nine months ended September 30, 2025 was $(79,579), primarily due to the repayment of notes totaling $79,579. Net cash used in financing activities during the nine months ended September 30, 2024, was $108,912, which included note repayments of $239,079, partially offset by contributed capital of $130,167.
Description of Indebtedness
On September 10, 2019, the Company entered into a promissory note payable whereby the Company borrowed $500,000 bearing interest at 8% per annum. Interest on the note is payable quarterly on the first business day of December, March, June and September commencing December 1, 2019. In 2022, the maturity date was extended to 2024. In April 2025, the Company and the holder of the promissory note reached an agreement to extend the maturity date of the note until December 31, 2027. In connection with the extension, the Company issued 60,000 shares of its common stock to the noteholder in consideration of the extension and in lieu of $60,000 of interest accrued on the promissory note through March 31, 2025. The outstanding balance of the note was $500,000 at September 30, 2025.
On October 28, 2019, the Company’s subsidiary CNP Operating, LLC entered into a promissory note payable with Complete Business Solutions Group, Inc (“CBSG”) whereby the Company borrowed $3,050,000. The outstanding balance of the note was $2,218,000 at September 30, 2025. The note is currently in default and personally guaranteed by Anthony Zingarelli.
On September 30, 2019, the Company’s subsidiary CNP Operating, LLC entered into a promissory note payable with Eagle Six Consultants, Inc. (“Eagle”) whereby the Company borrowed $550,000 bearing interest at 16% per annum. The outstanding balance of the note was $302,489 at September 30, 2025. The note is currently in default.
On June 24, 2020, the Company entered into a Loan Authorization and Agreement with the SBA under which the Company borrowed $150,000 and issued to the SBA a note and security agreement for the amount borrowed. Outstanding borrowings accrue interest at a rate of 3.75% per annum, and installment payments, including principal and interest, of $731 are due monthly and begin 12 months from the date of the loan agreement. The balance of any remaining principal and interest is due 30 years from the date of the loan agreement. As collateral for the borrowing, the Company granted the SBA a security interest in substantially all assets of the Company. The outstanding balance of the note was $121,864 at September 30, 2025.
On May 12, 2021, the Company’s subsidiary CNP Operating, LLC restructured the CSBG note payable of $2,957,000, the Eagle #1 note payable of $550,000 and the Eagle #2 note payable of $300,000 by entering into a payment and indemnification agreement with the receivers/trustee of CBSG and Eagle. The receiver has agreed that the balance of the outstanding amounts will be paid over the course of 24 months in equal payments of $158,625. Further, the Company shall pay $20,000 per month toward the balance and Anthony Zingarelli (“Zingarelli”) and Colorado Sky Industrial Supply LLC (“CSIS”), agree to personally pay the sum of $138,625 per month. Zingarelli is the only member of CNP Operating, LLC that signed a personal guarantee on the loans and Zingarelli is the sole member of CSIS. Zingarelli and CSIS has agreed to indemnify and hold the Company harmless from any and all losses, liabilities and claims. If a loss is incurred by the Company with respect to any claims, Zingarelli shall reimburse the Company for the amount of any such loss. This note is currently in default.
On November 19, 2020, the Company’s subsidiary CNP Operating, LLC purchased equipment for $58,095 which was financed at zero interest rate. The monthly payments of $968 will be made for the next 60 months and mature on November 19, 2025. Imputed interest was not material. In 2022, CNP Operating, LLC purchased equipment for $55,016 which was financed at zero interest rate with the same lender with similar terms. The outstanding balance of the note was $48,513 at September 30, 2025.
On October 19, 2021, the Company borrowed $250,000 from a lender and issued a promissory note for the repayment of the amount borrowed. The promissory note is unsecured, has a maturity date of December 31, 2024 and all principal is due upon maturity. The amount borrowed accrues interest at 12% per annum and accrued interest is payable monthly commencing on December 1, 2021. The promissory note contains customary events of default permitting acceleration of repayment for nonpayment of amounts due, a bankruptcy related proceeding, breach of representations or covenants, sale of substantially all assets, and change of control. The outstanding balance of the note was $250,000 at September 30, 2025.
On May 8, 2023, the Company entered into a promissory note with two lenders for aggregate proceeds of $1,150,000. The notes are unsecured and have a maturity date 15 months following their issuance. Beginning on the fourth month after issuance, the Company will make monthly repayments totaling $143,750, including principal and interest. Total principal and interest to be repaid is $1,725,000,
21
and any remaining outstanding balance is due at maturity. As of September 30, 2025, note payable, net of unamortized discount of $0, was $643,250 for these two notes.
On July 1, 2023, the Company entered into a promissory note with two lenders for aggregate proceeds of $3,850,000. The notes are unsecured and have a maturity date 15 months following their issuance. As of September 30, 2025, note payable, net of unamortized discount of $0, was $3,400,833 for these two notes.
On July 1, 2023, the May and July notes were rolled over to Ranco, LLC for an aggregate of $5,000,000 (the “Ranco Notes”). The Ranco Notes have a 15 month term and are subject to mandatory equal repayments commencing on the fourth month following issuance. The Ranco Notes are secured by the assets of Ranco and guaranteed by the Company.
The Company had three other notes payable with an aggregate outstanding balance of $65,767 at September 30, 2025.
Future scheduled maturities of long-term debt are as follows:
|
|
|
|
| September 30, |
2026 |
|
|
|
| 7,433,238 |
2027 |
|
|
|
| 8,772 |
2028 |
|
|
|
| 8,772 |
2029 |
|
|
|
| 8,772 |
Thereafter |
|
|
|
| 91,162 |
|
|
|
|
| 7,550,716 |
The aggregate current portion of long-term debt as of September 30, 2025 amounted is $7,433,238, which represents the contractual principal payments due in the next 12 months period as well as any notes in default.
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 our common stock at the election of the holder at a conversion price per share to be mutually agreed between us and the holder in the future, and be redeemable at our option following the third year after issuance, without voting rights or a liquidation preference.
On June 20, 2019, we 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 Emerging Growth Agreement. 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 bears interest at 6% per annum and is convertible into our common stock at the election of Emerging Growth, LLC at a conversion price per share to be mutually agreed between us and Emerging Growth, LLC in the future, without voting rights or a liquidation preference, except with respect to accrued penalty interest.
Other Outstanding Obligations at September 30, 2025
Warrants
As of September 30, 2025, 1,198,850 shares of our common stock are issuable pursuant to the exercise of warrants.
Options
As of September 30, 2025, 0 shares of our common stock are issuable pursuant to the exercise of options.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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 September 30, 2025, our disclosure controls and procedures were not effective.
22
Changes in Internal Control Over Financial Reporting
During the quarter ended September 30, 2025, in order to remediate the segregation of duties and other deficiencies, we hired accounting consultants to perform our account reconciliations and other day-to-day accounting requirements. The internal control structure was also documented and assessed in the areas of financial reporting and disclosure controls as it relates to our continuing operations. In addition, we revised and improved the use of our systems for getting appropriate approvals for purchases and other activities that require authorization. However, our ability to file timely reports is heavily dependent on having the necessary financial resources to pay consultants and other outside service providers involved with performing key elements of our disclosure and financial reporting controls. Our current financial condition, has temporarily hindered our ability to file timely reports for this reason. As a result, we have assessed our disclosure controls and controls over financial reporting as not effective.
PART II - OTHER INFORMATION
Item 5. Other Information
Given the timing of the events, the following information is included in this Form 10-Q pursuant to Item 5.02 “Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers” in lieu of filing a Form 8-K.
On November 19, 2025, the Company’s Board of Directors, or the Board, named Mario Marsillo, Jr., the Company’s current Chief Investment Officer and a director, as the Company’s Chief Business Officer, a title which more accurately reflects his responsibilities within the Company. This expanded title includes oversight of M&A activity, strategic partnerships, and support for business development across the CFN Enterprises portfolio of companies. The terms of Mr. Marsillo’s employment agreement with the Company remains unchanged.
Also on November 19, 2025, the Board terminated Allen Park, the Company’s Chief Operating Officer and Controller, for cause as defined in the Employment Agreement between the Company and Allen Park, dated July 1, 2023.
Given the timing of the events, the following information is included in this Form 10-Q pursuant to Item 7.01 “Item 7.01 Regulation FD Disclosure” in lieu of filing a Form 8-K.
On November 19, 2025, 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 on November 12, 2026, the Board has determined to discontinue the operations of its subsidiary Ranco LLC by December 31, 2025, and the Company has engaged a strategic advisor to advise on alternatives for Ranco LLC including potential sale, merger, or other strategic transactions.
Item 6. Exhibits
31.1 | |
|
|
32.1 | |
|
|
101. | The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Comprehensive Loss, (iv) the Statements of Changes in Stockholders’ Deficit, (v) the Statements of Cash Flows, and (vi) related notes to these financial statements.* |
*Filed herewith.
**Furnished herewith.
23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CFN ENTERPRISES INC. | |
|
|
|
Dated: November 19, 2025
|
By: |
/s/ Brian Ross |
|
| Brian Ross |
|
| President and Chief Executive Officer |
|
| (Principal Executive Officer and |
24