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.

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 $153,822, which pertained to work-in-progress wine inventory that Prestige is procuring from vendors. During the six months ended June 30, 2026, the Company recorded a write-off of $413,250 to fully impair the remaining J Street inventory, as the Company determined that the carrying value was no longer recoverable. The write-off was charged to selling, general and administrative expenses and is reflected as a non-cash adjustment within operating activities in the condensed consolidated statements of cash flows. As of June 30, 2026, all inventory from continuing operations pertained to wine inventory held by Prestige and Interstice.

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.

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

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.

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.

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 no outstanding stock options, 2,278,850 outstanding warrants, and 3,500 shares of preferred stock which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive.

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.