CNFN

New in FY2025

• Risk Factors” for a discussion of the impact of this legislation.
• Employees As of December 31, 2025, we had 10 full-time employees, including all of our executive officers.
• This figure does not include independent contractors that are utilized.
• None of our employees are covered by collective bargaining agreements, and we believe our relationships with our employees to be good.
• Our independent registered public accounting firm has expressed in its reports to our 2025 and 2024 audited consolidated financial statements a substantial doubt about our ability to continue as a going concern.
• As a result, our independent registered public accounting firm has expressed in its auditors’ reports on the consolidated financial statements for December 31, 2025 and 2024, a substantial doubt regarding our ability to continue as a going concern.
• Our working capital deficit at December 31, 2025 and 2024 amounted to approximately $23.8 million and $19.2 million, respectively.
• We had a net loss from continuing operations of approximately $2.0 million in 2025 and a net loss from continuing operations of approximately $2.1 million in 2024.
• As of December 31, 2025, we had total debt outstanding of $7,548,523.
• As of December 31, 2025, we had 500 shares of Series A Preferred Stock, each with a stated value of $1,000 per share which bears interest at 12% per annum, and 3,000 shares of Series B Preferred Stock, each with a stated value of $1,000 per share which bears interest at 12% per annum (increased from 6% effective August 1, 2025).
• The passage of H.R. 5371 banning intoxicating hemp-derived consumable products resulted in the discontinuation of our Ranco operations and may have continuing effects on our business.
• On November 12, 2025, the President signed H.R. 5371 into law, which bans intoxicating hemp-derived consumable products nationally effective November 12, 2026.
• As a result of this legislation and the resulting regulatory uncertainty, our Board of Directors approved a plan to discontinue the operations of Ranco LLC on November 19, 2025.
• Ranco had been a significant contributor to our consolidated revenues and its discontinuation has materially reduced our revenue base.
• We may also face costs associated with the wind-down of Ranco’s operations, including potential liabilities for unpaid vendors, lease obligations, and employee-related costs.
• Additionally, the discontinued operations of Ranco carry significant liabilities, including $13.3 million in current liabilities of discontinued operations as of December 31, 2025.
• Our wine and beverage business is subject to extensive regulation and may face challenges in scaling operations.
• The production, importation, distribution and sale of alcoholic beverages is a highly regulated industry.
• Our subsidiaries J Street and Prestige are required to maintain federal and state permits and licenses to operate.
• The loss or non-renewal of any required permits or licenses could materially adversely affect our business.
• Additionally, our wine and beverage operations are in early stages following recent acquisitions, and we may face challenges integrating acquired assets, building customer relationships, and achieving the scale necessary to generate meaningful revenues.
• Adverse macroeconomic and geopolitical conditions, including trade policies and tariffs, may have a material adverse effect on our business.
• Challenging macroeconomic conditions, including changes to international trade policies, tariffs, public health crises, disruptions in global supply chains, and changes in inflation and interest rates, may negatively impact our costs and consumer demand for our products.
• The U.S. administration has enacted additional or enhanced tariffs in various jurisdictions relevant to our business.
• Implementation of tariffs or other restrictive trade measures could materially negatively impact our results of operations, both directly and indirectly through negative effects to our supply chain.
• Department of Justice did take action against the cannabis industry, those of our clients operating in the legal cannabis industry would be lost to us.
• We compete with many established wine and beverage companies, marketing service providers, and other businesses for customers’ attention and spending.
• Our quarterly financial results will fluctuate, making it difficult to forecast our results of operations.
• Our revenues and operating results may vary significantly from quarter to quarter due to a number of factors, many of which are beyond our control, including variability in demand and usage for our products and services, market acceptance of new and existing services, and governmental regulations.
• As of December 31, 2025, 1,198,850 shares of Common Stock were issuable pursuant to the exercise of warrants.
• These securities represent, as of December 31, 2025, approximately 12% of our Common Stock on a fully diluted, as exercised basis.

Gone since FY2024

• Our working capital deficit at December 31, 2024 and 2023 amounted to $19.2 million and $14.4 million, respectively.
• Our capital requirements may vary materially from those currently planned if, for example, we incur unforeseen capital expenditures, incur unforeseen operating expenses, or make investments to maintain our competitive position.
• If this is the case, we may have to delay or abandon some or all of our development plans or otherwise forego market opportunities.
• We will need to generate significant revenues to be profitable in the future, and we may not generate sufficient revenues to be profitable on either a quarterly or annual basis in the future.
• We had a net loss from continuing operations of approximately $4.3 million in 2024 and a net loss of approximately $15.2 million in 2023.
• Our indebtedness and interest obligations could, among other things, make it more difficult for us to satisfy our debt obligations, require us to use a large portion of our cash flow from operations to repay and service our debt and preferred stock or otherwise create liquidity problems, limit our flexibility to adjust to market conditions, place us at a competitive disadvantage and expose us to interest rate fluctuations.
• As of December 31, 2024 we had total debt outstanding of $7,630,295, of which $7,510,624 was short term.
• As of December 31, 2024, we had 500 shares of Series A Preferred, Stock, each with a stated value of $1,000 per share which bears interest at 12% per annum, and 3,000 shares of Series B Preferred Stock, each with a stated value of $1,000 per share which bears interest at 6% per annum.
• We expect to obtain the money to pay our expenses and pay the principal and interest on our indebtedness, interest on our preferred stock, and tax liabilities from cash flow from our operations and potentially from securities offerings.
• Accordingly, our ability to meet our obligations depends on our future performance and capital raising activities, which will be affected by financial, business, economic and other factors, many of which are beyond our control.
• If our cash flow and capital resources prove inadequate to allow us to pay the principal and interest on our debt, interest on our preferred stock and meet our other obligations, we could face substantial liquidity problems and might be required to dispose of material assets or operations, restructure or refinance our debt, which we may be unable to do on acceptable terms, and forego attractive business opportunities.
• In addition, the terms of our existing or future debt agreements may restrict us from pursuing any of these alternatives.
• Our independent registered public accounting firm has expressed in its report to our 2024 audited consolidated financial statements a substantial doubt about our ability to continue as a going concern .
• As a result, our independent registered public accounting firm has expressed in its auditors’ report on the consolidated financial statements for December 31, 2024, a substantial doubt regarding our ability to continue as a going concern.
• This going concern opinion could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise.
• Future reports on our financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern.
• If we cannot continue as a going concern, our stockholders may lose their entire investment in the common stock.
• Our quarterly financial results will fluctuate, making it difficult to forecast our results of operation.
• Our revenues and operating results may vary significantly from quarter to quarter due to a number of factors, many of which are beyond our control, including: ● Variability in demand and usage for our products and services; ● Market acceptance of new and existing services offered by us, our competitors and potential competitors; and ● Governmental regulations affecting the use of the Internet, including regulations concerning intellectual property rights and security features.
• Our current and future levels of expenditures are based primarily on our growth plans and estimates of expected future revenues.
• If our operating results fall below the expectation of investors, our stock price will likely decline significantly.
• Adverse macroeconomic and geopolitical conditions, including trade policies and tariffs, may have a material adverse effect on the Company’s business, results of operations and financial condition.
• Challenging macroeconomic conditions, including as a result of geopolitical events, changes to international trade policies, public health crises, disruptions in global supply chains, and changes in inflation and interest rates, may negatively impact our costs from our suppliers and consumer demand for our products, as well as sales cycles, and in turn may materially affect the Company’s business, results of operations and financial condition.
• Such economic factors and uncertainties are beyond the Company’s control and the Company has no comparative advantage in forecasting their effects.
• The U.S. has established free trade laws and regulations that set certain duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements.
• Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where our supplies may be sourced could have a material adverse effect on our business and financial results.
• In recent years, the U.S. and Chinese governments have imposed a series of significant incremental retaliatory tariffs to certain imported products.
• Further, the U.S. administration recently has begun to enact additional or enhanced tariffs in various jurisdictions relevant to our business.
• Implementation of tariffs or other restrictive trade measures by the United States and potentially reciprocally by other countries subject to such to tariffs remains highly uncertain.
• If the actual and potential tariffs and reciprocal tariffs are implemented as currently proposed, our results of operations could be materially negatively impacted, both directly and indirectly through negative effects to our supply chain, as a result of increased costs, decreased demand and other adverse economic impacts, and we may not be able to successfully mitigate or offset such impacts.
• Depending upon their implementation and duration, as well as our ability to mitigate their impact, these tariffs and any other future regulatory actions implemented on a broader range of products or raw materials could materially affect our business, including in the form of increased cost of goods sold, decreased margins, increased pricing for customers, reduced sales and disruption in our supply chain.
• Furthermore, additional trade restrictions could be adopted with little to no advance notice, and we may not be able to effectively mitigate the adverse impacts from such measures, which could further increase the cost of our products, disrupt our supply chain and impair our ability to effectively operate and compete in the countries where we do business.
• The Company is closely monitoring this evolving situation but there can be no assurance that the Company will be able to mitigate the impacts of any trade measures, which could be material to the Company’s business operations or harm the Company’s competitive position.
• The United States Supreme Court has ruled that the Federal government has the right to regulate and criminalize cannabis, even for medical purposes, and thus Federal law criminalizing the use of cannabis preempts state laws that regulate its use.
• Department of Justice (“DOJ”) did take action against the cannabis industry, those of our clients operating in the legal cannabis industry would be lost to us.
• To analyze this risk, we are relying heavily upon the various U.S. federal governmental memos issued in the past (including the memorandum issued by the DOJ on October 19, 2009, known as the “Ogden Memorandum”, the memorandum issued by the DOJ on August 29, 2013, known as the “Cole Memorandum” and other guidance), to remain acceptable to those state and federal entities that regulate, enforce, or choose to defer enforcement of certain current regulations regarding cannabis and that the U.S. federal government will not change its attitude to those practitioners in the cannabis industry as long as they comply with their state and local jurisdictional rules and authorities.
• The legal cannabis industry is not yet well-developed, and many aspects of this industry’s development and evolution cannot be accurately predicted, and therefore losing any clients may have a material adverse effect on our business.
• While we have attempted to identify our business risks in the legal cannabis industry, you should carefully consider that there are other risks that cannot be foreseen or are not described in this annual report, which could materially and adversely affect our business and financial performance.
• As the possession and use of cannabis is illegal under the Federal Controlled Substances Act, we may be deemed to be aiding and abetting illegal activities through the services and data that we provide to cannabis dispensaries, cultivators and consumers.
• As a result, we may be subject to enforcement actions by law enforcement authorities, which would materially and adversely affect our business.

and 98 more.