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, and assumptions used in Black-Scholes valuation methods.

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.

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 business, accounts receivable are due from customers for products sold and services provided. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make payments. The allowance for doubtful accounts as of December 31, 2025 and 2024 amounted to $106,000 and $106,000, respectively, relating to continuing operations.

Inventory

The Company’s inventory from continuing operations consists of wine and related products acquired pursuant to the J Street and Prestige acquisitions, 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 December 31, 2025, inventory from continuing operations was $516,124, of which approximately $413,000 pertained to J Street wine inventory and approximately $103,000 pertained to work-in-progress wine inventory that Prestige is procuring from vendors.

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 $331,325 and $0 at December 31, 2025 and 2024, respectively.

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.  As of December 31, 2025, there was no wine and beverage revenue.

Disaggregation 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 820. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and deferred revenue approximate fair value due to their short-term maturities. The Company’s notes payable approximate fair value due to the market rate of interest on the notes.

Property and Equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives of five years.

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%.

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. As of December 31, 2025, the Company had no outstanding stock options, 1,198,850 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.

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 for the year ended December 31, 2025. Prior period segment information has been retrospectively adjusted to exclude the discontinued Ranco operations. See Note 12 – Discontinued Operations and Note 15 – Segment Reporting. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about significant segment expenses and other segment items on an interim and annual basis. The Company adopted this standard for the fiscal year ended December 31, 2024 and applied the enhanced disclosure requirements retrospectively. The adoption did not have a material impact on the Company’s consolidated financial statements, as the Company has a single reportable segment for continuing operations following the discontinued operations classification.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced disclosures including a rate

reconciliation presented in both percentages and amounts using specific categories, disclosure of income taxes paid disaggregated by federal, state and foreign taxes, and other enhancements. The Company adopted this standard for the fiscal year ended December 31, 2025. The adoption resulted in enhanced disclosures but did not have a material impact on the Company’s consolidated financial statements.

Non-Controlling Interests

The Company accounts for non-controlling interests in accordance with ASC 810, Consolidation. Non-controlling interests represent the portion of equity in a consolidated subsidiary that is not attributable, directly or indirectly, to the Company. Non-controlling interests are reported as a separate component of stockholders’ deficit in the consolidated balance sheets and the share of net income or loss attributable to non-controlling interests is presented separately in the consolidated statements of operations. The Company consolidates entities in which it has a controlling financial interest, which is generally determined by holding a majority voting or membership interest. In the case of limited liability companies, the Company evaluates whether it holds the power to direct the activities that most significantly impact the entity’s economic performance. As of December 31, 2025, the Company consolidates Interstice Cellars LLC, in which J Street Capital Partners, LLC holds a 51% managing membership interest. The remaining 49% is held by two unaffiliated members and is presented as non-controlling interests. See Note 9 – Non-Controlling Interests.

Recent 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.