10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from ________ to ________

Commission File Number: 000-52635

CFN ENTERPRISES INC.

(Exact name of registrant as specified in its charter)

Delaware	20-3858769
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

600 E. 8TH STREET

WHITEFISH, MT 59937

 (Address of principal executive offices) (Zip code)

(833) 420-2636

 (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.  Yes ☒  No ☐

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).  Yes ☒  No ☐

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 ☐
Non-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 ☐  No ☒

The number of shares outstanding of the registrant’s Common Stock, $0.001 par value per share, as of May 17, 2021 was 120,692,209.

When used in this quarterly report, the terms “CFN Enterprises,” “the Company,” “we,” “our,” and “us” refer to CFN Enterprises Inc., a Delaware corporation.

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 2021, 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 March 31, 2021. 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

	Page
PART I - FINANCIAL INFORMATION:	1
Item 1. Financial Statements (Unaudited)	1
Item 2. Management’s Discussion and Analysis of Financial Position and Results of Operations	12
Item 4. Controls and Procedures	18
PART II - OTHER INFORMATION:	18
Item 5. Other Information	18
Item 6. Exhibits	18
SIGNATURES	19

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CFN ENTERPRISES INC.

CONDENSED BALANCE SHEETS

	March 31, 2021	December 31, 2020
	(Unaudited)
Assets
Current assets
Cash	$167,956	$160,115
Restricted cash	20,000	20,000
Accounts receivable, net	132,131	9,000
Inventory	46,558	39,017
Prepaid expenses and other current assets	14,500	14,500
Total current assets	381,146	242,632
Other assets
Investments, at cost	235,000	200,000
Property and equipment	7,273	7,845
Total other assets	242,273	207,845
Total assets	$623,419	$450,477
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable and accrued expenses	$952,095	$946,846
Deferred revenues	138,241	25,815
Current portion of notes payable	232,001	188,249
Current liabilities of discontinued operations	79,823	79,823
Total current liabilities	1,402,161	1,240,733
Long-term note payable, net of current portion and discounts	935,529	714,812
Total liabilities	2,337,689	1,955,545
Commitments and contingencies
Stockholders' deficit
Series A Preferred stock, $0.001 par value, 500 shares authorized, 500 shares issued and outstanding as of March 31, 2021 and December 31, 2020	1	1
Series B Preferred stock, $0.001 par value, 3,000 shares authorized, 3,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020	3	3
Common stock, $0.001 par value, 500,000,000 shares authorized, 118,692,209 and 104,792,209 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	118,692	104,792
Common stock issuable	-	492,500
Additional paid-in capital	34,927,938	34,281,838
Accumulated deficit	(36,760,905)	(36,384,202)
Total stockholders' deficit	(1,714,271)	(1,505,068)
Total liabilities and stockholders' deficit	$623,419	$450,477

See accompanying notes to the unaudited condensed financial statements

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CFN ENTERPRISES INC.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

	For the Three Months Ended
	March 31, 2021	March 31, 2020
Net revenues	$207,642	$112,267
Cost of revenue	127,627	224,164
Gross profit (loss)	80,015	(111,897)
Operating expenses:
Selling, general and administrative	330,031	194,981
Total operating expenses	330,031	194,981
Loss from operations	(250,016)	(306,878)
Other income (expense):
Loss on extinguishment of debt	(52,500)	-
Interest expense	(14,190)	(11,463)
Interest income	2	10
Total other income (expense)	(66,687)	(11,453)
Net loss before provision for income taxes	(316,703)	(318,331)
Provision for income taxes	-	-
Net loss	$(316,703)	$(318,331)
Preferred stock interest	60,000	60,000
Net loss available to common shareholders	$(376,703)	$(378,331)
Net loss per share, basic and diluted	$(0.00)	$(0.00)
Weighted average number of common shares outstanding, basic and diluted	114,924,987	99,679,709

See accompanying notes to the unaudited condensed financial statements

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CFN ENTERPRISES INC.

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

	Series A Preferred Stock		Series B Preferred Stock		Common Stock		Common Stock	Additional Paid-in	Accumulated	Accumulated Other Comprehensive
	Shares	Amount	Shares	Amount	Shares	Amount	Issuable	Capital	Deficit	Income	`	Total
Balance, December 31, 2019	500	$1	3,000	$3	99,679,709	$99,679	$-	$34,031,326	$(34,721,149)	$(83,473)		$(673,613)
Preferred stock interest	-	-	-	-	-	-		-	(60,000)	-		(60,000)
Net loss	-	-	-	-	-	-		-	(318,331)	-		(318,331)
Foreign currency translation	-	-	-	-	-	-		-	-	(456)		(456)
Balance, March 31, 2020	500	$1	3,000	$3	99,679,709	$99,679	$-	$34,031,326	$(35,099,480)	$(83,929)		$(1,052,400)
Balance, December 31, 2020	500	$1	3,000	$3	104,792,209	$104,792	$492,500	34,281,838	$(36,384,202)	$-		$(1,505,068)
Issuance of common stock	-	-	-	-	12,150,000	12,150	(492,500)	490,350	-	-		10,000
Shares issued as payment for accrued interest	-	-	-	-	1,750,000	1,750	-	155,750	-	-		157,500
Preferred stock interest	-	-	-	-	-	-	-	-	(60,000)	-		(60,000)
Net loss	-	-	-	-	-	-	-	-	(316,703)	-		(316,703)
Balance, March 31, 2021	500	$1	3,000	$3	118,692,209	$118,692	$-	$34,927,938	$(36,760,905)	$-		$(1,412,271)

See accompanying notes to the unaudited condensed financial statements

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CFN ENTERPRISES INC.

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

	For the Three Months Ended
	March 31, 2021	March 31, 2020
Cash flows from operating activities
Net loss	$(316,703)	$(318,331)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	572	350
Loss on extinguishment of debt	52,500	-
Amortization of deferred financing cost	1,468	1,463
Provision for bad debt	-	20,000
Changes in operating assets and liabilities:
Accounts receivable	(123,131)	35,906
Inventory	(7,541)	-
Prepaid expenses and other current assets	-	(439)
Accounts payable and accrued expenses	50,250	211,657
Deferred revenue	112,426	25,600
Net cash used in operating activities of continuing operations	(230,160)	(23,794)
Net cash used in operating activities of discontinued operations	-	(4,198)
Net cash used in operating activities	(230,160)	(27,992)
Cash flows from investing activities
Payment for investment	(35,000)	-
Net cash provided by (used in) investing activities	(35,000)	-
Cash flows from financing activities
Proceeds from sale of common stock	10,000	-
Proceeds from promissory note	263,000	-
Payment of preferred stock interest	-	(30,000)
Net cash (used in) provided by financing activities	273,000	(30,000)
Effect of exchange rate fluctuations on cash	-	(1,590)
Net change in cash and restricted cash	7,840	(59,582)
Cash and restricted cash, beginning of the period	180,115	107,727
Cash and restricted cash, end of the period	$187,956	$48,145
Supplemental disclosure of cash flow information:
Interest paid	$-	$-
Income taxes paid	$-	$-
Supplemental disclosure of non-cash investing and financing information:
Accrual of preferred stock interest	$60,000	$30,000
Issuance of common stock sold in previous year	$492,500	$-
Issuance of common stock for payment of accrued preferred stock interest	$157,500	$-

See accompanying notes to the unaudited condensed financial statements

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CFN ENTERPRISES INC.

NOTES TO UNAUDITED CONDENSED 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 the Emerging Growth Agreement with Emerging Growth, LLC, or the Seller or Emerging Growth, pursuant to which the Company acquired certain assets from the Seller related to its sponsored content and marketing business for a purchase price consideration consisting of $420,000 in cash, 30,000,000 shares of the Company’s common stock, and 3,000 shares of Series B preferred stock with a total stated value of $3,000,000 which bears interest at 6% per annum and is convertible into the Company’s common stock at a conversion price to be mutually agreed in the future, without voting rights or a liquidation preference except with respect to default interest.  The securities were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended. The closing of the purchase of the assets pursuant to the Emerging Growth Agreement occurred on June 20, 2019.

The Company’s operations consist of the sponsored content and marketing business from the assets acquired pursuant to the Emerging Growth Agreement.

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 $1,021,015 and an accumulated deficit of $36,760,905 as of March 31, 2021.  The Company also had a net loss of $316,703 for the three months ended March 31, 2021.

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 Emerging Growth Agreement, 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.

COVID-19

The outbreak of a strain of coronavirus (COVID-19) in the U.S. has had an unfavorable impact on our business operations.  Our main customer market suffered its worst decline, decreasing our revenue.  Mandatory closures of businesses imposed by the federal, state and local governments to control the spread of the virus is disrupting the operations of our management, business and finance teams. In addition, the COVID-19 outbreak has adversely affected the U.S. economy and financial markets, which may result in a long-term economic downturn that could negatively affect future performance.  We took steps to diversify our revenue model by creating our CBD ecommerce business which has higher margins during the second half of 2020 and reduce our costs.  The extent to which COVID-19 will impact our business and our consolidated financial results further will depend on future developments which are highly uncertain and cannot be predicted at this time, but may result in a material adverse impact on our business, results of operations and financial condition.

Basis of Presentation

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, 2020 and 2019, which are included in the Company’s December 31, 2020 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on March 31, 2021.  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

5

may be determined in that context. The results of operations for the period ended March 31, 2021 are not necessarily indicative of results for the entire year ending December 31, 2021.

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, such as expected volatility, risk-free interest rate, and expected dividend rate.

Financial Statement Reclassification

Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.

Segment Reporting

The Company’s sponsored content and marketing business acquired from Emerging Growth in June 2019 has historically been its one reportable segment.  In late 2020, the Company launched an e-commerce network focused on the sale of general wellness CBD products.  As of March 31, 2021, sales of these products and the operating activities associated with the e-commerce business have not been significant.  However, management expects this e-commerce business to eventually become a reportable segment under GAAP as the business grows and the activity becomes more significant.

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 restricted cash as a result of its corporate card program through its bank, which requires collateral placed in a money market account. At March 31, 2021, the Company had a restricted cash balance of $20,000 included as a component of total cash and restricted cash as presented on the accompanying unaudited condensed consolidated statement of cash flows.

Accounts Receivable

The Company’s account receivables are due from customers relating to contracts to provide investor relation services. 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 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 March 31, 2021 and December 31, 2020 amounted to $394,720 and $183,750, respectively.

Inventory

The Company’s inventory consists of finished goods acquired for its e-commerce network business it is currently in the process of launching.  The inventory is valued at the lower of cost (first-in, first-out) or estimated net realizable value.

Concentration of Credit Risks

The Company is subject to concentrations of credit risk primarily from cash and cash equivalents and accounts receivable.

6

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 $250,000. From time-to-time, the Company’s bank balances 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 institution in which it holds deposits.

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.

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.

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.

Additional Disclosures Regarding Fair Value Measurements

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and lines of credit 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.

Advertising

The Company expenses advertising costs as incurred. Advertising expenses for the three months ended March 31, 2021 and 2020 amounted to $5,606 and $47,966, respectively.

7

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes. 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. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized, but no less than quarterly.

For interim periods, the Company uses the effective income tax rate method resulting in zero income tax for the three months ended March 31, 2021 and 2020.

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.

Investments

On December 24, 2020, the Company acquired a 9.8% interest in the outstanding stock of a privately held company for $200,000.  As the stock has no readily determinable fair values, the Company accounts for this stock received using the cost method, less adjustments for impairment.  At each reporting period, management reviews the status of the investment to determine if any indicators of impairment have occurred.

On January 22, 2021, the Company invested $35,000 in a new joint venture focused on marketing. The entity is in the formation phase and as such the Company accounts for this investment using the cost method. At each reporting period, management reviews the status of the investment to determine if any indicators of impairment have occurred.

There were no impairment charges recorded related to investments during the three months ended March 31, 2021.

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.

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 March 31, 2021, the Company had 3,160,000 outstanding stock options and 5,256,944 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive.  As of March 31, 2020, the Company had 3,160,000 outstanding stock options and 7,543,944 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive.  As a result, the basic and diluted earnings per share are the same for each of the periods presented.

Share-Based Payment

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.

8

Common stock awards

The Company has granted common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded on the consolidated statement of comprehensive loss in the same manner and charged to the same account as if such settlements had been made in cash.

Warrants

In connection with certain financing, consulting and collaboration arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants are recorded at fair value as expense over the requisite service period or at the date of issuance, if there is not a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 6, Stockholders’ Deficit.

NOTE 3: PROPERTY AND EQUIPMENT

The Company’s property and equipment relating to continuing operations consisted of the following at March 31, 2021 and December 31, 2020.

	March 31 2021	December 31, 2020
Computer equipment and software	$12,546	$12,546
Furniture and equipment	2,227	2,227
	14,773	14,773
Less: accumulated depreciation	(7,500)	(6,928)
	$7,273	$7,845

Depreciation expense for the three months ended March 31, 2021 and 2020 amounted to $572 and $350, respectively.

NOTE 4: NOTES PAYABLE

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. Outstanding principal on the note is due in full on September 30, 2022.

In connection with the promissory note on September 10, 2019, the Company issued warrants to purchase 500,000 shares of the Company’s common stock at an exercise price of $0.10 per share. The warrants expire on September 10, 2024 and are fully vested upon issuance. The note was discounted by $17,624 allocated from the valuation of the warrants issued. The discount recorded on the note is being amortized as interest expense through the maturity date, which amounted to $1,469 and $1,463 for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the net book value of the promissory note amounted to $491,530 including the principal amount outstanding of $500,000 net of the remaining discount of $8,470.

On May 6, 2020, the Company entered into a promissory note, or the Note, with Pacific Western Bank, evidencing an unsecured loan, or the Loan, in the amount of $263,000 made to the Company under the Paycheck Protection Program, or the PPP. The PPP is a program of the U.S. Small Business Administration, or SBA, established under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. Under the PPP, the proceeds of the Loan may be used to pay payroll and make certain covered interest payments, lease payments and utility payments, or the Qualifying Expenses. The Company intends to use the entire Loan amount for Qualifying Expenses under the PPP. Under the terms of the CARES Act, PPP loan recipients can be granted forgiveness for all or a portion of the loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of Qualifying Expenses and the Company maintaining its payroll levels over certain required thresholds under the PPP. The terms of any forgiveness also may be subject to further requirements in any regulations and guidelines the SBA may adopt. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part.

The interest rate on the Loan is 1.0% per annum. The Note matures on May 6, 2022. On December 1, 2020 and on the first day of each month thereafter until May 1, 2022, the Company must make monthly payments of $14,727 under the Loan that is not forgiven in accordance with the terms of the PPP and related accrued interest thereon. The Note contains events of default and other conditions customary for a Note of this type. As of March 31, 2021, the current portion of the Loan due within the next 12 months amounted to $188,249.  The Company has applied for full forgiveness of the amounts due under the Note.

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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.

On February 25, 2021, the Company entered into a secondary promissory note, or the Second PPP Note, with Pacific Western Bank, evidencing an unsecured loan, or the Second Loan, in the amount of $263,000 made to the Company under the PPP. Under the PPP, the proceeds of the Second Loan may be used to pay payroll and make certain covered interest payments, lease payments and utility payments, or the Qualifying Expenses. The Company intends to use the entire Second Loan amount for Qualifying Expenses under the PPP. Under the terms of the CARES Act, PPP loan recipients can be granted forgiveness for all or a portion of the loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of Qualifying Expenses and the Company maintaining its payroll levels over certain required thresholds under the PPP. The terms of any forgiveness also may be subject to further requirements in any regulations and guidelines the SBA may adopt. No assurance can be provided that the Company will obtain forgiveness of the Second Loan in whole or in part.

The interest rate on the Second Loan is 1.0% per annum. The Second PPP Note matures on February 25, 2023. On September 1, 2021 and on the first day of each month thereafter until February 1, 2023, the Company must make monthly payments of $14,727 under the Second Loan that is not forgiven in accordance with the terms of the PPP and related accrued interest thereon. The Second PPP Note contains events of default and other conditions customary for a note of this type. As of March 31, 2021, the current portion of the Second Loan due within the next 12 months amounted to $100,676.  The Company plans to apply for full forgiveness of the Second PPP Note.

Future scheduled maturities of long-term debt are as follows.

	Year Ending December 31,
2021	$232,001
2022	750,217
2023	32,822
2024	3,285
2025	3,416
Thereafter	145,789
Total	$1,167,530

The aggregate current portion of long-term debt as of March 31, 2021 amounted to $232,001, which represents the contractual principal payments due during the remainder of 2021.

NOTE 5: STOCKHOLDERS’ DEFICIT

Common Stock

Effective April 3, 2020, the Company granted 500,000 of restricted shares of its common stock to a consultant for services as an advisory board member, with 250,000 shares vesting immediately and the remainder vesting in four equal quarterly installments commencing on July 1, 2020. During 2020, the Company recorded $10,768 of share-based compensation expense. The arrangement was terminated on July 17, 2020, and the unvested portion of the restricted stock grant of 187,500 shares were forfeited.

Effective August 6, 2020, the Company and Emerging Growth reached an agreement whereby the Company issued 4.8 million shares of its common stock with a value of $240,000 to Emerging Growth as payment for outstanding liabilities due to Emerging Growth totaling $209,931.  The outstanding liabilities due to Emerging Growth included $104,931 in outstanding accrued interest on the Series B Preferred Stock through August 31, 2020, as well as $105,000 of outstanding payables.  The additional $30,069 was recorded as loss on extinguishment of debt during 2020.

Effective October 13, 2020, the Company and the holder of its $500,000 promissory note payable issued on September 10, 2019 (see Note 5) reached an agreement whereby the Company agreed to issue 1,650,000 shares of its common stock with a value of $82,500 to the noteholder as payment of $41,192 of accrued interest on the promissory note.  This resulted in a loss on extinguishment of debt of $41,308 in 2020.  The common shares were issued on January 2, 2021 and are reflected as common shares issuable as of December 31, 2020.

In December 2020, the Company received $410,000 in cash in respect of a sale of an aggregate total of 10,250,000 shares of its

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common stock for proceeds of $420,000.  The Company received the remaining $10,000 for the sale in January 2021 and the common shares were issued in January 2021.  The Company has reflected the $410,000 received in common shares issuable in the statement of shareholders equity.

In January 2021, the Company issued 12,150,000 shares of common stock, of which 11,900,000 were issuable on December 31, 2020 and 250,000 were sold in 2021 for $10,000.

In March 2021, the Company issued 1,750,000 shares of common stock in exchange for $105,000 of interest accrued to Emerging Growth as a result of holding the Series B Preferred stock. The fair value of the shares was $157,500 and the Company recognized a loss on extinguishment of debt in the amount of $52,500.

Preferred Stock

The Company is authorized to issue 2,000,000 shares of preferred stock with a par value of $0.001 per share, of which 500 have been authorized as Series A Preferred Stock and 3,000 have been authorized as Series B Preferred Stock.

On June 20, 2019, the Company issued to certain of its promissory noteholders an aggregate of 500 shares of Series A Preferred Stock, each with a stated value per share of $1,000, as conversion of $500,000 worth of outstanding promissory notes. The Series A Preferred Stock bears interest at 12% per annum, and is convertible into the Company’s common stock at the election of the holder at a conversion price per share to be mutually agreed between the Company and the holder in the future, and be redeemable at the Company’s option following the third year after issuance, without voting rights or a liquidation preference.

On June 20, 2019, the Company issued 3,000 shares of Series B Preferred Stock to Emerging Growth each with a stated value of $1,000 per share, 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 (see Note 4). The Series B Preferred Stock bears interest at 6% per annum and is convertible into the Company’s common stock at the election of Emerging Growth at a conversion price per share to be mutually agreed between the Company and Emerging Growth in the future, without voting rights or a liquidation preference, except with respect to accrued penalty interest.

For the three months ended March 31, 2021 and 2020, the Company incurred $60,000 and $60,000, respectively, of interest from the outstanding preferred stock.

Warrants

The following summarizes the Company’s warrant activity for the three months ended March 31, 2021.

	Warrants	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Life (Years)
Outstanding at December 31, 2020	5,256,944	$0.33	3.56
Forfeited	(69,444)	0.45
Outstanding at March 31, 2021	5,187,500	$0.33	3.36
Vested and expected to vest
at March 31, 2021	5,187,500	$0.33	3.36
Exercisable at March 31, 2020	5,187,500	$0.33	3.36

As of March 31, 2021, 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 22,500,000 shares of Common Stock from either authorized but unissued shares or treasury shares.  The Plan expired on December 14, 2016.

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The following summarizes the Company’s stock option activity for the three months ended March 31, 2021.

	Options	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Life Years)
Outstanding at December 31, 2020	3,160,000	$0.33	1.44
Granted/forfeited/cancelled	-
Outstanding at March 31, 2021	3,160,000	$0.33	1.19
Vested and expected to vest
at March 31, 2021	3,160,000	$0.33	1.19
Exercisable at March 31, 2021	3,160,000	$0.33	1.19

As of March 31, 2021, all outstanding options were fully vested and there is no remaining unrecorded compensation expense.

NOTE 6: COMMITMENTS AND CONTINGENCIES

Leases

On June 20, 2019, the Company entered into a Lease Agreement with Emerging Growth for the lease of office space in Whitefish, Montana, for a period of one year at a rate of $1,500 per month. On August 5, 2020, the Company entered into a lease agreement with Emerging Growth for additional office space in Whitefish, Montana, replacing its previous lease from June 20, 2019. The term of the lease commenced on September 1, 2020 for a period of one year at a rate of $4,500 per month.  The lease contains an option for the Company to renew the lease for a period of one additional year at a monthly rent subject to a 3% increase.  Management has elected a policy to exclude leases with an initial term of 12 months or less from the balance sheet presentation required under ASC 842. As a result, the office lease has been excluded from balance sheet presentation as it has an original term of 12 months or less.

On March 30, 2021, the Company entered into a new lease with Emerging Growth, which will take the place of the old lease effective April 1, 2021. The lease provides for payments of $4,500 per month, and has a term of three years. Starting on April 1, 2021, the Company will present this lease in accordance with ASC 842, Leases. The present value of the future lease payments is $144,560, which will be recorded as a lease liability and a right-to-use asset on the Company’s balance sheet.

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 7: SUBSEQUENT EVENTS

On April 1, 2021, the Company commenced a new lease for its office space in Whitefish, Montana. The lease has a three-year term and initial payments of $4,500 per month. On that date, the Company will record a right-to-use asset and related lease liability of $144,960 to be amortized over the three-year term of the lease.

Effective May 14, 2021, the Company and the holder of its $500,000 promissory note issued on September 10, 2019 (see Note 4) reached an agreement whereby the noteholder and the Company agreed to extend the maturity date of the note from September 30, 2022 to September 30, 2024. In connection with the extension, the Company agreed to issue 2 million shares of its common stock to the noteholder in lieu of $40,000 of interest accrued and accruing on the promissory note through December 31, 2021.

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, 2020. 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.

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Overview

We own and operate a cannabis industry focused sponsored content and marketing business, or the CFN Business. Our ongoing operations currently consist primarily of the CFN 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.

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.

The CFN Business’ primary expenses come from advertising on platforms like Twitter and Facebook and from employee salaries and contractor fees. The CFN Business’ content is primarily produced by a team of freelance writers and video content is produced through various vendors. The CFN Business also incurs hosting and development costs associated with maintaining and improving its website, web applications, and mobile applications. The CFN Business operates several media platforms, including CannabisFN.com, the CannabisFN iOS app, the CFN Media YouTube channel, the CFN Media podcast, and other venues. These properties are designed to educate and inform investors interested in the cannabis industry, as well as provide a platform for the clients of the CFN Business to reach investors. The CFN Business distributes content across numerous online platforms, including the CannabisFN.com website, press releases, financial news syndicates, search engines, YouTube, iTunes, Twitter, Instagram, Facebook, LinkedIn, and others.

The CFN Business targets the legal cannabis industry. According to Grand View Research, the global cannabis industry is expected to reach $146.4 billion by 2025, driven by the legalization of medical and adult-use cannabis across a growing number of jurisdictions. According to the Marijuana Index, there are approximately 400 public companies involved in the cannabis industry, which represents the primary target market of the CFN Business. The CFN Business’ services are designed to help private companies prepare to go public and public companies grow their shareholder base through sponsored content and marketing outreach. The success of the CFN Business depends on the legal status of cannabis, investor demand for cannabis investments, and numerous other external factors.

The CFN Business competes with other public relations firms for clients, as well as online publishers for investors. Public relations competition includes investor awareness firms like Stockhouse Publishing, Catalyst Xchange, Stonebridge Partners and Midan Ventures. Online publisher competition includes firms like New Cannabis Ventures, Leafly and High Times. The CFN Business is regulated by rules established by the SEC, FINRA, and certain federal and state cannabis regulations.

Our corporate website is: www.cfnenterprisesinc.com, the contents of which are not part of this quarterly report.

Our Common Stock is quoted on the OTCQB Marketplace under the symbol "CNFN."

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Results of Operations for the Three Months Ended March 31, 2021 and 2020

The following are the results of our operations for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020:

	For the Three Months Ended
	March 31, 2021	March 31, 2020	Change
Net revenues	$207,632	$112,267	$95,375
Cost of revenue	127,627	224,164	(96,537)
Gross profit (loss)	80,015	(111,897)	191,912
Operating expenses:
Selling, general and administrative	330,031	194,981	135,050
Total operating expenses	330,031	194,981	135,050
Loss from operations	(250,016)	(306,878)	56,892
Other income (expense):
Loss on extinguishment of debt	(52,500)	-	(52,500)
Interest expense	(14,190)	(11,463)	(2,727)
Interest income	2	10	(8)
Total other income (expense)	(66,687)	(11,453)	(55,234)
Net loss before provision for income taxes	(316,703)	(318,331)	1,628
Provision for income taxes	-	-	-
Net loss	$(316,703)	$(318,331)	$1,628

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Net Revenues

The Company’s revenues 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.

During the three months ended March 31, 2021, the Company started fourteen new campaigns, compared with five during the same period in 2020. These campaigns have a value of $432,500 which will be recognized as revenue over the next three to six months. In 2020, the cumulative value of campaigns begun in the first three months was $117,500 with much of the revenue recognized during the first quarter of 2020 attributable to the final stages of campaigns started in previous quarters.

Cost of Revenue

The costs of revenue consist primarily of labor, fees paid for production of content for clients and the costs of placement of the content on various platforms. In 2020, the contracts required more production services and related labor than the contracts in 2021. As a result, the cost of revenue in 2021 was lower as a percentage of the revenue recognized during the quarter.

Operating Expenses

Our operating expenses for the three months ended March 31, 2021 were higher than those in the corresponding three months in 2020 due largely to professional service fees related to the audit and filing of our Form 10-K for the year ended December 31, 2020. For the year ended December 31, 2019, we did not incur these fees until the second quarter of 2020.

Other Income/Expense

Other expenses increased during the first three months of 2021 due to the loss on extinguishment of debt we incurred as we issued common stock in payment of interest payable to our Preferred stockholders. We did not have a similar loss during the three months ended March 31, 2020.

Liquidity, Capital Resources and Going Concern

On May 6, 2020, we received $263,000 in the form of a loan from the PPP, as well $150,000 in proceeds from a loan with the SBA on June 24, 2020. We also received a second PPP loan of $263,000 on February 25, 2021. Our plan to continue as a going concern includes raising additional capital in the form of debt or equity, growing the business acquired under the Emerging Growth Agreement and managing and reducing operating and overhead costs. We cannot provide any assurance that unforeseen circumstances that could occur at any time within the next twelve months or thereafter will not increase the need for us to raise additional capital on an immediate basis.

These matters, among others, raise substantial doubt about our ability 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 we be unable to continue as a going concern.

The following is a summary of our cash flows from operating, investing and financing activities for the three months ended March 31, 2021 and 2020.

	Three Months Ended
	March 31, 2021	March 31, 2020
Cash flows used in operating activities	$(230,160)	$(27,992)
Cash flows provided by (used in) investing activities	$(35,000)	$-
Cash flows provided by (used in) financing activities	$273,000	$(30,000)

As of March 31, 2021, we had unrestricted cash of $167,956.

Net cash used in operating activities was $230,160 during the three months ended March 31, 2021, compared to cash used in operating activities of $27,992 during the same period in 2020. The cash used in operating activities in 2021 was primarily the result of the net loss during the period, after adding back the noncash loss on extinguishment of debt. During the three months ended March 31, 2020, the cash expended in the net loss of $318,331 was offset by allowing the payables to age longer and collecting the receivables faster.

Net cash used in investing activities during the three months ended March 31, 2020 was due to a new investment in a marketing startup.

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Net cash provided by financing activities during the three months ended March 31, 2021 of $273,000 was the result of proceeds from a second PPP loan of $263,000 and the sale of common stock for $10,000. The cash used in financing activities in 2020 was due to an interest payment to Preferred shareholders.

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. Outstanding principal on the note is due in full on September 30, 2022.

In connection with the promissory note on September 10, 2019, the Company issued warrants to purchase 500,000 shares of the Company’s common stock at an exercise price of $0.10 per share. The warrants expire on September 10, 2024 and are fully vested upon issuance. The note was discounted by $17,624 allocated from the valuation of the warrants issued. The discount recorded on the note is being amortized as interest expense through the maturity date, which amounted to $1,469 and $1,463 for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the net book value of the promissory note amounted to $491,530 including the principal amount outstanding of $500,000 net of the remaining discount of $8,470.

On May 6, 2020, the Company entered into a promissory note, or the Note, with Pacific Western Bank, evidencing an unsecured loan, or the Loan, in the amount of $263,000 made to the Company under the Paycheck Protection Program, or the PPP. The PPP is a program of the U.S. Small Business Administration, or SBA, established under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. Under the PPP, the proceeds of the Loan may be used to pay payroll and make certain covered interest payments, lease payments and utility payments, or the Qualifying Expenses. The Company intends to use the entire Loan amount for Qualifying Expenses under the PPP. Under the terms of the CARES Act, PPP loan recipients can be granted forgiveness for all or a portion of the loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of Qualifying Expenses and the Company maintaining its payroll levels over certain required thresholds under the PPP. The terms of any forgiveness also may be subject to further requirements in any regulations and guidelines the SBA may adopt. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part.

The interest rate on the Loan is 1.0% per annum. The Note matures on May 6, 2022. On December 1, 2020 and on the first day of each month thereafter until May 1, 2022, the Company must make monthly payments of $14,727 under the Loan that is not forgiven in accordance with the terms of the PPP and related accrued interest thereon. The Note contains events of default and other conditions customary for a Note of this type. As of March 31, 2021, the current portion of the Loan due within the next 12 months amounted to $188,249.  The Company has applied for full forgiveness of the amounts due under the Note.

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.

On February 25, 2021, the Company entered into a secondary promissory note, or the Second PPP Note, with Pacific Western Bank, evidencing an unsecured loan, or the Second Loan, in the amount of $263,000 made to the Company under the PPP. Under the PPP, the proceeds of the Second Loan may be used to pay payroll and make certain covered interest payments, lease payments and utility payments, or the Qualifying Expenses. The Company intends to use the entire Second Loan amount for Qualifying Expenses under the PPP. Under the terms of the CARES Act, PPP loan recipients can be granted forgiveness for all or a portion of the loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of Qualifying Expenses and the Company maintaining its payroll levels over certain required thresholds under the PPP. The terms of any forgiveness also may be subject to further requirements in any regulations and guidelines the SBA may adopt. No assurance can be provided that the Company will obtain forgiveness of the Second Loan in whole or in part.

The interest rate on the Second Loan is 1.0% per annum. The Second PPP Note matures on February 25, 2023. On September 1, 2021 and on the first day of each month thereafter until February 1, 2023, the Company must make monthly payments of $14,727 under the Second Loan that is not forgiven in accordance with the terms of the PPP and related accrued interest thereon. The Second PPP Note contains events of default and other conditions customary for a note of this type. As of March 31, 2021, the current portion of the Second Loan due within the next 12 months amounted to $100,676.  The Company plans to apply for full forgiveness of the Second PPP Note.

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Future scheduled maturities of long-term debt are as follows.

	Year Ending December 31,
2021	$232,001
2022	750,217
2023	32,822
2024	3,285
2025	3,416
Thereafter	145,789
Total	$1,167,530

The aggregate current portion of long-term debt as of March 31, 2021 amounted to $232,001, which represents the contractual principal payments due during the remainder of 2021.

Obligations Under Preferred Stock

On June 20, 2019, existing debtholders with outstanding principal balances totaling $500,000 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 March 31, 2021

Warrants

As of March 31, 2021, 5,187,500 shares of our common stock are issuable pursuant to the exercise of warrants.

Options

As of March 31, 2021, 3,160,000 shares of our common stock are issuable pursuant to the exercise of options.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

COVID-19

The outbreak of a strain of coronavirus (COVID-19) in the U.S. has had an unfavorable impact on our business operations.  Our main customer market suffered its worst decline, decreasing our revenue.  Mandatory closures of businesses imposed by the federal, state and local governments to control the spread of the virus is disrupting the operations of our management, business and finance teams. In addition, the COVID-19 outbreak has adversely affected the U.S. economy and financial markets, which may result in a long-term economic downturn that could negatively affect future performance.  We took steps to diversify our revenue model by creating our CBD ecommerce business which has higher margins during the second half of 2020 and reduce our costs.  The extent to which COVID-19 will impact our business and our consolidated financial results further will depend on future developments which are highly uncertain and cannot be predicted at this time, but may result in a material adverse impact on our business, results of operations and financial condition.

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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 March 31, 2021, our disclosure controls and procedures were not effective.

Changes in Internal Control Over Financial Reporting

During 2019, in order to remediate the segregation of duties and other deficiencies initially created by the departure of our accounting department in June 2019, 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, brought on in-part by COVID-19, 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 events, the following information is included in this Form 10-Q pursuant to Item 1.01 “Entry into a Material Definitive Agreement,” and Item 3.02 “Unregistered Sales of Equity Securities” of Form 8-K in lieu of filing a Form 8-K.

Effective May 14, 2021, the Company and the holder of its $500,000 promissory note issued on September 10, 2019 (see Note 4) reached an agreement whereby the noteholder and the Company agreed to extend the maturity date of the note from September 30, 2022 to September 30, 2024. In connection with the extension, the Company agreed to issue 2 million shares of its common stock to the noteholder in lieu of $40,000 of interest accrued and accruing on the promissory note through December 31, 2021. The shares were issued under the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as not involving a public offering.

Item 6.  Exhibits

10.1	Form of Securities Purchase Agreement dated January 6, 2021 (incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 31, 2021).
10.2	Common Stock and Common Unit Investment Agreement among CFN Enterprises Inc., Innovation Labs Ltd. And Innovation Shares LLC (incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 31, 2021).
10.3	Form of Promissory Note issued on February 8, 2021 (incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 31, 2021).
10.4	Lease Agreement dated March 30, 2021 (incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 31, 2021).
31.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14(a) and15d-14(a).*
32.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. 1350.**
101.	The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, 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. 

18

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: May 17, 2021	By:	/s/ Brian Ross
		Brian Ross President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)

19

EX-31.1

Exhibit 31.1

CERTIFICATION

Pursuant to Rule 13a-14(a) and 15d-14(a)

Under the Securities Exchange Act of 1934, as Amended

I, Brian Ross, certify that:

1.I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2021 of CFN Enterprises Inc.; 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report; 

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. 

5.The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): 

a)All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and 

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 

Date: May 17, 2021

/s/ Brian Ross

Brian Ross

President and Chief Executive Officer

(Principal Executive Officer and
Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report (the “Report”) of CFN Enterprises Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof, I, Brian Ross, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

Date: May 17, 2021

/s/ Brian Ross

Brian Ross

President and Chief Executive Officer

(Principal Executive Officer and
Principal Financial Officer)

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 17, 2021
Customer Two [Member]
Entity Registrant Name	CFN ENTERPRISES INC.
Entity Central Index Key	0001352952
Current Fiscal Year End Date	--12-31
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	600 E.
Entity Address, Address Line Two	8th STREET
Entity Address, City or Town	WHITEFISH
Entity Address, State or Province	MT
Entity Address, Postal Zip Code	59937
City Area Code	833
Local Phone Number	420-2636
Entity File Number	000-52635
Tax Identification Number (TIN)	20-3858769
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		120,692,209
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Title of 12(g) Security	Common Stock, par value $0.001

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Current assets
Cash	$ 167,956	$ 160,115
Restricted cash	20,000	20,000
Accounts receivable, net	132,131	9,000
Inventory	46,558	39,017
Prepaid expenses and other current assets	14,500	14,500
Total current assets	381,146	242,632
Other assets
Investments, at cost	235,000	200,000
Property and equipment	7,273	7,845
Total other assets	242,273	207,845
Total assets	623,419	450,477
Current liabilities
Accounts payable and accrued expenses	952,095	946,846
Deferred revenues	138,241	25,815
Current portion of notes payable	232,001	188,249
Current liabilities of discontinued operations	79,823	79,823
Total current liabilities	1,402,161	1,240,733
Long-term note payable, net of current portion and discounts	935,529	714,812
Total liabilities	2,337,689	1,955,545
Stockholders' deficit
Common stock, $0.001 par value, 500,000,000 shares authorized, 118,692,209 and 104,792,209 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	118,692	104,792
Common stock issuable	0	492,500
Additional paid-in capital	34,927,938	34,281,838
Accumulated deficit	(36,760,905)	(36,384,202)
Total stockholders' deficit	(1,714,271)	(1,505,068)
Total liabilities and stockholders' deficit	623,419	450,477
Series A Preferred Stock [Member]
Stockholders' deficit
Preferred stock	1	1
Series B Preferred Stock [Member]
Stockholders' deficit
Preferred stock	$ 3	$ 3

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	118,692,209	104,792,209
Common stock, shares outstanding (in shares)	118,692,209	104,792,209
Series A Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	500	500
Preferred stock, shares issued (in shares)	500	500
Preferred stock, shares outstanding (in shares)	500	500
Series B Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	3,000	3,000
Preferred stock, shares issued (in shares)	3,000	3,000
Preferred stock, shares outstanding (in shares)	3,000	3,000

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Net revenues	$ 207,642	$ 112,267
Cost of revenue	127,627	224,164
Gross profit (loss)	80,015	(111,897)
Operating expenses:
Selling, general and administrative	330,031	194,981
Total operating expenses	330,031	194,981
Loss from operations	(250,016)	(306,878)
Other income (expense):
Loss on extinguishment of debt	(52,500)	0
Interest expense	(14,190)	(11,463)
Interest income	2	10
Total other income (expense)	(66,687)	(11,453)
Net loss before provision for income taxes	(316,703)	(318,331)
Provision for income taxes	0	0
Net loss	(316,703)	(318,331)
Preferred stock interest	60,000	60,000
Net loss available to common shareholders	$ (376,703)	$ (378,331)
Net loss per share, basic and diluted	$ 0.00	$ 0.00
Weighted average number of common shares outstanding, basic and diluted	114,924,987	99,679,709

XML

Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($)	Series A Preferred Stock	Series B Preferred Stock	Common Stock [Member]	Common Stock Issuable	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance (in shares) at Dec. 31, 2019	500	3,000	99,679,709
Balance at Dec. 31, 2019	$ 1	$ 3	$ 99,679		$ 34,031,326	$ (34,721,149)	$ (83,473)	$ (673,613)
Preferred stock interest						(60,000)		(60,000)
Net loss						(318,331)		(318,331)
Foreign currency translation							(456)	(456)
Balance (in shares) at Mar. 31, 2020	500	3,000	99,679,709
Balance at Mar. 31, 2020	$ 1	$ 3	$ 99,679		34,031,326	(35,099,480)	(83,929)	(1,052,400)
Balance (in shares) at Dec. 31, 2020	500	3,000	104,792,209
Balance at Dec. 31, 2020	$ 1	$ 3	$ 104,792	492,500	34,281,838	(36,384,202)		(1,505,068)
Issuance of common stock, shares			12,150,000
Issuance of common stock, value			$ 12,150	(492,500)	490,350			10,000
Shares issued as payment for accrued interest, shares			1,750,000
Shares issued as payment for accrued interest, value			$ 1,750		155,750			157,500
Preferred stock interest						(60,000)		(60,000)
Net loss						(316,703)		(316,703)
Balance (in shares) at Mar. 31, 2021	500	3,000	118,692,209
Balance at Mar. 31, 2021	$ 1	$ 3	$ 118,692		$ 34,927,938	$ (36,760,905)		$ (1,714,271)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities
Net loss	$ (316,703)	$ (318,331)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	572	350
Loss on extinguishment of debt	52,500	0
Amortization of deferred financing cost	1,468	1,463
Provision for bad debt	0	20,000
Changes in operating assets and liabilities:
Accounts receivable	(123,131)	35,906
Inventory	(7,541)	0
Prepaid expenses and other current assets	0	(439)
Accounts payable and accrued expenses	50,250	211,657
Deferred revenue	112,426	25,600
Net cash used in operating activities of continuing operations	(230,160)	(23,794)
Net cash used in operating activities of discontinued operations	0	(4,198)
Net cash used in operating activities	(230,160)	(27,992)
Cash flows from investing activities
Payment for investment	(35,000)	0
Net cash provided by (used in) investing activities	(35,000)	0
Cash flows from financing activities
Proceeds from sale of common stock	10,000	0
Proceeds from promissory note	263,000	0
Payment of preferred stock interest	0	(30,000)
Net cash (used in) provided by financing activities	273,000	(30,000)
Effect of exchange rate fluctuations on cash	0	(1,590)
Net change in cash and restricted cash	7,840	(59,582)
Cash and restricted cash, beginning of the period	180,115	107,727
Cash and restricted cash, end of the period	187,956	48,145
Supplemental disclosure of cash flow information:
Interest paid	0	0
Income taxes paid	0	0
Supplemental disclosure of non-cash investing and financing information:
Accrual of preferred stock interest	60,000	30,000
Issuance of common stock sold in previous year	492,500	0
Issuance of common stock for payment of accrued preferred stock interest	$ 157,500	$ 0

XML

Note 1 - Organization and Basis of Presentation

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

Note 1 - Organization and Basis of Presentation

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 the Emerging Growth Agreement with Emerging Growth, LLC, or the Seller or Emerging Growth, pursuant to which the Company acquired certain assets from the Seller related to its sponsored content and marketing business for a purchase price consideration consisting of $420,000 in cash, 30,000,000 shares of the Company’s common stock, and 3,000 shares of Series B preferred stock with a total stated value of $3,000,000 which bears interest at 6% per annum and is convertible into the Company’s common stock at a conversion price to be mutually agreed in the future, without voting rights or a liquidation preference except with respect to default interest.  The securities were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended. The closing of the purchase of the assets pursuant to the Emerging Growth Agreement occurred on June 20, 2019.

The Company’s operations consist of the sponsored content and marketing business from the assets acquired pursuant to the Emerging Growth Agreement.

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 $1,021,015 and an accumulated deficit of $36,760,905 as of March 31, 2021.  The Company also had a net loss of $316,703 for the three months ended March 31, 2021.

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 Emerging Growth Agreement, 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.

COVID-19

The outbreak of a strain of coronavirus (COVID-19) in the U.S. has had an unfavorable impact on our business operations.  Our main customer market suffered its worst decline, decreasing our revenue. Mandatory closures of businesses imposed by the federal, state and local governments to control the spread of the virus is disrupting the operations of our management, business and finance teams. In addition, the COVID-19 outbreak has adversely affected the U.S. economy and financial markets, which may result in a long-term economic downturn that could negatively affect future performance.  We took steps to diversify our revenue model by creating our CBD ecommerce business which has higher margins during the second half of 2020 and reduce our costs. The extent to which COVID-19 will impact our business and our consolidated financial results further will depend on future developments which are highly uncertain and cannot be predicted at this time, but may result in a material adverse impact on our business, results of operations and financial condition.

Basis of Presentation

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, 2020 and 2019, which are included in the Company’s December 31, 2020 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on March 31, 2021.  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 March 31, 2021 are not necessarily indicative of results for the entire year ending December 31, 2021.

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Note 2 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

Note 2 - Summary of Significant Accounting Policies

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, such as expected volatility, risk-free interest rate, and expected dividend rate.

Financial Statement Reclassification

Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.

Segment Reporting

The Company’s sponsored content and marketing business acquired from Emerging Growth in June 2019 has historically been its one reportable segment. In late 2020, the Company launched an e-commerce network focused on the sale of general wellness CBD products. As of March 31, 2021, sales of these products and the operating activities associated with the e-commerce business have not been significant. However, management expects this e-commerce business to eventually become a reportable segment under GAAP as the business grows and the activity becomes more significant.

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 restricted cash as a result of its corporate card program through its bank, which requires collateral placed in a money market account. At March 31, 2021, the Company had a restricted cash balance of $20,000 included as a component of total cash and restricted cash as presented on the accompanying unaudited condensed consolidated statement of cash flows.

Accounts Receivable

The Company’s account receivables are due from customers relating to contracts to provide investor relation services. 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 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 March 31, 2021 and December 31, 2020 amounted to $394,720 and $183,750, respectively.

Inventory

The Company’s inventory consists of finished goods acquired for its e-commerce network business it is currently in the process of launching. The inventory is valued at the lower of cost (first-in, first-out) or estimated net realizable value.

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 $250,000. From time-to-time, the Company’s bank balances 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 institution in which it holds deposits.

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.

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.

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.

Additional Disclosures Regarding Fair Value Measurements

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and lines of credit 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.

Advertising

The Company expenses advertising costs as incurred. Advertising expenses for the three months ended March 31, 2021 and 2020 amounted to $5,606 and $47,966, respectively.

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes. 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. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized, but no less than quarterly.

For interim periods, the Company uses the effective income tax rate method resulting in zero income tax for the three months ended March 31, 2021 and 2020.

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.

Investments

On December 24, 2020, the Company acquired a 9.8% interest in the outstanding stock of a privately held company for $200,000. As the stock has no readily determinable fair values, the Company accounts for this stock received using the cost method, less adjustments for impairment. At each reporting period, management reviews the status of the investment to determine if any indicators of impairment have occurred.

On January 22, 2021, the Company invested $35,000 in a new joint venture focused on marketing. The entity is in the formation phase and as such the Company accounts for this investment using the cost method. At each reporting period, management reviews the status of the investment to determine if any indicators of impairment have occurred.

There were no impairment charges recorded related to investments during the three months ended March 31, 2021.

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.

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 March 31, 2021, the Company had 3,160,000 outstanding stock options and 5,256,944 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive. As of March 31, 2020, the Company had 3,160,000 outstanding stock options and 7,543,944 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive. As a result, the basic and diluted earnings per share are the same for each of the periods presented.

Share-Based Payment

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.

Common stock awards

The Company has granted common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded on the consolidated statement of comprehensive loss in the same manner and charged to the same account as if such settlements had been made in cash.

Warrants

In connection with certain financing, consulting and collaboration arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants are recorded at fair value as expense over the requisite service period or at the date of issuance, if there is not a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 6, Stockholders’ Deficit.

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Note 3 - Property and Equipment

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

Note 3 - Property and Equipment

NOTE 3: PROPERTY AND EQUIPMENT

The Company’s property and equipment relating to continuing operations consisted of the following at March 31, 2021 and December 31, 2020.

	March 31 2021	December 31, 2020
Computer equipment and software	$ 12,546	$ 12,546
Furniture and equipment	2,227	2,227
	14,773	14,773
Less: accumulated depreciation	(7,500)	(6,928)
	$ 7,273	$ 7,845

Depreciation expense for the three months ended March 31, 2021 and 2020 amounted to $572 and $350, respectively.

XML

Note 4 - Notes Payable

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

Note 4 - Note Payable

NOTE 4: NOTES PAYABLE

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. Outstanding principal on the note is due in full on September 30, 2022.

In connection with the promissory note on September 10, 2019, the Company issued warrants to purchase 500,000 shares of the Company’s common stock at an exercise price of $0.10 per share. The warrants expire on September 10, 2024 and are fully vested upon issuance. The note was discounted by $17,624 allocated from the valuation of the warrants issued. The discount recorded on the note is being amortized as interest expense through the maturity date, which amounted to $1,469 and $1,463 for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the net book value of the promissory note amounted to $491,530 including the principal amount outstanding of $500,000 net of the remaining discount of $8,470.

On May 6, 2020, the Company entered into a promissory note, or the Note, with Pacific Western Bank, evidencing an unsecured loan, or the Loan, in the amount of $263,000 made to the Company under the Paycheck Protection Program, or the PPP. The PPP is a program of the U.S. Small Business Administration, or SBA, established under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. Under the PPP, the proceeds of the Loan may be used to pay payroll and make certain covered interest payments, lease payments and utility payments, or the Qualifying Expenses. The Company intends to use the entire Loan amount for Qualifying Expenses under the PPP. Under the terms of the CARES Act, PPP loan recipients can be granted forgiveness for all or a portion of the loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of Qualifying Expenses and the Company maintaining its payroll levels over certain required thresholds under the PPP. The terms of any forgiveness also may be subject to further requirements in any regulations and guidelines the SBA may adopt. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part.

The interest rate on the Loan is 1.0% per annum. The Note matures on May 6, 2022. On December 1, 2020 and on the first day of each month thereafter until May 1, 2022, the Company must make monthly payments of $14,727 under the Loan that is not forgiven in accordance with the terms of the PPP and related accrued interest thereon. The Note contains events of default and other conditions customary for a Note of this type. As of March 31, 2021, the current portion of the Loan due within the next 12 months amounted to $188,249. The Company has applied for full forgiveness of the amounts due under the Note.

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.

On February 25, 2021, the Company entered into a secondary promissory note, or the Second PPP Note, with Pacific Western Bank, evidencing an unsecured loan, or the Second Loan, in the amount of $263,000 made to the Company under the PPP. Under the PPP, the proceeds of the Second Loan may be used to pay payroll and make certain covered interest payments, lease payments and utility payments, or the Qualifying Expenses. The Company intends to use the entire Second Loan amount for Qualifying Expenses under the PPP. Under the terms of the CARES Act, PPP loan recipients can be granted forgiveness for all or a portion of the loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of Qualifying Expenses and the Company maintaining its payroll levels over certain required thresholds under the PPP. The terms of any forgiveness also may be subject to further requirements in any regulations and guidelines the SBA may adopt. No assurance can be provided that the Company will obtain forgiveness of the Second Loan in whole or in part.

The interest rate on the Second Loan is 1.0% per annum. The Second PPP Note matures on February 25, 2023. On September 1, 2021 and on the first day of each month thereafter until February 1, 2023, the Company must make monthly payments of $14,727 under the Second Loan that is not forgiven in accordance with the terms of the PPP and related accrued interest thereon. The Second PPP Note contains events of default and other conditions customary for a note of this type. As of March 31, 2021, the current portion of the Second Loan due within the next 12 months amounted to $100,676. The Company plans to apply for full forgiveness of the Second PPP Note.

Future scheduled maturities of long-term debt are as follows.

	Year Ending December 31,
2021	$ 232,001
2022	750,217
2023	32,822
2024	3,285
2025	3,416
Thereafter	145,789
Total	$ 1,167,530

The aggregate current portion of long-term debt as of March 31, 2021 amounted to $232,001, which represents the contractual principal payments due during the remainder of 2021.

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Note 5 - Stockholders' Deficit

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

Note 6 - Stockholders' Deficit

NOTE 5: STOCKHOLDERS’ DEFICIT

Common Stock

Effective April 3, 2020, the Company granted 500,000 of restricted shares of its common stock to a consultant for services as an advisory board member, with 250,000 shares vesting immediately and the remainder vesting in four equal quarterly installments commencing on July 1, 2020. During 2020, the Company recorded $10,768 of share-based compensation expense. The arrangement was terminated on July 17, 2020, and the unvested portion of the restricted stock grant of 187,500 shares were forfeited.

Effective August 6, 2020, the Company and Emerging Growth reached an agreement whereby the Company issued 4.8 million shares of its common stock with a value of $240,000 to Emerging Growth as payment for outstanding liabilities due to Emerging Growth totaling $209,931. The outstanding liabilities due to Emerging Growth included $104,931 in outstanding accrued interest on the Series B Preferred Stock through August 31, 2020, as well as $105,000 of outstanding payables. The additional $30,069 was recorded as loss on extinguishment of debt during 2020.

Effective October 13, 2020, the Company and the holder of its $500,000 promissory note payable issued on September 10, 2019 (see Note 5) reached an agreement whereby the Company agreed to issue 1,650,000 shares of its common stock with a value of $82,500 to the noteholder as payment of $41,192 of accrued interest on the promissory note. This resulted in a loss on extinguishment of debt of $41,308 in 2020. The common shares were issued on January 2, 2021 and are reflected as common shares issuable as of December 31, 2020.

In December 2020, the Company received $410,000 in cash in respect of a sale of an aggregate total of 10,250,000 shares of its common stock for proceeds of $420,000. The Company received the remaining $10,000 for the sale in January 2021 and the common shares were issued in January 2021. The Company has reflected the $410,000 received in common shares issuable in the statement of shareholders equity.

In January 2021, the Company issued 12,150,000 shares of common stock, of which 11,900,000 were issuable on December 31, 2020 and 250,000 were sold in 2021 for $10,000.

In March 2021, the Company issued 1,750,000 shares of common stock in exchange for $105,000 of interest accrued to Emerging Growth as a result of holding the Series B Preferred stock. The fair value of the shares was $157,500 and the Company recognized a loss on extinguishment of debt in the amount of $52,500.

Preferred Stock

The Company is authorized to issue 2,000,000 shares of preferred stock with a par value of $0.001 per share, of which 500 have been authorized as Series A Preferred Stock and 3,000 have been authorized as Series B Preferred Stock.

On June 20, 2019, the Company issued to certain of its promissory noteholders an aggregate of 500 shares of Series A Preferred Stock, each with a stated value per share of $1,000, as conversion of $500,000 worth of outstanding promissory notes. The Series A Preferred Stock bears interest at 12% per annum, and is convertible into the Company’s common stock at the election of the holder at a conversion price per share to be mutually agreed between the Company and the holder in the future, and be redeemable at the Company’s option following the third year after issuance, without voting rights or a liquidation preference.

On June 20, 2019, the Company issued 3,000 shares of Series B Preferred Stock to Emerging Growth each with a stated value of $1,000 per share, 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 (see Note 4). The Series B Preferred Stock bears interest at 6% per annum and is convertible into the Company’s common stock at the election of Emerging Growth at a conversion price per share to be mutually agreed between the Company and Emerging Growth in the future, without voting rights or a liquidation preference, except with respect to accrued penalty interest.

For the three months ended March 31, 2021 and 2020, the Company incurred $60,000 and $60,000, respectively, of interest from the outstanding preferred stock.

Warrants

The following summarizes the Company’s warrant activity for the three months ended March 31, 2021.

	Warrants	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Life (Years)
Outstanding at December 31, 2020	5,256,944	$ 0.33	3.56
Forfeited	(69,444)	0.45
Outstanding at March 31, 2021	5,187,500	$ 0.33	3.36
Vested and expected to vest
at March 31, 2021	5,187,500	$ 0.33	3.36
Exercisable at March 31, 2020	5,187,500	$ 0.33	3.36

As of March 31, 2021, 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 22,500,000 shares of Common Stock from either authorized but unissued shares or treasury shares. The Plan expired on December 14, 2016.

The following summarizes the Company’s stock option activity for the three months ended March 31, 2021.

	Options	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Life Years)
Outstanding at December 31, 2020	3,160,000	$ 0.33	1.44
Granted/forfeited/cancelled	-
Outstanding at March 31, 2021	3,160,000	$ 0.33	1.19
Vested and expected to vest
at March 31, 2021	3,160,000	$ 0.33	1.19
Exercisable at March 31, 2021	3,160,000	$ 0.33	1.19

As of March 31, 2021, all outstanding options were fully vested and there is no remaining unrecorded compensation expense.

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Note 6 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

Note 6 - Commitments and Contingencies

NOTE 6: COMMITMENTS AND CONTINGENCIES

Leases

On June 20, 2019, the Company entered into a Lease Agreement with Emerging Growth for the lease of office space in Whitefish, Montana, for a period of one year at a rate of $1,500 per month. On August 5, 2020, the Company entered into a lease agreement with Emerging Growth for additional office space in Whitefish, Montana, replacing its previous lease from June 20, 2019. The term of the lease commenced on September 1, 2020 for a period of one year at a rate of $4,500 per month. The lease contains an option for the Company to renew the lease for a period of one additional year at a monthly rent subject to a 3% increase. Management has elected a policy to exclude leases with an initial term of 12 months or less from the balance sheet presentation required under ASC 842. As a result, the office lease has been excluded from balance sheet presentation as it has an original term of 12 months or less.

On March 30, 2021, the Company entered into a new lease with Emerging Growth, which will take the place of the old lease effective April 1, 2021. The lease provides for payments of $4,500 per month, and has a term of three years. Starting on April 1, 2021, the Company will present this lease in accordance with ASC 842, Leases. The present value of the future lease payments is $144,560, which will be recorded as a lease liability and a right-to-use asset on the Company’s balance sheet.

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.

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Note 7 - Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Note 7 - Subsequent Events

NOTE 7: SUBSEQUENT EVENTS

On April 1, 2021, the Company commenced a new lease for its office space in Whitefish, Montana. The lease has a three-year term and initial payments of $4,500 per month. On that date, the Company will record a right-to-use asset and related lease liability of $144,960 to be amortized over the three-year term of the lease.

Effective May 14, 2021, the Company and the holder of its $500,000 promissory note issued on September 10, 2019 (see Note 4) reached an agreement whereby the noteholder and the Company agreed to extend the maturity date of the note from September 30, 2022 to September 30, 2024. In connection with the extension, the Company agreed to issue 2 million shares of its common stock to the noteholder in lieu of $40,000 of interest accrued and accruing on the promissory note through December 31, 2021.

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Note 2 - Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Policy Text Block [Abstract]

Use of Estimates

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.

Financial Statement Reclassification

Financial Statement Reclassification

Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.

Segment Reporting

Segment Reporting

The Company’s sponsored content and marketing business acquired from Emerging Growth in June 2019 has historically been its one reportable segment. In late 2020, the Company launched an e-commerce network focused on the sale of general wellness CBD products. As of March 31, 2021, sales of these products and the operating activities associated with the e-commerce business have not been significant. However, management expects this e-commerce business to eventually become a reportable segment under GAAP as the business grows and the activity becomes more significant.

Cash and Cash Equivalents

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 restricted cash as a result of its corporate card program through its bank, which requires collateral placed in a money market account. At March 31, 2021, the Company had a restricted cash balance of $20,000 included as a component of total cash and restricted cash as presented on the accompanying unaudited condensed consolidated statement of cash flows.

Accounts Receivable

Accounts Receivable

The Company’s account receivables are due from customers relating to contracts to provide investor relation services. 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 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 March 31, 2021 and December 31, 2020 amounted to $394,720 and $183,750, respectively.

Inventory

Inventory

The Company’s inventory consists of finished goods acquired for its e-commerce network business it is currently in the process of launching. The inventory is valued at the lower of cost (first-in, first-out) or estimated net realizable value.

Concentration of Credit Risks

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 $250,000. From time-to-time, the Company’s bank balances 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 institution in which it holds deposits.

Revenue Recognition

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.

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.

Fair Value of Financial Instruments

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.

Additional Disclosures Regarding Fair Value Measurements

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and lines of credit 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.

Advertising

Advertising

The Company expenses advertising costs as incurred. Advertising expenses for the three months ended March 31, 2021 and 2020 amounted to $5,606 and $47,966, respectively.

Income Taxes

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes. 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. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized, but no less than quarterly.

For interim periods, the Company uses the effective income tax rate method resulting in zero income tax for the three months ended March 31, 2021 and 2020.

Property and Equipment

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.

Investment

Investments

On December 24, 2020, the Company acquired a 9.8% interest in the outstanding stock of a privately held company for $200,000. As the stock has no readily determinable fair values, the Company accounts for this stock received using the cost method, less adjustments for impairment. At each reporting period, management reviews the status of the investment to determine if any indicators of impairment have occurred.

On January 22, 2021, the Company invested $35,000 in a new joint venture focused on marketing. The entity is in the formation phase and as such the Company accounts for this investment using the cost method. At each reporting period, management reviews the status of the investment to determine if any indicators of impairment have occurred.

There were no impairment charges recorded related to investments during the three months ended March 31, 2021.

Long-Lived Assets

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.

Basic and Diluted Earnings Per Share

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 March 31, 2021, the Company had 3,160,000 outstanding stock options and 5,256,944 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive. As of March 31, 2020, the Company had 3,160,000 outstanding stock options and 7,543,944 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive. As a result, the basic and diluted earnings per share are the same for each of the periods presented.

Share-Based Payment

Share-Based Payment

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.

Common stock awards

Common stock awards

The Company has granted common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded on the consolidated statement of comprehensive loss in the same manner and charged to the same account as if such settlements had been made in cash.

Warrants

Warrants

In connection with certain financing, consulting and collaboration arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants are recorded at fair value as expense over the requisite service period or at the date of issuance, if there is not a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 6, Stockholders’ Deficit.

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Note 3 - Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2021

Table Text Block Supplement [Abstract]

Schedule of property, plant and equipment

The Company’s property and equipment relating to continuing operations consisted of the following at March 31, 2021 and December 31, 2020.

	March 31 2021	December 31, 2020
Computer equipment and software	$ 12,546	$ 12,546
Furniture and equipment	2,227	2,227
	14,773	14,773
Less: accumulated depreciation	(7,500)	(6,928)
	$ 7,273	$ 7,845

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Note 4 - Note Payable (Tables)

3 Months Ended

Mar. 31, 2021

Table Text Block Supplement [Abstract]

Schedule of maturities of long-term debt

Future scheduled maturities of long-term debt are as follows.

	Year Ending December 31,
2021	$ 232,001
2022	750,217
2023	32,822
2024	3,285
2025	3,416
Thereafter	145,789
Total	$ 1,167,530

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Note 5 - Stockholders' Deficit (Tables)

3 Months Ended

Mar. 31, 2021

Table Text Block Supplement [Abstract]

Schedule of warrant activity

The following summarizes the Company’s warrant activity for the three months ended March 31, 2021.

	Warrants	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Life (Years)
Outstanding at December 31, 2020	5,256,944	$ 0.33	3.56
Forfeited	(69,444)	0.45
Outstanding at March 31, 2021	5,187,500	$ 0.33	3.36
Vested and expected to vest
at March 31, 2021	5,187,500	$ 0.33	3.36
Exercisable at March 31, 2020	5,187,500	$ 0.33	3.36

Schedule of option activity

The following summarizes the Company’s stock option activity for the three months ended March 31, 2021.

	Options	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Life Years)
Outstanding at December 31, 2020	3,160,000	$ 0.33	1.44
Granted/forfeited/cancelled	-
Outstanding at March 31, 2021	3,160,000	$ 0.33	1.19
Vested and expected to vest
at March 31, 2021	3,160,000	$ 0.33	1.19
Exercisable at March 31, 2021	3,160,000	$ 0.33	1.19

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Note 1 - Organization and Basis of Presentation (Details) - USD ($)		1 Months Ended	3 Months Ended
	May 15, 2019	Jun. 20, 2019	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Working Capital (Deficit)			$ (1,021,015)
Accumulated Deficit			(36,760,905)		$ (36,384,202)
Net loss			(316,703)	$ (318,331)
Common Stock [Member]
Net loss
Asset Purchased Agreement with Emerging Growth LLC [Member]
Payments to Acquire Businesses, Gross	$ 420,000
Asset Purchased Agreement with Emerging Growth LLC [Member] | Common Stock [Member]
Stock Issued During Period, Shares, Acquisitions (in shares)	30,000,000
Asset Purchased Agreement with Emerging Growth LLC [Member] | Common Stock and Series B Preferred Stock [Member]
Stock Issued During Period, Value, Acquisitions	$ 3,000,000
Asset Purchased Agreement with Emerging Growth LLC [Member] | Series B Preferred Stock [Member]
Stock Issued During Period, Shares, Acquisitions (in shares)		3,000
Stock Issued During Period, Value, Acquisitions		$ 687,000
Preferred Stock, Dividend Rate, Percentage	6.00%	6.00%

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Note 2 - Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jan. 22, 2021	Dec. 31, 2020	Dec. 24, 2020
Restricted Cash and Cash Equivalents	$ 20,000			$ 20,000
Allowance for accounts receivable	394,720			183,750
FDIC insured amount	250,000
Advertising Expense	5,606	$ 47,966
Goodwill, Impairment charge	0
Ownership percentage					9.80%
Impairment of Intangible Assets, Finite-lived		541,724
Income tax	0	$ 0
Investment	$ 235,000		$ 35,000	$ 200,000
Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	3,160,000	3,160,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	5,256,944	7,543,944

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Note 3 - Property and Equipment (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 572	$ 350

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Note 3 - Property and Equipment: Property and Equipment (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Property and equipment, gross	$ 14,773	$ 14,773
Less: accumulated depreciation	(7,500)	(6,928)
Property, Plant and Equipment, net	7,273	7,845
Computer equipment and software [Member]
Property and equipment, gross	12,546	12,546
Furniture and equipment [Member]
Property and equipment, gross	$ 2,227	$ 2,227

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Note 4 - Notes Payable (Details) - USD ($)		1 Months Ended		3 Months Ended
	May 06, 2020	Jun. 25, 2021	Jun. 24, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Long-term Debt				$ 1,167,530
Long term debt, current				188,249
Long-term debt of current portion				$ 232,001		$ 188,249
Second PPP Note [Member]
Interest rate				1.00%
Maturity date				Feb. 25, 2023
Monthly payment				$ 14,727
Long term debt, current				100,676
PPP [Member]
Long-term Debt				188,249
Proceeds from loans	$ 263,000	$ 263,000
Interest rate	1.00%
Maturity date	May 06, 2022
Monthly payment	$ 14,727
Promissory Note Payable [Member]
Debt Instrument, Unamortized Discount				8,470
Amortization of Debt Discount				1,469	$ 1,463
Long-term Debt				491,530
Long-term Debt, Gross				$ 500,000
SBA [Member]
Proceeds from loans			$ 150,000
Interest rate			3.75%
Monthly payment			$ 731

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Note 4 - Notes Payable: Schedule Maturities of Long-term Debt (Details)	Mar. 31, 2021 USD ($)
Notes Payable [Abstract]
2021	$ 232,001
2022	750,217
2023	32,822
2024	3,285
2025	3,416
Thereafter	145,789
Total	$ 1,167,530

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Note 6 - Stockholders' Deficit (Details)						1 Months Ended				3 Months Ended
	Oct. 13, 2020 USD ($) shares	Aug. 06, 2020 USD ($) shares	Apr. 03, 2020 Integer shares	Sep. 10, 2019 shares	May 15, 2019	Jan. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) $ / shares shares	Jul. 17, 2020 shares	Jun. 20, 2019 USD ($) $ / shares shares	Mar. 31, 2021 USD ($) $ / shares shares	Mar. 31, 2020 USD ($)
Preferred stock, interest										$ 240,000	$ 126,575
Class Of Warrant Or Right Expense Recognized										0	126,810
Class of Warrant or Right, Unrecorded Compensation Expense										0
Unrecognisation stock based compensation										0
Loss on extinguishment of debt										$ 52,500
Sale of stock | shares							10,250,000			10,000
Proceeds from issuance of stock						$ 10,000	$ 410,000
Issuance of common stock, shares | shares						12,150,000
Common stock issuable, shares | shares						11,900,000	250,000
Preferred stock interest										$ 60,000	60,000
Restricted Stock [Member] | Non-employee Directors [Member]
Share-based Payment Arrangement, Expense										0	$ 60,000
Unrecognised Share-based Payment Arrangement, Nonvested Award										$ 0
Stock Option Plan [Member]
Number of Shares Authorized (in shares) | shares										22,500,000
Warrants Issued to Promissory Note Holders [Member]
Class of Warrant or Right, Issued During Period (in shares) | shares				500,000
Series B Preferred Stock [Member]
Preferred Stock, Shares Authorized (in shares) | shares							3,000			3,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares							$ 0.001			$ 0.001
Series A Preferred Stock [Member]
Preferred Stock, Shares Authorized (in shares) | shares							500			500
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares							$ 0.001			$ 0.001
Asset Purchased Agreement with Emerging Growth LLC [Member] | Series B Preferred Stock [Member]
Stock Issued During Period, Shares, Acquisitions (in shares) | shares									3,000
Stock Issued During Period, Value, Acquisitions									$ 687,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares									$ 1,000
Preferred Stock, Dividend Rate, Percentage					6.00%				6.00%
Emerging Growth [Member]
Debt Conversion, Converted Instrument, Shares Issued (in shares) | shares		4,800,000								1,750,000
Debt Conversion, Original Debt, Amount		$ 240,000								$ 105,000
Due to related party		209,931
Loss on extinguishment of debt										30,069
Fair value of shares										157,500
Emerging Growth [Member] | Payables [Member]
Due to related party		105,000
Emerging Growth [Member] | Accrued Interest [Member]
Due to related party		$ 104,931
Consultant [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | shares			250,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Vesting, Number of Equal Quarterly Increments | Integer			4
Share-based Payment Arrangement, Expense										10,768
Shares issued for services, shares | shares			500,000
Shares forfeited | shares								187,500
Holder [Member]
Debt Conversion, Converted Instrument, Shares Issued (in shares) | shares	1,650,000
Debt Conversion, Original Debt, Amount	$ 82,500
Loss on extinguishment of debt										$ 41,308
Principal amount	500,000
Holder [Member] | Accrued Interest [Member]
Debt Conversion, Original Debt, Amount	$ 41,192

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Note 6 - Stockholders' Equity: Warrant Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Forfeited, options (in shares)	0
Vested and expected to vest, options (in shares)	3,160,000
Exercisable balance, options (in shares)	3,160,000
Vested and expected to vest, weighted average price per share (in dollars per share)	$ 0.33
Exercisable balance, weighted average price per share (in dollars per share)	$ 0.33
Vested and expected to vest, weighted average remaining contractual term (Year)	1 year 2 months 8 days
Exercisable balance, weighted average remaining contractual term (Year)	1 year 2 months 8 days
Warrant [Member]
Warrants outstanding (in shares)	5,256,944
Forfeited, options (in shares)	(69,444)
Warrants outstanding (in shares)	5,187,500	5,256,944
Vested and expected to vest, options (in shares)	5,187,500
Exercisable balance, options (in shares)	5,187,500
Warrants outstanding, weighted average price per share (in dollars per share)	$ 0.33
Forfeited, weighted average price per share (in dollars per share)	0.45
Warrants outstanding, weighted average price per share (in dollars per share)	0.33	$ 0.33
Vested and expected to vest, weighted average price per share (in dollars per share)	0.33
Exercisable balance, weighted average price per share (in dollars per share)	$ 0.33
Warrants outstanding, weighted average remaining contractual term (Year)	3 years 4 months 9 days	3 years 6 months 21 days
Vested and expected to vest, weighted average remaining contractual term (Year)	3 years 4 months 9 days
Exercisable balance, weighted average remaining contractual term (Year)	3 years 4 months 9 days

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Note 5 - Stockholders' Equity: Stock Option Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Stockholders' deficit
Outstanding balance, options (in shares)	3,160,000
Granted/forfeited/cancelled, options (in shares)	0
Outstanding balance, options (in shares)	3,160,000	3,160,000
Vested and expected to vest, options (in shares)	3,160,000
Exercisable balance, options (in shares)	3,160,000
Outstanding balance, weighted average price per share (in dollars per share)	$ 0.33
Outstanding balance, weighted average price per share (in dollars per share)	0.33	$ 0.33
Vested and expected to vest, weighted average price per share (in dollars per share)	0.33
Exercisable balance, weighted average price per share (in dollars per share)	$ 0.33
Outstanding balance, weighted average remaining contractual term (Year)	1 year 2 months 8 days	1 year 5 months 9 days
Vested and expected to vest, weighted average remaining contractual term (Year)	1 year 2 months 8 days
Exercisable balance, weighted average remaining contractual term (Year)	1 year 2 months 8 days

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Note 6 - Commitments and Contingencies (Details) - USD ($)	1 Months Ended
	Mar. 30, 2021	Sep. 01, 2020	Jun. 20, 2019
Office Space in Whitefish, Montana [Member]
Operating Lease Monthly Rent	$ 4,500	$ 4,500	$ 1,500
Lease payment	$ 144,560
Office Space in Santa Monica, California [Member]
Operating Lease Monthly Rent			$ 1,000

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Note 7 - Subsequent Events (Details Narrative) - USD ($)			1 Months Ended
	May 14, 2021	Apr. 01, 2021	Jan. 31, 2021	Oct. 13, 2020
Stock issued during period, shares			12,150,000
Holder [Member]
Principal amount				$ 500,000
Subsequent Event [Member]
Right-to-use asset		$ 144,960
Lease liability		$ 144,960
Amortized period		3 years
Subsequent Event [Member] | Holder [Member]
Principal amount	$ 500,000
Maturity date	Sep. 30, 2024
Stock issued during period, shares	2,000,000
Accrued interest	$ 40,000