Document and Entity Information
Document and Entity Information - $ / shares | Nov. 19, 2021 | Sep. 30, 2021 |
Details | ||
Registrant CIK | 0001352952 | |
Fiscal Year End | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-52635 | |
Entity Registrant Name | CFN ENTERPRISES INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-3858769 | |
Entity Address, Address Line One | 600 E. 8TH STREET | |
Entity Address, City or Town | WHITEFISH | |
Entity Address, Country | MT | |
Entity Address, Postal Zip Code | 59937 | |
Country Region | 833 | |
City Area Code | 420 | |
Local Phone Number | 2636 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Listing, Par Value Per Share | $ 0.001 | |
Entity Common Stock, Shares Outstanding | 475,192,209 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 181,725 | $ 160,115 |
Restricted cash | 20,012 | 20,000 |
Accounts receivable, net | 475,160 | 9,000 |
Inventory | 258,547 | 39,017 |
Marketable Securities | 123,936 | 0 |
Prepaid expenses and other current assets | 139,500 | 14,500 |
Total current assets | 1,198,880 | 242,632 |
Other assets | ||
Investments, at cost | 200,000 | 200,000 |
Property and equipment | 5,474,445 | 7,845 |
Goodwill | 9,261,591 | 0 |
Right of Use Asset | 748,566 | 0 |
Other Assets | 20,431 | 0 |
Total other assets | 15,705,033 | 207,845 |
Total assets | 16,903,913 | 450,477 |
Current liabilities | ||
Accounts payable | 1,702,839 | 220,039 |
Accrued expenses | 1,924,682 | 726,807 |
Deferred revenues | 41,963 | 25,815 |
Current portion of notes payable | 2,043,555 | 188,249 |
Current portion of right of use liability | 198,869 | 0 |
Current liabilities of discontinued operations | 79,823 | 79,823 |
Total current liabilities | 5,991,731 | 1,240,733 |
Right of Use Liability | 509,303 | 0 |
Long-term note payable, net of current portion and discounts | 2,070,220 | 714,812 |
Total liabilities | 8,571,254 | 1,955,545 |
Stockholders' equity (deficit) | ||
Common shares | 475,192 | 104,792 |
Common stock issuable | 0 | 492,500 |
Additional paid-in capital | 45,401,438 | 34,281,838 |
Accumulated deficit | (37,580,345) | (36,384,202) |
Total stockholders' equity (deficit) | 8,296,289 | (1,505,068) |
Non-controlling interest | 36,370 | 0 |
Total stockholders' equity (deficit) | 8,332,659 | (1,505,068) |
Total liabilities and stockholders' equity (deficit) | 16,903,913 | 450,477 |
Series A Preferred Stock | ||
Stockholders' equity (deficit) | ||
Preferred shares | 1 | 1 |
Total stockholders' equity (deficit) | 1 | 1 |
Series B Preferred Stock | ||
Stockholders' equity (deficit) | ||
Preferred shares | 3 | 3 |
Total stockholders' equity (deficit) | $ 3 | $ 3 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |
Preferred Stock, Shares Authorized | 2,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 475,192,209 | 104,792,209 |
Common Stock, Shares, Outstanding | 475,192,209 | 104,792,209 |
Series A Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 500 | 500 |
Preferred Stock, Shares Issued | 500 | 500 |
Preferred Stock, Shares Outstanding | 500 | 500 |
Series B Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 3,000 | 3,000 |
Preferred Stock, Shares Issued | 3,000 | 3,000 |
Preferred Stock, Shares Outstanding | 3,000 | 3,000 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Details | ||||
Net revenues | $ 948,254 | $ 154,369 | $ 1,451,230 | $ 349,071 |
Cost of revenue | 730,186 | 128,885 | 949,170 | 414,154 |
Gross profit (loss) | 218,068 | 25,484 | 502,060 | (65,083) |
Operating expenses: | ||||
Selling, general and administrative | 847,888 | 307,069 | 1,551,790 | 906,739 |
Total operating expenses | 847,888 | 307,069 | 1,551,790 | 906,739 |
Loss from operations | (629,820) | (281,585) | (1,049,730) | (971,822) |
Other (income) expense: | ||||
Loss on extinguishment of debt | 0 | (30,069) | (172,500) | (30,069) |
Unrealized gain (loss) on marketable securities | 23,341 | 0 | 31,761 | 0 |
SBA PPP loan forgiveness | 263,000 | 10,000 | 263,000 | 10,000 |
Interest expense | (23,055) | (13,560) | (53,723) | (38,055) |
Interest income | 2 | 2 | 9 | 17 |
Total other (income) expense | 263,288 | (33,627) | (68,547) | (58,107) |
Net loss from continued operations | (366,532) | (315,212) | (981,183) | (1,029,929) |
Gain (Loss) from discontinued operations, net of tax | 0 | (80,422) | 0 | (80,422) |
Net loss | (366,532) | (395,634) | (981,183) | (1,110,351) |
Preferred stock interest | (60,000) | (60,000) | (180,000) | (180,000) |
Net loss after preferred stock interest | (426,532) | (455,634) | (1,161,183) | (1,290,351) |
Net income attributable to non-controlling interest | (26,122) | 0 | (34,960) | 0 |
Net loss available to common shareholders | $ (452,654) | $ (455,634) | $ (1,196,143) | $ (1,290,351) |
Net loss per share, basic and diluted | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding, basic and diluted | 137,047,395 | 102,808,921 | 130,315,311 | 100,814,828 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock | Common Stock Issuable | Additional Paid-in Capital | Retained Earnings | Noncontrolling Interest | AOCI Attributable to Parent | Total | Series A Preferred Stock | Series B Preferred Stock |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2019 | $ 99,679 | $ 0 | $ 34,031,326 | $ (34,721,149) | $ 0 | $ (83,473) | $ (673,613) | $ 1 | $ 3 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2019 | 99,679,709 | 500 | 3,000 | ||||||
Foreign currency translation | $ 0 | 0 | 0 | 0 | (456) | (456) | $ 0 | $ 0 | |
Net loss | 0 | 0 | (318,331) | 0 | (318,331) | 0 | 0 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2020 | $ 99,679 | 0 | 34,031,326 | (35,099,480) | 0 | (83,929) | (1,052,400) | $ 1 | $ 3 |
Shares, Outstanding, Ending Balance at Mar. 31, 2020 | 99,679,709 | 500 | 3,000 | ||||||
Preferred stock interest | $ 0 | 0 | (60,000) | 0 | (60,000) | $ 0 | $ 0 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2019 | $ 99,679 | 0 | 34,031,326 | (34,721,149) | 0 | (83,473) | (673,613) | $ 1 | $ 3 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2019 | 99,679,709 | 500 | 3,000 | ||||||
Preferred Stock Dividends and Other Adjustments | 180,000 | ||||||||
Proceeds from Warrant Exercises | 0 | ||||||||
Net loss | (1,110,351) | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2020 | $ 104,792 | 0 | 34,281,838 | (36,011,500) | 0 | 0 | (1,624,866) | $ 1 | $ 3 |
Shares, Outstanding, Ending Balance at Sep. 30, 2020 | 104,792,209 | 500 | 3,000 | ||||||
Preferred stock interest | (180,000) | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2020 | $ 99,679 | 0 | 34,031,326 | (35,099,480) | 0 | (83,929) | (1,052,400) | $ 1 | $ 3 |
Shares, Outstanding, Beginning Balance at Mar. 31, 2020 | 99,679,709 | 500 | 3,000 | ||||||
Share-based Payment Arrangement, Noncash Expense | $ 250 | 0 | 4,607 | 0 | 0 | 0 | 4,857 | $ 0 | $ 0 |
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 250,000 | ||||||||
Preferred Stock Dividends and Other Adjustments | $ 0 | 0 | 0 | (60,000) | 0 | 0 | (60,000) | 0 | 0 |
Net loss | 0 | 0 | 0 | (396,386) | 0 | 0 | (396,386) | 0 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2020 | $ 99,929 | 0 | 34,035,933 | (35,555,866) | 0 | 0 | (1,503,829) | $ 1 | $ 3 |
Shares, Outstanding, Ending Balance at Jun. 30, 2020 | 99,929,709 | 500 | 3,000 | ||||||
Preferred stock interest | $ 0 | 0 | 0 | 60,000 | 0 | 0 | 60,000 | $ 0 | $ 0 |
Share-based Payment Arrangement, Noncash Expense | $ 63 | 10,705 | 0 | 0 | 0 | 10,768 | 0 | 0 | |
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 62,500 | ||||||||
Shares issued as payment of accounts payable and accrued interest | $ 4,800 | 235,200 | 240,000 | ||||||
Shares issued as payment of accounts payable and accrued interest, shares | 4,800,000 | ||||||||
Preferred Stock Dividends and Other Adjustments | $ 0 | 0 | 60,000 | 0 | 0 | 60,000 | 0 | 0 | |
Net loss | 0 | 0 | (395,634) | 0 | 0 | (395,634) | 0 | 0 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2020 | $ 104,792 | 0 | 34,281,838 | (36,011,500) | 0 | 0 | (1,624,866) | $ 1 | $ 3 |
Shares, Outstanding, Ending Balance at Sep. 30, 2020 | 104,792,209 | 500 | 3,000 | ||||||
Preferred stock interest | $ 0 | 0 | (60,000) | 0 | 0 | (60,000) | $ 0 | $ 0 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2020 | $ 104,792 | 492,500 | 34,281,838 | (36,384,202) | 0 | 0 | (1,505,068) | $ 1 | $ 3 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 | 104,792,209 | 500 | 3,000 | ||||||
Preferred Stock Dividends and Other Adjustments | $ 0 | 0 | 0 | (60,000) | 0 | 0 | (60,000) | $ 0 | $ 0 |
Stock Issued During Period, Value, New Issues | $ 12,150 | (492,500) | 490,350 | 0 | 0 | 0 | 10,000 | 0 | 0 |
Stock Issued During Period, Shares, New Issues | 12,150,000 | ||||||||
Shares Issued As Payment For Accrued Interest, Value | $ 1,750 | 0 | 155,750 | 0 | 0 | 0 | 157,500 | 0 | 0 |
Shares Issued As Payment For Accrued Interest, Shares | 1,750,000 | ||||||||
Non-controlling interest | 1,410 | 1,410 | |||||||
Net loss | $ 0 | 0 | 0 | (331,709) | (15,001) | 0 | (346,710) | 0 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2021 | $ 118,692 | 0 | 34,927,938 | (36,775,911) | (13,591) | 0 | (1,742,867) | $ 1 | $ 3 |
Shares, Outstanding, Ending Balance at Mar. 31, 2021 | 118,692,209 | 500 | 3,000 | ||||||
Preferred stock interest | $ 0 | 0 | 0 | 60,000 | 0 | 0 | 60,000 | $ 0 | $ 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2020 | $ 104,792 | 492,500 | 34,281,838 | (36,384,202) | 0 | 0 | (1,505,068) | $ 1 | $ 3 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 | 104,792,209 | 500 | 3,000 | ||||||
Preferred Stock Dividends and Other Adjustments | 180,000 | ||||||||
Proceeds from Warrant Exercises | 50,000 | ||||||||
Non-controlling interest | 1,410 | ||||||||
Net loss | (981,183) | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2021 | $ 475,192 | 0 | 45,401,438 | (37,580,345) | 36,370 | 0 | 8,332,659 | $ 1 | $ 3 |
Shares, Outstanding, Ending Balance at Sep. 30, 2021 | 475,192,209 | 500 | 3,000 | ||||||
Preferred stock interest | (180,000) | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2021 | $ 118,692 | 0 | 34,927,938 | (36,775,911) | (13,591) | 0 | (1,742,867) | $ 1 | $ 3 |
Shares, Outstanding, Beginning Balance at Mar. 31, 2021 | 118,692,209 | 500 | 3,000 | ||||||
Stock Issued During Period, Value, Other | $ 2,000 | 0 | 158,000 | 0 | 0 | 160,000 | $ 0 | $ 0 | |
Stock Issued During Period, Shares, Other | 2,000,000 | ||||||||
Preferred Stock Dividends and Other Adjustments | (60,000) | (60,000) | |||||||
Shares issued as exercise of warrant | 50,000 | 50,000 | |||||||
Net loss | (291,780) | 23,839 | (267,941) | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2021 | $ 120,692 | 50,000 | 35,085,938 | 37,127,691 | 10,248 | 0 | (1,860,809) | $ 1 | $ 3 |
Shares, Outstanding, Ending Balance at Jun. 30, 2021 | 120,692,209 | 500 | 3,000 | ||||||
Preferred stock interest | 60,000 | 60,000 | |||||||
Preferred Stock Dividends and Other Adjustments | $ 0 | 0 | 0 | 60,000 | 0 | 60,000 | $ 0 | $ 0 | |
Stock Issued During Period, Value, New Issues | $ 354,000 | 0 | 10,266,000 | 0 | 0 | 0 | 10,620,000 | 0 | 0 |
Stock Issued During Period, Shares, New Issues | 354,000,000 | ||||||||
Proceeds from Warrant Exercises | $ 500 | (50,000) | 49,500 | 0 | 0 | 0 | 0 | 0 | 0 |
Shares issued as for exercise of warrant | 500,000 | ||||||||
Foreign currency translation | 83,829 | 83,829 | |||||||
Net loss | $ 0 | 0 | 0 | (392,654) | 26,122 | 0 | (366,532) | 0 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2021 | $ 475,192 | 0 | 45,401,438 | (37,580,345) | $ 36,370 | 0 | 8,332,659 | $ 1 | $ 3 |
Shares, Outstanding, Ending Balance at Sep. 30, 2021 | 475,192,209 | 500 | 3,000 | ||||||
Preferred stock interest | $ 0 | $ 0 | $ 0 | $ (60,000) | $ 0 | $ (60,000) | $ 0 | $ 0 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Cash flows from operating activities | |||||||
Net loss | $ (366,532) | $ (346,710) | $ (395,634) | $ (318,331) | $ (981,183) | $ (1,110,351) | |
Gain (Loss) from discontinued operations | (80,422) | ||||||
Net loss from continuing operations | (981,183) | (1,029,929) | |||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 102,720 | 1,225 | |||||
Share based compensation | 15,625 | ||||||
SBA PPP loan forgiveness | (263,000) | (10,000) | (263,000) | (10,000) | |||
Loss on extinguishment of debt | 172,500 | 30,069 | |||||
Amortization of deferred financing cost | 4,437 | 4,405 | |||||
Provision for doubtful accounts | 0 | 20,000 | |||||
Unrealized gain (loss) on marketable securities | (23,341) | 0 | (31,761) | 0 | |||
Amortization of right of use asset | (17,530) | 0 | |||||
Non-controlling interest | 1,410 | 1,410 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 30,635 | 9,812 | |||||
Inventory | 312,819 | (38,427) | |||||
Prepaid expenses and other current assets | 8,000 | (529) | |||||
Accounts payable and accrued expenses | 517,496 | 644,606 | |||||
Right of use liability | (35,668) | 0 | |||||
Deferred revenue | (76,027) | 33,390 | |||||
Net cash used in operating activities of continuing operations | (255,152) | (309,754) | |||||
Net cash used in operating activities of discontinued operations | 0 | (16,365) | |||||
Net cash used in operating activities | (255,152) | (326,119) | |||||
Cash flows from investing activities | |||||||
Purchase of property and equipment | (5,710) | (6,633) | |||||
Cash acquired in acquisition of CNP operating, LLC. | 60,590 | ||||||
Net cash provided by investing activities | 54,880 | (6,633) | |||||
Cash flows from financing activities | |||||||
Proceeds from sale of common stock | 10,000 | 0 | |||||
Proceeds from promissory note | 161,894 | 413,000 | |||||
Proceeds from Warrant Exercises | 0 | 50,000 | 0 | ||||
Payment of notes payable | 0 | 0 | |||||
Payment of interest for preferred stock | 0 | (60,000) | |||||
Net cash provided by financing activities | 221,894 | 353,000 | |||||
Effect of exchange rate fluctuations on cash | 0 | (456) | |||||
Cash and Cash Equivalents, Period Increase (Decrease) | 21,622 | 19,792 | |||||
Cash and restricted cash, beginning of the period | $ 180,115 | $ 107,727 | 180,115 | 107,727 | $ 107,727 | ||
Cash and restricted cash, end of the period | $ 201,737 | $ 127,519 | 201,737 | 127,519 | $ 180,115 | ||
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 | 180,000 | 120,000 | |||||
Issuance of common stock sold in previous year | 492,500 | 0 | |||||
Addition of Right of Use Asset | 181,134 | 0 | |||||
Investments received for services | 92,175 | 0 | |||||
Issuance of common stock for payment of accrued interest and Note extension | 0 | 104,931 | |||||
Issuance of common stock for payment of accounts payable and accrued expenses | 0 | 105,000 | |||||
Issuance common stock for acquisition of CNP Operating, LLC | $ 10,620,000 | $ 0 |
NOTE 1_ ORGANIZATION AND BASIS
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1: ORGANIZATION, GOING CONCERN AND BASIS OF PRESENTATION Organization CFN Enterprises Inc., formerly known as Accelerize Inc., or the Company, is a Delaware corporation incorporated on November 22, 2005. Effective October 22, 2019, the Company filed a certificate of amendment to its certificate of incorporation with the Secretary of State of the State of Delaware to change its corporate name to CFN Enterprises Inc. On May 15, 2019, the Company entered into an asset purchase agreement or the Emerging Growth Agreement with Emerging Growth, LLC, or 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. On January 22, 2021, the Company invested $35,000 in a new joint venture focused on sponsored content and marketing called East West Asset Management or East West. East West was formed as a Limited Liability Company in the State of Nevada on November 13, 2020. CFN owns 50% of the entity and one of its officers holds the title of Member Manager in East West. The Company has concluded that East West is a variable interest entity in accordance with applicable accounting standards and guidance. As such, the accounts and results of East West have been included in the Company’s condensed consolidated financial statements. On August 23, 2021, the Company entered into securities purchase agreements with CNP Operating, LLC, a Colorado limited liability company, or CNP Operating, and the owners of all of the equity interests of CNP Operating, or the Owners, whereby the Company acquired 100% of CNP Operating from the Owners in exchange for an aggregate of 354 million shares of the Company’s common stock. The securities were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended. On August 25, 2021 the transaction was closed and CNP Operating became a wholly owned subsidiary of the Company. CNP Operating is a leading cannabidiol, or CBD, manufacturer vertically integrated with a 360 degree approach to the processing of high quality CBD products designed for growers, pharmaceutical, wellness providers, and retailers needs. CNP Operating provide toll processing services which includes; extraction, distillation, remediation, isolation and chromatography. CNP Operating has a professional, organized and dedicated team with 30 years of combined experience. CNP Operating’s state of the art facility, ISO compliant, has 30,000 square feet filled with proprietary technology distillation equipment, in house lab testing, distribution warehouse and white labelling product formulation and design. 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 $4,792,851 and an accumulated deficit of $37,580,345 as of September 30, 2021. The Company also had a net loss of $1,196,143 for the nine months ended September 30, 2021. Management’s plan to continue as a going concern includes raising capital in the form of debt or equity, growing the CNP Operating business and 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 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 disrupted 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 to acquire CNP Operating in August 2021and to 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 and principles of consolidation These unaudited condensed financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. These unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the years ended December 31, 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 September 30, 2021 are not necessarily indicative of results for the entire year ending December 31, 2021. During the period, the Company concluded that East West is a variable interest entity in accordance with applicable accounting standards and guidance. As such, the accounts and results of East West have been included in the Company’s condensed consolidated financial statements. |
NOTE 2_ SUMMARY OF SIGNIFICANT
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
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 September 30, 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. The Company’s acquisition of CNP Operating in August 2021 results in an additional reporting segment that will be provided in future periods. 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 September 30, 2021, the Company had a restricted cash balance of $20,012 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 September 30, 2021 and December 31, 2020 amounted to $249,284 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 and for its CBD manufacturing business, CNP Operating. 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. During the first quarter of 2021, the Company began offering customers of its East West Venture who purchase services the option to pay the contract price in securities issued by the Customer which could be a common stock, preferred stock or convertible debentures. In accordance with ASC 606 - Revenue Recognition, the Company will value the shares received at the fair market value of the date the contract is executed. 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. The Company accounts for its CNP Operating 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. Shipping and Handling Fees and Costs Amounts billed to customers for shipping and handling fees are presented in revenue. Costs incurred for shipping and handling are included in cost of revenue. Fair Value of Financial Instruments The Company accounts for assets and liabilities measured at fair value on a recurring basis in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. 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 September 30, 2021 and 2020 amounted to $12,333 and $32,445, respectively. Advertising expenses for the nine months ended September 30, 2021 and 2020 amounted to $45,677 and $101,760, 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 nine months ended September 30, 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. There were no impairment charges recorded related to investments during the six months ended September 30, 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 September 30, 2021, the Company had 3,160,000 outstanding stock options and 4,687,500 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive. As of September 30, 2020, 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 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’ Equity (Deficit). Leases The Company adopted Accounting Standards Update No. 2016-02, Leases (“Topic 842”) using the modified retrospective method. This accounting standard requires a lessee to recognize an asset and liability for most leases on its balance sheet. Upon adoption, right-of-use (ROU) assets and lease liabilities for operating leases were recorded in the amount of $181,134 and $181,134, respectively The Company elected the practical expedient method permitted under the transition guidance, which allows a carryforward of historical lease classification, the assessment on whether a contract was or contains a lease, and the initial direct costs for any leases that existed prior to July 1, 2019. The Company also elected to recognize the associated lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Under Topic 842, the Company determines if an arrangement is a lease at inception. ROU assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement and leases with an initial term of 12 months or less are not included in lease liabilities or ROU asset. As most leases do not provide an implicit rate, a rate which approximates the Company’s incremental borrowing rate is used, based on the information available at commencement date, in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred. Lease agreements generally do not contain residual value guarantees or restrictive covenants. Over the lease term, the Company uses the effective interest rate method to account for the lease liability as lease payments are made and the ROU asset is amortized in a manner that results in straight-line expense recognition. |
NOTE 3_ PROPERTY AND EQUIPMENT
NOTE 3: PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
NOTE 3: PROPERTY AND EQUIPMENT | NOTE 3: PROPERTY AND EQUIPMENT The Company’s property and equipment relating to continuing operations consisted of the following: September 30, 2021 December 31, 2020 Machinery & Equipment $ 7,618,738 $ 12,546 Furniture, equipment and leasehold improvements 482,448 2,227 8,101,186 14,773 Less: accumulated depreciation and amortization (2,626,741) (6,928) $ 5,474,445 $ 7,845 Depreciation and amortization expense for the nine months ended September 30, 2021 and 2020 amounted to $102,720 and $1,049, respectively. Depreciation and amortization expense for the three months ended September 30, 2021 and 2020 amounted to $102,148 and $350, respectively. |
NOTE 4_ MARKETABLE SECURITIES
NOTE 4: MARKETABLE SECURITIES | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
NOTE 4: MARKETABLE SECURITIES | NOTE 4: MARKETABLE SECURITIES During the first quarter of 2021, the Company began offering customers of its East West Venture who purchase services the option to pay the contract price in securities issued by the Customer which could be a common stock, preferred stock or convertible debentures. In accordance with ASC 606 - Revenue Recognition, the Company will value the shares received at the fair market value of the date the contract is executed. The shares received will be accounted for in accordance with ASC 320 – Investments – Debt and Equity Securities, as such the shares will be classified as available-for-sale securities and will be measured at each reporting period at fair value with the unrealized gain or (loss) as a component of other income (expense). Upon the sale of the shares, the Company will record the gain or (loss) in the consolidated statement of operations as a component of net income (loss). September 30, 2021 Common Stock Balances at beginning of year $ - $ - Additions 92,175 92,175 Sale of marketable securities - - Change in fair value 31,761 31,761 Balances at period end $ 123,936 $ 123,936 The Company accounts for its investments in equity securities in accordance with ASC 321-10 Investments - Equity Securities. The equity securities may be classified into two categories and accounted for as follows: · · |
NOTE 5_ FAIR VALUE OF FINANCIAL
NOTE 5: FAIR VALUE OF FINANCIAL INSRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
NOTE 5: FAIR VALUE OF FINANCIAL INSRUMENTS | NOTE 5: FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash and accounts payable and accrued expenses, approximate their respective fair values due to the short-term nature of such instruments. Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The Company considers marketable securities quoted on the NASDAQ, Canadian Stock Exchange and OTC Pink sheets and then discounts the value after considering Rule 144 restrictions and market liquidity to be fair valued with Level 1 inputs. The Company had the following financial assets of September 30, 2021: Balance as of September 30, 2021 Significant Unobservable Inputs (Level 1) Significant Unobservable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Marketable Securities $ 123,936 $ 123,936 $ - $ - Total Assets $ 123,936 $ 123,936 $ - $ - |
NOTE 6_ NOTES PAYABLE
NOTE 6: NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
NOTE 6: NOTES PAYABLE | NOTE 6: 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. In May 2021, the Company and the holder of the promissory note reached an agreement to extend the maturity date of the note from September 30, 2022 to September 30, 2024. In connection with the extension, the Company issued 2,000,000 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. 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 were exercised on June 30, 2021 and the Company received $50,000. 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 $4,427 and $4,425 for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, the net book value of the promissory note amounted to $494,498 including the principal amount outstanding of $500,000 net of the remaining discount of $5,502. 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 interest rate on the Loan is 1.0% per annum. The Note matures on May 6, 2022. The Company has applied for full forgiveness of the amounts due under the Note and received forgiveness during the period ending September 30, 2021. 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, 2022 and on the first day of each month thereafter until February 1, 2024, 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 June 30, 2021, the current portion of the Second Loan due within the next 12 months amounted to $0. The Company plans to apply for full forgiveness of the Second PPP Note. On October 28, 2019, the Company’s subsidiary CNP Operating entered into a promissory note payable with Complete Business Solutions Group, Inc (“CBSG”) whereby the Company borrowed $3,050,000. The outstanding balance of the note was $2,633,875 at September 30, 2021. On September 30, 2019, the Company’s subsidiary CNP Operating entered into a promissory note payable with Eagle Six Consultants, Inc. (“Eagle”) whereby the Company borrowed $550,000 bearing interest at 16% per annum. The outstanding balance of the note was $300,000 at September 30, 2021. On June 6, 2020, the Company’s subsidiary CNP Operating entered into a second promissory note payable with Eagle whereby the Company borrowed $300,000 bearing interest at 18% per annum. The outstanding balance of the note was $80,000 September 30, 2021. On May 12, 2021 the Company’s subsidiary CNP Operating restructured the CSBG note payable of $2,957,000, the Eagle #1 note payable of $550,000 and the Eagle #2 note payable of $300,000 by entering into a payment and indemnification agreement with the receivers/trustee of CBSG and Eagle. The receiver has agreed that the balance of the outstanding amounts will be paid over the course of 24 months in equal payments of $158,625. Further, the Company shall pay $20,000 per month toward the balance and Anthony Zingarelli (“Zingarelli”) and Colorado Sky Industrial Supply LLC (“CSIS”), agree to personally pay the sum of $138,625 per month. Zingarelli is the only member of CNP Operating that signed a personal guarantee on the loans and Zingarelli is the sole member of CSIS. Zingarelli and CSIS has agreed to indemnify and hold the Company harmless from any and all losses, liabilities and claims. If a loss is incurred by the Company with respect to any claims, Zingarelli shall reimburse the Company for the amount of any such loss. The Company has recorded the Zingarelli portion of the entire obligations as an offset to member’s contribution. On January 10, 2020 the Company’s subsidiary CNP Operating purchased a distillation machine for $248,000. The company paid $108,000 and entered into a promissory note with company owned by one of the partners. The original value of the note was $140,000 and has no terms such as interest rate, maturity or monthly payments. Imputed interested was not material. The outstanding balance of the note was $49,331 at September 30, 2021. On Nov 19, 2020 the Company’s subsidiary CNP Operating purchased equipment for $58,095 which was financed at zero interest rate. The monthly payments of $968 will be made for the next 60 months and mature on Nov 19, 2025. Imputed interested was not material. The outstanding balance of the note was $49,331 at September 30, 2021. The Company’s subsidiary CNP Operating also entered into a note payable during 2020 with the landlord for additional improvements to the facility in Centennial, Colorado. The outstanding balance of this note was $11,708 at December 31, 2020 and $29,981 as of September 30, 2021 because additional improvements were completed during the period. Future scheduled maturities of long-term debt are as follows. Year Ending December 31, 2021 (3 months) $ 615,930 2022 1,985,529 2023 836,607 2024 534,179 2025 3,416 Thereafter 138,113 Total $ 4,113,775 The aggregate current portion of long-term debt as of September 30, 2021 amounted to $2,043,555 which represents the contractual principal payments due during the twelve months following September 30, 2021. |
NOTE 7_ STOCKHOLDERS' EQUITY (D
NOTE 7: STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
NOTE 7: STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 7: STOCKHOLDERS’ EQUITY (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. In May 2021, in connection with the maturity extension of the $500,000 promissory note (Note 4), the Company issued 2,000,000 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 fair value of the shares was $160,000 and the Company recognized a loss on extinguishment of debt in the amount of $120,000. In June 2021, the Company received $50,000 in cash in respect to an exercise of warrants by a Note holder. The Company has reflected the $50,000 received in common shares issuable in the statement of stockholder’s equity as the Company issued 500,000 shares of common stock on July 7, 2021. On August 23, 2021, the Company entered into securities purchase agreements with CNP Operating, whereby the Company acquired 100% of CNP Operating from the Owners in exchange for an aggregate of 354 million shares of Company common stock. The securities were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended. 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 nine months ended September 30, 2021 and 2020, the Company incurred $180,000 and $180,000, respectively, of dividends from the outstanding preferred stock. Warrants The following summarizes the Company’s warrant activity for the nine months ended September 30, 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 Exercised (500,000) Outstanding at September 30, 2021 4,687,500 $ 0.33 3.36 Vested and expected to vest at September 30, 2021 4,687,500 $ 0.33 3.36 Exercisable at September 30, 2020 4,687,500 $ 0.33 3.36 As of September 30, 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 nine months ended September 30, 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 September 30, 2021 3,160,000 $ 0.33 .94 Vested and expected to vest at September 30, 2021 3,160,000 $ 0.33 .94 Exercisable at September 30, 2021 3,160,000 $ 0.33 .94 As of September 30, 2021, all outstanding options were fully vested and there is no remaining unrecorded compensation expense. |
NOTE 8_ COMMITMENTS AND CONTING
NOTE 8: COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
NOTE 8: COMMITMENTS AND CONTINGENCIES | NOTE 8: COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company is not presently a party to any legal proceedings that it currently believes, if determined adversely to the Company, would individually or taken together have a material adverse effect on the Company’s business, operating results, financial condition or cash flows. |
NOTE 9_ LEASES
NOTE 9: LEASES | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
NOTE 9: LEASES | NOTE 9: 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 took 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 and 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. On June 4, 2019, the Company’s subsidiary CNP Operating entered into a Lease Agreement with Blair Investments, LLC for the lease of office space in Centennial Colorado, for a period of 3 year at a rate of $10,521 per month. On September 26, 2019 this agreement was terminated and replaced with a new agreement starting October 1, 2019 and expiring on June 30, 2023. On October 26, 2020 the Company’s subsidiary CNP Operating entered into an amendment to the previous agreement to extend the lease to June 30, 2024, adjust the monthly rent schedule, the landlord agreed to install additional HVAC equipment and the Company agreed to reimburse the landlord $40,000 over a 4-year period with a monthly payment amount of $835. The following is a summary of future minimum lease payments and related liabilities for all non-cancelable operating leases maturing as of September 30: Operating Leases 2021 $ 59,021 2022 256,155 2023 262,727 2024 234,083 Thereafter 13,905 Total minimum lease payments including interest 825,890 Less: Amounts representing interest (117,718) Present value of minimum lease payments 708,172 Less: Current portion of lease liabilities (198,869) Non-current portion of lease liabilities $ 509,303 Cash payments on lease liabilities $ 1,035,002 Weighted average remaining lease term 3.5 year Weighted average discount rate 10% |
NOTE 10_ ACQUISITION OF CNP OPE
NOTE 10: ACQUISITION OF CNP OPERATING | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
NOTE 10: ACQUISITION OF CNP OPERATING | NOTE 10: ACQUISITION OF CNP OPERATING On August 25, 2021, the Company acquired CNP Operating for a purchase price consideration consisting of 354,000,000 shares of the Company’s common stock valued at $10,620,000. Also, during 2019, CNP Operating acquired certain inventory from CSIS and a portion of that inventory became damaged or obsolete. CNP Operating assumed the obligation for the debt with CBSG for $3,050,000 and CSIS and its sole member guaranteed the CBSG debt. CSIS has agreed to fund the loan repayments at $138,625 per month for 24 months. The original balance of the CBSG debt assumed by CNP Operating has been offset as a contribution receivable from CSIS and treated as an initial reduction in members’ equity. As payments are made by CSIS on the CBSG debt the balance of those payments will be treated as members’ contributions. That balance was $3,050,000 at June 30, 2021 (unaudited), December 31, 2020 and 2019. The purchase price allocation at fair value is below. The business combination accounting is not yet complete and the amounts assigned to the net assets acquired are provisional. Therefore, the final purchase price allocation may vary based on final appraisals, valuations and analyses of the fair value of the net assets acquired. August 25, 2021 Unaudited Assets Current assets Cash $ 60,589 Accounts receivable, net 496,795 Inventory 532,349 Current portion of note receivable 133,000 Total current assets 1,222,733 Other assets Right of Use Asset 549,902 Property and equipment, net of accumulated depreciation 5,563,610 Goodwill 9,261,591 Other Assets 16,573 Total other assets 15,391,676 Total assets $ 16,614,409 Liabilities Current liabilities Accounts payable and accrued expenses $ 1,829,418 Due to CSIS 298,760 Current portion of lease obligation 198,869 Current portion of notes payable 1,990,021 Total current liabilities 4,317,068 Lease obligation, less current portion 359,979 Long-term note payable, net of current portion and discounts 1,317,362 Total liabilities 1,677,341 Total Purchase Price Consideration $ 10,620,000 The purchase price was 354,000,000 shares of common stock at $0.03 per share totaling $10,620,000. The historical operations of CNP Operating were as follows: Six Months Ended June 30, 2021 Twelve months ended December 31, 2020 Unaudited Audited Net revenues $ 5,541,627 $ 6,183,469 Cost of revenue 3,546,763 5,772,804 Gross profit (loss) 1,976,864 410,665 Operating expenses: Selling, general and administrative 2,159,390 3,829,785 Total operating expenses 2,159,390 3,829,785 Loss from operations (182,526) (3,419,120) Total other expense (28,730) (222,376) Net loss $ (211,256) $ (3,641,496) |
11. Subsequent Events
11. Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Notes | |
11. Subsequent Events | 11. Subsequent Events On October 19, 2021, the Company borrowed $250,000 from a lender and issued a promissory note for the repayment of the amount borrowed. The promissory note is unsecured, has a maturity date of December 31, 2024 and all principal is due upon maturity. The amount borrowed accrues interest at 12% per annum and accrued interest is payable monthly commencing on December 1, 2021. The promissory note contains customary events of default permitting acceleration of repayment for nonpayment of amounts due, a bankruptcy related proceeding, breach of representations or covenants, sale of substantially all assets, and change of control. |
NOTE 2_ SUMMARY OF SIGNIFICAN_2
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of Estimates (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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. |
NOTE 2_ SUMMARY OF SIGNIFICAN_3
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Financial Statement Reclassification (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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. |
NOTE 2_ SUMMARY OF SIGNIFICAN_4
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Segment Reporting (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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 September 30, 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. The Company’s acquisition of CNP Operating in August 2021 results in an additional reporting segment that will be provided in future periods. |
NOTE 2_ SUMMARY OF SIGNIFICAN_5
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Cash and Cash Equivalents (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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 September 30, 2021, the Company had a restricted cash balance of $20,012 included as a component of total cash and restricted cash as presented on the accompanying unaudited condensed consolidated statement of cash flows. |
NOTE 2_ SUMMARY OF SIGNIFICAN_6
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Accounts Receivable (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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 September 30, 2021 and December 31, 2020 amounted to $249,284 and $183,750, respectively. |
NOTE 2_ SUMMARY OF SIGNIFICAN_7
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Inventory (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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 and for its CBD manufacturing business, CNP Operating. The inventory is valued at the lower of cost (first-in, first-out) or estimated net realizable value. |
NOTE 2_ SUMMARY OF SIGNIFICAN_8
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentration of Credit Risks (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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. |
NOTE 2_ SUMMARY OF SIGNIFICAN_9
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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. During the first quarter of 2021, the Company began offering customers of its East West Venture who purchase services the option to pay the contract price in securities issued by the Customer which could be a common stock, preferred stock or convertible debentures. In accordance with ASC 606 - Revenue Recognition, the Company will value the shares received at the fair market value of the date the contract is executed. 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. The Company accounts for its CNP Operating 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. |
NOTE 2_ SUMMARY OF SIGNIFICA_10
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Shipping and Handling Fees and Costs (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs Amounts billed to customers for shipping and handling fees are presented in revenue. Costs incurred for shipping and handling are included in cost of revenue. |
NOTE 2_ SUMMARY OF SIGNIFICA_11
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Fair Value of Financial Instruments (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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. |
NOTE 2_ SUMMARY OF SIGNIFICA_12
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Advertising (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
Advertising | Advertising The Company expenses advertising costs as incurred. Advertising expenses for the three months ended September 30, 2021 and 2020 amounted to $12,333 and $32,445, respectively. Advertising expenses for the nine months ended September 30, 2021 and 2020 amounted to $45,677 and $101,760, respectively. |
NOTE 2_ SUMMARY OF SIGNIFICA_13
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Income Taxes (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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 nine months ended September 30, 2021 and 2020. |
NOTE 2_ SUMMARY OF SIGNIFICA_14
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Property and Equipment (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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. |
NOTE 2_ SUMMARY OF SIGNIFICA_15
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Investments (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
Investments | 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. There were no impairment charges recorded related to investments during the six months ended September 30, 2021. |
NOTE 2_ SUMMARY OF SIGNIFICA_16
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Long-Lived Assets (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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. |
NOTE 2_ SUMMARY OF SIGNIFICA_17
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basic and Diluted Earnings Per Share (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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 September 30, 2021, the Company had 3,160,000 outstanding stock options and 4,687,500 outstanding warrants which were excluded from the calculation of diluted earnings per share because their effects were anti-dilutive. As of September 30, 2020, 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 a result, the basic and diluted earnings per share are the same for each of the periods presented. |
NOTE 2_ SUMMARY OF SIGNIFICA_18
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Share-Based Payment (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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. |
NOTE 2_ SUMMARY OF SIGNIFICA_19
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Common stock awards (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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. |
NOTE 2_ SUMMARY OF SIGNIFICA_20
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Warrants (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
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’ Equity (Deficit). |
NOTE 2_ SUMMARY OF SIGNIFICA_21
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Leases (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Policies | |
Leases | Leases The Company adopted Accounting Standards Update No. 2016-02, Leases (“Topic 842”) using the modified retrospective method. This accounting standard requires a lessee to recognize an asset and liability for most leases on its balance sheet. Upon adoption, right-of-use (ROU) assets and lease liabilities for operating leases were recorded in the amount of $181,134 and $181,134, respectively The Company elected the practical expedient method permitted under the transition guidance, which allows a carryforward of historical lease classification, the assessment on whether a contract was or contains a lease, and the initial direct costs for any leases that existed prior to July 1, 2019. The Company also elected to recognize the associated lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Under Topic 842, the Company determines if an arrangement is a lease at inception. ROU assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement and leases with an initial term of 12 months or less are not included in lease liabilities or ROU asset. As most leases do not provide an implicit rate, a rate which approximates the Company’s incremental borrowing rate is used, based on the information available at commencement date, in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred. Lease agreements generally do not contain residual value guarantees or restrictive covenants. Over the lease term, the Company uses the effective interest rate method to account for the lease liability as lease payments are made and the ROU asset is amortized in a manner that results in straight-line expense recognition. |
NOTE 3_ PROPERTY AND EQUIPMENT_
NOTE 3: PROPERTY AND EQUIPMENT: Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Tables/Schedules | |
Property, Plant and Equipment | The Company’s property and equipment relating to continuing operations consisted of the following: September 30, 2021 December 31, 2020 Machinery & Equipment $ 7,618,738 $ 12,546 Furniture, equipment and leasehold improvements 482,448 2,227 8,101,186 14,773 Less: accumulated depreciation and amortization (2,626,741) (6,928) $ 5,474,445 $ 7,845 |
NOTE 4_ MARKETABLE SECURITIES_
NOTE 4: MARKETABLE SECURITIES: Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Tables/Schedules | |
Marketable Securities | September 30, 2021 Common Stock Balances at beginning of year $ - $ - Additions 92,175 92,175 Sale of marketable securities - - Change in fair value 31,761 31,761 Balances at period end $ 123,936 $ 123,936 |
NOTE 5_ FAIR VALUE OF FINANCI_2
NOTE 5: FAIR VALUE OF FINANCIAL INSRUMENTS: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Tables/Schedules | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Balance as of September 30, 2021 Significant Unobservable Inputs (Level 1) Significant Unobservable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Marketable Securities $ 123,936 $ 123,936 $ - $ - Total Assets $ 123,936 $ 123,936 $ - $ - |
NOTE 6_ NOTES PAYABLE_ Schedule
NOTE 6: NOTES PAYABLE: Schedule of Maturities of Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Tables/Schedules | |
Schedule of Maturities of Long-term Debt | Future scheduled maturities of long-term debt are as follows. Year Ending December 31, 2021 (3 months) $ 615,930 2022 1,985,529 2023 836,607 2024 534,179 2025 3,416 Thereafter 138,113 Total $ 4,113,775 |
NOTE 7_ STOCKHOLDERS' EQUITY _2
NOTE 7: STOCKHOLDERS' EQUITY (DEFICIT): Schedule of Stockholders' Equity Note, Warrants or Rights (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Tables/Schedules | |
Schedule of Stockholders' Equity Note, Warrants or Rights | The following summarizes the Company’s warrant activity for the nine months ended September 30, 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 Exercised (500,000) Outstanding at September 30, 2021 4,687,500 $ 0.33 3.36 Vested and expected to vest at September 30, 2021 4,687,500 $ 0.33 3.36 Exercisable at September 30, 2020 4,687,500 $ 0.33 3.36 |
NOTE 7_ STOCKHOLDERS' EQUITY _3
NOTE 7: STOCKHOLDERS' EQUITY (DEFICIT): Share-based Payment Arrangement, Option, Activity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Tables/Schedules | |
Share-based Payment Arrangement, Option, Activity | The following summarizes the Company’s stock option activity for the nine months ended September 30, 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 September 30, 2021 3,160,000 $ 0.33 .94 Vested and expected to vest at September 30, 2021 3,160,000 $ 0.33 .94 Exercisable at September 30, 2021 3,160,000 $ 0.33 .94 |
NOTE 9_ LEASES_ Schedule of Fut
NOTE 9: LEASES: Schedule of Future Minimum Lease Payments, Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Tables/Schedules | |
Schedule of Future Minimum Lease Payments, Operating Leases | The following is a summary of future minimum lease payments and related liabilities for all non-cancelable operating leases maturing as of September 30: Operating Leases 2021 $ 59,021 2022 256,155 2023 262,727 2024 234,083 Thereafter 13,905 Total minimum lease payments including interest 825,890 Less: Amounts representing interest (117,718) Present value of minimum lease payments 708,172 Less: Current portion of lease liabilities (198,869) Non-current portion of lease liabilities $ 509,303 Cash payments on lease liabilities $ 1,035,002 Weighted average remaining lease term 3.5 year Weighted average discount rate 10% |
NOTE 10_ ACQUISITION OF CNP O_2
NOTE 10: ACQUISITION OF CNP OPERATING: Schedule of assets and liabilities assumed (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Tables/Schedules | |
Schedule of assets and liabilities assumed | August 25, 2021 Unaudited Assets Current assets Cash $ 60,589 Accounts receivable, net 496,795 Inventory 532,349 Current portion of note receivable 133,000 Total current assets 1,222,733 Other assets Right of Use Asset 549,902 Property and equipment, net of accumulated depreciation 5,563,610 Goodwill 9,261,591 Other Assets 16,573 Total other assets 15,391,676 Total assets $ 16,614,409 Liabilities Current liabilities Accounts payable and accrued expenses $ 1,829,418 Due to CSIS 298,760 Current portion of lease obligation 198,869 Current portion of notes payable 1,990,021 Total current liabilities 4,317,068 Lease obligation, less current portion 359,979 Long-term note payable, net of current portion and discounts 1,317,362 Total liabilities 1,677,341 Total Purchase Price Consideration $ 10,620,000 |
NOTE 10_ ACQUISITION OF CNP O_3
NOTE 10: ACQUISITION OF CNP OPERATING: Condensed Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
CNP Operating | |
Condensed Financial Statements | The historical operations of CNP Operating were as follows: Six Months Ended June 30, 2021 Twelve months ended December 31, 2020 Unaudited Audited Net revenues $ 5,541,627 $ 6,183,469 Cost of revenue 3,546,763 5,772,804 Gross profit (loss) 1,976,864 410,665 Operating expenses: Selling, general and administrative 2,159,390 3,829,785 Total operating expenses 2,159,390 3,829,785 Loss from operations (182,526) (3,419,120) Total other expense (28,730) (222,376) Net loss $ (211,256) $ (3,641,496) |
NOTE 1_ ORGANIZATION AND BASI_2
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION (Details) - USD ($) | Jun. 20, 2019 | May 15, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Stock Issued During Period, Value, Acquisitions | $ 3,000,000 | ||||||
Working Capital Deficit | $ 4,792,851 | $ 4,792,851 | |||||
Accumulated deficit | 37,580,345 | 37,580,345 | $ 36,384,202 | ||||
Net loss available to common shareholders | $ 452,654 | $ 455,634 | $ 1,196,143 | $ 1,290,351 | |||
Series B Preferred Stock | |||||||
Stock Issued During Period, Shares, Acquisitions | 3,000 | ||||||
Common Stock | |||||||
Stock Issued During Period, Shares, Acquisitions | 30,000,000 | ||||||
Asset Purchased Agreement With Emerging Growth Llc | |||||||
Payments to Acquire Businesses, Gross | $ 420,000 | ||||||
Stock Issued During Period, Shares, Acquisitions | 3,000 | ||||||
Asset Purchased Agreement With Emerging Growth Llc | Series B Preferred Stock | |||||||
Stock Issued During Period, Value, Acquisitions | $ 687,000 |
NOTE 2_ SUMMARY OF SIGNIFICA_22
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Cash and Cash Equivalents (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Details | ||
Restricted cash | $ 20,012 | $ 20,000 |
NOTE 2_ SUMMARY OF SIGNIFICA_23
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Accounts Receivable (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Details | ||
Accounts Receivable, Allowance for Credit Loss | $ 249,284 | $ 183,750 |
NOTE 2_ SUMMARY OF SIGNIFICA_24
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentration of Credit Risks (Details) | Sep. 30, 2021USD ($) |
Details | |
Cash, FDIC Insured Amount | $ 250,000 |
NOTE 2_ SUMMARY OF SIGNIFICA_25
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Advertising (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Details | ||||
Advertising Expense | $ 12,333 | $ 32,445 | $ 45,677 | $ 101,760 |
NOTE 2_ SUMMARY OF SIGNIFICA_26
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Investments (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 24, 2020 |
Details | |||
Equity Method Investment, Ownership Percentage | 9.80% | ||
Investments, at cost | $ 200,000 | $ 200,000 | $ 200,000 |
NOTE 2_ SUMMARY OF SIGNIFICA_27
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basic and Diluted Earnings Per Share (Details) - shares | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Payment Arrangement, Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,160,000 | 3,160,000 |
Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,687,500 | 5,256,944 |
NOTE 3_ PROPERTY AND EQUIPMEN_2
NOTE 3: PROPERTY AND EQUIPMENT: Property, Plant and Equipment (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment, Gross | $ 8,101,186 | $ 14,773 |
Less: accumulated depreciation and amortization | (2,626,741) | (6,928) |
Property, Plant and Equipment, Other, Net | 5,474,445 | 7,845 |
Machinery and Equipment | ||
Property, Plant and Equipment, Gross | 7,618,738 | 12,546 |
Furniture and Fixtures | ||
Property, Plant and Equipment, Gross | $ 482,448 | $ 2,227 |
NOTE 3_ PROPERTY AND EQUIPMENT
NOTE 3: PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Details | ||||
Depreciation | $ 102,148 | $ 350 | $ 102,720 | $ 1,049 |
NOTE 4_ MARKETABLE SECURITIES_2
NOTE 4: MARKETABLE SECURITIES: Marketable Securities (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Marketable Securities | $ 123,936 | $ 0 |
Additions of Marketable Securities | 92,175 | |
Sale of marketable securities | 0 | |
Change in Fair Value of Marketable Securities | 31,761 | |
Common Stock | ||
Marketable Securities | 123,936 | $ 0 |
Additions of Marketable Securities | 92,175 | |
Sale of marketable securities | 0 | |
Change in Fair Value of Marketable Securities | $ 31,761 |
NOTE 5_ FAIR VALUE OF FINANCI_3
NOTE 5: FAIR VALUE OF FINANCIAL INSRUMENTS: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Marketable Securities | $ 123,936 | $ 0 |
Fair Value, Inputs, Level 1 | ||
Marketable Securities | 123,936 | |
Fair Value, Inputs, Level 2 | ||
Marketable Securities | 0 | |
Fair Value, Inputs, Level 3 | ||
Marketable Securities | $ 0 |
NOTE 6_ NOTES PAYABLE (Details)
NOTE 6: NOTES PAYABLE (Details) - USD ($) | Sep. 30, 2021 | Feb. 25, 2021 | Nov. 19, 2020 | Jun. 24, 2020 | Jun. 06, 2020 | May 06, 2020 | Jan. 10, 2020 | Oct. 28, 2019 | Sep. 30, 2019 | Sep. 10, 2019 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Proceeds from Warrant Exercises | $ 0 | $ 50,000 | $ 0 | |||||||||||
Long-term Debt | $ 4,113,775 | 4,113,775 | 4,113,775 | |||||||||||
Property and equipment | 5,474,445 | 5,474,445 | 5,474,445 | $ 7,845 | ||||||||||
Payments to Acquire Property, Plant, and Equipment | 5,710 | 6,633 | ||||||||||||
Current portion of notes payable | 2,043,555 | 2,043,555 | 2,043,555 | 188,249 | ||||||||||
Promissory Note Payable | ||||||||||||||
Proceeds from Long-term Lines of Credit | $ 500,000 | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||||||||||||
Debt Instrument, Unamortized Discount | 5,502 | $ 17,624 | 5,502 | 5,502 | ||||||||||
Amortization of Debt Discount (Premium) | 4,427 | $ 4,425 | ||||||||||||
Long-term Debt | 494,498 | 494,498 | 494,498 | |||||||||||
Long-term Debt, Gross | $ 500,000 | 500,000 | 500,000 | |||||||||||
Promissory Note Payable | Warrant in Connection with Promissory Note | ||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 500,000 | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.10 | |||||||||||||
Proceeds from Warrant Exercises | 50,000 | |||||||||||||
PPP | ||||||||||||||
Proceeds from Loans | $ 263,000 | $ 263,000 | ||||||||||||
Debt Instrument, Interest Rate During Period | 1.00% | |||||||||||||
Debt Instrument, Maturity Date | May 6, 2022 | |||||||||||||
SBA | ||||||||||||||
Proceeds from Loans | $ 150,000 | |||||||||||||
Debt Instrument, Interest Rate During Period | 3.75% | |||||||||||||
Debt Instrument, Periodic Payment | $ 731 | |||||||||||||
Second PPP Note | ||||||||||||||
Debt Instrument, Interest Rate During Period | 1.00% | |||||||||||||
Debt Instrument, Maturity Date | Feb. 25, 2023 | |||||||||||||
Debt Instrument, Periodic Payment | $ 14,727 | |||||||||||||
Long-term Debt, Current Maturities | 0 | 0 | 0 | |||||||||||
Promissory Note Payable 2 | ||||||||||||||
Long-term Debt | 2,633,875 | 2,633,875 | 2,633,875 | |||||||||||
Proceeds from Loans | $ 3,050,000 | |||||||||||||
Promissory Note Payable 3 | ||||||||||||||
Long-term Debt | 300,000 | 300,000 | 300,000 | |||||||||||
Proceeds from Loans | $ 550,000 | |||||||||||||
Debt Instrument, Interest Rate During Period | 16.00% | |||||||||||||
Promissory Note Payable 4 | ||||||||||||||
Long-term Debt | 80,000 | 80,000 | 80,000 | |||||||||||
Proceeds from Loans | $ 300,000 | |||||||||||||
Debt Instrument, Interest Rate During Period | 18.00% | |||||||||||||
Promissory Note Payable 5 | ||||||||||||||
Long-term Debt | 49,331 | 49,331 | 49,331 | |||||||||||
Proceeds from Loans | $ 140,000 | |||||||||||||
Property and equipment | 248,000 | |||||||||||||
Payments to Acquire Property, Plant, and Equipment | $ 108,000 | |||||||||||||
Promissory Note Payable 6 | ||||||||||||||
Long-term Debt | 49,331 | 49,331 | 49,331 | |||||||||||
Debt Instrument, Periodic Payment | $ 968 | |||||||||||||
Property and equipment | $ 58,095 | |||||||||||||
Promissory Note Payable 7 | ||||||||||||||
Long-term Debt | $ 29,981 | $ 29,981 | $ 29,981 | $ 11,708 |
NOTE 6_ NOTES PAYABLE_ Schedu_2
NOTE 6: NOTES PAYABLE: Schedule of Maturities of Long-term Debt (Details) | Sep. 30, 2021USD ($) |
Details | |
Long-Term Debt, Maturity, Remainder of Fiscal Year | $ 615,930 |
Long-Term Debt, Maturity, Year Two | 1,985,529 |
Long-Term Debt, Maturity, Year Three | 836,607 |
Long-Term Debt, Maturity, Year Four | 534,179 |
Long-Term Debt, Maturity, Year Five | 3,416 |
Long-Term Debt, Maturity, after Year Five | 138,113 |
Long-term Debt | $ 4,113,775 |
NOTE 7_ STOCKHOLDERS' EQUITY _4
NOTE 7: STOCKHOLDERS' EQUITY (DEFICIT) (Details) - USD ($) | Oct. 13, 2020 | Aug. 06, 2020 | Apr. 03, 2020 | Jun. 20, 2019 | May 15, 2019 | Jun. 30, 2021 | May 31, 2021 | Mar. 31, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Extinguishment of Debt, Gain (Loss), Net of Tax | $ (172,500) | $ (30,069) | ||||||||||||
Proceeds from Warrant Exercises | $ 0 | $ 50,000 | 0 | |||||||||||
Preferred Stock, Shares Authorized | 2,000,000 | 2,000,000 | ||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||||||||||||
Stock Issued During Period, Value, Acquisitions | $ 3,000,000 | |||||||||||||
Dividends, Paid-in-kind | $ 180,000 | $ 180,000 | ||||||||||||
Convert 2018 Promissory Note to Preferred Stock | ||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 500 | |||||||||||||
Debt Conversion, Original Debt, Amount | $ 500,000 | |||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | |||||||||||||
Preferred Stock, Dividend Rate, Percentage | 12.00% | |||||||||||||
Series A Preferred Stock | ||||||||||||||
Proceeds from Warrant Exercises | $ 0 | |||||||||||||
Preferred Stock, Shares Authorized | 500 | 500 | 500 | 500 | ||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Series B Preferred Stock | ||||||||||||||
Proceeds from Warrant Exercises | $ 0 | |||||||||||||
Preferred Stock, Shares Authorized | 3,000 | 3,000 | 3,000 | 3,000 | ||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Stock Issued During Period, Shares, Acquisitions | 3,000 | |||||||||||||
CNP Operating | ||||||||||||||
Ownership interest percentage | 100.00% | 100.00% | ||||||||||||
Asset Purchased Agreement With Emerging Growth Llc | ||||||||||||||
Stock Issued During Period, Shares, Acquisitions | 3,000 | |||||||||||||
Asset Purchased Agreement With Emerging Growth Llc | Series B Preferred Stock | ||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | |||||||||||||
Preferred Stock, Dividend Rate, Percentage | 6.00% | |||||||||||||
Stock Issued During Period, Value, Acquisitions | $ 687,000 | |||||||||||||
Stock Issuance 1 | ||||||||||||||
Proceeds from Issuance of Common Stock | $ 10,000 | $ 410,000 | ||||||||||||
Shares issued as for exercise of warrant | 10,250,000 | |||||||||||||
Stock Issuance 2 | ||||||||||||||
Proceeds from Issuance of Common Stock | $ 10,000 | |||||||||||||
Shares issued as for exercise of warrant | 12,150,000 | |||||||||||||
Stock Issuance 3 | ||||||||||||||
Shares issued as for exercise of warrant | 1,750,000 | |||||||||||||
Stock Issuance 4 | ||||||||||||||
Shares issued as for exercise of warrant | 2,000,000 | |||||||||||||
Stock Issuance 5 | ||||||||||||||
Shares issued as for exercise of warrant | 500,000 | |||||||||||||
Proceeds from Warrant Exercises | $ 50,000 | |||||||||||||
Consultant | ||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 500,000 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 250,000 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 187,500 | |||||||||||||
Emerging Growth | ||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 4,800,000 | |||||||||||||
Debt Conversion, Original Debt, Amount | $ 240,000 | |||||||||||||
Due to Related Parties | 209,931 | |||||||||||||
Extinguishment of Debt, Gain (Loss), Net of Tax | $ 30,069 | |||||||||||||
Emerging Growth | Accrued Interest | ||||||||||||||
Due to Related Parties | 104,931 | |||||||||||||
Emerging Growth | Payables | ||||||||||||||
Due to Related Parties | $ 105,000 | |||||||||||||
Holder | ||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 1,650,000 | |||||||||||||
Debt Conversion, Original Debt, Amount | $ 82,500 | |||||||||||||
Extinguishment of Debt, Gain (Loss), Net of Tax | $ 41,308 | |||||||||||||
Debt Instrument, Face Amount | 500,000 | |||||||||||||
Holder | Accrued Interest | ||||||||||||||
Debt Conversion, Original Debt, Amount | $ 41,192 |
NOTE 7_ STOCKHOLDERS' EQUITY _5
NOTE 7: STOCKHOLDERS' EQUITY (DEFICIT): Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - $ / shares | Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 3,160,000 | 3,160,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 0.33 | $ 0.33 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 3,160,000 | 3,160,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.33 | $ 0.33 | |
Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 4,687,500 | 4,687,500 | 5,256,944 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 0.33 | $ 0.33 | $ 0.33 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (69,444) | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 0.45 | ||
Warrants exercised (in shares) | (500,000) | ||
Warrants exercised, weighted average price per share (in dollars per share) | $ 0.10 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 4,687,500 | 4,687,500 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 0.33 | $ 0.33 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 4,687,500 | 4,687,500 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.33 | $ 0.33 |
NOTE 7_ STOCKHOLDERS' EQUITY _6
NOTE 7: STOCKHOLDERS' EQUITY (DEFICIT): Share-based Payment Arrangement, Option, Activity (Details) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 3,160,000 | 3,160,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.33 | $ 0.33 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 3,160,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 0.33 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 3,160,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.33 |
NOTE 9_ LEASES (Details)
NOTE 9: LEASES (Details) - USD ($) | Sep. 30, 2021 | Sep. 01, 2020 | Jun. 20, 2019 |
Office Space In Whitefish Montana | |||
Operating Lease Monthly Rent | $ 4,500 | $ 4,500 | $ 1,500 |
Office Space in Centennial, CO | |||
Operating Lease Monthly Rent | 10,521 | ||
Office Space in Centennial, CO - HVAC Installation | |||
Operating Lease Monthly Rent | $ 835 |
NOTE 9_ LEASES_ Schedule of F_2
NOTE 9: LEASES: Schedule of Future Minimum Lease Payments, Operating Leases (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Details | |
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months | $ 59,021 |
Operating Leases, Future Minimum Payments, Due in Rolling Year Two | 256,155 |
Operating Leases, Future Minimum Payments, Due in Rolling Year Three | 262,727 |
Operating Leases, Future Minimum Payments, Due in Rolling Year Four | 234,083 |
Operating Leases, Future Minimum Payments, Due Thereafter | 13,905 |
Operating Leases, Future Minimum Payments Due | 825,890 |
Amounts representing interest | (117,718) |
Present value of minimum lease payments | 708,172 |
Operating Lease, Liability, Current | (198,869) |
Operating Lease, Liability, Noncurrent | 509,303 |
Operating Lease, Payments | $ 1,035,002 |
Operating Lease, Weighted Average Remaining Lease Term | 3 years 6 months |
Operating Lease, Weighted Average Discount Rate, Percent | 10.00% |
NOTE 10_ ACQUISITION OF CNP O_4
NOTE 10: ACQUISITION OF CNP OPERATING (Details) - USD ($) | Oct. 28, 2019 | Sep. 30, 2021 | Mar. 31, 2021 | Aug. 25, 2021 |
Promissory Note Payable 2 | ||||
Proceeds from Loans | $ 3,050,000 | |||
Merger | ||||
Total Purchase Price Consideration | $ 10,620,000 | |||
Common Stock | ||||
Stock Issued During Period, Shares, New Issues | 354,000,000 | 12,150,000 |
NOTE 10_ ACQUISITION OF CNP O_5
NOTE 10: ACQUISITION OF CNP OPERATING: Schedule of assets and liabilities assumed (Details) - USD ($) | Sep. 30, 2021 | Aug. 25, 2021 | Dec. 31, 2020 |
Other assets | |||
Right of Use Asset | $ 748,566 | $ 0 | |
Goodwill | $ 9,261,591 | $ 0 | |
CNP Operating | |||
Current assets | |||
Cash | $ 60,589 | ||
Accounts receivable, net | 496,795 | ||
Inventory | 532,349 | ||
Current portion of note receivable | 133,000 | ||
Total current assets | 1,222,733 | ||
Other assets | |||
Right of Use Asset | 549,902 | ||
Property and equipment, net of accumulated depreciation | 5,563,610 | ||
Goodwill | 9,261,591 | ||
Other Assets | 16,573 | ||
Total other assets | 15,391,676 | ||
Total assets | 16,614,409 | ||
Current liabilities | |||
Accounts payable and accrued expenses | 1,829,418 | ||
Due to CSIS | 298,760 | ||
Current portion of lease obligation | 198,869 | ||
Current portion of notes payable | 1,990,021 | ||
Total current liabilities | 4,317,068 | ||
Lease obligation, less current portion | 359,979 | ||
Long-term note payable, net of current portion and discounts | 1,317,362 | ||
Total liabilities | 1,677,341 | ||
Total Purchase Price Consideration | $ 10,620,000 |
NOTE 10_ ACQUISITION OF CNP O_6
NOTE 10: ACQUISITION OF CNP OPERATING: Condensed Financial Statements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Net revenues | $ 948,254 | $ 154,369 | $ 1,451,230 | $ 349,071 | ||
Cost of revenue | 730,186 | 128,885 | 949,170 | 414,154 | ||
Gross profit (loss) | 218,068 | 25,484 | 502,060 | (65,083) | ||
Operating expenses: | ||||||
Selling, general and administrative | 847,888 | 307,069 | 1,551,790 | 906,739 | ||
Total operating expenses | 847,888 | 307,069 | 1,551,790 | 906,739 | ||
Loss from operations | $ (629,820) | $ (281,585) | $ (1,049,730) | $ (971,822) | ||
CNP Operating | ||||||
Net revenues | $ 5,541,627 | $ 6,183,469 | ||||
Cost of revenue | 3,546,763 | 5,772,804 | ||||
Gross profit (loss) | 1,976,864 | 410,665 | ||||
Operating expenses: | ||||||
Selling, general and administrative | 2,159,390 | 3,829,785 | ||||
Total operating expenses | 2,159,390 | 3,829,785 | ||||
Loss from operations | (182,526) | (3,419,120) | ||||
Total other expense | (28,730) | (222,376) | ||||
Net loss | $ (211,256) | $ (3,641,496) |
11. Subsequent Events (Details)
11. Subsequent Events (Details) - Promissory Note Payable 8 | Oct. 19, 2021USD ($) |
Proceeds from Loans | $ 250,000 |
Debt Instrument, Interest Rate During Period | 12.00% |