NOTE 6: STOCKHOLDERS' DEFICIT

12 Months Ended

Dec. 31, 2023

Notes

NOTE 6: STOCKHOLDERS' DEFICIT

NOTE 6: STOCKHOLDERS’ DEFICIT

Common Stock

On April 14, 2022, the Company entered into securities purchase agreements with investors for the purchase of an aggregate of 1,144,383 shares of common stock at a purchase price of $0.70 per share for gross proceeds of $800,020. The shares were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended.

On April 29, 2022, the Company issued 1,000,000 shares of common stock in connection with the closing of the purchase of property and equipment in Wray, Colorado, by the Company’s subsidiary CFN Real Estate II, LLC. The shares were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended. The shares were issued at a purchase price of $0.70 per share for a purchase price of $700,000.

On October 4, 2022, the Company converted the entire $676,000 in principal and $50,700 in accrued interest on its convertible notes into an aggregate of 2,906,800 shares of common stock.  The shares were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended.

On October 31, 2022, the Company converted $40,000 in accrued interest on an outstanding note into 160,000 shares of common stock.  As a result of the conversion, the Company recorded a gain on conversion of $8,000.  The shares were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended.

On November 3, 2022, the Company entered into securities purchase agreements with investors for the purchase of an aggregate of 800,000 shares of common stock at a purchase price of $0.25 per share for gross proceeds of $200,000. The shares were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended.

In January 2023, the Company issued 2,400,000 shares of common stock at a purchase price of $0.25 per share for $600,000 in gross proceeds.

In May 2023, the Company and Emerging Growth reached an agreement whereby the Company issued 1,620,000 shares of its common stock as payment for $405,000 in outstanding accrued interest on the Series B Preferred Stock through June 30, 2023.

In July 2023, the Company issued 40,000,000 shares of common stock at a price of $0.20 per share, or total fair value of $8,000,000, pursuant to the Ranco business combination.

In August 2023, the Company and Emerging Growth reached an agreement whereby the Company issued 500,000 shares of its common stock as payment for $45,000 in outstanding accrued interest on the Series B Preferred Stock through September 30, 2023.

As of December 31, 2023 and 2022, there was $0 and $217,500, respectively, in payments made in advance of securities date.

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.

In May, 2023, the Company and Emerging Growth reached an agreement whereby the Company issued 1,620,000 shares of its common stock as payment for $405,000 in outstanding accrued interest on the Series B Preferred Stock through June 30, 2023.

In August, 2023, the Company and Emerging Growth reached an agreement whereby the Company issued 500,000 shares of its common stock as payment for $45,000 in outstanding accrued interest on the Series B Preferred Stock through September 30, 2023.

For the year ended December 31, 2023 and 2022, the Company incurred $240,000 and $240,000, respectively, of interest from the outstanding preferred stock.

Warrants

The following summarizes the Company’s warrant activity for the years ended December 31, 2023 and 2022:

			Weighted-Average
		Weighted-	Remaining
		Average	Contractual Life
	Warrants	Exercise Price	(Years)
Outstanding at December 31, 2021	312,500	4.95	2.61
Granted	676,000	1.00
Forfeited	-	-
Outstanding at December 31, 2022	988,500	$2.25	2.39
Granted	11,000,000	0.25	0.25
Forfeited	-
Outstanding at December 31, 2023	11,988,500	$0.41	4.18
Vested and expected to vest at December 31, 2023	11,988,500	$0.41	4.18
Exercisable at December 31, 2023	11,988,500	$0.41	4.18

In April 2022, the Company granted 676,000 warrants in connection with the issuance of promissory notes (see Note 5). The warrants have an exercise price of $1.00 per share, expire in three years and are immediately exercisable.

On May 19, 2023, the Company entered into an advisory agreement with the Isaac Shehebar 2008 AIJJ Grantor Retained Annuity Trust and Ezra A. Chehebar (the “Advisors”), existing shareholders of the Company, for consulting services and to advise the Company’s executive team on strategic, branding, marketing, distribution, networking and other general business matters. As consideration under the advisory agreement, on May 22, 2023, the Company issued an aggregate of 6,000,000 five-year warrants to purchase common stock at a price of $0.25 per share to the Advisors.  The warrants are immediately exercisable.  During the year ended December 31, 2023, the Company recorded stock-based compensation expense of $1,156,100 pertaining to these warrants, which was included in additional paid-in capital.

In connection with the May 2023 notes (see Note 5), the Company issued 1,150,000 warrants to purchase common stock. The warrants have an exercise price of $0.25 per share, are immediately exercisable and have a term of 5 years. The fair value of the warrants was $185,788, which was recognized as a debt discount and will be amortized to interest expense over the life of the notes. During the year ended December 31, 2023, amortization of debt discount was $90,664.

In connection with the July 2023 notes (see Note 5), the Company issued 3,850,000 warrants to purchase common stock. The warrants have an exercise price of $0.25 per share, are immediately exercisable and have a term of 5 years. The fair value of the warrants was $626,073, which was recognized as a debt discount and will be amortized to interest expense over the life of the notes. During the year ended December 31, 2023, amortization of debt discount was $250,430.

As of December 31, 2023, 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 is currently 1,500,000 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 years ended December 31, 2023 and 2022:

			Weighted-Average
		Weighted-	Remaining
		Average	Contractual Life
	Options	Exercise Price	(Years)
Outstanding at January 1, 2022	210,667	4.95	0.94
Forfeited/cancelled	(210,667)	4.95
Outstanding at December 31, 2022	-
Outstanding at December 31, 2023	-
Vested and expected to vest at December 31, 2022	-	-	-
Vested and expected to vest at December 31, 2023	-	-	-