NOTE 9: COMMITMENTS AND CONTINGENCIES	6 Months Ended
Jun. 30, 2024
Notes
NOTE 9: COMMITMENTS AND CONTINGENCIES	NOTE 9: COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. Except as set forth below, 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. In October 2022, CAKE Software Inc., or CAKE, filed a lawsuit against the Company in the Supreme Court of the State of New York, County of New York, captioned CAKE Software, Inc. v. Accelerize Inc. n/k/a CFN Enterprises Inc., Index No. 653838/2022. On December 6, 2022, CAKE filed an amended complaint, which is the operative complaint in this matter. CAKE's lawsuit stems from an Asset Purchase Agreement, or the APA, executed by the parties in May 2019, in which CAKE was the buyer of certain assets from the Company. CAKE alleges that the Company breached the APA by not paying a purported outstanding amount due which was to be calculated post-closing, and for breaching certain representations and warranties in the APA. CAKE further seeks indemnification under the APA for what it alleges are liabilities the Company retained after the closing of the sale. Based on its claims, CAKE is seeking compensatory damages of at least $1,045,441.86, attorney's fees, interests and costs, and such other relief as the court may deem just and appropriate. In January 2023, the Company filed its initial Answer and Counterclaims, denying the material allegations and asserting its own claims against CAKE and Perseus Operating Group, or Perseus, a division of Constellation Software Inc. (TSX:CSU, OTCPK: CNSWF; www.csisoftware.com), or Constellation Software. On July 19, 2023, the parties held a mediation but were unsuccessful in reaching an agreement. On September 25, 2023, after prevailing on a motion for leave to amend its initial Answer with Counterclaims, the Company filed its Amended Answer with Counterclaims against CAKE and Constellation Software itself, instead of its operating group, Perseus. The Amended Answer with Counterclaims is the Company’s operative pleading in this matter, and through it, the Company asserts that CAKE breached the APA by failing to pay the Company an earn-out, calculated in accordance with the APA, over a three-year period and totaling no less than $12,375,000, and that CAKE failed to pay the Company a $500,000 holdback amount. The Company further alleges that Constellation Software is the alter ego of CAKE, and therefore, is also liable under the APA. Through its amended counterclaims, the Company seeks compensatory damages of no less than $12,875,000, encompassing the earn-out amounts owed and the holdback amount, plus attorneys' fees, interests and costs, and other such relief as the court may deem just and proper. On November 3, 2023, CAKE and Constellation Software filed replies to the Company’s amended counterclaims. Currently, the parties are engaged in the discovery process and a status conference with the Court regarding discovery is scheduled for December 8, 2024. The Company expects to vigorously defend against CAKE and Constellation Software’s claims, and to pursue its own counterclaims against CAKE, Constellation Software, and any other persons that it may identify through discovery to have harmed the Company or to have taken any action to interfere with the Company’s ability to receive its earn-out and/or the holdback amount. The Company has determined that potential losses in this matter are neither probable or reasonably possible at this time.

NOTE 9: COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2024

NOTE 9: COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. Except as set forth below, 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.

In October 2022, CAKE Software Inc., or CAKE, filed a lawsuit against the Company in the Supreme Court of the State of New York, County of New York, captioned CAKE Software, Inc. v. Accelerize Inc. n/k/a CFN Enterprises Inc., Index No. 653838/2022. On December 6, 2022, CAKE filed an amended complaint, which is the operative complaint in this matter. CAKE's lawsuit stems from an Asset Purchase Agreement, or the APA, executed by the parties in May 2019, in which CAKE was the buyer of certain assets from the Company. CAKE alleges that the Company breached the APA by not paying a purported outstanding amount due which was to be calculated post-closing, and for breaching certain representations and warranties in the APA. CAKE further seeks indemnification under the APA for what it alleges are liabilities the Company retained after the closing of the sale. Based on its claims, CAKE is seeking compensatory damages of at least $1,045,441.86, attorney's fees, interests and costs, and such other relief as the court may deem just and appropriate.

In January 2023, the Company filed its initial Answer and Counterclaims, denying the material allegations and asserting its own claims against CAKE and Perseus Operating Group, or Perseus, a division of Constellation Software Inc. (TSX:CSU, OTCPK: CNSWF; www.csisoftware.com), or Constellation Software. On July 19, 2023, the parties held a mediation but were unsuccessful in reaching an agreement.

On September 25, 2023, after prevailing on a motion for leave to amend its initial Answer with Counterclaims, the Company filed its Amended Answer with Counterclaims against CAKE and Constellation Software itself, instead of its operating group, Perseus. The Amended Answer with Counterclaims is the Company’s operative pleading in this matter, and through it, the Company asserts that CAKE breached the APA by failing to pay the Company an earn-out, calculated in accordance with the APA, over a three-year period and totaling no less than $12,375,000, and that CAKE failed to pay the Company a $500,000 holdback amount. The Company further alleges that Constellation Software is the alter ego of CAKE, and therefore, is also liable under the APA. Through its amended counterclaims, the Company seeks compensatory damages of no less than $12,875,000, encompassing the earn-out amounts owed and the holdback amount, plus attorneys' fees, interests and costs, and other such relief as the court may deem just and proper.

On November 3, 2023, CAKE and Constellation Software filed replies to the Company’s amended counterclaims. Currently, the parties are engaged in the discovery process and a status conference with the Court regarding discovery is scheduled for December 8, 2024. The Company expects to vigorously defend against CAKE and Constellation Software’s claims, and to pursue its own counterclaims against CAKE, Constellation Software, and any other persons that it may identify through discovery to have harmed the Company or to have taken any action to interfere with the Company’s ability to receive its earn-out and/or the holdback amount.

The Company has determined that potential losses in this matter are neither probable or reasonably possible at this time.