UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2022~~2023

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ________

Commission file number: 000-21202

Resonate Blends, Inc.

(Exact name of registrant as specified in its charter)

Nevada		58-1588291
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
26565 Agoura Road, Suite 200 Calabasas, CA		91302
One Marine Plaza, Suite 305A North Bergen, New Jersey		04047
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number: ~~571~~(786) 369-~~888-0009~~9696

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Title of each class

Common Stock, par value of $0.0001

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company.

☐ Large accelerated filer	☐ Accelerated filer
☒ Non-accelerated filer	☒ Smaller reporting company
	☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $26,~~878~~732,~~269~~534.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 7596,~~437~~179,~~604~~058 common shares as of ~~March~~April 3116, ~~2023~~2024.

Documents Incorporated by Reference

Amendment to Current Report on Form 8-K filed April 16, 2024.

TABLE OF CONTENTS

		Page	~~Page~~
	PART I
Item 1.	Business	3	3
Item 1A.	Risk Factors	4	9
Item 1B.	Unresolved Staff Comments	4	19
Item 2.	Properties	4	19
Item 3.	Legal Proceedings	4	19
Item 4.	Mine Safety Disclosures	4	19
	PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	5	20
Item 6.	Selected Financial Data	6	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6	22
Item 8.	Financial Statements and Supplementary Data	10	25
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	10	26
Item 9A.	Controls and Procedures	10	26
Item 9B.	Other Information	10	27
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	10	27
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	11	27
Item 11.	Executive Compensation	14	30
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	15	32
Item 13.	Certain Relationships and Related Transactions, and Director Independence	16	32
Item 14.	Principal Accountant Fees and Services	17	33
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	18	34
Item 16.	Form 10-K Summary	19	35
	Signatures	20
	Certifications

PART I

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Item 1. Business

Recent Acquisition, Change in Control and Change in Business Plan

Change in Control. Effective March 14, 2024, Geoffrey Selzer, our former Chief Executive Officer and Director, and Jim Morrison, our current President and Director, entered into a Securities Purchase Agreement (the “Control Agreement”), pursuant to which Mr. Selzer sold all 2,000,000 outstanding shares of the Company’s Series C Preferred Stock to Mr. Morrison for $10.00 in cash. Mr. Morrison now possesses voting control of the Company. See Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

EMGE Acquisition Transaction. On February 26, 2024, we entered into entered into a Share Exchange Agreement, as amended (the “Exchange Agreement”), with Emergent Health Corp., a publicly-traded (symbol: EMGE) Wyoming corporation (“EMGE”), and the holders (the “EMGE Preferred Shareholders”) of Series Class A Preferred Stock and the Series C Convertible Non-Voting Preferred Stock (collectively, the “EMGE Equity Interests”).

On March 14, 2024, the parties closed the Exchange Agreement. At the closing of the Exchange Agreement: (a) the EMGE Preferred Shareholders exchanged all of their respective EMGE Equity Interests for an equal number of shares of the Company’s to-be-designated Series F Convertible Preferred Stock that shall convert into 93% of the common stock of the Company on a fully-diluted basis (the “Series F Preferred Stock”), which shares of Series F Preferred Stock are currently issuable to the EMGE Preferred Shareholders and are to be issued upon the Company’s filing of a Certificate of Designation with the State of Nevada; (b) the Company consummated the Conveyance Agreement; and (c) all persons serving as directors and officers of the Company prior to the consummation of the Exchange Agreement resigned and appointed four new members of the Company’s Board of Directors.

Conveyance Agreement. On March 14, 2024, in conjunction with our acquisition of EMGE, we entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiary (the “Conveyance Agreement”) with two of our then-wholly-owned subsidiaries, Resonate Blends, LLC, a California limited liability company, and Entourage Labs, LLC, a California limited liability company (collectively, Resonate Blends, LLC and Entourage Labs, LLC are referred to as the “Subsidiary”), and our former Chief Executive Officer and Director, Geoffrey Selzer. Pursuant to the Conveyance Agreement, we assigned our ownership in the Subsidiary to Mr. Selzer. In consideration of our assignment of the Subsidiary, Mr. Selzer (a) assumed and agreed to pay, perform and discharge, fully and completely, all liabilities of the Subsidiary, (b) indemnified us for any loss arising from or in connection with any of such liabilities and (c) agreed to pay us (i) 20% of any proceeds from the sale of the Subsidiary that occurs prior to the one-year anniversary of the Conveyance Agreement and (ii) 10% of any proceeds from the sale of the Subsidiary that occurs after the one-year anniversary and prior to the two-year anniversary of the Conveyance Agreement.

New Business Plan. The business plan and operations of EMGE now represent the entirety of our company’s business operations. References to “the Company,” “our company,” “ours,” “us,” “we” and similar words are to Resonate Blends, Inc., EMGE and the subsidiaries of EMGE. The information below includes historical information about EMGE.

Overview

OnOur ~~October~~company ~~25,~~engages ~~2019,~~in the ~~Company~~discovery, ~~announced~~development ~~its~~and ~~entry~~marketing ~~into~~of products designed to better mankind. We believe we are positioning our company as a leader in the ~~cannabis~~field ~~industry~~of Regenerative Medicine defined by ~~acquiring~~the ~~Resonate~~National ~~Blends~~Institute ~~LLC~~of ~~(“Resonate~~Health ~~Blends”),~~using nutritionally designed products. aIntended ~~California~~products are to be marketed under third-~~based~~party ~~cannabis~~label ~~wellness~~exemptions. ~~lifestyle~~We ~~product~~are ~~company~~focusing ~~built~~our current efforts on amarketing ~~proprietary~~licensed ~~system~~patent-pending natural stem cell mobilizing agents capable of ~~experiential~~enhancing ~~targets.~~each ~~Resonate~~individual’s ~~Blends~~ability to mobilize their own adult stem cells from istheir ~~building~~bone amarrow. ~~value-added~~Also, ~~brand~~we are licensed under a patent-~~focused~~pending ~~cannabis~~application ~~organization~~to ~~offering~~market ~~premium~~a ~~brands~~dual ofacting ~~consistent~~all ~~quality~~natural diet aid designed to help control hunger through normal body signals to the brain and stomach. ~~The~~Products ~~Company~~are ~~also~~being ~~acquired~~developed for consumer and professional ~~Entourage~~markets. ~~Labs~~Research ~~LLC~~and ~~(“Entourage~~development ~~Labs”)~~activities center on exploring other areas, such as Secretogues that can naturally enhance a ~~sister~~person’s own ~~company~~growth ofhormone ~~Resonate~~production ~~Blends.~~and ~~Entourage~~similar ~~Labs~~all isnatural ~~the~~bioactive ~~Intellectual~~formulations ~~Property~~to ~~(IP)~~enhance human performance safely, ethically, legally ~~subsidiary~~and ofutilizing ~~Resonate~~known ~~Blends~~body mechanisms without the use of drugs.

~~Based~~Additional ininformation ~~Calabasas,~~about ~~California,~~our ~~the~~new ~~Company~~business isplan aand ~~cannabis~~historical ~~holding~~operations ~~company~~of ~~centered~~EMGE onis ~~value-added~~included ~~holistic~~in ~~Wellness~~our ~~and~~Amendment ~~Lifestyle brands. The Company’s strategy is~~ to ~~ignite~~Current ~~future~~Report ~~growth~~on byForm ~~building a purpose~~8-~~driven~~K ~~portfolio~~filed ofApril ~~innovative~~16, ~~trusted national brands~~2024, ~~emerging brands,~~which ~~research organizations, and a variety of retail channels. The Company’s focus~~ is ~~finding~~incorporated ~~mutual~~herein ~~value between product and consumer~~ by ~~optimizing quality, supply chain resources and financial performance~~reference. The Company offers a family of premium cannabis-based products of consistent quality based on unique formations calibrated to Resonate Blends effects system in what the Company believes is the industry gold standard in user experience.

Resonate believes the greatest long-term value creation in the cannabis industry will be in the establishment of high quality and consistent consumer brands. Resonate hopes to become a national leader through its vision in creating a family of brands designed specifically to deliver reliable, effective and beneficial experiences.

Resonate is committed to helping people live the life they love, but they do not make the medicinal vs. recreational distinction. This is a temporary legal separation in some states that should soon cease to exist. The Company believes in wellness for the whole person, especially people with insomnia, pain or anxiety who also want to enjoy friends, concerts and have satisfying intimate experiences. Resonate is designing experiences which should improve all areas of ones’ life.

To accomplish this, Resonate is Mastering the Art of Experience™. This is the Company’s mission. By integrating science, technology, education, branding, marketing, sales and delivery - with every customer interaction they aim to provide exceptional experiences. Cannabis has a broad range of unique characteristics, and they are dedicated to harnessing and amplifying those characteristics to support healthy empowered and engaged lifestyles. From product development through customer communication, they prefect and demystify cannabis bringing innovative products to an increasingly sophisticated market. Resonate Blends has a strong social mission and the Resonate team is building a successful business by focusing its knowledge, skill and energy on creating wellness-lifestyle products which will improve community by helping individuals live more satisfying, meaningful and connected lives. The need for these products currently is crucial.

To communicate the breadth of wellness products that Resonate is developing, the Company created The Resonate System. The Resonate System graphically represents a spectrum of wellness products based on cannabis scaffolding. This system helps users easily select which product they want. Products based on The Resonate System deliver relaxation, freedom from pain and anxiety, boosts in focus and creativity, sensuality, human connection and joy. Koan products are formulated around a system of interconnected experience targets that will allow you to know exactly what to expect when using them.

While respecting and honoring the natural power of plant medicine, Resonate also employs advanced science, leading technology and a deep understanding of how various cannabis compounds, when working in the body, simultaneously can create unique effects and benefits (referred to as the “Entourage Effect”). Product developers blend cannabinoids and terpenes to formulate products with specific, controllable and repeatable beneficial effects. Through innovation, experimentation, testing and an iterative product development strategy, the Koan team has unlocked new plant constituent combinations resulting in unique, enjoyable and extremely effective wellness products unlike anything else in the marketplace. Resonate has filed a provisional patent for protection of these formulations and products in the future.

Koan, the Resonate Blends product family, is based around a comprehensive system of interconnected experience targets that allow people to select the products that best fit their lifestyle and health objectives. Koan products are dedicated to the efficacy and precision of functional experience targets across a broad range of product categories.

Resonate’s initial products are a completely unique class of products called Cordials. These blends offer a wide range of experiences not currently available in the cannabis market. Cordials are water-soluble and use nano-emulsification technology to allow for quick onset and a sustained and nuanced experience. Single dose, healthful, subtle in taste, cordials are an ideal way for people to intentionally improve their well-being. They can be shipped directly or substituted for alcohol as a cocktail mixer. A significant competitive advantage is that the Cordials allow users to select both the experience they want and the beverage they choose to enjoy them in.

Resonate’s Cordials have been developed in partnership with an award-winning advanced infusion technology partner and were launched to the retail channel in late Q2 of 2021. The company is now offering seven unique formulations including the newly released Sleep Cordial available as of September 29, 2022. The Sleep Cordial has been thoroughly tested and is now available in “Single” samples and in cost effective 100 ml, 10 serving multi-serve bottles. Koan Cordials now come in: Calm, Create, Delight, Love, Play, Wonder and Sleep experience-targeted blends providing consumers a choice on how they want to feel.

The Cordials were awarded the Golden Leaf Award as “Best New Brand of 2021” at the “Luxury Meets Cannabis Conference” held in New York City in December. Resonate also won a Cannabis Clio Award for “Brand Design” in 2021.

Based on customer demand, the Company offers a “Singles” option for the Cordials which are now available. In response to customer requests, the company is now offering five popular blends in 10-serving bottles, also known as “multi-serve” bottles, that provide a lower cost per serving and allow users to customize their servings to their personal preference. In addition, the company is also offering a 4-pack that also lowers the cost per serving while preserving the convenience and portability of the discrete smaller bottles.

The Company offers market support to select premium California dispensaries both in person and thorough the Leaf.VIP budtender training program. The Company expects that building its brand online will complement retail sales by increasing customer awareness and creating “pull-through” at brick-and-mortar facilities. The social media strategy was brought in-house during Q1 to both reduce overall costs and control the messaging to the appropriate audience for the Cordials.

Resonate recently hired an internal sales manager to oversee all sales efforts in Southern California and expects to hire a sales manager for Northern California in the near future. The Company implemented an in-house sales strategy in Q1 2022 to maximize both the dispensary outreach and budtender education. The Company has added several new retail partners in 2022 to include Atrium, Cornerstone Wellness, 99 High Tide, Artist Tree, Canni Delivery and Rose Mary Jane. The Cordials are now featured at West Hollywood’s The Artist Tree Studio Cannabis Lounge where music performers will be providing the entertainment events throughout the summer. The Studio Cannabis Lounge in West Hollywood is the only one of its kind in the United States and this partnership should provide users an interactive experience unavailable elsewhere. Rose Mary Jane Cannabis Lounge in Oakland also added the Cordials to its menu on September 24, 2022. The Company is placing a major focus on cannabis lounges throughout California to enhance its marketing and sales efforts.

With the new in-house sales strategy in place, new wellness dispensaries are expected to grow throughout 2023. Wellness dispensaries are the main target due to the demographics of the consumer and the thorough educational process these dispensaries offer to buyers in their stores. Multi-state expansion through licensing arrangements with the Cordials is also being planned. Several retailers and leading brands in multiple states have reached out to Resonate requesting the Cordials to be stocked in their dispensaries. The Company is currently evaluating where and when to open new states outside of California.

We are no longer pursuing the acquisition of Iron Summit Distribution, Inc. (Kaneh Co.), as was announced on September 20 through a Press Release.

The principal executive office is located at 26565 Agoura Road, Suite 200, Calabasas, CA 91302. The executive telephone number is (571) 888-0009.

Partnerships

Product Development:

The Company signed a custom development contract with Vertosa in March of 2020, the leading provider of safe, reliable emulsion bases for infused product developers. This contract was a major milestone for the Company as it selected its strategic partners to develop innovative products and solutions.

Vertosa is an award-winning strategic partner who will assist the Company in the launch of its first unique category of six water soluble products. These multi-use products deliver specific, predictable, reliable, effects in a format that is completely unique in the industry. The first product developed collaboratively is the Cordial product line, but both companies expect several other products to be developed over time utilizing Vertosa’s emulsification technology.

The Vertosa and Resonate teams share a mission of maximizing the benefits of cannabinoids and plant medicine. Resonate selected Vertosa as a development partner because the Vertosa systems’ industry leading emulsification technology makes them highly stable, bioavailable, and water compatible. All of Vertosa’s inactive base materials are FDA approved and are lab tested for quality. Vertosa’s Hemp-derived CBD Emulsion System is now certified organic by CCOF, a United States Department of Agriculture-accredited certifier and non-profit advocacy group, and the company has also received its Good Manufacturing Practice (GMP) certification, confirming that its offerings follow regulations promulgated by the US Food and Drug Administration and are safe, pure, and effective. In addition, Vertosa is expanding into other legal states, and this paves the way for Resonate to follow behind moving beyond California while still assuring strict standards and high production quality for Koan products.

Manufacturing:

The Company partnered with The Galley, a California licensed Type N – Infused Products Manufacturer based in Santa Rosa, California. The Galley produces and packages premium award-winning products and has worked with some of the most popular brands in the industry. The Galley is built to FDA and CDPH standards and is focused on high demand areas of production – Edibles, Topicals, Tinctures, Chocolate, Hard Candies, Gummies, Pre-Rolls, Flower, Vapes and Beverages. Resonate Blends was granted a Type S: Shared Facility - Adult and Medicinal Cannabis Manufacturing License on July 23, 2021. The license allows Resonate Blends to manufacture cannabis products at the licensed facility of The Galley.

Resonate and The Galley entered into a Master Services Agreement in which The Galley will manufacture and package Resonate’s first family of products to precise specifications.

The Galley and Resonate have been in frequent contact throughout Resonate’s development period and are now supporting the production of the Company’s unique family of wellness lifestyle products. Resonate’s first of its kind offerings are emulsified through the advanced infusion technology provided by award-winning Vertosa and collaboratively developed to push the state of the art in its cannabis products.

Distribution:

The company plans to offer products to select premium dispensaries throughout California. These products will be delivered to retail establishments by a leading cannabis full-service distributor. The Company contracted with Nabis. The #1 licensed cannabis wholesaling platform in California with access to more than 300 brands, to provide logistics and statewide distribution for Resonate’s Koan Cordials, its product line of unique experience blends currently available in California.

Resonate is also developing relationships with a variety of complementary distribution channels such as subscription box companies and other non-storefront reseller organizations.

To summarize, Resonate has signed and announced definitive agreements with various partners to execute on its overall business strategy. Vertosa is expected to develop unique formulations through its advanced nano-emulsification process, The Galley is expected to assemble and package, and Nabis to distribute the products.

Marketing and Sales Plan

The cannabis industry is changing daily in response to updated regulations, customer product education, new interest from various demographics and now the COVID-19 pandemic. As a result, we are constantly attentive to these changes as they affect the marketing of Koan products. The marketing strategy is to launch in select dispensaries throughout California and to support the launch with dispensary promotional material and location-based marketing. A focus on cannabis consumption lounges in California has been a major priority in 2022 and will continue to be throughout all of 2023 in both California and in other states where consumption lunges are legal.

Resonate has implemented a plan to offer market support to select premium California dispensaries both in-person and thorough the Leaf.VIP budtender training program. The Company expects that building its brand online and through social media will complement retail sales by increasing customer awareness and creating “pull-through” at brick-and-mortar facilities.

The marketing budget and energy was being channeled into appropriate programmatic advertising, developing informational materials for customers on the website, and developing professional and effective social media, search engine optimization and direct to consumer marketing campaigns.

Resonate is currently recruiting two internal sales managers to oversee all sales efforts in Northern and Southern California. The Company is planning an in-house sales strategy for early Q1 2022 to maximize both the dispensary outreach and budtender education.. While wellness dispensaries will be a focus for the Company in the short run, the Company believes strongly in the value of establishing a strong D2C business and plans to identify partners to implement this strategy in 2023.

Multi-state expansion through licensing arrangements with the Cordials is also being planned. Several retailers in multiple states have reached out to Resonate requesting the Cordials to be stocked in their dispensaries. The Company is working with its emulsification partner, Vertosa, to target new legal states outside of California.

Current Products

Resonate’s first commercial release was a family of seven (7) precisely targeted effect blends. These products are category-breaking offerings as they are neither tinctures nor beverages but have the benefits of both. They are emulsified, water soluble, single-serving blends that can be enjoyed privately or shared socially. Resonate offers these across California in stylish mini bottles, each containing a single serving. They can be sipped directly from the bottle or poured into beverages. Koan products offer the very high bioavailability of tinctures not possible to deliver with edibles, take effect generally within minutes and provide benefits for approximately 3 hours. Significantly, these formulas all provide a pleasant predictable experience, a gentle onset and exit and have no unpleasant sensations or aftereffects sometimes associated with cannabis products. The current products are as follows:

Calm

CBD rich with a hint of THC, Calm is formulated to quiet your mind and ease you into a gentle sense of wellbeing.

Wonder

Our highest THC offering, Wonder is carefully crafted to bring back that youthful sense of wonder and awe we feel when we are fully engaged with our senses and environment.

Love

Crafted to reduce barriers to intimacy, stimulate personal connections and increase tactile sensation.

Create

Create is formulated to stimulate your senses, spark your imagination and channel your inner muse. Led by a stimulative blend of terpenes and just the right amount of THC to inspire and facilitate the artist in you.

Play

We formulated Play to help you become fully immersed in the moment and the people around you. From the park to the beach to the dance floor, Play helps you find your groove and keep it going.

Delight

Put on your rose-colored glasses and give everything some extra sparkle with Delight. Designed to open up your senses, raise your spirits and brighten your day.

Sleep

Precision calibrated to help you fall asleep quickly, stay asleep longer and wake up refreshed.

Future Products - Resonate Growth Plans

For the first 12-18 months, Resonate concentrated on releasing product and brand building in California, and possibly new state expansion if the proper opportunities exist. Resonate followed the launch of its first six Koan products with others based on The Resonate System at regular intervals, and they released their “Love” in Q1 2022 and “Sleep” Cordials in Q2. The formulas, combined with the proprietary Vertosa technology, will allow the Company to quickly deliver controlled, predictable, enjoyable effects in beverages, teas, and gummies. Vertosa is the leading provider of emulsification technology for cannabis manufacturers. Emulsification allows cannabinoids to become water-soluble so that they can be added to Cordials, beverages, gummies, etc. Vertosa and Resonate are engaged in joint research focusing on effects of various emulsification methods on cannabinoids. Resonate is working on methods that improve user experience by refining effects and managing bioavailability. Vertosa will also be providing the emulsification required for formulas in Resonate’s product line. The Company is in development stage of a new edible line that it expects to have available to the market in 2023 if favorable market conditions exist.

A major initiative for the Cordials in late 2022 was the cannabis consumption lounge business throughout California. Guests to the lounges can now select the cocktail of their choice and one of the six precisely crafted Koan Cordials experience options: Calm, Create, Delight Love, Play and Wonder. Resonate mixologists have developed a number of creative cocktail recipes that complement the Koan Cordials which have been very popular at events. The precisely targeted Koan Cordials allow users to choose both the drink they prefer and how they want to feel. The Company is looking to expand its lounge business in 2023 both in California and in other legal states.

If Resonate is successful in acquiring new brands, they expect product collaboration, to include improving the current brands – with improved branding and product enhancements. New product development would also be expected with joint product development initiatives.

The cannabis industry is in its infancy. Resonate’s growth strategy is to create an innovative ecosystem of companies, investments and research that all support The Resonate System and its mission of empowering the wellness market. In addition to creating “house” brands, the Company is also looking for other quality brands which could be incubated or targeted as either strategic partners or as acquisitions. Integrating these companies should provide consistent product quality that yields expected results and that also allows scalability to make a successful company overall. The Company is actively seeking potential acquisition roll-ups into the holding company that could offer product synergies, new product development and shared resources in critical areas of the Company.

Intellectual Property

Intellectual Property (“IP”) development and protection continues as a core area of value creation for Resonate. The Company has developed the world’s first Cannabis Cordial. The Koan Cordials combine THC (psychoactive), CBD (non-psychoactive) with botanical terpenes to deliver an all-natural, plant-derived, single-dosed experience that can be enjoyed straight out of the bottle or poured into any beverage. These multi-use products deliver specific, predictable, reliable, effects in a format that is completely unique in the industry.

The Company believes the greatest long-term value creation in the Cannabis industry will be in the establishment of high-quality consumer brands that deliver the expected experience. As cultivation, supplies and services become quickly commoditized, value-added brands represent the best opportunity for Resonate and its shareholders to support and benefit from the growth expected in the Cannabis industry. It is therefore critical for Resonate to protect its methods, formulations and packaging.

On June 14, 2021, the Company successfully filed a Provisional Patent Application with the US Patent & Trademark Office (USPTO) entitled “Cannabis Nano-Emulsions for Achieving a Reliable, Targeted, Specific and Repeatable User Experience.” The invention relates to methods and formulations including a combination of cannabinoids and terpenes calculated and specifically formulated to achieve a targeted, specific and repeatable user experience. The Company is also filing for patent protection on its unique product packaging and anticipates filing for other protections on new product development.

Competitive Landscape

The cannabis market still primarily consists of products of varying quality and poor branding. Much of the branding is heavy “stoner” or hospital medicinal, and differentiation between products is difficult. As a result, finding a product with controllable, consistent effects is difficult. Even products of high and reliable quality all look alike and have no shelf appeal. In addition, there is a mismatch between the fastest growing demographic and many current product offerings, which are designed to be inhaled. This is exactly why Resonate has developed Koan Cordials, tasty, single dose, healthy cannabis products with timeless, exceptional branding. As the market matures, some companies are recognizing the importance of branding. Branded category leaders represent the 10 spots among best-selling products and sales data supports the desire among consumers for branded products. This is further supported by Headset, data (the leading industry provider of retail buying patterns), which shows that brands are leading every category in cannabis. Further, branded products command higher prices. Some branded products generate pricing as high as 150%, over industry average. The Resonate team excels in product branding.

There is no product in the marketplace exactly like Koan products at this time. Other companies offer tinctures (which are concentrated herbal extracts made by soaking the bark, berries, leaves (dried or fresh), or roots from one or more plants in alcohol or vinegar), tea, salves, patches and cosmetics and vapes, and some of them provide effects which may be similar to those the Koan products will provide, but none are equal to Koan with respect to quality, efficacy, consistency and scope. Koan products are water soluble and can be enjoyed privately or poured in beverages and shared socially. Resonate believes the total experience offered by Koan products cannot be found elsewhere in the industry.

While there are a number of very fine products in the premium cannabis space, there is not yet a dominant brand in any category. Some are leading but no brand dominates. Data indicates that Resonate’s targeted demographic seeks out trusted brands when making product selections. Resonate is bringing to market custom, reliable, experience-targeted products which can be sipped or shared; and offered under a well-crafted brand supported by an accessible information system. The Company provides The Resonate System so customers can understand what to expect and can make informed confident selections.

Employees

Currently, there are six employees, comprised of 3 C-level executives and managers of brand, marketing and sales.

Item 1A. Risk Factors

~~Risk~~The ~~Factors~~report ~~Associated~~of ~~with~~our ~~COVID-19~~independent auditors indicates uncertainty concerning our ability to continue as a going concern and this may impair our ability to raise capital to fund our business. In its opinion on our financial statements for the year ended December 31, 2023, our independent auditors raised substantial doubt about our ability to continue as a going concern. We cannot assure you that this will not impair our ability to raise capital on attractive terms. Additionally, we cannot assure you that we will ever achieve significant revenues and therefore remain a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~The~~We ~~extent~~have toincurred ~~which~~losses in prior periods, and losses in the ~~coronavirus~~future ~~(“COVID-19”)~~could ~~outbreak~~cause ~~impacts~~the quoted price of our ~~business,~~common ~~results~~stock ofto ~~operations~~decline ~~and~~or have a material adverse effect on our financial condition ~~will~~, ~~depend~~our ability to pay our debts as they become due, and on our cash flows. We have incurred losses in prior periods. Any losses in the future ~~developments~~could cause the quoted price of our common stock to decline or have a material adverse effect on our financial condition, ~~which~~our ~~cannot~~ability beto ~~predicted~~pay our debts as they become due, and on our cash flows.

~~The~~There ~~COVID-19~~is ~~pandemic~~doubt ~~has~~about ~~caused~~our usability to ~~modify~~continue ~~our business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and we may take further actions~~ as ~~may~~a beviable ~~required~~business. byWe ~~government~~have ~~authorities or~~not ~~that~~earned wea ~~determine~~profit ~~are~~from ~~in the best interests of~~ our ~~employees,~~operations ~~customers~~during ~~and~~recent ~~business partners~~financial periods. There is no ~~certainty~~assurance that ~~such~~we ~~measures~~ will beever ~~sufficient~~earn toa ~~mitigate~~profit ~~the~~from ~~risks~~our ~~posed~~operations byin ~~the~~future ~~virus~~financial ~~or otherwise be satisfactory to government authorities~~periods.

~~The~~We ~~extent~~may be unable to ~~which~~obtain ~~COVID-19~~sufficient ~~impacts~~capital to implement our full plan of business. Currently, ~~results~~we ofdo ~~operations~~not ~~and~~have sufficient financial resources ~~condition~~with ~~will~~which ~~depend~~to onestablish ~~future~~our ~~developments,~~new ~~which are~~business ~~uncertain~~strategies. ~~and~~There ~~cannot~~is no assurance that we will be ~~predicted,~~able ~~including~~to obtain sources of financing, including ~~but~~in ~~not~~this ~~limited~~offering, in order to: satisfy our working capital needs.

●Additional ~~the~~risk ~~duration~~factors ~~and~~concerning our ~~scope of the pandemic; ● governmental~~company, ~~business~~including ~~and~~risk ~~individual~~factors ~~actions~~related ~~taken in response~~ to ~~the~~EMGE, ~~pandemic~~its ~~and the impact of those actions on global economic activity; ● the actions taken in response to economic disruption; ● the impact of~~ business ~~disruptions; ● the increase in business failures that we may utilize as industry partners~~ and ~~the~~financial ~~customers~~condition, weare ~~serve;~~included ●in ~~uncertainty~~our asAmendment to ~~the~~Current ~~impact~~Report oron ~~staff~~Form ~~availability~~8-K ~~during~~filed ~~and~~April ~~post~~16, ~~the pandemic; and ● our ability to provide our services~~2024, ~~including~~which asis aincorporated ~~result~~herein ofby ~~our employees or our customers and suppliers working remotely and/or closures of offices and facilities~~reference.

Even after the coronavirus outbreak has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including any recession that has occurred or may occur in the future.

Risk Factors Associated with the Cannabis Industry

Marijuana remains illegal under United States federal law.

Marijuana is a Schedule-I controlled substance under the Controlled Substances Act and is illegal under federal law. It remains illegal under United States federal law to grow, cultivate, sell or possess marijuana for any purpose or to assist or conspire with those who do so. Additionally, 21 U.S.C. 856 makes it illegal to “knowingly open, lease, rent, use, or maintain any place, whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance.” Even in those states in which the use of marijuana has been authorized, its use remains a violation of federal law. Since federal law criminalizing the use of marijuana is not pre-empted by state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely result in the Company’s clients’ inability to proceed with their operations, which would adversely affect demands for the Company’s products.

The Company’s operations are subject to various laws, regulations and guidelines relating to the manufacture, management, transportation, storage and disposal of cannabis but also including laws and regulations relating to health and safety, the conduct of operations and the protection of the environment.

The Company both directly and indirectly engages in the medical and adult-use cannabis industry in the United States where local state law permits such activities. Investors are cautioned that in the United States, cannabis is largely regulated at the state level. To the Company’s knowledge, there are to date a total of 33 states, and the District of Columbia, that have now legalized cannabis in some form, including California, Nevada, New York, Florida, Illinois and Arizona. Notwithstanding the permissive regulatory environment of cannabis at the state level, cannabis continues to be categorized as a controlled substance under the CSA and as such, cultivation, distribution, sale and possession of cannabis violates federal law in the United States. The inconsistency between federal and state laws and regulations is a major risk factor and there can be no assurance that the federal government will not seek to prosecute cases involving cannabis businesses that are otherwise compliant with state law. Violations of any federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, disgorgement of profits, cessation of business activities or divestiture. This could have a material adverse effect on the Company, including its reputation and ability to conduct business, its holding (directly or indirectly) of medical and adult-use cannabis licenses in the United States, the listing of its securities on applicable exchanges, its financial position, operating results, profitability or liquidity or the market price of our Common Stock.

The Company believes the cannabis industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the cannabis produced. Consumer perception of the Company’s products can be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of cannabis products. There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the medical cannabis market or any product, or consistent with earlier publicity The Company and its wholly-owned subsidiaries face an inherent risk of exposure to product liability claims, regulatory action and litigation if its products are alleged to have caused significant loss or injury. Greater access to medical cannabis, through home and designated growing and illegal dispensaries, may decrease the number of patients registering with the Company and may cause registered patients to leave the Company and grow for themselves. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact the business, financial condition and operating results of the Company and if the Company is unable to continually innovate and increase efficiencies, its ability to attract new customers may be adversely affected. The Company may become party to litigation, mediation and/or arbitration from time to time in the ordinary course of business which could adversely affect its business

The Company expects to derive a substantial portion of its revenues from the cannabis industry in certain states of the United States, which industry is illegal under United States federal law.

The Company is directly involved (through its subsidiaries) in the cannabis industry in the United States where local state laws permit such activities. The United States federal government regulates drugs through the Controlled Substances Act (21 U.S.C. § 811), which places controlled substances, including cannabis, in a schedule. Cannabis is classified as a Schedule I drug. Under United States federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of accepted safety for the use of the drug under medical supervision. The United States Food and Drug Administration has not approved marijuana as a safe and effective drug for any indication.

In the United States marijuana is largely regulated at the state level. State laws regulating cannabis are in direct conflict with the federal Controlled Substances Act, which makes cannabis use and possession federally illegal. Although certain states authorize medical or recreational cannabis production and distribution by licensed or registered entities, under U.S. federal law, the possession, use, cultivation, and transfer of cannabis and any related drug paraphernalia is illegal and any such acts are criminal acts under federal law. The Supremacy Clause of the United States Constitution establishes that the United States Constitution and federal laws made pursuant to it are paramount and in case of conflict between federal and state law, the federal law shall apply.

On January 4, 2018, U.S. Attorney General Jeff Sessions issued a memorandum to U.S. district attorneys which rescinded previous guidance from the U.S. Department of Justice specific to cannabis enforcement in the United States. U.S. federal prosecutors have been given discretion in determining whether to prosecute cannabis related violations of U.S. federal law. If the Department of Justice policy was to aggressively pursue financiers or equity owners of cannabis-related business, and United States Attorneys followed such Department of Justice policies through pursuing prosecutions, then the Company could face (i) seizure of its cash and other assets used to support or derived from its cannabis subsidiaries, (ii) the arrest of its employees, directors, officers, managers and investors, and charges of ancillary criminal violations of the CSA for aiding and abetting and conspiring to violate the CSA by virtue of providing financial support to cannabis companies that service or provide goods to state-licensed or permitted cultivators, processors, distributors, and/or retailers of cannabis, and/or (iii) barring employees, directors, officers, managers and investors who are not U.S. citizens from entry into the United States for life. There is no guarantee that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. Unless and until the United States Congress amends the Controlled Substances Act with respect to medical and/or adult-use cannabis (and as to the timing or scope of any such potential amendments there can be no assurance), there is a risk that federal authorities may enforce current federal law. If the federal government begins to enforce federal laws relating to cannabis in states where the sale and use of cannabis is currently legal, or if existing applicable state laws are repealed or curtailed, the Company’s business, results of operations, financial condition and prospects would be materially adversely affected.

Possible yet unanticipated changes in federal and state law could cause any products that we intend to launch, containing hemp-derived CBD oil to be illegal, or could otherwise prohibit, limit or restrict any of our products containing CBD.

Until 2014, when 7 U.S. Code §5940 became federal law as part of the Agricultural Act of 2014 (the “2014 Farm Act”), products containing oils derived from hemp, notwithstanding a minimal or non-existing THC content, were classified as Schedule I illegal drugs. The 2014 Farm Act expired on September 30, 2018, and was thereafter replaced by the Agricultural Improvement Act of 2018 on December 20, 2018 (the “2018 Farm Act “), which amended various sections of the U.S. Code, thereby removing hemp, defined as cannabis with less than 0.3% of THC, from Schedule 1 status under the Controlled Substances Act (“CSA”), and legalizing the cultivation and sale of hemp at the federal level, subject to compliance with certain federal requirements and state law, amongst other things. THC is the psychoactive component of plants in the cannabis family generally identified as marihuana or marijuana.

The 2018 Farm Bill also shifted regulatory authority from the Drug Enforcement Administration to the Department of Agriculture. The 2018 Farm Bill did not change the United States Food and Drug Administration’s (“FDA”) oversight authority over CBD products. The 2018 Farm Act delegated the authority to the states to regulate and limit the production of hemp and hemp derived products within their territories. Although many states have adopted laws and regulations that allow for the production and sale of hemp and hemp derived products under certain circumstances, no assurance can be given that such state laws may not be repealed or amended such that our intended products containing hemp-derived CBD would once again be deemed illegal under the laws of one or more states now permitting such products, which in turn would render such intended products illegal in those states under federal law even if the federal law is unchanged. In the event of either repeal of federal or of state laws and regulations, or of amendments thereto that are adverse to our intended medical CBD products, we may be restricted or limited with respect to those products that we may sell or distribute, which could adversely impact our intended business plan with respect to such intended products.

Additionally, the FDA has indicated its view that certain types of products containing CBD may not be permissible under the United States Federal Food, Drug and Cosmetic Act (“FDCA”). The FDA’s position is related to its approval of Epidiolex, a marijuana-derived prescription medicine to be available in the United States. The active ingredient in Epidiolex is CBD. On December 20, 2018, after the passage of the 2018 Farm Bill, FDA Commissioner Scott Gottlieb issued a statement in which he reiterated the FDA’s position that, among other things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce and that the FDCA prohibits introducing into interstate commerce food products containing added CBD, and marketing products containing CBD as a dietary supplement, regardless of whether the substances are hemp-derived. Although we believe our existing and planned CBD product offerings comply with applicable federal and state laws and regulations, legal proceedings alleging violations of such laws could have a material adverse effect on our business, financial condition and results of operations.

FDA regulation could negatively affect the hemp industry, which would directly affect our financial condition.

The FDA may seek expanded regulation of hemp under the FDCA. Additionally, the FDA may issue rules and regulations, including certified good manufacturing practices, or cGMPs, related to the growth, cultivation, harvesting and processing of hemp. Clinical trials may be needed to verify efficacy and safety. It is also possible that the FDA would require that facilities where hemp is grown register with the FDA and comply with certain federally prescribed regulations. In the event that some or all of these regulations are imposed, we do not know what the impact would be on the hemp industry, including what costs, requirements and possible prohibitions may be enforced. If we or our partners are unable to comply with the regulations or registration as prescribed by the FDA, we and or our partners (including C2M) may be unable to continue to operate their and our business in its current or planned form or at all.

Sources of hemp-derived CBD depend upon legality of cultivation, processing, marketing and sales of products derived from those plants under state law of the United States.

Hemp-derived CBD can only be legally produced in states that have laws and regulations that allow for such production and that comply with the 2018 Farm Act, apart from state laws legalizing and regulating medical and recreational cannabis or marijuana, which remains illegal under federal law and regulations. In addition, as described in the preceding risk factor, in the event of repeal or amendment of laws and regulations which are now favorable to the cannabis/hemp industry in such states, we would be required to locate new suppliers in states with laws and regulations that qualify under the 2018 Farm Act. If we were to be unsuccessful in arranging new sources of supply of our raw ingredients, or if our raw ingredients were to become legally unavailable, our intended business plan with respect to such products could be adversely impacted.

Because our distributors may only sell and ship our products containing hemp-derived CBD in states that have adopted laws and regulations qualifying under the 2018 Farm Act, a reduction in the number of states having such qualifying laws and regulations could limit, restrict or otherwise preclude the sale of intended products containing hemp-derived CBD.

The interstate shipment of hemp-derived CBD from one state to another is legal only where both states have laws and regulations that allow for the production and sale of such products and that qualify under the 2018 Farm Act. Therefore, the marketing and sale of our intended products containing hemp-derived CBD is limited by such factors and is restricted to such states. Although we believe we may lawfully sell any of our finished products, including those containing CBD, in a majority of states, a repeal or adverse amendment of laws and regulations that are now favorable to the distribution, marketing and sale of finished products we intend to sell could significantly limit, restrict or prevent us from generating revenue related to our products that contain hemp-derived CBD. Any such repeal or adverse amendment of now favorable laws and regulations could have an adverse impact on our business plan with respect to such products.

Due to recent expansion into the Cannabis industry, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.

Insurance that is otherwise readily available, such as general liability, and directors and officer’s insurance, may become more difficult for us to find, and more expensive, due to our intended launch of certain products containing Cannabis. There are no guarantees that we will be able to find such insurances in the future, or that the cost will be affordable to us. If we are forced to go without such insurances, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk and financial liabilities.

Our products may not meet health and safety standards or could become contaminated.

We have adopted various quality, environmental, health and safety standards. We do not have control over all of the third parties involved in the manufacturing of our products and their compliance with government health and safety standards. Even if our products meet these standards, they could otherwise become contaminated. A failure to meet these standards or contamination could occur in our operations or those of our manufacturers, distributors or suppliers. This could result in expensive production interruptions, recalls and liability claims. Moreover, negative publicity could be generated from false, unfounded or nominal liability claims or limited recalls. Any of these failures or occurrences could negatively affect our business and financial performance.

The sale of our products involves product liability and related risks that could expose us to significant insurance and loss expenses.

We face an inherent risk of exposure to product liability claims if the use of our products results in, or is believed to have resulted in, illness or injury. Our products contain combinations of ingredients, and there is little long-term experience with the effect of these combinations. In addition, interactions of these products with other products, prescription medicines and over-the-counter drugs have not been fully explored or understood and may have unintended consequences. While our third-party manufacturers perform tests in connection with the formulations of our products, these tests are not designed to evaluate the inherent safety of our products.

Any product liability claim may increase our costs and adversely affect our revenue and operating income. Moreover, liability claims arising from a serious adverse event may increase our costs through higher insurance premiums and deductibles and may make it more difficult to secure adequate insurance coverage in the future. In addition, our product liability insurance may fail to cover future product liability claims, which, if adversely determined, could subject us to substantial monetary damages.

Confusion between legal Cannabis and illegal Cannabis.

There is risk that confusion or uncertainty surrounding our products with regulated cannabis could occur on the state or federal level and impact us. We may have difficulty with establishing banking relationships, working with investment banks and brokers who would be willing to offer and sell our securities or accept deposits from shareholders, and auditors willing to certify our financial statements if we are confused with businesses that are in the cannabis business. Any of these additional factors, should they occur, could also affect our business, prospects, assets or results of operation could have a material adverse effect on the business, prospects, results of operations or financial condition of the Company.

There exists U.S. state regulatory uncertainty.

The rulemaking process for cannabis operators at the state level in any state will be ongoing and result in frequent changes. As a result, a compliance program is essential to manage regulatory risk. All operating policies and procedures implemented in the operation will be compliance-based and derived from the state regulatory structure governing ancillary cannabis businesses and their relationships to state-licensed or permitted cannabis operators, if any. Notwithstanding the Company’s efforts, regulatory compliance and the process of obtaining regulatory approvals can be costly and time-consuming. No assurance can be given that the Company will receive the requisite licenses, permits or cards to operate its businesses.

In addition, local laws and ordinances could restrict the Company’s business activity. Although legal under the laws of the states in which the Company’s business will operate, local governments have the ability to limit, restrict, and ban cannabis businesses from operating within their jurisdiction. Land use, zoning, local ordinances, and similar laws could be adopted or changed, and have a material adverse effect on the Company’s business.

The Company is aware that multiple states are considering special taxes or fees on businesses in the marijuana industry. It is a potential yet unknown risk at this time that other states are in the process of reviewing such additional fees and taxation. This could have a material adverse effect upon the Company’s business, results of operations, financial condition or prospects.

There is no assurance that the Company will obtain and retain any relevant licenses.

State licenses in the U.S. are subject to ongoing compliance and reporting requirements. Failure by the Company to comply with the requirements of licenses or any failure to maintain licenses would have a material adverse impact on the business, financial condition and operating results of the Company. Should any state in which the Company considers a license important not grant, extend or renew such license or should it renew such license on different terms, or should it decide to grant more than the anticipated number of licenses, the business, financial condition and results of the operation of the Company could be materially adversely affected. The cannabis laws and regulations of states in which we operate limit the granting and number of licenses granted for dispensaries and cultivation and production facilities. The number of licenses by category, and issuance of individual licenses, may be limited, delayed, denied or otherwise unissued. This separate treatment of individual licenses as well as license categories, along with limits set on the number of licenses granted in each of these operating categories, can result in market and supply chain risks including, for example, mismatch between cultivation and production facilities and dispensaries relating to availability and production of cannabis products. This can result in, among other things, market, pricing and supply risks, which may have a material effect on the Company’s business, financial condition and operations.

The Company is subject to restricted access to banking.

Because the manufacture, distribution, and dispensation of cannabis remains illegal under the CSA, banks and other financial institutions providing services to cannabis-related businesses risk violation of federal anti-money laundering statutes (18 U.S.C. §§ 1956 and 1957), the unlicensed money-remitter statute (18 U.S.C. § 1960) and the U.S. Bank Secrecy Act. These statutes can impose criminal liability for engaging in certain financial and monetary transactions with the proceeds of a “specified unlawful activity” such as distributing controlled substances which are illegal under federal law, including cannabis, and for failing to identify or report financial transactions that involve the proceeds of cannabis-related violations of the CSA.

In February 2014, the Financial Crimes Enforcement Network (“FinCEN”) bureau of the U.S. Treasury Department issued guidance (which is not law) with respect to financial institutions providing banking services to cannabis business, including burdensome due diligence expectations and reporting requirements. This guidance does not provide any safe harbors or legal defenses from examination or regulatory or criminal enforcement actions by the Department of Justice, FinCEN or other federal regulators. Thus, most banks and other financial institutions in the United States do not appear to be comfortable providing banking services to cannabis-related businesses, or relying on this guidance, which can be amended or revoked at any time by the Trump Administration. In addition to the foregoing, banks may refuse to process debit card payments and credit card companies generally refuse to process credit card payments for cannabis-related businesses. As a result, the Company may have limited or no access to banking or other financial services in the United States. In addition, federal money laundering statutes and Bank Secrecy Act regulations discourage financial institutions from working with any organization that sells a controlled substance, regardless of whether the state it resides in permits cannabis sales. The inability or limitation in the Company’s ability to open or maintain bank accounts, obtain other banking services and/or accept credit card and debit card payments may make it difficult for the Company to operate and conduct its business as planned or to operate efficiently.

On March 18, 2021, the Secure and Fair Enforcement Banking Act (the “SAFE Banking Act”) was reintroduced in the House of Representatives. On March 23, 2021, the bill was reintroduced in the Senate as well. The House previously passed the SAFE Banking Act in September 2019, but the measure stalled in the Senate. Most recently, on February 4, 2022, the House approved the America COMPETES Act of 2022, which includes the provisions of the SAFE Banking Act. The America COMPETES Act advanced to the Senate for consideration, but again stalled. As written, the SAFE Banking Act would allow financial institutions to provide their services to state-legal cannabis clients and ancillary businesses serving state-legal cannabis businesses without fear of federal sanctions. There is no guarantee the SAFE Banking Act will become law in its current form, if at all.

The Company is subject to constraints on marketing products.

The development of the Company’s business and operating results may be hindered by applicable restrictions on sales and marketing activities imposed by government regulatory bodies. The regulatory environment in the United States limits the Company’s ability to compete for market share in a manner similar to other industries. If the Company is unable to effectively market its products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for its products, the Company’s sales and operating results could be adversely affected.

The Company is subject to unfavorable tax treatment of cannabis businesses.

Under Section 280E (“Section 280E”) of the United States Internal Revenue Code of 1986, as amended (the “U.S. Tax Code”), “no deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.” This provision has been applied by the U.S. Internal Revenue Service to cannabis operations, prohibiting them from deducting expenses directly associated with the sale of cannabis. Section 280E therefore has a significant impact on the retail side of cannabis, but a lesser impact on cultivation and manufacturing operations. A result of Section 280E is that an otherwise profitable business may, in fact, operate at a loss, after taking into account its U.S. income tax expenses.

The Company is subject to a risk of civil asset forfeiture.

Because the cannabis industry remains illegal under U.S. federal law, any property owned by participants in the cannabis industry which are either used in the course of conducting such business, or are the proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture. Even if the owner of the property were never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture.

The Company is subject to proceeds of crime statutes.

The Company will be subject to a variety of laws and regulations domestically and in the United States that involve money laundering, financial recordkeeping and proceeds of crime, including the Currency and Foreign Transactions Reporting Act of 1970 (commonly known as the Bank Secrecy Act), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), as amended and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the United States

In the event that any of the Company’s license agreements, or any proceeds thereof, in the United States were found to be in violation of money laundering legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more of the statutes noted above or any other applicable legislation. This could be materially adverse to the Company and, among other things, could restrict or otherwise jeopardize the ability of the Company to declare or pay dividends.

The Company is subject to product liability.

The Company faces an inherent risk of exposure to product liability claims, regulatory action and litigation if its products are alleged to have caused significant loss or injury. In addition, the sale of the Company’s products would involve the risk of injury to consumers due to tampering by unauthorized third parties or product contamination. Previously unknown adverse reactions resulting from human consumption of the Company’s products alone or in combination with other medications or substances could occur. The Company may be subject to various product liability claims, including, among others, that the Company’s products caused injury or illness or death, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other substances. A product liability claim or regulatory action against the Company could result in increased costs, could adversely affect the Company’s reputation with its clients and consumers generally, and could have a material adverse effect on the business, results of operations and financial condition of the Company. There can be no assurances that the Company will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of the Company’s potential products.

The Company is subject to product recalls.

Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. If any of the Company’s products are recalled due to an alleged product defect or for any other reason, the Company could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. The Company may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin or at all. In addition, a product recall may require significant management attention. Although the Company has detailed procedures in place for testing its products, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. Additionally, if one of the Company’s significant brands were subject to recall, the image of that brand and the Company could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for the Company’s products and could have a material adverse effect on the results of operations and financial condition of the Company. Additionally, product recalls may lead to increased scrutiny of the Company’s operations by the U.S. Food and Drug Administration, or other regulatory agencies, requiring further management attention and potential legal fees and other expenses.

Controlled substance legislation differs between countries and legislation in certain countries may restrict or limit our ability to sell hemp-based consumer products.

Most countries are parties to the Single Convention on Narcotic Drugs 1961, which governs international trade and domestic control of narcotic substances, including cannabis extracts. Countries may interpret and implement their treaty obligations in a way that creates a legal obstacle to our obtaining regulatory approval for our hemp-based consumer products in those countries. These countries may not be willing or able to amend or otherwise modify their laws and regulations to permit our hemp-based consumer products to be marketed or achieving such amendments to the laws and regulations may take a prolonged period of time. In the case of countries with similar obstacles, we would be unable to market our hemp-based consumer products in countries in the near future or perhaps at all if the laws and regulations in those countries do not change.

Owners of properties located in close proximity to our properties may assert claims against us regarding the use of the property as a marijuana dispensary or marijuana cultivation and processing facility, which if successful, could materially and adversely affect our business.

Owners of properties located in close proximity to our properties may assert claims against us regarding the use of our properties, including assertions that the use of the property constitutes a nuisance that diminishes the market value of such owner’s nearby property. Such property owners may also attempt to assert such a claim in federal court as a civil matter under the Racketeer Influenced and Corrupt Organizations Act. If a property owner were to assert such a claim against us, we may be required to devote significant resources and costs to defending ourselves against such a claim, and if a property owner were to be successful on such a claim, our tenants may be unable to continue to operate their business in its current form at the property, which could materially adversely impact the tenant’s business and the value of our property, our business and financial results and the trading price of our securities.

Laws and regulations affecting the regulated cannabis and marijuana industry are constantly changing, which could materially adversely affect our operations, and we cannot predict the impact that future regulations may have on us.

Local, state and federal marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on its operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to our proposed business. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.

Risks Relating to Our Securities

If a market for our common stock does not develop, shareholders may be unable to sell their shares.

Our common stock is quoted under the symbol “KOAN” on the OTCQB. We do not currently have a consistent active trading market. There can be no assurance that a consistent active and liquid trading market will develop or, if developed, that it will be sustained.

Our securities are thinly traded. Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock.

The price of our common stock is volatile, which may cause investment losses for our stockholders.

The market price of our common stock has been and is likely in the future to be volatile. Our common stock price may fluctuate in response to factors such as:

● Announcements by us regarding liquidity, significant acquisitions, equity investments and divestitures, strategic relationships, addition or loss of significant customers and contracts, capital expenditure commitments and litigation; ● Issuance of convertible or equity securities and related warrants for general or merger and acquisition purposes; ● Issuance or repayment of debt, accounts payable or convertible debt for general or merger and acquisition purposes; ● Sale of a significant number of shares of our common stock by stockholders; ● General market and economic conditions; ● Quarterly variations in our operating results; ● Investor and public relation activities; ● Announcements of technological innovations; ● New product introductions by us or our competitors; ● Competitive activities; and ● Additions or departures of key personnel.

These broad market and industry factors may have a material adverse effect on the market price of our common stock, regardless of our actual operating performance. These factors could have a material adverse effect on our business, financial condition and results of operations.

Transfers of our securities may be restricted by virtue of state securities “blue sky” laws, which prohibit trading absent compliance with individual state laws. These restrictions may make it difficult or impossible to sell shares in those states. Without cannabis banking laws in place, the ability to clear restricted stock is difficult.

Transfers of our common stock may be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as “blue sky” laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities held by many of our stockholders have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them should be aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. These restrictions may prohibit the secondary trading of our common stock. Investors should consider the secondary market for our securities to be a limited one. The restricted access to cannabis banking makes it more difficult for cannabis investors to clear their stock from a Transfer Agent (“TA”) to their brokerage of choice. We can provide no assurances to investors of our stock that they will have the ability to move their restricted stock from the TA to their brokerage until federal banking laws are enacted.

The sale of a significant number of our shares of common stock could depress the price of our common stock.

Sales or issuances of a large number of shares of common stock in the public market or the perception that sales may occur could cause the market price of our common stock to decline. Significant shares of common stock are held by our principal stockholders, other company insiders and other large stockholders. As “affiliates” of Resonate, as defined under Securities and Exchange Commission Rule 144 under the Securities Act of 1933, our principal stockholders, other of our insiders and other large stockholders may only sell their shares of common stock in the public market pursuant to an effective registration statement or in compliance with Rule 144.

Future issuance of additional shares of common stock and/or preferred stock could dilute existing stockholders. We have and may issue preferred stock that could have rights that are preferential to the rights of common stock that could discourage potentially beneficially transactions to our common stockholders.

Pursuant to our Articles of Incorporation, we currently have authorized 200,000,000 shares of common stock and 10,000,000 shares of preferred stock. To the extent that common shares are available for issuance, subject to compliance with applicable stock exchange listing rules, our board of directors has the ability to issue additional shares of common stock in the future for such consideration as the board of directors may consider sufficient. The issuance of any additional securities could, among other things, result in substantial dilution of the percentage ownership of our stockholders at the time of issuance, result in substantial dilution of our earnings per share and adversely affect the prevailing market price for our common stock.

An issuance of additional shares of preferred stock could result in a class of outstanding securities that would have preferences with respect to voting rights and dividends and in liquidation over our common stock and could, upon conversion or otherwise, have all of the rights of our common stock. Our Board of Directors’ authority to issue preferred stock could discourage potential takeover attempts or could delay or prevent a change in control through merger, tender offer, proxy contest or otherwise by making these attempts more difficult or costly to achieve. The issuance of preferred stock could impair the voting, dividend and liquidation rights of common stockholders without their approval.

Future capital raises may dilute our existing stockholders’ ownership and/or have other adverse effects on our operations.

If we raise additional capital by issuing equity securities, our existing stockholders’ percentage ownership will be reduced, and these stockholders may experience substantial dilution. We may also issue equity securities that provide for rights, preferences and privileges senior to those of our common stock. If we raise additional funds by issuing debt securities, these debt securities would have rights senior to those of our common stock and the terms of the debt securities issued could impose significant restrictions on our operations, including liens on our assets. If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some rights to our technologies or candidate products, or to grant licenses on terms that are not favorable to us.

We do not anticipate paying any cash dividends on our capital stock in the foreseeable future.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business, and we do not anticipate paying any cash dividends on our capital stock in the foreseeable future. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

Anti-takeover provisions may limit the ability of another party to acquire our company, which could cause our stock price to decline.

Our Articles of Incorporation, as amended, our bylaws and Nevada law contain provisions that could discourage, delay or prevent a third party from acquiring our company, even if doing so may be beneficial to our stockholders. In addition, these provisions could limit the price investors would be willing to pay in the future for shares of our common stock.

Our Articles of Incorporation allow for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock; our outstanding Preferred Stock contains provisions that restrict our ability to take certain actions without the consent of a certain percentage of Preferred Stock then outstanding.

Our Board of Directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board of Directors also has the authority to issue preferred stock without further stockholder approval. As a result, our Board of Directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock. In addition, our Board of Directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.

Provisions in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.

Members of our board of directors and our officers will have no liability for breaches of their fiduciary duty of care as a director or officer, except in limited circumstances, pursuant to provisions in the Nevada Revised Statutes and our Bylaws as authorized by the Nevada Revised Statutes. Specifically, Section 78.138 of the Nevada Revised Statutes provides that a director or officer is not individually liable to the company or its shareholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that (1) the director’s or officer’s act or failure to act constituted a breach of his or her fiduciary duties as a director or officer and (2) his or her breach of those duties involved intentional misconduct, fraud or a knowing violation of law. This provision is intended to afford directors and officers protection against and to limit their potential liability for monetary damages resulting from suits alleging a breach of the duty of care by a director or officer. Accordingly, you may be unable to prevail in a legal action against our directors or officers even if they have breached their fiduciary duty of care. In addition, our Bylaws allow us to indemnify our directors and officers from and against any and all costs, charges and expenses resulting from their acting in such capacities with us. This means that if you were able to enforce an action against our directors or officers, in all likelihood, we would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise would be required to pay. Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our common stock.

Item 1B. Unresolved Staff comments

None.

Item 2. Properties

Currently, we do not own any real estate. Our principal executive offices are located at ~~26565~~One ~~Agoura~~Marine ~~Road~~Plaza, Suite ~~200~~305A, ~~Calabasas~~North Bergen, CANew ~~91302~~Jersey 04047. We pay rent of $~~99.00~~5,400 per month at this location. We believe that our properties are adequate for our current needs, but growth potential may require larger facilities due to anticipated addition of personnel. We do not have any policies regarding investments in real estate, securities or other forms of property.

Item 3. Legal Proceedings

We have no current legal proceedings.

Item 4. Mine Safety Disclosures

Not applicable.

194

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is quoted under the symbol “KOAN” on the OTCQB. Only a limited market exists for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder may be unable to resell his securities in our company.

The following table lists the high and low closing sale prices for our stock for each quarter for the last two fiscal years as reported on the OTCQB. Because our stock is traded on the OTCQB, these quotations reflect inter-dealer prices, without retail markup, markdown or commission and may not represent actual transactions.

	Closing Price
Quarter Ended	High		Low
March 31, 2021		.93		.11
March 31, 2023		.0695		.0181
June 30, 2021		.67		.23
June 30, 2023		.0960		.0161
September 30, 2021		.49		.34
September 30, 2023		.0930		.054
December 31, 2021		.42		.20
December 31, 2023		.0870		.0111

	Closing Price
Quarter Ended	High		Low
March 31, 2022		.3050		.0851
June 30, 2022		.1392		.0682
September 30, 2022		.093		.025
December 31, 2022		.0699		.0152

The ability of individual stockholders to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer’s securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Presently, we have no plans to register our securities in any particular state. Further, our shares may be subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

Holders of Our Common Stock

As of ~~March~~April 3116, ~~2023~~2024, we had 7596,~~437~~179,~~604~~058 shares of our common stock issued and outstanding, held by approximately 175 shareholders of ~~record~~ record at our transfer agent, with approximately 47 additional shareholders holding our shares in street name.

Dividends

We currently intend to retain future earnings for the operation of our business. We have never declared or paid cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future.

In the event that a dividend is declared, common stockholders on the record date are entitled to share ratably in any dividends that may be declared from time to time on the common stock by our board of directors from funds legally available.

There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

	1.	We would not be able to pay our debts as they become due in the usual course of business; or

	2.	Our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

Securities Authorized for Issuance under Equity Compensation Plans

On March 19, 2019, our Board of Directors adopted the 2019 Equity Incentive Plan (the “Plan”). The purpose of the Plan is to attract and retain the best available personnel for positions of substantial responsibility with us, to provide additional incentive to employees, directors and consultants, and to promote our success. Under the Plan, we are currently able to issue up to an aggregate total of 10,000,000 incentive or non-qualified options to purchase our common stock, stock awards and other offerings.

~~Equity Compensation Plans as of December 31, 2022~~5

Equity Compensation Plans as of December 31, 2023

Equity Compensation Plans Approved by the Shareholders	Number of Securities to be issued upon exercise of outstanding options		Weighted- average exercise price of outstanding options		Number of Securities remaining available for future issuance under equity compensation plans
	(a)		(b)		(c)
2019 Equity Compensation Plan		-		-		10,000,000
Other Equity Compensation (restricted stock awards)		-		-		-
Total		-		-		10,000,000

Recent Sales of Unregistered Securities

During the ~~fourth~~three ~~quarter~~months ofended ~~2022~~December 31, ~~we issued a total of 25~~2023,~~000~~ ~~shares~~we ofdid ~~common~~not ~~stock~~issue toany ~~vendors~~unregistered ~~for~~securities ~~services~~not ~~rendered~~previously reported.

~~During~~Subsequent ~~the~~to ~~third~~December ~~quarter~~31, ~~of 2022~~2023, we have issued aunregistered ~~total~~securities ofnot ~~27,565,745~~previously ~~shares of common stock to vendors for compensation~~reported, ~~services~~as ~~rendered, private placement note conversions into equity and commitment shares.~~follows:

OnIn ~~July~~March 152024, ~~2022,~~ we issued a ~~total~~$280,000 face amount promissory note (with $28,000 in OID) to an investor, in consideration of 21loan which netted our company $252,~~993~~000 in proceeds. This note bears interest at 12% per annum,~~806~~ with principal and interest payable on September 4, 2024. Should we be in default, which shall not have been cured, this note is convertible into shares of our common stock toat ~~certain~~a ~~note~~conversion ~~holders~~price that asshall equal the volume weighted average trading price (a) ~~result~~during ofthe ~~voluntary~~previous ~~conversions~~20 trading-day period ending on the date of issuance ~~their~~of 8%the ~~convertible~~AJB ~~notes~~Note ~~issued~~or in(b) ~~early~~during ~~2021~~the previous 20 trading-day period ending on the relevant conversion date, whichever is lower. ~~The~~This ~~aggregate~~note is ~~dollar~~secured ~~amount~~by all assets of ~~debt~~our ~~reduced~~company. byIn ~~the~~addition, ~~conversions~~we ~~was~~issued $1this investor a pre-funded common stock purchase warrant to purchase 3,~~917~~428,~~382~~571 shares of our common stock, with a nominal exercise price of $.00001 per share. This warrant may be exercised on a cashless basis.

~~During~~Also ~~the~~in ~~second~~March ~~quarter~~2024, we issued a $280,000 face amount promissory note (with $30,000 in OID) to an investor, in consideration of ~~2022~~a loan which netter our company $250,000 in proceeds. This note bears interest at 12% per annum, with principal and interest payable on September 29, 2024. This note is convertible at any time and from time to time into shares of our common stock at a conversion price that shall equal to $.035 per share; provided, however, that, upon an event of default, the ~~Company~~per ~~issued~~share conversion price shall be the lower of (a) $.035 ~~total~~or (b) the volume weighted average trading price during the previous 20 trading-day period ending on the date of 50issuance of this note or during the previous 20 trading-day period ending on the relevant conversion date, whichever is lower. This note is unsecured. In addition, we issued this investor pre-funded common stock purchase warrant to purchase 7,200,000 shares of our common stock, towith a ~~vendors~~nominal ~~for~~exercise ~~compensation~~price ~~and~~of ~~services~~$.00001 ~~rendered~~per share. This warrant may be exercised on a cashless basis. We also entered into a make-whole agreement that assures that this investor shall derive not less than $250,000 in net proceeds from its sales of our common stock underlying the warrant.

~~During~~These ~~the~~securities ~~first~~were ~~quarter~~issued ofpursuant ~~2022,~~to Section 4(a)(2) of the ~~company~~Securities ~~issued~~Act aand/or ~~total~~Rule of506 ~~904,666~~promulgated ~~shares~~thereunder. ofEach ~~common~~investor ~~stock~~is an accredited investor and each represented its intention to ~~vendors~~acquire the securities for ~~compensation~~investment only and ~~services~~not ~~rendered~~with a view towards distribution. Such investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. The securities issued to such investors were affixed with an appropriate restrictive legend.

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Item 6. Selected Financial Data

Not required under Regulation S-K for “smaller reporting companies.”

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Results~~Recent ofAcquisition, ~~Operations~~Change ~~for~~in ~~the~~Control ~~Years~~and ~~Ended~~Change ~~December~~in ~~31,~~Business ~~2022 and 2021~~Plan

Change in Control. Effective March 14, 2024, Geoffrey Selzer, our former Chief Executive Officer and Director, and Jim Morrison, our current President and Director, entered into a Securities Purchase Agreement (the Control Agreement), pursuant to which Mr. Selzer sold all 2,000,000 outstanding shares of the Company’s Series C Preferred Stock to Mr. Morrison. Mr. Morrison now possesses voting control of the Company. See Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

EMGE Acquisition Transaction. On February 26, 2024, we entered into entered into a Share Exchange Agreement, as amended (the Exchange Agreement), with Emergent Health Corp., a publicly-traded (symbol: EMGE) Wyoming corporation (EMGE), and the holders (the EMGE Preferred Shareholders) of Series Class A Preferred Stock and the Series C Convertible Non-Voting Preferred Stock (collectively, the EMGE Equity Interests).

On March 14, 2024, the parties closed the Exchange Agreement. At the closing of the Exchange Agreement: (a) the EMGE Preferred Shareholders exchanged all of their respective EMGE Equity Interests for an equal number of shares of the Company’s to-be-designated Series F Convertible Preferred Stock that shall convert into 93% of the common stock of the Company on a fully-diluted basis (the Series F Preferred Stock), which shares of Series F Preferred Stock are currently issuable to the EMGE Preferred Shareholders and are to be issued upon the Company’s filing of a Certificate of Designation with the State of Nevada; (b) the Company consummated the Conveyance Agreement; and (c) all persons serving as directors and officers of the Company prior to the consummation of the Exchange Agreement resigned and appointed four new members of the Company’s Board of Directors.

Conveyance Agreement.

On March 14, 2024, in conjunction with our acquisition of EMGE, we entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiary (the Conveyance Agreement) with two of our then-wholly-owned subsidiaries, Resonate Blends, LLC, a California limited liability company, and Entourage Labs, LLC, a California limited liability company (collectively, Resonate Blends, LLC and Entourage Labs, LLC are referred to as the “Subsidiary”), and our former Chief Executive Officer and Director, Geoffrey Selzer. Pursuant to the Conveyance Agreement, we assigned our ownership in the Subsidiary to Mr. Selzer. In consideration of our assignment of the Subsidiary, Mr. Selzer (a) assumed and agreed to pay, perform and discharge, fully and completely, all liabilities of the Subsidiary, (b) indemnified us for any loss arising from or in connection with any of such liabilities and (c) agreed to pay us (i) 20% of any proceeds from the sale of the Subsidiary that occurs prior to the one-year anniversary of the Conveyance Agreement and (ii) 10% of any proceeds from the sale of the Subsidiary that occurs after the one-year anniversary and prior to the two-year anniversary of the Conveyance Agreement.

New Business Plan.

The business plan and operations of EMGE now represent the entirety of our company’s business operations. The discussion below concerning our company’s results of operations for the years ended December 31, 2023 and 2022, and the financial condition of our company at December 31, 2023, relates only to our company prior to the consummation of the Exchange Agreement with the EMGE Preferred Shareholders. None of the information in the discussion below should be considered to be an indication of our company’s operating results for the year ending December 31, 2024, and beyond.

Current Status

In connection with the EMGE transaction, we obtained a loan from a third party and, subsequent to the closing of the EMGE transaction, we have obtained an additional loan from another third party. We remain, nevertheless, dependent on additional investment capital to continue our survival. Historically, we have raised money through convertible debt, almost always on unfavorable terms. There is no guarantee that any capital, including through convertible loan transactions, will be available to us in the future or, if available, on terms acceptable to us. The terms of the recently obtained loans are discussed below.

AJB Capital Investments, LLC. In March 2024, the Company obtained a loan from AJB Capital Investments, LLC (“AJB”) which netted the Company $252,000 in proceeds. In consideration of such loan, the Company issued a $280,000 face amount promissory note (the “AJB Note”), with OID of $28,000, bearing interest at 12% per annum, with principal and interest payable on September 4, 2024. The Company has the right to repay the AJB Note at any time. Should the Company be in default, which shall not have been cured, the AJB Note is convertible into shares of the Company’s common stock at a conversion price that shall equal the volume weighted average trading price (a) during the previous 20 trading-day period ending on the date of issuance of the AJB Note or (b) during the previous 20 trading-day period ending on the relevant conversion date, whichever is lower.

The AJB Note is secured by all assets of our company.

In addition, we issued to AJB a pre-funded common stock purchase warrant (the “AJB Warrant”) to purchase 3,428,571 shares of our common stock, with a nominal exercise price of $.00001 per share. The AJB Warrant may be exercised on a cashless basis,

Ray Vollintine. In March 2024, the Company obtained a loan from Ray Vollintine (“Vollintine”) which netted the Company $250,000 in proceeds. In consideration of such loan, the Company issued a $280,000 face amount promissory note (the “Vollintine Note”), with OID of $30,000, bearing interest at 12% per annum, with principal and interest payable on September 29, 2024. The Company has the right to repay the Vollintine Note at any time. The Vollintine Note is convertible at any time and from time to time into shares of the Company’s common stock at a conversion price that shall equal to $.035; provided, however, that, upon an event of default, the conversion price shall be the lower of (a) $.035 or (b) the volume weighted average trading price during the previous 20 trading-day period ending on the date of issuance of the Vollintine Note or during the previous 20 trading-day period ending on the relevant conversion date, whichever is lower.

The Vollintine Note is unsecured.

In addition, we issued to Vollintine a pre-funded common stock purchase warrant (the “Vollintine Warrant”) to purchase 7,200,000 shares of our common stock, with a nominal exercise price of $.00001 per share. The Vollintine Warrant may be exercised on a cashless basis, As further consideration for Vollintine’s purchasing the Vollintine Note, we entered into a make-whole agreement that assures that Vollintine shall derive not less than $250,000 in net proceeds from Vollintine’s sales of the common stock underlying the Vollintine Warrant.

Results of Operations for the Years Ended December 31, 2023 and 2022

Revenues

We ~~have~~ generated $4916,~~501~~468 in revenues for the year ended December 31, ~~2022~~2023, as compared with ~~sales~~revenues of $2749,~~031~~501 for the year ended December 31, ~~2021~~2022, onduring ~~our~~which ~~current~~year ~~product~~we ~~line. We have~~ launched our first line of ~~six~~cordial ~~Cordial~~ products in California~~, with a seventh introduced at the end of September 2022, and we have started to generate revenues from the sale of these products~~.

~~We anticipate increased revenues on our seven Cordials~~Due ~~including~~to our ~~newly~~acquisition ~~launched~~of ~~Sleep~~EMGE ~~Cordial,~~and ~~for~~divestiture of the ~~rest~~Subsidiary ofon ~~2023.~~March In14, ~~Q3 2022~~2024, weany ~~rolled~~revenues ~~out~~reported aduring ~~new~~the ~~packaging~~first ~~configuration~~quarter ~~for~~of ~~our Cordials:~~2024 towill ~~include~~be aattributed ~~one-pack, a 4-pack~~ to ~~replace~~ the ~~3-pack~~Subsidiary ~~and~~through aMarch ~~multi-dose~~14, ~~bottle~~2024; ~~which~~thereafter, isany ~~expected~~revenues toreported ~~bring~~by ~~the~~our ~~cost~~company ~~per~~would ~~dose~~be ~~down~~attributable ~~considerably.~~to ~~Our~~the ~~family~~business operations of ~~Cordial~~EMGE. ~~products~~There are ~~now~~no ~~fully~~assurances inthat ~~the~~we ~~market;~~will ~~however,~~be itsuccessful ~~may~~in ~~take some time for~~ the ~~markets~~implementation toof ~~react,~~our ~~gain~~EMGE-centered ~~traction and~~business ~~result~~plan inor ~~brand~~become ~~awareness~~financially ~~among~~viable ~~our~~and ~~customers.~~continue ~~There~~as ~~can~~a begoing ~~no assurances, however, that customers will positively react to our products~~concern.

Gross Profit

We accrued $33114,~~068~~140 in cost of revenues for the year ended December 31, ~~2022~~2023, resulting in a gross profit of ($1697,~~433~~762) for the year ~~ended December~~then ~~31, 2022~~ended. We ~~have had little historical data to compare our margins for the sale of our new products, which were introduced into the retail channel in late Q2 of 2021. We~~ accrued $1933,~~148~~068 in cost of revenues for the year ended December 31, ~~2021~~2022, resulting in a gross profit of $716,~~883~~433 for the year then ended ~~December 31, 2021~~. Our ~~gross~~negative ~~margin, which is the difference between our revenues and our cost of revenues, is expected to increase in future quarters as we work to increase our efficiency and lessen costs. In addition, our~~ gross margin ~~percentage,~~ ~~which~~ was ~~33.20%~~due ~~for the year ended December 31, 2022, and we hope will stabilize in the 35%~~ to ~~43%~~promotions ~~range as we implement cost saving measures~~ and ~~roll out new products to increase sales for~~ the ~~balance~~write down of ~~2023~~products. ~~We are also implementing new packaging configurations which we expect to stabilize our overall gross margin.~~

Due to our acquisition of EMGE and divestiture of the Subsidiary on March 14, 2024, the gross margin reported during the first quarter of 2024 will be attributed to the Subsidiary through March 14, 2024; thereafter, gross margin reported by our company would be attributable to the business operations of EMGE.

Operating Expenses

Our operating expenses were $1301,~~405,828~~551 for the year ended December 31, ~~2022~~2023, as compared with $21,~~539~~405,~~288~~828 for the year ended December 31, ~~2021~~2022.

The main drivers for the overall decrease in operating expenses in ~~2022~~2023 were the reduction of legal, professional fees and salaries, as well as a significant decrease in non-cash management fees.

~~Our~~We spent ~~continued~~$354,934 ~~focus~~less on ~~sales,~~ advertising for year ended December 31, ~~marketing~~2023, ~~and~~than ~~new~~for ~~product~~the ~~development~~year ~~costs~~ended December 31, 2022. We spent more on advertising for the year ended December 31, 2022, to ~~support~~introduce our ~~planned~~Koan ~~growth~~Cordials isto ~~expected~~the California retail channel, perform Search Engine Optimization (SEO), conduct Programmatic advertising, hire a professional agency to ~~increase~~promote ~~throughout~~our ~~2023~~Cordials on social media channels and other general advertising methods.

~~We spent $233,208 less on~~Legal ~~advertising~~and ~~for~~professional ~~year~~fees ~~ended~~decreased ~~December~~by 31$91,352 ~~2022, than~~ for the year ended ~~2021.~~December We31, ~~spent~~2023, ~~more~~over ~~on advertising for~~ the year ended December 31, ~~2021~~ ~~particularly~~2022. ~~the~~It ~~first~~is ~~quarter to introduce our Koan Cordials to the California retail channel~~anticipated that, ~~perform~~for ~~Search~~all ~~Engine~~of ~~Optimization (SEO)~~2024, ~~conduct~~legal ~~Programmatic~~and ~~advertising, hire a~~ professional ~~agency~~fees towill ~~promote~~be ~~our~~higher ~~Cordials~~than on2023 ~~social~~levels, ~~media~~due ~~channels~~to ~~and other general advertising methods. We believe~~ our ~~advertising~~acquisition ~~efforts will pay dividends for the rest~~ of ~~2023~~EMGE. asHowever, ~~the~~no ~~awareness groundwork has been established~~prediction tocan ~~educate~~be ~~the~~made ~~market~~in onthis ~~our family of Cordial formulations~~regard.

~~Professional~~General and ~~fees~~administrative expenses decreased by $~~390~~46,~~547~~154 for the year ended December 31, ~~2022~~2023, over the year ended ~~2021.~~December ~~Our~~31, ~~professional~~2022. ~~fees~~It ~~were~~is ~~less~~anticipated that, for ~~this~~all ~~year~~of ~~compared~~2024, ~~to last~~general ~~year,~~and ~~but~~administrative weexpenses ~~expect~~will ~~that~~be ~~professional~~higher ~~fees~~than ~~will~~2023 ~~increase~~levels, indue ~~2023~~to asour weacquisition ~~continue~~of toEMGE. ~~ramp~~However, no upprediction ~~operations~~can be made in this regard.

22Officer compensation decreased by $405,375 for the year ended December 31, 2023, over the year ended December 31, 2022. Our officer compensation declined as we suspended payments of officer salaries during 2023, but we expect that officer compensation will increase for all of 2024, following our acquisition of EMGE.

~~General~~Non-cash ~~and~~management ~~administrative~~fees ~~expenses~~decreased ~~increased~~ by $32206,~~793~~462 for the year ended December 31, ~~2022~~2023, over the year ended ~~2021~~December 31, 2022. ~~The~~Our ~~increased~~non-cash ~~expenses~~management ~~resulted~~fees ~~from~~were ~~establishing~~less ~~our~~in ~~internal~~2023 ~~sales~~compared ~~team~~to 2022, ~~attending~~as ~~strategic~~we ~~trade~~did ~~shows~~not ~~and~~issue ~~bringing~~shares onfor ~~consultants~~services ~~and~~during ~~financial analysts to assist in analyzing our acquisition strategy~~2023. WeIt ~~expect~~is ~~general~~possible, ~~and~~however, ~~administrative~~that ~~expenses~~non-cash management tofees ~~remain~~may ~~fairly~~increase ~~constant~~for ~~throughout~~all ~~2023~~of 2024, ~~but~~ ~~expenses~~in ~~could~~light ~~increase~~of ~~significantly~~our ifacquisition weof ~~acquire~~EMGE. ~~new~~However, ~~companies~~no asprediction ~~part~~can ofbe ~~our~~made ~~overall~~in ~~corporate~~this ~~strategy~~regard.

WeOther ~~also~~Income ~~expect~~/ that our operating expenses will increase in 2023 over 2022 as we roll out new products along with our existing products, and the increased expenses associated with operations, and in connection with any acquisitions.Expense

~~Other~~We ~~Income/Expenses~~had other expense of $1,016,759 and other income of $2,043,022 for the years ended December 31, 2023 and 2022, respectively.

~~We had other income of $2,043,022 for the year ended~~Our ~~December 31, 2022 compared with~~ other ~~expenses~~expense ~~of $2,341,651~~ for the year ended December 31, ~~2021. Our other income for the year ended December 31~~2023, ~~2022~~ was mainly attributable to ~~the~~a ~~gain~~loss on ~~revaluation~~the ofchange in derivative ~~liabilities.~~liability, ~~Our~~interest expense ~~other~~and ~~expenses for~~ the ~~year~~amortization ~~ended December 31, 2021 was mainly attributable to a loss on revaluation~~ of ~~derivative~~debt ~~liabilities~~issuance costs.

~~Net~~Our other ~~Income/Loss~~income for the year ended December 31, 2022, was mainly attributable to the gain on revaluation of derivative liabilities.

We ~~had net income of $653,627 for the year ended December~~ ~~31,~~are ~~2022,~~unable asto ~~compared~~predict ~~with~~our aother ~~net~~income/expense ~~loss of $4,873,056~~ for ~~the~~all ~~year~~of ~~ended December 31, 2021~~2024.

Net Income / Loss

We had a net loss of $1,415,979 and net income of $653,627 for the years ended December 31, 2023 and 2022, respectively.

It is expected that, for all of 2024, we will report a net loss. However, we are unable to make any prediction, in this regard.

Liquidity and Capital Resources

AsIn ofconnection ~~December~~with ~~31,~~the ~~2022~~EMGE transaction, we ~~had~~obtained a ~~total~~loan ~~assets of~~from ~~$399~~a third party and,~~121~~ ~~consisting~~subsequent to the closing of ~~$64,419~~the inEMGE ~~cash~~transaction, $0we inhave ~~advances~~obtained toan ~~suppliers~~additional loan from another third party. We remain, ~~$150~~nevertheless,~~000~~ independent ~~other~~on ~~receivable~~additional ~~and~~investment ~~$160,492~~capital into ~~inventories~~continue our survival. ~~Our~~ ~~total~~Historically, ~~current~~we ~~liabilities~~have asraised ofmoney through ~~December~~convertible 31debt, ~~2022~~almost ~~were~~always ~~$1,545,851.~~on Weunfavorable ~~had~~terms. aThere ~~working~~is ~~capital~~no ~~deficit~~guarantee ofthat $1any capital,~~170,940~~ asincluding ofthrough ~~December~~convertible ~~31,~~loan ~~2022~~transactions, ~~compared~~will ~~with~~be aavailable ~~working~~to ~~capital~~us ~~deficit~~in ofthe $4future or,~~133~~ if available,~~368~~ ason terms acceptable to us. The terms of ~~December~~the ~~31,~~recently ~~2021~~obtained loans are discussed below.

~~Cash~~AJB ~~Flows~~Capital Investments, LLC. In March 2024, the Company obtained a loan from ~~Operating~~AJB ~~Activities~~Capital Investments, LLC (AJB) which netted the Company $252,000 in proceeds. In consideration of such loan, the Company issued a $280,000 face amount promissory note (the AJB Note), with OID of $28,000, bearing interest at 12% per annum, with principal and interest payable on September 4, 2024. The Company has the right to repay the AJB Note at any time. Should the Company be in default, which shall not have been cured, the AJB Note is convertible into shares of the Company’s common stock at a conversion price that shall equal the volume weighted average trading price (a) during the previous 20 trading-day period ending on the date of issuance of the AJB Note or (b) during the previous 20 trading-day period ending on the relevant conversion date, whichever is lower.

~~Operating~~The ~~activities~~AJB ~~used~~Note ~~$1,428,467~~is insecured cash year ended December 31, 2022, compared with cash used of $2,782,102 for the year ended December 31, 2021. Our negative operating cash flow for the year ended December 31, 2022 was largely the result of our unrealized gain on derivative liability of $2,213,527, offset by ~~our net~~all ~~income~~assets of ~~$653,627. Our negative operating cash flow for the year ended December 31, 2021 was largely the result of~~ our ~~net loss of $4,873,056, offset mainly by the loss on derivative liabilities of $2,011,881~~company.

~~Cash~~In ~~Flows~~addition, ~~from~~we ~~Investing~~issued ~~Activities~~to AJB a pre-funded common stock purchase warrant (the AJB Warrant) to purchase 3,428,571 shares of our common stock, with a nominal exercise price of $.00001 per share. The AJB Warrant may be exercised on a cashless basis,

~~Investing activities used $0 in cash for year ended December 31, 2022, as compared with $36,048 to purchase computer equipment for the year ended December 31, 2021.~~8

~~Cash~~Ray ~~Flows~~Vollintine. In March 2024, the Company obtained a loan from ~~Financing~~Ray ~~Activities~~Vollintine (Vollintine) which netted the Company $250,000 in proceeds. In consideration of such loan, the Company issued a $280,000 face amount promissory note (the Vollintine Note), with OID of $30,000, bearing interest at 12% per annum, with principal and interest payable on September 29, 2024. The Company has the right to repay the Vollintine Note at any time. The Vollintine Note is convertible at any time and from time to time into shares of the Company’s common stock at a conversion price that shall equal to $.035; provided, however, that, upon an event of default, the conversion price shall be the lower of (a) $.035 or (b) the volume weighted average trading price during the previous 20 trading-day period ending on the date of issuance of the Vollintine Note or during the previous 20 trading-day period ending on the relevant conversion date, whichever is lower.

~~Cash~~The ~~flows~~Vollintine ~~provided~~Note byis ~~financing activities during the year ended December 31, 2022 amounted to $1,479,973, compared with cash flows provided by financing activities of $2,716,738 for the year ended December 31, 2021~~unsecured. Our positive cash flows for the year ended December 31, 2022, consisted of proceeds from issuance of common stock of $91,173 and proceeds from Convertible notes payable of $1,388,800. Our positive cash flows for the year ended December 31, 2021, consisted of proceeds from issuance of common stock of $1,367,115, proceeds from Convertible notes payable of $1,865,000, offset by payments of notes payable of $515,377.

~~The~~In ~~features~~addition, ofwe ~~the~~issued ~~debt~~to ~~instruments~~Vollintine ~~and~~a ~~payables~~pre-funded common stock purchase ~~concerning~~warrant (the Vollintine Warrant) to purchase 7,200,000 shares of our ~~financing~~common ~~activities~~stock, ~~are~~with ~~detailed~~a nominal exercise price of $.00001 per share. The Vollintine Warrant may be exercised on a cashless basis, As further consideration for Vollintine’s purchasing the Vollintine Note, we entered into a make-whole agreement that assures that Vollintine shall derive not less than $250,000 in net proceeds from Vollintine’s sales of the ~~footnotes~~common tostock ~~our~~underlying ~~financial~~the ~~statements~~Vollintine Warrant.

23As of December 31, 2023, we had total current assets of $976,938 consisting of $6,938 in cash and $970,000 in an advance to Pegasus Specialty Vehicles. Our total current liabilities as of December 31, 2023, were $3,127,913. We had a working capital deficit of $2,150,975 as of December 31, 2023, compared with a working capital deficit of $1,170,940 as of December 31, 2022.

WeCash ~~are~~Flows ~~dependent~~Provided onby ~~investment~~/ ~~capital~~Used ~~to continue our survival. We have raised money through convertible debt, almost always on unfavorable terms. There is no guarantee that these small convertible loans will be available to us~~ in ~~the~~Operating ~~future or on terms acceptable to us.~~Activities

WeOperating ~~also~~activities ~~plan~~provided to$11,166 ~~raise~~in ~~money~~cash infor the ~~sale~~year period ended December 31, 2023, compared with cash used of ~~our~~$1,428,467 ~~equity~~for ~~and~~the ~~debt~~year ~~securities~~ended December 31, 2022. ~~There~~Our ~~can~~positive beoperating nocash ~~assurance~~flow offor ~~funds~~the ~~from~~year ~~these~~ended ~~efforts~~December or31, ~~that any~~2023, ~~other~~was ~~type~~largely the result of ~~additional~~an ~~financing~~increase ~~will~~in beaccounts payable ~~available~~and toaccrued usexpenses. Our negative operating cash flow for the year ended December 31, 2022, was largely the result of our unrealized gain on ~~acceptable~~derivative ~~terms~~liability of $2,213,527, oroffset atby ~~all~~our net income of $653,627.

In light of the EMGE acquisition, we are unable to predict cash flows from operating activities for all of 2024.

Cash Flows Used in Investing Activities

For the year ended December 31, 2023, we used $805,000 in investing activities as an advance to Pegasus Specialty Vehicles. We did not use cash for investing activities for the year ended December 31, 2022.

In light of the EMGE acquisition, we are unable to predict cash flows from investing activities for all of 2024.

Cash Flows Provided by Financing Activities

Cash flows provided by financing activities during the year ended December 31, 2023, amounted to $736,353, compared with cash flows provided by financing activities of $1,479,973 for the year ended December 31, 2022. Our positive cash flows for the year ended December 31, 2023, consisted of net proceeds from convertible debentures of $791,200, proceeds from the sale of warrants of $30,000, proceeds from the sale of common stock of $10,000 offset by the repayment of related party advances of $94,847. Our positive cash flows for the year ended December 31, 2022, consisted of proceeds from issuance of common stock of $91,173 and proceeds from convertible notes payable of $1,388,800.

In light of the EMGE acquisition, we are unable to predict cash flows from financing activities for all of 2024.

Going Concern

As of December 31, ~~2022~~2023, we have an accumulated deficit of $2526,~~320~~736,~~424~~403. Our ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and our ability to achieve and maintain profitable operations. While we are expanding our best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.

Off Balance Sheet Arrangements

As of December 31, ~~2022~~2023, there were no off-balance sheet arrangements.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. There have been no material changes to our critical accounting policies as described in the footnotes to our financial statements included in our annual report on Form 10-K for the year ended December 31, 2022; however, we consider our critical accounting policies to be those related to determining the amount of revenue to be billed, the timing of revenue recognition, stock-based compensation, capitalization and related amortization of intangible assets, impairment of assets, and the fair value of liabilities.

Recent Accounting Pronouncements

No new accounting pronouncements issued or effective during the fiscal year has had or is expected to have a material impact on the financial statements.

249

Item 8. Financial Statements and Supplementary Data

~~Index~~Please tosee our Financial Statements ~~Required~~beginning byon ~~Article~~page 8F-1 of ~~Regulation~~this ~~S-X:~~Annual Report.

Audited Financial Statements:

F-1	Report of Independent Registered Public Accounting Firm;
F-4	Consolidated Balance Sheets as of December 31, 2022 and 2021;
F-5	Consolidated Statements of Operations for the years ended December 31, 2022 and 2021;
F-6	Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2022;
F-6	Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2021;
F-7	Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021; and
F-8	Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Resonate Blends Inc.

26565 Agoura Road, Suite 200

Calabasas, CA 91302

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Resonate Blends, Inc. (the Company) as of December 31, 2022, and the related consolidated statements of income, stockholders’ equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of year ended December 31, 2022, and the results of its operations and its cash flows for each of the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Substantial doubt about the Company’s ability to continue as a going concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s continuing operating losses and accumulated deficit raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

F-1

Critical Audit Matters

A critical audit matter is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee or the Company’s governance and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating a critical audit, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. We have determined there are critical matters related to the Company’s convertible debentures.

As described in Notes 2 and 4 to the consolidated financial statements, the Company had convertible debentures that required accounting considerations and significant estimates.

The Company determined that variable conversion features issued in connection with certain convertible debentures required derivative liability classification. These variable conversion features were initially measured at fair value and subsequently have been remeasured to fair value at each reporting period. The Company determined the fair value of the embedded derivatives using the Black-Scholes-Merton option pricing model. The value of the embedded derivative liabilities related to the convertible debentures was $72,487 and gain recognized from the change of derivative liability was $2,213,527 at December 31, 2022.

We identified the accounting considerations and related valuations, including the related fair value determinations of the embedded derivative liabilities of such as a critical audit matter. The principal considerations for our determination were: (1) the accounting consideration in determining the nature of the various features (2) the evaluation of the potential derivatives and potential bifurcation in the instruments, and (3) considerations related to the determination of the fair value of the various debt and equity instruments and the conversion features that include valuation models and assumptions utilized by management. An audit of these elements is especially challenging and requires auditor judgement due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or knowledge needed.

Our audit procedures related to management’s conclusion on the evaluation and related valuation of embedded derivatives, included the following, among others: (1) evaluating the relevant terms and conditions of the various financings, (2) assessing the appropriateness of conclusions reached by the Company with respect to the accounting for the convertible debt, and the assessment and accounting for potential derivatives and (3) independently recomputing the valuations determined by Management.

Other Matters

The accompanying consolidated balance sheet of Resonate Blends, Inc. as of December 31, 2021, the related consolidated statements of operations, changes in stockholders’ (deficit), and cash flows for the year ended December 31, 2021, and the related notes were audited by another Independent Registered Public Accounting Firm, Boyle CPA, LLC.

We have served as the Company’s auditor since 2022. Houston, Texas April 17, 2023 PCAOB ID: 6771

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Resonate Blends, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Resonate Blends, Inc. (the “Company”) as of December 31, 2021, the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

As discussed in Note 1 to the consolidated financial statements, the Company’s continuing operating losses and accumulated deficit raise substantial doubt about its ability to continue as a going concern for a period of one year from the issuance of the financial statements. Management’s plans are also described in Note 1. The financial statements do not include adjustments that might result from the outcome of this uncertainty.

Basis of Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to fraud or error. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Boyle CPA, LLC

We served as the Company’s auditor from 2018 to 2022.

Red Bank, NJ

April 19, 2022

(PCAOB ID: 6285)

331 Newman Springs Road
Building 1, 4th Floor, Suite 143	P (732) 784-1582
Red Bank, NJ 07701	F (732) 510-0665

F-3

RESONATE BLENDS, INC.

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

CONSOLIDATED BALANCE SHEET

	December 31,2022			December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	64,419		$	12,913
Advances to Suppliers		-			10,830
Other receivable		150,000			-
Inventories		160,492			245,776
Total current assets		374,911			269,519
Fixed assets, net		24,110			31,337
Derivative Valuation allowance		-			-
Investment in equity method investee		100			100
TOTAL ASSETS		399,121			300,956
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities		319,618			206,873
Due to related parties		164,946			45,000
Convertible notes payable, net of discount		988,800			1,865,000
Derivative liability		72,487			2,286,014
Settlement liability					-
Current liabilities of discontinued operations					-
Total current liabilities		1,545,851			4,402,887
Total liabilities		1,545,851			4,402,887
Stockholders’ deficit
Preferred stock, 10,000,000 shares authorized, $0.0001 par value, 0 shares issued.
Series B - Preferred stock, 66,667 shares authorized, $0.0001 par value, 0 issued.					-
Series C - Preferred stock, 2,000,000 shares authorized, $0.0001 par value, 2,000,000 issued and outstanding		200			200
Series D Preferred stock 40,000 shares authorized, $0.0001 par value 40,000 and 0 issued and outstanding, respectively
Preferred Stock Value		-
Common stock; $0.0001 par value; 200,000,000 shares authorized; 75,437,604 and 45,046,637 shares issued and outstanding as of December 31, 2022 and December 31, 2021 , respectively.		7,544			4,504
Stock subscription receivable		(261,059	)
Additional paid-in capital		24,427,009			21,867,416
Accumulated deficit		(25,320,424	)		(25,974,051	)
Total Stockholders’ deficit		(1,146,730	)		(4,101,931	)
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	399,121		$	300,956

The accompanying notes are an integral part of these consolidated financial statements

F-4

RESONATE BLENDS, INC.

CONSOLIDATED STATEMENT OF OPERATION

	December 31 2022			December 31 2021
	The Year ended
	December 31 2022			December 31 2021
REVENUES	$	49,501		$	27,031
COST OF REVENUES		33,068			19,148
Gross profit		16,433			7,883
Operating expenses
Advertising		378,706			611,914
General and administrative expenses		191,728			158,935
Legal and Professional fees		176,478			567,025
Officer Compensation		434,125			556,865
Salaries and Related		-			236,250
Depreciation and amortization		7,738			4,711
Office Rent		10,591			3,239
Impairment of in house software		-			-
Non cash management fees		206,462			400,349
Total operating expenses		1,405,828			2,539,288
Loss from operations		(1,389,395	)		(2,531,405	)
Other Income (expense)
Other Income		10,132			690
Interest expense		(150,065	)		(135,292	)
Gain (Loss) on change of derivative liability		2,213,527			(2,011,881	)
Amortization of debt discount		-			(10,583	)
Amortization of issuance costs		(31,795	)		(247,085	)
Gain (loss) on settlement of derivative liabilities		-			-
Legal settlement		-			-
(Loss) Gain on settlement of notes payable		1,223			62,500
Total other Income (expense)		2,043,022			(2,341,651	)
Income (loss) from investment in equity method investee		-			-
NET INCOME (LOSS) from continuing operations		653,627			(4,873,056	)
NET INCOME (LOSS) from discontinued operations					-
NET INCOME (LOSS)		653,627			(4,873,056	)
Basic weighted average common shares outstanding		75,437,604			31,085,610
Net Income (loss) per common share: basic and diluted	$	0.01		$	(0.16	)

The accompanying notes are an integral part of these consolidated financial statements

F-5

RESONATE BLENDS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

	Shares		Amount		Shares		Amount		Shares		Amount		APIC		Receivable			Deficit			Deficit
	Preferred Stock Series A				Preferred stock - Series C				Common Stock						Subscription			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		APIC		Receivable			Deficit			Deficit
Balance December 31, 2021		-		-		2,000,000	$	200		45,046,637	$	4,504	$	21,867,416				$	(25,974,051	)	$	(4,101,931	)
Issuance of common stock in private placement										6,636,985		664		504,312		(261,059	)					243,917
Issuance of common stock for debt conversions										22,749,316		2,275		1,844,332								1,846,607
Stock issuance for services										1,004,666		100		210,949								211,049
Net Income		-		-		-		-		-		-		-		-			653,627			653,627
Balance December 31, 2022		-		-		2,000,000	$	200		75,437,604	$	7,544	$	24,427,009	$	(261,059	)	$	(25,320,424	)	$	(1,146,730	)

	Shares		Amount		Shares		Amount		Shares		Amount		APIC		Receivable		Deficit			Deficit
	Preferred Stock Series A				Preferred stock - Series C				Common Stock						Subscription		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		APIC		Receivable		Deficit			Deficit
Balance December 31, 2020		-		-		2,000,000	$	200		29,769,627	$	2,976	$	20,101,480		-	$	(21,100,995	)	$	(996,339	)
Balance		-		-		2,000,000	$	200		29,769,627	$	2,976	$	20,101,480		-	$	(21,100,995	)	$	(996,339	)
Issuance of common stock in private placement										8,570,834		857		1,280,092							1,280,949
Issuance of common stock for debt conversions		-		-		-		-		2,828,186		283		73,383		-					73,666
Non-cash compensation										3,752,990		375		399,974							400,349
Exercise of warrant		-		-		-		-		125,000		13		12,487		-					12,500
Net Loss																		(4,873,056	)		(4,873,056	)
Net Income (Loss)																		(4,873,056	)		(4,873,056	)
Balance December 31, 2021		-		-		2,000,000	$	200		45,046,637	$	4,504	$	21,867,416	$	-	$	(25,974,051	)	$	(4,101,931	)
Balance		-		-		2,000,000	$	200		45,046,637	$	4,504	$	21,867,416	$	-	$	(25,974,051	)	$	(4,101,931	)

The accompanying notes are an integral part of these consolidated financial statements

F-6

RESONATE BLENDS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

	31-Dec-22			31-Dec-21
Cash Flows from Operating Activities
Net Income (loss)	$	653,627		$	(4,873,056	)
Net loss from discontinued operations
Adjustments to reconcile
Amortization and depreciation		7,738			15,294
(Gain) Loss on derivative liability		(2,213,527	)		2,011,881
Non cash interest expense					16,142
Stock subscription receivable		(261,059	)
Share professional fees/ compensation		206,462			-
Share-based compensation		-			400,349
Gain on settlement of Derivative liabilities		-			(62,500	)
Changes in assets and liabilities
Inventories		85,283			(191,177	)
Prepaids					(10,830	)
Advances to suppliers		10,830			-
Other receivables		(150,000	)		-
Accounts payable and accrued expenses		112,233			(8,205	)
Derivative liabilities		-			-
Due to Related party		119,946			(80,000	)
Net cash used by operating activities		(1,428,467	)		(2,782,102	)
Net cash provided by discontinued operations		-			-
Net cash provided by used in operating activities		(1,428,467	)		(2,782,102	)
Cash Flows from investing activities
Purchase of fixed assets		-			(36,048	)
Net cash used by investing activities		-			(36,048	)
Cash Flows from Financing Activities
Proceeds from subscription		91,173			1,367,115
Proceeds from convertible notes (net)		1,388,800			1,865,000
Payments on convertible notes payable		-			(515,377	)
Net cash provided by financing activities		1,479,973			2,716,738
Net increase in cash		51,506			(101,412	)
Cash, beginning of period		12,913			114,325
Cash, end of period	$	64,419		$	12,913
Supplemental disclosure of cash flow information
Cash paid for interest	$	-		$	38,048
Non-Cash investing and financing transactions
Conversion of debt for common stock	$	2,265,000		$	306,858

The accompanying notes are an integral part of these consolidated financial statements

F-7

RESONATE BLENDS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021

NOTE 1 – BASIS OF PRESENTATION AND GOING CONCERN

The Company

Resonate Blends, Inc. formerly Textmunication Holdings, Inc. (the “Company”) was incorporated on in October 1984 in the State of Georgia as Brock Control Systems. Founded by Richard T. Brock, the Company was in the sales automation market and an early developer of enterprise customer management systems. The Company went public at the end of March of 1993. In February of 1996, the Company changed its name to Brock International Inc., and in March of 1998, the Company again changed our name to Firstwave Technologies, Inc.

In 2007, the Company deregistered its common stock in order to avoid the expenses of being a public company. The Company reported briefly on the OTC Disclosure & News Service in 2008 but not for long. The Company again changed its name to FSTWV, Inc.

On October 28, 2013, the Company held a shareholder meeting to reincorporate the company in the State of Nevada and concurrently change its name to Textmunication Holdings, Inc. The Company also voted to approve a 1 for 5 reverse split of its outstanding common stock.

On November 16, 2013, the Company entered into a Share Exchange Agreement (SEA) with Textmunication, Inc. a California corporation, whereby the sole shareholder of the Company received 65,640,207 new shares of common stock of the Company in exchange for 100% of the Textmunication’s issued and outstanding shares.

Textmunication is an online mobile marketing platform service that will connect merchants with their customers and allow them to drive loyalty and repeat business in a non-intrusive, value added medium. For merchants we provide a mobile marketing platform where they can always send the most up-to-date offers/discounts/alerts/events schedule, such as happy hours, trivia night, and other campaigns. The consumer can also access specials and promotions that merchants choose to distribute through Textmunication by opting into keywords designated to the merchant’s keywords.

On July 9, 2018, the 1 – 1,000 Reverse Split of the Company’s common stock took effect at the open of business. All shares and per share amounts have been retroactively adjusted to reflect the reverse split.

On June 25, 2019, the Company issued a press release announcing it plans to change its business direction from its current SMS technology business to focus on the emerging national cannabis market. The Company planned on using its mobile texting platform to enhance communication efforts with the potential acquisitions.

On October 25, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Resonate Purchase Agreement”) with Resonate Blends, LLC, a California limited liability company (“Resonate”), and the members of Resonate. As a result of the transaction, Resonate became a wholly owned subsidiary of the Company. In accordance with the terms of the Purchase Agreement, at the closing an aggregate of 5% of the Company’s outstanding shares of common stock for a total of 665,072 shares were issued to the holders of Resonate in exchange for their membership interests of Resonate. These shares have anti-dilution protection. We have also agreed as part of the purchase price to issue: (ii) such number of shares of Series E Preferred Stock that will convert into 5% of the outstanding shares of common stock in the Company on a fully-diluted basis upon an annualized revenue run rate of Ten Million Dollars ($10,000,000.00) for any three (3) consecutive month trailing period; and (iii) such number of shares of Series E Preferred Stock that will convert into 5% of the outstanding shares of common stock in the Company on a fully-diluted basis upon the occurrence of the Company’s public market value reaching One Hundred Million US Dollars ($100,000,000). The shares in (ii) and (iii) shall have anti-dilution protections, except that this provision only applies for 2.5% of the outstanding shares acquired under each subsection.

Also, on October 25, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Entourage Labs Purchase Agreement”) with Entourage Labs, LLC, a California limited liability company (“Entourage Labs”), and the members of Entourage Labs. As a result of the transaction, Entourage Labs became a wholly owned subsidiary of the Company. In accordance with the terms of the Purchase Agreement, at the closing an aggregate of 5% of the Company’s outstanding shares of common stock for a total of 665,072 shares were issued to the holders of Entourage Labs in exchange for their membership interests of Entourage Labs. These shares have anti-dilution protection. We have also agreed as part of the purchase price to issue: (ii) such number of shares of Series E Preferred Stock that will convert into 5% of the outstanding shares of common stock in the Company on a fully-diluted basis upon an annualized revenue run rate of Ten Million Dollars ($10,000,000.00) for any three (3) consecutive month trailing period; and (iii) such number of shares of Series E Preferred Stock that will convert into 5% of the outstanding shares of common stock in the Company on a fully-diluted basis upon the occurrence of the Company’s public market value reaching One Hundred Million US Dollars ($100,000,000). The shares in (ii) and (iii) shall have anti-dilution protections, except that this provision only applies for 2.5% of the outstanding shares acquired under each subsection.

In addition, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations (the “Conveyance Agreement”) with Mark S. Johnson and the Company’s 49% owned subsidiary, Aspire Consulting Group, LLC, a Virginia limited liability company. Pursuant to the Conveyance Agreement, the Company transferred all assets and business operations associated with its IT consulting solutions, including all of the capital stock of Aspire Consulting, to Mr. Johnson. In exchange, Mr. Johnson agreed to cancel 20,000 shares of common stock in the Company and to assume and cancel all liabilities relating to the Company’s former business.

Finally, the Company entered into Employment Agreements with the following persons: (i) Geoffrey Selzer as Chief Executive Officer (CEO) of the Company with an annual salary of $180,000; and (ii) Pamela Kerwin as Chief Operating Officer (COO) of the Company with an annual salary of $120,000. Both are eligible for salary increases upon milestone achievements and other benefits. The Employment Agreement for the CEO has a term of 2 years and can’t be terminated without cause. Severance of six (6) weeks is available for termination of the COO without cause before one-year of service and eight (8) weeks after one-year of service.

F-8

On December 16, 2019 the Company filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger with its wholly owned subsidiary; Resonate Blends, Inc. Shareholder approval was not required under Section 92A.180 of the Nevada Revised Statutes. As part of the merger, the Company’s board of directors authorized a change in our name to “Resonate Blends, Inc.” and the Company’s Articles of Incorporation have been amended to reflect this name change.

In connection with the name change, the Company’s symbol was changed to “KOAN” that more resembles the Company’s new business focus.

On January 20, 2020, Wais Asefi resigned as Chairman and as a member of our Board of Directors. Mr. Asefi’s resignation is in support of Resonate Blends strategic direction of becoming a pure play cannabis company. The Company does not believe that Mr. Asefi has any disagreements on matters relating to our operations, policies or practices. Also, on January 20, 2020, our Board of Directors appointed Geoffrey Selzer as our Chairman.

On May 22, 2020, Resonate Blends, Inc. (the “Company”) entered into a Stock Purchase Agreement (the “SPA”) with Wais Asefi, Nick Miniello, Juleon Asefi, and Curt Byers (collectively, the “Asefi Group”) to sell to the Asefi Group its subsidiary, Textmunication, Inc., a California corporation (“Textmunication”). Textmunication operates the Company’s SMS business activities. The Company will retain its cannabis operations based in Calabasas, California.

The consideration for the sale of Textmunication consists of the cancellation by the Asefi Group of 4,822,029 shares of common stock (the “Shares”) of the Company. The Shares have a market value of $337,542, based on our last sales price of $0.07 per share as of May 26, 2020. Upon the cancellation of the Shares, the Company agreed to execute a general release in favor of Mr. Asefi.

Also on May 22, 2020, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Wais Asefi. Pursuant to the Separation Agreement, Mr. Asefi agreed to separate from all officer positions and as a director of the Company and to further accept the payment of $200,000 from the Company’s future fundraising as consideration of all debts outstanding under Mr. Asefi’s employment agreement with the Company. Mr. Asefi further agreed to cancel his 4,000,000 shares of Series A Preferred Stock and to transfer his 2,000,000 shares of Series C Preferred Stock to Geoffrey Selzer, the Company’s current CEO and Director. Mr. Asefi further released the Company of all claims.

Also on May 22, 2020, Mr. Selzer signed a Voting Agreement and agreed to vote his newly acquired 2,000,000 shares of Series C Preferred Stock in favor of the sale of Textmunication to the Asefi Group.

On July 20, 2020, the parties closed on the transactions contained in the SPA. The Asefi Group cancelled 4,755,209 shares of common stock (the “Shares”) of the Company. The Shares have a market value of $332,842, based on our last sales price of $0.07 per share as of May 26, 2020. The Company also executed a general release in favor of Mr. Asefi.

F-9

Basis of Presentation

Our financial statements are presented in conformity with accounting principles generally accepted in the United States of America, as reported on our fiscal years ending on December 31, 2022 and 2021. We have summarized our most significant accounting policies.

Going concern

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of December 31, 2022 the Company has an accumulated deficit of $25,320,424. The company’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. While the Company is expanding its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. These consolidated financial statements do not include any adjustments that might arise from this uncertainty.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. On December 31, 2022 and 2021 no cash balances exceeded the federally insured limit.

Accounts receivable and allowance for doubtful accounts

Accounts receivables are stated at the amount management expects to collect. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. As of December 31, 2022, and 2021 there’s no allowance for doubtful accounts and bad debts.

Revenue Recognition

The Company’s policy is that revenues will be recognized when control of the product is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

Results for reporting periods beginning after January 1, 2020 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. We did not have any cumulative impact as a result of applying Topic 606.

Fair Value of Financial Instruments

The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items.

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

F-10

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities,

Level 2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset or liability,

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The fair value of the accounts receivable, accounts payable, notes payable are considered short term in nature and therefore their value is considered fair value.

Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended December 31, 2022 and 2021:

SUMMARY OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS

As of December 31, 2022

Level 1

Level 2

Level 3

Total

Liabilities

Derivative Liabilities

72,487

As of December 31, 2021

Level 1

Level 2

Level 3

Total

Liabilities

Derivative Liabilities

2,286,014

Net income (loss) per Common Share

Basic net income (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

Property and equipment

Property and equipment are stated at cost, less accumulated depreciation provided on the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Expenditures for renewals or betterments are capitalized, and repairs and maintenance are charged to expense as incurred the cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts, and any gain or loss thereon is reflected in operations. Company policy capitalizes property and equipment for cost over $1,000, asset acquired under $1,000 are charge to operations.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. Because the Company has no net income, the tax benefit of the accumulated net loss has been fully offset by an equal valuation allowance.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-11

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.

Advertising Expenses

Advertising expenses are included in General and administrative expenses in the Statements of Operations and are expensed as incurred. The Company incurred $378,706 and $611,914 in advertising expenses for the years ended December 31, 2022 and 2021, respectively.

Recent Accounting Pronouncements

In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments including requirements to measure most equity investments at fair value with changes in fair value recognized in net income, to perform a qualitative assessment of equity investments without readily determinable fair values, and to separately present financial assets and liabilities by measurement category and by type of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01 will be effective for the Company beginning on January 1, 2018 and will be applied by means of a cumulative effect adjustment to the balance sheet, except for effects related to equity securities without readily determinable values, which will be applied prospectively. Management has reviewed this pronouncement and has determined that it would not have a material impact to the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases, which requires an entity to recognize long-term lease arrangements as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all long-term leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The amendments also require certain new quantitative and qualitative disclosures regarding leasing arrangements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. Management does not believe the adoption of ASU 2016-02 will have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, which clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument would not, in and of itself, be considered a termination of the derivative instrument, provided that all other hedge accounting criteria continue to be met. ASU 2016-05 is effective for the Company beginning on January 1, 2017. Early adoption is permitted, including in an interim period. Management evaluated ASU 2016-05 and determined that the adoption of this new accounting standard did not have a material impact on the Company’s consolidated financial statements.

F-12

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments, which aims to reduce the diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. ASU 2016-06 is effective for the Company beginning on January 1, 2017. Management evaluated ASU 2016-06 and determined that the adoption of this new accounting standard did not have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting and presentation of share-based payment transactions, including the accounting for related income taxes consequences and certain classifications within the statement of cash flows. ASU 2016-09 is effective for the Company beginning on January 1, 2017. Management evaluated the impact of adopting ASU 2016-09 and determined that the new accounting standard did not have a material impact on the Company’s consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. The provisions of this guidance are to be applied using a retrospective approach which requires application of the guidance for all periods presented. Management has reviewed this pronouncement and has determined that it would not have a material impact to the consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. Management has reviewed this pronouncement and has determined that it would not have a material impact to the consolidated financial statements.

In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

F-13

NOTE 3 – RELATED PARTY TRANSACTIONS

As of December 31, 2021, the Company completed the notes payable to a related party. On May 22, 2020, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Wais Asefi. Pursuant to the Separation Agreement, Mr. Asefi agreed to separate from all officer positions and as a director of the Company and to further accept the payment of $200,000 from the Company’s future fundraising as consideration of all debts outstanding under Mr. Asefi’s employment agreement with the Company. Mr. Asefi further agreed to cancel his 4,000,000 shares of Series A Preferred Stock and to transfer his 2,000,000 shares of Series C Preferred Stock to Geoffrey Selzer, the Company’s current CEO and Director. Mr. Asefi further released the Company of all claims.

On May 22, 2020, the 4,000,000 shares of Series A Preferred Stock were returned to the Company’s transfer agent and cancelled and on May 22, 2020 the 2,000,000 shares of Series C Preferred Stock were transferred to Mr. Selzer. The parties to the Separation Agreement agreed to a payment schedule of $200,000 based on future monies raised by the Company - and not on a specific date – as follows:

● $12,500 when the initial $250,000 is raised by the Company; ● $12,500 when a total of $500,000 is raised by the Company; ● $10,000 when a total of $750,000 is raised by the Company; ● $35,000 when a total of $1,750,000 is raised by the Company; ● $35,000 when a total of $2,750,000 is raised by the Company; ● $35,000 when a total of $3,750,000 is raised by the Company; ● $35,000 when a total of $4,750,000 is raised by the Company; and ● $25,000 when a total of $5,750,000 is raised by the Company.

On May 13, 2021, we amended the Separation Agreement to state the parties desire to reduce the total amount payable to Wais Asefi from $200,000 USD to $142,500 USD. In addition to the earlier payments made to Mr. Asefi, a payment of $40,000 was made on May 14, 2021 and another payment on June 27, 2021 for $40,000. The final payment due on August 11, 2021 was for $25,000. The final payment was made on August 11, 2021 and settled this agreement in full. Further under the amendment, Mr. Asefi nominated Textmunication, Inc., our prior subsidiary, as the recipient of the funds due under the Separation Agreement.

The outstanding balances as of December 31, 2022 and December 31, 2021 are $38,500 and $45,000 respectively. The remaining balance as of December 31, 2022 is due to Mr. Selzer, CEO of Resonate, as he has provided several loans to the Company.

NOTE 4 - CONVERTIBLE NOTE PAYABLE

Convertible notes payable consists of the following as of December 31, 2022 and December 31, 2021:

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

	December 31, 2022		December 31, 2021
Convertible notes face value	$	988,800	$	1,865,000
Less: Discounts		-		-	)
Less: Debt issuance cost
Net convertible notes	$	988,800	$	1,865,000

F-14

The convertible notes as of December 31, 2022 are 8% Unsecured Convertible Promissory Notes (“Notes”) from various accredited investors issued from January 1, 2021 to March 16, 2021. All notes have an automatic conversion into equity on the maturity date, which was July 3, 2022, or if a Qualified Financing (QF) of $5,000,000 is achieved, whichever occurs first. The maturity date pricing is $0.10. A QF converts into equity at the lesser of $1.00 or 75% of the average selling price of the aggregate offering. The outstanding balance as of December 31, 2022 for this Unsecured Convertible Promissory Notes amounts to $200,000. The remaining noteholder has expressed to the Company not to convert his Note into shares in the near term. Consequently, we have mutually agreed not to accrue interest on the this Note going forward.

On January 28, 2022, we entered into Securities Purchase Agreements (the “Purchase Agreements”) with two accredited investors, pursuant to which we issued and sold to the investors two convertible promissory notes, dated January 28, 2022, each in the principal amount of $275,000 for an aggregate principal amount of $550,000. We received $500,000 from the Notes after applying the original issue discount to the Notes.

The Purchase Agreements allow for additional notes to be issued to investors up to $750,000. On February 4, 2022, we issued and sold to two accredited investors (the “Investors”) convertible promissory notes in the principal amount of $55,000 under a Securities Purchase Agreement of the same date. We received $150,000 from the Notes after applying the original issue discount to the Notes.

On March 3, 2022, we issued and sold to an accredited investor a convertible promissory note the principal amount of $55,000 under a Securities Purchase Agreement of the same date. We received $50,000 from the Note after applying the original issue discount to the Note.

The maturity date for repayment of the Notes is nine months from issuance and the Notes bear interest at 10% per annum.

All principal and accrued interest on the Notes are convertible into shares of our common stock. The conversion price shall equal a fixed price of $0.15 per share or, at the option of the Investor in the event that we fail to complete a Qualified Offering before the five (5) month anniversary of the issue date, the Registration Conversion Price. The “Registration Conversion Price” shall mean 75% multiplied by the volume weighted average of the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The Investors shall be entitled to add to the principal amount of the Note $750.00 for each conversion to cover investor’s deposit fees associated with each Notice of Conversion. “Qualified Offering” means any offer and sale by us of an original issuance of equity securities, comprised of either Common Stock or preferred stock of the Company, in a single transaction to investors pursuant to which at least an aggregate of $2,000,000.00 gross proceeds are received by the Company.

In connection with the investment, we issued Commitment Shares to the Investors in the amount of 650,000 shares collectively and we also issued a warrant (the “Warrant”) to the Investors to purchase 812,500 shares collectively of our common stock at an exercise price of $0.40 per share.

The Securities Purchase Agreement contain a most favored nation provision that allows the Investor to claim any lower price from any future securities six months after this closing and a blocker on issuing variable rate investments.

F-15

On June 27, 2022, we issued and sold to an accredited investor a convertible promissory note the principal amount of $138,800 under a Securities Purchase Agreement of the same date. We received $128,500 from the Note after applying the original issue discount to the Note.

The Notes are convertible into shares of common stock, $0.0001 par value per share, of the Company upon the terms and subject to the limitations and conditions set forth in such Note. On the Closing Date (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price .

Finally, on September 8, 2022, we issued and sold a senior secured convertible promissory note to AJB Capital Investments LLC for a principal amount of $600,000, together with guaranteed interest of 12% per year calendar from the date hereof. All Principal and Interest owing hereunder, along with any and all other amounts, shall be due and owing on the Maturity Date March 8, 2023.

The Maturity Date may be extended at the sole discretion of the Borrower up to six (6) months following the date of the original Maturity Date hereunder. In the event that the Maturity Date is extended, the interest rate shall equal fifteen percent (15%) per annum for any period following the original Maturity Date, payable monthly.

We received $540,000 from the Note after applying the original issue discount to the Note.

In connection with the investment, we issued Commitment Shares to the Investors in the amount of 5,571,429 shares collectively. A total of 3,000,000 of those shares can be returned to treasury if the Note is paid off within six (6) months.

As of December 31, 2022 and 2021 accrued interest payable on notes payable were $265,480 and $134,758 respectively.

The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 “Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for’ any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model.

NOTE 5 – COMMITMENTS AND CONTINGENCIES

Office Lease

On October 16, 2019, the Company signed a lease agreement that expires on thirty days’ notice. Rent expense was approximately $10,591 and $3,239 for the years ended December 31, 2022 and 2021, respectively.

Executive Employment Agreement

On October 25, 2019 the Company entered into Employment Agreements with the following persons: (i) Geoffrey Selzer as Chief Executive Officer (CEO) of the Company with an annual salary of $180,000; (ii) Pamela Kerwin as Chief Operating Officer (COO) of the Company with an annual salary of $120,000; (iii) David Thielen as Chief Investment Officer (CIO) of the Company with an annual salary of $120,000. All are eligible for salary increases upon milestone achievements and other benefits. The Employment Agreement for the CEO has a term of 2 years and can’t be terminated without cause. Severance of six (6) weeks is available for termination of the COO and CIO without cause before one-year of service and eight (8) weeks after one-year of service.

F-16

NOTE 6 – INCOME TAXES

For the year ended December 31, 2022, the cumulative net operating loss carry-forward from continuing operations is approximately $25,604,413 and will expire beginning in the year 2030.

The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows as of December 31, 2022 and December 31, 2021:

SCHEDULE OF DEFERRED TAX ASSETS

Deferred tax attributable to:	2022		2021
Net Operating loss carry over		5,376,927		3,413,282
Valuation allowance		5,376,927		3,413,282
Net deferred tax assets		-		-

Due to the enactment of the Tax Reform Act of 2017, the corporate tax rate for those tax years beginning with 2018 has been reduced to 21%.

Note 7 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue an aggregate of 200,000,000 shares of common stock with a par value of $0.0001. The Company is also authorized to issue 10,000,000 shares of “blank check” preferred stock with a par value of $0.0001.

Preferred Stock

The board of directors of the Company has designated, out of the 10,000,000 shares of preferred stock authorized, the following series of preferred stock: 4,000,000 shares of Series A Preferred Stock, 66,667 shares of Series B Preferred Stock, 2,000,000 shares of Series C Preferred Stock, 40,000 shares of Series D Preferred Stock and 10,000 shares of Series E Preferred Stock.

On October 25, 2019, 66,667 outstanding shares of Series B Preferred Stock was returned to the Company’s transfer agent and cancelled.

On December 9, 2019, the Company exercised its right to redeem the 40,000 outstanding shares of Series D Preferred Stock by paying the holders $260,000 or 130% of the amount paid for the shares, as called for under the Securities Purchase Agreement.

On May 22, 2020, 4,000,000 outstanding shares of Series A Preferred Stock were returned to the Company’s transfer agent and cancelled,

There were 2,000,000 shares of Series C Preferred Stock issued and outstanding as of December 31, 2022.

There were 10,000 shares of Series E Preferred Stock authorized and 0 outstanding as of December 31, 2022. There are no other series of preferred stock outstanding as of December 31, 2022.

Common Stock

During the year ended December 31, 2018,

	●	the Company’s Board of Directors approved a one to one thousand (1:1000) reverse stock split, which became effective July 9, 2018. The Company consolidated financial statements have been retroactively restated to the reflect the effect of the stock split
	●	the Company entered into a subscription agreement for 9.98% of the company common shares outstanding for $100,000.

F-17

During the year ended December 31, 2018, the Company issued 1,380,933 shares of common stock with a fair value of $354,010 for the conversion of convertible notes payable. The converted portion of the notes also had associated derivative liabilities with fair values on the date of conversion of 866,361. The conversion of the derivative liabilities has been recorded through additional paid-in capital

During the first quarter of 2019 the company issued a total of 6,685,000 shares to employees and vendors for compensation and services rendered. The fair market value of the share issues accounted as expenses as follows:

SCHEDULE OF COMPENSATION AND SERVICES RENDERED

Management Fees	$	2,074,600
Professional Fees
Payment to obtain loan
Payment to management staff
Payment to subcontractor		446,982
Total	$	2,521,582

During the second quarter of 2019 the company issued 40,000 shares of preferred stock warrants for $200,000 cash.

During the third quarter of 2019 the company issued 1,280,000 common stocks in settlement of liabilities. The fair market value of the liabilities accounted as additional paid in capital of $164,033.

During the year ended December 31, 2019, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with the purchasers identified therein (collectively, the “Purchasers”) providing for the issuance and sale to the Purchasers of an aggregate of up to 40,000 shares of our Series D Convertible Preferred Stock (the “Preferred Shares”) and related warrants for gross proceeds to the Company of $200,000. On December 9, 2019, we exercised our right to redeem the Preferred Shares by paying the Purchasers $260,000 or 130% of the amount paid for the Preferred Shares, as called for under the Securities Purchase Agreement.

During the last quarter year end December 31, 2019, the company issued 4,274,936 shares of common stocks to acquire Resonate Blends, LLC, and Entourage LLC, both California limited liability companies. As a result of the transaction, both companies became wholly owned subsidiaries of the Company. The Company recognized a loss of $834,022 on the acquisitions.

During the year ended December 31, 2021 the company issued a total of 3,427,990 shares of common stock to management and vendors for compensation and services rendered. The fair market value of the share issues accounted as expenses as follows:

Professional Fees	$	201,619
Payment to obtain loan		408,674
Payment to management staff		166,309
Total		776,603

During the year ended December 31, 2022 the company issued a total 1,004,666 shares of common stock to management and vendors for compensation and services rendered. The fair market value of the share issues accounted as expenses as follows:

Professional Fees			211,049
Total			211,049

NOTE 8 – DISCONTINUED OPERATIONS

On July 20, 2020, the Company finalized a Stock Purchase Agreement (the “SPA”) with Wais Asefi, Nick Miniello, Juleon Asefi, and Curt Byers (collectively, the “Asefi Group”) to sell to the Asefi Group its subsidiary, Textmunication, Inc., a California corporation (“Textmunication”). Textmunication operates the Company’s SMS business activities. The Company retained its cannabis operations based in Calabasas, California. The Company has accounted for this spinout as a discontinued operation and retroactively reclassified all previously presented financial information. The following summarizes the results of operations for Textmunication, Inc.

SCHEDULE OF DISCONTINUED OPERATIONS

	2020			2019
Revenues	$	477,734		$	758,101
Cost of revenues		101,347			285,085
Operating expenses		468,815			581,764
Income (loss) from operations		570,162			866,849
Loss from operations of discontinued operation		(92,428	)		(108,748	)
Gain on disposal of discontinued operations		108,206			-
Gain (loss) from discontinued operations	$	15,778		$	(108,748	)

NOTE 9 – SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations subsequent to December 31, 2022 to the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements.

F-18

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

On November 11, 2022, Boyle CPA, LLC resigned as our independent registered public accounting firm and we engaged Victor Mokuolu, CPA PLLC as our independent registered public accounting firm. The engagement of ~~the~~ Victor Mokuolu, CPA PLLC was approved by our Board of Directors.

The information required by Item 304(b) of Regulation S-K concerning the above change in accounting firm is set forth in the Current Report on Form 8-K we filed on November 14, 2022, with the SEC.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this ~~annual~~Annual ~~report~~Report, ~~being~~ December 31, ~~2022~~2023. This evaluation was carried ~~out~~ out under the supervision and with the participation of our management, including our ~~Chief~~Principal Executive Officer and ~~Chief~~Principal Financial and Accounting Officer.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our ~~Chief~~Principal Executive Officer and ~~Chief~~Principal ~~Investment~~Financial and Accounting Officer, to allow timely decisions regarding required disclosure.

Based upon that evaluation, including our ~~Chief~~Principal Executive Officer and ~~Chief~~Principal ~~Investment~~Financial and Accounting Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this ~~annual~~Annual ~~report~~Report.

Management’s Annual Report on Internal Control over Financing Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of December 31, ~~2022~~2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of December 31, ~~2022~~2023, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

26We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this Annual Report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2024: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

WeThis ~~plan~~Annual toReport ~~take~~does ~~steps~~not toinclude ~~enhance~~an ~~and~~attestation ~~improve~~report ~~the design~~ of our registered public accounting firm regarding internal control over financial reporting. ~~During~~Management’s ~~the period covered by this annual~~ report onwas ~~Form 10-K, we have~~ not ~~been~~subject ~~able~~ to ~~remediate~~attestation ~~the~~by ~~material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during~~ our ~~fiscal~~registered ~~year~~public ~~ending~~accounting ~~December~~firm ~~31,~~pursuant ~~2023: (i) appoint additional qualified personnel~~ to ~~address~~an ~~inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures~~exemption for ~~accounting~~non-accelerated ~~and~~filers ~~financial reporting. The remediation efforts~~ set ~~out~~forth in ~~(i)~~Section ~~and~~989G ~~(ii) are largely dependent upon our securing additional financing to cover the costs~~ of ~~implementing~~ the ~~changes~~Dodd-Frank ~~required.~~Wall IfStreet weReform ~~are~~and ~~unsuccessful~~Consumer inProtection ~~securing~~Act ~~such~~that ~~funds,~~was ~~remediation efforts~~enacted ~~may be adversely affected~~ in ~~a material manner~~2010.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was enacted in 2010.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following table sets forth the name and positions of our executive officer and director as of the date ~~hereof~~of this Annual Report.

Name	Age	Positions
Geoffrey Selzer	66	Chairman and CEO
Jim Morrison	65	President, Principal Accounting Officer, Secretary and Director
Pamela Kerwin	74	Chief Operating Officer
Sandy P. Lipkins	37	Director
David Thielen	59	Chief Investment Officer and Director
Lance Liberti James W. Zimbler	52 63	Director Director

Set forth below is a brief description of the background and business experience of our executive officer and director:

~~Geoffrey~~Jim ~~Selzer~~Morrison – President, Chief Executive Officer, Principal Accounting Officer and ~~Chairman~~Director

~~Mr.~~Jim ~~Selzer~~Morrison ~~has~~is ~~built~~considered ~~his~~by ~~career~~many ~~through~~to ~~over~~be ~~two~~one ~~decades~~ of ~~hands-on~~the ~~corporate~~leading ~~finance~~personal care strategists in the world, ~~management~~as well as one of the top executives. From August 2022 to March 2024, ~~creative~~Mr. Morrison served as CEO and ~~production~~a ~~experience~~Director of Emergent Health Corp. ~~Former~~(“EMGE”), a publicly-traded ~~roles~~company ~~include~~involved in the health and wellness industry (symbol: EMGE). Mr. Morrison is currently CEO of ~~Emergent~~Integrity ~~Game~~Wellness ~~Technologies~~Inc., a ~~video~~dynamic company ~~game~~in ~~software~~the ~~company,~~wellness and regenerative biologics space. He has most recently been CEO of StarShop, which was the ~~Creative~~first ~~Head~~celebrity-driven video shopping app that was launched in a partnership with Sprint. His track record of ~~Disney~~leadership ~~Interactive~~and accomplishment in the personal care products space has been unparalleled. Mr. Morrison was President of L’sOréal ~~edutainment~~for over nine years. He was responsible ~~studio~~for many acquisitions, including both Redken and Matrix, and top-line growth that averaged over 20% during his tenure. ~~Geoffrey~~Prior isto ~~the~~L’Oréal, Mr. ~~founder~~Morrison was President and CEO of ~~Resonate~~Graham ~~Blends~~Webb, one of the most successful startups in the hair care space. After leaving L’Oréal, Mr. Morrison was CEO and owner of Sexy Hair Concepts for four years. In 2006, Business Week Magazine wrote, “Over the last two decades Mr. Morrison has had a ~~passion~~profound ~~for~~impact ~~building~~on ~~organizations~~the American Beauty Industry. In the industry’s history no other executive has had the level of financial responsibility or breadth of organizational experience as Jim. His devotion to, and ~~delivering~~success ~~results~~within the industry is unmatched.”

~~Mr.~~Sandy ~~Selzer~~P. ~~does~~Lipkins ~~not~~– hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.Director

~~Pamela~~Sandy ~~Kerwin~~P. –Lipkins ~~Chief~~served ~~Operating~~as ~~Officer~~Director of Business Development of EMGE from August 2023 through March 2024. Mr. Lipkins has over 20 plus years of venture capital, finance and sales experience. For the last 14 years, he has focused on the anti-aging/wellness sector. He has started numerous successful enterprises in the regenerative medical space which have required multiple levels of expertise in business development and strategic planning, as well as capital formation and executive management. Mr. Lipkins is passionate about promoting anti-aging, healthy lifestyle and bringing cutting edge regenerative medicine to the critical masses domestically and internationally. He has taken companies from incubation to revenues to setting up for sale or other liquidity events.

~~Ms.~~Lance ~~Kerwin~~Liberti ~~has~~– extensive senior management experience with both start-up and Fortune 500 companies. As the Vice President and General Manager of Pixar Animation Studios, Pamela played a critical role in the company’s successful IPO and transition from a tech company to a blockbuster studio. Pam is a company builder who specializes in identifying competitive advantages and executing successful marketing strategies.Director

27Lance Liberti served as COO of EMGE from August 2023 through March 2024. As CEO and founder of Integrative Practice Solutions, Lance Liberti brings a lifetime of experience and demonstrated excellence to the executive team. After founding a nationwide healthcare advertising agency in his collegiate years, Mr. Liberti assumed the role of Chief Operating Officer of Spinal Aid Centers of America. During his tenure he expanded the national franchise network from 67 to 162 locations and recognition as the #2 medical service franchise in the world and the 91st fastest growing franchise of the new millennium (as rated by Entrepreneur Magazine in the 2007 Franchise 500 edition). It was at this time that Mr. Liberti suffered his own run-in with “bone-on-bone” contact osteoarthritis, the result of a high school football injury and failed prior reconstructive knee surgery. One of his Chiropractic clients introduced him to his father, a D.O. performing Hyalgan injections that saved his knee and eliminated the need for further surgical intervention. Amazed by the miraculous results and lack of awareness in the medical community that this treatment option even existed, Mr. Liberti partnered with this physician to open the first stand-alone Osteoarthritis specialty practice in southern NJ in 2009. In this facility Mr. Liberti co-developed the now patented Advanced Arthritis Relief Protocol (AARP Program), as well as the patient marketing and administrative business practices that drive the clinical and financial success of this protocol in the more than 200+ licensed locations in 40+ US states today.

~~Ms.~~James ~~Kerwin~~W. ~~does~~Zimbler ~~not~~– hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.Director

~~David~~James ~~Thielen~~W. –Zimbler ~~Chief~~has ~~Investment~~served ~~Officer~~as Vice President of Corporate Finance of EMGE since July 1, 2020; he served as a Director of EMGE from November 2017 to November 2021. From December 2017 until June 2019, he served as President and ~~Board~~a ~~Member~~director of the predecessor iteration of a public company that is now Enzolytics, Inc., a drug development company. In December 2016 he founded Emerging Growth Advisors, Inc., a consulting firm providing advisory services related to mergers and acquisitions for corporations including us, where he has served as President since its formation. Prior to founding Emerging Growth Advisors, Inc., Mr. Zimbler served in a managerial role at other consulting firms, each specializing in mergers and acquisitions, roll-ups and turn-around work.

Mr. Thielen’s career includes roles in Management, Sales, Business Development, Start-ups and Strategy Management as Vice President, COO and CEO. Prior to joining Textmunication Holdings, Inc. in 2017 as COO, he served as Area Vice President of DeRoyal, a global healthcare manufacture. In 2014, he founded Aspire Consulting Group based in Washington, D.C., an IT Services government system integrator that continues to operate as Veteran Owned company.11

Mr. Thielen does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

Term of Office

Our directors are elected to hold office until the next annual meeting of the shareholders and until their respective successors have been elected and qualified. Our executive officers are appointed by our board of directors and hold office until removed by our board of directors or until their successors are appointed.

Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

Significant Employees

We have no significant employees.

Involvement in Certain Legal Proceedings

During the past 10 years, none of our current directors, nominees for directors or current executive officers has been involved in any legal proceeding identified in Item 401(f) of Regulation S-K, including:

1. Any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing;

2. Any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

3. Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:

i. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

ii. Engaging in any type of business practice; or

iii. Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

4. Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity;

5. Being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

6. Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

7. Being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

i. Any Federal or State securities or commodities law or regulation; or

ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

8. Being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Audit Committee

We do not have a separately designated standing audit committee. The entire board of directors performs the functions of an audit committee, but no written charter governs the actions of the board of directors when performing the functions of that would generally be performed by an audit committee. The board of directors approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In addition, the board of directors reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor.

We do not have an audit committee financial expert because of the size of our company and our board of directors at this time. We believe that we do not require an audit committee financial expert at this time because we retain outside consultants who possess these attributes as needed.

29For the fiscal year ending December 31, 2023, the board of directors:

For the fiscal year ending December 31, 2022, the board of directors:

	1.	Reviewed and discussed the audited financial statements with management, and

	2.	Reviewed and discussed the written disclosures and the letter from our independent auditors on the matters relating to the auditor’s independence.

Based upon the board of directors’ review and discussion of the matters above, the board of directors authorized inclusion of the audited financial statements for the year ended December 31, ~~2022~~2023, to be included in this Annual Report on Form 10-K and filed with the ~~Securities and Exchange Commission~~SEC.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us, no persons have failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended December 31, ~~2022~~2023.

Code of Ethics

As of December 31, ~~2022~~2023, we had not adopted a Code of Ethics. We ~~feel~~believe that the small ~~size~~number of ~~our~~ board and management ~~did~~members do not yet warrant the adoption of a Code of Ethics.

Item 11. Executive Compensation

The table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended December 31, ~~2022~~2023 and ~~2021~~2022.

Summary Compensation Table
Name and principal position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		All Other Compensation ($) (1)(2)		Total ($)
Geoffrey Selzer		2021	$	180,000									$	180,000
Jim Morrison (1)		2023		-		-		-		-		-		-
CEO and Director		2022	$	180,000									$	180,000
(President and Secretary)		2022		-		-		-		-		-		-
David Thielen		2021	$	120,000									$	120,000
Geoffrey Selzer		2022	$	180,000									$	180,000
CIO and Director		2022	$	120,000									$	120,000
(former CEO and Director)		2023	$	12,500									$	12,500
Pam Kerwin		2021	$	120,000									$	120,000
David Thielen		2022	$	120,000									$	120,000
Chief Operating Officer		2022	$	120,000									$	120,000
(former CIO and Director)		2023	$	12,500									$	12,500
Pam Kerwin		2022	$	120,000									$	120,000
(former Chief Operating Officer)		2023	$	3,750									$	3,750

(1) Mr. Morrison did not become Chief Executive Officer of our company until March 2024.

Narrative to Summary Compensation Table

OnJim ~~March 1, 2017, we appointed David Thielen as of Chief Operating Officer~~Morrison. We ~~did~~have not ~~have~~yet entered into an employment agreement with ~~Mr. Thielen at the time. He was CEO of Aspire in which we used to own a 49% equity interest. We paid Mr. Thielen an annual salary of $60~~,~~000~~ ~~until~~or ~~October 25,~~otherwise ~~2019~~compensated, ~~when~~our ~~Mr. Thielen resigned as COO and accepted a~~ new ~~role~~President, asJim ~~Chief Investment Officer (CIO) and Director~~Morrison. ~~Mr. Thielen now has~~ anIt ~~employment agreement and~~ is ~~paid~~expected ~~$120~~that,~~000~~ ~~annually.~~in ~~He can also receive equity shares through assigned revenue and company milestones set by~~ the ~~Board~~near offuture, ~~Directors.~~we ~~His~~will ~~initial~~enter ~~term~~into ofan employment isagreement ~~for two years. He may request to terminate his employment contract and forfeit all benefits and equity grants, if provided,~~ with ~~a 30-day notice~~Mr. ~~Should he terminate his employment before two years~~Morrison, ~~he will forfeit~~ the ~~right~~terms ~~to earn any future milestone achievement benefits entirely regardless~~ of ~~how~~which ~~close~~have ~~the~~not ~~company may be to achieving~~been ~~them~~determined. However, should a change of control occur resulting in the sale of the business anytime within 9 months of termination, all milestone achievements shall be deemed accomplished and all rights to the shares shall immediately vest prior to the close of such Change of Control event.

David Thielen. On March 1, 2017, we appointed David Thielen as our Chief Operating Officer. We did not have an employment agreement with Mr. Thielen at the time. He was CEO of Aspire in which we used to own a 49% equity interest. We paid Mr. Thielen an annual salary of $60,000 until October 25, 2019, when Mr. Thielen resigned as COO and accepted a new role as Chief Investment Officer (CIO) and Director. Mr. Thielen now has an employment agreement and is paid $120,000 annually. He can also receive equity shares through assigned revenue and company milestones set by the Board of Directors. His initial term of employment is for two years. He may request to terminate his employment contract and forfeit all benefits and equity grants, if provided, with a 30-day notice. Should he terminate his employment before two years, he will forfeit the right to earn any future milestone achievement benefits entirely regardless of how close the company may be to achieving them. However, should a change of control occur resulting in the sale of the business anytime within 9 months of termination, all milestone achievements shall be deemed accomplished and all rights to the shares shall immediately vest prior to the close of such Change of Control event.

~~With~~Geoffrey Selzer. With the merger of Resonate Blends LLC and Entourage Labs LLC on October 25, 2019, Mr. Selzer was announced as Chief Executive Officer of the holding company. His annual salary is $180,000 and his team has 10% non-dilutive stock, with Mr. Selzer controlling 51% of this amount. Mr. Selzer also has equity milestones in place for meeting preassigned revenue and market valuation goals.

Mr. Selzer’s term of employment is for two years. He may request to terminate his employment contract and forfeit all benefits and equity grants, if provided, with a 30-day notice. Should he terminate his employment before two years, he will forfeit the right to earn any future milestone achievement benefits entirely regardless of how close the company may be to achieving them. However, should a change of control occur resulting in the sale of the business anytime within 9 months of termination, all milestone achievements shall be deemed accomplished and all rights to the shares shall immediately vest prior to the close of such Change of Control event.

At the end of his employment term, an option to continue employment at an annual contract or at-will employment will be available if agreed upon by both parties. The Company may not terminate his employment without Cause.

~~Ms.~~Pamela Kerwin. Pamela Kerwin was announced as our Chief Operating Officer on October 25, 2019. Ms. Kerwin’s salary is $120,000 annually and she also participates in the 10% of non-dilutive stock of the holding company.

Her term of employment is for two years. She may request to terminate her employment contract and forfeit all benefits and equity grants, if provided, with a 30-day notice. Should she terminate her employment before two years, she will forfeit the right to earn any future milestone achievement benefits entirely regardless of how close the company may be to achieving them. However, should a change of control occur resulting in the sale of the business anytime within 9 months of termination, all milestone achievements shall be deemed accomplished and all rights to the shares shall immediately vest prior to the close of such Change of Control event.

Outstanding Equity Awards at Fiscal Year-End

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officers as of December 31, ~~2022~~2023.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OPTION AWARDS STOCK AWARDS Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) David Thielen Pam Kerwin Geoffrey Selzer

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

OPTION AWARDS

STOCK AWARDS

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)

Option Expiration Date

Number of Shares or Units of Stock That Have Not Vested (#)

Market Value of Shares or Units of Stock That Have Not Vested ($)

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#)

David Thielen⁽¹⁾

n/a

Pam Kerwin⁽¹⁾

n/a

Geoffrey Selzer⁽¹⁾

n/a

Jim Morrison⁽²⁾

n/a

31(1) This person resigned all positions with our company in March 2024.

(2) Mr. Morrison did not become an officer of our company until March 2024.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

~~The~~Series ~~following~~F ~~table~~Convertible ~~sets~~Preferred forth, as of March 31, 2023, certain information as to shares of our common stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group. Unless otherwise stated, the address for each beneficial owner is at 26565 Agoura Road, Suite 200 Calabasas, CA 91302.Stock

	Common Stock					Series C Preferred Stock
	Number of Shares Owned		Percent of Class(1)(2)			Number of Shares Owned		Percent of Class(1)(2)
Geoffrey Selzer		1,406,112		1.9	%		2,000,000		100	%
David Thielen		1,765,667		2.3	%		-		-
Pam Kerwin		880,895		1.2	%		-		-
All Directors and Executive Officers as a Group (3 persons)		4,052,674		5.4	%		2,000,000		100	%
5% Holders
Richard Hoge		5,198,640		6.9	%

In the EMGE Acquisition, we acquired the EMGE Equity Interests for an equal number of shares of our to-be-designated Series F Convertible Preferred Stock that shall convert into 93% of the common stock of our company on a fully-diluted basis, which is to say that the holders of our common stock immediately prior to the consummation of the EMGE Acquisition will, upon the conversion of the Series F Convertible Preferred Stock, own 7% of the then-outstanding shares of our common stock. The shares of Series F Convertible Preferred Stock are currently issuable to the EMGE Preferred Shareholders and are to be issued upon our filing of a Certificate of Designation with the State of Nevada.

	(1)	Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants.
	(2)	The percent of class is based on 75,437,604 shares of common stock outstanding and 2,000,000 shares of Series C Preferred Stock outstanding as of March 31, 2023.

The table below under “Common Stock and Series C Preferred Stock” does not take into account the conversion rights of the Series F Convertible Preferred Stock.

Common Stock and Series C Preferred Stock

The following table sets forth, as of April 16, 2024, certain information as to shares of our common stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group. Unless otherwise stated, the address for each beneficial owner is One Marine Plaza, Suite 305A, North Bergen, New Jersey 04047.

	Common Stock					Series C Preferred Stock
	Number of Shares Owned		Percent of Class⁽¹⁾⁽²⁾			Number of Shares Owned			Percent of Class⁽¹⁾⁽²⁾
Jim Morrison		0		0	%		2,000,000	⁽³⁾		100	%
Sandy P. Lipkins		0		0	%		-			-
Lance Liberti		0		0	%		-			-
James W. Zimbler		0		0	%
All Directors and Executive Officers as a Group (4 persons)		0		0	%		2,000,000	⁽³⁾		100	%
5% Holders
Richard Hoge		5,198,640		5.41	%

	(1)	Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants.
	(2)	The percent of class is based on 96,179,058 shares of common stock outstanding and 2,000,000 shares of Series C Preferred Stock outstanding as of April 16, 2024.
	(3)	Mr. Morrison’s ownership of 100% of the Series C Preferred Stock provides Mr. Morrison with voting control of our company.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Other than described below or the transactions described under the heading “Executive Compensation” (or with respect to which such information is omitted in accordance with SEC regulations), there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

Change in Control

Effective March 14, 2024, Geoffrey Selzer, our former Chief Executive Officer and Director, and Jim Morrison, our current President and Director, entered into a Securities Purchase Agreement (the “Control Agreement”), pursuant to which Mr. Selzer sold all 2,000,000 outstanding shares of the Company’s Series C Preferred Stock to Mr. Morrison for $10.00 in cash. Mr. Morrison now possesses voting control of the Company. See Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

EMGE Acquisition Transaction

On February 26, 2024, we entered into entered into a Share Exchange Agreement, as amended (the “Exchange Agreement”), with Emergent Health Corp., a Wyoming corporation (EMGE), and the holders (the “EMGE Preferred Shareholders”) of Series Class A Preferred Stock and the Series C Convertible Non-Voting Preferred Stock (collectively, the “EMGE Equity Interests”).

Conveyance Agreement

On March 14, 2024, in conjunction with our acquisition of EMGE, we entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiary (the “Conveyance Agreement”) with two of our then-wholly-owned subsidiaries, Resonate Blends, LLC, a California limited liability company, and Entourage Labs, LLC, a California limited liability company (collectively, Resonate Blends, LLC and Entourage Labs, LLC are referred to as the “Subsidiary”), and our former Chief Executive Officer and Director, Geoffrey Selzer. Pursuant to the Conveyance Agreement, we assigned our ownership in the Subsidiary to Mr. Selzer. In consideration of our assignment of the Subsidiary, Mr. Selzer (a) assumed and agreed to pay, perform and discharge, fully and completely, all liabilities of the Subsidiary, (b) indemnified us for any loss arising from or in connection with any of such liabilities and (c) agreed to pay us (i) 20% of any proceeds from the sale of the Subsidiary that occurs prior to the one-year anniversary of the Conveyance Agreement and (ii) 10% of any proceeds from the sale of the Subsidiary that occurs after the one-year anniversary and prior to the two-year anniversary of the Conveyance Agreement.

Other Transactions

On May 22, 2020, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Wais Asefi. Pursuant to the Separation Agreement, Mr. Asefi agreed to separate from all officer positions and as a director of the Company and to further accept the payment of $200,000 from the Company’s future fundraising as consideration of all debts outstanding under Mr. Asefi’s employment agreement with the Company. Mr. Asefi further agreed to cancel his 4,000,000 shares of Series A Preferred Stock and to transfer his 2,000,000 shares of Series C Preferred Stock to Geoffrey Selzer, the Company’s current CEO and Director. Mr. Asefi further released the Company of all claims.

● $12,500 when a total of $500,000 is raised by the Company;

● $10,000 when a total of $750,000 is raised by the Company;

● $35,000 when a total of $1,750,000 is raised by the Company;

● $35,000 when a total of $2,750,000 is raised by the Company;

● $35,000 when a total of $3,750,000 is raised by the Company;

● $35,000 when a total of $4,750,000 is raised by the Company; and

● $25,000 when a total of $5,750,000 is raised by the Company.

On May 13, 2021, we amended the Separation Agreement to state the parties desire to reduce the total amount payable to Wais Asefi from $200,000 USD to $142,500 USD. In addition to the earlier payments made to Mr. Asefi, a payment of $40,000 was made on May 14, 2021 and another payment on June 27, 2021 for $40,000. The final payment was made on August 11, 2021 for $25,000. The final payment on August 11, 2021 settled this agreement in full. Further under the amendment, Mr. Asefi nominated Textmunication, Inc., our prior subsidiary, as the recipient of the funds due under the Separation Agreement. As of December 31, 2022, the Company made all of its required payments to Mr. Asefi.

The outstanding balances as of December 31, ~~2022~~2023, and December 31, ~~2021~~2022, are $3870,~~500~~099 and $4538,~~000~~500, respectively. The remaining balance as of December 31, 2022, is due to Mr. Selzer, the former CEO of Resonate, as he has provided several loans to the Company.

Item 14. Principal Accounting Fees and Services

Below are tables of Audit Fees (amounts in US$) billed by our auditors in connection with the audit of the Company’s annual financial statements and review of the quarterly financial statements for the years ended:

Victor Mokuolu, CPA PLLC

Financial Statements for the Year Ended December 31	Audit Services		Audit Related Fees		Tax Fees		Other Fees
2023	$	21,000	$	-	$	-	$	-
2022	$	21,000	$	-	$	-	$	-

~~Boyle CPA, LLC~~17

Financial Statements for the Year Ended December 31		Audit Services				Audit Related Fees				Tax Fees				Other Fees
2021		$	20,000			$	-			$	-			$	-

PART IV

Item 15. Exhibits, Financial Statements Schedules

(a)

Financial Statements and Schedules

The following financial statements and schedules listed below are included in this Form 10-K.

Financial Statements (See Item 8)

(b) Exhibits

Exhibit Number		Description
2.1		Stock Purchase Agreement(1)
2.2		Membership Interest Purchase Agreement(2)
2.3		Membership Interest Purchase Agreement(2)
2.4		Agreement of Conveyance(2)
2.5		Letter of Intent(11)
2.6		Share Exchange Agreement, dated February 20, 2024 (incorporated by reference to Current Report on Form 8-K filed on February 26, 2024)(17)
2.7		Amendment to Share Exchange Agreement, dated March 4, 2024 (incorporated by reference to Current Report on Form 8-K filed on March 7, 2024)(18)
2.8		Amendment to Share Exchange Agreement, dated March 18, 2024 (incorporated by reference to Current Report on Form 8-K filed on March 20, 2024)
3.1		Articles of Incorporation(3)
3.2		Certificate of Change(3)
3.3		Certificate of Amendment(4)
3.4		Amendment to Certificate of Designation for Series C Preferred Stock(5)
3.5		Certificate of Designation for Series E Preferred Stock(7)
3.6		Certificate of Amendment(8)
3.7		Bylaws, as amended(3)
4.1		Secured Convertible Promissory Note(6)
4.2		8% Unsecured Convertible Promissory Note(10)
4.3		Warrant(10)
4.4		Warrant(10)
4.5		Convertible Promissory Note(12)
4.6		Convertible Promissory Note(12)
4.7		Common Stock Purchase Warrant(12)
4.8		Common Stock Purchase Warrant(12)
4.9		Convertible Promissory Note(13)
4.10		Convertible Promissory Note(13)
4.11		Common Stock Purchase Warrant(13)
4.12		Common Stock Purchase Warrant(13)
4.13		Convertible Promissory Note(14)
4.14		Common Stock Purchase Warrant(14)
4.15		Convertible Promissory Note(15)
4.16		Promissory Note(16)
4.17		Common Stock Purchase Warrant(16)
10.1		Separation Agreement and Release(1)
10.2		Voting Agreement(1)
10.3		Employment Agreement(2)
10.4		Employment Agreement(2)
10.5		Securities Purchase Agreement(6)
10.6		Addendum to Securities Purchase Agreement(9)
10.7		Securities Purchase Agreement(12)
10.7		Securities Purchase Agreement(12)
10.8		Securities Purchase Agreement(16)
10.9		Conveyance Agreement, dated March 14, 2024 (incorporated by reference to Current Report on Form 8-K filed on March 20, 2024)
10.10		Securities Purchase Agreement, dated March 14, 2024 (incorporated by reference to Current Report on Form 8-K filed on March 20, 2024)

3418

31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	1	Incorporated by reference to the Current Report on Form 8-K filed on July 20, 2020.
	2	Incorporated by reference to the Current Report on Form 8-K filed on October 31, 2019.
	3	Incorporated by reference to the Registration Statement on Form S-1 filed on June 6, 2014.
	4	Incorporated by reference to the Quarterly Report on Form 10-Q filed on November 23, 2020.
	5	Incorporated by reference to the Current Report on Form 8-K filed on May 21, 2019.
	6	Incorporated by reference to the Current Report on Form 8-K filed on July 23, 2020.
	7	Incorporated by reference to the Current Report on Form 8-K filed on August 10, 2020.
	8	Incorporated by reference to the Quarterly Report on Form 10-Q filed on August 14, 2020.
	9	Incorporated by reference to the Current Report on Form 8-K filed on September 21, 2020.
	10	Incorporated by reference to the Current Report on Form 8-K filed on March 18, 2021.
	11	Incorporated by reference to the Current Report on Form 8-K filed on September 13, 2021.
	12	Incorporated by reference to the Current Report on Form 8-K filed on February 3, 2022.
	13	Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2022.
	14	Incorporated by reference to the Current Report on Form 8-K filed on March 8, 2022.
	15	Incorporated by reference to the Current Report on Form 8-K filed on July 1, 2022.
	16	Incorporated by reference to the Current Report on Form 8-K filed on September 20, 2022.
	17	Incorporated by reference to the Current Report on Form 8-K filed on February 26, 2024.
	18	Incorporated by reference to the Current Report on Form 8-K filed on March 7, 2024.

Item 16. Form 10-K Summary

None.

3519

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Resonate Blends, Inc.
RESONATE BLENDS, INC.
By:	/s/ ~~Geoffrey~~Jim ~~Selzer~~Morrison
	Geoffrey Selzer President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director
	Jim Morrison President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director
	April 17, 2023
	April 16, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ ~~Geoffrey~~Jim ~~Selzer~~Morrison
	Geoffrey Selzer
	Jim Morrison
	President, Chief Executive Officer, Principal Executive Officer, Principal Financial Officer and Director
	President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director
	April 17, 2023
	April 16, 2024
By:	/s/ ~~David~~Sandy ~~Thielen~~P. Lipkins
	David Thielen
	Sandy P. Lipkins
	Chief Investment Officer, Chief Financial Officer, Principal Accounting Officer, Chief Accounting Officer and Director
	Director
	April 17, 2023
	April 16, 2024

By:	*/s/ Lance Liberti*
	Lance Liberti
	Director

	April 16, 2024

By:	*/s/ James W. Zimbler*
	James W. Zimbler
	Director

	April 16, 2024

INDEX TO FINANCIAL STATEMENTS

Resonate Blends, Inc.

Audited Consolidated Financial Statements for the Years Ended December 31, 2023 and 2022

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 6771)		F-1
Consolidated Balance Sheets at December 31, 2023 and 2022		F-2
Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022		F-3
Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2023 and 2022		F-4
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022		F-5
Notes to Financial Statements		F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors,

Resonate Blends, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Resonate Blends, Inc. (“the Company”) as of December 31, 2023, and December 31, 2022, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years ended December 31, 2023, and December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of years ended December 31, 2023, and December 31, 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s ability to continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring operating losses, has working capital deficit of $2,150,975 and $1,170,940, as of December 31, 2023, and December 31, 2022, respectively. The Company also had accumulated deficit of $26,736,403 and $25,320,424 as of December 31, 2023, and December 31, 2022, respectively. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Convertible Note Payable

As described in Note 4, Convertible Note Payable and Note 5, Derivative Liabilities, to the consolidated financial statements, the Company had convertible note payable that required accounting considerations and significant estimates.

The Company determined that variable conversion features issued in connection with certain convertible debentures required derivative liability classification. These variable conversion features were initially measured at fair value and subsequently have been remeasured to fair value at each reporting period. The Company determined the fair value of the embedded derivatives using the Binomial option pricing model. The value of the embedded derivative liabilities related to the convertible note payable was $166,861 as of December 31, 2023.


Victor Mokuolu, CPA PLLC
We have served as the Company’s auditor since 2023.

Houston, Texas

April 16, 2024 PCAOB ID: 6771

F-1

Resonate Blends, Inc.

Consolidated Balance Sheets

	December 31, 2023			December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	6,938		$	64,419
Inventory		-			160,492
Other receivable		-			150,000
Advances to Pegasus Specialty Vehicles LLC		970,000			-
Total current assets		976,938			374,911

Fixed assets, net		15,303			24,110
Investment		100			100

TOTAL ASSETS	$	992,341		$	399,121

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities
Accounts payable and accrued liabilities	$	445,219		$	319,618
Due to related parties		70,099			164,946
Convertible notes payable		1,845,734			988,800
Senior promissory note		600,000			-
Derivative liability		166,861			72,487
Total current liabilities		3,127,913			1,545,851

Total liabilities		3,127,913			1,545,851

Stockholders’ Deficit
Series B - Preferred stock, 66,667 shares authorized, $0.0001 par value, 0 issued and outstanding		-			-
Series C - Preferred stock, 2,000,000 shares authorized, $0.0001 par value, 2,000,000 issued and outstanding		200			200
Series D Preferred stock 40,000 shares authorized, $0.0001 par value 40,000 issued and outstanding		-			-
Preferred stock value		-			-
Common stock; $0.0001 par value; 200,000,000 shares authorized; 86,623,596 and 75,437,604 shares issued and outstanding		8,662			7,544
Stock subscription receivable		(261,059	)		(261,059	)
Additional paid-in capital		24,853,028			24,427,009
Accumulated deficit		(26,736,403	)		(25,320,424	)
Total stockholders’ deficit		(2,135,572	)		(1,146,730	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	992,341		$	399,121

The accompanying notes are an integral part of these consolidated financial statements.

F-2

Resonate Blends, Inc.

Consolidated Statements of Operations


	For the Year Ended
	December 31, 2023			December 31, 2022

REVENUES	$	16,468		$	49,501
COST OF REVENUES		114,140			33,068
Gross profit		(97,672	)		16,433

OPERATING EXPENSES
Advertising		23,772			378,706
General and administrative		163,903			210,057
Legal and professional		85,126			176,478
Officer compensation		28,750			434,125
Non cash management fees		-			206,462
Total operating expenses		301,551			1,405,828

OPERATING LOSS		(399,223	)		(1,389,395	)

OTHER INCOME (EXPENSES)
Interest expense		(636,616	)		(150,065	)
Gain (loss) on change in derivative liability		(94,374	)		2,213,527
Amortization of issuance costs		(160,733	)		(31,795	)
Gain (loss) on settlement of notes payable		(5,033	)		-
Loss on investment		(120,000	)		-
Other income		-			11,355
Total operating income (expense)		(1,016,756	)		2,043,022

NET INCOME (LOSS)	$	(1,415,979	)	$	653,627

INCOME (LOSS) PER SHARE- basic and diluted	$	(0.02	)	$	0.01

WEIGHTED AVERAGE SHARES OUTSTANDING		80,013,557			75,437,604

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Resonate Blends, Inc.

Consolidated Statement of Stockholders’ Deficit


	Preferred Stock Series A				Preferred Stock Series C				Common Stock				Additional Paid-in			Common Stock		Subscription			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Issuable		Receivable			Deficit			Total
Balance, December 31, 2021		-	$	-		2,000,000	$	200		45,046,637	$	4,504	$	21,867,416		$	-	$	-		$	(25,974,051	)	$	(4,101,931	)

Issuance of common stock in private placement		-		-		-		-		6,636,985		664		504,312			-		(261,059	)		-			243,917
Issuance of common stock for debt conversions		-		-		-		-		22,749,316		2,275		1,844,332			-		-			-			1,846,607
Stock issuance for services		-		-		-		-		1,004,666		101		210,949			-		-			-			211,050
Net income		-		-		-		-				-		-			-		-			653,627			653,627

Balance, December 31, 2022		-		-		2,000,000		200		75,437,604		7,544		24,427,009			-		(261,059	)		(25,320,424	)		(1,146,730	)
Balance		-		-		2,000,000		200		75,437,604		7,544		24,427,009			-		(261,059	)		(25,320,424	)		(1,146,730	)

Reclassification of convertible debt		-		-		-		-		-		-		(247,142	)		-		-			-			(247,142	)
Exercise of warrants		-		-		-		-		1,273,273		127		29,873			-		-			-			30,000
Stock issuance for services		-		-		-		-		250,000		25		2,278			-		-			-			2,303
Issuance of common stock for commitment fees		-		-		-		-		6,243,000		624		381,453			-		-			-			382,077
Recognition of stock issued for services		-		-		-		-		-		-		7,671			-		-			-			7,671
Issuance of common stock in private placement		-		-		-		-		137,500		14		9,986			-		-			-			10,000
Conversion of convertible debt		-		-		-		-		3,282,219		328		241,900			-		-			-			242,228
Net loss		-		-		-		-		-		-		-			-		-			(1,415,979	)		(1,415,979	)
Net income (loss)		-		-		-		-		-		-		-			-		-			(1,415,979	)		(1,415,979	)

Balance, December 31, 2023		-	$	-		2,000,000	$	200		86,623,596	$	8,662	$	24,853,028		$	-	$	(261,059	)	$	(26,736,403	)	$	(2,135,572	)
Balance		-	$	-		2,000,000	$	200		86,623,596	$	8,662	$	24,853,028		$	-	$	(261,059	)	$	(26,736,403	)	$	(2,135,572	)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Resonate Blends, Inc.

Consolidated Statements of Cash Flows


	For the Years Ended
	December 31, 2023			December 31, 2022
Cash Flows from Operating Activities
Net income (loss)	$	(1,415,979	)	$	653,627
Adjustments to reconcile net income (loss) to net cash used in operations
Gain on derivative liability		94,374			(2,213,527	)
Non cash interest expense		160,733			-
Loss on settlement of notes payable		5,033			-
Share professional fees/ compensation		392,051			206,462
Depreciation and amortization		8,807			7,738
Stock subscription receivable		-			(261,059	)
Loss on investment		120,000			-
Changes in operating assets and liabilities
Inventory		160,492			85,283
Advances to suppliers		-			10,830
Other receivables		30,000			(150,000	)
Accounts payable and accrued expenses		455,655			112,233
Due to related party		-			119,946
Net cash provided by (used in) operating activities		11,166			(1,428,467	)

Cash Flows from Investing Activities
Deposit on acquisition of Pegasus Specialty Vehicles LLC		(805,000	)		-
		(805,000	)		-

Cash Flows from Financing Activities
Proceeds from issuance of convertible notes		930,000			1,388,800
Proceeds from subsription		-			91,173
Proceeds from private placement		10,000			-
Proceeds from warrant exercise		30,000			-
Repayment of related party advances		(94,847	)		-
Repayment of convertible notes		(138,800	)		-
Net cash provided by (used in) financing activities		736,353			1,479,973

Net increase (decrease) in cash		(57,481	)		51,506
Cash, beginning of year		64,419			12,913
Cash, end of year	$	6,938		$	64,419

Supplemental cash flow disclosures
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

Non-cash investing and financing activities
Conversion of debt for common stock	$	242,228		$	2,265,000

The accompanying notes are an integral part of these consolidated financial statements.

F-5

RESONATE BLENDS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 and 2022

NOTE 1 – BASIS OF PRESENTATION AND GOING CONCERN

The Company

F-6

In connection with the name change, the Company’s symbol was changed to “KOAN” that more resembles the Company’s new business focus.

On June 20, 2023, the Company entered into an Agreement and Plan of Merger with Pegasus Specialty Vehicles, LLC, an Ohio limited liability company, and Pegasus Specialty Holdings LLC, an Ohio limited liability company (collectively “Pegasus”) and wholly-owned subsidiary of the Company. On December 7, 2023, the Company notice received a notice of termination from Pegasus notifying the Company that the Agreement and Plan of Merger has been terminated.

Basis of Presentation

Reclassifications

Certain reclassifications have been made to the December 31, 2022 classifications to make them comparable to December 31, 2023.

Going concern

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company had an accumulated deficit of $26,736,403 at December 31, 2023, had a working capital deficit of $2,150,975 and $1,170,940 at December 31, 2023 and December 31, 2022, respectively, had a net loss of $1,415,979 and net income $653,627 for years ended December 31, 2023 and 2022, respectively. The company’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. While the Company is expanding its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. These consolidated financial statements do not include any adjustments that might arise from this uncertainty.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

Consolidation

These consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

Cash

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. On December 31, 2023 and 2022 no cash balances exceeded the federally insured limit.

Accounts receivable and allowance for doubtful accounts

Accounts receivables are stated at the amount management expects to collect. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. As of December 31, 2023, and 2022 there’s no allowance for doubtful accounts and bad debts.

F-7

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, the core principle of which is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

	●	Identification of the contract, or contracts, with a customer
	●	Identification of the performance obligations in the contract
	●	Determination of the transaction price
	●	Allocation of the transaction price to the performance obligations in the contract
	●	Recognition of the revenue when, or as, performance obligations are satisfied

Revenue is generally recognized upon purchase of products by customers.

Fair Value of Financial Instruments

The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items.

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities,

Level 2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset or liability,

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The fair value of the accounts receivable, accounts payable, notes payable are considered short term in nature and therefore their value is considered fair value.

Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended December 31, 2023 and 2022:

As of December 31, 2023

Level 1

Level 2

Level 3

Total

Liabilities

Derivative Liabilities

166,861

As of December 31, 2022

Level 1

Level 2

Level 3

Total

Liabilities

Derivative Liabilities

72,487

Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis.. Management compares the cost of inventory with the net realizable value and, if applicable, an allowance is made for writing down the inventory to its net realizable value, if lower than cost, inventory is reviewed for potential write-down for estimated obsolescence or unmarketable inventory based upon forecasts for future demand and market conditions. Generally, the Company only keeps inventory on hand for sales made and in which a deposit has been received. At December 31, 2023, the Company determined its’ inventory was not saleable. As such, a charge of $100,883 was charged off to Cost of Revenue in the Statement of Operations.

F-8

Net income (loss) per Common Share

Property and equipment

Income Taxes

Stock-Based Compensation

Advertising Expenses

Advertising expenses are expensed as incurred. The Company incurred $23,772 and $378,706 in advertising expenses for the years ended December 31, 2023 and 2022, respectively.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, which requires an entity to recognize long-term lease arrangements as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all long-term leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The amendments also require certain new quantitative and qualitative disclosures regarding leasing arrangements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. Management does not believe the adoption of ASU 2016-02 will have a material impact on the Company’s consolidated financial statements.

NOTE 3 – RELATED PARTY TRANSACTIONS

Management has periodically advanced funds to the Company for operating expenses. At December 31, 2023 and December 31, 2022, amounts due related parties were $70,099 and $164,946, respectively. These advances are non-interest bearing and payable upon demand.

During the year 2023, a total of $28,750 in payments were made to senior management of the Company, which included Geoffrey Selzer, David Thielen and Pam Kerwin.

F-9

NOTE 4 - CONVERTIBLE NOTE PAYABLE

Convertible notes payable consists of the following as of December 31, 2023, and December 31, 2022:

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

	December 31, 2023			December 31, 2022
Convertible notes face value	$	1,852,500		$	988,800
Less: Discounts		(6,766	)		-
Less: Debt issuance cost
Net convertible notes	$	1,845,734		$	988,800

At December 31, 2022, $200,000 of the convertible notes was an 8% Unsecured Convertible Promissory Note from an investor issued March 5, 2021. The note has an automatic conversion into equity on the maturity date, which was July 3, 2022, or if a Qualified Financing (QF) of $5,000,000 is achieved, whichever occurs first. The maturity date pricing is $0.10. A QF converts into equity at the lesser of $1.00 or 75% of the average selling price of the aggregate offering. On July 10, 2023, the note was converted to 3,282,219 shares of common stock.

During the year ended December 31, 2022, the Company entered into Securities Purchase Agreements with five accredited investors, pursuant to which we issued and sold to the investors convertible promissory notes with a total principal amount of $715,000. We received $650,000 from the Notes after applying the original issue discount to the Notes. The Securities Purchase Agreements also included 812,500 warrants with a 5 year life and exercise price of $0.40 and 650,000 commitment shares. These notes have a Fixed Conversion Price or, at the option of the Holder in the event that the Borrower fails to complete a Qualified Offering before the five (5) month anniversary of the Issue Date, the Registration Conversion Price. The “Fixed Conversion Price” shall mean $0.15 per share. The “Registration Conversion Price” shall mean 75% multiplied by the Market Price (representing a discount rate of 25%). “Market Price” means the volume weighted average of the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The Company is currently working with each of the accredited investor on payoff options.

On June 27, 2022, the Company issued and sold to an accredited investor a convertible promissory note the principal amount of $138,800 under a Securities Purchase Agreement of the same date. The Company received $128,500 from the Note after applying the original issue discount to the Note. During the year ended December 31, 2023, the Company repaid the entire note.

On September 8, 2022, the Company issued and sold a senior secured convertible promissory note to AJB Capital Investments LLC (“AJB”) for a principal amount of $600,000, together with guaranteed interest of 12% per year calendar from the date hereof. All Principal and Interest owing hereunder, along with any and all other amounts, shall be due and owing on the Maturity Date March 8, 2023. We received $540,000 from the Note after applying the original issue discount to the Note. The note is convertible at a Variable Conversion Price shall equal the volume weighted average trading price (i) during the previous twenty (20) Trading Day period ending on the date of issuance of this Note, or (ii) during the previous twenty (20) Trading Day period ending on the Conversion Date.

The maturity date for repayment of the Notes is nine months from issuance and the Notes bear interest at 10% per annum. On September 29, 2023, the Company entered into an amendment with AJB extending the maturity date of the Note through December 28, 2023. In exchange for this amendment, we issued AJB 3,000,000 shares (“extension shares”) of common stock. The Company can redeem certain shares if all principal and interest is repaid in full prior to the new maturity date.

The Securities Purchase Agreement contain a most-favored nation provision that allows the Investor to claim any lower price from any future securities six months after this closing and a blocker on issuing variable rate investments.

During the year ended December 31, 2023, the Company issued 5 convertible promissory notes totalling $457,500, net of debt issuance costs of $37,500. At December 31, 2023, the balance of the notes were $453,125, net of unamortized discount. These notes are convertible into common stock into the next funding round expected to be priced at $.08 per share issued in a Series Preferred with a 4% coupon payable until the Preferred is converted into common stock. A 2-year cash Warrant with 50% coverage priced at $.25 is also available as part of this conversion. A total of 6,243,000 commitment shares and 250,000 warrants issued. This Note has a personal guarantee for the full principal amount to Resonate Blends, Inc. by Darshan Vyas, Principal of Pegasus. Resonate Blends, Inc. in return will guarantee the Lender.

On November 11, 2023, the Company issued and sold to an accredited investor a convertible promissory note the principal amount of $80,000 under a Securities Purchase Agreement of the same date. The Company received $75,000 from the Note after applying the original issue discount to the Note. The note can be converted 6 months after issuance into common stock at a variable conversion price of 73% of the market price, the market price being the average of the 3 lowest trading prices over the prior 10 days.

F-10

As of December 31, 2023 and 2022, accrued interest payable on notes payable was $322,040 and $265,480, respectively.

NOTE 5 – DERIVATIVE LIABILITIES

Certain of the above convertible notes contained an embedded conversion option with a conversion price that could result in issuing an undeterminable amount of future common stock to settle the host contract. Accordingly, the embedded conversion option is required to be bifurcated from the host instrument (convertible note) and treated as a liability, which is calculated at fair value, and marked to market at each reporting period.

The Company used the Binomial pricing model at December 31, 2023 and Black-Scholes pricing model at December 31, 2022 to estimate the fair value of its embedded conversion option and warrant liabilities on both the commitment date and the remeasurement date with the following inputs:

SCHEDULE OF DERIVATIVE LIABILITIES

	December 31, 2023			December 31, 2022

Exercise price	$	0.0133		$	0.030
Expected volatility		460	%		220	%
Risk-free interest rate		4.64	%		1.45	%
Expected term (in years)		1.00			.1
Expected dividend rate		0	%		0	%

NOTE 6 – SENIOR PROMISSORY NOTE

On June 16, 2023, the Company signed a Securities Purchase Agreement (“SPA”) with an accredited investor, pursuant to which the Company issued and sold to the accredited investor a 15% original issue discount Senior Promissory Note (non-convertible), dated June 20, 2023, in the principal amount of $575,000. The Senior Promissory Note is secured by all of the Company’s assets under a separate security agreement between the accredited investor and the Company.

The Company received $435,000 from the Senior Promissory Note after applying the original issue discount and commissions and fees. The proceeds were utilized as a deposit on the Company’s acquisition of Pegasus Specialty Vehicles, LLC (See Note 7).

The maturity date for repayment of the Senior Promissory Note is September 16, 2023, and bears interest at 15% per annum starting 60 days after issuance and interest payable in cash monthly thereafter. The Company may prepay the Senior Promissory Note at any time, but is required to pay a premium of 104% of the principal amount if repaid after 60 days.

As additional consideration, the Company issued 1,318,000 shares of its common stock as commitment shares. The Company was required to issue an additional 330,000 commitment shares due to the Senior Promissory Note not being prepaid at 60 days as required in the SPA. The Company is currently working with investor to address the entire Note payoff.

In the agreements, the Company agreed to certain restrictive covenants, including a restriction on borrowing and a most favored nation clause in favor of the accredited investor for any future offerings not specifically exempted.

On June 20, 2023, the Company and Pegasus Specialty Vehicles, LLC entered into a Loan and Security Agreement whereby the Company lent to Pegasus the principal amount of $575,000 secured by all of the Pegasus’ assets, but subordinate to the security interest of accredited investor and another lender of Pegasus.

On November 12, 2023, the Company and the accredited investor agreed to amend the original Note dated June 16, 2023. The amendment increased the Note amount from $575,000 to $600,000 and also called for the Company to issue an additional 420,000 shares to extend the maturity date of the Note.

NOTE 7 – AGREEMENT AND PLAN OF MERGER WITH PEGASUS SPECIALTY VEHICLES, LLC

On June 20, 2023, the Company entered into an Agreement and Plan of Merger with Pegasus Specialty Vehicles, LLC, an Ohio limited liability company (“Pegasus”), and Pegasus Specialty Holdings LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company (“Pegasus Sub”).

The Merger Agreement provides that at the closing, subject to terms and conditions, Pegasus Sub will merge with and into Pegasus, with Pegasus surviving as a wholly-owned subsidiary of the Company. At Closing of the Merger, the issued and outstanding common shares of Pegasus will automatically be converted into the right to receive an aggregate of 623,500 shares of Series AA Preferred Stock of the Company.

F-11

The Company, Pegasus, and Pegasus Sub have each made various representations and warranties and agreed to certain covenants in the Merger Agreement, including a covenant by the Company that it would raise $3,000,000 less costs in new financing at Closing, with $435,000 loaned pre-Closing to Pegasus under a secured promissory note with a face value of $575,000. Pegasus granted a security interest to the Company in all of Pegasus’ assets on the $575,000 loan, subordinate to other security interests as to the same collateral. The Company received $500,000 from the Note after applying the Original Issue Discount (OID), $30,000 of which was used to pay commission to a broker as placement agent, $30,000 was paid to the lender for its legal fees and $5,000 for a due diligence fee paid to the lender. The balance was tendered to the Company to lend to Pegasus under a Loan and Security Agreement as described below.

Consummation of the Merger was subject to the satisfaction or, if permitted by applicable law, waiver, by the Company, Pegasus, or both of various conditions. For Pegasus, these conditions include, without limitation, (i) an agreeable plan to spin out the existing Company cannabis assets and operations, (ii) an agreeable plan to transfer the outstanding shares of Series C Preferred Stock of the Company to Brian Barrington simultaneously to the date of the aforementioned spin-out; (iii) an agreeable plan to retire the Series E Designation; (iv) financing by the Company of $3,000,000 less costs; (v) the filing of the Certificate of Designation for the Series AA Preferred Stock with the Secretary of State of Nevada; and (vi) certain other customary conditions. For the Company, these conditions include, without limitation, (i) a secured promissory note issued by Pegasus to the Company in the amount of $500,000 with the collateral being a UCC lien subordinate to other lenders; (ii) the payback by the Company of certain advances contributed by corporate officers and others in the Company in an amount not to exceed $140,000; (iii) resolutions of the equity holders of Pegasus approving the Merger Agreement and the transactions contemplated; and (iv) certain other customary conditions.

The Merger Agreement contains certain termination rights including the right of the parties to mutually agree upon termination, and by each of the Company and Pegasus unilaterally if the other party has committed a violation of the covenants, representations and warranties in the Merger Agreement.

The Merger Agreement, the Merger, and the transactions contemplated thereby were unanimously approved by the board of directors of Pegasus, and unanimously approved by the board of directors of the Company.

On December 7, 2023, the Company notice received a notice of termination from Pegasus notifying the Company that the Agreement and Plan of Merger has been terminated.

At December 31, 2023, Pegasus owed the Company $970,000 of funds raised by the Company and advanced to Pegasus.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Office Lease

On October 16, 2019, the Company signed a lease agreement that expires on thirty days’ notice. Rent expense was approximately $5,912 and $10,591 for the years ended December 31, 2023 and 2022, respectively.

Executive Employment Agreement

NOTE 9 – INCOME TAXES

At December 31, 2023, the cumulative net operating loss carry-forward from continuing operations is approximately $26,000,000 and will expire beginning in the year 2030.

The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows as of December 31, 2023 and December 31, 2022:

SCHEDULE OF DEFERRED TAX ASSETS

Deferred tax attributable to:	2023		2022
Net Operating loss carry over	$	5,460,764	$	5,376,927
Valuation allowance		5,460,764		5,376,927
Net deferred tax assets	$	-	$	-

Due to the enactment of the Tax Reform Act of 2017, the corporate tax rate for those tax years beginning with 2018 has been reduced to 21%.

F-12

NOTE 10 – STOCKHOLDERS’ EQUITY

Preferred Stock

There were 2,000,000 shares of Series C Preferred Stock issued and outstanding as of December 31, 2023 and 2022.

There were 10,000 shares of Series E Preferred Stock authorized and 0 outstanding as of December 31, 2023 and 2022. There are no other series of preferred stock outstanding as of December 31, 2023 and 2022.

Common Stock

During the year ended December 31, 2023, the Company issued the following shares of common stock:

	●	The Company issued 1,273,273 shares of common stock for the exercise of a warrant for proceeds of $30,000;
	●	The Company issued 250,000 shares of common stock under a consulting agreement with a 1 year term. The shares were valued at $14,250, the fair value at the issuance date. Of this amount, $9,487 was recognized during the year ended December 31, 2023.
	●	The Company issued a total of 6,243,000 shares of common stock as commitment fees under borrowing agreements. The Company recognized $382,077 in expenses, the fair value of the common stock on the issuance dates.
	●	The Company issued 137,500 shares of common stock for $10,000 in a private placement.
	●	The Company issued a total of 3,282,219 shares of common stock as to convert a convertible note of $200,000 and accrued interest of $42,228.

During the year ended December 31, 2022, the Company issued the following shares of common stock:

	●	The Company issued 1,004,666 shares of common stock for services for $211,050.
	●	The Company issued 6,636,985 shares of common stock for $243,917 in private placements.
	●	The Company issued a total of 22,749,316 shares of common stock as to convert convertible notes and accrued interest of $1,846,607.

NOTE 11 – SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations subsequent to December 31, 2023, to the date these financial statements were issued and has determined that the following subsequent events:

Change in Control

Effective March 14, 2024, Geoffrey Selzer, the Company’s former Chief Executive Officer and Director, and Jim Morrison, the Company’s current President and Director, entered into a Securities Purchase Agreement (the “Control Agreement”), pursuant to which Mr. Selzer sold all 2,000,000 outstanding shares of the Company’s Series C Preferred Stock to Mr. Morrison for $10.00 in cash. Mr. Morrison now possesses voting control of the Company.

EMGE Acquisition Transaction

F-13

Conveyance Agreement

New Business Plan

Following the consummation of the EMGE-related transactions, the Company’s Board of Directors determined that the Company would adopt the business plan of EMGE, which is summarized in the following paragraph.

The Company now engages in the discovery, development and marketing of products designed to better mankind. The Company believes it is positioning itself as a leader in the field of Regenerative Medicine defined by the National Institute of Health using nutritionally designed products. Intended products are to be marketed under third-party label exemptions. The Company is focusing its current efforts on marketing licensed patent-pending natural stem cell mobilizing agents capable of enhancing each individual’s ability to mobilize their own adult stem cells from their bone marrow. Also, the Company is licensed under a patent-pending application to market a dual acting all natural diet aid designed to help control hunger through normal body signals to the brain and stomach. Products are being developed for consumer and professional markets. Research and development activities center on exploring other areas, such as Secretogues, that can naturally enhance a person’s own growth hormone production and similar all natural bioactive formulations to enhance human performance safely, ethically, legally and utilizing known body mechanisms without the use of drugs.

Convertible Notes – Third Parties

The AJB Note is secured by all assets of the Company.

In addition, the Company issued to AJB a pre-funded common stock purchase warrant (the “AJB Warrant”) to purchase 3,428,571 shares of our common stock, with a nominal exercise price of $.00001 per share. The AJB Warrant may be exercised on a cashless basis.

Ray Vollintine. In March 2024, the Company obtained a loan from Ray Vollintine (“Vollintine”) which netted the Company $250,000 in proceeds. In consideration of such loan, the Company issued a $280,000 face amount promissory note (the “Vollintine Note”), with OID of $30,000, bearing interest at 12% per annum, with principal and interest payable on September 29, 2024. The Company has the right to repay the Vollintine Note at any time. The Vollintine Note is convertible at any time and from time to time into shares of the Company’s common stock at a conversion price that shall equal to $.035 per share; provided, however, that, upon an event of default, the conversion price shall be the lower of (a) $.035 or (b) the volume weighted average trading price during the previous 20 trading-day period ending on the date of issuance of the Vollintine Note or during the previous 20 trading-day period ending on the relevant conversion date, whichever is lower.

The Vollintine Note is unsecured.

In addition, the Company issued to Vollintine a pre-funded common stock purchase warrant (the “Vollintine Warrant”) to purchase 7,200,000 shares of our common stock, with a nominal exercise price of $.00001 per share. The Vollintine Warrant may be exercised on a cashless basis, As further consideration for Vollintine’s purchasing the Vollintine Note, the Company entered into a make-whole agreement that assures that Vollintine shall derive not less than $250,000 in net proceeds from Vollintine’s sales of the common stock underlying the Vollintine Warrant.

F-14

Filing Compare · Resonate Blends, Inc.