What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-06-29 compared with 2019-11-19 · 435 added, 449 removed, 287 unchanged (75% of the section changed)

1 unchanged sentence

consolidated financial statements included in this Form 10-Q are as follows:

Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018;

Consolidated Statements of Operations for the for the three and nine months ended September 30, 2019 and 2018 (unaudited);

Consolidated Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019;

Consolidated Statements of Operations for the for the three months ended March 31, 2020 and 2019 (unaudited);

Consolidated Statement of Stockholders’

Equity (Deficit) for the nine months ended September 30, 2019 (unaudited);

Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited);

Equity (Deficit) for the three months ended March 31, 2020 (unaudited);

Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019 (unaudited);

Notes to Consolidated Financial Statements.

3 unchanged sentences

considered necessary for a fair presentation have been included.

Operating results for the interim period ended September 30,

Operating results for the interim period ended March 31, 2020

are not necessarily indicative of the results that can be expected for the full year.

TEXTMUNICATION

HOLDINGS, INC.

Balance Sheet

of September 30, 2019 and December 31, 2018

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

BALANCE SHEETS

March 31, 2020

December 31, 2019

Current assets

and cash equivalents

Cash and cash equivalents

Total current assets

in equity method investee

Investment in equity method investee

LIABILITIES AND STOCKHOLDERS’

EQUITY (DEFICIT)

Current liabilities

Accounts payable

and accrued liabilities

Accounts payable and accrued liabilities

Due to related parties

Loans payable

Convertible notes

payable, net of discount

Convertible notes payable, net of discount

Derivative liability

current liabilities

Settlement liability

Short term loan

Total current liabilities

Total liabilities

Stockholders’

Equity (Deficit)

Preferred stock,

5,933,333 shares authorized, $0.0001 par value, 4,000,000 issued and outstanding

Series B - Preferred

stock, 66,667 shares authorized, $0.0001 par value, 0 and 66,667 issued and outstanding

Series C - Preferred

stock, 2,000,000 shares authorized, $0.0001 par value, 2,000,000 issued and outstanding

Series D - Preferred

stock 40,000 shares authorized, $0.0001 par value 40,000 and 0 issued and outstanding, respectively

Series A - Preferred stock, 10,000,000 shares authorized,

$0.0001 par value, 4,000,000 issued and outstanding

Series C - Preferred stock, 2,000,000 shares authorized, $0.0001 par value, 2,000,000 issued and outstanding

Common stock;

1 unchanged sentence

100,000,000 shares authorized;

12,879,452 and 2,435,179 shares issued and outstanding as of September 30, 2019 and December 31, 2018,

respectively.

Additional paid-in

19,705,714 and 17,153,936 shares issued and outstanding as of March 31, 2020 and December 31, 2019 , respectively.

Additional paid-in capital

Accumulated deficit

(19,768,548 )

(19,159,721 )

stockholders’equity (deficit)

Total liabilities

and stockholders’

equity deficit

accompanying notes are an integral part of these consolidated financial statements

TEXTMUNICATION

HOLDINGS, INC.

Statement of Operations

the three months period ended March 31, 2019 and 2018

Total Stockholders’

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY

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

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

STATEMENTS OF OPERATIONS

COST OF REVENUES

Operating expenses

General and administrative

Legal and Professional

Officer Compensation

Salaries and Related

Sales Commission

Impairment of inhouse

Cash Expenses Management fees

and administrative expenses

and Professional fees

of inhouse software

cash management fees

operating expenses

1 unchanged sentence

Other Income (expense)

Interest expense

Gain on change of

derivative liability

Amortization of

debt discount

Gain (loss) on settlement

of derivative liabilities

Legal settlement

(loss) on settlement of notes payable

(loss) on change of derivative liability

of debt discount

(loss) on settlement of derivative liabilities

on settlement of notes payable

other income (expense)

(loss) from investment in equity method investee

Net Income (loss)

per common share:

basic and diluted

$ (3,023,461 )

INCOME (LOSS)

Basic weighted

average common shares outstanding

average common

Income (loss) per common share:

basic and diluted

accompanying notes are an integral part of these consolidated financial statements

TEXTMUNICATION,

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

(FORMERLY TEXTMUNICATION HOLDINGS,

STATEMENTS OF STOCKHOLDERS’

EQUITY (DEFICIT)

THE PERIOD ENDED SEPTEMBER 30, 2019

THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

stock Series A

stock - Series B

1 unchanged sentence

stock - Series D

Total Stockholders’

Stockholders’

of March 31, 2020

December 31, 2019

$ (19,159,721 )

of liabiliites

issuance for services

loss - 3 months ended March 31, 2019

stock issuance

March 31, 2020

(19,768,549 )

shares converted to common

and warrant issued for cash

loss - 3 months ended June 30, 2019

of March 31, 2019

December 31, 2018

$ (15,489,993 )

issuance for settlement of liabilities

loss - 3 months ended September 30, 2019

September 30, 2019

of liabilities

issuance for services

March 31, 2019

$ (18,081,318 )

accompanying notes are an integral part of these consolidated financial statements

TEXTMUNICATION,

Statements of Cash flow

the six months ended

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

RESONATE BLENDS, INC.

TEXTMUNICATION HOLDINGS, INC.)

STATEMENTS OF CASH FLOWS

three months ended March 31

Cash Flows from Operating Activities

Income (loss)

Net Income (loss)

$ (2,591,325 )

Adjustments to reconcile net income

(loss) to net cash provided by operating activities:

Amortization of

debt discount

( Gain) Loss on derivative

Write off Inhouse

Adjustments to reconcile

Amortization of debt discount

Loss on derivative liability

Impairment of software cost

Non cash interest expense

Legal Settlement

Share based compensation

Gain on settlement

Loss on legal settlement

Income (loss) from

equity method investee

Gain (Loss) on the settlement of debt

Gain on settlement of derivative liabilities

Income (Loss) from equity method investee

Changes in assets and liabilities

Accounts payable

and accrued expenses

cash provided by / ( used in) operating activities

Cash Flows from Investing Activities

Capitalization

of software cost

cash provided by investing activities

Cash Flows from

Financing Activities

Proceeds from short

Payments on convertible

Net proceeds from

issuance of common stocks

Proceeds on Convertible

Notes/ Loans Payable- RP

proceeds from sale of stock warrants

cash provided by financing activities

Accounts payable and accrued expenses

Due to Related party

Net cash provided by operating activities

Investments in Joiant

Disposal of Investment in Aspire

Net cash provided by investing activities

Cash Flows from Financing Activities

Proceeds from subscription

Proceeds from convertible notes / loans payable

Proceeds from notes payables

Payments on preferred stocks buy back

Payments on convertible notes payable

Acquisition of Resonate Blends

Net cash provided by financing activities

Net increase in cash

1 unchanged sentence

Cash, end of period

Supplemental disclosure of cash flow

paid for interest

Supplemental disclosure of cash flow information

Cash paid for interest

Cash paid for tax

Non-Cash investing and financing transactions

of debt for common stock

liabilities reclassified to paid in capital

of derivative liability

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

TEXTMUNICATION

HOLDINGS, INC.

Conversion of debt for common stock

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

RESONATE BLENDS, INC.

TEXTMUNICATION HOLDINGS, INC.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED SEPTEMBER 30, 2019 (UNAUDITED)

THE QUARTER ENDED MARCH 31, 2020

ORGANIZATION AND BUSINESS OPERATIONS

formerly Textmunication Holdings, Inc.

(the “Company”) was incorporated 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.

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.

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.

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

Holdings, Inc.

(Company) was incorporated on May 13, 2010 under the laws of the State of California.

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.

can also access specials and promotions that merchants choose to distribute through Textmunication by opting into keywords designated

to the merchant’s keywords.

November 16, 2013, the Company entered into a Share Exchange Agreement (SEA) with Textmunication Holdings (Holdings).

corporation, whereby the sole shareholder of the Company received 65,640,207 new shares of common stock of Holdings in exchange

for 100% of the Company’s issued and outstanding shares.

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.

July 9, 2018, the 1 –

1,000 Reverse Split of “Textmunication Holdings, Inc.”

(TXHD) common stock took effect

at the open of business.

All shares and per share amounts have been retroactively adjusted to reflect the reverse split.

9th, 2018 Textmunication Holdings, Inc.

(“TXHD”) entered into Advisory Agreements with Mr.

Thomas DiBenedetto and

Joseph Griffin.

DiBenedetto will advise Textmunication on business execution, growth initiatives and strategic investment

opportunities.

Joseph Griffin will join Textmunication as a financial investment advisor.

In his role, he will advise the

company on strategic investment opportunities and investment execution.

May 2, 2019 the Corporation received a notice of conversion under the Certificate of Designation of the Corporation from

Aspire Consulting Group LLC for the complete conversion of 66,667 shares of Series A Preferred Stock into 20,000 shares of

the Corporation’s common stock.

The board of directors approve conversion of the above shares of Series B Preferred

Stock into 20,000 shares of common stock in the Corporation.

May 16, 2019, the Corporation filed a Certificate of Withdrawal with the State of Nevada to withdraw its Certificate of Designation

for our Series B Preferred Stock.

There were no shares of preferred stock outstanding at the time of the filing and the action

was approved by our Board of Directors in accordance with Nevada law.

on May 16, 2019, our Board of Directors created, out of our available shares of preferred stock, par value $0.0001 per share,

a series of preferred stock known as “Series D Convertible Preferred Stock”

consisting of 40,000 shares.

terms of the Series D Certificate of Designation, the shares shall not accrue nor pay dividends except that if dividends are declared

for other equity holders of our Company then the Series D Convertible Preferred Stock shall participate on the same basis.

with respect to any future series of preferred stock of senior rank to the Series D Convertible Preferred Stock in respect of

the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of our Company or

the Series D Convertible Preferred Stock and any future series of preferred stock of pari passu rank to the Series D Convertible

Preferred Stock in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and

winding up of the Company, all shares of capital stock of our Company shall be junior in rank to the Series D Convertible Preferred

Stock with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding

up of our Company.

Each share of Series D Convertible Preferred Stock has a stated value of $10 and is convertible into shares

of Common Stock, equal to the stated value divided by the conversion price of our stock price on the day of conversion (subject

to adjustment in the event of stock splits and dividends).

Failure to affect a conversion within proscribed time periods will

affect both liquidated damages and buy-in charges.

We are prohibited from effecting the conversion of any share of the Series

D Convertible Preferred Stock to the extent that, as a result of such conversion, the holder or any affiliates would beneficially

own more than 9.99%, in the aggregate, of the issued and outstanding shares of our Company’s common stock calculated immediately

after giving effect to the issuance of shares of common stock upon the conversion of the Series D Convertible Preferred Stock.

Except as required by law and as set forth in the Series D Certificate of Designation, the Series D Convertible Preferred Stock

shall have no voting rights.

TEXTMUNICATION

HOLDINGS, INC.

1,000 Reverse Split of the Company’s common stock took effect at the open of business.

and per share amounts have been retroactively adjusted to reflect the reverse split.

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.

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.

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

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.

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

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.

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

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.

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.

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.

RESONATE BLENDS, INC.

TEXTMUNICATION HOLDINGS, INC.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED SEPTEMBER 30, 2019 (UNAUDITED)

rights of the holders of Series D Convertible Preferred Stock are defined in the relevant Certificate of Designation filed with

the Nevada Secretary of State on May 16, 2019, attached hereto as Exhibit 3.2, and is incorporated by reference herein.

on May 16, 2019, our Board of Directors and the majority of the holders of our Series C Convertible Preferred Stock approved an

amendment to the certificate of designation for our Series C Convertible Preferred Stock (the Amended Certificate of Designation”),

consisting of up 2,000,000 shares, par value $0.0001.

Under the Amended Certificate of Designation, holders of our Series C Convertible

Preferred Stock are entitled to vote on all shareholder matters with a vote equal to 51% of the total vote of all classes of voting

stock of our company.

The rights of the holders of Series C Convertible Preferred Stock are defined in the relevant Amended Certificate

of Designation filed with the Nevada Secretary of State on May 16, 2019.

June 11, 2019, the Corporation 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.

The Warrants have an exercise price of $0.50 per share (cashless)

and are exercisable sixty months from the issuance date.

June 25, 2019, Textmunication Holdings, Inc.

(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.

plans on using its mobile texting platform to enhance communication efforts with the potential acquisitions.

THE QUARTER ENDED MARCH 31, 2020

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

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.

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

As part of the merger, the Company’s board of directors authorized a change in our name to “Resonate Blends,

and the Company’s Articles of Incorporation have been amended to reflect this name change.

connection with the name change, the Company’s symbol was changed to “KOAN”

that more resembles the Company’s

new business focus.

of Presentation

13 unchanged sentences

course of business.

As of September 30, 2019, the Company has an accumulated deficit of $18,416,995.

As of March 31, 2020, the Company has an accumulated deficit of $19,768,548.

The company’s ability

8 unchanged sentences

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

TEXTMUNICATION

HOLDINGS, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED SEPTEMBER 30, 2019 (UNAUDITED)

Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial

The balance at times may exceed federally insured limits.

At September 30, 2019, no cash balances exceeded the federally

At March 31, 2020, no cash balances exceeded the federally

insured limit.

RESONATE BLENDS, INC.

TEXTMUNICATION HOLDINGS, INC.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED MARCH 31, 2020

receivable and allowance for doubtful accounts

4 unchanged sentences

receivable, historical collection information and existing economic conditions.

As of September 30, 2019, and December 31, 2018

no allowance for doubtful accounts was set up.

As of March 31, 2020, and 2019 no allowance for

doubtful accounts was set up.

are recognized when control of the promised is transferred to our customers, in an amount that reflects the consideration we expect

12 unchanged sentences

messages to their subscribers’

Our custom web application SMS/RCS platform is typically billed on a fixed price based

on the number of SMS/RCS allocated for each package our client purchases.

Our custom web application SMS/RCS platform is typically billed on a fixed-price

based on the number of SMS/RCS allocated for each package our client purchases.

Generally, revenue for SMS/RCS services is recognized

18 unchanged sentences

to develop its own assumptions.

TEXTMUNICATION

HOLDINGS, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED SEPTEMBER 30, 2019 (UNAUDITED)

three levels of the fair value hierarchy are described below:

4 unchanged sentences

(supported by little or no market activity).

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED MARCH 31, 2020

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

32 unchanged sentences

expense and credited to additional paid-in capital over the period during which services are rendered.

TEXTMUNICATION

HOLDINGS, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED SEPTEMBER 30, 2019 (UNAUDITED)

Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than

7 unchanged sentences

to compensation expense and additional paid-in capital over the period during which services are rendered.

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED MARCH 31, 2020

in Securities

4 unchanged sentences

Board of Directors, are considered in determining whether the equity method is appropriate.

Accounting Pronouncements

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.

Management evaluated ASU 2016-18 and determined that the adoption of this new accounting

standard did not have a material impact on the Company’s consolidated financial statements.

RELATED PARTY TRANSACTIONS

of September 30, 2019, the Company had advances due to a related party.

of March 31, 2020, the Company had advances due to a related party.

The loans are due on demand and have no interest.

outstanding as of September 30, 2019 and December 31, 2018 were approximately $11,750 and $11,750, respectively

outstanding as of March 31, 2020 and December 31, 2019 were approximately $11,625 and $11,650, respectively

4 - CONVERTIBLE NOTE PAYABLE

notes payable consists of the following as of September 30, 2019 and December 31, 2018:

notes payable consists of the following as of March 31, 2020 and December 31, 2019:

March 31, 2020

December 31, 2019

Total convertible notes payable

13 unchanged sentences

pricing model.

the three months ended September 30, 2019, the Company issued 1,280,000 shares of common stock with a fair value of $164,033 for

the settlement of liabilities payable.

The conversion of the derivative liabilities has been recorded through additional paid-in

INVESTMENT IN ASPIRE CONSULTING GROUP, LLC

January 5, 2016, the Company entered into a Share Exchange Agreement with Aspire Consulting Group, LLC, a Maryland limited liability

company and certain members of Aspire.

Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire 49% of all

of the issued and outstanding membership units of Aspire in exchange for the issuance of 66,667 shares of the Company’s

newly created Series B Convertible Preferred Stock to the Members valued at $460,002.

Preferred shares were later converted to

20,000 common stocks.

TEXTMUNICATION

HOLDINGS, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED SEPTEMBER 30, 2019 (UNAUDITED)

Company has concluded that it has the ability to exercise significant influence, but not control, over an Aspire through its acquired

49% equity interest and therefore has accounted for the acquisition of the interest under the equity method.

following table presents details of the Company’s investment is Aspire as of September 30, 2019 and December 31, 2018:

following table presents details of the changes in the Company’s derivative liabilities associated with its convertible

notes for the three months ended March 31, 2020:

Balance December 31, 2019

Income (loss) from equity method investee

Distributions received from Aspire

Balance September 30, 2019

Change in fair market value of derivative liabilities

Balance March 31, 2020

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

1, 2015 and expires on thirty days’

Rent expense was approximately $16,537 and $14,782 for the nine months ended

September 30, 2019 and 2018, respectively.

Rent expense was approximately $5,512 and $5,268

for the three months ended March 31, 2020 and 2019, respectively.

We also have a co-share office located in Calabasas,

California for our executive team at Resonate.

We pay $99 month for the office space.

Employment Agreement

Company has an employment agreement with the CEO/Chairman to perform duties and responsibilities as may be assigned by the Board

of Directors.

The base salary is in the amount of $120,000 per annum plus an annual discretionary bonus plus benefits commencing

on December 17, 2013 and ending May 1, 2017 with an automatic renewal on each anniversary date (May 1) thereafter.

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;

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

The Employment Agreement for the CEO has a term of 2 years and can’t be terminated without cause.

six (6) weeks is available for termination of the COO without cause before one-year of service and eight (8) weeks after one-year

STOCKHOLDERS’

the first quarter of 2019 the company issued a total of 6,685,000 shares to employees and vendors for compensation and services

The fair market value of the shares issues accounted as expenses as follows:

Management Fees

Payment to subcontractors

the 2 nd quarter of 2019 the company issued 40,000 shares of preferred stock warrants for $200,000 cash.

the 3 rd 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.

TEXTMUNICATION

HOLDINGS, INC.

During the first quarter of 2020, the

company issued a total of 1,501,778 shares of common stock to vendors for compensation and services rendered.

market value of the shares issues accounted as expenses as follows:

Professional fees

Payment to obtain loan

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED SEPTEMBER 30, 2019 (UNAUDITED)

THE QUARTER ENDED MARCH 31, 2020

SUBSEQUENT EVENTS

October 25, 2019, Textmunication Holdings, Inc.

(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

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.

Resonate Purchase Agreement includes a funding obligation, which requires the Company to provide an aggregate amount of capital

(i) Five Hundred Thousand Dollars ($500,000) on the Closing Date of, (ii) Five Hundred Thousand ($500,000) four (4)

months after Closing, and (iii) Five Hundred Thousand Dollars ($500,000) eight (8) months after Closing.

the time of closing, the Company invested $200,000 and short of what was required at Closing.

The Resonate Purchase Agreement

states that the Company will raise an additional $700,000 at terms no less favorable than the funds raised for the $200,000, referred

to above, and provide Resonate the additional $300,000 no later than December 1st, 2019, which will be used to pay off the holders

of Series D Preferred Stock prior to its conversion option on December 11th, 2019.

If the Company fails to do either of those,

it shall be deemed an Event of Default.

Based on the private placement currently in place, both sides are confident that the necessary

funds will be raised.

However, closing on October 25, 2019 was necessary to address the strategic partnerships in place to move

the Company forward.

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

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.

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

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.

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.

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.

the Company entered into Employment Agreements with the following persons:

(i) Geoff Selzer as Chief Executive Officer (CEO) of

the Company with an annual salary of $180,000;

and (ii) Pam 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.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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.

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

on May 22, 2020, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Wais

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.

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.

Asefi further released the Company of all claims.

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.

June 18, 2020, we executed a convertible promissory note with Geneva Roth Remark Holdings, Inc.

for $85,800 together with any

interest at the rate of 10% per annum from the issue date.

If we decide to let this Note convert, the variable conversion price

is 75% multiplied by the market price, representing a market discount of 25%.

We have the ability to prepay this Note beginning

on the Issue Date and ending on the date which is one hundred twenty (120) days following the Issue Date with a prepayment percentage

The period beginning on the date which is one hundred twenty-one (121) days following the Issue Date and ending on the

date which is one hundred eight (180) days following the Issue Date, the prepayment percentage is 118%.

March 3, 2020 Resonate Blends, Inc.

(“Resonate”) agreed to pay Cicero Holding, Inc.

(“Cicero”) five payments

of $10,000 plus a final balloon payment of $60,000 by September 15, 2020.

This settlement was on a previous $100,000 convertible

note issued to the Company on October 2, 2019.

To date, Resonate has made two payments of $10,000 each –

On June 23, 2020, both Parties agreed to amend the settlement agreement dated March 3, 2020.

Resonate will issue 900,000

common shares to Cicero with a leak-out of 120,000 shares per month to retire the remaining $90,000 owed on the Note.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Forward-Looking

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our financial results, is included herein and in our other filings with the SEC.

are a developing player in the mobile marketing and loyalty industry, providing cutting-edge mobile marketing solutions, rewards

Extension Disclosure

has relied upon the Securities and Exchange Commission’s Order under Section 36 of the Securities

Exchange Act of 1934 Granting Exemptions From Specified Provisions of the Exchange Act and Certain Rules Thereunder dated March

4, 2020 (Release No.

34-88318) (the “Order”) to delay the filing of its Quarterly Report on Form 10-Q for the quarter

ended March 31, 2020 (the “Quarterly Report”) due to circumstances related to the coronavirus disease (“COVID-19”).

On May 14, 2020, the Company filed a Current

Report on Form 8-K to indicate its intention to rely on the Order for such extension.

After the diagnosis of the coronavirus (“COVID-19”)

in close proximity of the Company’s employees in March 2020, the Company closed its corporate offices and requested that all employees

work remotely until further notice.

Employees affected include certain of its key personnel responsible for assisting the Company

in the preparation of its financial statements.

In view of these ongoing circumstances, the Company was unable to timely provide

its auditors and accountants with financial records, and therefore allow the Company to file a timely and accurate Quarterly Report

on Form 10-Q for the period ending March 31, 2020 by the prescribed date without undue hardship and expense to the Company.

October 25, 2019, Resonate Blends, Inc.

(formerly Textmunication Holdings Inc.) announced its entry into the cannabis industry

by acquiring Resonate Blends LLC (“Resonate”

or the “Company”), a California-based cannabis wellness lifestyle

product company built on a proprietary system of experiential targets.

Resonate is building a brand-focused vertically integrated

cannabis organization offering trusted brands of consistent quality.

The Company also acquired Entourage Labs LLC (“Entourage

Labs”), a sister company of Resonate.

Entourage Labs is the Intellectual Property (IP) subsidiary of Resonate.

Based in Calabasas, California, Resonate Blends,

is a cannabis holding company centered on valued-added holistic Wellness and Lifestyle brands.

The Company’s

strategy is to ignite future growth by building a purpose-driven portfolio of research organizations, innovative and emerging

brands, and retail channels.

The Company’s focus is finding mutual value between product and consumer by optimizing

quality, supply chain resources and financial performance.

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 we believe is the industry gold standard

in user experience.

Company 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 support the industry.

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.

are currently finalizing development in cooperation with an award-winning strategic partner in preparation for the launch of our

first product line of six products.

We believe that these multi-use products will deliver specific, predictable, reliable, effects

in a format that is completely unique in the industry.

We have formalized contracts with our logistical and marketing partners,

and we are on target for our upcoming product release.

This release will be followed before year end with our second product line

that is already in full development.

Our holding company, Resonate Blends, Inc.,

is now comprised of Resonate Blends LLC, the cannabis operations and product development side of the company;

Labs LLC, which is our Intellectual Property (IP) subsidiary, and Textmunication, Inc., our mobile marketing

subsidiary for the health, fitness and wellness sectors which, upon 20 days from mailing a definitive 14C information statement,

has been sold.

company and a group of shareholders (hereinafter referred to as, the “Asefi Group”), including Wais Asefi, our former

Chief Executive Officer and director, have entered into a Purchase Agreement, dated as of May 22, 2020, pursuant to which we have

agreed to sell Textmunication, Inc.

to the Asefi Group.

The consideration for the sale of Textmunication,

consists of 4,822,029 shares of common stock of our company that belong to Wais Asefi and other members of the Asefi Group,

and which will be cancelled in the transaction.

The 4,822,029 shares have a current market value of $337,542, based on

our last sales price of $.07 per share as of May 22, 2020.

Purchase Agreement contains customary representations, warranties and covenants made by our company and the Asefi Group, including

covenants relating to the conduct of their respective businesses between the date of signing of the Purchase Agreement and the

closing (the “Closing”), and customary non-solicitation provisions.

The transactions contemplated by the Purchase

Agreement are also subject to customary conditions, including our company’s receipt of a Broker Opinion of Value through

Pricing Analysis from an independent firm and the approval our company’s stockholders.

Purchase Agreement may be terminated by:

(a) by mutual written consent of the parties;

(b) by either party if the sale is not

consummated within two months following execution, subject to certain limitations;

issues an order, decree or ruling or takes any other action, in any case having the effect of permanently restraining, enjoining

or otherwise prohibiting the sale, which order, decree, ruling or other action is final and non-appealable;

(d) by either party

if the requisite approval of our company’s.

stockholders is not obtained, subject to certain limitations;

(e) by our company.,

upon the Asefi Group’s breach of any representation, warranty, covenant or agreement, or if any representation or warranty

of the Asefi Group becomes untrue, in either case such that the conditions set forth in the Purchase Agreement would not be satisfied

as of the time of such breach or as of the time such representation or warranty becomes untrue, subject to cure provisions;

by the Asefi Group, upon our company’s breach of any representation, warranty, covenant or agreement, or if any representation

or warranty of our company becomes untrue, in either case such that the conditions set forth in the Purchase Agreement would not

be satisfied as of the time of such breach or as of the time such representation or warranty becomes untrue, subject to cure provisions;

or (g) by our company.

if a material adverse effect with respect to the Asefi Group occurs after the date of execution, subject

to cure provisions.

Textmunication

is a developing player in the mobile marketing and loyalty industry, providing cutting-edge mobile marketing solutions, rewards

and loyalty to our clients.

3 unchanged sentences

tools in mobile marketing, rewards, paperless redemption and loyalty.

the past 4 years, we have grown to over 765 clients and more than 950 different locations in the United States and Canada.

have achieved this with an expanded focus on a variety of industries, including restaurants, retailers, entertainment venues and

other partnership opportunities.

We have decided to focus our energy on the gym, health and fitness club market.

However, we are

also working with Quick Service Restaurants (QSR), Beauty/Tanning salons, hospitality, entertainment, digital marketing and sporting

software platform provides a powerful nonintrusive and valued-added engagement tool capable of delivering more than one billion

SMS per month.

CIO Review Magazine recognized Textmunication as one of the “Top 20 Most Promising Digital Marketing Solution

Providers”

in its annual 2018 edition.

We offer cutting-edge technology with solutions such as Rich Communication Services

have built an advanced “Communication Platform as a Service”

(CPaaS) backbone enabling developers to add real-time

communication features in their own applications without needing to build backend infrastructure and interfaces.

We are working

to develop “Messaging as a Platform”

A MaaP platform combines advanced messaging with standardized interfaces

to plugins creating a richer experience for consumers, such as RCS.

Textmunication expanded its White Label program allowing companies

of all sizes to implement an “out-of-the-box”

solution “Powered by Textmunication”.

In addition to White

Label, the company offers standalone Application Programming Interfaces or APIs, integrated API solutions and non-integrated services.

can produce a new API in 2-4 weeks for each new client.

We now have 7 of the top 8 Health Club Management Software (CMS) companies

using our integrated SMS fitness solution.

There is no other automated health and fitness solution offering a completed end-to-end

solution similar to ours.

We now have access to more than 25,000 health clubs in North America and will focus on converting new

clubs to our solution in the next 12 months.

June 25, 2019, we issued a press release announcing our plans to change our business direction from the SMS technology business

to focus on the emerging national cannabis market.

We feel there are synergies between our mobile texting platform and the $4.2

trillion-dollar wellness lifestyle sector.

Our goal is to acquire assets and companies and utilize our mobile platform for member

and client communication.

Our focus on the cannabis wellness lifestyle segment will be centered on products, branding, retail

distribution and mobile technology.

are in the IT consulting business through our acquisition of a minority interest in Aspire Consulting, LLC.

We plan to assist

our controlling partner in the development of this consulting business in addition to improving the market position of our mobile

marketing business.

principal executive office is located at 1940 Contra Costa Blvd.

Pleasant Hill, CA 94523 and our telephone number is (925-777-2111).

of Operation for Nine Months Ended September 30, 2019 and 2018

the three months ended September 30, 2019, we earned revenues in the amount of $261,047 as compared with revenues of $218,251

for the three months ended September 30, 2018.

For the nine months ended September 30, 2019, we earned revenues in the amount

of $758,100, as compared with revenues of $709,375 for the nine months ended September 30, 2018.

slight increase in revenues for the three and nine months ended September 30, 2019 over the prior year period is due to launching

a new platform and services and we are hopeful will continue to increase revenues in future quarters.

of revenues was $114,101 for the three months ended September 30, 2019, as compared with $117,241 for the same period ended September

Cost of revenues was $298,654 for the nine months ended September 30, 2019, as compared with $232,145 for the same period

ended June 30, 2018.

gross profit was $146,946 for the three months ended September 30, 2019 or approximately 56% of revenues, as compared with $101,010

for the same period ended September 30, 2018, or approximately 46% of revenues.

For the nine months ended September 30, 2019 our

gross profit was $459,446 or approximately 61% of revenues, as compared with $477,230 or approximately 76% of revenues for the

same period ended September 30, 2018.

cost of revenues increased for 2019 compared with the 2018 and our margins were less as a result of increased software development

We expect a similar or increased cost of revenues for the rest of 2019.

operating expenses were $290,038 for the three months ended September 30, 2019, as compared with $302,329 for the three months

ended September 30, 2018.

Our operating expenses were $3,367,345 for the nine months ended September 30, 2019, as compared with

$815,528 for the nine months ended September 30, 2018.

main reason for our increased operating expenses in 2019 was a result of 6,685,000 shares issued to employees and vendors for

compensation and services rendered at a value of $2,521,582 and officer compensation of $310,404.

We expect that our operating

expenses for the rest of 2019 will decrease, provided that we do not have to issue stock for services.

Given our lack of operating

capital, we have been forced to issue shares for services rendered to the company.

We hope that increase revenues will lessen

that trend for 2019 and beyond.

had other expenses of $101,038 for the three months ended September 30, 2019 compared with other income of $27,947 for the same

period ended September 30, 2018.

We had net other expenses of $104,437 for the nine months ended September 30, 2019 compared with

other income of $324,952 for the same period ended September 30, 2018.

other expenses for the three months period ended September 30, 2019 consisted of interest expenses $38,686 and a loss on legal

settlement of $106,961, offset by a gain on the change in derivative liabilities of $44,428 compared to previous period net other

income consisted of change in the fair value of derivative liabilities $19,261 and gain on settlement of notes payables of $9,893.

Other expenses for the nine months ended September 30, 2019 consisted mainly interest expenses $43,528 and a loss on legal settlement

of $106,961, offset by a gain on the change in derivative liabilities of $44,428.

Net other income for the nine months ended September

30, 2018 consisted mainly of a $119,369 change in the fair value of derivative liabilities based on Black Scholes, along with

a $255,339 gain on the settlement of notes payable, offset mainly by the amortization of debt discount and interest expenses of

$42,534 and $7,222 respectively.

had net loss of $243,154 for the three months ended September 30, 2019, as compared with net loss of $174,488 for the three months

ended September 30, 2018.We had a net loss of $3,023,461 for the nine months ended September 30, 2019, as compared with net loss

of $15,583 for the nine months ended September 30, 2018.

the past 4 years, our mobile marketing business has not been able to generate sufficient revenue to be able to sustain administrative

expenses and has been unable to raise sufficient capital from the public market for the current and future competitive environment.

The board of directors, with the leadership of our new CEO, has decided to change the company’s business focus to the cannabis

industry and has plans to dispose of the mobile marketing business.

This determination of the board of directors has been based

on evaluating various strategic alternatives and conducting an extensive review of our financial condition, results of operations

and business prospects, that attempting to raise additional capital, continuing to operate as a going concern was not reasonably

likely to create greater value for our stockholders pursuing the mobile business model.

Company submitted the required information to affect a new corporate name and stock symbol change to Financial Industry Regulatory

Authority (FINRA).

On December 16, 2019, the new corporate name was announced as Resonate Blends, Inc.

and its common stock now

trades on the OTCQB under the symbol “KOAN”, a symbol named after the Company’s upcoming product brand.

Consulting Group LLC, an IT Services firm out of Gaithersburg, Maryland is no longer in the holding company as of October 25,

principal executive office is located at 26565 Agoura Road, Suite 200, Calabasas, CA 91302 and our mobile marketing offices are

located at 1940 Contra Costa Blvd.

Pleasant Hill, CA 94523.

Our executive telephone number is (571) 888-0009 and our mobile marketing

main number is (800) 677-7003.

of Operation for Nine Months Ended March 31, 2020 and 2019

the three months ended March 31, 2020, we earned revenues in the amount of $305,590 as compared with revenues of $243,443 for

the three months ended March 31, 2019.

The increase of approximately 26% compared to 2019 is due primarily to successful

marketing efforts and effective use our new platform.

revenues generated were from our subsidiary, Textmunication, Inc.

We are finalizing our product line for our cannabis operations,

and expect to achieve revenues in the coming months with the launch of these new products.

of revenues was $90,559 for the three months ended March 31, 2020, as compared with $88,398 for the same period ended March 31,

Our cost of revenues for 2020 was in the same level compared with the 2019 increased slightly in relation to increase in

gross profit was $215,031 for the three months ended March 31, 2020 or approximately 70% of revenues, as compared with $$155,045

for the same period ended March 31, 2019, or approximately 63% of revenues.

A slight increase in gross margin primarily due to

lower cost incurred from our service providers.

operating expenses were $898,976 for the three months ended March 31, 2020, as compared with $2,747,741 for the three months

ended March 31, 2019.

main reason for our decreased operating expenses in 2020 was a result of 6,685,000 shares issued to employees and vendors for

services rendered at a value of $2,521,582 offset by this year’s increased in Legal and Professional fees $152,693 and

officer compensation $266,811.

had other income of $75,117 for the three months ended March 31, 2020 compared with other income of $1,530 for the same

period ended March 31, 2019, mainly attributable to the changes in value of the derivative liability.

We had net loss of $608,828 for the

three months ended March 31, 2020, as compared with net loss of $2,591,325 for the three months ended March 31, 2019.

and Capital Resources

of September 30, 2019, we had total current assets of $100,993, consisting of cash and receivables.

Our total current liabilities

as of September 30, 2019 were $565,846.

We had a working capital deficit of $3464,853 as of September 30, 2019, compared with

a working capital deficit of $534,907 as of December 31, 2018.

As of March 31, 2020, we had total current

assets of $85,069 consisting of cash and receivables.

Our total current liabilities as of March 31, 2020 were $1,029,429.

We had a working capital deficit of $944,360 as of March 31, 2020, compared with a working capital deficit of $612,228

as of December 31, 2019.

Flows from Operating Activities

activities used $386,001 in cash for the nine months ended September 30, 2019, compared with cash used of $21,751 for the nine

months ended September 30,2018.

Our negative operating cash flow for the nine months ended September 30, 2019 was largely the

result of our net loss of $3,023,461, offset mainly by share based compensation of $2,521,635.

Our negative operating cash flow

for the nine months ended September 30, 2018 was largely the result of changes in loss on change in derivative liabilities $196,168,

offset mainly by the the gain on the settlement of debt of $261,256

Operating activities used $327,860

in cash for the three months ended March 31, 2020, compared with cash used of $54,391 for the three months ended March 31, 2019.

Our negative operating cash flow for the three months ended March 31, 2020 was largely the result of the result out net loss of

$608,828 offset mainly by share based compensation of $225,695.

Our negative operating cash flow for the three months

ended March 31, 2019 was largely the result of our net loss of $2,591,325, offset mainly by share based compensation of $2,521,582.

Flows from Investing Activities

activities used $0 in cash for the three months ended September 30, 2019, compared with cash used of $39,863 for the nine months

ended September 30, 2018.

Cash flows used in investing activities for the nine months ended September 30, 2018 resulted from the

capitalized cost for internal use software.

used no cash on investing activities for both the three months ended March 31, 2020 and 2019.

Flows from Financing Activities

flows provided by financing activities during the nine months ended September 30, 2019 amounted to $405,567 compared with cash

flows provided by financing activities of $62,500 for the nine months ended September 30, 2018.

Our positive cash flows for the

nine months ended September 30, 2019 consisted of proceeds from the issuance of preferred stock and warrants of $200,000, proceeds

from convertible notes $167,750 and short term loan of $38,067.

flows provided by financing activities during the three months ended March 31, 2020 amounted to $314,278 compared with

cash flows provided by financing activities of $0 for the three months ended March 31, 2019.

Our positive cash flows for the three

months ended March 31, 2020 consisted of proceeds from subscription $50,000, proceeds from convertible notes/loans payable

$151,960 and proceeds from notes payable of $130,075, offset by payments of $17,757 on convertible notes payable.

features of the debt instruments and payables concerning our financing activities are detailed in the footnotes to our financial

5 unchanged sentences

have experienced a history of losses.

With our revenues increasing, however, we are less reliant on outside capital as we have

been in the past.

We will need at a minimum $120,000 in capital to operate in the next 12 months.

With Resonate Blends in development stage and Textmunication revenues stable, we are still

reliant on outside capital as we have been in the past.

We will need at a minimum $1,500,000 in capital to operate in the next

are dependent on investment capital to continue our survival.

3 unchanged sentences

acceptable to us.

do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time.

can be no assurance that such additional financing will be available to us on acceptable terms, or at all .

of September 30, 2019, we have an accumulated deficit of $ 18,486,268.

also plan to raise money in the sale of our equity securities.

There can be no assurance of funds from these efforts or that any

other type of additional financing will be available to us on acceptable terms, or at all.

of March 31, 2020, we have an accumulated deficit of $19,768,548.

Our ability to continue as a going concern is contingent

5 unchanged sentences

Balance Sheet Arrangements

of September 30, 2019, there were no off-balance sheet arrangements.

of March 31, 2020, there were no off-balance sheet arrangements.

Accounting Policies

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements