What changed in this filing

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Item 1. Financial Statements

2020-08-14 compared with 2020-06-29 · 330 added, 321 removed, 401 unchanged (62% of the section changed)

1 unchanged sentence

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

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 Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019;

Consolidated Statements of Operations for the for the three and six months ended June 30, 2020 and 2019 (unaudited);

Consolidated Statement of Stockholders’

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);

Equity (Deficit) for the six months ended June 30, 2020 (unaudited);

Consolidated Statements of Cash Flows for the six months ended June 30, 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 March 31, 2020

Operating results for the interim period ended June 30, 2020

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

1 unchanged sentence

BALANCE SHEETS

March 31, 2020

June 30, 2020

December 31, 2019

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Stockholders’

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

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

Preferred stock, 5,933,333 shares authorized, $0.0001 par value, Series

A - 4,000,000 issued and outstanding

Series B - Preferred stock, 66,667 shares authorized, $0.0001 par value, 66,667 issued and outstanding

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

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100,000,000 shares authorized;

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

23,950,843 and 17,153,936 shares issued and outstanding as of June 30, 2020 and December 31, 2019 , respectively.

Additional paid-in capital

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STATEMENTS OF OPERATIONS

Three Months Ended

Six Months Ended

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

COST OF REVENUES

Operating expenses

and administrative expenses

and Professional fees

of inhouse software

cash management fees

operating expenses

from operations

Other Income (expense)

(loss) on change of derivative liability

of debt discount

(loss) on settlement of derivative liabilities

on settlement of notes payable

General and administrative expenses

Legal and Professional fees

Officer Compensation

Salaries and Related

Sales Commission

Impairment of inhouse software

Non cash management fees

Total operating expenses

Loss from operations

Other Income (expense)

(loss) from investment in equity method investee

INCOME (LOSS)

Basic weighted

average common

Income (loss) per common share:

Interest expense

Gan (Loss) on change of derivative liability

Amortization of debt discount

Gain on settlement of notes payable

Total other expense

Income (loss) from investment in equity method investee

NET INCOME (LOSS)

Basic weighted average common shares outstanding

Net Income (loss) per common share:

basic and diluted

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

(FORMERLY TEXTMUNICATION HOLDINGS,

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

STATEMENTS OF STOCKHOLDERS’

THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019

stock Series A

3 unchanged sentences

Stockholders’

of March 31, 2020

OF JUNE 30,2020

December 31, 2019

$ (19,159,721 )

Loss three months March 31, 2020

stock issuance

1 unchanged sentence

(19,768,549 )

of March 31, 2019

loss three months June 30, 2020

of notes payable

(20,950,632 )

OF JUNE 30, 2019

December 31, 2018

4 unchanged sentences

$ (18,081,318 )

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

RESONATE BLENDS, INC.

TEXTMUNICATION HOLDINGS, INC.)

shares converted to common

warrants issued for cash

loss three months June 30,2019

June 30, 2019

(18,270,300 )

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

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

STATEMENTS OF CASH FLOWS

three months ended March 31

six months ended June 30

Cash Flows from Operating Activities

1 unchanged sentence

$ (1,790,911 )

$ (2,591,325 )

Adjustments to reconcile

1 unchanged sentence

Loss on derivative liability

Impairment of software cost

Non cash interest expense

Legal Settlement

Share based professional fees

Share based compensation

6 unchanged sentences

Net cash provided by operating activities

Investments in Joiant

Disposal of Investment in Aspire

Net cash provided by investing activities

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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

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

RESONATE BLENDS, INC.

TEXTMUNICATION HOLDINGS, INC.)

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED MARCH 31, 2020

THE QUARTER ENDED JUNE 30, 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.

Resonate Blends, Inc.

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.

Brock, the Company was in the sales automation market and an early developer of enterprise customer management

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.

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.

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

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 –

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,

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 the company provides 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.

On July 9, 2018, the 1 –

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.

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.

October 25, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Resonate Purchase Agreement”)

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relating to the Company’s former business.

RESONATE BLENDS, INC.

TEXTMUNICATION HOLDINGS, INC.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

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.

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;

and David Thielen as Chief Investment Officer (CIO) 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.

December 16, 2019 the Company filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger with

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new business focus.

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.

of Presentation

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course of business.

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

As of June 30, 2020, the Company has an accumulated deficit of $20,950,632.

The company’s ability

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The balance at times may exceed federally insured limits.

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

At June 30, 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

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receivable, historical collection information and existing economic conditions.

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

As of June 30, 2020 and 2019 no allowance for

doubtful accounts was set up.

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services revenues are generated from SMS and RCS packages where client logs into a cloud-based application to send targeted SMS

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.

Generally, revenue for SMS/RCS services is recognized

immediately as our clients have instant access to their web-based application to send out messages, the number of SMS/RCS messages

allocated to a client expires at the end of each month and renews beginning of each month.

The Company offers whereby control

of the product passes to the customer when delivered and revenue is recognized at the time of delivery.

messages to their subscribers base.

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 immediately

as our clients have instant access to their web-based application to send out messages, the number of SMS/RCS messages allocated

to a client expires at the end of each month and renews beginning of each month.

The Company offers whereby control of the product

passes to the customer when delivered and revenue is recognized at the time of delivery.

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.

did not have a cumulative impact as of January 1, 2019 due to the adoption of Topic 606 and there was not an impact to our consolidated

statement of operations for the year ended December 31, 2018 as a result of applying Topic 606.

We did not have any cumulative impact

as a result of applying Topic 606.

Value of Financial Instruments

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(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

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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

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RELATED PARTY TRANSACTIONS

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

of June 30, 2020, the Company had advances due to a related party.

The loans are due on demand and have no interest.

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

Amounts outstanding

as of June 30, 2020 and December 31, 2019 were approximately $11,621 and $11,650, respectively

4 - CONVERTIBLE NOTE PAYABLE

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

March 31, 2020

January 22, 2020, we executed a convertible promissory note with Geneva Roth Remark Holdings, Inc.

for $113,300 with note

discounted of $10,300 and interest at the rate of 10% per annum from the issue date.

This note will mature on January 22, 2021

with penalty clause of 22% per annum should the note be defaulted.

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 Textmunication Holdings, Inc.

on October 2, 2019.

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

or $20,000 total.

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

Resonate issued

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.

March 13, 2020 we executed a convertible promissory note with Armada Capital Partners LLC.

for $142,000 with note discounted of

$8,667 and interest at the rate of 15% per annum from the issue date.

This note will mature on April 20, 2021 with penalty clause

of 18% per annum should the note be defaulted.

If we decide to let this Note convert, the variable conversion price is 65% multiplied

by the market price, representing a market discount of 35%.

We have the ability to prepay this Note beginning on the Issue Date

at our discretion.

March 13, 2020 we executed a convertible promissory note with BHP Capital NY for $142,000 with note discounted of $8,667 and interest

at the rate of 15% per annum from the issue date.

This note will mature on April 20, 2021 with penalty clause of 18% per annum

should the note be defaulted.

If we decide to let this Note convert, the variable conversion price is 65% multiplied by the market

price, representing a market discount of 35%.

We have the ability to prepay this Note beginning on the Issue Date at our discretion.

March 13, 2020 we executed a convertible promissory note with Jefferson Street Capital LLC for $142,000 with note discounted of

$8,667 and interest at the rate of 15% per annum from the issue date.

This note will mature on April 20, 2021 with penalty clause

of 18% per annum should the note be defaulted.

If we decide to let this Note convert, the variable conversion price is 65% multiplied

by the market price, representing a market discount of 35%.

We have the ability to prepay this Note beginning on the Issue Date

at our discretion.

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%.

notes payable consists of the following as of June 30, 2020 and December 31, 2019:

June 30, 2020

December 31, 2019

Total convertible notes payable

Less discounts

Convertible notes, net of discount

Convertible Note face value

Net Convertible notes payable

of June 30, 2020, and December 31, 2020 accrued interest on notes payable were $28,860 and $10,556 respectively

Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No.

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pricing model.

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

Change in fair market value of derivative liabilities

Balance March 31, 2020

COMMITMENTS AND CONTINGENCIES

January 6, 2015, the Company signed an amendment to its lease originally signed on May 9, 2008.

The amended lease commenced January

1, 2015 and expires on thirty days’

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.

The amended lease commenced

January 1, 2015 and expires on thirty days’

Rent expense was approximately $5,607 and $11,025 for the three six

ended June 30, 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

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

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.

Both are eligible for salary increases upon milestone achievements and other

On August 3, 2020, the Company entered into an Employment Agreement with David Thielen

as Chief Investment Officer (CIO) 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.

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 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.

STOCKHOLDERS’

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:

the six month ended June 30, 2020, the company issued a total of 3,996,907 shares of common stock to vendors for

compensation and services rendered.

The fair 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 MARCH 31, 2020

Payment to management staff

SUBSEQUENT EVENTS

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

previously disclosed, on January 21, 2020, we executed a convertible promissory note (the “Geneva Note”) with Geneva

Roth Remark Holdings, Inc.

for $113,300 together with any interest at the rate of 10% per annum from the issue date.

July 20, 2020, we executed a Securities Purchase Agreement (“SPA”) with FirstFire and issued the FirstFire

Note with a principal amount of $225,000, a $25,000 original issue discount and interest at 8% per annum.

The principal balance

and accrued but unpaid interest may be converted to our common stock at $0.10 per share or, upon default, at 75% of the lowest

trading price in the last 20 days in our trading market.

July 21, 2020, we paid off the Geneva Note in its entirety with proceeds acquired from the below new convertible promissory note

(the FirstFire Note”) we issued to FirstFire Global Opportunities Fund LLC.

The amount paid to Geneva was $140,397.01.

As previously disclosed, 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.

On July 20, 2020, the parties closed on

the transactions contained in the SPA.

The Asefi Group will cancel 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.

The Company also executed a general release in favor of Mr.

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.

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.

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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.

in Calabasas, California, Resonate Blends, Inc.

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

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

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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.

holding company, Resonate Blends, Inc., is now comprised of Resonate Blends LLC, the cannabis operations and product development

side of the company;

and Entourage Labs LLC, which is our Intellectual Property (IP) subsidiary.

recently sold Textmunication, Inc., our mobile marketing subsidiary for the health, fitness and wellness sectors.

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.

With a powerful yet intuitive suite of services, clients are able to reach more customers faster and

reward them for repeat business.

We help clients reach their marketing and revenue goals by educating clients with the most effective

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

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.

consideration for the sale of Textmunication, Inc.

consisted 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 were cancelled in the transaction.

The 4,822,029 shares had a current

market value of $337,542, based on our sales price of $.07 per share as of May 22, 2020.

principal executive office is located at 26565 Agoura Road, Suite 200, Calabasas, CA.

Our executive telephone number is (571)

of Operation for Three and Six Months Ended June 30, 2020 and 2019

the three months ended June 30, 2020, we earned revenues in the amount of $172,144 as compared with revenues of $253,683 for the

three months ended June 30, 2019.

A 32% decrease in revenue for the 3 months period ended June 30, 2020 was primarily due cancellation

of services from customers affected by the COVID19 pandemic.

For the six months ended June 30, 2020, we earned revenues

in the amount of $477,734, as compared with revenues of $497,053 for the six months ended June 30, 2019.

A slight decrease by

4% compared to previous year.

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 expect a drastic drop on the revenue for the next quarter

as a result of our subsidiary company being sold and discontinued operation of its business.

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 $68,678 for the three months ended June 30, 2020, as compared with $96,027 for the same period ended June 30,

Cost of revenues was $159,237 for the six months ended June 30, 2020, as compared with $184,553 for the same period ended

June 30, 2019.

gross profit was $103,466 for the three months ended June 30, 2020 or approximately 60% of revenues, as compared with $157,656

for the same period ended June 30, 2019, or approximately 62% of revenues.

Our gross profit was $318,497 for the six months ended

June 30, 2020 or approximately 67% of revenues, as compared with $312,500 for the same period ended June 30, 2019, or approximately

63% of revenues.

Gross profit ration for the six months period slightly increase due to reduction of cost of server and computer

programming cost.

operating expenses were $590,319 for the three months ended June 30, 2020, as compared with $331,62 for the three months ended

June 30, 2019.

Our operating expenses were $1,489,395 for the six months ended June 30, 2020, as compared with $3,077,307 for

the six months ended June 30, 2019.

main reason for our decreased in operating expenses in 2020 was a result of non-cash management fees in 2019 of $2,521,582, while

this year we only have $198,514 non-cash management fees.

We had other expense of $695,230

for the three months ended June 30, 2020 compared with other expenses of $3,070 for the same period ended June 30, 2019.

had other expenses of $620,113 for the six months ended June 30, 2020 compared with other income of $3,399 for the same

period ended June 30, 2019.

The main reason for our increased other income

in 2020 was a result of $617,768 loss on the change of derivative liability during 2020.

We had net loss of $1,182,083 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.

three months ended June 30, 2020, as compared with net loss of $188,982 for the three months ended June 30, 2019.

loss of $1,790,911 for the six months ended June 30, 2020, as compared with a net loss of $2,780,217 for the six

months ended June 30, 2019.

and Capital Resources

As of March 31, 2020, we had total current

As of June 30, 2020, we had total current

assets of $228,336, 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

Our total current liabilities as of June 30, 2020 were $1,931,265.

We had a working capital deficit of $1,677,929 as of June 30, 2020, compared with a working capital deficit of $612,228

as of December 31, 2019.

Flows from Operating Activities

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.

activities used $762,261 in cash for the six months ended June 30, 2020, compared with cash used of $54,391 for

the six months ended June 30, 2019.

Our negative operating cash flow for the six months ended June 30, 2020 was largely the result

of our net loss of $1,790,911.

Our negative operating cash flow for the six months ended June 30, 2019 was largely the

result of our net loss of $2,780,307, offset mainly by share based compensation of $2,521,580.

Flows from Investing Activities

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

used no cash on investing activities for both the three or six months ended June 30, 2020 and 2019.

Flows from Financing Activities

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.

flows provided by financing activities during the six months ended June 30, 2020 amounted to $890,862 compared with cash flows

provided by financing activities of $0 for the six months ended June 30, 2019.

Our positive cash flows for the six months ended

June 30, 2020 consisted primarily of convertible notes, notes payable and stock subscriptions.

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

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have experienced a history of losses.

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

With Resonate Blends in development stage and Textmunication revenues will cease in the

next quarter, we are 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 12 months.

are dependent on investment capital to continue our survival.

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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.

of June 30, 2020, we have an accumulated deficit of $20,950,632.

Our ability to continue as a going concern is contingent

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Balance Sheet Arrangements

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

of June 30, 2020, there were no off-balance sheet arrangements.

Accounting Policies

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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