What changed in this filing

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Item 1. Financial Statements

2020-11-23 compared with 2020-08-14 · 350 added, 262 removed, 469 unchanged (57% of the section changed)

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

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

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

Consolidated Statement of Stockholders’

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);

Equity (Deficit) for the nine months ended September 30, 2020 (unaudited);

Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 (unaudited);

Notes to Consolidated Financial Statements.

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considered necessary for a fair presentation have been included.

Operating results for the interim period ended June 30, 2020

Operating results for the interim period ended September 30,

2020 are not necessarily indicative of the results that can be expected for the full year.

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

BLENDS , INC.

TEXTMUNICATION HOLDINGS, INC.)

BALANCE SHEETS

June 30, 2020

September 30, 2020

December 31, 2019

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Cash and cash equivalents

Current assets of discontinued operations

Total current assets

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Due to related parties

Notes Payable Related Party

Convertible notes payable, net of discount

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Settlement liability

Short term loan

Current liabilities of discontinued operations

Total current liabilities

Total liabilities

Stockholders’

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

Preferred stock, 10,000,000 shares authorized, $0.0001 par value,

0 and 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

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100,000,000 shares authorized;

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

24,789,981 and 17,133,936 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

Additional paid-in capital

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

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

BLENDS , INC.

TEXTMUNICATION HOLDINGS, INC.)

STATEMENTS OF OPERATIONS

Three Months Ended

Six Months Ended

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

The Three Months Ended

The Nine Months Ended

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

COST OF REVENUES

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Interest expense

Gan (Loss) on change of derivative liability

Loss on change of derivative liability

Amortization of debt discount

Gain on settlement of derivative liabilities

Legal settlement

Gain on settlement of notes payable

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Income (loss) from investment in equity method investee

NET INCOME (LOSS)

Loss from continuing operations

Income (loss) on discontinued operations

$ (2,142,310 )

$ (3,023,461 )

Basic weighted average common shares outstanding

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

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

TEXTMUNICATION, INC.)

STATEMENTS OF STOCKHOLDERS’

THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019

stock Series A

stock Series B

stock Series C

stock Series D

Stockholders’

OF JUNE 30,2020

December 31, 2019

THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

Preferred stock

Additional Paid-in

Total Stockholders’

AS OF SEPTEMBER 30, 2020

As of December 31, 2019

$ (19,159,721 )

Loss three months March 31, 2020

stock issuance

March 31, 2020

Common stock issuance

Issuance for services

Net Loss 3 months ended March 31, 2020

Balances, March 31, 2020

(19,768,549 )

loss three months June 30, 2020

of notes payable

Conversion of notes payable

Common stock issuance

Non-cash Compensation

Net loss 3 months ended June 30, 2020

Balances June 30,2020

(20,950,632 )

OF JUNE 30, 2019

December 31, 2018

Common stock Issuance for Cash

Conversion of notes payable

Cancellation of shares held by Textmunication

Non cash compensation

Shares issues for legal settlement

Cancellation of preferred stock

Net loss 3 months ended September 30, 2020

Balances, September 30, 2020

$ (21,302,031 )

of liabilities

issuance for services

March 31, 2019

$ (1,756,821 )

shares converted to common

warrants issued for cash

loss three months June 30,2019

June 30, 2019

AS OF SEPTEMBER 30, 2019

As of December 31, 2018

$ (15,489,993 )

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

(FORMERLY TEXTMUNICATION HOLDINGS, INC.)

Settlement of liabilities

Stock issuance for services

Net loss 3 months ended March 31, 2019

Balances, March 31, 2019

(18,081,318 )

Preferred shares converted to common shares

Stocks and warrants issued for settlement for liabilities

Net loss 3 months ended June 30, 2019

Balances, June 30, 2019

(18,270,300 )

Stock issuance for settlement of liabilities

Net loss 3 months ended September 30, 2019

Balances, September 30, 2019

(18,513,454 )

accompanying notes are an integral part of these consolidated financial statements

TEXTMUNICATION,

STATEMENTS OF CASH FLOWS

six months ended June 30

the nine months ended September 30, 2020 and 2019

September 30, 2020

September 30, 2019

Cash Flows from Operating Activities

Net Income (loss)

$ (2,142,310 )

$ (3,023,461 )

(Income) loss from discontinued operations

Adjustments to reconcile

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Non cash interest expense

Legal Settlement

Share based professional fees

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Due to Related party

Net cash provided by operating activities

Net cash used in operating

activities of continuing operations

Net cash provided by (used in)

operating activities of discontinued operations

Net cash used in operating activities

Cash Flows from Investing Activities

Investments in Joiant

Disposal of subsidiary company

Net cash provided by investing activities

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Proceeds from convertible notes / loans payable

Proceeds from notes payables

Payments on convertible notes payable

Net cash provided by financing activities

Proceeds from issuance of stock warrants

Payments to notes payables

Net cash provided by financing activities of continuing operations

Net cash provided by financing

activities of discontinued operations

Net increase in cash

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TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE QUARTER ENDED JUNE 30, 2020

THE QUARTER ENDED SEPTEMBER 30, 2020

ORGANIZATION AND BUSINESS OPERATIONS

Resonate Blends, Inc.

formerly Textmunication

Holdings, Inc.

(the “Company”) was incorporated in October 1984 in the State of Georgia as Brock Control Systems.

(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

Brock, the Company was in the sales automation market and an

early developer of enterprise customer management systems.

The Company went public at the end of March of 1993.

In February of 1996, the Company changed its name to Brock International

Inc., and in March of 1998, the Company again changed our name to Firstwave Technologies, Inc.

In 2007, the Company deregistered its

common stock in order to avoid the expenses of being a public company.

The Company reported briefly on the OTC Disclosure &

News Service in 2008 but not for long.

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.

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 –

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 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

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 the Company’s common stock took effect at the open of business.

All shares and per share amounts have been

retroactively adjusted to reflect the reverse split.

On June 25, 2019, the Company issued

a press release announcing it plans to change its business direction from its current SMS technology business to focus on the

emerging national cannabis market.

The Company planned on using its mobile texting platform to enhance communication efforts with

the potential acquisitions.

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”)

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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.

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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Stock in favor of the sale of Textmunication to the Asefi Group.

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.

July 20, 2020, the parties closed on the transactions contained in the SPA.

The Asefi Group cancelled 4,755,209 shares of common

stock (the “Shares”) of the Company.

The Shares have a market value of $332,842, based on our last sales price of

$0.07 per share as of May 26, 2020.

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

of Presentation

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course of business.

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

The company’s ability

to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability

to achieve and maintain profitable operations.

While the Company is expanding its best efforts to achieve the above plans, there

is no assurance that any such activity will generate funds that will be available for operations.

These conditions raise substantial

doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial

These consolidated financial statements do not include any adjustments that might arise from this uncertainty.

As of September 30, 2020, the Company has an accumulated deficit of $21,302,031.

The company’s

ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its

ability to achieve and maintain profitable operations.

While the Company is expanding its best efforts to achieve the above plans,

there is no assurance that any such activity will generate funds that will be available for operations.

These conditions raise

substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance

of these financial statements.

These consolidated financial statements do not include any adjustments that might arise from this

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The balance at times may exceed federally insured limits.

At June 30, 2020 no cash balances exceeded the federally

insured limit.

At September 30, 2020 no cash balances exceeded

the federally insured limit.

receivable and allowance for doubtful accounts

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receivable, historical collection information and existing economic conditions.

As of June 30, 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

to be entitled to in exchange for those services.

Company currently derives a substantial majority of its revenue from fees associated with our subscription services, which generally

include mobile marketing platform services.

Customers are billed for the subscription on a monthly basis.

For all of the Company’s

customers, regardless of the method, the Company uses to bill them, subscription revenue is recorded as deferred revenue in the

accompanying consolidated balance sheets.

As services are performed, the Company recognizes subscription revenue on a monthly

basis over the applicable service period.

When the Company provides a free trial period, the Company does not begin to recognize

subscription revenue until the trial period has ended and the customer has been billed for the services.

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 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.

We did not have any cumulative impact

as a result of applying Topic 606.

As of September 30, 2020 and 2019 no allowance

for doubtful accounts was set up.

The Company did not have any revenues from

continuing operations for the periods presented.

The Company’s policy is that revenues will be recognized when control of

the product is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange

for those services.

Results for reporting periods beginning after January 1, 2020

are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our

historic accounting under Topic 605.

We did not have any cumulative impact as a result of applying Topic 606.

Value of Financial Instruments

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RELATED PARTY TRANSACTIONS

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

The loans are due on demand and have no interest.

Amounts outstanding

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

of September 30, 2020, the Company had notes payable to related party of $332,852.

The amount payable was in relation to

the agreed amount to buyout of shares held by former officer and employees of Textmunication Inc.

As of December 31, 2019,

there were approximately $11,650 of related party payables.

4 - CONVERTIBLE NOTE PAYABLE

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

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

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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

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 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.

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.

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

September 30, 2020

December 31, 2019

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Net Convertible notes payable

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

of September 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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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 $5,607 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.

The amended lease commenced January

1, 2015 and expires on thirty days’

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

ended September 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.

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with an annual salary of $120,000.

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.

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

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STOCKHOLDERS’

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

the nine months ended September 30, 2020, the company issued a total of 5,332,186 shares of common stock to vendors for

compensation and services rendered.

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Payment to management staff

DISCONTINUED OPERATONS

July 20, 2020, the Company finalized a Stock Purchase Agreement (the “SPA”) with Wais Asefi, Nick Miniello, Juleon

Asefi, and Curt Byers (collectively, the “Asefi Group”) to sell to the Asefi Group its subsidiary, Textmunication,

Inc., a California corporation (“Textmunication”).

Textmunication operates the Company’s SMS business activities.

The Company retained its cannabis operations based in Calabasas, California.

The Company has accounted for this spinout as a discontinued

operation and retroactively reclassified all previously presented financial information.

The following summarizes the results

of operations for Textmunication, Inc.

Nine Months Ended

Cost of revenues

Operating expenses

Loss from operations of discontinued operation

Gain on disposal of discontinued operations

Gain (loss) from discontinued operations

SUBSEQUENT EVENTS

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.

company has evaluated subsequent events for recognition and disclosure through September 29, 2020 which is the date the financial

statements were available to be issued.

No other matters were identified affecting the accompanying financial statements and related

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

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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.

Resonate is building a value-added, brand-focused cannabis

organization offering premium 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.

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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.

The Company’s strategy is to ignite future growth by building a purpose-driven portfolio of innovative, trusted

national brands, emerging brands, research organizations, and a variety of retail channels.

The Company’s focus is finding

mutual value between product and consumer by optimizing quality, supply chain resources and financial performance.

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

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Resonate hopes to become a national leader through its vision in creating a family of brands designed

specifically to support the industry.

specifically to deliver reliable, effective, beneficial experiences.

the Resonate Blends product family, is based around a comprehensive system of interconnected experience targets that allow people

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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.

Resonate’s

initial products are a completely unique class of products called Cordials.

These blends offer a wide range of experiences not

currently available in the cannabis market.

Our Cordials are water-soluble and use nano-emulsification technology to allow for

quick onset and a sustained and nuanced experience.

Single dose, healthful, subtle in taste, cordials are an ideal way for people

to gently intentionally improve their well-being.

They can be shipped directly or substituted for alcohol as a cocktail mixer.

Resonate’s

Cordials have been developed in partnership with an award-winning advanced infusion technology partner and are targeted for commercial

release in early Q1 of 2021.

The company plans to offer six unique blends at its initial release.

preparation for you upcoming release, we have formalized contracts with our logistical and marketing partners and are implementing

a digital native strategy supporting direct to consumer sales.

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

line that is already in full development.

Company signed a custom development contract with Vertosa in March of 2020, the leading provider of safe, reliable emulsion bases

for infused product developers.

This contract was a major milestone for the Company as it selects its strategic partners to develop

innovative products and solutions.

is an award-winning strategic partner who will assist the Company in the launch of its first unique category of six water soluble

These multi-use products deliver specific, predictable, reliable, effects in a format that is completely unique in the

The first product developed collaboratively is the Cordial product line, but both companies expect several other products

to be developed over time utilizing Vertosa’s nano-emulsification technology.

Vertosa and Resonate teams share a mission of maximizing the benefits of cannabinoids and plant medicine.

Resonate selected Vertosa

as a development partner because the Vertosa systems’

industry leading emulsification technology makes them highly stable,

bioavailable, and water compatible.

All of Vertosa’s inactive base materials are FDA approved and are lab tested for quality.

Vertosa’s Hemp-derived CBD Emulsion System is now certified organic by CCOF , a United States Department of

Agriculture-accredited certifier and non-profit advocacy group, and the company has also received its Good Manufacturing

Practice (GMP) certification , confirming that its offerings follow regulations promulgated by the US Food and Drug

Administration and are safe, pure, and effective.

Manufacturing:

Company partnered with The Hive Laboratory, LLC (THL), a California licensed Type N –

Infused Products Manufacturer based

in Grover Beach, CA.

THL produces and packages premium award-winning products for the medicinal, recreational and nutraceutical

cannabis industries, and has worked with some of the biggest named brands in the industry.

and THL entered into a Master Services Agreement in which THL will manufacture and package Resonate’s first family of products

to precise specifications.

THL also has a Bureau of Cannabis Control (BCC) issued distribution license in California and will

distribute Resonate’s products to retail establishments throughout the state.

and Resonate have been in frequent contact throughout Resonate’s development period and THL is prepared to support production

of the Company’s unique family of wellness lifestyle products.

Resonate’s upcoming first of its kind offerings are

emulsified through the advanced infusion technology provided by award-winning Vertosa and collaboratively developed to

push the state of the art in its cannabis products.

Distribution:

of the unique nature of Resonate’s Koan products and the recent expansion of home delivery services in the cannabis industry,

Resonate has adopted a direct to consumer method as their primary sales strategy.

Working with a technology partner, Resonate

is adding an e-commerce feature to the Koan web site that will allow the Company to sell products directly to consumers using

a licensed California state-wide delivery network for fulfilment.

addition to direct sales, the company plans to offer products to select premium dispensaries throughout California.

These products

will be delivered to retail establishments by Hive Labs under their distribution license.

is also developing relationships with a variety of complementary distribution channels such as subscription box companies and

other non-storefront reseller organizations.

selected Way To Blue as the marketing firm for its Koan family of wellness lifestyle blends.

Way To Blue, is an award-winning,

global, integrated communications agency working with consumer, lifestyle, media and entertainment companies, developing digitally

led strategic brand communications.

will draw upon Way To Blue’s expertise in social media strategy and execution, content creation, community management and

influencer engagement.

The marketing firm focuses on insight and data-driven storytelling campaigns to deliver optimal results

in both brand building and product sales.

Sale of Textmunication, Inc.:

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

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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 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

of Operation for Three and Nine Months Ended September 30, 2020 and 2019

have generated no revenues in our cannabis holding company or from our operating subsidiaries, Resonate Blends, LLC or Entourage

Labs, LLC, for the three and nine months ended September 30, 2020.

the discontinued operations of our prior held subsidiary, Textmunication, Inc., which we sold on July 20, 2020, we recorded discontinued

revenues of $534,743, as compared with revenues of $758,100 for the nine months ended September 30, 2019.

anticipate revenue from the Resonate Koan product line in first quarter of 2021.

Our operating expenses were $236,160

for the three months ended September 30, 2020, as compared with $112,129 for the three months ended September 30, 2019.

Our operating

expenses were $1,445,463 for the nine months ended September 30, 2020, as compared with $2,807,129 for the nine months

ended September 30, 2019.

main reason for our decreased 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 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.

expect that our operating expenses will increase in 2021 over 2020 as a result of our product launch and the increased expenses

associated with operations.

had other expenses of $86,910 for the three months ended September 30, 2020 compared with other expenses of $96,460 for the same

period ended September 30, 2019.

We had other expenses of $712,625 for the nine months ended September 30, 2020 compared with

other expenses of $96,459 for the same period ended September 30, 2019.

main reason for our increased other expenses in 2020 was a result of loss on revaluation of derivative liabilities of $617,769.

had net loss of $351,399 for the three months ended September 30, 2020, as compared with net loss of $243,154 for the three

months ended September 30, 2019.

We had a net loss of $2,142,310 for the nine months ended September 30, 2020, as compared

with a net loss of $3,023,461 for the nine months ended September 30, 2019.

and Capital Resources

As of June 30, 2020, we had total current

assets of $228,336, consisting of cash and receivables.

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 September 30, 2020, we had total current

assets of $9,014, consisting of $9,014 in cash.

Our total current liabilities as of September 30, 2020 were $1,790,835.

We had a working capital deficit of $1,781,821 as of September 30, 2020, compared with a working capital deficit of

$612,228 as of December 31, 2019.

Flows from Operating Activities

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.

activities used $1,301,663 in cash for the nine months ended September 30, 2020, compared with cash used of $386,001

for the nine months ended September 30, 2019.

Our negative operating cash flow for the nine months ended September 30, 2020

was largely the result of our net loss of $2,142,310, offset by loss on derivative liability of $536,819 and share

based compensation of $198,514.

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.

Flows from Investing Activities

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

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

Flows from Financing Activities

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.

flows provided by financing activities during the nine months ended September 30, 2020 amounted to $1,119,943 compared with cash

flows provided by financing activities of $367,500 for the nine months ended September 30, 2019.

Our positive cash flows for the

nine months ended September 30, 2020 consisted of proceeds from issuance of common stocks $540,000, proceeds from Convertible

notes payable $806,000, offset by payments of notes payable of $226,057.

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 and proceeds from convertible notes

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

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are difficult to raise in today’s economic environment.

If we are unable to raise $1,500,000, our ability to implement our

business plan and achieve our goals will be significantly diminished.

have experienced a history of losses.

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.

We have experienced a history of losses.

If we are unable to raise

$1,500,000, our ability to implement our business plan and achieve our goals will be significantly diminished.

are dependent on investment capital to continue our survival.

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acceptable to us.

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

also plan to raise money in the sale of our equity and debt 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 September 30, 2020, we have an accumulated deficit of $21,302,031.

Our ability to continue as a going concern is contingent

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Balance Sheet Arrangements

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

of September 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