What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-04-15 compared with 2020-05-14 · 102 added, 164 removed, 36 unchanged (88% of the section changed)

Market for Registrant’s Common Equity and Related

Stockholder Matters and Issuer Purchases of Equity Securities

common stock is quoted under the symbol “KOAN”

as of December 16, 2019 on the OTCQB operated by OTC Markets Group,

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

common stock is traded under the symbol “KOAN”

on the OTCQB.

Only a limited market exists for our securities.

There is no assurance that a regular trading market will develop, or if

developed, that it will be sustained.

Therefore, a shareholder may be unable to resell his securities in our company.

following tables set forth the range of high and low bid prices for our common stock for the each of the periods indicated as

reported by the OTCQB.

These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not

necessarily represent actual transactions.

Fiscal Year Ending December 31, 2019

Quarter Ended

December 31, 2019

September 30, 2019

June 30, 2019

March 31, 2019

Fiscal Year Ending December 31, 2018

Quarter Ended

December 31, 2018

September 30, 2018

June 30, 2018

March 31, 2018

April 30, 2020, the last sales price per share of our common stock on the OTCQB was $.08

SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.

Penny stocks are

generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities

exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such

securities is provided by the exchange or system.

The penny stock rules require a broker-dealer, prior to a transaction in a penny

stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

(a) contains a description of the nature

and level of risk in the market for penny stocks in both public offerings and secondary trading;

(b) contains a description of

the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect

to a violation of such duties or other requirements of the securities laws;

of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

(d) contains a toll-free telephone number for inquiries on disciplinary actions;

(e) defines significant terms in the disclosure

document or in the conduct of trading in penny stocks;

and (f) contains such other information and is in such form, including

language, type size and format, as the SEC shall require by rule or regulation.

broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations

for the penny stock;

(b) the compensation of the broker-dealer and its salesperson in the transaction;

to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for

and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the

broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive

the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions

involving penny stocks, and a signed and dated copy of a written suitability statement.

disclosure requirements may have the effect of reducing the trading activity for our common stock.

Therefore, stockholders may

have difficulty selling our securities.

is no assurance that a regular trading market will develop, or if developed, that it will be sustained.

Therefore, a shareholder

may be unable to resell his securities in our company.

following tables set forth the range of high and low bid information for our common stock for the each of the periods indicated.

These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent

actual transactions.

Year Ending December 31, 2020

Year Ending December 31, 2019

March 31, 2021, the last sales price per share of our common stock was $.40.

of Our Common Stock

of April 30, 2020, we had 22,700,843 shares of our common stock issued and outstanding, held by 744 shareholders of record, other

than those held in street name.

are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends.

of March 31, 2021, we had 38,652,887 shares of our common stock issued and outstanding, held by approximately 187

shareholders of record at our transfer agent, with approximately 33 additional shareholders holding our shares in street name.

currently intend to retain future earnings for the operation of our business.

We have never declared or paid cash dividends on

our common stock, and we do not anticipate paying any cash dividends in the foreseeable future.

the event that a dividend is declared, common stockholders on the record date are entitled to share ratably in any dividends that

may be declared from time to time on the common stock by our board of directors from funds legally available.

are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends.

The Nevada Revised Statutes,

however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

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

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

total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights

of shareholders who have preferential rights superior to those receiving the distribution.

have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

Authorized for Issuance under Equity Compensation Plans

March 19, 2019, our Board of Directors adopted the 2019 Equity Incentive Plan (the “Plan”).

The purpose of the Plan

is to attract and retain the best available personnel for positions of substantial responsibility with us, to provide additional

incentive to employees, directors and consultants, and to promote our success.

Under the Plan, we are currently able to issue

up to an aggregate total of 10,000,000 incentive or non-qualified options to purchase our common stock, stock awards and other

Compensation Plans as of December 31, 2019

Plans Approved by

the Shareholders

of Securities

be issued upon

of outstanding options

exercise price of

outstanding options

of Securities

remaining available

for future issuance under

equity compensation plans

Compensation Plan

Equity Compensation (restricted stock awards)

Sales of Unregistered Securities

information set forth below relates to our issuances of securities without registration under the Securities Act of 1933 during

the reporting period which were not previously included in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.

the year ended December 31, 2020 the company issued a total of 3,830,408 shares of common stock to management and vendors for

compensation and services rendered

securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder.

5 unchanged sentences

We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted

Authorized for Issuance under Equity Compensation Plans

have an Employee Stock Ownership Program (ESOP) in place for our employees.

The plan has 10,000,000 shares available.

December 31, 2019, we have issued 6,485,000 shares to employees with 3,515,000 shares held in reserve at our Transfer Agent.

Selected Financial Data

smaller reporting company is not required to provide the information required by this Item.

required under Regulation S-K for “smaller reporting companies.”

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

Forward-Looking

statements, other than purely historical information, including estimates, projections, statements relating to our business plans,

objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking

statements.”

These forward-looking statements generally are identified by the words “believes,”

“project,”

“expects,”

“anticipates,”

“estimates,”

“intends,”

“strategy,”

“plan,”

“may,”

“will,”

“would,”

“will be,”

“will continue,”

“will likely

result,”

and similar expressions.

Forward-looking statements are based on current expectations and assumptions that are

subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements.

ability to predict results or the actual effect of future plans or strategies is inherently uncertain.

Factors which could have

a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to:

in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted

accounting principles.

These risks and uncertainties should also be considered in evaluating forward-looking statements and undue

reliance should not be placed on such statements.

of Operations for the Years Ended December 31, 2020 and 2019

Textmunication

Cost of Revenues

for 2019 and 2018 remains constant primarily due the increase in clients was offset by cancellation few large label customers.

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

Textmunication

General and Administrative

Legal and Professional

Officer compensation

Salaries and related

Sales commission

Impairment of In House Software

Non Cash management fees

Total operating expenses

operating expenses for the year ended December 31, 2019 compared with 2018 increased primarily due to $2,650,518 as a stock-based

compensation to our management team and company officers.

increase in officers’

compensation were due to additional hiring of six (6) employees at Resonate Blends, Inc., including

a CEO, COO, CIO, Product Director, Chief Creative Designer and Marketing Director.

expect that our operating expenses for the rest of 2020 will be lower to that in the present year due to the departure of our

CEO Wais Asefi and other employees employed at our mobile marketing subsidiary.

Given our lack of operating capital, we may be

forced to issue shares for services rendered to the company.

We hope that increased revenues will lessen that trend for 2020 and

Income/ Expenses

had net other expenses of $336,179 for the year ended December 31, 2019 and $31,373 for the same period ended December

Other expenses for the year ended December 31, 2019 consisted mainly of $106,961 in the loss on settlement of legal

liabilities, $92,791 interest expenses, $118,124 amortization of debt discounts and $43,242 gain on settlement of derivative liabilities,

offset by a gain of $24,939 from the settlement of notes payable.

Other expense for 2018 consisted of $105,417 loss on settlement

of notes payable, $42,534 on the amortization of debt discounts, and $2,792 in interest expense, offset by a $119.370 change in

fair value of derivative liabilities based on the Black-Scholes option pricing model.

Company had a net loss of $3,669,728 for the year ended December

31, 2019, as compared with net loss of $339,753 for the year ended December 31, 2018.

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

Labs, LLC, for the years ended December 31, 2020 and 2019.

anticipate booking revenue from the Resonate Koan product line in early 2nd quarter of 2021.

operating expenses were $1,813,958 for the year ended December 31, 2020, as compared with $3,178,000 for the year

ended December 31, 2019.

main reason for our decreased operating expenses in 2020 was a result of non-cash management fees in 2019 of $2,650,518, while

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

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 $143,113 for the year ended December 31, 2020 compared with other expenses of $320,974 for the year

ended December 31, 2019.

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

had net loss of $1,941,274 for the year ended December 31, 2020, as compared with net loss of $3,669,728 for the

year ended December 31, 2019.

and Capital Resources

of December 31, 2019, we had total current assets of $105,742.

of December 31, 2020, we had total current assets of $168,924, consisting of $114,325 in cash and $54,599 in advances

to suppliers.

Our total current liabilities as of December 31, 2020 were $1,165,363.

We had a working capital deficit of $612,228 as of December 31, 2019.

We had a working capital deficit of

$996,439 as of December 31, 2020, compared with a working capital deficit of $612,330 as of December 31, 2019.

Flows from Operating Activities

activities used $809,386 in cash the year ended December 31, 2019, as compared with $54,145 for the year ended December 31, 2018.

Our net loss was $3,669,728, offset by $3,035,465 in non-cash expenses, an increase in receivables of $38,037, a decrease in accounts

payable and accrued expenses of $137,036 and a decrease in due to related party of $100.

Our net loss of $339,753 was the main

component of our negative operating cash flow in 2018, offset mainly by non-cash expenses of $73,810, an increase in receivables

of $11,667 and an increase in accounts payable and accrued expenses of $221,812.

activities used $1,381,003 in cash for the year ended December 31, 2020, compared with cash used of $790,897 for

the year ended December 31, 2019.

Our negative operating cash flow for the year ended December 31, 2020 was largely the result

of our net loss of $1,941,274, offset by share based compensation of $508,419.

Our negative operating cash flow

for the year ended December 31, 2019 was largely the result of our net loss of $3,510,101, offset mainly by share based compensation

of $2,650,518.

Flows from Investing Activities

activities used $25,000 in cash the year ended December 31, 2019.

Our negative investing cash flow in 2019 is the result

of the investment in Joiant.

used no cash on investing activities for the year ended December 31, 2020, but we had $25,000 used in connection with an investment

in Joaint in 2019.

Flows from Financing Activities

flows provided by financing activities during the year ended December 31, 2019 amounted to $819,012 as compared with $112,500

for the year ended December 31, 2018.

Our positive cash flow in 2019 consisted mostly of proceeds from the sale of issuance of

common stocks.

Our positive cash flow in 2018 consisted mostly of proceeds from the sale of convertible promissory notes, offset

by payments on loans payable.

flows provided by financing activities during the year ended December 31, 2020 amounted to $1,492,213 compared with cash

flows provided by financing activities of $819,012 for the year ended December 31, 2019.

Our positive cash flows for the year

ended December 31, 2020 consisted of proceeds from issuance of common stock $1,011,113, proceeds from Convertible notes

payable $850,100, offset by payments of notes payable of $369,000.

Our positive cash flows for the year ended December 31, 2019

consisted of proceeds from the issuance of preferred stock and warrants of $811,262 and proceeds from convertible notes of $267,750.

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

optimum level of growth for success will be achieved if we are able to raise $1,500,000 in the next twelve months.

funds 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 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 12 months.

However, funds

are difficult to raise in today’s economic environment.

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.

1 unchanged sentence

unfavorable terms.

There is no guarantee that these small convertible loans will be available to us in the future or on

terms 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.

There is no guarantee that these small convertible loans will be available to us in the future or on terms

acceptable to us.

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 December 31, 2020, we have an accumulated deficit of $21,100,995.

8 unchanged sentences

Accounting Policies

critical accounting policies are disclosed in Note 2 of our audited financial statements included in the Form 10-K.

Quantitative and Qualitative Disclosures

About Market Risk

smaller reporting company is not required to provide the information required by this Item.

December 2001, the SEC requested that all registrants list their most “critical accounting polices”

in the Management

Discussion and Analysis.

The SEC indicated that a “critical accounting policy”

is one which is both important to the

portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or

complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our critical accounting policies are disclosed in Note 2 of our audited financial statements included in the Form 10-K filed with

the Securities and Exchange Commission.

Accounting Pronouncements

new accounting pronouncements issued or effective during the fiscal year has had or is expected to have a material impact on the

financial statements.

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-K

Item 5. Market for Registrant’s Common Equity