What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-22 compared with 2021-08-18 · 231 added, 214 removed, 184 unchanged (71% of the section changed)

16 unchanged sentences

Factors which could have a

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

changes in economic

material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to changes in economic

conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles.

47 unchanged sentences

live more satisfying, meaningful and connected lives.

The need for these products at this time is crucial.

The need for these products currently is crucial.

communicate the breadth of wellness products that Resonate is developing, our team created The Resonate System.

24 unchanged sentences

a sustained and nuanced experience.

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

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

improve their well-being.

3 unchanged sentences

The company is offering six unique blends at its initial release and expects to have additional blends by

the end of 2021.

late 2021 into early 2022.

have formalized contracts with our logistical and marketing partners and are building a digital native strategy supporting direct to

consumer sales.

This release will be followed with our second product line that is already in full development and is expected for targeted

commercial release before the end of 2021.

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

infused product developers.

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

products and solutions.

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

Based on customer demand, the company is creating a “singles” option for the Cordials which will be available later

2021 and a multi-dose option shipping in Q1 2022.

Property (“IP”) development and protection continues as a core area of value creation for Resonate.

The Company has developed

the world’s first Cannabis Cordial.

The Koan Cordials combine THC (psychoactive), CBD (non-psychoactive) with botanical terpenes

to deliver an all-natural, plant-derived, single-dosed experience that can be enjoyed straight out of the bottle or poured into any beverage.

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

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

over time utilizing Vertosa’s emulsification technology.

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.

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 Galley, a California licensed Type N – Infused Products Manufacturer based in Santa Rosa, California.

The Galley produces and packages premium award-winning products and has worked with some of the most popular brands in the industry.

The Galley is built to FDA and CDPH standards and is focused on high demand areas of production

– Edibles, Topicals, Tinctures, Chocolate, Hard Candies, Gummies, Pre-Rolls, Flower, Vapes and Beverages.

and The Galley entered into a Master Services Agreement in which The Galley will manufacture and package Resonate’s first family

of products to precise specifications.

The Galley also has a Bureau of Cannabis Control (BCC) issued distribution license in California

and, along with other select distribution partners, will distribute Resonate’s products to retail establishments throughout the

Galley and Resonate have been in frequent contact throughout Resonate’s development period and are now supporting the production

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

Resonate’s first of its kind offerings are emulsified through

the advanced infusion technology provided by award-winning Vertosa and collaboratively developed to push the state of the art in its

cannabis products.

Distribution:

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

has prioritized a direct-to-consumer method as their primary sales strategy.

Resonate has identified a technology partner who will add

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 a leading cannabis full service distributor.

The Company contracted with MARS Distribution to

provide logistics and statewide distribution for Resonate’s Koan Cordials, its product line of unique experience blends currently

available in California.

MARS is the leading logistics and sales partner for cannabis beverages and top cannabis brands in California.

was built to support the massive growth in the cannabis industry and bring efficiency and consistency to it.

With a focus on beverages,

MARS is the only distributor equipped to support the movement, storage, and sales of beverages in California.

With hubs in Costa Mesa,

Sacramento, Nevada and three more hubs under way, MARS delivers orders to retailers in 72 hours or less.

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

reseller organizations.

and Sales Plan

cannabis industry is changing daily in response to updated regulations, customer product education, new interest from various demographics

and now the COVID-19 pandemic.

As a result, we are constantly attentive to these changes as they affect the marketing of our products.

Our initial marketing strategy was to launch in select dispensaries in Los Angeles and to support the launch with dispensary promotional

material and location-based marketing.

However, in the current market the Company has decided to modify this strategy.

Paradoxically,

retail restrictions and safety regulations were actually beneficial for us, as these allowed us to reprioritize our sales approach and

to build a marketing plan around on-line dispensaries with wide delivery networks.

Although retail restrictions will eventually be relaxed,

we do not expect that storefront dispensaries will return to the dominant role they played in the cannabis industry before COVID-19 for

several reasons.

Dispensaries are generally small, making social distancing difficult.

Limitations on a customers’ ability to touch

and smell products reduces the value of in-person shopping.

Restrictions on the number of people allowed in these small spaces will create

waiting lines outside stores, which will be inconvenient and even embarrassing for some.

Finally, we have learned that a significant

number of customers, particularly in our targeted demographic, really prefer the privacy and convenience of having products delivered

to their homes.

For all these reasons, we have decided to focus our marketing budget for at least the next six to nine months on supporting

online and delivery outlets.

response to the sudden change in customer buying preferences, Resonate has accelerated our plan to sell directly to consumers.

in the process of partnering with an on-line platform which will allow us to communicate the value of our products directly to consumers.

This platform will connect consumers to a licensed retail and California-wide home delivery network.

This direct-to-consumer approach

has significant benefits for us.

First, it allows us to control our brand messaging and to assure that we are able to provide the information

and education customers need to make confident and informed product choices.

Through this method, we also have access to customer information

which is not available from dispensaries, which allows us to employ successful marketing techniques used by leading on-line retailers

such as customer loyalty programs, memberships, ambassadors, etc., to build brand awareness and increase sales.

It is also better for

us financially as it increases our profit margin.

our marketing budget and energy is now being channeled into appropriate programmatic advertising, developing informational materials

for customers on our website, and developing professional and effective social media, search engine optimization and direct to consumer

marketing campaigns.

We will also offer training and market support to select premium California dispensaries.

We expect that building

our brand online will complement retail sales by increasing customer awareness and creating “pull-through” at brick-and-mortar

has partnered with Good People LLC as its statewide Koan Cordial sales team.

Good People is working closely with Resonate Blends’

marketing team to plan events, train budtenders, schedule and track relevant promotions and inform the innovation pipeline with field

Koan Cordials dispensary buyer sample kits are now available through Good People and dispensaries are now stocking the product

in strategic geographical locations.

Company believes the greatest long-term value creation in the Cannabis industry will be in the establishment of high-quality consumer

brands that deliver the expected experience.

As cultivation, supplies and services become quickly commoditized, value-added brands represent

the best opportunity for Resonate and its shareholders to support and benefit from the growth expected in the Cannabis industry.

therefore critical for Resonate to protect its methods, formulations and packaging.

June 14, 2021, the Company successfully filed a Provisional Patent Application with the US Patent & Trademark Office (USPTO) entitled

“Cannabis Nano-Emulsions for Achieving a Reliable, Targeted, Specific and Repeatable User Experience.” The invention relates

to methods and formulations including a combination of cannabinoids and terpenes calculated and specifically formulated to achieve a

targeted, specific and repeatable user experience.

The Company is also filing for patent protection on its unique product packaging.

Koan Product - Resonate Growth Plans

the first 12-18 months, Resonate will concentrate on releasing product and brand building in our home state of California.

Resonate plans

to follow the launch of its first six Koan products with others based on The Resonate System at regular intervals.

Our formulas, combined

with the proprietary Vertosa technology, will allow the Company to quickly deliver controlled, predictable, enjoyable effects in beverages,

teas, and gummies.

plans to follow the launch of its first six Koan products with others based on The Resonate System at regular intervals.

Our formulas,

combined with the proprietary Vertosa technology, will allow the Company to quickly deliver controlled, predictable, enjoyable effects

in beverages, teas, and gummies.

Vertosa is the leading provider of emulsification technology for cannabis manufacturers.

Emulsification allows cannabinoids

to become water-soluble so that they can be added to Cordials, beverages, gummies, etc.

Vertosa and Resonate are engaged in joint research

focusing on effects of various emulsification methods on cannabinoids.

We are working on methods that improve user experience by refining

effects and managing bioavailability.

Vertosa will also be providing the emulsification required for formulas in Resonate’s product

Emulsification

allows cannabinoids to become water-soluble so that they can be added to Cordials, beverages, gummies, etc.

Vertosa and Resonate are

engaged in joint research focusing on effects of various emulsification methods on cannabinoids.

We are working on methods that improve

user experience by refining effects and managing bioavailability.

Vertosa will also be providing the emulsification required for formulas

in Resonate’s product line.

cannabis industry is in its infancy.

9 unchanged sentences

are neither tinctures nor beverages but have the benefits of both.

They are emulsified, water soluble, single-dose formulas that can

be enjoyed privately or shared socially.

Resonate plans to make these available initially in California in stylish mini bottles, each

containing a single dose.

They are emulsified, water soluble, single-serving blends that

can be enjoyed privately or shared socially.

Resonate offers these across California in stylish mini bottles, each containing

a single serving.

They can be sipped directly from the bottle or poured into beverages.

16 unchanged sentences

on your rose-colored glasses and give everything some extra sparkle with Delight.

Designed to open up your senses, raise your spirits

and brighten your day.

Designed to open your senses, raise your spirits and

brighten your day.

September 9, 2021, we entered into a binding letter of intent with L & G USA Inc., a Delaware corporation and L & G Canada Inc.,

an Ontario corporation (together “Seller”), and the stockholders of Seller, pursuant to which the Company planned to acquire

substantially all of the assets from Seller associated with the Lemon & Grass business and the Koan business (the “Acquisition”).

October 27, 2021, the Company terminated the agreement.

The Company is still in discussions with Seller, and the Company may or may not

go through with a transaction with Seller, but if the Company does, the terms will change from the previous agreement.

cannabis market still primarily consists of products of varying quality and poor branding.

7 unchanged sentences

This is exactly why we

have developed Koan Cordials, tasty, single dose, healthy cannabis products with timeless, exceptional branding.

As the market matures,

some companies are recognizing the importance of branding.

Branded category leaders represent the 10 spots among best-selling products

and sales data supports the desire among consumers for branded products.

This is further supported by Headset, data (the leading industry

provider of retail buying patterns), which shows that brands are leading every category in cannabis.

Further, branded products command

higher prices.

have developed Koan Cordials, tasty, single serving, healthy cannabis products with timeless, exceptional branding.

As the market

matures, some companies are recognizing the importance of branding.

Branded category leaders represent the 10 spots among best-selling

products and sales data supports the desire among consumers for branded products.

This is further supported by Headset, data (the leading

industry provider of retail buying patterns), which shows that brands are leading every category in cannabis.

Further, branded products

command higher prices.

Some branded products generate pricing as high as 151%, over industry average.

The Resonate team excels in product branding.

is no product in the marketplace exactly like our Koan products at this time.

Other companies offer tinctures (which are concentrated

herbal extracts made by soaking the bark, berries, leaves (dried or fresh), or roots from one or more plants in alcohol or vinegar),

tea, salves, patches and cosmetics and vapes, and some of them provide effects which may be similar to those the Koan products will provide,

but we believe that none are equal to ours with respect to quality, efficacy, consistency and scope.

Our products are water soluble and

can be enjoyed privately or poured in beverages and shared socially.

The Resonate team excels in product

is no product in the marketplace exactly like our Koan products currently.

Other companies offer tinctures (which are concentrated herbal

extracts made by soaking the bark, berries, leaves (dried or fresh), or roots from one or more plants in alcohol or vinegar), tea, salves,

patches, and cosmetics and vapes, and some of them provide effects which may be similar to those the Koan products will provide, but

we believe that none are equal to ours with respect to quality, efficacy, consistency and scope.

Our products are water soluble and can

be enjoyed privately or poured in beverages and shared socially.

We believe that the total experience offered by our products cannot

be found elsewhere in the industry.

there are a number of very fine products in the premium cannabis space, there is not yet a dominant brand in any category.

there are several very fine products in the premium cannabis space, there is not yet a dominant brand in any category.

Some are leading

6 unchanged sentences

informed confident selections.

and Sales Plan

cannabis industry is changing daily in response to updated regulations, customer product education, new interest from various demographics

and now the COVID-19 pandemic.

As a result, we are constantly attentive to these changes as they affect the marketing of our products.

Our initial marketing strategy was to launch in select dispensaries in Los Angeles and to support the launch with dispensary promotional

material and location-based marketing.

However, in the current market the Company has decided to modify this strategy.

Paradoxically,

retail restrictions and safety regulations were beneficial for us, as these allowed us to reprioritize our sales approach and to build

a marketing plan around on-line dispensaries with wide delivery networks.

Although retail restrictions will eventually be relaxed, we

do not expect that storefront dispensaries will return to the dominant role they played in the cannabis industry before COVID-19 for

several reasons.

are generally small, making social distancing difficult.

Limitations on a customers’ ability to touch and smell products reduces

the value of in-person shopping.

Restrictions on the number of people allowed in these small spaces will create waiting lines outside

stores, which will be inconvenient and even embarrassing for some.

Finally, we have learned that a significant number of customers, particularly

in our targeted demographic, really prefer the privacy and convenience of having products delivered to their homes.

For all these reasons,

we have decided to focus our sales efforts on select high-end retail dispensaries and on-line, delivery and e-commerce outlets.

response to the sudden change in customer buying preferences, Resonate has implemented a plan to sell directly to consumers.

We are partnering

with an on-line platform which will allow us to communicate the value of our products directly to consumers.

This platform will connect

consumers to a licensed retail and California-wide home delivery network.

This direct-to-consumer approach has significant benefits for

First, it allows us to control our brand messaging and to assure that we can provide the information and education customers need

to make confident and informed product choices.

Through this method, we also have access to customer information, which is not available

from dispensaries, which allows us to employ successful marketing techniques used by leading on-line retailers such as customer loyalty

programs, memberships, ambassadors, etc., to build brand awareness and increase sales.

It is also better for us financially as it increases

our profit margin.

our marketing budget and energy is now being channeled into appropriate programmatic advertising, developing informational materials

for customers on our website, and developing professional and effective social media, search engine optimization and direct to consumer

marketing campaigns.

We also offer market suppose and to select premium California dispensaries both in person and thorough the Leaf.VIP

budtender training program.

We expect that building our brand online will complement retail sales by increasing customer awareness and

creating “pull-through” at brick-and-mortar facilities.

has partnered with Good People LLC as its state-wide Koan Cordial sales team.

Good People is working closely with Resonate Blends’

marketing team to plan events, train budtenders, schedule and track relevant promotions and inform the innovation pipeline with field

In addition, Resonate is currently recruiting two internal sales managers to oversee all sales efforts in Northern and Southern

Koan Cordials dispensary buyer sample kits are now available through Good People and dispensaries are now stocking the product

in strategic geographical locations.

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

infused product developers.

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

products and solutions.

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

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

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

over time utilizing Vertosa’s emulsification technology.

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.

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.

addition, Vertosa is expanding into other legal states, and this paves the way for Resonate to follow behind moving beyond California

while still assuring strict standards and high production quality for our products.

Manufacturing:

Company partnered with The Galley, a California licensed Type N – Infused Products Manufacturer based in Santa Rosa, California.

The Galley produces and packages premium award-winning products and has worked with some of the most popular brands in the industry.

The Galley is built to FDA and CDPH standards and is focused on high demand areas of production

– Edibles, Topicals, Tinctures, Chocolate, Hard Candies, Gummies, Pre-Rolls, Flower, Vapes and Beverages.

Resonate Blends

was granted a Type S:

Shared Facility - Adult and Medicinal Cannabis Manufacturing License on July 23, 2021.

The license allows Resonate

Blends to manufacture cannabis products at the licensed facility of The Galley.

and The Galley entered into a Master Services Agreement in which The Galley will manufacture and package Resonate’s first family

of products to precise specifications.

Galley and Resonate have been in frequent contact throughout Resonate’s development period and are now supporting the production

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

Resonate’s first of its kind offerings are emulsified through

the advanced infusion technology provided by award-winning Vertosa and collaboratively developed to push the state of the art in its

cannabis products.

Distribution:

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

has prioritized a direct-to-consumer method as a key sales strategy.

Resonate has identified a technology partner who will add 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 a leading cannabis full-service distributor.

The Company contracted with The Vault 3PL to provide

logistics and state-wide distribution for Resonate’s Koan Cordials, its product line of unique experience blends currently available

in California.

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

reseller organizations.

summarize, we have signed and announced definitive agreements with various partners to execute on our overall business strategy.

partner Vertosa is expected to develop our unique formulations through its advanced nano-emulsification process, The Galley is expected

to assemble and package, the Good People to sell the products, MARS Distribution to distribute our products and Way To Blue is expected

to actively market and deliver social media channels to the California market.

This release will be followed with our second product

line that is already in full development and is expected for targeted commercial release before the end of 2021.

to assemble and package, the Good People to sell the products, the Vault 3PL Distribution to distribute our products and, we

just engaged with The Flower Agency to actively market our social media channels to the California market.

principal executive office is located at 26565 Agoura Road, Suite 200, Calabasas, CA 91302.

Our executive telephone number is (571) 888-0009.

of Operation for Three Months Ended June 30, 2021 and 2020

have generated no sales for the three and six months ended June 30, 2021, as compared with no sales for the three and six months ended

June 30, 2020 on our current product line, but sales of $172,144 and $477,734 from the discontinued operations of our sold subsidiary,

Textmunication, Inc., for the three and six months ended June 30, 2020.

We recently launched our first line of six Cordial products to

the retail channel in California and will start to generate revenues from the sales of these products in Q3.

anticipate increased revenues on our six Cordials for the rest of the year, along with a rollout of our second product line before year’s

end, which we hope will contribute to increasing our revenues.

As we have just launched our products to the retail channel, however,

it may take some time for the markets to react, gain traction and result in brand awareness among our customers.

There can be no assurances,

however, that customers will positively react to our products.

operating expenses were $1,397,013 for the three months ended June 30, 2021, as compared with $527,904 for the three months ended

June 30, 2020.

Our operating expenses were $2,175,025 for the six months ended June 30, 2021, as compared with $1,079,315 for

the six months ended June 30, 2020.

main reason for the increased operating expense in 2021 was a result of non-cash management fees in this quarter of $986,121, while

in 2020 we only had $198,515 in non-cash management fees.

Non-cash expenses appear on an income statement because accounting

principles require them to be recorded despite not actually being paid for with cash.

The non-cash management fees resulted from salary

deferrals for insiders from 2020 that we issued in shares of common stock.

Stock-based compensation is a non-cash expense item.

We expect that our operating expenses will increase

in 2021 over 2020 as a result of our product launch and the increased expenses associated with our increased operations.

If we are not

able to meet the salaries of our management and are required to issue out stock as compensation, these non-cash expenses will also increase

our operating expenses in future quarters.

had other expenses of $3,984,516 for the three months ended June 30, 2021 compared with other expenses of $694,402 for

the same period ended June 30, 2020.

We had other expenses of $4,264,966 for the six months ended June 30, 2021 compared with other expenses

of $619,168 for the same period ended June 30, 2020.

main reason for our increased other expenses in 2021 was a result of loss on revaluation of derivative liabilities.

had net loss of $5,381,529 for the three months ended June 30, 2021, as compared with net loss of $1,182,083 for the three months

ended June 30, 2020.

We had net loss of $6,439,991 for the six months ended June 30, 2021, as compared with net loss of $1,790,911 for

the six months ended June 30, 2020.

of Operation for Three and Nine Months Ended September 30, 2021 and 2020

have generated $7,574 and $7,574 in sales for the three and nine months ended September 30, 2021, respectively, as compared with no sales

for the three and nine months ended September 30, 2020 on our current product line, but sales of $0 and $477,734 from the discontinued

operations of our sold subsidiary, Textmunication, Inc., for the three and nine months ended September 30, 2020, respectively.

We recently launched our first line of six Cordial products in California and we have started to generate revenues from the sale of these

anticipate increased revenues on our six Cordials for the rest of the year.

We anticipate a rollout of new packaging

configurations by early 2022 for our Cordials;

to include both a one-pack and a multi-dose bottle which will bring the cost per dose

down considerably.

We also plan on launching additional Cordial formulations by early 2022, which we hope will contribute to increasing

our revenues.

As we have just launched our products, however, it may take some time for the markets to react, gain traction and result

in brand awareness among our customers.

There can be no assurances, however, that customers will positively react to our products.

operating expenses were $762,912 for the three months ended September 30, 2021, as compared with $236,160 for the three months ended

September 30, 2020.

Our operating expenses were $2,937,437 for the nine months ended September 30, 2021, as compared with $1,445,463

for the nine months ended September 30, 2020.

main reasons for the increased operating expense in 2021 was a result of our efforts to increase spending on advertising, as

well as increased legal and professional fees and non-cash management fees.

expect that our operating expenses will increase in 2021 over 2020 because of our product launch and the increased expenses associated

with operations.

Income/Expenses

had other income of $866,917 for the three months ended September 30, 2021 compared with other expenses of $86,910 for

the same period ended September 30, 2020.

We had other expenses of $3,398,548 for the nine months ended September 30, 2021 compared

with other expenses of $712,625 for the same period ended September 30, 2020.

recorded a gain on revaluation of derivative liabilities in the amount of $961,857 that contributed to our other income for the quarter

ended September 30, 2021.

Our other expenses for the nine months ended September 30, 2021 was mainly attributable to a loss on revaluation

of derivative liabilities.

had net income of $99,274 for the three months ended September 30, 2021, as compared with net loss of $351,399 for the three months ended

September 30, 2020.

We had net loss of $6,340,715 for the nine months ended September 30, 2021, as compared with net loss of $2,142,310

for the nine months ended September 30, 2020.

and Capital Resources

of June 30, 2021, we had total current assets of $1,146,755 consisting of $975,869 in cash and $170,886 in advances to suppliers.

total current liabilities as of June 30, 2021 were $6,298,540.

We had a working capital deficit of $5,151,785 as of June 30, 2021, compared

with a working capital deficit of $996,439 as of December 31, 2020.

of September 30, 2021, we had total current assets of $649,017, consisting of $390,534 in cash and $258,483 in prepaids and inventory.

Our total current liabilities as of September 30, 2021 were $5,387,805.

We had a working capital deficit of $4,738,788 as of September

30, 2021, compared with a working capital deficit of $996,439 as of December 31, 2020.

Flows from Operating Activities

activities used $1,802,187 in cash for the six months ended June 30, 2021, compared with cash used of $762,261 for the six months

ended June 30, 2020.

Our negative operating cash flow for the six months ended June 30, 2021 was largely the result of our net loss of

$6,439,991, offset by share based compensation of $986,121.

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.

activities used $2,415,066 in cash for the nine months ended September 30, 2021, compared with cash used of $1,401,301 for the

nine months ended September 30, 2020.

Our negative operating cash flow for the nine months ended September 30, 2021 was largely the result

of our net loss of $6,340,714, offset by share based compensation of $1,267,297.

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.

Flows from Investing Activities

used $21,063 in cash used in investing activities for the six months ended June 30, 2021 for the purchase of fixed assets.

no cash on investing activities for the six months ended June 30, 2020.

used cash on investing activities to purchase computer equipment for the nine months ended September 30, 2021 with no

cash used for the same period ended 2020.

Flows from Financing Activities

flows provided by financing activities during the six months ended June 30, 2021 amounted to $2,684,794 compared with cash flows

provided by financing activities of $890,862 for the six months ended June 30, 2020.

Our positive cash flows for the six months ended

June 30, 2021 consisted of proceeds from issuance of common stock of $1,319,587, proceeds from Convertible notes payable of $1,870,000,

flows provided by financing activities during the nine months ended September 30, 2021 amounted to $2,727,322 compared with cash flows

provided by financing activities of $1,119,943 for the nine months ended September 30, 2020.

Our positive cash flows for the nine months

ended September 30, 2021 consisted of proceeds from issuance of common stock of $1,367,115, proceeds from Convertible notes payable of

$1,865,000, offset by payments of notes payable of $504,793.

Our positive cash flows for the six months ended June 30, 2020 consisted primarily of

convertible notes, notes payable and stock subscriptions.

December 1, 2020 through March 15, 2021, we sold units priced at $25,000 per unit where each unit consisted of (i) an 8.0% Note in the

principal amount of $25,000 convertible into Common Stock (the “Note) and (ii) a warrant for the purchase of 83,333 shares of the

Company’s Common Stock (the “Warrant”).

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

December 1, 2020 through March 15, 2021, we sold units priced at $25,000 per unit where each unit consisted of (i) an 8.0% Note

in the principal amount of $25,000 convertible into Common Stock (the “Note) and (ii) a warrant for the purchase of 83,333 shares

of the Company’s Common Stock (the “Warrant”).

sold 90 Units for total proceeds of $2,265,000.

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remaining convertible note debt and will also be used for working capital.

We also issued our placement agent 250,000 shares in restricted

stock on May 21, 2020 as part of the Placement Agent and Advisory Services Agreement.

we are able to generate sufficient revenues to sustain operations, we are dependent on investment capital to continue our survival.

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, 2021, we have an accumulated deficit of $27,540,986.

Our ability to continue as a going concern is contingent upon

the successful completion of additional financing arrangements and our ability to achieve and maintain profitable operations.

are expanding our best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will

be available for operations.

we can generate sufficient revenues to sustain operations, we are dependent on investment capital to continue our survival.

be no assurance of funds from these efforts or that any other type of additional financing will be available to us on acceptable terms,

of September 30, 2021, we have an accumulated deficit of $27,441,709.

Our ability to continue as a going concern is contingent upon the

successful completion of additional financing arrangements and our ability to achieve and maintain profitable operations.

expanding our best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be

available for operations.

These conditions raise substantial doubt about our ability to continue as a going concern.

2 unchanged sentences

Balance Sheet Arrangements

of June 30, 2021, there were no off-balance sheet arrangements.

of September 30, 2021, there were no off-balance sheet arrangements.

Accounting Policies

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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.

because 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

3 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis