What changed in this filing

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Item 1. Financial Statements

2022-05-20 compared with 2021-11-22 · 134 added, 166 removed, 312 unchanged (49% of the section changed)

1 unchanged sentence

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

Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020;

Consolidated Statements of Operations for the for the three and nine months ended September 30, 2021 and 2020 (unaudited);

Statement of Stockholders’ Equity (Deficit) for the nine months ended September 30, 2021 and 2020 (unaudited);

Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (unaudited);

Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021;

Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited);

Consolidated Statement of Stockholders’ Equity (Deficit) for the period ended March 31, 2022 (unaudited);

Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited);

Notes to Consolidated Financial Statements.

3 unchanged sentences

necessary for a fair presentation have been included.

Operating results for the interim period ended September 30, 2021 are not necessarily

Operating results for the interim period ended March 31, 2022 are not necessarily

indicative of the results that can be expected for the full year.

BLENDS , INC.

TEXTMUNICATION HOLDINGS, INC.)

RESONATE BLENDS, INC.

Balance Sheets

September 30,2021

of March 31, 2022 (unaudited) and December 31, 2021

March 31,2022

December 31, 2021

1 unchanged sentence

Cash and cash equivalents

Prepaid expenses and other current assets

Advances to Suppliers

Total current assets

18 unchanged sentences

Common stock;

200,000,000 shares

44,987,466 and 24,789,981

shares issued and outstanding as of September 30, 2021 December 31, 2020, respectively.

$ 0.0001 par value;

100,000,000 shares authorized;

47,796,859 and 45,046,637 shares

issued and outstanding as of March 31, 2022 December 31, 2021 , respectively.

Stock subscription receivable

Additional paid-in capital

Accumulated deficit

Total Stockholders’ deficit

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY

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

TEXTMUNICATION HOLDINGS, INC.)

( 25,484,011 )

( 25,974,051 )

Stockholders’ deficit

( 3,278,319 )

( 4,101,931 )

TOTAL LIABILITIES AND

STOCKHOLDER’S DEFICIT

RESONATE BLENDS, INC.

Statements of Operations

The Three Months Ended

The Nine Months Ended

September 30 2021

September 30 2020

September 30 2021

September 30 2020

For the three

months ended March 31, 2022 and 2021

Three Months Ended

March 31 2022

March 31 2021

COST OF REVENUES

4 unchanged sentences

Salaries and Related

Sales Commission

Depreciation and amortization

Impairment of inhouse software

2 unchanged sentences

Loss from operations

( 2,942,167 )

( 1,445,463 )

Other Income (expense)

Interest expense

Gain on change of derivative liability

( 3,168,598 )

Loss on change of derivative liability

Amortization of debt discount

Amortization of debt issuance costs

Amortization of issuance cost

Gain (loss) on settlement of derivative liabilities

1 unchanged sentence

Gain on settlement of notes payable

Total other expense

( 3,398,548 )

Total other Income (expense)

Income (loss) from investment in equity method investee

1 unchanged sentence

( 1,058,462 )

( 2,158,088 )

NET INCOME (LOSS) from discontinued operations

1 unchanged sentence

( 1,058,462 )

( 2,142,310 )

Basic weighted average common shares outstanding

1 unchanged sentence

basic and diluted

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

BLENDS , INC.

TEXTMUNICATION, INC.)

STATEMENTS OF STOCKHOLDERS’ DEFICIT

THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

Paid-in Capital

Preferred Stock Series A

Preferred stock - Series C

Total Stockholders’

Balance, December 31, 2020

( 21,100,995 )

Issuance of common stock

Non cash compensation

Non cash compensation, shares

Conversion of notes payable

Conversion of notes payable, shares

Cancellation of shares held by Textmunication

Cancellation of shares held by Textmunication, shares

Shares issues for legal settlement

Shares issues for legal settlement, shares

Cancellation of preferred stock

Cancellation of preferred stock, shares

Net Loss for the quarter

( 1,058,462 )

Balance, March 30, 2021

$ ( 21,100,995 )

$ ( 332,300 )

Net Loss for the quarter

( 6,439,991 )

Issuance of common stock

Balances June 30, 2021

$ ( 27,540,986 )

$ ( 5,130,621 )

Net Loss for the quarter

Non cash compensation

Balances September 30, 2021

$ ( 27,441,711 )

$ ( 4,702,641 )

Statement of Stockholders’ Equity (Deficit)

the period ended March 31, 2022

Stock Series A

stock - Series C

Paid-in Capital

Stockholders’

Balance December 31, 2019

December 31, 2021

$ ( 25,974,051 )

$ ( 4,101,931 )

Net Loss for the quarter

Common stock issuance

Balance March 31, 2020

stock issuance

stock issuance, shares

issuance in private placement

issuance for debt conversion

Stock issuance for services

income for the quarter

March 31, 2022

$ ( 25,484,011 )

$ ( 3,278,319 )

Net Loss for the quarter

of March 31, 2021

December 31, 2020

$ 20,101,480 $

$ ( 21,100,995 )

Non-Cash Compensation

Conversion of notes payable

Common stock issue

Balance June 30, 2020

$ ( 996,339 )

stock issuance

income for the quarter

( 1,058,462 )

Net Loss for the quarter

Common stock Issuance for Cash

Conversion of notes payable

Cancellation of shares held by Textmunication

( 1,058,462 )

Non cash compensation

Shares issues for legal settlement

Cancellation of preferred stock

Balance September 30, 2020

March 31, 2021

$ 21,822,818 $

$ ( 22,159,457 )

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

BLENDS , INC.

TEXTMUNICATION, INC.)

$ ( 332,300 )

RESONATE BLENDS, INC.

Statements of Cash Flows

THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

the three months ended March 31, 2022 and 2021

Cash Flows from Operating Activities

1 unchanged sentence

$ ( 1,058,462 )

$ ( 2,142,310 )

Net loss from discontinued operations

1 unchanged sentence

Amortization and depreciation

Loss on derivative liability

Gain on derivative liability

Non cash interest expense

Legal Settlement

Share professional fees

Share based compensation

Gain (Loss) on the settlement of debt

Gain on settlement of derivative liabilities

Gain on settlement of notes payable

Share professional fees/ compensation

Depreciation and amortization

Changes in assets and liabilities

Prepaid expenses and other current assets

Advances to suppliers

2 unchanged sentences

Net cash used by operating activities

( 2,415,066 )

( 1,401,301 )

Net cash provided by (used in) operating activities of discontinued operations

Net cash provided by discontinued operations

Net Cash Provided By

Used In Operating Activities

( 2,415,066 )

( 1,301,663 )

Cash Flows from investing activities

4 unchanged sentences

Proceeds from convertible notes (net)

Proceeds from notes payables

Payments on preferred stocks buy back

Payments on convertible notes payable

Net cash provided by financing activities

Net cash provided by financing activities of discontinued operations

Net Cash Provided By

Used In Financing Activities

Net increase in cash

6 unchanged sentences

Conversion of debt for common stock

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

TEXTMUNICATION

HOLDINGS, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

THE QUARTER ENDED March 31, 2022

1 – ORGANIZATION AND BUSINESS OPERATIONS

66 unchanged sentences

concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

As of September 30, 2021, the Company has an accumulated deficit of $ 27,441,709 .

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

As of March 31, 2022, the Company has an accumulated deficit of $ 25,484,011 .

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

While the Company is expanding its best efforts to achieve the above plans, there is no assurance that any such activity

8 unchanged sentences

The balance at times may exceed federally insured limits.

As of September 30, 2021, the company balances exceeded the federally insured

limit by approximately $ 140,534 deposited under one institution.

Management is making certain arrangements to mitigate this risk during

the next quarter.

However, as of March 31, 2022, the company balances was below the federally

insured limit by approximately $ 65,473 .

Management is making certain arrangements to mitigate this risk during the next quarter.

Company did have any revenues from continuing operations for the periods presented.

17 unchanged sentences

by little or no market activity).

assets and liabilities measured at fair value on a recurring basis are summarized below for the quarter ended September 30, 2021 and

year ended December 31, 2020.

assets and liabilities measured at fair value on a recurring basis are summarized below for the quarter ended March 31, 2022 and year

ended December 31, 2021.

SUMMARY OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS

As of September 30, 2021

As of March 31, 2022

Derivative Liabilities

13 unchanged sentences

accounts, and any gain or loss thereon is reflected in operations.

Company policy capitalize property and equipment for cost over $ 1,000 ,

Company policies capitalize property and equipment for cost over $ 1,000 ,

asset acquired under $ 1,000 are charge to operations.

48 unchanged sentences

May 13, 2021, we amended the Separation Agreement to state the parties desire to reduce the total amount payable to Wais Asefi from $ 200,000

USD to $ 142,500

In addition to the earlier payments made

Asefi, a payment of $ 40,000

was made on May 14, 2021 and another payment

on June 27, 2021 for $ 40,000 .

The final payment was made on August 11, 2021 for $ 25,000 .

The final payment on August 11, 2021 settled this agreement in full.

Further under the amendment, Mr.

Asefi nominated Textmunication,

Inc., our prior subsidiary, as the recipient of the funds due under the Separation Agreement.

outstanding balances as of September 30, 2021 and December 31, 2020 are $ 0 and $ 187,500 respectively.

USD to $ 142,500 USD.

In addition to the earlier payments made to Mr.

Asefi, a payment of $ 40,000 was made on May 14, 2021 and another

payment on June 27, 2021 for $ 40,000 .

The final payment was made on August 11, 2021 for $ 25,000 and settled this agreement in full.

under the amendment, Mr.

Asefi nominated Textmunication, Inc., our prior subsidiary, as the recipient of the funds due under the Separation

4 - CONVERTIBLE NOTE PAYABLE

notes payable consists of the following as of September 30, 2021 and December 31, 2020:

notes payable consists of the following as of March 31, 2022 and December 31, 2021:

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

September 30, 2021

March 31, 2022

December 31, 2021

2 unchanged sentences

Net convertible notes

convertible notes as of September 30, 2021 are 8 % Unsecured Convertible Promissory Notes from various accredited investors issued from

January 1, 2021 to September 30, 2021.

All notes have an automatic conversion into equity on the maturity date, which is January 2, 2022 ,

convertible notes as of March 31, 2022 are 8 % Unsecured Convertible Promissory Notes (“Notes”) from various accredited investors

issued from January 1, 2021 to March 31, 2022.

All notes have an automatic conversion into equity on the maturity date, which is July

3, 2022 , or if a Qualified Financing (QF) of $ 5,000,000 is achieved, whichever occurs first.

The maturity date pricing is the lesser of $.10 or

75% of the VWAP with a 20-day lookback.

A QF converts into equity at the lesser of $1.00 or 75% of the average selling price of the aggregate

three months ended September interest accrued for the convertible notes payable at $ 12,263 , $ 12,671 and $ 12,263 respectively.

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

815-15 “Derivatives

Embedded Derivatives” (“Topic No.

815-15 requires the Company to bifurcate and separately

account for the conversion features as an embedded derivative contained in the Company’s convertible debt.

The Company is required

to carry the embedded derivative on its balance sheet at fair value and account for’ any unrealized change in fair value as a component

of results of operations.

The Company values the embedded derivatives using the Black-Scholes pricing model.

The maturity date pricing is $0.10.

converts into equity at the lesser of $1.00 or 75% of the average selling price of the aggregate offering.

The outstanding balance as

of March 31, 2022 for this Unsecured Convertible Promissory Notes amounts to $ 1,715,000 .

On January 2, 2022, Certain Noteholders elected

to convert collectively $ 150,000 of the Notes into equity at $ 0.10 to reduce the outstanding principal.

January 28, 2022, we entered into Securities Purchase Agreements (the “Purchase Agreements”) with two accredited investors,

pursuant to which we issued and sold to the investors two convertible promissory notes, dated January 28, 2022, each in the principal

amount of $ 275,000 for an aggregate principal amount of $ 550,000 .

We received $ 500,000 from the Notes after applying the original issue

discount to the Notes.

Purchase Agreements allow for additional notes to be issued to investors up to $ 750,000 .

On February 4, 2022, we issued and sold to two

accredited investors (the “Investors”) convertible promissory notes in the principal amount of $ 55,000 under a Securities

Purchase Agreement of the same date.

We received $ 150,000 from the Notes after applying the original issue discount to the Notes.

March 3, 2022, we issued and sold to an accredited investor a convertible promissory note the principal amount of $ 55,000 under a Securities

Purchase Agreement of the same date.

We received $ 50,000 from the Note after applying the original issue discount to the Note.

maturity date for repayment of the Notes is nine months from issuance and the Notes bear interest at 10 % per annum.

We may prepay the

Notes provided that we shall make payment to the investors of an amount in cash equal to the sum of:

the then outstanding principal amount

of this Notes, plus interest on the unpaid principal amount of the Notes, plus any Default Interest on the amounts, plus any amounts

owed to the Investor pursuant to the Purchase Agreement.

principal and accrued interest on the Notes are convertible into shares of our common stock.

The conversion price shall equal a fixed

price of $ 0.15 per share or, at the option of the Investor in the event that we fail to complete a Qualified Offering before the five

(5) month anniversary of the issue date, the Registration Conversion Price.

The “Registration Conversion Price” shall mean

75% multiplied by the volume weighted average of the Common Stock during the twenty (20) Trading Day period ending on the latest complete

Trading Day prior to the Conversion Date.

The Investors shall be entitled to add to the principal amount of the Note $750.00 for each

conversion to cover investor’s deposit fees associated with each Notice of Conversion.

“Qualified Offering” means any

offer and sale by us of an original issuance of equity securities, comprised of either Common Stock or preferred stock of the Company,

in a single transaction to investors pursuant to which at least an aggregate of $ 2,000,000.00 gross proceeds are received by the Company .

the event that by the five (5) month anniversary of the issue date a Qualified Offering (as defined above) has not occurred, then we

shall file with the SEC a registration statement on Form S-1 covering the resale of the maximum number of Registrable Securities, defined

as the Commitment Shares, Conversion Shares and Warrant Shares.

connection with the investment, we issued Commitment Shares to the Investors in the amount of 650,000 shares collectively and we also

issued a warrant (the “Warrant”) to the Investors to purchase 812,500 shares collectively of our common stock at an exercise

price of $ 0.40 per share.

In the event that there is no effective registration statement five months from the issue date registering

the shares underlying the Warrant, then the Investors may exercise the Warrant using a cashless feature.

Securities Purchase Agreement contain a most favored nation provision that allows the Investor to claim any lower price from any future

securities six months after this closing and a blocker on issuing variable rate investments.

three months ended March 2022 and 2021 interest accrued for the convertible notes payable at $ 22,457

respectively.

5 – COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

Rent expense was approximately $ 1,165

and $ 310 for the quarter ended September 30, 2021 and 2020, respectively.

and $ 790 for the quarter ended March 31, 2022 and 2021, respectively.

Employment Agreement

12 unchanged sentences

6 – STOCKHOLDERS’ EQUITY

the third quarter of 2021 the company issued a total of 716,554 shares of common stock to vendors for compensation and services rendered.

the first quarter of 2022 the company issued a total of 904,666

shares of common stock to vendors for compensation

and services rendered.

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

18 unchanged sentences

8 – SUBSEQUENT EVENTS

previously disclosed, on September 9, 2021, Resonate Blends, Inc.

(the “Company”) entered into binding letter of intent (the

“Agreement”) with L & G USA Inc., a Delaware corporation and L & G Canada Inc., an Ontario corporation (together

“Seller”), and the stockholders of Seller (the “Stockholders”), 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.

In accordance with ASC Topic 855-10, the Company has analyzed

its operations subsequent to March 31, 2022 to the date these financial statements were issued and has determined that it does not have

any material subsequent events to disclose in these 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-Q

Item 1. Financial Statements