Resonate Blends, Inc. 10-Q

Item 1. Financial Statements Our consolidated financial statements included in this Form 10-Q are as follows: F-1 Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021; F-2 Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited); F-3 Consolidated Statement of Stockholders’ Equity (Deficit) for the period ended March 31, 2022 (unaudited); F-4 Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited); and F-5 Notes to Consolidated Financial Statements. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. 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. RESONATE BLENDS, INC. Consolidated Balance Sheets As of March 31, 2022 (unaudited) and December 31, 2021 March 31,2022 December 31, 2021 ASSETS Current assets Cash and cash equivalents $ 184,527 $ 12,913 Advances to Suppliers 23,781 10,830 Inventories 269,307 245,776 Total current assets 477,615 269,519 Fixed assets, net 28,333 31,337 Investment in equity method investee 100 100 TOTAL ASSETS 506,048 300,956 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities Accounts payable and accrued liabilities 250,192 206,873 Due to related parties 50,000 45,000 Convertible notes payable, net of discount 2,365,000 1,865,000 Derivative liability 1,119,175 2,286,014 Settlement liability - - Current liabilities of discontinued operations - - Total current liabilities 3,784,367 4,402,887 Total liabilities 3,784,367 4,402,887 Stockholders’ deficit Preferred stock, 5,933,333 shares authorized, $ 0.0001 par value, 0 shares issued. Series B - Preferred stock, 66,667 shares authorized, $ 0.0001 par value, 0 issued. - Series C - Preferred stock, 2,000,000 shares authorized, $ 0.0001 par value, 2,000,000 issued and outstanding 200 200 Series D Preferred stock 40,000 shares authorized, $ 0.0001 par value 40,000 and 0 issued and outstanding, respectively Preferred stock, value Common stock; $ 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. 4,779 4,504 Stock subscription receivable ( 261,059 ) - Additional paid-in capital 22,461,772 21,867,416 Accumulated deficit ( 25,484,011 ) ( 25,974,051 ) Total Stockholders’ deficit ( 3,278,319 ) ( 4,101,931 ) TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT $ 506,048 $ 300,956 F- 1 RESONATE BLENDS, INC. Consolidated Statements of Operations For the three months ended March 31, 2022 and 2021 (unaudited) Three Months Ended March 31 2022 March 31 2021 REVENUES $ 27,652 $ - COST OF REVENUES 12,857 - Gross profit 14,795 - Operating expenses Advertising 165,471 53,375 General and administrative expenses 23,347 134,498 Legal and Professional fees 25,675 330,599 Officer Compensation 235,000 133,750 Salaries and Related - 125,000 Depreciation and amortization 3,004 - Office Rent 1,165 790 Impairment of inhouse software - - Non cash management fees 201,957 - Total operating expenses 655,619 778,012 Loss from operations ( 640,824 ) ( 778,012 ) Other Income (expense) Other Income - 312 Interest expense ( 22,457 ) ( 21,530 ) Loss on change of derivative liability 1,166,839 ( 248,649 ) Amortization of debt discount - ( 10,583 ) Amortization of issuance cost ( 31,795 ) - Gain (loss) on settlement of derivative liabilities - - Legal settlement - - Gain on settlement of notes payable 18,277 - Total other Income (expense) 1,130,864 ( 280,450 ) Income (loss) from investment in equity method investee - - NET INCOME (LOSS) from continuing operations 490,040 ( 1,058,462 ) NET INCOME (LOSS) from discontinued operations - NET INCOME (LOSS) 490,040 ( 1,058,462 ) Basic weighted average common shares outstanding 47,796,859 31,085,610 Net Income (loss) per common share: basic and diluted $ 0.01 $ ( 0.03 ) F- 2 RESONATE BLENDS, INC. Consolidated Statement of Stockholders’ Equity (Deficit) For the period ended March 31, 2022 (unaudited) Preferred Stock Series A Preferred stock - Series C Common Stock Additional Paid-in Capital Subscription Receivable Accumulated Deficit Total Stockholders’ Deficit Balance, December 31, 2021 - - 2,000,000 $ 200 45,046,637 $ 4,504 $ 21,867,416 $ - $ ( 25,974,051 ) $ ( 4,101,931 ) Common stock issuance - - - - - Common stock issuance, shares - - - Stock issuance in private placement 1,065,556 107 260,952 ( 261,059 ) - - Stock issuance for debt conversion 780,000 78 131,447 - - 131,525 Stock issuance for services 904,666 90 201,957 - - 202,048 Net income for the quarter - - - 490,040 490,040 Balances March 31, 2022 - - 2,000,000 $ 200 47,796,859 $ 4,779 $ 22,461,772 $ ( 261,059 ) $ ( 25,484,011 ) $ ( 3,278,319 ) As of March 31, 2021 Balance December 31, 2020 - - 2,000,000 $ 200 29,769,627 $ 2,976 $ 20,101,480 $ - $ ( 21,100,995 ) $ ( 996,339 ) Common stock issuance 11,633,260 1,163 1,721,338 - 1,722,501 Net income for the quarter - - - - ( 1,058,462 ) ( 1,058,462 ) Balance March 31, 2021 - - 2,000,000 $ 200 41,402,887 $ 4,139 $ 21,822,818 $ - $ ( 22,159,457 ) $ ( 332,300 ) F- 3 RESONATE BLENDS, INC. Consolidated Statements of Cash Flows For the three months ended March 31, 2022 and 2021 (unaudited) 2022 2021 Cash Flows from Operating Activities Net Income (loss) $ 490,040 $ ( 1,058,462 ) Net loss from discontinued operations Adjustments to reconcile Amortization and depreciation - 10,583 Gain on derivative liability ( 1,166,839 ) 248,649 Non cash interest expense 22,457 16,142 Gain on settlement of notes payable ( 18,277 ) - Share professional fees/ compensation 201,957 82,473 Depreciation and amortization 3,004 - Changes in assets and liabilities Inventories ( 23,531 ) ( 182,326 ) Advances to suppliers ( 12,951 ) ( 54,599 ) Accounts payable and accrued expenses 20,754 4,558 Due to Related party 5,000 ( 25,000 ) Net cash used by operating activities ( 478,386 ) ( 957,982 ) Net cash provided by discontinued operations - - Net Cash Provided By Used In Operating Activities ( 478,386 ) ( 957,982 ) Cash Flows from investing activities Purchase of fixed assets - ( 20,333 ) Net cash used by investing activities - ( 20,333 ) Cash Flows from Financing Activities Proceeds from subscription - 1,347,500 Proceeds from convertible notes (net) 650,000 1,595,000 Payments on convertible notes payable - ( 504,793 ) Net cash provided by financing activities 650,000 2,437,707 Net increase in cash 171,614 1,459,392 Cash, beginning of period 12,913 114,325 Cash, end of period $ 184,527 $ 1,573,717 Supplemental disclosure of cash flow information Cash paid for interest $ - $ 21,530 Cash paid for tax - - Non-Cash investing and financing transactions Conversion of debt for common stock $ 150,000 $ 306,858 F- 4 RESONATE BLENDS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED March 31, 2022 (UNAUDITED) NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS The Company Resonate Blends, Inc. formerly Textmunication Holdings, Inc. (the “Company”) was incorporated on in October 1984 in the State of Georgia as Brock Control Systems. Founded by Richard T. Brock, the Company was in the sales automation market and an early developer of enterprise customer management systems. 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. On January 20, 2020, Wais Asefi resigned as Chairman and as a member of our Board of Directors. Mr. Asefi’s resignation is in support of Resonate Blends strategic direction of becoming a pure play cannabis company. The Company does not believe that Mr. Asefi has any disagreements on matters relating to our operations, policies or practices. Also, on January 20, 2020, our Board of Directors appointed Geoffrey Selzer as our Chairman. In connection with the name change, the Company’s symbol was changed to “KOAN” that more resembles the Company’s new business focus. 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. The Company will retain its cannabis operations based in Calabasas, California. The consideration for the sale of Textmunication consists of the cancellation by the Asefi Group of 4,822,029 shares of common stock (the “Shares”) of the Company. The Shares have a market value of $ 337,542 , based on our last sales price of $ 0.07 per share as of May 26, 2020. Upon the cancellation of the Shares, the Company agreed to execute a general release in favor of Mr. Asefi. Also on May 22, 2020, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Wais Asefi. Pursuant to the Separation Agreement, Mr. Asefi agreed to separate from all officer positions and as a director of the Company and to further accept the payment of $ 200,000 from the Company’s future fundraising as consideration of all debts outstanding under Mr. Asefi’s employment agreement with the Company. Mr. Asefi further agreed to cancel his 4,000,000 shares of Series A Preferred Stock and to transfer his 2,000,000 shares of Series C Preferred Stock to Geoffrey Selzer, the Company’s current CEO and Director. Mr. Asefi further released the Company of all claims. Also on May 22, 2020, Mr. Selzer signed a Voting Agreement and agreed to vote his newly acquired 2,000,000 shares of Series C Preferred Stock in favor of the sale of Textmunication to the Asefi Group. 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 cancelled 4,822,029 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. Asefi. F- 5 Basis of Presentation The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. Going concern These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. 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 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 uncertainty. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. 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. Revenue Recognition The Company did 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. Fair Value of Financial Instruments The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items. As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. F- 6 The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Financial 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 March 31, 2022 Level 1 Level 2 Level 3 Total Liabilities Derivative Liabilities - - 1,119,175 1,119,175 As of December 31, 2021 Level 1 Level 2 Level 3 Total Liabilities Derivative Liabilities - - 2,286,014 2,286,014 Net income (loss) per Common Share Basic net income (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Property and equipment Property and equipment are stated at cost, less accumulated depreciation provided on the straight-line method over the estimated useful lives of the assets, which range from three to seven years . Expenditures for renewals or betterments are capitalized, and repairs and maintenance are charged to expense as incurred the cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts, and any gain or loss thereon is reflected in operations. Company policies capitalize property and equipment for cost over $ 1,000 , asset acquired under $ 1,000 are charge to operations. Income Taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. Because the Company has no net income, the tax benefit of the accumulated net loss has been fully offset by an equal valuation allowance. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. F- 7 Stock-Based Compensation The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered. The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered. NOTE 3 – RELATED PARTY TRANSACTIONS On May 22, 2020, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Wais Asefi. Pursuant to the Separation Agreement, Mr. Asefi agreed to separate from all officer positions and as a director of the Company and to further accept the payment of $ 200,000 from the Company’s future fundraising as consideration of all debts outstanding under Mr. Asefi’s employment agreement with the Company. Mr. Asefi further agreed to cancel his 4,000,000 shares of Series A Preferred Stock and to transfer his 2,000,000 shares of Series C Preferred Stock to Geoffrey Selzer, the Company’s current CEO and Director. Mr. Asefi further released the Company of all claims. On May 22, 2020, the 4,000,000 shares of Series A Preferred Stock were returned to the Company’s transfer agent and cancelled and on May 22, 2020 the 2,000,000 shares of Series C Preferred Stock were transferred to Mr. Selzer. The parties to the Separation Agreement agreed to a payment schedule of $ 200,000 based on future monies raised by the Company - and not on a specific date – as follows: ● $ 12,500 when the initial $ 250,000 is raised by the Company; ● $ 12,500 when a total of $ 500,000 is raised by the Company; ● $ 10,000 when a total of $ 750,000 is raised by the Company; ● $ 35,000 when a total of $ 1,750,000 is raised by the Company; ● $ 35,000 when a total of $ 2,750,000 is raised by the Company; ● $ 35,000 when a total of $ 3,750,000 is raised by the Company; ● $ 35,000 when a total of $ 4,750,000 is raised by the Company; and ● $ 25,000 when a total of $ 5,750,000 is raised by the Company. On 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 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. Further under the amendment, Mr. Asefi nominated Textmunication, Inc., our prior subsidiary, as the recipient of the funds due under the Separation Agreement. F- 8 NOTE 4 - CONVERTIBLE NOTE PAYABLE Convertible notes payable consists of the following as of March 31, 2022 and December 31, 2021: SCHEDULE OF CONVERTIBLE NOTES PAYABLE March 31, 2022 December 31, 2021 Convertible notes face value $ 2,365,000 $ 1,865,000 Less: Discounts - - Less: Debt issuance cost - - Net convertible notes $ 2,365,000 $ 1,865,000 The 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 $0.10. A QF 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. On 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. The 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. On 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. The 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. All 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 . In 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. In 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. F- 9 The 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. The three months ended March 2022 and 2021 interest accrued for the convertible notes payable at $ 22,457 and $ 21,530 respectively. NOTE 5 – COMMITMENTS AND CONTINGENCIES Office Lease On October 16, 2019, the Company signed a lease agreement that expires on thirty days’ notice . Rent expense was approximately $ 1,165 and $ 790 for the quarter ended March 31, 2022 and 2021, respectively. Executive Employment Agreement On October 25, 2019, the Company entered into Employment Agreements with the following persons: (i) Geoffrey Selzer as Chief Executive Officer (CEO) of the Company with an annual salary of $ 180,000 ; (ii) Pamela Kerwin as Chief Operating Officer (COO) of the Company with an annual salary of $ 120,000 : and David Thielen as Chief Investment Officer (CIO) with an annual salary of $ 120,000 . All are eligible for salary increases upon milestone achievements and other benefits. The Employment Agreement for the CEO has a term of 2 years and can’t be terminated without cause. Severance of six (6) weeks is available for termination of the COO and CIO without cause before one-year of service and eight (8) weeks after one-year of service . NOTE 6 – STOCKHOLDERS’ EQUITY During 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: SCHEDULE OF COMPENSATION AND SERVICES RENDERED Professional Fees $ 195,509 Convertible promissory notes - Total $ 195,509 NOTE 7 – DISCONTINUED OPERATIONS On 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. for the three months ended June 30, 2020 SCHEDULE OF DISCONTINUED OPERATIONS 2020 Revenues $ 305,590 Cost of Revenues ( 90,559 ) Operating expenses ( 347,565 ) Loss from operations of discontinued operations ( 132,534 ) NOTE 8 – SUBSEQUENT EVENTS 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. F- 10