What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-20 compared with 2023-11-20 · 152 added, 231 removed, 45 unchanged (89% of the section changed)

15 unchanged sentences

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

results may differ materially from these expectations due to uncertainties related to the successful completion of our acquisition of

Pegasus Specialty Vehicles, LLC, or our failure to complete such acquisition;

the impact of the pendency of our acquisition on our business

and operations;

the timing and expected financing and the merger;

the possibility that any or all of the various conditions to the consummation

of the merger may not be satisfied or waived in a timely manner, if at all;

the possibility of business disruptions due to transaction-related

and the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement.

factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not

9 unchanged sentences

on Form 10-K.

History and Experience in the Cannabis Space

October 25, 2019, we announced our entry into the cannabis industry by acquiring Resonate Blends LLC (“Resonate Blends”),

a California-based cannabis wellness lifestyle product company built on a proprietary system of experiential targets.

Resonate Blends

is a brand-focused cannabis organization offering premium brands of consistent quality.

We also acquired Entourage Labs LLC (“Entourage

Labs”), a sister company of Resonate Blends.

Entourage Labs is the Intellectual Property (IP) subsidiary of Resonate Blends.

the first two years, we concentrated on releasing product and brand building in California and investigated state expansion efforts as

Resonate followed the launch of its first six Koan products, based on The Resonate System, by releasing “Love” in Q1-2022

and “Sleep” Cordials in Q2-2022.

To address the price sensitivity of the market, Resonate also produced multi-serve versions

of our most popular Cordials which significantly reduced the cost per serving.

The Resonate products were designed for the discriminating

wellness— focused consumer and that market has been slower to develop than anticipated.

The current buyers of cannabis products

seem interested in purchasing the highest level of THC for the least amount of money.

we have won awards for our Koan Cordial brand, such as the LMCC award for “Best New Brand of 2021” and also a Cannabis Clio

Award for “Packaging and Design”, the current environment in California has made it difficult to scale our business opportunities

in a challenging market environment.

Burdens such as overregulation, high taxes, price compression, the growth of the illicit market

and the overpopulation of dispensaries in some areas, and no dispensaries in other areas – have made it difficult for many brands

in California to succeed.

legal cannabis industry Itself is laden with obstacles.

There are significant restrictions on marketing activities and excessively high

banking fees for compliant financial institutions.

Layer upon layer of taxes raise prices of legal cannabis products so that they become

cost prohibitive for customers.

Many of the California dispensaries are in financial trouble and are unable to pay for the products that

they have purchased.

The distributor therefore prevents those accounts from ordering additional products.

These and other constraints

have made it difficult to build a successful business in the cannabis industry at this time.

The cannabis industry is still in its infancy,

so we expect continued headwinds.

We recently pivoted to the cannabis consumption lounges for new revenue traction.

These lounges are

becoming popular in California, and we’ve teamed with several new lounges to introduce our six (6) Cordial blends into this new

Company’s growth strategy is to create an innovative ecosystem of companies, investments and research that all support The Resonate

System and its mission of empowering the wellness market.

We have a product line of Cordials and have introduced our brand and products

to the market through dispensaries in California and now into cannabis consumption lounges.

Although we have had some success in establishing

our presence in the California market, as of the date of this filing, we have not achieved significant revenues.

We have a working capital

deficit of $2,118,418 as of September 30, 2023, and we are wholly dependent on capital to fund our business operations.

For these reasons,

there are no assurances that we will be successful in this or any of our endeavors or become financially viable and continue as a going

late 2019, we have been attempting to raise money to implement our business plan but have not been able to secure all the funds necessary

The lack of sufficient funds, the present economy, the restrictions on commercial banking and the saturated nature of the cannabis

industry have prevented this from happening.

We have recently relied on convertible loans for working capital expenses.

These loans were

mostly on unfavorable terms, such as discounted conversion rights, original discounts, equity incentives and restrictive covenants.

we have been unable to raise the capital necessary to fully implement our business plan, we recently commenced a search for other business

opportunities that may benefit our shareholders and allow us to raise capital to build a stronger operation.

Merger Agreement with Pegasus Specialty Vehicles, LLC

negotiations with what we believe is a more viable business opportunity for the holding company has emerged.

On June 20, 2023, we entered

into an Agreement and Plan of Merger (the “Merger Agreement”) with Pegasus Specialty Vehicles, LLC (“Pegasus”),

and Pegasus Specialty Holdings LLC, an Ohio limited liability company and our wholly-owned subsidiary (“Merger Sub”).

Merger Agreement provides that at the closing (the “Closing”), subject to the terms and conditions set forth in the Merger

Agreement, Merger Sub will merge with and into the Company (the “Merger”), with Pegasus surviving the Merger as a wholly-owned

subsidiary of our company.

At Closing of the Merger, the issued and outstanding common shares of Pegasus will automatically be converted

into the right to receive an aggregate of 623,500 shares of Series AA Preferred Stock of Parent (the “Merger Consideration”).

of our company, Pegasus, and Merger Sub has made various representations and warranties and agreed to certain covenants in the Merger

Agreement, including a covenant by us that we would raise $3,000,000 less costs in new financing at Closing, with $500,000 of such amount

less costs loaned pre-Closing to Pegasus under a secured promissory note.

Pegasus has a covenant that it would grant a security interest

to us in all of its assets on the $500,000 loan, subordinate to other security interests as to the same collateral.

of the Merger is subject to the satisfaction or, if permitted by applicable law, waiver, by us, Pegasus, or both of various

For Pegasus, these conditions include, without limitation, (i) an agreeable plan to spin out the existing cannabis

assets and operations, (ii) an agreeable plan to transfer the outstanding shares of Series C Preferred Stock of our company to Brian

Barrington simultaneously to the date of the aforementioned spin-out;

(iii) an agreeable plan to retire the Series E Designation;

(iv) financing by us of $3,000,000 less costs;

(v) the filing of the Certificate of Designation for the Series AA Preferred Stock

with the Secretary of State of Nevada;

and (vi) certain other customary conditions.

For us, these conditions include, without

limitation, (i) a secured promissory note issued by Pegasus to us in the amount of $500,000 with the collateral being a UCC lien

subordinate to other lenders;

(ii) the payback by us of certain advances contributed by corporate officers and others in our company

in an amount not to exceed $140,000;

(iii) resolutions of the equity holders of Pegasus approving the Merger Agreement and the

transactions contemplated;

and (iv) certain other customary conditions.

Merger Agreement contains certain termination rights including the right of the parties to mutually agree upon termination, and by each

of Pegasus and our company unilaterally if the other party has committed a violation of the covenants, representations and warranties

in the Merger Agreement.

Merger Agreement, the Merger, and the transactions contemplated thereby were unanimously approved by the board of directors of our company,

and unanimously approved by the board of directors of Pegasus and Merger Sub.

Closing of the Merger is expected to occur as soon as practicable after the satisfaction or waiver of all the conditions to Closing in

the Merger Agreement, which is currently expected to be in the 4th quarter of calendar year 2023.

on June 20, 2023, we signed a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Investor”),

pursuant to which we issued and sold to the Investor a 15% OID Senior Promissory Note (non-convertible), dated June 20, 2023, in the

principal amount of $575,000 (the “Note”).

The Note is secured by all of Pegasus’ assets under a separate security

agreement between the Investor and Pegasus.

received $500,000 from the Note after applying the original issue discount to the Note, $30,000 of which was used to pay a commission

to a broker as placement agent and $30,000 was paid to the lender for its legal fees, and the balance was tendered to us to lend to Pegasus

under a Loan and Security Agreement (described below) (the “Loan”).

maturity date for repayment of the Note is September 20, 2023, and the Note bears interest at 15% per annum starting 60 days after issuance

and interest payable in cash monthly thereafter.

We may prepay the Note at any time, but if we repay the Note after 60 days, it is required

to pay a premium of 104% of the principal amount.

additional consideration, we agreed to issue to the Investor 1,318,000 shares of our common stock as commitment shares.

We are required

to issue additional commitment shares in the event the Note is not prepaid at 60 days.

Pursuant to a Registration Rights Agreement (the

“Registration Agreement”), we have agreed to register the Investor shares with the SEC no later than 90 days from the issuance

the Purchase Agreement, we agreed to certain restrictive covenants, including a restriction on borrowing and a most favored nation clause

in favor of Investor for any future offerings not specifically exempted.

on June 20, 2023, we and Pegasus entered into a Loan and Security Agreement in the principal amount of $575,000 whereby we lent to Pegasus

funds received from the June 20, 2023 Purchase Agreement less expenses secured by all of Pegasus’ assets but subordinate to the

security interest of Investor and other lenders of Pegasus.

is a manufacturer built on an innovative business model and manufacturing architecture providing best-in-class traditional, electric

(EV) and hydrogen solutions to the multi-billion dollar school bus industry and also the broader specialty vehicle market.

us to believe that we will be revising our business plan and focus over the coming weeks and months.

If this opportunity does not develop,

however, we will continue to both seek new opportunities and look for capital to continue with our efforts in the cannabis industry.

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

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

of Operation for Three and Nine Months Ended September 30, 2023 and 2022

have generated $0 and $16,468 in sales for the three and nine months ended September 30, 2023, respectively, as compared with $10,429

and $40,917 in sales for the three and nine months ended September 30, 2022, respectively, on our current product line.

don’t anticipate increased revenues on our seven Cordials including our newly launched Sleep Cordial, for the rest of 2023, due

to the challenging market conditions we have experienced in the cannabis industry in California, as disclosed above.

There can be no

assurances, however, that customers will positively react to our products.

For these reasons, there are no assurances that we will be

successful in this or any of our endeavors or become financially viable and continue as a going concern.

explained above, we are currently under contract of the Merger Agreement to enter the electric vehicle (EV) bus and clean energy specialty

vehicle sector.

If this opportunity develops, subject to closing conditions and the availability of financing, we may be revising our

business plan and focus over the coming months.

paid $0 and $13,257 in cost of revenues for the three and nine months ended September 30, 2023, respectively, resulting in a gross profit

of $0 and $3,211 for the three nine months ended September 30, 2023, respectively.

We paid $9,718 and $24,996 in cost of revenues for

the three and nine months ended September 30, 2022, respectively, resulting in a gross profit of $711 and $15,921 for the three and nine

months ended September 30, 2022, respectively.

have had little historical data to compare our margins for the sale of our new products, which were introduced into the retail channel

in late Q2 of 2021.

If we are unable to consummate the Merger Agreement with Pegasus, we hope our work to continue to penetrate the market.

We are also implementing new packaging configurations which we expect to stabilize our overall gross margin.

operating expenses were $46,975 and $195,627 for the three and nine months ended September 30, 2023, respectively, as compared with $218,876

and $1,164,706 for the three and nine months ended September 30, 2022, respectively.

main drivers for the overall decrease in operating expenses in 2023 were the reduction of legal, professional fees and salaries as well

as a significant decrease in non-cash management fees.

we engage in a business combination Pegasus, our continued focus on sales, advertising, marketing and new product development costs to

support our planned growth is expected to increase throughout 2023, subject to the issues we have been experiencing in the industry,

as explained above.

spent $316,683 less on advertising for the nine months ended September 30, 2023, than for the nine months ended September 30, 2022.

spent more on advertising for the nine months ended September 30, 2022 to introduce our Koan Cordials to the California retail channel,

perform Search Engine Optimization (SEO), conduct Programmatic advertising, hire a professional agency to promote our Cordials on social

media channels and other general advertising methods.

fees decreased by $73,472 for the nine months ended September 30, 2023, over the nine months ended September 30, 2022.

Our professional

fees were less for this quarter compared to the same quarter last year, but we expect that professional fees will increase in 2023 as

we continue to ramp up operations or if we engage in a business combination with Pegasus as described above.

and administrative expenses decreased by $36,462 for the nine months ended September 30, 2023, over the nine months ended September 30,

We expect general and administrative expenses to remain fairly constant throughout 2023, but expenses could increase significantly

if we engage in a business combination with Pegasus.

compensation decreased by $336,000 for the nine months ended September 30, 2023, over the nine months ended September 30, 2022.

compensation was less for this quarter compared to the same quarter last year as we suspended payments of officer salaries during 2023,

but we expect that officer compensation will increase in 2023 as we continue to ramp up operations or if we engage in a business combination

with Pegasus as described above.

management fees decreased by $206,462 for the nine months ended September 30, 2023, over the nine months ended September 30, 2022.

non-cash management fees were less for this quarter compared to the same quarter last year as we did not issue shares for services during

2023, but non-cash management fees may increase in 2023 as we continue to ramp up operations or if we engage in a business combination

with Pegasus as described above.

Acquisition, Change in Control and Change in Business Plan

Effective March 14, 2024, Geoffrey Selzer, our former Chief Executive Officer and Director, and Jim Morrison, our

current President and Director, entered into a Securities Purchase Agreement (the Control Agreement), pursuant to which Mr.

all 2,000,000 outstanding shares of the Company’s Series C Preferred Stock to Mr.

Morrison now possesses voting control

of the Company.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .

Acquisition Transaction .

On February 26, 2024, we entered into entered into a Share Exchange Agreement, as amended (the Exchange

Agreement), with Emergent Health Corp., a publicly-traded (symbol:

EMGE) Wyoming corporation (EMGE), and the holders (the EMGE Preferred

Shareholders) of Series Class A Preferred Stock and the Series C Convertible Non-Voting Preferred Stock (collectively, the EMGE Equity

March 14, 2024, the parties closed the Exchange Agreement.

At the closing of the Exchange Agreement:

(a) the EMGE Preferred Shareholders

exchanged all of their respective EMGE Equity Interests for an equal number of shares of the Company’s to-be-designated Series

F Convertible Preferred Stock that shall convert into 93% of the common stock of the Company on a fully-diluted basis (the Series F Preferred

Stock), which shares of Series F Preferred Stock are currently issuable to the EMGE Preferred Shareholders and are to be issued upon

the Company’s filing of a Certificate of Designation with the State of Nevada;

(b) the Company consummated the Conveyance Agreement;

and (c) all persons serving as directors and officers of the Company prior to the consummation of the Exchange Agreement resigned and

appointed four new members of the Company’s Board of Directors.

March 14, 2024, in conjunction with our acquisition of EMGE, we entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiary

(the Conveyance Agreement) with two of our then-wholly-owned subsidiaries, Resonate Blends, LLC, a California limited liability company,

and Entourage Labs, LLC, a California limited liability company (collectively, Resonate Blends, LLC and Entourage Labs, LLC are referred

to as the “Subsidiary”), and our former Chief Executive Officer and Director, Geoffrey Selzer.

Pursuant to the Conveyance

Agreement, we assigned our ownership in the Subsidiary to Mr.

In consideration of our assignment of the Subsidiary, Mr.

(a) assumed and agreed to pay, perform and discharge, fully and completely, all liabilities of the Subsidiary, (b) indemnified us for

any loss arising from or in connection with any of such liabilities and (c) agreed to pay us (i) 20% of any proceeds from the sale of

the Subsidiary that occurs prior to the one-year anniversary of the Conveyance Agreement and (ii) 10% of any proceeds from the sale of

the Subsidiary that occurs after the one-year anniversary and prior to the two-year anniversary of the Conveyance Agreement.

Business Plan .

business plan and operations of EMGE now represent the entirety of our company’s business operations.

The discussion below concerning

our company’s results of operations for the years ended December 31, 2023 and 2022, and the financial condition of our company

at December 31, 2023, relates only to our company prior to the consummation of the Exchange Agreement with the EMGE Preferred Shareholders.

None of the information in the discussion below should be considered to be an indication of our company’s operating results for

the year ending December 31, 2024, and beyond .

connection with the EMGE transaction, we obtained a loan from a third party and, subsequent to the closing of the EMGE transaction, we

have obtained an additional loan from another third party.

We remain, nevertheless, dependent on additional investment capital to

continue our survival.

Historically, we have raised money through convertible debt, almost always on unfavorable terms.

There is no guarantee

that any capital, including through convertible loan transactions, will be available to us in the future or, if available, on terms acceptable

The terms of the recently obtained loans are discussed below.

Capital Investments, LLC .

In March 2024, the Company obtained a loan from AJB Capital Investments, LLC (“AJB”) which

netted the Company $252,000 in proceeds.

In consideration of such loan, the Company issued a $280,000 face amount promissory note (the

“AJB Note”), with OID of $28,000, bearing interest at 12% per annum, with principal and interest payable on September 4,

The Company has the right to repay the AJB Note at any time.

Should the Company be in default, which shall not have been cured,

the AJB Note is convertible into shares of the Company’s common stock at a conversion price that shall equal the volume weighted

average trading price (a) during the previous 20 trading-day period ending on the date of issuance of the AJB Note or (b) during the

previous 20 trading-day period ending on the relevant conversion date, whichever is lower.

AJB Note is secured by all assets of our company.

addition, we issued to AJB a pre-funded common stock purchase warrant (the “AJB Warrant”) to purchase 3,428,571 shares of

our common stock, with a nominal exercise price of $.00001 per share.

The AJB Warrant may be exercised on a cashless basis,

In March 2024, the Company obtained a loan from Ray Vollintine (“Vollintine”) which netted the Company

$250,000 in proceeds.

In consideration of such loan, the Company issued a $280,000 face amount promissory note (the “Vollintine

Note”), with OID of $30,000, bearing interest at 12% per annum, with principal and interest payable on September 29, 2024.

Company has the right to repay the Vollintine Note at any time.

The Vollintine Note is convertible at any time and from time to time

into shares of the Company’s common stock at a conversion price that shall equal to $.035;

provided, however, that, upon an event

of default, the conversion price shall be the lower of (a) $.035 or (b) the volume weighted average trading price during the previous

20 trading-day period ending on the date of issuance of the Vollintine Note or during the previous 20 trading-day period ending on the

relevant conversion date, whichever is lower.

Vollintine Note is unsecured.

addition, we issued to Vollintine a pre-funded common stock purchase warrant (the “Vollintine Warrant”) to purchase 7,200,000

shares of our common stock, with a nominal exercise price of $.00001 per share.

The Vollintine Warrant may be exercised on a cashless

basis, As further consideration for Vollintine’s purchasing the Vollintine Note, we entered into a make-whole agreement that assures

that Vollintine shall derive not less than $250,000 in net proceeds from Vollintine’s sales of the common stock underlying the

Vollintine Warrant.

of Operation for Three Months Ended March 31, 2024 and 2023

We reported $95,050 (unaudited) and $10,107 (unaudited) in sales for the three months ended March 31, 2024 (“Interim 2024”) and 2023 (“Interim

2023”), respectively.

All of our revenues for Interim 2024 were attributable to the business operations of EMGE for the period

from the acquisition date, March 14, 2024.

All revenues reported for Interim 2023 were attributable to the Subsidiary.

For Interim 2024, our cost of revenue was $31,204 (unaudited), compared to cost of revenue of $8,572 (unaudited) for

Interim 2023, resulting in a gross profit of $63,846 (unaudited) for Interim 2024 and a gross profit of $1,535 (unaudited) for Interim

cost of revenue and gross profit for Interim 2024 were attributable to the business operations of EMGE for the period from the acquisition

date, March 14, 2024.

All cost of revenue and gross profit reported for Interim 2023 were attributable to the Subsidiary.

Our operating expenses were $480,674 (unaudited) and $98,421 (unaudited) for Interim 2024 and Interim 2023, respectively.

Our operating expenses for the remainder of 2024 can be expected to increase as the effects of the acquisition of EMGE impact our operating

No prediction as to the level of operating expenses for all of 2024 can be made in this regard, however.

Income/Expense .

had other expense of $181,195 and $819,016 for the three and nine months ended September 30, 2023, respectively, compared with other

income of $280,267 and $1,912,657 for the three and nine months ended September 30, 2022, respectively.

other expense for the nine months ended September 30, 2023 was mainly attributable a loss on the change in derivative liability, interest

expense and the amortization of debt issuance costs.

other income for the nine months ended September 30, 2022 was mainly attributable the gain on revaluation of derivative liabilities.

We had other expense of $3,271,642 (unaudited) for Interim 2024, compared to $284,066 (unaudited) in other expense

for Interim 2023.

$3,007,627 of the other expense during Interim 2024 is attributable to loss on acquisition of EMGE.

Income/Loss .

had net losses of $228,170 and $1,011,432 for the three and nine months ended September 30, 2023, respectively, as compared with net income

of $61,102 and $763,872 for the three and nine months ended September 30, 2022, respectively.

For Interim 2024, we had a net loss of $3,688,470 (unaudited), compare to a net loss of $380,952 (unaudited) for

Interim 2023.

and Capital Resources

of September 30, 2023, we had total current assets of $941,471 consisting of $588 in cash, $120,000 in other receivables, $720,000 in

a deposit on the acquisition of Pegasus Specialty Vehicles and $100,883 in inventories.

Our total current liabilities as of September

30, 2023 were $2,960,056.

We had a working capital deficit of $2,018,585 as of September 30, 2023 compared with a working capital deficit

of $1,170,940 as of December 31, 2022.

Flows Provided by / Used in Operating Activities

activities provided $89,816 in cash for the nine months period ended September 30, 2023, compared with cash used of $1,476,854 for the

nine months period ended September 30, 2022.

Our positive operating cash flow for the nine months period ended September 30, 2023, was

largely the result of an increase in accounts payable and accrued expenses.

Our negative operating cash flow for the nine months ended

September 30, 2022 was largely the result of our unrealized gain on derivative liability of $2,213,527, offset by our net income of $763,872.

Flows Used in Investing Activities

the nine months ended September 30, 2023, the company used $720,000 in investing activities as a deposit on the acquisition of Pegasus

Specialty Vehicles.

We did not use cash for investing activities for the nine months ended September 30, 2022.

Flows Provided by Financing Activities

flows provided by financing activities during the nine months ended September 30, 2023 amounted to $566,353, compared with cash flows

provided by financing activities of $1,738,781 for the nine months ended September 30, 2022.

Our positive cash flows for the nine months

period ended September 30, 2023, consisted of net proceeds from convertible debentures of $621,200, proceeds from the sale of warrants

of $30,000, proceeds from the sale of common stock of $10,000 offset by the repayment of related party advances of $94,847.

cash flows for the nine months ended September 30, 2022, consisted of proceeds from issuance of common stock of $349,981 and proceeds

from convertible notes payable of $1,388,800.

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

are dependent on investment capital to continue our survival.

We have raised money through convertible debt, almost always on unfavorable

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

recently raised $500,000 from the sale of the Note in connection with the covenant made in the Merger Agreement to raise $3,000,000 in

funding, with $500,000 available prior to Closing.

We plan to raise money in the sale of our equity and/or debt securities.

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

securities offered will not be or have not been registered under the Securities Act and may not be offered or sold in the United States

absent registration or an applicable exemption from registration requirements.

of September 30, 2023, we have an accumulated deficit of $26,331,856.

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.

connection with the EMGE transaction, we obtained a loan from a third party and, subsequent to the closing of the EMGE transaction, we

have obtained an additional loan from another third party.

We remain, nevertheless, dependent on additional investment capital to

continue our survival.

Historically, we have raised money through convertible debt, almost always on unfavorable terms.

There is no guarantee

that any capital, including through convertible loan transactions, will be available to us in the future or, if available, on terms acceptable

The terms of the recently obtained loans are discussed below.

Capital Investments, LLC .

In March 2024, the Company obtained a loan from AJB Capital Investments, LLC (AJB) which netted the

Company $252,000 in proceeds.

In consideration of such loan, the Company issued a $280,000 face amount promissory note (the AJB Note),

with OID of $28,000, bearing interest at 12% per annum, with principal and interest payable on September 4, 2024.

The Company has the

right to repay the AJB Note at any time.

Should the Company be in default, which shall not have been cured, the AJB Note is convertible

into shares of the Company’s common stock at a conversion price that shall equal the volume weighted average trading price (a)

during the previous 20 trading-day period ending on the date of issuance of the AJB Note or (b) during the previous 20 trading-day period

ending on the relevant conversion date, whichever is lower.

AJB Note is secured by all assets of our company.

addition, we issued to AJB a pre-funded common stock purchase warrant (the AJB Warrant) to purchase 3,428,571 shares of our common stock,

with a nominal exercise price of $.00001 per share.

The AJB Warrant may be exercised on a cashless basis,

In March 2024, the Company obtained a loan from Ray Vollintine (Vollintine) which netted the Company $250,000 in

In consideration of such loan, the Company issued a $280,000 face amount promissory note (the Vollintine Note), with OID of

$30,000, bearing interest at 12% per annum, with principal and interest payable on September 29, 2024.

The Company has the right to repay

the Vollintine Note at any time.

The Vollintine Note is convertible at any time and from time to time into shares of the Company’s

common stock at a conversion price that shall equal to $.035;

provided, however, that, upon an event of default, the conversion price

shall be the lower of (a) $.035 or (b) the volume weighted average trading price during the previous 20 trading-day period ending on

the date of issuance of the Vollintine Note or during the previous 20 trading-day period ending on the relevant conversion date, whichever

Vollintine Note is unsecured.

addition, we issued to Vollintine a pre-funded common stock purchase warrant (the Vollintine Warrant) to purchase 7,200,000 shares of

our common stock, with a nominal exercise price of $.00001 per share.

The Vollintine Warrant may be exercised on a cashless basis, As

further consideration for Vollintine’s purchasing the Vollintine Note, we entered into a make-whole agreement that assures that

Vollintine shall derive not less than $250,000 in net proceeds from Vollintine’s sales of the common stock underlying the Vollintine

of March 31, 2024, we had total current assets of $1,017,194 (unaudited), consisting of $47,194 (unaudited) in cash and $970,000 (unaudited)

in advances to former acquisition partner-company.

Our total current liabilities as of March 31, 2024, were $6,000,985 (unaudited).

working capital deficit was $4,983,791 (unaudited) as of March 31, 2024, compared to our working capital deficit of $2,150,975 (unaudited)

as of December 31, 2023.

of March 31, 2024, we have an accumulated deficit of $30,424,873 (unaudited).

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.

While we 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.

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

These financial

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

These financial statements

do not include any adjustments that might arise from this uncertainty.

Balance Sheet Arrangements

of September 30, 2023, there were no off-balance sheet arrangements.

of March 31, 2024, there were no off-balance sheet arrangements.

Accounting Policies

12 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