UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~March~~June 3130, 2024

☐

Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to__________

Commission File Number: 000-21202

Resonate Blends, Inc.

(Exact name of registrant as specified in its charter)

Nevada

58-1588291

(State or other jurisdiction

of incorporation or organization)

(IRS Employer

Identification No.)

One Marine Plaza, Suite 305A

North Bergen, New Jersey 04047

(Address of principal executive offices)

203-253-9191

(Registrant’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.

	☐ Large accelerated filer	☐ Accelerated filer
	☒ Non-accelerated filer	☒ Smaller reporting company
		☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~96,179,058 shares of common stock as of May 17, 2024.~~

98,401,280 shares of common stock as of August 19, 2024.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION		3
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	87
Item 4:	Controls and Procedures	87
PART II – OTHER INFORMATION		108
Item 1:	Legal Proceedings	108
Item 1A:	Risk Factors	108
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	108
Item 3:	Defaults Upon Senior Securities	108
Item 4:	Mine Safety Disclosures	109
Item 5:	Other Information	109
Item 6:	Exhibits	109

PART I - FINANCIAL INFORMATION

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~~June 3130, 2024 (unaudited), and December 31, 2023
	F-2	Consolidated Statements of Operations for the ~~Three~~Six Months Ended ~~March~~June 3130, 2024 and 2023 (unaudited)
	F-3	Consolidated Statement of Stockholders’ Equity (Deficit) for the ~~Three~~Six Months Ended ~~March~~June 3130, 2024 and 2023 (unaudited)
	F-4	Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March~~June 3130, 2024 and 2023 (unaudited)
	F-5	Notes to Consolidated Unaudited 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 ~~three~~six months ended ~~March~~June 3130, 2024, are not necessarily indicative of the results that can be expected for the full year.

~~Resonate~~RESONATE ~~Blends~~BRANDS, ~~Inc~~INC. AND SUBSIDIARIES

~~Consolidated~~Condensed Consolidated Balance Sheets

(Unaudited)

	March 31, 2024			December 31, 2023
	June 30, 2024			December 31, 2023
ASSETS
Current assets
Current assets:
Cash and cash equivalents	$	4717,~~194~~030		$	6,938
Advances to Pegasus Specialty Vehicles LLC		970,000			970,000
Advances to Pegasus Specialty Vehicles, LLC		970,000			970,000
Total current assets		1,017,194			976,938
Loan receivable		6,000			-
Fixed assets, net		50,000			15,303
Investments		100			-
Intangible assets, net		4,803,841			-
Total current assets	$	993,130		$	976,938
Due from related parties		19,505			-
Fixed assets:
Investment		1,880			100
Fixed assets, net	$	15,303		$	15,303
Other assets		42,500			-
Total fixed assets	$	15,303			15,303
TOTAL ASSETS	$	5,934,920		$	992,341
Other assets:
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Intangible, net	$	-		$	-
Current liabilities
Investments		691,582			100
Accounts payable and accrued liabilities	$	912,895		$	445,219
Total other assets	$	691,582		$	100
Due to related parties		837,810			70,099
Total assets	$	1,700,015		$	992,341
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	917,401		$	445,219
Loans payable		145,867			-
Loans payable, related parties		133,910			70,099
Loans payable		133,910			70,099
Notes payable, net of discount		473,000			-
Notes payable, related parties		845,443			600,000
Notes payable		845,443			600,000
Convertible notes payable		1,535,037			1,845,734
Senior promissory note		845,443			600,000
Notes payable		1,869,800			-
Derivative liability		-			166,861
Total current liabilities	$	64,~~000~~050,~~985~~658			3,127,913
Total liabilities		6,000,985			3,127,913
Shareholders’ Deficit:
Stockholders’ Deficit
Series B Preferred Stock, $ 0.0001 par value; 66,667 shares authorized; 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.		-			-
Series B - Preferred stock, 66,667 shares authorized, $0.0001 par value, 0 issued and outstanding		-			-
Series C Preferred Stock, $ 0.0001 par value; 2,000,000 shares authorized; 2,000,000 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.		200			200
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, $ 0.0001 par value; 40,000 shares authorized; 40,000 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.		-			-
Series D Preferred stock 40,000 shares authorized, $0.0001 par value 40,000 issued and outstanding		-			-
Preferred Stock		-			-
Preferred stock value		-			-
Common stock, $ 0.0001 par value; 200,000,000 shares authorized; 96,179,058 and 86,623,596 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.		9,618			8,662
Common stock; $0.0001 par value; 200,000,000 shares authorized; 96,179,058 and 86,623,596 shares issued and outstanding		9,618			8,662
Additional paid-in capital		25,465,961			24,853,028
Preferred stock issuable		4,722,776			-
Common stock issuable		421,312			-
Stock subscription receivable		(261,059	)		(261,059	)
Additional paid-in capital		25,465,961			24,853,028
Accumulated deficit		(27,986,675	)		(26,736,403	)
Accumulated deficit		(30,424,873	)		(26,736,403	)
Total shareholders’ deficit	$	(2,350,643	)		(2,135,572	)
Total stockholders’ deficit		(66,065	)		(2,135,572	)
Total liabilities and shareholders’ deficit	$	1,700,015		$	992,341
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	5,934,920		$	992,341

~~The~~See accompanying notes ~~are~~to ~~an integral part of these unaudited~~ consolidated financial statements.

F-1

~~Resonate~~RESONATE ~~Blends~~BLENDS, ~~Inc~~INC.

~~Consolidated~~Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended
	For the Three Months Ended June 30, 2024			For the Three Months Ended June 30, 2023			For the Six Months Ended June 30, 2024			For the Six Months Ended June 30, 2023
	March 31, 2024			March 31, 2023
Sales	$	656,228		$	6,361		$	751,278		$	16,468
REVENUES	$	95,050		$	10,107
Cost of Goods Sold		266,718			4,685			297,922			13,257
COST OF REVENUES		31,204			8,572
Gross Profit (Loss)		389,510			1,676			453,356			3,211
Gross profit		63,846			1,535
Operating expenses:
OPERATING EXPENSES
General and administrative		298,827			24,416			659,261			104,872
Advertising		18,364			13,284
Salaries		(12,500	)		-			-			5,000
General and administrative		342,070			67,172
Sales Commissions		267,636			-			267,636			-
Legal and professional		107,740			12,965
Consulting		490,869			-			490,869			-
Officer compensation		12,500			5,000
Professional fees		53,310			25,815			54,430			38,780
Total operating expenses		480,674			98,421
Research and development		-			-			58,364			-
OPERATING LOSS		(416,828	)		(96,886	)
Total operating expenses		1,098,142			50,231			1,530,560			148,652
OTHER INCOME (EXPENSES)
Loss from operations		(708,632	)		(48,555	)		(1,077,204	)		(145,441	)
Interest expense		(165,514	)		(46,403	)
Other income (expense):
Gain (loss) on change in derivative liability		(140,043	)		(139,951	)
Gain on investment		-			-			15,000			-
Amortization of issuance costs		(10,246	)		(97,712	)
Gain on disposal of Resonate Blends		-			-			69,243			-
Loss on debt conversion		(32,455	)		-
Interest expense		-			(105,706	)		(107,022	)		(152,109	)
Other income		15,000			-
Gain (loss) on change in derivative liability		-			(211,786	)		(140,043	)		(351,737	)
Gain on disposal of Resonate Blends		69,243			-
Amortization of issuance costs		-			(36,263	)		(10,246	)		(133,975	)
Loss on acquiition of Emergent Health Corp.		(3,007,627	)		-
Total other income (expense)		-			(353,755	)		(173,068	)		(637,821	)
Total operating income (expense)		(3,271,642	)		(284,066	)
Net loss	$	(708,632	)	$	(402,310	)	$	(1,250,272	)	$	(783,262	)
NET INCOME (LOSS)	$	(3,688,470	)	$	(380,952	)
Net loss per share - basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
INCOME (LOSS) PER SHARE- basic and diluted	$	(0.04	)	$	(0.01	)
Weighted average shares outstanding - basic		96,179,058			76,480,707			96,179,058			75,962,037
WEIGHTED AVERAGE SHARES OUTSTANDING		89,983,758			75,437,604

~~The~~See accompanying notes ~~are~~to ~~an integral part of these~~ consolidated financial statements.

F-2

~~Resonate~~RESONATE ~~Blends~~BLENDS, ~~Inc~~INC.

~~Consolidated~~Condensed Statement of ~~Stockholders~~Stockholder’s ~~Deficit~~Equity (~~Unaudited~~Deficit)

	Preferred Stock Series A				Preferred Stock Series C				Common Stock				Additional Paid-in			Series FPreferred Stock		Common Stock		Subscription			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Issuable		Issuable		Receivable			Deficit			Total
Balance, December 31, 2022		-	$	-		2,000,000	$	200		75,437,604	$	7,544	$	24,427,009		$	-	$	-	$	(261,059	)	$	(25,320,424	)	$	(1,146,730	)
Reclassification of convertible debt		-		-		-		-		-		-		(247,142	)		-		-		-			-			(247,142	)
Exercise of warrants		-		-		-		-		-		-		-			-		6,000		-			-			6,000
Net loss		-		-		-		-		-		-		-			-		-		-			(380,952	)		(380,952	)
Balance, March 31, 2023		-	$	-		2,000,000	$	200		75,437,604	$	7,544	$	24,179,867		$	-	$	6,000	$	(261,059	)	$	(25,701,376	)	$	(1,768,824	)
Balance, December 31, 2023		-	$	-		2,000,000	$	200		86,623,596	$	8,662	$	24,853,028		$	-	$	-	$	(261,059	)	$	(26,736,403	)	$	(2,135,572	)
Balance		-	$	-		2,000,000	$	200		86,623,596	$	8,662	$	24,853,028		$	-	$	-	$	(261,059	)	$	(26,736,403	)	$	(2,135,572	)
Stock issuance for services		-		-		-		-		9,555,462		956		306,029			-		-		-			-			306,985
Conversion of convertible debt		-		-		-		-		-		-		-			-		421,312		-			-			421,312
Settlement of derivative liabilities		-		-		-		-		-		-		306,904			-		-		-			-			306,904
Acquistion of Emergent Health Corp.		-		-		-		-		-		-		-			4,722,776		-		-			-			4,722,776
Net loss		-		-		-		-		-		-		-			-		-		-			(3,688,470	)		(3,688,470	)
Balance, March 31, 2024		-	$	-		2,000,000	$	200		96,179,058	$	9,618	$	25,465,961		$	4,722,776	$	421,312	$	(261,059	)	$	(30,424,873	)	$	(66,065	)
Balance		-	$	-		2,000,000	$	200		96,179,058	$	9,618	$	25,465,961		$	4,722,776	$	421,312	$	(261,059	)	$	(30,424,873	)	$	(66,065	)

For the Period from December 31, 2022 to June 30, 2024

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

F-3

Resonate Blends, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months Ended
	Preferred Stock Series A Shares			Preferred Stock Series A Amount			Preferred Stock Series C Shares		Preferred Stock Series C Amount		Common Stock Shares		Common Stock Amount		Additional Paid-in Capital			Common Stock Issuable		Subscription Receivable			Earnings (Deficit) Accumulated			Total
	March 31, 2024			March 31, 2023
Balance, December 31, 2022		-		$	-			2,000,000	$	200		75,437,604	$	7,544	$	24,427,009		$	-	$	(261,059	)	$	(25,320,424	)	$	(1,146,730	)
Cash Flows from Operating Activities
Reclassification of convertible debt		-			-			-		-		-		-		(247,142	)		-		-			-			(247,142	)
Net income (loss)	$	(3,688,470	)	$	(380,952	)
Exercise of warrants		-			-			-		-		1,273,273		127		29,873			-		-			-			30,000
Adjustments to reconcile net income (loss) to net cash used in operations
Stock issuance for services		-			-			-		-		250,000		25		2,278			-		-			-			2,303
Gain on derivative liability		140,043			139,951
Issuance of common stock for commitment fees		-			-			-		-		6,243,000		624		381,453			-		-			-			382,077
Non cash interest expense		10,246			97,712
Recognition of stock issued for services		-			-			-		-		-		-		7,671			-		-			-			7,671
Gain on disposal of Resonate Blends		(69,243	)		-
Issuance of common stock in private placement		-			-			-		-		137,500		14		9,986			-		-			-			10,000
Loss on acquisition of Emergent Health Corp.		2,806,683			-
Conversion of convertible debt		-			-			-		-		3,282,219		328		241,900			-		-			-			242,228
Loss on conversion of convertible debt		32,455			-
Net loss, December 31, 2023														-										(1,415,979	)		(1,415,979	)
Share professional fees/ compensation		306,985			-
Balance, December 31, 2023		-		$	-			2,000,000	$	200		86,623,596	$	8,662	$	24,853,028		$	-	$	(261,059	)	$	(26,736,403	)	$	(2,135,572	)
Depreciation and amortization		1,890			3,004
Balance		-		$	-			2,000,000	$	200		86,623,596	$	8,662	$	24,853,028		$	-	$	(261,059	)	$	(26,736,403	)	$	(2,135,572	)
Changes in operating assets and liabilities
Stock issuance for services		-			-			-		-		9,555,462		956		306,029			-		-			-			306,985
Inventory		-			45,420
Conversion of convertible debt		-			-			-		-		-		-		-			421,312		-			-			421,312
Advances to suppliers		-			-
Settlement of derivative liabilities		-			-			-		-		-		-		306,904											306,904
Other receivables		-			30,000
Net loss, June 30,2024																								(1,250,272	)		(1,250,272	)
Accounts payable and accrued expenses		279,672			210,134
Net loss																								(1,250,272	)		(1,250,272	)
Due to related party		(19,505	)		-
Balance, June 30, 2024		-		$	-			2,000,000	$	200		96,179,058	$	9,618	$	25,465,961		$	421,312	$	(261,059	)	$	(27,986,675	)	$	(2,350,643	)
Net cash provided by (used in) operating activities		(199,244	)		145,269
Balance		-		$	-			2,000,000	$	200		96,179,058	$	9,618	$	25,465,961		$	421,312	$	(261,059	)	$	(27,986,675	)	$	(2,350,643	)
Cash Flows from Investing Activities
Deposit on acquisition of Pegasus Specialty Vehicles LLC		-			-
Net cash provided by (used in) investing activities		-			-
Cash Flows from Financing Activities
Proceeds from issuance of secured promissory notes		239,500			-
Proceeds from issuance of convertible notes		-			-
Proceeds from warrant exercise		-			6,000
Repayment of related party advances					(95,846	)
Repayment of convertible notes		-			(118,800	)
Net cash provided by (used in) financing activities		239,500			(208,646	)
Net increase (decrease) in cash		40,256			(63,377	)
Cash, beginning of period		6,938			64,419
Cash, end of period	$	47,194		$	1,042
Supplemental cash flow disclosures
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-
Non-cash investing and financing activities
Conversion of debt for common stock	$	-		$	-

~~The~~See accompanying notes ~~are~~to ~~an integral part of these unaudited~~ consolidated financial statements.

F-3

RESONATE BLENDS, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

	For the Six Months Ended June 30, 2024			For the Six Months Ended June 30, 2023
Cash flows from operating activities
Net loss	$	(1,250,272	)	$	(783,262	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accrued interest, notes payable		107,022			133,975
Gain on derivative liability		140,043			351,737
Share professional fees/compensation		-			47,988
Gain on disposal of investment		15,000			-
Gain on disposal of subsidiary		69,243			-
Depreciation and amortization		17,136			4,938
Changes in operating assets and liabilities:
Inventory		-			59,473
Other receivables		(6,000	)		30,000
Accounts payable and accrued expenses		472,182			271,639
Net cash used in operating activities		(435,646	)		116,488

Cash flows from investing activities
Deposits on acquistions		(486,915	)		(435,000	)
Net cash provided by investing activities		(486,915	)		(435,000	)

Cash flows from financing activities
Payments to notes payable		-			-
Payments to loans payable, related parties		(24,300	)		(94,847	)
Payments to notes payable, related parties		-			-
Payments to convertible note payable					(138,800	)
Payments from warrant exercise					30,000
Proceeds from loans payable, related parties		39,000			-
Proceeds from notes payable		900,025			-
Proceeds from convertible notes payable					460,000
Proceeds from issuance of common stock		-			-
Net cash provided by financing activities		914,725			256,353

Net increase (decrease) in cash		(7,836	)		(62,159	)
Cash at beginning of period		24,866			64,419
Cash at end of period	$	17,030		$	2,260

Supplemental Cash Flow Information:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

Non-cash investing and financing information:
Conversion of debt for common stock	$	-		$	-

See accompanying notes to consolidated financial statements.

F-4

NOTES TO FINANCIAL STATEMENTS TO BE COMPLETED

RESONATE BLENDS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED ~~MARCH~~JUNE 3130, 2024 AND 2023

(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~~ Brock International Inc., and in March of 1998, the Company again changed its’ name to Firstwave Technologies, Inc.

In 2007, the Company deregistered its common stock in order to avoid the expenses of being a public company. The Company reported briefly on the OTC Disclosure & News Service in 2008. The Company again changed its name to FSTWV, Inc.

On October 28, 2013, the Company held a shareholder meeting to reincorporate the company in the State of Nevada and concurrently change its name to Textmunication Holdings, Inc. The Company also voted to approve a 1 for 5 reverse split of its outstanding common stock.

On November 16, 2013, the Company entered into a Share Exchange Agreement (SEA) with Textmunication, Inc. a California corporation, whereby the sole shareholder of the Company received 65,640,207 new shares of common stock of the Company in exchange for 100% of the Textmunication’s issued and outstanding shares.

On October 25, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Resonate Purchase Agreement”) with Resonate Blends, LLC, a California limited liability company (“Resonate”), and the members of Resonate. As a result of the transaction, Resonate became a wholly owned subsidiary of the Company. In accordance with the terms of the Purchase Agreement, at the closing an aggregate of 5% of the Company’s outstanding shares of common stock for a total of 665,072 shares were issued to the holders of Resonate in exchange for their membership interests of Resonate. These shares have anti-dilution protection. We have also agreed as part of the purchase price to issue: (ii) such number of shares of Series E Preferred Stock that will convert into 5% of the outstanding shares of common stock in the Company on a fully-diluted basis upon an annualized revenue run rate of Ten Million Dollars ($10,000,000.00) for any three (3) consecutive month trailing period; and (iii) such number of shares of Series E Preferred Stock that will convert into 5% of the outstanding shares of common stock in the Company on a fully-diluted basis upon the occurrence of the Company’s public market value reaching One Hundred Million US Dollars ($100,000,000). The shares in (ii) and (iii) shall have anti-dilution protections, except that this provision only applies for 2.5% of the outstanding shares acquired under each subsection.

Also, on October 25, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Entourage Labs Purchase Agreement”) with Entourage Labs, LLC, a California limited liability company (“Entourage Labs”), and the members of Entourage Labs. As a result of the transaction, Entourage Labs became a wholly owned subsidiary of the Company. In accordance with the terms of the Purchase Agreement, at the closing an aggregate of 5% of the Company’s outstanding shares of common stock for a total of 665,072 shares were issued to the holders of Entourage Labs in exchange for their membership interests of Entourage Labs. These shares have anti-dilution protection. We have also agreed as part of the purchase price to issue: (ii) such number of shares of Series E Preferred Stock that will convert into 5% of the outstanding shares of common stock in the Company on a fully-diluted basis upon an annualized revenue run rate of Ten Million Dollars ($10,000,000.00) for any three (3) consecutive month trailing period; and (iii) such number of shares of Series E Preferred Stock that will convert into 5% of the outstanding shares of common stock in the Company on a fully-diluted basis upon the occurrence of the Company’s public market value reaching One Hundred Million US Dollars ($100,000,000). The shares in (ii) and (iii) shall have anti-dilution protections, except that this provision only applies for 2.5% of the outstanding shares acquired under each subsection.

F-5

In addition, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations (the “Conveyance Agreement”) with Mark S. Johnson and the Company’s 49% owned subsidiary, Aspire Consulting Group, LLC, a Virginia limited liability company. Pursuant to the Conveyance Agreement, the Company transferred all assets and business operations associated with its IT consulting solutions, including all of the capital stock of Aspire Consulting, to Mr. Johnson. In exchange, Mr. Johnson agreed to cancel 20,000 shares of common stock in the Company and to assume and cancel all liabilities relating to the Company’s former business.

On December 16, 2019 the Company filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger with its wholly owned subsidiary; Resonate Blends, Inc. Shareholder approval was not required under Section 92A.180 of the Nevada Revised Statutes. As part of the merger, the Company’s board of directors authorized a change in our name to “Resonate Blends, Inc.” and the Company’s Articles of Incorporation have been amended to reflect this name change.

F-5

In connection with the name change, the Company’s symbol was changed to “KOAN” that more resembles the Company’s new business focus.

Effective March 14, 2024, Geoffrey Selzer, the Company’s former Chief Executive Officer and Director, and Jim Morrison, the Company’s current President and Director, entered into a Securities Purchase Agreement, pursuant to which Mr. Selzer sold all 2,000,000 outstanding shares of the Company’s Series C Preferred Stock to Mr. Morrison for $10.00 in cash. Mr. Morrison now possesses voting control of the Company.

On February 26, 2024, the Company entered into entered into a Share Exchange Agreement, as amended, (the “Exchange Agreement”), with Emergent Health Corp., a 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 (the “EMGE Equity Interests”). On 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 (the “Exchange Shares”) 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.

On March 14, 2024, in conjunction with the acquisition of EMGE, we entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiary with two of the Company’s then-wholly-owned subsidiaries, Resonate Blends, LLC, a California limited liability company, and Entourage Labs, LLC, a California limited liability company, and our former Chief Executive Officer and Director, Geoffrey Selzer. Pursuant to the Conveyance Agreement, the Company assigned its’ ownership in the Subsidiary to Mr. Selzer. In consideration of our assignment of the Subsidiary, Mr. Selzer (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 the Company (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.

FEffective August 8, 2024, the Company entered into a Reformation of Share Exchange Agreement (the “Reformation Agreement”) with EMGE and the EMGE Preferred Shareholders. The Reformation Agreement was entered into after the Company, EMGE and the EMGE Preferred Shareholders having independently determined that the structure of the Exchange Agreement resulted in the parties’ experiencing consequences that were unintended and that would not, in the long term, be beneficial to the parties and that a reformation of the Exchange Agreement from a share-6for-share structure to a share-for-asset structure would be beneficial to each of the parties.

By the Reformation Agreement, share-for-share structure of the Exchange Agreement was reformed to become a share-for-asset structure (the “Reformation”). Effecting the Reformation produced the following actions (the “Reformation Actions”):

(a) First, the issuances of the Company Exchange Shares to the EMGE Preferred Shareholders were rescinded.

(b) Next, the assignments of the EMGE Equity Interests by the EMGE Preferred Shareholders to the Company were rescinded.

(c) The Company, then, re-issued the Exchange Shares to EMGE, in consideration of the following assets of EMGE (the “Acquired Assets”):

	●	All of the capital stock of Evolutionary Biologics, Inc.;
	●	All of the capital stock of Apollo Biowellness, Inc.;
	●	All of the capital stock of Nanosthetic, Inc.; and
	●	All of the capital stock of Nanogistics, Inc.

In addition, the Reformation Actions resulted in the Company’s no longer being the controlling shareholder of EMGE.

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.

F-6

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~~June 3130, 2024, the Company has an accumulated deficit of $3027,~~424~~986,~~873~~675. 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

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.

Consolidation

These consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

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.

Accounts receivable and allowance for doubtful accounts

Accounts receivables are stated at the amount management expects to collect. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. As of ~~March~~June 3130, 2024 and December 31, 2023, there’s no allowance for doubtful accounts and bad debts.

F-7

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, the core principle of which is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

	●	Identification of the contract, or contracts, with a customer
	●	Identification of the performance obligations in the contract
	●	Determination of the transaction price
	●	Allocation of the transaction price to the performance obligations in the contract
	●	Recognition of the revenue when, or as, performance obligations are satisfied

Revenue is generally recognized upon purchase of products by customers.

EMGE sells ingestible and topical products to retail customers across the United States of America. The Company’s standard delivery method is “free on board” shipping point. Consequently, the Company considers control of products to transfer at a single point in time when control is transferred to the customer, which is generally when products are shipped in accordance with an agreement or purchase order. Control is defined as the ability to direct the use of and obtain substantially all of the remaining benefits of the product. The Company considers the customer’s purchase order, and the Company’s corresponding sales order acknowledgement as the contract with the customer. For each contract, the Company considers the promise to transfer products to be the identified performance obligations. The Company satisfies its performance obligations under a contract with a customer by transferring goods and services in exchange for monetary consideration from the customer. Sales taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.

Revenue is deferred when the Company receives payment under a contract with a customer prior to satisfying its performance obligation. As the majority of orders are processed and shipped immediately upon receipt of payment, it is rare that revenue is deferred. There was no deferred revenue as of March 31, 2024 and December 31, 2023.F-7

~~Significant~~Revenue ~~payment~~is ~~terms~~deferred –when ~~The~~the Company’s ~~contracts~~receives ~~with~~payment ~~its~~under ~~customers~~a ~~state~~contract ~~the~~with ~~final~~a ~~terms~~customer ofprior ~~the~~to ~~sale,~~satisfying ~~including~~its ~~the~~performance ~~description, quantity,~~obligation. ~~and~~As ~~price~~the majority of ~~each~~orders ~~product purchased. Payments~~ are ~~typically~~processed ~~due prior to delivery. Since the customer agrees to a stated rate~~ and ~~price~~shipped inimmediately ~~the~~upon ~~contract~~receipt ~~that~~of ~~do not vary over the contract~~payment, ~~the~~it ~~Company’s~~is ~~contracts~~rare dothat ~~not~~revenue ~~contain~~is ~~variable consideration~~deferred. ~~Economic factors~~There -was ~~The Company’s revenues and accounts receivable are derived primarily from the United States with~~ no ~~particular concentration~~deferred ~~in any industry. Sales~~ revenue ~~is impacted by overall economic conditions,~~ as ~~there~~of ~~are~~June ~~fewer sales when the Company’s customers are impacted by negative economic conditions. Returns~~30, ~~refunds,~~2024 and ~~warranties~~December ~~– The Company has a 30-day return policy on all products. As the amount of returned product is minimal, management believes that returns on any goods sold subsequent to March~~ 31, ~~2024, and~~ 2023~~, were not material~~.

Significant payment terms – The Company’s contracts with its customers state the final terms of the sale, including the description, quantity, and price of each product purchased. Payments are typically due prior to delivery. Since the customer agrees to a stated rate and price in the contract that do not vary over the contract, the Company’s contracts do not contain variable consideration. Economic factors - The Company’s revenues and accounts receivable are derived primarily from the United States with no particular concentration in any industry. Sales revenue is impacted by overall economic conditions, as there are fewer sales when the Company’s customers are impacted by negative economic conditions. Returns, refunds, and warranties – The Company has a 30-day return policy on all products. As the amount of returned product is minimal, management believes that returns on any goods sold subsequent to June 30, 2024, and 2023, were not material.

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-8

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~~June 3130, 2024 and year ended December 31, 2023.

As of March 31, 2024

Level 1

Level 2

Level 3

Total

As of June 30, 2024

Level 1

Level 2

Level 3

Total

Liabilities

Derivative Liabilities

As of December 31, 2023	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liabilities	$	-	$	-	$	166,861	$	166,861

Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis.. Management compares the cost of inventory with the net realizable value and, if applicable, an allowance is made for writing down the inventory to its net realizable value, if lower than cost, inventory is reviewed for potential write-down for estimated obsolescence or unmarketable inventory based upon forecasts for future demand and market conditions. Generally, the Company only keeps inventory on hand for sales made and in which a deposit has been received.

F-8

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.

F-9

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

Management has periodically advanced funds to the Company for operating expenses. At ~~March~~June 3130, 2024 and December 31, 2023, amounts due related parties were $~~837~~133,~~810~~910 and $70,099, respectively. These advances are non-interest bearing and payable upon demand.

On 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. Selzer. In consideration of our assignment of the Subsidiary, Mr. Selzer (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.

NOTE 4 - CONVERTIBLE ~~NOTE~~NOTES PAYABLE

Convertible notes payable consists of the following as of ~~March~~June 3130, 2024 and December 31, 2023:

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

	March 31, 2024			December 31, 2023
	June 30, 2024			December 31, 2023
Convertible notes face value	$	1,537,500		$	1,852,800
Less: Discounts		(2,463	)		(6,766	)
Less: Debt issuance cost		-			-
Net convertible notes	$	1,535,037		$	1,845,734

F-9

At December 31, 2022, $200,000 of the convertible notes was an 8% Unsecured Convertible Promissory Note from an investor issued March 5, 2021. The note has an automatic conversion into equity on the maturity date, which was 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. On July 10, 2023, the note was converted to 3,282,219 shares of common stock.

F-10

During the year ended December 31, 2022, the Company entered into Securities Purchase Agreements with five accredited investors, pursuant to which we issued and sold to the investors convertible promissory notes with a total principal amount of $715,000. We received $650,000 from the Notes after applying the original issue discount to the Notes. The Securities Purchase Agreements also included 812,500 warrants with a 5 year life and exercise price of $0.40 and 650,000 commitment shares. These notes have a Fixed Conversion Price or, at the option of the Holder in the event that the Borrower fails to complete a Qualified Offering before the five (5) month anniversary of the Issue Date, the Registration Conversion Price. The “Fixed Conversion Price” shall mean $0.15 per share. The “Registration Conversion Price” shall mean 75% multiplied by the Market Price (representing a discount rate of 25%). “Market Price” means 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 Company is currently working with each of the accredited investor on payoff options.

On June 27, 2022, the Company issued and sold to an accredited investor a convertible promissory note the principal amount of $138,800 under a Securities Purchase Agreement of the same date. The Company received $128,500 from the Note after applying the original issue discount to the Note. During the year ended December 31, 2023, the Company repaid the entire note.

On September 8, 2022, the Company issued and sold a senior secured convertible promissory note to AJB Capital Investments LLC (“AJB”) for a principal amount of $600,000, together with guaranteed interest of 12% per year calendar from the date hereof. All Principal and Interest owing hereunder, along with any and all other amounts, shall be due and owing on the Maturity Date March 8, 2023. We received $540,000 from the Note after applying the original issue discount to the Note. The note is convertible at a Variable Conversion Price shall equal the volume weighted average trading price (i) during the previous twenty (20) Trading Day period ending on the date of issuance of this Note, or (ii) during the previous twenty (20) Trading Day period ending on the Conversion Date.

The Maturity Date may be extended at the sole discretion of the Borrower up to six (6) months following the date of the original Maturity Date hereunder. In the event that the Maturity Date is extended, the interest rate shall equal fifteen percent (15%) per annum for any period following the original Maturity Date, payable monthly.

The maturity date for repayment of the Notes is nine months from issuance and the Notes bear interest at 10% per annum. On September 29, 2023, the Company entered into an amendment with AJB extending the maturity date of the Note through December 28, 2023. In exchange for this amendment, we issued AJB 3,000,000 shares (“extension shares”) of common stock. The Company can redeem certain shares if all principal and interest is repaid in full prior to the new maturity date.

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.

During the year ended December 31, 2023, the Company issued 5 convertible promissory notes totaling $457,500, net of debt issuance costs of $37,500. At December 31, 2023, the balance of the notes were $453,125, net of unamortized discount. These notes are convertible into common stock into the next funding round expected to be priced at $.08 per share issued in a Series Preferred with a 4% coupon payable until the Preferred is converted into common stock. A 2-year cash Warrant with 50% coverage priced at $.25 is also available as part of this conversion. A total of 6,243,000 commitment shares and 250,000 warrants issued. This Note has a personal guarantee for the full principal amount to Resonate Blends, Inc. by Darshan Vyas, Principal of Pegasus. Resonate Blends, Inc. in return will guarantee the Lender.

On November 11, 2023, the Company issued and sold to an accredited investor a convertible promissory note the principal amount of $80,000 under a Securities Purchase Agreement of the same date. The Company received $75,000 from the Note after applying the original issue discount to the Note. The note can be converted 6 months after issuance into common stock at a variable conversion price of 73% of the market price, the market price being the average of the 3 lowest trading prices over the prior 10 days.

F-11

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.

The AJB Note is secured by all assets of the Company.

F-10

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. 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 per share; 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.

The Vollintine Note is unsecured.

In addition, the Company 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, the Company 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.

The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 “Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). 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.

NOTE 5 – DERIVATIVE LIABILITIES

Certain of the above convertible notes contained an embedded conversion option with a conversion price that could result in issuing an undeterminable amount of future common stock to settle the host contract. Accordingly, the embedded conversion option is required to be bifurcated from the host instrument (convertible note) and treated as a liability, which is calculated at fair value, and marked to market at each reporting period.

The Company used the Black-Scholes pricing model to estimate the fair value of its embedded conversion option and warrant liabilities on both the commitment date and the remeasurement date with the following inputs:

SCHEDULE OF DERIVATIVE LIABILITIES

	September 30, 2023			December 31, 2023
	June 30, 2024			December 31, 2023
Exercise price	$	-0		$	0.0133
Expected volatility		-0	%		460	%
Risk-free interest rate		-0	%		4.64	%
Expected term (in years)		-0			1.0
Expected dividend rate		-0	%		0	%
Derivative liabilities measurement input		-0	%		0	%

NOTE 6 – SENIOR PROMISSORY NOTE

On June 20, 2023, the Company signed a Securities Purchase Agreement (“SPA”) with an accredited investor, pursuant to which the Company issued and sold to the accredited investor a 15% original issue discount Senior Promissory Note (non-convertible), dated June 20, 2023, in the principal amount of $575,000. The Senior Promissory Note is secured by all of the Company’s assets under a separate security agreement between the accredited investor and the Company.

The Company received $435,000 from the Senior Promissory Note after applying the original issue discount and commissions and fees. The proceeds were utilized as a deposit on the Company’s acquisition of Pegasus Specialty Vehicles, LLC (See Note 7).

The maturity date for repayment of the Senior Promissory Note is September 20, 2023 and bears interest at 15% per annum starting 60 days after issuance and interest payable in cash monthly thereafter. The Company may prepay the Senior Promissory Note at any time, but is required to pay a premium of 104% of the principal amount if repaid after 60 days.

F-12

As additional consideration, the Company issued 1,318,000 shares of its common stock as commitment shares. The Company was required to issue an additional 330,000 commitment shares due to the Senior Promissory Note not being prepaid at 60 days as required in the SPA. The Company is currently working with investor to address the entire Note payoff.

In the agreements, the Company agreed to certain restrictive covenants, including a restriction on borrowing and a most favored nation clause in favor of the accredited investor for any future offerings not specifically exempted.

F-11

On June 20, 2023, the Company and Pegasus Specialty Vehicles, LLC entered into a Loan and Security Agreement whereby the Company lent to Pegasus the principal amount of $575,000 secured by all of the Pegasus’ assets, but subordinate to the security interest of accredited investor and another lender of Pegasus.

NOTE 7 – AGREEMENT AND PLAN OF MERGER WITH PEGASUS SPECIALTY VEHICLES, LLC

On June 20, 2023, the Company entered into an Agreement and Plan of Merger with Pegasus Specialty Vehicles, LLC, an Ohio limited liability company (“Pegasus”), and Pegasus Specialty Holdings LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company (“Pegasus Sub”).

The Merger Agreement provides that at the closing, subject to terms and conditions, Pegasus Sub will merge with and into Pegasus, with Pegasus surviving as a wholly-owned subsidiary of the 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 the Company.

The Company, Pegasus, and Pegasus Sub have each made various representations and warranties and agreed to certain covenants in the Merger Agreement, including a covenant by the Company that it would raise $3,000,000 less costs in new financing at Closing, with $435,000 loaned pre-Closing to Pegasus under a secured promissory note with a face value of $575,000. Pegasus granted a security interest to the Company in all of Pegasus’ assets on the $575,000 loan, subordinate to other security interests as to the same collateral. The Company received $500,000 from the Note after applying the Original Issue Discount (OID), $30,000 of which was used to pay commission to a broker as placement agent, $30,000 was paid to the lender for its legal fees and $5,000 for a due diligence fee paid to the lender. The balance was tendered to the Company to lend to Pegasus under a Loan and Security Agreement as described below.

Consummation of the Merger is subject to the satisfaction or, if permitted by applicable law, waiver, by the Company, Pegasus, or both of various conditions. For Pegasus, these conditions include, without limitation, (i) an agreeable plan to spin out the existing Company cannabis assets and operations, (ii) an agreeable plan to transfer the outstanding shares of Series C Preferred Stock of the 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 the Company 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 the Company, these conditions include, without limitation, (i) a secured promissory note issued by Pegasus to the Company in the amount of $500,000 with the collateral being a UCC lien subordinate to other lenders; (ii) the payback by the Company of certain advances contributed by corporate officers and others in the 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.

The Merger Agreement contains certain termination rights including the right of the parties to mutually agree upon termination, and by each of the Company and Pegasus unilaterally if the other party has committed a violation of the covenants, representations and warranties in the Merger Agreement.

The Merger Agreement, the Merger, and the transactions contemplated thereby were unanimously approved by the board of directors of Pegasus, and unanimously approved by the board of directors of the Company.

On December 7, 2023, the Company notice received a notice of termination from Pegasus notifying the Company that the Agreement and Plan of Merger has been terminated.

F-13

At December 31, 2023, Pegasus owed the Company $970,000 of funds raised by the Company and advanced to Pegasus.

NOTE 8 – ~~STOCKHOLDERS’~~SHARE ~~EQUITY~~EXCHANGE AGREEMENT

~~During~~On February 26, 2024, the ~~three~~Company ~~months~~entered ~~ended~~into entered into a Share Exchange Agreement, as amended (the Exchange Agreement), with Emergent Health Corp., a 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 (the EMGE Equity Interests). On March 3114, 2024, the ~~Company~~parties ~~issued~~closed the ~~following~~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 (the Exchange Shares) 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.

F-12

Effective August 8, 2024, the Company entered into a Reformation of Share Exchange Agreement (the Reformation Agreement) with EMGE and the EMGE Preferred Shareholders. The Reformation Agreement was entered into after the Company, EMGE and the EMGE Preferred Shareholders having independently determined that the structure of the Exchange Agreement resulted in the parties’ experiencing consequences that were unintended and that would not, in the long term, be beneficial to the parties and that a reformation of the Exchange Agreement from a share-for-share structure to a share-for-asset structure would be beneficial to each of the parties.

By the Reformation Agreement, share-for-share structure of the Exchange Agreement was reformed to become a share-for-asset structure (the Reformation). Effecting the Reformation produced the following actions (the Reformation Actions):

(a) First, the issuances of the Company Exchange Shares to the EMGE Preferred Shareholders were rescinded.

(b) Next, the assignments of the EMGE Equity Interests by the EMGE Preferred Shareholders to the Company were rescinded.

(c) The Company, then, re-issued the Exchange Shares to EMGE, in consideration of the following assets of EMGE (the “Acquired Assets”):

	●	All of the capital stock of Evolutionary Biologics, Inc.;
	●	All of the capital stock of Apollo Biowellness, Inc.;
	●	All of the capital stock of Nanosthetic, Inc.; and
	●	All of the capital stock of Nanogistics, Inc.

In addition, the Reformation Actions resulted in the Company’s no longer being the controlling shareholder of EMGE.

NOTE 9 – STOCKHOLDERS’ EQUITY

During the six months ended June 30, 2024, the Company issued the following shares of common stock:

●	The Company issued a total of 9,555,462 shares of common stock as to convert a convertible note and accrued interest of $306,985.

NOTE 910 – SUBSEQUENT EVENTS

~~Ray~~Effective ~~Vollintine.~~August In8, ~~March~~ 2024, the Company ~~obtained~~entered into a ~~loan~~Reformation ~~from Ray Vollintine (“Vollintine”) which netted the Company $250,000 in proceeds. In consideration~~ of ~~such~~Share ~~loan,~~Exchange ~~the~~Agreement ~~Company issued a $280,000 face amount promissory note~~ (the ~~“Vollintine Note”~~Reformation Agreement), with ~~OID~~EMGE ~~of $30,000, bearing interest at 12% per annum, with principal~~ and ~~interest~~the ~~payable on September 29, 2024. The~~EMGE ~~Company~~Preferred ~~has the right to repay the Vollintine Note at any time~~Shareholders. The ~~Vollintine~~Reformation ~~Note~~Agreement iswas ~~convertible~~entered ~~at any time and from time to time~~ into ~~shares~~after of the Company’s, ~~common~~EMGE ~~stock~~and atthe aEMGE ~~conversion~~Preferred ~~price~~Shareholders ~~that~~having independently ~~shall~~determined ~~equal to $.035 per share; provided, however,~~ that, ~~upon an~~the ~~event~~structure of ~~default,~~ the ~~conversion~~Exchange ~~price~~Agreement ~~shall~~resulted bein the ~~lower~~parties’ ofexperiencing ~~(a)~~consequences ~~$.035~~that orwere unintended ~~(b)~~and ~~the~~that ~~volume~~would ~~weighted~~not, ~~average~~in ~~trading price during~~ the ~~previous~~ 20long ~~trading-day~~term, ~~period~~be ~~ending~~beneficial onto the ~~date~~parties ofand ~~issuance~~that a reformation of the ~~Vollintine~~Exchange ~~Note~~Agreement orfrom ~~during~~a share-for-share ~~the~~structure ~~previous~~to 20a ~~trading~~share-~~day~~for-asset ~~period~~structure ~~ending on~~would ~~the~~be ~~relevant~~beneficial ~~conversion~~to ~~date,~~each ~~whichever~~of isthe ~~lower~~parties.

~~The~~By ~~Vollintine~~the ~~Note~~Reformation isAgreement, ~~unsecured~~share-for-share structure of the Exchange Agreement was reformed to become a share-for-asset structure (the Reformation). Effecting the Reformation produced the following actions (the Reformation Actions):

~~In addition, the Company issued to Vollintine a pre-funded common stock purchase warrant~~ (~~the “Vollintine Warrant”~~a) ~~to purchase~~ 7First,~~200,000~~ ~~shares~~the ofissuances ~~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, the~~ Company ~~entered~~Exchange ~~into~~Shares ato ~~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~~EMGE ~~underlying~~Preferred ~~the~~Shareholders ~~Vollintine~~were ~~Warrant~~rescinded.

~~F-14~~(b) Next, the assignments of the EMGE Equity Interests by the EMGE Preferred Shareholders to the Company were rescinded.

(c) The Company, then, re-issued the Exchange Shares to EMGE, in consideration of the following assets of EMGE (the “Acquired Assets”):

	●	All of the capital stock of Evolutionary Biologics, Inc.;
	●	All of the capital stock of Apollo Biowellness, Inc.;
	●	All of the capital stock of Nanosthetic, Inc.; and
	●	All of the capital stock of Nanogistics, Inc.

In addition, the Reformation Actions resulted in the Company’s no longer being the controlling shareholder of EMGE.

F-13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.

Other 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 conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC, including the risks and uncertainties identified under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K.

Recent Acquisition, Change in Control and Change in Business Plan

Change in Control. 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. Selzer sold all 2,000,000 outstanding shares of the Company’s Series C Preferred Stock to Mr. Morrison. Mr. Morrison now possesses voting control of the Company. ~~See Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.~~

EMGE Acquisition Transaction. On February 26, 2024, wethe ~~entered~~Company ~~into~~ entered into a Share Exchange Agreement, as amended (the ~~Exchange~~ “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 Interests”). On 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 (the “Exchange Shares”) 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.

OnEffective ~~March~~August 148, 2024, the ~~parties~~Company ~~closed~~entered ~~the~~into ~~Exchange~~a ~~Agreement.~~Reformation ~~At the closing~~ of ~~the~~Share Exchange Agreement: (athe “Reformation Agreement”) with EMGE and the EMGE Preferred Shareholders ~~exchanged~~. ~~all~~The ofReformation ~~their~~Agreement ~~respective~~was ~~EMGE~~entered ~~Equity~~into ~~Interests~~after ~~for~~the anCompany, ~~equal~~EMGE ~~number~~and ~~of shares of~~ the ~~Company’s~~EMGE ~~to-be-designated~~Preferred ~~Series~~Shareholders Fhaving ~~Convertible~~independently ~~Preferred~~determined ~~Stock~~ that ~~shall convert into 93% of~~ the ~~common~~structure ~~stock~~ of the ~~Company~~Exchange onAgreement aresulted ~~fully-diluted~~in ~~basis (~~the ~~Series~~parties’ Fexperiencing ~~Preferred~~consequences ~~Stock),~~that ~~which~~were ~~shares~~unintended ofand ~~Series~~that Fwould ~~Preferred~~not, ~~Stock~~in ~~are currently issuable to~~ the ~~EMGE~~long ~~Preferred~~term, ~~Shareholders~~be ~~and~~beneficial ~~are~~ to ~~be issued upon~~ the ~~Company’s~~parties ~~filing~~and ofthat a ~~Certificate~~reformation of ~~Designation with~~ the ~~State~~Exchange ~~of Nevada; (b) the Company consummated the Conveyance~~ Agreement; ~~and~~from ~~(c)~~a ~~all~~share-for-share ~~persons~~structure ~~serving~~to asa ~~directors~~share-for-asset ~~and~~structure ~~officers~~would ofbe ~~the~~beneficial ~~Company prior~~ to ~~the~~each ~~consummation~~ of the ~~Exchange Agreement resigned and appointed four new members of the Company’s Board of Directors~~parties.

(a) First, the issuances of the Company Exchange Shares to the EMGE Preferred Shareholders were rescinded.

(b) Next, the assignments of the EMGE Equity Interests by the EMGE Preferred Shareholders to the Company were rescinded.

(c) The Company, then, re-issued the Exchange Shares to EMGE, in consideration of the following assets of EMGE (the “Acquired Assets”):

	●	All of the capital stock of Evolutionary Biologics, Inc.;
	●	All of the capital stock of Apollo Biowellness, Inc.;
	●	All of the capital stock of Nanosthetic, Inc.; and
	●	All of the capital stock of Nanogistics, Inc.

In addition, the Reformation Actions resulted in the Company’s no longer being the controlling shareholder of EMGE.

Conveyance Agreement.

On 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. Selzer. In consideration of our assignment of the Subsidiary, Mr. Selzer (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.

New Business Plan.

The business plan and operations of EMGE now represent the entirety of our company’s business operations. The discussion below concerning ~~our~~the ~~company’s~~six months ended June 30, 2024, include the operating results of ~~operations~~the ~~for~~acquired ~~the~~EMGE ~~years~~assets ~~ended~~from ~~December~~March 3114, ~~2023~~2024, ~~and~~through ~~2022~~June 30, ~~and~~2024. The ~~the~~discussion ~~financial~~below ~~condition~~concerning of our company at’s ~~December~~results 31of operations for the six months ended June 30, 2023, ~~relates~~relate only to our company prior to the consummation of the Exchange Agreement, ~~with~~as ~~the~~amended ~~EMGE~~and ~~Preferred Shareholders~~reformed. 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.

Current Status

In 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 to us. The terms of the recently obtained loans are discussed below.

AJB 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.

The AJB Note is secured by all assets of our company.

In 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,

Ray Vollintine. 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. 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 is lower.

The Vollintine Note is unsecured.

In 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.

Results of Operation for ~~Three~~Six Months Ended ~~March~~June 3130, 2024 and 2023

Revenues. We reported $95721,~~050~~278 (unaudited) and $1016,~~107~~468 (unaudited) in sales for the ~~three~~six months ended ~~March~~June 3130, 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.

Gross Profit. For Interim 2024, our cost of revenue was $31297,~~204~~922 (unaudited), compared to cost of revenue of $813,~~572~~257 (unaudited) for Interim 2023, resulting in a gross profit of $63453,~~846~~356 (unaudited) for Interim 2024 and a gross profit of $13,~~535~~211 (unaudited) for Interim 2023.

All 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.

Operating Expenses. Our operating expenses were $~~480~~1,~~674~~530,560 (unaudited) and $98148,~~421~~652 (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 results. No prediction as to the level of operating expenses for all of 2024 can be made in this regard, however.

Other Income/Expense. We had other expense of $3173,~~271,642~~068 (unaudited) for Interim 2024, compared to $~~284~~637,~~066~~821 (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.~~

Net Income/Loss. For Interim 2024, we had a net loss of $31,~~688~~250,~~470~~272 (unaudited), compare to a net loss of $~~380~~783,~~952~~262 (unaudited) for Interim 2023.

Liquidity and Capital Resources

AJB 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.

The AJB Note is secured by all assets of our company.

In 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,.

~~Ray Vollintine.~~ 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. 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 is lower.

The Vollintine Note is unsecured.

In 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.

As 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). Our 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.~~

As of June 30, 2024, we had total current assets of $993,130 (unaudited), consisting of $17,030 (unaudited) in cash and $970,000 (unaudited) in advances to former acquisition partner-company. Our total current liabilities as of June 30, 2024, were $4,050,658 (unaudited). Our working capital deficit was $3,057,528 (unaudited) as of June 30, 2024, compared to our working capital deficit of $2,150,975 (unaudited) as of December 31, 2023.

Going Concern

As of ~~March~~June 3130, 2024, we have an accumulated deficit of $3027,~~424~~986,~~873~~675 (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~~ statements do not include any adjustments that might arise from this uncertainty.

Off Balance Sheet Arrangements

As of ~~March~~June 3130, 2024, there were no off-balance sheet arrangements.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are disclosed in Note 2 of our audited financial statements included in the Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission.

Recent Accounting Pronouncements

No new accounting pronouncements issued or effective during the fiscal year has had or is expected to have a material impact on the financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of ~~March~~June 3130, 2024, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of ~~March~~June 3130, 2024, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described below.

Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following three material weaknesses that have caused management to conclude that, as of ~~March~~June 3130, 2024, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the ~~reasonable~~ reasonable assurance level:

1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act as of the period ending ~~March~~June 3130, 2024. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2.	We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

3.	Effective controls over the control environment were not maintained. Specifically, a formally adopted written code of business conduct and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed and effectively communicated to employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

To remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party firm to assist us in remedying this material weakness once resources become available.

We intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, the period ended ~~March~~June 3130, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A: Risk Factors

Please see “Risk Factors” in Item 2.01. Completion of Acquisition or Disposition of Assets of our amended Current Report on Form 8-K filed on April 16, 2024, which are incorporated herein by this reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended ~~March~~June 3130, 2024, we did not issue any unregistered securities not previously reported.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

None

Item 6. Exhibits

Exhibit Number		Description of Exhibit
4.1		Promissory Note dated March 4, 2024, $280,000 principal amount, issued by the Company in favor of AJB Capital Investments, LLC
4.1*		Promissory Note dated March 4, 2024, $280,000 principal amount, issued by the Company in favor of AJB Capital Investments, LLC (Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed May 20, 2024.)
4.2		Promissory Note dated March 29, 2024, $280,000 principal amount, issued by the Company in favor of AJB Capital Investments, LLC
4.2*		Promissory Note dated March 29, 2024, $280,000 principal amount, issued by the Company in favor of Ray Vollintine (Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed May 20, 2024.)
4.3		Pre-Funded Common Stock Purchase Warrant dated March 4, 2024, issued by the Company to AJB Capital Investments, LLC
4.3*		Pre-Funded Common Stock Purchase Warrant dated March 4, 2024, issued by the Company to AJB Capital Investments, LLC (Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed May 20, 2024.)
4.4		Pre-Funded Common Stock Purchase Warrant dated March 29, 2024, issued by the Company to Ray Vollintine
4.4*		Pre-Funded Common Stock Purchase Warrant dated March 29, 2024, issued by the Company to Ray Vollintine (Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed May 20, 2024.)
10.1		Securities Purchase Agreement dated as of March 4, 2024, between the Company and AJB Capital Investments, LLC
10.1*		Securities Purchase Agreement dated as of March 4, 2024, between the Company and AJB Capital Investments, LLC (Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed May 20, 2024.)
10.2		Security Agreement dated as of March 4, 2024, between the Company AJB Capital Investments, LLC
10.2*		Security Agreement dated as of March 4, 2024, between the Company AJB Capital Investments, LLC (Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed May 20, 2024.)
10.3		Securities Purchase Agreement dated as of March 29, 2024, between the Company and Ray Vollintine
10.3*		Securities Purchase Agreement dated as of March 29, 2024, between the Company and Ray Vollintine (Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed May 20, 2024.)
10.4		Make-Whole Letter dated March 29, 2024, between the Company and Ray Vollintine
10.4*		Make-Whole Letter dated March 29, 2024, between the Company and Ray Vollintine (Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed May 20, 2024.)
31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.1#		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2#		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1#		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Extensible Business Reporting Language (XBRL).

* Incorporated by reference as indicated. # Filed herewith. **Provided herewith.

109

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Resonate Blends, Inc.
Date:	~~May~~August 20, 2024
By:	/s/ Jim Morrison
	Jim Morrison
Title:	President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director

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