Resonate Blends, Inc 10-K for FY2022

Resonate Blends, Inc. (KOAN)

10-K 2023-04-17 For: 2022-12-31

Added on April 09, 2026

About this 10-K

Resonate Blends, Inc filed this 10-K on April 17, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $49.5K; up 83.1% from $27.03K a year earlier
Net income: $653.63K; compared with a net loss of $4.87M a year earlier

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Nevada		58-1588291
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

26565 Agoura Road, Suite 200 Calabasas, CA		91302
(Address of principal executive offices)		(Zip Code)

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

		Page
	PART I

Item 1.	Business	3
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	19
Item 4.	Mine Safety Disclosures	19

	PART II

Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6.	Selected Financial Data	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 8.	Financial Statements and Supplementary Data	25
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	26
Item 9A.	Controls and Procedures	26
Item 9B.	Other Information	27
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	27

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	27
Item 11.	Executive Compensation	30
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	32
Item 13.	Certain Relationships and Related Transactions, and Director Independence	32
Item 14.	Principal Accountant Fees and Services	33

	PART IV

Item 15.	Exhibits, Financial Statement Schedules	34
Item 16.	Form 10-K Summary	35

	●	the duration and scope of the pandemic;
	●	governmental, business and individual actions taken in response to the pandemic and the impact of those actions on global economic activity;
	●	the actions taken in response to economic disruption;
	●	the impact of business disruptions;
	●	the increase in business failures that we may utilize as industry partners and the customers we serve;
	●	uncertainty as to the impact or staff availability during and post the pandemic; and
	●	our ability to provide our services, including as a result of our employees or our customers and suppliers working remotely and/or closures of offices and facilities.

	●	Announcements by us regarding liquidity, significant acquisitions, equity investments and divestitures, strategic relationships, addition or loss of significant customers and contracts, capital expenditure commitments and litigation;

	●	Issuance of convertible or equity securities and related warrants for general or merger and acquisition purposes;

	●	Issuance or repayment of debt, accounts payable or convertible debt for general or merger and acquisition purposes;

	●	Sale of a significant number of shares of our common stock by stockholders;

	●	General market and economic conditions;

	●	Quarterly variations in our operating results;

	●	Investor and public relation activities;

	●	Announcements of technological innovations;

	●	New product introductions by us or our competitors;

	●	Competitive activities; and

	●	Additions or departures of key personnel.

	Closing Price
Quarter Ended	High		Low
March 31, 2021		.93		.11
June 30, 2021		.67		.23
September 30, 2021		.49		.34
December 31, 2021		.42		.20

	1.	We would not be able to pay our debts as they become due in the usual course of business; or

	2.	Our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

Equity Compensation Plans Approved by the Shareholders	Number of Securities to be issued upon exercise of outstanding options		Weighted- average exercise price of outstanding options		Number of Securities remaining available for future issuance under equity compensation plans
		(a)		(b)		(c)
2019 Equity Compensation Plan		-		-		10,000,000
Other Equity Compensation (restricted stock awards)		-		-		-
Total		-		-		10,000,000

F-1	Report of Independent Registered Public Accounting Firm;
F-4	Consolidated Balance Sheets as of December 31, 2022 and 2021;
F-5	Consolidated Statements of Operations for the years ended December 31, 2022 and 2021;
F-6	Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2022;
F-6	Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2021;
F-7	Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021; and
F-8	Notes to Consolidated Financial Statements



We have served as the Company’s auditor since 2022.

Houston, Texas

April 17, 2023 PCAOB ID: 6771

331 Newman Springs Road
Building 1, 4^th Floor, Suite 143	P (732) 784-1582
Red Bank, NJ 07701	F (732) 510-0665


	December 31,2022			December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	64,419		$	12,913
Advances to Suppliers		-			10,830
Other receivable		150,000			-
Inventories		160,492			245,776
Total current assets		374,911			269,519
Fixed assets, net		24,110			31,337
Derivative Valuation allowance		-			-
Investment in equity method investee		100			100
TOTAL ASSETS		399,121			300,956

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities		319,618			206,873
Due to related parties		164,946			45,000
Convertible notes payable, net of discount		988,800			1,865,000
Derivative liability		72,487			2,286,014
Settlement liability					-
Current liabilities of discontinued operations					-
Total current liabilities		1,545,851			4,402,887
Total liabilities		1,545,851			4,402,887
Stockholders’ deficit
Preferred stock, 10,000,000 shares authorized, $0.0001 par value, 0 shares issued.
Series B - Preferred stock, 66,667 shares authorized, $0.0001 par value, 0 issued.					-
Series C - Preferred stock, 2,000,000 shares authorized, $0.0001 par value, 2,000,000 issued and outstanding		200			200
Series D Preferred stock 40,000 shares authorized, $0.0001 par value 40,000 and 0 issued and outstanding, respectively
Preferred Stock Value		-
Common stock; $0.0001 par value; 200,000,000 shares authorized; 75,437,604 and 45,046,637 shares issued and outstanding as of December 31, 2022 and December 31, 2021 , respectively.		7,544			4,504
Stock subscription receivable		(261,059	)
Additional paid-in capital		24,427,009			21,867,416
Accumulated deficit		(25,320,424	)		(25,974,051	)
Total Stockholders’ deficit		(1,146,730	)		(4,101,931	)
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	399,121		$	300,956

	December 31 2022			December 31 2021
	The Year ended
	December 31 2022			December 31 2021
REVENUES	$	49,501		$	27,031
COST OF REVENUES		33,068			19,148
Gross profit		16,433			7,883
Operating expenses
Advertising		378,706			611,914
General and administrative expenses		191,728			158,935
Legal and Professional fees		176,478			567,025
Officer Compensation		434,125			556,865
Salaries and Related		-			236,250
Depreciation and amortization		7,738			4,711
Office Rent		10,591			3,239
Impairment of in house software		-			-
Non cash management fees		206,462			400,349
Total operating expenses		1,405,828			2,539,288
Loss from operations		(1,389,395	)		(2,531,405	)
Other Income (expense)
Other Income		10,132			690
Interest expense		(150,065	)		(135,292	)
Gain (Loss) on change of derivative liability		2,213,527			(2,011,881	)
Amortization of debt discount		-			(10,583	)
Amortization of issuance costs		(31,795	)		(247,085	)
Gain (loss) on settlement of derivative liabilities		-			-
Legal settlement		-			-
(Loss) Gain on settlement of notes payable		1,223			62,500
Total other Income (expense)		2,043,022			(2,341,651	)
Income (loss) from investment in equity method investee		-			-
NET INCOME (LOSS) from continuing operations		653,627			(4,873,056	)
NET INCOME (LOSS) from discontinued operations					-
NET INCOME (LOSS)		653,627			(4,873,056	)

Basic weighted average common shares outstanding		75,437,604			31,085,610
Net Income (loss) per common share: basic and diluted	$	0.01		$	(0.16	)

	Shares		Amount		Shares		Amount		Shares		Amount		APIC		Receivable			Deficit			Deficit
	Preferred Stock Series A				Preferred stock - Series C				Common Stock						Subscription			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		APIC		Receivable			Deficit			Deficit
Balance December 31, 2021		-		-		2,000,000	$	200		45,046,637	$	4,504	$	21,867,416				$	(25,974,051	)	$	(4,101,931	)
Issuance of common stock in private placement										6,636,985		664		504,312		(261,059	)					243,917
Issuance of common stock for debt conversions										22,749,316		2,275		1,844,332								1,846,607
Stock issuance for services										1,004,666		100		210,949								211,049
Net Income		-		-		-		-		-		-		-		-			653,627			653,627
Balance December 31, 2022		-		-		2,000,000	$	200		75,437,604	$	7,544	$	24,427,009	$	(261,059	)	$	(25,320,424	)	$	(1,146,730	)


	31-Dec-22			31-Dec-21
Cash Flows from Operating Activities
Net Income (loss)	$	653,627		$	(4,873,056	)
Net loss from discontinued operations
Adjustments to reconcile
Amortization and depreciation		7,738			15,294
(Gain) Loss on derivative liability		(2,213,527	)		2,011,881
Non cash interest expense					16,142
Stock subscription receivable		(261,059	)
Share professional fees/ compensation		206,462			-
Share-based compensation		-			400,349
Gain on settlement of Derivative liabilities		-			(62,500	)
Changes in assets and liabilities
Inventories		85,283			(191,177	)
Prepaids					(10,830	)
Advances to suppliers		10,830			-
Other receivables		(150,000	)		-
Accounts payable and accrued expenses		112,233			(8,205	)
Derivative liabilities		-			-
Due to Related party		119,946			(80,000	)
Net cash used by operating activities		(1,428,467	)		(2,782,102	)
Net cash provided by discontinued operations		-			-
Net cash provided by used in operating activities		(1,428,467	)		(2,782,102	)
Cash Flows from investing activities
Purchase of fixed assets		-			(36,048	)
Net cash used by investing activities		-			(36,048	)
Cash Flows from Financing Activities
Proceeds from subscription		91,173			1,367,115
Proceeds from convertible notes (net)		1,388,800			1,865,000
Payments on convertible notes payable		-			(515,377	)
Net cash provided by financing activities		1,479,973			2,716,738
Net increase in cash		51,506			(101,412	)
Cash, beginning of period		12,913			114,325
Cash, end of period	$	64,419		$	12,913

Supplemental disclosure of cash flow information
Cash paid for interest	$	-		$	38,048
Non-Cash investing and financing transactions
Conversion of debt for common stock	$	2,265,000		$	306,858

	●	$12,500 when the initial $250,000 is raised by the Company;
	●	$12,500 when a total of $500,000 is raised by the Company;
	●	$10,000 when a total of $750,000 is raised by the Company;
	●	$35,000 when a total of $1,750,000 is raised by the Company;
	●	$35,000 when a total of $2,750,000 is raised by the Company;
	●	$35,000 when a total of $3,750,000 is raised by the Company;
	●	$35,000 when a total of $4,750,000 is raised by the Company; and
	●	$25,000 when a total of $5,750,000 is raised by the Company.

	December 31, 2022		December 31, 2021
Convertible notes face value	$	988,800	$	1,865,000
Less: Discounts		-		-	)
Less: Debt issuance cost
Net convertible notes	$	988,800	$	1,865,000

Deferred tax attributable to:	2022		2021
Net Operating loss carry over		5,376,927		3,413,282
Valuation allowance		5,376,927		3,413,282
Net deferred tax assets		-		-

	●	the Company’s Board of Directors approved a one to one thousand (1:1000) reverse stock split, which became effective July 9, 2018. The Company consolidated financial statements have been retroactively restated to the reflect the effect of the stock split
	●	the Company entered into a subscription agreement for 9.98% of the company common shares outstanding for $100,000.


Management Fees	$	2,074,600
Professional Fees
Payment to obtain loan
Payment to management staff
Payment to subcontractor		446,982
Total	$	2,521,582


Professional Fees	$	201,619
Payment to obtain loan		408,674
Payment to management staff		166,309
Total		776,603

	2020			2019
Revenues	$	477,734		$	758,101

Cost of revenues		101,347			285,085
Operating expenses		468,815			581,764
Income (loss) from operations		570,162			866,849

Loss from operations of discontinued operation		(92,428	)		(108,748	)
Gain on disposal of discontinued operations		108,206			-
Gain (loss) from discontinued operations	$	15,778		$	(108,748	)

Name	Age	Positions
Geoffrey Selzer	66	Chairman and CEO
Pamela Kerwin	74	Chief Operating Officer
David Thielen	59	Chief Investment Officer and Director

	1.	Reviewed and discussed the audited financial statements with management, and
	2.	Reviewed and discussed the written disclosures and the letter from our independent auditors on the matters relating to the auditor’s independence.

Summary Compensation Table
Name and principal position	Year		Salary ($)		Bonus ($)	Stock Awards ($)	Option Awards ($)	All Other Compensation ($) (1)(2)	Total ($)

Geoffrey Selzer		2021	$	180,000					$	180,000
CEO and Director		2022	$	180,000					$	180,000

David Thielen		2021	$	120,000					$	120,000
CIO and Director		2022	$	120,000					$	120,000

Pam Kerwin		2021	$	120,000					$	120,000
Chief Operating Officer		2022	$	120,000					$	120,000

	Common Stock					Series C Preferred Stock
	Number of Shares Owned		Percent of Class(1)(2)			Number of Shares Owned		Percent of Class(1)(2)
Geoffrey Selzer		1,406,112		1.9	%		2,000,000		100	%
David Thielen		1,765,667		2.3	%		-		-
Pam Kerwin		880,895		1.2	%		-		-
All Directors and Executive Officers as a Group (3 persons)		4,052,674		5.4	%		2,000,000		100	%
5% Holders
Richard Hoge		5,198,640		6.9	%

	(1)	Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants.
	(2)	The percent of class is based on 75,437,604 shares of common stock outstanding and 2,000,000 shares of Series C Preferred Stock outstanding as of March 31, 2023.

Financial Statements for the Year Ended December 31		Audit Services				Audit Related Fees				Tax Fees				Other Fees
2022		$	21,000			$	-			$	-			$	-

Exhibit Number		Description
2.1		Stock Purchase Agreement⁽¹⁾
2.2		Membership Interest Purchase Agreement⁽²⁾
2.3		Membership Interest Purchase Agreement⁽²⁾
2.4		Agreement of Conveyance⁽²⁾
2.5		Letter of Intent⁽¹¹⁾
3.1		Articles of Incorporation⁽³⁾
3.2		Certificate of Change⁽³⁾
3.3		Certificate of Amendment⁽⁴⁾
3.4		Amendment to Certificate of Designation for Series C Preferred Stock⁽⁵⁾
3.5		Certificate of Designation for Series E Preferred Stock⁽⁷⁾
3.6		Certificate of Amendment⁽⁸⁾
3.7		Bylaws, as amended⁽³⁾
4.1		Secured Convertible Promissory Note⁽⁶⁾
4.2		8% Unsecured Convertible Promissory Note⁽¹⁰⁾
4.3		Warrant⁽¹⁰⁾
4.4		Warrant⁽¹⁰⁾
4.5		Convertible Promissory Note⁽¹²⁾
4.6		Convertible Promissory Note⁽¹²⁾
4.7		Common Stock Purchase Warrant⁽¹²⁾
4.8		Common Stock Purchase Warrant⁽¹²⁾
4.9		Convertible Promissory Note⁽¹³⁾
4.10		Convertible Promissory Note⁽¹³⁾
4.11		Common Stock Purchase Warrant⁽¹³⁾
4.12		Common Stock Purchase Warrant⁽¹³⁾
4.13		Convertible Promissory Note⁽¹⁴⁾
4.14		Common Stock Purchase Warrant⁽¹⁴⁾
4.15		Convertible Promissory Note⁽¹⁵⁾
4.16		Promissory Note⁽¹⁶⁾
4.17		Common Stock Purchase Warrant⁽¹⁶⁾
10.1		Separation Agreement and Release⁽¹⁾
10.2		Voting Agreement⁽¹⁾
10.3		Employment Agreement⁽²⁾
10.4		Employment Agreement⁽²⁾
10.5		Securities Purchase Agreement⁽⁶⁾
10.6		Addendum to Securities Purchase Agreement⁽⁹⁾
10.7		Securities Purchase Agreement⁽¹²⁾
10.7		Securities Purchase Agreement⁽¹²⁾
10.8		Securities Purchase Agreement⁽¹⁶⁾

31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), 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

101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	¹	Incorporated by reference to the Current Report on Form 8-K filed on July 20, 2020.
	²	Incorporated by reference to the Current Report on Form 8-K filed on October 31, 2019.
	³	Incorporated by reference to the Registration Statement on Form S-1 filed on June 6, 2014.
	⁴	Incorporated by reference to the Quarterly Report on Form 10-Q filed on November 23, 2020.
	⁵	Incorporated by reference to the Current Report on Form 8-K filed on May 21, 2019.
	⁶	Incorporated by reference to the Current Report on Form 8-K filed on July 23, 2020.
	⁷	Incorporated by reference to the Current Report on Form 8-K filed on August 10, 2020.
	⁸	Incorporated by reference to the Quarterly Report on Form 10-Q filed on August 14, 2020.
	⁹	Incorporated by reference to the Current Report on Form 8-K filed on September 21, 2020.
	¹⁰	Incorporated by reference to the Current Report on Form 8-K filed on March 18, 2021.
	¹¹	Incorporated by reference to the Current Report on Form 8-K filed on September 13, 2021.
	¹²	Incorporated by reference to the Current Report on Form 8-K filed on February 3, 2022.
	¹³	Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2022.
	¹⁴	Incorporated by reference to the Current Report on Form 8-K filed on March 8, 2022.
	¹⁵	Incorporated by reference to the Current Report on Form 8-K filed on July 1, 2022.
	¹⁶	Incorporated by reference to the Current Report on Form 8-K filed on September 20, 2022.

Resonate Blends, Inc.

By:	*/s/ Geoffrey Selzer*
	Geoffrey Selzer President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director

	April 17, 2023

By:	*/s/ Geoffrey Selzer*
	Geoffrey Selzer
	President, Chief Executive Officer, Principal Executive Officer, Principal Financial Officer and Director

	April 17, 2023

By:	*/s/ David Thielen*
	David Thielen
	Chief Investment Officer, Chief Financial Officer, Principal Accounting Officer, Chief Accounting Officer and Director

	April 17, 2023

1.	I have reviewed this annual report on Form 10-K for the year ended December 31, 2022 of Resonate Blends, Inc. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and