10-Q
Resonate Blends, Inc. (KOAN)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
| ☒ | Quarterly<br> Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|---|
For the three months ended ### March 31, 2025
| ☐ | Transition<br> 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
ResonateBlends, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 58-1588291 |
|---|---|
| (State<br> or other jurisdiction | (IRS<br> Employer |
| of<br> incorporation or organization) | Identification<br> 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: 195,248,774 shares of common stock as of June 16, 2025.
TABLE
OF CONTENTS
| Page | ||
|---|---|---|
| PART I – FINANCIAL INFORMATION | ||
| Item1: | Financial Statements | 3 |
| Item 2: | Management’s Discussion and Analy sis of Financial Condition and Results of Operations | 4 |
| Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 7 |
| Item 4: | Controls and Procedures | 7 |
| PART II – OTHER INFORMATION | ||
| Item 1: | Legal Proceedings | 9 |
| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 9 |
| Item 3: | Defaults Upon Senior Securities | 9 |
| Item 4: | Mine Safety Disclosures | 9 |
| Item 5: | Other Information | 9 |
| Item 6: | Exhibits | 9 |
| 2 |
| --- |
PART
I - FINANCIAL INFORMATION
Item
- Financial Statements
Our consolidated financial statements included in this Form 10-Q are as follows:
| F-1 | Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 (unaudited) |
|---|---|
| F-2 | Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (unaudited) |
| F-3 | Consolidated Statement of Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2025 and 2024 (unaudited) |
| F-4 | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (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.
| 3 |
| --- |
RESONATE BRANDS, INC.AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
| December<br> 31, 2024 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current<br> assets: | |||||
| Cash<br> and cash equivalents | 18,117 | $ | 8,048 | ||
| Accounts<br> receivable, net | 20,067 | 49,731 | |||
| Advances<br> to Pegasus Specialty Vehicles, LLC | 970,000 | 970,000 | |||
| Loan<br> receivable | 178,604 | 6,000 | |||
| Total<br> current assets | 1,186,788 | $ | 1,033,779 | ||
| Fixed<br> assets: | |||||
| Fixed<br> assets, net | 15,303 | $ | 15,303 | ||
| Total<br> fixed assets | 15,303 | 15,303 | |||
| Other<br> assets: | |||||
| Investments | - | $ | 805,379 | ||
| Total<br> other assets | - | $ | 805,379 | ||
| Total<br> assets | 1,202,091 | $ | 1,854,461 | ||
| LIABILITIES<br> AND SHAREHOLDERS' DEFICIT | |||||
| Current<br> liabilities: | |||||
| Accounts<br> payable and accrued liabilities | 1,260,837 | $ | 1,196,528 | ||
| Loans<br> payable, related parties | 523,868 | 780,032 | |||
| Notes<br> payable, net of discount | 831,000 | 481,000 | |||
| Notes<br> payable, related parties | 845,443 | 845,443 | |||
| Notes<br> payable | 845,443 | 845,443 | |||
| Convertible<br> notes payable | 1,957,037 | 2,003,037 | |||
| Total<br> current liabilities | 5,418,185 | 5,306,040 | |||
| Shareholders'<br> Deficit: | |||||
| Series<br> B Preferred Stock, 0.0001 par value; 66,667 shares authorized; 0 shares issued and outstanding at March 31, 2025 and<br> December 31, 2024, respectively. | - | - | |||
| Series<br> C Preferred Stock, 0.0001 par value; 2,000,000 shares authorized; 2,000,000 shares issued and outstanding at March 31, 2025 and<br> December 31, 2024, respectively. | 200 | 200 | |||
| Series<br> D Preferred Stock, 0.0001 par value; 40,000 shares authorized; 40,000 shares issued and outstanding at March 31, 2025 and December<br> 31, 2024, respectively. | - | - | |||
| Preferred Stock, value | - | - | |||
| Common<br> stock, 0.0001 par value; 200,000,000 shares authorized; 195,248,774 and 110,401,280 shares issued and outstanding at March 31,<br> 2025 and December 31, 2024, respectively. | 19,526 | 11,040 | |||
| Additional<br> paid-in capital | 25,558,668 | 25,498,539 | |||
| Common<br> stock issuable | - | 421,312 | |||
| Stock<br> subscription receivable | (261,059 | ) | (261,059 | ) | |
| Accumulated<br> deficit | (29,533,429 | ) | (29,121,611 | ) | |
| Total<br> shareholders' deficit | (4,216,094 | ) | (3,451,579 | ) | |
| Total<br> liabilities and shareholders' deficit | 1,202,091 | $ | 1,854,461 |
All values are in US Dollars.
See accompanying notes to consolidatedfinancial statements.
| F-1 |
| --- |
RESONATE BLENDS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
| For<br> the Three<br><br> Months Ended<br><br> March 31, 2025 | For<br> the Three<br><br> Months Ended<br><br> March 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Sales | $ | 430,768 | $ | 95,050 | ||
| Cost<br> of Goods Sold | 140,725 | 31,204 | ||||
| Gross<br> Profit (Loss) | 290,043 | 63,846 | ||||
| Operating<br> expenses: | ||||||
| General<br> and administrative | 181,910 | 360,434 | ||||
| Sales<br> commissions | 188,602 | - | ||||
| Consulting | 247,273 | - | ||||
| Legal<br> and professional | 2,500 | 107,740 | ||||
| Officers<br> compensation | - | 12,500 | ||||
| Total<br> operating expenses | 620,285 | 480,674 | ||||
| Loss<br> from operations | (330,242 | ) | (416,828 | ) | ||
| Other<br> income (expense): | ||||||
| Interest<br> expense | (81,791 | ) | (165,514 | ) | ||
| Commission<br> income | 215 | - | ||||
| Other<br> income | - | 15,000 | ||||
| Gain<br> on disposal of Resonate Blends | - | 69,243 | ||||
| Loss<br> on acquisition of Emergent Health Corp on investment | - | (3,007,627 | ) | |||
| Loss<br> on change in derivative liability | - | (140,043 | ) | |||
| Amortization<br> of issuance costs | - | (10,246 | ) | |||
| Loss<br> on conversion of debt | - | (32,455 | ) | |||
| Total<br> other income (expense) | (81,576 | ) | (3,271,642 | ) | ||
| Net<br> loss | $ | (411,818 | ) | $ | (3,688,470 | ) |
| Net<br> loss per share - basic and diluted | $ | (0.00 | ) | $ | (0.04 | ) |
| Weighted<br> average shares outstanding - basic | 150,022,612 | 89,986,758 |
See accompanying notes to consolidatedfinancial statements.
| F-2 |
| --- |
RESONATE BLENDS, INC.
Condensed Statement of Stockholder's Equity (Deficit)
For the Period from December 31, 2022 to March 31, 2025
(Unaudited)
| Preferred<br> Stock Series A Shares | Preferred<br> Stock Series A Amount | Preferred<br> Stock Series C Shares | Preferred<br> Stock Series C Amount | Common Stock<br> Shares | Common Stock<br> Amount | Additional<br> Paid-in Capital | Common Stock<br> Issuable | Subscription<br> Receivable | Earnings (Deficit)<br> Accumulated | Total | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance, December 31, 2023 | - | $ | - | 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 | - | - | - | - | 14,222,222 | 1,422 | 32,578 | 421,312 | - | - | 455,312 | |||||||||||||||
| Settlement of derivative liabilities | - | - | - | - | - | - | 306,904 | - | - | - | 306,904 | |||||||||||||||
| Net loss, December 31,2024 | (2,385,208 | ) | (2,385,208 | ) | ||||||||||||||||||||||
| Balance, December 31, 2024 | - | $ | - | 2,000,000 | $ | 200 | 110,401,280 | $ | 11,040 | $ | 25,498,539 | $ | 421,312 | $ | (261,059 | ) | $ | (29,121,611 | ) | $ | (3,451,579 | ) | ||||
| Balance | - | $ | - | 2,000,000 | $ | 200 | 110,401,280 | $ | 11,040 | $ | 25,498,539 | $ | 421,312 | $ | (261,059 | ) | $ | (29,121,611 | ) | $ | (3,451,579 | ) | ||||
| Conversion of convertible debt | - | - | - | - | 84,847,494 | 8,485 | 60,129 | (421,312 | ) | - | - | (352,698 | ) | |||||||||||||
| Net loss, March 31,2025 | (411,818 | ) | (411,818 | ) | ||||||||||||||||||||||
| Net loss | (411,818 | ) | (411,818 | ) | ||||||||||||||||||||||
| Balance, March 31, 2025 | - | $ | - | 2,000,000 | $ | 200 | 195,248,774 | $ | 19,526 | $ | 25,558,668 | $ | - | $ | (261,059 | ) | $ | (29,533,429 | ) | $ | (4,216,094 | ) | ||||
| Balance | - | $ | - | 2,000,000 | $ | 200 | 195,248,774 | $ | 19,526 | $ | 25,558,668 | $ | - | $ | (261,059 | ) | $ | (29,533,429 | ) | $ | (4,216,094 | ) |
See accompanying notes to consolidatedfinancial statements.
| F-3 |
| --- |
RESONATE BLENDS, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
| For<br> the Three<br><br> Months Ended<br><br> March 31, 2025 | For<br> the Three<br><br> Months Ended<br><br> March 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Cash<br> flows from operating activities | ||||||
| Net<br> loss | $ | (411,818 | ) | $ | (3,688,470 | ) |
| Adjustments<br> to reconcile net loss to net cash used in operating activities: | ||||||
| Accrued<br> interest, notes payable | 81,791 | 10,246 | ||||
| Gain<br> on derivative liability | - | 140,043 | ||||
| Loss<br> on conversion of convertible debt | - | 32,455 | ||||
| Share<br> professional fees/compensation | - | 306,986 | ||||
| Loss<br> on acquisition of Emergent Health Corp | - | 2,806,682 | ||||
| Gain<br> on disposal of subsidiary | - | (69,243 | ) | |||
| Depreciation<br> and amortization | - | 1,890 | ||||
| Changes<br> in operating assets and liabilities: | ||||||
| Accounts<br> receivables | 29,664 | |||||
| Other<br> receivables | - | 279,672 | ||||
| Accounts<br> payable and accrued expenses | 64,309 | (19,505 | ) | |||
| Net<br> cash used in operating activities | (236,055 | ) | (199,244 | ) | ||
| Cash<br> flows from financing activities | ||||||
| Payments<br> to loans payable, related parties | (144,007 | ) | - | |||
| Proceeds<br> from issuance of secured promissory notes | - | 239,500 | ||||
| Proceeds<br> from loans payable, related parties | 40,130 | - | ||||
| Proceeds<br> from notes payable | 350,000 | - | ||||
| Net<br> cash provided by financing activities | 246,124 | 239,500 | ||||
| Net<br> increase (decrease) in cash | 10,069 | 40,256 | ||||
| Cash<br> at beginning of period | 8,048 | 6,938 | ||||
| Cash<br> at end of period | $ | 18,117 | $ | 47,194 | ||
| Supplemental<br> Cash Flow Information: | ||||||
| Cash<br> paid for interest | $ | 382 | $ | 826 | ||
| Cash<br> paid for income taxes | $ | - | $ | - | ||
| Non-cash<br> investing and financing information: | ||||||
| Conversion<br> of debt for common stock | $ | 68,614 | $ | 34,000 |
See accompanyingnotes to consolidated financial statements.
| F-4 |
| --- |
RESONATE
BLENDS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 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 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.
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 past 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, 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. 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 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.
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<br> Company Exchange Shares to the EMGE Preferred Shareholders were rescinded. |
|---|---|
| (b) | Next, the assignments of<br> the EMGE Equity Interests by the EMGE Preferred Shareholders to the Company were rescinded. |
| (c) | The Company, then, re-issued<br> the Exchange Shares to EMGE, in consideration of the following assets of EMGE (the “Acquired Assets”): |
| ● | All of the capital stock<br> of Evolutionary Biologics, Inc.; |
| --- | --- |
| ● | All of the capital stock<br> of Apollo Biowellness, Inc.; |
| ● | All of the capital stock<br> of Nanosthetic, Inc.; and |
| ● | All of the capital stock<br> of Nanogistics, Inc. |
In addition, the Reformation Actions resulted in the Company’s no longer being the controlling shareholder of EMGE.
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.
On March 5, 2025, Jim Morrison resigned as President/CEO of the Company but shall remain a director of the Company. As of March 5, 2025, James W. Zimbler was appointed by the Board of Directors as President/CEO of the Company. Mr. Zimbler has served on the Board of Directors and Vice President of Finance since March 2024.
| F-6 |
| --- |
Basis of Presentation
The accompanying unaudited 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 period presented have been reflected herein. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.
Going concern
These
consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of March 31, 2025, the Company has an accumulated deficit of $29,533,429. 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
Useof 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.
Accountsreceivable 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 31, 2025, and December 31, 2024, there’s no allowance for doubtful accounts and bad debts.
| F-7 |
| --- |
RevenueRecognition
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<br> of the contract, or contracts, with a customer |
|---|---|
| ● | Identification<br> of the performance obligations in the contract |
| ● | Determination<br> of the transaction price |
| ● | Allocation<br> of the transaction price to the performance obligations in the contract |
| ● | Recognition<br> of the revenue when, or as, performance obligations are satisfied |
Revenue is generally recognized upon purchase of products by customers.
KOAN 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, 2025 and December 31, 2024.
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 March 31, 2025 and December 31, 2024, were not material.
FairValue 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.
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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 year ended December 31, 2024, and 2023.
SUMMARY OF ASSETS AND LIABILITIES MEASURED AT VALUE ON RECURRING BASIS
| As of March 31, 2025 | Level 1 | Level 2 | Level 3 | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Liabilities | ||||||||
| Derivative Liabilities | $ | - | $ | - | $ | - | $ | - |
| As of December 31, 2024 | Level 1 | Level 2 | Level 3 | Total | ||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Liabilities | ||||||||
| Derivative Liabilities | $ | - | $ | - | $ | - | $ | - |
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.
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 3 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.
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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 31, 2025 and 2024, amounts due related parties were $523,868 and $837,810, 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 PAYABLE
Convertible notes payable consists of the following as of March 31, 2025 and December 31, 2024:
SCHEDULE OF CONVERTIBLE NOTES PAYABLE
| March<br> 31, 2025 | December<br> 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Convertible notes face value | $ | 2,017,500 | $ | 2,063,500 | ||
| Less: Discounts | (60,463 | ) | (60,463 | ) | ||
| Less: Debt issuance cost | - | - | ||||
| Net convertible notes | $ | 1,957,037 | $ | 2,003,037 |
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.
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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. The Note was converted into shares as of March 19, 2025.
| F-11 |
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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.
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.
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.
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
| March<br> 31, 2025 | December<br> 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Exercise price | $ | - | $ | - | ||
| Expected volatility | - | % | - | % | ||
| Risk-free interest rate | - | % | - | % | ||
| Expected<br> term (in years) | - | - | ||||
| Expected dividend rate | - | % | - | % | ||
| Derivative liabilities measurement input | - | % | - | % |
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.
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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.
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.
At
March 31, 2025, Pegasus owed the Company $970,000 of funds raised by the Company and advanced to Pegasus.
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NOTE
8 – SHARE EXCHANGE AGREEMENT
On February 26, 2024, the Company 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.
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<br> issuances of the Company Exchange Shares to the EMGE Preferred Shareholders were rescinded. |
|---|---|
| (b) | Next,<br> the assignments of the EMGE Equity Interests by the EMGE Preferred Shareholders to the Company were rescinded. |
| --- | --- |
| (c) | The Company,<br> then, re-issued the Exchange Shares to EMGE, in consideration of the following assets of EMGE (the “Acquired<br> Assets”): |
| --- | --- |
| ● | All<br> of the capital stock of Evolutionary Biologics, Inc.; |
| --- | --- |
| ● | All<br> of the capital stock of Apollo Biowellness, Inc.; |
| ● | All<br> of the capital stock of Nanosthetic, Inc.; and |
| ● | All<br> 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 three months ended March 31, 2025, the Company issued the following shares of common stock:
| ● | On<br> January 8, 2025, The Company issued a total of 5,500,000 shares of common stock as to convert<br> a convertible note of $6,600. |
|---|---|
| ● | On<br> January 15, 2025, The Company issued a total of 5,775,000 shares of common stock as to convert<br> a convertible note of $6,930. |
| --- | --- |
| ● | On<br> January 17, 2025, The Company issued a total of 5,775,000 shares of common stock as to convert<br> a convertible note of $6,930. |
| --- | --- |
| ● | On<br> January 22, 2025, The Company issued a total of 5,775,000 shares of common stock as to convert<br> a convertible note of $6,930. |
| --- | --- |
| ● | On<br> February 3, 2025, The Company issued a total of 6,600,000 shares of common stock as to convert<br> a convertible note of $7,260. |
| --- | --- |
| ● | On<br> February 20, 2025, The Company issued a total of 6,971,917 shares of common stock as to convert<br> a convertible note of $5,578. |
| --- | --- |
| ● | On<br> February 20, 2025, The Company issued a total of 6,971,917 shares of common stock as to convert<br> a convertible note of $5,578. |
| --- | --- |
| ● | On<br> February 25, 2025, The Company issued a total of 7,313,797 shares of common stock as to convert<br> a convertible note and accrued interest of $5,851. |
| --- | --- |
| ● | On<br> March 3, 2025, The Company issued a total of 8,031,746 shares of common stock as to convert<br> a convertible note and accrued interest of $4,819. |
| --- | --- |
| ● | On<br> March 7, 2025, The Company issued a total of 8,428,571 shares of common stock as to convert<br> a convertible note and accrued interest of $5,057. |
| --- | --- |
| ● | On<br> March 18, 2025, The Company issued a total of 8,852,273 shares of common stock as to convert<br> a convertible note and accrued interest of $3,541. |
| --- | --- |
| ● | On<br> March 19, 2025, The Company issued a total of 8,852,273 shares of common stock as to convert<br> a convertible note and accrued interest of $3,541. |
| --- | --- |
Ite During the year ended December 31, 2024, the Company issued the following shares of common stock:
| ● | The<br> Company issued a total of 9,555,462 shares of common stock as to convert a convertible note<br> and accrued interest of $306,985. |
|---|---|
| ● | The<br> Company issued a total of 4,222,222 shares of common stock as to convert a convertible note<br> of $20,000. |
| --- | --- |
| ● | The<br> Company issued a total of 5,000,000 shares of common stock as to convert a convertible note<br> of $9,500. |
| --- | --- |
| ● | The<br> Company issued a total of 5,000,000 shares of common stock as to convert a convertible note<br> of $4,500. |
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NOTE
10 – SUBSEQUENT EVENTS
| F-14 |
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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
Changein Control. Effective March 14, 2024, Geoffrey Selzer, our former Chief Executive Officer and Director, and Jim Morrison, our past 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.
EMGEAcquisition Transaction. On February 26, 2024, we entered into entered into a Share Exchange Agreement, as amended (the Exchange Agreement), with Emergent Health Corp., a publicly-traded (symbol: EMGE) Wyoming corporation (EMGE), and the holders (the EMGE Preferred Shareholders) of Series Class A Preferred Stock and the Series C Convertible Non-Voting Preferred Stock (collectively, the EMGE Equity 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 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.
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,<br> the issuances of the Company Exchange Shares to the EMGE Preferred Shareholders were rescinded. |
|---|---|
| (b) | Next,<br> the assignments of the EMGE Equity Interests by the EMGE Preferred Shareholders to the Company were rescinded. |
| --- | --- |
| (c) | The Company,<br> then, re-issued the Exchange Shares to EMGE, in consideration of the following assets of EMGE (the “Acquired<br> Assets”): |
| --- | --- |
| ● | All<br> of the capital stock of Evolutionary Biologics, Inc.; |
| --- | --- |
| ● | All<br> of the capital stock of Apollo Biowellness, Inc.; |
| ● | All<br> of the capital stock of Nanosthetic, Inc.; and |
| ● | All<br> 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.
| 4 |
| --- |
ConveyanceAgreement.
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.
NewBusiness Plan.
Thebusiness plan and operations of EMGE now represent the entirety of our company’s business operations. The discussion below concerningthe six months ended June 30, 2024, include the operating results of the acquired EMGE assets from March 14, 2024, through June 30, 2024.The discussion below concerning our company’s results of operations for the six months ended June 30, 2023, relate only to ourcompany prior to the consummation of the Exchange Agreement, as amended and reformed. None of the information in the discussion belowshould 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 tocontinue our survival. Historically, we have raised money through convertible debt, almost always on unfavorable terms. There is no guaranteethat any capital, including through convertible loan transactions, will be available to us in the future or, if available, on terms acceptableto us. The terms of the recently obtained loans are discussed below.
AJBCapital 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,
RayVollintine. 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.
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Resultsof Operation for Three Months Ended March 31, 2025 and 2024
Revenues. We reported $430,768 (unaudited) and $95,050 (unaudited) in sales for the year ended March 31, 2025 and 2024, respectively. All of our revenues for 2025 and 2024 were attributable to the business operations of the Subsidiary for the period from the acquisition date, March 14, 2024.
GrossProfit. For March 31, 2025, our cost of revenue was $140,725 (unaudited), compared to cost of revenue of $31,204 (unaudited) for March 14 – March 31, 2024, resulting in a gross profit of $290,043 (unaudited) for March 31, 2025 and a gross profit of $63,846 (unaudited) for March 31, 2024.
All cost of revenue and gross profit for 2025 were attributable to the Subsidiary for the period from the acquisition date, March 14, 2024.
OperatingExpenses. Our operating expenses were $330,242 (unaudited) and $416,828 (unaudited) for March 31, 2025 and 2024, respectively.
OtherIncome/Expense. We had other expense of $81,576 (unaudited) for March 31, 2025, compared to $3,271,642 (unaudited) in other expense for March 31, 2024, which includes the acquisition of EMGE.
NetIncome/Loss. For March 31, 2025, we had a net loss of $411,818 (unaudited), compare to a net loss of $3,688,470 (unaudited) for March 31, 2024, which includes the acquisition of the assets of EMGE.
Liquidity and Capital Resources
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 tocontinue our survival. Historically, we have raised money through convertible debt, almost always on unfavorable terms. There is no guaranteethat any capital, including through convertible loan transactions, will be available to us in the future or, if available, on terms acceptableto us. The terms of the recently obtained loans are discussed below.
AJBCapital 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,
RayVollintine. 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 December 31, 2024, we had total current assets of $1,033,779 (unaudited), consisting of $8,048 (unaudited) in cash, $49,731 in accounts receivable, $6,000 loan receivable and $970,000 (unaudited) in advances to former acquisition partner-company. Our total current liabilities as of December 31, 2024, were $4,831,830 (unaudited). Our working capital deficit was $3,798,051 (unaudited) as of December 31, 2024, compared to our working capital deficit of $2,150,975 (unaudited) as of December 31, 2023.
Going Concern
As of March 31, 2025, we have an accumulated deficit of $29,533,429 (unaudited). Our ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and our ability to achieve and maintain profitable operations. While we are expanding our best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.
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Off Balance Sheet Arrangements
As of March 31, 2025, 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 31, 2025 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 31, 2025, 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 31, 2025, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:
| 1. | We<br> do not have written documentation of our internal control policies and procedures. Written<br> documentation of key internal controls over financial reporting is a requirement of Section<br> 404 of the Sarbanes-Oxley Act as of the period ending March 31, 2025. Management evaluated<br> the impact of our failure to have written documentation of our internal controls and procedures<br> on our assessment of our disclosure controls and procedures and has concluded that the control<br> deficiency that resulted represented a material weakness. |
|---|
| 7 |
| --- | | 2. | We<br> do not have sufficient segregation of duties within accounting functions, which is a basic<br> internal control. Due to our size and nature, segregation of all conflicting duties may not<br> always be possible and may not be economically feasible. However, to the extent possible,<br> the initiation of transactions, the custody of assets and the recording of transactions should<br> be performed by separate individuals. Management evaluated the impact of our failure to have<br> segregation of duties on our assessment of our disclosure controls and procedures and has<br> concluded that the control deficiency that resulted represented a material weakness. | | --- | --- | | 3. | Effective<br> controls over the control environment were not maintained. Specifically, a formally adopted<br> written code of business conduct and ethics that governs our employees, officers, and directors<br> was not in place. Additionally, management has not developed and effectively communicated<br> to employees its accounting policies and procedures. This has resulted in inconsistent practices.<br> Further, our Board of Directors does not currently have any independent members and no director<br> qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation<br> S-K. Since these entity level programs have a pervasive effect across the organization, management<br> 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 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART
II – OTHER INFORMATION
Item
- 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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2025, 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<br><br> <br>Number | Description of Exhibit |
|---|---|
| 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 |
| 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<br> following materials from the Company’s Annual Report on Form 10-K for the year ended<br> December 31, 2023, formatted in Extensible Business Reporting Language (XBRL). |
**Provided herewith
| 9 |
| --- |
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: | June<br> 16, 2025, |
| By: | /s/ James W. |
| James<br> W. Zimbler | |
| Title: | President,<br> Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director |
| 10 |
| --- |
Exhibit31.1
CERTIFICATIONS
I, James W. Zimbler, certify
| 1. | I<br> have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2025, of Resonate Blends, Inc. (the “registrant”); |
|---|---|
| 2. | Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to<br> the period covered by this report; |
| 3. | Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material<br> respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report; |
| 4. | The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures<br> (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange<br> Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly during the period in which this report is being prepared; |
| --- | --- |
| b. | Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and |
| d. | Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The<br> registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial<br> reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing<br> the equivalent functions): |
| --- | --- |
| a. | All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and |
| --- | --- |
| b. | Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting. |
| Date: June 16, 2025. | |
| --- | --- |
| /s/ James W. Zimbler | |
| By: | James<br> W. Zimbler |
| Title: | Chief<br> Executive Officer |
Exhibit31.2
CERTIFICATIONS
I, James W. Zimbler, certify
| 1. | I<br> have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2025, of Resonate Blends, Inc. (the “registrant”); |
|---|---|
| 2. | Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to<br> the period covered by this report; |
| 3. | Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material<br> respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report; |
| 4. | The<br> registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures<br> (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange<br> Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly during the period in which this report is being prepared; |
| --- | --- |
| b. | Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and |
| d. | Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The<br> registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial<br> reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing<br> the equivalent functions): |
| --- | --- |
| a. | All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and |
| --- | --- |
| b. | Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting. |
Date: June 16, 2025.
| /s/ James W. Zimbler | |
|---|---|
| By: | James<br> W. Zimbler |
| Title: | Chief<br> Financial Officer |
Exhibit32.1
CERTIFICATIONOF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
PURSUANTTO
18U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual Report of Resonate Blends, Inc. (the “Company”) on Form 10-Q for the year ended March 31, 2025, filed with the Securities and Exchange Commission (the “Report”), I, James W. Zimbler, Chief Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The<br> Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
|---|---|
| 2. | The<br> information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company<br> as of the dates presented and the consolidated result of operations of the Company for the periods presented. |
| By: | /s/ James W. Zimbler |
| --- | --- |
| Name: | James<br> W. Zimbler |
| Title: | Principal<br> Executive Officer, Principal Accounting Officer and Principal Financial Officer |
| Date: | June<br> 16, 2025 |
This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.