Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jun. 26, 2020 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Resonate Blends, Inc. | |
Entity Central Index Key | 0000897078 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,950,843 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 39,557 | $ 53,139 |
Receivables | 45,512 | 52,603 |
Total current assets | 85,069 | 105,742 |
Investment in equity method investee | 25,000 | 25,000 |
TOTAL ASSETS | 109,069 | 130,742 |
Current liabilities | ||
Accounts payable and accrued liabilities | 217,932 | 175,243 |
Due to related parties | 11,625 | 11,650 |
Convertible notes payable, net of discount | 496,653 | 161,404 |
Derivative liability | 179,480 | 262,712 |
Settlement liability | 106,964 | 106,961 |
Short term loan | 16,775 | |
Total current liabilities | 1,029,429 | 717,970 |
Total liabilities | 1,029,429 | 717,970 |
Stockholders' deficit | ||
Common stock; $0.0001 par value; 100,000,000 shares authorized; 19,705,714 and 17,153,936 shares issued and outstanding as of March 31, 2020 and December 31, 2019 , respectively. | 1,970 | 1,715 |
Additional paid-in capital | 18,845,618 | 18,570,178 |
Accumulated deficit | (19,768,548) | (19,159,721) |
Total Stockholders' deficit | (920,360) | (587,228) |
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | 109,069 | 130,742 |
Series A Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock value | 400 | 400 |
Series C Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock value | $ 200 | $ 200 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,705,714 | 17,153,936 |
Common stock, shares outstanding | 19,705,714 | 17,153,936 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 4,000,000 | 4,000,000 |
Preferred stock, shares outstanding | 4,000,000 | 4,000,000 |
Series C Preferred Stock [Member] | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding | 2,000,000 | 2,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
REVENUES | $ 305,590 | $ 243,443 |
COST OF REVENUES | 90,559 | 88,398 |
Gross profit | 215,031 | 155,045 |
Operating expenses | ||
Advertising | 14,466 | 2,630 |
General and administrative expenses | 315,382 | 80,461 |
Legal and Professional fees | 286,213 | 19,162 |
Officer Compensation | 66,800 | 45,000 |
Salaries and Related | 198,703 | 54,437 |
Sales Commission | 17,412 | 18,957 |
Office Rent | 5,512 | |
Impairment of inhouse software | ||
Non cash management fees | 2,521,582 | |
Total operating expenses | 898,976 | 2,747,741 |
Loss from operations | (683,945) | (2,592,696) |
Other Income (expense) | ||
Other Income | 1,530 | |
Interest expense | (7,114) | |
Gain (loss) on change of derivative liability | 82,231 | |
Amortization of debt discount | ||
Gain (loss) on settlement of derivative liabilities | ||
Legal settlement | ||
Gain on settlement of notes payable | ||
Total other income (expense) | 75,117 | 1,530 |
Income (loss) from investment in equity method investee | (159) | |
NET INCOME (LOSS) | $ (608,828) | $ (2,591,325) |
Basic weighted average common shares outstanding | 17,872,298 | 5,526,452 |
Net Income (loss) per common share: basic and diluted | $ (0.03) | $ (0.4689) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) | Preferred Stock - Series A [Member] | Preferred Stock - Series B [Member] | Preferred Stock - Series C [Member] | Preferred Stock - Series D [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 400 | $ 7 | $ 200 | $ 446 | $ 15,404,716 | $ (15,489,993) | $ (84,224) | |
Balance, shares at Dec. 31, 2018 | 4,000,000 | 66,667 | 2,000,000 | 4,456,452 | ||||
Net Loss | (2,591,325) | (2,591,325) | ||||||
Settlement of liabilities | $ 44 | 196,732 | 196,776 | |||||
Settlement of liabilities, shares | 438,000 | |||||||
Stock issuance for services | $ 669 | 2,520,913 | 2,521,582 | |||||
Stock issuance for services, shares | 6,685,000 | |||||||
Balance at Mar. 31, 2019 | $ 400 | $ 7 | $ 200 | $ 1,159 | 18,122,361 | (18,081,318) | 42,809 | |
Balance, shares at Mar. 31, 2019 | 4,000,000 | 66,667 | 2,000,000 | 11,579,452 | ||||
Balance at Dec. 31, 2019 | $ 400 | $ 200 | $ 1,715 | 18,570,178 | (19,159,721) | (587,228) | ||
Balance, shares at Dec. 31, 2019 | 4,000,000 | 2,000,000 | 17,133,936 | |||||
Net Loss | (608,828) | (608,828) | ||||||
Common stock issuance | $ 255 | 275,440 | 275,696 | |||||
Common stock issuance, shares | 2,551,718 | |||||||
Balance at Mar. 31, 2020 | $ 400 | $ 200 | $ 1,970 | $ 18,845,618 | $ (19,768,549) | $ (920,360) | ||
Balance, shares at Mar. 31, 2020 | 4,000,000 | 2,000,000 | 19,685,654 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net Income (loss) | $ (608,828) | $ (2,591,325) |
Adjustments to reconcile | ||
Amortization of debt discount | ||
Loss on derivative liability | ||
Impairment of software cost | ||
Non cash interest expense | 5,468 | |
Legal Settlement | ||
Share based compensation | 225,695 | 2,521,582 |
Gain (Loss) on the settlement of debt | ||
Gain on settlement of derivative liabilities | ||
Income (Loss) from equity method investee | 159 | |
Changes in assets and liabilities | ||
Receivables | 7,091 | 4,799 |
Accounts payable and accrued expenses | 42,689 | 10,394 |
Due to Related party | 25 | |
Net cash provided by operating activities | (327,860) | (54,391) |
Investments in Joiant | ||
Disposal of Investment in Aspire | ||
Net cash provided by investing activities | ||
Cash Flows from Financing Activities | ||
Proceeds from subscription | 50,000 | |
Proceeds from convertible notes / loans payable | 151,960 | |
Proceeds from notes payables | 130,075 | |
Payments on preferred stocks buy back | ||
Payments on convertible notes payable | (17,757) | |
Acquisition of Resonate Blends | ||
Net cash provided by financing activities | 314,278 | |
Net increase in cash | (13,582) | (54,391) |
Cash, beginning of period | 53,139 | 68,513 |
Cash, end of period | 39,557 | 14,122 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 1,529 | |
Cash paid for tax | 1,500 | |
Non-Cash investing and financing transactions | ||
Conversion of debt for common stock | $ 196,776 |
Organization and Business Opera
Organization and Business Operations | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS The Company Resonate Blends, Inc. formerly Textmunication Holdings, Inc. (the “Company”) was incorporated in October 1984 in the State of Georgia as Brock Control Systems. Founded by Richard T. Brock, the Company was in the sales automation market and an early developer of enterprise customer management systems. The Company went public at the end of March of 1993. In February of 1996, the Company changed its name to Brock International Inc., and in March of 1998, the Company again changed our name to Firstwave Technologies, Inc. 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 but not for long. 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. Textmunication is an online mobile marketing platform service that will connect merchants with their customers and allow them to drive loyalty and repeat business in a non-intrusive, value added medium. For merchants we provide a mobile marketing platform where they can always send the most up-to-date offers/discounts/alerts/events schedule, such as happy hours, trivia night, and other campaigns. The consumer can also access specials and promotions that merchants choose to distribute through Textmunication by opting into keywords designated to the merchant’s keywords. On July 9, 2018, the 1 – 1,000 Reverse Split of the Company’s common stock took effect at the open of business. All shares and per share amounts have been retroactively adjusted to reflect the reverse split. On June 25, 2019, the Company issued a press release announcing it plans to change its business direction from its current SMS technology business to focus on the emerging national cannabis market. The Company planned on using its mobile texting platform to enhance communication efforts with the potential acquisitions. 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. 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. Finally, the Company entered into Employment Agreements with the following persons: (i) Geoffrey Selzer as Chief Executive Officer (CEO) of the Company with an annual salary of $180,000; and (ii) Pamela Kerwin as Chief Operating Officer (COO) of the Company with an annual salary of $120,000. Both are eligible for salary increases upon milestone achievements and other benefits. The Employment Agreement for the CEO has a term of 2 years and can’t be terminated without cause. Severance of six (6) weeks is available for termination of the COO without cause before one-year of service and eight (8) weeks after one-year of service. 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. B asis of Presentation The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. Going concern These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of March 31, 2020, the Company has an accumulated deficit of $19,768,548. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At March 31, 2020, no cash balances exceeded the federally insured limit. Accounts receivable and allowance for doubtful accounts Accounts receivable 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, 2020, and 2019 no allowance for doubtful accounts was set up. Revenue Recognition Revenues are recognized when control of the promised is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. The Company currently derives a substantial majority of its revenue from fees associated with our subscription services, which generally include mobile marketing platform services. Customers are billed for the subscription on a monthly basis. For all of the Company’s customers, regardless of the method, the Company uses to bill them, subscription revenue is recorded as deferred revenue in the accompanying consolidated balance sheets. As services are performed, the Company recognizes subscription revenue on a monthly basis over the applicable service period. When the Company provides a free trial period, the Company does not begin to recognize subscription revenue until the trial period has ended and the customer has been billed for the services. Professional services revenues are generated from SMS and RCS packages where client logs into a cloud-based application to send targeted SMS messages to their subscribers base. Our custom web application SMS/RCS platform is typically billed on a fixed-price based on the number of SMS/RCS allocated for each package our client purchases. Generally, revenue for SMS/RCS services is recognized immediately as our clients have instant access to their web-based application to send out messages, the number of SMS/RCS messages allocated to a client expires at the end of each month and renews beginning of each month. The Company offers whereby control of the product passes to the customer when delivered and revenue is recognized at the time of delivery. Results for reporting periods beginning after January 1, 2019 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605 We did not have a cumulative impact as of January 1, 2019 due to the adoption of Topic 606 and there was not an impact to our consolidated statement of operations for the year ended December 31, 2018 as a result of applying Topic 606. Fair Value of Financial Instruments The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items. As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. 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). The fair value of the accounts receivable, accounts payable, notes payable are considered short term in nature and therefore their value is considered fair value. Net income (loss) per Common Share Basic net income (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Property and equipment Property and equipment are stated at cost, less accumulated depreciation provided on the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Expenditures for renewals or betterments are capitalized, and repairs and maintenance are charged to expense as incurred the cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts, and any gain or loss thereon is reflected in operations. Company policy capitalize property and equipment for cost over $1,000, asset acquired under $1,000 are charge to operations. Income Taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. Because the Company has no net income, the tax benefit of the accumulated net loss has been fully offset by an equal valuation allowance. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. 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. Investments in Securities Investments in securities are accounted for using the equity method if the investment provides the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method is appropriate. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 3 – RELATED PARTY TRANSACTIONS As of March 31, 2020, the Company had advances due to a related party. The loans are due on demand and have no interest. Amounts outstanding as of March 31, 2020 and December 31, 2019 were approximately $11,625 and $11,650, respectively |
Convertible Note Payable
Convertible Note Payable | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | NOTE 4 - CONVERTIBLE NOTE PAYABLE Convertible notes payable consists of the following as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Total convertible notes payable 649,300 277,750 Less discounts (152,647 ) (116,346 ) Convertible notes, net of discount $ 496,653 $ 20,000 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. The following table presents details of the changes in the Company’s derivative liabilities associated with its convertible notes for the three months ended March 31, 2020: Amount Balance December 31, 2019 $ 262,711 Change in fair market value of derivative liabilities (83,231 ) Balance March 31, 2020 $ 179,480 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 5 – COMMITMENTS AND CONTINGENCIES Office Lease On January 6, 2015 the Company signed an amendment to its lease originally signed on May 9, 2008. The amended lease commenced January 1, 2015 and expires on thirty days’ notice. Rent expense was approximately $5,512 and $5,268 for the three months ended March 31, 2020 and 2019, respectively. We also have a co-share office located in Calabasas, California for our executive team at Resonate. We pay $99 month for the office space. Executive Employment Agreement On October 25, 2019 the Company entered into Employment Agreements with the following persons: (i) Geoffrey Selzer as Chief Executive Officer (CEO) of the Company with an annual salary of $180,000; and (ii) Pamela Kerwin as Chief Operating Officer (COO) of the Company with an annual salary of $120,000. Both are eligible for salary increases upon milestone achievements and other benefits. The Employment Agreement for the CEO has a term of 2 years and can’t be terminated without cause. Severance of six (6) weeks is available for termination of the COO without cause before one-year of service and eight (8) weeks after one-year of service. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 6 – STOCKHOLDERS’ EQUITY During the first quarter of 2020 the company issued a total of 1,501,778 vendors for compensation and services rendered. The fair market value of the shares issues accounted as expenses as follows: Professional fees $ 60,500 Payment to obtain loan 165,195 Total 225,695 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7 – SUBSEQUENT EVENTS On May 22, 2020, Resonate Blends, Inc. (the “Company”) entered into a Stock Purchase Agreement (the “SPA”) with Wais Asefi, Nick Miniello, Juleon Asefi, and Curt Byers (collectively, the “Asefi Group”) to sell to the Asefi Group its subsidiary, Textmunication, Inc., a California corporation (“Textmunication”). Textmunication operates the Company’s SMS business activities. The Company will retain its cannabis operations based in Calabasas, California. The consideration for the sale of Textmunication consists of the cancellation by the Asefi Group of 4,822,029 shares of common stock (the “Shares”) of the Company. The Shares have a market value of $337,542, based on our last sales price of $0.07 per share as of May 26, 2020. Upon the cancellation of the Shares, the Company agreed to execute a general release in favor of Mr. Asefi. Also on May 22, 2020, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Wais Asefi. Pursuant to the Separation Agreement, Mr. Asefi agreed to separate from all officer positions and as a director of the Company and to further accept the payment of $200,000 from the Company’s future fundraising as consideration of all debts outstanding under Mr. Asefi’s employment agreement with the Company. Mr. Asefi further agreed to cancel his 4,000,000 shares of Series A Preferred Stock and to transfer his 2,000,000 shares of Series C Preferred Stock to Geoffrey Selzer, the Company’s current CEO and Director. Mr. Asefi further released the Company of all claims. Also on May 22, 2020, Mr. Selzer signed a Voting Agreement and agreed to vote his newly acquired 2,000,000 shares of Series C Preferred Stock in favor of the sale of Textmunication to the Asefi Group. On June 18, 2020, we executed a convertible promissory note with Geneva Roth Remark Holdings, Inc. for $85,800 together with any interest at the rate of 10% per annum from the issue date. If we decide to let this Note convert, the variable conversion price is 75% multiplied by the market price, representing a market discount of 25%. We have the ability to prepay this Note beginning on the Issue Date and ending on the date which is one hundred twenty (120) days following the Issue Date with a prepayment percentage of 113%. The period beginning on the date which is one hundred twenty-one (121) days following the Issue Date and ending on the date which is one hundred eight (180) days following the Issue Date, the prepayment percentage is 118%. On March 3, 2020 Resonate Blends, Inc. (“Resonate”) agreed to pay Cicero Holding, Inc. (“Cicero”) five payments of $10,000 plus a final balloon payment of $60,000 by September 15, 2020. This settlement was on a previous $100,000 convertible note issued to the Company on October 2, 2019. To date, Resonate has made two payments of $10,000 each – or $20,000 total. On June 23, 2020, both Parties agreed to amend the settlement agreement dated March 3, 2020. Resonate will issue 900,000 common shares to Cicero with a leak-out of 120,000 shares per month to retire the remaining $90,000 owed on the Note. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Cash | 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. At March 31, 2020, no cash balances exceeded the federally insured limit. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable 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, 2020, and 2019 no allowance for doubtful accounts was set up. |
Revenue Recognition | Revenue Recognition Revenues are recognized when control of the promised is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. The Company currently derives a substantial majority of its revenue from fees associated with our subscription services, which generally include mobile marketing platform services. Customers are billed for the subscription on a monthly basis. For all of the Company’s customers, regardless of the method, the Company uses to bill them, subscription revenue is recorded as deferred revenue in the accompanying consolidated balance sheets. As services are performed, the Company recognizes subscription revenue on a monthly basis over the applicable service period. When the Company provides a free trial period, the Company does not begin to recognize subscription revenue until the trial period has ended and the customer has been billed for the services. Professional services revenues are generated from SMS and RCS packages where client logs into a cloud-based application to send targeted SMS messages to their subscribers base. Our custom web application SMS/RCS platform is typically billed on a fixed-price based on the number of SMS/RCS allocated for each package our client purchases. Generally, revenue for SMS/RCS services is recognized immediately as our clients have instant access to their web-based application to send out messages, the number of SMS/RCS messages allocated to a client expires at the end of each month and renews beginning of each month. The Company offers whereby control of the product passes to the customer when delivered and revenue is recognized at the time of delivery. Results for reporting periods beginning after January 1, 2019 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605 We did not have a cumulative impact as of January 1, 2019 due to the adoption of Topic 606 and there was not an impact to our consolidated statement of operations for the year ended December 31, 2018 as a result of applying Topic 606. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items. As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. 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). The fair value of the accounts receivable, accounts payable, notes payable are considered short term in nature and therefore their value is considered fair value. |
Net Income (Loss) Per Common Share | 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 Property and equipment are stated at cost, less accumulated depreciation provided on the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Expenditures for renewals or betterments are capitalized, and repairs and maintenance are charged to expense as incurred the cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts, and any gain or loss thereon is reflected in operations. Company policy capitalize property and equipment for cost over $1,000, asset acquired under $1,000 are charge to operations. |
Income Taxes | Income Taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. Because the Company has no net income, the tax benefit of the accumulated net loss has been fully offset by an equal valuation allowance. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Stock-Based Compensation | 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. |
Investments in Securities | Investments in Securities Investments in securities are accounted for using the equity method if the investment provides the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method is appropriate. |
Convertible Note Payable (Table
Convertible Note Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible notes payable consists of the following as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Total convertible notes payable 649,300 277,750 Less discounts (152,647 ) (116,346 ) Convertible notes, net of discount $ 496,653 $ 20,000 |
Schedule of Changes in Fair Value of Derivative Liabilities | The following table presents details of the changes in the Company’s derivative liabilities associated with its convertible notes for the three months ended March 31, 2020: Amount Balance December 31, 2019 $ 262,711 Change in fair market value of derivative liabilities (83,231 ) Balance March 31, 2020 $ 179,480 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Compensation and Services Rendered | The fair market value of the shares issues accounted as expenses as follows: Professional fees $ 60,500 Payment to obtain loan 165,195 Total 225,695 |
Organization and Business Ope_2
Organization and Business Operations (Details Narrative) - USD ($) | Oct. 25, 2019 | Jul. 09, 2018 | Nov. 16, 2013 | Oct. 28, 2013 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Reverse stock split, description | 1 - 1,000 Reverse Split | 1 for 5 reverse split of its outstanding common stock. | |||||
Annual salary | $ 66,800 | $ 45,000 | |||||
Accumulated deficit | $ (19,768,548) | $ (19,159,721) | |||||
Share Exchange Agreement [Member] | |||||||
Shares received on transaction | 65,640,207 | ||||||
Percentage of shares exchanged | 100.00% | ||||||
Resonate Purchase Agreement [Member] | |||||||
Percentage of common shares issued | 5.00% | ||||||
Number of shares issued during period | 665,072 | ||||||
Agreement, description | 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. | ||||||
Entourage Labs Purchase Agreement [Member] | |||||||
Percentage of common shares issued | 5.00% | ||||||
Number of shares issued during period | 665,072 | ||||||
Agreement, description | 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. | ||||||
Conveyance Agreement [Member] | Mark S Johnson [Member] | |||||||
Equity interest percentage | 49.00% | ||||||
Number of shares cancelled during period | $ 20,000 | ||||||
Employment Agreement [Member] | |||||||
Agreement, description | The Employment Agreement for the CEO has a term of 2 years and can't be terminated without cause. Severance of six (6) weeks is available for termination of the COO without cause before one-year of service and eight (8) weeks after one-year of service. | ||||||
Employment Agreement [Member] | Geoffrey Selzer, CEO [Member] | |||||||
Annual salary | $ 180,000 | ||||||
Employment Agreement [Member] | Pamela Kerwin, COO [Member] | |||||||
Annual salary | $ 120,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash insured limit | ||
Allowance for doubtful accounts | ||
Property and equipment excess capitalized cost | 1,000 | |
Value of assets acquired | $ 1,000 | |
Minimum [Member] | ||
Estimated useful life | 3 years | |
Minimum [Member] | Investee [Member] | ||
Investment percentage | 20.00% | |
Maximum [Member] | ||
Estimated useful life | 7 years | |
Maximum [Member] | Investee [Member] | ||
Investment percentage | 50.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Loans payable - related party | $ 11,625 | $ 11,650 |
Convertible Note Payable - Sche
Convertible Note Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Total convertible notes payable | $ 649,300 | $ 277,750 |
Less discounts | (152,647) | (116,346) |
Convertible notes, net of discount | $ 496,653 | $ 161,404 |
Convertible Note Payable - Sc_2
Convertible Note Payable - Schedule of Changes in Fair Value of Derivative Liabilities (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Beginning Balance | $ 262,712 | |
Change in fair market value of derivative liabilities | (82,231) | |
Ending Balance | $ 179,480 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Oct. 25, 2019 | Jan. 06, 2015 | Mar. 31, 2020 | Mar. 31, 2019 |
Description on lease | The Company signed an amendment to its lease originally signed on May 9, 2008. The amended lease commenced January 1, 2015 and expires on thirty days' notice. | |||
Rent expense | $ 5,512 | $ 5,268 | ||
Monthly lease payments | 99 | |||
Annual salary | $ 66,800 | $ 45,000 | ||
Employment Agreement [Member] | ||||
Agreement, description | The Employment Agreement for the CEO has a term of 2 years and can't be terminated without cause. Severance of six (6) weeks is available for termination of the COO without cause before one-year of service and eight (8) weeks after one-year of service. | |||
Employment Agreement [Member] | Geoffrey Selzer, CEO [Member] | ||||
Annual salary | $ 180,000 | |||
Employment Agreement [Member] | Pamela Kerwin, COO [Member] | ||||
Annual salary | $ 120,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | 3 Months Ended |
Mar. 31, 2020shares | |
Vendors [Member] | |
Number of shares issued for services, shares | 1,501,778 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Compensation and Services Rendered (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Equity [Abstract] | |
Professional fees | $ 60,500 |
Payment to obtain loan | 165,195 |
Total | $ 225,695 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jun. 18, 2020 | May 22, 2020 | Mar. 03, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Sep. 15, 2020 | May 26, 2020 |
Payments of notes payable | $ 17,757 | ||||||
Cicero [Member] | |||||||
Number of common stock shares issued | 900,000 | ||||||
Remaining of notes owned | $ 90,000 | ||||||
Cicero [Member] | Five Payments [Member] | |||||||
Payments of notes payable | 10,000 | ||||||
Cicero [Member] | Forecast [Member] | |||||||
Final balloon payment | $ 60,000 | ||||||
Convertible debt | $ 100,000 | ||||||
Cicero [Member] | Payment One [Member] | |||||||
Payments of notes payable | 10,000 | ||||||
Cicero [Member] | Payment Two [Member] | |||||||
Payments of notes payable | $ 20,000 | ||||||
Cicero [Member] | Leak-Out [Member] | |||||||
Number of common stock shares issued | 120,000 | ||||||
Subsequent Event [Member] | Convertible Promissory Note [Member] | Geneva Roth Remark Holdings, Inc [Member] | |||||||
Debt instrument, face amount | $ 85,800 | ||||||
Debt instrument, interest rate | 10.00% | ||||||
Debt, conversion price percentage | 75.00% | ||||||
Debt, market discount percentage | 25.00% | ||||||
Debt prepayments, description | We have the ability to prepay this Note beginning on the Issue Date and ending on the date which is one hundred twenty (120) days following the Issue Date with a prepayment percentage of 113%. The period beginning on the date which is one hundred twenty-one (121) days following the Issue Date and ending on the date which is one hundred eight (180) days following the Issue Date, the prepayment percentage is 118%. | ||||||
Subsequent Event [Member] | Stock Purchase Agreement [Member] | |||||||
Payment of future fundraising | $ 200,000 | ||||||
Subsequent Event [Member] | Stock Purchase Agreement [Member] | Asefi Group [Member] | |||||||
Cancellation of shares | 4,822,029 | ||||||
Cancellation of shares, values | $ 337,542 | ||||||
Sales price per share | $ 0.07 | ||||||
Subsequent Event [Member] | Stock Purchase Agreement [Member] | Asefi Group [Member] | Series A Preferred Stock [Member] | |||||||
Cancellation of shares | 4,000,000 | ||||||
Subsequent Event [Member] | Stock Purchase Agreement [Member] | CEO and Director [Member] | Series C Preferred Stock [Member] | |||||||
Cancellation of shares | 2,000,000 | ||||||
Subsequent Event [Member] | Voting Agreement [Member] | Series C Preferred Stock [Member] | |||||||
Number of shares to acquire | 2,000,000 |