Resonate Blends Inc (KOAN)

[TheFinalCD]

On September 26, 2017, the Circuit Court of Baltimore County, Maryland (the “Court”), entered an order (the “LAM Order”) approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), in accordance with a stipulation of settlement, pursuant to the Settlement Agreement between the Company and LAM, in the matter entitled Livingston Asset Management LLC v. Textmunication Holdings, Inc . (the “LAM Action”). LAM commenced the LAM Action against the Company to recover an aggregate of $414,507.08 of past-due obligations and accounts payable of the Company (the “LAM Claim”), which LAM had purchased from certain vendors of the Company pursuant to the terms of separate receivable purchase agreements between LAM and each of such vendors (the “LAM Assigned Accounts”). The LAM Assigned Accounts relate to certain contractual obligations and legal services provided to the Company. The LAM Order provides for the full and final settlement of the LAM Claim and the LAM Action. The Settlement Agreement became effective and binding upon the Company and LAM upon execution of the LAM Order by the Court on September 26, 2017.

Pursuant to the terms of the Settlement Agreement approved by the LAM Order, on September 26, 2017, the Company agreed to issue to LAM shares (the “LAM Settlement Shares”) of the Company’s common stock, $0.0001 par value (the “Common Stock”). The Settlement Agreement provides that the LAM Settlement Shares will be issued in one or more tranches, as necessary, sufficient to satisfy the LAM Settlement Amount through the issuance of freely trading securities issued pursuant to Section 3(a)(10) of the Securities Act. Pursuant to the Settlement Agreement, LAM may deliver a request to the Company for shares of common stock to be issued to LAM (the “LAM Share Request”). The parties reasonably estimate that the fair market value of the LAM Settlement Shares to be received by LAM is equal to approximately $690,845.00. Additional tranche requests shall be made as requested by LAM until the LAM Settlement Amount is paid in full.

The Settlement Agreement provides that in no event shall the number of shares of Common Stock issued to LAM or its designee in connection with the Settlement Agreement, when aggregated with all other shares of Common Stock then beneficially owned by LAM and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder), result in the beneficial ownership by LAM and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and the rules and regulations thereunder) at any time of more than 9.99% of the Common Stock.

The Company has reserved a minimum of 650,000,000 shares of Common Stock to provide for issuances upon full satisfaction of the Settlement Amount.