NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December
31, 2022
(1)
BASIS OF PRESENTATION, ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting
principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”)
regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain
information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or
omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in
conjunction with the audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for
the fiscal year ended March 31, 2022, which was filed with the SEC on June 29, 2022. The results from operations for the three and nine-month
periods ended December 31, 2022, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31,
2023. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations, stockholders’ equity, and cash flows at June 30, 2022 and for all periods presented herein
have been made.
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts and the disclosure of contingent amounts in the Company’s financial statements and the accompanying notes. Actual results
could materially differ from those estimates.
Organization
and Nature of Operations
Sundance
Strategies, Inc. (formerly known as Java Express, Inc.) was organized under the laws of the State of Nevada on December 14, 2001, and
engaged in the retail selling of beverage products to the general public until these endeavors ceased in 2006; it had no material business
operations from 2006, until its acquisition of ANEW LIFE, INC. (“ANEW LIFE”), a subsidiary of Sundance Strategies, Inc. (“Sundance
Strategies”, “the Company”, “we” or “our”).
Our
historical business model has focused on purchasing or acquiring life insurance policies and residual interests in or financial products
tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part
of or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace,
often referred to as the “life settlements market.”
During
the latter part of the fiscal year ended March 31, 2021, the Company began developing an additional business offering, providing professional
services to specialty structured finance groups, bond issuers and life settlement aggregators. The Company has now assembled an experienced
team from the life settlement marketplace, as well as from other areas such as financial services and public financial markets. As a
professional services provider, the Company applies industry best practices to advise on the selection of specific portfolios of life
insurance policies that are tailored to meet the needs of its clients. The Company’s clients may include bond issuers, bond investors,
or other structured finance product issuers. The Company has developed strategies and methodologies which include the acquisition of
life insurance portfolios, then uses common structured finance techniques and proprietary analytics to structure bonds for issuances,
including principal protected bonds. The Company’s goal is to deliver long-term value and profitability to shareholders by growing the
Company’s professional services business and asset base, resulting in the ability to pay dividends to its shareholders.
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December
31, 2022
During
the latter part of the year ended March 31, 2021, the Company began working closely with bond placement agents and aggregators to establish
various aspects of a proprietary, investment grade bond offering. In this arrangement, the Company participates as the sole originator
in the role of structuring and advising on the structure of the proprietary bond instrument. Included in the role of structuring financial
assets, the Company uses proprietary analytics to establish the makeup of the rated instrument, including but not limited to, life settlement
assets (life insurance policies) and managed cash, and implements a process of selective assembly of the underlying assets and cash management
that will meet the policy requirements and analytics. The Company continues to provide current and ongoing resources for all analytics,
as well as advisement support for the investment and non-investment grade ratings for the managed asset pool and the managed cash accounts.
Acting in an advisory role, the Company is reimbursed for all expenses associated with the structuring and preparation of any bond offering,
will receive an advisory payment upon the closing of any bond offering, and then will hold residual rights on the balance of assets once
the bond is retired.
During
the year ended March 31, 2022, the Company and US Capital Global Securities LLC, an affiliate of US Capital Global, entered into an arrangement
wherein the Company is the lead advisor and lead originator of tailored life insurance portfolios to be used in a life insurance-linked
bond offering (“bond offering”) of between $250 million to $500 million. US Capital Global Securities LLC is the lead placement
agent and is marketing the bond offering on behalf of the issuer on a best-efforts basis to qualified investors. The Company has worked
with Egan Jones rating agency to obtain a minimum of BBB plus to an A minus rating on the bond offering. This initial rating is based
upon a sample portfolio of life settlement assets similar to those expected to be utilized in the bond offering. Once a percentage of
the bond offering is in escrow, then the actual life settlement portfolios will be purchased and held until the bond offering closes.
Once the final group of assets are assembled, then a final rating will be obtained. The Company has engaged a licensed asset manager,
whose projected returns will be approved by the rating agency. Important for the success of the bond is the treatment of the various
cash accounts that will support the bond. The two primary accounts will be the Investment account and the Cash Reserve account. These
accounts will represent approximately 40% of the total cash raised from the bond offering. The Investment and Cash Reserve accounts are
projected to produce sufficient annual returns to support the cost associated to maintain the bonds. A nationally recognized trust manager
has been engaged to insure all the workings of the bond are handled properly and timely. An actuarial company has also been engaged to
provide the modeling needed for the rating agency, asset manager and bond issuer. For services provided, the Company will receive a fee
upon the closing on the bond offering and will also hold a residual monetary right to cash flows from the life settlement assets once
the bond is retired.
On
January 1, 2022, the Company entered into a marketing and consulting agreement with Tradability, LLC (“Consultant”) that
requires the Company to make an initial $100,000 payment and up to an additional $400,000 in the future (which will be financed by the
Consultant via a promissory note). The $400,000 obligation is contingent upon the Consultant and the Company successfully reaching certain
milestones. Further, the agreement requires the Company to issue between 1,000,000 and 10,000,000 stock options (which are exercisable
into the Company’s common stock at prices between $1.00 to $2.50 per share) contingent upon the Consultant and the Company successfully
reaching certain milestones. The milestones primarily relate to the Consultant finalizing the tokenization of 500 million non-fungible
tokens (“NFTs”) and the successful placement of NFTs with proceeds of between $100 million and $500 million. The proceeds
will be used to purchase Life Settlements for which the Company will be an advisor. As of December 31, 2022, none of the milestones related
to the potential issuance of equity have been met; and no assurance can be given that these anticipated milestones will be reached.
In
addition to the arrangements described above, management of the Company is actively seeking additional bonding and financing opportunities
that would allow the Company to leverage its unique position within the life-settlements market, and lead to future revenue opportunities.
To be able to quickly pivot to any of these additional opportunities, the Company has been actively seeking to secure additional bond
ratings from other bond rating agencies to expand its attractiveness within the marketplace.
Significant
Accounting Policies
There
have been no changes to the significant accounting policies of the Company from the information provided in Note 2 of the Notes to Consolidated
Financial Statements in the Company’s most recent Form 10-K, except as discussed below.
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December
31, 2022
Basic
and Diluted Net Income (Loss) Per Common Share
Basic
net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the periods
presented using the treasury stock method. Diluted net loss per common share is computed by including common shares that may be issued
subject to existing rights with dilutive potential, when applicable. Potential dilutive common stock equivalents are primarily comprised
of potential dilutive shares resulting from convertible debt agreements and common stock warrants. Potentially dilutive shares resulting
from convertible debt agreements are evaluated using the if-converted method. Potentially dilutive securities are not included in the
calculation of diluted net loss per share for the three and nine months ended December 31, 2022 and 2021, because to do so would be anti-dilutive.
Potentially dilutive securities outstanding as of December 31, 2022 and 2021 are comprised of warrants convertible into 7,873,990 and
4,958,754 shares of common stock, respectively.
New
Accounting Pronouncements
Adopted
During the Nine Months Ended December 31, 2022
In
May 2021, the FASB issued ASU 2021-04 Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified
Written Call Options. This ASU clarifies an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified
written call options (for example, warrants) that remain equity classified after modification or exchange. Specifically, it provides
a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity
or an expense. The amendment is effective for fiscal years beginning after December 15, 2021, and interim periods therein. The Company
adopted the new guidance as of April 1, 2022 and used the framework to record modification to the exercise price of equity classified
warrants during the nine months ended December 31, 2022.
Not
Yet Adopted
The
Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on
its results of operations, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements
will have a significant effect on its financial statements.
(2)
LIQUIDITY REQUIREMENTS AND GOING CONCERN
Since
the Company’s inception on January 31, 2013, operations have been primarily financed through sales of equity, debt financing from
related parties and the issuance of notes payable and convertible debentures. As of December 31, 2022, the Company had $3,158 of cash
assets, compared to $267,966 as of March 31, 2022. As of December 31, 2022, the Company had access to draw an additional $4,492,192 on
the notes payable, related party (see Note 6) and $3,000,000 on the Convertible Debenture Agreement (See Note 7). For the nine months
ended December 31, 2022, the Company’s average monthly operating expenses were approximately $58,500, which includes salaries of our
employees, consulting agreements and contract labor, general and administrative expenses and legal and accounting expenses. In addition
to the monthly operating expenses, the Company continues to pursue other debt and equity financing opportunities, and as a result, financing
expenses of $13,500 were incurred during the three months ended December 31, 2022. As management continues to explore additional financing
alternatives, beginning January 1, 2023, the Company is expected to spend up to an additional $385,000 on these efforts. Outstanding
Accounts Payable as of December 31, 2022 totaled $698,797. Management has concluded that its existing capital resources and availability
under its existing convertible debentures and debt agreements with related parties will be sufficient to fund its operating working capital
requirements for at least the next 12 months, or through February 2024. Related parties have given assurance that their continued support,
by way of either extensions of due dates, or increases in lines-of-credit, can be relied on. As mentioned above, the Company also continues
to evaluate other debt and equity financing opportunities.
The
outbreak of COVID-19 originated in Wuhan, China, in December 2019 and has since spread to multiple countries, including the United States
and several European countries. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. The COVID-19 pandemic
is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which
the Company relies. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess
or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital,
which could negatively impact the Company’s short-term and long-term liquidity. The ultimate impact of the COVID-19 pandemic is
highly uncertain and subject to change. The Company does not yet know the full extent of potential delays or impacts on its business,
financing or other activities or on healthcare systems or the global economy as a whole. However, these effects could have a material
impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which we rely.
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December
31, 2022
The
accompanying financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize
its assets and satisfy its liabilities in the normal course of business.
(3)
FAIR VALUE MEASUREMENTS
As
defined by ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), fair value is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values.
Those
levels of input are summarized as follows:
| ● |
Level
1: Quoted prices in active markets for identical assets and liabilities. |
| |
|
| ● |
Level
2: Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets, quoted prices
for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant
assumptions are observable in the market. |
| |
|
| ● |
Level
3: Unobservable inputs that are supported by little or no market activity. Level 3 assets and liabilities include financial instruments
whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques as well as instruments
for which the determination of fair value requires significant management judgment or estimation. |
The
level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that
is significant to the fair value measurement in its entirety.
The
Company did not have any transfers of assets and liabilities between Levels 1, 2 and 3 of the fair value measurement hierarchy during
the nine months ended December 31, 2022 and 2021.
Other
Financial Instruments
The
Company’s recorded values of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued liabilities
approximate their fair values based on their short-term nature. The recorded values of the notes payable and convertible debenture approximate
the fair values as the interest rate approximates market interest rates.
(4)
STOCKHOLDERS’ EQUITY
Common
Stock
Effective
December 6, 2018, three existing stockholders have contributed to the Company a portion of their common shares held at a repurchase price
to the Company of $0.05 per share. The Company has cancelled the acquired shares, which decreased the outstanding common shares on the
books of the Company. The total number of common shares canceled/retired was 8,000,000. Of the 8,000,000 shares, 6,000,000 were owned
by a related party to the Company. The total liability related to the repurchase of these shares is $400,000, with repayment to the related
party stockholders contingent on a major financing event. Of the $400,000 liability, $300,000 is to a related party.
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December
31, 2022
Warrants
to Purchase Common Stock
The
Company’s related party lenders consist of: the Chairman of the Board of Directors and a stockholder, Radiant Life, LLC and Mr.
Dickman, a board member and stockholder. These holders of the related party unsecured promissory notes, hold agreements that provide
each related party with common stock warrants upon the lender’s extension of a maturity due date or upon the loaning of additional
monies. The number of warrants issued for an extension is based on the following formula: 10,000 warrants per month the due date is extended
plus 1 warrant for every $2 of the principal balance outstanding (not including interest) at the time of the extension (rounded to the
nearest whole warrant). Upon the loaning of additional monies, the lender will also require 2 warrants for each dollar loaned. All warrants
issued under these terms vested immediately upon issuance, have an exercise price approximately equal to the fair value of the Company’s
common stock on the date of grant, and expire 5 years from the date of issuance.
On
June 20, 2022, the Company amended the agreements with the related party lenders to adjust the exercise price of the warrants issued
in conjunction with extensions of due dates and new monies lent on the outstanding notes payable, related parties from January 5, 2022
to February 5, 2022. The original agreements stated that the exercise price of the warrants issued was $0.05. The amended agreements
adjust the exercise price from $0.05 to $1.05, which is the estimated fair market value of the common stock on the grant dates of the
warrants. The original agreements inadvertently stated an exercise price of $0.05, when the Company had intended to grant warrants with
an exercise price of $1.05. This modification was evaluated and it was determined that the increase in exercise price resulted in a decrease
in the fair value of the warrants issued from January 5, 2022 to February 5, 2022, and therefore no additional warrant expense was required.
During
the three months ended December 31, 2022, and per the provisions outlined above, the Company agreed
to provide Mr. Dickman with warrants for 399,749 shares of common stock in conjunction with the extension of the due date of the outstanding
promissory notes and agreed to provide the Chairman of the Board of Directors and a stockholder with warrants for 224,000 shares of common
stock in conjunction with the Company borrowing $112,000 under the respective note payable and line of credit agreement (see note
6). The exercise price of the warrants issued during the three months ended December 31, 2022 was $1.05. The value of the warrants on
the date of grant, as calculated by the Black-Scholes-Merton valuation model, was $589,858. The inputs used in these calculations included
a fair value of the underlying common stock of $1.049 per share, a risk-free of between
3.84% and 4.31%, volatility of between 142.23% and 143.97% and a dividend rate of 0%. The Company determined the cost of debt issuance
to be $211,922, to be amortized quarterly through November 30, 2022 (the due date of the lender’s line of credit at the time of
the borrowing event). As such, $52,980 of debt discount was amortized as interest expense during the quarter ended December 31, 2022.
The remaining $377,936 of expense, related to Mr. Dickman’s warrants, was recorded as a loss on extinguishment of debt.
The
following table summarizes the warrants issued and outstanding as of December 31, 2022:
SCHEDULE
OF WARRANTS ISSUED AND OUTSTANDING
| Exercise Price ($) | | |
Warrants Outstanding | | |
Warrants Exercisable | | |
Weighted Average Remaining Contractual Life (Years) | | |
Proceeds to Company if Exercised | |
| | | |
| | |
| | |
| | |
| |
| | 0.05 | | |
| 3,708,754 | | |
| 3,708,754 | | |
| 2.45 | | |
$ | 185,439 | |
| | 1.00 | | |
| 1,000,000 | | |
| 1,000,000 | | |
| 1.27 | | |
| 1,000,000 | |
| | 1.05 | | |
| 2,615,236 | | |
| 2,615,236 | | |
| 4.27 | | |
| 2,745,998 | |
| | 2.00 | | |
| 50,000 | | |
| 50,000 | | |
| 3.59 | | |
| 100,000 | |
| | 5.00 | | |
| 500,000 | | |
| 500,000 | | |
| 4.07 | | |
| 2,500,000 | |
| | | | |
| 7,873,990 | | |
| 7,873,990 | | |
| | | |
$ | 6,531,437 | |
The
shares of common stock issuable upon exercise of the warrants are not registered with the Securities and Exchange Commission and the
holders of the warrants do not have registration rights with respect to the warrants or the underlying shares of common stock.
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December
31, 2022
(5)
NOTES PAYABLE
On
April 6, 2021, the Company borrowed $300,000 under an unsecured promissory note with Satco International, Ltd. This promissory note bears
interest at a rate of 8% annually and was due January 6, 2023. In conjunction with this note, the Company issued warrants for 1,000,000
shares of common stock, exercisable at $1.00 per share and expiring in 3 years from the date of the promissory note. On February 2, 2023,
the unsecured promissory note with Satco International, Ltd. was amended to extend the due date from January 6, 2023 to April 6, 2023,
or at the immediate time when alternative financing or other proceeds are received. This extension has no bearing on the warrants that
were issued in conjunction with the original promissory note. This note is separate from the 8% convertible debenture agreement that
the Company has in place with Satco International, Ltd. (see note 7). As of December 31, 2022 accrued interest on the note totaled $41,688.
(6)
NOTES PAYABLE, RELATED PARTY
As
of December 31, 2022, and March 31, 2022, the Company had borrowed $3,113,808
and $3,001,808
respectively, excluding accrued interest and net of the debt discount, from related parties. The interest associated with the Notes Payable, Related Party of
$977,598
and $767,358
is recorded on the balance sheet as an Accrued Expense obligation at December 31, 2022 and March 31, 2021, respectively.
Related
Party Promissory Notes
As
of both December 31, 2022 and March 31, 2022, the Company owed $826,000 under the unsecured promissory notes from Mr. Dickman. The promissory
notes bear interest at a rate of 8% annually. On November 10, 2022, the notes were amended to extend the due date from October 31, 2022
to July 31, 2023, or at the immediate time when alternative financing or other proceeds are received. As per the provision outlined in
Note 4, and in conjunction with the extension of the due date of the promissory notes, the Company also agreed to provide Mr. Dickman
with warrants for 399,749 shares of common stock. The
total number of warrants issued to the related party lender was 2,090,332 as of December 31, 2022
(see Note 4 for further details on these warrants). During the nine months ended December
31, 2022, the Company neither borrowed any additional funds under this agreement nor made any principal repayments. As of December 31,
2022, accrued interest on the notes totaled $287,962. In the event the Company completes a successful equity raise all principal and
interest on the notes are due in full at that time.
On
July 29, 2021, the Company entered into an unsecured promissory note agreement with Radiant Life, LLC. This agreement was in conjunction
with the Company borrowing $50,000 of Notes Payable, Related Party on the date of the agreement, and is not part of the existing note
payable and lines of credit agreement the Company has with Radiant Life, LLC that is outlined below in this Note 6. The $50,000 promissory
note bears interest at a rate of 8% annually and was due on July 29, 2022. On August 3, 2022, the promissory note was amended to extend
the due date from July 29, 2022 to July 29, 2023, or at the immediate time when alternative financing or other proceeds are received.
As of December 31, 2022, accrued interest on the note totaled $6,035.
Related
Party Note Payable and Line of Credit Agreements
As
of December 31, 2022, and March 31, 2022, the Company, the Company owed $1,178,300
and $1,066,300
respectively, exclusive of accrued interest and net of the debt discount, under the note payable and line of credit agreement with the Chairman of the Board of
Directors and a stockholder. The note was due November
30, 2023 or at the immediate time when alternative financing or other proceeds are received (see Note 8). On February 2,
2022, the related party note payable and line of credit agreement was amended to extend the due date from November
30, 2023 to November 30, 2024, or at the immediate time when alternative financing or other proceeds are received (see Note
8). On As of December 31, 2022, the agreement allowed for borrowings of up to $4,600,000.
During the nine months ended December 31, 2022, the Company borrowed $112,000
under this agreement and no principal repayments were made. The note payable and line of credit agreement incurs interest at 7.5%
per annum and are collateralized by the Company’s NIBS, if any. As of December 31,
2022, accrued interest on this note totaled $283,826.
As discussed in Note 4, a provision to the lending agreement provides the related party lender with common stock warrants upon the
lenders extension of a maturity due date or upon the loaning of additional monies. As per this
provision and in conjunction with the extension of the due date of the promissory notes, the Company also agreed to provide the
Chairman of the Board of Directors and a stockholder with warrants for 224,000
shares of common stock during the nine months ended December 31, 2022. The total number of warrants issued to the related
party lender was 2,604,150
as of December 31, 2022 (see Note 4 for further details on these warrants).
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December
31, 2022
As
of December 31, 2022 and March 31, 2021, the Company owed $1,059,508 in principle under the note payable and lines of credit agreement
with Radiant Life, LLC. The agreement allows for borrowings of up to $2,130,000. The principal and interest on the note were due November
30, 2024 or at the immediate time when alternative financing or other proceeds are received. On
February 2, 2023, the agreement was amended to extend the due date from November 30, 2023 to November 30, 2024, or at the immediate time
when alternative financing or other proceeds are received (see Note 8). The note
payable and line of credit agreement incurs interest at 7.5% per annum and is collateralized by the Company’s NIBS, if any. During the
nine months ended December 31, 2022 the Company neither borrowed nor repaid any principal under this agreement. As of December 31, 2022,
accrued interest on this agreement totaled $399,775. As discussed in Note 4, a provision to the lending agreement provides the related
party lender with common stock warrants upon the lenders extension of a maturity due date or upon the loaning of additional monies. No
new warrants were issued during the nine months ended December 31, 2022. The total number of warrants issued to the related party lender
was 1,679,508 as of December 31, 2022 (see Note 4 for further details on these warrants).
(7)
CONVERTIBLE DEBENTURE AGREEMENT
The
Company has entered into an 8% convertible debenture agreement with Satco International, Ltd., that allows for borrowings of up to $3,000,000.
The holder originally had the option to convert the outstanding principal and accrued interest to unregistered, restricted common stock
of the Company on June 2, 2016. Per the agreement, the number of shares issuable at conversion shall be determined by the quotient obtained
by dividing the outstanding principal and accrued and unpaid interest by 90% of the 90-day average closing price of the Company’s
common stock from the date the notice of conversion is received; and the price at which the Debenture may be converted will be no lower
than $1.00 per share. The original maturity date was June 2, 2016, but was later extended, through a series of extensions, to November
30, 2023. On February 9, 2023, the note was amended to extend the due date from November
30, 2023 to November 30, 2024 , or at the immediate time when alternative financing or other proceeds are received. This extension
has no bearing on the warrants that were issued in conjunction with the original promissory note.
As
of December 31, 2022 and March 31, 2022, the Company owed $0 under the agreement, excluding accrued interest. The associated interest
of $124,225 is recorded on the balance sheet as an Accrued Expense obligation at December 31, 2022 and March 31, 2022.
(8)
SUBSEQUENT EVENTS
Subsequent
to December 31, 2022, the following events transpired:
On
February 2, 2023, the unsecured promissory note with Satco International, Ltd. was amended to extend the due date from January 6, 2023
to April 6, 2023, or at the immediate time when alternative financing or other proceeds are received. This extension has no bearing on
the warrants that were issued in conjunction with the original promissory note.
On
February 2, 2023, the related party note payable and line of credit agreement with Radiant Life, LLC (see Note 6) was amended to extend
the due date from November 30, 2023 to November 30, 2024, or at the immediate time when alternative financing or other proceeds are received.
As per the provision outlined in Note 4, and in conjunction with the extension of the due date of the agreement, the Company also agreed
to provide Radiant Life, LLC with warrants for 649,754 shares of common stock vested immediately upon issuance, with an exercise price
of $1.05 per share and a 5-year exercise window from the date of the extension agreement.
On
February 2, 2023 ,
the related party note payable and line of credit agreement with the Chairman of the Board of Directors and a stockholder (see Note 6)
was amended to extend the due date from November 30, 2023 to November 30, 2024, or at the immediate time when alternative financing or
other proceeds are received. As per the provision outlined in Note 4, and in conjunction with the extension of the due date of the agreement,
the Company also agreed to provide the Chairman of the Board of Directors and a stockholder, with warrants for 719,300 shares of common
stock, vested immediately upon issuance, with an exercise price of $1.05 per share and a 5-year exercise window from the date of the
extension agreement
On
February 9, 2023, the Company agreed to amend the 8% convertible debenture agreement with Satco International, Ltd. (see Note 7) to extend
the due date and conversion rights from November 30, 2023 to November 30, 2024.
.
