Table of Contents

Filed Pursuant to Rule 253(g)(2)

File No. 024-10888

 

Offering Circular dated December 13, 2019

 

B2Digital, Incorporated

 

$4,500,000

600,000,000 SHARES OF COMMON STOCK OFFERED BY THE COMPANY

$0.0075 PER SHARE

 

This is the public offering of securities of B2Digital, Incorporated, a Delaware corporation. We are offering 600,000,000 shares of our common stock, par value $0.00001 (“Common Stock”), at an offering price of $0.0075 per share (the “Offered Shares”) by the Company. This Offering will terminate on twelve months from the day the Offering is qualified or the date on which the maximum offering amount is sold (such earlier date, the “Termination Date”). The minimum purchase requirement per investor is 100,000 Offered Shares ($750); however, we can waive the minimum purchase requirement on a case-by-case basis in our sole discretion.

 

These securities are speculative securities. Investment in the Company’s stock involves significant risk. You should purchase these securities only if you can afford a complete loss of your investment. See the “Risk Factors” section on page 5 of this Offering Circular.

  

Under Rule 251 of Regulation A, non-accredited investors are subject to the investment limitation and may only invest funds which do not exceed 10% of the greater of the purchaser's revenue or net assets (as of the purchaser's most recent fiscal year end). A non-accredited, natural person may only invest funds which do not exceed 10% of the greater of the purchaser's annual income or net worth.

 

No Escrow

 

The proceeds of this offering will not be placed into an escrow account. We will offer our Common Stock on a best efforts basis. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.

 

Subscriptions are irrevocable and the purchase price is non-refundable as expressly stated in this Offering Circular. All proceeds received by the Company from subscribers for this Offering will be available for use by the Company upon acceptance of subscriptions for the Securities by the Company.

 

Sale of these shares will commence within two calendar days of the qualification date and it will be a continuous Offering pursuant to Rule 251(d)(3)(i)(F).

 

This Offering will be conducted on a “best-efforts” basis, which means our Officers will use their commercially reasonable best efforts in an attempt to offer and sell the Shares. Our Officers will not receive any commission or any other remuneration for these sales. In offering the securities on our behalf, the Officers will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934, as amended.

 

Our Common Stock is traded in the OTC Market Pink Open Market under the stock symbol “BTDG.”

 

 

 

 

 

     
 

 

Investing in our Common Stock involves a high degree of risk. See “Risk Factors” beginning on page 5 for a discussion of certain risks that you should consider in connection with an investment in our Common Stock.

 

    Number of
Shares
  Price to
Public
  Underwriting 
Discounts and 
Commissions (3)
  Proceeds Before
Expenses to
Company (4)
Per Share (1)(2)       $0.0075   0   $0
Total Maximum   600,000,000   $0.0075   0   $4,500,000

 

  (1) We are offering shares on a continuous basis. See “Distribution – Continuous Offering.”

 

  (2) This is a “best efforts” offering. The proceeds of this offering will not be placed into an escrow account. We will offer our Common Stock on a best efforts basis primarily through an online platform. Upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds. See “How to Subscribe.”

 

  (3) We are offering these securities without an underwriter.

 

  (4) Excludes estimated total offering expenses, will be approximately $750,000 assuming the maximum offering amount is sold.

 

Our Board of Directors used its business judgment in setting a value of $0.0075 per share to the Company as consideration for the stock to be issued under the Offering. The sales price per share bears no relationship to our book value or any other measure of our current value or worth.

 

THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

 

THE SECURITIES UNDERLYING THIS OFFERING STATEMENT MAY NOT BE SOLD UNTIL QUALIFIED BY THE SECURITIES AND EXCHANGE COMMISSION. THIS OFFERING CIRCULAR IS NOT AN OFFER TO SELL, NOR SOLICITING AN OFFER TO BUY, ANY SHARES OF OUR COMMON STOCK IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH SALE IS PROHIBITED.

 

AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION, WHICH WE REFER TO AS THE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF ANY SUCH STATE. WE MAY ELECT TO SATISFY OUR OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO (2) BUSINESS DAYS AFTER THE COMPLETION OF OUR SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

 

This Offering Circular follows the disclosure format prescribed by Part I of Form S-1 pursuant to the general instructions of Part II(a)(1)(ii) of Form 1-A.

 

The date of this Offering Circular is December 13, 2019.

 

 

 

     
 

 

TABLE OF CONTENTS

 

   

Page

 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS   1  
SUMMARY   2  
THE OFFERING   4  
RISK FACTORS   5  
USE OF PROCEEDS   15  
DILUTION   17  
DISTRIBUTION   18  
SELLING SHAREHOLDERS   20  
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   21  
BUSINESS   30  
MANAGEMENT   33  
EXECUTIVE COMPENSATION   36  
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS   37  
PRINCIPAL STOCKHOLDERS   38  
DESCRIPTION OF SECURITIES   39  
DIVIDEND POLICY   42  
SECURITIES OFFERED   43  
SHARES ELIGIBLE FOR FUTURE SALE   43  
LEGAL MATTERS   43  
EXPERTS   43  
WHERE YOU CAN FIND MORE INFORMATION   44  
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS   F-1  

 

 

We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where such offers and sales are permitted. You should rely only on the information contained in this Offering Circular. We have not authorized anyone to provide you with any information other than the information contained in this Offering Circular. The information contained in this Offering Circular is accurate only as of its date, regardless of the time of its delivery or of any sale or delivery of our securities. Neither the delivery of this Offering Circular nor any sale or delivery of our securities shall, under any circumstances, imply that there has been no change in our affairs since the date of this Offering Circular. This Offering Circular will be updated and made available for delivery to the extent required by the federal securities laws.

 

In this Offering Circular, unless the context indicates otherwise, references to “B2Digital”, “we”, the “Company”, “our” and “us” refer to the activities of and the assets and liabilities of the business and operations of B2Digital, Incorporated

 

 

 

 

  i  

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

Some of the statements under “Summary”, “Risk Factors”, “Management's Discussion and Analysis of Financial Condition and Results of Operations”, “Our Business” and elsewhere in this Offering Circular constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “potential”, “should”, and “would” or the negatives of these terms or other comparable terminology.

 

You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Offering Circular, including in “Risk Factors” and elsewhere, identify important factors, which you should consider in evaluating our forward-looking statements. These factors include, among other things:

 

  · The speculative nature of the business we intend to develop;

 

  · Our reliance on suppliers and customers;

 

  · Our dependence upon external sources for the financing of our operations, particularly given that there are concerns about our ability to continue as a “going concern;”

 

  · Our ability to effectively execute our business plan;

 

  · Our ability to manage our expansion, growth and operating expenses;

 

  · Our ability to finance our businesses;

 

  · Our ability to promote our businesses;

 

  · Our ability to compete and succeed in highly competitive and evolving businesses;

 

  · Our ability to respond and adapt to changes in technology and customer behavior; and

 

  · Our ability to protect our intellectual property and to develop, maintain and enhance strong brands.

 

Although the forward-looking statements in this Offering Circular are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as maybe be required by law, to re-issue this Offering Circular or otherwise make public statements updating our forward-looking statements.

 

 

 

 

  1  

 

 

SUMMARY

 

This summary highlights selected information contained elsewhere in this Offering Circular. This summary is not complete and does not contain all the information that you should consider before deciding whether to invest in our Common Stock. You should carefully read the entire Offering Circular, including the risks associated with an investment in the company discussed in the “Risk Factors” section of this Offering Circular, before making an investment decision. Some of the statements in this Offering Circular are forward-looking statements. See the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

 

Company Information

 

The Company, sometimes referred to herein as “we,” “us,” “our,” and the “Company” and/or “B2Digital” was incorporated on October 22, 1991 under the laws of the State of Delaware, to engage in any lawful corporate undertaking. Our fiscal year-end date is March 31.

 

B2Digital, Incorporated offices are located at 4522 West Village Drive Suite 215. Tampa, Florida 33624, Telephone: (813) 961-3051 and our email address is gbell@b3enterprises.net.

 

In February 2017, the Board of Directors approved a complete restructuring, new management team and strategic direction for the company. Capitalizing on its history in television, video and technology, the company is now forging ahead and becoming a full-service Live Event Sports Company.

 

B2Digital, Incorporated. was incorporated as a Delaware corporation on June 3, 2004. Historically, the Company had been a provider of in-room, on-demand video entertainment and satellite services to the domestic lodging industry. In the past, the Company had provided the video services to over 50,000 hotel rooms in the lodging industry. Pay-Per View lost a great deal of market share due to the increased Internet use by hotel guests. With this loss, the Company’s Board of Directors agreed to dissolve Hotel Movie Network on March 11, 2010.

 

In February 2017, the Issuer’s Board of Directors approved a complete restructuring, new management team and strategic direction for the company. Capitalizing on its history in television, video and technology, the Issuer is now forging ahead and becoming a full-service live event sports company.

 

Since the restructuring, the Company has been led by a management team headed by the Company’s Chairman and CEO, Greg P. Bell. The management team has over 30 years of global experience developing more than 20 companies in the Sports, Television, Entertainment, Digital Distribution and Banking Transaction industries. As part of its growth strategy, B2Digital intends to continue to develop and acquire assets meeting its business model with the goal of becoming a Premier Vertically Integrated LIVE Event Sports Company.

 

With extensive background in entertainment, television, video and technology, the Company is now forging ahead and becoming a full-service Live Event Sports Company. The current Chairman and CEO of the Company is Greg P. Bell. Capitalizing on the combination of his expertise, relationships and experience as well as his involvement with more than 40,000 LIVE events over his career for major sports leagues and entertainment venues, B2Digital is in the process of developing and acquiring companies to become a Premier Vertically Integrated LIVE Event Sports Company. B2Digital's first strategy is to build an integrated LIVE Event Minor League for the MMA Mixed Martial Arts marketplace, which is a billion-dollar industry.

 

B2Digital will be creating and developing Minor League champions that will move on to the MMA Major Leagues from the B2FS, B2 Fighting Series. In 2017, B2Digital started operating LIVE MMA Events by acquiring additional existing MMA Promotions. These acquisitions which facilitate the best Fighters being invited annually to the yearly B2FS National Championship Live Event. B2Digital owns all media rights, merchandising rights, digital distribution networks of the B2 Fighting Series. B2Digital is developing the Systems and Technologies for Event Management, Digital Ticketing Sales, Digital Video Distribution, Digital Marketing, PPV, Fighter Management, Merchandise Sales, Brand Management and Financial Control Systems.

 

 

 

 

  2  
 

 

Voting Control

 

The officers and directors currently have voting control of the Company, including ownership of 2,000,000 shares of Series A Preferred Stock are currently issued and outstanding which votes with the Common Stock on all matters to be voted on by the Common Stock on an as-converted basis. On such matters, each holder of Series A Preferred Stock is entitled to 240 votes for each share of Series A Preferred Stock held by such shareholder. If all of the shares offered in this Offering are sold the officers and directors will control 66.70% of all votes.

 

B2Digital will also be developing and expanding the B2 LIVE Event Systems and Technologies. These include Systems for Event Management, Digital Ticketing Sales, Digital Video Distribution, Digital Marketing, PPV (Pay per View), Fighter Management, Merchandise Sales, Brand Management and Financial Control Systems.

 

Section 15(g) of the Securities Exchange Act of 1934

 

Our shares are covered by section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.

 

Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one-page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as bid and offer quotes, a dealers spread and broker/dealer compensation; the broker/dealer compensation, the broker/dealers’ duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers’ rights and remedies in cases of fraud in penny stock transactions; and, the FINRA’s toll free telephone number and the central number of the North American Securities Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.

 

Dividends

 

The Company has not declared or paid a cash dividend to stockholders since it was organized and does not intend to pay dividends in the foreseeable future. The board of directors presently intends to retain any earnings to finance our operations and does not expect to authorize cash dividends in the foreseeable future. Any payment of cash dividends in the future will depend upon the Company's earnings, capital requirements and other factors.

 

Trading Market

 

Our Common Stock trades in the OTC Market Pink Open Market under the symbol “BTDG.”

 

 

 

 

 

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THE OFFERING

______

 

 

Issuer:   B2Digital, Incorporated
     
Securities offered:   A maximum of 600,000,000 shares of our common stock, par value $0.00001 (the “Common Stock”) at an offering price of $0.0075 per share (the “Offered Shares”). (See “Distribution.”)
     
Number of shares of Common Stock outstanding before the offering   581,003,354 shares of Common Stock issued and outstanding as December 13, 2019.
     
Number of shares of Common Stock to be outstanding after the offering   1,181,003,354 shares of Common Stock, if the maximum amount of Offered Shares are sold.
     
Price per share:   $0.0075
     
Maximum offering amount for the Company:   600,000,000 shares at $0.0075 per share, or $4,500,000 (See “Distribution.”)
     
Trading Market:   Our Common Stock is trading on the OTC Markets Pink Open Market under the symbol “BTDG.”
     
Use of proceeds:   If we sell all of the shares being offered, our net proceeds (after our estimated offering expenses) will be $3,750,000. We will use these net proceeds for working capital and other general corporate purposes.
     
Risk factors:  

Investing in our Common Stock involves a high degree of risk, including:

 

Immediate and substantial dilution.

 

Limited market for our stock.

 

See “Risk Factors.”

 

 

 

 

  4  

 

 

RISK FACTORS

______

 

The following is only a brief summary of the risks involved in investing in our Company. Investment in our Securities involves risks. You should carefully consider the following risk factors in addition to other information contained in this Offering Circular. The occurrence of any of the following risks might cause you to lose all or part of your investment. Some statements in this Offering Circular, including statements in the following risk factors, constitute “Forward-Looking Statements.”

 

The price of our common stock may continue to be volatile.

 

The trading price of our common stock has been and is likely to remain highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control or unrelated to our operating performance. In addition to the factors discussed in this “Risk Factors” section and elsewhere, these factors include: the operating performance of similar companies; the overall performance of the equity markets; the announcements by us or our competitors of acquisitions, business plans, or commercial relationships; threatened or actual litigation; changes in laws or regulations relating to the our business; any major change in our board of directors or management; publication of research reports or news stories about us, our competitors, or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; large volumes of sales of our shares of common stock by existing stockholders; and general political and economic conditions.

 

In addition, the stock market in general, and the market for developmental related companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies securities. This litigation, if instituted against us, could result in very substantial costs; divert our management’s attention and resources; and harm our business, operating results, and financial condition.

 

There are doubts about our ability to continue as a going concern.

 

The Company is a development stage enterprise and has commenced planned principal operations. The Company has realized minimal revenues and has incurred losses of $904,927 for the six months ended September 30, 2019. In addition, the Company incurred losses of $3,367,295 for the period since inception through September 30, 2019. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources, such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations, or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.

 

The Company intends to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company anticipates raising additional funds through public or private financing, strategic relationships or other arrangements in the near future to support its business operations; however, the Company may not have commitments from third parties for a sufficient amount of additional capital. The Company cannot be certain that any such financing will be available on acceptable terms, or at all, and its failure to raise capital when needed could limit its ability to continue its operations. The Company’s ability to obtain additional funding will determine its ability to continue as a going concern. Failure to secure additional financing in a timely manner and on favorable terms would have a material adverse effect on the Company’s financial performance, results of operations and stock price and require it to curtail or cease operations, sell off its assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. Furthermore, additional equity financing may be dilutive to the holders of the Company’s common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights. Please see Financial Statements – Note 1. Operations and Basis of Presentation – Going Concern for further information.

 

 

 

 

  5  

 

 

Risks Related to Our Business

 

The Company may fail to consummate its planned acquisitions, which could have a material adverse impact on its earnings and results of operations.

 

The Company may fail to consummate acquisitions as planned. Because acquisitions are subject to a variety of factors, including the Company's ongoing due diligence and the satisfaction of customary closing conditions, many of which are outside of the Company's control.

 

If the Company is unable to complete the planned acquisitions, it may experience delays in locating and securing attractive alternative investments in which to invest the net proceeds of this Offering. The Company's failure to apply a substantial portion of the net proceeds of this Offering effectively or to find suitable uses for the net proceeds in a timely manner or on acceptable terms could result in returns that are substantially below expectations, or result in losses.

 

Furthermore, acquisitions, whether or not they are successful, require substantial time and attention from management of the Company. The Company may have incurred significant legal, accounting and other transaction costs in connection with a transaction without realizing a corresponding increase in its earnings and cash flow from the acquisition. As a result, the Company's failure to consummate an acquisition could have a material adverse impact on the Company's results of operations and earnings.

 

The success of our business is subject to the continued success and popularity of Mixed Martial Arts ("MMA").

 

MMA is currently a popular sport in the United States, but our business is affected by consumer tastes and sports and entertainment trends, which are unpredictable and subject to change. Any decline in the popularity of MMA, changes in our fans' and customers' tastes or a material change in the perceptions of the MMA industry, whether due to internal or external factors, could adversely affect our operating results and have a material adverse effect on our business.

 

We may not be able to attract and retain key professional MMA fighters.

 

Our business is dependent upon identifying; recruiting and retaining highly regarded professional MMA fighters for our promotions. Fans and sponsors are attracted to events featuring top fighters, and the value placed on a promotion's television and other media rights is dependent to a great extent on the quality of the promotion's fighter roster. We may not be able to attract and retain key professional MMA fighters due to competition with other regional promoters for the same fighters. Failing to put on events featuring top professional fighters could adversely affect our operating results and have a material adverse effect on our business.

 

We may not be able to attract sufficient promotional and advertising sponsorships or maintain such arrangements.

 

Our business strategy involves developing sponsorship arrangements, or expanding existing sponsorship arrangements, in support of our network of live MMA events. We will compete with larger, more established sports and entertainment organizations and media outlets for sponsorship and advertising revenue. Many factors, including the popularity and perception of MMA and the perceived quality of our promotions, will significantly affect our ability to secure and maintain important advertising and promotional arrangements. If we are unable to generate sponsorship and promotional revenue and increase that revenue over time, our operating results and business will be adversely affected.

 

Future acquisitions may result in potentially dilutive issuances of equity securities, the incurrence of indebtedness and increased amortization expense.

 

Future acquisitions will likely result in issuances of equity securities, which may be dilutive to the equity interests of existing stockholders; the incurrence of debt, which will require us to maintain cash flows sufficient to make payments of principal and interest; the assumption of known and unknown liabilities; and the amortization of expenses related to intangible assets, all of which could have an adverse effect on our business, financial condition and results of operations.

 

 

 

  6  
 

 

We may need additional capital to support our operations or the growth of our business, and we cannot be certain that this capital will be available on reasonable terms when required, or at all.

 

In order for us to grow and successfully execute our business plan, we may require additional financing which may not be available or may not be available on acceptable terms. If such financing is available, it may be dilutive to the equity interests of existing stockholders. Failure to obtain financing may have a material adverse effect on our financial position. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support the operation or growth of our business could be significantly impaired and our operating results may be harmed.

  

We may be prohibited from promoting and conducting our live events if we do not comply with applicable regulations.

 

In various states in the United States and in some foreign jurisdictions, athletic commissions and other applicable regulatory agencies will require us to obtain licenses for promoters, medical clearances and/or other permits or licenses for athletes and/or permits for events in order for us to promote and conduct our live events. If we fail to comply with the regulations of a particular jurisdiction, we may be prohibited from promoting and conducting live events in that jurisdiction. The inability to present live events over an extended period of time or in a number of jurisdictions could lead to a decline in the revenue streams generated from our live events, in which case our operating results would be adversely affected.

 

We could incur substantial liability in the event of accidents or injuries occurring during our events.

 

We intend to hold numerous live MMA events each year. Each live event will expose our employees who are involved in the production of those events to the risk of travel and match-related accidents, the costs of which may not be fully covered by insurance. The physical nature of our events will expose our professional MMA fighters to the risk of serious injury or death. Although our fighters, as independent contractors, are responsible for maintaining their own health, disability and life insurance, we insure medical costs for injuries that a fighter may suffer at our events. Any liability we incur as a result of the death of or a serious injury sustained by one of our fighters while fighting in a match at our events, to the extent not covered by our insurance, could adversely affect our business, financial condition and operating results.

 

Our live events will entail other risks inherent in public live events, including air and land travel interruption or accidents, the spread of illness, injuries resulting from building problems, equipment malfunction, terrorism or other violence, local labor strikes and other "force majeure" type events. These circumstances could result in personal injuries or deaths, canceled events and other disruptions to our business for which we do not carry business interruption insurance, or result in liability to third parties for which we may not have insurance. The occurrence of any of these circumstances could adversely affect our business, financial condition and results of operations.

 

We may be unable to establish, protect or enforce our intellectual property rights adequately.

 

Our success will depend in part on our ability to establish, protect and enforce our intellectual property and other proprietary rights. Our inability to protect our portfolio of copyrighted material, trade names and other intellectual property rights from infringement, piracy, counterfeiting or other unauthorized use could negatively affect our business. If we fail to establish, protect or enforce our intellectual property rights, we may lose an important advantage in the market in which we compete. Our intellectual property rights may not be sufficient to help us maintain our position in the market and our competitive advantages. Monitoring unauthorized uses of and enforcing our intellectual property rights can be difficult and costly. Legal intellectual property actions are inherently uncertain and may not be successful, and may require a substantial amount of resources and divert our management's attention.

 

We rely on our marketing efforts and channels to promote our brand and events. These efforts may require significant expense and may not be successful.

 

We will employ various marketing tactics and use a variety of marketing channels to promote our brand, including sponsorships, advertisement, email and social media marketing. If we lose access to one or more of these channels for any reason, we will not be able to promote our brand or events effectively, which could limit our ability to grow. Further, if the marketing activities fail to generate traffic to our events, attract new fans or lead to new and renewal sales for our events, our business and operating results could be affected. There is no assurance in the results of our continuing marketing efforts. If customer acquisition cost increases, the operating results could also be affected.

 

 

  7  
 

 

Risks Relating to Our Financial Condition

 

Our management has a limited experience operating a public company and are subject to the risks commonly encountered by early-stage companies.

 

Although management of B2Digital, Incorporated has experience in operating small companies, current management has not had to manage expansion while being a public company. Many investors may treat us as an early-stage company. In addition, management has not overseen a company with large growth. Because we have a limited operating history, our operating prospects should be considered in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. These risks include:

 

  · risks that we may not have sufficient capital to achieve our growth strategy;

 

  · risks that we may not develop our product and service offerings in a manner that enables us to be profitable and meet our customers’ requirements;

 

  · risks that our growth strategy may not be successful; and

 

  · risks that fluctuations in our operating results will be significant relative to our revenues.

 

These risks are described in more detail below. Our future growth will depend substantially on our ability to address these and the other risks described in this section. If we do not successfully address these risks, our business could be significantly harmed.

 

We have limited operational history in an emerging industry, making it difficult to accurately predict and forecast business operations.

 

As we have limited operations in our business and have yet to generate revenue, it is extremely difficult to make accurate predictions and forecasts on our finances. This is compounded by the fact that we operate in a rapidly transforming industry. There is no guarantee that our products or services will remain attractive to potential and current users as these industries undergo rapid change, or that potential customers will utilize our services.

 

As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.

 

We have not yet produced a net profit and may not in the near future, if at all. While we expect our revenue to grow, we have not achieved profitability and cannot be certain that we will be able to sustain our current growth rate or realize sufficient revenue to achieve profitability. Our ability to continue as a going concern may be dependent upon raising capital from financing transactions, increasing revenue throughout the year and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.

 

We will require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

 

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to update hardware, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we will need to engage in continued equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our common stock. Any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be impaired, and our business may be harmed.

 

 

 

  8  
 

 

We are highly dependent on the services of our key executive, the loss of whom could materially harm our business and our strategic direction. If we lose key management or significant personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in our compensation costs, our business may materially suffer.

 

We are highly dependent on our management, specifically Greg P. Bell. We have an Employment Agreement in place with Mr. Bell. If we lose key employees, our business may suffer. Furthermore, our future success will also depend in part on the continued service of our management personnel and our ability to identify, hire, and retain additional key personnel. We do not carry “key-man” life insurance on the lives of any of our executives, employees or advisors. We experience intense competition for qualified personnel and may be unable to attract and retain the personnel necessary for the development of our business. Because of this competition, our compensation costs may increase significantly.

 

We may be unable to manage growth, which may impact our potential profitability.

 

Successful implementation of our business strategy requires us to manage our growth. Growth could place an increasing strain on our management and financial resources. To manage growth effectively, we will need to:

 

  · Establish definitive business strategies, goals and objectives;

 

  · Maintain a system of management controls; and

 

  · Attract and retain qualified personnel, as well as develop, train, and manage management-level and other employees.

 

If we fail to manage our growth effectively, our business, financial condition, or operating results could be materially harmed, and our stock price may decline.

 

We operate in a highly competitive environment, and if we are unable to compete with our competitors, our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.

 

We operate in a highly competitive environment. Our competition includes all other companies that are in the business of entertainment events or other related companies. A highly competitive environment could materially adversely affect our business, financial condition, results of operations, cash flows and prospects.

 

We may not be able to compete successfully with other established companies offering the same or similar services and, as a result, we may not achieve our projected revenue and user targets.

 

If we are unable to compete successfully with other businesses in our existing market, we may not achieve our projected revenue and/or customer targets. We compete with both start-up and established companies. Compared to our business, some of our competitors may have greater financial and other resources, have been in business longer, have greater name recognition and be better established.

 

Our lack of adequate D&O insurance may also make it difficult for us to retain and attract talented and skilled directors and officers.

 

In the future we may be subject to additional litigation, including potential class action and stockholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. To date, we have not obtained directors and officers liability (“D&O”) insurance. Without adequate D&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to the Company could have a material adverse effect on our financial condition, results of operations and liquidity. Furthermore, our lack of adequate D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers, which could adversely affect our business.

 

 

 

  9  
 

 

We expect to incur substantial expenses to meet our reporting obligations as a public company. In addition, failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to manage our expenses.

 

We estimate that it will cost approximately $50,000 annually to maintain the proper management and financial controls for our filings required as a public reporting company. In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in our stock price and adversely affect our ability to raise capital.

 

 

Risks Relating to our Common Stock and Offering

 

The Common Stock is thinly traded, so you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.

 

The Common Stock has historically been sporadically traded on the OTC Markets, meaning that the number of persons interested in purchasing our shares at, or near ask prices at any given time, may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer, which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained.

 

The market price for the common stock is particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, limited operating history, and lack of revenue, which could lead to wide fluctuations in our share price. The price at which you purchase our shares may not be indicative of the price that will prevail in the trading market. You may be unable to sell your common shares at or above your purchase price, which may result in substantial losses to you.

 

The market for our shares of common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our shares are sporadically traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our shares is sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative investment due to, among other matters, our limited operating history and lack of revenue or profit to date, and the uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-averse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the securities of a seasoned issuer. The following factors may add to the volatility in the price of our shares: actual or anticipated variations in our quarterly or annual operating results; acceptance of our inventory of events, games; government regulations, announcements of significant acquisitions, strategic partnerships or joint ventures; our capital commitments and additions or departures of our key personnel. Many of these factors are beyond our control and may decrease the market price of our shares regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our shares will be at any time, including as to whether our shares will sustain their current market prices, or as to what effect the sale of shares or the availability of shares for sale at any time will have on the prevailing market price.

 

 

 

 

  10  
 

 

Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The possible occurrence of these patterns or practices could increase the volatility of our share price.

 

The market price of our common stock may be volatile and adversely affected by several factors.

 

The market price of our common stock could fluctuate significantly in response to various factors and events, including, but not limited to:

 

  · our ability to integrate operations, technology, products and services;

 

  · our ability to execute our business plan;

 

  · operating results below expectations;

 

  · our issuance of additional securities, including debt or equity or a combination thereof;

 

  · announcements of technological innovations or new products by us or our competitors;

 

  · loss of any strategic relationship;

 

  · industry developments, including, without limitation, changes in competition or practices;

 

  · economic and other external factors;

 

  · period-to-period fluctuations in our financial results; and

 

  · whether an active trading market in our common stock develops and is maintained.

 

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock. Issuers using the Alternative Reporting standard for filing financial reports with OTC Markets are often subject to large volatility unrelated to the fundamentals of the company.

 

Natural disasters and geo-political events could adversely affect our business.

 

Natural disasters, including hurricanes, cyclones, typhoons, tropical storms, floods, earthquakes and tsunamis, weather conditions, including winter storms, droughts and tornadoes, whether as a result of climate change or otherwise, and geo-political events, including civil unrest or terrorist attacks, that affect us, or other service providers, could adversely affect our business.

 

 

 

  11  
 

 

We do not expect to pay dividends in the future; any return on investment may be limited to the value of our common stock.

 

We do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increasing our capital base and development and marketing efforts. There can be no assurance that the Company will ever have sufficient earnings to declare and pay dividends to the holders of our common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.

 

Our issuance of additional shares of Common Stock, or options or warrants to purchase those shares, would dilute your proportionate ownership and voting rights.

 

We are entitled under our articles of incorporation to issue up to 5,000,000,000 shares of common stock. We have issued and outstanding 581,003,354 shares of Common Stock as of December 13, 2019. In addition, we are entitled under our Articles of Incorporation to issue “blank check” preferred stock. Our board may generally issue shares of common stock, preferred stock, options, or warrants to purchase those shares, without further approval by our shareholders based upon such factors as our board of directors may deem relevant at that time. It is likely that we will be required to issue a large amount of additional securities to raise capital to further our development. It is also likely that we will issue a large amount of additional securities to directors, officers, employees and consultants as compensatory grants in connection with their services, both in the form of stand-alone grants or under our stock plans. We cannot give you any assurance that we will not issue additional shares of common stock, or options or warrants to purchase those shares, under circumstances we may deem appropriate at the time.

 

The elimination of monetary liability against our directors, officers and employees under our Articles of Incorporation and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees.

 

Our Articles of Incorporation contains provisions that eliminate the liability of our directors for monetary damages to our company and shareholders. Our bylaws also require us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements with our directors, officers and employees. The foregoing indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers and employees that we may be unable to recoup. These provisions and resulting costs may also discourage our company from bringing a lawsuit against directors, officers and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors, officers and employees even though such actions, if successful, might otherwise benefit our company and shareholders.

 

We may become involved in securities class action litigation that could divert management’s attention and harm our business.

 

The stock market in general, and the shares of early stage companies in particular, have experienced extreme price and volume fluctuations. These fluctuations have often been unrelated or disproportionate to the operating performance of the companies involved. If these fluctuations occur in the future, the market price of our shares could fall regardless of our operating performance. In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company. If the market price or volume of our shares suffers extreme fluctuations, then we may become involved in this type of litigation, which would be expensive and divert management’s attention and resources from managing our business.

 

As a public company, we may also from time to time make forward-looking statements about future operating results and provide some financial guidance to the public markets. Our management has limited experience as a management team in a public company and as a result, projections may not be made timely or set at expected performance levels and could materially affect the price of our shares. Any failure to meet published forward-looking statements that adversely affect the stock price could result in losses to investors, stockholder lawsuits or other litigation, sanctions or restrictions issued by the SEC.

 

 

 

  12  
 

 

Our common stock is currently deemed a “penny stock,” which makes it more difficult for our investors to sell their shares.

 

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination, and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock if and when such shares are eligible for sale and may cause a decline in the market value of its stock.

 

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

 

As an issuer of a “penny stock,” the protection provided by the federal securities laws relating to forward-looking statements does not apply to us.

 

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading. Such an action could hurt our financial condition.

 

Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the stock price.

 

At this time, no securities analysts provide research coverage of our common stock, and securities analysts may not elect to provide such coverage in the future. It may remain difficult for our company, with its small market capitalization, to attract independent financial analysts that will cover our common stock. If securities analysts do not cover our common stock, the lack of research coverage may adversely affect the stock’s actual and potential market price. The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish about our business. If one or more analysts elect to cover our company and then downgrade the stock, the stock price would likely decline rapidly. If one or more of these analysts cease coverage of our company, we could lose visibility in the market, which, in turn, could cause our stock price to decline. This could have a negative effect on the market price of our common stock.

 

 

 

 

  13  
 

 

Because directors and officers currently and for the foreseeable future will continue to control B2Digital, Incorporated, it is not likely that you will be able to elect directors or have any say in the policies of B2Digital, Incorporated.

 

Even if all shares offered hereby are sold, the current officers and directors will control 66.7% of all shareholder votes, see “Principal Shareholders.”

 

Our shareholders are not entitled to cumulative voting rights. Consequently, the election of directors and all other matters requiring shareholder approval will be decided by majority vote. The directors, officers and affiliates of B2Digital, Incorporated beneficially own a majority of our outstanding common stock voting rights. Due to such significant ownership position held by our insiders, new investors may not be able to affect a change in our business or management, and therefore, shareholders would have no recourse as a result of decisions made by management.

 

In addition, sales of significant amounts of shares held by our directors, officers or affiliates, or the prospect of these sales, could adversely affect the market price of our common stock. Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

 

Risks Relating to Our Company and Industry

 

The following risks relate to our proposed business and the effects upon us assuming we obtain financing in a sufficient amount.

 

Intellectual property rights claims may adversely affect an investment in us.

 

We are not aware of any intellectual property claims that may prevent us from operating; however, third parties may assert intellectual property claims relating to our operation. Regardless of the merit of an intellectual property or other legal action, any legal expenses to defend or payments to settle such claims would be extremely expensive. Additionally, a meritorious intellectual property claim could prevent us from operating and force us to liquidate. As a result, an intellectual property claim against us could adversely affect an investment in us.

 

 

Statements Regarding Forward-looking Statements

______

 

This Offering Circular contains various “forward-looking statements.” You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “would,” “could,” “should,” “seeks,” “approximately,” “intends,” “plans,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. These statements may be impacted by a number of risks and uncertainties.

 

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our Securities. For a further discussion of these and other factors that could impact our future results, performance or transactions, see the section entitled “Risk Factors.”

 

 

  14  

 

 

USE OF PROCEEDS

 

If we sell all of the shares being offered, our net proceeds (after our estimated offering expenses of $750,000) will be $3,090,000. We will use these net proceeds for the following.

 

If 25% of the Shares offered are sold:

 

 

Percentage of
Offering Sold
  Offering
Proceeds
  Approximate
Offering Expenses
  Total Net
Offering Proceeds
  Principal Uses
of Net Proceeds
                Future acquisitions $200,000
                Acquisition of Fight Group $160,000
                Infrastructure/CAPEX $300,000
                        Working capital $273,000
25%     $1,125,000     $192,000     $933,000     $933,000

 

 

 

If 50% of the Shares offered are sold:

 

Percentage of
Offering Sold
  Offering
Proceeds
  Approximate
Offering Expenses
  Total Net
Offering Proceeds
  Principal Uses
of Net Proceeds
                Future acquisitions $400,000
                Acquisition of Fight Group $600,000
                Infrastructure/CAPEX $400,000
                        Working capital $550,000
50%     $2,250,000     $300,000     $1,950,000     $1,950,000

 

 

If 75% of the Shared offered are sold:

  

Percentage of
Offering Sold
  Offering
Proceeds
  Approximate
Offering Expenses
  Total Net
Offering Proceeds
  Principal Uses
of Net Proceeds
                Future acquisitions $600,000
                Acquisition of Fight Group $800,000
                Infrastructure/CAPEX $500,000
                        Working capital $875,000
75%     $3,375,000     $500,000.00     $2,875,000     $2,875,000

 

If 100% of the Shares offered are sold

 

Percentage of
Offering Sold
  Offering
Proceeds
  Approximate
Offering Expenses
  Total Net
Offering Proceeds
  Principal Uses
of Net Proceeds
                Future acquisitions $800,000
                Acquisition of Fight Group $1,000,000
                Infrastructure/CAPEX $700,000
                        Working capital $1,250,000
100%     $4,500,000     $750,000     $3,750,000     $3,750,000

 

 

  15  

 

 

The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors.

 

As indicated in the table above, if we sell only 75%, or 50%, or 25% of the shares offered for sale in this offering, we would expect to use the resulting net proceeds for the same purposes as we would use the net proceeds from a sale of 100% of the shares, and in approximately the same proportions, until such time as such use of proceeds would leave us without working capital reserve. At that point we would expect to modify our use of proceeds by limiting our expansion, leaving us with the working capital reserve indicated.

 

The expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. The amounts and timing of our actual expenditures, specifically with respect to working capital, may vary significantly depending on numerous factors. The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering.

 

In the event we do not sell all of the shares being offered, we may seek additional financing from other sources in order to support the intended use of proceeds indicated above. If we secure additional equity funding, investors in this offering would be diluted. In all events, there can be no assurance that additional financing would be available to us when wanted or needed and, if available, on terms acceptable to us. We do not expect to use material amounts of other funds in conjunction with the proceeds.

 

We intend to expand by acquiring local fight groups. Generally, we pay a portion of their purchase price in cash which represents an amount close to the value of their net assets plus a portion of the purchase price in stock which represents three to four times the value of their net assets.

 

We do not have a current agreement to acquire a Fight Group. The reference to an acquisition of a Fight Group in this Use of Proceeds discussion does not indicate a current plan to acquire a specific local fight group.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  16  

 

DILUTION

______

 

 

If you purchase shares in this offering, your ownership interest in our Common Stock will be diluted immediately, to the extent of the difference between the price to the public charged for each share in this offering and the net tangible book value per share of our Common Stock after this offering.

 

Our historical net tangible book value as of September 30, 2019 was $167,495 based on 563,120,110 outstanding shares of our Common Stock outstanding on September 30, 2019. Historical net tangible book value per share equals the amount of our total tangible assets less total liabilities, divided by the total number of shares of our Common Stock outstanding, all as of the date specified.

 

The following table illustrates the per share dilution to new investors discussed above, assuming the sale of, respectively, 100%, 75%, 50% and 25% of the shares offered for sale in this offering (after deducting estimated offering expenses of $750,000):

 

Percentage of shares offered that are sold   100%   75%   50%   25%
                 
Price to the public charged for each share in this offering   $0.0075   $0.0075   $0.0075   $0.0075
                 
Historical net tangible book value per share as of September 30, 2019 (1)   $0.0003   $0.0003   $0.0003   $0.0003
                 
Increase in net tangible book value per share attributable to new investors in this offering (2)   0.0031   0.0024   0.0016   0.0004
                 
Net tangible book value per share, after this offering   0.0034   0.0027   0.0019   0.0007
                 
Dilution per share to new investors   $0.0041   $0.0048   $0.0056   $0.0068

__________________________ 

  (1) Based on net tangible shareholders equity book value as of September 30, 2019 of $167,495 or $0.0003 based on 563,120,110 outstanding shares of Common Stock.

 

  (2) After deducting estimated offering expenses of $750,000.

 

 

 

  17  

 

 

DISTRIBUTION

 

This Offering Circular is part of an Offering Statement that we filed with the SEC, using a continuous offering process. Periodically, as we have material developments, we will provide an Offering Circular supplement that may add, update or change information contained in this Offering Circular. Any statement that we make in this Offering Circular will be modified or superseded by any inconsistent statement made by us in a subsequent Offering Circular supplement. The Offering Statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this Offering Circular. You should read this Offering Circular and the related exhibits filed with the SEC and any Offering Circular supplement, together with additional information contained in our annual reports, semi-annual reports and other reports and information statements that we will file periodically with the SEC. See the section entitled “Additional Information” below for more details.

 

Pricing of the Offering

 

Prior to the Offering, there has been a limited public market for the Offered Shares. The initial public offering price was determined by negotiation between us and the Underwriter. The principal factors considered in determining the initial public offering price include:

 

  · the information set forth in this Offering Circular and otherwise available;

 

  · our history and prospects and the history of and prospects for the industry in which we compete;

 

  · our past and present financial performance;

 

  · our prospects for future earnings and the present state of our development;

 

  · the general condition of the securities markets at the time of this Offering;

 

  · the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

 

  · other factors deemed relevant by us.

 

Offering Period and Expiration Date

 

This Offering will start on or after the Qualification Date and will terminate when the maximum offering is reached or, if it is not reached, on the Termination Date.

 

Procedures for Subscribing

 

When you decide to subscribe for Offered Shares in this Offering, you should:

 

Go to https://www.sec.gov/Archives/edgar/data/725929/000168316819001684/b2digital_253g2-ex0401.htm

 

  1. Electronically download and receive, review, execute and deliver to us a subscription agreement; and

 

  2. Deliver funds directly by wire or electronic funds transfer via ACH to the specified account maintained by us.

 

Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. We shall only deliver such subscription agreement upon request after a potential investor has had ample opportunity to review this Offering Circular.

 

 

 

  18  
 

 

Right to Reject Subscriptions. After we receive your complete, executed subscription agreement and the funds required under the subscription agreement have been transferred to the escrow account, we have the right to review and accept or reject your subscription in whole or in part, for any reason or for no reason. We will return all monies from rejected subscriptions immediately to you, without interest or deduction.

 

Acceptance of Subscriptions. Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and issue the shares subscribed at closing. Once you submit the subscription agreement and it is accepted, you may not revoke or change your subscription or request your subscription funds. All accepted subscription agreements are irrevocable.

 

Under Rule 251 of Regulation A, non-accredited investors are subject to the investment limitation and may only invest funds which do not exceed 10% of the greater of the purchaser's revenue or net assets (as of the purchaser's most recent fiscal year end). A non-accredited, natural person may only invest funds which do not exceed 10% of the greater of the purchaser's annual income or net worth.

  

NOTE: For the purposes of calculating your net worth, it is defined as the difference between total assets and total liabilities. This calculation must exclude the value of your primary residence and may exclude any indebtedness secured by your primary residence (up to an amount equal to the value of your primary residence). In the case of fiduciary accounts, net worth and/or income suitability requirements may be satisfied by the beneficiary of the account or by the fiduciary, if the fiduciary directly or indirectly provides funds for the purchase of the Offered Shares.

 

In order to purchase offered Shares and prior to the acceptance of any funds from an investor, an investor will be required to represent, to the Company's satisfaction, that he is either an accredited investor or is in compliance with the 10% of net worth or annual income limitation on investment in this Offering.

 

No Escrow

 

The proceeds of this offering will not be placed into an escrow account. We will offer our Common Stock on a best efforts basis primarily through an online platform. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds. 

 

The Offering

 

This Offering in being conducted on a "best-efforts" basis.

 

Our officers are relying upon SEC Rule 3a4-1 under the Securities Exchange Act of 1934. The officers of the Company will not be deemed to be brokers solely by reason of their participation in the sale of the securities. The officers are not subject to a statutory disqualification; and they will not be compensated in connection with their participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities; and are not at the time of their participation an associated person of a broker or dealer. They will perform substantial duties for or on behalf of the issuer otherwise than in connection with transactions in securities. They were not a broker or dealer, or an associated person of a broker or dealer, within the preceding 12 months. They will not participate in selling an offering of securities for any issuer more than once every 12 months. They will restrict their participation to any one or more of the following activities: (a) preparing any written communication or delivering such communication through the mails or other means that does not involve oral solicitation by the associated person of a potential purchaser; (b) responding to inquiries of a potential purchaser in a communication initiated by the potential purchaser; Provided, however, that the content of such responses are limited to information contained in a Offering Statement filed  under the Securities Act of 1933 or other offering document; or (c) performing ministerial and clerical work involved in effecting any transaction.

 

 

 

 

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SELLING SHAREHOLDERS

 

No shares are being offered for resale by stockholders.

 

 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

______

 

You should read the following discussion and analysis of our financial condition and results of our operations together with our consolidated financial statements and the notes thereto appearing elsewhere in this Offering Circular. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors”, “Cautionary Statement regarding Forward-Looking Statements” and elsewhere in this Offering Circular. Please see the notes to our Financial Statements for information about our Critical Accounting Policies and Recently Issued Accounting Pronouncements.

 

Basis of Presentation

 

We have seven wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, Colosseum Combat LLC which owns Colosseum Combat MMA in Indiana, Blue Grass MMA LLC which is a marketing company, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, and B2 Productions LLC.

 

The consolidated financial statements, which include the accounts of the Company and its six wholly owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated.

 

Forward-Looking Statements

 

Some of the statements under “Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” and “would” or the negatives of these terms or other comparable terminology.

 

You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Quarterly Report on Form 10-Q identify important factors, which you should consider in evaluating our forward-looking statements. These factors include, among other things:

 

  · The speculative nature of the business we intend to develop;

 

  · Our reliance on suppliers and customers;

 

  · Our dependence upon external sources for the financing of our operations, particularly given that there are concerns about our ability to continue as a “going concern;”

 

  · Our ability to effectively execute our business plan;

 

  · Our ability to manage our expansion, growth and operating expenses;

 

  · Our ability to finance our businesses;

 

 

 

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  · Our ability to promote our businesses;

 

  · Our ability to compete and succeed in highly competitive and evolving businesses;

 

  · Our ability to respond and adapt to changes in technology and customer behavior; and

 

  · Our ability to protect our intellectual property and to develop, maintain and enhance strong brands.

 

Although the forward-looking statements in this Quarterly Report on Form 10-Q are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as maybe be required by law, to update this Quarterly Report on Form 10-Q or otherwise make public statements updating our forward-looking statements.

 

Critical Accounting Policies

 

Basis of Accounting

 

The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three and six months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending March 31, 2020.

 

Use of Estimates

 

Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from these estimates and assumptions.

 

Cash and Cash Equivalents

 

We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. We maintain deposits primarily in four financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). We have not experienced any losses related to amounts in excess of FDIC limits.

 

Fair Value of Financial Instruments

 

The Company’s financial instruments consist primarily of accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

 

Property and Equipment

 

Property and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned, and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying consolidated statement of operations of the respective period. The estimated useful lives range from three to seven years.

 

 

 

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Goodwill

 

Goodwill represents the cost in excess of the fair value of net assets acquired in business combinations. We test goodwill for impairment on an annual basis and when events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is deemed to be impaired if the carrying amount of goodwill exceeds its estimated fair value.

 

Revenue Recognition

 

Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that we expect to receive in exchange for those goods. We apply the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) we satisfy each performance obligation.

 

We only apply the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606 at contract inception, we review the contract to determine which performance obligations we must deliver and which of these performance obligations are distinct. We recognize as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, our performance obligations are transferred to customers at a point in time, typically upon delivery.

 

Income Taxes

 

We follow Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated Statements of Operations in the period that includes the enactment date. Through September 30, 2019, we have an accumulated deficit. Due to uncertainty of realization for these losses, a full valuation allowance is expected. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

 

Stock-Based Compensation

 

We record stock-based compensation in accordance with the provisions of FASB ASC Topic 718, “Accounting for Stock Compensation,” which establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC.

 

Topic 718, we recognize an expense for the fair value of its stock awards at the time of grant and the fair value of its outstanding stock options as they vest, whether held by employees or others. As of September 30, 2019, there were no options outstanding.

 

 

 

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Recently Adopted Accounting Pronouncements

 

On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC 718 and forgo revaluing the award after this date. The Company adopted ASU 2018-07 on April 1, 2019. The adoption of this standard did not have a material impact on the financial statements.

 

We have implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Organization and Nature of Business

 

In February 2017, the Board of Directors of B2Digital, Incorporated, a Delaware corporation (“B2Digital” or the “Company”) approved a complete restructuring, new management team and strategic direction for the Company. Capitalizing on its history in television, video and technology, we are now forging ahead and becoming a full-service live event sports company.

 

Our Chairman and CEO is now Greg P. Bell. Mr. Bell has over 30 years of global experience developing more than 20 companies in the sports, television, entertainment, digital distribution and banking transaction industries. Capitalizing on the combination of his expertise, relationships and experience as well as his involvement with more than 40,000 live events over his career for major sports leagues and entertainment venues, we are in the process of developing and acquiring companies to become a premier vertically integrated live event sports company.

 

Our first strategy is to build an integrated live event minor league for the mixed martial arts (“MMA”) marketplace, which is a billion-dollar industry. We are creating and developing minor league champions that will move on to the MMA major leagues from the B2 Fighting Series (“B2FS”). This will be accomplished by sponsoring operating live events, acquiring existing MMA promotions and then inviting those champions to the B2FS Regional and National Championship Series. We own all media and merchandising rights and digital distribution networks for the B2FS. This concept was developed and test marketed for two years by Mr. Bell’s B2 Management Group, LLC.

 

2017 marked the kickoff of the B2FS by sponsoring and acquiring MMA regional promotion companies for the development of the B2FS. Our second strategy is to add additional sports, leagues, tournaments and special events to our live event business model. This will enable us to capitalize on our core technologies and business models that will be key to broadening the revenue base of our live event core business. We will also be developing and expanding the B2Digital live event systems and technologies. These include systems for event management, digital ticketing sales, digital video distribution, digital marketing, Pay-Per View (“PPV”), fighter management, merchandise sales, brand management and financial control systems.

 

Historically, we had been a provider of in-room, on-demand video entertainment and satellite services to the domestic lodging industry. In the past, we had provided video services to over 50,000 hotel rooms in the lodging industry. PPV lost a great deal of market share due to the increased internet use by hotel guests. With this loss, our Board of Directors agreed to dissolve Hotel Movie Network on March 11, 2010.

 

Business of the Company

 

The Company has seven wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, Colosseum Combat LLC which owns Colosseum Combat MMA in Indiana, Blue Grass MMA LLC which is a marketing company, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, and B2 Productions LLC.

 

 

 

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Results of Operations

 

The following information represents our results of operations for three months ended September 30, 2019 compared to September 30, 2018.

 

Three Months Ended September 30, 2019 Compared to September 30, 2018

 

    For the three months ended September 30, 2019
(unaudited)
    For the three months ended September 30, 2018
(unaudited)
    Change     % Change  
Live event revenue   $ 96,275     $ 78,992     $ 17,283       21.88%  
                                 
Live event expenses     73,588       60,948       12,640       20.74%  
                                 
Live event income- net     22,687       18,044       4,643       25.73%  
                                 
General and administrative corporate expenses                                
Stock compensation expense     233,600             233,600       100.00%  
General & administrative expenses     115,697       32,593       83,104       254.97%  
Depreciation expense     6,741       1,815       4,926       271.40%  
Total general and administrative corporate expenses     356,038       34,408       321,630       934.75%  
                                 
Loss from continuing operations     (333,351 )     (16,364 )     (316,987 )     1937.09%  
                                 
Other income (expense):                                
Loss on forgiveness of loan receivable     (27,000 )           (27,000 )     100.00%  
Loss on modification of debt     (50,756 )           (50,756 )     100.00%  
Interest expense     (2,308 )     (750 )     (1,558 )     207.73%  
Total other income (expense)     (80,064 )     (750 )     (79,314 )     10575.20%  
                                 
Net loss   $ (413,415 )   $ (17,114 )   $ (396,301 )     2315.65%  

 

Revenue

 

We had revenues of $96,275 for the three months ended September 30, 2019 versus revenues of $78,992 for the three months ended September 30, 2018. The increase of $17,283 is due to increased live events from new business acquisitions.

 

Live Event Expenses

 

We incurred live event expenses of $73,588 for the three months ended September 30, 2019 versus live event expenses of $60,948 for the three months ended September 30, 2018. The increase of $12,640 is due to increased live events from new business acquisitions.

 

Live Event income (loss) - net

 

We had live event income of $22,687 for the three months ended September 30, 2019 versus live event income of $18,044 for the three months ended September 30, 2018. The increase of $4,643 is due to increased live events from new business acquisitions.

 

 

 

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Operating Expenses

 

Stock Compensation Expenses

 

We recorded stock compensation expense in the amount of $233,600 for the three months ended September 30, 2019 for common stock issued for services. We did not have any stock compensation expense for the three months ended September 30, 2018.

 

General & Administrative Expenses

 

Other general and administrative expenses include professional fees, all costs associated with marketing, press releases, public relations, rent, sponsorships and other expenses. We incurred general and administrative expenses of $115,697 for the three months ended September 30, 2019 versus general and administrative expenses of $24,819 for the three months ended September 30, 2018. The increase of $90,878 was primarily due to increased operations associated with new business acquisitions.

 

Depreciation Expense

 

We incurred depreciation expense of $6,741 for the three months ended September 30, 2019 versus depreciation expense of $1,815 for the three months ended September 30, 2018. The increase of $4,926 was due to the purchase of assets during the three months ended September 30, 2019 related to a business acquisition.

 

Other Income (Expense)

 

Other Expense

 

Our other income and expenses include interest expense, loss on forgiveness of notes receivable, and a loss on modification of debt. We incurred interest expense of $2,308 for the three months ended September 30, 2019 versus interest expenses of $750 for the three months ended September 30, 2018. We recorded a loss on forgiveness of notes receivable in the amount of $27,000 and a loss on the modification of debt in the amount of $50,756 for the three months ended September 30, 2019.

 

Net Losses

 

We incurred a net loss of $413,415 for the three months ended September 30, 2019 versus a net loss of $17,114 for the three months ended September 30, 2018. The increase of $396,301 was primarily due to increased operations from acquisitions and stock-based compensation expense.

 

 

 

 

 

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Results of Operations

 

The following information represents our results of operations for six months ended September 30, 2019 compared to September 30, 2018.

 

Six Months Ended September 30, 2019 Compared to September 30, 2018

 

    For the six months ended September 30, 2019     For the six months ended September 30, 2018              
    (unaudited)     (unaudited)     Change     % Change  
                         
Live event revenue   $ 181,911     $ 172,595     $ 9,316       5.40%  
                                 
Live event expenses     135,540       142,976       (7,436 )     (5.20% )
                                 
Live event income- net     46,371       29,619       16,752       56.56%  
                                 
General and administrative corporate expenses:                                
Stock compensation expense     688,000             688,000       100.00%  
General & administrative expenses     171,810       74,825       96,985       129.62%  
Depreciation expense     10,053       4,314       5,739       133.03%  
Total general and administrative corporate expenses     869,863       79,139       790,724       999.16%  
                                 
Loss from continuing operations     (823,492 )     (49,520 )     (773,972 )     1562.98%  
                                 
Other income (expense):                                
Loss on forgiveness of loan receivable     (27,000 )           (27,000 )     100.00%  
Loss on modification of debt     (50,756 )           (50,756 )     100.00%  
Interest expense     (3,679 )     (2,107 )     (1,572 )     74.61%  
Total other income (expense)     (81,435 )     (2,107 )     (79,328 )     3764.97%  
                                 
Net loss   $ (904,927 )   $ (51,627 )   $ (853,300 )     1652.85%  

 

Revenue

 

We had revenues of $181,911 for the six months ended September 30, 2019 versus revenues of $172,595 for the six months ended September 30, 2018. The increase of $9,316 is due to increased live events from new business acquisitions.

 

Live Event Expenses

 

We incurred live event expenses of $135,540 for the six months ended September 30, 2019 versus live event expenses of $142,976 for the six months ended September 30, 2018. The decrease of $7,436 is due to changes in cost of different cities of fight venues.

 

 

 

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Live Event income (loss) - net

 

We had live event income of $46,371 for the six months ended September 30, 2019 versus a live event income of $29,619 for the six months ended September 30, 2018. The increase of $16,752 is due to increased live events from new business acquisitions.

 

Operating Expenses

 

Stock Compensation Expenses

 

We recorded stock compensation expense in the amount of $688,000 for the six months ended September 30, 2019 for common stock issued for services. We did not have any stock compensation expense for the six months ended September 30, 2018.

 

General & Administrative Expenses

 

Other general and administrative expenses include professional fees, all costs associated with marketing, press releases, public relations, rent, sponsorships and other expenses. We incurred general and administrative expenses of $171,810 for the six months ended September 30, 2019 versus general and administrative expenses of $74,825 for the six months ended September 30, 2018. The increase of $96,985 was primarily due to increased operations associated with new business acquisitions.

 

Depreciation Expense

 

We incurred depreciation expense of $10,053 for the six months ended September 30, 2019 versus depreciation expense of $4,314 for the six months ended September 30, 2018. The increase of $5,739 was due to the purchase of assets during the six months ended September 30, 2019 related to a business acquisition.

 

Other Income (Expense)

 

Other Expense

 

Our other income and expenses include interest expense, loss on forgiveness of notes receivable, and a loss on modification of debt. We incurred interest expense of $3,679 for the six months ended September 30, 2019 versus interest expenses of $2,107 for the six months ended September 30, 2018. We recorded a loss on forgiveness of notes receivable in the amount of $27,000 and a loss on the modification of debt in the amount of $50,756 for the six months ended September 30, 2019.

 

Net Losses

 

We incurred a net loss of $904,927 for the six months ended September 30, 2019 versus a net loss of $51,627 for the six months ended September 30, 2018. The increase of $853,800 was primarily due to increased operations from acquisitions and stock-based compensation expense.

 

 

 

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Current Liquidity and Capital Resources for the six months ended September 30, 2019 compared to the six months ended September 30, 2018

 

    2019     2018  
Summary of Cash Flows:                
Net cash used by operating activities   $ (184,942 )   $ (52,034 )
Net cash used by investing activities     (206,230 )     (1,659 )
Net cash provided by financing activities     400,000       36,154  
Net increase (decrease) in cash and cash equivalents     8,828       (17,539 )
Beginning cash and cash equivalents     27,579       25,874  
Ending cash and cash equivalents   $ 36,407     $ 8,335  

 

Operating Activities

 

Cash used in operations of $184,942 during the six months ended September 30, 2019 was primarily a result of our $904,927 net loss reconciled with our net non-cash expenses relating to stock compensation, depreciation expense, inventory, prepaid expenses, accounts payable, accrued liabilities and deferred compensation. Cash used in operations of $52,034 during the six months ended September 30, 2018 was primarily a result of our $51,627 net loss reconciled with our net non-cash expenses relating to stock compensation, depreciation expense, inventory, prepaid expenses, accounts payable, accrued liabilities and deferred compensation.

 

Investing Activities

 

Net cash used in investing activities for the six months ended September 30, 2019 of $206,230 resulted from the from the business acquisitions, net of cash in the amount of $31,985 and money loaned to a related party in the amount of $174,245. Net cash used in investing activities for the six months ended September 30, 2018 of $1,659 resulted from the acquisition of fixed assets.

 

Financing Activities

 

Net cash provided by financing activities was $400,000 for six months ended September 30, 2019, which consisted of $400,000 in proceeds from the issuance of common stock. Net cash provided by financing activities was $36,154 for six months ended September 30, 2018, which consisted of $38,760 in proceeds from the issuance of common stock, $14,195 in payments on notes payable and $11,589 in proceeds form notes payable.

 

Future Capital Requirements

 

Our current available cash and cash equivalents are insufficient to satisfy our liquidity requirements. Our capital requirements for fiscal year 2020 will depend on numerous factors, including management’s evaluation of the timing of projects to pursue. Subject to our ability to generate revenues and cash flow from operations and our ability to raise additional capital (including through possible joint ventures and/or partnerships), we expect to incur substantial expenditures to carry out our business plan, as well as costs associated with our capital raising efforts and being a public company.

 

Our plans to finance our operations include seeking equity and debt financing, alliances or other partnership agreements, or other business transactions, that would generate sufficient resources to ensure continuation of our operations.

 

The sale of additional equity or debt securities may result in additional dilution to our shareholders. If we raise additional funds through the issuance of debt securities or preferred stock, these securities could have rights senior to those of our common stock and could contain covenants that would restrict our operations. Any such required additional capital may not be available on reasonable terms, if at all. If we were unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned activities and limit our operations which could have a material adverse effect on our business, financial condition and results of operations.

 

 

 

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Inflation

 

The amounts presented in our consolidated financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

 

Going concern

 

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. At September 30, 2019 and March 31, 2019, the Company had $36,407 and $27,579 in cash and $49,497 in working capital and $85,372 in negative working capital, respectively. For the six months ended September 30, 2019 and 2018, the Company had a net loss of $904,927 and $51,627, respectively. For the three months ended September 30, 2019 and 2018, the Company had a net loss of $413,415 and $17,114, respectively. Continued losses may adversely affect the liquidity of the Company in the future. In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

As a going concern, Management’s plan moving forward is to improve operating results through the live event sports businesses. Management believes these will operate with positive cash flows and facilitate acquisition of additional Sports related businesses. Management plans to finance the growth of the company and cover operating shortfalls by securing convertible loans and selling common stock.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Quantitative and Qualitative Disclosures about Market Risk

 

In the ordinary course of our business, we are not exposed to market risk of the sort that may arise from changes in interest rates or foreign currency exchange rates, or that may otherwise arise from transactions in derivatives.

 

The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our significant estimates and assumptions include the fair value of our common stock, stock-based compensation, the recoverability and useful lives of long-lived assets, and the valuation allowance relating to our deferred tax assets.

 

Contingencies

 

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Our management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

 

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BUSINESS

____

 

Summary

 

B2Digital, Inc. was incorporated as a Delaware corporation on June 3, 2004. Historically, the Company had been a provider of in-room, on-demand video entertainment and satellite services to the domestic lodging industry. In the past the Company had provided the video services to over 50,000 hotel rooms in the lodging industry. Pay-Per View lost a great deal of market share due to the increased internet use by hotel guests. With this loss the Company’s Board of Directors agreed to dissolve Hotel Movie Network on March 11, 2010.

 

In February 2017, the Company’s Board of Directors approved a complete restructuring, new management team and strategic direction for the company. Capitalizing on its history in television, video and technology, the Company is now forging ahead and becoming a full-service live event sports company.

 

Since the restructuring, the Company has been led by a management team headed by the Company’s Chairman and CEO, Greg P. Bell. The management team has over 30 years of global experience developing more than 20 companies in the Sports, Television, Entertainment, Digital Distribution and Banking Transaction industries. As part of its growth strategy, B2Digital intends to continue to develop and acquire assets meeting its business model with the goal of becoming a Premier Vertically Integrated LIVE Event Sports Company.

 

With extensive background in entertainment, television, video and technology, the Company is now forging ahead and becoming a full-service Live Event Sports Company. The current Chairman and CEO of the Company is Greg P. Bell. Capitalizing on the combination of his expertise, relationships and experience as well as his involvement with more than 40,000 LIVE events over his career for major sports leagues and entertainment venues, B2Digital is in the process of developing and acquiring companies to become a Premier Vertically Integrated LIVE Event Sports Company. B2Digital's first strategy is to build an integrated LIVE Event Minor League for the MMA Mixed Martial Arts marketplace, which is a billion-dollar industry.

 

B2Digital will be creating and developing Minor League champions that will move on to the MMA Major Leagues from the B2FS, B2 Fighting Series. In 2017, B2Digital started operating LIVE MMA Events by acquiring additional existing MMA Promotions. These acquisitions which facilitate the best Fighters being invited annually to the yearly B2FS National Championship Live Event. B2Digital owns all media rights, merchandising rights, digital distribution networks of the B2 Fighting Series. B2Digital is developing the Systems and Technologies for Event Management, Digital Ticketing Sales, Digital Video Distribution, Digital Marketing, PPV, Fighter Management, Merchandise Sales, Brand Management and Financial Control Systems.

 

The Company’s fiscal year runs from April 1 – March 31 of each year.

 

The Company owns 100% of the following entities

 

Blue Grass MMA LLC

www.bluegrassmma.com

Online News and social Media Site for MMA

CEO: Gary Thomas

 

Colosseum Combat LLC

www.colosseumcombat.com

MMA Company that puts on LIVE MMA Fights

Indiana, Michigan

CEO: Mark Slater

 

 

 

 

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Hardrock Promotions LLC

www.hrmma.com

MMA Company that puts on LIVE MMA Fights

Kentucky, Ohio, Tennessee, West Virginia

CEO: Vanessa Higdon

 

Pinnacle Combat LLC

www.pinnaclecombat.com

MMA Company that puts on LIVE MMA Fights

Iowa

CEO: Harry Maglaris

 

UCL MMA LLC

www.uclmma.com

MMA Company that puts on LIVE MMA Fights

Illinois, Indiana

CEO: Mike Davis

 

Strike Hard Productions, LLC

www.strikehardproductions.com

MMA Company that puts on LIVE MMA Fights

Alabama

CEO: Jamie Sullivan

 

B2 Productions LLC

Entity that supplies all the TV, PPV and media for B2 Fighting Series LIVE Events

CEO: Greg P. Bell

 

Expansion by Acquisition

 

Our operational plan is to acquire existing other operating fight groups that are properly licensed and operating in up to 10 additional states or to expand one of our existing brands into those target states if we cannot find or identify an existing compatible fight group to the B2 business model in the target states.

 

The target states are but not limited to:

 

Currently licensed and Planned Fights to Occur

 

  1. Kentucky
  2. Ohio
  3. Indiana
  4. Illinois
  5. Iowa
  6. West Virginia
  7. Tennessee
  8. Michigan
  9. Alabama

 

 

 

 

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New target States to Expand into 

 

  1. Mississippi
  2. Kansas
  3. Nebraska
  4. South Dakota

 

Fight group businesses of this type typically do not have a large amount of hard dollar assets. They own a cage, a truck to transport the cage, materials that are used in the LIVE EVENT shows such as pipe and drape and signage, and retail POS machines to sell merchandise and tickets at the event.

 

Seasonality

 

We do not expect material seasonality in our business.

 

Facilities

 

The Company occupies offices at 4522 West Village Drive Suite 215. Tampa, Florida 33624. The Company does not currently own or lease any properties or facilities. The Company expects to lease new office space in the future to the extent consistent with its business model.

 

Intellectual Property

 

We have a policy of requiring key employees and consultants to execute confidentiality agreements upon the commencement of an employment or consulting relationship with us. Our employee agreements also require relevant employees to assign to us all rights to any inventions made or conceived during their employment with us. In addition, we have a policy of requiring individuals and entities with which we discuss potential business relationships to sign non-disclosure agreements. Our agreements with clients include confidentiality and non-disclosure provisions.

 

Legal Proceedings

 

We may from time to time be involved in various claims and legal proceedings of a nature we believe are normal and incidental to our business. These matters may include product liability, intellectual property, employment, personal injury cause by our employees, and other general claims. We are not presently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

 

Employees

 

As of December 13, 2019, we had one employee, including officers and directors. We believe that we will be successful in attracting experienced and capable personnel. Our employee has entered into agreements with us requiring him not to compete or disclose our proprietary information. Our employee is not represented by any labor union. We believe that relations with our employee are excellent. Usually the number of total employees and number of full-time employees will vary.

 

 

 

 

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MANAGEMENT

______

 

The following table sets forth information regarding our executive officers, directors and significant employees, including their ages as of March 31, 2019:

 

Name and Principal Position   Age   Term of Office  

Approximate hours

per week for

part-time

employees

Greg P. Bell, Chief Executive Officer and Director   61   Since January 2017   45
Paul D. H. LaBarre, Executive Vice President   73   Since September 2005   3
Andrew Georgens, Director, Secretary   67   Since November 2017   2
Hugh Darryl Metz, Director   58   Since November 2017   2

 

Greg P. Bell, Chairman of the Board Chief Executive Officer and Director

 

Mr. Bell is one of the early pioneers and entrepreneurs in Entertainment and Digital Media and has been working in the field for over 30 years. He was involved in the early creation of the technologies and algorithms that allowed analog media to be transformed into digital bits and compressed data streams and created specific business enterprises that capitalized on the creation of digital transmissions at Scientific Atlanta, Compression Labs, VCON International and Qwest. Mr. Bell was one of the initial Vice Presidents of Business Development at Qwest Communications where he developed Qwest's Digital Media Company, Slingshot Networks. He then ran all operations of Slingshot, reporting to the board of directors, which managed and operated three full time studios including the creation of the Broadcast Studio in Staples Center, TV and News productions, LIVE events at the Staples Center, distribution of a national television show distributed by Warner Brothers TV Distribution and online television productions and web distribution for the NFL, NBA, NHL, AFL, Boxing, Democratic Convention and LIVE music events.

 

Upon leaving Slingshot in 2000, Mr. Bell founded B3 Development Group, a firm specializing in developing emerging market media companies. Mr. Bell ‘s B3 Development Group founded B2 Networks in 2001 which quickly became the defacto standard for Watching LIVE Pay per View Sporting events online. B2's Proprietary Online System broadcast LIVE Professional and Collegiate sporting events online to a global audience broadcasting over 1000 LIVE games per month. Mr. Bell developed and implemented a merger with B2 Networks and the America ONE Television Network where he became CEO of the combined companies. Under Mr. Bell's direction the company now called ONE Media Corp launched the new ONE World Sports TV Network, now operating under the brand Eleven Sports, in North America on Cable and Satellite, with a pure digital end-to-end distribution system, along with continuing the company’s growth in the online distribution of Sports and Entertainment. After leaving as CEO of ONE Media Corp, he continues to develop companies and specializes in developing and fast tracking emerging entertainment, transaction technology and media companies, Mr. Bell continues to expand his holdings and currently has business holdings in B3 Development Group which under contract with Caymanas Park Race Track, owned by the country of Jamaica, developed Jamaica’s first all-digital state of the art Pari-Mutuel Live Sports Gaming System for mobile devices and currently is operating under the brand CaymanasToGO for the Caribbean Consumers and Platinum Racing for USA, European and global consumers. The B3 mobile device wagering system and technology allows consumers globally to watch and wager on Live Horse Races and Sporting Events being held in the UK, USA, Canada and the Caribbean; B3 Gaming Services Group, a premier transaction and customer service group that offers management services to the Gaming industry in the Caribbean, B3 Networks, a premier state of the art digital broadcasting company that developed the B3 Television Satellite Replacement Technology which allows TV Networks to broadcast globally on the public internet instead of satellites in broadcast quality HD & SD Television. B3 Networks has deployed and services the B3 technology to broadcast High Definition and SD TV signals globally to cable headends, smart phones and Internet connected devices for the Jamaica Education Television Network, the Caymanas Race Track and other mobile applications globally. In February 2017 he became the Chairman and CEO of B2 Digital, Inc., trading at Symbol: BTDG on the OTC. B2 Digital will capitalize on Mr. Bell’s LIVE Event Experience and is in the process of building a Minor League for the MMA, Mixed Martial Arts Major Leagues, in conjunction with acquiring Sports Related companies to develop the business into a vertically integrated LIVE Event Sports Company.

 

 

 

 

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Mr. Bell has worked at the top technology development companies that developed the digital technologies, which are in use today at Scientific Atlanta, Compression Labs, VCON and Qwest. He also has managed and been directly involved with over 55,000 LIVE events in his 30-year career. He has worked with a diverse group of clients in the entertainment, sports and technology communities including the NFL, NBA, NHL, AHL, NLL, ECHL, IFL, USHL, SPHL, NCAA, NAIA, MISL, AFL, AOL, FOX, UFC, NAAFS, Bellator, WEF, the Staples Center, the Orleans Arena, Oscar De La Hoya, Barbra Streisand, and top entertainment venues, acts and actors. His clients and companies have capitalized on Mr. Bell's knowledge of the world of Entertainment, LIVE Events, Sports, Digital Television and Digital Online Transaction and Distribution Systems.

 

EDUCATION:

East Grand Rapids High School

Graduated 1975

 

Grand Valley State University

Graduated 1980

BBA Business Management

Emphasis in Computer Science, Economics and Marketing

 

Hugh Darryl Metz, Director

 

Mr. Metz has over 30 years’ experience in Broadcasting, Television, Computer Graphics and LIVE Event Management. He was one of the first to operate computer graphics television technology in the early 80s while developing Live Event graphics solutions for major television networks for LIVE professional and college sports television broadcasts.  He is certified in several Microsoft and Cisco product lines and served as IT systems administrator for Blockbuster Entertainment and IBM on the Blockbuster business support systems of the Blockbuster franchisees IT Network. He has worked on Sports productions for national TV networks operating and managing LIVE Television broadcasts for over 1000 LIVE Sports Event.

 

In 2007 Mr. Metz began working with the B2 Networks PPV Company as Mr. Bell’s head of LIVE Event Operations. His responsibilities included managing all aspects of over 200 LIVE TV and Internet broadcast productions for the NCAA and Pro Sports Leagues in Football, Basketball, Hockey, MMA and Special Events and then serving as Special Projects Director reporting to Mr. Bell the CEO of ONE World Sports, which acquired B2 Networks.

 

In 2012 Mr. Metz became VP of Operations for Mr. Bell’s B3 Enterprises Company, which owned the largest minority share of the NAAFS MMA group in OHIO. He was instrumental in developing all the LIVE Event operations systems, financial controls, security and event management operations with the management team who operated the B2 MMA Test Market Business model that produced over 20 LIVE MMA Events in 2 years.

 

Currently, he is the acting Broadcast IT Engineer at Gray Television's station that serves southern Oklahoma and oversees the technical operations of 3 local CBS, MyTV, Fox affiliate Television Networks. 

 

EDUCATION:

Robstown High School

Robstown, Texas

Graduated 1979

 

Courses Attended:

2000 to 2001

Grayson County College

IT and Technology Training

 

IBM Technical Training

2000 to 2007

Internal Technical Certification in IT, Infrastructure and Systems Engineering

 

 

 

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Paul D. H. LaBarre, Executive Vice President, Director

 

2006 to 2017, Member of the Board of Directors Good Hunting Communications, Inc.

 

2010 to 2017, CEO B2Digital INC. and Director

 

EDUCATION:

Attended Courses and studies:

Business Management, technology courses offered by Scientific Atlanta, Blonder Tongue, Jerrold, C-Cor & Magnavox,

Lawyer’s Assistant-Litigation & Trial Practice,

Automotive Training, Ford, General Motors, Chrysler & VW, Attended Several Courses in Automotive Training, CAC, PC General studies.

 

Andrew Georgens, Director

 

1970 - 1973 Payne Construction Company, Monsoon MATel Com / CATV construction Lineman, foreman, supervisor, management.

 

1973 - 1980 Tiger Communications, Springfield MA Tel com / CATV construction / engineering
  Owner, General Manager
   
1980 - 2005   Communications Systems Contractors, Springfield MA / Dalton MA
  Tel com / CATV & related fields / construction / engineering
  Owner / General Manager
   
2005 - present Retired
   

 

EDUCATION:

Cathedral High School

Springfield MA

Graduated 1969

Springfield Technical Community College

Attended 1970. 1 yr.

 

Except as given herein, none of our officers or directors in the last five years has been the subject of any conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses), the entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities; a finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or the entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended or otherwise limited such person’s involvement in any type of business or securities activities.

 

On June 26, 2013, Paul D.H. LaBarre, the Company’s Executive Vice President and a director, was convicted of improper use of a satellite signal in connection with the previously disclosed action involving DirecTV. Mr. LaBarre was sentenced to five years’ probation in connection with the conviction.

 

There are no family relationships among and between our directors, officers, persons nominated or chosen by the Company to become directors or officers, or beneficial owners of more than five percent (5%) of the any class of the Company’s equity securities.

 

 

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EXECUTIVE COMPENSATION

______

 

The following table represents information regarding the total compensation our officers and directors of the Company for the year ended March 31, 2019:

 

    Cash 
Compensation
  Annual Bonus
Available
  Other
Compensation*
  Total 
Compensation
Name and Principal Position                
Greg P. Bell, CEO and Director   -0-   -0-   $3,000   -0-
Paul LaBarre, Executive Vice President and Director   -0-   -0-   -0-   -0-
Andrew Georgens, Director   -0-   -0-   -0-   -0-
Hugh Darryl Metz, Director                
Total   -0-   -0-   -0-   -0-

*Stock awards

 

Board Service Agreements

 

Messrs. Metz and Georgens have entered into Board Service Agreements with the Company (collectively, the “Board Service Agreements”). Pursuant to the terms of the Board Service Agreements, Mr. Metz was awarded 3,000,000 shares and Mr. Georgens was awarded 1,000,000 shares of the Company’s common stock, par value $0.00001 per share (the “Common Stock” and each such award, a “Director Common Stock Award”), and will be paid annual cash compensation of $500 per year, in each case as compensation for services performed as a director of the Company. Each Director Common Stock Award will vest over a two-year period from the Effective Date, with 50% vesting on the first anniversary thereof and 50% vesting on the second anniversary thereof.

 

CEO Agreement

 

The Company has also entered into an agreement with Mr. Bell as the Chairman of the Board and Chief Executive Officer & President (the “CEO Agreement”). Pursuant to the terms of the CEO Agreement, the Company may not terminate Mr. Bell from his positions as Chief Executive Officer and President of the Company, or remove him from the Board or change his position as Chairman thereof, without the approval of 80% of the voting capital stock of the Company, unless such termination and/or removal is due to death or legal incapacity.

 

As compensation for Mr. Bell’s services pursuant to the terms of the CEO Agreement, the Company will issue B2 Management Group Group LLC, a limited liability company wholly owned and controlled by Mr. Bell (“B2 Management Group”), a total of 30,000,000 shares of Common Stock (the “CEO Stock Award”). The 30,000,000 shares of the CEO Stock Award will be issued to B2 Management Group within ten days of the Effective Date (the “Issuance Date”).

 

As further compensation for Mr. Bell’s services to the Company in connection with the Company’s acquisition activity, the Company has issued B2 Management Group, LLC an additional 60,000,000 shares of Common Stock as compensation for the completion of the Company’s previously announced acquisitions of Hard Rock MMA (30,000,000 Shares) and Colosseum Combat LLC (30,000,000) (collectively, the “Recent Acquisitions”).

 

Finally, pursuant to the terms of the CEO Agreement, the Company will issue B2 Management Group, LLC an additional 30,000,000 shares of Common Stock within ten days of completion of each future acquisition by the Company of any MMA fight organization, whether pursuant to an equity or asset purchase, up to a total of five (5) acquisitions subsequent to the Recent Acquisitions (corresponding to a total aggregate amount of 150,000,000 shares that may be issued in connection with future acquisitions).

 

The CEO Agreement also includes a non-compete covenant whereby Mr. Bell will not compete directly with the Company during the term of the CEO Agreement.

 

 

 

  36  
 

 

The foregoing summary is qualified in its entirety to the terms of the CEO Agreement itself, a copy of which is an exhibit to this Offering Circular.

 

LaBarre Agreement

 

The Company has also entered into an Employment and Board Service Agreement with Paul D.H. LaBarre, the Company’s Executive Vice President and a director (the “LaBarre Agreement”). The term of the LaBarre Agreement is 36 months, which shall run from the Effective Date, and will renew automatically for successive two-year periods unless either the Company or Mr. LaBarre provides notice of non-renewal no later than six months prior to the expiration of the then-current term. Pursuant to the terms of the LaBarre Agreement, the Company may not terminate Mr. LaBarre from his positions as Executive Vice President of the Company, or remove him from the Board, without the approval of 80% of the voting capital stock of the Company, unless such termination and/or removal is due to death or legal incapacity. Additionally, Mr. LaBarre may terminate the LaBarre Agreement at any time upon three months’ prior written notice to the Company.

 

As payment for past compensation owed to Mr. LaBarre from his employment agreement for his past services to the Company, the Company will issue Mr. LaBarre 50,000,000 shares of Common Stock. As compensation for Mr. LaBarre’s continuing services to the Company as Executive Vice President, the Company will issue Mr. LaBarre 4,000,000 shares of Common Stock per year for each year in which Mr. LaBarre remains employed in such capacity and the LaBarre Agreement remains in effect (the “Annual Salary Issuance”). 50% of the Annual Salary Issuance will vest every six months. In the event of a merger or consolidation of the Company in which the Company is not the surviving entity, or a proposed dissolution or liquidation of the Company or a sale of substantially all of its assets, any unvested portion of the Annual Salary Issuance remaining in the then-current term of the LaBarre Agreement will vest immediately.

 

As payment to Mr. LaBarre for his services as a director, the Company will pay Mr. LaBarre annual cash compensation of $500 per year.

 

The foregoing summary is qualified in its entirety to the terms of the LaBarre Agreement itself, a copy of which is an exhibit to this Offering Circular.

 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

Except as given in this Offering Circular, during the last two full fiscal years and the current fiscal year or any currently proposed transaction, there is no transaction involving the Company, in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for its last three fiscal years.

 

Disclosure of Conflicts of Interest

 

There are no conflicts of interest between the Company and any of its officers or directors

 

Indemnification Agreements

 

We have entered into indemnification agreements with each of our directors, executive officers and other key employees. The indemnification agreements and our amended and restated By-Laws will require us to indemnify our directors to the fullest extent permitted by Delaware law.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the Securities Act), may be permitted to directors, executive officers or persons controlling us, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

 

 

  37  
 

 

Review, Approval or Ratification of Transactions with Related Parties

 

We have adopted a related-party transactions policy under which our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our Common Stock, and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related-party transaction with us without the consent of our audit committee. If the related party is, or is associated with, a member of our audit committee, the transaction must be reviewed and approved by another independent body of our Board of Directors, such as our governance committee. Any request for us to enter into a transaction with a related party in which the amount involved exceeds $120,000 and such party would have a direct or indirect interest must first be presented to our audit committee for review, consideration and approval. If advance approval of a related-party transaction was not feasible or was not obtained, the related-party transaction must be submitted to the audit committee as soon as reasonably practicable, at which time the audit committee shall consider whether to ratify and continue, amend and ratify, or terminate or rescind such related-party transaction. All of the transactions described above were reviewed and considered by, and were entered into with the approval of, or ratification by, our Board of Directors.

 

During the last two full fiscal years and the current fiscal year or any currently proposed transaction, there are transactions involving the issuer, in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the issuer’s total assets at year-end for its last three fiscal years, except compensation awarded to executives.

 

Disclosure of Conflicts of Interest

 

There are no conflicts of interest between the Company and any of its officers or directors.

 

PRINCIPAL STOCKHOLDERS

______

 

The following table sets forth certain information known to us regarding beneficial ownership of our capital stock as of December 13, 2019 for (i) all executive officers and directors as a group and (ii) each person, or group of affiliated persons, known by us to be the beneficial owner of more than ten percent (10%) of our capital stock. The percentage of beneficial ownership in the table below is based on 581,003,354 shares of Common Stock and 2,000,000 shares of Series A Preferred Stock issued and outstanding as December 13, 2019.

 

Name and Address Shares of
Series A
Preferred Stock Owned
  Shares of
Common Stock
Owned
  Total Votes from Preferred and Common Stock Outstanding on December 13, 2019   Percentage of Total Votes   Percentage of Total Votes Assuming All Shares Offered are Sold(1)  
Paul D. H. LaBarre
1112 W. Farmdale Ave. Mesa, AZ 85210-3427 (1)
  850,000     64,191,494     268,191,494     26.47%     16.63%  
B2 Management Group, LLC
4522 West Village Drive, Suite 215, Tampa, Florida 33624(2)
  850,000     199,500,000     403,500,000     39.83%     25.02%  
Andrew Georgens   100,000     1,022,880     25,022,280     2.47%     *  
Hugh Darryl Metz   0     3,000,000     3,000,000     *     *  
Total Officers and Directors   1,800,000     267,714,374     699,713,774     69.07%     43.38%  

*Less than 1%

 

  (1) Total Common Shares outstanding will be 1,181,003,354 if all of the Offering is sold.

 

  (2) B2 Management Group, LLC is owned and controlled by Mr. Greg P. Bell, the Company’s Chairman and Chief Executive Officer.

 

 

 

  38  
 

 

In addition to the Common Stock, the Company has authorized a total of 50,000,000 shares of preferred stock, currently designated as Series A Convertible Preferred Stock and Series B Convertible Preferred Stock (“Series B Preferred Stock”). 2,000,000 shares of Series A Preferred Stock are currently issued and outstanding. The Series A Preferred Stock votes with the Common Stock on all matters to be voted on by the common stock on an as-converted basis. On such matters, each holder of Series A Preferred Stock is entitled to 240 votes for each share of Series A Preferred Stock held by such shareholder.

 

Capitalization

 

Class of Stock   Par Value   Authorized   Outstanding as of
December 13, 2019
Preferred Stock, Series A   0.00001     2,000,000     2,000,000  
Preferred Stock, Series B   0.00001     40,000,000     0  
Common Stock   0.00001     5,000,000,000     581,003,354  

 

DESCRIPTION OF SECURITIES

______

 

The Common Stock

 

We are authorized to issue 5,000,000,000 shares of Common Stock, $0.00001 par value. The holders of Common Stock are entitled to equal dividends and distributions, with respect to the Common Stock when, as, and if declared by the Board of Directors from funds legally available for such dividends. No holder of Common Stock has any preemptive right to subscribe for any of our stock nor are any shares subject to redemption. Upon our liquidation, dissolution or winding up, and after payment of creditors and any amounts payable to senior securities, the assets will be divided pro rata on a share-for-share basis among the holders of the shares of Common Stock. All shares of Common Stock now outstanding upon completion of this Offering and conversion of any Preferred Stock, are, and will be, fully paid, validly issued and non-assessable.

 

Holders of our Common Stock do not have cumulative voting rights, so that the holders of more than 50% of the shares voting for the election of directors will be able to elect 100% of the directors if they choose to do so, and in that event, the holders of the remaining shares will not be able to elect any members to the Board of Directors.

 

The Company has never paid any dividends to shareholders of our Common Stock. The declaration in the future of any cash or stock dividends will depend upon our capital requirements and financial position, general economic conditions, and other pertinent factors. We presently intend not to pay any cash or stock dividends in the foreseeable future. Management intends to reinvest earnings, if any, in the development and expansion of our business. No dividend may be paid on the Common Stock until all Preferred Stock dividends are paid in full.

 

Preferred Stock

 

We are authorized to issued 5,000,000,000 shares of preferred stock of the Company, par value $0.00001 per share.

 

Series A Convertible Preferred Stock

 

There are 2,000,000 shares of Series A Convertible Preferred Stock designated.

 

The Series A Preferred is senior to the Common Stock and any other series or class of the Company's Preferred Stock.

 

 

 

 

  39  
 

 

Liquidation Rights. In the event of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, the holders of the Series A Preferred then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its shareholders, before any payment or declaration, and setting apart for payment of any amount shall be made in respect of any outstanding capital stock of the Company, an amount equal to Two Dollars and Forty Cents ($2.40) per share, plus the Redemption provision (as defined below). Then all of the assets of the Company available to be distributed shall be distributed ratably to the holders of the Series A Preferred and then to the holders of other outstanding shares of capital stock of the Company. If upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, the assets to be distributed to the holders of the Series A Preferred shall be insufficient to permit the payment to the holders thereof the full preferential amount as provided herein, then such available assets shall be distributed ratably to the holders of the Series A Preferred.

 

None of the following events shall be treated as or deemed to be a liquidation hereunder: (1) A merger, consolidation or reorganization of the Company; (2) A sale or other transfer of all or substantially all of the Company's assets; (3) A sale of 50% or more of the Company's capital stock then issued and outstanding; (4) A purchase or redemption by the Company of stock of any class; or (5) Payment of a dividend or distribution from funds legally available therefor.

 

Voting Rights. On all matters to be voted on by the holders of Common Stock, the Holders of the Series A Preferred shall be entitled to 240 votes for each share of Series A Preferred held of record. On all such matters, the holders of Common Stock and the Holders of Series A Preferred shall vote together as a single class. If the Company effects a stock split which either increases or decreases the number of shares of Common Stock outstanding and entitled to vote, the voting rights of the Series A Preferred shall not be subject to adjustment unless specifically authorized Conversion. The Series A Preferred shall have the following conversion rights (the "Conversion Rights"):

 

Holder's Optional Right to Convert. Each share of Series A Preferred shall be convertible, at the option of the holder(s), on the Conversion Basis (as set forth below) in effect at the time of conversion. Such right to convert shall commence as of the Issue Date and shall continue thereafter for a period of years, such period ending on the fifth anniversary' of the Issue Date. In the event that the holder(s) of the Series A Preferred elect to convert such shares into Common Stock, the holder(s) shall have 60 days from the date of such notice in which they tender their shares of Series A Preferred to the Company.

 

Conversion Basis. Each share of Series A Preferred shall be convertible into 240 shares of the Company's Common Stock.

 

Mechanics of Conversion. Before any bolder of Series A Preferred shall be entitled to convert the same into shares of Common Stock, such holder shall (i) give written notice to the Company, at the office of the Company or of its transfer agent for the Common Stock or the Preferred Stock, that he elects to convert the same and shall state therein the number of shares of Series A Preferred being converted; and (ii) surrender the certificate or certificates therefor, duly endorsed. Thereupon the Company shall promptly issue and deliver to such holder of Series A Preferred a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled. The conversion shall be deemed to have been made and the resulting shares of Common Stock shall be deemed to have been issued immediately prior to the close of business on the date of such notice and tender of the shares of Series A Preferred.

 

Adjustments to the Conversion Basis. (1) Stock Splits and Combinations. Subject to the Protective Provisions (as defined below), if at any time after the Company first issues the Series A Preferred and while any of the shares of Series A Preferred remain outstanding, if the Company shall effect a subdivision or combination of the Common Stock, the Conversion Basis then in effect immediately before that subdivision or combination shall be proportionately adjusted. Any adjustment shall become effective at the close of business on the date the subdivision or combination becomes effective. (2) Reclassification. Exchange or Substitution. At any time after the Company first issues the Series A Preferred and while any of the shares of Series A Preferred remain outstanding, if the Common Stock issuable upon the conversion of the Series A Preferred shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares or stock dividend provided for above, or a reorganization, merger, consolidation, or sale of assets), then and in each such event the holder of each share of Series A Preferred shall have the right thereafter to convert such shares into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification, or other change, by holders of the number of shares of Common Stock into which such shares of Series A Preferred might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustments as provided herein. (3) Reorganization. Mergers. Consolidations or Sales of Assets. At any time after the Company first issues the Series A Preferred and while any of such shares remain outstanding, if there shall be a capital reorganization of the Common Stock (other than a subdivision, combination, reclassification, or exchange of shares), or a merger or consolidation of the Company with or into another Company, or the sale of all or substantially all of the Company's assets to any other person, then as a part of such reorganization, merger, consolidation, or sale, provision shall be made so that the holders of the Series A Preferred thereafter shall be entitled to receive upon conversion of the Series A Preferred, the number of shares of stock or other securities or property of the Company, or of the successor Company resulting from such merger or consolidation or sale, to which a bolder of Series A Preferred deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale.

 

 

 

 

  40  
 

 

Notices of Record Date. In the event of any reclassification or recapitalization of the capital stock of the Company, any merger or consolidation of the Company, or any transfer of all or substantially all of the assets of the Company to any other Company, entity, or person, or any voluntary or involuntary dissolution, liquidating, or winding up of the Company, the Company shall mail to each holder of Series A Preferred at least 30 days prior to the record date specified therein, a notice specifying the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up is expected to become effective, and the time, if any is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation, or winding up.

 

Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series A Preferred. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company shall pay cash equal to the product of such fraction multiplied by the fair market value of one share of the Company's Common Stock on the date of conversion, as determined in good faith by the Company's directors.

 

Reservation of Stock Issuable Upon Conversion. At such time as the Company increases its authorized capital resulting in a sufficient number of shares of Common Stock becoming available for the conversion of the Series A Preferred the Company shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series A Preferred, a number of its shares of Common Stock as shall from time to time be sufficient to effectuate the conversion of all outstanding shares of Series A Preferred.

 

Protective Provisions. Notwithstanding anything contained herein to the contrary, so long any of the Series A Preferred shall be outstanding, the Company shall not without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least two-thirds of the total number of shares of Series A Preferred outstanding: (a) Alter or change the rights, preferences or privileges of the Series A Preferred by way of reverse stock lit, reclassification, merger consolidation or otherwise, so as to adversely affect in any manner the voting rights including number of votes presently allowed or the conversion basis by which the shares of Series A Preferred are presently converted into shares of Common Stock; (b) Increase the authorized number of Series A Preferred; (c) Create any new class of shares having preferences over or being on a parity with the Series A Preferred as to dividends or assets, unless the purpose of creation of such class is, and the proceeds to be derived from the sale and issuance thereof are to be used for, the retirement of all Series A Preferred then outstanding; (d) Repurchase any of the Company's Common Stock (e) Merge or consolidate with any other Company, except into or with a wholly-owned subsidiary of the Company with the requisite shareholder approval; (f) Sell, convey or otherwise dispose of, or create or incur any mortgage, lien, charge or encumbrance on or security interest in or pledge of, or sell and leaseback, all or substantially all of the property or business of the Company; or (g) Incur, assume or guarantee any indebtedness (other than such as may be represented by the obligation to pay rent under leases) maturing more than 18 months after the date on which it is incurred, assumed or guaranteed by the Company, except purchase money obligations, obligations assumed as part of the price of property purchased, or the extension, renewal or refunding of any thereof.

 

Redemption. Subject to the applicable provisions of Delaware law, the Company, at the option of its directors, may at any time or from time to time redeem the whole or any part of the outstanding Series A Preferred. Upon redemption the Company shall pay for each share redeemed $2.40 per share, payable in cash, plus a premium to compensate the original purchaser(s) for the investment risk and cost of capital equal to the greater of (a) $2.40 per share, or (b) an amount per shares equal to 50% of the market capitalization of the Company on the date of notice of such redemption divided by 2,000,000 (the "Redemption Premium"), the redemption amount and the Redemption Premium hereinafter being referred to as the "Redemption Price." Such redemption shall be on an all-or-nothing basis.

 

At least 30 days previous notice by mail, postage prepaid, shall be given to the holders of record of the Series A Preferred to be redeemed, such notice to be addressed to each such shareholder at the address of such holder appearing on the books of the Company or given to such holder to the Company for the purpose of notice, or if no such address appears or is given, at the place where the principal office of the Company is located. Such notice shall state the date fixed for redemption and the redemption price and shall call upon the holder to surrender to the Company on said date at the place designated in the notice such holder's certificate or certificates representing the shares to be redeemed. On or after the date fixed for redemption and stated in such notice, each holder of Series A Preferred called for redemption shall surrender the certificate evidencing such shares to the Company at the place designated in such notice and shall thereupon be entitled to receive payment of the redemption price. If less than all the shares represented by any such surrendered certificate are redeemed, a new certificate shall be issued representing the unredeemed shares. If such notice of redemption shall have been duly given, and if on the date fixed for redemption funds necessary for the redemption shall be available therefore, notwithstanding that the certificates evidencing any Series A Preferred called for redemption shall not have been surrendered, the dividends, if any, with respect to the shares so called for redemption shall forthwith after such date cease and desist and determine, except only the right of the holders to receive the redemption price without interest upon surrender of their certificates therefore.

 

 

 

  41  
 

 

If, on or prior to any date fixed for redemption or Series A Preferred, the Company deposits, with any bank or trust company as trust fund, the number of shares of Common Stock of a sum sufficient to redeem, on the date fixed for redemption thereof, the shares called for redemption, with irrevocable instructions and authority to the bank or trust company to give the notice of redemption thereof (or to complete the giving of such notice if theretofore commenced and to pay, or deliver, on or after the date fixed for redemption or prior thereto, the redemption price of the shares to their respective holders upon the surrender of their share certificates, then from and after the date of the deposit (although prior to the date fixed for redemption), the shares so called shall be redeemed and any dividends on those shares shall cease to accrue after the date fixed for redemption. The deposit shall constitute full payment of the shares to their holders and from and after the date of the deposit the shares shall no longer be outstanding and the holders thereof shall cease to be shareholders with respect to such shares, and shall have no rights with respect thereto except the right to receive from the bank or trust company payment of the redemption price of the shares without interest, upon the surrender of their certificates therefore. Any interest accrued on any funds so deposited shall be the property of, ari4 paid to, the Company. If the holders of Series A Preferred so called for redemption shall. not, at the end of six years from the date fixed for redemption thereof, have claimed any funds so deposited, such bank or trust company shall thereupon pay over to the Company such unclaimed funds, and such bank or trust company shall thereafter be relieved of all responsibility in respect thereof to such holders and such holders shall look only to the Company for payment of the redemption price.

 

 Reissuance. No share or shares of Series A Preferred acquired by the Company by reason of conversion or otherwise shall be reissued as Series A Preferred, and all such shares thereafter shall be returned to the status of undesignated and unissued shares of Preferred Stock of the Company.

 

Status of Reacquired Stock. Shares of Series A Preferred which have been issued and reacquired in any manner shall, upon compliance with any applicable provisions of Delaware law, have the status of authorized and unissued shares of Preferred Stock may be redesignated and reissued in any series or class.

 

Series B Convertible Preferred Stock

 

There are 40,000,000 shares of Series B Convertible Preferred Stock designated.

 

Voting. Liquidation. Dividends, and Redemption. Each outstanding share of Series B Convertible Preferred Stock shall have no voting rights on matters submitted to the common stockholders of the Corporation. The shares of Series B Convertible Preferred Stock shall (i) not have a Liquidation preference; (ii) not accrue, earn, or participate in any dividends; and (iii) not be subject to redemption by the Corporation.

 

Conversion. 12 months following the original issuance date, but not before, each outstanding share of Series B Convertible Preferred Stock may be converted, at the option of the owner, into five shares of the Company’s common stock.

 

DIVIDEND POLICY

______

 

We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any further determination to pay dividends on our capital stock will be at the discretion of our Board of Directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our Board of Directors considers relevant.

 

 

 

 

  42  
 

 

SECURITIES OFFERED

______

 

Current Offering

 

B2Digital, Incorporated (“B2Digital, Incorporated,” “We,” or the “Company”) is offering up to 600,000,000 total shares of Common Stock, $0.00001 par value (the “Common Stock” or collectively the “Securities”).

 

The Common Stock

 

We are authorized to issue 5,000,000,000 shares of Common Stock, $0.00001 par value. The holders of Common Stock are entitled to equal dividends and distributions, with respect to the Common Stock when, as, and if declared by the Board of Directors from funds legally available for such dividends. No holder of Common Stock has any preemptive right to subscribe for any of our stock nor are any shares subject to redemption. Upon our liquidation, dissolution or winding up, and after payment of creditors and senior securities, the assets will be divided pro rata on a share-for-share basis among the holders of the shares of Common Stock. All shares of Common Stock now outstanding upon completion of this Offering are, and will be, fully paid, validly issued and non-assessable.

 

Holders of our Common Stock do not have cumulative voting rights, so that the holders of more than 50% of the shares voting for the election of directors will be able to elect 100% of the directors if they choose to do so. In that event, the holders of the remaining shares will not be able to elect any members to the Board of Directors.

 

Transfer Agent

 

Our transfer agent is Signature Stock Transfer, Inc., 14673 Midway Road, Suite #220, Addison, Texas 75001, (972) 612-4120, www.signaturestocktransfer.com. The transfer agent is registered under the Exchange Act and operates under the regulatory authority of the SEC and FINRA.

 

SHARES ELIGIBLE FOR FUTURE SALE

_____

 

Prior to this Offering, there has been a limited market for our Common Stock. Future sales of substantial amounts of our Common Stock, or securities or instruments convertible into our Common Stock, in the public market, or the perception that such sales may occur, could adversely affect the market price of our Common Stock prevailing from time to time. Furthermore, because there will be limits on the number of shares available for resale shortly after this Offering due to contractual and legal restrictions described below, there may be resales of substantial amounts of our Common Stock in the public market after those restrictions lapse. This could adversely affect the market price of our Common Stock prevailing at that time.

 

LEGAL MATTERS

_____

 

Certain legal matters with respect to the shares of common stock offered hereby will be reviewed by Business Legal Advisors, LLC of Utah. 

 

EXPERTS

______

 

The consolidated financial statements of the Company appearing elsewhere in this Offering Circular have been prepared by management and have not been reviewed by an independent accountant.

 

 

 

  43  
 

 

WHERE YOU CAN FIND MORE INFORMATION

______

 

We have filed with the SEC a Regulation A Offering Statement on Form 1-A under the Securities Act with respect to the shares of common stock offered hereby. This Offering Circular, which constitutes a part of the Offering Statement, does not contain all of the information set forth in the Offering Statement or the exhibits and schedules filed therewith. For further information about us and the common stock offered hereby, we refer you to the Offering Statement and the exhibits and schedules filed therewith. Statements contained in this Offering Circular regarding the contents of any contract or other document that is filed as an exhibit to the Offering Statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the Offering Statement. Upon the completion of this Offering, we will be required to file periodic reports, proxy statements, and other information with the SEC pursuant to the Securities Exchange Act of 1934. You may read and copy this information at the SEC's Public Reference Room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, including us, that file electronically with the SEC. The address of this site is www.sec.gov.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  44  

 

 

B2Digital, Inc.

 

INDEX TO FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

 

Table of Contents

 

For the Six Months Ended September 30, 2018  
   
Consolidated Balance Sheets as of September 30, 2019 (unaudited) and March 31, 2019 F-2
Consolidated Statements of Operations (unaudited) for the six months ended September 30, 2019 and September 30, 2018 F-3
Consolidated Statements of Operations (Unaudited) for the three months ended September 30, 2019 and September 30, 2018 F-4
Consolidated Statements of Stockholders’ Equity (Unaudited) for the six months ended September 30, 2019 and September 30, 2018 F-5
Consolidated Statements of Cash Flows (Unaudited) for the six months ended September 30, 2019 and September 30, 2018 F-7
Notes to the consolidated financial statements F-8

 

 

For the Year Ended March 31, 2019  
   
Independent Auditor’s Report F-16
Balance Sheet at March 31, 2019 F-17
Statement of Operations for the year ended March 31, 2019 F-18
Statement of Changes in Stockholders' Equity for the year ended March 31, 2019 F-19
Statement of Cash Flows for the Year Ended March 31, 2019 F-20
Notes to Financial Statements F-21

 

 

For the Year Ended March 31, 2018  
   
Independent Auditor’s Report F-27
Balance Sheet at March 31, 2018 F-28
Statement of Operations for the year ended March 31, 2018 F-29
Statement of Changes in Stockholders' Equity for the year ended March 31, 2018 F-30
Statement of Cash Flows for the year ended March 31, 2018 F-31
Notes to Financial Statements F-32

 

 

 

 

 

  F-1  
 

B2Digital, Incorporated

Consolidated Balance Sheets

             

 

   

As of

September 30, 2019

(Unaudited)

   

As of

March 31, 2019

 
Assets                
Current assets                
Cash and cash equivalents   $ 36,407     $ 27,579  
Deposits and prepaid expenses     25,588       6,260  
Note receivable- related party     164,661       65,416  
Total current assets     226,656       99,255  
                 
Fixed assets                
Cages     122,025       46,025  
Trucks trailers and vehicles     12,500       9,500  
Event assets     59,462       8,987  
Electronics hardware and software     10,470       6,960  
Less: accumulated depreciation     (26,459 )     (16,407 )
Total fixed assets     177,998       55,065  
                 
                 
Goodwill     314,272       193,045  
Total Assets   $ 718,926     $ 347,365  
                 
                 
Liabilities & Stockholders' Equity                
Current liabilities                
Accounts payable & accrued liabilities   $ 129,909     $ 109,627  
Deferred revenue     3,250        
Note payable- current maturity     14,000       75,000  
Payable due for business acquisitions     15,000        
Note payable- in default     15,000        
Total current liabilities     177,159       184,627  
                 
Note payable- long-term     60,000       14,000  
                 
Total Liabilities     237,159       198,627  
                 
Commitments and contingencies (Note 7)                
                 
Stockholders' Equity                
Preferred stock, 50,000,000 shares authorized, 40,000,000 shares of Series B; 2,000,000 shares of Series A, convertible into 240 shares of common stock issued and outstanding at September 30, 2019 and March 31, 2019, respectively; 8,000,000 shares are undesignated     20       20  
Common stock, $0.00001 par value; 5,000,000,000 shares authorized; 563,120,110 and 377,620,110 shares issued and outstanding at September 30, 2019 and March 31, 2019, respectively     5,631       3,776  
Additional paid in capital     3,860,674       2,624,573  
Accumulated deficit     (3,384,558 )     (2,479,631 )
Total Stockholders' Equity     481,767       148,738  
Total Liabilities and Stockholders' Equity   $ 718,926     $ 347,365  

 

See accompanying notes to the unaudited consolidated financial statements.

 

 

  F-2  
 

 

B2Digital, Incorporated

Consolidated Statements of Operations

               

 

    For the six months ended
September 30, 2019
    For the six months ended
September 30, 2018
 
    (unaudited)     (unaudited)  
             
             
Live event revenue   $ 181,911     $ 172,595  
                 
Live event expenses     135,540       142,976  
                 
Live event income- net     46,371       29,619  
                 
General and administrative corporate expenses                
Stock compensation expense     688,000        
General & administrative expenses     171,810       74,825  
Depreciation expense     10,053       4,314  
Total general and administrative corporate expenses     869,863       79,139  
                 
Loss from continuing operations     (823,492 )     (49,520 )
                 
Other income (expense)                
Loss on forgiveness of note receivable     (27,000 )      
Loss on modification of debt     (50,756 )      
Interest expense     (3,679 )     (2,107 )
Total other income (expense)     (81,435 )     (2,107 )
                 
Net loss   $ (904,927 )   $ (51,627 )
                 
Basic diluted earnings per share on net loss   $ (0 )   $ (0 )
                 
Weighted average shares outstanding     471,101,799       328,684,393  

 

 

See accompanying notes to the unaudited consolidated financial statements.

 

 

 

 

  F-3  
 

 

B2Digital, Incorporated

Consolidated Statements of Operations

               

 

    For the three months ended September 30, 2019    

For the three

months ended

September 30, 2018

 
    (unaudited)     (unaudited)  
             
Live event revenue   $ 96,275     $ 78,992  
                 
Live event expenses     73,588       60,948  
                 
Live event income- net     22,687       18,044  
                 
General and administrative corporate expenses                
Stock compensation expense     233,600        
General & administrative expenses     115,697       32,593  
Depreciation expense     6,741       1,815  
Total general and administrative corporate expenses     356,038       34,408  
                 
Loss from continuing operations     (333,351 )     (16,364 )
                 
Other income (expense)                
Loss on forgiveness of loan receivable     (27,000 )      
Loss on modification of debt     (50,756 )      
Interest expense     (2,308 )     (750 )
Total other income (expense)     (80,064 )     (750 )
                 
Net loss   $ (413,415 )   $ (17,114 )
                 
Basic diluted earnings per share on net loss   $ (0 )   $ (0 )
                 
Weighted average shares outstanding     528,339,793       340,921,298  

 

 

See accompanying notes to the unaudited consolidated financial statements.

 

 

 

  F-4  
 

 

B2Digital, Incorporated

Consolidated Statement of Changes in Stockholders' Equity (Unaudited)

Six Months Ended September 30, 2018

                           

 

    Preferred Stock     Common Stock    

Additional

Paid in

    Accumulated        
    Shares     Amount     Shares     Amount     Capital     Deficit     Total  
Balance March 31, 2018     2,000,000     $ 20       263,075,044     $ 2,631     $ 2,381,068     $ (2,345,820 )   $ 37,899  
                                                         
Sale of common stock                 30,000,000       300                   300  
                                                         
Issuance of common stock for services                 35,000,000       350                   350  
                                                         
Issuance of common stock for conversion of debt                 3,478,400       35       37,985             38,020  
                                                         
Net Loss                                   (34,513 )     (34,513 )
                                                         
Balance June 30, 2018     2,000,000       20       331,553,444       3,316       2,419,053       (2,380,333 )     42,056  
                                                         
Net Loss                                   (17,114 )     (17,114 )
                                                         
Balance September 30, 2018     2,000,000     $ 20       331,553,444     $ 3,316     $ 2,419,053     $ (2,397,447 )   $ 24,942  

 

 

See accompanying notes to the unaudited consolidated financial statements.

 

 

 

 

  F-5  
 

 

B2Digital, Incorporated

Consolidated Statement of Changes in Stockholders' Equity (Unaudited)

Six Months Ended September 30, 2019

                           

 

    Preferred Stock     Common Stock     Additional
Paid in
    Accumulated        
    Shares     Amount     Shares     Amount     Capital     Deficit     Total  
Balance March 31, 2019     2,000,000     $ 20       377,620,110     $ 3,776     $ 2,624,573     $ (2,479,631 )   $ 148,738  
                                                         
Sale of common stock                 13,281,250       133       84,867             85,000  
                                                         
Issuance of common stock for services                 71,000,000       710       453,690             454,400  
                                                         
Issuance of common stock as part of business combination                 14,000,000       140       89,460             89,600  
                                                         
Net Loss                                   (491,512 )     (491,512 )
                                                         
Balance June 30, 2019     2,000,000       20       475,901,360       4,759       3,252,590       (2,971,143 )     286,226  
                                                         
Sale of common stock                 49,218,750       492       314,508             315,000  
                                                         
Issuance of common stock for services                 36,500,000       365       233,235             233,600  
                                                         
Issuance of common stock as part of business combination                 9,000,000       90       57,510             57,600  
                                                         
Cancellation of outstanding shares in exchange cancellation of notes receivable - related party                 (7,500,000 )     (75 )     (47,925 )           (48,000 )
                                                         
Loss from modification of debt                             50,756             50,756  
                                                         
Net Loss                                   (413,415 )     (413,415 )
                                                         
Balance September 30, 2019     2,000,000     $ 20       563,120,110     $ 5,631     $ 3,860,674     $ (3,384,558 )   $ 481,767  

 

 

See accompanying notes to the unaudited consolidated financial statements.


 

  F-6  
 

 

B2Digital, Incorporated

Consolidated Statements of Cash Flows

 

 

    For the six months ended
September 30, 2019
    For the six months ended
September 30, 2018
 
    (unaudited)     (unaudited)  
             
Cash Flows from Operating Activities                
Net Loss   $ (904,927 )   $ (51,627 )
                 
Adjustments to reconcile net loss to net cash used by operating activities:                
Stock compensation     688,000        
Depreciation     10,053       4,314  
Loss on forgiveness of loan receivable     27,000        
Loss on modification of debt     50,756        
Changes in operating assets & liabilities                
Deposits and prepaid expenses     (19,329 )      
Inventory           (885 )
Accounts payable & accrued Liabilities     (36,495 )     (3,836 )
Net cash used by operating activities     (184,942 )     (52,034 )
                 
Cash Flows from Investing Activities                
Note receivable- related party     (174,245 )      
Purchase of fixed assets           (1,659 )
Business acquisitions, net of cash acquired     (31,985 )      
Net cash used by investing activities     (206,230 )     (1,659 )
                 
Cash Flows from Financing Activities                
Proceeds from notes payables           11,589  
Payment to note payable           (14,195 )
Issuance of common stock     400,000       38,760  
Net cash provided by financing activities     400,000       36,154  
                 
Increase (decrease) in cash     8,828       (17,539 )
                 
Cash at beginning of period     27,579       25,874  
                 
Cash at end of period   $ 36,407     $ 8,335  
                 
Supplemental Cash Flow Information                
Cash paid for interest   $     $ 250  
Cash paid for income taxes   $     $  
                 
Non-cash investing and financing activities:                
23,000,000 shares of common stock issued for business combination   $ 147,200     $  
7,500,000 shares returned in exchange for forgiveness of loan receivable   $ 480,000     $  
Payables for acquisitions   $ 15,000     $  

 

See accompanying notes to the unaudited consolidated financial statements.

 

  F-7  
 

 

B2DIGITAL, INCORPORATED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

 

In February 2017, the Board of Directors of B2Digital, Incorporated ("B2Digital" or the "Company") approved a complete restructuring, new management team and strategic direction for the Company. Capitalizing on its history in television, video and technology, the Company is now forging ahead and becoming a full service live event sports company.

 

B2Digital's first strategy is to build an integrated live event Minor League for the Mixed Martial Arts (MMA) marketplace. B2Digital will be creating and developing Minor League champions that will move on to the MMA Major Leagues from the B2 Fighting Series (B2FS). This will be accomplished by sponsoring operating live events, acquiring existing MMA promotions and then inviting those champions to the B2FS Regional and National Championship Series. B2Digital will own all media and merchandising rights and digital distribution networks for the B2FS.

 

2017 marked the kickoff of the B2FS by sponsoring and acquiring MMA regional promotion companies for the development of the B2FS. The second strategy is that the Company plans to add additional sports, leagues, tournaments and special events to its live event business model. This will enable B2Digital to capitalize on their core technologies and business models that will be key to broadening the revenue base of the Company's live event core business. B2Digital will also be developing and expanding the B2Digital live event systems and technologies. These include systems for event management, digital ticketing sales, digital video distribution, digital marketing, Pay-Per View (PPV), fighter management, merchandise sales, brand management and financial control systems.

 

Basis of Presentation and Consolidation

 

The Company has six wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, Colosseum Combat LLC which owns Colosseum Combat MMA in Indiana and Blue Grass MMA LLC which is a marketing company, United Combat League MMA LLC, Pinnacle Combat LLC, and Strike Hard Productions, LLC.

 

The consolidated financial statements, which include the accounts of the Company and its six wholly-owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP). All significant intercompany balances and transactions have been eliminated. The consolidated financial statements, which include the accounts of the Company and its six wholly-owned subsidiaries, and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and presented in US dollars. The fiscal year end is March 31.

 

NOTE 2 - ACCOUNTING POLICIES

 

The significant accounting policies of the Company are as follows:

 

Basis of Accounting

The accounts are maintained and the consolidated financial statements have been prepared using the accrual basis of accounting in accordance with GAAP. The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three and six months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending March 31, 2020.

 

Use of Estimates

Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from these estimates and assumptions.

 

 

 

  F-8  
 

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains deposits primarily in four financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation ("FDIC"). The Company has not experienced any losses related to amounts in excess of FDIC limits.

 

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

 

Property and Equipment

Property and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying consolidated statement of operations of the respective period. The estimated useful lives range from 3 to 7 years.

 

Goodwill

Goodwill represents the cost in excess of the fair value of net assets acquired in business combinations. The Company tests goodwill for impairment on an annual basis and when events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is deemed to be impaired if the carrying amount of goodwill exceeds its estimated fair value.

 

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

 

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of Financial Accounting Standards Board (“ FASB”) Accounting Standards Codification (“ASC”) 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery.

 

Income Taxes

The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated Statements of Operations in the period that includes the enactment date. Through September 30, 2019, the Company has an accumulated deficit. Due to uncertainty of realization for these losses, a full valuation allowance is expected. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

 

 

 

 

  F-9  
 

 

Stock based compensation

The Company records stock-based compensation in accordance with the provisions of FASB ASC Topic 718, “Accounting for Stock Compensation,” which establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC.

 

Topic 718, the Company recognizes an expense for the fair value of its stock awards at the time of grant and the fair value of its outstanding stock options as they vest, whether held by employees or others. As of September 30, 2019, there were no options outstanding.

 

Recently Adopted Accounting Pronouncements

On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC 718 and forgo revaluing the award after this date. The Company adopted ASU 2018-07 on April 1, 2019. The adoption of this standard did not have a material impact on the financial statements.

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 3 - RELATED PARTY

 

B2 Management, LLC (“B2 Management”) has as its sole member the Chief Executive Officer and Chairman of B2Digital. During the six months ended September 30, 2019, B2 Management received $174,245 in advances. On September 27, 2019, the Company and B2 Management Group LLC (“B2MG”) entered into an agreement whereby B2MG agreed to return 7,500,000 shares of the Company’s common stock in exchange for the cancellation of $75,000 owed by B2MG to the Company. As of September 30, 2019 and March 31, 2019, the Company has an uncollateralized, non-interest-bearing note receivable of $164,661 and $65,416, respectively, from B2 Management that is due upon demand.

 

NOTE 4 – BUSINESS ACQUISITIONS

 

United Combat League, UCL MMA LLC

 

Effective May 1, 2019, the Company completed its previously announced acquisition of 100% of the equity interest in United Combat League, LLC (“UCL”), in an effort to execute its strategy of developing and building a Premier Development League for the Mixed Martial Arts (“MMA”) marketplace. The purchase price was $20,000 in cash and 6,000,000 shares of Restricted Common Stock issuable to Michael Davis, the seller of the equity interest in the acquisition. The Company is required to pay the cash consideration in three payments as follows: (i) $10,000 on or before 10 calendar days after the execution date of the agreement, (ii) $5,000 on or before 45 calendar days after the execution date of the agreement, and (iii) $5,000 on or before 90 calendar days after the execution date of the agreement.

 

Consideration      
       
Cash   $ 20,000  
6,000,000 shares of common stock issued to the sellers     38,400  
Total consideration   $ 58,400  
         
Fair value of net identifiable assets (liabilities) acquired        
         
Goodwill resulting from transaction   $ 58,400  

 

 

 

  F-10  
 

 

Goodwill is calculated as the excess of the purchase price paid over the net assets recognized. The goodwill recorded as part of the UCL acquisition primarily reflects the value of adding UCL to B2Digital in order to expand its footprint in the MMA marketplace and execute its strategy of developing and building a Premier Development League MMA marketplace. Goodwill is not amortizable nor deductible for tax purposes. The Company analyzed the acquisition under applicable guidance and determined that the acquisition should be accounted for as a business combination. The initial accounting for this transaction is not completed and the fair value of the acquired identifiable intangible assets are provisional pending receipt of the final valuations for those assets.

 

The Company is required to present a pro forma balance sheet assuming the transaction was consummated on the date of the latest balance sheet included in the filing and a pro forma statement of operations assuming the transaction was consummated at the beginning of the fiscal year presented and carried forward through any interim period presented. However, since the initial accounting has not been finalized for the transaction the Company believes presenting pro forma information is impracticable and plans to present it once the accounting is finalized.

 

Pinnacle Combat LLC- Acquisition

 

On July 15, 2019, to be effective June 29, 2019, the Company completed an acquisition of 100% of the equity interest in Pinnacle Combat LLC of Iowa (“Pinnacle”), in an effort to execute its strategy of developing and building a Premier Development League for the MMA marketplace. The purchase price was $20,000 in cash and 8,000,000 shares of Restricted Common Stock, 5,000,000 to be issued to Harry Maglaris and 3,000,000 to be issued to Ken Rigdon, collectively the sellers of the equity interest in the acquisition. The Company is required to pay the cash consideration in three payments as follows: (i) $10,000 on or before 10 calendar days after the execution date of the agreement, (ii) $5,000 on or before 45 calendar days after the execution date of the agreement, and (iii) $5,000 on or before 90 calendar days after the execution date of the agreement.

 

Consideration      
Cash   $ 20,000  
8,000,000 shares of common stock issued to the sellers     51,200  
Total consideration   $ 71,200  
         
Fair values of identifiable net assets:        
Cages   $ 54,000  
Event asset (barriers)     6,000  
Truck/trailer     3,000  
Venture lighting system     25,000  
Total identifiable net assets     88,000  
         
Fair value of liabilities assumed:        
Credit card liability     25,028  
         
Fair value of net identifiable assets (liabilities) acquired     62,972  
         
Goodwill resulting from transaction   $ 8,228  

 

 

 

 

  F-11  
 

 

Goodwill is calculated as the excess of the purchase price paid over the net assets recognized. The goodwill recorded as part of the Pinnacle acquisition primarily reflects the value of adding Pinnacle to B2Digital in order to expand its footprint in the MMA marketplace and execute its strategy of developing and building a Premier Development League MMA marketplace. Goodwill is not amortizable nor deductible for tax purposes. The Company analyzed the acquisition under applicable guidance and determined that the acquisition should be accounted for as a business combination. The initial accounting for this transaction is not completed and the fair value of the acquired identifiable intangible assets are provisional pending receipt of the final valuations for those assets.

 

The Company is required to present a pro forma balance sheet assuming the transaction was consummated on the date of the latest balance sheet included in the filing and a pro forma statement of operations assuming the transaction was consummated at the beginning of the fiscal year presented and carried forward through any interim period presented. However, since the initial accounting has not been finalized for the transaction the Company believes presenting pro forma information is impracticable and plans to present it once the accounting is finalized.

 

Strike Hard Productions LLC- Acquisition

 

On September 1, 2019, the Company completed an acquisition of 100% of the equity interest in Strike Hard Productions LLC, a fighting promotion business, in an effort to execute its strategy of developing and building a Premier Development League for the MMA marketplace. The purchase price was $20,000 in cash and 9,000,000 shares of Restricted Common Stock, 3,000,000 Restricted Shares issued to be issued to David Elder, 3,000,000 Restricted Common Shares to be issued to James Sullivan and 3,000,000 Restricted Common Shares to be issued to Matt Leavell, collectively the sellers of the equity interest in the acquisition. The Company is required to pay the cash consideration in three payments as follows: (i) $10,000 on or before 10 calendar days after the execution date of the agreement, (ii) $5,000 on or before 45 calendar days after the execution date of the agreement, and (iii) $5,000 on or before 90 calendar days after the execution date of the agreement.

 

Consideration      
Cash   $ 20,000  
9,000,000 shares of common stock issued to the sellers     57,600  
Total consideration   $ 77,600  
         
Fair values of identifiable net assets:        
Cages   $ 22,000  
Event asset (tables)     1,000  
Total fair value of identifiable net assets     23,000  
         
Goodwill resulting from transaction   $ 54,600  

 

 

 

 

  F-12  
 

 

Goodwill is calculated as the excess of the purchase price paid over the net assets recognized. The goodwill recorded as part of the Strike Hard acquisition primarily reflects the value of adding Strike Hard to B2Digital in order to expand its footprint in the MMA marketplace and execute its strategy of developing and building a Premier Development League MMA marketplace. Goodwill is not amortizable nor deductible for tax purposes. The Company analyzed the acquisition under applicable guidance and determined that the acquisition should be accounted for as a business combination. The initial accounting for this transaction is not completed and the fair value of the acquired identifiable intangible assets are provisional pending receipt of the final valuations for those assets.

 

The Company is required to present a pro forma balance sheet assuming the transaction was consummated on the date of the latest balance sheet included in the filing and a pro forma statement of operations assuming the transaction was consummated at the beginning of the fiscal year presented and carried forward through any interim period presented. However, since the initial accounting has not been finalized for the transaction the Company believes presenting pro forma information is impracticable and plans to present it once the accounting is finalized.

 

NOTE 5 - NOTES PAYABLE

 

The following is a summary of notes payable as of September 30, 2019 and March 31, 2019:

 

    As of     As of  
    September 30,
2019
    March 31,
2019
 
Notes payable - current maturity:                
Emry Capital $14,000, 4% loan with principal and interest due April, 2020.   $ 14,000     $ 14,000  
Notes payable – in default:                
Good Hunting $15,000, 7.5% loan with principal and interest due March 31, 2019 (In Default)     15,000       15,000  
Notes payable – long term:                
WLES LP LLC $60,000, 5% loan due January 15, 2022     60,000       60,000  
Total   $ 89,000     $ 89,000  

 

On August 31, 2019, WLES LP LLC agreed to sign an amendment which extended the maturity date of the note and added conversion option. This amendment gave rise to a modification because a substantive conversion option was added to the contract. Under ASC 470-50-40-10, when a modification or an exchange of debt instruments adds a substantive conversion option debt extinguishment accounting is required. As a result, the Company recorded a loss on modification of debt in the amount of $50,756.

 

NOTE 6 - EQUITY

 

Preferred stock

 

There are 50,000,000 shares authorized as preferred stock, of which 40,000,000 are designated as Series B and 2,000,000 are designated as Series A. 8,000,000 shares have yet to be designated. All 2,000,000 shares of Series A preferred are issued and outstanding. Each share of Series A preferred is convertible into 240 shares of common stock. The Series A Preferred Stock votes with the Common Stock on all matters to be voted on by the common stock on an as-converted basis. On such matters, each holder of Series A Preferred Stock is entitled to 240 votes for each share of Series A Preferred Stock held by such shareholder.

 

 

 

 

  F-13  
 

 

Common stock

 

On April 23, 2019 the Company issued 4,000,000 shares of common stock in exchange for services valued at $25,600 or $0.0064 per share.

 

On May 14, 2019 the Company sold 1,562,500 shares of common stock for $10,000 or $0.0064 per share.

 

On May 25, 2019 the Company sold 11,718,750 shares of common stock for $75,000 or $0.0064 per share.

 

On June 1, 2019 the Company issued 67,000,000 shares of common stock in exchange for services valued at $428,800 or $0.0064 per share.

 

On June 1, 2019 the Company issued 6,000,000 shares of common stock in exchange for the acquisition of UCL MMA LLC valued at $38,400 or $0.0064 per share.

 

On July 3, 2019 the Company issued 6,000,000 shares of common stock in exchange for services valued at $38,400 or $0.0064 per share.

 

On July 8, 2019, the Company entered into a Subscription Agreement with a holder for the sale of 14,062,500 shares of common stock at $0.0064 per share, or $90,000.

 

On July 15, 2019 the Company issued 30,500,000 shares of common stock in exchange for services valued at $195,200 or $0.0064 per share.

 

On July 15, 2019 the Company issued 8,000,000 shares of common stock in exchange for the acquisition of Pinnacle Combat LLC valued at $51,200 or $0.0064 per share.

 

On August 30, 2019 the Company sold 15,625,000 shares of common stock for $100,000 or $0.0064 per share.

 

On September 7, 2019 the Company sold 7,812,500 shares of common stock for $50,000 or $0.0064 per share.

 

On September 19, 2019 the Company sold 11,718,750 shares of common stock for $75,000 or $0.0064 per share.

 

On September 27, 2019, the Company canceled 7,500,000 in exchange for the cancellation of $75,000 in Notes Receivable.

 

As part of the Strike Hard Productions LLC acquisition, the Company issued 9,000,000 shares of common stock valued at $57,600 or $0.0064 per share.

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with FASB ASC 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of September 30, 2019, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements.

 

The Company entered into employment agreements with its Chief Executive Officer and Executive Vice President as of November 24, 2017. Under the terms of these agreements the Company will be liable for severance and other payments under certain conditions. The employment agreement for the Executive Vice President is for a period of 36 months and renews for a successive two years unless written notice is provided by either party under the terms of the agreement. The employment agreement for the Chief Executive Officer can be terminated by the Chief Executive Officer upon three months written notice. Termination of the Chief Executive Officer requires 80% of the votes of all stockholders of the Company.

 

Each of the acquisition agreements contain a Management Services Agreement (“MSA”) whereby the Company agrees to pay a management fee based on certain performance targets. The MSA agreements expire 10 years from the acquisition agreement dates.

 

 

 

  F-14  
 

 

NOTE 8 – GOING CONCERN

 

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. At September 30, 2019 and March 31, 2019, the Company had $36,407 and $27,579 in cash and $49,497 in working capital and $85,372 in negative working capital, respectively.  For the six months ended September 30, 2019 and 2018, the Company had a net loss of $904,927 and $51,627, respectively. For the three months ended September 30, 2019 and 2018, the Company had a net loss of $413,415 and $17,114, respectively. Continued losses may adversely affect the liquidity of the Company in the future. In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

As a going concern, Management’s plan moving forward is to improve operating results through the live event sports businesses. Management believes these will operate with positive cash flows and facilitate acquisition of additional Sports related businesses. Management plans to finance the growth of the company and cover operating shortfalls by securing convertible loans and selling common stock.

 

NOTE 9 - SUBSEQUENT EVENTS

 

Formation of wholly-owned subsidiary

 

On October 1, 2019, the Company formed a wholly-owned subsidiary called B2 Productions LLC. B2 Productions is an entity that supplies all the TV, PPV and media for B2 Fighting Series LIVE Events.

 

Securities purchase agreement

 

On October 4, 2019, the Company entered into a Securities Purchase Agreement with GS Capital Partners, LLC, whereby the Company agreed to issue an $82,000 face value, 8% convertible note.

 

Convertible promissory note

 

On October 31, 2019, the Company issued a face value $208,000 Convertible Promissory Note to GS Capital Partners, LLC. The Note has a maturity date of December 15, 2020 and the Company has agreed to pay interest on the unpaid principal balance of the Note at the rate of eight percent (8%) per annum from the date on which the Note is issued until the same becomes due and payable. The Note contains a $6,000 original issue discount.

 

The outstanding principal amount of the Note is convertible into common stock at the lender’s option at $0.01 per share for the first six months. After the six-month anniversary, the conversion price is 63% of the average of the three lowest trading prices of the Common Stock.

 

 

 

  F-15  
 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors and

Stockholders of B2 Digital Incorporated

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheet of B2 Digital Incorporated (the “Company”) as of March 31, 2019, and the related statements of operations, changes in stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2019, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred net losses since its inception. This factor, and the need for additional financing in order for the Company to meet its business plans raises substantial doubt about the Company’s ability to continue as a going concern. Our opinion is not modified with respect to that matter.

 

 

 

We have served as the Company’s auditor since 2019.

 

Tampa, Florida

August 2, 2019

 

 

 

 

4806 West Gandy Boulevard • Tampa, Florida 33611 • 813.440.6380

 

  F-16  
 

 

 

B2 Digital Incorporated

Consolidated Balance Sheet

March 31, 2019

 

Assets      
Current Assets        
Cash and Cash Equivalents   $ 27,579  
Prepaid Expenses     6,260  
Note Receivable - Related Party     65,416  
Total Current Assets     99,255  
         
Property & Equipment        
Cages     46,025  
Trucks Trailers and Vehicles     9,500  
Event Assets     8,987  
Electronics Hardware and Software     6,960  
Less: Accumulated Depreciation     (16,407 )
Total Property & Equipment     55,065  
         
Goodwill     193,045  
         
Total Assets   $ 347,365  
         
Liabilities & Stockholders’ Equity        
Current Liabilities        
Accounts Payable & Accrued Liabilities   $ 109,627  
Notes Payable - Current Maturity     75,000  
Total Current Liabilities     184,627  
         
Note Payable - Long Term     14,000  
         
Total Liabilities     198,627  
         
Commitments and Contingencies (Note 7)        
Stockholders’ Equity        
Common stock, $0.00001 par value; 5,000,000,000 shares authorized; 377,620,110 shares issued and outstanding     3,776  
Preferred stock, 50,000,000 shares authorized, 40,000,000 shares of Series B; 2,000,000 shares of Series A, convertible into 240 shares of common stock; 8,000,000 shares are undesignated     20  
Additional Paid in capital     2,624,573  
Accumulated Deficit     (2,479,631 )
Total Stockholders’ Equity     148,738  
         
Total Liabilities and Stockholders’ Equity   $ 347,365  

 

See accompanying notes to the financial statements.

 

 

 

  F-17  
 

 

B2 Digital Incorporated
Consolidated Statement of Operations

Year Ended March 31, 2019

 

Live Event Revenue   $ 346,688  
         
Live Event Expenses     251,550  
         

Gross Profit

    95,138  
         
General and Administrative Corporate Expenses        
Professional Fees     69,024  
Other General & Administrative Expenses     141,866  
Depreciation Expense     12,951  
General and Administrative Corporate Expenses     223,841  
         

Loss from Continuing Operations

    (128,703 )
         
Interest Expense     5,108  
         

Net Loss

  $ (133,811 )
         

Basic and diluted earnings per share on net loss

  $ (0.0004 )
         

Weighted average shares outstanding

    337,444,728  

 

See accompanying notes to the financial statements.

 

 

  F-18  
 

 

B2 Digital Incorporated

Consolidated Statement of Changes in Stockholders' Equity
Year Ended March 31, 2019

 

 

                            Additional              
    Common Stock     Preferred Stock     Paid in     Accumulated        
    Shares     Amount     Shares     Amount     Capital     Deficit     Total  
Balance March 31, 2018     263,075,044     $ 2,631       2,000,000     $ 20     $ 2,381,068     $ (2,345,820 )   $ 37,899  
                                                         
Issuance of Common Stock     114,545,066       1,145                   243,505             244,650  
                                                         
Net Loss                                   (133,811 )     (133,811 )
                                                         
Balance March 31, 2019     377,620,110     $ 3,776       2,000,000     $ 20     $ 2,624,573     $ (2,479,631 )   $ 148,738  

 

See accompanying notes to the financial statements.

 

 

 

  F-19  
 

 

B2 Digital Incorporated
Consolidated Statement of Cash Flows

Year Ended March 31, 2019

 

Cash Flows from Operating Activities      
Net Loss   $ (133,811 )
         
Adjustments to reconcile net loss to net cash used by operating activities:        
Stock Compensation     51,368  
Depreciation     12,951  
         

Changes in Operating Assets & Liabilities:

       
Inventory     1,740  
Prepaid Expenses and Other     (5,126 )
Accounts Payable & Accrued Liabilities     9,818  
Deferred Compensation     1,600  
Net cash used by operating activities     (61,460 )
         
Cash flows from investing activities        
Note Receivable - Related Party     (65,416 )
Purchases of Property & Equipment     (3,260 )
Net cash used by investing activities     (68,676 )
         
Cash Flows from Financing Activities        

Proceeds from Notes Payables

    52,450  
Payment of Related Party Note Payable     (45,035 )
Issuance of Common Stock     133,832  
Net cash provided by financing activities     141,247  
         

Increase in Cash and Cash Equivalents

    11,111  
         
Cash and Cash Equivalents at beginning of period     16,468  
         
Cash and Cash Equivalents at end of period   $ 27,579  
         
Supplemental Cash Flow Information        
Cash paid for interest   $ 1,443  
Cash paid for income taxes   $  
Conversion of Note Payable to Equity   $ 59,400  

 

See accompanying notes to the financial statements.

 

 

 

  F-20  
 

 

B2 DIGITAL INCORPORATED

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended March 31, 2019

 

 

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

 

In February 2017, the Board of Directors of B2 Digital Incorporated ("B2 Digital" or the "Company") approved a complete restructuring, new management team and strategic direction for the Company. Capitalizing on its history in television, video and technology, the Company is now forging ahead and becoming a full service live event sports company.

 

B2 Digital's first strategy is to build an integrated live event Minor League for the Mixed Martial Arts (MMA) marketplace. B2 Digital will be creating and developing Minor League champions that will move on to the MMA Major Leagues from the B2 Fighting Series (B2FS). This will be accomplished by sponsoring operating live events, acquiring existing MMA promotions and then inviting those champions to the B2FS Regional and National Championship Series. B2 Digital will own all media and merchandising rights and digital distribution networks for the B2FS.

 

2017 marked the kickoff of the B2FS by sponsoring and acquiring MMA regional promotion companies for the development of the B2FS. The second strategy is that the Company plans to add additional sports, leagues, tournaments and special events to its live event business model. This will enable B2 Digital to capitalize on their core technologies and business models that will be key to broadening the revenue base of the Company's live event core business. B2 Digital will also be developing and expanding the B2 Digital live event systems and technologies. These include systems for event management, digital ticketing sales, digital video distribution, digital marketing, Pay-Per View (PPV), fighter management, merchandise sales, brand management and financial control systems.

 

Basis of Presentation and Consolidation

 

The Company has three wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, Colosseum Combat LLC which owns Colosseum Combat MMA in Indiana and Blue Grass MMA LLC which is a marketing company.

 

The consolidated financial statements, which include the accounts of the Company and its three wholly-owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP). All significant intercompany balances and transactions have been eliminated.

 

 

NOTE 2 - ACCOUNTING POLICIES

 

The significant accounting policies of the Company are as follows:

 

Basis of Accounting

The accounts are maintained and the consolidated financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

 

Use of Estimates

Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from these estimates and assumptions.

 

 

 

  F-21  
 

 

B2 DIGITAL INCORPORATED

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended March 31, 2019

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains deposits primarily in four financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation ("FDIC"). The Company has not experienced any losses related to amounts in excess of FDIC limits.

 

Property and Equipment

Property and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying consolidated statement of operations of the respective period. The estimated useful lives range from 3 to 7 years.

 

Goodwill

Goodwill represents the cost in excess of the fair value of net assets acquired in business combinations. The Company tests goodwill for impairment on an annual basis and when events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is deemed to be impaired if the carrying amount of goodwill exceeds its estimated fair value.

 

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

 

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of Financial Accounting Standards Board (“ FASB”) Accounting Standards Codification (“ASC”) 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery.

 

Income Taxes

The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated Statements of Operations in the period that includes the enactment date. Through March 31, 2019, the Company has an accumulated deficit. Due to uncertainty of realization for these losses, a full valuation allowance is expected. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

 

 

 

  F-22  
 

 

B2 DIGITAL INCORPORATED

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended March 31, 2019

 

Stock based compensation

The Company records stock-based compensation in accordance with the provisions of FASB ASC Topic 718, “Accounting for Stock Compensation,” which establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC.

 

Topic 718, the Company recognizes an expense for the fair value of its stock awards at the time of grant and the fair value of its outstanding stock options as they vest, whether held by employees or others. As of March 31, 2019, all outstanding stock options were vested.

 

Recently Adopted Accounting Pronouncements

ASC 606, Revenue from Contracts with Customers, was originally issued by the FASB in May 2014 in Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Since then, the FASB has issued several ASUs that have revised or clarified the guidance in ASC 606. The Company has evaluated the impact of this accounting standard update and noted that it has had no material impact.

 

On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC 718 and forgo revaluing the award after this date. The guidance is effective for interim and annual periods beginning after December 15, 2018.

 

In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December 15, 2017 and should be applied prospectively on or after the effective date. The Company has evaluated the impact of this accounting standard update and noted that it has had no material impact.

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

 

NOTE 3 – GOING CONCERN

 

The Company’s financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities and commitments in the normal course of business for the foreseeable future. The Company does not yet have operations or revenue to cover its operating expenses. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operations in the future and/or to obtain the necessary financing to meet the Company’s obligations and repay its liabilities arising from normal business operations when they come due. As a going concern, Management’s plan moving forward is to improve operating results through the live event sports businesses. Management believes these will operate with positive cash flows and facilitate acquisition of additional Sports related businesses. Management plans to finance the growth of the company and cover operating shortfalls by securing convertible loans and selling common stock. While the Company believes that it will be successful in obtaining the necessary financing and generating revenue to fund its operations, meet regulatory requirements and achieve commercial goals, there are no assurances that such additional funding will be achieved and that it will succeed in its future operations. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties.

 

 

 

  F-23  
 

 

B2 DIGITAL INCORPORATED

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended March 31, 2019

 

NOTE 4 - RELATED PARTY

 

B2 Management, LLC (“B2 Management”) has as its sole member the Chief Executive Officer and Chairman of B2 Digital. During the year, the Company repaid the note payable to B2 Management of $45,035. As of March 31, 2019, the Company has an uncollateralized, non-interest bearing note receivable of $65,416 from B2 Management that is due upon demand.

 

 

NOTE 5 - NOTES PAYABLE

 

The following is a summary of notes payable as of March 31, 2019:

 

    Total  
WLES LP LLC $60,000, 5% loan due in 18 monthly Installments through June, 2019.   $ 60,000  
         
Good Hunting $15,000, 7.5% loan with principal and interest due March 31, 2019.     15,000  
         
Emry Capital $14,000, 4% loan with principal and interest due April, 2020.     14,000  
    $ 89,000  

 

The notes payable balance as of March 31, 2019 includes $75,000 due during fiscal year 2020 and $14,000 due during fiscal year 2021.

 

 

NOTE 6 - EQUITY

 

There are 50,000,000 shares authorized as preferred stock, of which 40,000,000 are designated as Series B and 2,000,000 are designated as Series A. 8,000,000 shares have yet to be designated. All 2,000,000 shares of Series A preferred are issued and outstanding. Each share of Series A preferred is convertible into 240 shares of common stock. The Series A Preferred Stock votes with the Common Stock on all matters to be voted on by the common stock on an as-converted basis. On such matters, each holder of Series A Preferred Stock is entitled to 240 votes for each share of Series A Preferred Stock held by such shareholder.

 

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with FASB ASC 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of March 31, 2019, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements.

 

The Company entered into employment agreements with its Chief Executive Officer and Executive Vice President as of November 24, 2017. Under the terms of these agreements the Company will be liable for severance and other payments under certain conditions. The employment agreement for the Executive Vice President is for a period of 36 months and renews for a successive two years unless written notice is provided by either party under the terms of the agreement. The employment agreement for the Chief Executive Officer can be terminated by the Chief Executive Officer upon three months written notice. Termination of the Chief Executive Officer requires 80% of the votes of all stockholders of the Company.

 

 

 

  F-24  
 

 

B2 DIGITAL INCORPORATED

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended March 31, 2019

 

NOTE 8 – INCOME TAXES

 

The Company accounts for income taxes in accordance with the provisions of FASB ASC 740, Accounting for Uncertainty in Income Taxes. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company is subject to taxation in the United States where the federal income tax rate is 21%.

 

The provision for Federal income tax consists of the following for the year ended March 31, 2019:

 

    2019  
         
Federal income tax benefit attributable to:        
         
Net operating loss from current operations   $ 28,100  
         
Less: valuation allowance     (28,100 )
         
Net provision for Federal income taxes   $  

 

The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:

 

    2019  
       
Federal income tax benefit attributable to:        
         
Net operating loss carryover   $ 249,845  
         
Less: valuation allowance     (249,845 )
         
Net deferred tax asset   $  

 

The related deferred tax benefit on the above unutilized tax losses has a full valuation allowance not recognized against it as there is no certainty of its realization. Management has evaluated tax positions in accordance with ASC 740 and has not identified any significant tax positions, other than those disclosed.

 

Due to the change in ownership provisions of the income tax laws of United States of America, net operating loss carry forwards of approximately $249,845, which expire in 20 years and are currently expiring annually for federal income tax reporting purposes, are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years.

 

 

 

  F-25  
 

 

B2 DIGITAL INCORPORATED

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended March 31, 2019

 

NOTE 9 - SUBSEQUENT EVENTS

 

In preparing the accompanying financial statements, management has evaluated all subsequent events and transactions for disclosure through August 1, 2019, the date the consolidated financial statements were available for issuance and no other items, in management’s opinion, have occurred through that date.

 

On Friday May 22, 2019, the Company filed a form 253G2 to change the offering price to $.0064 per share for the Registration A Common Shares.

 

On June 1, 2019, the Company completed its previously announced acquisition of 100% of the equity interest in United Combat League, UCL MMA LLC, the owner of Colosseum Combat MMA in Indiana. The purchase price was $20,000 in cash and 6,000,000 shares of Restricted Common Stock issuable to Michael Davis, the seller of the equity interest in the acquisition.

 

On July 15, 2019, to be effective June 29, 2019, the Company completed an acquisition of 100% of the equity interest in Pinnacle Combat LLC of Iowa. The purchase price was $20,000 in cash and 8,000,000 shares of Restricted Common Stock, 5,000,000 Restricted Shares issued to be issued to Harry Maglaris and 3,000,000 Restricted Common Shares to be issued to Ken Rigdon, collectively the sellers of the equity interest in the acquisition.

 

 

 

 

 

  F-26  
 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and

Stockholders of B2Digital, Incorporated

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheet of B2Digital, Incorporated (the “Company”) as of March 31, 2018, and the related statements of operations, changes in stockholders’ equity, and cash flows for the year ended March 31, 2018, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2018, and the results of its operations and its cash flows for the year ended March 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

 

Explanatory Paragraph – Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has suffered recurring losses from operations and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

We have served as the Company’s auditor since 2017.

 

/s/ M. Vail & Associates, P.C.

 

Richardson, Texas

July 6, 2018

 

 

 

  F-27  
 

 

B2 DIGITAL INCORPORATED

BALANCE SHEET
March 31, 2018

 

Assets      
Current assets        
Cash   $ 6,428  
Undeposited funds     10,040  
Inventory     1,740  
Total current assets     18,208  
         
Fixed assets        
Cages     45,000  
Trucks and trailers     9,500  
Electronics     4,115  
Event assets     9,597  
Less: accumulated depreciation     (3,456 )
Total fixed assets     64,756  
         
Intangible assets        
Loan fees     1,200  
Less: accumulated amortization     (67 )
Total intangible assets     1,133  
         
Other assets        
Deferred compensation     1,600  
Goodwill     193,044  
Total other assets     194,644  
         
Total assets   $ 278,741  
         
Liabilities and Stockholders' Equity        
Current liabilities        
Accounts payable   $ 92,095  
Notes payable - current     40,000  
Notes payable to related parties     88,747  
Total current liabilities     220,842  
         
Notes payable - long-term     20,000  
         
Total liabilities     240,842  
         
Stockholders' equity        
Common stock, $0.00001 par value; 5,000,000,000 shares authorized; 263,075,044 shares issued and outstanding     2,631  
Preferred stock, 50,000,000 shares authorized; 40,000,000 shares of Series B; 2,000,000 shares of Series A, convertible into 240 shares of common stock;8,000,000 shares are undesignated      20    
Additional paid in capital     2,381,068  
Accumulated deficit     (2,345,820 )
Total stockholders' equity     37,899  
         
Total liabilities and stockholders' equity   $ 278,741  

 

See accompanying notes to financial statements

 

 

 

  F-28  
 

 

B2 DIGITAL INCORPORATED
STATEMENT OF OPERATIONS
Year Ended March 31, 2018

 

Sales   $ 171,092  
         
Cost of goods sold     6,377  
         
Gross profit     164,715  
         
Live event expenses     158,887  
         
Income from live events     5,828  
         
General and administrative corporate expense        
Amortization     67  
Bank fees     1,179  
Legal fees     64,788  
Marketing     12,256  
Officer compensation     28,000  
Outside services     5,275  
Press releases     2,691  
Professional fees     50,074  
Public relations     2,248  
Rent     600  
Sponsorships     10,300  
Total general and administrative corporate expense     177,478  
         
Loss from continuing operations     (171,650 )
         
Other expense        
Loss on sale of investments     600  
Interest expense     4,495  
Total other expense     5,095  
         
Net loss   $ (176,745 )

 

 

 

  F-29  
 

 

B2 DIGITAL INCORPORATED

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Year Ended March 31, 2018

 

 

    Common
Stock
    Preferred Stock     Additional
Paid-In Capital
    Accumulated
Deficit
    Total  
Balance March 31, 2017   $ 42,199     $ 20     $ 2,072,125     $ (2,169,075 )   $ (54,731 )
Reverse stock split     (44,747 )           44,747              
Issuance of common stock     5,179             264,196             269,375  
Net loss                       (176,745 )     (176,745 )
Balance March 31, 2018   $ 2,631     $ 20     $ 2,381,068     $ (2,345,820 )   $ 37,899  

 

See accompanying notes to financial statements

 

 

 

  F-30  
 

 

B2 DIGITAL INCORPORATED
STATEMENT OF CASH FLOWS
Year Ended March 31, 2018

 

Cash flows from operating activities      
Net loss   $ (176,745 )
Adjustments to reconcile net loss to net cash used by operating activities:         
Depreciation and amortization     3,523  
Accounts payable     76,844  
Deferred compensation     (1,600 )
Loss on sale of investments     600  
Inventory     (1,740 )
Accrued other expenses     4,245  
Net cash used by operating activities     (94,873 )
         
Cash flows from investing activities        
Purchase of goodwill     (193,045 )
Purchases of fixed assets     (68,212 )
Net cash used by investing activities     (261,257 )
         
Cash flows from financing activities        
Payments for debt issue costs     (1,200 )
Proceeds from notes payable     104,423  
Issuance of common stock     269,375  
Net cash provided by financing activities     372,598  
         
Increase in cash     16,468  
         
Cash at beginning of period      
Cash (and equivalents) at end of period   $ 16,468  
         
Supplemental cash flow information        
Cash paid for interest   $ 4,495  
Cash paid for income taxes   $  

 

See accompanying notes to financial statements

 

 

  F-31  
 

 

B2 DIGITAL INCORPORATED

 

NOTES TO FINANCIAL STATEMENTS
Year Ended March 31, 2018

 

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

 

In February 2017, the Board of Directors of B2 Digital Incorporated ("B2 Digital" or the "Company") approved a complete restructuring, new management team and strategic direction for the company. Capitalizing on its history in television, video and technology, the Company is now forging ahead and becoming a full service live event sports company.

 

The Chairman and CEO of the Company is now Greg P. Bell. Mr. Bell has over 30 years of global experience developing more than 20 companies in the sports, television, entertainment, digital distribution and banking transaction industries. Capitalizing on the combination of his expertise, relationships and experience as well as his involvement with more than 40,000 live events over his career for major sports leagues and entertainment venues, B2 Digital is in the process of developing and acquiring companies to become a premier vertically integrated live event sports company.

 

B2 Digital's first strategy is to build an integrated live event Minor League for the Mixed Martial Arts (MMA) marketplace, which is a billion dollar industry. B2 Digital will be creating and developing Minor League champions that will move on to the MMA Major Leagues from the B2 Fighting Series (B2FS). This will be accomplished by sponsoring operating live events, acquiring existing MMA promotions and then inviting those champions to the B2FS Regional and National Championship Series. B2 Digital will own all media and merchandising rights and digital distribution networks for the B2FS. This concept was developed and test marketed for 2 years by Mr. Bell's B2 Management, LLC.

 

2017 marked the kickoff of the B2FS by sponsoring and acquiring MMA regional promotion companies for the development of the B2FS. The second strategy is that the company plans to add additional sports, leagues, tournaments and special events to its live event business model. This will enable B2 Digital to capitalize on their core technologies and business models that will be key to broadening the revenue base of the company's live event core business. B2 Digital will also be developing and expanding the B2 Digital live event systems and technologies. These include systems for event management, digital ticketing sales, digital video distribution, digital marketing, Pay-Per View (PPV), fighter management, merchandise sales, brand management and financial control systems.

 

Historically, B2 Digital had been a provider of in-room, on-demand video entertainment and satellite services to the domestic lodging industry. In the past B2 Digital had provided the video services to over 50,000 hotel rooms in the lodging industry. PPV lost a great deal of market share due to the increased internet use by hotel guests. With this loss the B2 Digital Board of Directors agreed to dissolve Hotel Movie Network on March 11, 2010.

 

NOTE 2 - ACCOUNTING POLICIES

 

The significant accounting policies of the Company are as follows:

 

Basis of Accounting

The accounts are maintained and the financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

 

Use of Estimates

Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from these estimates and assumptions.

 

 

 

  F-32  
 

 

Cash

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains deposits primarily in four financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation ("FDIC"). The Company has not experienced any losses related to amounts in excess of FDIC limits.

 

Inventories

Inventories are carried at the lower of cost or market using the last-in, first-out (“LIFO”) method of accounting for domestic inventories.

 

Property and Equipment

Property and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying statement of income of the respective period. The estimated useful lives of machinery and equipment range from 4 to 10 years. Goodwill

 

Goodwill represents the cost in excess of the fair value of net assets acquired in business combinations. The Company tests goodwill for impairment on an annual basis and when events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is deemed to be impaired if the carrying amount of goodwill exceeds its estimated fair value.

 

Revenue Recognition

Continuing revenue is recognized monthly as earned. Initial revenue is recognized when all services or conditions relating to the sale of the individual services have been substantially performed.

 

Income Taxes

The Company is organized as a corporation for federal income tax purposes. Through March 31, 2018 the Company has an accumulated deficit. Due to uncertainty of realization for these losses a full valuation allowance is expected. Accordingly, no provision has been made for federal income taxes in the accompanying financial statements.

 

Recently Adopted Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern, requiring management to evaluate, on an annual basis, whether there are any conditions or events, considered in the aggregate, that would raise substantial doubt about the ability to continue as a going concern within one year after the date that the financial statements are issued. The guidance further defines substantial doubt and the disclosure requirements necessary once substantial doubt is identified. The guidance is effective for annual periods ending after December 15, 2016. The Company has adopted this guidance during the year ended March 31, 2018.

 

NOTE 3 - BUSINESS ACQUISITIONS

 

On November 3, 2017, B2 Digital completed its previously announced acquisition of 100% of the equity interest in Hard Rock Promotions LLC, the owner of Hard Rock MMA in Kentucky.

 

The following table summarizes the consideration paid and the amount of the assets acquired at the acquisition date:

 

Consideration

 

Cash   $ 48,759  
15,000,000 shares of common stock issued to the sellers     100,000  
         
Total consideration   $ 148,759  

 

 

 

 

  F-33  
 

 

Recognized amounts of identifiable net assets:

 

Cash and cash equivalents   $ 16,699  
Property and equipment     35,550  
         
Total identifiable net assets     52,249  
Goodwill     96,510  
         
    $ 148,759  

 

On November 20, 2017, B2 Digital completed its previously announced acquisition of 100% of the equity interest in Colosseum Combat LLC, the owner of Colosseum Combat MMA in Indiana.

 

The following table summarizes the consideration paid and the amount of the assets acquired at the acquisition date:

 

Consideration 

 

Cash   $ 26,418  
8,000,000 shares of common stock issued to the sellers     80,000  
         
Total consideration   $ 106,418  

 

Recognized amounts of identifiable net assets

 

Cash and cash equivalents   $ 273  
Property and equipment     30,400  
         
Total identifiable net assets     30,673  
Goodwill     75,745  
         
    $ 106,418  

 

 

On January 9, 2018, B2 Digital completed its previously announced acquisition of 100% of the equity interest in Blue Grass MMA LLC.

 

The following table summarizes the consideration paid and the amount of the assets acquired at the acquisition date:

 

Consideration

 

3,000,000 shares of common stock issued to the sellers   $ 21,000  
         
Total consideration   $ 21,000  

 

Recognized amounts of identifiable net assets  

 

Cash and cash equivalents   $ 210  
         
Total identifiable net assets     210  
Goodwill     20,790  
         
    $ 21,000  

 

 

 

  F-34  
 

 

NOTE 4 - GOING CONCERN

 

The Company had revenue of $171,092 and operating losses of $171,650 during the fiscal year ended March 31, 2018. For the last two quarters the three acquired MMA companies generated net income of $5,828 from operating LIVE events. The fiscal year loss of $171,650 was due primarily to non-recurring Company restructuring expenses of $64,788 in legal, $50,074 in accounting and filing, and $28,000 in stock issuances to management.

 

As a going concern, Management’s plan moving forward is to improve operating results through the live event sports businesses. Management believes these will operate with positive cash flows and facilitate acquisition of additional Sports related businesses. Management plans to finance the growth of the company and cover operating shortfalls by securing convertible loans and selling common stock.

 

NOTE 5 - RELATED PARTY

 

Good Hunting, Inc.

 

Pursuant to B2 Digital Resolution dated April 27, 2015, a Promissory Note was entered into between B2 Digital and Good Hunting, Inc. in the amount of $21,000. The note bears a 7.5% interest rate and was to be paid in full before April 29, 2017. Upon written request the note may be converted to common stock under Rule 144. As of March 31, 2018 the note had not been converted to stock. The due date has been extended and interest was accrued through March 31, 2018.

 

Pursuant to B2 Digital Resolution dated April 27, 2016, a Promissory Note was entered into between B2 Digital and Good Hunting, Inc. in the amount of $15,000. The note bears a 7.5% interest rate and was to be paid in full before December 31, 2017. Upon written request the note may be converted to common stock under Rule 144. The due date has been extended and interest was accrued through March 31, 2018.

 

At March 31, 2018, B2 Digital had total notes payable to Good Hunting, Inc. of $42,750. Accrued interest on the notes totaled $6,750 as of March 31, 2018, and is included in the note payable balance.

 

B2 Management, LLC

 

During May, 2017 notes totaling $37,100 were entered into with B2 Management, LLC. The notes bear a 4% interest rate and shall be paid in full within four years. Payments of $200 were made in September, 2017. An additional $26,600 in payments were made in the quarter ended March 31, 2018.

 

During August and September, 2017 additional notes totaling $6,000 were entered into with B2 Management, LLC. The notes bear a 4% interest rate and shall be paid in full within four years.

 

At various times during the three months ended December 31, 2017, additional notes totaling $20,045 were entered into with B2 Management, LLC. The notes bear a 4% interest rate and shall be paid in full within four years. Payments of $562 were made in November and December, 2017.

 

During January and February, 2018 additional notes totaling $8,640 were entered into with B2 Management, LLC. The notes bear a 4% interest rate and shall be paid in full within four years.

 

At March 31, 2018, B2 Digital had total notes payable to B2 Management, LLC of $45,998. Accrued interest on the notes totaled $963 as of March 31, 2018, and is included in the note payable balance.

 

B2 Management, LLC has as its sole member, Greg P. Bell. Mr. Bell is Chief Executive Officer and Chairman of B2 Digital.

 

 

 

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NOTE 6 - NOTES PAYABLE

 

The following is a summary of notes payable as of March 31, 2018:

 

    Current     Long-term     Total  
                   
WLES LP LLC $60,000, 5% loan due in 18 monthly                        
Installments through June, 2019.   $ 40,000     $ 20,000     $ 60,000  

 

NOTE 7 - EQUITY

 

B2 Digital has 5,000,000,000 shares of common stock authorized and 263,075,044 shares issued and outstanding. The common stock has a par value of $0.00001. All shares are adjusted to reflect the 100-to-1 reverse stock split on October 2, 2017.

 

On May 4, 2017, B2 Digital Board of Directors authorized Manhattan Transfer to send a certificate for 1,000,000 shares of B2 Digital Common Stock under Rule 144 (Restricted) to B2 Management, LLC. Payment for said shares of Ten-Thousand Dollars ($10,000) had been received on May 4, 2017 and deposited in the B2 Digital checking account. Mr. Greg P. Bell has a relationship with both B2 Digital as a member of the Board of Directors and with B2 Management LLC of ownership. The shares were initially authorized by Board of Directors Resolution dated February 8, 2017.

 

On May 6, 2017, B2 Digital Board of Directors authorized Manhattan Transfer to send a certificate for 2,000,000 shares of B2 Digital Common Stock under Rule 144 (Restricted) to B2 Management, LLC. Payment for said shares of Twenty-Thousand Dollars ($20,000) had been received on May 6, 2017 and deposited in the B2 Digital checking account. Mr. Greg P. Bell has a relationship with both B2 Digital as a member of the Board of Directors and with B2 Management LLC of ownership.

 

On October 2, 2017, B2 Digital completed its previously announced 100-to-1 reverse stock split of its Common Stock (the “Reverse Stock Split”). Pursuant to the terms of the Reverse Stock Split, each 100 issued and outstanding shares of Common Stock were converted into one (1) issued and outstanding share of Common Stock. No fractional shares were issued. Instead, each holder of any fractional interest created by the Reverse Stock Split was issued one post-Reverse Stock Split share of Common Stock in exchange for such fractional interest.

 

In connection with the Reverse Stock Split, no proportional adjustment to the conversion basis, voting rights or any other rights applicable to the Issuer’s Series A Convertible Preferred Stock (“Series A Preferred Stock”) were made.

 

On November 3, 2017, B2 Digital completed its previously announced acquisition of 100% of the equity interest in Hard Rock Promotions LLC, the owner of Hard Rock MMA in Kentucky. As part of the purchase price 15,000,000 shares of Common Stock were issued to Higdon MMA Consulting LLC, the seller of the equity interest in the acquisition.

 

On November 20, 2017, B2 Digital completed its previously announced acquisition of 100% of the equity interest in Colosseum Combat LLC, the owner of Colosseum Combat MMA in Indiana. As part of the purchase agreement 8,000,000 shares of Common Stock were issued to Mark Slater, the seller of the equity interest in the acquisition.

 

On November 24, 2017, Messrs. Metz and Georgens entered into Board Service Agreements with the Company (collectively, the “Board Service Agreements”). Pursuant to the terms of the Board Service Agreements, Mr. Metz was awarded 3,000,000 shares and Mr. Georgens was awarded 1,000,000 shares of the Company’s common stock, par value $0.00001 per share (the “Common Stock” and each such award, a “Director Common Stock Award". Each Director Common Stock Award will vest over a two-year period from November 24, 2017, with 50% vesting on the first anniversary thereof and 50% vesting on the second anniversary thereof.

 

On November 24, 2017, as compensation for Mr. Bell’s services pursuant to the terms of the CEO Agreement, the Company issued B2 Management Group LLC, a limited liability company wholly owned and controlled by Mr. Bell (“B2 Management”), a total of 30,000,000 shares of Common Stock (the “CEO Stock Award”).

 

 

 

  F-36  
 

 

As further compensation for Mr. Bell’s services to the Company in connection with the Company’s acquisition activity, the Company issued B2 Management an additional 60,000,000 shares of Common Stock as compensation for the completion of the Company’s previously announced acquisitions of Hard Rock MMA (30,000,000 Shares) and Colosseum Combat LLC (30,000,000) (collectively, the “Recent Acquisitions”).

 

On November 24, 2017, as payment for past compensation owed to Mr. LaBarre from his employment agreement for his past services to the Company, the Company issued Mr. LaBarre 50,000,000 shares of Common Stock. As compensation for Mr. LaBarre’s continuing services to the Company as Executive Vice President, the Company will issue Mr. LaBarre 4,000,000 shares of Common Stock per year for each year in which Mr. LaBarre remains employed in such capacity and the LaBarre Agreement remains in effect (the “Annual Salary Issuance”). 50% of the Annual Salary Issuance will vest every six months. In the event of a merger or consolidation of the Company in which the Company is not the surviving entity, or a proposed dissolution or liquidation of the Company or a sale of substantially all of its assets, any unvested portion of the Annual Salary Issuance remaining in the then-current term of the LaBarre Agreement will vest immediately.

 

On November 24, 2017, the Board of Directors approved the addition of Joe D. Michaels as a Company Advisor to advise the Chairman & CEO on Company Business and Strategy. Mr. Michaels was issued 3,000,000 Restricted Common Shares for his services.

 

On November 24, 2017, the Board of Directors approved the addition of two Independent Contractors to complete services. Gary Thomas was Issued 1,000,000 Restricted Common Shares for his services. Mr. Porter was Issued 1,000,000 Restricted Common Shares for his services.

 

On December 17, 2017, the Board of Directors approved the addition of an Independent Contractor to complete services. John Prisco was Issued 1,000,000 Restricted Common Shares for his services.

 

On December 20, 2017, Gary Thomas was issued 375,000 shares for his incentive award for his work in the Company acquiring Colosseum Combat LLC.

 

On December 26, 2017, the Board of Directors approved the issue of 30,000,000 Restricted Common Shares to B2 Management Group LLC for the “Incentive Award Shares” for the completion of the Acquisition of Blue Grass MMA.

 

On January 9, 2018, B2 Digital issued 1,500,000 Restricted Common Shares to Gary Thomas and 1,500,000 Restricted Common Shares to Juan Valle for the completion of the Acquisition of Blue Grass MMA.

 

On December 31, 2017, B2 Digital entered into a MMA Training Facility Agreement with Amped Fitness LLC to be an Approved B2 Fighting Series Training Facility for 500,000 Restricted Common Shares and the Board of Directors approved by Unanimous Consent the MMA Training Facility Agreement and the issue of shares on March 17, 2018.

 

On January 28, 2018, B2 Digital entered into a Loan Agreement with WLES LP LLC for $60,000 and 6,000,000 Restricted Common Shares and the Board of Directors approved by Unanimous Consent the Loan and Agreement and the issue of shares on March 17, 2018.

 

On March 17, 2018, the Board of Directors approved by Unanimous Consent to Issue 500,000 Common Restricted Shares to Kellen Vancamp and 500,000 Common Restricted Shares to Cameron Vancamp as an award for each of them becoming Champions in both Hard Rock MMA and Colosseum Combat in their respective weight classes.

 

In addition there are 50,000,000 shares authorized as preferred stock, of which 40,000,000 are designated as Series B and 2,000,000 are designated as Series A. 8,000,000 shares have yet to be designated. All 2,000,000 shares of Series A preferred are issued and outstanding. Each share of Series A preferred is convertible into 240 shares of common stock.

 

NOTE 8 - CONTINGENCIES

 

On February 6, 2017 an agreement was reached with Manhattan Transfer to satisfy outstanding invoices. All past accounts were scheduled to be paid in full on September 15, 2017. As of March 31, 2018 the agreement has expired but B2 Digital continues to make payments on the account. The current balance is included in accounts payable.

 

 

 

  F-37  
 

 

NOTE 9 - SUBSEQUENT EVENTS

 

In preparing the accompanying financial statements, management has evaluated all subsequent events and transactions for disclosure through July 11, 2018, the date the financial statements were available for issuance and no other items, in management’s opinion, have occurred through that date.

 

On April 19, 2018, the Board of Directors approved the conversion of the amount due Good Hunting Communications, Inc. per the Loan Agreement executed on August 24, 2015 between the parties for payment in full of the Loan Agreement between the parties to be converted to 3,478,400 Common Restricted Shares.

 

On April 25, 2018, the Board of Directors approved by Unanimous Consent to Issue 5,000,000 Common Restricted Shares to Higdon MMA Consulting for the Expansion into Ohio and receiving a Promoters license from the Ohio State Athletic Commission.

 

On April 25, 2018, the Board of Directors approved the issue of 30,000,000 Restricted Common Shares to B2 Management Group LLC for the “Incentive Award Shares” for the Expansion into Ohio and receiving a Promoters license from the Ohio State Athletic Commission.

 

On April 25, 2018, the Board of Directors approved by Unanimous Consent to Issue 30,000,000 Common Restricted Shares to Emry Capital.

 

On June 18, 2018, the Board of Directors approved by Unanimous Consent to Issue 3,000,000 Common Restricted Shares to W.J. Host for his advisory services provided to the Chairman & CEO. The shares have not been issued as of June 30, 2018 and are to be issued in July 2018.

 

On June 18, 2018, the Board of Directors approved the addition of Riverbend Productions LLC as an Independent Contractor to complete services. The shares have not been issued as of June 30, 2018 and are to be issued in July 2018.

 

 

 

 

  F-38  
 

 

 

PART III—EXHIBITS

 

Index to Exhibits

 

Exhibit 
Number
Exhibit Description
   
2.1* Amended Articles of Incorporation
2.2* Bylaws
3.1* Specimen Stock Certificate
4.1 Form of Subscription Agreement
6.1* Employment Agreement of Greg P. Bell
6.2* Indemnification Agreement of Greg P. Bell
6.3* Employment Agreement of Paul D.H. LaBarre
6.4* Indemnification Agreement of Andrew Georgens
6.5* Indemnification Agreement of Paul Labarre
6.6* Indemnification Agreement of Hugh Darryl Metz
11.1***

Consent of Business Legal Advisors, LLC. (included in Exhibit 12.1)

11.2** Consent of M. Vail & Associates, P.C.
11.3** Consent of Accell Audit and Compliance, PA
12.1*** Opinion of Business Legal Advisors, LLC

_________________

* Filed with the Company’s Form 1-A on August 21, 2018
** Filed with the Company’s Post-Qualification Amendment to Form 1-A on October 1, 2019
*** Filed with the Company’s Post-Qualification Amendment to Form 1-A on September 5, 2019

 

 

  III-1  

 

 

SIGNATURES

 

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tampa, Florida, December 13, 2019.

 

(Exact name of issuer as specified in its charter):

B2Digital, Incorporated

   
  By: /s/ Greg P. Bell
  Greg P. Bell, Chief Executive Officer (Principal Executive Officer).

 

This Offering Statement has been signed by the following persons in the capacities and on the dates indicated.

 

By:

/s/ Greg P. Bell

  Greg P. Bell, Chief Executive Officer (Principal Executive Officer).

 

Date: December 13, 2019

 

By:

/s/ Greg P. Bell

  Greg P. Bell, Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer).

 

Date: December 13, 2019

 

SIGNATURES OF DIRECTORS:

 

/s/ Greg P. Bell

  Date: December 13, 2019  
Greg P. Bell, Director      

 

 

/s/ Paul D. H. LaBarre

  Date: December 13, 2019  
Paul D. H. LaBarre, Director      

 

 

/s/ Andrew Georgens

  Date: December 13, 2019  

Andrew Geogens, Director

     

 

 

/s/ Hugh Darryl Metz

  Date: December 13, 2019  
Hugh Darryl Metz, Director      

 

 

 

  III-2  

 

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