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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended March 31, 2022

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

 

Commission File Number: 000-11882

 

B2DIGITAL, INCORPORATED
(Exact name of Registrant as specified in its charter)

 

Delaware   84-0916299
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)

 

4522 West Village Drive, Suite 215, Tampa, FL   33624
(Address of principal executive offices)   (Zip Code)

 

Issuer’s telephone number, including area code: (813) 961-3051

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
N/A N/A N/A

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par Value $0.00001

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

        

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of its most recently completed second fiscal quarter based upon the price at which the common equity was last sold was $5,980,417.

 

As of September 19, 2022, there were 2,171,546,992 shares of the registrant’s Common Stock outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None

 

 

     

 

 

TABLE OF CONTENTS

 

 

PART I 4
Item 1.    Business 4
Item 1A.   Risk Factors 5
Item 1B.   Unresolved Staff Comments 15
Item 2.    Properties 15
Item 3.    Legal Proceedings 15
Item 4.    Mine Safety Disclosure 15
PART II 16
Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 16
Item 6.    Selected Financial Data 19
Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations 19
Item 7A.   Quantitative And Qualitative Disclosures About Market Risk 28
Item 8.    Financial Statements 28
Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 28
Item 9A.   Controls and Procedures 28
Item 9B    Other Information 29
Item 9C.   Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 29
PART III 30
Item 10.    Directors, Executive Officers and Corporate Governance 30
Item 11.    Executive Compensation 33
Item 12.    Security Ownership of Certain Beneficial Owners and Management 35
Item 13.    Certain Relationships and Related Transactions, and Director Independence 36
Item 14.    Principal Accountant Fees and Services 37
PART IV 39
Item 15.    Exhibits, Financial Statement Schedules 39
Item 16.    Form 10-K Summary 41

 

 

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Forward-Looking Statements

 

Some of the statements under “Summary,” “Risk Factors,” “Management's Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” and elsewhere in this Annual Report on Form 10-K (the “10-K”) 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 10-K, 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 unprecedented impact of the ongoing COVID-19 pandemic on our business, customers, employees, consultants, service providers, stockholders, investors and other stakeholders;

 

  · 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, including the need to raise additional capital;

 

  · Our ability to pay for the costs of being a public company;

 

  · 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 10-K 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 10-K or otherwise make public statements updating our forward-looking statements.

  

Introductory Comment

 

Unless otherwise indicated, any reference to “the Company”, “our company”, “we”, “us”, or “our” refers to B2Digital, Incorporated, a Delaware corporation, and as applicable to its wholly-owned subsidiaries: Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, One More Gym Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC.

 

 

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PART I

 

Item 1. Business

 

Summary

 

B2Digital, Incorporated, a Delaware corporation (“we,” “us,” or, the “Company”), was incorporated in the State of Delaware on June 3, 2004.

 

We are led by a management team headed by our Chairman and CEO, Greg P. Bell. Our 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 our growth strategy, we intend to continue to develop and acquire assets meeting our business model with the goal of becoming a premier vertically integrated live event sports company and fitness brand with many locations throughout the U.S.

 

We are the premier development league for mixed martial arts (“MMA”). We operate in two major branded segments: The B2 Fighting Series and The Official B2 Training Facilities Network, which is comprised of ONE MORE Gym. We primarily derive revenues from live event ticket sales, pay-per-view ticket sales, content media marketing, and fitness facility memberships.

 

The Live Events segment (the B2 Fighting Series) is primarily engaged with scheduling, organizing, and producing live MMA events, marketing those events, and generating both live audience and PPV ticket sales, as well as creatively marketing the archived content generated through its operations in this segment. We own all media rights, merchandising rights, digital distribution networks of the B2 Fighting Series. We also plan to generate additional revenues over time from endorsement deals with global brands as its audience grows. The B2 Fighting Series is licensed in 18 U.S. states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate.

 

The B2 Training Facilities segment operates primarily through our ONE More Gym brand. We currently operate two ONE More Gym locations. ONE MORE Gym locations include specialized MMA training resources and serve a recruiting function for our Live Events segment.

 

For more information about B2Digital, visit our website at www.B2FS.com. We do not incorporate the information on or accessible through our website into this Form 10-K. We have included our website address in this 10-K solely as an inactive textual reference.

 

Government Regulation

 

We require approval from each state in which we hold an MMA event to issue to us a license. Through our wholly owned subsidiaries, we are currently licensed in the following states:

 

  1. Alabama

 

  2. Arkansas

 

  3. Georgia

 

  4. Illinois

 

  5. Indiana

 

  6. Iowa

 

  7. Kansas

  

  8. Kentucky

 

  9. Louisiana

 

 

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  10. Michigan
     
  11. Missouri
     
  12. Mississippi
     
  13. Nebraska
     
  14. Ohio
     
  15. Oklahoma
     
  16. South Dakota
     
  17. Tennessee
     
  18. West Virginia

 

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. 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.

 

We own the trademark, “B2 DIGITAL TRADING AT: BTDG.”

 

Employees

 

As of August 31, 2022, we had 28 employees, including officers and directors, all of which are full-time. We believe that we will be successful in attracting experienced and capable personnel. Our CEO has entered into agreements with us requiring him not to compete or disclose our proprietary information. Our employees are not represented by any labor union. Usually, the number of total employees and number of full-time employees will vary.

 

Item 1A. 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 10-K. The occurrence of any of the following risks might cause you to lose all or part of your investment. Some statements in this 10-K, including statements in the following Risk Factors, constitute “Forward-Looking Statements.”

  

Risks Related to Our Business

 

The Company needs additional capital to support its operations or the growth of its business, and the Company cannot be certain that this capital will be available on reasonable terms when required, or at all.

 

In order for the Company to successfully execute its business plan, the Company will require additional financing which may not be available or 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 the Company’s financial position and may force the Company to seek protection from its creditors through bankruptcy proceedings or pursue other options such as sell assets. If the Company is unable to obtain adequate financing or financing on terms satisfactory to it when required, the Company’s ability to continue to support the operation or growth of its business could be significantly impaired and its operating results may be harmed.

 

 

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The Company’s inability to pay its secured debt, when due, will cause a default, which will allow the lender to foreclose on our assets and take control of the Company, which would adversely impact the Company’s business.

 

On July 7, 2022, the Company entered into a Securities Purchase Agreement (the “SPA”) with GS Capital Partners, LLC (the “Lender”) pursuant to which the Company issued to the Lender an 8% redeemable promissory note (the “Note”) in the principal amount of $483,000. Upon the occurrence of Event of Default (as defined in the Note) the Company will have a 15-day grace period, during which no default shall be deemed to have occurred (the “Grace Period”). After the conclusion of the Grace Period, the Lender will be required to provide the Company with written notice of default, after which time Lender will have a 45-day cure period to remedy such default (the “Cure Period”).

 

As long as there is no uncured Event of Default, the principal will be paid as follows:

 

  · $125,550 upon Closing;
  · $116,250 within 30 days of Closing;
  · $106,950 within 60 days of Closing; and
  · $100,440 within 90 days of Closing.

 

Pursuant to the SPA, the Company entered into the Pledge Agreement with the Lender, Greg P. Bell, and B2 Management Group LLC, a Nevada limited liability company (“B2 Management”), pursuant to which, as security for all existing and outstanding notes issued to the Lender, Mr. Bell and B2 Management pledged to the all shares of the Company’s Series A and Series B Preferred Stock owned by Mr. Bell and B2 Management, collectively (the “Pledged Shares”), and granted to the Lender a first priority lien on and a first priority security interest in the following (collectively, the “Stock Collateral”):

 

  · the Pledged Shares and all capital, revenue, profit, income, gain or other property or proceeds, return on contribution or otherwise with respect to the Pledged Shares;
  · all securities, moneys or property representing dividends or interest on any of the Pledged Shares, or representing a distribution in respect of the Pledged Shares, or resulting from a split-up, revision, reclassification or other like change of the Pledged Shares or otherwise received in exchange therefor, and any subscription warrants, rights or options issued to the holders of, or otherwise in respect of, the Pledged Shares (exclusive of any equity holder loans);
  · all right, title and interest of Mr. Bell and/or B2 Management in, to and under any policy of insurance payable by reason of loss or damage to the Pledged Shares and any other Stock Collateral;
  · all other payments due or to become due to Mr. Bell and/or B2 Management in respect of the Pledged Shares whether under any organizational document or otherwise, whether as contractual obligations, damages or otherwise;
  · all “accounts”, “general intangibles”, “instruments” and “investment property” (in each case as defined in the UCC) constituting or relating to the foregoing;
  · all proceeds of any of the foregoing property of Mr. Bell and/or B2 Management (including, without limitation, any proceeds of insurance thereon, all “accounts”, “general intangibles”, “instruments” and “investment property”, in each case as defined in the UCC, constituting or relating to the foregoing); and
  · all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof.

 

Pursuant to the Pledge Agreement, Mr. Bell and B2 Management entered into Irrevocable Proxies pursuant to which Mr. Bell and B2 Management appointed the Lender with full power to appoint a nominee or nominees to act from time to time, the true and lawful attorney and proxy of the Pledged Shares, at all annual and special meetings of the shareholders of the Company and to take any action by written consent with the same force and effect as either Mr. Bell or B2 Management might or could do.

 

Pursuant to the SPA, B2 Management entered into the Non-Recourse Guaranty and Security Agreement pursuant to which B2 Management granted to the Lender a security interest in the shares of Series A Preferred Stock owned by B2 Management and all proceeds and products thereof.

 

In the event that the Company defaults on the Note, the Lender could not only take control of the Company but could also foreclose on the Company’s assets, which would make an investment in the Company worthless.

 

 

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A pandemic, epidemic or outbreak of an infectious disease in the markets in which the Company operates or that otherwise impacts its facilities and customers could adversely impact the Company’s business.

 

If a pandemic, epidemic, or outbreak of an infectious disease including the recent outbreak of respiratory illness caused by a novel coronavirus (COVID-19) first identified in Wuhan, Hubei Province, China, or other public health crisis were to affect the Company’s markets or facilities, or its customers, the Company’s business could be adversely affected. Consequences of the coronavirus outbreak are resulting in disruptions in or restrictions on the Company’s ability to travel and hold live events. If such an infectious disease broke out at the Company’s office, facilities or work sites, its operations may be affected significantly, its productivity may be affected, and the Company may incur increased costs. If the persons and entities with which the Company contracts are affected by an outbreak of infectious disease, its live events may be delayed or cancelled, and the Company may incur increased costs. If the Company’s subcontractors with whom it works were affected by an outbreak of infectious disease, the Company’s labor supply may be affected, and it may incur increased labor costs. In addition, the Company may experience difficulties with certain suppliers or with vendors in its supply chains, and its business could be affected if the Company becomes unable to procure essential equipment, supplies or services in adequate quantities and at acceptable prices. Further, an infectious outbreak may cause disruption to the U.S. economy, or the local economies of the markets in which the Company operates, increase costs associated with its business, affect job growth and consumer confidence, or cause economic changes that the Company cannot anticipate. Overall, the potential impact of a pandemic, epidemic or outbreak of an infectious disease with respect to the Company’s markets or its facilities is difficult to predict and could adversely impact the Company’s business. In response to the COVID-19 situation, federal, state and local governments (or other governments or bodies) are considering placing, or have placed, restrictions on travel and conducting or operating business activities. At this time those restrictions are very fluid and evolving. the Company has been and will continue to be impacted by those restrictions. Given that the type, degree and length of such restrictions are not known at this time, the Company cannot predict the overall impact of such restrictions on it, its customers, its subcontractors, and others with whom the Company works or the overall economic environment. As such, the impact these restrictions may have on the Company’s financial position, operating results and liquidity cannot be reasonably estimated at this time, but the impact may be material. In addition, due to the speed with which the COVID-19 situation is developing and evolving, there is uncertainty around its ultimate impact on public health, business operations and the overall economy; therefore, the negative impact on the Company’s financial position, operating results and liquidity cannot be reasonably estimated at this time, but the impact may be material.

 

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

 

MMA is currently a popular sport in the U.S., but the Company’s 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 the Company’s 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 the Company’s operating results and have a material adverse effect on its business.

  

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

 

The Company’s business is dependent upon identifying, recruiting, and retaining highly regarded professional MMA fighters for its 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. The Company 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 the Company’s business.

 

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

 

The Company’s business strategy involves developing sponsorship arrangements, or expanding existing sponsorship arrangements, in support of its network of live MMA events. The Company 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 the Company’s ability to secure and maintain important advertising and promotional arrangements. If the Company is unable to generate sponsorship and promotional revenue and increase that revenue over time, its operating results and business will be adversely affected.

 

 

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The Company may be prohibited from promoting and conducting its live events if it does not comply with applicable regulations.

 

In various states in the U.S. and in some foreign jurisdictions, athletic commissions and other applicable regulatory agencies will require the Company to obtain licenses for promoters, medical clearances and/or other permits or licenses for athletes and/or permits for events in order for it to promote and conduct its live events. If the Company fails to comply with the regulations of a particular jurisdiction, it 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 the Company’s live events, in which case its operating results would be adversely affected.

 

The Company could incur substantial liability in the event of accidents or injuries occurring during its events.

 

The Company intends to hold numerous live MMA events each year. Each live event will expose the Company’s 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 the Company’s events will expose its professional MMA fighters to the risk of serious injury or death. Although the Company’s fighters, as independent contractors, are responsible for maintaining their own health, disability and life insurance, the Company insures medical costs for injuries that a fighter may suffer at its events. Any liability the Company incurs as a result of the death of, or a serious injury sustained by one of its fighters while fighting in a match at its events, to the extent not covered by the Company’s insurance, could adversely affect its business, financial condition and operating results.

  

The Company’s live events will entail other risks inherent in public live events, including air and land travel interruption or accidents, the spread of illness, pandemics, 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 the Company’s business for which it does not carry business interruption insurance or result in liability to third parties for which the Company may not have insurance. The occurrence of any of these circumstances could adversely affect the Company’s business, financial condition, and results of operations.

 

The Company may be unable to establish, protect or enforce its intellectual property rights adequately.

 

The Company’s success will depend in part on its ability to establish, protect and enforce its intellectual property and other proprietary rights. The Company’s inability to protect its portfolio of copyrighted material, trade names and other intellectual property rights from infringement, piracy, counterfeiting or other unauthorized use could negatively affect its business. If the Company fails to establish, protect or enforce our intellectual property rights, it may lose an important advantage in the markets in which it competes. The Company’s intellectual property rights may not be sufficient to help it maintain its position in the markets and its competitive advantages. Monitoring unauthorized uses of and enforcing the Company’s 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 the attention of management.

 

The Company relies on its marketing efforts and channels to promote its brand and events. These efforts may require significant expense and may not be successful.

 

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

 

 

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Risks Relating to Our Financial Condition

 

There are doubts about the Company’s ability to continue as a going concern.

 

The Company is a development stage enterprise and has commenced planned principal operations. The Company had revenues of $2,502,302 and incurred losses of $11,276,819 for the fiscal year ended March 31, 2022. 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 growth of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing, which may be dilutive. 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 3. Going Concern for further information.

 

The Company will require additional capital and this capital might not be available on acceptable terms, if at all.

 

The Company will require additional funds to respond to operate its business. Accordingly, the Company will need to engage in continued equity or debt financings to secure additional funds. If the Company raises additional funds through future issuances of equity or convertible debt securities, its existing stockholders could suffer significant dilution, and any new equity securities the Company issues could have rights, preferences, and privileges superior to those of its common stock. Any debt financing the Company secures in the future could involve restrictive covenants relating to the Company’s capital raising activities and other financial and operational matters, which may make it more difficult for the Company to obtain additional capital and to pursue business opportunities, including potential acquisitions. The Company may not be able to obtain additional financing on terms favorable to it, if at all. If the Company is unable to obtain adequate financing or financing on terms satisfactory to it when we required, its ability to continue to support its business growth and to respond to business challenges could be impaired, and the Company’s business may be harmed.

 

The Company’s management has a limited experience operating a public company and is subject to the risks commonly encountered by early-stage companies.

 

Although the Company’s management has experience in operating small companies, its management has not had to manage expansion while being a public company. Many investors may treat the Company as an early-stage company. In addition, the Company’s management has not overseen a company with large growth. Because the Company has a limited operating history, its 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 the Company may not have sufficient capital to achieve its growth strategy;

 

  · risks that the Company may not develop its product and service offerings in a manner that enables it to be profitable and meet our customers’ requirements;

 

  · risks that the Company’s growth strategy may not be successful; and

 

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

 

 

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These risks are described in more detail below. The Company’s future growth will depend substantially on its ability to address these, and the other risks described in this section. If the Company does not successfully address these risks, its business could be significantly harmed.

 

The Company has limited operational history in an emerging industry, making it difficult to accurately predict and forecast business operations.

 

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

 

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

 

The Company has not yet produced a net profit and may not in the near future, if at all. The Company cannot be certain that it will be able to realize sufficient revenue to achieve profitability. The Company’s 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 revenue levels in order to achieve positive cash flows, none of which can be assured.

 

The Company is highly dependent on the services of its key executive, the loss of whom could materially harm the Company’s business and its strategic direction. If the Company loses key management or significant personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in its compensation costs, the Company’s business may materially suffer.

 

The Company is highly dependent on its management, specifically Greg P. Bell. The Company has an employment agreement in place with Mr. Bell. If the Company loses key employees, its business may suffer. Furthermore, the Company’s future success will also depend, in part, on the continued service of its management personnel and its ability to identify, hire, and retain additional key personnel. The Company does not carry “key-man” life insurance on the lives of any of its executives, employees, or advisors. The Company experiences intense competition for qualified personnel and may be unable to attract and retain the personnel necessary for the development of its business. Because of this competition, the Company’s compensation costs may increase significantly.

 

The Company operates in a highly competitive environment, and if it is unable to compete with its competitors, its business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.

 

The Company operates in a highly competitive environment. The Company’s 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 the Company’s business, financial condition, results of operations, cash flows and prospects.

 

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

 

If the Company is unable to compete successfully with other businesses in its existing markets, it may not achieve its projected revenue and/or customer targets. The Company competes with both start-up and established companies. Compared to the Company’s business, some of its competitors may have greater financial and other resources, have been in business longer, have greater name recognition and be better established.

 

 

  10  

 

 

The Company’s lack of adequate D&O insurance may also make it difficult for it to retain and attract talented and skilled directors and officers.

 

In the future the Company 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, the Company has not obtained directors and officers liability (“D&O”) insurance. Without adequate D&O insurance, the amounts the Company would pay to indemnify its officers and directors should they be subject to legal action based on their service to the Company could have a material adverse effect on the Company’s financial condition, results of operations and liquidity. Furthermore, the Company’s lack of adequate D&O insurance may make it difficult for it to retain and attract talented and skilled directors and officers, which could adversely affect its business.

  

The Company expects to incur substantial expenses to meet its reporting obligations as a public company. In addition, failure to maintain adequate financial and management processes and controls could lead to errors in the Company’s financial reporting and could harm its ability to manage its expenses.

 

The Company estimates that it will cost approximately $117,000 annually to maintain the proper management and financial controls for the Company’s filings required as a public reporting company. In addition, if the Company does not maintain adequate financial and management personnel, processes, and controls, it may not be able to accurately report its financial performance on a timely basis, which could cause a decline in the Company’s stock price and adversely affect our ability to raise capital.

 

Risks Relating to our Common Stock

 

In the event the Company fails to timely file its period SEC reports, it may lose its trading symbol on the OTC Markets and, if that happens, shareholders will suffer from a lack of liquidity.

 

The OTC Markets requires its companies provide periodic financial and business-related disclosure through several methods, including through filing with the SEC. The Company has elected to provide the required disclosure on the OTC Markets through this method. In the event that the Company fails to file its periodic filings with the SEC for a sustained period of time, the OTC Markets will suspend the Company’s trading symbol, which will lead to a revocation of the symbol. In the event that the Company loses its trading symbol and status with the OTC Markets, the liquidity of the Company’s common stock will be severely limited.

 

The price of the Company’s common stock may continue to be volatile.

 

The trading price of the Company’s 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 the Company’s control or unrelated to its operating performance. In addition to the factors discussed in this “Risk Factors” section and elsewhere, these factors include: the ongoing COVID-19 pandemic, the operating performance of similar companies; the overall performance of the equity markets; the announcements by the Company or its competitors of acquisitions, business plans, or commercial relationships; threatened or actual litigation; changes in laws or regulations relating to the Company’s business; any major change in the Company’s board of directors or management; publication of research reports or news stories about the Company, its competitors, or its 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 the Company, could result in very substantial costs; divert management’s attention and resources; and harm the Company’s business, operating results, and financial condition.

 

 

  11  

 

 

The Company’s common stock is thinly traded, so the Company’s stockholders may be unable to sell at or near ask prices or at all if they need to sell their shares to raise money or otherwise desire to liquidate their shares.

 

The Company’s common stock has historically been sporadically traded on the OTC Markets, meaning that the number of persons interested in purchasing the Company’s 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 the Company is 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 the Company came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as the Company or purchase or recommend the purchase of its shares until such time as the Company became more seasoned and viable. Consequently, there may be periods of several days or more when trading activity in the Company’s 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. The Company cannot give shareholders any assurance that a broader or more active public trading market for its common shares will develop or be sustained, or that current trading levels will be sustained.

  

The market price for the Company’s common stock is particularly volatile given its 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 the Company’s share price. The price at which a shareholder purchases the Company’s shares may not be indicative of the price that will prevail in the trading market. The Company’s shareholders may be unable to sell their common shares at or above the purchase price, which may result in substantial losses to the Company’s shareholders.

 

The market for the Company’s shares of common stock is characterized by significant price volatility when compared to seasoned issuers, and the Company expects that its share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in the Company’s share price is attributable to a number of factors. First, as noted above, the Company’s shares are sporadically traded. Because 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 the Company’s shares could, for example, decline precipitously in the event that a large number of the Company’s shares is sold into 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, the Company is a speculative investment due to, among other matters, its limited operating history and lack of significant revenue or profit to date, and the uncertainty of future market acceptance for the Company’s products. Because 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 the Company’s shares: actual or anticipated variations in our quarterly or annual operating results; acceptance of the Company’s inventory of events, games, government regulations, announcements of significant acquisitions, strategic partnerships or joint ventures, the Company’s capital commitments and additions or departures of its key personnel. Many of these factors are beyond the Company’s control and may decrease the market price of its shares regardless of operating performance. The Company cannot make any predictions or projections as to what the prevailing market price for its shares will be at any time, including as to whether its 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.

 

The Company’s 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. The Company’s management is aware of the abuses that have occurred historically in the penny stock market. Although the Company does not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, the Company’s management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to its securities. The possible occurrence of these patterns or practices could increase the volatility of the Company’s share price.

 

 

  12  

 

 

The market price of the Company’s common stock may be volatile and adversely affected by several factors.

 

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

 

  · the unprecedented impact of COVID-19 pandemic on our business, customers, employees, consultants, service providers, stockholders, investors, and other stakeholders;

 

  · the Company’s 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 the Company’s 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.

 

Pandemics, natural disasters and geo-political events could adversely affect the Company’s business.

 

Pandemics, 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 the Company, or other service providers, could adversely affect the Company’s business.

 

The Company does not expect to pay dividends in the future; any return on investment may be limited to the value of the Company’s common stock.

 

The Company does not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends on the Company’s 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. The Company’s current intention is to apply net earnings, if any, in the foreseeable future to increasing the Company’s 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 its common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of the Company’s board of directors. If the Company does not pay dividends, its common stock may be less valuable because a return on investment will only occur if its stock price appreciates.

 

 

  13  

 

 

The Company’s issuance of additional shares of common stock, or options or warrants to purchase those shares, would dilute shareholders’ proportionate ownership and voting rights.

 

As of March 31, 2022 the Company was entitled under its Certificate of Incorporation to issue up to 5,000,000,000 shares of common stock as of September 1, 2022 the company is entitled under its Certificate of Incorporation to issue up to 20,000,000,000 shares of common stock. The Company has issued and outstanding 2,171,546,992 shares of common stock as of September 19, 2022. In addition, the Company is entitled under its Certificate of Incorporation to issue “blank check” preferred stock. The Company’s 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 the Company’s board of directors may deem relevant at that time. It is likely that the Company will be required to issue a large number of additional securities to raise capital to further its development. It is also likely that the Company will issue a large number 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 the Company’s stock plans. The Company cannot give any assurance that it will not issue additional shares of common stock, or options or warrants to purchase those shares, under circumstances the Company may deem appropriate at that time.

  

The existence of indemnification rights to the Company’s directors, officers and employees may result in substantial expenditures by the Company and may discourage lawsuits against its directors, officers and employees.

 

The Company has contractual indemnification obligations under its agreements with its directors, officers, and employees. The foregoing indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers, and employees that the Company may be unable to recoup. These provisions and resulting costs may also discourage the 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 the Company’s shareholders against its directors, officers, and employees even though such actions, if successful, might otherwise benefit the Company and shareholders.

 

The Company may become involved in securities class action litigation that could divert management’s attention and harm its 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 the Company’s shares could fall regardless of its 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 the Company’s shares suffers extreme fluctuations, then it may become involved in this type of litigation, which would be expensive and divert management’s attention and resources from managing the Company’s business.

 

As a public company, the Company may also from time to time make forward-looking statements about future operating results and provide some financial guidance to the public markets. The Company’s 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 the Company’s 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.

 

The Company’s common stock is currently deemed a “penny stock,” which makes it more difficult for the Company’s shareholders 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.

 

 

  14  

 

 

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 must 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 must 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 the Company.

 

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, the Company 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 the Company contained a material misstatement of fact or was misleading in any material respect because of the Company’s failure to include any statements necessary to make the statements not misleading. Such an action could hurt the Company’s financial condition.

 

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

 

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

 

Item 1B. Unresolved Staff Comments

 

Not applicable.

 

Item 2. Properties

 

We occupy offices at 4522 West Village Drive Suite 215. Tampa, Florida 33624. We do not currently own any properties or facilities. We lease the Fitness Facilities through ONE More Gym Tuscaloosa LLC in Tuscaloosa, Alabama and ONE More Gym Birmingham LLC in Moody, Alabama. We expect to lease new office space in the future to the extent consistent with its business model.

 

Item 3. Legal Proceedings

 

The Company has received a subpoena from the SEC Division of Enforcement seeking documents regarding the REG A offering that occurred on August 21, 2018 and the Company’s compliance with Section 5(a) and 5(c) of the Securities Act of 1933 regarding that offering. The Company has fully supplied all documents that the SEC requested and is cooperating fully with the SEC.

 

Besides the disclosure above, we are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results. From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

Item 4. Mine Safety Disclosure

 

Not Applicable.

 

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PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

Market Information

 

Our common stock is quoted on the OTC Pink under the symbol “BTDG.” The table below sets forth for the periods indicated the quarterly high and low bid prices as reported by OTC Markets. Limited trading volume has occurred during these periods. These quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

 

    Quarter   High     Low  
FISCAL YEAR ENDING MARCH 31, 2023   First   $ 0.0027     $ 0.0004  
                     

 

    Quarter   High     Low  
FISCAL YEAR ENDED MARCH 31, 2022   First   $ 0.0075     $ 0.004  
    Second   $ 0.0114     $ 0.0031  
    Third   $ 0.0061     $ 0.0021  
    Fourth   $ 0.0053     $ 0.0022  

 

    Quarter   High     Low  
FISCAL YEAR ENDED MARCH 31, 2021   First   $ 0.0042     $ 0.0025  
    Second   $ 0.0216     $ 0.0025  
    Third   $ 0.0138     $ 0.0040  
    Fourth   $ 0.0195     $ 0.0040  

 

Our common stock is considered to be penny stock under rules promulgated by the Securities and Exchange Commission (the “SEC”). Under these rules, broker-dealers participating in transactions in these securities must first deliver a risk disclosure document which describes risks associated with these stocks, broker-dealers’ duties, customers’ rights and remedies, market and other information, and make suitability determinations approving the customers for these stock transactions based on financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing, provide monthly account statements to customers, and obtain specific written consent of each customer. With these restrictions, the likely effect of designation as a penny stock is to decrease the willingness of broker-dealers to make a market for the stock, to decrease the liquidity of the stock and increase the transaction cost of sales and purchases of these stocks compared to other securities.

 

Holders

 

As of the close of business on September 19, 2022, we had approximately 348 holders of our common stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. Our transfer agent is Nevada Agency & Transfer Company, 50 W Liberty St # 880, Reno, NV 89501, (775) 322-0626, www.natco.com. The transfer agent is registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and operates under the regulatory authority of the SEC and FINRA.

 

Dividends

 

We have not declared or paid a cash dividend to stockholders since we were organized, and we do not intend to pay dividends in the foreseeable future. Our 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 our earnings, capital requirements and other factors.

 

 

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Securities Authorized for Issuance under Equity Compensation Plans

 

As of March 31, 2022, we had no securities authorized for issuance under equity compensation plans either approved or not approved by our shareholders.

  

Recent Sales of Unregistered Securities

 

Convertible Promissory Notes Issued

 

On January 4, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of January 4, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.

 

On January 12, 2022, the Company entered into an Agreement with Mast Hill Fund, L.P. pursuant to which the Company issued to Mast Hill Fund, L.P. a Promissory Note in the aggregate principal amount of $300,000. The Note has a maturity date of January 12, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note. On January 12, 2022, the Company issued 17,500,000 shares of common stock as commitment shares to Mast Hill pursuant to Convertible Note dated January 12, 2022.

 

On January 19, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of January 19, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.

 

On February 2, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of February 2, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.

 

On February 3, 2022, the Company entered into an Agreement with Mast Hill Fund, L.P. pursuant to which the Company issued to Mast Hill Fund, L.P. a Promissory Note in the aggregate principal amount of $425,000. The Note has a maturity date of February 3, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note. On February 7, 2022, the Company issued 24,800,000 shares of common stock as commitment shares pursuant to Mast Hill pursuant to Convertible Note dated February 3, 2022

 

On February 15, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of February 15, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.

 

 

  17  

 

 

On February 24, 2022, the Company entered into an Agreement with Sixth Street Lending LLC pursuant to which the Company issued to Sixth Street Lending LLC a Promissory Note in the aggregate principal amount of $211,640. The Note has a maturity date of February 24, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Sixth Street Lending LLC as set forth in the note.

 

On March 1, 2022, the Company entered into an Agreement with Mast Hill Fund, L.P. pursuant to which the Company issued to Mast Hill Fund, L.P. a Promissory Note in the aggregate principal amount of $120,000. The Note has a maturity date of March 1, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note. On March 2, 2022, the Company issued 7,000,000 shares of common stock as commitment shares pursuant to Mast Hill pursuant to Convertible Note 49 dated March 1, 2022

 

On March 1, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of March 1, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.

 

On March 16, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of March 16, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.

 

On March 22, 2022, the Company entered into an Agreement with Mast Hill Fund, L.P. pursuant to which the Company issued to Mast Hill Fund, L.P. a Promissory Note in the aggregate principal amount of $120,000. The Note has a maturity date of March 22, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of 8% per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note.

 

These notes were issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering. No selling commissions were paid in connection with the issuances of these notes.

 

Shares Issued Pursuant to Note Conversions

 

On February 2, 2022, GS Capital Partners converted $38,000 in principal and $5,947 in accrued interest into 27,717,906 shares of common stock at a conversion price of $0.0015855 per share, pursuant to Note 6 dated February 19, 2020.

 

On March 3, 2022, GS Capital Partners converted $38,000 in principal and $6,022 in accrued interest into 29,114,800 shares of common stock at a conversion price of $0.001512 per share, pursuant to Note 7 dated March 20, 2020.

 

The securities were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering. No selling commissions were paid in connection with the issuance of the securities.

 

 

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Share Awards

 

On January 20, 2022, the Company issued 12,000,000 shares of common stock as a stock award to a non-employee pursuant to a Board of Directors Consent dated January 12, 2022.

 

On February 1, 2022, the Company issued 20,000,000 shares of common stock as a stock award to employees and non-employees pursuant to a Board of Directors Consent dated January 25, 2022.

 

On March 25, 2022, the Company issued 91,000,000 shares of common stock as a stock award to employees and non-employees.

 

The securities were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof as a transaction by an issuer not involving any public offering. No selling commissions were paid in connection with the issuance of the securities.

 

Item 6. Selected Financial Data

 

As a Smaller Reporting Company, we are not required to furnish information under this Item 6.

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contain certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events; are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in the section titled “Risk Factors” herein. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements.

 

Basis of Presentation

 

We have ten wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, One More Gym Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC.

 

The consolidated financial statements, which include the accounts of the Company and its ten 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 Annual Report on Form 10-K 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.

 

 

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

 

  · The unprecedented impact of COVID-19 pandemic on our business, customers, employees, consultants, service providers, stockholders, investors, and other stakeholders;

 

  · 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 Annual Report on Form 10-K are based on our beliefs, assumptions, and expectations, considering 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 Annual Report on Form 10-K or otherwise make public statements updating our forward-looking statements.

 

Critical Accounting Policies

 

Basis of Accounting

 

The accompanying consolidated financial statements were prepared in conformity with U.S. 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. The most significant assumptions and estimates relate to the valuation of derivative liabilities and the valuation of assets and liabilities acquired through business combinations. Actual results could differ from these estimates and assumptions.

 

 

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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 or $250,000. The Company did not have any cash in excess of FDIC limits at March 31, 2022 and 2021, respectively.

 

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. The three levels of valuation hierarchy are defined as follows:

 

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

 

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

  

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, Distinguishing Liabilities from Equity, and ASC 815.

 

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.

 

Assets Held for Sale

 

We consider properties to be Assets held for sale when management approves and commits to a plan to dispose of a property or group of properties. The property held for sale prior to the sale date is separately presented on the balance sheet as Assets held for sale. During the fourth quarter of fiscal 2022 management initiated the sale of the gyms located in Indiana: One More Gym Kokomo, One More Gym Valparaiso and One More Gym Merrillville. We completed the sale during the first quarter of fiscal 2023 with proceeds of $80,000, reflecting a loss of $162,298. We have no additional assets held for sale.

 

Long-Lived Assets

 

Management reviews long-lived assets, including finite-lived intangible assets, for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the related assets are estimated over the asset’s useful life on an undiscounted basis. For assets held for use, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If the evaluation indicates that the carrying value of the asset may not be recoverable, the potential impairment is measured using fair value. Impairment losses for assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.

 

 

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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.

 

Live Event Revenue

 

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. The majority of revenues are received from ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue. 

 

Gym Revenue

 

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. The majority of revenues are received for gym membership dues. Members pay their dues on the monthly anniversary of when they join the gym. Dues are recognized as revenue over the period they are earned. Any unearned dues are recorded in deferred revenue.

  

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, 2022, the Company has an expected loss. Due to uncertainty of realization for these losses, a full valuation allowance is recorded. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

 

 

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Impairment of Long-Lived Assets

 

In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. There were no impairment charges recorded during the years ended March 31, 2022, and 2021.

 

Inventory

 

Inventories are valued at the lower of cost (determined on a weighted average basis) or market. Management compares the cost of inventories with the market value and allowance is made to write down inventories to market value, if lower. As of March 31, 2022 and 2021, the Company did not have balances in finished goods inventory, respectively.

 

Earnings Per Share (EPS)

 

The Company utilizes FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. As of March 31, 2022, the convertible notes are indexed to 3,606,309,640 shares of common stock.

 

The following table sets for the computation of basic and diluted earnings per share the years ended March 31, 2022 and 2021:

  

   

March 31,

2022

   

March 31,

2021

 
Basic and diluted                
Net loss   $ (11,276,819 )   $ (5,380,270 )
                 
Net loss per share                
Basic   $ (0.008 )   $ (0.008 )
Diluted   $ (0.008 )   $ (0.008 )
                 
Weighted average number of shares outstanding:                
Basic & diluted     1,449,504,359       684,096,652  

  

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, 2022, there were no options outstanding.

 

 

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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 consolidated financial statements.

 

During the years ended March 31, 2022 and 2021, the Company recorded $626,050 and $409,333 in stock-compensation expense, respectively.

 

Leases

 

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606.

 

On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.

 

Operating lease right of use (“ROU”) assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is presented on the statements of operations.

 

As permitted under the new guidance, the Company has made an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of twelve months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term.

 

Recently Adopted Accounting Pronouncements

 

In September 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred-loss impairment methodology and requires immediate recognition of estimated credit losses expected to occur for most financial assets, including trade receivables. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. The new guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Recently, the FASB voted to delay the implementation date for this accounting standard, for smaller reporting companies, the new effective date is beginning after December 15, 2022, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of this ASU on the consolidated financial statements and is collecting and analyzing data that will be needed to produce historical inputs into any models created as a result of adopting this ASU. At this time, the Company does not believe the adoption of this ASU will have a material effect on the financial statements.

 

 

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Organization and Nature of Business

 

We are the premier development league for MMA. We operate in two major branded segments: The B2 Fighting Series and The Official B2 Training Facilities Network, which is comprised of our two ONE MORE Gym Facilities. We primarily derive revenues from live event ticket sales, pay-per-view ticket sales, content media marketing, and fitness facility memberships.

 

The Live Events segment (the B2 Fighting Series) is primarily engaged with scheduling, organizing, and producing live MMA events, marketing those events, and generating both live audience and PPV ticket sales, as well as creatively marketing the archived content generated through its operations in this segment. We own all media rights, merchandising rights, digital distribution networks of the B2 Fighting Series. We also plan to generate additional revenues over time from endorsement deals with global brands as its audience grows. The B2 Fighting Series is licensed in 20 U.S. states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate. We now operate at a pace of more than 40 events per year.

 

The B2 Training Facilities segment operates primarily through our ONE More Gym Facilities brand. We currently operate two ONE More Gym locations.

 

For more information about B2Digital, visit our website at www.B2FS.com. We do not incorporate the information on or accessible through our website into this 10-K. We have included our website address in this 10-K solely as an inactive textual reference.

 

Results of Operations for the Year Ended March 31, 2022, Compared to the Year Ended March 31, 2021

 

Revenue

 

We had total revenues of $2,502,302 for the year ended March 31, 2022, versus revenues of $951,302 for the year ended March 31, 2021. There was an increase in live event revenue of $749,430, or 247%, due to an increase in live events related to less restrictions resulting from the COVID-19 pandemic. There was an increase in gym revenue of $801,570, or 124%, due to the increase in the number of gym locations over the prior period.

   

Operating Expenses

 

Operating expenses are all expenses including merchant fees, payroll, utilities, professional fees, all costs associated with marketing, press releases, public relations, rent, sponsorships, and other expenses. We incurred operating expenses of $10,552,426 for the year ended March 31, 2022, versus operating expenses of $3,563,734 for the year ended March 31, 2021. The increase of $6,988,692 was primarily due to an increase in the number of live events, increased operations as a result of gym acquisitions, increased salaries, investor relations and professional fees due to the growth of the business. Additionally, a loss on impairment of assets was recorded for $560,156.

 

Depreciation and Amortization Expense

 

We incurred depreciation and amortization expense of $462,004 for the year ended March 31, 2022, versus depreciation expense of $186,063 for the year ended March 31, 2021. The increase of $275,941 was due to an increase in capitalized assets and intangible assets as a result of business acquisitions.

 

Other Income (Expense)

 

Our other income and expenses include gain on forgiveness of loan, gain on bargain purchase, grant income, loss on extinguishment of debt, gain on extinguishment of debt, change in fair value of derivative liabilities and interest expense. We incurred other expenses of $2,764,691 for the year ended March 31, 2022, versus other expenses of $2,581,775 for the year ended March 31, 2021. The increase in other expenses of $182,916 was primarily due to an increase in interest expense. This increase was primarily offset by gains recorded in the extinguishment of debt.

 

 

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Net Losses

 

We incurred a net loss of $11,276,819 for the year ended March 31, 2022, versus a net loss of $5,380,270 for the year ended March 31, 2021.

 

Current Liquidity and Capital Resources for the Year Ended March 31, 2022, Compared to the Year Ended March 31, 2021

 

    March 31,  
    2022     2021  
Summary of Cash Flows:            
Net cash used by operating activities   $ (6,518,124 )   $ (2,052,264 )
Net cash used by investing activities     (757,170 )     (715,737 )
Net cash provided by financing activities     7,192,741       2,843,448  
Net increase in cash and cash equivalents     (82,553 )     75,447  
Beginning cash and cash equivalents     122,176       46,729  
Ending cash and cash equivalents   $ 39,623     $ 122,176  

  

Operating Activities

 

Cash used in operations of $6,518,124 during the year ended March 31, 2022 was primarily a result of our $11,276,819 net loss reconciled with our net non-cash expenses relating to stock compensation, depreciation and amortization expense, loss on settlement of debt, loss on extinguishment of debt, loss on goodwill impairment, gain on forgiveness of loan, gain on bargain purchase, gain on extinguishment of debt, amortization of debt discount, day one derivative loss, changes in fair value of derivative liabilities, inventory, prepaid expenses, accounts payable, accrued liabilities and deferred compensation. Cash used in operations of $2,052,264 during the year ended March 31, 2021 was primarily a result of our $5,380,270 net loss reconciled with our net non-cash expenses relating to stock compensation, depreciation and amortization expense, loss on settlement of debt, loss on extinguishment of debt, loss on goodwill impairment, gain on forgiveness of loan, gain on bargain purchase, gain on extinguishment of debt, amortization of debt discount, day one derivative loss, changes in fair value of derivative liabilities, inventory, prepaid expenses, accounts payable, accrued liabilities and deferred compensation.

  

Investing Activities

 

Net cash used in investing activities for the year ended March 31, 2022, of $757,170 resulted from payments for capital expenditures related to capital expenditures in the amount of $592,170 and business acquisitions in the amount of $165,000. Net cash used in investing activities for the year ended March 31, 2021, of $715,737 resulted from payments related to business acquisitions in the amount of $215,000 and capital expenditures in the amount of $500,737.

 

Financing Activities

 

Net cash provided by financing activities was $7,192,741 for the year ended March 31, 2022, which consisted of $150,000 from proceeds from the issuance of notes payable, $6,456,855 from proceeds from the issuance of convertible notes payable, $540,733 payments on convertible notes payable, $23,681 payment on notes payable, $74,700 for the repurchase of common stock and proceeds from the issuance of common stock of $1,225,000. Net cash provided by financing activities was $2,843,448 for year ended March 31, 2021, which consisted of $122,766 from proceeds from the issuance of notes payable, $1,200,000 from proceeds from the issuance of convertible notes payable, $15,000 in payments related to payable due for business acquisitions, $107,500 payments on convertible notes payable, $11,818 payment on notes payable, and $1,655,000 in proceeds from the issuance of common stock.

 

 

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Future Capital Requirements

 

Our current available cash and cash equivalents are insufficient to satisfy our liquidity requirements. Our capital requirements for the fiscal year 2022-23 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 our planned activities and limit our operations which could have a material adverse effect on our business, financial condition, and results of operations.

  

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 accompanying consolidated financial statements have been prepared on a going concern basis. For the year ended March 31, 2022, the Company had a net loss of $(11,276,819), had net cash used in operating activities of $6,518,124, had negative working capital of $(11,387,636), accumulated deficit of $(20,474,067), and stockholders’ deficit of $(10,204,271). These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

  

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.

 

 

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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.

 

Item 7A. Quantitative And Qualitative Disclosures About Market Risk

 

As a Smaller Reporting Company, we are not required to furnish information under this Item 7A.

 

Item 8. Financial Statements

 

The financial statements and supplementary data required by this item are included following the signature page of this report.

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

 

None.

 

Item 9A. Controls and Procedures

 

Disclosure Controls and Procedures

 

The Company has established disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and, as such, is accumulated and communicated to the Company’s Chief Executive Officer, Greg P. Bell, who serves as the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Mr. Bell, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of March 31, 2022. Based on his evaluation, Mr. Bell concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2022.

  

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of our company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

 

 

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Management assessed our internal control over financial reporting as of March 31, 2022, the end of our fiscal year.  Management based its assessment on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment.

 

Based on our assessment, management has concluded that our internal control over financial reporting was effective, as of the end of the fiscal year, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.

 

Changes in Internal Control over Financial Reporting

 

There has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during our most recent fiscal quarter ended March 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B Other Information

 

None.

 

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 

Not applicable.

 

 

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PART III

 

Item 10. Directors, Executive Officers and Corporate Governance

 

Current Management

 

The following table sets forth information regarding our executive officers, directors and significant employees, including their ages as of September 19, 2022:

 

Name and Principal Position   Age   Term of Office   Approximate hours spent per week
Greg P. Bell, Chief Executive Officer, and Director   65   Since January 2017   45
Paul D. H. LaBarre, Executive Vice President   78   Since September 2005   3
Andrew Georgens, Director, Secretary   72   Since November 2017   2
Hugh Darryl Metz, Director   63   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 40,000 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 three 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 disclosed herein, there are no arrangements or understandings between our directors any other person(s) (naming such person(s)) pursuant to which he was or is to be selected as a director or nominee

 

Legal Proceedings

 

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.

 

Besides the disclosure above, during the past ten years there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any of our directors or executive officers, and none of these persons has been involved in any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business entity, any judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws or regulations, or any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.

 

 

  32  

 

 

Family Relationships

 

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 5% of the any class of the Company’s equity securities.

  

Director Independence

 

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.”

 

We currently have not established any committees of the Board of Directors. Our Board of Directors may designate from among its members an executive committee and one or more other committees in the future. We do not have a nominating committee or a nominating committee charter. Further, we do not have a policy regarding the consideration of any director candidates recommended by security holders. To date, other than as described above, no security holders have made any such recommendations. The entire Board of Directors performs all functions that would otherwise be performed by committees. Given the present size of our board it is not practical for us to have committees. If we are able to grow our business and increase our operations, we intend to expand the size of our board and allocate responsibilities accordingly.

 

Delinquent Section 16(a) Reports

 

Section 16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities, file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater-than-ten percent stockholders are required by SEC regulations to furnish us with all Section 16(a) forms they file. To the best of our knowledge, based solely upon a review of Forms 3 and 4 and amendments thereto furnished to our Company during its most recent fiscal year and Forms 5 and amendments thereto furnished to our Company with respect to its most recent fiscal year, and any written representation referred to in paragraph (b)(1) of Item 405 of Regulation S-K, other than as set forth herein, all of our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements. During the year ended March 31, 2022, Paul LaBarre, Andrew Georgens, and Hugh Darryl Metz all failed to file Form 4s for 12,000,000 shares issued to each of them on December 6, 2021.

 

Code of Ethics

 

The Company has yet to adopt a Code of Ethics due to the COVID-19 pandemic and lack of resources. The Company plans on adopting a Code of Ethics during the fiscal year ending March 31, 2023.

  

Item 11. Executive Compensation

 

The following table sets forth information concerning the annual compensation awarded to, earned by, or paid to the following named executive officers for all services rendered in all capacities to our company and its subsidiaries for the fiscal years ended March 31, 2022 and 2021.

  

Summary Compensation Table

 

Name and principal position   Year  

Salary

($)

   

Stock Awards

($)

  Total
($)
Greg P. Bell, Chairman, CEO, and President     2021-22     136,800(1)     0   136,800  
      2020-21     240,245(2)(3)     320,000(4)   560,245  

 

  (1) Amount includes $125,000 of salary paid to Mr. Bell pursuant to his employment agreements and $11,800 paid to B2 Management, an entity owned by Mr. Bell, for services provided to the Company.
  (2) Amount includes $48,000 of salary paid to Mr. Bell pursuant to his employment agreements and $192,245 paid to B2 Management, an entity owned by Mr. Bell, for services provided to the Company.
  (3) Amount includes $30,000 that has been paid and $18,000 accrued but unpaid as of March 31, 2021.
  (4) Includes the issuance of 40,000,000 shares of Series B Convertible Preferred Stock valued at $320,000.

 

 

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CEO Agreements

 

November 2017 Agreement

 

Effective November 24, 2017, the Company entered into an agreement with Mr. Bell as the Chairman of the Board and Chief Executive Officer & President. Pursuant to the terms of the 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 agreement, the Company issued to B2 Management 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.

 

November 2020 Renewal

 

Effective November 23, 2020, Mr. Bell renewed his agreement with the Company (upon terms substantially similar to those in the previous agreement). Pursuant to the new agreement, Mr. Bell is entitled to an annual salary of $120,000 and Mr. Bell was also issued 40,000,000 shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”).

 

As further compensation for Mr. Bell’s services to the Company in connection with the Company’s acquisition activity, the Company issued B2 Management Group an additional 60,000,000 shares of Common Stock as compensation for the completion of acquisitions.

 

Finally, pursuant to the terms of the agreement, the Company will issue B2 Management Group 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 acquisitions subsequent to the previously-completed acquisitions (corresponding to a total aggregate amount of 150,000,000 shares that may be issued in connection with future acquisitions).

 

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

 

March 2022 Renewal

 

Effective March 1, 2022, the Company entered into the Chairman of the Board and Chief Executive Officer & President Agreement with Mr. Bell (upon terms substantially similar to those in the previous agreement). The agreement supersedes the previous agreement of the same title dated effective November 23, 2020. The term of the Agreement is until Mr. Bell is removed from his executive positions by 80% of the voting control of the Company unless Mr. Bell is legally incapacitated (until legal capacity is regained), as determined by a court of competent jurisdiction or upon Mr. Bell’s death. Mr. Bell can terminate the agreement upon three months’ prior written notice to the Company.

 

Pursuant to the Agreement, Mr. Bell is entitled to a monthly salary of $15,000.

 

The foregoing summary is qualified in its entirety to the terms of the agreements referenced herein, copies of which are exhibits to this 10-K.

 

Equity Awards

 

As of March 31, 2022, there were no unvested equity awards for our named executive officers.

 

 

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Compensation of Directors

 

The following table sets forth information concerning the compensation awarded to, earned by, or paid to the following directors for all services rendered in all capacities to our company and its subsidiaries for the year ended March 31, 2022. This table includes any person who served as a director at any time during fiscal 2021-22.

 

    Fees Earned or        
    Paid in Cash(1)     Total  
Name   ($)     (S)  
Andrew Georgens   $ 12,000     $ 12,000  
Hugh Darryl Metz   $ 12,000     $ 12,000  
Paul D.H. Labarre   $ 5,000     $ 5,000  

 

Board Service Agreements

 

Messrs. Metz and Georgens have entered into Board Service Agreements with the Company pursuant to which they will be paid annual cash compensation of $500 per year as compensation for services performed as directors of the Company.

 

LaBarre Agreement

 

The Company has entered into an Employment and Board Service Agreement with Paul D.H. LaBarre on November 4, 2017, the Company’s Executive Vice President and a director. The term of the 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 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 agreement at any time upon three months’ prior written notice to the Company.

 

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 agreement itself, a copy of which is an exhibit to this 10-K.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management

 

The following table and footnotes thereto sets forth information regarding the number of shares of common stock beneficially owned by (i) each director and named executive officer of our company, (ii) each person known by us to be the beneficial owner of 5% or more of its issued and outstanding shares of common stock, and (iii) named executive officers, executive officers, and directors of the Company as a group. In calculating any percentage in the following table of common stock beneficially owned by one or more persons named therein, the following table assumes 2,171,546,992 shares of common stock, 2,000,000 shares of Series A Preferred Stock, and 40,000,000 shares of Series B Preferred Stock issued and outstanding. Unless otherwise further indicated in the following table, the footnotes thereto and/or elsewhere in this 10-K, the persons and entities named in the following table have sole voting and sole investment power with respect to the shares set forth opposite the shareholder’s name, subject to community property laws, where applicable. Unless as otherwise indicated in the following table and/or the footnotes thereto, the address of our named executive officers and directors in the following table is: 4522 West Village Drive, Suite 215, Tampa, FL 33624. 

 

 

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Name and Address  

Shares of

Series A

Preferred

Stock Owned

   

Shares of

Series B

Preferred

Stock Owned

   

Shares of

Common

Stock

Owned

   

Amount and

Nature of

Beneficial

Ownership(1)

    Percentage of Beneficial Ownership  
Greg P. Bell(2)     850,000       40,000,000       141,045,200       665,045,200       24.67%  
Paul D. H. LaBarre     850,000             76,191,494       280,191,494       11.79%  
Andrew Georgens     100,000             13,022,880       37,022,880       1.69%  
Hugh Darryl Metz                 15,000,000       15,000,000       *  
Total Officers and Directors     1,800,000       40,000,000       245,259,574       997,259,574       34.11%  
>5% Shareholders                                        

B2 Management Group LLC(2)

4522 West Village Drive, Suite 215,

Tampa, Florida 33624

                141,045,200       141,045,200       6.50%  

*Less than 1%

 

  (1) Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the above table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on the date of this Annual Report.

 

  (2) Includes 145,045,200 shares of Common Stock are owned by B2 Management Group LLC which is owned and controlled by Mr. Bell, the Company’s Chairman and Chief Executive Officer.

 

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 Preferred Stock and Series B Preferred Stock. 2,000,000 shares of Series A Preferred Stock are currently issued and outstanding and 40,000,000 shares of Series B Preferred Stock are currently issued and outstanding.

 

The Series A Preferred Stock and Series B 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 and each holder of Series B Preferred Stock is entitled to 80 votes for each share of Series B Preferred Stock held by such shareholder.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence

 

Certain Relationships and Related Transactions

 

Except as disclosed below, for transactions with our executive officers and directors, please see the disclosure under “Executive Compensation” above.

 

B2 Management Group LLC

 

Our CEO and Chairman is the sole member of B2 Management Group. During the years ended March 31, 2022, and 2021, B2 Management Group received $11,800 and $192,245, respectively, as compensation for services from the Company. During the years ended March 31, 2022 and 2021, B2 Management Group was also reimbursed for $30,500 and $0, respectively, for expenses paid for the Company. The payments were expensed in operating expenses.

 

 

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Indemnification Agreements

 

We have entered into indemnification agreements with each of our directors, executive officers, and other key employees. The indemnification agreements 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, 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.

 

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.

  

Disclosure of Conflicts of Interest

 

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

 

Director Independence

 

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.” Although we have not adopted the independence standards any national securities exchange to determine the independence of directors, the NYSE MKT LLC provides that a person will be considered an independent director if he or she is not an officer of the company and is, in the view of our board of directors, free of any relationship that would interfere with the exercise of independent judgment. Under this standard, our board of directors has determined that Messrs. Metz and Georgens would meet this standard, and therefore, would be considered to be independent.

 

Item 14. Principal Accountant Fees and Services

 

Fees Paid

 

Audit Fees

 

The aggregate fees billed for professional services rendered by our principal accountants for the audit of our annual financial statements, review of financial statements included in the quarterly reports and other fees that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal year ended March 31, 2022, were $49,626 and $51,310 for the fiscal year ended March 31, 2021.

 

Audit-Related Fees

 

There were no fees billed for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of the financial statements, other than those reported above, for the fiscal years ended March 31, 2022, and 2021.

 

 

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Tax Fees

 

There were no fees billed for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning in the fiscal years ended March 31, 2022, and 2021.

 

All Other Fees

 

There were no other fees billed for products or services provided by the principal accountants, other than those previously reported above, for the fiscal years ended March 31, 2022, and 2021.

 

Audit Committee

 

We do not have an Audit Committee; therefore, the Board of Directors has considered whether the non-audit services provided by our auditors to us are compatible with maintaining the independence of our auditors and concluded that the independence of our auditors is not compromised by the provision of such services. Our Board of Directors pre-approves all auditing services and permitted non-audit services, including the fees and terms of those services, to be performed for us by our independent auditor prior to engagement.

 

  38  

 

 

   

PART IV

 

Item 15. Exhibits, Financial Statement Schedules

 

Financial Statements

 

The following financial statements are filed with this 10-K:

 

Report of Independent Registered Public Accounting Firm

 

Balance Sheets at March 31, 2022 and 2021

 

Statements of Operations for the fiscal years ended March 31, 2022 and 2021

 

Statements of Changes in Stockholders’ Deficit for the fiscal years ended March 31, 2022 and 2021

 

Statements of Cash Flows for the fiscal years ended March 31, 2022 and 2021

 

Notes to Financial Statements

 

  39  

 

 

Exhibits

 

The following exhibits are included with this 10-K:

 

Incorporated by Reference            
Exhibit
Number
  Exhibit Description   Form   File No.   Exhibit   Filing Date   Filed
Herewith
3.1   Amended Articles of Incorporation   1-A POS   000-50773   99.1   10/1/19    
3.2   Certificate of Designation for Series A Convertible Stock   S-1   333-251846   3.2   12/31/20    
3.3   Amendment to Certificate of Designation for Series A Convertible Preferred Stock Dated March 17, 2022   8-K   000-11882   3.1   3/23/22    
3.4   Certificate of Designation for Series B Convertible Stock   S-1   333-251846   3.3   12/31/20    
3.5   Amendment to Certificate of Designation for Series B Convertible Preferred Stock   8-K   000-11882   3.1   12/3/20    
3.6   Amendment to Certificate of Designation for Series B Convertible Preferred Stock Filed August 25, 2021   8-K   000-11882   3.1   8/25/21    
3.7   Amendment to Certificate of Designation for Series B Convertible Preferred Stock Dated February 24, 2022   8-K   000-11882   3.1   3/2/22    
3.8   Bylaws   1-A POS   000-50773   99.2   10/1/19    
4.1   Specimen Stock Certificate   1-A POS   000-50773   99.3   10/1/19    
10.1*   Employment Agreement of Greg P. Bell   1-A POS   000-50773   99.3   10/1/19    
10.2*   Employment Agreement with Greg Bell dated November 23, 2020   S-1   333-251846   10.2   12/31/20    
10.3*   Chairman of the Board and Chief Executive Officer & President Agreement Dated Effective March 1, 2022 with Greg P. Bell                   X
10.4   Indemnification Agreement of Greg P. Bell   1-A POS   000-50773   99.4   10/1/19    
10.5   Employment Agreement of Paul D.H. LaBarre   1-A POS   000-50773   99.5   10/1/19    
10.6   Indemnification Agreement of Andrew Georgens   1-A POS   000-50773   99.6   10/1/19    
10.7   Indemnification Agreement of Paul Labarre   1-A POS   000-50773   99.7   10/1/19    
10.8   Indemnification Agreement of Hugh Darryl Metz   1-A POS   000-50773   99.8   10/1/19    
10.9   Repurchase of Shares Agreement between B2Digital, Incorporated and GS Capital Partners LLC dated January 28, 2020   8-K   000-11882   99.1   2/3/20    
10.10   Repurchase of Shares Agreement between B2Digital, Incorporated and GS Capital Partners LLC dated November 22, 2019   8-K   000-11882   99.1   12/5/19    
10.11   Common Stock Purchase Agreement dated December 23, 2020   S-1   333-251846   10.10   12/31/20    
10.12   Warrant Agreement dated December 23, 2020   S-1   333-251846   10.11   12/31/20    
10.13   Amendment to Common Stock Purchase Agreement dated February 18, 2021   10-K   000-11882   10.12   6/29/21    
10.14   Business Purchase Agreement and Management Services Agreement Termination Agreement dated effective November 1, 2021 with Mark Slater and Colosseum Combat LLC   10-Q   000-11882   10.1   2/14/22    
10.15   Common Stock Repurchase Agreement dated October 11, 2021 with Go Value Networks   10-Q   000-11882   10.2   2/14/22    
10.16   Common Stock Repurchase Agreement dated December 23, 2021, with Mike Davis   10-Q   000-11882   10.3   2/14/22    
16.1   Letter from Accell Audit & Compliance, P.A. Dated January 9, 2020 Regarding Change in Certifying Accountant   8-K   000-11882   16.1   1/9/20    
21.1   List of Subsidiaries                   X
23.1   Consent of Assurance Dimensions   POS Am.   333-251846   23.1   7/6/21    
23.2   Consent of Business Legal Advisors, LLC   S-1   333-251846   23.3   12/31/20    
31.1   Rule 13a-14(a) Certification by Principal Executive Officer                   X
32.1   Section 1350 Certification of Principal Executive Officer                   X

 

 

  40  

 

 

101.INS   XBRL Instance Document                   X
101.SCH   XBRL Taxonomy Extension Schema Document                   X
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document                   X
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document                   X
101.LAB   XBRL Taxonomy Extension Label Linkbase Document                   X
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document                   X
104   Cover Page Interactive Data File (formatted in Inline XBRL, and included in exhibit 101).                   X

 

 

*Management contract or compensatory plan or arrangement.

 

Item 16. Form 10-K Summary

 

None.

 

SIGNATURE PAGE FOLLOWS

 

 

  41  

 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  B2DIGITAL, INCORPORATED
     
     
Date: September 28, 2022 By: /s/ Greg P. Bell
    Greg P. Bell, Chief Executive Officer
    (Principal Executive Officer and Principal Financial Officer)

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

 

NAME   TITLE   DATE
         
/s/ Greg P. Bell   Director and Chairman   September 28, 2022
Greg P. Bell        
         
/s/ Paul LaBarre   Director   September 28, 2022
Paul LaBarre        
         
/s/ Hugh Darryl Metz   Director   September 28, 2022
Hugh Darryl Metz        
         
/s/ Andrew Georgens   Director   September 28, 2022
Andrew Georgens        

 

 

 

  42  

 

 

 

INDEX TO FINANCIAL STATEMENTS

 

    Page
Report of Independent Registered Public Accounting Firm (PCAOB No. 5036)   F-1
     
Consolidated Balance Sheets as of March 31, 2022 and 2021   F-2
     
Consolidated Statements of Operations for the years ended March 31, 2022 and 2021   F-3
     
Consolidated Statements of Changes of Stockholders’ Deficit for the years ended March 31, 2022 and 2021   F-4
     
Consolidated Statements of Cash Flows for the years ended March 31, 2022 and 2021   F-5
     
Notes to the consolidated financial statements    

 

 

 

 

 

  43  

 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board and Management

of B2Digital Incorporated

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheet of B2Digital Incorporated (the Company) as of March 31, 2022 and 2021 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for each of the two years in the period ended March 31, 2022, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2022 and 2021 and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

 

Explanatory Paragraph- Going Concern

 

The accompanying consolidated 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 suffered recurring losses. For the year ended March 31, 2022 the Company had a net loss of $11,276,819, had net cash used in operating activities of $6,518,124, and had negative working capital of $11,387,636. These factors 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 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 audits to obtain reasonable assurance about whether the consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provided a reasonable basis for our opinion.

 

Critical Audit Matters

 

The critical audit matters to be communicated, are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

 

We did not identify any critical audit matters that need to be communicated.

 

/s/ Assurance Dimensions

 

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

Margate, Florida

September 28, 2022

 

  F- 1  

 

 

B2Digital, Incorporated

Consolidated Balance Sheets

 

                 
    As of March 31, 2022     As of March 31, 2021  
Assets                
Current assets                
Cash and cash equivalents   $ 39,623     $ 122,176  
Notes receivable     6,096        
Prepaid expenses     49,363       10,681  
Total current assets     95,082       132,857  
                 
Operating lease right-of-use asset     73,085       1,575,792  
Property and equipment, net of accumulated depreciation     984,217       944,999  
Intangible assets, net of accumulated amortization     45,215       224,890  
Deposits     11,126        
Net assets held for sale     80,000        
Notes receivable – long term     35,400       35,400  
Total Assets   $ 1,324,125     $ 2,913,938  
                 
Liabilities & Stockholders' Deficit                
Current liabilities                
Accounts payable & accrued liabilities   $ 744,068     $ 253,663  
Deferred revenue     104,704       119,504  
Note payable- current maturity     295,601       158,200  
Note payable- in default     14,000       14,000  
Convertible notes payable, net of discount     6,035,090       1,074,733  
Derivative liabilities     3,831,191       1,137,623  
Due to shareholder     2,800        
Lease liability, current     123,319       264,165  
Total current liabilities     11,150,773       3,021,888  
                 
Lease liability - long-term     347,623       1,319,457  
Note payable - long-term     30,000       105,929  
Total Liabilities     11,528,396       4,447,274  
                 
Commitments and contingencies (Note 13)            
                 
Stockholders' Deficit                
Preferred stock, 50,000,000 shares authorized, 8,000,000 shares are undesignated                
Series A: 2,000,000 shares convertible into 240 shares of common stock issued and outstanding at March 31, 2022 and 2021     20       20  
Series B: 40,000,000 shares convertible into 80,000,000 shares of common stock and 0 shares issued and outstanding at March 31, 2022 and 2021, respectively;     400       400  
Common stock, $0.00001 par value; 20,000,000,000 shares authorized; 1,849,932,312 and 1,081,390,550 shares issued and outstanding at March 31, 2022 and 2021, respectively     17,846       10,815  
Additional paid in capital     10,251,530       7,652,677  
Accumulated deficit     (20,474,067 )     (9,197,248 )
Total Stockholders' Deficit     (10,204,271 )     (1,533,336 )
Total Liabilities and Stockholders' Deficit   $ 1,324,125     $ 2,913,938  

 

 

  F- 2  

 

 

 

B2Digital, Incorporated

Consolidated Statements of Operations

 

 

                 
    For the years ended  
    March 31,     March 31,  
    2022     2021  
Revenue:            
Live event revenue   $ 1,053,242     $ 303,812  
Gym revenue     1,449,060       647,490  
Total revenue     2,502,302       951,302  
                 
Operating expenses                
Sales and marketing     355,718       170,471  
Utilities     181,852       54,621  
Leasing expense     598,318       198,060  
Payroll expenses     2,259,092       552,036  
General and administrative     7,157,446       2,588,546  
Depreciation and amortization expense     462,004       186,063  
Total operating expenses     11,014,430       3,749,797  
                 
Loss from continuing operations     (8,512,128 )     (2,798,495 )
                 
Other income (expense):                
Gain on forgiveness of loan     23,303       10,080  
Gain on bargain purchase           91,870  
Grant income           16,500  
Loss on extinguishment of debt           (18,281 )
Loss on sale of assets     (11,444 )      
Loss on modification of debt           (566,261 )
Financing expense     (228,807 )      
Gain on extinguishment of debt with derivative liabilities     282,508       55,568  
Loss on goodwill impairment           (172,254 )
Change in fair value of derivative liabilities     (1,181,178 )     (1,332,661 )
Initial derivative expense     (45,485 )     (151,978 )
Interest expense     (1,603,588 )     (514,358 )
Total other expense     (2,764,691 )     (2,581,775 )
                 
Net loss   $ (11,276,819 )   $ (5,380,270 )
                 
Basic and diluted earnings per share on net loss   $ (0.008 )   $ (0.008 )
                 
Weighted average shares outstanding     1,449,504,359       684,096,652  

 

 

  F- 3  

 

 

 

B2Digital, Incorporated

Consolidated Statement of Changes in Stockholders' Deficit

For the Years Ended March 31, 2022 and 2021

 

 

                                                                         
    Series A Preferred Stock     Series B Preferred Stock     Common Stock     Additional Paid in Capital     Accumulated Deficit     Total  
    Shares     Amount     Shares     Amount     Shares     Amount                    
Balance March 31, 2020     2,000,000     $ 20           $       539,267,304     $ 5,394       3,600,197     $ (3,816,978 )   $ (211,367 )
                                                                         
Sale of common stock                             359,500,002       3,595       1,651,405             1,655,000  
                                                                         
Issuance of common stock for services                             15,733,333       157       89,176             89,333  
                                                                         
Conversion of notes payable                             166,889,911       1,669       1,426,038             1,427,707  
                                                                         
Issuance of warrants as financing costs                                         566,261             566,261  
                                                                         
Issuance of Series B Convertible Preferred Stock in exchange for services                 40,000,000       400                   319,600             320,000  
                                                                         
Net loss                                               (5,380,270 )     (5,380,270 )
                                                                         
Balance March 31, 2021     2,000,000     $ 20       40,000,000     $ 400       1,081,390,550     $ 10,815       7,652,677     $ (9,197,248 )   $ (1,533,336 )
                                                                         
Sale of common stock                             306,250,000       3,063       1,221,937             1,225,000  
                                                                         
Issuance of common stock in connection with notes payable                             87,200,000       218       206,776             206,994  
                                                                         
Issuance of common stock upon conversion of notes payable                             172,091,762       1,720       652,820             654,540  
                                                                         
Issuance of common stock for services                             227,500,000       2,275       623,775             626,050  
                                                                         
Shares repurchased                             (24,500,000 )     (245 )     (106,455 )           (106,700 )
                                                                         
Net loss                                               (11,276,819 )     (11,276,819 )
                                                                         
Balance March 31, 2022     2,000,000     $ 20       40,000,000     $ 400       1,849,932,312     $ 17,846       10,251,530     $ (20,474,067 )   $ (10,204,271 )

 

 

  F- 4  

 

 

 

B2Digital, Incorporated

Consolidated Statements of Cash Flows

 

 

                 
    For the years ended  
    March 31,     March 31,  
    2022     2021  
Cash Flows from Operating Activities                
Net Loss   $ (11,276,819 )   $ (5,380,270 )
                 
Adjustments to reconcile net loss to net cash used by operating activities:                
Stock compensation     626,050       409,333  
Depreciation and amortization     462,004       186,063  
Gain on conversion of debt     (39,208 )      
Loss on extinguishment of debt           18,281  
Loss on sale of assets     11,444        
Loss on impairment of assets     560,155        
Loss on goodwill impairment           172,254  
Gain on forgiveness of loan     (23,303 )     (14,477 )
Gain on bargain purchase           (91,870 )
Financing Expense     457,148       566,261  
Gain on extinguishment of debt     (282,508 )     (55,568 )
Amortization of debt discount     1,174,347       412,170  
Derivative expense     45,485       151,978  
Changes in fair value of compound embedded derivative     1,181,178       1,332,661  
Right-of-use asset/liability     57,506       7,830  
Changes in operating assets & liabilities                
Prepaid expenses     (38,682 )     (7,561 )
Deposits     (11,126 )      
Inventory           7,256  
Accounts payable and accrued liabilities     590,205       153,750  
Related party advances     2,800       (2,396 )
Deferred revenue     (14,800 )     82,041  
Net cash used by operating activities     (6,518,124 )     (2,052,264 )
                 
Cash Flows from Investing Activities                
Business acquisitions     (165,000 )     (215,000 )
Capital expenditures     (592,170 )     (500,737 )
Net cash used by investing activities     (757,170 )     (715,737 )
                 
Cash Flows from Financing Activities                
Proceeds from notes payable     150,000       122,766  
Proceeds from convertible notes payable     6,456,855       1,200,000  
Repayments related to payable due for business combinations           (15,000 )
Repayments of convertible notes payable     (540,733 )     (107,500 )
Payment of note payable     (23,681 )     (11,818 )
Purchase of cancelled stock     (74,700 )      
Issuance of common stock     1,225,000       1,655,000  
Net cash provided by financing activities     7,192,741       2,843,448  
                 
(Decrease) Increase in Cash     (82,553 )     75,447  
                 
Cash at beginning of period     122,176       46,729  
                 
Cash (and equivalents) at end of period   $ 39,623     $ 122,176  
                 
Supplemental Cash Flow Information                
Cash paid for interest   $ 23,238     $ 5,856  
Cash paid for income taxes   $     $  
                 
Non-cash investing and financing activities:                
Conversion of note payable and accrued interest to equity   $ 365,110     $ 1,427,707  
Initial recognition of derivative liability as debt discount   $ 1,279,181     $ 732,416  
Assets acquired on acquisition   $ 125,000     $  

 

 

  F- 5  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

 

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

 

We are the premier development league for mixed martial arts (“MMA”). We operate in two major branded segments: The B2 Fighting Series and The ONE More Gym Official B2 Training Facilities Network. We primarily derive revenues from live event ticket sales, pay-per-view ticket sales, content media marketing, and fitness facility memberships.

 

Our Live Events segment (the B2 Fighting Series) is primarily engaged with scheduling, organizing, and producing live MMA events, marketing those events, and generating both live audience and PPV ticket sales, as well as creatively marketing the archived content generated through its operations in this segment. We also plan to generate additional revenues over time from endorsement deals with global brands as its audience grows. The B2 Fighting Series is licensed in 18 U.S. states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate.

 

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 Fitness Facility segment operates primarily through the ONE More Gym Official B2 Training Facilities Network. We currently operate two ONE More Gym locations.

 

Basis of Presentation and Consolidation

 

The Company has ten wholly owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, ONE More Gym LLC, One More Gym Merrillville LLC, One More Gym Valparaiso LLC, One More Gym Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC. Subsequent to March 31, 2022, the Company disposed of ONE More Gym LLC, One More Gym Merrillville LLC and One More Gym Valparaiso LLC. This is further detailed in subsequent events footnote 14 of the financial statements.

 

The consolidated financial statements, which include the accounts of the Company and its ten 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 ten 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 U.S. dollars. The fiscal year end is March 31.

 

The Company changed the presentation of prior year cost of sales to operating expenses. It’s the opinion of management that with both B2’s business segment's expenses are operating in nature. The nature of the gym segment’s expenses for payroll, leasing and utilities do not directly derive income in the form of memberships and services generated by the gym on a daily basis. Secondarily, the nature of the MMA LIVE Fights segment’s expenses also does not directly affect or derive income in the form of ticket, merchandise and concession sales generated by live MMA events. Therefore, we believe the traditional cost of goods sold expense items should be eliminated from both business segments statements and all expenses should be reported as operating expense to more accurately reflect the true nature of the business. Traditional line items such as raw materials, labor associated with the production of finished goods and depreciation and amortization of machinery and intangibles associated with converting raw materials into finished goods do not exist in either of these business segments. As such for the year ended March 31, 2021, approximately $308,000 was reclassified as operating expense.

 

 

  F- 6  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

NOTE 2 - ACCOUNTING POLICIES

 

The significant accounting policies of the Company are as follows:

 

Basis of Accounting

The accompanying consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”).

 

Use of Estimates

Management uses estimates and assumptions in preparing the consolidated 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. The most significant assumptions and estimates relate to the valuation of derivative liabilities, the valuation of long-lived and intangible assets and the valuation of assets and liabilities acquired through business combinations. Actual results could differ from these estimates and assumptions.

  

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 or $250,000. The Company did not have any cash in excess of FDIC limits at March 31, 2022 and 2021, respectively.

 

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. The three levels of valuation hierarchy are defined as follows:

 

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

 

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.

 

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.

 

 

  F- 7  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

Assets Held for Sale

We consider properties to be Assets held for sale when management approves and commits to a plan to dispose of a property or group of properties. The property held for sale prior to the sale date is separately presented on the balance sheet as Assets held for sale. During the fourth quarter of fiscal 2022 management initiated the sale of the gyms located in Indiana: One More Gym Kokomo, One More Gym Valparaiso and One More Gym Merrillville. We completed the sale during the first quarter of fiscal 2023 with proceeds of $80,000, reflecting an impairment against the assets of $162,298. We have no additional assets held for sale.

 

Long-Lived Assets

Management reviews long-lived assets, including finite-lived intangible assets, for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the related assets are estimated over the asset’s useful life on an undiscounted basis. For assets held for use, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If the evaluation indicates that the carrying value of the asset may not be recoverable, the potential impairment is measured using fair value. Impairment losses for assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. The Company recorded impairment of $397,857 against the right of use assets for three leases.

 

Other income

During the twelve months ended March 31, 2022, and March 31, 2021, the Company received $0 and $16,500, respectively in grant income due to COVID-19 relief. The Company has recorded this grant income under other income in the Statement of Operations.

 

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.

 

Live event revenue

 

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. Revenue associated with B2FS (Fight Club) consist primarily of ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue.

 

Gym revenue

 

Revenues in connection with Company owned Fitness Clubs consist primarily of monthly membership dues and ancillary products. Monthly membership dues are recognized during the monthly membership period and any dues paid not correlating to the current period are recorded in deferred revenue. Ancillary products are recorded in the period the services or products are delivered.

 

 

  F- 8  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

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, 2022, the Company has an expected loss. Due to uncertainty of realization for these losses, a full valuation allowance is recorded. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

 

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, consequently, believes that its accounts receivable credit risk exposure beyond such allowance is limited. In addition, revenue processed through the Company's payment processor are guaranteed further mitigating Credit Risk.

 

Earnings Per Share (EPS)

The Company utilize FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options, restricted stock awards and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. As of March 31, 2022, the convertible notes are indexed to 3,606,309,640 shares of common stock.

 

The following table sets for the computation of basic and diluted earnings per share the years ended March 31, 2022 and 2021:  

               
   

March 31,

2022

   

March 31,

2021

 
Basic and diluted                
Net loss   $ (11,276,819 )   $ (5,380,270 )
                 
Net loss per share                
Basic   $ (0.008 )   $ (0.008 )
Diluted   $ (0.008 )   $ (0.008 )
                 
Weighted average number of shares outstanding:                
Basic & diluted     1,449,504,359       684,096,652  

 

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.

 

 

  F- 9  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

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 and stock awards, whether held by employees or others. As of March 31, 2022, there were no options outstanding.

 

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.

 

During the years ended March 31, 2022 and 2021, the Company recorded $626,050 and $409,333 in stock-compensation expense, respectively.

 

Leases

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606.

 

On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.

 

Operating lease right of use (“ROU”) assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is presented on the statements of operations.

 

As permitted under the new guidance, the Company has made an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of twelve months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term.

 

Recently Adopted Accounting Pronouncements

 

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated 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.

 

 

  F- 10  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

NOTE 3 – GOING CONCERN

 

The accompanying consolidated financial statements have been prepared on a going concern basis. For the 12 months ended March 31, 2022, the Company had a net loss of $(11,276,819), had net cash used in operating activities of $6,518,124, had negative working capital of $(11,387,636), accumulated deficit of $(20,474,067) and stockholders’ deficit of $(10,204,271). These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 4 – REVENUE

 

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. Live event revenue primarily includes ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue. Gym revenue comprises primarily of membership dues and subscription. Other gym revenue includes personal training, group fitness and meal planning.

 

Information about the Company’s net sales by revenue type for the years ended March 31, 2022 and 2021 are as follows: 

               
    For the year ended  
    March 31,     March 31,  
    2022     2021  
Live events   $ 1,053,242     $ 303,812  
Gym revenue     1,449,060       647,490  
Net sales   $ 2,502,302     $ 951,302  

 

All revenue is derived in the United States.

 

Information about the Company’s deferred revenue for the years ended March 31, 2022 and 2021 are as follows: 

           
    As of  
    March 31,     March 31,  
    2022     2021  
Balance at beginning of year   $ 119,504     $ 13,992  
Deferral of revenue     1,079,579       389,665  
Recognition of unearned revenue     (1,094,379 )     (284,153 )
Balance at end of year   $ 104,704     $ 119,504  

 

Deferral of revenue in the years ended March 31, 2022 and 2021 was $104,704 and $119,504, respectively. This deferred revenue represents deferred gym memberships fees and tickets pre-sold for live events, which pertain to performance obligations not realized as of March 31, 2022, and 2021.

 

Revenue recognized in the years ended March 31, 2022 and 2021, which was included in the unearned revenue liability balance at the beginning of the year, was $1,094,379 and $284,153, respectively. This revenue represents gym membership fees and live event sales for performance obligations met in the years ended March 31, 2022 and 2021.

 

 

  F- 11  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

NOTE 5 – PROPERTY AND EQUIPMENT

 

Property and equipment, net, consisted of the following at March 31, 2022 and 2021: 

               
    March 31, 2022     March 31, 2021  
             
Gym equipment   $ 229,821     $ 420,880  
Cages     151,009       132,350  
Event assets     122,795       92,117  
Furniture and fixtures     19,366       16,766  
Production truck gear     11,740       11,740  
Production equipment     80,965       32,875  
Venue lighting system     38,266       37,250  
Leasehold improvements     126,851       43,712  
Electronics hardware and software     181,720       124,624  
Trucks trailers and vehicles     289,028       197,921  
      1,251,561       1,110,235  
Less:  accumulated depreciation     (267,344 )     (165,236 )
    $ 984,217     $ 944,999  

 

Depreciation expense related to these assets for the years ended March 31, 2022 and 2021 amounted to $293,275 and $114,386, respectively.

 

NOTE 6 – INTANGIBLE ASSETS

 

Intangible assets, net, consisted of the following at March 31, 2022 and 2021: 

               
    As of     As of  
    March 31,
2022
    March 31,
2021
 
             
Licenses   $ 142,248     $ 142,248  
Software/website development     12,585       12,585  
Customer relationships     60,322       170,031  
      215,155       324,864  
Less:  accumulated amortization     (169,940 )     (99,974 )
    $ 45,215     $ 224,890  

 

Licenses are amortized over five years, whereas customer relationships and software/website development are amortized over three years. Amortization expense related to these assets for the years ended March 31, 2022 and 2021 amounted to $168,729 and $71,677, respectively.

 

Estimated amortization expense for each of the next five years: 

       
Fiscal year ended March 31, 2023   $ 24,303  
Fiscal year ended March 31, 2024     20,912  
Total   $ 45,215  

 

 

  F- 12  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

NOTE 7 – BUSINESS ACQUISITIONS

 

Club Fitness, LLC

 

On April 1, 2021, the Company entered into an agreement for the acquisition of 100% of the equity interest in Club Fitness LLC. The purchase price was $125,000 in cash. The acquisition closed in April 2021. 

       
       
Consideration      
Cash   $ 125,000  
         
Fair values of identifiable net assets:        
Property & equipment:        
Gym equipment   $ 76,689  
         
Intangible assets:        
Customer relationships     46,311  
         
Total fair value of identifiable net assets   $ 125,000  

 

The Company analyzed the acquisition under applicable guidance and determined that the acquisition should be accounted for as a business combination. The fair value of the net identifiable assets consisted of gym equipment of $76,689. The Company assigned a fair value of $46,311 in intangible assets – customer relationships. The intangible assets – customer relationships are being amortized over their estimated life, currently expected to be three years.

  

The Company analyzed the acquisition under applicable guidance and determined that the acquisition should be accounted for as a business combination. The intangible assets - licenses are being amortized over their estimated life, currently expected to be five years.

 

On January 25, 2022, the Company entered into an agreement for the acquisition of 100% of the equity interest in Spartan Fitness, however, on August 2, 2022 both parties mutually agreed to terminate the acquisition/sale of Spartan Fitness. Consequently, the Company recorded stock compensation expense of $150,000 in connection with the issuance of 50,000 shares of B2Digital common stock. Also, the Company recorded $293,727 in management expense paid to Chris Conolley, the owner of Spartan Fitness.

 

NOTE 8 - NOTES PAYABLE

 

The following is a summary of notes payable as March 31, 2022 and 2021: 

               
    As of     As of  
    March 31,     March 31,  
    2022     2021  
Notes payable - current maturity:                
Note Payable PPP SBA Loan           15,600  
SBA EIDL Loan     10,000       10,000  
SBA Loan Payable B2Digital     97,200       97,200  
GS Capital, LLC     153,000        
SBA Loan (Hillcrest)     35,400       35,400  
Notes payable – in default:                
Emry Capital $14,000, 4% loan with principal and interest due April, 2021     14,000       14,000  
Notes payable – long term:                
WLES LP LLC $60,000, 5% loan due January 15, 2022     30,000       30,000  
Brian Cox 401K           12,882  
SBA Loan (One More Gym, LLC)           63,047  
                 
Total notes payable     339,600       278,129  
Less: long-term     (30,000 )     (105,929 )
Total   $ 309,600     $ 172,200  

 

 

  F- 13  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

During the year ended March 31, 2022, the Company repaid $12,882 on its loan payable to Brian Cox 401K.

 

During the year ended March 31, 2022, the Company repaid $11,868 on its SBA Loan (One More Gym, LLC). The Government paid another $6,634 in principle and $1,069 in interest as part of COVID relief. As a result, the Company recorded $7,703 in gain on forgiveness.

 

During the year ended March 31, 2022, the Company recorded a loss on impairment partially offset by the SBA loan (One More Gym, LLc) for the remaining balance of $44,546.

 

During year ended March 31, 2022, the government forgave $15,600 in principle on its PPP SBA Loan. As a result, the Company recorded $15,600 in gain on forgiveness of loan.

 

As of March 31, 2022, the Emry Capital note is in default. However, the note is not subject to any default provisions.

 

On May 8, 2020, WLES LP LLC converted $30,000 of its $60,000 notes payable into 12,000,000 shares of common stock. As a result, the Company recorded a loss on settlement of debt in the amount of $18,281.

 

During the year ended March 31, 2021, the Company repaid $9,082 on its loan payable to Brian Cox 401K.

 

During the year ended March 31, 2021, the Company repaid $5,047 on its SBA Loan (One More Gym, LLC). The Government paid another $6,916 as part of COVID relief.

 

During year ended March 31, 2021, the bank forgave $6,949 in principal and $3,132 in accrued interest on its SBA Loan (One More Gym, LLC). As a result, the Company recorded $10,080 in gain on forgiveness of loan.

 

As of March 31, 2021, the Emry Capital note is in default. However, the note is not subject to any default provisions.

 

NOTE 9 – CONVERTIBLE NOTE PAYABLE

 

The following is a summary of convertible notes payable as of March 31, 2022:   

                                               
 
Note*   Issuance Date     Maturity     Coupon     Face Value    

Unamortized

Discount

    Carrying Value  
Note 7     3/10/2020       4/18/2022       8%      $ 47,800      $      $ 47,800  
Note 8     8/4/2020       4/18/2022       8%       156,000             156,000  
Note 9     10/2/2020       4/18/2022       8%       205,000             205,000  
Note 10     10/15/2020       4/18/2022       8%       172,000             172,000  
Note 11     11/2/2020       4/18/2022       8%       69,000             69,000  
Note 12     11/12/2020       4/18/2022       8%       69,000             69,000  
Note 14     12/10/2020       4/18/2022       8%       80,000             80,000  
Note 16     1/14/2021       4/18/2022       8%       107,000             107,000  
Note 17     1/27/2021       4/18/2022       8%       60,000             60,000  
Note 20     4/30/2021       4/30/2022       8%       104,000       339       103,661  
Note 21     5/25/2021       5/25/2022       8%       104,000       1,039       102,961  
Note 22     6/24/2021       6/24/2022       8%       185,652       16,440       169,212  
Note 24     7/24/2021       7/24/2022       8%       265,000       26,315       238,685  
Note 25     8/04/2021       8/4/2022       8%       129,800       13,599       116,201  
Note 26     8/11/2021       8/11/2022       8%       151,500       15,380       136,120  
Note 27     8/16/2021       8/16/2022       8%       88,400       12,288       76,112  
Note 28     8/20/2021       8/20/2022       8%       151,500       17,520       133,980  
Note 29     8/30/2021       8/30/2022       8%       140,650       16,652       123,998  

 

 

  F- 14  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

 

Note 30     9/02/2021       9/02/2022       8%       216,385       28,641       187,744  
Note 31     9/17/2021       9/17/2022       8%       270,480       31,151       239,329  
Note 32     9/30/2021       9/30/2022       8%       270,480       34,045       236,435  
Note 34     10/26/2021       10/26/2022       8%       270,480       38,932       231,548  
Note 35     10/30/2021       10/30/2022       8%       46,800       34,584       12,216  
Note 36     11/03/2021       11/03/2022       8%       270,480       27,491       242,989  
Note 37     11/16/2021       11/16/2022       8%       324,576       95,326       229,250  
Note 38     11/30/2021       11/30/2022       8%       270,480       60,147       210,333  
Note 39     12/10/2021       12/10/2022       8%       601,000       135,594       465,406  
Note 40     12/15/2021       12/15/2022       8%       270,480       66,910       203,570  
Note 41     12/23/2021       12/23/2022       8%       54,100       13,832       40,268  
Note 42     1/4/2022       1/4/2023       8%       270,480       32,311       238,169  
Note 43     1/12/2022       1/12/2023       8%       300,000       255,936       44,064  
Note 44     1/19/2022       1/19/2023       8%       270,480       46,654       223,826  
Note 45     2/02/2022       2/02/2023       8%       270,480       37,049       233,431  
Note 46     2/03/2022       2/03/2023       8%       425,000       362,619       62,381  
Note 47     2/15/2022       2/15/2023       8%       270,480       28,517       241,963  
Note 48     2/24/2022       2/24/2023       8%       211,640       180,545       31,095  
Note 49     3/01/2022       3/01/2023       8%       120,000       105,462       14,538  
Note 50     3/01/2022       3/01/2023       8%       270,480       37,434       233,046  
Note 51     3/16/2022       3/16/2023       8%       270,480       35,721       234,759  
Note 52     3/22/2022       3/22/2023       8%       120,000       108,000       12,000  
 Total                           $ 7,951,563     $ 1,916,473     $ 6,035,090  

 

* Notes 1, 2, 3, 4, 5 and 6 in the amounts of $82,000, $208,000, $27,000, $62,000, $202,400 and $78,000, respectively, were fully converted as of March 31, 2022.

 

* On October 18, 2021, the maturity dates of each of Notes 7, 8, 9, 10, 11, 12, 14, 16, and 17 were extended to April 18, 2022 and the lender waived all penalty interest for non-payment.

 

* On July 7, 2022, the maturity date of each of Notes 8, 9, 10, 11, 12, 14, 16, 17, 20, 21, 22, 24, 25, 26, 27, 28, 29, 30, 31, 32, 34, 36, 37, 38, & 40 were extended to December 31, 2022, and the lender waived all penalty interest for non-payment.

 

*Note 23 in the amount of $180,400 was paid in cash on November 23, 2021. The Company recognized a gain on extinguishment of debt in the amount of $32,544, related to the write off of the derivative liability.

 

*Note 33 in the amount of $86,900 was paid in cash on February 7, 2022. The Company recognized a gain on extinguishment of debt in the amount of $74,059

 

Between April 1, 2021, and March 31, 2022, the Company issued to “accredited investors,” Convertible Promissory Notes aggregating a principal amount of $7,253,063. The Company received an aggregate net proceeds of $6,419,958 after $689,498 in original note discount and $40,250 in legal fees. The Company has agreed to pay interest on the unpaid principal balance at the rate of eight percent (8%) per annum from the dates on which Notes are issued until the same becomes due and payable, whether at maturity or upon acceleration, prepayment or otherwise. The Company shall have the right to prepay the Notes, provided it makes a payment as set forth in the agreements.

 

The outstanding principal amount of the Notes is convertible into the Company’s common stock at the lender’s option at $0.01 per share for the first six months of the term of the Notes. The notes have varying conversion rates. After the six-month anniversary, the conversion price is equal to 63%-70% of the average of the three lowest trading prices of the Company’s common stock. Five of 40 notes outstanding have a fixed conversion rate of $0.002.

 

 

  F- 15  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

The following is a summary of convertible notes payable as of March 31, 2021:

 

Note*   Inception Date   Maturity   Coupon   Face Value     Unamortized Discount     Carrying Value  
Note 5   1/27/2020   1/27/2021   8%   $ 202,400     $ -     $ 202,400  
Note 6   2/19/2020   2/19/2021   8%     85,800       -       85,800  
Note 7   3/10/2020   3/10/2021   8%     85,800       -       85,800  
Note 8   8/4/2020   8/4/2021   8%     156,000       22,400       133,600  
Note 9   10/2/2020   10/2/2021   8%     205,000       68,000       137,000  
Note 10   10/15/2020   10/15/2021   8%     172,000       45,911       126,089  
Note 11   11/2/2020   11/2/2021   8%     69,000       21,287       47,713  
Note 12   11/12/2020   11/12/2021   8%     69,000       13,892       55,108  
Note 14   12/10/2020   12/10/2021   8%     80,000       24,738       55,262  
Note 15   12/29/2020   12/29/2021   8%     55,650       43,660       11,990  
Note 16   1/14/2021   1/14/2022   8%     107,000       31,364       75,636  
Note 17   1/27/2021   1/27/2021   8%     60,000       21,437       38,563  
Note 18   2/3/2021   2/3/2022   8%     45,250       38,608       6,642  
Note 19   2/12/2021   2/12/2022   8%     69,000       55,870       13,130  
                $ 1,461,900     $ 387,167     $ 1,074,733  

 

Accounting Considerations

 

The Company has accounted for the Notes as a financing transaction, wherein the net proceeds that were received were allocated to the financial instrument issued. Prior to making the accounting allocation, the Company evaluated the agreement under ASC 815 Derivatives and Hedging (“ASC 815”). ASC 815 generally requires the analysis embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The material embedded derivative features consisted of the embedded conversion option and default puts. The conversion option and default puts bear risks of equity which were not clearly and closely related to the host debt agreement and required bifurcation. The contracts do not permit the Company to settle in registered shares and the contracts also contain make-whole provisions both of which preclude equity classification. Current accounting principles that are also provided in ASC 815 do not permit an issuer to account separately for individual derivative terms and features that require bifurcation and liability classification. Rather, such terms and features must be and were bundled together and fair valued as a single, compound embedded derivative.

 

The net proceeds were allocated to the compound embedded derivative and original issue discount. The notes will be amortized up to its face value over the life of Notes based on an effective interest rate. Amortization expense and interest expense for the year ended March 31, 2022, is as follows: 

                               
Note   Interest Expense     Accrued Interest     Amortization of Debt Discount     Unamortized  
Note 5     17,913                    
Note 6     9,821                    
Note 7     15,529       21,504              
Note 8     28,987       30,867       22,400        
Note 9     26,510       34,597       68,000        
Note 10     21,630       27,925       45,911        
Note 11     8,337       10,590       21,287        
Note 12     8,148       10,250       13,892        
Note 14     8,833       10,779       24,738        
Note 15     12             43,660        
Note 16     11,113       12,570       31,364        
Note 17     6,190       6,664       21,437        
Note 18     1,180             38,608        
Note 19     2,027             55,870        

 

  F- 16  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

 

Note 20     7,636       7,636       3,661       339  
Note 21     7,066       7,066       5,041       1,039  
Note 22     11,393       11,393       41,089       16,440  
Note 23     8,019             8,928        
Note 24     14,346       14,347       45,050       26,315  
Note 25     6,799       6,799       23,111       13,599  
Note 26     7,704       7,704       26,234       15,380  
Note 27     4,398       4,398       19,316       12,288  
Note 28     7,405       7,405       29,196       17,520  
Note 29     6,566       6,566       20,054       16,652  
Note 30     9,960       9,960       33,843       28,641  
Note 31     12,449       12,450       37,679       31,151  
Note 32     10,790       10,790       29,760       34,045  
Note 33     3,314             78,210        
Note 34     9,663       9,664       24,329       38,932  
Note 35     1,600       1,600       7,535       34,584  
Note 36     8,774       8,774       17,908       27,491  
Note 37     9,604       9,604       36,584       95,326  
Note 38     7,173       7,173       24,855       60,147  
Note 39     15,939       15,939       58,366       135,594  
Note 40     6,284       6,284       26,965       66,910  
Note 41     1,162       1,162       3,775       13,832  
Note 42     5,098       5,098       5,983       32,311  
Note 43     5,195       5,195       44,034       255,936  
Note 44     4,209       4,209       8,317       46,654  
Note 45     3,379       3,379       6,777       37,049  
Note 46     5,216       5,216       62,381       362,619  
Note 47     2,608       2,608       5,332       28,517  
Note 48     1,624       1,624       31,065       180,545  
Note 49     789       789       3,663       105,462  
Note 50     1,779       1,779       3,135       37,434  
Note 51     889       889       3,004       35,721  
Note 52     237       237       12,000       108,000  
Total   $ 375,298     $ 363,483     $ 1,174,347     $ 1,916,473  

 

Debt conversions 

 

The following table illustrates the debt converted and the associated gain or loss: 

                           
Note Conversion Date Shares issued in conversion Fair value of shares  Face Value Accrued Interest

Total

Debt

Derivative liability Net (gain) / loss
Note 5 October 5, 2021 44,293,306   199,320   100,000   13,479 $ 113,479   87,568   (1,727)
Note 5 October 19, 2021 37,306,982   182,058   102,400   15,318   117,718   102,328   (37,988)
Note 6 December 28, 2021 33,658,688   90,878   40,000   5,944   45,944   45,268   (334)
Note 7 February 2, 2022 27,717,906   80,382   38,000   5,947   43,947   36,550   (115)
Note 6 March 3, 2022 29,114,880   101,902   38,000   6,022   44,022   56,924   956
    172,091,762  $ 654,540  $ 318,400  $ 46,710  $ 365,110  $ 328,638  $ (39,208)

 

 

  F- 17  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

During the year ended March 31, 2022, the Company repaid Notes 15, 18, 19, 23 & 33 in cash. The principal balance was $437,200 and the accrued interest was $18,059. The prepayment fee was $85,474. The Company repaid $540,733. As of the repayment dates, the derivative liability related to Notes was $243,300. As a result, the Company recorded a gain of extinguishment in the amount of $243,300.

 

Between the gain on extinguishment of $39,208 related the conversions above and the gain on extinguishment related to the repayment, the net gain was $282,508.

 

NOTE 10 –DERIVATIVE FINANCIAL INSTRUMENTS

 

The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of March 31, 2022: 

               
    March 31, 2022  
The financings giving rise to derivative financial instruments   Indexed
Shares
    Fair
Values
 
Compound embedded derivatives     3,418,910,016     $ (3,831,191 )
Total     3,418,910,016     $ (3,831,191 )

 

The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of March 31, 2021:

 

    March 31, 2021  
The financings giving rise to derivative financial instruments   Indexed
Shares
    Fair
Values
 
Compound embedded derivatives     347,942,680     $ (1,137,623 )
Total     347,942,680     $ (1,137,623 )

 

The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the years ended March 31, 2022 and 2021:

 

    March 31,     March 31,  
    2022     2021  
             
Compound embedded derivatives   $ (1,181,178 )   $ (1,332,661 )
Day one derivative loss     (45,485 )     (151,978 )
Total   $ (1,226,663 )   $ (1,484,639 )

 

The Company’s Convertible Promissory Notes issued between October 4, 2019 and March 22, 2022 gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option.

 

Current accounting principles that are provided in ASC 815 - Derivatives and Hedging require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. In addition, the standards do not permit an issuer to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation and liability classification as derivative financial instruments. Rather, such terms and features must be bundled together, and fair valued as a single, compound embedded derivative. The Company has selected the Monte Carlo Simulations valuation technique to fair value the compound embedded derivative because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving compound embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk-free rates. The Monte Carlo Simulations technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators.

 

 

  F- 18  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

Significant inputs and results arising from the Monte Carlo Simulations process are as follows for the embedded derivatives that have been bifurcated from the Convertible Notes and classified in liabilities: 

   
  March 31, 2022  
Quoted market price on valuation date $0.0025  
Contractual conversion rate $0.001512 - $0.01  
Contractual term to maturity 0.23 Years – 0.98 Years  
Market volatility:    
Equivalent Volatility 123.46% - 374.31%  
Interest rate 8.0%  

 

The following table reflects the issuances of compound embedded derivatives and the changes in fair value inputs and assumptions related to the compound embedded derivatives during the period ended March 31, 2022 and 2021. 

               
    March 31,     March 31,  
    2022     2021  
             
Beginning balance   $ 1,137,623     $ 58,790  
Issuances:                
Compound embedded derivatives     2,038,843       732,416  
Conversions     (328,638 )     (859,352 )
Derivative extinguished / debt repaid in cash     (243,300 )     (126,892 )
Loss (gain) on changes in fair value inputs and assumptions reflected in income     1,181,178       1,332,661  
Day one derivative expense     45,485        
Total   $ 3,831,191     $ 1,137,623  

 

NOTE 11 - 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. All 40,000,000 of Series B are issued and outstanding. Each share of Series B is convertible into 8 shares of common stock. The Series B 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 B Preferred Stock is entitled to 120 votes for each share of Series B Preferred Stock held by such shareholder.

 

Common Stock Issuances for the year ended March 31, 2021

 

On April 23, 2020, the Company issued 4,292,915 shares of stock to GS Capital in exchange for the conversion of $7,341 in convertible note principal.

 

On May 8, 2020, the Company issued 12,000,000 shares of stock to WLES LP LLC in exchange for the conversion of $30,000 in convertible note principal. The 12,000,000 shares were valued at $48,281 resulting in a loss on settlement of debt in the amount of $18,281.

 

 

  F- 19  

 

 

B2Digital, Incorporated

Notes to Consolidated Financial Statements

March 31, 2022 and 2021

 

On June 16, 2020, the Company issued 4,000,000 shares of common stock to Veyo Partners LLC in exchange for investor relation services valued at $14,400 or $0.0036 per share.

  

On July 10, 2020, the Company issued 4,000,000 shares of common stock to Veyo Partners LLC in exchange for investor relation services valued at $14,000 or $0.0035 per share.

 

On July 31, 2020, GS Capital converted $7,500 in principal and $488 in accrued interest of the October 4, 2019 $84,000 face value note into 5,071,885 shares of common stock. The 5,071,885 shares were valued at $16,558. The Company recorded the removal of the $7,500 in principal, $488 in interest, and $8,570 in derivative liabilities resulting in no gain or loss.

 

On August 10, 2020, the Company issued 4,000,000 shares of common stock to Veyo Partners LLC in exchange for investor relation services valued at $34,800 or $0.0087 per share.

 

On August 13, 2020, the Company sold 13,333,334 shares of common stock for $100,000 or $0.0075 per share.

 

On August 19, 2020, the Company sold 13,333,334 shares of common stock for $100,000 or $0.0075 per share.

 

On August 20, 2020, GS Capital converted $12,500 in principal and $871 in accrued interest of the October 4, 2019, $84,000 face value note into 8,468,394 shares of common stock. The 8,468,394 shares were valued at $155,914. After recording the removal of the $12,500 in principal, $871 in interest, and $138,647 in derivative liabilities, the Company recorded $3,896 as loss on extinguishment of debt.

 

On September 1, 2020, the Company sold 13,333,334 shares of common stock for $100,000 or $0.0075 per share.

 

On September 9, 2020, GS Capital converted $55,000 in principal and $4,075 in accrued interest of the October 4, 2019, $84,000 face value note into 12,123,426 shares of common stock. The 12,123,426 shares were valued at $262,363. After recording the removal of the $55,000 in principal, $4,075 in interest, and $142,990 in derivative liabilities, the Company recorded $60,298 as loss on extinguishment of debt.

 

On September 14, 2020, the Company sold 22,000,000 shares of common stock for $165,000 or $0.0075 per share.

 

On September 30, 2020, the Company issued 3,733,333 shares of common stock for services valued at $26,133 or $0.0070 per share.

 

On October 2, 2020, GS Capital converted $108,000 in principal, $7,196 in accrued interest, and $750 in conversion fees of the October 31, 2019 $208,000 face value note into 33,934,758 shares of common stock. The 33,934,758 shares were valued at $239,298. After recording the removal of the $108,000 in principal, $7,196 in interest, $750 in conversion fees and $80,674 in derivative liabilities, the Company recorded $42,678 as loss on extinguishment of debt.

 

On October 21, 2020, GS Capital converted $45,000 in principal, $3,136 in accrued interest, and $350 in conversion fees of the October 31, 2019 $208,000 face value note into 14,521,245 shares of common stock. The 14,521,245 shares were valued at $98,279. After recording the removal of the $45,000 in principal, $3,136 in interest, $350 in conversion fees and $39,128 in derivative liabilities, the Company recorded $10,665 as loss on extinguishment of debt.

 

On November 25, 2020, GS Capital converted $35,000 in principal, $2,754 in accrued interest, and $350 in conversion fees of the October 31, 2019 $208,000 face value note into 15,120,623 shares of common stock. The 15,120,623 shares were valued at $84,823. After recording the removal of the $