UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

Commission File Number 000-50547

SUNDANCE STRATEGIES, INC.

(Exact name of registrant as specified in its charter)

(801) 717-3935

(Registrant’s telephone number, including area code)

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

None

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

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 or a 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.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒

As of FebruaryAugust 14, 2023, the registrant had 41,408,441 shares of common stock, par value $0.001, issued and outstanding.

SUNDANCE STRATEGIES, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets

The accompanying notes are an integral part of these condensed consolidated financial statements.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Operations

(Unaudited)(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated financial statements.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Six and Nine Months Ended December 31,June 30, 2023 and 2022 and 2021

(Unaudited)(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated financial statements.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

(Unaudited)(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated financial statements.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2022June 30, 2023

(1) BASIS OF PRESENTATION, ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022,2023, which was filed with the SEC on June 29, 2022.2023. The results from operations for the three and nine-month periodsthree-month period ended December 31, 2022,June 30, 2023, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2023.2024. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, stockholders’ equity, and cash flows at June 30, 20222023 and for all periods presented herein have been made.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s financial statements and the accompanying notes. Actual results could materially differ from those estimates.

Organization and Nature of Operations

Sundance Strategies, Inc. (formerly known as Java Express, Inc.) was organized under the laws of the State of Nevada on December 14, 2001, and engaged in the retail selling of beverage products to the general public until these endeavors ceased in 2006; it had no material business operations from 2006, until its acquisition of ANEW LIFE, INC. (“ANEW LIFE”), a subsidiary of Sundance Strategies, Inc. (“Sundance Strategies”, “the Company”, “we” or “our”).

Our historical business model has focused on purchasing or acquiring life insurance policies and residual interests in or financial products tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part of or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace, often referred to as the “life settlements market.”

During the latter part of the fiscal year ended March 31, 2021, the Company began developing an additional business offering, providing professional services to specialty structured finance groups, bond issuers and life settlement aggregators. The Company has now assembled an experienced team from the life settlement marketplace, as well as from other areas such as financial services and public financial markets. As a professional services provider, the Company applies industry best practices to advise on the selection of specific portfolios of life insurance policies that are tailored to meet the needs of its clients. The Company’s clients may include bond issuers, bond investors, or other structured finance product issuers. The Company has developeddevelops strategies and methodologies which include the acquisition of life insurance portfolios, then uses common structured finance techniques and proprietary analytics to structure bonds for issuances, including principal protected bonds. The Company’s goal is to deliver long-term value and profitability to shareholders by growing the Company’s professional services business and asset base, resulting in the ability to pay dividends to its shareholders.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2022

During the latter part of the year ended March 31, 2021, the Company began working closely with bond placement agents and aggregators to establish various aspects of a proprietary, investment grade bond offering. In this arrangement, the Company participates as the sole originator in the role of structuring and advising on the structure of the proprietary bond instrument. Included in the role of structuring financial assets, the Company uses proprietary analytics to establish the makeup of the rated instrument, including but not limited to, life settlement assets (life insurance policies) and managed cash, and implements a process of selective assembly of the underlying assets and cash management that will meet the policy requirements and analytics. The Company continues to provideprovides current and ongoing resources for all analytics, as well as advisement support for the investment and non-investment grade ratings for the managed asset pool and the managed cash accounts. Acting in anIn its advisory role, the Company is reimbursed for all expenses associated with the structuring and preparation of any bond offering, will receive an advisory payment upon the closing of any bond offering, and then will hold residual rights on the balance of assets once the bond is retired.

During the year ended March 31, 2022, the Company and US Capital Global Securities LLC, an affiliate of US Capital Global, entered into an arrangement wherein the Company is the lead advisor and lead originator of tailored life insurance portfolios to be used in a life insurance-linked bond offering (“bond offering”) of between $250 million to $500 million. US Capital Global Securities LLC is the lead placement agent and is marketing the bond offering on behalf of the issuer on a best-efforts basis to qualified investors. The Company has worked with Egan Jones rating agency to obtain a minimum of BBB plus to an A minus rating on the bond offering. This initial rating is based upon a sample portfolio of life settlement assets similar to those expected to be utilized in the bond offering. Once a percentage of the bond offering is in escrow, then the actual life settlement portfolios will be purchased and held until the bond offering closes. Once the final group of assets are assembled, then a final rating will be obtained. The Company has engaged a licensed asset manager, whose projected returns will be approved by the rating agency. Important for the success of the bond is the treatment of the various cash accounts that will support the bond. The two primary accounts will be the Investment account and the Cash Reserve account. These accounts will represent approximately 40% of the total cash raised from the bond offering. The Investment and Cash Reserve accounts are projected to produce sufficient annual returns to support the cost associated to maintain the bonds. A nationally recognized trust manager has been engaged to insure all the workings of the bond are handled properly and timely. An actuarial company has also been engaged to provide the modeling needed for the rating agency, asset manager and bond issuer. For services provided, the Company will receive a fee upon the closing on the bond offering and will also hold a residual monetary right to cash flows from the life settlement assets once the bond is retired.

On January 1, 2022, the Company entered into a marketing and consulting agreement with Tradability, LLC (“Consultant”) that requires the Company to make an initial $100,000 payment and up to an additional $400,000 in the future (which will be financed by the Consultant via a promissory note). The $400,000 obligation is contingent upon the Consultant and the Company successfully reaching certain milestones. Further, the agreement requires the Company to issue between 1,000,000 and 10,000,000 stock options (which are exercisable into the Company’sour common stock at prices between $1.00 to $2.50per share) contingent upon the Consultant and the Company successfully reaching certain milestones. The milestones primarily relate to the Consultant finalizing the tokenization of 500 million non-fungible tokens (“NFTs”) and the successful placement of NFTs with proceeds of between $100 million and $500 million. The proceeds will be used to purchase Life Settlements for which the Company will be an advisor. As of December 31, 2022,August 14, 2023, none of the milestones related to the potential issuance of equity have been met; and no assurance can be given that these anticipated milestones will be reached.met.

In addition to the arrangements described above, management of the Company is actively seeking additional bonding and financing opportunities that would allow the Company to leverage its unique position within the life-settlements market, and lead to future revenue opportunities. To be able to quickly pivot to any of these additional opportunities, the Company has been actively seeking to secure additional bond ratings from other bond rating agencies to expand its attractiveness within the marketplace.

Significant Accounting Policies

There have been no changes to the significant accounting policies of the Company from the information provided in Note 2 of the Notes to Consolidated Financial Statements in the Company’s most recent Form 10-K, except as discussed below.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2022

Basic and Diluted Net Income (Loss) Per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the periods presented using the treasury stock method. Diluted net loss per common share is computed by including common shares that may be issued subject to existing rights with dilutive potential, when applicable. Potential dilutive common stock equivalents are primarily comprised of potential dilutive shares resulting from convertible debt agreements and common stock warrants. Potentially dilutive shares resulting from convertible debt agreements are evaluated using the if-converted method. Potentially dilutive securities are not included in the calculation of diluted net loss per share for the three and nine months ended December 31,June 30, 2023, or 2022, and 2021, because to do so would be anti-dilutive. Potentially dilutive securities outstanding as of December 31,June 30, 2023, and 2022, and 2021 are comprised of warrants convertible into 7,873,99010,170,544 and 4,958,7547,250,241 shares of common stock, respectively.

New Accounting Pronouncements

Adopted During the Nine Months Ended December 31, 2022

In May 2021, the FASB issued ASU 2021-04 Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options. This ASU clarifies an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. Specifically, it provides a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense. The amendment is effective for fiscal years beginning after December 15, 2021, and interim periods therein. The Company adopted the new guidance as of April 1, 2022 and used the framework to record modification to the exercise price of equity classified warrants during the nine months ended December 31, 2022.

Not Yet Adopted

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.

(2) LIQUIDITY REQUIREMENTS AND GOING CONCERN

Since the Company’s inception on January 31, 2013, its operations have been primarily financed through sales of equity, debt financing from related parties and the issuance of notes payable and convertible debentures. As of December 31, 2022,June 30, 2023, the Company had $3,1586,071 of cash assets, compared to $267,966553 as of March 31, 2022.2023. As of December 31, 2022,June 30, 2023, the Company had access to draw an additional $4,492,1924,299,942 on the notes payable, related party (see Note 6) and $3,000,000 on the Convertible Debenture Agreement (See Note 7). For the ninethree months ended December 31, 2022,June 30, 2023, the Company’s average monthly operating expenses were approximately $58,50044,000, which includes salaries of our employees,the Company’s employee, consulting agreements and contract labor, general and administrative expenses and legal and accounting expenses. In addition to the monthly operating expenses, the Company continues to pursue other debt and equity financing opportunities, and as a result, financing expenses of $0 and $13,500 were incurred during the three months ended December 31, 2022.June 30, 2023, and 2022, respectively. As management continues to explore additional financing alternatives, beginning JanuaryJuly 1, 2023, the Company is expected to spend up to an additional $385,000300,000 on these efforts. Outstanding Accounts Payable as of December 31, 2022June 30, 2023, totaled $698,797464,389. Management has concluded that its existing capital resources and availability under its existing convertible debentures and debt agreements with related parties will be sufficient to fund its operating working capital requirements for at least the next 12 months from the issuance of these financial statements, or through FebruaryAugust 2024. Related parties have given assurance that their continued support, by way of either extensions of due dates, or increases in lines-of-credit, can be relied on. As mentioned above, the Company also continues to evaluate other debt and equity financing opportunities.

The recent outbreak of COVID-19 originated in Wuhan, China, in December 2019 and has since spread to multiple countries, including the United States and several European countries. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. The COVID-19 pandemic is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which the Company relies. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact the Company’s short-term and long-term liquidity. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company does not yet know the full extent of potential delays or impacts on its business, financing or other activities or on healthcare systems or the global economy as a whole. However, these effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which we rely.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2022

The accompanying financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business.

(3) FAIR VALUE MEASUREMENTS

As defined by ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values.

Those levels of input are summarized as follows:

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

The Company did not have any transfers of assets and liabilities between Levels 1, 2 and 3 of the fair value measurement hierarchy during the ninethree months ended December 31, 2022June 30, 2023 and 2021.2022.

Other Financial Instruments

The Company’s recorded values of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued liabilities approximate their fair values based on their short-term nature. The recorded values of the notes payable and convertible debenture approximate the fair values as the interest rate approximates market interest rates.

(4) STOCKHOLDERS’ EQUITY

Common Stock

Effective December 6, 2018, three existing stockholders have contributed to the Company a portion of their common shares held at a repurchase price to the Company of $0.05per share. The Company has cancelled the acquired shares, which decreased the outstanding common shares on the books of the Company. The total number of common shares canceled/retired was 8,000,000. Of6,000,000 of the 8,000,000 shares6,000,000 were owned by a related party to the Company. The total liability related to the repurchase of these shares is $400,000, with repayment to the related party stockholders contingent on a major financing event. Of$300,000 of the $400,000liability $300,000 is to a related party.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2022

Warrants to Purchase Common Stock

The Company’s related party lenders consist of: Kraig Higginson, the Chairman of the Board of Directors and a stockholder, Radiant Life, LLC and Mr. Dickman, a board member and stockholder. These holders of the related party unsecured promissory notes hold agreements that provide each related party with common stock warrants upon the lender’s extension of a maturity due date or upon the loaning of additional monies. The number of warrants issued for an extension is based on the following formula: 10,000 warrants per month the due date is extended plus 1 warrant for every $2 of the principal balance outstanding (not including interest) at the time of the extension (rounded to the nearest whole warrant). Upon the loaning of additional monies, the lender will also require 2 warrants for each dollar loaned. All warrants issued under these terms vested immediately upon issuance, have an exercise price approximately equalequivalent to the fair value of the Company’s common stock on the date of grant, and expire 5 years from the date of issuance.

During the fiscal quarter ended June 30, 2023, the Company issued 223,900 warrants to the Chairman of the Board of Directors in conjunction with monies borrowed during the period per the terms outlined above. The exercise price of these warrants was $1.05. The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model was $166,001. The inputs used in this calculation included a fair value of the underlying common stock of $1.049 per share, a risk-free between 3.36% and 4.06%, volatility between 86.52% and 89.11% and a dividend rate of 0%.

On June 5, 2023, the Company issued 543,000 warrants to Mr. Dickman in conjunction with an extension of the maturity dates during the period per the terms outlined above. The exercise price of these warrants was $1.05. The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model was $398,920. The inputs used in this calculation included a fair value of the underlying common stock of $1.049 per share, a risk-free rate of 3.82%, volatility of 89.07% and a dividend rate of 0%.

SCHEDULE OF WARRANT OUTSTANDING

There was no change in the number of warrants outstanding during the three months ended June 30, 2022.

The following table summarizes the warrants issued and outstanding as of June 30, 2023

On June 20, 2022, the Company amended the agreements with the related party lenders to adjust the exercise price of the warrants issued in conjunction with extensions of due dates and new monies lent on the outstanding notes payable, related parties from January 5, 2022, to February 5, 2022. The original agreements stated that the exercise price of the warrants issued was $0.05. The amended agreements adjust the exercise price from $0.05 to $1.05, which is the estimated fair market value of the common stock on the grant dates of the warrants. The original agreements inadvertently stated an exercise price of $0.05, when the Company had intended to grant warrants with an exercise price of $1.05. This modification was evaluated, and it was determined that the increase in exercise price resulted in a decrease in the fair value of the warrants issued from January 5, 2022, to February 5, 2022, and therefore no additional warrant expense was required.

During the three months ended December 31, 2022, and per the provisions outlined above, the Company agreed to provide Mr. Dickman with warrants for 399,749 shares of common stock in conjunction with the extension of the due date of the outstanding promissory notes and agreed to provide the Chairman of the Board of Directors and a stockholder with warrants for 224,000 shares of common stock in conjunction with the Company borrowing $112,000under the respective note payable and line of credit agreement (see note 6). The exercise price of the warrants issued during the three months ended December 31, 2022 was $1.05. The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model, was $589,858. The inputs used in these calculations included a fair value of the underlying common stock of $1.049 per share, a risk-free of between 3.84% and 4.31%, volatility of between 142.23% and 143.97% and a dividend rate of 0%. The Company determined the cost of debt issuance to be $211,922, to be amortized quarterly through November 30, 2022 (the due date of the lender’s line of credit at the time of the borrowing event). As such, $52,980 of debt discount was amortized as interest expense during the quarter ended December 31, 2022. The remaining $377,936 of expense, related to Mr. Dickman’s warrants, was recorded as a loss on extinguishment of debt.

The following table summarizes the warrants issued and outstanding as of December 31, 2022:

SCHEDULE OF WARRANTS ISSUED AND OUTSTANDING

The shares of common stock issuable upon exercise of the warrants are not registered with the Securities and Exchange Commission and the holders of the warrants do not have registration rights with respect to the warrants or the underlying shares of common stock.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2022

(5) NOTES PAYABLE

On April 6, 2021, the Company borrowed $300,000 under an unsecured promissory note with Satco International, Ltd. This promissory note bears interest at a rate of 8% annually and was due JanuaryApril 6, 2023. In conjunction with this note, the Company issued warrants for 1,000,000 shares of common stock, exercisable at $1.00 per share and expiring in 3 years years from the date of the promissory note. On February 2, 2023,Since that date, the unsecured promissory note with Satco International, Ltd. washas been amended through a series of amendments to extend the due date from JanuaryApril 6, 2023 to April 6, 2023,August 31, 2024, or at the immediate time when alternative financing or other proceeds are received. This extension hasThese extensions have no bearing on the warrants that were issued in conjunction with the original promissory note. This note is separate from the 8% convertible debenture agreement that the Company has in place with Satco International, Ltd. (see note 7). As of December 31, 2022June 30, 2023, accrued interest on the note totaled $41,68853,589.

(6) NOTES PAYABLE, RELATED PARTY

As of December 31, 2022,June 30, 2023, and March 31, 2022,2023, the Company had borrowed $3,113,8083,306,058 and $3,001,8083,194,108 respectively, excluding accrued interest, and net of the debt discount, from related parties. TheShort-term accrued interest associated with the Notes Payable, Related PartyParties and Promissory Notes, Related Parties, of $977,5980 and $767,358364,908 is recorded on the balance sheet as an Accrued Expense obligation at December 31, 2022June 30, 2023, and March 31, 2021,2023, respectively. Long-term accrued interest associated with the Notes Payable, Related Parties, and Promissory Notes, Related Parties, of $1,127,121

and $857,685 is recorded on the balance sheet as an Accrued Expense obligation at June 30, 2023, and March 31, 2023, respectively.

Related Party Promissory Notes

As of both December 31, 2022June 30, 2023, and March 31, 2022,2023, the Company owed $826,000 under the unsecured promissory notes from Mr. Dickman. The promissory notes bear interest at a rate of 8% annually. On November 10, 2022,June 5, 2023, the notes were amended to extend thehave a due date fromof OctoberAugust 31, 2022 to July 31, 20232024, or at the immediate time when alternative financing or other proceeds are received. As per the provision outlined in Note 4, and in conjunction with the extension of the due date of the promissory notes on June 5, 2023, the Company also agreed to provide Mr. Dickman with warrants for 399,749543,000 shares of common stock. The total number of warrants issued to the related party lender was 2,090,332 as of December 31, 2022 (seestock (see Note 4 for further details on these warrants)4). During the nine monthsyear ended DecemberMarch 31, 2022,2023, the Company neither borrowed any additional funds under this agreement nor made any principal repayments. As of December 31, 2022,June 30, 2023, accrued interest on the notes totaled $287,962332,947. In the event the Company completes a successful equity raise all principal and interest on the notes are due in full at that time. The total number of warrants issued to the related party lender was 2,633,332 as of June 30, 2023 (See Note 4 for further details on these warrants).

On July 29, 2021, the Company entered into an unsecured promissory note agreement with Radiant Life, LLC. This agreement was in conjunction with the Company borrowing $50,000of Notes Payable, Related Party, on the date of the agreement, and is not part of the existing note payable and lines of credit agreement the Company has with Radiant Life, LLC that is outlined below in this Note 6.LLC. The $50,000 promissory note bears interest at a rate of 8%annually and was amended on June 12, 2023 to be due on July 29, 20222024. On August 3, 2022, the promissory note was amended to extend the due date from July 29, 2022 to July 29, 2023, or at the immediate time when alternative financing or other proceeds are received. As of December 31, 2022,June 30, 2023, accrued interest on the note totaled $6,0358,303.

Related Party Note Payable and Line of Credit Agreements

As of December 31, 2022,June 30, 2023, and March 31, 2022, the Company,2023, the Company owed $1,178,3001,310,550 and $1,066,3001,198,600, respectively, exclusive of accrued interest, and net of the debt discount, under the note payable and line of credit agreement with theKraig T. Higginson, Chairman of the Board of Directors and a stockholder. The note was due NovemberAs of June 30, 2023, or at the immediate time when alternative financing or other proceeds are received (see Note 8). On February 2, 2022, the related party note payable and line of credit agreement was amended to extend the due date from November 30, 2023 to November 30, 2024, or at the immediate time when alternative financing or other proceeds are received (see Note 8). On As of December 31, 2022, the agreement allowed for borrowings of up to $4,600,000. During the ninethree months ended December 31, 2022,June 30, 2023, the Company borrowed $112,000111,950 in principal and made no repayments of principal on this agreement. The note payable and line of credit agreement incurs interest at 7.5% per annum. As of June 30, 2023, accrued interest on this note totaled $329,094. As per the provision outlined in Note 4, and in conjunction with the $111,950 borrowed during the three months ended June 30, 2023, the Company also agreed to provide the Chairman of the Board of Directors and a stockholder, with warrants for 223,900 shares of common stock, vested immediately upon issuance, having an exercise price of $1.05 per share, and a 5-year exercise window from the dates of issuance. During the three months ended June 30, 2023, the company amortized $10,530 of debt discount, leaving a remaining debt discount balance of $63,181 in association with these warrants. The total number of warrants issued to the related party lender was 3,587,950 as of June 30, 2023 (see Note 4 for further details on these warrants).

As of June 30, 2023, and March 31, 2023, the Company owed $1,119,508 in principle under thisthe note payable and lines of credit agreement with Radiant Life, LLC, an entity partially owned by the Chairman of the Board of Directors. The agreement allows for borrowings of up to $2,130,000. The note payable has a due date of the principal and no principal repayments were made.interest on the note to November 30, 2024, or at the immediate time when alternative financing or other proceeds are received. The note payable and line of credit agreement incurs interest at 7.5% per annum and areis collateralized by the Company’s NIBS, if any. During the three months ended June 30, 2023, the Company neither borrowed nor repaid any principal under this agreement. As of December 31, 2022,June 30, 2023, accrued interest on this noteagreement totaled $283,826456,777. As discussed in Note 4, a provision to the lending agreement provides the related party lender with common stock warrants upon the lenders extension of a maturity due date or upon the loaning of additional monies. As per this provision and in conjunction with the extension of the due date of the promissory notes, the Company also agreed to provide Nothe Chairman of the Board of Directors and a stockholder with new warrants for 224,000 shares of common stock were issued during the ninethree months ended December 31, 2022. June 30, 2023. During the three months ended June 30, 2023, the company amortized $5,235 of debt discount, leaving a remaining debt discount balance of $31,410 in association with existing warrants. The total number of warrants issued to the related party lender was 2,604,1502,449,262 as of December 31, 2022 (seeJune 30, 2023 (see Note 4 for further details on these warrants).

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2022

As of December 31, 2022 and March 31, 2021, the Company owed $1,059,508 in principle under the note payable and lines of credit agreement with Radiant Life, LLC. The agreement allows for borrowings of up to $2,130,000. The principal and interest on the note were due NovemberJune 30, 2024  or at the immediate time when alternative financing or other proceeds are received. On February 2, 2023, the agreement was amended to extend the due date from November 30, 2023 to November 30, 2024, or at the immediate time when alternative financing or other proceeds are received (see Note 8). The note payable and line of credit agreement incurs interest at 7.5% per annum and is collateralized by the Company’s NIBS, if any. During the nine months ended December 31, 2022 the Company neither borrowed nor repaid any principal under this agreement. As of December 31, 2022, accrued interestunamortized debt discount on this agreement totaled $399,775. As discussed in Note 4, a provision to the lending agreement provides the related party lender with common stock warrants upon the lenders extension of a maturity due date or upon the loaning of additional monies. notes payable is $No94,591 new warrants were issued during the nine months ended December 31, 2022. The total number of warrants issued to the related party lender was 1,679,508 as of December 31, 2022 (see Note 4 for further details on these warrants).

(7) CONVERTIBLE DEBENTURE AGREEMENT

The Company has entered into an 8% convertible debenture agreement with Satco International, Ltd., that allows for borrowings of up to $3,000,000. The holder originally had the option to convert the outstanding principal and accrued interest to unregistered, restricted common stock of the Company on June 2, 2016. Per the agreement, the number of shares issuable at conversion shall be determined by the quotient obtained by dividing the outstanding principal and accrued and unpaid interest by 90% of the 90-day average closing price of the Company’s common stock from the date the notice of conversion is received; and the price at which the Debenture may be converted will be no lower than $1.00 per shareshare.. The original maturity date was June 2, 2016, but was later extended, through a series of extensions, to November 30, 2023. On February 9, 2023, the note was amended to extend the due date from November 30, 2023 to November 30, 2024 , or at the immediate time when alternative financing or other proceeds are received. This extension has no bearing on the warrants that were issued in conjunction with the original promissory note.

. As of December 31, 2022June 30, 2023, and March 31, 2022,2023, the Company owed $0 under the agreement, excluding accrued interest. The associated interest of $124,225 is recorded on the balance sheet as an Accrued Expense obligation at December 31, 2022June 30, 2023, and March 31, 2022.2023.

(8) GAIN ON SETTLEMENT OF LIABILITIES

During the three months ended June 30, 2023, we negotiated a settlement to reduce the outstanding accounts payable to one vendor by $290,000. This gain was recorded as a gain on settlement of liabilities.

(8) SUBSEQUENT EVENTS

Subsequent to December 31, 2022, the following events transpired:

On February 2, 2023, the unsecured promissory note with Satco International, Ltd. was amended to extend the due date from January 6, 2023 to April 6, 2023, or at the immediate time when alternative financing or other proceeds are received. This extension has no bearing on the warrants that were issued in conjunction with the original promissory note.

On February 2, 2023, the related party note payable and line of credit agreement with Radiant Life, LLC (see Note 6) was amended to extend the due date from November 30, 2023 to November 30, 2024, or at the immediate time when alternative financing or other proceeds are received. As per the provision outlined in Note 4, and in conjunction with the extension of the due date of the agreement, the Company also agreed to provide Radiant Life, LLC with warrants for 649,754 shares of common stock vested immediately upon issuance, with an exercise price of $1.05 per share and a 5-year exercise window from the date of the extension agreement.

On February 2, 2023, the related party note payable and line of credit agreement with the Chairman of the Board of Directors and a stockholder (see Note 6) was amended to extend the due date from November 30, 2023 to November 30, 2024, or at the immediate time when alternative financing or other proceeds are received. As per the provision outlined in Note 4, and in conjunction with the extension of the due date of the agreement, the Company also agreed to provide the Chairman of the Board of Directors and a stockholder, with warrants for 719,300 shares of common stock, vested immediately upon issuance, with an exercise price of $1.05 per share and a 5-year exercise window from the date of the extension agreement

On February 9, 2023, the Company agreed to amend the 8% convertible debenture agreement with Satco International, Ltd. (see Note 7) to extend the due date and conversion rights from November 30, 2023 to November 30, 2024.

.

Item 2. Management’s Discussions and Analysis of Financial Condition and Results of Operations.

This discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and capital resources at and during the nine months ended December 31, 2022 and 2021. For a complete understanding, this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Financial Statements and Notes to the Financial Statements contained in this quarterly report on Form 10-Q and our annual report on Form 10-K for the year ended March 31, 2022.

Forward-looking Statements

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are based on management’s beliefs and assumptions and on information currently available to management. For this purpose any statement contained in this report that is not a statement of historical fact may be deemed to be forward-looking, including, but not limited to, statements relating to our future actions, intentions, plans, strategies, objectives, results of operations, cash flows and the adequacy of or need to seek additional capital resources and liquidity. Without limiting the foregoing, words such as “may”, “should”, “expect”, “project”, “plan”, “anticipate”, “believe”, “estimate”, “intend”, “budget”, “forecast”, “predict”, “potential”, “continue”, “should”, “could”, “will” or comparable terminology or the negative of such terms are intended to identify forward-looking statements, however, the absence of these words does not necessarily mean that a statement is not forward-looking. These statements by their nature involve known and unknown risks and uncertainties and other factors that may cause actual results and outcomes to differ materially depending on a variety of factors, many of which are not within our control. Such factors include, but are not limited to, economic conditions generally and in the industry in which we and our customers participate; competition within our industry; legislative requirements or changes which could render our products or services less competitive or obsolete; our failure to successfully develop new products and/or services or to anticipate current or prospective customers’ needs; price increases; employee limitations; or delays, reductions, or cancellations of contracts we have previously entered into; sufficiency of working capital, capital resources and liquidity and other factors detailed herein and in our other filings with the United States Securities and Exchange Commission (the “SEC” or “Commission”). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.

Forward-looking statements are predictions and not guarantees of future performance or events. Forward-looking statements are based on current industry, financial and economic information which we have assessed but which by its nature is dynamic and subject to rapid and possibly abrupt changes. Our actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements and we hereby qualify all our forward-looking statements by these cautionary statements.

These forward-looking statements speak only as of their dates and should not be unduly relied upon. We undertake no obligation to amend this report or revise publicly these forward-looking statements (other than pursuant to reporting obligations imposed on registrants pursuant to the Exchange Act) to reflect subsequent events or circumstances, whether as the result of new information, future events or otherwise.

The following discussion should be read in conjunction with our financial statements and the related notes contained elsewhere in this report and in our other filings with the Commission.

Overview

Our historical business model has focused on purchasing or acquiring life insurance policies and residual interests in or financial products tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace, often referred to as the “life settlements market.”

We currently do not hold life settlement or life insurance policies but, rather, previously held a contractual right to receive the net insurance benefits, or “NIBs”, from a portfolio of life insurance policies held by a third party (“the Owners” or “the Holders”). These NIBs represented an indirect, residual ownership interest in a portfolio of individual life insurance policies, and they allowed us to receive a portion of the settlement proceeds from such policies, after expenses related to the acquisition, financing, insuring and servicing of the policies underlying our NIBs have been paid.

NIBs are generally sold by an entity that holds the underlying life settlement or life insurance policies, either directly or indirectly through a subsidiary, such an entity being referred to herein as a “Holder.” A Holder, either directly or through a wholly owned subsidiary, purchases life insurance policies either from the insured or on the secondary market and aggregates them into a portfolio of policies. At the time of purchase, the Holder also (i) contracts with a service provider to manage the servicing of the policies until maturity, (ii) consider purchasing mortality re-insurance (“MRI”) coverage under which payments will be made to the Holder in the event the insurance policies do not mature according to actuarial life expectancies, and (iii) arranges financing to cover the initial purchase of the insurance policies, the servicing of the life insurance policies until maturity and the payment of the MRI premiums. The financing obtained by the Holder for a portfolio of life settlement or life insurance policies is secured by the insurance policies for which the financing was obtained. After a Holder purchases policies, aggregates them into a portfolio and arranges for the servicing, MRI coverage and financing, the Holder contracts to sell NIBs related to the policies, which gives the holder of the NIBs the right to receive the proceeds from the settlement of the insurance policies after all of the expenses related to such policies have been paid. When an insurance policy underlying our NIBs comes to maturity, the insurance proceeds are first used to pay expenses associated with such policy. Once all of the expenses have been paid, the Holder will retain a small percentage of the proceeds and then will pay the remaining insurance proceeds to us.

During the latter part of the fiscal year ended March 31, 2021, we began developing an additional business offering, providing professional services to specialty structured finance groups, bond issuers and life settlement aggregators. We have assembled an experienced team from the life settlement marketplace, as well as from other areas such as financial services and public financial markets. As a professional services provider, we apply industry best practices to advise on the selection of specific portfolios of life insurance policies that are tailored to meet the needs of its clients. Our clients may include bond issuers, bond investors, or other structured finance product issuers. We have developeddevelop strategies and methodologies which include the acquisition of life insurance portfolios, then useuses common structured finance techniques and proprietary analytics to structure bonds for issuances, including principal protected bonds. Our goal is to deliver long-term value and profitability to shareholders by growing our professional services business and asset base, resulting in the ability to pay dividends to its shareholders.

During the latter part of the year ended March 31, 2021, we began working closely with bond placement agents and aggregators to establish various aspects of a proprietary, investment grade bond offering. In this arrangement, we participate as the sole originator in the role of structuring and advising on the structure of the proprietary bond instrument. Included in the role of structuring financial assets, we use proprietary analytics to establish the makeup of the rated instrument, including but not limited to, life settlement assets (life insurance policies) and managed cash, and implements a process of selective assembly of the underlying assets and cash management that will meet the policy requirements and analytics. We provide current and ongoing resources for all analytics, as well as advisement support for the investment and non-investment grade ratings for the managed asset pool and the managed cash accounts. In our advisory role, we are reimbursed for all expenses associated with the structuring and preparation of any bond offering, will receive an advisory payment upon the closing of any bond offering, and then will hold residual rights on the balance of assets once the bond is retired.

During the year ended March 31, 2022, we and US Capital Global Securities LLC, an affiliate of US Capital Global, entered into an arrangement wherein we are the lead advisor and lead originator of tailored life insurance portfolios to be used in a life insurance-linked bond offering (“bond offering”) of between $250 million to $500 million. US Capital Global Securities LLC is the lead placement agent and is marketing the bond offering on behalf of the issuer on a best-efforts basis to qualified investors. We have worked with Egan Jones rating agency to obtain a minimum of BBB plus to an A minus rating on the bond offering. This initial rating projection is based upon a sample portfolio of life settlement assets similar to those expected to be utilized in the bond offering. Once a percentage of the bond offering is in escrow, then the actual life settlement portfolios will be purchased and held until the bond offering closes. Once the final group of assets are assembled, then a final rating will be obtained. We have engaged a licensed asset manager, whose projected returns will be approved by the rating agency. Important for the success of the bond is the treatment of the various cash accounts that will support the bond. The two primary accounts will be the Investment account and the Cash Reserve account. These accounts will represent approximately 40% of the total cash raised from the bond offering. The Investment and Cash Reserve accounts are projected to produce sufficient annual returns to support the cost associated to maintain the bonds. A nationally recognized trust manager has been engaged to insure all the workings of the bond are handled properly and timely. An actuarial company has also been engaged to provide the modeling needed for the rating agency, asset manager and bond issuer. For services provided, we will receive a fee upon the closing on the bond offering and will also hold a residual monetary right to cash flows from the life settlement assets once the bond is retired.

On January 1, 2022, we entered into a marketing and consulting agreement with Tradability, LLC (“Consultant”) that requires us to make an initial $100,000 payment and up to an additional $400,000 in the future (which will be financed by the Consultant via a promissory note). The $400,000 obligation is contingent upon the Consultant and us successfully reaching certain milestones. Further, the agreement requires us to issue between 1,000,000 and 10,000,000 stock options (which are exercisable into our common stock at prices between $1.00 to $2.50 per share) contingent upon the Consultant and us successfully reaching certain milestones. The milestones primarily relate to the Consultant finalizing the tokenization of 500 million non-fungible tokens (“NFTs”) and the successful placement of NFTs with proceeds of between $100 million and $500 million. The proceeds will be used to purchase Life Settlements for which we will be an advisor. As of June 30, 20222023, none of the milestones related to the potential issuance of equity have been metand no assurance can be given that these anticipated milestones will be reached.

In addition to the arrangements described above, we are actively seeking additional bonding and financing opportunities that would allow us to leverage our unique position within the life-settlements market, and lead to future revenue opportunities. To be able to quickly pivot to any of these additional opportunities, we have been actively seeking to secure an additional bond rating from another industry recognized rating agencies to expand our potential within the marketplace.

Our active board of directors continues to provide valuable industry expertise to the Company, including providing strategic insights and direction, leveraging their relationships within the financial community to provide potential financing opportunities, and extending valuable operational support through frequent and informal planning sessions.

Plan of Operations

Life Settlements is not a market sector without competition and, at present, we are a minor competitor. We will need substantial additional funds to effectively compete in this industry and no assurance can be given that we will be able to adequately fund our current and intended operations through debt or equity financing. The Company has no current source of operating revenues. When we hold NIBs we may be required to expend funds on premiums, interest and servicing costs to protect our interest in NIBs, though we have no legal responsibility nor adequate funds for these payments. In the event that neither party fulfils the financial obligations pertaining to the premiums, interest and servicing costs, we would be required to evaluate our investment in NIBs for possible adverse impairment.

When we hold NIBs, we use an estimation methodology to project cash flows and returns as presented. The estimation model requires many assumptions, including, but not limited to the following: (i) an assumption that the distinct number of lives in our portfolio would exhibit similar experience to a statistically diverse portfolio from which mortality tables have been created; (ii) an assumption that the life expectancies (the “LE” or “LEs”) provided by LE providers represent the actuarial mean of the life expectancies of the insureds in our portfolio, (iii) the weighted average of the LEs provided by the LE providers represents an appropriate method for adjusting for discrepancies in the LEs; (iv) life expectancy tables and projections are accurate; (v) the minimum premiums calculated based on the in-force illustrations provided by life insurance carriers are accurate and will not change over the course of the lifetime of our portfolio; and (vi) the Holders’ Lender fees, MRI fees, and insurance, servicing and custodial fees will not change materially over time. While this method of modeling cash flows is helpful in providing a theoretical expectation of potential returns that might be produced from our NIBs portfolio, actual cash flows and returns inevitably will be different (possibly materially) due to the fact that predicting the exact date of death of any individual is virtually impossible. The provision of a theoretical cash flow model is by no means any guarantee of any results. The actual performance of these NIB interests (as well as our future expectations as to what such performance might be) may differ substantially from our expectations, especially if any of the assumptions change or differ from our initial assumptions.met.

Results of Operations

Three-Months Ended December 31, 2022,June 30, 2023, Compared with Three-Months Ended December 31, 2021June 30, 2022

Interest Income from Investments

Due to the Company not holding NIBs, no interest income was recorded for the three months ended December 31, 2022June 30, 2023, or 2021.2022.

General & Administrative Expenses

General and administrative expenses totaled $149,158$131,299, and $149,086$213,957 during the three months ended December 31,June 30, 2023, and 2022, and 2021, respectively. A significant portion of these expenses were professional fees and payroll costs. The reduction in these expenses was primarily attributable to lower monthly fees from our contractors.

Other Income and Expenses

For the three months ended December 31, 2022 and 2021, other expenses related to pursuing potential financing alternatives were $13,500 and $10,200, respectively.

During the three months ended December 31, 2022, and 2021, interest expense accrued in the amount of $131,257 and $71,245, respectively. The increased interest expense was due to higher principal balances on our notes payable, as well as recognizing an additional $52,980 in amortized debt discount.

During three months ended December 31, 2022,June 30, 2023, we recognized $377,936$398,920 as loss on extinguishment of debt in conjunction with related party debt.

During the three months ended June 30, 2023, we negotiated a settlement to reduce our outstanding accounts payable to one of our vendors by $290,000. The gain was recorded as a gain on settlement of liabilities.

During the three months ended June 30, 2023, and 2022, interest expense accrued in the amount of $97,973 and $74,139, respectively. The increase in interest expense was a result of higher loan balances, as well as an additional $15,765 of debt discount recognized during the three months.

For the three months ended June 30, 2023, and June 30, 2022, other expenses related to pursuing potential financing alternatives were $0 and $13,500, respectively.

Income Taxes

During the three months ended December 31,June 30, 2023, and 2022, the Company recorded a net loss before income taxes of $671,851,$338,192, and $301,596, respectively, and had no income tax expense or benefit as a result of a full valuation allowance on the net deferred tax asset.

Nine-Months Ended December 31, 2022, Compared with Nine-Months Ended December 31, 2021

Income from Investments

Due to the Company not holding NIBs, no interest income was recorded for the nine months ended December 31, 2022 or 2021.

General & Administrative Expenses

General and administrative expenses totaled $524,649 and $564,691 during the nine months ended December 31, 2022, and 2021, respectively. A significant portion of these expenses were professional fees and payroll costs. The decrease in expenses was primarily due to a decrease in professional fees.

Other Income and Expenses

During the nine months ended December 31, 2021, we negotiated a settlement to reduce our outstanding accounts payable to one of our vendors by $285,192. The gain was recorded as a gain on settlement of liabilities.

For the nine months ended December 31, 2022 and 2021, other expenses related to pursuing potential financing alternatives were $40,500 and $97,761, respectively.

During nine months ended December 31, 2022, we recognized $377,936 as loss on extinguishment of debt in conjunction with related party debt.

During the nine months ended December 31, 2022, and 2021, interest expense accrued in the amount of $281,303 and $204,982, respectively. The increased interest expense was due to higher principal balances on our notes payable, as well as recognizing an additional $52,980 in amortized debt discount.

Income Taxes

During the nine months ended December 31, 2022, the Company recorded a net loss before income taxes of $1,224,388, and had no income tax expense or benefit as a result of a full valuation allowance on the net deferred tax asset.

Liquidity and Capital Resources

Since our inception our operations have been primarily financed through sales of equity instruments, debt financing, lines of credit and notes payable from related and unrelated parties and the issuance of convertible debentures. As of December 31, 2022,June 30, 2023, we had $3,158$6,071 of cash, compared to $267,966$553 as of March 31, 2022.2023. As of December 31, 2022,June 30, 2023, the Company had access to draw an additional $4,492,192$4,299,942 on the notes payable, related party and $3,000,000 on the Convertible Debenture Agreement. Our monthly expenses are anticipated to be approximately $70,000,$44,000, which includes salaries of our employees,employee, policy servicing expenses, consulting agreements and contract labor, general and administrative expenses, and estimated legal and accounting expenses. Outstanding Accounts Payable as of December 31, 2022June 30, 2023, totaled $698,797, short term notes payable totaled $300,000, short term notes payable to related parties totaled $717,058, net of debt discounts,$464,389, and other accrued short term liabilities totaled $514,916.$1,534,424. We believe that our availability under our existing lines of credit with related parties, our existing capital resources, together with the issuance of additional notes payable and convertible debentures will be sufficient to fund our operating working capital requirements for at least the next 12 months, or through FebruaryAugust 2024.

Debt

At December 31, 2022,June 30, 2023, we owed $4,557,319,$4,910,857, including accrued interest, and exclusive of debt discounts, for debt obligations. We owed $3,113,808$3,306,058 in principal pursuant to notes payable and lines-of-credits from related parties, $300,000 in other notes payable, and had fully paid off the principal owing on the 8% Convertible Debenture. As of December 31, 2022,June 30, 2023, one note payable and line-of-credit had a principal balance of $1,059,508$50,000 due on July 29, 2024, and is$1,119,508 due on November 30, 2024, or when the Company completes a successful equity raise, at which time principal and interest is due in full. The second note payable and line-of-credit had a principal balance of $1,178,300,$1,310,550, and the line of credit is currently extended through November 30, 2024. At December 31, 2022,June 30, 2023, unsecured promissory notes with related parties had principal balances totaling $826,000 and are due JulyAugust 31, 2023.2024. The convertible debenture agreement, which has no principal balance due as of December 31, 2022June 30, 2023, is open through November 30, 2024. As of FebruaryAugust 14, 2023, there was $4,492,192$4,299,942 available under the lines-of-credit we currently have with related parties and $3,000,000 available under the 8% convertible debenture agreement.

Critical Accounting Policies and Estimates

See Consolidated Financial Statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022,2023, which was filed with the SEC on June 29, 2022.2023.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

Not Applicable.

Item 4. Controls and Procedures

Limitation on the Effectiveness of Controls

The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be disclosed timely, is accumulated and communicated to management in a timely fashion. In designing and evaluating such controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management is necessarily required to use judgment in evaluating controls and procedures.

Evaluation of Controls and Procedures

Our management, with the participation of our principal executive and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to the issuer’s management, including its Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive and principal financial officer has concluded that our disclosure controls and procedures as of the end of the period covered by the Quarterly Report were not effective due to the lack of design and operating effectiveness of our control environment and risk assessment, control activities and monitoring activities relating to complex accounting matters relating to the valuation of equity-based compensation instruments as disclosed in Item 9A of our 10K filed on June 29, 2022.

Our principal executive and principal financial officer is in the process of performing a review of our processes and controls over complex accounting matters relating to the valuation of equity-based compensation instruments.

Changes in Internal Control

There were no changes in our internal control over financial reporting that occurred during the thirdfirst quarter of 20232024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

To the best of our knowledge, there are no legal proceedings pending or threatened against us; and there are no actions pending or threatened against any of our directors or officers that are adverse to us.

Item 1A. Risk Factors

In addition to the other information set forth in this quarterly report on Form10-Q, you should carefully consider the risks discussed in our Annual Report on Form 10-K for the year ended March 31, 2022,2023, which risks could materially affect our business, financial condition or future results. There were no material changes during the quarter ended December 31, 2022June 30, 2023, to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended March 31, 2022. These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Purchases of Equity Securities by the Issuer

There were no repurchases of equity during the quarter ended December 31, 2022.June 30, 2023.

Item 3. Defaults upon Senior Securities.

None; not applicable.

Item 4. Mine Safety Disclosures.

None; not applicable.

Item 5. Other Information.

None; not applicable.

Item 6. Exhibits

Exhibits. The following exhibits are included as part of this report:

* Previously filed as an Exhibit to the registrant’s Annual Report on Form 10-K for the year ended March 31, 2022,2023, filed with the Securities and Exchange Commission on June 29, 2022,2023, and incorporated herein by reference.reference herein.

+**Filed herewith.

SIGNATURES

Pursuant to the requirements 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.