What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-06-29 compared with 2020-08-11 · 460 added, 430 removed, 197 unchanged (82% of the section changed)

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OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Shareholders of Sundance Strategies, Inc.:

the Shareholders and the Board of Directors of Sundance Strategies, Inc.:

on the Financial Statements

have audited the accompanying consolidated balance sheets of Sundance Strategies, Inc.

(“the Company”) as of March

31, 2020 and 2019, the related consolidated statements of operations, stockholders’

deficit, and cash flows for each of

the years in the two-year period ended March 31, 2020 and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial

position of the Company as of March 31, 2020 and 2019 and the results of its operations and its cash flows for each of the years

in the two-year period ended March 31, 2020, in conformity with accounting principles generally accepted in the United States

We have audited the accompanying consolidated balance sheets of Sundance

Strategies, Inc.

and Subsidiaries (“the Company”) as of March 31, 2021 and 2020, the related consolidated statements of operations

, stockholders’

deficit, and cash flows for each of the years in the two-year period ended March 31, 2021 and the related notes

(collectively referred to as the “financial statements”).

In our opinion, the financial statements referred to above present

fairly, in all material respects, the financial position of the Company as of March 31, 2021 and 2020, and the results of its operations

and its cash flows for each of the years in the two-year period ended March 31, 2021, in conformity with accounting principles generally

accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

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The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but

not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

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We believe that our audits provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current-period audit of the consolidated 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.

The communication

of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not,

by communicating the critical audit matters below, providing a separate audit opinion on the critical audit matters or on the

accounts or disclosures to which it relates.

of a Going Concern

of the Critical Audit Matter

described further in Note 9 to the financial statements, the Company has relied on debt and equity financing to finance operations,

as there are not sufficient cash flows from operations, which raises doubt about its ability to continue as a going concern.

has implemented plans to alleviate the substantial doubt.

Management plans to address the concerns, as needed, by (a) utilizing

recent financing obtained through notes payable;

(b) utilizing current lines of credit.

When considering these factors in conjunction

with the Company’s operating plan, management believes it has sufficient ability to fund operations and satisfy the Company’s

obligations as they come due for at least one year from the financial statement issuance date.

determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and execution

uncertainty regarding the Company’s available capital and the risk of bias in management’s judgments and assumptions

in their determination.

the Critical Audit Matter Was Addressed in the Audit

audit procedures related to the Company’s assertion on its ability to continue as a going concern included the following,

among others:

performed testing procedures such as analytical procedures to identify conditions and events that indicate there could be

substantial doubt about the entity’s ability to continue as a going concern for a reasonable period of time.

reviewed and evaluated management’s plans for dealing with adverse effect of these conditions and events that raised

doubt about the Company’s ability to continue as a going concern.

tested the reasonableness of management’s assessment of whether the Company has sufficient liquidity to fund operations

for at least one year from the financial statement issuance date.

assessed whether the Company’s determination that there is substantial doubt about its ability to continue as a going

concern was adequately disclosed.

of Equity-based Compensation

of the Critical Audit Matter

the year ended March 31, 2021, the Company issued common stock and warrants that required management to assess the fair value

of these instruments in order to record and disclose the transactions.

The Company’s common stock does not trade on an active

The Company utilized a third-party valuation specialist to assist in the determination of the fair value of the Company’s

common stock.

The valuation specialist utilized an income method approach to discern the equity value of the Company.

uses certain assumptions related to scenario weighting, revenue and expense projections, weighted average cost of capital and

lack of marketability discount.

identified auditing the valuation of the equity-based compensation as a critical audit matter due to the significant judgements

used by the Company in determining value of its common stock.

Auditing the determination and valuation of the common stock involved

a high degree of auditor judgement, and specialized skills and knowledge were needed.

the Critical Audit Matter Was Addressed in the Audit

audit procedures included the following, among others:

evaluated the reasonableness and appropriateness of the choice of valuation methodology and model used for valuing the common

tested the reasonableness of the assumptions used by the third-party specialist and the Company in the valuation model, including

scenario weighting, revenue and expense projections and discount rates.

tested the accuracy and completeness of data used in developing the assumptions used in the valuation models.

developed an independent expectation for comparison to the Company’s estimates, which included developing our own discount

evaluated the knowledge, skill and ability of the third-party specialist and the specialist’s independence in relation

to the Company.

evaluated the accuracy and completeness of the Company’s presentation of these instruments in the financial statements

and related disclosures, including evaluating whether such disclosures were in accordance with relevant accounting standards.

Professionals

with specialized skill and knowledge were utilized by the Firm to assist in the evaluation of the valuation models deployed

by management.

Sadler, Gibb & Associates, LLC

have served as the Company’s auditor since 2018.

Lake City, UT

August 10, 2020

STRATEGIES, INC.

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Accounts payable

Accrued expenses

Current portion of notes payable, related parties

Stock repurchase payable

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Long-Term Liabilities

Notes payable, related parties

Accrued expenses

Notes payable, related parties, net of current portion

Total Long-Term Liabilities

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Preferred stock, authorized 10,000,000 shares, par value $0.001;

-0- shares issued and

Common stock, authorized 500,000,000 shares, par value $0.001;

-0- shares issued and outstanding

Common stock, authorized 500,000,000 shares, par value $0.001;

40,108,441 and 37,828,441 shares issued and outstanding as of March 31, 2021 and 2020, respectively

Additional paid in capital

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Loss from Operations

Other Expense

Impairment of investment in net insurance benefits

Other Income (Expense)

Gain on Extinguishment of Debt

Interest expense

Financing expense

Total Other Expense

Total Other Income (Expense)

Loss Before Income Taxes

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$ (1,112,834 )

Basic and Diluted:

Basic and diluted loss per share

Basic and diluted weighted average number of shares outstanding

Loss per share - basic and diluted

Weighted average shares outstanding - basic and diluted

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

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$ (26,842,408 )

Issuance of Common Stock in exchange for Net Insurance Benefits

Cancellation of repurchased shares

Issuance of Common Stock in lieu of Director Compensation

Balance, March 31, 2019

$ (2,613,355 )

Balance, March 31, 2020

(27,955,242 )

Common stock issued for consulting services

Common stock issued for director compensation

Common stock issued for cash

Balance, March 31, 2021

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Statements of Cash Flows

Year Ended March 31.

Operating Activities

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Share based compensation - common stock

Impairment of net insurance benefits

Expense paid on behalf of Company by director

Gain on Extinguishment of Debt

Changes in operating assets and liabilities

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Proceeds from issuance of notes payable, related party

Common Stock Issued for Cash

Proceeds from Paycheck Protection Program Loan

Net Cash provided by Financing Activities

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Cash paid for income taxes

Non Cash Financing & Investing Activities, and Other Disclosures

Exchange common stock for Investment in Net Insurance Benefits

Repurchase of stock in exchange for Stock Repurchase Payable

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

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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,

(“Sundance Strategies”, “the Company”, “we”

(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”).

The Company is engaged

in the business of 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.”

Since the Company’s inception its operations have been primarily

financed through sales of equity, debt financing from related parties and the issuance of notes payable and convertible debentures.

Currently, the Company is focused on the purchase of net insurance benefit contracts (“NIBs”) based on life settlements

or life insurance policies.

Treatment When the Company Holds NIBs

Company does not take possession or control of the policies.

The owners of the life settlements or life insurance policies (the

“Owners”

or “the Holders”) acquire such policies at a discount to their face value.

On settlement, the

Company receives the net insurance benefit after all borrowings, interest and expenses have been paid by the Owners out of the

settlement proceeds.

Owners are variable interest entities (VIEs), for which the Company has a variable interest, but is not the primary beneficiary.

The Company’s investment in NIBs were issued by the Owners (i.e.

The Company’s maximum exposure to loss

in the variable interest entities is limited to the investment in NIBs balance.

The Company does not have the power to direct

activities of the VIEs.

Further, the Company does not have the contractual obligation to absorb losses of the VIEs.

investment in NIBs is a residual economic beneficial interest in a portfolio of life insurance contracts that have been financed

by an independent third party via a loan from a lender and, in certain cases, insured via a mortality risk insurance product or

mortality re-insurance (“MRI”).

Future expected cash flow and positive profits are defined as the net insurance proceeds

from death benefits after senior debt repayment, mortality risk repayment, and service provider or other third-party payments.

NIBs held by the Company are classified as held-to-maturity the Company accounted for its investment in NIBs at the initial investment

value increased for interest income and decreased for cash receipts received by the Company and impairment losses.

of transfer or purchase of an investment in NIBs, we estimated the future expected cash flows and determine the effective interest

rate based on these estimated cash flows and our initial investment.

Based on this effective interest rate, the Company calculated

accretable income, which was recorded as interest income on investment in NIBs in the statement of operations.

Our projections

were based on various assumptions that are subject to uncertainties and contingencies including, but not limited to, the amount

and timing of projected net cash receipts, expected maturity events, counter party performance risk, changes to applicable regulation

of the investment, shortage of funds needed to maintain the asset until maturity, changes in discount rates, life expectancy estimates

and their relation to premiums, interest, and other costs incurred, among other items.

These uncertainties and contingencies are

difficult to predict and are subject to future events that may impact our estimates and interest income.

As a result, actual results

could differ significantly from these projections.

Therefore, subsequent to the purchase and on a regular basis, these future

estimated cash flows were evaluated for changes.

If the determination was made that the future estimated cash flows should be

adjusted to the point of a material change in revenue, a revised effective yield was calculated prospectively based on the current

amortized cost of the investment, including accrued accretion.

Any positive or adverse change in cash flows would result in a

prospective increase or decrease in the effective interest rate used to recognize interest income.

Any significant adverse change

in the cash flows that may have resulted in the recognition of an “other-than-temporary impairment”

(“OTTI”),

and would be evaluated by the Company accordingly.

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.”

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.

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 develops 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.

recently 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 provides 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 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.

to March 31, 2021, 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.

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.

STRATEGIES, INC.

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31, 2021 and 2020

evaluate the carrying value of our investment in NIBs for impairment on a regular basis and adjust our total basis in the NIBs

using new or updated information that affects our assumptions.

We recognized impairment on a NIB contract when the fair value

of the beneficial interest was less than the carrying amount of the investment, plus anticipated undiscounted future premiums

and direct external costs, if any, and if there are adverse changes in cash flow.

We had not recognized any impairment on our

investment in NIBs from inception, through the year ended March 31, 2017.

the Company holds NIBs classified as available-for-sale the investment in NIBs are recorded at fair value.

May 2018 and July 2018, the Owners entered into agreements that completed a strict foreclosure transaction that transferred these

policies from the owners to the lenders in full satisfaction of the loan obligation.

As a result of the foreclosure, the Company

has lost its position in the residual benefits of the policies and recognized a $22,950,126 impairment on the NIBs and $1,936,311

impairment of related interest receivable during the year ended March 31, 3018.

Management concluded that the foreclosure event

represented the culmination of conditions that provided indications affecting the realization of the Company’s investment

in NIBs assets during the fiscal year ended March 31, 2018.

As a result, the Company recorded the impairment of the NIBs during

the fiscal year ended March 31, 2018, and changed the classification of the Investment in NIBs from held-to-maturity to available-for-sale.

July 11, 2018, the Company issued 800,000 common shares in return for obtaining the remaining 27.8% ownership of certain NIBs.

The transaction was recorded at $17,840, the estimated fair value of the common stock issued (which management believes approximated

the fair value of the NIBs received on the date of the transaction).

The additional NIBs acquired were reflected as an increase

to the Investment in NIBs account, and the NIBs were immediately impaired on the date of the transaction, bringing the total impairment

recognized on the NIBs to $22,967,966 plus $1,936,311 of impairment on accrued interest receivable.

March 31, 2020 and 2019, the Company had fully impaired the Investment in NIBs, and the value of those assets were zero.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of

America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses

during the reporting period.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting

Actual results could differ from those estimates.

and Cash Equivalents, For purposes of reporting cash flows, the Company considers all highly-liquid debt instruments purchased

with an original maturity of three months or less to be cash equivalents.

Recognition, Interest income on investment in NIBs represents the excess of all cash flows attributable to the investment

in net insurance benefits greater than the initial investment over the life of each pool of net insurance benefits using the effective

yield method.

Changes in the estimate of expected cash flows from investments in NIBs are adjusted prospectively.

Basic and Diluted Net

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.

and Cash Equivalents, For purposes of reporting cash flows, the Company considers all highly-liquid debt instruments purchased with

an original maturity of three months or less to be cash equivalents.

and Diluted Net 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

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Potential dilutive

common stock equivalents are primarily comprised of potential dilutive shares resulting from convertible debt agreements and common

stock warrants.

common stock equivalents are primarily comprised of potential dilutive shares resulting from convertible debt agreements and common stock

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 years ended March 31,

2020 and 2019, because to do so would be anti-dilutive.

Potentially dilutive securities outstanding as of March 31, 2020 include

warrants convertible into 1,702,000 shares of common stock.

No potentially dilutive securities were outstanding as of March 31,

STRATEGIES, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2020 and 2019

Based Compensation , The Company measures stock-based compensation expense related to employee stock-based awards based on

the estimated fair value of the awards as determined on the date of grant and is recognized as expense over the remaining requisite

service period.

The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options issued

as compensation.

The Black-Scholes model requires the input of highly subjective and complex assumptions, including the estimated

fair value of the Company’s common stock on the date of grant, the expected term of the stock option, and the expected volatility

of the Company’s common stock over the period equal to the expected term of the grant.

The Company estimates forfeitures

at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

in Net Insurance Benefits, The investment in NIBs is a residual economic beneficial interest in a portfolio of life insurance

contracts that have been financed by an independent third party via a loan from a lender and insured, on occasion, via a mortality

risk insurance product or mortality re-insurance (“MRI”).

Future expected cash flow is defined as the net insurance

proceeds from death benefits after senior debt repayment, mortality risk repayment, and service provider or other third-party

The Company is not responsible for maintaining premiums or other expenses related to maintaining the underlying life

insurance contracts.

Therefore, the investment in NIBs balance on the Company’s balance sheet does not increase when premiums

or other expenses are paid.

At March 31, 2020, we have determined our investment in NIBs to have no fair value, as all remaining

benefits had been received and the underlying policies have been subject to foreclosure (see Note 1).

estimating these cash flows for purposes of interest income and impairment calculations, there are a number of assumptions that

are subject to uncertainties and contingencies.

These include the amount and timing of projected net cash receipts, expected maturity

events, counter party performance risk, changes to applicable regulation of the investment, shortage of funds needed to maintain

the asset until maturity, changes in discount rates, life expectancy estimates and their relation to premiums, interest, and other

costs incurred, among other items.

These uncertainties and contingencies are difficult to predict and are subject to future events

that may impact our estimates and interest income.

As a result, actual results could differ significantly from those estimates.

dilutive securities are not included in the calculation of diluted net loss per share for the years ended March 31, 2021 and 2020, because

to do so would be anti-dilutive.

Potentially dilutive securities outstanding as of March 31, 2021 and 2020 include warrants convertible

into 3,488,754 and 1,702,000 shares of common stock, respectively.

Based Compensation , The Company measures stock-based compensation expense related to employee stock-based awards based on the estimated

fair value of the awards as determined on the date of grant and is recognized as expense over the remaining requisite service period.

The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options issued as compensation.

The Black-Scholes

model requires the input of highly subjective and complex assumptions, including the estimated fair value of the Company’s common

stock on the date of grant, the expected term of the stock option, and the expected volatility of the Company’s common stock over

the period equal to the expected term of the grant.

The Company estimates forfeitures at the date of grant and revises the estimates,

if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Taxes, The Company accounts for income taxes under FASB ASC 740, “Income Taxes”.

Deferred income tax assets and

liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and

are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not”

that some component or all of the benefits of deferred tax assets will not be realized.

tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than

not of being sustained if the position were to be challenged by a taxing authority.

The Company has examined the tax positions

taken in its tax returns and determined that there are no uncertain tax positions.

As a result, the Company has recorded no uncertain

tax liabilities in its balance sheet.

Interest and penalties for uncertain positions, when applicable, would be recognized as

a component of income tax expense.

Deferred income tax assets and liabilities

are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using

the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Accounting standards require the

consideration of a valuation allowance for deferred tax assets if it is “more likely than not”

that some component or all

of the benefits of deferred tax assets will not be realized.

tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not

of being sustained if the position were to be challenged by a taxing authority.

The Company has examined the tax positions taken in its

tax returns and determined that there are no uncertain tax positions.

As a result, the Company has recorded no uncertain tax liabilities

in its balance sheet.

Interest and penalties for uncertain positions, when applicable, would be recognized as a component of income tax

Company files United States Federal and State income tax returns.

The income tax returns of the Company are subject to examination

by taxing authorities for three to five years from the date they are filed.

The Company has tax returns subject to examination

for 2014-2019.

The income tax returns of the Company are subject to examination by

taxing authorities for three to five years from the date they are filed.

The Company has tax returns subject to examination for 2015-2020.

of Consolidation, The consolidated financial statements include the accounts of the Company and its subsidiary.

The subsidiary

is wholly owned.

The subsidiary is

wholly owned.

All intercompany accounts and transactions are eliminated in consolidation.

Interest Entities (“VIEs”), When the Company holds NIBs the owners of the underlying Life Insurance Policies are

often considered variable interest entities (VIEs), for which the Company has a variable interest, but is not the primary beneficiary,

as it does not have control over the significant activities affecting the economic performance of the owners.

The Company’s

maximum exposure to loss in the variable interest entities is limited to the investment in NIBs balance, which has a carrying

value of zero as of March 31, 2020 and 2019.

The Company does not have the power to direct activities of the VIEs.

Company does not have the contractual obligation to absorb losses of the VIE beyond the Company’s initial investment.

STRATEGIES, INC.

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Value, 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.

(“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.

levels of input are summarized as follows:

Quoted prices in active markets for identical assets and liabilities.

Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets,

quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which

all significant assumptions are observable in the market.

Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets, quoted

prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant

assumptions are observable in the market.

Unobservable inputs that are supported by little or no market activity.

Level 3 assets and liabilities include financial

instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques as well

as instruments for which the determination of fair value requires significant management judgment or estimation.

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.

Company did not have any transfers of assets and liabilities between Levels 1, 2 and 3 of the fair value measurement hierarchy

during the years ended March 31, 2020 and 2019.

Company’s recorded values of cash and cash equivalents, accounts payable and accrued liabilities approximate their fair

values based on their short-term nature.

The recorded values of the Notes Payable, Related Parties and Convertible Debenture approximates

the fair values as the interest rate approximates market interest rates.

Level 3 assets and liabilities include financial instruments

whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques as well as instruments for

which the determination of fair value requires significant management judgment or estimation.

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.

Company did not have any transfers of assets and liabilities between Levels 1, 2 and 3 of the fair value measurement hierarchy during

the years ended March 31, 2021 and 2020.

Company’s recorded values of cash and cash equivalents, accounts payable and accrued liabilities approximate their fair values

based on their short-term nature.

The recorded values of the Notes Payable, Related Parties and Convertible Debenture approximates the

fair values as the interest rate approximates market interest rates.

NEW ACCOUNTING PRONOUNCEMENTS

During the Year Ended March 31, 2021

February 2016, the FASB issued ASU 2016-02 related to the accounting for leases.

This pronouncement requires lessees to record

most leases on their balance sheet, while expense recognition on the income statement remains similar to current lease accounting

The guidance also eliminates real estate-specific provisions and modifies certain aspects of lessor accounting.

the new guidance, lease classification as either a finance lease or an operating lease will determine how lease-related revenue

and expense are recognized.

The pronouncement is effective for the Company’s fiscal year beginning April 1, 2019, and for

interim periods within that fiscal year.

The adoption of this standard did not have an impact on the consolidated financial statements

because leases are month-to-month and not material to the Company’s financial statements.

June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses.

1 unchanged sentence

credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss”

These expected credit losses for financial assets held at the reporting date are to be based on historical experience,

current conditions, and reasonable and supportable forecasts.

This ASU will also require enhanced disclosures relating to significant

estimates and judgments used in estimating credit losses, as well as the credit quality.

The amendments are effective for the

Company’s fiscal year beginning April 1, 2020, including interim periods within that fiscal year.

The Company is currently

evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements and results of operations.

These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions,

and reasonable and supportable forecasts.

This ASU will also require enhanced disclosures relating to significant estimates and judgments

used in estimating credit losses, as well as the credit quality.

The amendments are effective for the Company’s fiscal year beginning

April 1, 2020, including interim periods within that fiscal year.

The adoption of this standard did not have an impact on the consolidated

financial statements because the Company does not hold financial instruments subject to credit losses.

Company has reviewed all other 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.

CASH AND CASH EQUIVALENTS

and cash equivalents consist principally of currency on hand and demand deposits at commercial banks.

The Company had $21,179 and $28,784

in cash and cash equivalents as of March 31, 2021, and 2020, respectively.

The Company maintains non-interest-bearing accounts at one

financial institution.

The accounts at this institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.

STRATEGIES, INC.

2 unchanged sentences

31, 2021 and 2020

Company has reviewed all other 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.

CASH AND CASH EQUIVALENTS

and cash equivalents consist principally of currency on hand and demand deposits at commercial banks.

The Company had $28,784

and $579 in cash and cash equivalents as of March 31, 2020, and 2019, respectively.

The Company maintains non-interest-bearing

accounts at one financial institution.

The accounts at this institution are insured by the Federal Deposit Insurance Corporation

(FDIC) up to $250,000.

STOCKHOLDERS’

December 6, 2018, three existing stockholders have contributed to the Company a portion of their common shares held at a repurchase

price to the Company of $0.05 per share.

The Company has cancelled the acquired shares, which decreased the outstanding common

shares on the books of the Company.

December 6, 2018, three existing stockholders have contributed to the Company a portion of their common shares held at a repurchase price

to the Company of $0.05 per share.

The Company has cancelled the acquired shares, which decreased the outstanding common shares on the

books of the Company.

The total number of common shares canceled/retired was 8,000,000.

The total liability related

to the repurchase of these shares is $400,000, with repayment contingent on a major financing event.

July 11, 2018, the Company issued 800,000 common shares in return for obtaining the remaining 27.8% ownership of certain NIBs.

The transaction was recorded at $17,840, the estimated fair value of the common stock issued (which management believes approximated

the fair value of the NIBs received on the date of the transaction).

The additional NIBs acquired were reflected as an increase

to the Investment in NIBs account, and the NIBs were immediately impaired on the date of the transaction, bringing the total impairment

recognized on the NIBs to $22,967,966 plus $1,936,311 of impairment on accrued interest receivable.

The total liability related to the repurchase

of these shares is $400,000, with repayment contingent on a major financing event.

August 2020, the Company awarded members of the Board of Directors a total of 1,500,000 shares of the Company’s common stock, in

lieu of director cash compensation.

The stock awards vested 25% on the date of grant and the remainder of the shares vested equally over

the three months following the date grant.

As of March 31, 2021, all grant shares were 100% vested.

Using a fair value stock price of

$0.0223 per share, the transaction resulted in a compensation expense of $33,450, which was fully recognized during the year ended March

October 5, 2020, the Company granted one of its consultants 280,000 shares of the Company’s common stock in exchange for services

The shares vested upon issuance, and the Company is under no obligation to register the restricted shares.

Using a fair value

stock price of $0.0223 per share, the transaction resulted in a consulting expense of $6,244, which was fully recognized during

the year ended March 31, 2021.

November 10, 2020, the Company issued a private placement memorandum offering to raise up to $1,000,000 through the issuance of restricted

shares of the Company’s common stock (par value $0.001) to qualified investors.

As of March 31, 2021, the Company had received

subscription agreements from related parties, which are family members and business associates of a significant stockholder for 500,000

common shares at a purchase price of $1 per share, with proceeds to the Company totaling $500,000.

to Purchase Common Stock

explained in Note 6, the related party lenders have received warrants to purchase common stock of the Company if extensions of

due dates had been granted or additional monies had been loaned under the agreements.

April 3, 2020, 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 include a formal provision that 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.

The number of warrants issued will

be 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).

Effective April

3, 2020, the number of warrants to be issued upon the loaning of additional monies is 2 warrants for each dollar loaned.

April 3, 2020, 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 include a formal provision that 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.

The number of warrants issued will be based on the following

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).

Effective April 3, 2020, the number of warrants to be

issued upon the loaning of additional monies is 2 warrants for each dollar loaned.

addition, Mr.

Dickman, the holder of the related party, unsecured promissory notes (see Note 6) has informed the Company that,

at such time the Company requests either an extension or additional monies from the lender, in addition to interest, the lender

will require 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.

of March 31, 2020, the Company held outstanding warrants to related parties totaling 1,702,000 (none as of March 31, 2019).

warrants have an exercise price of $0.05 per share, a five-year life as of the date of grant and expire between November 2024

and February 2025.

The average remaining outstanding life of the warrants as of March 31, 2020, was 4.75 years.

The common stock

issued upon exercise of the warrants are not registered with the Securities and Exchange Commission and do not have registration

Dickman, the holder of the related party, unsecured promissory notes (see Note 6) has informed the Company that, at such

time the Company requests either an extension or additional monies from the lender, in addition to interest, the lender will require

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.

October 1, 2020, the related party, note payable and line of credit agreement with Radiant Life, LLC, an entity partially owned by the

Chairman of the Board of Directors (see Note 6) was amended to include a formal provision that 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.

The number of warrants

issued will be 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).

the number of warrants to be issued upon the loaning of additional monies is 2 warrants for each dollar loaned.

In this amendment, the

due date was extended from August 31, 2021 to November 30, 2022 or at the immediate time when alternative financing or other proceeds

are received.

As per the provision outlined above, and in conjunction with the extension of the due date of the agreement, the Company

also agreed to provide the Radiant Life, LLC with warrants for 579,754 shares of common stock at an exercise price of $0.05 per share.

The warrants have a 5-year exercise window from the date of the extension agreement.

STRATEGIES, INC.

2 unchanged sentences

31, 2021 and 2020

of March 31, 2021 and 2020, the Company held outstanding warrants to related parties totaling 3,488,754 and 1,702,000, respectively.

All warrants have an exercise price of $0.05 per share, a five-year life as of the date of grant and expire between November 2024 and

October 2025.

The estimated fair value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model,

was not significant.

The inputs used in this calculation included a fair value of $0.0223 per share, a risk-free rate of 0.23% to 1.67%,

volatility of 20% to 123% and a dividend rate of 0%.

The average remaining outstanding life of the warrants as of March 31, 2021, was

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.

NOTES PAYABLE, RELATED PARTY

of March 31, 2020 and 2019, the Company had borrowed $2,450,508 and $1,672,008 respectively, excluding accrued interest, from

related parties.

The interest associated with the Notes Payable, Related Party of $288,369 and $113,981 is recorded on the balance

sheet as an Accrued Expense obligation at March 31, 2020 and March 31, 2019, respectively.

of March 31, 2021 and 2020, the Company had borrowed $2,741,808 and $2,450,508 respectively, excluding accrued interest, from related

The interest associated with the Notes Payable, Related Party of $513,665 and $288,369 is recorded on the balance sheet as an

Accrued Expense obligation at March 31, 2021 and March 31, 2020, respectively.

Party Promissory Notes

of March 31, 2020 and 2019, the Company owed $826,000 and $450,000, respectively, under the unsecured promissory notes from Mr.

Dickman, a stockholder and member of the Board of Directors.

of both March 31, 2021 and 2020, the Company owed $826,000 under the unsecured promissory notes from Mr.

Dickman, a stockholder

and member of the Board of Directors.

The promissory notes bear interest at a rate of 8% annually.

On November 5, 2019, the Company agreed to amend the agreements to extend the due date on the promissory notes from August 31,

2020 to November 30, 2021 or at the immediate time when alternative financing or other proceeds are received.

In addition, the

Company agreed to provide Mr.

Dickman warrants for 450,000 shares of common stock at an exercise price of $0.05 per share and

a five-year life.

The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model, was

not significant.

The inputs used in this calculation included a risk-free rate of 1.66%, volatility of 27.29% and a dividend rate

On February 4, 2020, the Company borrowed an additional $230,000 from Mr.

Dickman, and agreed to provide him with an additional

752,000 warrants for shares of common stock at an exercise price of $0.05 per share.

The value of the warrants on the date of

grant, as calculated by the Black-Scholes-Merton valuation model, was not significant.

The inputs used in this calculation included

a risk-free rate of 1.66%, volatility of 27.29% and a dividend rate of 0%.

During the year ended March 31, 2020, the Company borrowed

a total of $376,000 of principal under this agreement and made no repayments.

As of March 31, 2020, accrued interest on the notes

totaled $67,752.

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 notes are due on November 30,

2021, or at the immediate time when alternative financing or other proceeds are received.

In addition, as mentioned in Note 5, prior

to March 31, 2020, the Company had provided Mr.

Dickman warrants for 1,202,000 shares of common stock.

During the year ended March 31,

2021, the Company neither borrowed any additional funds under this agreement nor made any principal repayments.

As of March 31, 2021,

accrued interest on the notes totaled $142,182.

In the event the Company completes a successful equity raise all principal and interest

on the notes are due in full at that time.

Party Note Payable and Line of Credit Agreements

of March 31, 2020 and 2019, the Company owed $795,000 and $392,500, respectively, exclusive of accrued interest, under the note

payable and line of credit agreement with the Chairman of the Board of Directors and a stockholder.

The agreement allows for borrowings

of up to $4,600,000.

On January 8, 2020, the note payable and the line of credit agreement was extended from November 30, 2020

to August 31, 2021.

In addition, the Company agreed to provide the Chairman with warrants for 500,000 shares of common stock at

an exercise price of $0.05 per share and a five-year life.

The value of the warrants on the date of grant, as calculated by the

Black-Scholes-Merton valuation model, was not significant.

The inputs used in this calculation included a risk-free rate of 1.66%,

volatility of 27.29% and a dividend rate of 0%.

of March 31, 2021 and 2020, the Company owed $1,056,300 and $795,000, respectively, exclusive

of accrued interest, under the note payable and line of credit agreement with the Chairman of the Board of Directors and a stockholder.

On October 27, 2020, the Company agreed to amend the agreement to extend the due date on the agreement to extend the due date from August

31, 2021 to November 30, 2022 or at the immediate time when alternative financing or other proceeds are received.

31, 2021 , the agreement allowed for borrowings of up to $4,600,000.

During the year ended March

31, 2021 the Company borrowed $256,800 in cash, and another $7,000 of expense paid on behalf of the Company, totaling and additional

$263,800 in principal borrowed under this agreement.

During the year ended March 31, 2021 ,

the company repaid $2,500 in principal on this agreement.

The note payable and line of credit agreement incurs interest at 7.5% per annum

and are collateralized by the Company’s NIBS, if any.

During the year ended March 31, 2020 the Company borrowed $402,500

of principal under this agreement and made no repayments.

As of March 31, 2020, accrued interest on totaled $69,209.

the Company completes a successful equity raise all principal and interest on this note are due in full at that time.

of March 31, 2020 and 2019, the Company owed $829,508, exclusive of accrued interest, under the note payable and lines of credit

As of March 31, 2021 , accrued

interest on this note totaled $142,511.

discussed in Note 5, effective April 3, 2020, 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.

Under this provision, additional

warrants for 527,600 shares of common stock were issued in conjunction with the $263,800 borrowed during the year ended March

31, 2021 , and warrants for 679,400 shares of common stock were issued in conjunction with the October 2020 due date extension,

bringing the total number of warrants issued to the related party lender to 1,707,000 as of March

31, 2021 (see Note 5 for further details on these warrants).

These warrants have an exercise price of $0.05 per share and have

a 5-year exercise window from the respective dates of issuance.

of March 31, 2021 and 2020, the Company owed $859,508 and $829,508 in principal, respectively, under the 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.

On December 19, 2019, the Company agreed to amend the agreement to extend the due date on the

note payable and line of credit agreement from November 30, 2020 to August 31, 2021, 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

is collateralized by the Company’s NIBS, if any.

During the year ended March 31, 2020 the Company neither borrowed nor repaid

any principal under this agreement.

As of March 31, 2020, accrued interest on this agreement totaled $151,408.

In the event the

Company completes a successful equity raise, all principal and interest on this note are due in full at that time.

The agreement allows for borrowings

of up to $2,130,000.

On October 1, 2020, the related party, note payable and line of credit agreement was amended to extend the due date

from August 31, 2021 to November 30, 2022 or at the immediate time when alternative financing or other proceeds are received.

payable and line of credit agreement incurs interest at 7.5% per annum and is collateralized by the Company’s NIBS, if any.

the year ended March 31, 2021 the Company borrowed $30,000 of principal under this agreement and made no repayments.

As of March 31,

2021, accrued interest on this agreement totaled $228,972.

STRATEGIES, INC.

2 unchanged sentences

31, 2021 and 2020

per the provision outlined in Note 5, and in conjunction with the extension of the due date of the agreement, the Company also agreed

to provide the Radiant Life, LLC with warrants for 579,754 shares of common stock at an exercise price of $0.05 per share.

have a 5-year exercise window from the date of the extension agreement.

CONVERTIBLE DEBENTURE AGREEMENT

Company has entered into an 8% convertible debenture agreement with Satco International, Ltd., that allows for borrowings of up

to $3,000,000 and is not collateralized.

The holder originally had the option to convert the outstanding principal and accrued

interest to unregistered, restricted common stock of the Company on June 2, 2016.

Per the agreement, the number of shares issuable

at conversion shall be determined by the quotient obtained by dividing the outstanding principal and accrued and unpaid interest

by 90% of the 90 day average closing price of the Company’s common stock from the date the notice of conversion is received;

and the price at which the Debenture may be converted will be no lower than $1.00 per share.

The original maturity date was June

2, 2016, but was later extended, through a series of extensions, to August 31, 2019.

On October 29, 2019, the Company agreed to

amend the 8% Convertible Debenture Agreement and extended the due date and conversion rights to December 1, 2020.

Subsequent to

March 31, 2020, the Company agreed to further extend the due date and conversion rights to November 30, 2021.

As of March 31,

2020 and 2019, the Company owed no principal under the agreement.

The associated interest of $124,225 is recorded on the balance

sheet as an Accrued Expense obligation at March 31, 2020 and 2019.

Company has entered into an 8% convertible debenture agreement with Satco International, Ltd., that allows for borrowings of up to $3,000,000.

The holder originally had the option to convert the outstanding principal and accrued interest to unregistered, restricted common stock

of the Company on June 2, 2016.

Per the agreement, the number of shares issuable at conversion shall be determined by the quotient obtained

by dividing the outstanding principal and accrued and unpaid interest by 90% of the 90 day average closing price of the Company’s

common stock from the date the notice of conversion is received;

and the price at which the Debenture may be converted will be no lower

than $1.00 per share.

The original maturity date was June 2, 2016, but was later extended, through a series of extensions, to December

On July 13, 2020, the Company agreed to amend the convertible debenture agreement to extend the due date and conversion rights

from December 1, 2020 to November 30, 2021.

As of March 31, 2021 and 2020, the Company owed $0 under the agreement, excluding accrued

The associated interest of $124,225 is recorded on the balance sheet as an accrued expense obligation at March 31, 2021 and

April 20, 2020, the Company received funding under a Paycheck Protection Program (“PPP”) loan (the “PPP Loan”)

from CCBank (the “Lender”).

The principal amount of the PPP Loan was $26,458.

The PPP was established under the Coronavirus

Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S.

Small Business Administration (the

“SBA”).

The PPP Loan has a two-year term, maturing on April 20, 2022.

The interest rate on the PPP Loan is 1.0% per annum.

Principal and interest are payable in monthly installments, beginning on November 20, 2020, until maturity with respect to any portion

of the PPP Loan which is not forgiven as described below.

The Company did not provide any collateral or guarantees for the PPP Loan,

nor did the Company pay any facility charge to obtain the PPP Loan.

The PPP Loan provides for customary events of default, including,

among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects.

Loan could be partially or fully forgiven if the Company complied with the provisions of the CARES Act, including the use of PPP Loan

proceeds for payroll costs, rent, utilities and other expenses, provided that such amounts are incurred during a 24-week period that

commenced on April 20, 2020, and at least 60% of any forgiven amount had been used for covered payroll costs as defined by the CARES

December 9, 2020, the Company received notice that the full PPP Loan amount of $26,458 had been forgiven.

As such, the Company recorded

$26,458 of Gain on Extinguishment of Debt on its Statement of Operations for the year ended March

LIQUIDITY REQUIREMENTS

1 unchanged sentence

from related parties and the issuance of notes payable and convertible debentures.

As of March 31, 2020, the Company had $28,784

of cash assets, compared to $579 as of March 31, 2019.

As of March 31, 2020, the Company had access to draw an additional $5,105,492

on the notes payable, related party (see Note 6) and $3,000,000 on the Convertible Debenture Agreement (See Note 7).

ended March 31, 2020, the Company’s average monthly operating expenses were approximately $70,000, which includes salaries

of our employees, consulting agreements and contract labor, general and administrative expenses and legal and accounting expenses.

The Company anticipates the average monthly expenses of $70,000 to decrease by approximately $10,000 over the next 12 months,

resulting in ongoing, average monthly expenses of approximately $60,000.

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 $110,000 and $849,806

were incurred during the years ended March 31, 2020, and 2019, respectively.

As management continues to explore additional financing

alternatives, beginning April 1, 2020 the Company is expected to spend up to an additional $400,000 on these efforts.

Accounts Payable as of March 31, 2020 totaled $481,716.

Management has concluded that its existing capital resources and availability

under its existing convertible debentures and debt agreements with related parties will be sufficient to fund its operating working

capital requirements for at least the next 12 months, or through June 2020.

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.

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

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.

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.

Due to the foreclosure on the NIBs mentioned

above, the Company has no current source of operating revenues.

In order to purchase NIBs, the Company will need to raise additional

capital or secure alternative sources of debt financing.

Company provides for income taxes under ASC 740, Income Taxes.

ASC 740 requires the use of an asset and liability approach in

accounting for income taxes.

Deferred tax assets and liabilities are recorded based on the differences between the financial statement

and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

As of March 31, 2021, the Company had $21,179 of cash

assets, compared to $28,784 as of March 31, 2020.

As of March 31, 2021, the Company had access to draw an additional $4,814,192 on the

notes payable, related party (see Note 6) and $3,000,000 on the Convertible Debenture Agreement (See Note 7).

For the year ended March

31, 2021, the Company’s average monthly operating expenses were approximately $75,000, which includes salaries of our employees,

consulting agreements and contract labor, general and administrative expenses and legal and accounting expenses.

The Company anticipates

the average monthly expenses of $75,000 to decrease by approximately $10,000 over the next 12 months, resulting in ongoing, average monthly

expenses of approximately $65,000.

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 $422,751 and $110,000 were incurred during the years ended March 31,

2021, and 2020, respectively.

As management continues to explore additional financing alternatives, beginning April 1, 2021 the Company

is expected to spend up to an additional $400,000 on these efforts.

Outstanding Accounts Payable as of March 31, 2021 totaled $893,674.

Management has concluded that its existing capital resources and availability under its existing convertible debentures and debt agreements

with related parties will be sufficient to fund its operating working capital requirements for at least the next 12 months, or through

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.

STRATEGIES, INC.

2 unchanged sentences

31, 2021 and 2020

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.

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.

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.

Company provides for income taxes under ASC 740, Income Taxes.

ASC 740 requires the use of an asset and liability approach in accounting

for income taxes.

Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases

of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

Company recorded no provision for income taxes for the years ended March 31, 2021 and 2020.

income tax provision differs from the amount of income tax determined by applying the U.S.

federal tax rate of 21% to pretax income

from continuing operations for the years ended March 31, 2020 and 2019, due to the following:

federal tax rate of 21% to pretax income from

continuing operations for the years ended March 31, 2021 and 2020, due to the following:

Income tax benefit at U.

2 unchanged sentences

Permanent and other differences

Net operating losses

Change in valuation allowance

Change in statutory rate

STRATEGIES, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2021 and 2020

tax effects of significant items comprising the Company’s net deferred taxes as of March 31, 2021 and 2020 were as follows:

4 unchanged sentences

Net deferred tax asset

Deferred tax liability:

Investment in net insurance benefits

Net deferred tax liability

Company assesses the need for a valuation allowance against its deferred income tax assets at March 31, 2021.

Factors considered

in this assessment include recent and expected future earnings and the Company’s liquidity and equity positions.

the year ended March 31, 2018, the underlying policies related to the Company’s NIBs were subject to foreclosure (see Note

As a result, the Company has placed a 100% valuation allowance on the deferred tax assets.

The deferred tax assets primarily

relate to net operating loss carryforwards and the deferred tax liabilities primarily related to revenue recognized for financial

reporting purposes, but not for tax reporting purposes.

Factors considered in this

assessment include recent and expected future earnings and the Company’s liquidity and equity positions.

During the year ended

March 31, 2018, the underlying policies related to the Company’s NIBs were subject to foreclosure (see Note 1).

As a result, the

Company has placed a 100% valuation allowance on the deferred tax assets.

The deferred tax assets primarily relate to net operating loss

carryforwards.

of March 31, 2021, the Company has U.S.

federal net operating loss carryforwards of $27,893,903.

These carry forwards are available

to offset future taxable income, if any, and begin to expire in 2021.

The utilization of the net operating loss carry forwards

is dependent upon the tax laws in effect at the time the net operating loss carry forwards can be utilized and may be significantly

limited based on ownership changes within the meaning of section 382 of the Internal Revenue Code.

FASB ASC 740-10-05-6, tax benefits are recognized only for the tax positions that are more likely than not to be sustained upon

examination by tax authorities.

The amount recognized is measured as the largest amount of benefit that is greater than 50 percent

likely to be realized upon ultimate settlement.

Unrecognized tax benefits are tax benefits claimed in the company’s tax

return that do not meet these recognition and measurement standards.

These carry forwards are available to

offset future taxable income, if any, and begin to expire in 2021.

The utilization of the net operating loss carry forwards is dependent

upon the tax laws in effect at the time the net operating loss carry forwards can be utilized and may be significantly limited based

on ownership changes within the meaning of section 382 of the Internal Revenue Code.

FASB ASC 740-10-05-6, tax benefits are recognized only for the tax positions that are more likely than not to be sustained upon examination

by tax authorities.

The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized

upon ultimate settlement.

Unrecognized tax benefits are tax benefits claimed in the company’s tax return that do not meet these

recognition and measurement standards.

Company had no liabilities for unrecognized tax benefits and the Company has recorded no additional interest or penalties.

STRATEGIES, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2020 and 2019

SUBSEQUENT EVENTS

to year end, the following events transpired:

July 13, 2020, the Company agreed to amend the 8% convertible debenture agreement with Satco International, Ltd., to extend the

due date and conversion rights from December 1, 2020 to November 30, 2021.

Subsequent to March 31,

2020, the Company borrowed an additional $173,500 on Notes Payable, Related Party and issued 347,000 warrants.

April 6, 2021, the Company borrowed $300,000 under an unsecured promissory note with Satco International,

This promissory note bears interest at a rate of 8% annually and is due July 5, 2021.

This note is separate from the 8%

convertible debenture agreement that the Company has in place with Satco International, Ltd..

In conjunction with this note, the Company

issued a warrant for 1,000,000 shares of common stock, exercisable at $1.00 per share and expiring in 3 years from the date of

the promissory note.

May 4, 2021, the Company issued 1,200,000 shares of the Company’s common stock to members of the Board of Directors.

awards vested 25% on the date of grant and the remainder of the shares vested equally over the three months following the date grant.

Using a fair value stock price of $0.062 per share, the transaction resulted in a compensation expense of $73,200, which is to be recognized

according to the vesting schedule outlined above.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data