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Item 8. Financial Statements and Supplementary Data

2023-06-29 compared with 2022-06-29 · 342 added, 452 removed, 358 unchanged (69% of the section changed)

3 unchanged sentences

TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm (PCAOB ID NO:

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of March 31, 2023, and 2022

8 unchanged sentences

and Subsidiary (“the Company”) as

of March 31, 2022 and 2021, the related consolidated statements of operations, stockholders’ deficit, and cash flows for each

of the years in the two-year period ended March 31, 2022 and the related notes (collectively referred to as the “financial statements”).

of March 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of

the years in the two-year period ended March 31, 2023 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

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

We 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.

We 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.

We 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 Instruments

of the Critical Audit Matter

the year ended March 31, 2022, 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 actively trade on an

active market.

The Company utilized a valuation methodology that incorporated the price from equity instruments issued for cash and

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

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, specialized skills and knowledge.

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 stock.

tested the reasonableness of the assumptions used by 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 rates.

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.

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

assessed whether the Company’s determination that there is substantial doubt about

its ability to continue as a going concern was adequately disclosed.

Sadler, Gibb & Associates, LLC

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AND SUBSIDIARY

Balance Sheets

March 31, 2022

March 31, 2021

Consolidated Balance Sheets

Current Assets

8 unchanged sentences

Current portion of notes payable, related parties

Current notes payable

Stock repurchase payable

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Accrued expenses

Notes payable, related parties, net of current portion

Notes payable, related parties, net of current portion, net of debt discount

Total Long-Term Liabilities

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

41,408,441 and 40,108,441 shares issued

and outstanding as of March 31, 2022 and 2021, respectively

41,408,441 shares issued and outstanding as of March 31, 2023, and

Additional paid-in capital

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AND SUBSIDIARY

Statements of Operations

Year Ended March 31,

Consolidated Statements of Operations

Years Ended March 31,

Income from Investments

2 unchanged sentences

Other Income (Expense)

Gain (loss) on extinguishment of debt

Loss on extinguishment of debt

( 1,745,808 )

( 1,869,971 )

Gain on settlement of liabilities

1 unchanged sentence

Financing expense

Total Other Expense

Total Other Income (Expense)

( 2,129,698 )

( 2,070,227 )

Loss Before Income Taxes

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AND SUBSIDIARY

Statements of Stockholders’ Deficit

the Years Ended March 31, 2022 and 2021

Consolidated Statements of Stockholders’ Deficit

the Year Ended March 31, 2023, and 2022

Stockholders’

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$ ( 4,716,062 )

Common stock issued for consulting services

Common stock issued for director compensation

Common stock issued for cash

Common stock and warrants issued for cash

Warrants issued in connection with debt issuances

Warrants issued in connection to extinguishment of debt

( 2,765,085 )

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$ ( 5,026,867 )

Common stock issued for director compensation

Common stock and warrants issued for cash

$ ( 32,249,894 )

$ ( 5,026,867 )

Warrants issued in connection with debt issuances

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$ ( 6,033,908 )

$ ( 35,061,875 )

$ ( 6,033,908 )

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

STRATEGIES, INC.

SUNDANCE STRATEGIES, INC.

AND SUBSIDIARY

Statements of Cash Flows

Year Ended March 31,

Operating Activities

Consolidated Statements of Cash Flows

Ended March 31,

$ ( 2,811,981 )

$ ( 2,765,085 )

Adjustments to reconcile to net cash used in operating activities:

Share based compensation - common stock

Expense paid on behalf of Company by director

Gain on settlement of liabilities

Loss (gain) on extinguishment of debt

Amortization of debt discount

Changes in operating assets and liabilities

Prepaid expenses and other assets

Accounts payable

Accrued expenses

Net Cash used in Operating Activities

Financing Activities

Proceeds from issuance of notes payable, related party

Proceeds from issuance of notes payable

Common stock issued for cash

Proceeds from Paycheck Protection Program loan

Debt issuance costs

Net Cash provided by Financing Activities

Net Change in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents at End of Period

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash paid for income taxes

Non Cash Financing & Investing Activities, and Other Disclosures

Issued warrants as debt issuance costs

to reconcile net loss to net cash used in operating activities:

based compensation – common stock

on settlement of liabilities

on extinguishment of debt

of debt discount

in operating assets and liabilities

expenses and other assets

Cash used in Operating Activities

from issuance of notes payable, related party

from issuance of notes payable

stock issued for cash

Cash provided by Financing Activities

Change in Cash and Cash Equivalents

and Cash Equivalents at Beginning of Period

and Cash Equivalents at End of Period

disclosure of cash flow information:

paid for interest

paid for income taxes

Cash Financing & Investing Activities, and Other Disclosures

warrants as debt issuance costs

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

SUNDANCE STRATEGIES, INC.

STRATEGIES, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and 2021

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023, and 2022

(1) ORGANIZATION AND BASIS OF PRESENTATION

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As of March 31, 2023 and the issuances of these financial

statements, none of the milestones related to the potential issuance of equity have been

SUNDANCE STRATEGIES, INC.

statements, none of the milestones related to the potential issuance of equity have been met.

STRATEGIES, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and 2021

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023, and 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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 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 years ended March 31, 2022 and 2021, because to do so would be anti-dilutive.

dilutive securities outstanding as of March 31, 2022 and 2021 include warrants convertible into 7,520,241

and 3,488,754

shares of common stock, respectively.

Based Compensation and Financing Costs , The Company measures stock-based compensation expense related to employee stock-based awards

and stock based expense associated with certain financing costs 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 for options and vesting period for warrants.

utilizes the Black-Scholes pricing model to estimate the fair value of stock options issued as compensation and warrants issued as financing

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 warrant, 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.

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

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

Potentially dilutive shares resulting from convertible debt agreements are evaluated using the if-converted method.

dilutive securities are not included in the calculation of diluted net loss per share for the years ended March 31, 2023, and 2022, because

to do so would be anti-dilutive.

Potentially dilutive securities outstanding as of March 31, 2023, and 2022, include warrants convertible

into 9,403,644 and 7,250,241 shares of common stock, respectively.

Compensation and Financing Costs , The Company measures stock-based compensation expense related to employee stock-based awards and

stock-based expense associated with certain financing costs 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 for options and vesting period for warrants.

The Company utilizes

the Black-Scholes pricing model to estimate the fair value of stock options issued as compensation and warrants issued as financing costs.

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 warrant, 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”.

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ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values.

SUNDANCE STRATEGIES, INC.

STRATEGIES, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and 2021

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023, and 2022

levels of input are summarized as follows:

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

NOTES PAYABLE

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

This promissory note bears

interest at a rate of 8 % annually and was due January 6, 2022.

In conjunction with this note, the Company issued warrants for 1,000,000

shares of common stock, exercisable at $ 1.00 per share and expiring in 3 years from the date of the promissory note.

9, 2023 , the unsecured promissory note with Satco International, Ltd.

was amended to extend the

due date from April 6, 2023 to August 31, 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.

This note is separate from the 8 % convertible debenture agreement that

the Company has in place with Satco International, Ltd.

(see note 8).

As of March 31, 2023 accrued

interest on the note totaled $ 47,605 .

STRATEGIES, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023, and 2022

NOTES PAYABLE, RELATED PARTY

of March 31, 2023, and 2022, the Company had borrowed $ 3,194,108

and $ 3,001,808

respectively, excluding accrued interest, from related parties.

Unamortized debt discount with the Notes Payable, Related party was

$ 36,645 and $ 0 as of March 31, 2023, and March 31, 2022, respectively.

Short-term accrued interest associated with the Notes

Payable, Related Party of $ 364,908 and

is recorded on the balance sheet as an Accrued Expense obligation at March 31, 2023, and March 31, 2022, respectively.

Long-term accrued interest associated with the Notes Payable, Related Party of $ 857,684 and $ 666,015 is recorded on the balance sheet

as an Accrued Expense obligation at March 31, 2023, and March 31, 2022, respectively.

Party Promissory Notes

of both March 31, 2023, and 2022 ,

the Company owed $ 826,000 under the unsecured promissory notes from Mr.

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

On November 10, 2022, the notes were amended to extend the due date from October 31, 2022,

to July 31, 2023 , or at the immediate time when alternative financing or other proceeds

are received, and on June 5, 2023, the notes were amended to extend the due date from July 31, 2023, to August 31, 2024 , or at the immediate

time when alternative financing or other proceeds are received.

As per the provision outlined in Note 8, and in conjunction with the

extension of the due date of the promissory notes on November 10, 2022, the Company also agreed to provide Mr.

Dickman with warrants

for 399,749 shares of common stock (see Note

As per the provision outlined in Note 8, 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 543,000 shares of common stock (see Note 11).

During the year

ended March 31, 2023 , the Company neither borrowed any additional funds under this agreement

nor made any principal repayments.

As of March 31, 2023 , accrued interest on the notes totaled

In the event the Company completes

a successful equity raise all principal and interest on the notes are due in full at that time.

July 29, 2021, the Company entered into an unsecured promissory note agreement with Radiant Life, LLC.

This agreement was in conjunction

with the Company borrowing $ 50,000 of Notes Payable, Related Party, and is not part of the existing note payable and lines of credit

agreement the Company has with Radiant Life, LLC.

The promissory note bears interest at a rate of 8 % annually and is due on July 29,2024

In conjunction

with this specific loan event, the agreement awards Radiant Life, LLC with 50,000 common stock warrants, which have an exercise price

of $ 1.05 , and expire in 5 years (see Note 8).

As of March 31, 2023 , accrued interest on the note totaled $ 7,152 .

Party Note Payable and Line of Credit Agreements

of March 31, 2023, and 2022, the Company owed $ 1,198,600

and $ 1,066,300 ,

respectively, exclusive of accrued interest, under the note payable and line of credit agreement with Kraig T.

Higginson, Chairman of the Board of

Directors and a stockholder.

February 2, 2023, 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 .

31, 2023 , the agreement allowed for borrowings of up to $ 4,600,000 .

During the year ended March 31, 2023, the Company borrowed $ 132,300

in principal and made no repayments of principal on this agreement.

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

As of March 31, 2023 , accrued interest on this note totaled $ 305,879 .

As per the provision outlined in Note 8, and in conjunction with the due date extension and the $ 132,300

borrowed during the year ended March 31, 2023, the Company also agreed to provide the Chairman of the Board of Directors and a

stockholder, with warrants for 983,900

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.

The total number of warrants issued to the related party lender was 3,364,050

as of March 31, 2023 (see Note 8 for further details on these warrants).

STRATEGIES, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023, and 2022

of March 31, 2023, and 2022, the Company owed $ 1,119,508

and $ 1,059,508

in principal, respectively, under the note payable

and lines of credit agreement with Radiant Life, LLC.

The agreement allows for borrowings of up to $ 2,130,000 .

On February 2, 2023, 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.

The note payable and line

of credit agreement incurs interest at 7.5 %

During the year ended March 31, 2023 the Company borrowed $ 60,000

of principal under this agreement and made no

As of March 31, 2023, accrued interest on this agreement totaled $ 427,580 .

As per the provision outlined in Note 8, and in conjunction with the due date extension and the $ 60,000

borrowed under the note payable and lines of

credit agreement during the year, the Company also agreed to provide Radiant Life, LLC with warrants for 769,754

shares of common stock, vested immediately upon

issuance, a 5-year exercise window from the dates of issuance, having an exercise price of $ 1.05

The total number of warrants issued

to the related party lender was 2,449,262

as of March 31, 2023 (see Note 8 for further

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 .

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

of the Company on June 2, 2016.

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

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

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

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

than $ 1.00 per share .

The original maturity date was June 2, 2016 , but was later extended, through a series of extensions, to November 30, 2023 .

On February 9, 2023 the convertible debenture agreement with Satco International, Ltd.

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.

of March 31, 2023 and March 31, 2022, the Company owed $ 0 under the agreement, excluding accrued interest.

The associated interest of

$ 124,225 is recorded on the balance sheet as an Accrued Expense obligation at March 31, 2023, and 2022.

STOCKHOLDERS’ EQUITY

5 unchanged sentences

Proceeds to the Company totaled $ 500,000 .

May 4, 2021, the Company issued 1,200,000

shares of the Company’s common stock to

members of the Board of Directors in lieu of 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 granted.

Using a fair value

stock price of $ 0.062

per share, the transaction resulted in a compensation

expense of $ 73,920 .

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 .

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

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 granted.

Using a fair value stock price of $ 0.062 per share, the transaction resulted in a compensation expense of

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

5 unchanged sentences

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

SUNDANCE STRATEGIES, INC.

STRATEGIES, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and 2021

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023, and 2022

to Purchase Common Stock

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SCHEDULE OF WARRANT OUTSTANDING

Number of Warrants

Weighted Average

Exercise Price ($)

at March 31, 2020

Outstanding at

March 31, 2021

Outstanding at March 31, 2021

Outstanding at March 31, 2022

Outstanding at March 31, 2023

Exercisable at March 31, 2023

Company’s related party lenders consist of:

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Upon the loaning of additional monies, the lender will also require 2 warrants for each dollar loaned.

issued under these terms vested immediately upon issuance, have an exercise price of $ 0.05 , and expire 5 years from the date of issuance.

February 5, 2022, the Company issued 649,754 warrants

to Radiant Life, LLC, 653,150 warrants

to the Chairman of the Board of Directors and a stockholder and 488,583 warrants

Dickman in conjunction with various extensions of maturity dates during the period (see Note 7) per the terms outlined above.

issued under these terms vested immediately upon issuance, have an exercise price approximately equivalent 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 year ended March 31, 2023, the Company issued 339,749

warrants to Mr.

Dickman, 719,300

warrants to the Chairman of the Board of Directors,

warrants to Radiant Life, LLC in conjunction

with an extension of the maturity dates during the period (see Note 8) per the terms outlined above.

The exercise price of these warrants

The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model was $ 1,678,810 .

The inputs used in this calculation included a fair value of the underlying common stock of $ 1.049

per share, a risk-free between 3.49 %

volatility between 142.92 %

and a dividend rate of 0 %.

the year ended March 31, 2023 the Company issued 264,600

warrants to the Chairman of the Board of Directors

warrants to Radiant Life, LLC in conjunction

with monies borrowed during the period (see Note 8) 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 $ 365,502 .

The inputs used in this calculation included a fair value of the underlying common stock of $ 1.049 per

share, a risk-free of 1.76 %,

volatility of 131.78 %

The inputs used in this calculation included a fair value of the underlying common stock of $ 1.049

per share, a risk-free between 3.62 %

volatility between 142.23 %

and a dividend rate of 0 %.

Subsequent to March 31, 2022, the exercise price was adjusted from $ 0.05 to

which was the estimated fair market value of the common stock on the grant date (see Note 11).

STRATEGIES, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023, and 2022

February 5, 2022, the Company issued 649,754 warrants to Radiant Life, LLC, 653,150 warrants to the Chairman of the Board of Directors

and a stockholder and 488,583 warrants to Mr.

Dickman in conjunction with various extensions of maturity dates during the period (see

Note 8) per the terms outlined above.

The exercise price of these warrants was $ 0.05 .

The value of the warrants on the date of grant,

as calculated by the Black-Scholes-Merton valuation model, was $ 1,840,149 .

The inputs used in this calculation included a fair value

of the underlying common stock of $ 1.049 per share, a risk-free of 1.76 %, volatility of 131.78 % and a dividend rate of 0 %.

year ended March 31, 2022, the exercise price was adjusted from $ 0.05 to $ 1.05 , which was the estimated fair market value of the common

stock on the grant date.

January 5, 2022, the Company issued 200,000 warrants to Radiant Life, LLC in conjunction with monies borrowed (see Note 8) per the terms

3 unchanged sentences

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 1.43 %, volatility of 131.78 % and a dividend rate of

The Company determined the cost of debt issuance to be $ 40,211 , to originally 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, $ 10,389 of debt discount was amortized as

interest expense until February 7, 2022.

On February 7, 2022, the related party note payable and line of credit agreement was amended

to extend the due date from November 30, 2022 to November 30, 2023, and on the date of the amendment the Company recorded the remaining

$ 29,822 of debt discount as a loss on extinguishment of debt.

Subsequent to March 31, 2022, the exercise price was adjusted from $ 0.05

to $ 1.05 , which was the estimated fair market value of the common stock on the date of the lending event (see Note 11).

August 1, 2021 and September 16, 2021, the Company issued 200,000 warrants to Radiant Life, LLC and 20,000 warrants to the Chairman of

in this calculation included a fair value of the underlying common stock of $ 1.049 per share, a risk-free rate of 1.43 %, volatility of

131.78 % and a dividend rate of 0 %.

The Company determined the cost of debt issuance to be $ 40,211 , to originally 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, $ 10,389 of

debt discount was amortized as interest expense until February 7, 2022.

On February 7, 2022, the related party note payable and line

of credit agreement was amended to extend the due date from November 30, 2022 to November 30, 2023, and on the date of the amendment

the Company recorded the remaining $ 29,822 of debt discount as a loss on extinguishment of debt.

During the year ended March 31, 2022,

the exercise price was adjusted from $ 0.05 to $ 1.05 , which was the estimated fair market value of the common stock on the date of the

lending event.

During the year ended March 31, 2022, the Company issued 200,000 warrants to Radiant Life, LLC and 20,000 warrants to the Chairman of

the Board of Directors and Mr.

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41.97 % to 42.01 % and a dividend rate of 0 %.

SUNDANCE STRATEGIES, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and 2021

mentioned above, on October 29, 2021, the Company issued a private placement memorandum offering to raise up to $ 500,000 through the

3 unchanged sentences

including 500,000 warrants exercisable at $ 5 per share, vested immediately upon issuance, with a five year expiration.

July 29, 2021, the Company borrowed an additional $ 50,000

from Radiant Life, LLC.

In conjunction with this specific loan event, a one-time agreement specifies that the associated warrants

issued totaled 50,000 ,

vested immediately upon issuance, have an exercise price of $ 2.00 ,

and expire in 5

The value of the warrants on the date of

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

July 29, 2021, the Company borrowed an additional $ 50,000 from Radiant Life, LLC.

In conjunction with this specific loan event, a one-time

agreement specifies that the associated warrants issued totaled 50,000 , vested immediately upon issuance, have an exercise price of $ 2.00 ,

and expire in 5 years.

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 fair value of the underlying common stock of $ 0.062

per share, a risk-free rate of 0.66 %

volatility of 42.14 %

and a dividend rate of 0 %.

April 6, 2021, the Company borrowed $ 300,000

under an unsecured promissory note with Satco International, Ltd.

a fair value of the underlying common stock of $ 0.062 per share, a risk-free rate of 0.66 % volatility of 42.14 % and a dividend rate of

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

(see Note 5).

In conjunction

with this note, the Company issued warrants exercisable into 1,000,000

shares of common stock, which vest immediately upon issuance, exercisable at $ 1.00

per share and expire three years from the date of the promissory note.

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 fair value of the

underlying common stock of $ 0.062

per share, a risk-free rate of 0.35 %,

volatility of 50.3 %

and a dividend rate of 0 %.

October 1, 2020, the related party, note payable and line of credit agreement with Radiant Life, LLC, 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.

the provision in place, 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.

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 the underlying

common stock of $ 0.0223 per share, a risk-free rate of 0.27 %, volatility of 27 % and a dividend rate of 0 %.

April 3, 2020 to October 27, 2020, in the Company issued warrants for 527,600 shares of common stock in conjunction with borrowing $ 263,800

from the Chairman of the Board of Directors and a stockholder,

and an additional 679,400 shares in conjunction with a due date extension on the note payable and line of credit with the Chairman of

the Board of Directors and a stockholder.

These warrants had an exercise price of $ 0.05 per share and a

5 -year exercise window from the date of issuance.

The estimated fair value of the warrants on the dates 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 the underlying

common stock of $ 0.0223 per share, a risk-free rate of 0.23 % to 0.39 %, volatility of 41.6 % to 123.85 %

and a dividend rate of 0 %.

In conjunction with this note, the Company issued warrants exercisable into 1,000,000 shares of common stock,

which vest immediately upon issuance, exercisable at $ 1.00 per share and expire three years from the date of the promissory note.

value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model, was not significant.

used in this calculation included a fair value of the underlying common stock of $ 0.062 per share, a risk-free rate of 0.35 %, volatility

of 50.3 % and a dividend rate of 0 %.

STRATEGIES, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023, and 2022

following table summarizes the warrants issued and outstanding as of March 31, 2023:

SCHEDULE OF WARRANTS ISSUED AND OUTSTANDING

Weighted Average

Remaining Contractual

Proceeds to Company

Average Remaining Contractual Life (Years)

to Company if Exercised

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

April 6, 2021, the Company borrowed $ 300,000

under an unsecured

promissory note with Satco International, Ltd.

This promissory note bears interest at a rate of 8 %

annually and was due January

In conjunction with this note, the Company

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

On February 2, 2022, the unsecured promissory note with Satco International, Ltd.

to extend the due date from January

6, 2022 to April 6, 2022 ,

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

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 March 31, 2022 accrued

interest on the note totaled $ 23,605 .

SUNDANCE STRATEGIES, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and 2021

NOTES PAYABLE, RELATED PARTY

of March 31, 2022 and 2021, the Company had borrowed $ 3,001,808 and $ 2,741,808 respectively, excluding accrued interest, from related

The interest associated with the Notes Payable, Related Party of $ 767,358 and $ 513,665 is recorded on the balance sheet as an

Accrued Expense obligation at March 31, 2022 and March 31, 2021, respectively.

Party Promissory Notes

of both March 31, 2022 and 2021, the Company owed $ 826,000 under the unsecured promissory notes from Mr.

The promissory notes

bear interest at a rate of 8 % annually.

On February 10, 2022, the notes were amended to extend the due date from November 30, 2021 to

October 31, 2022, or at the immediate time when alternative financing or other proceeds are received.

As per the provision outlined in

Note 5, and in conjunction with the extension of the due date of the promissory notes, the Company also agreed to provide Mr.

with warrants for 488,583 shares of common stock (see Note 5), During the year ended March 31, 2022, the Company neither borrowed any

additional funds under this agreement nor made any principal repayments.

As of March 31, 2022, accrued interest on the notes totaled

In the event the Company completes a successful equity raise all principal and interest on the notes are due in full at that

July 29, 2021, the Company entered into an unsecured promissory note agreement with Radiant Life, LLC.

This agreement was in conjunction

with the Company borrowing $ 50,000 of Notes Payable, Related Party, and is not part of the existing note payable and lines of credit

agreement the Company has with Radiant Life, LLC.

The promissory note bears interest at a rate of 8 % annually and is due on July 29,

In conjunction with this specific loan event, the agreement awards Radiant Life, LLC with 50,000 common stock warrants, which have

an exercise price of $ 2.00 , and expire in 5 years (see Note 5).

As of March 31, 2022, accrued interest on the note totaled $ 2,758 .

Party Note Payable and Line of Credit Agreements

of March 31, 2022 and 2021, the Company owed $ 1,066,300 and $ 1,056,300 , 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 February 7, 2022, the related party note payable and line of credit agreement was amended to extend the due date from November 30,

2022 to November 30, 2023, or at the immediate time when alternative financing or other proceeds are received.

31, 2022 , the agreement allowed for borrowings of up to $ 4,600,000 .

During the year ended March

31, 2022, the Company borrowed $ 10,000 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 March 31, 2022 , accrued

interest on this note totaled $ 222,180 .

As per the provision outlined in Note 4, and in conjunction with the due date extension and the

$ 10,000 borrowed during the year ended March 31, 2022, the Company also agreed to provide the Chairman of the Board of Directors and

a stockholder, with warrants for 673,150 shares of common stock, vested immediately upon issuance, having an exercise price of $ 0.05

per share, and a 5 -year exercise window from the dates of issuance.

The total number of warrants issued to the related party lender was

2,380,150 as of March 31, 2022 (see Note 5 for further details on these warrants).

of March 31, 2022 and 2021, the Company owed $ 1,059,508 and $ 859,508 in principal, respectively, under the note payable and lines of

credit agreement with Radiant Life, LLC.

The agreement allows for borrowings of up to $ 2,130,000 .

On February 7, 2022, the related party

note payable and line of credit agreement was amended to extend the due date from November 30, 2022 to November 30, 2023, 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 %

During the year ended March 31, 2022 the Company borrowed $ 200,000 of principal under this agreement and made no repayments.

As of March 31, 2022, accrued interest on this agreement totaled $ 319,610 .

As per the provision outlined in Note 5, and in conjunction

with the due date extension and the $ 200,000 borrowed under the note payable and lines of credit agreement during the year, the Company

also agreed to provide Radiant Life, LLC with warrants for 1,099,754 shares of common stock, vested immediately upon issuance, a 5 -year

exercise window from the dates of issuance, 50,000 warrants having an exercise price of $ 2.00 per share, and the remainder having an

exercise price of $ 0.05 per share.

The total number of warrants issued to the related party lender was 1,679,508 as of March 31, 2022

(see Note 5 for further details).

SUNDANCE STRATEGIES, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and 2021

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 .

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 January

On February 2, 2022 the unsecured promissory note with Satco International, Ltd.

was amended to extend the due date from January

6, 2022 to April 6, 2022, 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.

of March 31, 2022 and March 31, 2021, 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 March 31, 2022 and 2021.

LIQUIDITY REQUIREMENTS

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.

LIQUIDITY REQUIREMENTS AND GOING CONCERN

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 March 31, 2023, the Company had

1 unchanged sentence

as of March 31, 2022.

As of March 31, 2022, the

Company had access to draw an additional $ 4,604,192

on the notes payable, related party (see Note

7) and $ 3,000,000 on

the Convertible Debenture Agreement (See Note 7).

For the year ended March 31, 2022, 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 $ 197,761

and $ 422,751

were incurred during the years ended March 31,

2022, and 2021, respectively.

As management continues to explore additional financing alternatives, beginning April 1, 2022 the Company

is expected to spend up to an additional $ 400,000

As of March 31, 2023, the Company had access to draw an additional $ 4,411,892

on the notes payable, related party (see Note 8) and $ 3,000,000

on the Convertible Debenture Agreement (see Note 8).

For the year ended March 31, 2023, the Company’s average monthly

operating expenses were approximately $ 57,000 ,

which includes salaries of our employees, consulting agreements and contract labor, general and administrative expenses and legal

and accounting expenses.

In addition to the monthly operating expenses, the Company continues to pursue other debt and equity

financing opportunities, and as a result, financing expenses of $ 54,000

and $ 197,761 were incurred

during the years ended March 31, 2023, and 2022, respectively.

As management continues to explore additional financing alternatives,

beginning April 1, 2023 the Company is expected to spend up to an additional $ 300,000

on these efforts.

Outstanding Accounts Payable

as of March 31, 2022 totaled $ 580,972 .

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.

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.

Outstanding Accounts Payable as of March 31, 2023 totaled $ 753,050 .

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 the 12 months from the issuance of the financial statements.

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.

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.

SUNDANCE STRATEGIES, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and 2021

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

3 unchanged sentences

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

STRATEGIES, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023, and 2022

Company recorded $ 0 and $ 4,149 provision for income taxes for the years ended March 31, 2023, and 2022, respectively.

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, 2022 and 2021, due to the following:

federal tax rate of 21 % to pretax income from

continuing operations for the years ended March 31, 2023, and 2022, due to the following:

SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT)

4 unchanged sentences

State tax, net of federal benefit

Permanent and other differences

Change in valuation allowance

12 unchanged sentences

The Company has placed

valuation allowance on the deferred tax assets.

a 100 % valuation allowance on the deferred tax assets.

The deferred tax assets primarily relate to net operating loss carryforwards.

1 unchanged sentence

federal net operating loss carryforwards of $ 29,994,131 .

These carry forwards are available to offset

future taxable income, if any, and begin to expire in 2023 .

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.

These carry forwards are available to

offset future taxable income, if any, and begin to expire in 2023 .

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

6 unchanged sentences

SUBSEQUENT EVENTS

to year end, the following events transpired:

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 (see Note 5

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 .

June 5, 2023, the related party note payable with Mr.

Dickman (see Note 8) was amended to extend the due date from July 31, 2023, to

August 31, 2024 , or at the immediate time when alternative financing or other proceeds are received.

As per the provision outlined in

Note 8, and in conjunction with the extension of the due date of the agreement, the Company also agreed to provide Mr.

Dickman with warrants

for 543,000 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.

June 6, 2023, we negotiated a settlement to reduce our outstanding accounts payable to one of our vendors by $ 290,000 .

The gain will

be recorded as a gain on settlement of liabilities.

June 9, 2023 the unsecured promissory note with Satco International, Ltd.

(see Note 5) was amended to extend the due date from April

6, 2022 to July 6, 2022 , 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.

6, 2023 to August 31, 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.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Controls and Procedures

Disclosure Controls and Procedures

maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act

of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the reports filed

or submitted under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the Commission’s

rules and forms.

We carried out an evaluation,

under the supervision and with the participation of our management, including our principal executive officer and principal financial

officer, of the effectiveness of the design and operation of these disclosure controls and procedures, as such term is defined in Exchange

Act Rule 13a-15(e), as of March 31, 2022.

Based on this evaluation, our principal executive officer and principal financial officer concluded

our disclosure controls and procedures were not effective as of March 31, 2022, the end of the period covered by this Annual Report on

Form 10-K due to the material weakness described below.

Management’s Report on Internal Control over Financial Reporting

of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules

13a-15(f) and 15d-15(f) under the Exchange Act.

control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that controls

may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

internal control over financial reporting is designed to provide reasonable assurance of achieving its objectives as specified above.

Management does not expect, however, that our internal control over financial reporting will prevent or detect all error and fraud.

control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute,

assurance that its objectives will be met.

Further, no evaluation of controls can provide absolute assurance that misstatements due to

error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

including our principal executive officer and principal financial officer, has assessed the effectiveness of our internal control over

financial reporting as of March 31, 2022.

In making our assessment of the effectiveness of internal control over financial reporting,

management used the criteria set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations

of the Treadway Commission (“COSO”).

Based on this assessment, management has concluded that, as of March 31, 2022,

our internal control over financial reporting was not effective due to the material weakness described below.

defined in SEC Regulation S-X, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial

reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial

statements will not be prevented or detected on a timely basis.

Management determined

that the following material weaknesses exited as of March 31, 2022:

The design and operating effectiveness of our control environment

and risk assessment, control activities and monitoring activities were inadequate to ensure that complex accounting matters relating to

the valuation of equity-based compensation instruments are always properly accounted for and reviewed in a timely manner.

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.

Notwithstanding

the identified material weakness, the Company believes the financial statements included in this Annual Report on Form 10-K fairly represent

in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance

with accounting principles generally accepted in the United States of America.

Annual Report does not include an attestation report of our registered public accounting firm regarding our internal controls over financial

Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the

SEC that permit us to provide only management’s report in this Annual Report.

Changes in Internal Control Over Financial Reporting

Other than described above in

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