Sundance Strategies, Inc. 10-Q

Item 1. Financial Statements (Unaudited) SUNDANCE STRATEGIES, INC. AND SUBSIDIARY Condensed Consolidated Balance Sheets September 30, March 31, 2023 2023 (UNAUDITED) ASSETS Current Assets Cash and cash equivalents $ 184,992 $ 553 Prepaid expenses and other assets 16,185 8,295 Total Current Assets 201,177 8,848 Total Current Assets $ 201,177 $ 8,848 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities Accounts payable $ 463,050 $ 753,050 Accrued expenses 670,579 574,558 Current portion of notes payable 300,000 300,000 Current portion of notes payable, related parties 876,000 876,000 Current portion of notes payable 876,000 876,000 Stock repurchase payable 400,000 400,000 Total Current Liabilities 2,709,629 2,903,608 Long-Term Liabilities Accrued expenses 964,995 857,685 Notes payable, related parties, net of current portion, net of debt discount 2,386,020 2,281,463 Total Long-Term Liabilities 3,351,015 3,139,148 Total Liabilities 6,060,644 6,042,756 Stockholders’ Deficit Preferred stock, authorized 10,000,000 shares, par value $ 0.001 ; - 0 - shares issued and outstanding - - Common stock, authorized 500,000,000 shares, par value $ 0.001 ; 41,608,441 shares issued and outstanding as of September 30, 2023; and 41,408,441 shares issued and oustanding as of March 31, 2023 41,609 41,409 Additional paid-in capital 29,699,975 28,986,558 Accumulated deficit ( 35,601,051 ) ( 35,061,875 ) Total Stockholders’ Deficit ( 5,859,467 ) ( 6,033,908 ) Total Liabilities and Stockholders’ Deficit $ 201,177 $ 8,848 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 SUNDANCE STRATEGIES, INC. AND SUBSIDIARY Condensed Consolidated Statements of Operations (UNAUDITED) 2023 2022 2023 2022 Three Months Ended September 30, Six Months Ended September 30, 2023 2022 2023 2022 Income from Investments $ - $ - $ - $ - General and Administrative Expenses 92,698 161,534 223,997 375,491 Loss from Operations ( 92,698 ) ( 161,534 ) ( 223,997 ) ( 375,491 ) Other Income (Expense) Loss on extinguishment of debt - - ( 398,920 ) - Gain on settlement of liabilities - - 290,000 - Interest expense ( 108,286 ) ( 75,907 ) ( 206,259 ) ( 150,046 ) Financing expense - ( 13,500 ) - ( 27,000 ) Total Other Income (Expense) ( 108,286 ) ( 89,407 ) ( 315,179 ) ( 177,046 ) Loss Before Income Taxes ( 200,984 ) ( 250,941 ) ( 539,176 ) ( 552,537 ) Income Tax Provision (Benefit) - - - - Net Loss $ ( 200,984 ) $ ( 250,941 ) $ ( 539,176 ) $ ( 552,537 ) Loss per share - basic and diluted $ ( 0.00 ) $ ( 0.01 ) $ ( 0.01 ) $ ( 0.01 ) Weighted average shares outstanding - basic and diluted 41,432,354 41,408,441 41,420,463 41,408,441 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 SUNDANCE STRATEGIES, INC. AND SUBSIDIARY Condensed Consolidated Statements of Stockholders’ Deficit For the Six Months Ended September 30, 2023 and 2022 (UNAUDITED) Shares Amount Capital Deficit Deficit Additional Total Common Stock Paid-In Accumulated Stockholders’ Shares Amount Capital Deficit Deficit Balance, March 31, 2022 41,408,441 $ 41,409 $ 27,181,618 $ ( 32,249,894 ) $ ( 5,026,867 ) Net loss - - - ( 301,596 ) ( 301,596 ) Balance, June 30, 2022 41,408,441 41,409 27,181,618 ( 32,551,490 ) ( 5,328,463 ) Net loss - - - ( 250,941 ) ( 250,941 ) Balance, September 30, 2022 41,408,441 $ 41,409 $ 27,181,618 $ ( 32,802,431 ) $ ( 5,579,404 ) Common Stock Additional Paid-In Accumulated Total Stockholders’ Shares Amount Capital Deficit Deficit Balance, March 31, 2023 41,408,441 $ 41,409 $ 28,986,558 $ ( 35,061,875 ) $ ( 6,033,908 ) Warrants issued in connection with debt issuances - - 73,712 - 73,712 Warrants issued in connection to extinguishment of debt - - 398,920 - 398,920 Net loss - - - ( 338,192 ) ( 338,192 ) Balance, June 30, 2023 41,408,441 41,409 29,459,190 ( 35,400,067 ) ( 5,899,468 ) Beginning balance 41,408,441 41,409 29,459,190 ( 35,400,067 ) ( 5,899,468 ) Common stock and warrants issued for cash 200,000 200 199,800 - 200,000 Warrants issued in connection with debt issuances - - 40,985 - 40,985 Net loss - - - ( 200,984 ) ( 200,984 ) Balance, September 30, 2023 41,608,441 $ 41,609 $ 29,699,975 $ ( 35,601,051 ) $ ( 5,859,467 ) Ending balance 41,608,441 41,609 29,699,975 ( 35,601,051 ) ( 5,859,467 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 5 SUNDANCE STRATEGIES, INC. AND SUBSIDIARY Condensed Consolidated Statements of Cash Flows (UNAUDITED) 2023 2022 Six Months Ended September 30, 2023 2022 Operating Activities Net Loss $ ( 539,176 ) $ ( 552,537 ) Adjustments to reconcile net loss to net cash used in operating activities: Loss on extinguishment of debt 398,920 - Gain on settlement of liabilities ( 290,000 ) - Amortization of debt discount 38,304 - Changes in operating assets and liabilities Prepaid expenses and other assets ( 7,890 ) 7,000 Accounts payable - 84,298 Accrued expenses 203,331 193,771 Net Cash used in Operating Activities ( 196,511 ) ( 267,468 ) Financing Activities Proceeds from issuance of common stock and warrants – net of issuance costs 200,000 - Proceeds from issuance of notes payable, related party 180,950 - Net Cash provided by Financing Activities 380,950 - Net Change in Cash and Cash Equivalents 184,439 ( 267,468 ) Cash and Cash Equivalents at Beginning of Period 553 267,966 Cash and Cash Equivalents at End of Period $ 184,992 $ 498 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 $ 114,697 $ - The accompanying notes are an integral part of these condensed consolidated financial statements. 6 SUNDANCE STRATEGIES, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) September 30, 2023 (1) BASIS OF PRESENTATION, ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023, which was filed with the SEC on June 29, 2023. The results from operations for the three- and six-month period ended September 30, 2023, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2024. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, stockholders’ equity, and cash flows at September 30, 2023 and for all periods presented herein have been made. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s financial statements and the accompanying notes. Actual results could materially differ from those estimates. Organization and Nature of Operations Sundance Strategies, Inc. (formerly known as Java Express, Inc.) was organized under the laws of the State of Nevada on December 14, 2001, and engaged in the retail selling of beverage products to the general public until these endeavors ceased in 2006; it had no material business operations from 2006, until its acquisition of ANEW LIFE, INC. (“ANEW LIFE”), a subsidiary of Sundance Strategies, Inc. (“Sundance Strategies”, “the Company”, “we” or “our”). Our historical business model has focused on purchasing or acquiring life insurance policies and residual interests in or financial products tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace, often referred to as the “life settlements market.” During the latter part of the fiscal year ended March 31, 2021, the Company began developing an additional business offering, providing professional services to specialty structured finance groups, bond issuers and life settlement aggregators. The Company has now assembled an experienced team from the life settlement marketplace, as well as from other areas such as financial services and public financial markets. As a professional services provider, the Company applies industry best practices to advise on the selection of specific portfolios of life insurance policies that are tailored to meet the needs of its clients. The Company’s clients may include bond issuers, bond investors, or other structured finance product issuers. The Company 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. 7 During the latter part of the year ended March 31, 2021, the Company began working closely with bond placement agents and aggregators to establish various aspects of a proprietary, investment grade bond offering. In this arrangement, the Company participates as the sole originator in the role of structuring and advising on the structure of the proprietary bond instrument. Included in the role of structuring financial assets, the Company uses proprietary analytics to establish the makeup of the rated instrument, including but not limited to, life settlement assets (life insurance policies) and managed cash, and implements a process of selective assembly of the underlying assets and cash management that will meet the policy requirements and analytics. The Company 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. On January 1, 2022, the Company entered into a marketing and consulting agreement with Tradability, LLC (“Consultant”) that requires an initial $ 100,000 payment and up to an additional $ 400,000 in the future (which will be financed by the Consultant via a promissory note). The $ 400,000 obligation is contingent upon the Consultant and the Company successfully reaching certain milestones. Further, the agreement requires the Company to issue between 1,000,000 and 10,000,000 stock options (which are exercisable into our common stock at prices between $ 1.00 to $ 2.50 per share) contingent upon the Consultant and the Company successfully reaching certain milestones. The milestones primarily relate to the Consultant finalizing the tokenization of 500 million non-fungible tokens (“NFTs”) and the successful placement of NFTs with proceeds of between $ 100 million and $ 500 million. The proceeds will be used to purchase Life Settlements for which the Company will be an advisor. As of November 14, 2023, none of the milestones related to the potential issuance of equity have been met. Management does not expect any of these milestones to be met in the next 12 months. Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 2 of the Notes to Consolidated Financial Statements in the Company’s most recent Form 10-K, except as discussed below. Basic and Diluted Net Income (Loss) Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the periods presented using the treasury stock method. Diluted net loss per common share is computed by including common shares that may be issued subject to existing rights with dilutive potential, when applicable. Potential dilutive common stock equivalents are primarily comprised of potential dilutive shares resulting from convertible debt agreements and common stock warrants. Potentially dilutive shares resulting from convertible debt agreements are evaluated using the if-converted method. Potentially dilutive securities are not included in the calculation of diluted net loss per share for the three and six months ended September 30, 2023, or 2022, because to do so would be anti-dilutive. Potentially dilutive securities outstanding as of September 30, 2023, and 2022, are comprised of warrants convertible into 10,708,544 and 7,250,241 shares of common stock, respectively. New Accounting Pronouncements Not Yet Adopted The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements. 8 (2) LIQUIDITY REQUIREMENTS Since the Company’s inception on January 31, 2013, its operations have been primarily financed through sales of equity, debt financing from related parties and the issuance of notes payable and convertible debentures. As of September 30, 2023, the Company had $ 184,992 of cash assets, compared to $ 553 as of March 31, 2023. As of September 30, 2023, the Company had access to draw an additional $ 4,230,942 on the notes payable, related party (see Note 6) and $ 3,000,000 on the Convertible Debenture Agreement (See Note 7). For the six months ended September 30, 2023, the Company’s average monthly operating expenses were approximately $ 41,000 , which includes salaries of the Company’s employee, consulting agreements and contract labor, general and administrative expenses and legal and accounting expenses. In addition to the monthly operating expenses, the Company continues to pursue other debt and equity financing opportunities, and as a result, financing expenses of $ 0 and $ 27,000 were incurred during the six months ended September 30, 2023, and 2022, respectively. As management continues to explore additional financing alternatives, beginning October 1, 2023, the Company is expected to spend up to an additional $ 300,000 on these efforts. Outstanding Accounts Payable as of September 30, 2023, totaled $ 463,050 . 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 at least the next 12 months from the issuance of these financial statements, or through November 2024. Related parties have given assurance that their continued support, by way of either extensions of due dates, or increases in lines-of-credit, can be relied on. As mentioned above, the Company also continues to evaluate other debt and equity financing opportunities. The recent outbreak of COVID-19 originated in Wuhan, China, in December 2019 and has since spread to multiple countries, including the United States and several European countries. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. The COVID-19 pandemic is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which the Company relies. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact the Company’s short-term and long-term liquidity. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company does not yet know the full extent of potential delays or impacts on its business, financing or other activities or on healthcare systems or the global economy as a whole. However, these effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which we rely. The accompanying financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. (3) FAIR VALUE MEASUREMENTS As defined by ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Those levels of input are summarized as follows: ● Level 1: Quoted prices in active markets for identical assets and liabilities. ● Level 2: 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. ● Level 3: 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. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company did not have any transfers of assets and liabilities between Levels 1, 2 and 3 of the fair value measurement hierarchy during the six months ended September 30, 2023, and 2022. 9 Other Financial Instruments The Company’s recorded values of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued liabilities approximate their fair values based on their short-term nature. The recorded values of the notes payable and convertible debenture approximate the fair values as the interest rate approximates market interest rates. (4) STOCKHOLDERS’ EQUITY Common Stock Effective December 6, 2018, three existing stockholders have contributed to the Company a portion of their common shares held at a repurchase price to the Company of $ 0.05 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 , of which 6,000,000 shares were owned by a related party to the Company. The total liability related to the repurchase of these shares is $ 400,000 , with repayment to the related party stockholders contingent on a major financing event. $ 300,000 of the $ 400,000 liability is to a related party. On August 15, 2023, the Company issued a private placement memorandum offering to raise up to $ 1,500,000 through the issuance of restricted shares of the Company’s common stock (par value $ 0.001 ) to qualified investors. On September 20, 2023, the Company received subscription agreements from an investor, for 200,000 shares of common stock in conjunction with a purchase of 400,000 warrants to purchase shares of common stock. The proceeds from this transaction were $ 200,000 . Subscription agreements from additional investors were received subsequent to September 30, 2023 (see note 8). Warrants to Purchase Common Stock The Company’s related party lenders consist of: Kraig Higginson, the Chairman of the Board of Directors and a stockholder, Radiant Life, LLC and Mr. Dickman, a board member and stockholder. These holders of the related party unsecured promissory notes hold agreements that provide each related party with common stock warrants upon the lender’s extension of a maturity due date or upon the loaning of additional monies. The number of warrants issued for an extension is based on the following formula: 10,000 warrants per month the due date is extended plus 1 warrant for every $2 of the principal balance outstanding (not including interest) at the time of the extension (rounded to the nearest whole warrant). Upon the loaning of additional monies, the lender will also require 2 warrants for each dollar loaned. All warrants issued under these terms vested immediately upon issuance, have an exercise price approximately 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 six months ended September 30, 2023, the Company issued 281,900 warrants to the Chairman of the Board of Directors in conjunction with monies borrowed during the period per the terms outlined above. The exercise price of these warrants was $ 1.05 . The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model was $ 208,545 . The inputs used in this calculation included a fair value of the underlying common stock of $ 1.049 per share, a risk-free between 3.36 % and 4.19 %, volatility between 86.04 % and 89.11 % and a dividend rate of 0 %. During the six months ended September 30, 2023, the Company issued 281,900 warrants to Radiant Life, LLC in conjunction with monies borrowed during the period per the terms outlined above. The exercise price of these warrants was $ 1.05 . The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model was $ 58,402 . The inputs used in this calculation included a fair value of the underlying common stock of $ 1.049 per share, a risk-free between 4.04 % and 4.29 %, volatility between 85.03 % and 86.44 % and a dividend rate of 0 %. On June 5, 2023, the Company issued 543,000 warrants to Mr. Dickman in conjunction with an extension of the maturity dates during the period per the terms outlined above. The exercise price of these warrants was $ 1.05 . The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model was $ 398,920 . The inputs used in this calculation included a fair value of the underlying common stock of $ 1.049 per share, a risk-free rate of 3.82 %, volatility of 89.07 % and a dividend rate of 0 %. On September 20, 2023, the Company issued 400,000 warrants to an equity investor, which vested immediately, in conjunction with a purchase of 200,000 shares of the Company’s common stock. The exercise price of these warrants was $ 0.35 . 10 SCHEDULE OF WARRANT OUTSTANDING Number of Warrants Outstanding at March 31, 2023 9,403,644 Granted in conjunction with monies borrowed 361,900 Granted in conjunction with extension 543,000 Granted to investors for cash 400,000 Outstanding at September 30, 2023 10,708,544 Exercisable at September 30, 2023 10,708,544 The following table summarizes the warrants issued and outstanding as of September 30, 2023: SCHEDULE OF WARRANTS ISSUED AND OUTSTANDING Exercise Price ($) Warrants Outstanding Warrants Exercisable Weighted Average Remaining Contractual Life (Years) Proceeds to Company if Exercised 0.05 3,708,754 3,708,754 1.70 $ 185,439 0.35 400,000 400,000 4.98 $ 140,000 1.00 1,000,000 1,000,000 0.52 $ 1,000,000 1.05 5,049,790 5,049,790 3.99 $ 5,302,280 2.00 50,000 50,000 2.84 $ 100,000 5.00 500,000 500,000 3.32 $ 2,500,000 10,708,544 10,708,544 $ 9,227,719 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. (5) NOTES PAYABLE On April 6, 2021, the Company borrowed $ 300,000 under an unsecured promissory note with Satco International, Ltd. This promissory note bears interest at a rate of 8 % annually and was due April 6, 2023. In conjunction with this note, the Company issued warrants for 1,000,000 shares of common stock, exercisable at $ 1.00 per share and expiring in 3 years from the date of the promissory note. Since that date, the unsecured promissory note with Satco International, Ltd. has been amended through a series of amendments 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 . These extensions have no bearing on the warrants that were issued in conjunction with the original promissory note. This note is separate from the 8 % convertible debenture agreement that the Company has in place with Satco International, Ltd. (see note 7). As of September 30, 2023, accrued interest on the note totaled $ 59,638 . (6) NOTES PAYABLE, RELATED PARTY As of September 30, 2023, and March 31, 2023, the Company had borrowed $ 3,375,058 and $ 3,194,108 respectively, excluding accrued interest, from related parties. Short-term accrued interest associated with the Notes Payable, Related Parties and Promissory Notes, Related Parties, of $ 365,914 and $ 364,908 is recorded on the balance sheet as an Accrued Expense obligation at September 30, 2023, and March 31, 2023, respectively. Long-term accrued interest associated with the Notes Payable, Related Parties, and Promissory Notes, Related Parties, of $ 840,770 and $ 857,684 is recorded on the balance sheet as an Accrued Expense obligation at September 30, 2023, and March 31, 2023, respectively. 11 Related Party Promissory Notes As of both September 30, 2023, and March 31, 2023 , the Company owed $ 826,000 under the unsecured promissory notes from Mr. Dickman. The promissory notes bear interest at a rate of 8 % annually. On June 5, 2023, the notes were amended to have a due date of August 31, 2024, or at the immediate time when alternative financing or other proceeds are received. As per the provision outlined in Note 4, and in conjunction with the extension of the due date of the promissory notes on June 5, 2023, the Company agreed to provide Mr. Dickman with warrants for 543,000 shares of common stock (see Note 4). During the year ended March 31, 2023 , the Company neither borrowed any additional funds under this agreement nor made any principal repayments. As of September 30, 2023 , accrued interest on the notes totaled $ 356,423 . In the event the Company completes a successful equity raise all principal and interest on the notes are due in full at that time . The total number of warrants issued to the related party lender was 2,633,332 as of September 30, 2023 (See Note 4 for further details on these warrants). On July 29, 2021, the Company entered into an unsecured promissory note agreement with Radiant Life, LLC. This agreement was in conjunction with the Company borrowing $ 50,000 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 was amended on June 12, 2023, to be due on July 29, 2024 . As of September 30, 2023 , accrued interest on the note totaled $ 9,490 . Related Party Note Payable and Line of Credit Agreements As of September 30, 2023, and March 31, 2023, the Company owed $ 1,339,550 and $ 1,198,600 , 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. As of September 30, 2023 , the agreement allowed for borrowings of up to $ 4,600,000 . During the six months ended September 30, 2023, the Company borrowed $ 140,950 in principal and made no repayments of principal on this agreement. The note payable and line of credit agreement incurs interest at 7.5 % per annum. As of September 30, 2023 , accrued interest on this note totaled $ 354,270 . As per the provision outlined in Note 4, and in conjunction with the $ 140,950 borrowed during the six months ended September 30, 2023, the Company also agreed to provide the Chairman of the Board of Directors and a stockholder, with warrants for 281,900 shares of common stock, vested immediately upon issuance, having an exercise price of $ 1.05 per share, and a 5 -year exercise window from the dates of issuance. During the six months ended September 30, 2023, the company amortized $ 23,878 of debt discount, leaving a remaining debt discount balance of $ 67,079 in association with these warrants. The total number of warrants issued to the related party lender was 3,645,950 as of September 30, 2023 (see Note 4 for further details on these warrants). As of September 30, 2023, and March 31, 2023, the Company owed $ 1,159,508 and $ 1,119,508 , respectively, in principle 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 . The note payable has a due date of the principal and interest on the note to November 30, 2024, or at the immediate time when alternative financing or other proceeds are received. The note payable and line of credit agreement incurs interest at 7.5 % per annum and is collateralized by the Company’s NIBS, if any. During the three months and six ended September 30, 2023, the Company borrowed $ 40,000 , and made no repayments of principal on this agreement. As of September 30, 2023, accrued interest on this agreement totaled $ 487,197 . As per the provision outlined in Note 4, and in conjunction with the $ 40,000 borrowed during the six months ended September 30, 2023, the Company also agreed to provide Radiant Life, LLC, with warrants for 80,000 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 date’s issuance. During the six months ended September 30, 2023, the company amortized $ 14,426 of debt discount, leaving a remaining debt discount balance of $ 45,959 in association with existing warrants. The total number of warrants issued to the related party lender was 2,529,262 as of September 30, 2023 (see Note 4 for further details on these warrants). As of September 30, 2023, the unamortized debt discount on related party notes payable is $ 113,038 . (7) CONVERTIBLE DEBENTURE AGREEMENT The Company has entered into an 8% convertible debenture agreement with Satco International, Ltd., that allows for borrowings of up to $ 3,000,000 . The holder originally had the option to convert the outstanding principal and accrued interest to unregistered, restricted common stock of the Company on June 2, 2016. Per the agreement, the number of shares issuable at conversion shall be determined by the quotient obtained by dividing the outstanding principal and accrued and unpaid interest by 90% of the 90-day average closing price of the Company’s common stock from the date the notice of conversion is received; and the price at which the Debenture may be converted will be no lower than $ 1.00 per share. The original maturity date was June 2, 2016 , but was later extended, through a series of extensions, to November 30, 2024 . As of September 30, 2023, and March 31, 2023, the Company owed $ 0 under the agreement, excluding accrued interest. The associated interest of $ 124,225 is recorded on the balance sheet as an Accrued Expense obligation at September 30, 2023, and March 31, 2023. (8) SUBSEQUENT EVENTS On October 4, 2023, the Company issued an additional 650,000 shares of common stock and 1,300,000 warrants to equity investors. 12