UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

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

For the quarterly period ended: November 30, 2022

or

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

For the transition period from __________________ to __________________

Commission file number: 333-265471

BUSINESS WARRIOR CORPORATION

(Exact name of registrant as specified in its charter)

Wyoming	90-1901168
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

455 E Pebble Road, #230912, Las Vegas, NV 89123-0912

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code (855) 294-2900

Securities registered pursuant to Section 12(b) of the Act: None

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☐     No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐     No ☒

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

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☒
			Emerging growth company	☒

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐      No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of March 6, 2023, there were 465,618,093 shares of the registrant’s common stock issued and outstanding.

Documents Incorporated by Reference: None

BUSINESS WARRIOR CORPORATION

TABLE OF CONTENTS

	Page
Consolidated Balance Sheet as of November 30, 2022 (unaudited) and August 31, 2022	F-1
Consolidated Statements of Operations for the three months ended November 30, 2022 and 2021 (unaudited)	F-2
Consolidated Statements of Changes in Stockholders’ Equity/(Deficit) for the three months ended November 30, 2022 and 2021 (unaudited)	F-3
Consolidated Statements of Cash Flows for the three months ended November 30, 2022 and 2021 (unaudited)	F-4
Notes to the Consolidated Unaudited Financial Statements	F-5

2

BUSINESS WARRIOR CORPORATION

CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	November 30,			August 31,
	2022			2022
	(Restated - See Note 3)
Assets
Current assets
Cash and cash equivalents	$	175,261		$	382,431
Accounts receivable, net		428,572			542,428
Current portion of loans receivable, net		62,816			70,399
Prepaids and other current assets		17,390			16,638
Total current assets		684,039			1,011,896
Loans receivable, non-current, net		163,472			223,219
Right-of-use asset, net		72,061			76,219
Property and equipment, net		212,794			244,633
Goodwill		2,321,667			2,321,667
Total Assets	$	3,454,033		$	3,877,634
Liabilities and Stockholders’ Equity/(Deficit)
Current liabilities
Accounts payable and accrued liabilities		1,328,573			1,063,345
Contingent earn-out liability		1,250,000			1,250,000
Deferred revenue		5,280			474,977
Current portion of finance lease liability		13,564			18,487
Due to related party		159,147			159,161
Current portion of SBA loan		6,577			8,039
Total current liabilities		2,763,141			2,974,009
Derivative liability		755,274			-
Line of credit, net		1,163,463			-
Finance lease liability, long term		57,164			57,164
Notes payable		60,647			75,000
SBA loan, non-current		141,861			141,861
Total Liabilities	$	4,941,550		$	3,248,034
Commitments and contingencies (Note 11)
Stockholders’ Equity /(Deficit)
Preferred stock, par value $0.001, 10,000,000 shares authorized
Series A Preferred stock; 15,500 shares authorized; 15,500 shares issued and outstanding		16			16
Series B Preferred stock, 100,000 shares authorized; 2,023 and 12,017 shares issued and outstanding at November 30, 2022 and August 31, 2022, respectively		2			12
Series C Preferred stock, 50,000 shares authorized; 50,000 shares issued and outstanding at November 30, 2022 and August 31, 2022		50			50
Common stock, $0.0001 par value; 500,000,000 shares authorized; 465,618,093 shares issued and outstanding as of November 30, 2022 and August 31, 2022		46,562			46,562
Additional paid in capital		10,558,531			11,539,564
Accumulated deficit		(12,092,678	)		(10,956,604	)
Total stockholders’ equity/(deficit)		(1,487,517	)		629,600
Total Liabilities and Stockholders’ Equity/(Deficit)	$	3,454,033		$	3,877,634

See notes to unaudited consolidated financial statements

F-1

BUSINESS WARRIOR CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the three months ended
	November 30,
	2022			2021
	(Restated - See Note 3)
Sales	$	1,455,742		$	452,490
Cost of sales		1,031,441			23,051
Gross profit		424,301			429,439
Operating expenses:
Advertising and promotion		66,246			308,519
Salaries and wages		778,307			313,537
Professional services		101,635			64,280
General and administrative expenses		224,668			336,670
Loss from operations		(746,555	)		(593,567	)
Other income (expense):
Interest expense, net		(187,889	)		577
Gain on extinguishment of debt		-			77,500
Change in fair value of derivative liablity		(94,548	)		-
Other income (expense)		38,751			1,699
Net loss before income taxes		(990,242	)		(513,791	)
Income taxes		-			-
Net loss		(990,242	)		(513,791	)
Preferred stock dividends		145,833			-
Net loss attributable to common stockholders		(1,136,074	)		(513,791	)
Basic and diluted loss per share	$	(0.0022	)	$	(0.0013	)
Weighted average shares outstanding - basic and diluted		448,406,527			410,032,902

See notes to unaudited consolidated financial statements.

F-2

BUSINESS WARRIOR CORPORATION

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY/(DEFICIT)

	Series A Preferred Stock				Series B Preferred Stock						Series C Preferred Stock				Common Stock				Additional Paid in			Accumulated
	Shares		Amount		Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance August 31, 2022		15,500	$	16		12,017		$	12			50,000	$	50		465,618,093	$	46,562	$	11,539,564		$	(10,956,604	)	$	629,600
Conversion of preferred stock to debt		-		-		(9,994	)		(10	)		-		-		-		-		(981,033	)		-			(981,043	)
Deemed divided of Preferred Series C		-		-		-			-			-		-		-		-		-			(145,833	)		(145,833	)
Net loss (restated - see Note 3)		-		-		-			-			-		-		-		-		-			(990,242	)		(990,242	)
Balance November 30, 2022		15,500	$	16		2,023		$	2			50,000	$	50		465,618,093	$	46,562	$	10,558,531		$	(12,092,679	)	$	(1,487,517	)

	Series A Preferred Stock				Series B Preferred Stock				Common Stock				Additional Paid in		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balances, August 31, 2021		15,500	$	16		-	$	-		394,243,067	$	39,424	$	5,271,880	$	(3,365,354	)	$	1,906,542
Issuance of common stock for services		-		-		-		-		150,000		15		29,228		-			297,565
Issuance of common stock for cash		-		-		-		-		22,075,000		2,207		1,757,793	$	-			1,757,793
Net loss		-		-		-		-		-		-		-		(513,791	)		(513,791	)
Balance November 30, 2021		15,500	$	16		-	$	-		416,468,067	$	41,646	$	7,058,901		(3,879,145	)	$	3,448,110

See notes to unaudited consolidated financial statements

F-3

BUSINESS WARRIOR CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three months ended
	November, 30
	2022			2021
	(Restated - See Note 3)
Cash Flows from Operating Activities
Net loss	$	(990,242	)	$	(513,791	)
Adjustments to reconcile net loss to net
cash from operating activities:
Depreciation and amortization		35,997			14,446
Stock-based compensation		-			29,243
Change in fair value of derivative liability		94,548			-
Amortization of debt discount		58,498			-
Gain on extinguishment of debt		-			(77,500	)
Changes in operating assets and liabilities
Accounts receivable, net		113,856			(422,816	)
Prepaids and other current assets		(752	)		-
Deferred revenue		(469,697	)		-
Accounts payable and accrued liabilities		119,395			(1,042,022	)
Net cash from operating activities		(1,038,397	)		(2,012,440	)
Cash Flows from Investing Activities
Issuance of loans receivable		(1,852	)		-
Payments received on loans receivable		69,182			-
Purchase of property and equipment		-			(65,075	)
Net cash from investing activities		67,330			(65,075	)
Cash Flows from Financing Activities
Net change in related party payables		-			14,258
Proceeds from line of credit		784,649			-
Proceeds from issuance of common stock		-			1,760,000
Payments of SBA loan		(1,462	)		-
Payments of finance lease liability		(4,923	)		(3,281	)
Payments of notes payable		(14,353	)		(23,349	)
Payments of notes payable, related party		(14	)		(1,717	)
Net cash from financing activities		763,897			1,745,911
Change in cash and cash equivalents		(207,170	)		(331,604	)
Cash and cash equivalents at beginning of period		382,431			4,251,741
Cash and cash and equivalents at end of period	$	175,261		$	3,920,137
Noncash
Conversion of preferred stock into debt	$	981,043			-
Deemed dividends of Series C preferred stock included in Accounts payable and accrued liabilities		145,833
Issuance of warrants		660,726			-
Supplemental Cash Flow Information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

See notes to unaudited consolidated financial statements

F-4

BUSINESS WARRIOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. ORGANIZATION AND NATURE OF OPERATIONS

Organization—Business Warrior Corporation (the Company” or “Business Warrior”) was originally incorporated under the name Kading Companies, S.A., under the International Business Companies Ordinance of the Territory of the British Virgin Islands on October 10, 1995. Kading Companies was traded on the Pink Sheets of the OTC Markets under the stock ticker KDNG. On January 27, 2020, Kading Companies was redomiciled in Wyoming. Bluume, LLC was founded in 2014 and was a sales and marketing organization that provided small businesses with basic advertising, merchant services, white label Point of Sale systems, and a white label business analytics software. On January 31, 2020, Bluume, LLC completed a triangular reverse merger with Kading Companies (formerly KDNG) and changed its name to Business Warrior. It is currently an active corporation in the state of Wyoming. The previous Bluume team took over all operations of the Company and formed a new business plan, which replaced all former plans of the previous management team at Kading Companies. In July 2020, the Company changed its stock ticker to BZWR.

On March 18, 2022, the Company acquired Helix House, LLC, a premium marketing agency that provides small business advertising services including digital marketing. Additionally, on June 18, 2022, the Company acquired FluidFi Inc., dba Alchemy Technology, a lending technology company that builds fully customized lending end-to-ending lending solutions.

Nature of Operations— Business Warrior has three divisions of the company: Helix House, LLC, Alchemy Technologies, and Business Warrior. Helix House is a premium marketing agency that provides small business advertising services including digital marketing (YouTube, Google, social media), traditional marketing (billboards, mailers, fliers, etc.), and social media content. Alchemy builds and manages lending software technology for enterprise businesses which are fully customized for each client. Through the combination of services from Helix House and Alchemy, Business Warrior offers a full service lending as a service solution known as PayPlan: a comprehensive lending software platform that includes marketing services to drive applicants for lenders and merchants.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation—The consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its consolidated and wholly owned subsidiaries. The consolidated financial statements reflect the elimination of all significant inter-company accounts and transactions.

Use of Estimates—The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual events and results could materially differ from those assumptions and estimates.

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

Cash and Cash Equivalents—The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions, and at times, balances may exceed federally insured limits.

F-5

Property and Equipment— Property and equipment are stated at cost. Depreciation is calculated by the straight-line method over the estimated useful lives of depreciable assets.

Cost and accumulated depreciation for property retired or disposed of are removed from the accounts, and any resulting gain or loss is included in earnings. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-Lived Assets—Potential impairments of long-lived assets are reviewed when events or changes in circumstances indicate a potential impairment may exist. In accordance with Accounting Standard Codification (“ASC”) Subtopic 360-10, “Property, Plant and Equipment – Overall,” impairment is determined when estimated future undiscounted cash flows associated with an asset are less than the asset’s carrying value.

Goodwill—The Company’s goodwill balance of $2.3 million as of November 30, 2022 resulted from the acquisitions of Helix House, LLC and FluidFi, Inc. Helix House, LLC was acquired on March 17, 2022, and FluidFi, Inc. was acquired on June 8, 2022. Goodwill represents the excess of the cost of an acquired business over the estimated fair values of the assets acquired and liabilities assumed. Goodwill is reviewed at least annually for impairment, which may result from the deterioration in the operating performance of the acquired business, adverse market conditions, adverse changes in the applicable laws or regulations and a variety of other circumstances. Any resulting impairment charge would be recognized as an expense in the period in which impairment is identified. After performing a qualitative and quantitative analyses for the acquired companies, the Company recognized approximately $4.0 million in goodwill impairment during the year ended August 31, 2022.

Accounts Receivable and Allowance for Doubtful Accounts— Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts based on the probability of future collection. The probability of future collection is based on specific considerations of historical loss patterns and an assessment of the continuation of such patterns based on past collection trends and known or anticipated future economic events that may impact collectability. The probability of future collection is also assessed by geography. To date, losses resulting from uncollected receivables have not exceeded management’s expectations. The Company recorded an allowance for doubtful accounts of $459,117 and $0 as of November 30, 2022 and August 31, 2022, respectively.

Income Taxes— Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits as a component of general and administrative expenses. Our federal tax return and any state tax returns are not currently under examination.

The Company has adopted ASC 740-10, Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually from differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Revenue Recognition—The Company recognizes revenue in accordance with Accounting Standards Update 2014-09, “Revenue from contracts with customers,” (Topic 606). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company’s main revenue stream is from sales of products. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery.

F-6

The Company has four main sources of revenue. Helix House is a premium marketing agency that charges monthly service fees and one-time project charges for providing small business advertising services including digital marketing (YouTube, Google, social media), traditional marketing (billboards, mailers, fliers, etc.), and social media content. FluidFi Inc, dba Alchemy builds fully customized lending end-to-end lending software solutions for banks, lenders, and financial technology firms. Alchemy charges monthly recurring fees for each client’s software-as-a-service as well as contracted work for custom software development. Business Warrior collects revenue for building software lending solutions, and sales and marketing solutions associated with each lending client. Business Warrior Funding collects principal and interest payments for providing business loans to small businesses.

Identify the customer contract

A customer contract is generally identified when the Company and a customer have executed an arrangement that calls for the Company to grant access to its online software products and provide professional services in exchange for consideration from the customer.

Identify performance obligations that are distinct

A performance obligation is a promise to provide a distinct good or service or a series of distinct goods or services. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and a company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. The Company has determined that subscriptions for its online software products are distinct because, once a customer has access to the online software product is fully functional and does not require any additional development, modification, or customization. Professional services sold are distinct because the customer benefits from the on-boarding and training to make better use of the online software products it purchased.

Determine the transaction price

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding sales taxes that are collected on behalf of government agencies. The Company estimates any variable consideration to which it will be entitled at contract inception, and reassesses at each reporting date, when determining the transaction price. The Company does not include variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will occur when any uncertainty associated with the variable consideration is resolved.

Allocate the transaction price to the distinct performance obligations

The transaction price is allocated to each performance obligation based on the relative standalone selling prices (“SSP”) of the goods or services being provided to the customer. The Company determines the SSP of its goods and services based upon the average sales prices for each type of online software product and professional services sold. In instances where there are not sufficient data points, or the selling prices for a particular online software product or professional service are disparate, the Company estimates the SSP using other observable inputs, such as similar products or services.

Recognize revenue as the performance obligations are satisfied

Revenues are recognized when or as control of the promised goods or services is transferred to customers. Revenue from online software products is recognized ratably over the subscription period beginning on the date the Company’s online software products are made available to customers. Most subscription contracts are one year or less. The Company recognizes revenue from on-boarding, training, and consulting services as the services are provided. Cash payments received in advance of providing subscription or services are recorded to deferred revenue until the performance obligation is satisfied. Revenue from the Company’s business lending solution is recognized as interest income and origination fees, based upon the loan that is issued to each customer.

F-7

Net Income (Loss) Per Common Share—The Company computes income per common share, in accordance with ASC Topic 260, Earnings Per Share, which requires dual presentation of basic and diluted earnings per share. Basic income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding, plus the issuance of common shares, if dilutive, that could result from the exercise of outstanding stock options and warrants. No potential dilutive common shares are included in the computation of any diluted per share amount when a loss is reported.

Fair Value Measurements—ASC Topic 820, Fair Value Measurements, clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2: Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3: Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The estimated fair value of certain financial instruments, including all current liabilities are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

Advertising and Promotion— The Company follows the policy of charging the costs of advertising, marketing, and public relations to expense as incurred. The Company has $66,246 and $308,519 in advertising expenses for the three months ended November 30, 2022 and 2021, respectively.

Cost of Sales — This is comprised of referral and sales commission, advertising for our premium marketing clients, website hosting fees, and data fees for our software subscribers.

Leases— Under ASC Top 842, ”Leases”, the Company determines if an agreement is a lease at inception. Operating leases are included in operating lease – right to use, current portion of operating lease liability, and operating lease liability, less current portion in the Company’s consolidated balance sheets. Finance leases are included in property and equipment, net, current portion of long-term debt, net and long-term debt, less current portion and debt issuance costs in the Company’s consolidated balance sheets.

As permitted under ASU Topic 842, the Company has made an accounting policy election not to apply the recognition provisions of ASU 2016-02 to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term.

3. RESTATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements as of and for the three months ended November 30, 2022 have been restated to properly reflect warrants issued in connection with the line of credit which resulted in a derivative liability. The derivative liability was determined to be approximately $755,274 as of November 30, 2022. Accordingly, the unaudited consolidated financial statements as of and for the three months ended November 30, 2022 have been restated to correctly reflect this change.

F-8

The effects of the restatement are as follows:

	November 30, 2022
	As Reported			As Restated
Consolidated Balance Sheets:
Derivative liability	$	-		$	755,274
Line of credit, net		1,900,535			1,163,464
Debt discount		-
Total Liabilities		4,777,420			4,795,718
Accumulated deficit		(11,928,548	)		(12,092,678	)
Total stockholders' (deficit)		(1,323,386	)		(1,487,517	)

	November 30, 2022
	As Reported			As Restated
Consolidated Statements of Operations
Change in fair value of derivative liability	$	-		$	(94,548	)
Other income (expense)	$	47,831		$	38,751
Net loss		(971,944	)		(990,241	)
Consolidated Statement of Stockholders' Equity/(Deficit)
Net loss		(971,944	)		(990,241	)
Accumulated deficit		(11,928,548	)		(12,092,678	)
Total stockholders' deficit		(1,323,386	)		(1,487,517	)
Consolidated Statements of Cash Flows
Operating Activities
Net loss		(971,944	)		(990,241	)
Change in fair value derivative liability		-			94,548
Amortization of debt discount		-			58,498

F-9

4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

5. LOANS RECEIVABLE

During the year ended August 31, 2022, the Company launched its new small business lending solution called Business Warrior Funding. The new lending solution leverages the Company’s expertise and strategic partnerships to help entrepreneurs grow their business and offset the difficulty often associated with traditional bank lending. Loans to customers range from $5,000 to $125,000, with interest rates ranging from 16.99% to 23.0%. As of November 30, 2022, the Company had a loans receivable balance of $286,035. As of August 31, 2022, the Company had a loans receivable balance of $293,618, of which $70,399 are considered current and $223,219 are non-current. The Company has $59,427 recorded as an allowance for doubtful accounts as of November 30, 2022 and August 31, 2022.

                   As of November 30, 2022, the maturities of loan receivables are as follows:

Year ending August 31, 2023	$	62,816
Year ending August 31, 2024		163,472
	$	226,288

F-10

6. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	Useful lives	November 30, 2022			August 31, 2022
Software and computer equipment	5 years	$	635,555		$	652,892
Furniture and fixtures and other equipment	3 years		2,960			2,960
Total property and equipment			638,515			655,852
Less accumulated depreciation			(425,721	)		(411,219	)
Total property and equipment, net		$	212,794		$	244,633

For the three months ended November 30, 2022 and 2021, depreciation expense was $31,839 and $10,288, respectively.

7. LEASE RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

Finance leases

The Company leases a vehicle which meets the classification of a finance lease under ASC 842. The monthly payments are $1,778 and the term is 60 months. The lease commenced on August 26, 2021.

Finance right of use assets are summarized below:

	November 30, 2022			August 31, 2022
Finance lease	$	94,237		$	94,237
Less accumulated depreciation		(22,176	)		(18,018	)
Finance lease, net	$	72,061		$	76,219

Depreciation expense was $4,158 for the three months ended November 30, 2022 and 2021.

Finance lease liabilities are summarized below:

	November 30, 2022			August 31, 2022
Finance lease liability	$	70,728		$	75,651
Less:  current portion		(13,564	)		(18,487	)
Long term portion	$	57,164		$	57,164

Maturity of lease liabilities are as follows:

	November 30, 2022
Year ending August 31, 2023	$	16,417
Year ending August 31, 2024		21,340
Year ending August 31, 2025		21,340
Year ending August 31, 2026		19,562
Total future minimum lease payments		78,659
Less imputed interest		(7,931	)
Present value of lease of payments	$	70,728

F-11

8. NOTES PAYABLE

As of August 31, 2022, the Company entered into a note payable due to Elev8 Advisors for $75,000. This note bears interest of 17.97% and matures in February 2024.

The Company made payments of $14,353 to bring the note payable balance to $60,647 for the three months ended November 30, 2022.

9. PPP AND SBA LOANS

The Company also entered into a normal SBA loan during 2020 with a principal amount of $149,900. The note bears interest at a rate of 3.75% per annum. On March 16, 2021, the SBA announced extended deferment periods for all COVID-19 and other disaster loans until 2022. For the three months ended November 30, 2022, the Company made payments of $1,462.

Aggregate principal maturities of the SBA loan is as follows:

Year ending August 31, 2023	$	6,577
Year ending August 31, 2024		8,772
Year ending August 31, 2025		8,772
Year ending August 31, 2026		8,772
Year ending August 31, 2027		8,772
Thereafter	$	106,773
	$	148,438

10. RELATED PARTIES

The Board of Directors has adopted a written related party transaction policy. This policy applies to all transactions that qualify for disclosure. Information about transactions involving related persons is reviewed by management. Related persons include Company directors and executive officers, as well as their immediate family members. If a related person has a direct or indirect material interest in any Company transaction, then management would decide whether or not to approve or ratify the transaction. Amounts due to related parties were $159,147 and $159,161 as of November 30, 2022 and August 31, 2022. These amounts are considered a current liability.

11. COMMITMENTS AND CONTINGENCIES

During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with ASC 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals.

In March 2022, the Company closed the acquisition of 100% of the equity interests of Helix House, LLC, a marketing agency based in Scottsdale, Arizona, for an initial closing purchase price of $2,250,000. The closing purchase price included $1,200,000 in cash and 18,004,115 shares of restricted common stock valued at $1,050,000 at the acquisition date. There is additional earn-out potential based on future revenue growth of Helix House, LLC. The earn-out potential is up to a total of $600,000 in cash and $1,900,000 in stock, which is valued at the average of the closing prices of the Company’s Common Stock for the 20 trading days following the achievement of the revenue milestones. Based on year to date activity with the Helix House acquisition, Management has estimated the potential earnout liability to be at 50%. As of November 30, 2022 the Company recorded a contingent liability earnout of $1,250,000.

F-12

12. DERIVATIVE FINANCIAL INSTRUMENTS

Detachable warrants

Certain promissory notes were issued with detachable warrants which contained terms that did not achieve equity classification.

The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of November 30, 2022 and the amounts that were reflected in income related to derivatives for the period ended:

	November 30, 2022
	Indexed		Fair
The financings giving rise to derivative financial instruments	Shares		Values
Warrant derivatives		84,360,841	$	755,274
Total		84,360,841	$	755,274

The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the three months ended November 30, 2022:

	For the Three Months Ended
	November 30, 2022
Warrant derivatives	$	(94,548	)
Total	$	(94,548	)

The Company utilized the Black Scholes Merton (“BSM”) technique for the warrant derivatives. The significant assumptions utilized in the BSM is risk-free interest, volatility, time to expiration, strike price and underlying price.

Significant inputs and results arising from the BSM calculations are as follows for the warrant derivatives classified in liabilities:

	Inception Dates		Quarter Ended
Quoted market price on valuation date	$0.0082 - $0.0091			$0.01
Effective contractual conversion rates		$0.0125		$0.0125
Contractual term to maturity		5 years		4.86 years
Market volatility:
Volatility		231.20% - 231.46%		235.90% - 236.58%
Risk-adjusted interest rate		3.84% - 4.14%		3.82%

There were no detachable warrants as of August 31, 2022.

The following table reflects the issuances of embedded derivatives and changes in fair value inputs and assumptions related to the embedded derivatives as of November 30, 2022.

November 30, 2022	Period Ended
Balances at beginning of period	$	-
Issuances:
Warrant derivatives		660,726
Conversions		-
Warrant exercise		-
Changes in fair value inputs and assumptions reflected in income		94,548
Balances at end of period	$	755,274

13. EQUITY

Series A preferred shares

As of November 30, 2022 and August 31, 2022, 15,500 shares were issued and outstanding with a par value of $.001 These shares were authorized in 2020 and each share is convertible into 0.1% of the total number of shares of common stock outstanding at the time of conversion. Each holder of these preferred shares shall be entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series A preferred stock held by each holder are convertible.

Series B preferred shares

In May 2022, the Company authorized 100,000 shares of the Series B preferred stock with a par value of $.001. As of November 30, 2022 and August 31, 2022, the Company has 2,023 and 12,017 Preferred B shares issued and outstanding, respectively. Each share shall be convertible, at the option of the holder into the number of fully paid and nonassessable shares of common stock that have fair market value, in the aggregate, equal to the Series B conversion price.

F-13

Series C preferred shares

As part of the acquisition of FluidFi, Inc., on June 8, 2022, the Company authorized 50,000 shares of the Series C preferred stock with a stated value of $100 per share of $.001, with a dividend equal to seven percent (7%) per annum of the Original issuance price of $100.  As of November 30, 2022, And August 31, 2022, the Company has 50,000 Preferred C shares issued and outstanding.  As of November 30, 2022, the dividend due was $145,833. 

14. CONCENTRATIONS

For the three months ended November 30, 2022 and November 30, 2021, the Company had four customers representing 32% of total revenue and one customer representing 56% of total revenue, respectively. For the three months ended November 30, 2022, the Company had four customers representing 61% of total accounts receivable and two customers representing 42% of total accounts receivable as of August 31, 2022.

15. RECLASSIFICATIONS

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

16. INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. Federal income tax rate is 21%.

The provision for Federal income tax consists of the following three months ended November 30:

Federal income taxes attributable to:	2022			2021
Current operations	$	207,951		$	107,896
Less:  valuation allowance		(207,951	)		(107,896	)
Net provision for federal income taxes	$	-		$	-

The cumulative tax effect at the expected rate of 21% of significant stems comprising our net deferred tax amount is as follows:

	2022			2021
U.S. statutory federal income tax rate		21.0	%		21.0	%
Income tax expense (benefit) for the period		-64.3	%		21.0	%

	November 30,			August 31,
	2022			2022
Net operating loss carryover	$	1,663,835		$	1,455,884
Less:  valuation allowance		(1,663,835	)		(1,455,884	)
Net deferred income taxes	$	-		$	-

The Company files income tax returns for federal purposes and in many states. The Company’s tax filings remain subject to examination by applicable tax authorities for certain length of time, generally three to four years, following the tax year to which these filings related. The statue of limitations for adjustment of the net operating losses utilized on these tax returns remains open an additional three to four years, depending on jurisdiction, from the date these returns were filed.

17. SUBSEQUENT EVENTS

In January 2023, the Company converted 2,023 shares of Series B preferred stock into debt.

F-15

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

Our management’s discussion and analysis provides a narrative about our financial performance and condition that should be read in conjunction with the audited and unaudited consolidated financial statements and related notes thereto included in this quarterly report on Form 10-Q. This discussion contains forward looking statements reflecting our current expectations and estimates and assumptions about events and trends that may affect our future operating results or financial position. Our actual results and the timing of certain events could differ materially from those discussed in these forward-looking statements due to a number of factors, including, but not limited to, those set forth in the sections of our annual report on Form 10-K titled “Risk Factors”. 

Results of Operations

For the Three Months Ended November 30, 2022 and 2021

Revenues

For the three months ended November 30, 2022, and 2021, we had revenues of $1,455,742 and $452,490, respectively. The increase was due to the revenue earned from the two entities that we acquired in 2022 (Alchemy and Helix). Additionally, we entered into a long-term contract in November 2021, for which only one month of revenue was earned in the same period in 2021, while two months of revenue were earned in the same period of 2022

Operating Expenses

For the three months ended November 30, 2022, and 2021, we had operating expenses of $1,170,856 and 1,023,006, an increase 14.4%, due to an increase in salaries and wages due to additional staff onboarded in conjunction with the acquisition of Helix and Alchemy. This amount was offset by a decrease in advertising and promotion. There was a decrease in advertising and promotion in the quarter as we focused on building a new product and waiting for that product to be completed before spending significantly on marketing.

Net Loss

Our net loss for the three months ended November 30, 2022, and 2021, was $(990,242) versus $(513,791) respectively. The difference is attributable to an increase in cost of sales attributed to the new business models in the acquisitions of Helix and Alchemy.

Assets and Liabilities

Our total current assets decreased to $684,039 from $1,011,896 during the three-month period ended November 30, 2022, compared to August 31, 2022. This decrease was due to cash used for operations and decrease in Accounts Receivables collected.

Total current liabilities decreased to $2,763,142 from $2,974,009 during the three-month period ended November 30, 2022, compared to our year end at August 31, 2022. The decrease reflects a decrease in deferred revenue from $474,977 to $5,280.

Net cash from financing activities decreased to $763,897 as of November 30, 2022, as compared to $1,745,911 for the same period in 2021. The decrease was due to a decrease of proceeds from the issuance of Common Stock and the conversion of Preferred Shares to debt, but partially offset by the proceeds from a new Line of Credit.

Liquidity and Capital Resources

Cash used by operating activities

The Company used $1,038,397 in cash from operating activities for the quarter ended November 30, 2022, as compared to a use of $2,012,440 for the quarter ended November 30, 2021. The decrease is due to an improvement in Accounts Receivables and less cash used for Account Payables.

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Cash provided by investing activities

Net cash from investing activities was $67,330 for the period ended November 30, 2022, as compared to cash used of $65,075 for the period ended November 30, 2021. The increase in net cash is due to the collection of loan receivables from the small business loans provided by Business Warrior Funding.

Cash provided by financing activities

Net cash from financing activities decreased to $763,897 as of November 30, 2022, as compared to $1,745,911 for the same period in 2021. The decrease was due to the exchange of preferred stock for debt.

We currently do not have sufficient capital to fund our cash needs for the next 12 months. We intend to rely on financing from convertible debt, promissory notes, and sale of stock to fund our operations.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Business Warrior Corporation vs. Timothy Li, CASE #: 8:22-cv-02144-DOC-ADS

On November 28, 2022, the Company filed a complaint in United States District Court for the Central District of California, against Timothy Li, alleging breach of fiduciary duty, fraudulent concealment, civil theft under California Penal Code §§484 and 496, breach of duty of loyalty, and unfair competition in violation of CA Bus, & Prof. Code §§17200 et seq., in connection with the acquisition of FluidFi Inc. d/b/a Alchemy and the transfer by Timothy Li of $200,000 from accounts of FluidFi to Timothy Li after the closing of acquisition.

Other than as set forth above, we are not a party to any material legal proceedings, nor is our property the subject of any material legal proceedings.

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

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

Not applicable

Item 5. Other Information.

In January 2023, the Company converted 2,023 shares of Series B preferred stock into debt.

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Item 6. Exhibits.

Exhibit Number	Description
3.1(i)*	Articles of Continuance (incorporated by reference to Exhibit 2.1 to the Company’s filing on Form 1-A on November 16, 2020)
3.1(ii)*	Amended and Restated Articles of Incorporation of Business Warrior (incorporated by reference to Exhibit 2.2 to the Company’s Filing on Form 1-A on November 16, 2020)
3.1(iii)*	Designation of the Series B Preferred Stock(incorporated by reference to Exhibit 3.1(iii) to the Company’s Filing on Form S-1 on June 8, 2022)
3.2(ii)*	Bylaws of Business Warrior Corporation.(incorporated by reference to Exhibit 3.2(ii) to the Company’s Filing on Form S-1 on June 16, 2022)
10.1*	Plan and Agreement of Merger and Reorganization (incorporated by reference to Exhibit 6.1 to the Company’s filing on Form 1-A on November 16, 2020)
10.2*	Consulting agreement with Kevin Kading (incorporated by reference to Exhibit 6.1 to the Company’s filing on Form 1-A on November 16, 2020)
10.3*	Agreement with Savior Software (incorporated by reference to Exhibit 3.1(iii) to the Company’s Filing on Form S-1 on June 8, 2022)
10.4*	Development Agreement with Alchemy (incorporated by reference to Exhibit 3.1(iii) to the Company’s Filing on Form S-1 on June 8, 2022)
10.5*	Agreement with EVRGRN (incorporated by reference to Exhibit 3.1(iii) to the Company’s Filing on Form S-1 on June 8, 2022)
10.6*	Helix House Membership Interest Purchase Agreement (incorporated by reference to Exhibit 3.1(iii) to the Company’s Filing on Form S-1 on June 8, 2022)
10.7*	Series B Exchange Agreement (incorporated by reference to Exhibit 3.1(iii) to the Company’s Filing on Form S-1 on June 8, 2022)
10.8*	Common Stock Purchase Agreement (Keystone) (incorporated by reference to Exhibit 3.1(iii) to the Company’s Filing on Form S-1 on June 8, 2022)
10.9*	Registration Rights Agreement (Keystone) (incorporated by reference to Exhibit 3.1(iii) to the Company’s Filing on Form S-1 on June 8, 2022)
(31)	Rule 13a-14(a)/15d-14(a) Certification
31.1**	Certification of the Principal Executive Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)	Section 1350 Certification
32.1+	Certification of the Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

*	Previously Filed
**	Filed herewith.

+ In accordance with SEC Release 33-8238, Exhibits 32.1 is being furnished and not filed.

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SIGNATURES

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

	BUSINESS WARRIOR CORPORATION
Date: May 3, 2023	By:	/s/ Rhett Doolittle
	Name:	Rhett Doolittle
	Title:	Chief Executive Officer and Director (Principal Executive Officer) (Principal Financial and Accounting Officer)

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