UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
| For the quarterly period ended |
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:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
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.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☐ | 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 Exchange Act). Yes ☐
Securities registered pursuant to section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Not applicable | Not applicable | Not applicable |
The number of shares outstanding of the registrant’s common stock, par value of $0.00001 on February 11, 2022, was .
TABLE OF CONTENTS
| 2 |
PART I - FINANCIAL INFORMATION
| Item 1. | Financial Statements. |
B2Digital, Incorporated
Consolidated Balance Sheets
As of 2021 (Unaudited) | As of 2021 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Deposits and prepaid expenses | ||||||||
| Total current assets | ||||||||
| Notes receivable & other receivables | ||||||||
| Operating lease right-of-use asset | ||||||||
| Property and equipment, net of accumulated depreciation | ||||||||
| Intangible assets, net of accumulated amortization | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities & Stockholders' Deficit | ||||||||
| Current liabilities | ||||||||
| Accounts payable & accrued liabilities | $ | $ | ||||||
| Deferred revenue | ||||||||
| Note payable- current maturity | ||||||||
| Note payable- in default | ||||||||
| Due to shareholder | ||||||||
| Payable due for business acquisitions | ||||||||
| Convertible notes payable, net of debt discount | ||||||||
| Derivative liabilities | ||||||||
| Lease liability, current | ||||||||
| Total current liabilities | ||||||||
| Lease liability, long-term | ||||||||
| Note payable- long-term | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 13) | ||||||||
| Stockholders' Deficit | ||||||||
| Preferred stock, shares authorized, | ||||||||
| Series A: shares convertible into 480,000,000 shares of common stock issued and outstanding at December 31, 2021 and March 31, 2021, respectively. | ||||||||
| Series B: shares convertible into 160,000,000 shares of common stock issued and outstanding at December 31, 2021 and March 31, 2021, respectively. | ||||||||
| Common stock, $ par value; shares authorized; and shares issued and outstanding at December 31, 2021 and March 31, 2021, respectively. (This includes shares in treasury repurchased for $ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders' Deficit | $ | ( | ) | $ | ( | ) | ||
| Total Liabilities and Stockholders' Deficit | $ | $ | ||||||
See accompanying notes to the unaudited consolidated financial statements.
| 3 |
B2Digital, Incorporated
Consolidated Statements of Operations (Unaudited)
| For the three months ended | For the nine months ended | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue: | ||||||||||||||||
| Live event revenue | $ | $ | $ | $ | ||||||||||||
| Gym revenue | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of sales | ||||||||||||||||
| Gross profit | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| General & administrative expenses | ||||||||||||||||
| Depreciation and amortization expense | ||||||||||||||||
| Total general and administrative corporate expenses | ||||||||||||||||
| Loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Gain on forgiveness of loan | ||||||||||||||||
| Gain on bargain purchase | ||||||||||||||||
| Gain (loss) on sale of assets | ( | ) | ||||||||||||||
| Grant income | ||||||||||||||||
| Financing expense | ( | ) | ( | ) | ||||||||||||
| Loss on settlement of debt | ( | ) | ||||||||||||||
| Loss on forgiveness of notes receivable | ( | ) | ||||||||||||||
| Gain (loss) on extinguishment of debt | ( | ) | ( | ) | ||||||||||||
| Change in fair value of derivatives | ( | ) | ( | ) | ( | ) | ||||||||||
| Day one derivative loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted earnings per share on net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding - Basic | ||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
| 4 |
B2Digital, Incorporated
Consolidated Statement of Changes in Stockholders' Deficit
For the Three and Nine months ended December 31, 2021, and 2020 (Unaudited)
| Preferred Stock | Preferred Stock | Additional | Total | |||||||||||||||||||||||||||||||||||||
| Series A | Series B | Common Stock | Treasury | Paid in | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Stock | Capital | Deficit | Deficit | |||||||||||||||||||||||||||||||
| Balance March 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Sale of common stock | – | – | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for services | – | – | ||||||||||||||||||||||||||||||||||||||
| Issuance of convertible notes | – | – | – | |||||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance June 30, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Sale of common stock | – | – | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for services | – | – | – | |||||||||||||||||||||||||||||||||||||
| Issuance of convertible notes | – | – | – | |||||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance September 30, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
| Sale of common stock | – | – | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with notes payable | – | – | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon conversion of notes payable | – | – | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for services | – | – | ||||||||||||||||||||||||||||||||||||||
| Shares repurchased | – | – | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance December 31, 2021 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
| 5 |
B2Digital, Incorporated
Consolidated Statement of Changes in Stockholders' Deficit
For the Three and Nine months ended December 31, 2021, and 2020 (Unaudited)
| Preferred Stock | Preferred Stock | Additional | Total | |||||||||||||||||||||||||||||||||||||
| Series A | Series B | Common Stock | Treasury | Paid in | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Stock | Capital | Deficit | Deficit | |||||||||||||||||||||||||||||||
| Balance March 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||
| Issuance of common stock for services | – | – | ||||||||||||||||||||||||||||||||||||||
| Conversion of notes payable | – | – | ||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance June 30, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||
| Sale of common stock | – | – | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for services | – | – | ||||||||||||||||||||||||||||||||||||||
| Conversion of notes payable | – | – | ||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance September 30, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||
| Stock issued for compensation | – | $ | – | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Equity offering costs | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Warrants issued for offering costs | – | – | – | |||||||||||||||||||||||||||||||||||||
| Conversion of notes payable | – | – | ||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance December 31, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
| 6 |
B2Digital, Incorporated
Consolidated Statements of Cash Flows (Unaudited)
| For the nine months ended | ||||||||
| December 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Stock compensation | ||||||||
| Depreciation and amortization expense | ||||||||
| Gain on forgiveness of loan | ( | ) | ||||||
| Financing expense | ||||||||
| Loss on settlement of debt | ||||||||
| Gain on settlement of debt | ( | ) | ||||||
| Loss on extinguishment of debt | ||||||||
| Loss on forgiveness of notes receivable | ||||||||
| Gain on extinguishment of debt | ( | ) | ||||||
| Gain on bargain purchase | ( | ) | ||||||
| Loss of sale of assets | ||||||||
| Amortization of debt discount | ||||||||
| Day one derivative loss | ||||||||
| Changes in fair value of compound embedded derivative | ||||||||
| Right- of- use asset/liability | ||||||||
| Changes in operating assets & liabilities | ||||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Inventory | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Related party (advances) repayment | ||||||||
| Deferred revenue | ( | ) | ||||||
| Net cash used by operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Business acquisition | ( | ) | ( | ) | ||||
| Capital expenditures | ( | ) | ( | ) | ||||
| Net cash used by investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from notes payable | ||||||||
| Proceeds from convertible notes payable | ||||||||
| Repayments related to payable due for business combinations | ( | ) | ||||||
| Repayments of convertible notes payable | ( | ) | ||||||
| Repayment of notes payable | ( | ) | ||||||
| Payment to note payable | ( | ) | ||||||
| Stock repurchases | ( | ) | ||||||
| Issuance of common stock (less treasury
stock of $ | ||||||||
| Net cash provided by financing activities | ||||||||
| (Decrease) increase in Cash | ( | ) | ||||||
| Cash at beginning of period | ||||||||
| Cash (and equivalents) at end of period | $ | $ | ||||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Conversion of note payable to equity | $ | $ | ||||||
See accompanying notes to the unaudited consolidated financial statements.
| 7 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
(Unaudited)
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
We are the premier development league for mixed martial arts (“MMA”). We operate in two major branded segments: The B2 Fighting Series and The ONE More Gym Official B2 Training Facilities Network. We primarily derive revenues from live event ticket sales, pay-per-view ticket sales, content media marketing, and fitness facility memberships.
Our Live Events segment (the B2 Fighting Series) is primarily engaged with scheduling, organizing, and producing live MMA events, marketing those events, and generating both live audience and PPV ticket sales, as well as creatively marketing the archived content generated through its operations in this segment. We also plan to generate additional revenues over time from endorsement deals with global brands as its audience grows. The B2 Fighting Series is licensed in 20 U.S, states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate. We now operate at a pace of more than 40 events per year.
Our Chairman and CEO is now Greg P. Bell. Mr. Bell has over 30 years of global experience developing more than 20 companies in the sports, television, entertainment, digital distribution and banking transaction industries. Capitalizing on the combination of his expertise, relationships and experience as well as his involvement with more than 40,000 live events over his career for major sports leagues and entertainment venues, we are in the process of developing and acquiring companies to become a premier vertically integrated live event sports company.
Our Fitness Facility segment operates primarily through the ONE More Gym Official B2 Training Facilities Network. We currently operate five ONE More Gym locations, with plans to continue to scale up this segment at a pace of 4-8 new locations per year. ONE More Gym locations include specialized MMA training resources and serve a recruiting function for the Company's Live Events segment.
Basis of Presentation and Consolidation
The Company has ten wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, ONE More Gym LLC, One More Gym Merrillville LLC, One More Gym Valparaiso LLC, One More Gym Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC.
The consolidated financial statements, which include the accounts of the Company and its ten wholly-owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated. The consolidated financial statements, which include the accounts of the Company and its ten wholly-owned subsidiaries, and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and presented in U.S. dollars. The fiscal year end is March 31.
NOTE 2 - ACCOUNTING POLICIES
The significant accounting policies of the Company are as follows:
Basis of Accounting
The interim consolidated financial statements are condensed and should be read in conjunction with the Company’s latest annual financial statements; interim disclosures generally do not repeat those in the annual statements. The interim unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
| 8 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The most significant assumptions and estimates relate to the valuation of derivative liabilities and the valuation of assets and liabilities acquired through business combinations. Actual results could differ from these estimates and assumptions.
Cash and Cash Equivalents
The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. The Company maintains deposits primarily in four financial
institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”).
The Company has not experienced any losses related to amounts in excess of FDIC limits or $250,000. The Company did
Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The three levels of valuation hierarchy are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.
Property and Equipment
Property and equipment are carried at cost. Depreciation
is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged
to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned and the related
accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying consolidated statement
of operations of the respective period. The estimated useful lives range from
| 9 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
Other income
During the nine months ended December 31, 2021,
and December 31, 2020, the Company received $
Revenue Recognition
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 only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. 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. The majority of revenues are received from ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue.
Income Taxes
The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the consolidated Statements of Operations in the period that includes the enactment date. Through December 31, 2021, the Company has an expected loss. Due to uncertainty of realization for these losses, a full valuation allowance is recorded. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables 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. In addition, Receivables that are factored through the Company's Receivable finance facility are guaranteed by the finance company that further mitigates Credit Risk.
| 10 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
Impairment of Long-Lived Assets
In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. There were no impairment charges recorded during the nine months ended December 31, 2021, and 2020, respectively.
The Company utilize FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options, restricted stock awards and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. As of December 31, 2021, the convertible notes are indexed to shares of common stock.
The following table sets forth the computation of basic and diluted earnings per share for the nine months ended December 31, 2021, and 2020:
December 31, 2021 | December 31, 2020 | |||||||
| Basic and diluted | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of shares outstanding: | ||||||||
| Basic | ||||||||
The Company records stock-based compensation in accordance with the provisions of FASB ASC Topic 718, Accounting for Stock Compensation, which establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC.
Topic 718, the Company recognizes an expense for the fair value of its stock awards at the time of grant and the fair value of its outstanding stock options and stock awards, whether held by employees or others. As of December 31, 2021, there were options outstanding and shares of stock awards.
| 11 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC 718 and forgo revaluing the award after this date. The Company adopted ASU 2018-07 on April 1, 2019. The adoption of this standard did not have a material impact on the consolidated financial statements.
Recently Adopted Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, 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.
NOTE 3 – GOING CONCERN
The accompanying consolidated financial statements
have been prepared on a going concern basis. For the nine months ended December 31, 2021, the Company had a net loss of $(
| 12 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
NOTE 4 – REVENUE
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. Live event revenue primarily includes ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue. Gym revenue comprises primarily of membership dues and subscription. Other gym revenue includes personal training, group fitness and meal planning.
Information about the Company’s net sales by revenue type for the three and nine months ended December 31, 2021, and 2020 are as follows:
| For the three months ended | ||||||||
| December 31, | December 31, | |||||||
2021 (Unaudited) | 2020 (Unaudited) | |||||||
| Live events | $ | $ | ||||||
| Gym revenue | ||||||||
| Total revenue | $ | $ | ||||||
| For the nine months ended | ||||||||
| December 31, | December 31, | |||||||
2021 (Unaudited) | 2020 (Unaudited) | |||||||
| Live events | $ | $ | ||||||
| Gym revenue | ||||||||
| Total revenue | $ | $ | ||||||
| 13 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment, net, consisted of the following as of December 31, 2021, and March 31, 2021:
| As of | As of | |||||||
December 31, 2021 | March 31, 2021 | |||||||
| Gym equipment | $ | $ | ||||||
| Cages | ||||||||
| Event assets | ||||||||
| Furniture and fixtures | ||||||||
| Production truck gear | ||||||||
| Production equipment | ||||||||
| Venue lighting system | ||||||||
| Leasehold improvements | ||||||||
| Electronics hardware and software | ||||||||
| Trucks trailers and vehicles | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Depreciation expense related to these assets for
the nine months ended December 31, 2021, and 2020 amounted to $
NOTE 6 – INTANGIBLE ASSETS
Intangible assets, net, consisted of the following as of December 31, 2021, and March 31, 2021:
| As of | As of | |||||||
December 31, 2021 | March 31, 2021 | |||||||
| Licenses | $ | $ | ||||||
| Software/website development | ||||||||
| Customer relationships | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Licenses are amortized over five years, whereas
customer relationships and software/website development are amortized over three years. Amortization expense related to these assets for
the nine months ended December 31, 2021, and 2020 amounted to $
| 14 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
Estimated amortization expense for each of the next four years:
| Fiscal year ended March 31, 2022 | $ | |||
| Fiscal year ended March 31, 2023 | ||||
| Fiscal year ended March 31, 2024 | ||||
| Fiscal year ended March 31, 2025 | ||||
| Total | $ |
NOTE 7 – BUSINESS ACQUISITIONS
Club Fitness, LLC
On April 1, 2021, the Company entered into an
agreement for the acquisition of 100% of the equity interest in Club Fitness LLC. The purchase price was $
| Consideration | ||||
| Cash | $ | |||
| Fair values of identifiable net assets: | ||||
| Property & equipment: | ||||
| Gym equipment | $ | |||
| Intangible assets: | ||||
| Customer relationships | ||||
| Total fair value of identifiable net assets | $ |
The Company analyzed the acquisition under applicable
guidance and determined that the acquisition should be accounted for as a business combination. The fair value of the net identifiable
assets consisted of gym equipment of $
| 15 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
NOTE 8 - NOTES PAYABLE
The following is a summary of notes payable as of December 31, 2021, and March 31, 2021:
| As of | As of | |||||||
| December 31, | March 31, | |||||||
| 2021 | 2021 | |||||||
| Notes payable - current maturity: | ||||||||
| Note Payable PPP SBA Loan | $ | $ | ||||||
| SBA EIDL Loan | ||||||||
| SBA Loan Payable B2Digital | ||||||||
| GS Capital, LLC | ||||||||
| Notes payable – in default: | ||||||||
| Emry Capital $14,000, 4% loan with principal and interest due April, 2020 | ||||||||
| Notes payable – long term: | ||||||||
| WLES LP LLC $60,000, 5% loan due January 15, 2022 | ||||||||
| Brian Cox 401K | ||||||||
| SBA Loan (Hillcrest) | ||||||||
| SBA Loan (One More Gym, LLC) | ||||||||
| Total notes payable | ||||||||
| Less: long-term | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
During the nine months ended December 31, 2021,
the Company incurred $
During the nine months ended December 31, 2021,
the Company repaid $
During the nine months ended December 31, 2021,
the bank forgave $
During the nine months ended December 31, 2021,
the bank forgave the Company’s PPP loan of $
| 16 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
NOTE 9 – CONVERTIBLE NOTE PAYABLE
The following is a summary of convertible notes payable as of December 31, 2021:
| Note* | Issuance Date | Maturity | Coupon | Face Value | Unamortized Discount | Carrying Value | ||||||||||||||||||
| Note 6 | ||||||||||||||||||||||||
| Note 7 | ||||||||||||||||||||||||
| Note 8 | ||||||||||||||||||||||||
| Note 9 | ||||||||||||||||||||||||
| Note 10 | ||||||||||||||||||||||||
| Note 11 | ||||||||||||||||||||||||
| Note 12 | ||||||||||||||||||||||||
| Note 14 | ||||||||||||||||||||||||
| Note 16 | ||||||||||||||||||||||||
| Note 17 | ||||||||||||||||||||||||
| Note 20 | ||||||||||||||||||||||||
| Note 21 | ||||||||||||||||||||||||
| Note 22 | ||||||||||||||||||||||||
| Note 24 | ||||||||||||||||||||||||
| Note 25 | ||||||||||||||||||||||||
| Note 26 | ||||||||||||||||||||||||
| Note 27 | ||||||||||||||||||||||||
| Note 28 | ||||||||||||||||||||||||
| Note 29 | ||||||||||||||||||||||||
| Note 30 | ||||||||||||||||||||||||
| Note 31 | ||||||||||||||||||||||||
| Note 32 | ||||||||||||||||||||||||
| Note 33 | ||||||||||||||||||||||||
| Note 34 | ||||||||||||||||||||||||
| Note 35 | ||||||||||||||||||||||||
| Note 36 | ||||||||||||||||||||||||
| Note 37 | ||||||||||||||||||||||||
| Note 38 | ||||||||||||||||||||||||
| Note 39 | ||||||||||||||||||||||||
| Note 40 | ||||||||||||||||||||||||
| Note 41 | ||||||||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||||||
* Notes 1, 2, 3, 4 and 5 in the amounts of $82,000, $208,000, $27,000, $62,000 and $202,400, respectively, were fully converted as of December 31, 2021.
* On October 18, 2021, the maturity dates of each of Notes 6, 7, 8, 9, 10, 11, 12, 14, 16, and 17 were extended to April 18, 2022 and the lender waived all penalty interest for non-payment.
*Note 23 in the amount of $
| 17 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
Between April 1, 2021, and December 31, 2021,
the Company issued to “accredited investors,” Convertible Promissory Notes aggregating a principal amount of $
The outstanding principal amount of the Notes is convertible into the Company’s common stock at the lender’s option at $0.01 per share for the first six months of the term of the Notes. After the six-month anniversary, the conversion price is equal to 63% of the average of the three lowest trading prices of the Company’s common stock.
Accounting Considerations
The Company has accounted for the Notes as a financing transaction, wherein the net proceeds that were received were allocated to the financial instrument issued. Prior to making the accounting allocation, the Company evaluated the agreement under ASC 815 Derivatives and Hedging (“ASC 815”). ASC 815 generally requires the analysis embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The material embedded derivative features consisted of the embedded conversion option and default puts. The conversion option and default puts bear risks of equity which were not clearly and closely related to the host debt agreement and required bifurcation. The contracts do not permit the Company to settle in registered shares and the contracts also contain make-whole provisions both of which preclude equity classification. Current accounting principles that are also provided in ASC 815 do not permit an issuer to account separately for individual derivative terms and features that require bifurcation and liability classification. Rather, such terms and features must be and were bundled together and fair valued as a single, compound embedded derivative.
| 18 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
The net proceeds were allocated to the compound embedded derivative and original issue discount. The notes will be amortized up to its face value over the life of Notes based on an effective interest rate. Amortization expense and interest expense for the nine months ended December 31, 2021 is as follows:
| Note | Interest Expense | Accrued Interest | Amortization of Debt Discount | Unamortized | ||||||||||||
| Note 6 | $ | $ | $ | $ | ||||||||||||
| Note 7 | ||||||||||||||||
| Note 8 | ||||||||||||||||
| Note 9 | ||||||||||||||||
| Note 10 | ||||||||||||||||
| Note 11 | ||||||||||||||||
| Note 12 | ||||||||||||||||
| Note 14 | ||||||||||||||||
| Note 16 | ||||||||||||||||
| Note 17 | ||||||||||||||||
| Note 20 | ||||||||||||||||
| Note 21 | ||||||||||||||||
| Note 22 | ||||||||||||||||
| Note 24 | ||||||||||||||||
| Note 25 | ||||||||||||||||
| Note 26 | ||||||||||||||||
| Note 27 | ||||||||||||||||
| Note 28 | ||||||||||||||||
| Note 29 | ||||||||||||||||
| Note 30 | ||||||||||||||||
| Note 31 | ||||||||||||||||
| Note 32 | ||||||||||||||||
| Note 33 | ||||||||||||||||
| Note 34 | ||||||||||||||||
| Note 35 | ||||||||||||||||
| Note 36 | ||||||||||||||||
| Note 37 | ||||||||||||||||
| Note 38 | ||||||||||||||||
| Note 39 | ||||||||||||||||
| Note 40 | ||||||||||||||||
| Note 41 | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| 19 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
NOTE 10 –DERIVATIVE FINANCIAL INSTRUMENTS
The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of December 31, 2021:
| December 31, 2021 | ||||||||
| The financings giving rise to derivative financial instruments | Indexed Shares | Fair Values | ||||||
| Compound embedded derivatives | ( | ) | ||||||
| Total | 1,372,797,202 | (2,199,087 | ) | |||||
The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of December 31, 2020:
| December 31, 2020 | ||||||||
| The financings giving rise to derivative financial instruments | Indexed Shares | Fair Values | ||||||
| Compound embedded derivatives | ( | ) | ||||||
| Total | 311,625,168 | (739,574 | ) | |||||
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 December 31, 2021, and 2020:
| The financings giving rise to derivative financial instruments and the income effects: | December 31, 2021 | December 31, 2020 | ||||||
| Compound embedded derivatives | $ | ( | ) | $ | ||||
| Day one derivative loss | ( | ) | ( | ) | ||||
| Total (loss) | $ | ( | ) | $ | ( | ) | ||
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 nine months ended December 31, 2021, and 2020:
| The financings giving rise to derivative financial instruments and the income effects: | December 31, 2021 | December 31, 2020 | ||||||
| Compound embedded derivatives | $ | ( | ) | $ | ( | ) | ||
| Day one derivative loss | ( | ) | ( | ) | ||||
| Total (loss) | $ | ( | ) | $ | ( | ) | ||
| 20 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
The Company’s Convertible Promissory Notes issued between October 4, 2019, and December 31, 2021, gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option.
Current accounting principles that are provided in ASC 815 - Derivatives and Hedging require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. In addition, the standards do not permit an issuer to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation and liability classification as derivative financial instruments. Rather, such terms and features must be bundled, and fair valued as a single, compound embedded derivative. The Company has selected the Monte Carlo Simulations valuation technique to fair value the compound embedded derivative because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving compound embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk-free rates. The Monte Carlo Simulations technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators.
Significant inputs and results arising from the Monte Carlo Simulations process are as follows for the embedded derivatives that have been bifurcated from the Convertible Notes and classified in liabilities:
| December 31, 2021 | ||||
| Quoted market price on valuation date | $ | |||
| Contractual conversion rate | $ | |||
| Contractual term to maturity | ||||
| Market volatility: | ||||
| Equivalent Volatility | ||||
| Interest rate | ||||
The following table reflects the issuances of compound embedded derivatives and the changes in fair value inputs and assumptions related to the compound embedded derivatives during the period ended December 31, 2021, and March 31, 2021.
| December 31, | March 31, | |||||||
| 2021 | 2021 | |||||||
| Beginning balance | $ | $ | ||||||
| Issuances: | ||||||||
| Compound embedded derivatives | ||||||||
| Conversions | ( | ) | ( | ) | ||||
| Derivative extinguished / debt repaid in cash | ( | ) | ( | ) | ||||
| (Gain) loss on changes in fair value inputs and assumptions reflected in income | ||||||||
| Total | $ | $ | ||||||
| 21 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
NOTE 11 - EQUITY
Preferred Stock
There are 50,000,000 shares authorized as preferred stock, of which 40,000,000 are designated as Series B and 2,000,000 are designated as Series A. 8,000,000 shares have yet to be designated. All 2,000,000 shares of Series A preferred are issued and outstanding. Each share of Series A preferred is convertible into 240 shares of common stock. The Series A Preferred Stock votes with the Common Stock on all matters to be voted on by the common stock on an as-converted basis. On such matters, each holder of Series A Preferred Stock is entitled to 240 votes for each share of Series A Preferred Stock held by such shareholder.
Common Stock
Common Stock Issuances for the nine months ended December 31, 2020
On April 23, 2020, the Company issued
shares of stock to GS Capital in exchange for the conversion of $
On May 8, 2020, the Company issued
shares of stock to WLES LP LLC in exchange for the conversion of $
On June 16, 2020, the Company issued
shares of common stock to Veyo Partners LLC in exchange for investor relation services valued at $
On July 10, 2020, the Company issued
shares of common stock to Veyo Partners LLC in exchange for investor relation services valued at $
On July 31, 2020, GS Capital converted $
On August 10, 2020, the Company issued
shares of common stock to Veyo Partners LLC in exchange for investor relation services valued at $
On August 13, 2020, the Company sold
shares of common stock for $
On August 19, 2020, the Company sold
shares of common stock for $
On August 20, 2020, GS Capital converted $
| 22 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
On September 1, 2020, the Company sold
shares of common stock for $
On September 9, 2020, GS Capital converted $
On September 14, 2020, the Company sold
shares of common stock for $
On December 31, 2020, the Company issued
shares of common stock for services valued at $
Common Stock Issuances for the nine months ended December 31, 2021
On April 1, 2021, the Company issued
shares of stock to GS Capital in exchange for $
On April 10, 2021, the Company issued
shares of stock to AES Capital in exchange for $
On April 14, 2021, the Company issued
shares of stock to GS Capital in exchange for $
On May 13, 2021, the Company issued
shares of stock to GS Capital in exchange for $
On May 21, 2021, the Company issued
shares of common stock to Rex Chan in exchange for contractor services valued at $
On May 21, 2021, the Company issued
shares of common stock to BM Giancarlo in exchange for management services valued at $
On May 21, 2021, the Company issued
shares of common stock to Carlos Diaz in exchange for management services valued at $
On June 3, 2021, the Company issued
shares of stock to AES Capital in exchange for $
On June 16, 2021, the Company issued
shares of stock to GS Capital in exchange for $
On June 25, 2021, the Company issued
shares of stock to AES Capital in exchange for $
On July 13, 2021, the Company issued
shares of stock to Geneva Roth in exchange for $
| 23 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
On July 15, 2021, the Company issued
shares of stock to GS Capital in exchange for $
On July 21, 2021, the Company issued
shares of stock to GS Capital in exchange for $
On October 5, 2021, GS Capital converted $
On October 8, 2021, the Company issued Shares in connection with compensation for services rendered. This award was valued using the stock price of $0.0052 on the date of the award.
On October 19, 2021, GS Capital converted $
On October 26, 2021, the Company issued Shares in connection with stock awards granted to employees and non-employees. This award was valued using the stock price of $0.0044 on the date of the award.
On October 26, 2021, the Company sold
shares of common stock for $
On December 6, 2021, the Company issued Shares in connection with stock awards granted to employees and non-employees. This award was valued using the stock price of $0.0023 on the date of the award.
On December 14, 2021, the Company issued shares of common stock pursuant to Note 39 dated December 10, 2021. The expense associated with this issuance is being amortized over 12 months.
On December 22, 2021, the Company issued shares of common stock to GS Capital in connection with a Promissory Note dated April 26, 2021. As of December 31, 2021 the expense associated with these shares was fully expensed.
On December 28, 2021, GS Capital converted $
NOTE 12 –LEASES
Kokomo lease
On October 1, 2020, the Company, under its subsidiary ONE More Gym LLC, entered into a facilities lease (“Kokomo Lease”) for 25,000 square feet in Kokomo, Indiana. The initial lease term is for five years, and the lease commencement date is October 1, 2020. The monthly lease payments are $7,292 in year 1, $7,656 in year 2, $8,039 in year 3, and $8,441 in years 4 and 5.
| 24 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
Valparaiso Lease
The Company leases 11,676 square feet of office
space located at 1805 E. Lincolnway, Valparaiso, Indiana 46383. The Company assumed the lease (“Valparaiso Lease”) when it
acquired CFit Indiana Inc. on October 6, 2020. The
Merrill Lease
In connection with the acquisition of CFit Indiana
Inc. on October 6, 2020, the Company acquired a facilities lease for 15,000 square feet at 6055N. Broadway Ave., Merrillville, Indiana.
The
Tuscaloosa Lease
In connection with the acquisition of Hillcrest
Fitness LLC on December 1, 2020, the Company acquired a facilities lease at 6551 Highway 69 South, Tuscaloosa, AL 35405. The
Birmingham Lease
In connection with the acquisition of Club Fitness
LLC on April 1, 2021, the Company acquired a facilities lease at 2520 Moody Parkway, Mood, AL 35004. The
Valparaiso Additional Space Lease
On August 30, 2021, the Company entered into a
facilities lease (“Valparaiso Additional Space”) for 6,380 square feet in Valparaiso, Indiana. The initial lease term is for
five years, and the lease commencement date is August 30, 2021. The
On November 23, 2021 the Company terminated its
lease for (‘Valparaiso Additional Space”). The results of this lease termination were to reduce the Operating Lease Right
of Use Asset by $
Tuscaloosa Additional Space Lease
On November 1, 2021, the Company entered into
a facilities lease (“Tuscaloosa Additional Space”) in Tuscaloosa, Alabama. The initial lease term is for five years, and the
lease commencement date is December 1, 2021. The
| 25 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
Operating lease right-of-use asset and liability are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 10%, as the interest rate implicit in most of our leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. Since the common area maintenance expenses are expenses that do not depend on an index or rate, they are excluded from the measurement of the lease liability and recognized in other general and administrative expenses on the statements of operations.
Right-of-use asset is summarized below:
| December 31, 2021 | ||||||||||||||||||||||||||||
| Kokomo Lease | Valparaiso Lease | Merrill Lease | Tuscaloosa Lease | Birmingham Lease | Tuscaloosa Additional Lease | Total | ||||||||||||||||||||||
| Office lease | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Right-of-use asset, net | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Operating lease liability is summarized below:
| December 31, 2021 | ||||||||||||||||||||||||||||
| Kokomo Lease | Valparaiso Lease | Merrill Lease | Tuscaloosa Lease | Birmingham Lease | Tuscaloosa Additional Lease | Total | ||||||||||||||||||||||
| Office lease | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Less: current portion | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Long term portion | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Maturity of the lease liability is as follows:
| December 31, 2021 | ||||||||||||||||||||||||||||
Kokomo Lease | Valparaiso Lease | Merrill Lease | Tuscaloosa Lease | Birmingham Lease | Tuscaloosa Additional Lease | Total | ||||||||||||||||||||||
| Fiscal year ending March 31, 2022 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Fiscal year ending March 31, 2023 | ||||||||||||||||||||||||||||
| Fiscal year ending March 31, 2024 | ||||||||||||||||||||||||||||
| Fiscal year ending March 31, 2025 | ||||||||||||||||||||||||||||
| Fiscal year ending March 31, 2026 | ||||||||||||||||||||||||||||
| Fiscal year ending March 31, 2027 | ||||||||||||||||||||||||||||
| Present value discount | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Lease liability | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| 26 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
NOTE 13 – 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 FASB 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. As of December 31, 2021, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements.
The Company entered into an employment agreement with its Executive Vice President as of November 24, 2017. Under the terms of the agreement, the Company will be liable for severance and other payments under certain conditions. The employment agreement is for a period of 36 months and renews for a successive two years unless written notice is provided by either party under the terms of the agreement.
On November 29, 2020, with Greg P. Bell abstaining, the board of directors of the Company approved the Chairman of the Board and Chief Executive Officer & President Agreement dated effective November 23, 2020, with Mr. Bell, the Company’s Chairman of the Board, CEO, and President. The agreement supersedes the previous agreement of the same title dated effective November 24, 2017. The term of the agreement is until Mr. Bell is removed from his executive positions by 80% of the voting control of the Company unless Mr. Bell is legally incapacitated (until legal capacity is regained), as determined by a court of competent jurisdiction or upon Mr. Bell’s death. Mr. Bell can terminate the agreement upon three months’ prior written notice to the Company.
Pursuant to the agreement, Mr. Bell is entitled
to an annual salary of $
Each of the acquisition agreements contain a Management Services Agreement (“MSA”) whereby the Company agrees to pay a management fee based on certain performance targets. The MSA agreements expire 10 years from the acquisition agreement dates.
NOTE 14 - SUBSEQUENT EVENTS
Convertible Promissory Note
On January 4, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of January 4, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.
On January 12, 2022, the Company entered into an Agreement with Mast Hill Fund, L.P. pursuant to which the Company issued to Mast Hill Fund, L.P. a Promissory Note in the aggregate principal amount of $300,000. The Note has a maturity date of January 12, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note.
| 27 |
B2DIGITAL, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2021
On January
19, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a
Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of
On February 2, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of February 2, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.
On February 3, 2022, the Company entered into an Agreement with Mast Hill Fund, L.P. pursuant to which the Company issued to Mast Hill Fund, L.P. a Promissory Note in the aggregate principal amount of $425,000. The Note has a maturity date of February 3, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note.
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| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. |
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contain certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events; are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in the section titled “Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, 2021, filed on June 29, 2021. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements
Basis of Presentation
We have ten wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, ONE More Gym LLC, One More Gym Merrillville LLC, One More Gym Valparaiso LLC, One More Gym Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC.
The consolidated financial statements, which include the accounts of the Company and its ten wholly owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated.
Forward-Looking Statements
Some of the statements under “Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” and “would” or the negatives of these terms or other comparable terminology.
You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Quarterly Report on Form 10-Q identify important factors, which you should consider in evaluating our forward-looking statements. These factors include, among other things:
| · | The unprecedented impact of COVID-19 pandemic on our business, customers, employees, consultants, service providers, stockholders, investors and other stakeholders; |
| · | The speculative nature of the business we intend to develop; |
| · | Our reliance on suppliers and customers; |
| · | Our dependence upon external sources for the financing of our operations, particularly given that there are concerns about our ability to continue as a “going concern;” |
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| · | Our ability to effectively execute our business plan; |
| · | Our ability to manage our expansion, growth and operating expenses; |
| · | Our ability to finance our businesses; |
| · | Our ability to promote our businesses; |
| · | Our ability to compete and succeed in highly competitive and evolving businesses; |
| · | Our ability to respond and adapt to changes in technology and customer behavior; and |
| · | Our ability to protect our intellectual property and to develop, maintain and enhance strong brands. |
Although the forward-looking statements in this Quarterly Report on Form 10-Q are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as maybe be required by law, to update this Quarterly Report on Form 10-Q or otherwise make public statements updating our forward-looking statements.
Critical Accounting Policies
Basis of Accounting
The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three and nine months ended December 31, 2021, are not necessarily indicative of the results to be expected for the year ending March 31, 2022.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The most significant assumptions and estimates relate to the valuation of derivative liabilities and the valuation of assets and liabilities acquired through business combinations. Actual results could differ from these estimates and assumptions.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains deposits primarily in four financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation ("FDIC"). The Company has not experienced any losses related to amounts in excess of FDIC limits or $250,000. The Company did not have any cash in excess of FDIC limits as of December 31, 2021, and March 31, 2021, respectively.
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Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The three levels of valuation hierarchy are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.
Property and Equipment
Property and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned, and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying consolidated statement of operations of the respective period. The estimated useful lives range from 3-7 years.
Goodwill
Goodwill represents the cost in excess of the fair value of net assets acquired in business combinations. The Company tests goodwill for impairment on an annual basis and when events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is deemed to be impaired if the carrying amount of goodwill exceeds its estimated fair value. As of December 31, 2021, there were no charges to goodwill impairment.
Other Income
During the three months ended December 31, 2021, the Company received $0 in grant income due to COVID-19 relief.
Revenue Recognition
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.
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The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. 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. The majority of revenues are received from ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue.
Income Taxes
The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the consolidated Statements of Operations in the period that includes the enactment date. Through December 31, 2021, the Company has an expected loss. Due to uncertainty of realization for these losses, a full valuation allowance is recorded. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables 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, consequently, believes that its accounts receivable credit risk exposure beyond such allowance is limited.
Impairment of Long-Lived Assets
In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. There were no impairment charges recorded during the three months ended December 31, 2021, and 2020, respectively.
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Inventory
Inventories are valued at the lower of cost (determined on a weighted average basis) or market. Management compares the cost of inventories with the market value and allowance is made to write down inventories to market value, if lower. As of December 31, 2021, and March 31, 2021, the Company did not carry any finished goods inventory.
Earnings Per Share (EPS)
The Company utilize FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. As of December 31, 2021, the convertible notes are indexed to 1,372,797,202 shares of common stock.
The following table sets forth the computation of basic and diluted earnings per share for the three months ended December 31, 2021, and 2020:
| December 31, 2021 | December 31, 2020 | |||||||
| Basic and diluted | ||||||||
| Net loss | $ | (2,693,117 | ) | $ | (978,156 | ) | ||
| Net loss per share | ||||||||
| Basic | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Weighted average number of shares outstanding: | ||||||||
| Basic | 1,452,481,989 | 710,522,374 | ||||||
Stock Based Compensation
The Company records stock-based compensation in accordance with the provisions of FASB ASC Topic 718, Accounting for Stock Compensation, which establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC.
Topic 718, the Company recognizes an expense for the fair value of its stock awards at the time of grant and the fair value of its outstanding stock options as they vest, whether held by employees or others. As of December 31, 2021, there were no options outstanding.
On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC 718 and forgo revaluing the award after this date. The Company adopted ASU 2018-07 on April 1, 2019. The adoption of this standard did not have a material impact on the consolidated financial statements.
During the nine months ended December 31, 2021, and 2020, the Company recorded $316,050 and $409,333, respectively in stock-compensation expense.
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Leases
In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606.
On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.
Operating lease right of use (“ROU”) assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is presented on the statements of operations.
As permitted under the new guidance, the Company has made an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of twelve 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.
Recently Adopted Accounting Pronouncements
In September 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred-loss impairment methodology and requires immediate recognition of estimated credit losses expected to occur for most financial assets, including trade receivables. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. The new guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Recently, the FASB voted to delay the implementation date for this accounting standard, for smaller reporting companies, the new effective date is beginning after December 15, 2022, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of this ASU on the consolidated financial statements and is collecting and analyzing data that will be needed to produce historical inputs into any models created as a result of adopting this ASU. At this time, the Company does not believe the adoption of this ASU will have a material effect on the financial statements.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, 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.
Organization and Nature of Business
We are the premier development league for mixed martial arts (“MMA”). We operate in two major branded segments: The B2 Fighting Series and The ONE More Gym Official B2 Training Facilities Network. We primarily derive revenues from live event ticket sales, pay-per-view ticket sales, content media marketing, and fitness facility memberships.
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Our Live Events segment (the B2 Fighting Series) is primarily engaged with scheduling, organizing, and producing live MMA events, marketing those events, and generating both live audience and PPV ticket sales, as well as creatively marketing the archived content generated through its operations in this segment. We also plan to generate additional revenues over time from endorsement deals with global brands as its audience grows. The B2 Fighting Series is licensed in 20 U.S, states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate. We now operate at a pace of more than 40 events per year.
Our Chairman and CEO is now Greg P. Bell. Mr. Bell has over 30 years of global experience developing more than 20 companies in the sports, television, entertainment, digital distribution and banking transaction industries. Capitalizing on the combination of his expertise, relationships and experience as well as his involvement with more than 40,000 live events over his career for major sports leagues and entertainment venues, we are in the process of developing and acquiring companies to become a premier vertically integrated live event sports company.
Our Fitness Facility segment operates primarily through the ONE More Gym Official B2 Training Facilities Network. We currently operate five ONE More Gym locations, with plans to continue to scale up this segment at a pace of 4-8 new locations per year. ONE More Gym locations include specialized MMA training resources and serve a recruiting function for the Company's Live Events segment.
Results of Operations
Three Months Ended December 31, 2021, Compared to the Three Months Ended December 31, 2020
Revenue
We had revenues of $612,632 for the three months ended December 31, 2021, versus revenues of $300,549 for the three months ended December 31, 2020. There was an increase of $181,258, or 220% in live event revenue due to the reopening of live events as there continues to be a partial recovery from the effects of COVID-19. There was also an increase in gym revenue of $130,825, or 60% primarily as a result of the Company acquiring four gyms since the comparative period.
Cost of Sales
We incurred cost of sales of $388,263 for the three months ended December 31, 2021, versus cost of sales of $102,722 for the three months ended December 31, 2020. This increase of $285,541 is mainly attributable to the increase in live event revenue and gym revenue for the three months ended December 31, 2021.
Operating Expenses
General & Administrative Expenses
General and administrative expenses include all costs associated with professional fees, salaries, marketing, public relations, rent, travel, sponsorships and other expenses. We incurred general and administrative expenses of $2,299,300 for the three months ended December 31, 2021, versus general and administrative expenses of $1,147,001 for the three months ended December 31, 2020. The increase of $1,152,299 was primarily due to increased operations as a result of gym acquisitions, investor relations, salaries, travel, professional fees and other costs associated with expanding infrastructure as we continue to execute our growth strategy.
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Depreciation and Amortization Expense
We incurred depreciation and amortization expense of $102,713 for the three months ended December 31, 2021, versus depreciation expense of $52,516 for the three months ended December 31, 2020. The increase of $50,197 was due to the purchase of fixed and intangible assets as a result of business acquisitions and infrastructure growth.
Other Income (Expense)
Our other income and expenses include loss on sale of assets, loss on the forgiveness of notes receivable, gain on extinguishment of debt, change in fair value of derivative liabilities and interest expense. The increase of $539,007 (net expense) was primarily due to an increase in interest expense, financing expense and negative changes in the fair value of derivative instruments.
Net Losses
We incurred a net loss of $2,693,117 for the three months ended December 31, 2021, versus a net loss of $978,156 for the three months ended December 31, 2020.
Nine months ended December 31, 2021, Compared to the Nine months ended December 31, 2020
Revenue
We had revenues of $1,841,407 for the nine months ended December 31, 2021, versus revenues of $496,497 for the nine months ended December 31, 2020. There was an increase of $669,643 or 593% in live event revenue due to the reopening of live events as there continues to be a partial recovery from the effects of COVID-19. There was also an increase in gym revenue of $675,267 or 176% primarily as a result of the Company acquiring four gyms since the comparative period.
Cost of Sales
We incurred cost of sales of $919,447 for the nine months ended December 31, 2021, versus cost of sales of $151,941 for the nine months ended December 31, 2020. This increase of $767,506 is directly attributable to the increase in live event revenue and gym revenue for the nine months ended December 31, 2021.
Operating Expenses
General & Administrative Expenses
General and administrative expenses include all costs associated with professional fees, salaries, marketing, public relations, rent, travel, sponsorships and other expenses. We incurred general and administrative expenses of $5,707,667 for the nine months ended December 31, 2021, versus general and administrative expenses of $1,986,918 for the nine months ended December 31, 2020. The increase of $3,720,749 was primarily due to increased operations as a result of gym acquisitions, investor relations, salaries, travel, professional fees and other costs associated with expanding infrastructure as we continue to execute our growth strategy.
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Depreciation and Amortization Expense
We incurred depreciation and amortization expense of $289,232 for the nine months ended December 31, 2021, versus depreciation expense of $119,371 for the nine months ended December 31, 2020. The increase of $169,861 was due to the purchase of fixed and intangible assets as result of business acquisitions and infrastructure growth.
Other Income (Expense)
Our other income and expenses include gain on forgiveness of loan, loss on sale of assets, loss on the forgiveness of notes receivable, loss on settlement of debt, (loss) on extinguishment of debt, change in the fair value of derivative liabilities and interest expense. The increase of $255,419 was primarily due an increase in interest expense, offset in part due to a positive change in fair value of derivatives and a gain on extinguishment of debt.
Net Losses
We incurred a net loss of $6,311,640 for the nine months ended December 31, 2021, versus a net loss of $2,743,015 for the nine months ended December 31, 2020.
Current Liquidity and Capital Resources for the nine months ended December 31, 2021, compared to the nine months ended December 31, 2020
| December 31, | ||||||||
| 2021 | 2020 | |||||||
| Summary of Cash Flows: | ||||||||
| Net cash used by operating activities | $ | (4,561,880 | ) | $ | (1,105,767 | ) | ||
| Net cash used by investing activities | (577,892 | ) | (292,138 | ) | ||||
| Net cash provided by financing activities | 5,026,790 | 1,425,948 | ||||||
| Net (decrease) increase in cash and cash equivalents | (112,981 | ) | 28,043 | |||||
| Beginning cash and cash equivalents | 122,176 | 46,729 | ||||||
| Ending cash and cash equivalents | $ | 9,195 | $ | 74,772 | ||||
Operating Activities
Cash used in operations of $4,561,880 during the nine months ended December 31, 2021, was primarily a result of our $6,311,640 net loss reconciled with our net non-cash expenses relating to depreciation and amortization expense, financing expense, gain on extinguishment of debt, amortization of debt discount, changes in fair value of derivative liabilities, and accrued liabilities.
Cash used in operations of $1,105,767 during the nine months ended December 31, 2020, was primarily a result of our $2,743,015 net loss reconciled with our net non-cash expenses relating to stock compensation, depreciation and amortization expense, amortization of debt discount, derivative expense, and changes in fair value of derivative liabilities.
Investing Activities
Net cash used in investing activities for the nine months ended December 31, 2021, of $577,892 resulted from the payments of $165,000 related to business acquisitions and capital expenditures in the amount of $412,892.
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Net cash used in investing activities for the nine months ended December 31, 2020, of $292,138 resulted from the payments of $114,100 related to business acquisitions and capital expenditures in the amount of $178,028.
Financing Activities
Net cash provided by financing activities was $5,026,790 for nine months ended December 31, 2021, which consisted primarily of $150,000 from the issuance of notes payable, $4,178,506 from the issuance of convertible notes payable, $(432,362) in payments related to repayment of convertible notes payable, and $1,225,000 in proceeds from the issuance of common stock.
Net cash provided by financing activities was $1,425,948 for nine months ended December 31, 2020, which consisted of $122,766 from proceeds from the issuance of notes payable, $865,000 from the issuance of convertible notes payable, and $465,000 in proceeds from the issuance of common stock.
Future Capital Requirements
Our current available cash and cash equivalents are insufficient to satisfy our liquidity requirements. Our capital requirements for fiscal year 2022 will depend on numerous factors, including management’s evaluation of the timing of projects to pursue. Subject to our ability to generate revenues and cash flow from operations and our ability to raise additional capital (including through possible joint ventures and/or partnerships), we expect to incur substantial expenditures to carry out our business plan, as well as costs associated with our capital raising efforts and being a public company.
Our plans to finance our operations include seeking equity and debt financing, alliances or other partnership agreements, or other business transactions, that would generate sufficient resources to ensure continuation of our operations.
The sale of additional equity or debt securities may result in additional dilution to our shareholders. If we raise additional funds through the issuance of debt securities or preferred stock, these securities could have rights senior to those of our common stock and could contain covenants that would restrict our operations. Any such required additional capital may not be available on reasonable terms, if at all. If we were unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned activities and limit our operations which could have a material adverse effect on our business, financial condition and results of operations.
Inflation
The amounts presented in our consolidated financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
Going Concern
The accompanying financial statements have been prepared on a going concern basis. For the nine months ended December 31, 2021, the Company had a net loss of $6,311,640 had net cash used in operating activities of $4,561,880, had negative working capital of $7,608,136 accumulated deficit of $15,508,888 and stockholders’ deficit of $5,914,766. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Quantitative and Qualitative Disclosures about Market Risk
In the ordinary course of our business, we are not exposed to market risk of the sort that may arise from changes in interest rates or foreign currency exchange rates, or that may otherwise arise from transactions in derivatives.
The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our significant estimates and assumptions include the fair value of our common stock, stock-based compensation, the recoverability and useful lives of long-lived assets, and the valuation allowance relating to our deferred tax assets.
Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Our management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
As a smaller reporting company, the Company has elected not to provide the disclosure required by this item.
| Item 4. | Controls and Procedures. |
Disclosure Controls and Procedures
The Company has established disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and, as such, is accumulated and communicated to the Company’s Chief Executive Officer, Greg P. Bell, who serves as our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Mr. Bell, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of December 31, 2021. Based on his evaluation, Mr. Bell concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2021.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during the Company’s most recent fiscal quarter ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II—OTHER INFORMATION
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Unregistered Sales of Equity Securities
Convertible Note Issuances
During the quarter ended December 31, 2021, we issued to “accredited investors,” Convertible Promissory Notes aggregating a principal amount of $2,195,296. In addition, 35,000,000 shares of Common Stock were issued to a lender as commitment shares (the “Commitment Shares”).
These Notes and Commitment Shares were issued without registration under the Securities Act of 1933, as amended, by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as transactions by an issuer not involving any public offering. Selling commissions of $43,552 were paid to Moody Capital Solutions, Inc. in connection with the issuances of one of the notes.
Shares Issued Pursuant to Note Conversions
During the quarter ended December 31, 2021, a lender converted an aggregate of $255,003 in principal and accrued and unpaid interest of their promissory notes into an aggregate of 115,258,976 shares of our Common Stock. The securities were issued without registration under the Securities Act of 1933, as amended, by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering. No selling commissions were paid in connection with the issuance of the securities.
Shares Issued for Services
During the quarter ended December 31, 2021, we issued 99,000,000 shares of our Common Stock to a total of 12 individuals for services. The securities were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering. No selling commissions were paid in connection with the issuance of the securities.
Shares Issued as Commitment Shares
During the quarter ended December 31, 2021, we issued 2,900,000 shares of common stock as commitment shares to a lender in connection with a Promissory Note dated April 26, 2021. The securities were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering. No selling commissions were paid in connection with the issuance of the securities.
Issuer Purchases of Equity Securities
On October 11, 2021, our Board of Directors approved the Company entering into the Common Stock Repurchase Agreement dated October 11, 2021 with Go Value Networks pursuant to which we agreed to repurchase an aggregate of 12,816,666 shares of our Common Stock previously issued to Go Value Networks. The shares were repurchased by us at a purchase price of $0.005 per Share for an aggregate purchase price of $50,000.
Effective November 1, 2021, we entered into the Business Purchase Agreement and Management Services Agreement Termination Agreement with Mark Slater and Colosseum Combat LLC pursuant to which Mr. Slater agreed to cancel 8,000,000 previously-issued shares of our Common Stock, amongst other obligations, in exchange for an aggregate of $8,750 to be made in five equal payments.
On December 23, 2021, our Board of Directors approved the Company entering into the Common Stock Repurchase Agreement dated December 23, 2021 with Mike Davis pursuant to which we agreed to repurchase an aggregate of 6,500,000 shares of our Common Stock previously purchased by Mr. Davis. The shares were repurchased by us at a purchase price of $0.0038 per Share for an aggregate purchase price of $24,700.
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Use of Proceeds
On February 2, 2021, our Registration Statement on Form S-1 (File No. 333-251846) was declared effective by the SEC and the offering was commenced upon effectiveness and is still ongoing as all of the 625,000,000 (for gross proceeds of $2,500,000) offered shares have not been sold and the offering has not been terminated.
During the quarter ended December 31, 2021, we sold a total of 11,250,000 shares of Common Stock for gross proceeds of $45,000. We did not pay any fees or commissions from the sales and received net proceeds of $45,000. The net proceeds were used for capital expenditures.
| Item 5. | Other Information. |
On December 23, 2021, our Board of Directors approved the Company entering into the Common Stock Repurchase Agreement dated December 23, 2021, with Mike Davis pursuant to which we agreed to repurchase an aggregate of 6,500,000 shares of our Common Stock previously purchased by Mr. Davis. The shares were repurchased by us at a purchase price of $0.0038 per Share for an aggregate purchase price of $24,700.
| Item 6. | Exhibits. |
| SEC Ref. No. | Title of Document | |
| 10.1* | Business Purchase Agreement and Management Services Agreement Termination Agreement dated effective November 1, 2021 with Mark Slater and Colosseum Combat LLC | |
| 10.2* | Common Stock Repurchase Agreement dated October 11, 2021 with Go Value Networks | |
| 10.3* | Common Stock Repurchase Agreement dated December 23, 2021, with Mike Davis | |
| 31.1* | Rule 13a-14(a) Certification by Principal Executive and Financial Officer | |
| 32.1** | Section 1350 Certification of Principal Executive and Financial Officer | |
| 101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101). | |
__________________
| * | Filed with this Report. | |
| ** | Furnished with this Report. |
| 41 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| B2Digital, Incorporated | ||
| Date: February 14, 2022 | By | /s/ Greg P. Bell |
| Greg P. Bell, Chief Executive Officer | ||
| (Principal Executive Officer and Principal | ||
| Financial Officer) | ||
| 42 |
Exhibit 10.1
Business Purchase Agreement and Management
Services Agreement
Termination Agreement
This Business Purchase Agreement and Management Services Termination Agreement is effective the 1st day of November 2021 by and between Mark Slater who resides at, 1121 S. Elizabeth St., Kokomo, Indiana 46902 and Colosseum Combat LLC jointly (herein called “CCMS” ) and B2 Digital INC. (Herein called “B2”) with offices at 4522 West Village Drive, Suite 215, Tampa, Florida 33624 (Herein called" B2")
Now, therefore in consideration of the foregoing premises and the covenants herein contains, the parties hereto mutually agree as follows.
| 1.0 | Agreement |
The terms used in the Business Purchase Agreement and Management Services Agreement Termination Agreement shall have the meanings assigned to them in this section or elsewhere in this Management Services Termination Agreement:
| 1.0 | Mark Salter will Return on the execution date of this agreement to B2 the B2 Digital INC. Physical certificate issued to Mark Slater of Eight Million (8,000,000) Restricted REG 144 Common Stock Shares which B2 will cancel said certificate. |
| 2.0 | CCMS and specifically Mark Slater will return the Dodge Caravan owned by B2 on the execution date of this agreement in good working order, |
| 3.0 | B2 will Pay to Mark Slater per the following schedule: |
| 3.1 $1750 on or before the 1st of November | ||
| 3.2 $1750 on or before the 7th of November | ||
| 3.3 $1750 on or before the 21st of November | ||
| 3.4 $1750 on or before the 7th of December | ||
| 3.5 $1750 on or before the 21st of December |
| 4.0 | CCMS hereby Agrees to Exhibit A of this Agreement |
| 5.0 | The Business Purchase Agreement executed between the parties on November 17, 2017 attached as Exhibit B herein is hereby Terminated in its entirety except for the following clauses, 11 and 13 |
| 6.0 | The Management Services Agreement executed between the parties on November 17, 2017 attached as Exhibit B herein is hereby Terminated in its entirety except for the following clauses, 4, 5, 6 and 7. |
| 7.0 | CCMS agrees to not represent, publish, post any information, pictures or video of any kind about B2, B2 Fighting Series, B2Digital Inc. or any information received, discussed, or disseminated to CMS or in CCMS procession about b2 or CCMS. |
| 7.0 | The laws and courts of Florida will govern this agreement. |
| 8.0 | All assets and the title ownership of any asset acquired in the Business Purchase Agreement executed between the parties will hereby transfer from Colosseum Combat LLC to B2Digital INC., except for the following will transfer to Mark Slater |
a. Colosseum Combat LLC 100% ownership owned by B2 will transfer to Mark Slater on the execution of this agreement
b. Colosseum Combat Bank Account with $1000 cash in it
c. Original Cage that was acquired by B2 in the Business Purchase Agreement between the parties
d. Cage trailer that was acquired by B2 in the Business Purchase Agreement between the parties
e. All Colosseum combat Social media, websites, logo rights and usages of Colosseum Combat marks
THIS AREA PURPOSELY LEFT BLANK
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| 9.0 | Notices. All notices, requests, demands, instructions, and other communications shall be in writing, and shall be addressed respectively as follows: |
If to B2 and CCMS:
Mr. Greg P. Bell
gbell@B2enterprises.net
Mobile Phone: (310) 663-6615
If to "CCMS":
Mark Slater
Email: mark@colosseumcombat.com
Mobile Phone: (765) 513-0016
In witness whereof, the parties hereto agree to the terms in this Management Services Agreement.
/s/ Greg P. Bell
Greg P. Bell
B2 Digital INC.
Chairman & CEO
Date: 10/29/21
/s/ Mark Slater
CCMS
Mark Slater
Date: 10/28/21
/s/ Mark Slater
Mark Slater
Date: 10/28/21
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Exhibit A
Covenant Not to Compete; Non-Solicitation; Confidentiality
1. CCMS for a period of ten (10) years following the execution date of this Agreement will not recruit or employ (whether as an employee or independent contractor) any of the B2 current employees or independent contractors excluding any fighters who have fought for CCMS or B2.
2. CCMS shall hold the Confidential Information (as hereinafter defined) in confidence and shall not use the Confidential Information for any purpose other than in furtherance of the B2 operation of the Business without the B2's express written consent. CCMS recognizes that Confidential Information involves one of the valuable and unique assets B2 has acquired. "Confidential Information" means information directly or indirectly involving the Business that is not available or open to the public generally.
3. CCMS has carefully read and considered the provisions of this Exhibit A and, having done so, agrees that the restrictions set forth herein are fair and reasonable given the terms and conditions of this agreement, the nature of the B2 and its affiliates' business, the area in which its affiliates market their products and services, and the consideration being provided pursuant to this agreement. In addition, CCMS and B2 each specifically agrees that the length, scope, and definitions used in this covenant and other restrictions set forth in this Exhibit A are fair and reasonable.
4. CCMS and B2 each acknowledge and agree that its breach of any of the agreements in this Exhibit A would result in irreparable damage and continuing injury to B2. Therefore, in the event of any breach or threatened breach of such agreements, CCMS and B2 each agrees that the 132 will be entitled to an injunction from any court of competent jurisdiction enjoining such person or entity from committing any violation or threatened violation of this agreement.
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Schedule B
Business Purchase Agreement and Management Services Agreement
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BUSINESS PURCHASE AGREEMENT
This Purchase Agreement is entered into on November 20, 2017, between B2Digital, INC a Delaware Corporation trading on the OTC at: BTDG, (the “Buyer”) with offices at 4522 West Village Dr., Tampa, Florida 33624, and Colosseum Combat LLC, a INDIANA LIMITED LIABILITY (the “Seller”) with offices at 1121 S. Elizabeth St., Kokomo, Indiana 46902 which is owned by Mark Slater (the “Owner”).
The Seller owns and operates a Fighting Promotion Business known as Colosseum Combat (the “Business”).
The Seller has agreed to sell and the Buyer has agreed to purchase (as defined below).
The Owner owns 100% of the outstanding equity of the Seller and Seller hereby agrees to Sell 100% of Owner’s interest in Seller to the Buyer per the following terms and conditions;
Therefore, the parties agree as follows:
1. Sale of the Purchased Business Assets; Assumption of the Assumed Contracts. Subject to the provisions set forth in this agreement, as of midnight at the beginning of the date of this agreement (the “Effective Time”), the Seller hereby sells, conveys, assigns, and transfers to the Buyer the assets of the Colosseum Combat Business set forth on Schedule 1 (the “Purchased Assets”) free and clear of any and all liens and encumbrances, and the Buyer hereby accepts the sale, conveyance, assignment, and transfer of the Purchased Assets and assumes the Buyer’s obligations under the contracts listed on Schedule 1 (the “Assumed Contracts”).
2. No Other Assumption of Liabilities. Except for the Assumed Contracts, Provisions and Items listed in Schedule 1 through 5 of this agreement, the Buyer does not assume any obligation or liability of the Seller or the Owner, and the Seller or the Owner or both, as applicable, will continue to be liable for any and all liabilities of the Seller or the Owner or both for the business prior to the execution of this agreement. The Buyer does not assume any liability under the Assumed Contracts arising before the Effective Time. The Seller will not be responsible for any liability that arises from the Buyer’s operation of the Business after the Effective Time.
3. Purchase Price.
A. In full consideration for the transfer of the Assets and the company to Buyer, Buyer hereby agrees to pay to Owner $26,418 Cash for the business herein the “Cash Purchase Price”, and 8,000,000 Million shares of “B2 Digital Restricted Common Shares of B2 Digital INC. ”, Restricted shares as defined in Schedule 6.
B. Within 10 business days of this agreement being executed Buyer will pay $0 to Seller.
C. The Buyer will pay to Seller the remaining unpaid balance of the Cash Purchase Price of $26,418 paid in 3 payments in electronic bank transfers in Cash per the following schedule:
1. $10,000 on or before 30 calendar Days after the Execution date of this Agreement
2. $10,000 on or before 60 Calendar Days after the Execution date of this Agreement
3. $6418 on or before 90 Calendar Days after the Execution date of this Agreement
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D. The Buyer will Issue 8,000,000 “B2 Digital Restricted Common “SHARES” in the names of the Seller within 10 Business Days from the execution date of this agreement.
E. For the purpose of income reporting of “CC” to B2 Digital INC, this agreement will make the official Acquisition date of “CC” by “B2” for financial reporting reasons October 1, 2017
4. Representations and Warranties. The Seller and the Owner, jointly and severally, represent and warrant to the Buyer that all of the representations and warranties set forth on Schedule 4 are true and correct in all respects as of the date of this agreement.
5. Covenant Not to Compete; Nonsolicitation; Confidentiality. As further consideration for the Purchase Price, the Seller and the Owner each agree to abide by the noncompetition, nonsolicitation, and confidentiality obligations set forth on Schedule 4.
6. Proration of Expenses. Any costs associated with operating the Business in the ordinary course, including but not limited to payroll expenses and utility or similar charges, payable with respect to the period in which the Execution Date of this agreement falls will be prorated based on the actual number of days applicable to the pre Execution Date of this agreement and post Execution Date of this agreement occupancy and use. The Seller will be liable for the prorated amount of all such expenses during the period through the Execution Date of this agreement, and the Buyer will be liable for the prorated amount of all such expenses during the period after the Execution Date of this agreement.
7. Survival. Except as otherwise provided in this agreement, the representations and promises of the parties contained in this agreement will survive (and not be affected in any respect by) the Effective Time for the applicable statute of limitations as well as any investigation conducted by any party and any information which any party may receive.
8. Further Actions. At any time and from time to time after the date of this agreement: (1) the Seller shall execute and deliver or cause to be executed and delivered to the Buyer such other instruments and take such other action, all as the Buyer may reasonably request, in order to carry out the intent and purpose of this agreement; and (2) the Buyer shall execute and deliver or cause to be executed and delivered to the Seller such other instruments and take such other action, all as the Seller may reasonably request, in order to carry out the intent and purpose of this agreement.
9. Governing Law; Venue. This agreement and the transactions contemplated hereby will be construed in accordance with and governed by the internal laws (without reference to choice or conflict of laws principles) of the State of Nevada. Any suit, action, or other proceeding brought against any of the parties to this agreement or any dispute arising out of this agreement or the transactions contemplated hereby must be brought either in the courts sitting in the state of Nevada and by its execution and delivery of this agreement, each party accepts the jurisdiction of such courts and waives any objections based on personal jurisdiction or venue.
10. Assignment. No party may assign either this agreement or any of its rights, interests, or obligations hereunder without the prior written approval of each other party, except that the Buyer may assign any or all of its rights under this agreement, in whole or in part, without obtaining the consent or approval of any other party, (1) to any current or future affiliate of the Buyer, (2) to any entity into which the Buyer may be merged or consolidated, (3) in connection with any acquisition, restructuring, merger, conversion, or consolidation to which the Buyer may be a party, or (4) to a lender to the Buyer or its affiliates as collateral security for current or future obligations owed by the Buyer or its affiliates to the lender.
11. Notices. All notices and other communications under this agreement must be in writing and given by first class mail, return receipt requested, nationally recognized overnight delivery service, such as Federal Express, or personal delivery against receipt to the party to whom it is given, in each case, at the party's address set forth in this section 11 or such other address as the party may hereafter specify by notice to the other parties given in accordance with this section. Any such notice or other communication will be deemed to have been given as of the date the applicable delivery receipt for such communication is executed as received or in the case of mail, three days after it is mailed.
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12. Owner, Seller and Buyer hereby agree to the terms of "Contractor Services Agreement" as listed in Schedule 5.
13. Any official notification regarding this agreement will be sent by overnight courier to the following addresses and a copy via email to:
The Seller or Owner:
Mark Slater
1121 S. Elizabeth St.
Kokomo, Indiana 46902
Email: mark@colosseumcombat.com
If to the Buyer:
Greg P. Bell
Chairman and CEO
B2Digital INC
4522 West Village Drive
Tampa, Florida 33624
Email: gbell@b3enterprises.net
14. Miscellaneous. This agreement contains the entire agreement between the parties with respect to the subject matter hereof and all prior negotiations, writings, and understandings relating to the subject matter of this agreement are merged in and are superseded and canceled by, this agreement. This agreement may not be modified or amended except by a writing signed by the parties. This agreement is not intended to confer upon any person or entity not a party (or their successors and permitted assigns) any rights or remedies hereunder. This agreement may be signed in any number of counterparts, each of which will be an original with the same effect as if the signatures were upon the same instrument, and it may be signed electronically. The captions in this agreement are included for convenience of reference only and will be ignored in the construction or interpretation hereof. If any date provided for in this agreement falls on a day which is not a business day, the date provided for will be deemed to refer to the next business day. Any provision in this agreement that is held to be invalid, illegal, or unenforceable in any respect by a court of competent jurisdiction will be ineffective only to the extent of such invalidity, illegality, or unenforceability without affecting in any way the remaining provisions hereof; provided, however, that the parties will attempt in good faith to reform this agreement in a manner consistent with the intent of any such ineffective provision for the purpose of carrying out such intent.
15. No announcements or disclosure of any of the terms, conditions, payments or information contained in this agreement shall be made verbally or in writing by either party until "B2 POST REVERSAL COMPLETION DATE" has occurred.
The Exhibits and Schedules to this agreement are a material part of this agreement and are incorporated by reference herein.
Each of the undersigned has caused this bill of sale and assignment and assumption agreement to be duly executed and delivered as of the date first written above.
BUYER
/s/ Greg P. Bell
By: Greg P. Bell
Name: B2Digital Inc.,
Title: Chairman and CEO
Date: November 20, 2017
| SELLER | OWNER | ||
| /s/ Mark Slater | /s/ Mark Slater | ||
| Name: Colosseum Combat | Name: Mark Slater | ||
| Title: Mark Slater | Date: | ||
| Date: 11/2/17 |
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Schedule 1
Purchased Assets
"Purchased Assets of the Business," means all of the assets of the Seller used or useful in the operation of the Business, including the following assets, but specifically excluding the Excluded Assets:
a) all books, records, mailing lists, customer lists, advertising and promotional materials, equipment maintenance records, and all other documents used by the Seller in the Business (whether in hard copy or electronic form);
b) all computers and related software, websites, office equipment, and office supplies used by the Seller in the Business;
c) fixtures and furniture used by the Seller in the Business;
d) phone system and any other technological equipment used by the Business
e) the trade name "Colosseum Combat" and associated goodwill and all copyrights, patents, trademarks, trade secrets, and other intellectual property and associated goodwill;
f) All Retail Merchandise, banners, signage, posters or any physical material identified as owned by Colosseum Combat as outlined in Schedule 2
g) the internet domain name www.colosseumcombat.com and all variants including software, site code and mailing lists both analog, phone numbers, emails and digital copies owned by the Seller and/or used in the Business;
h) all social media accounts, including, without limitation Facebook, Google Plus, Linkedln, Twitter and YouTube accounts, used in the Business
i) All physical media of the Video library of all past events and TV shows owned by the Seller
j) The Seller shall transfer the ownership of the physical Colosseum Combat Bank Account to the Buyer on the execution of this agreement. Signing authority to remain with Seller on the Bank Account.
k) Cash in Colosseum Combat Bank Accounts of $10,000.00 for the ongoing operation of the business and $0 (ZERO) in cash to pay existing Accounts Payable of the business.
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Schedule 2
Merchandise and Equipment Inventory
24 ft. enclosed trailer
24 ft. cage
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Schedule 3
Representations and Warranties
1. Capitalization. The only equity owner of the Seller is the Owner and no person has any existing right to purchase any equity of the Seller.
2. Consents. The Seller is not required to obtain the consent of any party to a contract or any governmental entity in connection with the execution, delivery, or performance by it of this agreement or the consummation of the transactions contemplated in this agreement.
3. Compliance with Laws. With respect to the operation of the Business by the Seller before the Effective Time, the Seller and its employees and officers are and at all times have been in compliance in all material respects with each law applicable to the Seller or to the operation of the Business.
4. Taxes. The Seller has, in respect of the Business, filed all tax returns that are required to be filed and has paid all taxes that have become due under the tax returns or under any assessment that has become payable or for which the Buyer may otherwise have any transferee liability. All monies required to be withheld by the Seller from employees for income taxes and social security and other payroll taxes have been collected or withheld and either paid to the respective governmental bodies or set aside in accounts for such purpose.
5. Litigation. There are no claims or suits pending or, to the Seller's knowledge, threatened by or against the Seller (1) relating to or affecting the Business or Purchased Assets or (2) by or against any employee of the Seller relating to or affecting the Business or Purchased Assets. There are no judgments, decrees, orders, writs, injunctions, rulings, decisions, or awards of any court or governmental body to which the Seller is a party or is subject with respect to any of the Purchased Assets is subject.
6. Financial Information; Ordinary Course. The financial information the Seller provided to the Buyer is accurate, correct, and complete, is in accordance with the books and records of the Seller, and presents fairly the results of operation and financial condition of the Seller's Business. The Seller has operated the Business in the ordinary course before the Effective Time.
7. Title; Condition of Purchased Assets. The Seller has good and marketable title to all of the Purchased Assets free and clear of all liens and encumbrances. Pursuant to this agreement, the Seller conveys to the Buyer good and marketable title to all of the Purchased Assets, free and clear of all liens and encumbrances. The Inventory is salable in the ordinary course of business and consists of items that are current, standard, and first quality. All equipment and signs are in working order and the premises will pass all inspections necessary to conduct the Business.
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Schedule 4
Covenant Not to Compete; Non-Solicitation; Confidentiality
1. The Seller and the Owner each covenants and agrees that neither the Seller nor the Owner will: (1) for a period of 10 years following the Execution Date of this agreement own, manage, or be employed by (whether as an employee or independent contractor) a competing business within the USA; (2) or for a period of 10 years following the Execution Date of this agreement recruit or employ (whether as an employee or independent contractor) any of the Business's current employees or independent contractors.
2. The Seller and the Owner shall hold the Confidential Information in confidence and shall not use the Confidential Information for any purpose other than in furtherance of the Buyer's operation of the Business without the Buyer's express written consent. The Seller and the Owner recognize that Confidential Information involves one of the Buyer's valuable and unique assets. "Confidential Information" means information directly or indirectly involving the Business that is not available or open to the public generally.
3. The Seller and the Owner each has carefully read and considered the provisions of this Schedule 4 and, having done so, agrees that the restrictions set forth herein are fair and reasonable given the terms and conditions of this agreement, the nature of the Seller's and its affiliates' business, the area in which the Seller and its affiliates market their products and services, and the consideration being provided pursuant to this agreement. In addition, the Seller and the Owner each specifically agrees that the length, scope, and definitions used in the covenant not to compete and other restrictions set forth in this Schedule 5 are fair and reasonable.
4. The Seller and the Owner each acknowledges and agrees that its breach of any of the agreements in this Schedule 4 would result in irreparable damage and continuing injury to the Buyer. Therefore, in the event of any breach or threatened breach of such agreements, the Seller and the Owner each agrees that the Buyer will be entitled to an injunction from any court of competent jurisdiction enjoining such person or entity from committing any violation or threatened violation of those agreement.
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Schedule 5
Ongoing and Future Services
1. Mark Slater agrees to the attached Schedule 5 Contractor Services Agreements
| 12 |
Contractor Services Agreement
This Contractor Services Agreement is effective the 15th day of November 2017 by and between Mark Slater (herein called "MS") who resides at 1121 S. Elizabeth St, Kokomo, Indiana 12345, and B2 Digital INC with offices at 4522 West Village Drive, Suite 215, Tampa, Florida 33624 (Herein called " B2")
Recitals
| A. | "B2" desires to engage "MS" to render certain professional services (Herein called Services) for the consideration set forth. |
| B. | "MS" desires to render such services to "B2" |
| C . | These Services to be rendered by "MS" to Colosseum Combat LLC "CC" of Indiana |
Now,therefore in consideration of the foregoing premises and the covenants herein contains, the parties hereto mutually agree as follows.
1.0 Agreement
The terms used in the Contractor Services Agreement shall have the meanings assigned to them in this section or elsewhere in the Contractor Services Agreement:
| 1.1 | B2 shall include any entity, which is at any time the parent or the subsidiary of B2, or any corporation, partnership, or entity which is an affiliate of B2 by virtue of common ownership, and for which "MS" is providing services in any form during "MS"'s engagement by B2. | |
| 1.2 | Services shall consist of all obligations, duties, requirements and responsibilities required for the successful completion by "MS" of the services described in section 2.0 as set forth herein. | |
| 1.3 | The laws of Nevada will govern this agreement. |
2.0 Services
| 2.1 | "B2" and the "MS" agree that the Services to be provided by "MS" hereunder shall consist of: |
| 2.1.1 | Perform all technical tasks and responsibilities as assigned and required for the proper ongoing operation of the Hard Rock MMA Business. | |
| 2.1.2 | Specifically Assist B2 with |
| 2.1.2.1 | Operations of all aspects of the LIVE EVENTS, herein "LE" as currently being operated for 87 events by "MS" for the Colosseum Combat MMA Business | |
| 2.1.2.2 | Matchmaking for each "LE". | |
| 2.1.2.3 | Financial operation of the entire Business including all check writing, administering and completing all accounting and report filing | |
| 2.1.2.4 | Developing and reporting a monthly reporting of financial performance for the Hard Rock MMA Business, each event and status reports to B2 | |
| 2.1.2.5 | Working on a daily basis with the B2 management and operations on ongoing projects as directed by B2. | |
| 2.1.2.6 | Operation and assistance with the Regional and National B2 Fighting Series Events | |
| 2.1.2.7 | Mark Slater to be a member of the B2 Matchmaking Committee | |
| 2.1.2.8 | Mark Slater to be a member of the B2 Operations Committee | |
| 2.1.2.9 | Setting up and working with B2 to develop any NEW programs on B2 Related business and technology |
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| 2.1.2.10 | Travel to assist B2 on LIVE Events, Meetings, and Special Sponsor(ed) events. | |
| 2.1.2.11 | Specific Tasks as requested by B2 | |
| 2.1.2.12 | Be available 7 days a week for interaction with B2 staff | |
| 2.1.2.13 | Participation in meeting as per the request of B2. |
| 2.2 | In performing the Services, "MS" shall coordinate all of "MS" efforts with "B2" specifically interfacing with Mr. Greg P. Bell the Chairman and CEO of "B2". In all matters pertinent to the Services "MS" shall keep "B2" fully advised v i a email or phone calls of "MS"'s activities. |
3.0 Terms, Conditions and Expenses
| 3.1 | This Contractor Services Agreement shall expire 10 years from the execution date of this agreement. | |
| 3.2 | "MS" agrees to devote all of his workweek to accomplish the Services to "CC" and in consideration therefore, "CC," agrees to pay 50% of each event margin to "MS" 5 business days after each event for the term of this agreement. | |
| 3.3 | "MS" Shall cause 5% of each "LE" event margin to be Paid to "B2" within 5 Business days of the completion of each "LE". | |
| 3.4 | "B2" will Pay a "Signing Bonus" of $4000 to "MS" within 10 Business Days of the execution date of this agreement | |
| 3.5 | It is specifically understood by both parties that Mark Slater is the person who shall be fulfilling the services listed in this agreement to "CC" and "B2". | |
| 3.6 | Payments to be Paid to "MS" for the services contained herein;via Wire transfer or electronic deposit in US$s | |
| 3.7 | This agreement can be renewed by joint agreement in writing by both parties for a 1-year extension. Notifications of said extension to be executed in writing between the parties no later than 60 days before the expiration date of this agreement. | |
| 3.8 | Mark Slater "MS" will serve as "Matchmaker" for "CC" and cannot be removed from his position for the term of this contract unless by unanimous agreement by "MS" and B2 Digital. | |
| 3.9 | Mark Slater "VH" will serve as "President" for "CC" and cannot be removed from his position for the term of this contract unless by unanimous agreement by "MS" and B2 Digital"B2". | |
| 3.10 | "MS" will be responsible for the payment of all taxes associated with the fees paid by to "MS" for the Services covered under this agreement. |
4.0 B2 Furnished Documents
| All data, plans,specifications,technical information,drawings, customer or price list or other B2 furnished data or property shall remain the exclusive property of "B2". Upon conclusion of the work performed by the "MS", such property in "MS"'s possession will be promptly returned to "B2" |
5.0. Ownership of Documents
| 5.1 | It is specifically understood by "MS" that all drawings' reports, documents and other data and information prepared acquired or given to "MS" in connection with the "MS"'s performance of the Services for B2 are the exclusive property of B2. | |
| 5.2 | It is expressly understood by "MS" that "MS"'s work product for all the services in this agreement are the exclusive property of "B2". |
6.0. Confidentiality Agreement
| 6.1 | It is specifically understood by "MS" that the NDA, Non Disclosure and Confidentiality Agreement, executed between the parties, covers his actions during the performance of the services covered under this agreement. | |
| 6.2 | "MS" also specifically agrees to not discuss or pass on any information to anyone for any reason about Mr. Greg P. Bell, B2, and or the services covered in this agreement, and or any knowledge or information he acquires from B2 or Mr. Greg P. Bell without the expressed permission of Mr. Greg P. Bell. | |
| 6.3 | Any violation of 6.2 or 6.3 as determined in the sole discretion of B2. B2 will then have the right to cancel and terminate this agreement immediately on said violation notification to "MS" by B2. |
| 14 |
7.0 Notices
| 7.1 | Notices All notices, requests, demands, instructions,and other communications shall be in writing, and shall be addressed respectively as follows: | |
| 7.2 | If to B2: |
| Mr. Greg P. Bell | ||
| gbell@B2enterprises.net | ||
| Mobile Phone: (310) 663-6615 |
| 7.3 | If to "MS": |
| Mark Slater | ||
| Email: mark@colosseumcombat.com | ||
| Mobile Phone: (765) 513-0016 |
8.0 Yearly Plan
| "MS" agree to use best efforts to meet and accomplish the Business Plan herein Attached as Exhibit A to this agreement. It is specifically understood by "MS" that they will hold a minimum of 5 Live Events per year, in Indiana as "CC" completed in calendar year 2017. By joint agreement by "B2" and "MS" the business plan can be adjusted as market conditions or operations change. |
9.0 Entire Agreement
| This Contractor Services Agreement constitutes the entire agreement between "B2" and the "MS" and supercedes all prior agreements whether oral or written with respect to the subject matter thereof. |
In witness whereof, the parties hereto agree to the terms in this Contractor Services Agreement.
/s/ Greg P. Bell
B2Digital INC.
Greg P. Bell
Chairman & CEO
Date: November 20, 2017
/s/ Mark Slater
Mark Slater
Date: 11-2-17
| 15 |
Exhibit 10.2
COMMON STOCK REPURCHASE AGREEMENT
THIS COMMON STOCK REPURCHASE AGREEMENT (the “Agreement”) is entered into as of October 11, 2021 by and between B2Digital, Incorporated, a Delaware corporation (the “Company”), and Go Value Networks (the “Stockholder”).
RECITALS
WHEREAS, the Stockholder is the holder of 10,000,000 shares of the Company’s common stock represented by share certificate 10118 (the “Shares”); and
WHEREAS, the Stockholder desires to sell, and the Company desires to repurchase, the Shares on the terms and subject to the conditions set forth in this Agreement (the “Repurchase”).
NOW, THEREFORE, in consideration of the promises, covenants and agreements herein contained, the parties agree as follows:
AGREEMENT
SECTION 1. REPURCHASE OF SHARES.
1.1 Repurchase. At the Closing (as defined below), the Company hereby agrees to repurchase from the Stockholder, and the Stockholder hereby agrees to sell, assign and transfer to the Company, all of the Stockholder’s right, title and interest in and to the Shares at the per Share price of $0.005, for an aggregate repurchase price of $50,000.00 (the “Repurchase Amount”). Upon the execution of this Agreement, the Stockholder shall execute an Assignment Separate from Certificate, in the form attached hereto as Exhibit A (the “Stock Assignment”), and at the Closing shall deliver the Stock Assignment and the stock certificate representing the Shares (or an affidavit of lost certificate in lieu of the stock certificate representing the Shares). Upon consummation of this Agreement, the Company shall cancel such stock certificates. The Repurchase Amount shall be paid by cash, check or wire transfer of immediately available funds to an account or accounts to be designated by the Stockholder.
1.2 Closing. The closing of the Repurchase (the “Closing”) shall take place at the offices of the Company, 4522 West Village Drive, Tampa, FL 33624 on the date hereof, or at such other time and place as the parties hereto shall mutually agree.
1.3 Termination of Rights as the Stockholder. Upon payment of the Repurchase Amount, the Shares shall cease to be outstanding for any and all purposes, and the Stockholder shall no longer have any rights as a holder of the Shares, including any rights that the Stockholder may have had under the Company’s Certificate of Incorporation or otherwise.
1.4 Withholding Rights. The Company shall be entitled to deduct and withhold from the Repurchase Amount such amounts as it may be required to deduct and withhold with respect to the making of such payment under the U.S. Internal Revenue Code of 1986, as amended, or any provision of foreign, state or local tax law. To the extent that amounts are so withheld by the Company, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Stockholder.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
In connection with the transactions provided for hereby, the Stockholder represents and warrants to the Company as follows:
2.1 Ownership of Shares. The Stockholder has good and marketable right, title and interest (legal and beneficial) in and to all of the Shares, free and clear of all liens, pledges, security interests, charges, claims, equity or encumbrances of any kind. Upon paying for the Shares in accordance with this Agreement, the Company will acquire good and marketable title to the Shares, free and clear of all liens, pledges, security interests, charges, claims, equity or encumbrances of any kind.
| 1 |
2.2 Authorization. The Stockholder has all necessary power and authority to execute, deliver and perform the Stockholder’s obligations under this Agreement and all agreements, instruments and documents contemplated hereby and to sell and deliver the Shares being sold hereunder, and this Agreement constitutes a valid and binding obligation of the Stockholder.
2.3 No Conflict. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not result in a breach by the Stockholder of, or constitute a default by the Stockholder under, any agreement, instrument, decree, judgment or order to which the Stockholder is a party or by which the Stockholder may be bound.
2.4 Experience and Evaluation. By reason of the Stockholder’s business or financial experience or the business or financial experience of the Stockholder’s professional advisers who are unaffiliated with the Company and who are not compensated by the Company, the Stockholder has the capacity to protect the Stockholder’s own interests in connection with the sale of the Shares to the Company. The Stockholder is capable of evaluating the potential risks and benefits of the sale hereunder of the Shares.
2.5 Access to Information. The Stockholder has received all of the information that the Stockholder considers necessary or appropriate for deciding whether to sell the Shares hereunder and perform the other transactions contemplated hereby. The Stockholder further represents that the Stockholder has had an opportunity to ask questions and receive answers from the Company regarding the business, properties, prospects and financial condition of the Company and to seek from the Company such additional information as the Stockholder has deemed necessary to verify the accuracy of any such information furnished or otherwise made available to the Stockholder by or on behalf of the Company.
2.6 No Future Participation. The Stockholder acknowledges that the Stockholder will have no future participation in any Company gains, losses, profits or distributions with respect to the Shares. If the Shares increase in value by any means, or if the Company’s equity becomes freely tradable and increases in value, the Stockholder acknowledges that the Stockholder is voluntarily forfeiting any opportunity to share in any resulting increase in value from the Shares.
2.7 Tax Matters. The Stockholder has had an opportunity to review with the Stockholder’s tax advisers the federal, state, local and foreign tax consequences of the Repurchase and the transactions contemplated by this Agreement. The Stockholder is relying solely on such advisers and not on any statements or representations of the Company or any of its agents. The Stockholder understands that the Stockholder (and not the Company) shall be responsible for the Stockholder’s tax liability and any related interest and penalties that may arise as a result of the transactions contemplated by this Agreement.
SECTION 3. SUCCESSORS AND ASSIGNS.
Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Shares). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
SECTION 4. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, except the choice-of-law provisions thereof.
SECTION 5. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the parties, and there are no further or other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof, except as expressly referred to herein.
| 2 |
SECTION 6. AMENDMENTS AND WAIVERS.
Any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Stockholder and the Company.
SECTION 7. FURTHER ACTION.
Each party hereto agrees to execute any additional documents and to take any further action as may be necessary or desirable in order to implement the transactions contemplated by this Agreement.
SECTION 8. SURVIVAL.
The representations and warranties herein shall survive the Closing.
SECTION 9. SEVERABILITY.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
SECTION 10. NOTICES.
All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile, if sent during normal business hours of the recipient or, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 10).
SECTION 11. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
| 3 |
IN WITNESS WHEREOF, each of the parties has executed this Stock Repurchase Agreement as of the day and year first above written.
| COMPANY: | ||
| B2Digital, Incorporated | ||
| By |
/s/ Greg P. Bell | |
| Name: Greg P. Bell | ||
| Title: Chief Executive Officer | ||
| STOCKHOLDER: | |
| Go Value Networks | |
|
/s/ Ronald McKay | |
| Name: Ronald McKay | |
| Title: CEO | |
|
Address: 215 SE 8th Ave. Unit 760 Fort Lauderdale, FL 33301 |
| 4 |
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the Stockholder hereby sells, assigns and transfers unto B2Digital, Incorporated (the “Company”) 10,000,000 shares of the Company’s common stock standing in the Stockholder’s name on the books of the Company and represented by Certificate Number 10118 herewith and does hereby irrevocably constitutes and appoints B2Digital, Incorporated, to transfer such stock on the books of the Company with full power of substitution in the premises.
| Dated: |
10/11/21 |
| STOCKHOLDER | |
| Go Value Networks | |
| /s/ Ronald McKay | |
| Name: Ronald McKay | |
| Title: CEO |
This Assignment Separate from Certificate was executed pursuant to the terms of that certain Stock Repurchase Agreement by and between B2Digital, Incorporated and the Stockholder dated October 11, 2021.
| 5 |
Exhibit 10.3
COMMON STOCK REPURCHASE AGREEMENT
THIS COMMON STOCK REPURCHASE AGREEMENT (the “Agreement”) is entered into as of December 23, 2021 by and between B2Digital, Incorporated, a Delaware corporation (the “Company”), and Mike Davis (the “Stockholder”).
RECITALS
WHEREAS, the Stockholder is the holder of 6,500,000 shares of the Company’s common stock represented by share certificates 9870 and 9900 (the “Shares”); and
WHEREAS, the Stockholder desires to sell, and the Company desires to repurchase, the Shares on the terms and subject to the conditions set forth in this Agreement (the “Repurchase”).
NOW, THEREFORE, in consideration of the promises, covenants and agreements herein contained, the parties agree as follows:
AGREEMENT
SECTION 1. REPURCHASE OF SHARES.
1.1 Repurchase. At the Closing (as defined below), the Company hereby agrees to repurchase from the Stockholder, and the Stockholder hereby agrees to sell, assign and transfer to the Company, all of the Stockholder’s right, title and interest in and to the Shares at the per Share price of $0.0038, for an aggregate repurchase price of $24,700 (the “Repurchase Amount”). Upon the execution of this Agreement, the Stockholder shall execute an Assignment Separate from Certificate, in the form attached hereto as Exhibit A (the “Stock Assignment”), and at the Closing shall deliver the Stock Assignment and the stock certificate representing the Shares (or an affidavit of lost certificate in lieu of the stock certificate representing the Shares). Upon consummation of this Agreement, the Company shall cancel such stock certificates. The Repurchase Amount shall be paid by cash, check or wire transfer of immediately available funds to an account or accounts to be designated by the Stockholder.
1.2 Closing. The closing of the Repurchase (the “Closing”) shall take place at the offices of the Company, 4522 West Village Drive, Tampa, FL 33624 on the date hereof, or at such other time and place as the parties hereto shall mutually agree.
1.3 Termination of Rights as the Stockholder. Upon payment of the Repurchase Amount, the Shares shall cease to be outstanding for any and all purposes, and the Stockholder shall no longer have any rights as a holder of the Shares, including any rights that the Stockholder may have had under the Company’s Certificate of Incorporation or otherwise.
1.4 Withholding Rights. The Company shall be entitled to deduct and withhold from the Repurchase Amount such amounts as it may be required to deduct and withhold with respect to the making of such payment under the U.S. Internal Revenue Code of 1986, as amended, or any provision of foreign, state or local tax law. To the extent that amounts are so withheld by the Company, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Stockholder.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
In connection with the transactions provided for hereby, the Stockholder represents and warrants to the Company as follows:
2.1 Ownership of Shares. The Stockholder has good and marketable right, title and interest (legal and beneficial) in and to all of the Shares, free and clear of all liens, pledges, security interests, charges, claims, equity or encumbrances of any kind. Upon paying for the Shares in accordance with this Agreement, the Company will acquire good and marketable title to the Shares, free and clear of all liens, pledges, security interests, charges, claims, equity or encumbrances of any kind.
| 1 |
2.2 Authorization. The Stockholder has all necessary power and authority to execute, deliver and perform the Stockholder’s obligations under this Agreement and all agreements, instruments and documents contemplated hereby and to sell and deliver the Shares being sold hereunder, and this Agreement constitutes a valid and binding obligation of the Stockholder.
2.3 No Conflict. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not result in a breach by the Stockholder of, or constitute a default by the Stockholder under, any agreement, instrument, decree, judgment or order to which the Stockholder is a party or by which the Stockholder may be bound.
2.4 Experience and Evaluation. By reason of the Stockholder’s business or financial experience or the business or financial experience of the Stockholder’s professional advisers who are unaffiliated with the Company and who are not compensated by the Company, the Stockholder has the capacity to protect the Stockholder’s own interests in connection with the sale of the Shares to the Company. The Stockholder is capable of evaluating the potential risks and benefits of the sale hereunder of the Shares.
2.5 Access to Information. The Stockholder has received all of the information that the Stockholder considers necessary or appropriate for deciding whether to sell the Shares hereunder and perform the other transactions contemplated hereby. The Stockholder further represents that the Stockholder has had an opportunity to ask questions and receive answers from the Company regarding the business, properties, prospects and financial condition of the Company and to seek from the Company such additional information as the Stockholder has deemed necessary to verify the accuracy of any such information furnished or otherwise made available to the Stockholder by or on behalf of the Company.
2.6 No Future Participation. The Stockholder acknowledges that the Stockholder will have no future participation in any Company gains, losses, profits or distributions with respect to the Shares. If the Shares increase in value by any means, or if the Company’s equity becomes freely tradable and increases in value, the Stockholder acknowledges that the Stockholder is voluntarily forfeiting any opportunity to share in any resulting increase in value from the Shares.
2.7 Tax Matters. The Stockholder has had an opportunity to review with the Stockholder’s tax advisers the federal, state, local and foreign tax consequences of the Repurchase and the transactions contemplated by this Agreement. The Stockholder is relying solely on such advisers and not on any statements or representations of the Company or any of its agents. The Stockholder understands that the Stockholder (and not the Company) shall be responsible for the Stockholder’s tax liability and any related interest and penalties that may arise as a result of the transactions contemplated by this Agreement.
SECTION 3. SUCCESSORS AND ASSIGNS.
Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Shares). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
SECTION 4. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, except the choice-of-law provisions thereof.
SECTION 5. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the parties, and there are no further or other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof, except as expressly referred to herein.
| 2 |
SECTION 6. AMENDMENTS AND WAIVERS.
Any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Stockholder and the Company.
SECTION 7. FURTHER ACTION.
Each party hereto agrees to execute any additional documents and to take any further action as may be necessary or desirable in order to implement the transactions contemplated by this Agreement.
SECTION 8. SURVIVAL.
The representations and warranties herein shall survive the Closing.
SECTION 9. SEVERABILITY.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
SECTION 10. NOTICES.
All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile, if sent during normal business hours of the recipient or, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 10).
SECTION 11. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
| 3 |
IN WITNESS WHEREOF, each of the parties has executed this Stock Repurchase Agreement as of the day and year first above written.
| COMPANY: | ||
| B2Digital, Incorporated | ||
| By |
/s/ Greg P. Bell | |
| Name: Greg P. Bell | ||
| Title: Chief Executive Officer | ||
| STOCKHOLDER: | |
|
/s/ Mike Davis | |
| Name: Mike Davis | |
| Address: |
| 4 |
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the Stockholder hereby sells, assigns and transfers unto B2Digital, Incorporated (the “Company”) 6,500,000 shares of the Company’s common stock standing in the Stockholder’s name on the books of the Company and represented by Certificate Numbers 9870 and 9900 herewith and does hereby irrevocably constitutes and appoints B2Digital, Incorporated, to transfer such stock on the books of the Company with full power of substitution in the premises.
| Dated: |
12/23/21 |
| STOCKHOLDER | |
| /s/ Mike Davis | |
| Name: Mike Davis |
This Assignment Separate from Certificate was executed pursuant to the terms of that certain Stock Repurchase Agreement by and between B2Digital, Incorporated and the Stockholder dated December 23, 2021.
| 5 |
Exhibit 31.1
CERTIFICATION
I, Greg P. Bell, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of B2Digital, Incorporated |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
| (c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
| Date: February 14, 2022 | /s/ Greg P. Bell |
|
Greg P. Bell, Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of B2Digital, Incorporated (the "Company") on Form 10-Q for the period ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Greg P. Bell, Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ Greg P. Bell
Greg P. Bell, Chief Executive Officer
(Principal Executive Officer and Principal Financial Officer)
February 14, 2022
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) |
Dec. 31, 2021 |
Mar. 31, 2021 |
|---|---|---|
| Preferred stock shares authorized | 50,000,000 | 50,000,000 |
| Preferred stock undesignated | 8,000,000 | 8,000,000 |
| Common stock par value | $ 0.00001 | $ 0.00001 |
| Common stock shares authorized | 5,000,000,000 | 5,000,000,000 |
| Common stock shares issued | 1,630,799,526 | 1,081,390,550 |
| Common stock shares outstanding | 1,630,799,526 | 1,081,390,550 |
| Treasury Stock, Common, Shares | 10,000,000 | 10,000,000 |
| Treasury Stock, Common, Value | $ 50,000 | $ 50,000 |
| Series A Preferred Stock [Member] | ||
| Preferred Stock, Shares Issued | 2,000,000 | 2,000,000 |
| Preferred Stock, Shares Outstanding | 2,000,000 | 2,000,000 |
| Series B Preferred Stock [Member] | ||
| Preferred Stock, Shares Issued | 40,000,000 | 40,000,000 |
| Preferred Stock, Shares Outstanding | 40,000,000 | 40,000,000 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Revenue: | ||||
| Total revenue | $ 612,632 | $ 300,549 | $ 1,841,407 | $ 496,497 |
| Cost of sales | 388,263 | 102,722 | 919,447 | 151,941 |
| Gross profit | 224,369 | 197,827 | 921,960 | 344,556 |
| General and administrative expenses | ||||
| General & administrative expenses | 2,299,300 | 1,147,001 | 5,707,667 | 1,986,918 |
| Depreciation and amortization expense | 102,713 | 52,516 | 289,232 | 119,371 |
| Total general and administrative corporate expenses | 2,402,013 | 1,199,517 | 5,996,899 | 2,106,289 |
| Loss from continuing operations | (2,177,644) | (1,001,690) | (5,074,939) | (1,761,733) |
| Other income (expense): | ||||
| Gain on forgiveness of loan | 0 | 0 | 23,303 | 10,080 |
| Gain on bargain purchase | 0 | 91,870 | 0 | 91,870 |
| Gain (loss) on sale of assets | 887 | 0 | (640) | 0 |
| Grant income | 0 | 0 | 0 | 2,000 |
| Financing expense | (136,170) | 0 | (136,170) | 0 |
| Loss on settlement of debt | 0 | 0 | 0 | (18,281) |
| Loss on forgiveness of notes receivable | 0 | 0 | (2,094) | 0 |
| Gain (loss) on extinguishment of debt | 72,592 | (6,670) | 209,258 | (70,864) |
| Change in fair value of derivatives | (66,894) | 194,758 | (421,836) | (592,649) |
| Day one derivative loss | (45,485) | (125,408) | (45,485) | (125,408) |
| Interest expense | (340,403) | (131,016) | (863,037) | (278,030) |
| Total other income (expense) | (515,473) | 23,534 | (1,236,701) | (981,282) |
| Net loss | $ (2,693,117) | $ (978,156) | $ (6,311,640) | $ (2,743,015) |
| Basic and diluted earnings per share on net loss | $ (0) | $ (0) | $ (0) | $ (0) |
| Weighted average shares outstanding - Basic | 1,452,481,989 | 710,522,374 | 1,341,287,504 | 619,783,280 |
| Live Events [Member] | ||||
| Revenue: | ||||
| Total revenue | $ 263,782 | $ 82,524 | $ 782,544 | $ 112,901 |
| Gym [Member] | ||||
| Revenue: | ||||
| Total revenue | $ 348,850 | $ 218,025 | $ 1,058,863 | $ 383,596 |
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) |
9 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Statement of Cash Flows [Abstract] | ||
| Proceeds from sale of treasury stock | $ 50,000 | $ 50,000 |
ORGANIZATION AND NATURE OF BUSINESS |
9 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| ORGANIZATION AND NATURE OF BUSINESS | NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
We are the premier development league for mixed martial arts (“MMA”). We operate in two major branded segments: The B2 Fighting Series and The ONE More Gym Official B2 Training Facilities Network. We primarily derive revenues from live event ticket sales, pay-per-view ticket sales, content media marketing, and fitness facility memberships.
Our Live Events segment (the B2 Fighting Series) is primarily engaged with scheduling, organizing, and producing live MMA events, marketing those events, and generating both live audience and PPV ticket sales, as well as creatively marketing the archived content generated through its operations in this segment. We also plan to generate additional revenues over time from endorsement deals with global brands as its audience grows. The B2 Fighting Series is licensed in 20 U.S, states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate. We now operate at a pace of more than 40 events per year.
Our Chairman and CEO is now Greg P. Bell. Mr. Bell has over 30 years of global experience developing more than 20 companies in the sports, television, entertainment, digital distribution and banking transaction industries. Capitalizing on the combination of his expertise, relationships and experience as well as his involvement with more than 40,000 live events over his career for major sports leagues and entertainment venues, we are in the process of developing and acquiring companies to become a premier vertically integrated live event sports company.
Our Fitness Facility segment operates primarily through the ONE More Gym Official B2 Training Facilities Network. We currently operate five ONE More Gym locations, with plans to continue to scale up this segment at a pace of 4-8 new locations per year. ONE More Gym locations include specialized MMA training resources and serve a recruiting function for the Company's Live Events segment.
Basis of Presentation and Consolidation
The Company has ten wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, ONE More Gym LLC, One More Gym Merrillville LLC, One More Gym Valparaiso LLC, One More Gym Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC.
The consolidated financial statements, which include the accounts of the Company and its ten wholly-owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated. The consolidated financial statements, which include the accounts of the Company and its ten wholly-owned subsidiaries, and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and presented in U.S. dollars. The fiscal year end is March 31.
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ACCOUNTING POLICIES |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACCOUNTING POLICIES | NOTE 2 - ACCOUNTING POLICIES
The significant accounting policies of the Company are as follows:
Basis of Accounting The interim consolidated financial statements are condensed and should be read in conjunction with the Company’s latest annual financial statements; interim disclosures generally do not repeat those in the annual statements. The interim unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.
Use of Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The most significant assumptions and estimates relate to the valuation of derivative liabilities and the valuation of assets and liabilities acquired through business combinations. Actual results could differ from these estimates and assumptions.
Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains deposits primarily in four financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits or $250,000. The Company did not have any cash in excess of FDIC limits at December 31, 2021 and 2020, respectively.
Fair Value of Financial Instruments The Company’s financial instruments consist primarily of accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The three levels of valuation hierarchy are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.
Property and Equipment Property and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying consolidated statement of operations of the respective period. The estimated useful lives range from 3 to 7 years.
Other income During the nine months ended December 31, 2021, and December 31, 2020, the Company received $0 and $2,000, respectively in grant income due to COVID-19 relief. The Company has recorded this grant income under other income in the Statement of Operations.
Revenue Recognition 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 only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. 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. The majority of revenues are received from ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue.
Income Taxes The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the consolidated Statements of Operations in the period that includes the enactment date. Through December 31, 2021, the Company has an expected loss. Due to uncertainty of realization for these losses, a full valuation allowance is recorded. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.
Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables 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. In addition, Receivables that are factored through the Company's Receivable finance facility are guaranteed by the finance company that further mitigates Credit Risk.
Impairment of Long-Lived Assets In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. There were no impairment charges recorded during the nine months ended December 31, 2021, and 2020, respectively.
The Company utilize FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options, restricted stock awards and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. As of December 31, 2021, the convertible notes are indexed to shares of common stock.
The following table sets forth the computation of basic and diluted earnings per share for the nine months ended December 31, 2021, and 2020:
The Company records stock-based compensation in accordance with the provisions of FASB ASC Topic 718, Accounting for Stock Compensation, which establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC.
Topic 718, the Company recognizes an expense for the fair value of its stock awards at the time of grant and the fair value of its outstanding stock options and stock awards, whether held by employees or others. As of December 31, 2021, there were options outstanding and shares of stock awards.
On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC 718 and forgo revaluing the award after this date. The Company adopted ASU 2018-07 on April 1, 2019. The adoption of this standard did not have a material impact on the consolidated financial statements.
Recently Adopted Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, 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.
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GOING CONCERN |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN | NOTE 3 – GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis. For the nine months ended December 31, 2021, the Company had a net loss of $(6,311,640), had net cash used in operating activities of $4,561,880, had negative working capital of $7,608,136, accumulated deficit of $15,508,888 and stockholders’ deficit of $5,914,766. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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REVENUE |
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| REVENUE | NOTE 4 – REVENUE
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. Live event revenue primarily includes ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue. Gym revenue comprises primarily of membership dues and subscription. Other gym revenue includes personal training, group fitness and meal planning.
Information about the Company’s net sales by revenue type for the three and nine months ended December 31, 2021, and 2020 are as follows:
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PROPERTY AND EQUIPMENT |
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| PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment, net, consisted of the following as of December 31, 2021, and March 31, 2021:
Depreciation expense related to these assets for the nine months ended December 31, 2021, and 2020 amounted to $210,663 and $70,025, respectively.
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INTANGIBLE ASSETS |
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| INTANGIBLE ASSETS | NOTE 6 – INTANGIBLE ASSETS
Intangible assets, net, consisted of the following as of December 31, 2021, and March 31, 2021:
Licenses are amortized over five years, whereas customer relationships and software/website development are amortized over three years. Amortization expense related to these assets for the nine months ended December 31, 2021, and 2020 amounted to $78,569 and $49,346, respectively.
Estimated amortization expense for each of the next four years:
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BUSINESS ACQUISITIONS |
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| BUSINESS ACQUISITIONS | NOTE 7 – BUSINESS ACQUISITIONS
Club Fitness, LLC
On April 1, 2021, the Company entered into an agreement for the acquisition of 100% of the equity interest in Club Fitness LLC. The purchase price was $125,000 in cash. The acquisition closed in April 2021.
The Company analyzed the acquisition under applicable guidance and determined that the acquisition should be accounted for as a business combination. The fair value of the net identifiable assets consisted of gym equipment of $76,689. The Company assigned a fair value of $46,311 in intangible assets – customer relationships. The intangible assets – customer relationships are being amortized over their estimated life, currently expected to be three years.
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NOTES PAYABLE |
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| NOTES PAYABLE | NOTE 8 - NOTES PAYABLE
The following is a summary of notes payable as of December 31, 2021, and March 31, 2021:
During the nine months ended December 31, 2021, the Company incurred $15,018 in interest expense related to notes payable.
During the nine months ended December 31, 2021, the Company repaid $12,881 on its loan payable to Brian Cox.
During the nine months ended December 31, 2021, the bank forgave $6,634 in principal and $1,069 in accrued interest on its SBA Loan (One More Gym, LLC). As a result, the Company recorded $7,703 in gain on forgiveness of loan.
During the nine months ended December 31, 2021, the bank forgave the Company’s PPP loan of $15,600. No interest was accrued as of the payoff date. As a result, the Company recorded $15,600 in gain on forgiveness of loan.
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONVERTIBLE NOTE PAYABLE | NOTE 9 – CONVERTIBLE NOTE PAYABLE
The following is a summary of convertible notes payable as of December 31, 2021:
* Notes 1, 2, 3, 4 and 5 in the amounts of $82,000, $208,000, $27,000, $62,000 and $202,400, respectively, were fully converted as of December 31, 2021.
* On October 18, 2021, the maturity dates of each of Notes 6, 7, 8, 9, 10, 11, 12, 14, 16, and 17 were extended to April 18, 2022 and the lender waived all penalty interest for non-payment.
*Note 23 in the amount of $180,400 was paid in cash on November 23, 2021. The Company recognized a gain on extinguishment of debt in the amount of $32,544.
Between April 1, 2021, and December 31, 2021, the Company issued to “accredited investors,” Convertible Promissory Notes aggregating a principal amount of $4,453,543. The Company received an aggregate net proceeds of $3,949,765 after $481,278 in original note discount and $22,500 in legal fees. The Company has agreed to pay interest on the unpaid principal balance at the rate of eight percent (8%) per annum from the dates on which Notes are issued until the same becomes due and payable, whether at maturity or upon acceleration, prepayment or otherwise. The Company shall have the right to prepay the Notes, provided it makes a payment as set forth in the agreements.
The outstanding principal amount of the Notes is convertible into the Company’s common stock at the lender’s option at $0.01 per share for the first six months of the term of the Notes. After the six-month anniversary, the conversion price is equal to 63% of the average of the three lowest trading prices of the Company’s common stock.
Accounting Considerations
The Company has accounted for the Notes as a financing transaction, wherein the net proceeds that were received were allocated to the financial instrument issued. Prior to making the accounting allocation, the Company evaluated the agreement under ASC 815 Derivatives and Hedging (“ASC 815”). ASC 815 generally requires the analysis embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The material embedded derivative features consisted of the embedded conversion option and default puts. The conversion option and default puts bear risks of equity which were not clearly and closely related to the host debt agreement and required bifurcation. The contracts do not permit the Company to settle in registered shares and the contracts also contain make-whole provisions both of which preclude equity classification. Current accounting principles that are also provided in ASC 815 do not permit an issuer to account separately for individual derivative terms and features that require bifurcation and liability classification. Rather, such terms and features must be and were bundled together and fair valued as a single, compound embedded derivative.
The net proceeds were allocated to the compound embedded derivative and original issue discount. The notes will be amortized up to its face value over the life of Notes based on an effective interest rate. Amortization expense and interest expense for the nine months ended December 31, 2021 is as follows:
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DERIVATIVE FINANCIAL INSTRUMENTS |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 10 –DERIVATIVE FINANCIAL INSTRUMENTS
The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of December 31, 2021:
The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of December 31, 2020:
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 December 31, 2021, and 2020:
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 nine months ended December 31, 2021, and 2020:
The Company’s Convertible Promissory Notes issued between October 4, 2019, and December 31, 2021, gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option.
Current accounting principles that are provided in ASC 815 - Derivatives and Hedging require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. In addition, the standards do not permit an issuer to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation and liability classification as derivative financial instruments. Rather, such terms and features must be bundled, and fair valued as a single, compound embedded derivative. The Company has selected the Monte Carlo Simulations valuation technique to fair value the compound embedded derivative because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving compound embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk-free rates. The Monte Carlo Simulations technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators.
Significant inputs and results arising from the Monte Carlo Simulations process are as follows for the embedded derivatives that have been bifurcated from the Convertible Notes and classified in liabilities:
The following table reflects the issuances of compound embedded derivatives and the changes in fair value inputs and assumptions related to the compound embedded derivatives during the period ended December 31, 2021, and March 31, 2021.
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EQUITY |
9 Months Ended |
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Dec. 31, 2021 | |
| Equity [Abstract] | |
| EQUITY | NOTE 11 - EQUITY
Preferred Stock
There are 50,000,000 shares authorized as preferred stock, of which 40,000,000 are designated as Series B and 2,000,000 are designated as Series A. 8,000,000 shares have yet to be designated. All 2,000,000 shares of Series A preferred are issued and outstanding. Each share of Series A preferred is convertible into 240 shares of common stock. The Series A Preferred Stock votes with the Common Stock on all matters to be voted on by the common stock on an as-converted basis. On such matters, each holder of Series A Preferred Stock is entitled to 240 votes for each share of Series A Preferred Stock held by such shareholder.
Common Stock
Common Stock Issuances for the nine months ended December 31, 2020
On April 23, 2020, the Company issued shares of stock to GS Capital in exchange for the conversion of $7,341 in convertible note principal.
On May 8, 2020, the Company issued shares of stock to WLES LP LLC in exchange for the conversion of $30,000 in convertible note principal. The shares were valued at $48,281 resulting in a loss on settlement of debt in the amount of $18,281.
On June 16, 2020, the Company issued shares of common stock to Veyo Partners LLC in exchange for investor relation services valued at $14,400 or $0.0036 per share.
On July 10, 2020, the Company issued shares of common stock to Veyo Partners LLC in exchange for investor relation services valued at $14,000 or $0.0035 per share.
On July 31, 2020, GS Capital converted $7,500 in principal and $488 in accrued interest of the October 4, 2019, $84,000 face value note into shares of common stock. The shares were valued at $16,558. The Company recorded the removal of the $7,500 in principle, $488 in interest, and $8,570 in derivative liabilities resulting in no gain or loss.
On August 10, 2020, the Company issued shares of common stock to Veyo Partners LLC in exchange for investor relation services valued at $34,800 or $0.0087 per share.
On August 13, 2020, the Company sold shares of common stock for $100,000 or $0.0075 per share.
On August 19, 2020, the Company sold shares of common stock for $100,000 or $0.0075 per share.
On August 20, 2020, GS Capital converted $12,500 in principal and $871 in accrued interest of the October 4, 2019, $84,000 face value note into shares of common stock. The shares were valued at $155,914. After recording the removal of the $12,500 in principal, $871 in interest, and $138,647 in derivative liabilities, the Company recorded $3,896 as loss on extinguishment of debt.
On September 1, 2020, the Company sold shares of common stock for $100,000 or $0.0075 per share.
On September 9, 2020, GS Capital converted $55,000 in principal and $4,075 in accrued interest of the October 4, 2019, $84,000 face value note into shares of common stock. The shares were valued at $262,363. After recording the removal of the $55,000 in principal amounts, $4,075 in interest, and $142,990 in derivative liabilities, the Company recorded $60,298 as loss on extinguishment of debt.
On September 14, 2020, the Company sold shares of common stock for $165,000 or $0.0075 per share.
On December 31, 2020, the Company issued shares of common stock for services valued at $26,133 or $0.0070 per share.
Common Stock Issuances for the nine months ended December 31, 2021
On April 1, 2021, the Company issued shares of stock to GS Capital in exchange for $200,000 or $0.004 per share.
On April 10, 2021, the Company issued shares of stock to AES Capital in exchange for $100,000 or $0.004 per share.
On April 14, 2021, the Company issued shares of stock to GS Capital in exchange for $55,000 or $0.004 per share.
On May 13, 2021, the Company issued shares of stock to GS Capital in exchange for $200,000 or $0.004 per share.
On May 21, 2021, the Company issued shares of common stock to Rex Chan in exchange for contractor services valued at $6,450 or $0.0043 per share representing the share price at the date of the transaction.
On May 21, 2021, the Company issued shares of common stock to BM Giancarlo in exchange for management services valued at $8,600 or $0.0043 per share representing the share price at the date of the transaction.
On May 21, 2021, the Company issued shares of common stock to Carlos Diaz in exchange for management services valued at $8,600 or $0.0043 per share representing the share price at the date of the transaction.
On June 3, 2021, the Company issued shares of stock to AES Capital in exchange for $100,000 or $0.004 per share.
On June 16, 2021, the Company issued shares of stock to GS Capital in exchange for $125,000 or $0.004 per share.
On June 25, 2021, the Company issued shares of stock to AES Capital in exchange for $100,000 or $0.004 per share.
On July 13, 2021, the Company issued shares of stock to Geneva Roth in exchange for $100,000 or $0.004 per share.
On July 15, 2021, the Company issued shares of stock to GS Capital in exchange for $100,000 or $0.004 per share.
On July 21, 2021, the Company issued shares of stock to GS Capital in exchange for $100,000 or $0.004 per share.
On October 5, 2021, GS Capital converted $100,000 in principal and $13,479 in accrued interest in connection with Promissory Note dated January 20, 2020. Pursuant to the terms of the conversion, the Company issued shares of common stock at $0.002562 per share.
On October 8, 2021, the Company issued Shares in connection with compensation for services rendered. This award was valued using the stock price of $0.0052 on the date of the award.
On October 19, 2021, GS Capital converted $84,000 in principal and $11,580 in accrued interest in connection with Promissory Note dated January 20, 2020. Pursuant to the terms of the conversion, the Company issued shares of common stock at $0.002562 per share.
On October 26, 2021, the Company issued Shares in connection with stock awards granted to employees and non-employees. This award was valued using the stock price of $0.0044 on the date of the award.
On October 26, 2021, the Company sold shares of common stock for $45,000 or $0.004 per share.
On December 6, 2021, the Company issued Shares in connection with stock awards granted to employees and non-employees. This award was valued using the stock price of $0.0023 on the date of the award.
On December 14, 2021, the Company issued shares of common stock pursuant to Note 39 dated December 10, 2021. The expense associated with this issuance is being amortized over 12 months.
On December 22, 2021, the Company issued shares of common stock to GS Capital in connection with a Promissory Note dated April 26, 2021. As of December 31, 2021 the expense associated with these shares was fully expensed.
On December 28, 2021, GS Capital converted $40,000 in principal and $5,944 in accrued interest in connection with Promissory Note dated January 20, 2020. Pursuant to the terms of the conversion, the Company issued shares of common stock at $0.001365 per share.
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LEASES |
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| Leases | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LEASES | NOTE 12 –LEASES
Kokomo lease
On October 1, 2020, the Company, under its subsidiary ONE More Gym LLC, entered into a facilities lease (“Kokomo Lease”) for 25,000 square feet in Kokomo, Indiana. The initial lease term is for five years, and the lease commencement date is October 1, 2020. The monthly lease payments are $7,292 in year 1, $7,656 in year 2, $8,039 in year 3, and $8,441 in years 4 and 5.
Valparaiso Lease
The Company leases 11,676 square feet of office space located at 1805 E. Lincolnway, Valparaiso, Indiana 46383. The Company assumed the lease (“Valparaiso Lease”) when it acquired CFit Indiana Inc. on October 6, 2020. The monthly lease payments are $7,625 and the lease expires on December 31, 2023.
Merrill Lease
In connection with the acquisition of CFit Indiana Inc. on October 6, 2020, the Company acquired a facilities lease for 15,000 square feet at 6055N. Broadway Ave., Merrillville, Indiana. The monthly lease payments are $11,190 and the lease expires on February 28, 2026.
Tuscaloosa Lease
In connection with the acquisition of Hillcrest Fitness LLC on December 1, 2020, the Company acquired a facilities lease at 6551 Highway 69 South, Tuscaloosa, AL 35405. The monthly lease payments are $6,000 and the lease expires on March 6, 2024.
Birmingham Lease
In connection with the acquisition of Club Fitness LLC on April 1, 2021, the Company acquired a facilities lease at 2520 Moody Parkway, Mood, AL 35004. The monthly lease payments are $6,000 and the lease expires on April 30, 2026.
Valparaiso Additional Space Lease
On August 30, 2021, the Company entered into a facilities lease (“Valparaiso Additional Space”) for 6,380 square feet in Valparaiso, Indiana. The initial lease term is for five years, and the lease commencement date is August 30, 2021. The monthly lease payments are $4,250 plus Common Area Maintenance (“CAM”) in year 1, $5,317 plus (“CAM”) in year 2 and 3, and $6,380 plus (“CAM”) in year 4 and 5. The Company has the option to renew at a rental rate of $6,912 plus (“CAM”) for years 2029 through 2033.
On November 23, 2021 the Company terminated its lease for (‘Valparaiso Additional Space”). The results of this lease termination were to reduce the Operating Lease Right of Use Asset by $369,663 and decrease the Lease Liability by $375,883.
Tuscaloosa Additional Space Lease
On November 1, 2021, the Company entered into a facilities lease (“Tuscaloosa Additional Space”) in Tuscaloosa, Alabama. The initial lease term is for five years, and the lease commencement date is December 1, 2021. The monthly lease payments are fixed at $1,625 plus Common Area Maintenance of $125 per month for all five years.
Operating lease right-of-use asset and liability are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 10%, as the interest rate implicit in most of our leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. Since the common area maintenance expenses are expenses that do not depend on an index or rate, they are excluded from the measurement of the lease liability and recognized in other general and administrative expenses on the statements of operations.
Right-of-use asset is summarized below:
Operating lease liability is summarized below:
Maturity of the lease liability is as follows:
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Dec. 31, 2021 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | NOTE 13 – 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 FASB 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. As of December 31, 2021, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements.
The Company entered into an employment agreement with its Executive Vice President as of November 24, 2017. Under the terms of the agreement, the Company will be liable for severance and other payments under certain conditions. The employment agreement is for a period of 36 months and renews for a successive two years unless written notice is provided by either party under the terms of the agreement.
On November 29, 2020, with Greg P. Bell abstaining, the board of directors of the Company approved the Chairman of the Board and Chief Executive Officer & President Agreement dated effective November 23, 2020, with Mr. Bell, the Company’s Chairman of the Board, CEO, and President. The agreement supersedes the previous agreement of the same title dated effective November 24, 2017. The term of the agreement is until Mr. Bell is removed from his executive positions by 80% of the voting control of the Company unless Mr. Bell is legally incapacitated (until legal capacity is regained), as determined by a court of competent jurisdiction or upon Mr. Bell’s death. Mr. Bell can terminate the agreement upon three months’ prior written notice to the Company.
Pursuant to the agreement, Mr. Bell is entitled to an annual salary of $120,000 and Mr. Bell was also issued shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”).
Each of the acquisition agreements contain a Management Services Agreement (“MSA”) whereby the Company agrees to pay a management fee based on certain performance targets. The MSA agreements expire 10 years from the acquisition agreement dates.
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SUBSEQUENT EVENTS |
9 Months Ended |
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Dec. 31, 2021 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 14 - SUBSEQUENT EVENTS
Convertible Promissory Note
On January 4, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of January 4, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.
On January 12, 2022, the Company entered into an Agreement with Mast Hill Fund, L.P. pursuant to which the Company issued to Mast Hill Fund, L.P. a Promissory Note in the aggregate principal amount of $300,000. The Note has a maturity date of January 12, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note.
On January 19, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of January 19, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.
On February 2, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of $270,480. The Note has a maturity date of February 2, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to GS Capital as set forth in the note.
On February 3, 2022, the Company entered into an Agreement with Mast Hill Fund, L.P. pursuant to which the Company issued to Mast Hill Fund, L.P. a Promissory Note in the aggregate principal amount of $425,000. The Note has a maturity date of February 3, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note.
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ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Accounting | Basis of Accounting The interim consolidated financial statements are condensed and should be read in conjunction with the Company’s latest annual financial statements; interim disclosures generally do not repeat those in the annual statements. The interim unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.
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| Use of Estimates | Use of Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The most significant assumptions and estimates relate to the valuation of derivative liabilities and the valuation of assets and liabilities acquired through business combinations. Actual results could differ from these estimates and assumptions.
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| Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains deposits primarily in four financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits or $250,000. The Company did not have any cash in excess of FDIC limits at December 31, 2021 and 2020, respectively.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist primarily of accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The three levels of valuation hierarchy are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.
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| Property and Equipment | Property and Equipment Property and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying consolidated statement of operations of the respective period. The estimated useful lives range from 3 to 7 years.
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| Other income | Other income During the nine months ended December 31, 2021, and December 31, 2020, the Company received $0 and $2,000, respectively in grant income due to COVID-19 relief. The Company has recorded this grant income under other income in the Statement of Operations.
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| Revenue Recognition | Revenue Recognition 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 only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. 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. The majority of revenues are received from ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue.
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| Income Taxes | Income Taxes The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the consolidated Statements of Operations in the period that includes the enactment date. Through December 31, 2021, the Company has an expected loss. Due to uncertainty of realization for these losses, a full valuation allowance is recorded. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.
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| Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables 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. In addition, Receivables that are factored through the Company's Receivable finance facility are guaranteed by the finance company that further mitigates Credit Risk.
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| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. There were no impairment charges recorded during the nine months ended December 31, 2021, and 2020, respectively.
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| Earnings Per Share (EPS) |
The Company utilize FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options, restricted stock awards and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. As of December 31, 2021, the convertible notes are indexed to shares of common stock.
The following table sets forth the computation of basic and diluted earnings per share for the nine months ended December 31, 2021, and 2020:
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| Stock Based Compensation |
The Company records stock-based compensation in accordance with the provisions of FASB ASC Topic 718, Accounting for Stock Compensation, which establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC.
Topic 718, the Company recognizes an expense for the fair value of its stock awards at the time of grant and the fair value of its outstanding stock options and stock awards, whether held by employees or others. As of December 31, 2021, there were options outstanding and shares of stock awards.
On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC 718 and forgo revaluing the award after this date. The Company adopted ASU 2018-07 on April 1, 2019. The adoption of this standard did not have a material impact on the consolidated financial statements.
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| Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, 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.
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ACCOUNTING POLICIES (Tables) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted |
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REVENUE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of net sales by revenue type |
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PROPERTY AND EQUIPMENT (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of property and equipment |
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INTANGIBLE ASSETS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of intangible assets |
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| Schedule of amortization expense |
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BUSINESS ACQUISITIONS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Acquisitions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of business combination purchase allocation |
|
NOTES PAYABLE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of notes payable |
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CONVERTIBLE NOTE PAYABLE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Convertible Notes Payable |
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| Schedule of amortization expense, interest expense and accrued interest on debt |
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DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of derivative liabilities |
The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of December 31, 2020:
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 December 31, 2021, and 2020:
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 nine months ended December 31, 2021, and 2020:
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| Schedule of significant inputs |
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| Schedule of changes in fair value of derivatives |
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LEASES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of right-of-use asset |
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| Summary of operating lease liability |
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| Schedule of maturity of the lease liability |
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ACCOUNTING POLICIES (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Accounting Policies [Abstract] | ||||||||
| Net loss | $ (2,693,117) | $ (2,557,176) | $ (1,061,347) | $ (978,156) | $ (1,269,353) | $ (495,506) | $ (6,311,640) | $ (2,743,015) |
| Net loss per share | ||||||||
| Basic | $ (0.00) | $ (0.00) | ||||||
| Diluted | $ (0.00) | $ (0.00) | ||||||
| Weighted average number of shares outstanding: | ||||||||
| Basic | 1,452,481,989 | 710,522,374 | 1,341,287,504 | 619,783,280 | ||||
ACCOUNTING POLICIES (Details Narrative) - USD ($) |
9 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2021 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Cash in excess of FDIC limit | $ 0 | $ 0 | |
| Property useful life | 3 to 7 years | ||
| Grant income | $ 0 | $ 2,000 | |
| Anti-dilutive securities | 1,372,797,202 | ||
| Equity Option [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Options outstanding | 0 | ||
| Common Stock Awards [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Stock awards outstanding | 99,000,000 | ||
GOING CONCERN (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
| Net Income (Loss) Attributable to Parent | $ (2,693,117) | $ (2,557,176) | $ (1,061,347) | $ (978,156) | $ (1,269,353) | $ (495,506) | $ (6,311,640) | $ (2,743,015) | ||
| Net Cash Provided by (Used in) Operating Activities | 4,561,880 | 1,105,767 | ||||||||
| Working Capital | 7,608,136 | 7,608,136 | ||||||||
| Accumulated Deficit | 15,508,888 | 15,508,888 | $ 9,197,248 | |||||||
| Stockholders equity | $ 5,914,766 | $ 3,946,129 | $ 1,688,953 | $ 1,175,403 | $ 931,436 | $ 636,851 | $ 5,914,766 | $ 1,175,403 | $ 1,533,336 | $ 211,367 |
REVENUE (Details - Net sales by revenue type) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Disaggregation of Revenue [Line Items] | ||||
| Net sales | $ 612,632 | $ 300,549 | $ 1,841,407 | $ 496,497 |
| Live Events [Member] | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Net sales | 263,782 | 82,524 | 782,544 | 112,901 |
| Gym [Member] | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Net sales | $ 348,850 | $ 218,025 | $ 1,058,863 | $ 383,596 |
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) |
9 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expense | $ 210,663 | $ 70,025 |
INTANGIBLE ASSETS (Details - Intangible assets, net) - USD ($) |
Dec. 31, 2021 |
Mar. 31, 2021 |
|---|---|---|
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible assets gross | $ 371,176 | $ 324,864 |
| Less: accumulated amortization | (178,542) | (99,974) |
| Intangible assets net | 192,634 | 224,890 |
| License [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible assets gross | 142,248 | 142,248 |
| Software Development [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible assets gross | 12,585 | 12,585 |
| Customer Relationships [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible assets gross | $ 216,343 | $ 170,031 |
INTANGIBLE ASSETS (Details - Estimated amortization expense) - USD ($) |
Dec. 31, 2021 |
Mar. 31, 2021 |
|---|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Fiscal year ended March 31, 2022 | $ 26,189 | |
| Fiscal year ended March 31, 2023 | 97,842 | |
| Fiscal year ended March 31, 2024 | 61,532 | |
| Fiscal year ended March 31, 2025 | 7,071 | |
| Total | $ 192,634 | $ 224,890 |
INTANGIBLE ASSETS (Details Narrative) - USD ($) |
9 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Intangible assets net | $ 78,569 | $ 49,346 |
BUSINESS ACQUISITIONS (Details - allocation of purchase) - Club Fitness [Member] |
Apr. 02, 2021
USD ($)
|
|---|---|
| Business Acquisition [Line Items] | |
| Cash | $ 125,000 |
| Total fair value of identifiable net assets | 125,000 |
| Customer Relationships [Member] | |
| Business Acquisition [Line Items] | |
| Intangible assets | 46,311 |
| Gym Equipment [Member] | |
| Business Acquisition [Line Items] | |
| Property & equipment | $ 76,689 |
BUSINESS ACQUISITIONS (Details Narrative) - Club Fitness [Member] |
Apr. 02, 2021
USD ($)
|
|---|---|
| Business Acquisition [Line Items] | |
| Payments to Acquire Businesses, Gross | $ 125,000 |
| Customer Relationships [Member] | |
| Business Acquisition [Line Items] | |
| Intangible assets | 46,311 |
| Gym Equipment [Member] | |
| Business Acquisition [Line Items] | |
| Property & equipment | $ 76,689 |
NOTES PAYABLE (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2021 |
|
| Debt Instrument [Line Items] | |||||
| Interest Expense, Debt | $ 91,752 | ||||
| Principal amount | $ 5,322,743 | 5,322,743 | |||
| Accrued interest | 204,820 | 204,820 | |||
| Gain on forgiveness of loan | 0 | $ 0 | 23,303 | $ 10,080 | |
| Total notes payable | 388,173 | 388,173 | $ 278,129 | ||
| Notes Payable [Member] | |||||
| Debt Instrument [Line Items] | |||||
| Interest Expense, Debt | 15,018 | ||||
| Brian Cox [Member] | |||||
| Debt Instrument [Line Items] | |||||
| Repayment of Loan payable | 12,881 | ||||
| Total notes payable | 0 | 0 | 12,882 | ||
| Small Business Loan [Member] | |||||
| Debt Instrument [Line Items] | |||||
| Principal amount | 6,634 | 6,634 | |||
| Accrued interest | 1,069 | 1,069 | |||
| Gain on forgiveness of loan | 7,703 | ||||
| Total notes payable | 48,573 | 48,573 | $ 63,047 | ||
| P P P Loan [Member] | |||||
| Debt Instrument [Line Items] | |||||
| Gain on forgiveness of loan | 15,600 | ||||
| Total notes payable | $ 15,600 | $ 15,600 | |||
CONVERTIBLE NOTE PAYABLE (Details Narrative) - USD ($) |
9 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Nov. 23, 2021 |
|
| Debt Instrument [Line Items] | |||
| Convertible notes payable | $ 4,281,617 | $ 180,400 | |
| Gain on extinguishment of debt | 32,544 | ||
| Debt face amount | 5,322,743 | ||
| Net proceeds | 4,178,506 | $ 865,000 | |
| Legal fees | 22,500 | ||
| Convertible Note 1 [Member] | |||
| Debt Instrument [Line Items] | |||
| Debt face amount | 4,453,543 | ||
| Original issue discount | 481,278 | ||
| Convertible Notes 1 [Member] | |||
| Debt Instrument [Line Items] | |||
| Net proceeds | $ 3,949,765 | ||
DERIVATIVE FINANCIAL INSTRUMENTS (Details - Derivative liabilities) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||||
| Compound embedded derivatives, shares | 1,372,797,202 | 311,625,168 | 1,372,797,202 | 311,625,168 |
| Compound embedded derivatives, value | $ (2,199,087) | $ (739,574) | $ (2,199,087) | $ (739,574) |
| Derivative, Gain (Loss) on Derivative, Net | (112,379) | (69,002) | (467,321) | (715,405) |
| Compound Embedded Derivatives [Member] | ||||
| Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||||
| Derivative, Gain (Loss) on Derivative, Net | (66,894) | 194,410 | (421,836) | (592,997) |
| Day One Derivative Loss [Member] | ||||
| Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||||
| Derivative, Gain (Loss) on Derivative, Net | $ (45,485) | $ (125,408) | $ (45,485) | $ (125,408) |
DERIVATIVE FINANCIAL INSTRUMENTS (Details - Significant inputs) |
9 Months Ended |
|---|---|
|
Dec. 31, 2021
$ / shares
| |
| Derivative [Line Items] | |
| Quoted market price on valuation date | 0.0029 |
| Contractual term to maturity | 0.005 Years – 1.0 Years |
| Equivalent Volatility | 90.12% - 170.73% |
| Interest rate | 8.00% |
| Minimum [Member] | |
| Derivative [Line Items] | |
| Contractual conversion rate | $ 0.0001 |
| Maximum [Member] | |
| Derivative [Line Items] | |
| Contractual conversion rate | $ 0.01 |
DERIVATIVE FINANCIAL INSTRUMENTS (Details - Change in fair value) - USD ($) |
9 Months Ended | 12 Months Ended |
|---|---|---|
Dec. 31, 2021 |
Mar. 31, 2021 |
|
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
| Derivative liabilities, beginning balance | $ 1,137,623 | $ 58,790 |
| Compound embedded derivatives | 1,088,514 | 732,416 |
| Conversions | (287,897) | (859,352) |
| Derivative extinguished / debt repaid in cash | (160,989) | (126,892) |
| Loss (gain) on changes in fair value inputs and assumptions reflected in income | 421,836 | 1,332,661 |
| Derivative liabilities, ending balance | $ 2,199,087 | $ 1,137,623 |
LEASES (Details - Right-of-use asset) - USD ($) |
Dec. 31, 2021 |
Mar. 31, 2021 |
|---|---|---|
| Office lease | $ 2,035,198 | |
| Less: accumulated amortization | (386,035) | |
| Right-of-use asset, net | 1,649,163 | $ 1,575,792 |
| Kokomo Lease [Member] | ||
| Office lease | 375,483 | |
| Less: accumulated amortization | (77,434) | |
| Right-of-use asset, net | 298,049 | |
| Valparaiso Lease [Member] | ||
| Office lease | 374,360 | |
| Less: accumulated amortization | (129,853) | |
| Right-of-use asset, net | 244,507 | |
| Merrill Lease [Member] | ||
| Office lease | 701,404 | |
| Less: accumulated amortization | (94,697) | |
| Right-of-use asset, net | 606,707 | |
| Tuscaloosa Lease [Member] | ||
| Office lease | 222,087 | |
| Less: accumulated amortization | (52,766) | |
| Right-of-use asset, net | 169,321 | |
| Birmingham Lease [Member] | ||
| Office lease | 284,745 | |
| Less: accumulated amortization | (30,289) | |
| Right-of-use asset, net | 254,456 | |
| Tuscaloosa Lease Additional [Member] | ||
| Office lease | 77,119 | |
| Less: accumulated amortization | (996) | |
| Right-of-use asset, net | $ 76,123 |
LEASES (Details - Operating lease liability) - USD ($) |
Dec. 31, 2021 |
Mar. 31, 2021 |
|---|---|---|
| Office lease | $ 1,724,742 | |
| Less: current portion | (426,212) | $ 0 |
| Long term portion | 1,298,530 | $ 1,319,457 |
| Kokomo Lease [Member] | ||
| Office lease | 307,187 | |
| Less: current portion | (66,008) | |
| Long term portion | 241,179 | |
| Valparaiso Lease [Member] | ||
| Office lease | 244,508 | |
| Less: current portion | (116,171) | |
| Long term portion | 128,336 | |
| Merrill Lease [Member] | ||
| Office lease | 673,147 | |
| Less: current portion | (123,746) | |
| Long term portion | 549,402 | |
| Tuscaloosa Lease [Member] | ||
| Office lease | 169,321 | |
| Less: current portion | (58,292) | |
| Long term portion | 111,029 | |
| Birmingham Lease [Member] | ||
| Office lease | 254,456 | |
| Less: current portion | (49,377) | |
| Long term portion | 205,079 | |
| Tuscaloosa Lease Additional [Member] | ||
| Office lease | 76,123 | |
| Less: current portion | (12,618) | |
| Long term portion | $ 63,505 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) |
9 Months Ended |
|---|---|
|
Dec. 31, 2021
USD ($)
shares
| |
| Commitments and Contingencies Disclosure [Abstract] | |
| Annual salary | $ | $ 120,000 |
| Shares issued | shares | 40,000,000 |
SUBSEQUENT EVENTS (Details Narrative) |
1 Months Ended |
|---|---|
Jan. 19, 2022 | |
| Subsequent Event [Member] | |
| Subsequent Event [Line Items] | |
| Debt Instrument, Maturity Date | Jan. 19, 2023 |
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