10-Q
Sundance Strategies, Inc. (SUND)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
| ☒ | QUARTERLY<br> REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|---|
| For the Quarterly Period Ended June 30, 2024 | |
| --- | |
| ☐ | TRANSITION<br> REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| --- | --- |
| For the Transition Period From ___________ to ___________ | |
| --- |
Commission
File Number 000-50547
SUNDANCE
STRATEGIES, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 88-0515333 |
|---|---|
| (State<br> or other jurisdiction<br><br> <br>of<br> incorporation or organization) | (I.R.S.<br> Employer<br><br> <br>Identification<br> No.) |
| 4626 North 300 West, Suite No. 365, Provo, Utah | 84604 |
| --- | --- |
| (Address<br> of principal executive offices) | (Zip<br> Code) |
(801)717-3935
(Registrant’s telephone number, including area code)
Securities registered pursuant to section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Act:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common<br> Stock, $0.001 par value | SUND | OTCQB |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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.) Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” “smallerreporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large<br> accelerated filer ☐ | Accelerated<br> filer ☐ |
|---|---|
| Non-accelerated<br> filer ☒ | Smaller<br> reporting company ☒ |
| Emerging<br> 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 ☐ No ☒
As
of August 13, 2024, the registrant had 43,063,441 shares of common stock, par value $0.001, issued and outstanding.
SUNDANCE
STRATEGIES, INC.
FORM
10-Q
TABLE
OF CONTENTS
| Page | |
|---|---|
| PART<br> I — FINANCIAL INFORMATION | |
| Item<br> 1. Financial Statements (Unaudited) | 3 |
| Condensed<br> Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and March 31, 2024 | 3 |
| Condensed<br> Consolidated Statements of Operations for the three months ended June 30, 2024, and 2023 (Unaudited) | 4 |
| Condensed<br> Consolidated Statements of Stockholders’ Deficit for the three months ended June 30, 2024, and 2023 (Unaudited) | 5 |
| Condensed<br> Consolidated Statements of Cash Flows for the three months ended June 30, 2024, and 2023 (Unaudited) | 6 |
| Notes<br> to Condensed Consolidated Financial Statements June 30, 2024 (Unaudited) | 7 |
| Item<br> 2. Management’s Discussion and Analysis of Financial Condition And Results of Operations | 12 |
| Item<br> 3. Quantitative and Qualitative Disclosure about Market Risk | 15 |
| Item<br> 4. Controls and Procedures | 15 |
| PART<br> II — OTHER INFORMATION | |
| Item<br> 1. Legal Proceedings | 16 |
| Item<br> 1A. Risk Factors | 16 |
| Item<br> 2. Unregistered Sales of Equity Securities and Use of Proceeds | 16 |
| Item<br> 3. Defaults upon Senior Securities | 16 |
| Item<br> 4. Mine Safety Disclosures | 16 |
| Item<br> 5. Other Information | 16 |
| Item<br> 6. Exhibits | 17 |
| Signatures | 19 |
| 2 |
| --- |
PART
I — FINANCIAL INFORMATION
Item1. Financial Statements (Unaudited)
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
Consolidated
Balance Sheets
| March 31, | |||||
| 2024 | |||||
| ASSETS | |||||
| Current Assets | |||||
| Cash and cash<br> equivalents | 185,259 | $ | 329,860 | ||
| Prepaid<br> expenses and other assets | 5,520 | 9,075 | |||
| Total Current Assets | 190,779 | 338,935 | |||
| Total Current Assets | 190,779 | $ | 338,935 | ||
| LIABILITIES AND<br> STOCKHOLDERS’ DEFICIT | |||||
| Current Liabilities | |||||
| Accounts payable | 452,604 | $ | 447,862 | ||
| Accrued expenses | 377,987 | 433,201 | |||
| Current portion of notes<br> payable | - | 300,000 | |||
| Current portion of notes<br> payable, related parties | 50,000 | 50,000 | |||
| Current portion of notes<br> payable | 50,000 | 50,000 | |||
| Stock<br> repurchase payable | 400,000 | 400,000 | |||
| Total Current Liabilities | 1,280,591 | 1,631,063 | |||
| Long-Term Liabilities | |||||
| Accrued expenses | 1,516,484 | 1,357,739 | |||
| Notes payable | 300,000 | - | |||
| Notes payable, related<br> parties, net of current portion, net of debt discount | 3,290,058 | 3,290,058 | |||
| Notes payable, net of current portion, net of debt discount | 3,290,058 | 3,290,058 | |||
| - | - | ||||
| Total Long-Term Liabilities | 5,106,542 | 4,647,797 | |||
| Total Liabilities | 6,387,133 | 6,278,860 | |||
| Stockholders’ Deficit | |||||
| Preferred stock, authorized 10,000,000 shares,<br> par value 0.001; -0- shares issued and outstanding | - | - | |||
| Common stock, authorized<br> 500,000,000 shares, par value 0.001; 42,438,441 shares issued and outstanding as of June, 30 2024; and 42,258,441 shares issued<br> and outstanding as of March, 31 2024 | 42,439 | 42,259 | |||
| Additional paid-in capital | 31,094,502 | 30,914,682 | |||
| Accumulated<br> deficit | (37,333,295 | ) | (36,896,866 | ) | |
| Total Stockholders’<br> Deficit | (6,196,354 | ) | (5,939,925 | ) | |
| Total Liabilities and<br> Stockholders’ Deficit | 190,779 | $ | 338,935 |
All values are in US Dollars.
The
accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
| --- |
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
Consolidated
Statements of Operations
(UNAUDITED)
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Three<br> Months Ended June 30, | ||||||
| 2024 | 2023 | |||||
| Income from Investments | $ | - | $ | - | ||
| General<br> and Administrative Expenses | 193,107 | 131,299 | ||||
| Loss<br> from Operations | (193,107 | ) | (131,299 | ) | ||
| Other Income (Expense) | ||||||
| Loss on extinguishment<br> of debt | - | (398,920 | ) | |||
| Gain on settlement of liabilities | - | 290,000 | ||||
| Interest expense | (88,322 | ) | (97,973 | ) | ||
| Financing<br> expense | (155,000 | ) | - | |||
| Total<br> Other Income (Expense) | (243,322 | ) | (206,893 | ) | ||
| Loss Before Income Taxes | (436,429 | ) | (338,192 | ) | ||
| Income<br> Tax Provision (Benefit) | - | - | ||||
| Net<br> Loss | $ | (436,429 | ) | $ | (338,192 | ) |
| Loss<br> per share - basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) |
| Weighted average shares<br> outstanding - basic and diluted | 42,282,245 | 41,408,441 |
The
accompanying notes are an integral part of these condensed consolidated financial statements.
| 4 |
| --- |
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
Consolidated
Statements of Stockholders’ Deficit
For
the Three Months Ended June 30, 2024 and 2023
(UNAUDITED)
| Additional | Total | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common<br> Stock | Paid-In | Accumulated | Stockholders’ | |||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||
| Balance, March 31, 2023 | 41,408,441 | $ | 41,409 | $ | 28,986,558 | $ | (35,061,875 | ) | $ | (6,033,908 | ) | |
| Warrants issued in connection with debt issuances | - | - | 73,712 | - | 73,712 | |||||||
| Warrants issued in connection to extinguishment<br> of debt | - | - | 398,920 | - | 398,920 | |||||||
| Net loss | - | - | - | (338,192 | ) | (338,192 | ) | |||||
| Balance, June 30, 2023 | 41,408,441 | $ | 41,409 | $ | 29,459,190 | $ | (35,400,067 | ) | $ | (5,899,468 | ) | |
| Additional | Total | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Common<br> Stock | Paid-In | Accumulated | Stockholders’ | |||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||
| Balance, March 31, 2024 | 42,258,441 | $ | 42,259 | $ | 30,914,682 | $ | (36,896,866 | ) | $ | (5,939,925 | ) | |
| Balance | 42,258,441 | $ | 42,259 | $ | 30,914,682 | $ | (36,896,866 | ) | $ | (5,939,925 | ) | |
| Common stock and warrants issued for cash | 180,000 | 180 | 179,820 | - | 180,000 | |||||||
| Net loss | - | - | - | (436,429 | ) | (436,429 | ) | |||||
| Balance, June 30, 2024 | 42,438,441 | $ | 42,439 | $ | 31,094,502 | $ | (37,333,295 | ) | $ | (6,196,354 | ) | |
| Balance | 42,438,441 | 42,439 | 31,094,502 | (37,333,295 | ) | (6,196,354 | ) |
The
accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
| --- |
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
Consolidated
Statements of Cash Flows
(UNAUDITED)
| 2024 | 2023 | |||||
|---|---|---|---|---|---|---|
| Three<br> Months Ended June 30, | ||||||
| 2024 | 2023 | |||||
| Operating Activities | ||||||
| Net Loss | $ | (436,429 | ) | $ | (338,192 | ) |
| Adjustments to reconcile<br> net loss to net cash used in operating activities: | ||||||
| Loss on extinguishment<br> of debt | - | 398,920 | ||||
| Gain on settlement of liabilities | - | (290,000 | ) | |||
| Amortization of debt discount | - | 15,765 | ||||
| Changes in operating assets<br> and liabilities | ||||||
| Prepaid expenses and other<br> assets | 3,555 | 3,555 | ||||
| Accounts payable | 4,742 | 1,339 | ||||
| Accrued<br> expenses | 103,531 | 102,181 | ||||
| Net<br> Cash used in Operating Activities | (324,601 | ) | (106,432 | ) | ||
| Financing Activities | ||||||
| Proceeds from issuance<br> of common stock and warrants | 180,000 | - | ||||
| Proceeds<br> from issuance of notes payable, related party | - | 111,950 | ||||
| Net<br> Cash provided by Financing Activities | 180,000 | 111,950 | ||||
| Net Change in Cash and Cash<br> Equivalents | (144,601 | ) | 5,518 | |||
| Cash<br> and Cash Equivalents at Beginning of Period | 329,860 | 553 | ||||
| Cash<br> and Cash Equivalents at End of Period | $ | 185,259 | $ | 6,071 | ||
| Supplemental disclosure<br> of cash flow information: | ||||||
| Cash paid for interest | $ | - | $ | - | ||
| Cash paid for income taxes | $ | - | $ | - | ||
| Non Cash Financing &<br> Investing Activities, and Other Disclosures | ||||||
| Issued warrants as debt<br> issuance costs | $ | - | $ | 73,712 |
The
accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
| --- |
SUNDANCE
STRATEGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
June
30, 2024
(1)
BASIS OF PRESENTATION, ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basisof Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024, which was filed with the SEC on July 1, 2024. The results from operations for the three-month period ended June 30, 2024, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2025. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, stockholders’ equity, and cash flows at June 30, 2024 and for all periods presented herein have been made.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s financial statements and the accompanying notes. Actual results could materially differ from those estimates.
Organizationand Nature of Operations
Sundance Strategies, Inc. (formerly known as Java Express, Inc.) was organized under the laws of the State of Nevada on December 14, 2001, and engaged in the retail selling of beverage products to the general public until these endeavors ceased in 2006; it had no material business operations from 2006, until its acquisition of ANEW LIFE, INC. (“ANEW LIFE”), a subsidiary of Sundance Strategies, Inc. (“Sundance Strategies”, “the Company”, “we” or “our”).
Our historical business model has focused on purchasing or acquiring life insurance policies and residual interests in or financial products tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace, often referred to as the “life settlements market.”
During the latter part of the fiscal year ended March 31, 2021, the Company began developing an additional business offering, providing professional services to specialty structured finance groups, bond issuers and life settlement aggregators. The Company has now assembled an experienced team from the life settlement marketplace, as well as from other areas such as financial services and public financial markets. As a professional services provider, the Company applies industry best practices to advise on the selection of specific portfolios of life insurance policies that are tailored to meet the needs of its clients. The Company’s clients may include bond issuers, bond investors, or other structured finance product issuers. The Company develops strategies and methodologies which include the acquisition of life insurance portfolios, then uses common structured finance techniques and proprietary analytics to structure bonds for issuances, including principal protected bonds. The Company’s goal is to deliver long-term value and profitability to shareholders by growing the Company’s professional services business and asset base, resulting in the ability to pay dividends to its shareholders.
| 7 |
| --- |
The Company has developed an additional business offering working closely with bond placement agents and aggregators to establish various aspects of a proprietary, investment grade bond offering. In this arrangement, the Company participates as the sole originator in the role of structuring and advising on the structure of the proprietary bond instrument. Included in the role of structuring financial assets, the Company uses proprietary analytics to establish the makeup of the rated instrument, including but not limited to, life settlement assets (life insurance policies) and managed cash, and implements a process of selective assembly of the underlying assets and cash management that will meet the policy requirements and analytics. The Company provides current and ongoing resources for all analytics, as well as advisement support for the investment and non-investment grade ratings for the managed asset pool and the managed cash accounts. In its advisory role, the Company is reimbursed for all expenses associated with the structuring and preparation of any bond offering, will receive an advisory payment upon the closing of any bond offering, and then will hold residual rights on the balance of assets once the bond is retired.
SignificantAccounting Policies
There have been no changes to the significant accounting policies of the Company from the information provided in Note 2 of the Notes to Consolidated Financial Statements in the Company’s most recent Form 10-K, except as discussed below.
Basicand Diluted Net Income (Loss) Per Common Share
Basic
net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the periods presented using the treasury stock method. Diluted net loss per common share is computed by including common shares that may be issued subject to existing rights with dilutive potential, when applicable. Potential dilutive common stock equivalents are primarily comprised of potential dilutive shares resulting from convertible debt agreements and common stock warrants. Potentially dilutive shares resulting from convertible debt agreements are evaluated using the if-converted method. Potentially dilutive securities are not included in the calculation of diluted net loss per share for the three months ended June 30, 2024, or 2023, because to do so would be anti-dilutive. Potentially dilutive securities outstanding as of June 30, 2024, and 2023, are comprised of warrants convertible into 13,403,573 and 10,170,544 shares of common stock, respectively.
NewAccounting Pronouncements
NotYet Adopted
The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.
(2)
LIQUIDITY REQUIREMENTS
Since
the Company’s inception on January 31, 2013, its operations have been primarily financed through sales of equity, debt financing from related parties, and the issuance of notes payable and convertible debentures. As of June 30, 2024, the Company had $185,259 of cash assets, compared to $329,860 as of March 31, 2024. As of June 30, 2024, the Company had access to draw an additional $4,265,942 on the notes payable, related party (see Note 5) and $3,000,000 on the Convertible Debenture Agreement (See Note 6). For the three months ended June 30, 2024, the Company’s average monthly operating expenses were approximately $67,000, which includes salaries of the Company’s employee, consulting agreements and contract labor, general and administrative expenses, and legal and accounting expenses. In addition to the monthly operating expenses, the Company continues to pursue other debt and equity financing opportunities, and as a result, financing expenses of $155,000 and $0 were incurred during the three months ended June 30, 2024, and 2023, respectively. As management continues to explore additional financing alternatives, beginning July 1, 2024, the Company is expected to spend up to an additional $300,000 on these efforts. Outstanding Accounts Payable as of June 30, 2024, totaled $452,604. Management has concluded that its existing capital resources and availability under its existing debt agreements with related parties will be sufficient to fund its operating working capital requirements for at least the next 12 months from the issuance of these financial statements, or through August 2025. Related parties have given assurance that their continued support, by way of either extensions of due dates, or increases in lines-of-credit, can be relied on. As mentioned above, the Company also continues to evaluate other debt and equity financing opportunities.
| 8 |
| --- |
The accompanying financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business.
(3)
FAIR VALUE MEASUREMENTS
As defined by ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values.
Those levels of input are summarized as follows:
| ● | Level<br> 1: Quoted prices in active markets for identical assets and liabilities. |
|---|---|
| ● | Level<br> 2: Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets, quoted prices<br> for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant<br> assumptions are observable in the market. |
| ● | Level<br> 3: Unobservable inputs that are supported by little or no market activity. Level 3 assets and liabilities include financial instruments<br> whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques as well as instruments<br> for which the determination of fair value requires significant management judgment or estimation. |
The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.
The Company did not have any transfers of assets and liabilities between Levels 1, 2 and 3 of the fair value measurement hierarchy during the three months ended June 30, 2024, and 2023.
The Company issues warrants from time to time (see Note 7), which fair value is calculated using Level 3 inputs.
OtherFinancial Instruments
The Company’s recorded values of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued liabilities approximate their fair values based on their short-term nature. The recorded values of the notes payable and convertible debenture approximate the fair values as the interest rate approximates market interest rates.
(4)
NOTES PAYABLE
On April 6, 2021, the Company borrowed $300,000 under an unsecured promissory note with Satco International, Ltd. This promissory note bears interest at a rate of 8% annually and was due April 6, 2023. In conjunction with this note, the Company issued warrants for 1,000,000 shares of common stock, exercisable at $1.00 per share and expiring in 3 years from the date of the promissory note, which are now expired. Since the original note date, the unsecured promissory note with Satco International, Ltd. has been amended through a series of amendments to extend the due date from April 6, 2023 to August 31, 2024, or at the immediate time when alternative financing or other proceeds are received. Subsequent to quarter end, this unsecured promissory note was extended to have a due date of August 31, 2025. These extensions have no bearing on the warrants that were issued in conjunction with the original promissory note. This note is separate from the 8% convertible debenture agreement that the Company has in place with Satco International, Ltd. (see Note 6). As of June 30, 2024, accrued interest on the note totaled $77,655.
(5)
NOTES PAYABLE, RELATED PARTY
As
of June 30, 2024, and March 31, 2024, the Company had borrowed $3,340,058, excluding accrued interest, from related parties. Short-term accrued interest associated with the Notes Payable, Related Parties and Promissory Notes, Related Parties, of $13,172 and $11,925 is recorded on the balance sheet as an Accrued Expense obligation at June 30, 2024, and March 31, 2024, respectively. Long-term accrued interest associated with the Notes Payable, Related Parties, and Promissory Notes, Related Parties, of $1,516,484 and $1,357,738 is recorded on the balance sheet as an Accrued Expense obligation at June 30, 2024, and March 31, 2024, respectively.
RelatedParty Promissory Notes
As of both June 30, 2024, and March 31, 2024
,
the Company owed $826,000, exclusive of accrued interest, under the unsecured promissory notes from Mr. Dickman. The promissory notes bear interest at a rate of 8% annually. On January 26, 2024, as per the provision outlined in Note 7, Mr. Dickman agreed to extend the unsecured promissory note to November 30, 2025. The Company agreed to provide Mr. Dickman with warrants to purchase 563,000 shares of common stock (see Note 8). During the three months ended June 30, 2024, the Company neither borrowed any additional funds under this agreement nor made any principal repayments. As of June 30, 2024, accrued interest on the notes totaled $428,516. In the event the Company completes a successful equity raise all principal and interest on the notes are due in full at that time. The total number of warrants issued to the related party lender was 3,196,332 as of June 30, 2024 (See Note 7 for further details on these warrants).
| 9 |
| --- |
On July 29, 2021, the Company entered into an unsecured promissory note agreement with Radiant Life, LLC. This agreement was in conjunction with the Company borrowing $50,000 of Notes Payable, Related Party, and is not part of the existing note payable and lines of credit agreement the Company has with Radiant Life, LLC. The promissory note bears interest at a rate of 8% annually and was amended on June 12, 2023, to be due on July 29, 2024. As of June 30, 2024, accrued interest on the note totaled $13,172
.
Subsequent to quarter end, the company fully repaid the principal and interest due on this note, totaling $63,200.
RelatedParty Note Payable and Line of Credit Agreements
As of June 30, 2024, and March 31, 2024, the Company owed $
1,304,550
, exclusive of accrued interest, under the note payable and line of credit agreement with Kraig T. Higginson, Chairman of the Board of Directors and a stockholder. As of June 30, 2024, the agreement allowed for borrowings of up to $4,600,000. The note payable has a due date of the principal and interest on the note of November 30, 2025, or at the immediate time when alternative financing or other proceeds are received. The note payable and line of credit agreement incurs interest at 7.5% per annum. During the three months ended June 30, 2024, the Company did not borrow and made no repayments of principal on this agreement. As of June 30, 2024, accrued interest on this note totaled $427,754. The total number of warrants issued to the related party lender was 4,418,225 as of June 30, 2024 (see Note 7 for further details on these warrants).
As of June 30, 2024, and March 31, 2024, the Company owed $
1,159,508
, exclusive of accrued interest, under the note payable and lines of credit agreement with Radiant Life, LLC, an entity partially owned by the Chairman of the Board of Directors. The agreement allows for borrowings of up to $2,130,000. The note payable has a due date of the principal and interest on the note of November 30, 2025, or at the immediate time when alternative financing or other proceeds are received. The note payable and line of credit agreement incurs interest at 7.5% per annum and is collateralized by the Company’s NIBS, if any. During the three months ended June 30, 2024, the Company did not borrow and made no repayments of principal on this agreement. As of June 30, 2024, accrued interest on this agreement totaled $582,558. The total number of warrants issued to the related party lender was 3,229,016 as of June 30, 2024 (see Note 7 for further details on these warrants).
As of June 30, 2024, there was no unamortized debt discount on related party notes payable.
(6)
CONVERTIBLE DEBENTURE AGREEMENT
The Company has entered into an 8% convertible debenture agreement with Satco International, Ltd., that allows for borrowings of up to $3,000,000. The holder originally had the option to convert the outstanding principal and accrued interest to unregistered, restricted common stock of the Company on June 2, 2016.
Per the agreement, the number of shares issuable at conversion shall be determined by the quotient obtained
by dividing the outstanding principal and accrued and unpaid interest by 90% of the 90-day average closing price of the Company’s common stock from the date the notice of conversion is received; and the price at which the Debenture may be converted will be no lower than $1.00 per share . The original maturity date was June 2, 2016, but was later extended, through a series of extensions, to November 30, 2024. As of June 30, 2024, and March 31, 2024, the Company owed $0 under the agreement, excluding accrued interest. The associated interest of $
124,225
is recorded on the balance sheet as an Accrued Expense obligation at June 30, 2024, and March 31, 2024.
(7)
STOCKHOLDERS’ EQUITY
CommonStock
Effective
December 6, 2018, three existing stockholders have contributed to the Company a portion of their common shares held at a repurchase price to the Company of $0.05 per share. The Company has cancelled the acquired shares, which decreased the common shares outstanding. The total number of common shares canceled/retired was 8,000,000, of which 6,000,000 shares were owned by a related party to the Company. The total liability related to the repurchase of these shares is $400,000, with repayment to the related party stockholders contingent on a major financing event. $300,000 of the $400,000 liability is due to a related party.
On
August 15, 2023, the Company issued a private placement memorandum offering to raise up to $1,500,000 through the issuance of restricted shares of the Company’s common stock (par value $0.001) to qualified investors. On September 20, 2023, the Company received subscription agreements from an investor, for 200,000 shares of common stock in conjunction with a purchase of 400,000 warrants to purchase shares of common stock. The proceeds from this transaction were $400,000. On October 4, 2023, the Company received subscription agreements from three separate investors, for 650,000 shares of common stock in conjunction with a purchase of 1,300,000 warrants to purchase shares of common stock. The proceeds from this transaction were $650,000.
Between
June 18, 2024, and June 21, 2024, the Company received subscription agreements from six separate investors, for 180,000 shares of common stock in conjunction with a purchase of 360,000 warrants to purchase shares of common stock. The proceeds from these transactions were $180,000.
| 10 |
| --- |
Warrantsto Purchase Common Stock
The Company’s related party lenders consist of: Kraig Higginson, the Chairman of the Board of Directors and a stockholder, Radiant Life, LLC, and Mr. Dickman, a board member and stockholder. These holders of the related party unsecured promissory notes hold agreements that provide each related party with common stock warrants upon the lender’s extension of a maturity due date or upon the loaning of additional monies. The number of warrants issued for an extension is based on the following formula: 10,000 warrants per month the due date is extended plus 1 warrant for every $2 of the principal balance outstanding (not including interest) at the time of the extension (rounded to the nearest whole warrant). Upon the loaning of additional monies, the lender will also require 2 warrants for each dollar loaned. All warrants issued under these terms vested immediately upon issuance, have an exercise price approximately equivalent to the fair value of the Company’s common stock on the date of grant, and expire 5 years from the date of issuance.
During the three months ended June 30, 2024, the Company issued no new warrants to the Chairman of the Board of Directors, Radiant Life, LLC or Mr. Dickman in conjunction with an extension of the maturity dates during the period per the terms outlined above.
Between June 18, 2024 and June 21, 2024,
the Company issued 360,000
warrants to equity investors, which vested immediately and expire 5 years from the date of issuance, in conjunction with a purchase of 180,000 shares of the Company’s common stock. The exercise price of these warrants was $0.35.
During
the three months ended June 30, 2024, 1,000,000 warrants that had been previously issued expired. These warrants had an exercise price of $1.00 and were issued in 2021 in association with the unsecured promissory note agreement that the Company has in place with Satco International.
SCHEDULE
OF WARRANT OUTSTANDING
| Number<br> of Warrants | Weighted<br> Average Exercise Price () | |||
|---|---|---|---|---|
| Outstanding at March 31, 2024 | 14,043,573 | |||
| Granted to investors for cash | 360,000 | |||
| Expired | (1,000,000 | ) | ||
| Outstanding at June 30, 2024 | 13,403,573 | |||
| Exercisable at June 30, 2024 | 13,403,573 |
All values are in US Dollars.
The following table summarizes the warrants issued and outstanding as of June 30, 2024:
SCHEDULE
OF WARRANTS ISSUED AND OUTSTANDING
| Exercise<br> Price () | Warrants<br> Outstanding | Warrants<br> Exercisable | Weighted<br> Average Remaining Contractual Life (Years) | Proceeds<br> to Company if Exercised | ||||
|---|---|---|---|---|---|---|---|---|
| 3,708,754 | 3,708,754 | 0.95 | $ | 185,439 | ||||
| 2,060,000 | 2,060,000 | 4.38 | 721,000 | |||||
| 2,035,029 | 2,035,029 | 4.58 | 834,362 | |||||
| 5,049,790 | 5,049,790 | 3.24 | 5,302,280 | |||||
| 50,000 | 50,000 | 2.09 | 100,000 | |||||
| 500,000 | 500,000 | 2.57 | 2,500,000 | |||||
| 13,403,573 | 13,403,573 | $ | 9,643,081 |
All values are in US Dollars.
The shares of common stock issuable upon exercise of the warrants are not registered with the Securities and Exchange Commission and the holders of the warrants do not have registration rights with respect to the warrants or the underlying shares of common stock.
(8)
SUBSEQUENT EVENTS
Between
July 2, 2024, and July 10, 2024, the Company issued an additional 625,000 shares of stock and 1,250,000 warrants to two separate investors for cash of $625,000.
On
July 5, 2024, the Company paid $200,000 towards lines of credit with Radiant Life, LLC. This $200,000 paid the principal balance on the unsecured promissory note and the accrued interest, with all other funds being applied to accrued interest associated with the note payable and lines of credit with Radiant Life, LLC (see Note 5). The unsecured promissory note with Radiant Life, LLC was then closed. Immediately after the payment was applied, the Company owed $1,159,508 in principal and $447,548 in interest is association with notes payable and lines of credit with Radiant Life, LLC.
On July 19, 2024, the Company negotiated with Satco International, Ltd. to extend the due date of the unsecured promissory note. The due date was extended to August 31, 2025, with all other aspects of the unsecured promissory note remaining as disclosed in Note 4.
| 11 |
| --- |
Item2. Management’s Discussions and Analysis of Financial Condition and Results of Operations.
Forward-lookingStatements
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are based on management’s beliefs and assumptions and on information currently available to management. For this purpose, any statement contained in this report that is not a statement of historical fact may be deemed to be forward-looking, including, but not limited to, statements relating to our future actions, intentions, plans, strategies, objectives, results of operations, cash flows and the adequacy of or need to seek additional capital resources and liquidity. Without limiting the foregoing, words such as “may”, “should”, “expect”, “project”, “plan”, “anticipate”, “believe”, “estimate”, “intend”, “budget”, “forecast”, “predict”, “potential”, “continue”, “should”, “could”, “will” or comparable terminology or the negative of such terms are intended to identify forward-looking statements, however, the absence of these words does not necessarily mean that a statement is not forward-looking. These statements by their nature involve known and unknown risks and uncertainties and other factors that may cause actual results and outcomes to differ materially depending on a variety of factors, many of which are not within our control. Such factors include, but are not limited to, economic conditions generally and in the industry in which we and our customers participate; competition within our industry; legislative requirements or changes which could render our products or services less competitive or obsolete; our failure to successfully develop new products and/or services or to anticipate current or prospective customers’ needs; price increases; employee limitations; or delays, reductions, or cancellations of contracts we have previously entered into; sufficiency of working capital, capital resources and liquidity and other factors detailed herein and in our other filings with the United States Securities and Exchange Commission (the “SEC” or “Commission”). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.
Forward-looking statements are predictions and not guarantees of future performance or events. Forward-looking statements are based on current industry, financial and economic information which we have assessed but which by its nature is dynamic and subject to rapid and possibly abrupt changes. Our actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements and we hereby qualify all our forward-looking statements by these cautionary statements.
These forward-looking statements speak only as of their dates and should not be unduly relied upon. We undertake no obligation to amend this report or revise publicly these forward-looking statements (other than pursuant to reporting obligations imposed on registrants pursuant to the Exchange Act) to reflect subsequent events or circumstances, whether as the result of new information, future events or otherwise.
The following discussion should be read in conjunction with our financial statements and the related notes contained elsewhere in this report and in our other filings with the Commission.
Overview
Our historical business model has focused on purchasing or acquiring life insurance policies and residual interests in or financial products tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace, often referred to as the “life settlements market.”
| 12 |
| --- |
We currently do not hold life settlement or life insurance policies but, rather, previously held a contractual right to receive the net insurance benefits, or “NIBs”, from a portfolio of life insurance policies held by a third party (“the Owners” or “the Holders”). These NIBs represented an indirect, residual ownership interest in a portfolio of individual life insurance policies, and they allowed us to receive a portion of the settlement proceeds from such policies, after expenses related to the acquisition, financing, insuring and servicing of the policies underlying our NIBs have been paid.
NIBs are generally sold by an entity that holds the underlying life settlement or life insurance policies, either directly or indirectly through a subsidiary, such an entity being referred to herein as a “Holder.” A Holder, either directly or through a wholly owned subsidiary, purchases life insurance policies either from the insured or on the secondary market and aggregates them into a portfolio of policies. At the time of purchase, the Holder also (i) contracts with a service provider to manage the servicing of the policies until maturity, (ii) consider purchasing mortality re-insurance (“MRI”) coverage under which payments will be made to the Holder in the event the insurance policies do not mature according to actuarial life expectancies, and (iii) arranges financing to cover the initial purchase of the insurance policies, the servicing of the life insurance policies until maturity and the payment of the MRI premiums. The financing obtained by the Holder for a portfolio of life settlement or life insurance policies is secured by the insurance policies for which the financing was obtained. After a Holder purchases policies, aggregates them into a portfolio and arranges for the servicing, MRI coverage and financing, the Holder contracts to sell NIBs related to the policies, which gives the holder of the NIBs the right to receive the proceeds from the settlement of the insurance policies after all of the expenses related to such policies have been paid. When an insurance policy underlying our NIBs comes to maturity, the insurance proceeds are first used to pay expenses associated with such policy. Once all of the expenses have been paid, the Holder will retain a small percentage of the proceeds and then will pay the remaining insurance proceeds to us.
During the latter part of the fiscal year ended March 31, 2021, we began developing an additional business offering, providing professional services to specialty structured finance groups, bond issuers and life settlement aggregators. We have assembled an experienced team from the life settlement marketplace, as well as from other areas such as financial services and public financial markets. As a professional services provider, we apply industry best practices to advise on the selection of specific portfolios of life insurance policies that are tailored to meet the needs of its clients. Our clients may include bond issuers, bond investors, or other structured finance product issuers. We develop strategies and methodologies which include the acquisition of life insurance portfolios, then uses common structured finance techniques and proprietary analytics to structure bonds for issuances, including principal protected bonds. Our goal is to deliver long-term value and profitability to shareholders by growing our professional services business and asset base, resulting in the ability to pay dividends to its shareholders.
The Company has developed an additional business offering working closely with bond placement agents and aggregators to establish various aspects of a proprietary, investment grade bond offering. In this arrangement, we participate as the sole originator in the role of structuring and advising on the structure of the proprietary bond instrument. Included in the role of structuring financial assets, we use proprietary analytics to establish the makeup of the rated instrument, including but not limited to, life settlement assets (life insurance policies) and managed cash, and implement a process of selective assembly of the underlying assets and cash management that will meet the policy requirements and analytics. We provide current and ongoing resources for all analytics, as well as advisement support for the investment and non-investment grade ratings for the managed asset pool and the managed cash accounts. In our advisory role, we are reimbursed for all expenses associated with the structuring and preparation of any bond offering, will receive an advisory payment upon the closing of any bond offering, and then will hold residual rights on the balance of assets once the bond is retired.
Resultsof Operations
Three-MonthsEnded June 30, 2024, Compared with Three-Months Ended June 30, 2023
InterestIncome
Due to the Company not holding NIBs, no interest income was recorded for the three months ended June 30, 2024, or 2023.
| 13 |
| --- |
General& Administrative Expenses
General and administrative expenses totaled $193,107, and $131,299 during the three months ended June 30, 2024, and 2023, respectively. A significant portion of these expenses were professional fees and payroll costs. The increase in general and administrative expenses is a result of increased professional fees.
OtherIncome and Expenses
During the three months ended June 30, 2023, we recognized $398,920, as a loss on extinguishment of debt in conjunction with related party debt.
During the three months ended June 30, 2023, we negotiated a settlement to reduce our outstanding accounts payable to one of our vendors by $290,000. This gain was recorded as a gain on settlement of liabilities.
During the three months ended June 30, 2024, and 2023, interest expense accrued in the amount of $88,322 and $97,973, respectively. The decrease in interest expense was a result of no amortized debt discounts recognized during the three months ended June 30, 2024.
During the three months ended June 30, 2024, other expenses related to pursuing potential financing alternatives were $155,000. These expenses are related to additional consultant fees in pursuit of bonds.
IncomeTaxes
During the three months ended June 30, 2024, and 2023, the Company recorded net loss before income taxes of $436,429, and $338,192, respectively, and had no income tax expense or benefit as a result of a full valuation allowance on the net deferred tax asset.
Liquidityand Capital Resources
Since our inception our operations have been primarily financed through sales of equity instruments, debt financing, lines of credit and notes payable from related parties and the issuance of convertible debentures. As of June 30, 2024, we had $185,259 of cash, compared to $329,860 as of March 31, 2024. As of June 30, 2024, the Company had access to draw an additional $4,265,942 on the notes payable, related party and $3,000,000 on the Convertible Debenture Agreement. Our monthly expenses are anticipated to be approximately $67,000, which includes salaries of our employee, policy servicing expenses, consulting agreements and contract labor, general and administrative expenses, estimated legal and accounting expenses. Outstanding Accounts Payable as of June 30, 2024, totaled $452,604, and other accrued liabilities totaled $1,894,471. We believe that our availability under our existing lines of credit with related parties, our existing capital resources, together with the issuance of additional notes payable and convertible debentures will be sufficient to fund our operating working capital requirements for at least the next 12 months, or through August 2025.
Debt
At June 30, 2024, we owed $5,293,938, including accrued interest, for debt obligations. We owed $3,340,058 in principal pursuant to notes payable and lines-of-credits from related parties, $300,000 in other notes payable, and had fully paid off the principal owing on the 8% Convertible Debenture. As of June 30, 2024, one note payable had a principal balance of $50,000 which was completely paid subsequent to quarter end, and a line-of-credit to that same third party had a balance of $1,159,508 due on November 30, 2025, or when the Company completes a successful equity raise, at which time principal and interest is due in full. A line-of-credit to a second third party had a principal balance of $1,304,550 and is currently extended due on November 30, 2025. As of June 30, 2024, unsecured promissory notes had principal balances totaling $826,000 and are due on November 30, 2025. The convertible debenture agreement, which has no principal balance due as of June 30, 2024, is open through November 30, 2024. As of August 12, 2024, there was $4,265,942 available under the lines-of-credit we currently have with related parties and $3,000,000 available under the 8% convertible debenture agreement.
| 14 |
| --- |
CriticalAccounting Policies and Estimates
See Consolidated Financial Statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024, which was filed with the SEC on July 1, 2024.
Off-BalanceSheet Arrangements
We have no off-balance sheet arrangements.
Item3. Quantitative and Qualitative Disclosure about Market Risk
Not Applicable.
Item4. Controls and Procedures
Limitationon the Effectiveness of Controls
The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be disclosed timely, is accumulated and communicated to management in a timely fashion. In designing and evaluating such controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management is necessarily required to use judgment in evaluating controls and procedures.
Evaluationof Controls and Procedures
Our management, with the participation of our principal executive and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to the issuer’s management, including its Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive and principal financial officer has concluded that our disclosure controls and procedures as of the end of the period covered by the Quarterly Report were not effective due to the lack of design and operating effectiveness of our control environment and risk assessment, control activities and monitoring activities relating to complex accounting matters relating to the valuation of equity-based compensation instruments as disclosed in Item 9A of our 10K filed on June 29, 2022.
Our principal executive and principal financial officer is in the process of performing a review of our processes and controls over complex accounting matters relating to the valuation of equity-based compensation instruments.
Changesin Internal Control
There were no changes in our internal control over financial reporting that occurred during the first quarter of 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 15 |
| --- |
PART
II - OTHER INFORMATION
Item1. Legal Proceedings
To the best of our knowledge, there are no legal proceedings pending or threatened against us; and there are no actions pending or threatened against any of our directors or officers that are adverse to us.
Item1A. Risk Factors
In addition to the other information set forth in this quarterly report on Form10-Q, you should carefully consider the risks discussed in our Annual Report on Form 10-K for the year ended March 31, 2024, which risks could materially affect our business, financial condition or future results. There were no material changes during the quarter ended June 30, 2024, to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended March 31, 2022. These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
Item2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Purchasesof Equity Securities by the Issuer
There were no repurchases of equity during the quarter ended June 30, 2024.
Item3. Defaults upon Senior Securities.
None; not applicable.
Item4. Mine Safety Disclosures.
None; not applicable.
Item5. Other Information.
None; not applicable.
| 16 |
| --- |
Item6. Exhibits
| 17 |
| --- | | 10.45 | Extension<br> Agreement to Promissory Note between Sundance Strategies, Inc. and Radiant Life, dated June 12, 2023 (incorporated by reference to<br> Exhibit 10.45 to the Company’s Annual Report on Form 10-K filed June 29, 2023, File No. 000-50547) | | --- | --- | | 10.46 | Extension<br> to Promissory Note between Sundance Strategies, Inc. and Satco International, Limited, dated June 9, 2023 (incorporated by reference<br> to Exhibit 10.46 to the Company’s Annual Report on Form 10-K filed June 29, 2023, File No. 000-50547) | | 10.47 | Extension<br> to Promissory Note between Sundance Strategies, Inc. and Kraig T. Higginson, dated January 26, 2024* | | 10.48 | Extension<br> to Promissory Notes between Sundance Strategies, Inc. and Glenn S. Dickman, dated January 26, 2024* | | 10.49 | Extension<br> to Promissory Note between Sundance Strategies, Inc. and Radiant Life, dated February 1, 2024* | | 14.1 | Code<br> of Ethics (incorporated by reference to Exhibit 14 to the Company’s Current Report on Form 8-K filed April 5, 2013, file no.<br> 000-50547) | | 31 | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14(a)* | | 32 | Certification<br> of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350‡ | | 101<br> INS | Inline<br> XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within<br> the Inline XBRL document** | | 101<br> SCH | Inline<br> XBRL Schema Document** | | 101<br> CAL | Inline<br> XBRL Calculation Linkbase Document** | | 101<br> DEF | Inline<br> XBRL Defindition Linkbase Document** | | 101<br> LAB | Inline<br> XBRL Labels Linkbase Document** | | 101<br> PRE | Inline<br> XBRL Presentation Linkbase Document** | | 104 | Cover<br> Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because<br> its XBRL tags are embedded within the Inline XBRL document. |
* Previously filed as an Exhibit to the registrant’s Annual Report on form 10-K for the year ended March 31, 2024, filed with the Securities and Exchange Commission on July 1, 2024, and incorporated by reference herein.
‡ Document has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in any such filing.
** The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
| 18 |
| --- |
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.
| SUNDANCE STRATEGIES, INC. | ||
|---|---|---|
| Date:<br> August 12, 2024 | By: | /s/ Randall F. Pearson |
| Randall<br> F. Pearson | ||
| President<br> and Principal Financial Officer |
| 19 |
| --- |
Exhibit4.1
DESCRIPTIONOF THE REGISTRANT’S SECURITIES
REGISTEREDPURSUANT TO SECTION 12 OF THE SECURITIES
EXCHANGEACT OF 1934
SundanceStrategies, Inc. has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our commonstock.
DESCRIPTIONOF CAPITAL STOCK
The following summary of the terms of our capital stock is based upon our Restated Articles of Incorporation (the “Articles of Incorporation”) and our Amended and Restated Bylaws (the “Bylaws”). The summary is not complete, and is qualified by reference to our Articles of Incorporation and our Bylaws, which are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein. We encourage you to read our Articles of Incorporation, our Bylaws and the applicable provisions of the Nevada Corporations Code for additional information.
AuthorizedShares of Capital Stock
The aggregate number of shares which this Corporation shave have authority to issue is 510,000,000 shares, comprised of 500,000,000 shares of common stock of a par value of $0.001 per share, and 10,000,000 shares of preferred stock of a par value of $0.001 per share. The Board of Directors has the right to set the series, classes, rights, privileges and preferences of the preferred stock or any class or series thereof, by amendment hereto, without shareholder approval, as provided in the NRS. As of August 12, 2024, the registrant had 43,063,441 shares of common stock, par value $0.001, issued and outstanding.
Listing
Sundance Strategies common stock is currently listed on the “pink sheets” of the OTC markets under the symbol “SUND.”
VotingRights
Each outstanding share of the corporation entitled to vote shall be entitled to one (1) vote on each matter submitted to vote at a meeting of shareholders, except to the extent that the voting rights of the shares of any class or series of stock are determined and specified as greater or lesser than one (1) vote per share in the manner provided by the Articles of Incorporation. Pursuant to our Articles of Incorporation, shareholders do not have the right to vote cumulatively.
DividendRights
The Board of Directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in the manner and on the terms and conditions provided by the Articles of Incorporation and Bylaws.
Rightsupon Liquidation
The rights of the shares or a series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation and the relative rights of priority of payment of a series is subject to determination by the Board of Directors.
OtherRights and Preferences
Our common stock has no sinking fun, redemption provision, or preemptive, conversion, or exchange rights. Special meetings of the shareholders may be called at any time by the Chairman of the Board, the President or member of the Board of Directors or by written request of holders of not less than one-tenth (1/10th) of all the shares entitled to vote at the meeting.
TransferAgent and Registrar
Action Stock Transfer Corporation, located in Utah is the transfer agent and registrar for our common stock.
CertainAnti-Takeover Effects
Certain provisions of our Articles of Incorporation and Bylaws may be deemed to have an anti-takeover effect.
AdditionalAuthorized Shares of Capital Stock. The additional shares of authorized common stock and preferred stock available for issuance under our Articles of Incorporation, could be issued at such times, under such circumstances and with such terms and conditions as to impede a change in control.
Issuanceof Undesignated Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to issue shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock would enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or other means.
EXHIBIT31.1
CERTIFICATIONOF PRINCIPAL EXECUTIVE OFFICER
Pursuantto Rule 13a-14(a) of the Securities Exchange Act of 1934
I, Randall F. Pearson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sundance Strategies, Inc.;
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 officers 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<br> such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to<br> ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly during the period in which this report is being prepared; |
|---|---|
| b) | Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;<br> and |
| d) | Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. The registrant’s other certifying officer 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<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and | |
|---|---|---|
| b) | Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting. | |
| Date:<br> August 12, 2024 | By: | /s/ Randall F. Pearson |
| --- | --- | --- |
| Randall<br> F. Pearson | ||
| President<br> and Principal Executive Officer |
EXHIBIT31.2
CERTIFICATIONOF PRINCIPAL FINANCIAL OFFICER
Pursuantto Rule 13a-14(a) of the Securities Exchange Act of 1934
I, Randall F. Pearson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sundance Strategies, Inc.;
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 officers 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<br> such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to<br> ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly during the period in which this report is being prepared; |
|---|---|
| b) | Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;<br> and |
| d) | Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. The registrant’s other certifying officer 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<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and | |
|---|---|---|
| b) | Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting. | |
| Date:<br> August 12, 2024 | By: | /s/ Randall F. Pearson |
| --- | --- | --- |
| Randall<br> F. Pearson | ||
| President<br> and Principal Financial Officer |
EXHIBIT32
CERTIFICATIONOF PRINCIPAL
EXECUTIVEOFFICER PURSUANT TO
18U.S.C. SECTION 1350,
ASADOPTED PURSUANT TO
SECTION906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this quarterly report on Form 10-Q of Sundance Strategies, Inc. (the “Company”) for the period ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Randall F. Pearson, President and Chief 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<br> Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
|---|---|---|
| (2) | The<br> information contained in the Report fairly presents, in all material respects, the financial condition and results of operations<br> of the Company. | |
| Date:<br> August 12, 2024 | By: | /s/ Randall F. Pearson |
| --- | --- | --- |
| Randall<br> F. Pearson | ||
| President,<br> Principal Executive Officer and Principal Financial Officer |