B2Digital, Inc. - Quarter Report: 2020 December (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

		For the quarterly period ended December 31, 2020

☐		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: 000-11882

B2Digital, Incorporated

(Exact name of registrant as specified in its charter)

Delaware	84-0916299
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4522 West Village Drive, Suite 215, Tampa, FL	33624
(Address of principal executive offices)	(Zip Code)

(813) 961-3051

(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. 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, 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	☐
Non-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 ☐ No ☒

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 16, 2021, was 783,890,550.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	3
Item 1. Financial Statements.	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	4
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	15
Item 4. Controls and Procedures.	15

PART II—OTHER INFORMATION	16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	16
Item 6. exhibits.	17
SIGNATURES	18

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements.

Consolidated Financial Statements

B2Digital, Incorporated

		Page
Consolidated Balance Sheets as of December 31, 2020 (unaudited) and March 31, 2020		F-1

Consolidated Statements of Operations (unaudited) for the three and nine months ended December 31, 2020 and 2019		F-2

Consolidated Statements of Stockholders’ Deficit (unaudited) for the three, six and nine months ended December 31, 2020		F-3

Consolidated Statements of Stockholders’ Deficit (unaudited) for the three, six and nine months ended December 31, 2019		F-4

Consolidated Statements of Cash Flows (unaudited) for the nine months ended December 31, 2020 and 2019		F-5

Notes to the Unaudited Consolidated Financial Statements		F-6

B2Digital, Incorporated

Consolidated Balance Sheets

	As of December 31, 2020 (Unaudited)			As of March 31, 2020
Assets
Current assets
Cash and cash equivalents	$	74,772		$	46,729
Inventory		2,020			7,256
Deposits and prepaid expenses		7,537			3,120
Total current assets		84,329			57,105

Operating lease right-of-use asset		710,326			–
Property and equipment, net of accumulated depreciation		592,574			351,393
Intangible assets, net of accumulated amortization		233,211			196,951
Goodwill		172,254			172,254
Total Assets	$	1,792,694		$	777,703

Liabilities & Stockholders' Deficit
Current liabilities
Accounts payable & accrued liabilities	$	201,608		$	131,700
Deferred revenue		82,531			13,992
Related party advance		7,950			–
Note payable- current maturity		122,800			34,162
Note payable- in default		14,000			–
Payable due for business acquisitions		–			15,000
Convertible notes payable, net of discount		956,877			598,150
Derivative liabilities		739,574			58,790
Due to shareholder		22,391			711
Lease liability, current		160,678			–
Total current liabilities		2,308,409			852,505

Lease liability, long-term		551,695			–
Note payable- long-term		107,993			136,565

Total Liabilities		2,968,097			989,070

Commitments and contingencies (Note 13)

Stockholders' Deficit
Preferred stock, 50,000,000 shares authorized, 8,000,000 shares are undesignated
Series A: 2,000,000 shares convertible into 240 shares of common stock issued and outstanding at December 31, 2020 and March 31, 2020,		20			20
Series B: 40,000,000 shares convertible into 80,000,000 shares of common stock 40,000,000 and 0 shares issued and outstanding at December 31, 2020 and March 31, 2020, respectively		400			–
Common stock, $0.00001 par value; 5,000,000,000 shares authorized; 730,864,213 and 539,267,304 shares issued and outstanding at December 31, 2020 and March 31, 2020, respectively		7,309			5,394
Additional paid in capital		5,376,861			3,600,197
Accumulated deficit		(6,559,993	)		(3,816,978	)
Total Stockholders' Deficit		(1,175,403	)		(211,367	)
Total Liabilities and Stockholders' Deficit	$	1,792,694		$	777,703

See accompanying notes to the unaudited consolidated financial statements.

F-1

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,
	2020			2019			2020			2019
Revenue:
Live event revenue	$	82,524		$	169,363		$	112,901		$	351,274
Gym revenue		218,025			–			383,596			–
Total revenue		300,549			169,363			496,497			351,274

Cost of sales		102,722			126,737			151,941			262,277

Gross profit		197,827			42,626			344,556			88,997

General and administrative corporate expenses
General & administrative expenses		1,147,001			256,889			1,986,918			1,116,699
Depreciation and amortization expense		52,516			10,192			119,371			20,245
Total general and administrative corporate expenses		1,199,517			267,081			2,106,289			1,136,944

Loss from continuing operations		(1,001,690	)		(224,455	)		(1,761,733	)		(1,047,947	)

Other income (expense):
Gain on forgiveness of loan		–			–			10,080			–
Gain on bargain purchase		91,870			–			91,870			–
Grant income		–			–			2,000			–
Loss on settlement of debt		–			–			(18,281	)		–
Loss on forgiveness of notes receivable		–			(54,887	)		–			(81,887	)
Loss on modification of debt		–			–			–			(50,756	)
Loss on extinguishment of debt		(6,670	)		–			(70,864	)		–
Loss (gain) on fair value of derivatives		194,758			17,360			(592,649	)		17,360
Day one derivative loss		(125,408	)		–			(125,408	)		–
Interest expense		(131,016	)		(12,572	)		(278,030	)		(16,251	)
Total other income (expense)		23,534			(50,099	)		(981,282	)		(131,534	)

Net loss	$	(978,156	)	$	(274,554	)	$	(2,743,015	)	$	(1,179,481	)

Basic and diluted earnings per share on net loss	$	(0	)	$	(0	)	$	(0	)	$	(0	)

Weighted average shares outstanding		710,522,374			528,339,793			619,783,280			492,698,294

See accompanying notes to the unaudited consolidated financial statements.

F-2

B2Digital, Incorporated

Consolidated Statement of Changes in Stockholders' Deficit

For the Three, Six and Nine Months Ended December 31, 2020 (Unaudited)

	Series A Preferred Stock				Series B Preferred Stock				Common Stock				Additional Paid in			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance March 31, 2020		2,000,000	$	20		–	$	–		539,267,304	$	5,394	$	3,600,197		$	(3,816,978	)	$	(211,367	)

Issuance of common stock for services		–		–		–		–		4,000,000		40		14,360			–			14,400

Conversion of notes payable		–		–		–		–		16,292,915		163		55,459			–			55,622

Net loss		–		–		–		–		–		–		–			(495,506	)		(495,506	)

Balance June 30, 2020		2,000,000		20		–		–		559,560,219		5,597		3,670,016			(4,312,484	)		(636,851	)

Sale of common stock		–		–		–		–		62,000,002		620		464,380			–			465,000

Issuance of common stock for services		–		–		–		–		11,733,333		117		74,816			–			74,933

Conversion of notes payable		–		–		–		–		25,663,705		256		434,579			–			434,835

Net loss		–		–		–		–		–		–		–			(1,269,353	)		(1,269,353	)

Balance September 30, 2020		2,000,000		20		–		–		658,957,259		6,590		4,643,791			(5,581,837	)		(931,436	)

Stock issued for compensation						40,000,000		400		–		–		319,600			–			320,000

Equity offering costs		–		–		–		–		–		–		(566,261	)		–			(566,261	)

Warrants issued for offering costs		–		–		–		–		–		–		566,261			–			566,261

Conversion of notes payable		–		–		–		–		71,906,954		719		413,470			–			414,189

Net loss		–		–		–		–		–		–		–			(978,156	)		(978,156	)

Balance December 31, 2020		2,000,000	$	20		40,000,000	$	400		730,864,213	$	7,309	$	5,376,861		$	(6,559,993	)	$	(1,175,403	)

See accompanying notes to the unaudited consolidated financial statements.

F-3

B2Digital, Incorporated

Consolidated Statement of Changes in Stockholders' Deficit

For the Three, Six and Nine Months Ended December 31, 2019 (Unaudited)

	Preferred Stock				Common Stock						Additional Paid in			Accumulated
	Shares		Amount		Shares			Amount			Capital			Deficit			Total
Balance March 31, 2019		2,000,000	$	20		377,620,110		$	3,776		$	2,624,573		$	(2,479,631	)	$	148,738

Sale of common stock		–		–		13,281,250			133			84,867			–			85,000

Issuance of common stock for services		–		–		71,000,000			710			453,690			–			454,400

Issuance of common stock as part of business combination		–		–		14,000,000			140			89,460			–			89,600

Net Loss		–		–		–			–			–			(491,512	)		(491,512	)

Balance June 30, 2019		2,000,000		20		475,901,360			4,759			3,252,590			(2,971,143	)		286,226

Sale of common stock		–		–		49,218,750			492			314,508			–			315,000

Issuance of common stock for services		–		–		36,500,000			365			233,235			–			233,600

Issuance of common stock as part of business combination		–		–		–			90			57,510			–			57,600

Cancellation of outstanding shares in exchange cancellation of notes receivable - related party		–		–		(7,500,000	)		(75	)		(47,925	)		–			(48,000	)

Loss from modification of debt		–		–		–			–			50,756			–			50,756

Net loss		–		–		–			–			–			(413,415	)		(413,415	)

Balance September 30, 2019		2,000,000		20		563,120,110			5,631			3,860,674			(3,384,558	)		481,767

Cancellation of outstanding shares in exchange for payoff of notes receivable - related party		–		–		(21,954,800	)		(219	)		(109,554	)		–			(109,773	)

Repurchase of outstanding shares		–		–		(14,062,500	)		(140	)		(101,111	)		–			(101,251	)

Net Loss		–		–		–			–			–			(274,554	)		(274,554	)

Balance December 31, 2019		2,000,000	$	20		527,102,810		$	5,272		$	3,650,009		$	(3,659,112	)	$	(3,811	)

See accompanying notes to the unaudited consolidated financial statements.

F-4

B2Digital, Incorporated

Consolidated Statements of Cash Flows

	For the nine months ended
	December 31,			December 31,
	2020			2019
Cash Flows from Operating Activities
Net Loss	$	(2,743,015	)	$	(1,179,481	)

Adjustments to reconcile net loss to net cash used by operating activities:
Stock compensation		409,333			688,000
Depreciation and amortization		119,371			20,245
Loss on settlement of debt		18,281			81,887
Loss on extinguishment of debt		70,864			50,756
Gain on settlement of debt		(10,080	)		–
Gain on bargain purchase		(91,870	)		–
Rent accretion of right-of-use asset		2,047			–
Amortization of debt discount		212,103			6,771
Day one derivative loss		125,408			–
Changes in fair value of compound embedded derivative		592,649			(17,360	)
Changes in operating assets & liabilities
Prepaid expenses		(4,417	)		5,758
Inventory		5,236			–
Accounts payable and accrued liabilities		90,154			(13,823	)
Related party advances		29,630			–
Deferred revenue		68,539			9,879
Net cash used by operating activities		(1,105,767	)		(347,368	)

Cash Flows from Investing Activities
Business acquisitions		(114,110	)		(55,000	)
Payments to related parties		–			(174,244	)
Capital expenditures		(178,028	)		(78,612	)
Net cash used by investing activities		(292,138	)		(307,856	)

Cash Flows from Financing Activities
Proceeds from notes payable		122,766			14,912
Proceeds from convertible notes payable		865,000			397,000
Repayments related to payable due for business combinations		(15,000	)		–
Payment to note payable		(11,818	)		(8,000	)
Purchase of cancelled stock		–			(101,250	)
Issuance of common stock		465,000			400,000
Net cash provided by financing activities		1,425,948			702,662

Increase in Cash		28,043			47,438

Cash at beginning of period		46,729			27,579

Cash (and equivalents) at end of period	$	74,772		$	75,017

Supplemental Cash Flow Information
Cash paid for interest	$	–		$	–
Cash paid for income taxes	$	–		$	–

Non-cash investing and financing activities:
Conversion of note payable to equity	$	303,212		$	–
23,000,000 shares of common stock issued for business combination	$	–		$	147,200
29,454,800 shares returned in exchange for forgiveness of loan receivable	$	–		$	644,441

See accompanying notes to the unaudited consolidated financial statements.

F-5

B2Digital, Incorporated

Notes to Consolidated Financial Statements

December 31, 2020

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

In February 2017, the Board of Directors of B2Digital, Incorporated ("B2Digital" or the "Company") approved a complete restructuring, new management team and strategic direction for the Company. Capitalizing on its history in television, video and technology, the Company is now forging ahead and becoming a full-service live event sports company.

B2Digital's first strategy is to build an integrated live event Minor League for the Mixed Martial Arts (MMA) marketplace. B2Digital will be creating and developing Minor League champions that will move on to the MMA Major Leagues from the B2 Fighting Series (B2FS). This will be accomplished by sponsoring operating live events, acquiring existing MMA promotions and then inviting those champions to the B2FS Regional and National Championship Series. B2Digital will own all media and merchandising rights and digital distribution networks for the B2FS.

2017 marked the kickoff of the B2FS by sponsoring and acquiring MMA regional promotion companies for the development of the B2FS. The second strategy is that the Company plans to add additional sports, leagues, tournaments and special events to its live event business model. This will enable B2Digital to capitalize on their core technologies and business models that will be key to broadening the revenue base of the Company's live event core business. B2Digital will also be developing and expanding the B2Digital live event systems and technologies. These include systems for event management, digital ticketing sales, digital video distribution, digital marketing, Pay-Per View (PPV), fighter management, merchandise sales, brand management and financial control systems.

Basis of Presentation and Consolidation

The Company has eight wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, Colosseum Combat LLC which owns Colosseum Combat MMA in Indiana, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, ONE More Gym, CFit Indiana Inc., and B2 Productions LLC.

The consolidated financial statements, which include the accounts of the Company and its eight 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 eight 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 US dollars. The fiscal year end is March 31.

F-6

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, 2020 and March 31, 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.

F-7

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.

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, 2020, there were no charges to goodwill impairment.

Other income

During the nine months ended December 31, 2020, the Company received $2,000 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, 2020, 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.

F-8

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.

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, 2020 and 2019.

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, 2020 and March 31, 2020, the Company had outstanding balances of finished goods inventory of $2,020 and $7,256, respectively.

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, 2020, the convertible notes are indexed to 311,625,168 shares of common stock.

The following table sets for the computation of basic and diluted earnings per share the nine months ended December 31, 2020 and 2019:

	December 31, 2020			December 31, 2019
Basic and diluted
Net loss	$	(2,743,015	)	$	(1,179,481	)

Net loss per share
Basic	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)

Weighted average number of shares outstanding:
Basic & diluted		619,783,280			492,698,294

F-9

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, 2020, 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, 2020 and 2019, the Company recorded $409,333 and $688,000 in stock-compensation expense, respectively.

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.

F-10

Recently Adopted Accounting Pronouncements

In January 2017, the FASB issued ASU No. 2017-04, Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates the requirement to calculate the implied fair value of goodwill, but rather requires an entity to record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. We do not expect the adoption of this ASU to have a material effect on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820. The ASU is effective for the Registrants for fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Company is currently assessing the impact of this standard on their Financial Statements.

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. ASU 2016-13 is effective for the Company beginning January 1, 2020 and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows.

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, 2020, the Company had a net loss of $2,743,015, had net cash used in operating activities of $1,105,767, had negative working capital of $2,224,080, accumulated deficit of $6,559,993 and stockholders’ deficit of $1,175,403. 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.

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.

F-11

Information about the Company’s net sales by revenue type for the nine months ended December 31, 2020 and 2019 are as follows:

	For the nine months ended
	December 31,		December 31,
	2020 (Unaudited)		2019 (Unaudited)
Live events	$	112,901	$	351,274
Gym revenue		383,596		–
Net sales	$	496,497	$	351,274

	For the three months ended
	December 31,		December 31,
	2020 (Unaudited)		2019 (Unaudited)
Live events	$	82,524	$	169,363
Gym revenue		218,025		–
Net sales	$	300,549	$	169,363

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following at December 31, 2020 and March 31, 2020:

	As of			As of
	December 31, 2020			March 31, 2020

Gym equipment	$	304,351		$	163,147
Cages		124,025			124,025
Event assets		79,531			61,319
Furniture and fixtures		4,419			–
Production truck gear		11,740			–
Production equipment		30,697			30,697
Venue lighting system		14,250			–
Leasehold improvements		15,200			–
Electronics hardware and software		55,587			11,845
Trucks trailers and vehicles		73,649			11,210
		713,449			402,243
Less: accumulated depreciation		(120,875	)		(50,850	)
	$	592,574		$	351,393

Depreciation expense related to these assets for the nine months ended December 31, 2020 and 2019 amounted to $70,025 and $20,245, respectively.

F-12

NOTE 6 – INTANGIBLE ASSETS

Intangible assets, net, consisted of the following at December 31, 2020 and March 31, 2020:

	As of			As of
	December 31, 2020			March 31, 2020

Licenses	$	142,248		$	142,248
Software/website development		12,585			–
Customer relationships		156,020			83,000
		310,853			225,248
Less: accumulated amortization		(77,642	)		(28,297	)
	$	233,211		$	196,951

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, 2020 and 2019 amounted to $49,346 and $0, respectively.

Estimated amortization expense for each of the next five years:

Fiscal year ended March 31, 2021	$	21,164
Fiscal year ended March 31, 2022		84,651
Fiscal year ended March 31, 2023		77,735
Fiscal year ended March 31, 2024		42,592
Fiscal year ended March 31, 2025		7,069
Total	$	233,211

NOTE 7 – BUSINESS ACQUISITIONS

CFit Indiana Inc.

On October 6, 2020, the Company completed an acquisition of 100% of the equity interest in CFit Indiana, Inc., doing business as Charter Fitness, a gym. Charter Fitness has two locations: one is Merrillville, Indiana and the other in Valparaiso, Indiana. The purchase price was $115,000 in cash.

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 $133,850. The Company assigned a fair value of $73,020 in intangible assets – customer relationships. The intangible assets – customer relationships are being amortized over their estimated life, currently expected to be three years. The Company recorded a gain on bargain purchase of $91,870.

F-13

NOTE 8 - NOTES PAYABLE

The following is a summary of notes payable as of December 31, 2020 and March 31, 2020:

	As of			As of
	December 31,			March 31,
	2020			2020
Notes payable - current maturity:
Emry Capital $14,000, 4% loan with principal and interest due April, 2020	$	–		$	14,000
Note Payable PPP SBA Loan		15,600			–
SBA EIDL Loan		10,000			–
SBA Loan Payable B2Digital		97,200			–
Notes payable – in default:
Emry Capital $14,000, 4% loan with principal and interest due April, 2020		14,000			–
Notes payable – long term:
WLES LP LLC $60,000, 5% loan due January 15, 2022		30,000			60,000
Brian Cox 401K		15,199			21,970
SBA Loan (One More Gym, LLC)		62,794			74,757
Total notes payable		244,793			170,727
Less: long-term		(107,993	)		(136,565	)
Total	$	136,800		$	34,162

On May 8, 2020, WLES LP LLC converted $30,000 of its $60,000 notes payable into 12,000,000 shares of common stock. As a result, the Company recorded a loss on settlement of debt in the amount of $18,281.

During the nine months ended December 31, 2020, the Company repaid $6,771 on its loan payable to Brian Cox 401K.

During the nine months ended December 31, 2020, the Company repaid $5,047 on its SBA Loan (One More Gym, LLC). The Government paid another $6,916 as part of COVID relief.

During the nine months ended December 31, 2020, the bank forgave $6,949 in principal and $3,132 in accrued interest on its SBA Loan (One More Gym, LLC). As a result, the Company recorded $10,080 in gain on forgiveness of loan.

As of December 31, 2020, the Emry Capital note is in default. However, the note is not subject to any default provisions.

F-14

NOTE 9 – CONVERTIBLE NOTE PAYABLE

The following is a summary of convertible notes payable as of December 31, 2020:

Note*	Inception Date	Maturity	Coupon	Face Value		Unamortized Discount		Carrying Value
Note 3	12/5/2019	12/5/2020	8%	$	62,000	$	–	$	62,000
Note 4	12/31/2019	12/31/2020	8%		62,000		–		62,000
Note 5	1/27/2020	1/27/2021	8%		184,000		2,840		181,160
Note 6	2/19/2020	2/19/2021	8%		78,000		3,151		74,849
Note 7	3/10/2020	3/10/2021	8%		78,000		3,894		74,106
Note 8	8/4/2020	8/4/2021	8%		156,000		34,266		121,734
Note 9	10/2/2020	10/2/2021	8%		205,000		93,004		111,996
Note 10	10/15/2020	10/15/2021	8%		172,000		61,621		110,379
Note 11	11/2/2020	11/2/2021	8%		69,000		28,264		40,736
Note 12	11/12/2020	11/12/2021	8%		69,000		18,953		50,047
Note 13	12/1/2020	12/1/2021	8%		107,500		94,476		13,024
Note 14	12/10/2020	12/10/2021	8%		80,000		31,896		48,104
Note 15	12/29/2020	12/29/2021	8%		55,650		48,908		6,742
				$	1,378,150	$	421,273	$	956,877

* Note 1 and Note 2 in the amounts of $82,000 and $208,000 were fully converted as of December 31, 2020.

Between October 4, 2019 and December 29, 2020, the Company issued to GS Capital Partners, LLC, an accredited investor (“GS Capital”), Convertible Promissory Notes aggregating a principal amount of $1,668,150. The Company received an aggregate net proceeds of $1,590,500 after $70,650 in original note discount. The Company has agreed to pay interest on the unpaid principal balance at the rate of eight percent (8%) per annum from the date on which Notes are 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 Notes, provided it makes a payment to GS Capital 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.

F-15

Based on the previous conclusions, the Company allocated the cash proceeds first to the derivative components at its fair value with the residual allocated to the host debt contract, as follows:

	Note 1		Note 2		Note 3		Note 4		Note 5		Note 6		Note 7		Note 8
Compound embedded derivative	$	26,395	$	68,030	$	15,893	$	10,812	$	25,834	$	14,095	$	17,636	$	42,463
Convertible notes payable		48,605		133,970		44,107		49,188		152,666		60,905		57,364		107,537
Original issue discount		7,000		6,000		2,000		2,000		5,500		3,000		3,000		6,000
Face value	$	82,000	$	208,000	$	62,000	$	62,000	$	184,000	$	78,000	$	78,000	$	156,000

	Note 9		Note 10		Note 11		Note 12		Note 13			Note 14		Note 15
Compound embedded derivative	$	103,445	$	63,992	$	28,339	$	18,066	$	209,545		$	29,070	$	65,863
Convertible notes payable		91,555		101,008		36,661		46,934		–			45,930		–
Day one derivative loss		–		–		–		–		(109,545	)		–		(15,863	)
Legal fees		–		–		–		–		3,500			–		3,500
Original issue discount		10,000		7,000		4,000		4,000		4,000			5,000		2,150
Face value	$	205,000	$	172,000	$	69,000	$	69,000	$	107,500		$	80,000	$	55,650

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, 2020 is as follows:

Note	Interest Expense		Accrued Interest		Amortization of Debt Discount		Unamortized
Note 1	$	2,696	$	–	$	28,186	$	–
Note 2		8,342				53,298		–
Note 3		3,737		5,327		13,021		–
Note 4		3,737		4,974		9,180		–
Note 5		11,090		13,671		23,669		2,840
Note 6		4,701		5,402		12,675		3,151
Note 7		4,701		5,060		15,254		3,894
Note 8		5,095		5,095		14,197		34,266
Note 9		4,044		4,044		20,440		93,004
Note 10		2,903		2,903		9,370		61,621
Note 11		892		892		4,075		28,264
Note 12		741		741		3,113		18,953
Note 13		707		707		2,274		94,476
Note 14		368		368		2,174		31,896
Note 15		366		366		1,177		48,908
	$	54,120	$	49,550	$	212,103	$	421,273

F-16

On April 23, 2020, GS Capital converted $7,000 in principal and $341 in accrued interest of the October 4, 2019 $84,000 face value note into 4,292,915 shares of common stock. 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 5,071,885 shares of common stock. 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 8,468,394 shares of common stock. 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 12,123,426 shares of common stock. 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 12,123,426 shares of common stock. On October 1, 2020, GS Capital converted $108,000 in principal and $7,196 in accrued interest of the October 31, 2019 $208,000 face value note into 33,934,758 shares of common stock. On October 15, 2020, GS Capital converted $45,000 in principal and $3,136 in accrued interest of the October 31, 2019 $208,000 face value note into 14,521,245 shares of common stock. On November 25, 2020, GS Capital converted $35,000 in principal and $2,754 in accrued interest of the October 31, 2019 $208,000 face value note into 15,120,623 shares of common stock. On December 22, 2020, GS Capital converted $20,000 in principal and $1,692 in accrued interest of the October 31, 2019 $208,000 face value note into 8,330,328 shares of common stock. As a result of the August, September, October, November and December conversions, the Company recorded $70,864 as loss on extinguishment of debt. As of December 31, 2020, Note 3 and Note 4 are considered in default. Upon an event of default, the interest accrues at 18%. Additionally, upon non-payment at maturity, the principal increases by 10%. The Company is in the process of obtaining a waiver for these defaults and as such has not recorded the additional interest or principal. The Company has not yet received any written notification from the note holder on the default in accordance with the agreement.

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, 2020:

	December 31, 2020
The financings giving rise to derivative financial instruments	Indexed Shares		Fair Values
Compound embedded derivatives		311,625,168	$	(739,574	)
Total		311,625,168	$	(739,574	)

The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of March 31, 2020:

	March 31, 2020
The financings giving rise to derivative financial instruments	Indexed Shares		Fair Values
Compound embedded derivatives		77,027,083	$	(58,790	)
Total		77,027,083	$	(58,790	)

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, 2020 and 2019:

	December 31,			December 31,
	2020			2019

Compound embedded derivatives	$	(592,997	)	$	17,360
Day one derivative loss		(125,408	)		–
Total	$	(718,405	)	$	17,360

F-17

	December 31,			December 31,
	2020			2019

Compound embedded derivatives	$	194,410		$	17,360
Day one derivative loss		(125,408	)		–
Total	$	69,002		$	17,360

The Company’s Convertible Promissory Notes issued between October 4, 2019 and December 29, 2020 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 together 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, 2020
Quoted market price on valuation date	$0.0047
Contractual conversion rate	$0.002 - $0.01
Contractual term to maturity	0.07 Years – 0.99 Years
Market volatility:
Equivalent Volatility	114.91% - 266.31%
Interest rate	8.0%

F-18

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, 2020 and March 31, 2020.

	December 31,			March 31,
	2020			2020

Beginning balance	$	58,790		$	–
Issuances:
Compound embedded derivatives		435,723			178,692
Conversions		(472,996	)		–
Day-one derivative loss		125,408			–
Loss (gain) on changes in fair value inputs and assumptions reflected in income		592,649			(119,902	)
Total	$	739,574		$	58,790

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.

On November 23, 2020, as part of an Employment Agreement, the Company’s Chief Executive Officer received 40,000,000 shares of Series B Convertible Preferred Stock. Each share of Series B Preferred is convertible into two shares of common stock. As such the fair value, $320,000, was based on the value of 80,000,000 common shares on the date of agreement, $0.004 per share. The shares are considered immediately vested as of November 23, 2020.

Common Stock

Common Stock Issuances for the nine months ended December 31, 2019

On April 23, 2019, the Company issued 4,000,000 shares of common stock in exchange for services valued at $25,600 or $0.0064 per share.

On May 14, 2019, the Company sold 1,562,500 shares of common stock for $10,000 or $0.0064 per share.

On May 25, 2019, the Company sold 11,718,750 shares of common stock for $75,000 or $0.0064 per share.

On June 1, 2019, the Company issued 67,000,000 shares of common stock in exchange for services valued at $428,800 or $0.0064 per share.

On June 1, 2019, the Company issued 6,000,000 shares of common stock in exchange for the acquisition of UCL MMA LLC valued at $39,000 or $0.0065 per share.

On July 3, 2019 the Company issued 6,000,000 shares of common stock in exchange for services valued at $38,400 or $0.0064 per share.

F-19

On July 8, 2019, the Company entered into a Subscription Agreement with a holder for the sale of 14,062,500 shares of common stock at $0.0064 per share, or $90,000.

On July 15, 2019 the Company issued 30,500,000 shares of common stock in exchange for services valued at $195,200 or $0.0064 per share.

On July 15, 2019 the Company issued 8,000,000 shares of common stock in exchange for the acquisition of Pinnacle Combat LLC valued at $51,200 or $0.0064 per share.

On August 30, 2019 the Company sold 15,625,000 shares of common stock for $100,000 or $0.0064 per share.

On September 7, 2019 the Company sold 7,812,500 shares of common stock for $50,000 or $0.0064 per share.

On September 19, 2019 the Company sold 11,718,750 shares of common stock for $75,000 or $0.0064 per share.

On September 27, 2019, the Company canceled 7,500,000 in exchange for the cancellation of $75,000 in Notes Receivable.

As part of the Strike Hard Productions LLC acquisition, the Company issued 9,000,000 shares of common stock valued at $57,600 or $0.0064 per share.

On December 3, 2019, the Company purchased 14,062,500 shares of stock back from GS Capital in exchange for the payment of $101,250 in cash.

On December 22, 2019, B2MG returned 21,954,800 shares of the Company’s common stock, valued at $109,773 in exchange for the cancellation of $164,441 owed by B2MG to the Company.

Common Stock Issuances for the nine months ended December 31, 2020

On April 23, 2020, the Company issued 4,292,915 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 12,000,000 shares of stock to WLES LP LLC in exchange for the conversion of $30,000 in convertible note principal. The 12,000,000 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 4,000,000 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 4,000,000 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 5,071,885 shares of common stock. The 5,071,885 shares were valued at $16,558. The Company recorded the removal of the $7,500 in principal, $488 in interest, and $8,570 in derivative liabilities resulting in no gain or loss.

F-20

On August 10, 2020, the Company issued 4,000,000 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 13,333,334 shares of common stock for $100,000 or $0.0075 per share.

On August 19, 2020, the Company sold 13,333,334 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 8,468,394 shares of common stock. The 8,468,394 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 13,333,334 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 12,123,426 shares of common stock. The 12,123,426 shares were valued at $262,363. After recording the removal of the $55,000 in principal, $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 22,000,000 shares of common stock for $165,000 or $0.0075 per share.

On September 30, 2020, the Company issued 3,733,333 shares of common stock for services valued at $26,133 or $0.0070 per share.

On October 2, 2020, GS Capital converted $108,000 in principal, $7,196 in accrued interest, and $750 in conversion fees of the October 31, 2019 $208,000 face value note into 33,934,758 shares of common stock. The 33,934,758 shares were valued at $239,298. After recording the removal of the $108,000 in principal, $7,196 in interest, $750 in conversion fees and $80,674 in derivative liabilities, the Company recorded $42,678 as loss on extinguishment of debt.

On October 21, 2020, GS Capital converted $45,000 in principal, $3,136 in accrued interest, and $350 in conversion fees of the October 31, 2019 $208,000 face value note into 14,521,245 shares of common stock. The 14,521,245 shares were valued at $98,279. After recording the removal of the $45,000 in principal, $3,136 in interest, $350 in conversion fees and $39,128 in derivative liabilities, the Company recorded $10,665 as loss on extinguishment of debt.

On November 25, 2020, GS Capital converted $35,000 in principal, $2,754 in accrued interest, and $350 in conversion fees of the October 31, 2019 $208,000 face value note into 15,120,623 shares of common stock. The 15,120,623 shares were valued at $84,823. After recording the removal of the $35,000 in principal, $2,754 in interest, $350 in conversion fees and $44,183 in derivative liabilities, the Company recorded $2,536 as loss on extinguishment of debt.

On December 22, 2020, GS Capital converted $20,000 in principal, $1,692 in accrued interest, and $350 in conversion fees of the October 31, 2019 $208,000 face value note into 8,330,328 shares of common stock. The 8,330,328 shares were valued at $44,185. After recording the removal of the $20,000 in principal, $1,692 in interest, $350 in conversion fees and $19,806 in derivative liabilities, the Company recorded $2,337 as loss on extinguishment of debt.

F-21

Warrants

On December 23, 2020, the Company entered into a Common Stock Purchase Agreement (the “CSPA”) with Triton Funds, LP, a Delaware limited partnership (“Triton”), an unrelated third party. Triton agreed to invest $2,500,000 in the Company in the form of common stock purchases. Subject to the terms and conditions set forth in the CSPA, the Company agreed to sell to Triton common shares of the Company having an aggregate value of $2,500,000. The Company may, in its sole discretion, deliver a Purchase Notice to Triton which states the dollar amount of shares which the Company intends to sell to Triton. The price of the shares to be sold will be $0.005 per share. Triton’s obligation to purchase securities is conditioned on certain factors including, but not limited to, the Company having an effective registration available for sale of the securities being purchased, a minimum closing price of $0.0075 is met on the date Triton receives the purchased shares as DWAC shares by Triton’s custodian, and Triton’s ownership not exceeding 9.99% of the issued and outstanding shares of the Company at any time. The CSPA terminates the Common Stock Purchase Agreement between the Company and Triton entered into on October 15, 2020.

In connection with the CSPA, the Company also issued to Triton warrants to purchase 125,000,000 of the Company’s Common Stock at $0.02 per share (the “Warrants”), subject to adjustments. The Warrants terminate five years from the date of issuance. In the event that the S-1 Registration Statement registering the resales of the shares underlying the exercise of the Warrant (the “Warrant Shares”) is not deemed effective within 90 days of the issuance of the Warrants, 100,000,000 Warrants will terminate and 25,000,000 Warrants will remain which shall either be registered by the Company in an S-1 Registration Statement or will be available for cashless exercise pursuant to the terms of the Warrant Agreement. The 125,000,000 warrants were at $566,261 and were valued using a Black-Scholes Merton model. These warrants have been recorded in equity as an offering cost.

NOTE 12 –LEASES

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 $7,291.66 in year 1, $7,656.25 in year 2, $8,039.06 in year 3, and $8,441.02 in years 4 and 5.

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 $11,189.50 and the lease expires on December 31, 2023.

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, 2020
	Kokomo Lease			Valparaiso Lease			Total
Office lease	$	375,483		$	374,360		$	749,843
Less: accumulated amortization		(14,823	)		(24,694	)		(39,517	)
Right-of-use asset, net	$	360,660		$	349,666		$	710,326

F-22

Operating lease liability is summarized below:

	December 31, 2020
	Kokomo Lease			Valparaiso Lease			Total
Office lease	$	362,707		$	349,666		$	712,373
Less: current portion		(55,519	)		(105,159	)		(160,678	)
Long term portion	$	307,188		$	244,507		$	551,695

Maturity of the lease liability is as follows:

	December 31, 2020
	Kokomo Lease			Valparaiso Lease			Total
Fiscal year ending March 31, 2021	$	21,875		$	33,569		$	55,443
Fiscal year ending March 31, 2022		89,687			134,274			223,961
Fiscal year ending March 31, 2023		94,172			134,274			228,446
Fiscal year ending March 31, 2024		98,880			100,706			199,586
Fiscal year ending March 31, 2025		101,292			0			101,292
Fiscal year ending March 31, 2026		50,646			0			50,646
Present value discount		(93,846	)		(53,156	)		(147,002	)
Lease liability	$	362,707		$	349,666		$	712,373

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. As of December 31, 2020, the Company is in the process of renegotiating this lease.

In connection with the acquisition of the One More Gym, LLC, the Company assumed a building lease and two equipment leases. The lease terms are under 12 months. Under Topic 842, a short-term lease is a lease that, at the commencement date, has a ‘lease term’ of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Although short-term leases are in the scope of Topic 842, a simplified form of accounting is permitted. A lessee can elect, by class of underlying asset, not to apply the recognition requirements of Topic 842 and instead to recognize the lease payments as lease cost on a straight-line basis over the lease term. The Company has elected the short-term method to account for these leases.

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, 2020, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements.

F-23

The Company entered into employment agreements with its Chief Executive Officer and Executive Vice President as of November 23, 2020. Under the terms of these agreements the Company will be liable for severance and other payments under certain conditions. The employment agreement for the Executive Vice President 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. The employment agreement for the Chief Executive Officer can be terminated by the Chief Executive Officer upon three months written notice. Termination of the Chief Executive Officer requires 80% of the votes of all stockholders of the Company.

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 Notes

On January 14, 2021, the Company entered into a Securities Purchase Agreement with GS Capital pursuant to which the Company issued to GS Capital a Convertible Promissory Note in the aggregate principal amount of $107,000. The Company received net proceeds of $100,000 after a $7,000 original note discount. The note has a maturity date of January 14, 2022 and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of eight percent (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.

The outstanding principal amount of the note 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 note. 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. The initial accounting for this note is not completed.

On January 27, 2021, the Company entered into a Securities Purchase Agreement with GS Capital pursuant to which the Company issued to GS Capital a Convertible Promissory Note in the aggregate principal amount of $60,000. The Company received net proceeds of $55,000 after a $5,000 original note discount. The note has a maturity date of February 2, 2022 and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of eight percent (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 as set forth in the note.

The outstanding principal amount of the note is convertible into the Company’s common stock at the lender’s option 63% of the market price of the Company’s common stock. The initial accounting for this note is not completed.

On February 10, 2021, the Company entered into a Securities Purchase Agreement with AES Management, LLC pursuant to which the Company issued to AES Capital a Convertible Promissory Note in the aggregate principal amount of $69,000. The Company received net proceeds of $65,000 after a $4,000 original note discount. The note has a maturity date of February 10, 2022 and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of eight percent (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 AES as set forth in the note.

F-24

On February 2, 2021, the Company entered into a Securities Purchase Agreement with Geneva Roth Remark Holdings, Inc. pursuant to which the Company issued to Geneva Roth Remark Holdings, Inc. a Convertible Promissory Note in the aggregate principal amount of $45,250. The Company received net proceeds of $40,000 after a $1,750 original note discount, $3,000 in legal fees and $500 in due diligence fees. The note has a maturity date of January 27, 2022 and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of eight percent (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 Geneva Capital as set forth in the note.

Common Stock Issuances

On January 19, 2021, the Company issued 15,087,285 shares of common stock in conversion of $35,000 in principal and $3,145 of accrued interest.

On February 5, 2021, the Company issued 11,659,246 shares of common stock in conversion of $27,000 in principal and $2,521 of accrued interest.

On February 10, 2021, the Company issued 26,279,806 shares of common stock in conversion of $62,000 in principal and $5,531 of accrued interest.

Business Acquisition

On December 1, 2020, the Company entered into an agreement for the acquisition of 100% of the equity interest in Hillcrest Fitness LLC. The purchase price is $100,000. As of December 31, 2020, the closing was not completed.

Subscription Agreements

On February 9, 2021, the Company entered into a Subscription Agreement with Macita Financial, LLC for the sale of 25,000,000 shares of common stock for $100,000, or $0.004 per share. As of the date of this filing, the shares have not been issued.

On February 9, 2021, the Company entered into a Subscription Agreement with Tiger Management, LLC for the sale of 25,000,000 shares of common stock for $100,000, or $0.004 per share. As of the date of this filing, the shares have not been issued.

On February 10, 2021, the Company entered into a Subscription Agreement with AES Capital Management, LLC for the sale of 8,750,000 shares of common stock for $35,000, or $0.004 per share. As of the date of this filing, the shares have not been issued.

On February 12, 2021, the Company entered into a Subscription Agreement with GS Capital Partners, LLC for the sale of 37,500,000 shares of common stock for $150,000, or $0.004 per share. As of the date of this filing, the shares have not been issued.

F-25

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, 2020 filed on August 19, 2020. 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 eight wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, Colosseum Combat LLC which owns Colosseum Combat MMA in Indiana, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, CFit Indiana Inc., and B2 Productions LLC.

The consolidated financial statements, which include the accounts of the Company and its eight 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;”

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 nine months ended December 31, 2020 are not necessarily indicative of the results to be expected for the year ending March 31, 2021.

Use of Estimates

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, 2020 and March 31, 2020, respectively.

Fair Value of Financial Instruments

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

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

Goodwill

Other income

Revenue Recognition

Income Taxes

Concentration of Credit Risk

Impairment of Long-Lived Assets

Inventory

Earnings Per Share (EPS)

The following table sets for the computation of basic and diluted earnings per share the nine months ended December 31, 2020 and 2019:

	December 31, 2020			December 31, 2019
Basic and diluted
Net loss	$	(2,743,015	)	$	(1,179,481	)

Net loss per share
Basic	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)

Weighted average number of shares outstanding:
Basic & diluted		619,783,280			492,698,294

Stock Based Compensation

During the nine months ended December 31, 2020 and 2019, the Company recorded $409,333 and $688,000 in stock-compensation expense, respectively.

Leases

Recently Adopted Accounting Pronouncements

Organization and Nature of Business

In February 2017, our Board of Directors approved a complete restructuring, new management team and strategic direction for the Company. Capitalizing on management’s history in television, video and technology, we are now forging ahead and becoming a full-service live event sports company.

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 first strategy is to build an integrated live event minor league for the mixed martial arts (“MMA”) marketplace, which is a billion-dollar industry. We are creating and developing minor league champions that will move on to the MMA major leagues from the B2 Fighting Series (“B2FS”). This will be accomplished by sponsoring operating live events, acquiring existing MMA promotions and then inviting those champions to the B2FS Regional and National Championship Series. We own all media and merchandising rights and digital distribution networks for the B2FS. This concept was developed and test marketed for two years by Mr. Bell’s B2 Management Group, LLC.

2017 marked the kickoff of the B2FS by sponsoring and acquiring MMA regional promotion companies for the development of the B2FS. Our second strategy is to add additional sports, leagues, tournaments and special events to our live event business model. This will enable us to capitalize on our core technologies and business models that will be key to broadening the revenue base of our live event core business. We will also be developing and expanding the B2Digital live event systems and technologies. These include systems for event management, digital ticketing sales, digital video distribution, digital marketing, Pay-Per View (“PPV”), fighter management, merchandise sales, brand management and financial control systems.

Historically, we had been a provider of in-room, on-demand video entertainment and satellite services to the domestic lodging industry. In the past, we had provided video services to over 50,000 hotel rooms in the lodging industry. PPV lost a great deal of market share due to the increased internet use by hotel guests. With this loss, our Board of Directors agreed to dissolve Hotel Movie Network on March 11, 2010.

Business of the Company

The Company has seven wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, Colosseum Combat LLC which owns Colosseum Combat MMA in Indiana, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, LLC, ONE More Gym, and B2 Productions LLC.

Results of Operations

Three Months Ended December 31, 2020 Compared to the Three Months Ended December 31, 2019

Revenue

We had revenues of $300,549 for the three months ended December 31, 2020 versus revenues of $169,363 for the three months ended December 31, 2019. There was a decrease of $86,389, or 51.27%, in live event revenue due to the effects of COVID-19. There was an increase in gym revenue of $218,025, or 100%, as the Company acquired gyms since the comparative period.

Cost of Sales

We incurred cost of sales of $102,722 for the three months ended December 31, 2020 versus cost of sales of $126,737 for the three months ended December 31, 2019. The decrease of $24,015 is due to a decrease in live events due to the effects of COVID-19 but is partially offset by the increase associated with cost of sales at the gym.

Operating Expenses

General & Administrative Expenses

General and administrative expenses include professional fees, all costs associated with marketing, press releases, public relations, rent, sponsorships and other expenses. We incurred general and administrative expenses of $1,147,001 for the three months ended December 31, 2020 versus general and administrative expenses of $256,889 for the three months ended December 31, 2019. The increase of $890,112 was primarily due to increased operations as a result of gym acquisitions, investor relations and professional fees due to the growth of the business, and stock-based compensation related to the issuance of preferred stock,

Depreciation and Amortization Expense

We incurred depreciation and amortization expense of $52,516 for the three months ended December 31, 2020 versus depreciation expense of $10,192 for the three months ended December 31, 2019. The increase of $42,324 was due to the purchase of fixed and intangible assets a result of business acquisitions.

Other Income (Expense)

Our other income and expenses include gain on forgiveness of loan, loss on extinguishment of debt, change in fair value of derivative liabilities and interest expense. We incurred other income and expenses of $23,534 for the three months ended December 31, 2020 versus other income and expenses of $50,099 for the three months ended December 31, 2019. The change of $73,633 was primarily due to gain on bargain purchase as a result of a gym acquisition.

Net Losses

We incurred a net loss of $978,156 for the three months ended December 31, 2020 versus a net loss of $274,554 for the three months ended December 31, 2019.

Results of Operations

Nine Months Ended December 31, 2020 Compared to the Nine Months Ended December 31, 2019

Revenue

We had revenues of $496,497 for the nine months ended December 31, 2020 versus revenues of $351,274 for the nine months ended December 31, 2019. There was a decrease of $238,373 in live event revenue due to the effects of COVID-19. There was an increase in gym revenue of $383,596, or 100% as the Company acquired gyms since the comparative period.

Cost of Sales

We incurred cost of sales of $151,941 for the nine months ended December 31, 2020 versus cost of sales of $262,277 for the nine months ended December 31, 2019. The decrease of $110,336 is due to a decrease in live events due to the effects of COVID-19.

Operating Expenses

General & Administrative Expenses

General and administrative expenses include professional fees, all costs associated with marketing, press releases, public relations, rent, sponsorships and other expenses. We incurred general and administrative expenses of $1,986,918 for the nine months ended December 31, 2020 versus general and administrative expenses of $1,116,699 for the nine months ended December 31, 2019. The increase of $870,219 was a result of stock-based compensation related to the issuance of preferred stock, the increase in G&A due to gym acquisitions and investor relation costs but the increase was partially offset by decrease in live events due to COVID-19.

Depreciation and Amortization Expense

We incurred depreciation and amortization expense of $119,371 for the nine months ended December 31, 2020 versus depreciation expense of $20,245 for the nine months ended December 31, 2019. The increase of $99,126 was due to the purchase of fixed and intangible assets a result of business acquisitions.

Other Income (Expense)

Our other income and expenses include gain on forgiveness of loan, grant income, loss on settlement of debt, loss on extinguishment of debt, change in fair value of derivative liabilities and interest expense. We incurred other income and expenses of $981,282 for the nine months ended December 31, 2020 versus other income and expenses of $131,534 for the nine months ended December 31, 2019.The increase of $849,748 was primarily due to interest expense and changes in fair value of derivative instruments.

Net Losses

We incurred a net loss of $2,743,015 for the nine months ended December 31, 2020 versus a net loss of $1,179,481 for the nine months ended December 31, 2019.

Current Liquidity and Capital Resources for the nine months ended December 31, 2020 compared to the nine months ended December 31, 2019

	December 31,
	2020			2019
Summary of Cash Flows:
Net cash used by operating activities	$	(1,105,767	)	$	(347,368	)
Net cash used by investing activities		(292,138	)		(307,856	)
Net cash provided by financing activities		1,425,948			702,662
Net increase in cash and cash equivalents		28,043			47,438
Beginning cash and cash equivalents		46,729			27,579
Ending cash and cash equivalents	$	74,772		$	75,017

Operating Activities

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 expense, loss on settlement of debt, loss on extinguishment of debt, gain on settlement of debt, gain on bargain purchase, grant income, amortization of debt discount, day one derivative loss, changes in fair value of derivative liabilities, inventory, prepaid expenses, accounts payable, accrued liabilities and deferred compensation. Cash used in operations of $347,368 during the nine months ended December 31, 2019 was primarily a result of was primarily a result of our $1,179,481 net loss reconciled with our net non-cash expenses relating to stock compensation, depreciation expense, inventory, prepaid expenses, accounts payable, accrued liabilities and deferred compensation.

Investing Activities

Net cash used in investing activities for the nine months ended December 31, 2020 of $292,138 resulted from payments related to business acquisitions in the amount of $114,110 and capital expenditures in the amount of $178,028. Net cash used in investing activities for the nine months ended December 31, 2019 of $307,856 resulted from the from the business acquisitions in the amount of $55,000, payments to related parties in the amount of $174,244 and capital expenditures in the amount of $78,612.

Financing Activities

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 proceeds from the issuance of convertible notes payable, $15,000 in payments related to payable due for business acquisitions, $11,818 payment on notes payable, and $465,000 in proceeds from the issuance of common stock. Net cash provided by financing activities was $702,662 for nine months ended December 31, 2019, which consisted of $397,000 from proceeds from the issuance of convertible notes payable, $14,912 in proceeds from notes payable, $8,000 payment on notes payable, $101,250 for the purchase of treasury stock and $400,000 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 the remainder of fiscal year 2020 and for 2021 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

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, 2020. Based on his evaluation, Mr. Bell concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2020.

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, 2020, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Shares Sold Pursuant to Regulation A

During the quarter ended December 31, 2020, the Company sold an aggregate of 4,400,000 shares of Common Stock for aggregate consideration of $33,000. These sales were made without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Regulation A of the Securities Act. There were no sales commissions paid pursuant to this transaction.

Convertible Note Issuances

On October 2, 2020, the Company entered into a Securities Purchase Agreement with GS Capital Partners, LLC (“GS Capital”) pursuant to which the Company issued to GS Capital a Convertible Promissory Note in the principal amount of $205,000. This note was 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 note.

On October 15, 2020, the Company entered into a Securities Purchase Agreement with GS Capital pursuant to which the Company issued to GS Capital a Convertible Promissory Note in the principal amount of $172,000. This note was 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 note.

On November 2, 2020, the Company entered into a Securities Purchase Agreement with GS Capital pursuant to which the Company issued to GS Capital a Convertible Promissory Note in the principal amount of $69,000. This note was 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 note.

On November 12, 2020, the Company entered into a Securities Purchase Agreement with GS Capital pursuant to which the Company issued to GS Capital a Convertible Promissory Note in the principal amount of $69,000. This note was 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 note.

On December 28, 2020, the Company entered into a Securities Purchase Agreement with Geneva Roth Remark Holdings, Inc. (“Geneva Roth”) pursuant to which the Company issued to Geneva Roth a Convertible Promissory Note in the principal amount of $107,500. This note was 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 note.

Shares Issued Pursuant to Note Conversions

During the quarter ended December 31, 2020, a lender converted an aggregate of $108,633 in principal and accrued and unpaid interest of their promissory notes into an aggregate of 71,906,954 shares of the Company’s 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.

Item 6.

Exhibits.

SEC Ref. No.	Title of Document
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*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

__________________

*Filed with this Report.

**Furnished with this Report.

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 16, 2021	By	/s/ Greg P. Bell
		Greg P. Bell, Chief Executive Officer
		(Principal Executive Officer and Principal
		Financial Officer)