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, 2021~~June 30, 2022

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

		For the transition period from ~~_______________________to___________________________~~____________________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 11,~~October 12, 2022, was ~~1,722,817,434~~2,171,546,992.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	3F-1

Item 1. Financial ~~Statements.~~Statements	3F-1

Item 2. Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations	2926

Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk	3935

Item 4. Controls and ~~Procedures.~~Procedures	35

PART II - OTHER INFORMATION	36

Item 1A. Risk Factors	3936

~~PART II—OTHER INFORMATION~~	40
Item 2. Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds	4036

Item ~~5. Other Information~~6. Exhibits	37
	41
SIGNATURES	38

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

Consolidated Financial Statements

B2Digital, Incorporated

	Page

~~Item 6. exhibits.~~Consolidated Balance Sheets as of June 30, 2022 (unaudited) and March 31, 2022	41F-2

~~SIGNATURES~~Consolidated Statements of Operations (unaudited) for the three months ended June 30, 2022 and 2021	42F-3

Consolidated Statements of Stockholders’ Deficit (unaudited) for the three months ended June 30, 2022 and 2021	F-4

Consolidated Statements of Cash Flows (unaudited) for the three months ended June 30, 2022 and 2021	F-5

Notes to the Unaudited Consolidated Financial Statements	F-6

~~PART I - FINANCIAL INFORMATION~~

~~Item 1.~~

~~Financial Statements.~~

~~B2Digital, Incorporated~~

~~Consolidated Balance Sheets~~

As of
December 31,
2021 (Unaudited)

As of
March 31,
2021

Assets
Current assets
Cash and cash equivalents $ 9,195 $ 122,176
Deposits and prepaid expenses 67,693 10,681
Total current assets 76,888 132,857

Notes receivable & other receivables 35,400 35,400
Operating lease right-of-use asset 1,649,163 1,575,792
Property and equipment, net of accumulated depreciation 1,193,276 944,999
Intangible assets, net of accumulated amortization 192,634 224,890
Total Assets $ 3,147,361 $ 2,913,938

Liabilities & Stockholders' Deficit
Current liabilities
Accounts payable & accrued liabilities $ 401,971 $ 213,663
Deferred revenue 64,736 119,504
Note payable- current maturity 295,600 158,200
Note payable- in default 14,000 14,000
Due to shareholder 1,800 0
Payable due for business acquisitions 0 40,000
Convertible notes payable, net of debt discount 4,281,617 1,074,733
Derivative liabilities 2,199,087 1,137,623
Lease liability, current 426,212 0
Total current liabilities 7,685,024 3,021,888

Lease liability, long-term 1,298,530 1,319,457
Note payable- long-term 78,573 105,929

Total Liabilities 9,062,127 4,447,274

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 480,000,000 shares of common stock issued and outstanding at December 31, 2021 and March 31, 2021, respectively. 20 20
Series B: 40,000,000 shares convertible into 160,000,000 shares of common stock issued and outstanding at December 31, 2021 and March 31, 2021, respectively. 400 400
Common stock, $0.00001 par value; 5,000,000,000 shares authorized; 1,630,799,526 and 1,081,390,550 shares issued and outstanding at December 31, 2021 and March 31, 2021, respectively. (This includes 10,000,000 shares in treasury repurchased for $50,000) 15,979 10,815
Additional paid in capital 9,577,723 7,652,677
Accumulated deficit (15,508,888 ) (9,197,248 )
Total Stockholders' Deficit $ (5,914,766 ) $ (1,533,336 )
Total Liabilities and Stockholders' Deficit $ 3,147,361 $ 2,913,938

~~See accompanying notes to the unaudited consolidated financial statements.~~

3F-1

B2Digital, Incorporated

Consolidated ~~Statements of Operations (Unaudited)~~Balance Sheets

For the three months ended For the nine months ended
December 31, December 31, December 31, December 31,
2021 2020 2021 2020
Revenue:
Live event revenue $ 263,782 $ 82,524 $ 782,544 $ 112,901
Gym revenue 348,850 218,025 1,058,863 383,596
Total revenue 612,632 300,549 1,841,407 496,497

Cost of sales 388,263 102,722 919,447 151,941

Gross profit 224,369 197,827 921,960 344,556

General and administrative expenses
General & administrative expenses 2,299,300 1,147,001 5,707,667 1,986,918
Depreciation and amortization expense 102,713 52,516 289,232 119,371
Total general and administrative corporate expenses 2,402,013 1,199,517 5,996,899 2,106,289

Loss from continuing operations (2,177,644 ) (1,001,690 ) (5,074,939 ) (1,761,733 )

Other income (expense):
Gain on forgiveness of loan 0 0 23,303 10,080
Gain on bargain purchase 0 91,870 0 91,870
Gain (loss) on sale of assets 887 0 (640 ) 0
Grant income 0 0 0 2,000
Financing expense (136,170 ) 0 (136,170 ) 0
Loss on settlement of debt 0 0 0 (18,281 )
Loss on forgiveness of notes receivable 0 0 (2,094 ) 0
Gain (loss) on extinguishment of debt 72,592 (6,670 ) 209,258 (70,864 )
Change in fair value of derivatives (66,894 ) 194,758 (421,836 ) (592,649 )
Day one derivative loss (45,485 ) (125,408 ) (45,485 ) (125,408 )
Interest expense (340,403 ) (131,016 ) (863,037 ) (278,030 )
Total other income (expense) (515,473 ) 23,534 (1,236,701 ) (981,282 )

Net loss $ (2,693,117 ) $ (978,156 ) $ (6,311,640 ) $ (2,743,015 )

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

Weighted average shares outstanding - Basic 1,452,481,989 710,522,374 1,341,287,504 619,783,280


	As of June 30, 2022 (unaudited)			As of March 31, 2022
Assets
Current assets
Cash and cash equivalents	$	16,946		$	39,623
Notes receivable		–			6,096
Prepaid expenses		7,035			49,363
Total current assets		23,981			95,082

Operating lease right-of-use asset		69,971			73,085
Property and equipment, net of accumulated depreciation		936,563			984,217
Intangible assets, net of accumulated amortization		39,139			45,215
Deposits		11,126			11,126
Net assets held for sale		40,000			80,000
Notes receivable – long term		35,400			35,400
Total Assets	$	1,156,180		$	1,324,125

Liabilities & Stockholders' Deficit
Current liabilities
Accounts payable & accrued liabilities	$	1,294,705		$	744,069
Deferred revenue		48,786			104,704
Note payable- current maturity		665,600			295,600
Note payable- in default		44,000			14,000
Convertible notes payable, net of discount		7,216,579			6,035,090
Derivative liabilities		6,911,764			3,831,191
Due to shareholder		–			2,800
Lease liability, current		126,428			123,319
Total current liabilities		16,307,862			11,150,773

Lease liability - long-term		314,826			347,623
Note payable - long-term		–			30,000
Total Liabilities		16,622,688			11,528,396

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 480,000,000 shares of common stock issued and outstanding at June 30, 2022 and March 31, 2022, respectively.		20			20
Series B: 40,000,000 shares convertible into 320,000,000 shares of common stock and 40,000,000 shares issued and outstanding at June 30, 2022 and March 31, 2022, respectively;		400			400
Common stock, $0.00001 par value; 20,000,000,000 shares authorized; 2,097,743,117 and 1,849,932,312 shares issued and outstanding at June 30, 2022 and March 31, 2022, respectively		20,323			17,846
Additional paid in capital		10,556,458			10,251,530
Accumulated deficit		(26,043,709	)		(20,474,067	)
Total Stockholders' Deficit		(15,466,508	)		(10,204,271	)
Total Liabilities and Stockholders' Deficit	$	1,156,180		$	1,324,125

See accompanying notes to the unaudited consolidated financial ~~statements.~~statements

F-2

B2Digital, Incorporated

Consolidated Income Statement

For the Three months Ended June 30, 2022 and 2021 (Unaudited)


	For the Three months ended
	June 30, 2022			June 30, 2021
Revenue:
Live event revenue	$	337,822		$	235,591
Gym revenue		362,519			333,174
Total revenue		700,341			568,765

Operating expenses
Sales and marketing		64,577			62,278
Utilities		40,710			31,191
Leasing expense		129,466			147,436
Payroll expenses		648,429			415,628
General and administrative		1,552,480			1,100,849
Depreciation and amortization expense		71,759			88,049
Total operating expenses		2,507,421			1,845,431

Loss from continuing operations		(1,807,080	)		(1,276,666	)

Other income (expense):
Gain on forgiveness of loan		–			23,303
Gain on extinguishment of debt		107,208			80,741
(Loss) gain on sale of assets		(6,427	)		230
Financing expense		(39,196	)		–
(Loss) gain on fair value of derivative liabilities		(2,809,276	)		310,871
Initial derivative expense		(194,323	)		–
Interest expense		(820,548	)		(199,826	)
Total other income		(3,762,562	)		215,319

Net loss	$	(5,569,642	)	$	(1,061,347	)

Basic and diluted earnings per share on net loss	$	(0.003	)	$	(0.001	)

Weighted average shares outstanding		1,981,717,164			1,207,948,242

See accompanying notes to the unaudited consolidated financial statements

4F-3

B2Digital, Incorporated

Consolidated Statement of Changes in Stockholders' Deficit

For the Three months Ended June 30, 2022 and ~~Nine months ended December 31,~~ 2021 ~~and 2020~~ (Unaudited)

Preferred Stock Preferred Stock Additional Total
Series A Series B Common Stock Treasury Paid in Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Stock Capital Deficit Deficit
Balance March 31, 2021 2,000,000 $ 20 40,000,000 $ 400 1,081,390,550 $ 10,815 – $ 7,652,677 $ (9,197,248 ) $ (1,533,336 )

Sale of common stock – – – – 220,000,000 2,200 – 877,800 – 880,000

Issuance of common stock for services – – – – 5,500,000 55 – 23,595 – 23,650

Issuance of convertible notes – – – – – – – 2,080 – 2,080

Net loss – – – – – – – – (1,061,347 ) (1,061,347 )

Balance June 30, 2021 2,000,000 $ 20 40,000,000 $ 400 1,306,890,550 $ 13,070 – $ 8,556,152 $ (10,258,595 ) $ (1,688,953 )

Sale of common stock – – – – 75,000,000 $ 750 – $ 299,250 $ – $ 300,000

Issuance of common stock for services – – – – – – – – – –

Issuance of convertible notes – – – – – – – – – –

Net loss – – – – – – – – (2,557,176 ) (2,557,176 )

Balance September 30, 2021 2,000,000 $ 20 40,000,000 $ 400 1,381,890,550 $ 13,820 – $ 8,855,402 $ (12,815,771 ) $ (3,946,129 )

Sale of common stock – – – – 11,250,000 $ 113 – $ 44,887 $ – $ 45,000

Issuance of common stock in connection with notes payable – – – – 37,900,000 49 – 21,475 – 21,524

Issuance of common stock upon conversion of notes payable – – – – 115,258,976 1,152 – 471,104 – 472,256

Issuance of common stock for services – – – – 99,000,000 990 – 291,410 – 292,400

Shares repurchased – – – – (14,500,000 ) (145 ) (10,000,000 ) (106,555 ) – (106,700 )

Net loss – – – – – – – – (2,693,117 ) (2,693,117 )

Balance December 31, 2021 2,000,000 $ 20 40,000,000 $ 400 1,630,799,526 $ 15,979 (10,000,000 ) $ 9,577,723 $ (15,508,888 ) $ (5,914,766 )

~~See accompanying notes to the unaudited consolidated financial statements.~~


	Preferred Stock			Preferred Stock							Additional
	Series A			Series B			Common Stock				Paid in		Accumulated
	Shares	Amount		Shares	Amount		Shares		Amount		Capital		Deficit			Total
Balance March 31, 2022	2,000,000	$	20	40,000,000	$	400	1,849,932,312		$	17,846	$	10,251,530	$	(20,474,067	)	$	(10,204,271	)

Issuance of common stock upon conversion of notes	–		–	–		–	247,810,805			2,477		304,928		–			307,405
								��
Net loss	–		–	–		–	–			–		–		(5,569,642	)		(5,569,642	)

Balance June 30, 2022	2,000,000	$	20	40,000,000	$	400	2,097,743,117		$	20,323	$	10,556,458	$	(26,043,709	)	$	(15,466,508	)

~~B2Digital, Incorporated~~

~~Consolidated Statement of Changes in Stockholders' Deficit~~

~~For the Three and Nine months ended December 31, 2021, and 2020 (Unaudited)~~

Preferred Stock Preferred Stock Additional Total
Series A Series B Common Stock Treasury Paid in Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Stock Capital Deficit Deficit
Balance March 31, 2020 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 )

	Preferred Stock			Preferred Stock						Additional
	Series A			Series B			Common Stock			Paid in		Accumulated
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit			Total
Balance March 31, 2021	2,000,000	$	20	40,000,000	$	400	1,081,390,550	$	10,815	$	7,652,677	$	(9,197,248	)	$	(1,533,336	)

Sale of common stock	–		–	–		–	220,000,000		2,200		877,800		–			880,000

Issuance of common stock for services	–		–	–		–	5,500,000		55		23,595		–			23,650

Issuance of convertible notes	–		–	–		–	–		–		2,080		–			2,080

Net loss	–		–	–		–	–		–		–		(1,061,347	)		(1,061,347	)

Balance June 30, 2021	2,000,000	$	20	40,000,000	$	400	1,306,890,550	$	13,070	$	8,556,152	$	(10,258,595	)	$	(1,688,953	)

See accompanying notes to the unaudited consolidated financial ~~statements.~~statements

6F-4

B2Digital, Incorporated

Consolidated Statements of Cash Flows ~~(Unaudited)~~

(Unaudited)

For the nine months ended
December 31, December 31,
2021 2020
Cash Flows from Operating Activities
Net Loss $ (6,311,640 ) $ (2,743,015 )

Adjustments to reconcile net loss to net cash used by operating activities:
Stock compensation 316,050 409,333
Depreciation and amortization expense 289,232 119,371
Gain on forgiveness of loan (23,303 ) 0
Financing expense 136,170 0
Loss on settlement of debt 0 18,281
Gain on settlement of debt 0 (10,080 )
Loss on extinguishment of debt 0 70,864
Loss on forgiveness of notes receivable 2,094 0
Gain on extinguishment of debt (209,258 ) 0
Gain on bargain purchase 0 (91,870 )
Loss of sale of assets 640 0
Amortization of debt discount 665,080 212,103
Day one derivative loss 45,485 125,408
Changes in fair value of compound embedded derivative 421,836 592,649
Right- of- use asset/liability 67,750 2,047
Changes in operating assets & liabilities
Prepaid expenses (57,012 ) (4,417 )
Inventory 0 5,236
Accounts payable and accrued liabilities 147,964 90,154
Related party (advances) repayment 1,800 29,630
Deferred revenue (54,768 ) 68,539
Net cash used by operating activities (4,561,880 ) (1,105,767 )

Cash Flows from Investing Activities
Business acquisition (165,000 ) (114,110 )
Capital expenditures (412,892 ) (178,028 )
Net cash used by investing activities (577,892 ) (292,138 )

Cash Flows from Financing Activities
Proceeds from notes payable 150,000 122,766
Proceeds from convertible notes payable 4,178,506 865,000
Repayments related to payable due for business combinations 0 (15,000 )
Repayments of convertible notes payable (432,363 ) 0
Repayment of notes payable (19,653 ) 0
Payment to note payable 0 (11,818 )
Stock repurchases (74,700 ) 0
Issuance of common stock (less treasury stock of $50,000) 1,225,000 465,000
Net cash provided by financing activities 5,026,790 1,425,948

(Decrease) increase in Cash (112,981 ) 28,043

Cash at beginning of period 122,176 46,729

Cash (and equivalents) at end of period $ 9,195 $ 74,772
Supplemental Cash Flow Information
Cash paid for interest $ 9,534 $ 0
Non-cash investing and financing activities:
Conversion of note payable to equity $ 242,400 $ 303,212


	For the Three months ended
	June 30,			June 30,
	2022			2021
Cash Flows from Operating Activities
Net Loss	$	(5,569,642	)	$	(1,061,347	)

Adjustments to reconcile net loss to net cash used by operating activities:
Stock compensation		–			23,650
Depreciation and amortization		71,759			88,049
Loss (gain) on sale of assets		6,427			(230	)
Gain on forgiveness of loan		–			(23,303	)
Gain on extinguishment of debt		(107,208	)		(80,741	)
Financing expense		–			8,246
Amortization of debt discount		578,080			155,736
Initial derivative expense		194,323			–
Loss (gain) on fair value of compound embedded derivative		2,809,276			(310,871	)
Right-of-use asset/liability		(26,574	)		24,376
Changes in operating assets & liabilities
Prepaid expenses		42,328			(18,231	)
Accounts payable and accrued liabilities		598,247			183,736
Related party advances		(5,786	)		–
Deferred revenue		(55,918	)		(34,896	)
Net cash used by operating activities		(1,464,688	)		(1,045,826	)

Cash Flows from Investing Activities
Business acquisitions		40,000			(125,000	)
Capital expenditures		(24,456	)		(174,184	)
Net cash provided by investing activities		15,544			(299,184	)

Cash Flows from Financing Activities
Proceeds from notes payable		367,608			153,000
Proceeds from convertible notes payable		1,167,230			370,181
Repayments of convertible notes payable		(108,371	)		(65,372	)
Repayments of notes payable		–			(2,347	)
Payment of note payable		–			(843	)
Issuance of common stock		–			880,000
Net cash provided by financing activities		1,426,467			1,334,619

Decrease in Cash		(22,677	)		(10,391	)

Cash at beginning of period		39,623			122,176

Cash (and equivalents) at end of period	$	16,946		$	111,785

Supplemental Cash Flow Information
Cash paid for interest	$	34,789		$	2,319
Cash paid for income taxes	$	–		$	–

Non-cash investing and financing activities:
Conversion of note payable and accrued interest to common stock	$	162,795		$	–
Initial recognition of derivative liability as debt discount	$	725,305		$	2,038,843
Net assets disposed of	$	40,000		$	–

See accompanying notes to the unaudited consolidated financial ~~statements.~~statements

7F-5

~~B2DIGITAL, INCORPORATED~~

B2Digital, Incorporated

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~Notes to Consolidated Financial Statements

~~DECEMBER 31, 2021~~

June 30, 2022 (Unaudited)

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

We are the premier development league for mixed martial arts (“MMA”). We operate in two major branded ~~segments:~~businesses: The B2 Fighting Series and The ONE More Gym Official B2 Training Facilities Network. We primarily derive revenues from live event ticket sales, pay-per-view ticket sales, content media marketing, and fitness facility memberships.

Our Live Events ~~segment~~business (the B2 Fighting Series) is primarily engaged with scheduling, organizing, and producing live MMA events, marketing those events, and generating both live audience and PPV ticket sales, as well as creatively marketing the archived content generated through its operations in this ~~segment.~~business. We also plan to generate additional revenues over time from endorsement deals with global brands as its audience grows. The B2 Fighting Series is licensed in ~~20 U.S,~~18 U.S. states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate. ~~We now operate at a pace of more than 40 events per year.~~

Our Chairman and CEO is now Greg P. Bell. Mr. Bell has over 30 years of global experience developing more than 20 companies in the sports, television, entertainment, digital distribution, and banking transaction industries. Capitalizing on the combination of his expertise, relationships, and experience as well as his involvement with more than 40,000 live events over his career for major sports leagues and entertainment venues, we are in the process of developing and acquiring companies to become a premier vertically integrated live event sports company.

Our Fitness Facility ~~segment~~business operates primarily through the ONE More Gym Official B2 Training Facilities Network. We currently operate ~~five~~two ONE More Gym locations, with plans to continue to scale up this segment at a pace of 4-8 new locations per year. ONE More Gym locations include specialized MMA training resources and serve a recruiting function for the Company's Live Events segment.locations.

Basis of Presentation and Consolidation

The Company has ~~ten wholly-owned~~seven wholly owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, ~~LLC, ONE More Gym LLC, One More Gym Merrillville LLC, One More Gym Valparaiso~~ LLC, One More Gym Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC.

The consolidated financial statements, which include the accounts of the Company and its ~~ten wholly-owned~~seven wholly owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated. The consolidated financial statements, which include the accounts of the Company and its ten ~~wholly-owned~~wholly owned subsidiaries, and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and presented in U.S. dollars. The fiscal year end is March 31.

F-6

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

The Company changed the presentation of prior year cost of sales to operating expenses. It’s the opinion of management that with all of B2’s business expenses are operating in nature. The nature of the gym’s expenses for payroll, leasing and utilities do not directly derive income in the form of memberships and services generated by the gym on a daily basis. Secondarily, the nature of the MMA LIVE Fights’ expenses also does not directly affect or derive income in the form of ticket, merchandise and concession sales generated by live MMA events. Therefore, we believe the traditional cost of goods sold expense items should be eliminated from both business income statements and all expenses should be reported as operating expense to more accurately reflect the true nature of the business. Traditional line items such as raw materials, labor associated with the production of finished goods and depreciation and amortization of machinery and intangibles associated with converting raw materials into finished goods do not exist in either of these businesses. As such for the three months ended June 30, 2021, approximately $203,502 of cost of sales was reclassified as operating expense.

NOTE 2 - ACCOUNTING POLICIES

The significant accounting policies of the Company are as follows:

Basis of Accounting

The ~~interim~~accompanying 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 beenwere prepared in conformity with generally accepted accounting principles ~~generally accepted~~ in the United States of America (“US GAAP”).

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

Use of Estimates

Management uses estimates and assumptions in preparing the consolidated 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, the valuation of long-lived and intangible assets 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 0not have any cash in excess of FDIC limits at ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ respectively.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The three levels of valuation hierarchy are defined as follows:

F-7

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

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

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.

Property and Equipment

Property and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned, and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying consolidated statement of operations of the respective period. The estimated useful lives range from 3 to 7 years.

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~Assets Held for Sale

We consider properties to be Assets held for sale when management approves and commits to a plan to dispose of a property or group of properties. The property held for sale prior to the sale date is separately presented on the balance sheets as Net assets held for sale. During the fourth quarter of fiscal 2022 management initiated the sale of the gyms located in Indiana: One More Gym, LLC, One More Gym Valparaiso and One More Gym Merrillville. During the three months ended June 30, 2022 the Company completed the sale of ONE More Gym, LLC for cash proceeds of $40,000.

~~Other income~~Long-Lived Assets

~~During~~Management reviews long-lived assets, including finite-lived intangible assets, for indicators of impairment whenever events or changes in circumstances indicate that the ~~nine months ended December 31, 2021, and December 31, 2020,~~carrying value may not be recoverable. Cash flows expected to be generated by the related assets are estimated over the asset’s useful life on an undiscounted basis. For assets held for use, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If the evaluation indicates that the carrying value of the asset may not be recoverable, the potential impairment is measured using fair value. Impairment losses for assets to be disposed of, if any, are based on the estimated proceeds to be received, $0 ~~and $2,000, respectively in grant income due to COVID-19 relief. The Company has recorded this grant income under other income in the Statement~~less costs of ~~Operations.~~disposal.

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.

F-8

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

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.

Live event 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. ~~The majority~~Revenue associated with B2FS (Fight Club) consist primarily 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.

Gym revenue

Revenues in connection with Company owned Fitness Clubs consist primarily of monthly membership dues and ancillary products. Monthly membership dues are recognized during the monthly membership period and any dues paid not correlating to the current period are recorded in deferred revenue. Ancillary products are recorded in the period the services or products are delivered.

Income Taxes

The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated Statements of Operations in the period that includes the enactment date. Through ~~December 31, 2021,~~June 30, 2022, the Company has an expected loss. Due to uncertainty of realization for these losses, a full valuation allowance is recorded. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, ~~as a consequence,~~consequently, believes that its accounts receivable credit risk exposure beyond such allowance is limited. In addition, ~~Receivables that are factored~~revenue processed through the Company's ~~Receivable finance facility~~payment processor are guaranteed ~~by the finance company that~~ further ~~mitigates~~mitigating Credit Risk.

10F-9

~~B2DIGITAL, INCORPORATED~~B2Digital, Incorporated

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~Notes to Consolidated Financial Statements

~~DECEMBER 31, 2021~~June 30, 2022 (Unaudited)

~~Impairment of Long-Lived Assets~~

In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset, discounted at a rate commensurate with the risk involved. There were no impairment charges recorded during the nine months ended December 31, 2021, and 2020, respectively.

Earnings Per Share (EPS)

The Company utilize FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options, restricted stock awards and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. As of ~~December 31, 2021,~~June 30, 2022, the convertible notes are indexed to ~~1,372,797,202~~19,585,533,532 shares of common stock.

The following table sets ~~forth~~for the computation of basic and diluted earnings per share for the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022 and ~~2020:~~ 2021:

Schedule of Earnings Per Share, Basic and Diluted
	December 31, 2021			December 31, 2020			June 30, 2022			June 30, 2021
Basic and diluted
Net loss	$	(6,311,640	)	$	(2,743,015	)	$	(5,569,642	)	$	(1,061,347	)

Net loss per share
Basic	$	(0.00	)	$	(0.00	)	$	(0.003	)	$	(0.001	)
Diluted	$	(0.00	)	$	(0.00	)	$	(0.003	)	$	(0.001	)

Weighted average number of shares outstanding:
Basic		1,341,287,504			619,783,280
Basic & diluted								1,981,717,164			1,207,948,242

Stock Based Compensation

The Company records stock-based compensation in accordance with the provisions of FASB ASC Topic 718, Accounting for Stock Compensation, which establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services. In accordance with guidance provided under ASC.

Topic 718, the Company recognizes an expense for the fair value of its stock awards at the time of grant and the fair value of its outstanding stock options and stock awards, whether held by employees or others. As of ~~December 31, 2021,~~June 30, 2022, there were 0no options ~~outstanding and~~ ~~99,000,000~~ ~~shares of stock awards.~~outstanding.

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC 718 and forgo revaluing the award after this date. The Company adopted ASU 2018-07 on April 1, 2019.

F-10

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

During the three months ended June 30, 2021, the Company recorded $23,650 in stock-compensation expense.

Leases

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The ~~adoption~~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 ~~this standard did~~practical expedients to leases that commenced before the effective date whereby the Company elected to not ~~have~~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 ~~material impact~~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 ~~consolidated financial statements.~~present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is presented on the statements of operations.

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

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements.

F-11

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

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~~three months ended ~~December 31, 2021,~~June 30, 2022, the Company had a net loss of $~~(6,311,640)~~(5,569,642), had net cash used in operating activities of $~~4,561,880~~1,464,688, had negative working capital of $~~7,608,136~~(16,283,881), accumulated deficit of $~~15,508,888~~(26,043,709) and stockholders’ deficit of $~~5,914,766~~(15,466,508). 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.

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

NOTE 4 – REVENUE

The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Live event revenue primarily includes ticket and beverage sales before and during the live events. Sponsorship revenue is also recognized when the live event takes place. Any revenue received for events that have yet to take place are recorded in deferred revenue. Gym revenue comprises primarily of membership dues and subscription. Other gym revenue includes personal training, group fitness and meal planning.

Information about the Company’s net sales by revenue type for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ are as follows:

Schedule of net sales by revenue type
For the three months ended
December 31, December 31,

2021
(Unaudited)

2020
(Unaudited)

Live events $ 263,782 $ 82,524
Gym revenue 348,850 218,025
Total revenue $ 612,632 $ 300,549

Schedule of net sales by revenue type
	For the nine months ended				For the three months ended
	December 31,		December 31,		June 30,		June 30,
	2021 (Unaudited)		2020 (Unaudited)		2022		2021
Live events	$	782,544	$	112,901	$	337,822	$	235,591
Gym revenue		1,058,863		383,596		362,519		333,174
Total revenue	$	1,841,407	$	496,497
Net sales					$	700,341	$	568,765

All revenue is derived in the United States.

13F-12

~~B2DIGITAL, INCORPORATED~~B2Digital, Incorporated

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~Notes to Consolidated Financial Statements

~~DECEMBER~~June 30, 2022 (Unaudited)

Information about the Company’s deferred revenue for the three months ended June 30, 2022 and 2021 are as follows:

Schedule of deferred revenue
	As of
	June 30,			June 30,
	2022			2021
Balance at beginning of year	$	104,704		$	119,504
Deferral of revenue		303,857			169,798
Recognition of unearned revenue		(359,775	)		(204,694	)
Balance at June 30	$	48,786		$	84,608

Deferred revenue for the periods ended June 30, 2022 and March 31, 2022 was $48,786 and $104,704, respectively. This deferred revenue represents deferred gym memberships fees and tickets pre-sold for live events, which pertain to performance obligations not realized as of June 30, 2022 and March 31, 2022.

Revenue recognized for the three months ended June 30, 2022 and 2021, which was included in the unearned revenue liability balance at the beginning of the year, was $359,775 and $204,694, respectively. This revenue represents gym membership fees and live event sales for performance obligations met in the three months ended June 30, 2022 and 2021.

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following ~~as of December 31, 2021,~~at June 30, 2022 and March 31, ~~2021:~~2022:

Schedule of property and equipment
	As of			As of
	December 31, 2021			March 31, 2021			June 30, 2022			March 31, 2022

Gym equipment	$	533,253		$	420,880		$	229,821		$	229,821
Cages		151,009			132,350			151,009			151,009
Event assets		116,088			92,117			122,795			122,795
Furniture and fixtures		16,765			16,766			19,366			19,366
Production truck gear		11,740			11,740			11,740			11,740
Production equipment		60,888			32,875			80,965			80,965
Venue lighting system		38,266			37,250			38,266			38,266
Leasehold improvements		215,643			43,712			135,301			126,851
Electronics hardware and software		164,921			124,624			191,299			181,720
Trucks trailers and vehicles		234,533			197,921			289,028			289,028
		1,543,106			1,110,235			1,269,590			1,251,561
Less: accumulated depreciation		(349,830	)		(165,236	)		(333,027	)		(267,344	)
	$	1,193,276		$	944,999		$	936,563		$	984,217

Depreciation expense related to these assets for the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ amounted to $~~210,663~~ 65,683and $~~70,025~~61,859, respectively.

F-13

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

NOTE 6 – INTANGIBLE ASSETS

Intangible assets, net, consisted of the following ~~as of December 31, 2021,~~at June 30, 2022 and March 31, 2021:

Schedule of intangible assets
	As of			As of			As of			As of
	December 31, 2021			March 31, 2021			June 30, 2022			March 31, 2022

Licenses	$	142,248		$	142,248		$	142,248		$	142,248
Software/website development		12,585			12,585			12,585			12,585
Customer relationships		216,343			170,031			60,322			60,322
		371,176			324,864			215,155			215,155
Less: accumulated amortization		(178,542	)		(99,974	)		(176,016	)		(169,940	)
	$	192,634		$	224,890		$	39,139		$	45,215

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~~three months ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~ amounted to $~~78,569~~6,076 and $~~49,346~~26,190, respectively.

Estimated amortization expense for each of the next five years:

Schedule of amortization expense
Fiscal year ended March 31, 2023	$	18,227
Fiscal year ended March 31, 2024		20,912
Total	$	39,139

NOTE 7 – BUSINESS DISPOSITION

One More Gym, LLC

On June 2, 2022 the Company entered into an agreement to dispose of 100% of the equity interest in One More Gym, LLC. The value received for the disposition was $40,000 and during the quarter ended the Company removed the assets held for sale related to this entity. The Company recorded an impairment loss on the assets of One More Gym, LLC during the year ended March 31, 2022 in the amount of $86,099.

14F-14

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

~~Estimated amortization expense for each of the next four years:~~B2Digital, Incorporated

~~Schedule of amortization expense~~
~~Fiscal year ended March 31, 2022~~	$	~~26,189~~
~~Fiscal year ended March 31, 2023~~		~~97,842~~
~~Fiscal year ended March 31, 2024~~		~~61,532~~
~~Fiscal year ended March 31, 2025~~		~~7,071~~
~~Total~~	$	~~192,634~~

~~NOTE 7 –~~ ~~BUSINESS ACQUISITIONS~~Notes to Consolidated Financial Statements

~~Club Fitness, LLC~~

~~On April 1, 2021, the Company entered into an agreement for the acquisition of 100% of the equity interest in Club Fitness LLC. The purchase price was $125,000~~ ~~in cash. The acquisition closed in April 2021.~~

Schedule of business combination purchase allocation
Consideration
Cash $ 125,000

Fair values of identifiable net assets:
Property & equipment:
Gym equipment $ 76,689

Intangible assets:
Customer relationships 46,311

Total fair value of identifiable net assets $ 125,000

The Company analyzed the acquisition under applicable guidance and determined that the acquisition should be accounted for as a business combination. The fair value of the net identifiable assets consisted of gym equipment of $~~76,689. The Company assigned a fair value of $46,311~~ ~~in intangible assets – customer relationships. The intangible assets – customer relationships are being amortized over their estimated life, currently expected to be three years.~~

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~June 30, 2022 (Unaudited)

NOTE 8 - NOTES PAYABLE

The following is a summary of notes payable as of ~~December 31, 2021,~~June 30, 2022 and March 31, ~~2021:~~2022:

Schedule of notes payable
	As of			As of			As of June 30, 2022		As of March 31, 2022
Notes Payable:
SBA EIDL Loan							$	10,000	$	10,000
SBA Loan Payable B2 Digital								97,200		97,200
GS Capital, LLC								303,000		153,000
SBA Loan (Hillcrest)								35,400		35,400
Advantage Platform								220,000		–
	December 31,			March 31,
Notes Payable – in default
Emry Capital $14,000, 4% loan with principal and interest due April, 2021								14,000		14,000
WLES LP LLC $60,000, 5% loan due January 15, 2022								30,000		30,000
	2021			2021
Notes payable - current maturity:
Note Payable PPP SBA Loan	$	–		$	15,600
SBA EIDL Loan		10,000			10,000
SBA Loan Payable B2Digital		97,200			97,200
GS Capital, LLC		153,000			0
Notes payable – in default:
Emry Capital $14,000, 4% loan with principal and interest due April, 2020		14,000			14,000
Notes payable – long term:
WLES LP LLC $60,000, 5% loan due January 15, 2022		30,000			30,000
Brian Cox 401K		0			12,882
SBA Loan (Hillcrest)		35,400			35,400
SBA Loan (One More Gym, LLC)		48,573			63,047
Total notes payable		388,173			278,129			709,600		339,600
Less: long-term		(78,573	)		(105,929	)		–		(30,000	)
Total	$	309,600		$	172,200		$	709,600	$	309,600

During the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022, the Company ~~incurred~~entered into an Agreement for the Purchase and Sale of Future Receipts with Advantage Platform. In exchange for $~~15,018~~300,000 the Company agreed to release future revenue to Advantage in ~~interest expense related~~the amount of $14,400 for 30 weeks. The Company accounted for this agreement as a debt under guidance from ASC 470-10-25-2. This transaction does not purport a sale of the Company, the Company continues to ~~notes payable.~~be involved in the daily operations and generation of cash flow, the transaction is cancelable by either party and with a lump sum payment or other transfer of assets to Advantage by the Company, the agreement explicitly limits Advantage’s rate of return, Advantage has several other entities in its portfolio and has any recourse to the Company relating to the payments due under the agreement.

~~During~~As of June 30, 2022, the ~~nine months ended December 31, 2021,~~Emry Capital note is in default. However, the ~~Company repaid $12,881~~ ~~on its loan payable~~note is not subject to ~~Brian Cox.~~any default provisions.

~~During~~As of June 30, 2022, the ~~nine months ended December 31, 2021,~~WLES LP LLC note is in default. However, the ~~bank forgave $6,634~~ ~~in principal and $1,069~~ ~~in accrued interest on its SBA Loan (One More Gym, LLC). As a result, the Company recorded $7,703~~ ~~in gain on forgiveness of loan.~~

~~During the nine months ended December 31, 2021, the bank forgave the Company’s PPP loan of $15,600. No interest was accrued as of the payoff date. As a result, the Company recorded $15,600~~ ~~in gain on forgiveness of loan.~~

note is not subject to any default provisions.

16F-15

~~B2DIGITAL, INCORPORATED~~B2Digital, Incorporated

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~Notes to Consolidated Financial Statements

~~DECEMBER 31, 2021~~June 30, 2022 (Unaudited)

NOTE 9 – CONVERTIBLE NOTE PAYABLE

The following is a summary of convertible notes payable as of ~~December 31, 2021:~~June 30, 2022:

Schedule of convertible notes payable
Schedule of Convertible Notes Payable
Note*	Issuance Date		Maturity		Coupon		Face Value		Unamortized Discount		Carrying Value		Issuance Date	Maturity	Coupon	Face Value		Unamortized Discount		Carrying Value
Note 6		2/19/2020		4/18/2022		8%		45,800		–		45,800
Note 7		3/10/2020		4/18/2022		8%		85,800		–		85,800
Note 8		8/4/2020		4/18/2022		8%		156,000		–		156,000	8/04/2020	12/31/2022	8%	$	97,000	$	–	$	97,000
Note 9		10/2/2020		4/18/2022		8%		205,000		–		205,000	10/02/2020	12/31/2022	8%		205,000		–		205,000
Note 10		10/15/2020		4/18/2022		8%		172,000		–		172,000	10/15/2020	12/31/2022	8%		172,000		–		172,000
Note 11		11/2/2020		4/18/2022		8%		69,000		–		69,000	11/02/2020	12/31/2022	8%		69,000		–		69,000
Note 12		11/12/2020		4/18/2022		8%		69,000		–		69,000	11/12/2020	12/31/2022	8%		69,000		–		69,000
Note 14		12/10/2020		4/18/2022		8%		80,000		–		80,000	12/10/2020	12/31/2022	8%		80,000		–		80,000
Note 16		1/14/2021		4/18/2022		8%		107,000		3,648		103,352	1/14/2021	12/31/2022	8%		107,000		–		107,000
Note 17		1/27/2021		4/18/2022		8%		60,000		2,595		57,405	1/27/2021	12/31/2022	8%		60,000		–		60,000
Note 20		4/30/2021		4/30/2022		8%		104,000		1,351		102,649	4/30/2021	12/31/2022	8%		104,000		–		104,000
Note 21		5/25/2021		5/25/2022		8%		104,000		2,578		101,422	5/25/2021	12/31/2022	8%		104,000		–		104,000
Note 22		6/24/2021		6/24/2022		8%		185,652		31,424		154,228	6/24/2021	12/31/2022	8%		185,652		–		185,652
Note 24		7/24/2021		7/24/2022		8%		265,000		44,322		220,678	7/24/2021	12/31/2022	8%		265,000		6,839		258,161
Note 25		8/04/2021		8/4/2022		8%		129,800		22,854		106,946	8/04/2021	12/31/2022	8%		129,800		3,542		126,258
Note 26		8/11/2021		8/11/2022		8%		151,500		25,881		125,619	8/11/2021	12/31/2022	8%		151,500		4,001		147,499
Note 27		8/16/2021		8/16/2022		8%		88,400		20,369		68,031
Note 28		8/20/2021		8/20/2022		8%		151,500		29,317		122,183	8/20/2021	12/31/2022	8%		151,500		4,584		146,916
Note 29		8/30/2021		8/30/2022		8%		140,650		25,682		114,968	8/30/2021	12/31/2022	8%		140,650		6,914		133,736
Note 30		9/02/2021		9/02/2022		8%		216,385		43,972		172,413	9/02/2021	12/31/2022	8%		216,385		11,947		204,438
Note 31		9/17/2021		9/17/2022		8%		270,480		48,092		222,388	9/17/2021	12/31/2022	8%		270,480		12,919		257,561
Note 32		9/30/2021		9/30/2022		8%		270,480		49,425		221,055	9/30/2021	12/31/2022	8%		270,480		17,595		252,885
Note 33		10/07/2021		10/7/2022		8%		86,900		71,447		15,453
Note 34		10/26/2021		10/26/2022		8%		270,480		53,852		216,628	10/26/2021	12/31/2022	8%		270,480		22,985		247,495
Note 35		10/30/2021		10/30/2022		8%		46,800		39,931		6,869
Note 36		11/03/2021		11/03/2022		8%		270,480		38,400		232,080	11/03/2021	12/31/2022	8%		270,480		16,069		254,411
Note 37		11/16/2021		11/16/2022		8%		324,576		123,669		200,907	11/16/2021	12/31/2022	8%		324,576		63,398		261,178
Note 38		11/30/2021		11/30/2022		8%		270,480		79,078		191,402	11/30/2021	12/31/2022	8%		270,480		39,344		231,136
Note 39		12/10/2021		12/10/2022		8%		601,000		178,145		422,855	12/10/2021	12/31/2022	8%		601,000		88,760		512,240
Note 40		12/15/2021		12/15/2022		8%		270,480		87,489		182,991	12/15/2021	12/31/2022	8%		270,480		44,017		226,463
Note 41		12/23/2021		12/23/2022		8%		54,100		17,605		36,495	12/23/2021	12/23/2022	8%		54,100		9,667		44,433
Note 42													1/04/2022	1/04/2023	8%		270,480		23,045		247,435
Note 43													1/12/2022	1/12/2023	8%		300,000		221,695		78,305
Note 44													1/19/2022	1/19/2023	8%		270,480		33,573		236,907
Note 45													2/02/2022	2/02/2023	8%		270,480		26,502		243,978
Note 46													2/03/2022	2/03/2023	8%		425,000		314,068		110,932
Note 47													2/15/2022	2/15/2023	8%		270,480		20,293		250,187
Note 48													2/24/2022	2/24/2023	8%		211,640		156,399		55,241
Note 49													3/01/2022	3/01/2023	8%		120,000		94,147		25,853
Note 50													3/01/2022	3/01/2023	8%		270,480		27,771		242,709
Note 51													3/16/2022	3/16/2023	8%		270,480		26,476		244,004
Note 52													3/22/2022	3/22/2023	8%		120,000		98,661		21,339
Note 53													4/01/2022	4/01/2023	8%		135,240		12,936		122,304
Note 54													4/01/2022	4/01/2023	8%		270,480		25,402		245,078
Note 55													4/04/2022	4/04/2023	8%		92,040		78,530		13,510
Note 56													4/15/2022	4/15/2023	8%		270,480		27,618		242,862
Note 57													4/29/2022	4/29/2023	8%		270,480		21,093		249,387
Note 58													5/05/2022	5/05/2023	8%		66,100		56,398		9,702
Note 59													5/31/2022	5/31/2023	8%		160,000		140,616		19,384
Total							$	5,322,743	$	1,041,126	$	4,281,617				$	8,974,383	$	1,757,804	$	7,216,579

F-16

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

* Notes 1, 2, 3, 4, 5, 6 and 57 in the amounts of $82,000, $208,000, $27,000, $62,000, $202,400, $78,000 and ~~$202,400,~~$85,800 respectively, were fully converted as of ~~December 31, 2021.~~June 30, 2022.

* On ~~October 18, 2021,~~July 7, 2022, the maturity ~~dates~~date of each of Notes ~~6, 7,~~ 8, 9, 10, 11, 12, 14, 16, ~~and~~ 17, 20, 21, 22, 24, 25, 26, 27, 28, 29, 30, 31, 32, 34, 36, 37, 38, & 40 were extended to ~~April 18,~~December 31, 2022, and the lender waived all penalty interest for non-payment.

*Note 2327 in the amount of $~~180,400~~88,400 was paid in cash on ~~November 23, 2021.~~April 4, 2022. The Company recognized a gain on extinguishment of debt in the amount of $~~32,544~~71,799.

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

, related to the write off of the derivative liability.

Between April 1, ~~2021,~~2022, and ~~December 31, 2021,~~June 30, 2022, the Company issued to “accredited investors,” Convertible Promissory Notes aggregating a principal amount of $~~4,453,543~~1,264,820. The Company received an aggregate net proceeds of $~~3,949,765~~1,167,230 after $~~481,278~~90,590 in original note discount and $~~22,500~~7,000 in legal fees. The Company has agreed to pay interest on the unpaid principal balance at the rate of eight percent (8%) per annum from the dates on which Notes are issued until the same becomes due and payable, whether at maturity or upon acceleration, prepayment or otherwise. The Company shall have the right to prepay the Notes, provided it makes a payment as set forth in the agreements.

The outstanding principal amount of the Notes is convertible into the Company’s common stock at the lender’s option at $0.01 per share for the first six months of the term of the Notes. The notes have varying conversion rates. After the six-month anniversary, the conversion price is equal to 63%-70% of the average of the three lowest trading prices of the Company’s common stock. Five of 40 notes outstanding have a fixed conversion rate of $0.002.

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.

18F-17

~~B2DIGITAL, INCORPORATED~~B2Digital, Incorporated

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~Notes to Consolidated Financial Statements

~~DECEMBER 31, 2021~~June 30, 2022 (Unaudited)

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~~three months ended ~~December 31, 2021~~June 30, 2022, is as follows:

Schedule of amortization expense, interest expense and accrued interest on debt
Note Interest Expense Accrued Interest Amortization of Debt Discount Unamortized
Note 6 $ 2,078 $ 9,723 $ – $ –
Note 7 7,785 22,675 – –
Note 8 4,343 17,575 – –
Note 9 4,044 20,400 – –
Note 10 3,468 16,663 7,463 –
Note 11 1,391 6,412 3,542 –
Note 12 1,391 6,261 2,181 –
Note 14 1,613 6,768 7,067 –
Note 16 2,158 8,232 10,215 3,648
Note 17 1,210 4,445 7,130 2,595
Note 20 2,097 5,585 1,002 1,351
Note 21 2,097 5,015 1,516 2,578
Note 22 3,744 7,731 13,657 31,424
Note 24 5,344 9,119 16,648 44,322
Note 25 2,617 4,239 8,518 22,854
Note 26 3,055 4,715 9,691 25,881
Note 27 1,783 2,654 7,223 20,369
Note 28 3,055 4,416 10,758 29,317
Note 29 2,836 3,792 8,372 25,682
Note 30 4,363 5,691 14,079 43,972
Note 31 5,454 6,883 15,742 48,092
Note 32 5,454 5,454 14,380 49,425
Note 33 1,600 1,600 6,763 71,447
Note 34 4,328 4,328 9,409 53,852
Note 35 677 677 2,189 39,931
Note 36 3,695 3,695 6,999 38,400
Note 37 3,201 3,201 8,559 123,669
Note 38 1,838 1,838 5,924 79,078
Note 39 4,084 4,084 15,815 178,145
Note 40 949 949 6,386 87,489
Note 41 – – – 17,605
Total $ 91,752 $ 204,820 $ 221,228 $ 1,041,126

Schedule of amortization expense, interest expense and accrued interest on debt
Note	Interest Expense		Accrued Interest		Amortization of Debt Discount		Unamortized
Note 7	$	–	$	11,420	$	–	$	–
Note 8		10,991		36,746		–		–
Note 9		9,200		43,797		–		–
Note 10		7,719		35,644		–		–
Note 11		3,096		13,687		–		–
Note 12		3,096		13,346		–		–
Note 14		3,590		14,369		–		–
Note 15		–		–		–		–
Note 16		3,746		16,317		–		–
Note 17		2,693		9,357		–		–
Note 18		–		–		–		–
Note 19		–		–		–		–
Note 20		2,074		9,710		339		–
Note 21		2,074		9,141		1,039		–
Note 22		3,703		15,096		16,440		–
Note 24		5,285		19,632		19,476		6,839
Note 25		2,589		9,388		10,057		3,542
Note 26		3,022		10,725		11,379		4,001
Note 27		78		–		12,288		–
Note 28		3,022		10,427		12,936		4,584
Note 29		2,805		9,372		9,739		6,914
Note 30		4,316		14,275		16,695		11,947
Note 31		5,395		17,844		18,231		12,919
Note 32		5,395		16,184		16,450		17,595
Note 34		5,395		15,058		15,947		22,985
Note 35		200		–		34,584		–
Note 36		5,395		14,169		11,422		16,069
Note 37		6,474		16,078		31,928		63,398
Note 38		5,395		12,568		20,803		39,344
Note 39		11,987		27,926		46,833		88,760
Note 40		5,395		11,679		22,893		44,017
Note 41		1,079		2,241		4,165		9,667
Note 42		5,395		10,493		9,265		23,045
Note 43		5,984		11,178		34,271		221,695
Note 44		5,395		9,604		13,081		33,573
Note 45		5,395		8,774		10,548		26,502
Note 46		8,477		13,693		48,550		314,068
Note 47		5,395		8,003		8,224		20,293
Note 48		4,221		5,845		24,177		156,399
Note 49		2,393		3,182		11,315		94,147
Note 50		5,395		7,173		9,663		27,771
Note 51		5,395		6,284		9,246		26,476
Note 52		2,393		2,630		9,339		98,661
Note 53		2,668		2,668		4,031		12,936
Note 54		5,335		5,335		7,926		25,402
Note 55		1,755		1,755		4,306		78,530
Note 56		4,506		4,506		5,176		27,618
Note 57		3,676		3,676		4,028		21,093
Note 58		811		811		3,092		56,398
Note 59		1,052		1,052		3,384		140,616
Total	$	200,850	$	542,858	$	553,266	$	1,757,804

19F-18

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

Debt conversions

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~The following table illustrates the debt converted and the associated gain or loss:

Schedule of Debt Conversions
Note	Conversion Date	Shares issued in conversion	Fair value of shares		Face Value		Accrued Interest		Total Debt		Derivative liability		Net (gain) / loss
Note 7	April 14, 2022	35,873,156	$	82,508	$	40,000	$	6,707	$	46,707	$	45,869	$	(10,068	)
Note 35	April 28, 2022	20,000,000		32,000		20,000		–		20,000		20,685		(8,685	)
Note 35	May 5, 2022	37,631,579		48,921		26,800		1,800		28,600		33,022		(12,701	)
Note 8	May 10, 2022	42,813,737		51,377		26,000		3,670		29,670		26,202		(4,495	)
Note 8	May 25, 2022	47,230,793		28,338		13,000		1,877		14,877		10,638		2,823
Note 8	June 6, 2022	64,261,540		64,262		20,000		2,941		22,941		41,730		(409	)
		247,810,805	$	307,406	$	145,800	$	16,995	$	162,795	$	178,146	$	(33,535	)

~~DECEMBER 31, 2021~~During the three months ended June 30, 2022, the Company repaid Note 27 in cash. The principal balance was $88,400 and the accrued interest was $4,476. The prepayment fee was $15,495. The Company repaid $108,371. As of the repayment dates, the derivative liability related to Notes was $73,673. As a result, the Company recorded a gain of extinguishment in the amount of $73,673.

Between the gain on extinguishment of $33,535 related to the conversions above and the gain on extinguishment related to the repayment, the total gain was $107,208.

NOTE 10 –DERIVATIVE FINANCIAL INSTRUMENTS

The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of ~~December 31, 2021:~~June 30, 2022:

Schedule of derivative liabilities
	December 31, 2021					June 30, 2022
The financings giving rise to derivative financial instruments	Indexed Shares		Fair Values			Indexed Shares		Fair Values
Compound embedded derivatives		1,372,797,202		(2,199,087	)		19,585,533,532		(6,911,764	)
Total		1,372,797,202		(2,199,087	)		19,585,533,532		(6,911,764	)

F-19

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of ~~December~~March 31, ~~2020:~~2022:

	December 31, 2020					March 31, 2022
The financings giving rise to derivative financial instruments	Indexed Shares		Fair Values			Indexed Shares		Fair Values
Compound embedded derivatives		311,625,168		(739,574	)		559,931,126	$	(3,831,191	)
Total		311,625,168		(739,574	)		559,931,126	$	(3,831,191	)

The following table summarizes the effects on the Company’s (loss) gain ~~(loss)~~ associated with changes in the fair values of the derivative financial instruments by type of financing for the three months ended ~~December 31, 2021,~~June 30, 2022 and ~~2020:~~2021:

The financings giving rise to derivative financial instruments and the income effects: December 31, 2021 December 31, 2020
Compound embedded derivatives $ (66,894 ) $ 194,410
Day one derivative loss (45,485 ) (125,408 )
Total (loss) $ (112,379 ) $ (69,002 )

The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the nine months ended December 31, 2021, and 2020:

The financings giving rise to derivative financial instruments and the income effects: December 31, 2021 December 31, 2020
Compound embedded derivatives $ (421,836 ) $ (592,997 )
Day one derivative loss (45,485 ) (125,408 )
Total (loss) $ (467,321 ) $ (715,405 )

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

	June 30,			June 30,
	2022			2021

Compound embedded derivatives	$	(2,809,276	)	$	310,871
Day one derivative loss		(194,323	)		–
Total	$	(3,003,599	)	$	310,871

The Company’s Convertible Promissory Notes issued between October 4, 2019 and ~~December 31, 2021,~~June 30, 2022 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.

F-20

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

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:

Schedule of significant inputs
December 31, 2021
Quoted market price on valuation date $ 0.0029
Contractual conversion rate $0.0001-$0.01
Contractual term to maturity 0.005 Years – 1.0 Years
Market volatility:
Equivalent Volatility 90.12% - 170.73%
Interest rate 8.00%

Schedule of significant inputs
	June 30, 2022
Quoted market price on valuation date	$0.0006
Contractual conversion rate	$0.0003 - $0.01
Contractual term to maturity	0.74 Years - 0.918 Years
Market volatility:
Equivalent Volatility	69.86% - 282.23%
Interest rate	8.0%

The following table reflects the issuances of compound embedded derivatives and the changes in fair value inputs and assumptions related to the compound embedded derivatives during the period ended ~~December 31, 2021, and~~June 30, 2022 March 31, ~~2021.~~2022.

Schedule of changes in fair value of derivatives
December 31, March 31,
2021 2021
Beginning balance $ 1,137,623 $ 58,790
Issuances:
Compound embedded derivatives 1,088,514 732,416
Conversions (287,897 ) (859,352 )
Derivative extinguished / debt repaid in cash (160,989 ) (126,892 )
(Gain) loss on changes in fair value inputs and assumptions reflected in income 421,836 1,332,661
Total $ 2,199,087 $ 1,137,623

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

Schedule of changes in fair value of derivatives
	June 30,			March 31,
	2022			2022

Beginning balance	$	3,831,191		$	1,137,623
Issuances:
Compound embedded derivatives		326,921			2,038,843
Conversions		(178,146	)		(328,638	)
Derivative extinguished / debt repaid in cash		(71,801	)		(243,300	)
Loss on changes in fair value inputs and assumptions reflected in income		2,809,276			1,181,178
Day one derivative expense		194,323			45,485
Total	$	6,911,764		$	3,831,191

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~~480,000,000 shares of common stock. The Series A Preferred Stock votes with the Common Stock on all matters to be voted on by the common stock on an as-converted basis. On such matters, each holder of Series A Preferred Stock is entitled to 240 votes for each share of Series A Preferred Stock held by such shareholder.

~~Common Stock~~

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

~~On April 23, 2020, the Company~~ All 40,000,000 of Series B are issued ~~4,292,915~~ ~~shares of stock to GS Capital in exchange for the conversion of $7,341~~ inand outstanding. Series B is 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~~320,000,000 shares of common stock. The ~~5,071,885~~ ~~shares were valued at $16,558. The Company recorded~~Series B Preferred Stock votes with the ~~removal of~~Common Stock on all matters to be voted on by the $~~7,500~~ ~~in principle, $488~~ ~~in interest, and $8,570~~ ~~in derivative liabilities resulting in no gain or loss.~~

~~On August 10, 2020, the Company issued~~ ~~4,000,000~~ ~~shares of~~ common stock on an as-converted basis. On such matters, each holder of Series B Preferred Stock is entitled to ~~Veyo Partners LLC in exchange~~120 votes for ~~investor relation services valued at $34,800~~ ~~or $0.0087 per share.~~

~~On August 13, 2020, the Company sold~~ ~~13,333,334~~ ~~shares~~each share of ~~common stock for $100,000~~Series B Preferred Stock held by such shareholder. ~~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.~~

22F-21

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~B2Digital, Incorporated

~~DECEMBER 31, 2021~~Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

~~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 amounts, $4,075~~ ~~in interest, and $142,990~~ ~~in derivative liabilities, the Company recorded $60,298~~ ~~as loss on extinguishment of debt.~~

~~On September 14, 2020, the Company sold~~ ~~22,000,000~~ ~~shares of common stock for $165,000~~ ~~or $0.0075 per share.~~

~~On December 31, 2020, the Company issued~~ ~~3,733,333~~ ~~shares of common stock for services valued at $26,133~~ ~~or $0.0070 per share.~~

Common Stock Issuances for the ~~nine~~three months ended ~~December 31,~~June 30, 2022

On April 14, 2022, GS Capital converted $40,000 in principal and $6,707 in accrued interest in connection with Promissory Note dated March 10, 2020. Pursuant to the terms of the conversion, the Company issued 35,873,156 shares of common stock at $0.001302 per share.

On April 28, 2022, Sixth Street Lending converted $20,000 in principal in connection with Promissory Note dated October 26, 2021. Pursuant to the terms of the conversion, the Company issued 20,000,000 shares of common stock at $0.0010 per share.

On May 5, 2022, 1800 Diagonal Lending converted $26,800 in principal and $1,800 in accrued interest in connection with Promissory Note dated October 26, 2021. Pursuant to the terms of the conversion, the Company issued 37,631,579 shares of common stock at $0.00076 per share.

On May 10, 2022, GS Capital converted $26,000 in principal and $3,670 in accrued interest in connection with Promissory Note dated August 4, 2020. Pursuant to the terms of the conversion, the Company issued 42,813,737 shares of common stock at $0.000693 per share.

On May 25, 2022, GS Capital converted $13,000 in principal and $1,877 in accrued interest in connection with Promissory Note dated August 4, 2020. Pursuant to the terms of the conversion, the Company issued 47,230,793 shares of common stock at $0.000315 per share.

On June 6, 2022, GS Capital converted $20,000 in principal and $2,941 in accrued interest in connection with Promissory Note dated August 4, 2020. Pursuant to the terms of the conversion, the Company issued 64,261,540 shares of common stock at $0.000357 per share.

Common Stock Issuances for the three months ended June 30, 2021

On April 1, 2021, the Company issued 50,000,000 shares of stock to GS Capital in exchange for $200,000 or $0.004 per share.

On April 10, 2021, the Company issued 25,000,000 shares of stock to AES Capital in exchange for $100,000 or $0.004 per share.

On April 14, 2021, the Company issued 13,750,000 shares of stock to GS Capital in exchange for $55,000 or $0.004 per share.

On May 13, 2021, the Company issued 50,000,000 shares of stock to GS Capital in exchange for $200,000 or $0.004 per share.

On May 21, 2021, the Company issued 1,500,000 shares of common stock to Rex Chan in exchange for contractor services valued at $6,450 or $0.0043 per share representing the share price at the date of the transaction.

On May 21, 2021, the Company issued 2,000,000 shares of common stock to BM Giancarlo in exchange for management services valued at $8,600 or $0.0043 per share representing the share price at the date of the transaction.

F-22

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

On May 21, 2021, the Company issued 2,000,000 shares of common stock to Carlos Diaz in exchange for management services valued at $8,600 or $0.0043 per share representing the share price at the date of the transaction.

On June 3, 2021, the Company issued 25,000,000 shares of stock to AES Capital in exchange for $100,000 or $0.004 per share.

On June 16, 2021, the Company issued 31,250,000 shares of stock to GS Capital in exchange for $125,000 or $0.004 per share.

On June 25, 2021, the Company issued 25,000,000 shares of stock to AES Capital in exchange for $100,000 or $0.004 per share.

~~On July 13, 2021, the Company issued~~ ~~25,000,000~~ ~~shares of stock to Geneva Roth in exchange for $100,000~~ ~~or $0.004 per share.~~

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

~~On July 15, 2021, the Company issued~~ ~~25,000,000~~ ~~shares of stock to GS Capital in exchange for $100,000~~ ~~or $0.004 per share.~~

~~On July 21, 2021, the Company issued~~ ~~25,000,000~~ ~~shares of stock to GS Capital in exchange for $100,000~~ ~~or $0.004 per share.~~

~~On October 5, 2021, GS Capital converted $100,000~~ ~~in principal and $13,479~~ ~~in accrued interest in connection with Promissory Note dated January 20, 2020. Pursuant to the terms of the conversion, the Company issued~~ ~~44,293,306~~ ~~shares of common stock at $0.002562 per share.~~

~~On October 8, 2021, the Company issued~~ ~~10,000,000~~ ~~Shares in connection with compensation for services rendered. This award was valued using the stock price of $0.0052 on the date of the award.~~

~~On October 19, 2021, GS Capital converted $84,000~~ ~~in principal and $11,580~~ ~~in accrued interest in connection with Promissory Note dated January 20, 2020. Pursuant to the terms of the conversion, the Company issued~~ ~~37,306,982~~ ~~shares of common stock at $0.002562 per share.~~

~~On October 26, 2021, the Company issued~~ ~~17,000,000~~ ~~Shares in connection with stock awards granted to employees and non-employees. This award was valued using the stock price of $0.0044 on the date of the award.~~

~~On October 26, 2021, the Company sold~~ ~~11,250,000~~ ~~shares of common stock for $45,000~~ ~~or $0.004 per share.~~

~~On December 6, 2021, the Company issued~~ ~~72,000,000~~ ~~Shares in connection with stock awards granted to employees and non-employees. This award was valued using the stock price of $0.0023 on the date of the award.~~

~~On December 14, 2021, the Company issued~~ ~~35,000,000~~ ~~shares of common stock pursuant to Note 39 dated December 10, 2021. The expense associated with this issuance is being amortized over 12 months.~~

~~On December 22, 2021, the Company issued~~ ~~2,900,000~~ ~~shares of common stock to GS Capital in connection with a Promissory Note dated April 26, 2021. As of December 31, 2021 the expense associated with these shares was fully expensed.~~

~~On December 28, 2021, GS Capital converted $40,000~~ ~~in principal and $5,944~~ ~~in accrued interest in connection with Promissory Note dated January 20, 2020. Pursuant to the terms of the conversion, the Company issued~~ ~~33,658,688~~ ~~shares of common stock at $0.001365 per share.~~

NOTE 12 –LEASES

~~Kokomo lease~~

On October 1, 2020, the Company, under its subsidiary ONE More Gym LLC, entered into a facilities lease (“Kokomo Lease”) for 25,000 square feet in Kokomo, Indiana. The initial lease term is for five years, and the lease commencement date is October 1, 2020. The monthly lease payments are $7,292 in year 1, $7,656 in year 2, $8,039 in year 3, and $8,441 in years 4 and 5.

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

~~Valparaiso Lease~~

The Company leases 11,676 square feet of office space located at 1805 E. Lincolnway, Valparaiso, Indiana 46383. The Company assumed the lease (“Valparaiso Lease”) when it acquired CFit Indiana Inc. on October 6, 2020. The ~~monthly~~ ~~lease payments are $7,625~~ ~~and the lease expires on~~ ~~December 31, 2023~~.

~~Merrill Lease~~

~~In connection with the acquisition of CFit Indiana Inc. on October 6, 2020, the Company acquired a facilities lease for 15,000 square feet at 6055N. Broadway Ave., Merrillville, Indiana. The~~ ~~monthly~~ ~~lease payments are $11,190~~ ~~and the lease expires on~~ ~~February 28, 2026~~.

Tuscaloosa Lease

In connection with the acquisition of Hillcrest Fitness LLC on December 1, ~~2020,~~2021, the Company acquired a facilities lease at 6551 Highway 69 South, Tuscaloosa, AL 35405. The monthly lease payments are $6,000 and the lease expires on March 6, 2024.

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 operating expenses on the statements of operations.

Birmingham Lease

In connection with the acquisition of Club Fitness LLC on April 1, 2021, the Company acquired a ~~facilities~~facility lease at 2520 Moody Parkway, Mood, AL 35004. The monthly lease payments are $6,000 and the lease expires on April 30, 2026.

~~Valparaiso Additional Space Lease~~

On August 30, 2021, the Company entered into a facilities lease (“Valparaiso Additional Space”) for 6,380 square feet in Valparaiso, Indiana. The initial lease term is for five years, and the lease commencement date is August 30, 2021. The ~~monthly~~ ~~lease payments are $4,250~~ plus Common Area Maintenance (“CAM”) in year 1, $5,317 plus (“CAM”) in year 2 and 3, and $6,380 plus (“CAM”) in year 4 and 5. The Company has the option to renew at a rental rate of $6,912 plus (“CAM”) for years 2029 through 2033.

~~On November 23, 2021 the Company terminated its lease for (‘Valparaiso Additional Space”). The results of this lease termination were to reduce the Operating Lease Right of Use Asset by $369,663~~ ~~and decrease the Lease Liability by $375,883~~.

Tuscaloosa Additional Space Lease

On November 1, 2021, the Company entered into a facilities lease (“Tuscaloosa Additional Space”) in Tuscaloosa, Alabama. The initial lease term is for five years, and the lease commencement date is December 1, 2021. The monthly lease payments are fixed at $1,625 plus Common Area Maintenance of $125 per month for all five years.

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

F-23

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

Right-of-use asset is summarized below:

Summary of right-of-use asset
	December 31, 2021																						June 30, 2022
	Kokomo Lease			Valparaiso Lease			Merrill Lease			Tuscaloosa Lease			Birmingham Lease			Tuscaloosa Additional Lease			Total			Tuscaloosa Additional Lease
Office lease	$	375,483		$	374,360		$	701,404		$	222,087		$	284,745		$	77,119		$	2,035,198		$	77,119
Less: accumulated amortization		(77,434	)		(129,853	)		(94,697	)		(52,766	)		(30,289	)		(996	)		(386,035	)		(7,148	)
Right-of-use asset, net	$	298,049		$	244,507		$	606,707		$	169,321		$	254,456		$	76,123		$	1,649,163		$	69,971

Operating lease liability is summarized below:

Summary of operating lease liability
	December 31, 2021																					June 30, 2022
	Kokomo Lease			Valparaiso Lease			Merrill Lease			Tuscaloosa Lease			Birmingham Lease			Tuscaloosa Additional Lease			Total			Tuscaloosa Lease			Birmingham Lease			Tuscaloosa Additional Lease			Total
Office lease	$	307,187		$	244,508		$	673,147		$	169,321		$	254,456		$	76,123		$	1,724,742		$	140,901		$	230,382		$	69,971		$	441,254
Less: current portion		(66,008	)		(116,171	)		(123,746	)		(58,292	)		(49,377	)		(12,618	)		(426,212	)		(61,268	)		(51,898	)		(13,262	)		(126,428	)
Long term portion	$	241,179		$	128,336		$	549,402		$	111,029		$	205,079		$	63,505		$	1,298,530		$	79,633		$	178,484		$	56,709		$	314,826

Maturity of the lease liability is as follows:

Schedule of maturity of the lease liability
	December 31, 2021																					June 30, 2022
	Kokomo Lease			Valparaiso Lease			Merrill Lease			Tuscaloosa Lease			Birmingham Lease			Tuscaloosa Additional Lease			Total			Tuscaloosa Lease			Birmingham Lease			Tuscaloosa Additional Lease			Total
Fiscal year ending March 31, 2022	$	22,969		$	33,569		$	33,575		$	18,000		$	18,000		$	4,875		$	130,988
Fiscal year ending March 31, 2023		94,172			134,274			201,450			72,000			72,000			19,500			593,396		$	54,000		$	54,000		$	14,625		$	122,625
Fiscal year ending March 31, 2024		98,880			100,706			201,450			72,000			72,000			19,500			564,536			72,000			72,000			19,500			163,500
Fiscal year ending March 31, 2025		101,292			–			201,450			30,000			72,000			19,500			424,242			30,000			72,000			19,500			121,500
Fiscal year ending March 31, 2026		50,646			–			184,661			–			72,000			19,500			326,807			–			72,000			19,500			91,500
Fiscal year ending March 31, 2027		–			–			–			–			6,000			13,000			19,000			–			6,000			13,000			19,000
Present value discount		(60,772	)		(24,041	)		(149,439	)		(22,679	)		(57,544	)		(19,752	)		(334,227	)		(15,099	)		(45,618	)		(16,154	)		(76,871	)
Lease liability	$	307,187		$	244,508		$	673,147		$	169,321		$	254,456		$	76,123		$	1,724,742		$	140,901		$	230,382		$	69,971		$	441,254

26F-24

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~B2Digital, Incorporated

~~DECEMBER 31, 2021~~Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

NOTE 13 – COMMITMENTS AND CONTINGENCIES

During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with FASB ASC 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of ~~December 31, 2021,~~June 30, 2022, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements.

The Company entered into an employment agreement with its Executive Vice President as of November 24, 2017. Under the terms of the agreement, the Company will be liable for severance and other payments under certain conditions. The employment agreement is for a period of 36 months and renews for a successive two years unless written notice is provided by either party under the terms of the agreement.

On ~~November 29, 2020,~~March 1, 2022, with Greg P. Bell abstaining, the board of directors of the Company approved the Chairman of the Board and Chief Executive Officer & President Agreement dated effective ~~November 23, 2020,~~March 1, 2022, with Mr. Bell, the Company’s Chairman of the Board, CEO, and President. The agreement supersedes the previous agreement of the same title dated effective November ~~24, 2017.~~23, 2020. The term of the agreement is until Mr. Bell is removed from his executive positions by 80% of the voting control of the Company unless Mr. Bell is legally incapacitated (until legal capacity is regained), as determined by a court of competent jurisdiction or upon Mr. Bell’s death. Mr. Bell can terminate the agreement upon three months’ prior written notice to the Company.

Pursuant to the agreement, Mr. Bell is entitled to an annual salary of $120,000 and Mr. Bell was also issued 40,000,000 shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”).

Each of the acquisition agreements contain a Management Services Agreement (“MSA”) whereby the Company agrees to pay a management fee based on certain performance targets. The MSA agreements expire 10 years from the acquisition agreement dates.

NOTE 14 - SUBSEQUENT EVENTS

Convertible Promissory ~~Note~~Notes

On ~~January 4,~~August 16, 2022, the Company issued 73,803,875 shares of stock to GS Capital in exchange for the conversion of $20,000 of principal and $3,248 of accrued interest related to convertible notes payable.

Notes payable

On July 7, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to Mast Hill Fund, LP a Promissory Note in the aggregate principal amount of $483,000.00. The Note has a maturity date of July 7, 2023, and the Company has agreed to principal payments that shall be made in ten (10) installments each in the amount of $33,810.00 commencing on the ninetieth (90^th) day anniversary following the issue date and continuing thereafter each thirty (30) days for ten (10) months.

B2Digital, Incorporated

Notes to Consolidated Financial Statements

June 30, 2022 (Unaudited)

On August 11, 2022, the Company entered into an Agreement with Mast Hill Fund, LP pursuant to which the Company issued to Mast Hill Fund, LP a Promissory Note in the aggregate principal amount of $57,777.78. The Note has a maturity date of August 11, 2023, and the Company has agreed to principal payments that shall be made in ten (10) installments each in the amount of $5,777.75 commencing on the ninetieth (90^th) day anniversary following the issue date and continuing thereafter each thirty (30) days for ten (10) months.

On August 26, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of ~~$270,480.~~$66,000. The Note has a maturity date of ~~January 4,~~August 26, 2023, and the Company has agreed to ~~pay interest~~principal payments that shall be made in ten (10) installments each in the amount of $7,128 commencing on the ~~unpaid principal balance of~~ninetieth (90^th) day anniversary following the ~~note at the rate of (8%) per annum from the~~issue 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.continuing thereafter each thirty (30) days for ten (10) months.

On January 12, 2022, the Company entered into an Agreement with Mast Hill Fund, L.P. pursuant to which the Company issued to Mast Hill Fund, L.P. a Promissory Note in the aggregate principal amount of $300,000. The Note has a maturity date of January 12, 2023, and the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of (8%) per annum from the date on which the note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note.

~~B2DIGITAL, INCORPORATED~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2021~~

~~On January 19,~~September 9, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of ~~$270,480.~~$55,000. The Note has a maturity date of ~~January 19,~~September 9, 2023,, and the Company has agreed to ~~pay interest~~principal payments that shall be made in ten (10) installments each in the amount of $5,940 commencing on the ~~unpaid principal balance of~~ninetieth (90^th) day anniversary following the ~~note at the rate of (8%) per annum from the~~issue 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.continuing thereafter each thirty (30) days for ten (10) months.

On ~~February 2,~~September 16, 2022, the Company entered into an Agreement with GS Capital Partners pursuant to which the Company issued to GS Capital Partners a Promissory Note in the aggregate principal amount of ~~$270,480.~~$55,000. The Note has a maturity date of ~~February 2,~~September 16, 2023, and the Company has agreed to ~~pay interest~~principal payments that shall be made in ten (10) installments each in the amount of $5,940 commencing on the ~~unpaid principal balance of~~ninetieth (90^th) day anniversary following the ~~note at the rate of (8%) per annum from the~~issue 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.continuing thereafter each thirty (30) days for ten (10) months.

On ~~February 3,~~September 23, 2022, the Company entered into an Agreement with ~~Mast Hill Fund, L.P.~~GS Capital Partners pursuant to which the Company issued to ~~Mast Hill Fund, L.P.~~GS Capital Partners a Promissory Note in the aggregate principal amount of ~~$425,000.~~$135,000. The Note has a maturity date of ~~February 3,~~September 23, 2023, and the Company has agreed to ~~pay interest~~principal payments that shall be made in ten (10) installments each in the amount of $14,580 commencing on the ~~unpaid principal balance of~~ninetieth (90^th) day anniversary following the ~~note at the rate of (8%) per annum from the~~issue date ~~on which the note is issued until the same becomes due~~ and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment to Mast Hill Fund, L.P. as set forth in the note.

continuing thereafter each thirty (30) days for ten (10) months.

Assets

On July 27, 2022, the Company disposed of One More Gym Merrillville, LLC in a sale of the assets. The Company received cash of $15,000 in exchange for the net assets totaling $36,299. This generated a loss on sale of assets of $21,299.

On July 27, 2022, the Company disposed of One More Gym Valparaiso, LLC in a sale of the assets. The Company received cash of 25,000 in exchange for the net assets totaling $71,452. This generated a loss on sale of assets of $46,452.

28F-26

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contain certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events; are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in the section titled “Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, ~~2021,~~2022 filed on ~~June 29, 2021.~~September 28, 2022. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements

Basis of Presentation

We have ~~ten~~seven wholly-owned subsidiaries. Hardrock Promotions LLC which owns Hardrock MMA in Kentucky, United Combat League MMA LLC, Pinnacle Combat LLC, Strike Hard Productions, ~~LLC, ONE More Gym LLC, One More Gym Merrillville LLC, One More Gym Valparaiso~~ LLC, One More Gym Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC.

The consolidated financial statements, which include the accounts of the Company and its ~~ten~~seven 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 nature of our outstanding debt being senior secured and the risk of foreclosure on our assets by the lender;

	·	The unprecedented impact of COVID-19 pandemic on our business, customers, employees, consultants, service providers, stockholders, investors and other stakeholders;


	·	The speculative nature of the business we intend to develop;


	·	Our reliance on suppliers and customers;


	·	Our dependence upon external sources for the financing of our operations, particularly given that there are concerns about our ability to continue as a “going concern;”

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Our ability to effectively execute our business plan;


	·	Our ability to manage our expansion, growth and operating expenses;


	·	Our ability to finance our businesses;


	·	Our ability to service debt, when due and avoid defaults;

	·	Our ability to promote our businesses;


	·	Our ability to compete and succeed in highly competitive and evolving businesses;


	·	Our ability to respond and adapt to changes in technology and customer behavior; and


	·	Our ability to protect our intellectual property and to develop, maintain and enhance strong brands.

Although the forward-looking statements in this Quarterly Report on Form 10-Q are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as maybe be required by law, to update this Quarterly Report on Form 10-Q or otherwise make public statements updating our forward-looking statements.

Critical Accounting Policies

Basis of Accounting

The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three ~~and nine~~ months ended ~~December 31, 2021,~~June 30, 2022 are not necessarily indicative of the results to be expected for the year ending March 31, ~~2022.~~2023.

Use of Estimates

Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The most significant assumptions and estimates relate to the valuation of derivative liabilities and the valuation of assets and liabilities acquired through business combinations. Actual results could differ from these estimates and assumptions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains deposits primarily in four financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation ("FDIC"). The Company has not experienced any losses related to amounts in excess of FDIC limits or $250,000. The Company did not have any cash in excess of FDIC limits ~~as of December 31, 2021,~~at June 30, 2022 and March 31, ~~2021,~~2022, respectively.

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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

Property and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets’ estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying consolidated statement of operations of the respective period. The estimated useful lives range from 3-7 years.

~~Goodwill~~Assets Held for Sale

We consider properties to be Assets held for sale when management approves and commits to a plan to dispose of a property or group of properties. The property held for sale prior to the sale date is separately presented on the balance sheet as Assets held for sale. During the fourth quarter of fiscal 2022 management initiated the sale of the gyms located in Indiana: One More Gym, LLC One More Gym Valparaiso and One More Gym Merrillville. The Company completed the sale of One More Gym, LLC during the first quarter of fiscal 2023 with proceeds of $40,000.

~~Goodwill represents the cost in excess~~Long-Lived Assets

Management reviews long-lived assets, including finite-lived intangible assets, for indicators of ~~the fair value of net assets acquired in business combinations. The Company tests goodwill for~~ impairment ~~on an annual basis and when~~whenever events or changes in circumstances indicate that the carrying ~~amount~~value may not be recoverable. ~~Goodwill is deemed~~Cash flows expected to be ~~impaired if~~generated by the related assets are estimated over the asset’s useful life on an undiscounted basis. For assets held for use, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If the evaluation indicates that the carrying ~~amount~~value of ~~goodwill exceeds its estimated~~the asset may not be recoverable, the potential impairment is measured using fair value. AsImpairment losses for assets to be disposed of, ~~December 31, 2021, there were no charges~~if any, are based on the estimated proceeds to ~~goodwill impairment.~~be received, less costs of disposal.

~~Other Income~~

~~During the three months ended December 31, 2021, the Company received $0 in grant income due to COVID-19 relief.~~

Revenue Recognition

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.

Live Event 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. 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.

Gym 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. The majority of revenues are received for gym membership dues. Members pay their dues on the monthly anniversary of when they join the gym. Dues are recognized as revenue over the period they are earned. Any unearned dues are recorded in deferred revenue.

Income Taxes

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, ~~consequently,~~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 three months ended ~~December 31, 2021,~~June 30, 2022 and ~~2020, respectively.~~

2021.

~~Inventory~~

Inventory

Inventories are valued at the lower of cost (determined on a weighted average basis) or market. Management compares the cost of inventories with the market value and allowance is made to write down inventories to market value, if lower. As of ~~December 31, 2021,~~June 30, 2022 and March 31, ~~2021,~~ 2022, the Company did not carry any finished goods ~~inventory.~~inventory.

Earnings Per Share (EPS)

The Company utilize FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. As of ~~December 31, 2021,~~June 30, 2022, the convertible notes are indexed to ~~1,372,797,202~~18,503,829,049 shares of common stock.

The following table sets ~~forth~~for the computation of basic and diluted earnings per share ~~for~~ the three months ended ~~December 31, 2021,~~June 30, 2022 and ~~2020:~~2021:

	December 31, 2021			December 31, 2020			June 30, 2022			June 30, 2021
Basic and diluted
Net loss	$	(2,693,117	)	$	(978,156	)	$	(5,569,642	)	$	(1,061,347	)

Net loss per share
Basic	$	(0.00	)	$	(0.00	)	$	(0.003	)	$	(0.001	)
Diluted							$	(0.003	)	$	(0.001	)

Weighted average number of shares outstanding:
Basic		1,452,481,989			710,522,374
Basic & diluted								1,981,717,164			1,207,948,242

Stock Based Compensation

Topic 718, the Company recognizes an expense for the fair value of its stock awards at the time of grant and the fair value of its outstanding stock options as they vest, whether held by employees or others. As of ~~December 31, 2021,~~June 30, 2022, there were no options outstanding.

During the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ the Company recorded ~~$316,050~~$0 and ~~$409,333, respectively~~$23,650 in stock-compensation ~~expense.~~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.

Recently Adopted Accounting Pronouncements

In September 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred-loss impairment methodology and requires immediate recognition of estimated credit losses expected to occur for most financial assets, including trade receivables. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. The new guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Recently, the FASB voted to delay the implementation date for this accounting standard, for smaller reporting companies, the new effective date is beginning after December 15, 2022, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of this ASU on the consolidated financial statements and is collecting and analyzing data that will be needed to produce historical inputs into any models created as a result of adopting this ASU. At this time, the Company does not believe the adoption of this ASU will have a material effect on the financial statements.

Organization and Nature of Business

We are the premier development league for ~~mixed martial arts (“MMA”).~~MMA. We operate in two major branded ~~segments:~~businesses: The B2 Fighting Series and The ~~ONE More Gym~~ Official B2 Training Facilities ~~Network.~~Network, which is comprised of our two ONE MORE Gym Facilities. We primarily derive revenues from live event ticket sales, pay-per-view ticket sales, content media marketing, and fitness facility memberships.

~~Our~~The Live Events ~~segment~~business (the B2 Fighting Series) is primarily engaged with scheduling, organizing, and producing live MMA events, marketing those events, and generating both live audience and PPV ticket sales, as well as creatively marketing the archived content generated through its operations in this ~~segment.~~business. We own all media rights, merchandising rights, digital distribution networks of the B2 Fighting Series. We also plan to generate additional revenues over time from endorsement deals with global brands as its audience grows. The B2 Fighting Series is licensed in 20 ~~U.S,~~U.S. states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate. We now operate at a pace of more than 40 events per year.

Our Chairman and CEO is now Greg P. Bell. Mr. Bell has over 30 years of global experience developing more than 20 companies in the sports, television, entertainment, digital distribution and banking transaction industries. Capitalizing on the combination of his expertise, relationships and experience as well as his involvement with more than 40,000 live events over his career for major sports leagues and entertainment venues, we are in the process of developing and acquiring companies to become a premier vertically integrated live event sports company.

~~Our Fitness Facility segment~~The B2 Training Facilities business operates primarily through ~~the~~our ONE More Gym ~~Official B2 Training~~ Facilities ~~Network.~~brand. We currently operate ~~five~~two ONE More Gym ~~locations, with plans to continue to scale up~~locations.

For more information about B2Digital, visit our website at www.B2FS.com. We do not incorporate the information on or accessible through our website into this ~~segment at a pace of 4-8 new locations per year. ONE More Gym locations include specialized MMA training resources and serve a recruiting function for the Company's Live Events segment.~~10-Q. We have included our website address in this 10-Q solely as an inactive textual reference.

Results of Operations

~~Three Months Ended December 31, 2021, Compared to the Three Months Ended December 31, 2020~~

~~Revenue~~

~~We had revenues of $612,632~~ for the three months ended ~~December 31,~~June 30, 2022 compared to the three months ended June 30, 2021 ~~versus~~

Revenue

We had total revenues of ~~$300,549~~$700,341 for the three months ended ~~December 31, 2020.~~June 30, 2022, versus revenues of $568,765 for the three months ended June 30, 2021. There was an increase ~~of $181,258, or 220%~~ in live event revenue of $102,231, or 43%, due to ~~the reopening of~~an increase in live events ~~as there continues~~related to ~~be a partial recovery~~less restrictions resulting from the ~~effects of COVID-19.~~COVID-19 pandemic. There was ~~also~~ an increase in gym revenue of ~~$130,825,~~$29,345 or ~~60% primarily as a result of the Company acquiring four gyms since the comparative period.~~

~~Cost of Sales~~

We incurred cost of sales of $388,263 for the three months ended December 31, 2021, versus cost of sales of $102,722 for the three months ended December 31, 2020. This increase of $285,541 is mainly attributable9%, due to the increase in ~~live event revenue and~~the number of gym ~~revenue for~~locations over the ~~three months ended December 31, 2021.~~prior period.

Operating Expenses

~~General & Administrative Expenses~~

~~General and administrative~~Operating expenses ~~include~~are all expenses including merchant fees, payroll, utilities, professional fees, all costs associated with ~~professional fees, salaries,~~ marketing, press releases, public relations, rent, ~~travel,~~ sponsorships, and other expenses. We incurred ~~general and administrative~~operating expenses of ~~$2,299,300~~$2,507,421 for the three months ended ~~December 31, 2021,~~June 30, 2022, versus ~~general and administrative~~operating expenses of ~~$1,147,001~~$1,845,431 for the three months ended ~~December 31, 2020.~~June 30, 2021. The increase of ~~$1,152,299~~$661,990 was primarily due to an increase in the number of live events, increased operations as a result of gym acquisitions, increased salaries, investor relations ~~salaries, travel,~~and professional fees ~~and other costs associated with expanding infrastructure as we continue~~due to ~~execute our~~the growth ~~strategy.~~

of the business.

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Depreciation and Amortization Expense

We incurred depreciation and amortization expense of ~~$102,713~~$71,759 for the three months ended ~~December 31, 2021,~~June 30, 2022, versus depreciation expense of ~~$52,516~~$88,049 for the three months ended ~~December 31, 2020.~~June 30, 2021. The ~~increase~~decrease of ~~$50,197~~$16,290 was due to ~~the purchase of fixed~~a decrease in capitalized assets and intangible assets as a result of ~~business acquisitions and infrastructure growth.~~

~~Other Income (Expense)~~

~~Our other income and expenses include~~recording an impairment loss ~~on sale of assets, loss on~~during the forgiveness of notes receivable, gain on extinguishment of debt, change in fair value of derivative liabilities and interest expense. The increase of $539,007 (net expense) was primarily due to an increase in interest expense, financing expense and negative changes in the fair value of derivative instruments.year ended March 31, 2022.

~~Net Losses~~

~~We incurred a net loss of $2,693,117 for the three months ended December 31, 2021, versus a net loss of $978,156 for the three months ended December 31, 2020.~~

~~Nine months ended December 31, 2021, Compared to the Nine months ended December 31, 2020~~

~~Revenue~~

We had revenues of $1,841,407 for the nine months ended December 31, 2021, versus revenues of $496,497 for the nine months ended December 31, 2020. There was an increase of $669,643 or 593% in live event revenue due to the reopening of live events as there continues to be a partial recovery from the effects of COVID-19. There was also an increase in gym revenue of $675,267 or 176% primarily as a result of the Company acquiring four gyms since the comparative period.

~~Cost of Sales~~

We incurred cost of sales of $919,447 for the nine months ended December 31, 2021, versus cost of sales of $151,941 for the nine months ended December 31, 2020. This increase of $767,506 is directly attributable to the increase in live event revenue and gym revenue for the nine months ended December 31, 2021.

~~Operating Expenses~~

~~General & Administrative Expenses~~

General and administrative expenses include all costs associated with professional fees, salaries, marketing, public relations, rent, travel, sponsorships and other expenses. We incurred general and administrative expenses of $5,707,667 for the nine months ended December 31, 2021, versus general and administrative expenses of $1,986,918 for the nine months ended December 31, 2020. The increase of $3,720,749 was primarily due to increased operations as a result of gym acquisitions, investor relations, salaries, travel, professional fees and other costs associated with expanding infrastructure as we continue to execute our growth strategy.

~~Depreciation and Amortization Expense~~

We incurred depreciation and amortization expense of $289,232 for the nine months ended December 31, 2021, versus depreciation expense of $119,371 for the nine months ended December 31, 2020. The increase of $169,861 was due to the purchase of fixed and intangible assets as result of business acquisitions and infrastructure growth.

Other Income (Expense)

Our other income and expenses include gain on forgiveness of loan, loss on sale of assets, ~~loss on the forgiveness of notes receivable, loss on settlement of debt, (loss)~~gain on extinguishment of debt, financing expense, change in fair value of derivative liabilities, day-one derivative expense and interest expense. We incurred other expenses of $3,762,562 for the three months ended June 30, 2022, versus other income of $215,319 for the three months ended June 30, 2021. The increase in other expenses of $3,977,881 was primarily due to increases in the fair value of derivatives, day-one derivative ~~liabilities~~expense and interest expense. ~~The increase of $255,419 was primarily due an increase in interest expense, offset in part due to a positive change in fair value of derivatives and a gain on extinguishment of debt.~~

Net Losses

We incurred a net loss of ~~$6,311,640~~$5,569,642 for the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022, versus a net loss of ~~$2,743,015~~$1,061,347 for the ~~nine~~three months ended ~~December 31, 2020.~~June 30, 2021.

Current Liquidity and Capital Resources for the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022 compared to the ~~nine~~three months ended ~~December 31, 2020~~June 30, 2021

	December 31,						June 30,
	2021			2020			2022			2021
Summary of Cash Flows:
Net cash used by operating activities	$	(4,561,880	)	$	(1,105,767	)	$	(1,464,688	)	$	(1,045,826	)
Net cash used by investing activities		(577,892	)		(292,138	)
Net cash provided by investing activities								15,544			(299,184	)
Net cash provided by financing activities		5,026,790			1,425,948			1,426,467			1,334,619
Net (decrease) increase in cash and cash equivalents		(112,981	)		28,043
Net increase in cash and cash equivalents								(22,677	)		(10,391	)
Beginning cash and cash equivalents		122,176			46,729			39,623			122,176
Ending cash and cash equivalents	$	9,195		$	74,772		$	16,946		$	111,785

Operating Activities

Cash used in operations of ~~$4,561,880~~$1,464,688 during the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022 was primarily a result of our ~~$6,311,640~~$5,569,642 net loss reconciled with our net non-cash expenses relating to depreciation ~~and amortization~~ expense, ~~financing expense,~~prepaid expenses, accounts payable, accrued liabilities, gain on extinguishment of debt, amortization of debt discount, initial derivative expense, changes in fair value of derivative liabilities and ~~accrued liabilities.~~

deferred revenue. Cash used in operations of ~~$1,105,767~~$1,045,826 during the ~~nine~~three months ended ~~December 31, 2020,~~June 30, 2021 was primarily a result of our ~~$2,743,015~~$1,061,347 net loss reconciled with our net non-cash expenses relating to stock compensation, depreciation ~~and amortization~~ expense, prepaid expenses, accounts payable, accrued liabilities, amortization of debt discount, ~~derivative expense, and~~ changes in fair value of derivative ~~liabilities.~~

~~Investing Activities~~

~~Net cash used in investing activities for the nine months ended December 31, 2021, of $577,892 resulted from the payments of $165,000 related to business acquisitions~~liabilities and ~~capital expenditures in the amount of $412,892.~~

deferred revenue.

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Investing Activities

Net cash received in investing activities for the three months ended June 30, 2022 of $15,544 resulted from the sale of gym locations partially offset by capital expenditures. Net cash used in investing activities for the ~~nine~~three months ended ~~December 31, 2020,~~June 30, 2021 of ~~$292,138~~$299,184 resulted from ~~the payments of $114,100 related to~~ business acquisitions and capital ~~expenditures in the amount of $178,028.~~expenditures.

Financing Activities

Net cash provided by financing activities was ~~$5,026,790~~$1,426,467 for ~~nine~~three months ended ~~December 31,~~June 30, 2022, which consisted primarily of proceeds from notes payable less repayments of notes payable and from the conversion of existing notes payable, Net cash provided by financing activities was $1,334,619 for three months ended June 30, 2021, which consisted primarily of ~~$150,000~~proceeds from ~~the issuance~~notes payable less repayments of notes payable, ~~$4,178,506~~proceeds from the ~~issuance~~conversion of ~~convertible~~existing notes payable ~~$(432,362) in payments related to repayment of convertible notes payable,~~ and ~~$1,225,000 in proceeds from~~ the issuance of common stock.

Net cash provided by financing activities was $1,425,948 for nine months ended December 31, 2020, which consisted of $122,766 from proceeds from the issuance of notes payable, $865,000 from the issuance of convertible notes payable, and $465,000 in proceeds from the issuance of common stock.

Future Capital Requirements

Our current available cash and cash equivalents are insufficient to satisfy our liquidity requirements. Our capital requirements for the remainder of fiscal year 2022 and for 2023 will depend on numerous factors, including management’s evaluation of the timing of projects to pursue. Subject to our ability to generate revenues and cash flow from operations and our ability to raise additional capital (including through possible joint ventures and/or partnerships), we expect to incur substantial expenditures to carry out our business plan, as well as costs associated with our capital raising efforts and being a public company.

Our plans to finance our operations include seeking equity and debt financing, alliances or other partnership agreements, or other business transactions, that would generate sufficient resources to ensure continuation of our operations.

The sale of additional equity or debt securities may result in additional dilution to our shareholders. If we raise additional funds through the issuance of debt securities or preferred stock, these securities could have rights senior to those of our common stock and could contain covenants that would restrict our operations. Any such required additional capital may not be available on reasonable terms, if at all. If we were unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned activities and limit our operations which could have a material adverse effect on our business, financial condition and results of operations.

Inflation

The amounts presented in our consolidated financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis. For the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022, the Company had a net loss of ~~$6,311,640~~$5,569,642, had net cash used in operating activities of ~~$4,561,880,~~$1,464,688, had negative working capital of ~~$7,608,136~~$16,283,881, accumulated deficit of ~~$15,508,888~~$26,043,709 and stockholders’ deficit of ~~$5,914,766.~~$15,466,508. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

In the ordinary course of our business, we are not exposed to market risk of the sort that may arise from changes in interest rates or foreign currency exchange rates, or that may otherwise arise from transactions in derivatives.

The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our significant estimates and assumptions include the fair value of our common stock, stock-based compensation, the recoverability and useful lives of long-lived assets, and the valuation allowance relating to our deferred tax assets.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Our management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, the Company has elected not to provide the disclosure required by this item.

Item 4.

Controls and Procedures.

Disclosure Controls and Procedures

The Company has established disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and, as such, is accumulated and communicated to the Company’s Chief Executive Officer, Greg P. Bell, who serves as our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Mr. Bell, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of ~~December 31, 2021.~~June 30, 2022. Based on his evaluation, Mr. Bell concluded that the Company’s disclosure controls and procedures were effective as of ~~December 31, 2021.~~June 30, 2022.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during the Company’s most recent fiscal quarter ended ~~December 31, 2021,~~June 30, 2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

3936

PART ~~II—~~II – OTHER INFORMATION

Item 1A.

Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended March 31, 2022, which could materially affect our business, financial condition or future results. The risks described in the Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

Convertible Note Issuances

~~During~~Between April 1, 2022, and June 30, 2022, the ~~quarter ended December 31, 2021, we~~Company issued to “accredited investors,” Convertible Promissory Notes aggregating a principal amount of ~~$2,195,296. In addition, 35,000,000 shares~~$1,264,820. The Company received an aggregate net proceeds of ~~Common Stock were~~$1,167,230 after $90,590 in original note discount and $7,000 legal fees. The Company has agreed to pay interest on the unpaid principal balance at the rate of eight percent (8%) per annum from the dates on which Notes are issued until the same becomes due and payable, whether at maturity or upon acceleration, prepayment or otherwise. The Company shall have the right to prepay the Notes, provided it makes a ~~lender~~payment as ~~commitment shares (the “~~~~Commitment Shares~~~~”).~~set forth in the agreements.

These ~~Notes and Commitment Shares~~notes were issued without registration under the Securities Act of 1933, as amended, by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as ~~transactions~~a transaction by an issuer not involving any public offering. ~~Selling~~We paid $11,700 in selling commissions ~~of $43,552 were paid~~ to Moody Capital Solutions, Inc., a registered broker-dealer, in connection with the ~~issuances~~issuance of one of the notes.

Shares Issued Pursuant to Note Conversions

During the quarter ended ~~December 31, 2021,~~June 30, 2022, a lender converted an aggregate of ~~$255,003~~$162,795 in principal and accrued and unpaid interest of their promissory notes into an aggregate of ~~115,258,976~~247,810,805 shares of our Common Stock. The securities were issued without registration under the Securities Act of 1933, as amended, by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering. No selling commissions were paid in connection with the issuance of the securities.

~~Shares Issued for Services~~

During the quarter ended December 31, 2021, we issued 99,000,000 shares of our Common Stock to a total of 12 individuals for services. The securities were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering. No selling commissions were paid in connection with the issuance of the securities.

~~Shares Issued as Commitment Shares~~

During the quarter ended December 31, 2021, we issued 2,900,000 shares of common stock as commitment shares to a lender in connection with a Promissory Note dated April 26, 2021. The securities were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering. No selling commissions were paid in connection with the issuance of the securities.

~~Issuer Purchases of Equity Securities~~

On October 11, 2021, our Board of Directors approved the Company entering into the Common Stock Repurchase Agreement dated October 11, 2021 with Go Value Networks pursuant to which we agreed to repurchase an aggregate of 12,816,666 shares of our Common Stock previously issued to Go Value Networks. The shares were repurchased by us at a purchase price of $0.005 per Share for an aggregate purchase price of $50,000.

Effective November 1, 2021, we entered into the Business Purchase Agreement and Management Services Agreement Termination Agreement with Mark Slater and Colosseum Combat LLC pursuant to which Mr. Slater agreed to cancel 8,000,000 previously-issued shares of our Common Stock, amongst other obligations, in exchange for an aggregate of $8,750 to be made in five equal payments.

On December 23, 2021, our Board of Directors approved the Company entering into the Common Stock Repurchase Agreement dated December 23, 2021 with Mike Davis pursuant to which we agreed to repurchase an aggregate of 6,500,000 shares of our Common Stock previously purchased by Mr. Davis. The shares were repurchased by us at a purchase price of $0.0038 per Share for an aggregate purchase price of $24,700.

4037

~~Use of Proceeds~~

On February 2, 2021, our Registration Statement on Form S-1 (File No. 333-251846) was declared effective by the SEC and the offering was commenced upon effectiveness and is still ongoing as all of the 625,000,000 (for gross proceeds of $2,500,000) offered shares have not been sold and the offering has not been terminated.

During the quarter ended December 31, 2021, we sold a total of 11,250,000 shares of Common Stock for gross proceeds of $45,000. We did not pay any fees or commissions from the sales and received net proceeds of $45,000. The net proceeds were used for capital expenditures.

~~Item 5.~~

~~Other Information.~~

On December 23, 2021, our Board of Directors approved the Company entering into the Common Stock Repurchase Agreement dated December 23, 2021, with Mike Davis pursuant to which we agreed to repurchase an aggregate of 6,500,000 shares of our Common Stock previously purchased by Mr. Davis. The shares were repurchased by us at a purchase price of $0.0038 per Share for an aggregate purchase price of $24,700.

Item 6.

Exhibits.

SEC Ref. No.	Title of Document

10.1*	~~Business Purchase Agreement and Management Services Agreement Termination Agreement dated effective November 1, 2021 with Mark Slater and Colosseum Combat LLC~~
10.2*	~~Common Stock Repurchase Agreement dated October 11, 2021 with Go Value Networks~~
10.3*	~~Common Stock Repurchase Agreement dated December 23, 2021, with Mike Davis~~
31.1*	Rule 13a-14(a) Certification by Principal Executive and Financial Officer
32.1**	Section 1350 Certification of Principal Executive and Financial Officer
101.INS*	~~Inline~~ XBRL Instance Document ~~(the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)~~
101.SCH*	~~Inline~~ XBRL Taxonomy Extension Schema Document
101.CAL*	~~Inline~~ XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	~~Inline~~ XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	~~Inline~~ XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	~~Inline~~ XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).

__________________

	*	~~Filed with this Report.~~
	**	~~Furnished with this Report.~~

*Filed with this Report.

**Furnished with this Report.

4138

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~~October 14, 2022	By	/s/ Greg P. Bell
		Greg P. Bell, Chief Executive Officer
		(Principal Executive Officer and Principal
		Financial Officer)

4239


	As of December 31, 2021 (Unaudited)			As of March 31, 2021
Assets
Current assets
Cash and cash equivalents	$	9,195		$	122,176
Deposits and prepaid expenses		67,693			10,681
Total current assets		76,888			132,857

Notes receivable & other receivables		35,400			35,400
Operating lease right-of-use asset		1,649,163			1,575,792
Property and equipment, net of accumulated depreciation		1,193,276			944,999
Intangible assets, net of accumulated amortization		192,634			224,890
Total Assets	$	3,147,361		$	2,913,938

Liabilities & Stockholders' Deficit
Current liabilities
Accounts payable & accrued liabilities	$	401,971		$	213,663
Deferred revenue		64,736			119,504
Note payable- current maturity		295,600			158,200
Note payable- in default		14,000			14,000
Due to shareholder		1,800			0
Payable due for business acquisitions		0			40,000
Convertible notes payable, net of debt discount		4,281,617			1,074,733
Derivative liabilities		2,199,087			1,137,623
Lease liability, current		426,212			0
Total current liabilities		7,685,024			3,021,888

Lease liability, long-term		1,298,530			1,319,457
Note payable- long-term		78,573			105,929

Total Liabilities		9,062,127			4,447,274

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 480,000,000 shares of common stock issued and outstanding at December 31, 2021 and March 31, 2021, respectively.		20			20
Series B: 40,000,000 shares convertible into 160,000,000 shares of common stock issued and outstanding at December 31, 2021 and March 31, 2021, respectively.		400			400
Common stock, $0.00001 par value; 5,000,000,000 shares authorized; 1,630,799,526 and 1,081,390,550 shares issued and outstanding at December 31, 2021 and March 31, 2021, respectively. (This includes 10,000,000 shares in treasury repurchased for $50,000)		15,979			10,815
Additional paid in capital		9,577,723			7,652,677
Accumulated deficit		(15,508,888	)		(9,197,248	)
Total Stockholders' Deficit	$	(5,914,766	)	$	(1,533,336	)
Total Liabilities and Stockholders' Deficit	$	3,147,361		$	2,913,938


	Preferred Stock				Preferred Stock													Additional						Total
	Series A				Series B				Common Stock						Treasury			Paid in			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Stock			Capital			Deficit			Deficit
Balance March 31, 2021		2,000,000	$	20		40,000,000	$	400		1,081,390,550		$	10,815			–		$	7,652,677		$	(9,197,248	)	$	(1,533,336	)

Sale of common stock		–		–		–		–		220,000,000			2,200			–			877,800			–			880,000

Issuance of common stock for services		–		–		–		–		5,500,000			55			–			23,595			–			23,650

Issuance of convertible notes		–		–		–		–		–			–			–			2,080			–			2,080

Net loss		–		–		–		–		–			–			–			–			(1,061,347	)		(1,061,347	)

Balance June 30, 2021		2,000,000	$	20		40,000,000	$	400		1,306,890,550		$	13,070			–		$	8,556,152		$	(10,258,595	)	$	(1,688,953	)

Sale of common stock		–		–		–		–		75,000,000		$	750			–		$	299,250		$	–		$	300,000

Issuance of common stock for services		–		–		–		–		–			–			–			–			–			–

Issuance of convertible notes		–		–		–		–		–			–			–			–			–			–

Net loss		–		–		–		–		–			–			–			–			(2,557,176	)		(2,557,176	)

Balance September 30, 2021		2,000,000	$	20		40,000,000	$	400		1,381,890,550		$	13,820			–		$	8,855,402		$	(12,815,771	)	$	(3,946,129	)

Sale of common stock		–		–		–		–		11,250,000		$	113			–		$	44,887		$	–		$	45,000

Issuance of common stock in connection with notes payable		–		–		–		–		37,900,000			49			–			21,475			–			21,524

Issuance of common stock upon conversion of notes payable		–		–		–		–		115,258,976			1,152			–			471,104			–			472,256

Issuance of common stock for services		–		–		–		–		99,000,000			990			–			291,410			–			292,400

Shares repurchased		–		–		–		–		(14,500,000	)		(145	)		(10,000,000	)		(106,555	)		–			(106,700	)

Net loss		–		–		–		–		–			–			–			–			(2,693,117	)		(2,693,117	)

Balance December 31, 2021		2,000,000	$	20		40,000,000	$	400		1,630,799,526		$	15,979			(10,000,000	)	$	9,577,723		$	(15,508,888	)	$	(5,914,766	)

Schedule of business combination purchase allocation
Consideration
Cash	$	125,000

Fair values of identifiable net assets:
Property & equipment:
Gym equipment	$	76,689

Intangible assets:
Customer relationships		46,311

Total fair value of identifiable net assets	$	125,000