Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2019 | Feb. 19, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Sundance Strategies, Inc. | |
Entity Central Index Key | 0001171838 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 37,828,441 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 16,217 | $ 579 |
Prepaid expenses and other assets | 4,181 | 5,108 |
Total Current Assets | 20,398 | 5,687 |
Current Liabilities | ||
Accounts payable | 754,220 | 306,871 |
Stock repurchase payable | 400,000 | 400,000 |
Total Current Liabilities | 1,154,220 | 706,871 |
Long-Term Liabilities | ||
Notes payable, related parties | 2,220,508 | 1,672,008 |
Accrued expenses | 365,706 | 240,163 |
Total Long-Term Liabilities | 2,586,214 | 1,912,171 |
Total Liabilities | 3,740,434 | 2,619,042 |
Stockholders' Deficit | ||
Preferred stock, authorized 10,000,000 shares, par value $0.001; -0- shares issued and outstanding | ||
Common stock, authorized 500,000,000 shares, par value $0.001; 37,828,441 shares issued and outstanding | 37,829 | 37,829 |
Additional paid in capital | 24,191,224 | 24,191,224 |
Accumulated deficit | (27,949,089) | (26,842,408) |
Total Stockholders' Deficit | (3,720,036) | (2,613,355) |
Total Liabilities and Stockholders' Deficit | $ 20,398 | $ 5,687 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Mar. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares issued | 37,828,441 | 37,828,441 |
Common stock, shares outstanding | 37,828,441 | 37,828,441 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||||
Interest Income on Investment in Net Insurance Benefits | ||||
General and Administrative Expenses | 282,363 | 291,690 | 894,196 | 845,559 |
Loss from Operations | (282,363) | (291,690) | (894,196) | (845,559) |
Other Expense | ||||
Impairment of investment in net insurance benefits | (17,840) | |||
Interest expense | (45,044) | (26,527) | (125,485) | (61,608) |
Financing expense | (4,500) | (155,000) | (87,000) | (774,806) |
Total Other Expense | (49,544) | (181,527) | (212,485) | (854,254) |
Loss Before Income Taxes | (331,907) | (473,217) | (1,106,681) | (1,699,813) |
Income Tax Provision (Benefit) | ||||
Net Loss | $ (331,907) | $ (473,217) | $ (1,106,681) | $ (1,699,813) |
Basic and Diluted: | ||||
Basic and diluted loss per share | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.04) |
Basic and diluted weighted average number of shares outstanding | 37,828,441 | 42,943,495 | 37,828,441 | 43,963,948 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Mar. 31, 2018 | $ 44,129 | $ 24,547,014 | $ (24,786,290) | $ (195,147) |
Balance, shares at Mar. 31, 2018 | 44,128,441 | |||
Net loss | (890,089) | (890,089) | ||
Balance at Jun. 30, 2018 | $ 44,129 | 24,547,014 | (25,676,379) | (1,085,236) |
Balance, shares at Jun. 30, 2018 | 44,128,441 | |||
Balance at Mar. 31, 2018 | $ 44,129 | 24,547,014 | (24,786,290) | (195,147) |
Balance, shares at Mar. 31, 2018 | 44,128,441 | |||
Net loss | (1,699,813) | |||
Balance at Dec. 31, 2018 | $ 37,829 | 24,176,172 | (26,486,103) | (2,272,102) |
Balance, shares at Dec. 31, 2018 | 37,828,441 | |||
Balance at Jun. 30, 2018 | $ 44,129 | 24,547,014 | (25,676,379) | (1,085,236) |
Balance, shares at Jun. 30, 2018 | 44,128,441 | |||
Issuance of Common Stock in exchange for Net Insurance Benefits | $ 800 | 17,040 | 17,840 | |
Issuance of Common Stock in exchange for Net Insurance Benefits, shares | 800,000 | |||
Net loss | (336,507) | (336,507) | ||
Balance at Sep. 30, 2018 | $ 44,929 | 24,564,054 | (26,012,886) | (1,403,903) |
Balance, shares at Sep. 30, 2018 | 44,928,441 | |||
Cancellation of repurchased shares | $ (8,000) | (392,000) | (400,000) | |
Cancellation of repurchased shares, shares | (8,000,000) | |||
Issuance of Common Stock in lieu of Director Compensation | $ 900 | 4,118 | 5,018 | |
Issuance of Common Stock in lieu of Director Compensation, shares | 900,000 | |||
Net loss | (473,217) | (473,217) | ||
Balance at Dec. 31, 2018 | $ 37,829 | 24,176,172 | (26,486,103) | (2,272,102) |
Balance, shares at Dec. 31, 2018 | 37,828,441 | |||
Balance at Mar. 31, 2019 | $ 37,829 | 24,191,224 | (26,842,408) | (2,613,355) |
Balance, shares at Mar. 31, 2019 | 37,828,441 | |||
Net loss | (369,849) | (369,849) | ||
Balance at Jun. 30, 2019 | $ 37,829 | 24,191,224 | (27,212,257) | (2,983,204) |
Balance, shares at Jun. 30, 2019 | 37,828,441 | |||
Balance at Mar. 31, 2019 | $ 37,829 | 24,191,224 | (26,842,408) | (2,613,355) |
Balance, shares at Mar. 31, 2019 | 37,828,441 | |||
Net loss | (1,106,681) | |||
Balance at Dec. 31, 2019 | $ 37,829 | 24,191,224 | (27,949,089) | (3,720,036) |
Balance, shares at Dec. 31, 2019 | 37,828,441 | |||
Balance at Jun. 30, 2019 | $ 37,829 | 24,191,224 | (27,212,257) | (2,983,204) |
Balance, shares at Jun. 30, 2019 | 37,828,441 | |||
Net loss | (404,925) | (404,925) | ||
Balance at Sep. 30, 2019 | $ 37,829 | 24,191,224 | (27,617,182) | (3,388,129) |
Balance, shares at Sep. 30, 2019 | 37,828,441 | |||
Net loss | (331,907) | (331,907) | ||
Balance at Dec. 31, 2019 | $ 37,829 | $ 24,191,224 | $ (27,949,089) | $ (3,720,036) |
Balance, shares at Dec. 31, 2019 | 37,828,441 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Activities | ||
Net Loss | $ (1,106,681) | $ (1,699,813) |
Adjustments to reconcile to net cash provided by (used in) operating activities: | ||
Share based compensation - common stock | 5,018 | |
Impairment of net insurance benefits | 17,840 | |
Changes in operating assets and liabilities | ||
Prepaid expenses and other assets | 927 | (1,130) |
Accounts payable | 447,349 | 58,121 |
Accrued expenses | 125,543 | 61,607 |
Net Cash used in Operating Activities | (532,862) | (1,558,357) |
Financing Activities | ||
Proceeds from issuance of notes payable, related party | 548,500 | 712,500 |
Net Cash provided by Financing Activities | 548,500 | 712,500 |
Net Change in Cash and Cash Equivalents | 15,638 | (845,857) |
Cash and Cash Equivalents at Beginning of Period | 579 | 936,902 |
Cash and Cash Equivalents at End of Period | 16,217 | 91,045 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Non Cash Financing & Investing Activities, and Other Disclosures | ||
Exchange common stock for Investment in Net Insurance Benefits | 17,840 | |
Repurchase of stock in exchange for Stock Repurchase Payable | $ 400,000 |
Basis of Presentation, Organiza
Basis of Presentation, Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation, Organization and Summary of Significant Accounting Policies | (1) BASIS OF PRESENTATION, ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019, which was filed with the SEC on January 16, 2020. The results from operations for the nine-month period ended December 31, 2019, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2020. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s financial statements and the accompanying notes. Actual results could materially differ from those estimates. Organization and Nature of Operations Sundance Strategies, Inc. (formerly known as Java Express, Inc.) was organized under the laws of the State of Nevada on December 14, 2001, and engaged in the retail selling of beverage products to the general public until these endeavors ceased in 2006; it had no material business operations from 2006, until its acquisition of ANEW LIFE, INC. (“ANEW LIFE”), a subsidiary of Sundance Strategies, Inc. (“Sundance Strategies”, “the Company”, “we” or “our”). The Company is engaged in the business of purchasing or acquiring life insurance policies and residual interests in or financial products tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace, often referred to as the “life settlements market.” Since the Company’s inception its operations have been primarily financed through sales of equity, debt financing from related parties and the issuance of notes payable and convertible debentures. Currently, the Company is focused on the purchase of net insurance benefit contracts (“NIBs”) based on life settlements or life insurance policies. Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 2 of the Notes to Consolidated Financial Statements in the Company’s most recent Form 10-K, except as discussed below. Accounting Treatment When the Company Holds NIBs The Company accounted for its investment in NIBs at the initial investment value increased for interest income and decreased for cash receipts received by the Company and impairment losses. At the time of transfer or purchase of an investment in NIBs, we estimated the future expected cash flows and determined the effective interest rate based on these estimated cash flows and our initial investment. Based on this effective interest rate, the Company calculated accretable income, which was recorded as interest income on investment in NIBs in the statement of operations. Our projections were based on various assumptions that are subject to uncertainties and contingencies including, but not limited to, the amount and timing of projected net cash receipts, expected maturity events, counter party performance risk, changes to applicable regulation of the investment, shortage of funds needed to maintain the asset until maturity, changes in discount rates, life expectancy estimates and their relation to premiums, interest, and other costs incurred, among other items. These uncertainties and contingencies are difficult to predict and are subject to future events that may impact our estimates and interest income. As a result, actual results could differ significantly from these projections. Therefore, subsequent to the purchase and on a regular basis, these future estimated cash flows were evaluated for changes. If the determination was made that the future estimated cash flows should be adjusted to the point of a material change in revenue, a revised effective yield was calculated prospectively based on the current amortized cost of the investment, including accrued accretion. Any positive or adverse change in cash flows would result in a prospective increase or decrease in the effective interest rate used to recognize interest income. Any significant adverse change in the cash flows that may have resulted in the recognition of an “other-than-temporary impairment” (“OTTI”), and would be evaluated by the Company accordingly. We evaluate the carrying value of our investment in NIBs for impairment on a regular basis and adjust our total basis in the NIBs using new or updated information that affects our assumptions. We recognized impairment on a NIB contract when the fair value of the beneficial interest was less than the carrying amount of the investment, plus anticipated undiscounted future premiums and direct external costs, if any, and if there are adverse changes in cash flow. Basic and Diluted Net Income (Loss) Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the periods presented using the treasury stock method. Diluted net loss per common share is computed by including common shares that may be issued subject to existing rights with dilutive potential, when applicable. Dilutive common stock equivalents are primarily comprised of stock options. Potentially dilutive shares resulting from convertible debt agreements are evaluated using the if-converted method, and such amounts were not dilutive. As of December 31, 2019 and 2018, there were no options were outstanding. Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 2 of the Notes to Consolidated Financial Statements in the Company’s most recent Form 10-K, except as discussed in Note 2, below. New Accounting Pronouncements Adopted During the Nine months Ended December 31, 2019 In February 2016, the FASB issued ASU 2016-02 related to the accounting for leases. This pronouncement requires lessees to record most leases on their balance sheet, while expense recognition on the income statement remains similar to current lease accounting guidance. The guidance also eliminates real estate-specific provisions and modifies certain aspects of lessor accounting. Under the new guidance, lease classification as either a finance lease or an operating lease will determine how lease-related revenue and expense are recognized. The pronouncement is effective for the Company’s fiscal year beginning April 1, 2019, and for interim periods within that fiscal year. The adoption of this standard did not have an impact on the consolidated financial statements because leases are month-to-month and not material to the Company’s financial statements. Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. ASU 2016-13 requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. The amendments are effective for the Company’s fiscal year beginning April 1, 2020, including interim periods within that fiscal year. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements and results of operations. The Company has reviewed all other recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements. |
Liquidity Requirements
Liquidity Requirements | 9 Months Ended |
Dec. 31, 2019 | |
Liquidity Requirements | |
Liquidity Requirements | (2) LIQUIDITY REQUIREMENTS The accompanying financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Due to the fact that the Company is in the process of seeking NIB investments to acquire as mentioned above, the Company has no current source of operating revenues. In order to purchase NIBs, the Company will need to raise additional capital or secure alternative sources of debt financing. Since the Company’s inception on January 31, 2013, its operations have been primarily financed through sales of equity, debt financing from related parties and the issuance of notes payable and convertible debentures. As of December 31, 2019, the Company had $16,217 of cash assets, compared to $579 as of March 31, 2019. As of December 31, 2019, the Company had access to draw an additional $5,105,492 on the notes payable, related party (see Note 5) and $3,000,000 on the Convertible Debenture Agreement (See Note 6). For the nine months ended December 31, 2019, the Company’s average monthly operating expenses were approximately $99,000, which includes salaries of our employees, consulting agreements and contract labor, general and administrative expenses and legal and accounting expenses. In addition to the monthly operating expenses, the Company continues to pursue other debt and equity financing opportunities, and as a result, a financing expense of $87,000 was incurred during the nine months ended December 31, 2019. As management continues to explore additional financing alternatives, the Company is expected to spend an additional $80,000 to $350,000 over the next 12 months related to these efforts. Outstanding Accounts Payable as of December 31, 2019 totaled $754,220, and other accrued liabilities totaled $765,706. Management has concluded that its existing capital resources and availability under its existing convertible debentures and debt agreements with related parties will be sufficient to fund its operating working capital requirements for at least the next 12 months from the issuance of these financial statements. Related parties have given assurance that their continued support, by way of either extensions of due dates, or increases in lines-of-credit, can be relied on. As mentioned above, the Company also continues to evaluate other debt and equity financing opportunities. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | (3) FAIR VALUE MEASUREMENTS As defined by ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values. Those levels of input are summarized as follows: ● Level 1: Quoted prices in active markets for identical assets and liabilities. ● Level 2: Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. ● Level 3: Unobservable inputs that are supported by little or no market activity. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques as well as instruments for which the determination of fair value requires significant management judgment or estimation. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Between May 2018 and July 2018, the Holders entered into agreements that completed a strict foreclosure transaction that transferred the underlying life insurance policies relating to the Company’s NIBs to the lenders in full satisfaction of the loan obligation. As a result of the foreclosure, the Company has lost its position in the residual benefits of the policies and has reduced both the fair value and the carrying value of the NIBs at March 31, 2019 to zero. The Company did not have any transfers of assets and liabilities between Levels 1, 2 and 3 of the fair value measurement hierarchy during the nine months ended December 31, 2019. Other Financial Instruments The Company’s recorded values of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued liabilities approximate their fair values based on their short-term nature. The recorded values of the notes payable and convertible debenture approximate the fair values as the interest rate approximates market interest rates. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | (4) STOCKHOLDERS’ EQUITY Effective December 6, 2018, three existing stockholders have contributed to the Company a portion of their common shares held at a repurchase price to the Company of $0.05 per share. The Company has cancelled the acquired shares, which decreased the outstanding common shares on the books of the Company. The total number of common shares canceled/retired was 8,000,000. The total liability related to the repurchase of these shares is $400,000, with repayment contingent on a major financing event. On July 11, 2018, the Company issued 800,000 common shares in return for obtaining the remaining 27.8% ownership of certain NIBs. The transaction was recorded at $17,840, the estimated fair value of the common stock issued (which management believes approximated the fair value of the NIBs received on the date of the transaction). The additional NIBs acquired were reflected as an increase to the Investment in NIBs account, and the NIBs were immediately impaired on the date of the transaction, bringing the total impairment recognized on the NIBs to $22,967,966 plus $1,936,311 of impairment on accrued interest receivable. On November 5, 2019, in conjunction with an agreement to extend the due date of his promissory note (see Note 5) the Company agreed to provide Mr. Dickman warrants for 450,000 shares of common stock at an exercise price of $0.05 per share. The warrants have a 5-year exercise window from the date of the extension agreement. The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model, was not significant. The inputs used in this calculation included a risk-free rate of 1.66%, volatility of 27.29% and a dividend rate of 0%. As of December 31, 2019, the weighted average remaining life of the warrants is 4.85 years. |
Notes Payable, Related Party
Notes Payable, Related Party | 9 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable, Related Party | 5) NOTES PAYABLE, RELATED PARTY As of December 31, 2019, and March 31, 2019, the Company had borrowed $2,220,508 and $1,672,008 respectively, excluding accrued interest, from related parties. As of December 31, 2019, and March 31, 2019, the Company owed $596,000 and $450,000, respectively, under the unsecured promissory note from Mr. Glenn S. Dickman, a stockholder and member of the Board of Directors. This promissory note bears interest at a rate of 8% annually. On November 5, 2019, the Company agreed to amend the agreement to extend the due date on the promissory note from August 31, 2020 to November 30, 2021 or at the immediate time when alternative financing or other proceeds are received. In addition, the Company agreed to provide Mr. Dickman warrants for 450,000 shares of common stock at an exercise price of $0.05 per share. The warrants have a 5-year exercise window from the date of the extension agreement. During the nine months ended December 31, 2019 the Company borrowed $146,000 of principal under this agreement and made no repayments. As of December 31, 2019, accrued interest on this note totaled $51,884. In the event the Company completes a successful equity raise, all principal and interest on this note are due in full at that time. As of December 31, 2019, and March 31, 2019, the Company owed $795,000 and $392,500, respectively, exclusive of accrued interest, under the note payable and line of credit agreement with the Chairman of the Board of Directors and a stockholder. The agreement allows for borrowings of up to $4,600,000. Subsequent to December 31, 2019 the note and the line of credit was extended from November 30, 2020 to August 31, 2021 (see Note 7 for detail on the due date extension). The note payable incurs interest at 7.5% per annum. During the nine months ended December 31, 2019 the Company borrowed $402,500 of principal under this agreement and made no repayments. As of December 31, 2019, accrued interest on this note totaled $54,344. In the event the Company completes a successful equity raise, all principal and interest on this note are due in full at that time As of December 31, 2019, and March 31, 2019, the Company owed $829,508, exclusive of accrued interest, under the note payable and lines of credit agreement with Radiant Life, LLC, an entity partially owned by the Chairman of the Board of Directors. The agreement allows for borrowings of up to $2,130,000. On December 19, 2019, the Company agreed to amend the agreement to extend the due date on the note payable and line of credit agreement from November 30, 2020 to August 31, 2021 or at the immediate time when alternative financing or other proceeds are received. The note payable incurs interest at 7.5% per annum. During the nine months ended December 31, 2019 the Company neither borrowed nor repaid any principal under this agreement. As of December 31, 2019, accrued interest on this agreement totaled $133,238. In the event the Company completes a successful equity raise, all principal and interest on this note are due in full at that time. The interest associated with the Notes Payable, Related Party of $239,466 and $113,981 is recorded on the balance sheet as an Accrued Expense obligation at December 31, 2019 and March 31, 2019, respectively. There are no covenants associated with any of these three agreements. |
Convertible Debenture Agreement
Convertible Debenture Agreement | 9 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Debenture Agreement | (6) CONVERTIBLE DEBENTURE AGREEMENT The Company has entered into an 8% convertible debenture agreement with Satco International, Ltd., that allows for borrowings of up to $3,000,000. The holder originally had the option to convert the outstanding principal and accrued interest to unregistered, restricted common stock of the Company on June 2, 2016. Per the agreement, the number of shares issuable at conversion shall be determined by the quotient obtained by dividing the outstanding principal and accrued and unpaid interest by 90% of the 90 day average closing price of the Company’s common stock from the date the notice of conversion is received; and the price at which the Debenture may be converted will be no lower than $1.00 per share. The original maturity date was June 2, 2016, but was later extended, through a series of extensions, to August 31, 2019. On October 29, 2019, the Company agreed to amend the 8% Convertible Debenture Agreement and extended the due date and conversion rights to December 1, 2020. As of December 31, 2019 and March 31, 2019, the Company owed $0 under the agreement, excluding accrued interest. The associated interest of $124,225 is recorded on the balance sheet as an Accrued Expense obligation at December 31, 2019 and March 31, 2019. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | (7) SUBSEQUENT EVENTS Subsequent to December 31, 2019, the following events transpired: On January 8, 2020, the Company agreed to amend the agreement to extend the due date on the note payable and line of credit agreement with the Chairman of the Board of Directors and a stockholder. The due date was extended from November 30, 2020 to August 31, 2021 or at the immediate time when alternative financing or other proceeds are received. In addition, the Company agreed to provide the Chairman with warrants for 500,000 shares of common stock at an exercise price of $0.05 per share. The warrants have a 5-year exercise window from the date of the extension agreement. On February 4, 2020, the Company borrowed $230,000 in conjunction with an additional promissory note agreement entered into with Glenn S. Dickman. In addition, the Company agreed to provide Mr. Dickman warrants for 752,000 shares of common stock at an exercise price of $0.05 per share. The warrants have a 5-year exercise window from the date of the extension agreement. Subsequent to December 31, 2019, the Company has borrowed an additional $323,500 (inclusive of the $230,000 borrowed on February 4, 2020, mentioned above) on the Notes Payable, Related Party lines of credit agreements and promissory notes. As of February 19, 2020, the outstanding principal balances of all Notes Payable, Related Party totaled $2,450,508 and the outstanding principal balance of the Convertible Debenture is zero. $1,624,508 of the outstanding principal is currently due on August 31, 2021 and the remaining $826,000 is due on November 30, 2021. In the event the Company completes a successful equity raise, all principal and interest on these notes is due at that time. |
Basis of Presentation, Organi_2
Basis of Presentation, Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019, which was filed with the SEC on January 16, 2020. The results from operations for the nine-month period ended December 31, 2019, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2020. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s financial statements and the accompanying notes. Actual results could materially differ from those estimates. |
Organization and Nature of Operations | Organization and Nature of Operations Sundance Strategies, Inc. (formerly known as Java Express, Inc.) was organized under the laws of the State of Nevada on December 14, 2001, and engaged in the retail selling of beverage products to the general public until these endeavors ceased in 2006; it had no material business operations from 2006, until its acquisition of ANEW LIFE, INC. (“ANEW LIFE”), a subsidiary of Sundance Strategies, Inc. (“Sundance Strategies”, “the Company”, “we” or “our”). The Company is engaged in the business of purchasing or acquiring life insurance policies and residual interests in or financial products tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace, often referred to as the “life settlements market.” Since the Company’s inception its operations have been primarily financed through sales of equity, debt financing from related parties and the issuance of notes payable and convertible debentures. Currently, the Company is focused on the purchase of net insurance benefit contracts (“NIBs”) based on life settlements or life insurance policies. |
Significant Accounting Policies | Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 2 of the Notes to Consolidated Financial Statements in the Company’s most recent Form 10-K, except as discussed below. |
Accounting Treatment When the Company Holds NIBs | Accounting Treatment When the Company Holds NIBs The Company accounted for its investment in NIBs at the initial investment value increased for interest income and decreased for cash receipts received by the Company and impairment losses. At the time of transfer or purchase of an investment in NIBs, we estimated the future expected cash flows and determined the effective interest rate based on these estimated cash flows and our initial investment. Based on this effective interest rate, the Company calculated accretable income, which was recorded as interest income on investment in NIBs in the statement of operations. Our projections were based on various assumptions that are subject to uncertainties and contingencies including, but not limited to, the amount and timing of projected net cash receipts, expected maturity events, counter party performance risk, changes to applicable regulation of the investment, shortage of funds needed to maintain the asset until maturity, changes in discount rates, life expectancy estimates and their relation to premiums, interest, and other costs incurred, among other items. These uncertainties and contingencies are difficult to predict and are subject to future events that may impact our estimates and interest income. As a result, actual results could differ significantly from these projections. Therefore, subsequent to the purchase and on a regular basis, these future estimated cash flows were evaluated for changes. If the determination was made that the future estimated cash flows should be adjusted to the point of a material change in revenue, a revised effective yield was calculated prospectively based on the current amortized cost of the investment, including accrued accretion. Any positive or adverse change in cash flows would result in a prospective increase or decrease in the effective interest rate used to recognize interest income. Any significant adverse change in the cash flows that may have resulted in the recognition of an “other-than-temporary impairment” (“OTTI”), and would be evaluated by the Company accordingly. We evaluate the carrying value of our investment in NIBs for impairment on a regular basis and adjust our total basis in the NIBs using new or updated information that affects our assumptions. We recognized impairment on a NIB contract when the fair value of the beneficial interest was less than the carrying amount of the investment, plus anticipated undiscounted future premiums and direct external costs, if any, and if there are adverse changes in cash flow. |
Basic and Diluted Net Income (Loss) Per Common Share | Basic and Diluted Net Income (Loss) Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the periods presented using the treasury stock method. Diluted net loss per common share is computed by including common shares that may be issued subject to existing rights with dilutive potential, when applicable. Dilutive common stock equivalents are primarily comprised of stock options. Potentially dilutive shares resulting from convertible debt agreements are evaluated using the if-converted method, and such amounts were not dilutive. As of December 31, 2019 and 2018, there were no options were outstanding. |
New Accounting Pronouncements | New Accounting Pronouncements Adopted During the Nine months Ended December 31, 2019 In February 2016, the FASB issued ASU 2016-02 related to the accounting for leases. This pronouncement requires lessees to record most leases on their balance sheet, while expense recognition on the income statement remains similar to current lease accounting guidance. The guidance also eliminates real estate-specific provisions and modifies certain aspects of lessor accounting. Under the new guidance, lease classification as either a finance lease or an operating lease will determine how lease-related revenue and expense are recognized. The pronouncement is effective for the Company’s fiscal year beginning April 1, 2019, and for interim periods within that fiscal year. The adoption of this standard did not have an impact on the consolidated financial statements because leases are month-to-month and not material to the Company’s financial statements. Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. ASU 2016-13 requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. The amendments are effective for the Company’s fiscal year beginning April 1, 2020, including interim periods within that fiscal year. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements and results of operations. The Company has reviewed all other recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements. |
Basis of Presentation, Organi_3
Basis of Presentation, Organization and Summary of Significant Accounting Policies (Details Narrative) - shares | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Number of options outstanding during period |
Liquidity Requirements (Details
Liquidity Requirements (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Cash assets | $ 16,217 | $ 16,217 | $ 579 | ||
Additional borrowing capacity from related party notes payable | 5,105,492 | 5,105,492 | |||
Additional borrowing capacity from convertible debenture agreement | 3,000,000 | 3,000,000 | |||
Monthly operating expenses | 99,000 | ||||
Financing expenses | 4,500 | $ 155,000 | 87,000 | $ 774,806 | |
Accounts payable | 754,220 | 754,220 | $ 306,871 | ||
Other accrued liabilities | $ 765,706 | 765,706 | |||
Minimum [Member] | |||||
Expected to spend additional financial expense | 80,000 | ||||
Maximum [Member] | |||||
Expected to spend additional financial expense | $ 350,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Dec. 06, 2018 | Jul. 11, 2018 | Dec. 31, 2019 | Nov. 05, 2019 |
Net Insurance Benefit Contracts [Member] | ||||
Stock issued during period, shares, acquisitions | 800,000 | |||
Equity method investment, ownership percentage | 27.80% | |||
Stock issued during period, value, acquisitions | $ 17,840 | |||
Impairment of investment in net insurance benefits | 22,967,966 | |||
Impairment of accrued interest receivable | $ 1,936,311 | |||
Three Existing Shareholders [Member] | ||||
Stock repurchase, price per share | $ 0.05 | |||
Number of shares cancelled/retired | 8,000,000 | |||
Number of stock value repurchased | $ 400,000 | |||
Mr. Dickman [Member] | ||||
Warrants purchase of common stock | 450,000 | |||
Warrants exercise price | $ 0.05 | |||
Warrants term | 5 years | |||
Risk-free rate | 1.66% | |||
Volatility rate | 27.29% | |||
Dividend rate | 0.00% | |||
Weighted average remaining life of warrants | 4 years 10 months 6 days |
Notes Payable, Related Party (D
Notes Payable, Related Party (Details Narrative) - USD ($) | Dec. 19, 2019 | Nov. 05, 2019 | Feb. 18, 2020 | Feb. 19, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Notes payable, related parties | $ 2,220,508 | $ 1,672,008 | ||||
Accrued expense obligation | 239,466 | 113,981 | ||||
Subsequent Event [Member] | ||||||
Notes payable, related parties | $ 2,450,508 | |||||
Notes Payable and Lines of Credit Agreement [Member] | ||||||
Notes payable, related parties | $ 795,000 | $ 392,500 | ||||
Debt interest rate | 7.50% | 7.50% | ||||
Additional principal amount borrowed | $ 402,500 | |||||
Accrued interest | 54,344 | |||||
Line of credit facility, maximum borrowing capacity | 4,600,000 | |||||
Notes Payable and Lines of Credit Agreement [Member] | Radiant Life, LLC [Member] | ||||||
Notes payable, related parties | $ 829,508 | $ 829,508 | ||||
Debt interest rate | 7.50% | 7.50% | ||||
Debt instrument due date, description | November 30, 2020 to August 31, 2021 | |||||
Accrued interest | $ 133,238 | |||||
Line of credit facility, maximum borrowing capacity | 2,130,000 | |||||
Notes Payable and Lines of Credit Agreement [Member] | Subsequent Event [Member] | ||||||
Debt instrument due date, description | The note and the line of credit was extended from was extended from November 30, 2020 to August 31, 2021 (see Note 7 for detail on the due date extension). | |||||
Mr. Dickman [Member] | ||||||
Warrants purchase of common stock | 450,000 | |||||
Warrants exercise price | $ 0.05 | |||||
Warrant terms | 5 years | |||||
Unsecured Promissory Note [Member] | Mr. Glenn S. Dickman [Member] | ||||||
Notes payable, related parties | $ 596,000 | $ 450,000 | ||||
Debt interest rate | 8.00% | 8.00% | ||||
Additional principal amount borrowed | $ 146,000 | |||||
Accrued interest | $ 51,884 | |||||
Promissory Note [Member] | Mr. Dickman [Member] | ||||||
Debt instrument due date, description | August 31, 2020 to November 30, 2021. |
Convertible Debenture Agreeme_2
Convertible Debenture Agreement (Details Narrative) - USD ($) | Oct. 29, 2019 | Dec. 31, 2019 | Mar. 31, 2019 |
Accrued interest | $ 124,225 | $ 124,225 | |
8% Convertible Debenture Agreement [Member] | |||
Interest rate | 8.00% | ||
8% Convertible Debenture Agreement [Member] | Extended Maturity [Member] | |||
Maturity date | Dec. 1, 2020 | ||
8% Convertible Debenture Agreement [Member] | Satco International, Ltd. [Member] | |||
Interest rate | 8.00% | ||
Convertible debenture, terms of conversion | Per the agreement, the number of shares issuable at conversion shall be determined by the quotient obtained by dividing the outstanding principal and accrued and unpaid interest by 90% of the 90 day average closing price of the Company's common stock from the date the notice of conversion is received; and the price at which the Debenture may be converted will be no lower than $1.00 per share. | ||
Debt conversion price per share | $ 1 | ||
Maturity date | Jun. 2, 2016 | ||
Amount payable | $ 0 | $ 0 | |
8% Convertible Debenture Agreement [Member] | Satco International, Ltd. [Member] | Extended Maturity [Member] | |||
Maturity date | Aug. 31, 2019 | ||
8% Convertible Debenture Agreement [Member] | Satco International, Ltd. [Member] | Maximum [Member] | |||
Face amount of debt instrument | $ 3,000,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jan. 08, 2020 | Nov. 30, 2021 | Aug. 31, 2021 | Feb. 19, 2020 | Feb. 04, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Notes payable, related party | $ 2,220,508 | $ 1,672,008 | |||||
Forecast [Member] | |||||||
Notes payable, related party | $ 826,000 | $ 1,624,508 | |||||
Subsequent Event [Member] | |||||||
Notes payable, related party | $ 2,450,508 | ||||||
Convertible debenture | 0 | ||||||
Subsequent Event [Member] | Glenn S. Dickman [Member] | |||||||
Warrants purchase for common stock | 752,000 | ||||||
Warrants exercise price | $ 0.05 | ||||||
Warrants term | 5 years | ||||||
Debt principal amount | $ 230,000 | ||||||
Subsequent Event [Member] | Note Payable and Line of Credit Agreement [Member] | |||||||
Debt instrument maturity date, description | Due date was extended from November 30, 2020 to August 31, 2021. | ||||||
Subsequent Event [Member] | Note Payable and Line of Credit Agreement [Member] | Chairman [Member] | |||||||
Warrants purchase for common stock | 500,000 | ||||||
Warrants exercise price | $ 0.05 | ||||||
Warrants term | 5 years | ||||||
Subsequent Event [Member] | Related Party Lines of Credit Agreements [Member] | Three Notes Payable [Member] | |||||||
Additional amount borrowed from related party | $ 323,500 |