UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended ~~September~~December 3031, 2022

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

	For the transition period from ____________________to_______________________

Commission File Number: 000-11882

B2Digital, Incorporated

(Exact name of registrant as specified in its charter)

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

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

(813) 961-3051

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)	Name of each exchange on which registered
Not applicable	Not applicable			Not applicable

The number of shares outstanding of the registrant’s common stock, par value of $0.00001 on ~~November~~February 721, ~~2022~~2023, was 2$7,~~310~~899,~~607~~196,~~184~~368.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION 3 Item 1. Financial Statements 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3. Quantitative and Qualitative Disclosures About Market Risk 38 Item 4. Controls and Procedures 38 PART II - OTHER INFORMATION 39 Item 1A. Risk Factors 39 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39 Item 6. Exhibits 39 SIGNATURES 40

PART I - FINANCIAL INFORMATION	3

Item 1. Financial Statements	3

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3. Quantitative and Qualitative Disclosures About Market Risk	35

Item 4. Controls and Procedures	35

PART II - OTHER INFORMATION	36

Item 1A. Risk Factors	36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 6. Exhibits	37

SIGNATURES	38

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

Consolidated Financial Statements

B2Digital, Incorporated

	~~Page~~	Page
Consolidated Balance Sheets as of September 30, 2022 (unaudited) and March 31, 2022		4
Consolidated Balance Sheets as of December 31, 2022 (unaudited) and March 31, 2023		4
Consolidated Statements of Operations (unaudited) for the three and six months ended September 30, 2022 and 2021		5
Consolidated Statements of Operations (unaudited) for the three and nine months ended December 31, 2022 and 2021		5
Consolidated Statements of Stockholders’ Deficit (unaudited) for the three and six months ended September 30, 2022 and 2021		6
Consolidated Statements of Changes in Stockholders’ Deficit (unaudited) for the three and nine months ended December 31, 2022 and 2021		6
Consolidated Statements of Cash Flows (unaudited) for the six months ended September 30, 2022 and 2021		7
Consolidated Statements of Cash Flows (unaudited) for the nine months ended December 31, 2022 and 2021		8
Notes to the Unaudited Consolidated Financial Statements		8
Condensed Notes to the Unaudited Consolidated Financial Statements		9

B2Digital, Incorporated

Consolidated Balance Sheets

	As of September 30, 2022 (unaudited)			As of March 31, 2022
	As of December 31, 2022 (unaudited)			As of March 31, 2022
Assets
Current assets
Cash and cash equivalents	$	~~126,330~~264		$	39,623
Notes receivable		–			6,096
Prepaid expenses		21,~~751~~376			49,363
Total current assets		~~129~~1,~~081~~640			95,082
Operating lease right-of-use asset, net of accumulated amortization		6663,~~778~~505			73,085
Property and equipment, net of accumulated depreciation		~~870~~528,~~771~~250			984,217
Intangible assets, net of accumulated amortization		333,~~064~~022			45,215
Deposits		11,126			11,126
Net assets held for sale		–			80,000
Notes receivable – long term		35,400			35,400
Total Assets	$	1642,~~146,220~~943		$	1,324,125
Liabilities & Stockholders' Deficit
Current liabilities
Accounts payable & accrued liabilities	$	1,~~498~~655,~~958~~676		$	744,069
Deferred revenue		338,~~399~~158			104,704
Note payable- current maturity		1,~~402~~624,440			295,600
Note payable- in default		44,000			14,000
Convertible notes payable, net of discount		8,~~120~~467,~~081~~971			6,035,090
Derivative liabilities		817,~~606~~291,~~244~~640			3,831,191
Due to shareholder		–			2,800
Lease liability, current		~~129~~13,~~615~~939			~~123,319~~–
Total current liabilities		19,834,737			11,150,773
Current liabilities from discontinued operations		118,942			123,319
Lease liability – non-current		281,203			347,623
Total current liabilities		29,224,766			11,150,773
Lease liability – non-current		49,566			–
Note payable - long-term		–			30,000
Total Liabilities		20,115,940			11,528,396
Long term liabilities from discontinued operations		197,167			347,623
Commitments and contingencies (Note 13)		–			–
Total Liabilities		29,471,499			11,528,396
Commitments and contingencies (Note 14)		–			–
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 September 30, 2022 and March 31, 2022, respectively.		20			20
Series A: 2,000,000 shares convertible into 480,000,000 shares of common stock issued and outstanding at December 31, 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 September 30, 2022 and March 31, 2022, respectively;		400			400
Series B: 40,000,000 shares convertible into 320,000,000 shares of common stock and 40,000,000 shares issued and outstanding at December 31, 2022 and March 31, 2022, respectively;		400			400
Common stock, $0.00001 par value; 20,000,000,000 shares authorized; 2,171,546,990 and 1,849,932,312 shares issued and outstanding at September 30, 2022 and March 31, 2022, respectively		21,062			17,846
Common stock, $0.00001 par value; 20,000,000,000 shares authorized; 5,241,514,211 and 1,849,932,312 shares issued and outstanding at December 31, 2022 and March 31, 2022, respectively		51,762			17,846
Additional paid in capital		1011,~~592~~463,~~621~~039			10,251,530
Accumulated deficit		(2940,~~583~~343,~~823~~777	)		(20,474,067	)
Total Stockholders' Deficit		(1828,~~969~~828,~~720~~556	)		(10,204,271	)
Total Liabilities and Stockholders' Deficit	$	1642,~~146,220~~943		$	1,324,125

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

B2Digital, Incorporated

Consolidated ~~Income~~Statements ~~Statement~~of Operations (Unaudited)

	For the three months ended						For the ~~six~~nine months ended
	September 30,			September 30,			September 30,			September 30,
	December 31,			December 31,			December 31,			December 31,
	2022			2021			2022			2021
Revenue:
Live event revenue	$	~~160~~77,~~469~~847		$	~~283~~263,~~171~~782		$	~~498~~576,~~291~~138		$	~~518~~782,~~762~~544
Gym revenue		75,007			376,839			437,526			710,013
Total revenue from continuing operations		77,847			263,782			576,138			782,544
Total revenue		235,476			660,010			935,817			1,228,775
Operating expenses
Sales and marketing		4314,~~797~~786			~~114~~92,~~413~~868			~~108~~118,~~374~~059			~~162~~246,~~326~~186
Utilities		~~15,238~~569			~~53,202~~935			555,~~948~~294			~~84,393~~985
Leasing expense		135,~~632~~144			~~156~~5,~~375~~209			~~143~~23,~~098~~819			~~301~~28,~~848~~621
Payroll expense		~~222~~11,~~967~~523			~~485~~492,~~820~~501			~~871~~686,~~396~~756			~~897~~1,~~173~~107,392
General and administrative		~~580~~138,~~580~~428			1,~~337~~611,~~345~~014			2,~~133~~175,~~060~~950			23,~~458~~828,~~797~~721
Depreciation and amortization expense		7172,~~868~~090			98102,~~470~~713			~~143~~215,~~627~~717			~~186~~289,~~519~~232
Total general and administrative corporate expenses		~~948~~242,~~082~~540			2,~~245~~305,~~625~~240			3,~~455~~225,~~503~~595			45,~~091~~501,~~056~~137
Loss from continuing operations		(~~712~~164,~~606~~693	)		(12,~~585~~041,~~615~~458	)		(2,~~519~~649,~~686~~457	)		(24,~~862~~718,~~281~~593	)
Other income (expense):
Gain on forgiveness of loan		–			–			–			2315,~~303~~600
Gain (loss) on sale of assets		~~7,869~~–			~~(1,757~~787	)		18,~~442~~400			(~~1,527~~640	)
Grant income		–			–			–			–
Financing expense		(19,150	)		(136,170	)		(58,346	)		(136,170	)
Financing expense		–			(35,014	)		(39,196	)		(35,014	)
Loss on forgiveness of notes receivable		–			–			–			(2,094	)
Loss on forgiveness of notes receivable		–			(2,094	)		–			(2,094	)
(Loss) gain on extinguishment of debt		(75,787	)		72,592			43,477			209,258
Gain on extinguishment of debt		12,056			55,925			119,264			136,666
Loss on change in fair value of derivatives		(8,688,144	)		(66,894	)		(12,980,720	)		(421,836	)
Change in fair value of derivatives		(1,483,300	)		(665,813	)		(4,292,576	)		(354,942	)
Initial derivative expense		(98,877	)		(45,485	)		(478,090	)		(45,485	)
Initial derivative expense		(184,890	)		–			(379,213	)		–
Interest expense		(1,106,884	)		(339,474	)		(3,106,675	)		(859,754	)
Interest expense		(1,179,243	)		(322,808	)		(1,999,791	)		(522,634	)
Total other expense		(9,988,842	)		(514,644	)		(16,571,954	)		(1,241,121	)
Total other expense		(2,827,508	)		(971,561	)		(6,590,070	)		(756,242	)
Net loss from continuing operations	$	(10,153,535	)	$	(2,556,102	)	$	(19,221,411	)	$	(5,959,714	)
Net loss	$	(3,540,114	)	$	(2,557,176	)	$	(9,109,756	)	$	(3,618,523	)
Net loss from discontinued operations		(606,950	)		(137,015	)		(648,299	)		(351,926	)
Basic and diluted earnings per share on net loss	$	(0.002	)	$	(0.002	)	$	(0.004	)	$	(0.003	)
Net loss from operations	$	(10,760,485	)	$	(2,693,117	)	$	(19,869,710	)	$	(6,311,640	)
Weighted average shares outstanding		2,144,271,646			1,369,390,550			2,063,438,543			1,289,383,719
Basic and diluted earnings per share on net loss from continuing operations	$	(0.003	)	$	(0.002	)	$	(0.008	)	$	(0.004	)
Basic and diluted earnings per share on net loss from discontinued operations	$	(0.000	)	$	(0.000	)	$	(0.000	)	$	(0.001	)
Basic and diluted earnings per share on net loss from operations	$	(0.003	)	$	(0.002	)	$	(0.008	)	$	(0.005	)
Weighted average shares outstanding		3,207,338,338			1,452,481,989			2,446,125,019			1,341,287,504

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

B2Digital, Incorporated

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

For the Three and ~~Six~~Nine months Ended ~~September~~December 3031, 2022 and 2021 (Unaudited)

	Preferred Stock				Preferred Stock								~~Additional~~		Additional
	Series A				Series B				Common Stock				~~Paid in~~Treasury		~~Accumulated~~Paid in			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		~~Capital~~Stock		~~Deficit~~Capital			~~Total~~Deficit			Total
Balance March 31, 2022		2,000,000	$	20		40,000,000	$	400		1,849,932,312	$	17,846	$	~~10,251,530~~–	$	~~(20~~10,~~474~~251,~~067~~530	)	$	(1020,~~204~~474,~~271~~067	)	$	(10,204,271	)
Issuance of shares from conversion of notes payable		–		–		–		–		247,810,805		2,477		304,928		–			307,405
Issuance of convertible notes		–		–		–		–		247,810,805		2,477		–		304,928			–			307,405
Net loss		–		–		–		–		–		–		–		~~(5,569,642~~–	)		(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~~10,~~043~~556,~~709~~458	)	$	(1526,~~466~~043,~~508~~709	)	$	(15,466,508	)
Issuance of convertible notes		–		–		–		–		73,803,873		739		~~36,163~~–		–36,163			~~36,902~~–			36,902
Net loss		–		–		–		–		–		–		–		~~(3,540,114~~–	)		(3,540,114	)		(3,540,114	)
Balance September 30, 2022		2,000,000	$	20		40,000,000	$	400		2,171,546,990	$	21,062	$	10,592,621	$	(29,583,823	)	$	(18,969,720	)
														–
Balance September 30, 2022		2,000,000	$	20		40,000,000	$	400		2,171,546,990	$	21,062	$	–	$	10,592,621		$	(29,583,823	)	$	(18,969,720	)
Issuance of convertible notes		–		–		–		–		3,044,967,221		30,450		–		865,668			–			896,118
Issuance of common stock for services		–		–		–		–		25,000,000		250		–		4,750			–			5,000
Net loss		–		–		–		–						–		–			(10,760,485	)		(10,760,485	)
Balance December 31, 2022		2,000,000	$	20		40,000,000	$	400		5,241,514,211	$	51,762	$	–	$	11,463,039		$	(40,343,777	)	$	(28,828,556	)

	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	)
Sale of common stock		–	$	–		–	$	–		75,000,000.00	$	750	$	299,250	$	–		$	300,000
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	)

continued..

See accompanying notes to the unaudited consolidated financial statements

B2Digital, Incorporated

Consolidated Statements of Changes in Stockholders' Deficit

For the Three and Nine months Ended December 31, 2022 and 2021 (Unaudited)


	Preferred Stock				Preferred Stock													Additional
	Series A				Series B				Common Stock						Treasury			Paid in			Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount			Stock			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	)

Sale of common stock		–	$	–		–	$	–		75,000,000.00		$	750			–		$	299,250		$	–		$	300,000

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 condensed notes to the unaudited consolidated financial statements

B2Digital, Incorporated

Consolidated Statements of Cash Flows

(Unaudited)

	For the six months ended
	For the nine months ended
	September 30,			September 30,
	December 31,			December 31,
	2022			2021
Cash Flows from Operating Activities
Net Loss	$	(9,109,756	)	$	(3,618,523	)
Net loss	$	(19,869,710	)		(6,311,640	)
Net loss from discontinued operations		(648,299	)		(351,926	)
Net loss from continuing operations		(19,221,411	)		(5,959,714	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock compensation		–			23,650
Stock based compensation		5,000			316,050
Depreciation and amortization		~~143~~215,~~627~~717			~~186~~289,~~519~~232
(Gain) loss on sale of assets		(18,~~442~~400	)		~~1,527~~640
Gain on forgiveness of loan		–			(2315,~~303~~600	)
Gain on extinguishment of debt		(119,264	)		(136,666	)
Loss on forgiveness of notes receivable		–			2,094
Financing expense		–			–
Gain on extinguishment of debt		(43,477	)		(209,258	)
Amortization of debt discount		1,501,582			413,180
Financing expense		–			136,170
Initial derivative expense		379,213			–
Amortization of debt discount		2,180,665			665,080
Loss on fair value of compound embedded derivative		4,292,576			354,952
Initial derivative expense		478,090			45,485
Right-of-use asset/liability		(53,817	)		52,830
Loss on fair value of compound embedded derivative		12,980,720			421,836
Changes in operating assets & liabilities
Prepaid expenses		4647,~~612~~987			(7057,~~113~~012	)
Accounts payable and accrued liabilities		~~808~~1,~~002~~107,577			~~211~~147,~~608~~964
Related party advances		(2,800	)		–1,800
Deferred revenue		(7196,~~305~~546	)		(3054,~~624~~768	)
Net cash used in operating activities		(2,186,772	)		(2,634,963	)
Net cash used in operating activities of continuing operations		(2,356,879	)		(4,270,001	)
Net cash used in operating activities of discontinued operations		(429,572	)		(291,879	)
Net cash used in operating activities		(2,786,451	)		(4,561,880	)
Cash Flows from Investing Activities
Business acquisitions and dispositions		87,869			(165,000	)
Capital expenditures		(24,456	)		(412,892	)
Capital expenditures		(24,456	)		(256,156	)
Net cash used in investing activities of continuing operations		(24,456	)		(412,892	)
Net cash provided (used) in investing activities		63,413			(421,156	)
Net cash provided (used) in investing activities of discontinued operations		87,869			(165,000	)
Net cash provided (used) in investing activities		63,413			(577,892	)
Cash Flows from Financing Activities
Proceeds from notes payable		1,~~104~~326,448			150,000
Proceeds from convertible notes payable		1,~~213~~465,~~989~~602			24,~~096~~178,~~681~~506
Repayments of convertible notes payable		(108,371	)		(~~207~~432,~~863~~363	)
Repayments of notes payable		–			(819,~~609~~653	)
Payment of note payable		–			(2,354	)
Stock repurchases		–			(74,700	)
Issuance of common stock		–			1,~~180~~225,000
Net cash provided by financing activities		2,210,066			3,207,855
Net cash provided by financing activities of continuing operations		2,683,679			5,026,790
Increase in Cash		86,707			151,736
Net cash provided by financing activities of discontinued operations		–			–
Net cash provided by financing activities		2,683,679			5,026,790
Decrease in Cash		(39,359	)		(112,982	)
Cash at beginning of period		39,623			122,176
Cash (and equivalents) at end of period	$	126,330		$	273,912
Cash and cash equivalents at end of period	$	264			9,194
Less: cash and cash equivalents classified as discontinued operations		–			–
Cash and cash equivalents at end of period from continuing operations	$	264		$	9,194
Supplemental Cash Flow Information
Cash paid for interest	$	66114,~~200~~651		$	89,~~303~~534
Cash paid for income taxes	$	–		$	–
Non-cash investing and financing activities:
Conversion of note payable and accrued interest to common stock	$	~~186~~654,~~043~~348		$	–242,400
Initial recognition of derivative liability as debt discount	$	~~342~~478,~~019~~090		$	-1,044,001
Net assets disposed of	$	87,869		$	–

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

B2Digital, Incorporated

Condensed Notes to Consolidated Financial Statements

~~September~~December 3031, 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 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~~The Company’s Live Events 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 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 18 U.S. states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate.

Our Chairman and CEO is ~~now~~ Greg P. Bell. Mr. ~~Bell~~ 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 business operates primarily through the ONE More Gym Official B2 Training Facilities Network. We currently operate two ONE More Gym locations.

Basis of Presentation and Consolidation

The Company has 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 Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC.

The unaudited, consolidated financial statements, which include the accounts of the Company and its 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 seven 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.

8The 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 and nine months ended December 31, 2021, approximately $327,682 and $531,184 of cost of sales was reclassified as operating expense, respectively.

~~B2Digital, Incorporated~~9

~~Notes~~NOTE to2 ~~Consolidated~~– ~~Financial~~ACCOUNTING ~~Statements~~POLICIES

September 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 and six months ended September 30, 2021, approximately $327,682 and $531,184 of cost of sales was reclassified as operating expense, respectively.

NOTE 2 - ACCOUNTING POLICIES

The significant accounting policies of the Company are as follows:

Basis of Accounting

The interim consolidated financial statements should be read in conjunction with the Company’s latest annual financial statements; interim disclosures generally do not repeat those in the annual statements. The interim unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

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

Use of Estimates

Management uses estimates and assumptions in preparing 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 not have any cash in excess of FDIC limits at ~~September~~December 3031, 2022 and March 31, 2022, 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:

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 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.

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~~third quarter of fiscal ~~2022~~2023 management initiated the sale of the gyms located in ~~Indiana~~Alabama: One More Gym Tuscaloosa, LLC, ~~One More Gym Valparaiso~~ and One More Gym ~~Merrillville~~Birmingham, LLC.

Discontinued Operations

Discontinued operations comprise those activities disposed of during the period or classified as held for sale at the end of the period. It represents a separate, major line of business clearly distinguished for operational and financial reporting purposes. Due to the efforts of the Company to sell One More Gym Tuscaloosa, LLC and One More Gym Birmingham, LLC the assets and liabilities were written down to fair value and an impairment loss was recognized. At this time the Company does not intend to continue the fitness business. See Note 3.

Long-Lived Assets

Management reviews long-lived assets, including finite-lived intangible assets, for indicators of impairment whenever events or changes in circumstances indicate that the 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, less costs of 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.

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 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. Revenue associated with B2FS (Fight Club) consist primarily of 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.

Reclassifications

Certain reclassifications have been made to the comparative period amounts in order to conform to the current period presentation. The assets, liabilities, income, and cash flows of the Company have been separated from the comparative period amounts to conform to the current period presentation as discontinued operations as the result of the Company’s reclassification of the fitness business to discontinued operations. The reclassifications had no effect on the reported financial position, results of operations or cash flows of the Company.

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 ~~September~~December 3031, 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, consequently, believes that its accounts receivable credit risk exposure beyond such allowance is limited. In addition, revenue processed through the Company's payment processor are guaranteed further mitigating Credit Risk.

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 30, 2022 (Unaudited)

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 ~~September~~December 3031, 2022, the convertible notes are indexed to 2186,~~938~~458,~~772~~200,~~500~~000 shares of common stock.

The following table sets for the computation of basic and diluted earnings per share for the ~~six~~nine months ended ~~September~~December 3031, 2022 and 2021:

Schedule of Earnings Per Share, Basic and Diluted
Schedule of Earnings Per Share calculation
	September 30, 2022			September 30, 2021
	December 31, 2022			December 31, 2021
Basic and diluted
Net loss	$	(9,109,756	)	$	(3,618,523	)
Net loss from continuing operations	$	(19,221,411	)	$	(5,959,714	)
Net loss per share
Net loss from discontinued operations	$	(648,299	)		(351,926	)
Basic	$	(0.004	)	$	(0.003	)
Net loss from operations	$	(19,869,710	)	$	(6,311,640	)
Diluted	$	(0.004	)	$	(0.003	)
Net loss per share from continuing operations
Basic	$	(0.008	)	$	(0.004	)
Diluted	$	(0.008	)	$	(0.004	)
Net loss per share from discontinued operations
Basic	$	(0.000	)	$	(0.001	)
Diluted	$	(0.000	)	$	(0.001	)
Net loss per share from operations
Basic	$	(0.008	)	$	(0.005	)
Diluted	$	(0.008	)	$	(0.005	)
Weighted average number of shares outstanding:
Basic & diluted		2,~~063~~446,~~438~~125,~~543~~019			1,~~289~~341,~~383~~287,~~719~~504

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 ~~September~~December 3031, 2022, there were no options outstanding.

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

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 30, 2022 (Unaudited)

Leases

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606.

On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.

Operating lease right of use (“ROU”) assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is presented on the statements of operations.

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

Recent 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, 2022, 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.

In June 2016, the FASB issued the ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Among other things, the amendments in this ASU requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The ASU also requires additional disclosures related to estimates and judgments used to measure all expected credit losses. The new guidance was originally 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 for fiscal years beginning after December 15, 2022, and early adoption is permitted. At this time, the Company believes the adoption of this ASU will have no effect on the consolidated financial statements.

~~B2Digital~~In June 2016, ~~Incorporated~~the FASB issued the ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Among other things, the amendments in this ASU requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The ASU also requires additional disclosures related to estimates and judgments used to measure all expected credit losses. The new guidance was originally 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 for fiscal years beginning after December 15, 2022, and early adoption is permitted. At this time, the Company believes the adoption of this ASU will have no effect on the consolidated financial statements.

Notes to Consolidated Financial Statements

September 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~~DISCONTINUED ~~CONCERN~~OPERATIONS

~~The~~Discontinued ~~accompanying~~operations ~~consolidated~~comprise ~~financial statements~~those ~~have been prepared on a going concern basis. For the six months ended September 30, 2022, the Company had a net loss of $9,109,756, had net cash used in operating~~ activities ~~of $2,186,772 had negative working capital of $19,705,656,~~ ~~accumulated~~disposed ~~deficit~~ of ~~$29,583,823 and~~during ~~stockholders’ deficit of $18,969,720. These matters raise substantial doubt about~~ the ~~Company’s~~period ~~ability~~or toclassified ~~continue~~ as aheld ~~going concern~~ for asale ~~period~~at ~~of one year from~~ the ~~date~~end of ~~this~~the ~~filing~~period. ~~The~~It ~~Company’s~~represents ~~ability to continue as~~ a ~~going~~separate, ~~concern~~major isline ~~dependent~~of ~~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~~clearly ~~possible~~distinguished ~~future~~for ~~acquisitions,~~operational and tofinancial ~~generate~~reporting ~~profitable operations in the future~~purposes. ~~Management~~Due ~~plans~~ to ~~provide for~~ the ~~Company’s~~ ~~capital~~efforts ~~requirements~~of bythe ~~continuing~~Company to ~~issue~~sell ~~additional~~One ~~equity~~More ~~and~~Gym ~~debt securities. The outcome of these matters~~Tuscaloosa, ~~cannot~~LLC ~~be predicted at this time~~ and ~~there~~One ~~are~~More noGym ~~assurances that~~Birmingham, ifLLC ~~achieved,~~ the ~~Company~~assets ~~will~~and ~~have~~liabilities ~~sufficient~~were ~~funds~~written down to ~~execute its~~fair ~~business~~value ~~plan~~and oran ~~generate~~impairment ~~positive~~loss ~~operating~~was ~~results~~recognized. ~~The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~

~~NOTE~~The 4revenues –and ~~REVENUE~~expenses associated with discontinued operations included in the Company’s consolidated income statement for the three and nine months ended December 31, 2022 and 2021 were as follows:


	For the three months ended						For the nine months ended
	December 31,			December 31,			December 31,			December 31,
	2022			2021			2022			2021
Revenue from discontinued operations
Gym revenue		63,688			348,850			501,214			1,058,863

Operating expenses from discontinued operations
Sales and marketing		–			5,170			5,102			14,178
Utilities		9,514			42,268			60,737			126,611
Leasing expense		8,069			138,859			132,492			417,296
Payroll expense		30,229			174,179			226,392			456,461
General and administrative		322,351			124,560			417,357			401,904
Loss on impairment of assets		300,475			–			300,475			–
Total general and administrative corporate expenses from discontinued operations		670,638			485,036			1,142,555			1,416,450

Loss from discontinued operations		(606,950	)		(136,186	)		(641,341	)		(357,587	)

Other income (expense):
Gain on forgiveness of loan		–			–			–			7,704
Gain (loss) on sale of assets		–			100			(6,958	)		1,240
Interest expense		–			(929	)		–			(3,283	)
Total other expense		–			(829	)		(6,958	)		5,661

Net loss on discontinued operations	$	(606,950	)	$	(137,015	)	$	(648,299	)	$	(351,926	)

Basic and diluted earnings per share on net loss from discontinued operations	$	(0.000	)	$	(0.000	)	$	(0.000	)	$	(0.001	)

Weighted average shares outstanding		3,207,338,338			1,452,481,989			2,446,125,019			1,341,287,504

NOTE 4 – GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis. For the nine months ended December 31, 2022, the Company had a net loss from operations of $19,869,710, had net cash used in operating activities of $2,786,451 had negative working capital of $29,223,126, accumulated deficit of $40,343,777 and stockholders’ deficit of $28,828,556. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 5 – 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 ~~six~~nine months ended ~~September~~December 3031, 2022 and 2021 are as follows:

Schedule of net sales by revenue type
	For the three months ended
	September 30,		September 30,
	December 31,		December 31,
	~~2022 (Unaudited)~~	2022 (Unaudited)	~~2021 (Unaudited)~~	2021 (Unaudited)
Live events	$	~~160~~77,~~469~~847	$	~~283~~263,~~171~~782
Gym revenue		75,007		376,839
Net sales	$	235,476	$	660,010

	For the six months ended
	For the nine months ended
	September 30,		September 30,
	December 31,		December 31,
	2022 (Unaudited)		2021 (Unaudited)
Live events	$	~~498~~576,~~291~~138	$	~~518~~782,~~762~~544
Gym revenue		437,526		710,013
Net sales	$	935,817	$	1,228,775

All revenue is derived in the United States.

14Information about the Company’s deferred revenue for the nine months ended December 31, 2022 and 2021 are as follows:

B2Digital, Incorporated

Schedule of deferred revenue
	As of
	December 31,			December 31,
	2022			2021
Balance at beginning of fiscal year	$	104,704		$	119,504
Deferral of revenue		559,775			711,281
Recognition of unearned revenue		(656,321	)		(766,049	)
Balance at December 31	$	8,158		$	64,736

Notes to Consolidated Financial Statements

September 30, 2022 (Unaudited)

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

Schedule of deferred revenue
	As of
	September 30,			September 30,
	2022			2021
Balance at beginning of fiscal year	$	104,704		$	119,504
Deferral of revenue		504,247			453,342
Recognition of unearned revenue		(575,552	)		(483,966	)
Balance at September 30	$	33,399		$	88,880

Deferred revenue for the periods ended September 30, 2022 and March 31, 2022 was $33,399 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 September 30, 2022 and March 31, 2022.

Revenue recognized for the six months ended September 30, 2022 and 2021, which was included in the unearned revenue liability balance at the beginning of the year, was $575,552 and $483,966, respectively. This revenue represents gym membership fees and live event sales for performance obligations met in the six months ended September 30, 2022 and 2021.

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following at September 30, 2022 and March 31, 2022:

Schedule of property and equipment
	September 30, 2022			March 31, 2022
Gym equipment	$	229,821		$	229,821
Cages		151,009			151,009
Event assets		122,795			122,795
Furniture and fixtures		19,366			19,366
Production truck gear		11,740			11,740
Production equipment		80,965			80,965
Venue lighting system		38,266			38,266
Leasehold improvements		135,301			126,851
Electronics hardware and software		191,299			181,720
Trucks trailers and vehicles		289,028			289,028
		1,269,590			1,251,561
Less: accumulated depreciation		(398,819	)		(267,344	)
	$	870,771		$	984,217

Depreciation expense related to these assets for the three months ended September 30, 2022 and 2021 amounted to $65,792 and $72,280, respectively. Depreciation expense related to these assets for the six months ended September 30, 2022 and 2021 amounted to $131,475 and $134,140, respectively.

~~B2Digital~~Deferred revenue for the periods ended December 31, ~~Incorporated~~2022 and March 31, 2022 was $8,158 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 December 31, 2022 and March 31, 2022.

~~Notes~~Revenue torecognized ~~Consolidated~~for ~~Financial~~the ~~Statements~~nine months ended December 31, 2022 and 2021, which was included in the unearned revenue liability balance at the beginning of the year, was $656,321 and $766,049, respectively. This revenue represents gym membership fees and live event sales for performance obligations met in the nine months ended December 31, 2022 and 2021.

~~September~~NOTE ~~30,~~6 ~~2022~~– ~~(Unaudited)~~PROPERTY AND EQUIPMENT

~~NOTE~~Property 6and –equipment, ~~INTANGIBLE~~net, ~~ASSETS~~consisted of the following at December 31, 2022 and March 31, 2022:

Intangible assets, net, consisted of the following at September 30, 2022 and March 31, 2021:

Schedule of property and equipment
	December 31, 2022			March 31, 2022

Gym equipment	$	–		$	229,821
Cages		151,009			151,009
Event assets		122,795			122,795
Furniture and fixtures		–			19,366
Production truck gear		11,740			11,740
Production equipment		80,965			80,965
Venue lighting system		38,266			38,266
Leasehold improvements		4,452			126,851
Electronics hardware and software		191,299			181,720
Trucks trailers and vehicles		289,028			289,028
		889,554			1,251,561
Less: accumulated depreciation		(361,304	)		(267,344	)
	$	528,250		$	984,217

Schedule of intangible assets
	As of			As of
	September 30, 2022			March 31, 2022
Licenses	$	142,248		$	142,248
Software/website development		12,585			12,585
Customer relationships		60,322			60,322
		215,155			215,155
Less: accumulated amortization		(182,091	)		(169,940	)
	$	33,064		$	45,215

Depreciation expense related to these assets for the three months ended December 31, 2022 and 2021 amounted to $66,015 and $76,523, respectively. Depreciation expense related to these assets for the nine months ended December 31, 2022 and 2021 amounted to $197,490 and $210,663, respectively.

~~Licenses~~As ~~are~~of ~~amortized~~December ~~over five years~~31, ~~whereas customer~~2022 ~~relationships~~the ~~and~~Company ~~software/website~~has ~~development are amortized over three years. Amortization expense related to these assets for~~deemed the ~~three~~assets ~~months~~of ~~ended~~One ~~September~~More ~~30,~~Gym ~~2022~~Birmingham ~~and~~LLC ~~2021 amounted to $6,076~~ and ~~$26,190~~One ~~respectively.~~More ~~Amortization~~Gym ~~expense~~Tuscaloosa ~~related~~LLC to ~~these assets~~be ~~for~~impaired. ~~the~~The ~~six~~Company ~~months~~recorded ~~ended~~a ~~September~~loss ~~30,~~of ~~2022 and 2021 amounted to~~ $12300,~~152~~475 ~~and~~on ~~$52,379, respectively~~the impairment.

NOTE 7 – INTANGIBLE ASSETS

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

Schedule of intangible assets
	As of			As of
	December 31, 2022			March 31, 2022

Licenses	$	–		$	142,248
Software/website development		12,585			12,585
Customer relationships		–			60,322
		12,585			215,155
Less: accumulated amortization		(9,563	)		(169,940	)
	$	3,022		$	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 three months ended December 31, 2022 and 2021 amounted to $6,075 and $26,190, respectively. Amortization expense related to these assets for the nine months ended December 31, 2022 and 2021 amounted to $18,227 and $78,569, respectively.

Estimated amortization expense for each of the next five years:

Schedule of amortization expense
Schedule of future amortization expense
Fiscal year ended March 31, 2023	$	121,~~152~~049
Fiscal year ended March 31, 2024		201,~~912~~973
Total	$	333,~~064~~022

NOTE 78 – BUSINESS DISPOSITION

One More Gym Merrillville, LLC

On July 27, 2022, the Company disposed of One More Gym Merrillville, LLC in a sale of the assets. The Company received relief of $15,000 in payables exchange for the net assets totaling $36,299. The Company had previously recorded an impairment loss on assets of $21,299.

One More Gym Valparaiso, LLC

On July 27, 2022, the Company disposed of One More Gym Valparaiso, LLC in a sale of the assets. The Company received relief of $25,000 in payables in exchange for the net assets totaling $71,452. The Company had previously recorded an impairment loss on assets of $46,452.

16NOTE 9 – NOTES PAYABLE

~~B2Digital~~The following is a summary of notes payable as of December 31, ~~Incorporated~~2022 and March 31, 2022:

Notes to Consolidated Financial Statements

Schedule of notes payable
	As of December 31, 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		1,352,500			153,000
SBA Loan (Hillcrest)		35,400			35,400
Advantage Platform		222,650			–
	$	1,717,750		$	295,600

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
	$	44,000		$	44,000

Total notes payable		1,761,750			339,600
Less: long-term		–			(30,000	)
Less: discount on notes payable		(93,310	)		–
Total notes payable, current portion	$	1,668,440		$	309,600

September 30, 2022 (Unaudited)

NOTE 8 - NOTES PAYABLE

The following is a summary of notes payable as of September 30, 2022 and March 31, 2022:

Schedule of notes payable
	As of September 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		1,112,000		153,000
SBA Loan (Hillcrest)		35,400		35,400
Advantage Platform		222,650		–
	$	1,477,250	$	295,600
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
	$	44,000	$	44,000
Total notes payable		1,521,250		339,600
Less: long-term		–		(30,000	)
Less: discount on notes payable		74,810		–
Total notes payable, current portion	$	1,446,440	$	309,600

During the three months ended September 30, 2022, the Company entered into an Agreement for the Purchase and Sale of Future Receipts with Advantage Platform. In exchange for $300,000 the Company agreed to release future revenue to Advantage in 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 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.

As of September 30, 2022, the Emry Capital note is in default. However, the note is not subject to any default provisions.

As of September 30, 2022, the WLES LP LLC note is in default. However, the note is not subject to any default provisions.

~~B2Digital~~During the nine months ended December 31, ~~Incorporated~~2022, the Company entered into an Agreement for the Purchase and Sale of Future Receipts with Advantage Platform. In exchange for $300,000 the Company agreed to release future revenue to Advantage in 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 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.

~~Notes~~As of December 31, 2022, the Company has paid $77,350 to ~~Consolidated~~Advantage ~~Financial~~Platform ~~Statements~~and has not received notice of default from the lender.

~~September~~As 30of December 31, 2022, ~~(Unaudited)~~the Emry Capital note is in default. However, the note is not subject to any default provisions.

~~NOTE~~As 9of –December ~~CONVERTIBLE~~31, ~~NOTE~~2022, ~~PAYABLE~~the WLES LP LLC note is in default. However, the note is not subject to any default provisions.

~~The~~NOTE ~~following~~10 is– aCONVERTIBLE ~~summary~~NOTE ~~of convertible notes payable as of September 30, 2022:~~ PAYABLE

Schedule of Convertible Notes Payable
Note*	Issuance Date	Maturity	Coupon	Face Value		Unamortized Discount		Carrying Value
Note 8	8/04/2020	12/31/2022	8%	$	77,000	$	–	$	77,000
Note 9	10/02/2020	12/31/2022	8%		205,000		–		205,000
Note 10	10/15/2020	12/31/2022	8%		172,000		–		172,000
Note 11	11/02/2020	12/31/2022	8%		69,000		–		69,000
Note 12	11/12/2020	12/31/2022	8%		69,000		–		69,000
Note 14	12/10/2020	12/31/2022	8%		80,000		–		80,000
Note 16	1/14/2021	12/31/2022	8%		107,000		–		107,000
Note 17	1/27/2021	12/31/2022	8%		60,000		–		60,000
Note 20	4/30/2021	12/31/2022	8%		104,000		–		104,000
Note 21	5/25/2021	12/31/2022	8%		104,000		–		104,000
Note 22	6/24/2021	12/31/2022	8%		185,652		–		185,652
Note 24	7/24/2021	12/31/2022	8%		265,000		–		265,000
Note 25	8/04/2021	12/31/2022	8%		129,800		–		129,800
Note 26	8/11/2021	12/31/2022	8%		151,500		–		151,500
Note 28	8/20/2021	12/31/2022	8%		151,500		–		151,500
Note 29	8/30/2021	12/31/2022	8%		140,650		–		140,650
Note 30	9/02/2021	12/31/2022	8%		216,385		–		216,385
Note 31	9/17/2021	12/31/2022	8%		270,480		–		270,480
Note 32	9/30/2021	12/31/2022	8%		270,480		–		270,480
Note 34	10/26/2021	12/31/2022	8%		270,480		4,546		265,934
Note 36	11/03/2021	12/31/2022	8%		270,480		4,257		266,223
Note 37	11/16/2021	12/31/2022	8%		324,576		17,105		307,471
Note 38	11/30/2021	12/31/2022	8%		270,480		14,254		256,226
Note 39	12/10/2021	12/31/2022	8%		601,000		37,836		563,164
Note 40	12/15/2021	12/31/2022	8%		270,480		19,597		250,883
Note 41	12/23/2021	12/23/2022	8%		54,100		4,061		50,039
Note 42	1/04/2022	1/04/2023	8%		270,480		10,091		260,389
Note 43	1/12/2022	1/12/2023	8%		300,000		85,618		214,382
Note 44	1/19/2022	1/19/2023	8%		270,480		16,743		253,737
Note 45	2/02/2022	2/02/2023	8%		270,480		15,029		255,451
Note 46	2/03/2022	2/03/2023	8%		425,000		146,903		278,097
Note 47	2/15/2022	2/15/2023	8%		270,480		12,812		257,668
Note 48	2/24/2022	2/24/2023	8%		211,640		85,310		126,330
Note 49	3/01/2022	3/01/2023	8%		120,000		45,487		74,513
Note 50	3/01/2022	3/01/2023	8%		270,480		16,911		253,569
Note 51	3/16/2022	3/16/2023	8%		270,480		17,732		252,748
Note 52	3/22/2022	3/22/2023	8%		120,000		56,920		63,080
Note 53	4/01/2022	4/01/2023	8%		135,240		8,513		126,727
Note 54	4/01/2022	4/01/2023	8%		270,480		16,721		253,759
Note 55	4/04/2022	4/04/2023	8%		92,040		42,240		49,800
Note 56	4/15/2022	4/15/2023	8%		270,480		17,710		252,770
Note 57	4/29/2022	4/29/2023	8%		270,480		14,529		255,951
Note 58	5/05/2022	5/05/2023	8%		66,100		35,385		30,715
Note 59	5/31/2022	5/31/2023	8%		160,000		95,901		64,099
Note 60	8/11/2022	8/11/2023	8%		57,778		49,869		7,909
Total				$	9,012,161	$	892,080	$	8,120,081

The following is a summary of convertible notes payable:

Schedule of Convertible Notes Payable
	December 31, 2022			March 31, 2022
Face value	$	8,946,968		$	7,951,563
Unamortized discount		(478,997	)		(1,916,473	)
Carrying value	$	8,467,971		$	6,035,090

Between April 1, 2022, and December 31, 2022, the Company issued to “accredited investors,” Convertible Promissory Notes aggregating a principal amount of $1,588,598. The Company received an aggregate net proceeds of $1,434,450 after $122,998 in original note discount and $31,150 legal fees. The Company has agreed to pay interest on the unpaid principal balance at the rates ranging from eight percent (8%) per annum to twelve percent (12%) 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 notes have varying conversion rates. The outstanding principal amount of the Notes is convertible into the Company’s common stock at a contractual conversion rate depending on the Note terms, number of months held and conversion prices exercised by other Convertible Promissory Note holders.

On October 1, 2022, the Notes having maturity dates prior to March 1, 2023 were extended to July 31, 2023, and the lender waived all penalty interest for non-payment.

During the nine months ended December 31, 2023 a Note in the amount of $88,400 was paid in cash on April 4, 2022. The Company recognized a gain on extinguishment of debt in the amount of $71,799, related to the write off of the derivative liability.

The Company was notified during the three months ended December 31, 2022, of a note in default. The default provision of the note provided the note holder a penalty fee of $118,818. The penalty was recorded to interest expense. The note was subsequently, fully converted into shares of common stock. The Company has not received notice of default from any of the other note holders.

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 30, 2022 (Unaudited)

* Notes 1, 2, 3, 4, 5, 6 and 7 in the amounts of $82,000, $208,000, $27,000, $62,000, $202,400, $78,000 and $85,800 respectively, were fully converted as of September 30, 2022.

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

*Note 27 in the amount of $88,400 was paid in cash on April 4, 2022. The Company recognized a gain on extinguishment of debt in the amount of $71,799, related to the write off of the derivative liability.

Between April 1, 2022, and September 30, 2022, the Company issued to “accredited investors,” Convertible Promissory Notes aggregating a principal amount of $1,322,707. The Company received an aggregate net proceeds of $1,213,989 after $101,718 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 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.

19The 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 the Notes based on an effective interest rate. Amortization expense and interest expense for the nine months ended December 31, 2022, is as follows:

B2Digital, Incorporated

Schedule of interest expense
	December 31, 2022		December 31, 2021
Interest Expense	$	620,905	$	91,752

Amortization of debt discount	$	2,185,141	$	221,228

Notes to Consolidated Financial Statements

September 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 six months ended September 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 8	$	12,531	$	38,286	$	–	$	–
Note 9		13,300		47,897		–		–
Note 10		11,159		39,084		–		–
Note 11		4,476		15,067		–		–
Note 12		4,476		14,726		–		–
Note 14		5,190		15,969		–		–
Note 16		5,886		18,457		–		–
Note 17		3,893		10,557		–		–
Note 20		4,154		11,790		339		–
Note 21		4,154		11,221		1,039		–
Note 22		7,416		18,809		16,440		–
Note 24		10,585		24,932		26,315		–
Note 25		5,185		11,984		13,599		–
Note 26		6,052		13,755		15,380		–
Note 27		78		–		12,288		–
Note 28		6,052		13,457		17,520		–
Note 29		5,618		12,185		16,653		–
Note 30		8,644		18,603		28,642		–
Note 31		10,805		23,254		31,150		–
Note 32		10,805		21,594		34,045		–
Note 34		10,805		20,468		34,386		4,546
Note 35		200		–		34,584		–
Note 36		10,805		19,578		23,234		4,257
Note 37		12,966		22,569		78,221		17,105
Note 38		10,805		17,978		45,893		14,254
Note 39		24,007		39,946		97,757		37,836
Note 40		10,805		17,088		47,313		19,597
Note 41		2,161		3,323		9,771		4,061
Note 42		10,805		15,903		22,219		10,091
Note 43		11,984		17,178		170,348		85,618
Note 44		10,805		15,013		29,911		16,743
Note 45		10,805		14,184		22,021		15,029
Note 46		16,977		22,193		215,715		146,903
Note 47		10,805		13,413		15,705		12,812
Note 48		8,454		10,078		95,266		85,310
Note 49		4,793		5,582		59,975		45,487
Note 50		10,805		12,583		20,523		16,911
Note 51		10,805		11,694		17,990		17,732
Note 52		4,793		5,030		51,080		56,920
Note 53		5,373		5,373		8,454		8,513
Note 54		10,745		10,745		16,607		16,721
Note 55		3,596		3,596		40,596		42,240
Note 56		9,915		9,915		15,084		17,710
Note 57		9,085		9,085		10,592		14,529
Note 58		2,133		2,133		24,105		35,385
Note 59		4,252		4,252		48,099		95,901
Note 60		949		949		7,909		49,869
Total	$	380,892	$	711,476	$	1,476,768	$	892,080

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 30, 2022 (Unaudited)

Debt conversions

~~The~~During ~~following~~the ~~table~~nine ~~illustrates~~months ended December 31, 2022, the ~~debt~~Company ~~converted~~repaid a Note in cash. The principal balance was $88,400 and the ~~associated~~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 orof ~~loss:~~extinguishment in the amount of $73,673.

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	)
Note 8	August 4, 2022	73,803,873		36,901		20,000		3,247		23,247		25,710		(12,056	)
		321,614,678	$	344,307	$	165,800	$	20,242	$	186,042		203,856		(45,591	)

During the nine months ended December 31, 2022, $615,812 of principal balance and $38,536 of accrued interest associated with Notes was converted into 3,366,581,899 shares of common stock having a fair value of $1,240,425. The derivative liability related to the notes converted was $544,881. As a result, the Company recorded a loss on extinguishment of debt of $30,196 and legal fees of $11,000.

~~During~~Between the ~~six~~loss ~~months~~on ~~ended~~extinguishment ~~September~~of ~~30,~~debt ~~2022,~~related to the ~~Company~~conversions ~~repaid~~above ~~Note 27 in cash. The principal balance was $88,400~~ and the ~~accrued~~gain ~~interest~~on ~~was~~extinguishment ~~$4,476.~~related ~~The~~to ~~prepayment fee was $15,495. The Company repaid $108,371. As of~~ the repayment ~~dates~~, the ~~derivative~~total ~~liability~~gain ~~related to Notes~~ was $7343,~~673~~477. ~~As a result, the Company recorded a gain of extinguishment in the amount of $73,673.~~

~~Between the gain on extinguishment of $45,591~~NOTE ~~related~~11 to– ~~the~~DERIVATIVE ~~conversions~~FINANCIAL ~~above and the gain on extinguishment related to the repayment, the total gain was $119,264.~~INSTRUMENTS

~~NOTE~~The 10following ~~–DERIVATIVE~~tables ~~FINANCIAL~~summarize ~~INSTRUMENTS~~the components of the Company’s derivative liabilities and linked common shares as of December 31, 2022:

The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of September 30, 2022:


	December 31, 2022
The financings giving rise to derivative financial instruments	Indexed Shares		Fair Values
Compound embedded derivatives		86,458,200,000		(17,291,640	)
Total		86,458,200,000		(17,291,640	)

Schedule of derivative liabilities
	September 30, 2022
The financings giving rise to derivative financial instruments	Indexed Shares		Fair Values
Compound embedded derivatives		21,938,772,500		(8,606,244	)
Total		21,938,772,500		(8,606,244	)

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 30, 2022 (Unaudited)

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

	March 31, 2022
The financings giving rise to derivative financial instruments	Indexed Shares		Fair Values
Compound embedded derivatives		~~559~~4,~~931~~418,~~126~~910,016	$	(3,831,191	)
Total		~~559~~4,~~931~~418,~~126~~910,016	$	(3,831,191	)

The following table summarizes the effects on the Company’s (loss) gain associated with changes in the fair values of the derivative financial instruments by type of financing for the three months ended September 30, 2022 and 2021:19

	September 30,			September 30,
	2022			2021
Change in fair value of compound embedded derivatives	$	(1,483,300	)	$	(665,813	)
Initial derivative expense		(184,890	)		–
Total	$	(1,668,190	)	$	(665,813	)

	December 31,			December 31,
	2022			2021

Change in fair value of compound embedded derivatives	$	(8,688,144	)		(66,894	)
Initial derivative expense		(98,877	)		(45,485	)
Total	$	(8,787,021	)		(112,379	)

	September 30,			September 30,
	2022			2021
Change in fair value of compound embedded derivatives	$	(4,292,576	)	$	(354,942	)
Initial derivative expense		(379,213	)		–
Total	$	(4,671,789	)	$	(354,942	)

The Company’s Convertible Promissory Notes issued between October 4, 2019 and September 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.

	December 31,			December 31,
	2022			2021

Change in fair value of compound embedded derivatives	$	(12,980,720	)		(421,836	)
Initial derivative expense		(478,090	)		(45,485	)
Total	$	(13,458,810	)		(467,321	)

The Company’s Convertible Promissory Notes issued between October 4, 2019 and December 31, 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.

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 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
	September 30, 2022
	December 31, 2022
Quoted market price on valuation date	$0.~~0004~~0002
Contractual conversion rate	$0.~~0003~~0001 - $0.~~002~~0002
Contractual term to maturity	0~~.25~~ ~~Years~~– - 0.8691 Years
Market volatility:
Equivalent Volatility	268.22% - 399.05%
Equivalent Volatility	153.28% - 228.14%
Interest rate	8% - 12%
Interest rate	8.0%-12.0%

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 September 30, 2022 and March 31, 2022. 20

Schedule of changes in fair value of derivatives
	September 30,			March 31,
	2022			2022
Beginning balance	$	3,831,191		$	1,137,623
Issuances:
Compound embedded derivatives		378,921			2,038,843
Conversions		(203,856	)		(328,638	)
Derivative extinguished / debt repaid in cash		(71,801	)		(243,300	)
Loss on changes in fair value inputs and assumptions reflected in income		4,292,576			1,181,178
Initial derivative expense		379,213			45,485
Total	$	8,606,244		$	3,831,191

NOTE 11 - EQUITY


	December 31,			March 31,
	2022			2022

Beginning balance	$	3,831,191		$	1,137,623
Issuances:
Compound embedded derivatives		618,321			2,038,843
Conversions		(544,881	)		(328,638	)
Derivative extinguished / debt repaid in cash		(71,801	)		(243,300	)
Loss on changes in fair value inputs and assumptions reflected in income		12,980,720			1,181,178
Initial derivative expense		478,090			45,485
Total	$	17,291,640		$	3,831,191

NOTE 12 – 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 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. All 40,000,000 of Series B are issued and outstanding. Series B is convertible into 320,000,000 shares of common stock. The Series B 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 B Preferred Stock is entitled to 120 votes for each share of Series B Preferred Stock held by such shareholder.

23Common Stock Issuances for the nine months ended December 31, 2022

~~B2Digital,~~Common ~~Incorporated~~Stock Issued for Conversion of Notes

Between April 1, 2022 and December 31, 2022, the Company issued 3,366,581,899 shares in exchange for $615,810 in principal and $38,537 in accrued interest in connection with Promissory Notes with conversion prices ranging from a low of $0.000063 to ~~Consolidated~~a ~~Financial~~high ~~Statements~~of $0.0013020.

~~September~~Common ~~30,~~Stock ~~2022~~Issued ~~(Unaudited)~~for Services

~~Common~~On ~~Stock~~December ~~Issuances~~12, ~~for~~2022, Company issued 25,000,000 shares of stock to New to the ~~six~~Street ~~months~~Group ~~ended September~~in ~~30,~~exchange ~~2022~~for services valued at $5,000.

OnCommon ~~April~~Stock ~~14,~~Issuances ~~2022,~~for ~~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~~nine ~~of the conversion,~~months ~~the~~ended ~~Company~~December ~~issued 35~~31,~~873,156~~ ~~shares of common stock at $0.001302 per share.~~2021

OnCommon ~~April~~Stock ~~28,~~Issued ~~2022,~~for 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.Cash

OnBetween ~~May~~April 51, ~~2022,~~2021 ~~1800 Diagonal Lending converted $26,800 in principal~~ and ~~$1,800~~December ~~in accrued interest in connection with Promissory Note dated October 26~~31, 2021~~. Pursuant to the terms of the conversion~~, the Company issued 37295,~~631~~000,~~579~~000 shares of ~~common~~ stock atto ~~$0.00076~~various ~~per~~investors ~~share~~for $1,180,000.

OnCommon ~~May~~Stock ~~10,~~Issued ~~2022,~~for 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.Services

OnBetween ~~May~~April 251, ~~2022,~~2021 GSand ~~Capital~~December ~~converted $13~~31,~~000 in~~ ~~principal and $1~~2021,~~877~~ ~~in accrued interest in connection with Promissory Note dated August 4, 2020. Pursuant to~~ the ~~terms of the conversion,~~ ~~the~~ Company issued 475,~~230~~500,~~793~~000 shares of common stock in exchange for services valued at $023,650.~~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.21

OnNOTE ~~August~~13 ~~16,~~– ~~2022, the Company issued 73,803,873 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.~~LEASES

Common Stock Issuances for the six months ended September 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.

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 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.

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.

NOTE 12 – LEASES

Tuscaloosa Lease

In connection with the acquisition of Hillcrest Fitness LLC on December 1, 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~~Tuscaloosa ~~rate~~facility ~~used~~was toclassified ~~determine~~in ~~the~~discontinued ~~present~~operations ~~value~~as isDecember ~~our incremental borrowing rate~~31, ~~estimated to be 10%, as the interest rate implicit in most of our leases is not readily determinable~~2022. ~~Operating~~The lease ~~expense~~has ~~is recognized on~~ a ~~straight-line~~noncancelable ~~basis over the lease~~ term. ~~Since~~through ~~the~~March ~~common area maintenance expenses are expenses that do not depend on an index or rate~~6, ~~they~~2024. ~~are~~The ~~excluded~~Company ~~from~~will ~~the~~continue ~~measurement~~to oflease the ~~lease~~facility until ~~liability~~operations ~~and~~end ~~recognized~~or ~~in operating expenses on~~ the ~~statements~~business ofunit ~~operations~~is sold.

Birmingham Lease

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

The Birmingham facility was classified in discontinued operations as December 31, 2022. The lease has a noncancelable term through April 30, 2026. The Company will continue to lease the facility until operations end or the business unit is sold.

Tuscaloosa Additional Space Lease

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

Operating lease right-of-use asset and liability are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 10%, as the interest rate implicit in most of our leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. Since the common area maintenance expenses are expenses that do not depend on an index or rate, they are excluded from the measurement of the lease liability and recognized in other operating expenses on the statements of operations.

B2Digital, Incorporated

Notes to Consolidated Financial Statements

September 30, 2022 (Unaudited)

Right-of-use asset is summarized below:

Summary of right-of-use asset
	September 30, 2022
	December 31, 2022
	Tuscaloosa Additional Lease	~~Tuscaloosa Additional Lease~~
Office lease	$	77,119
Less: accumulated amortization		(1013,~~341~~614	)
Right-of-use asset, net	$	6663,~~778~~505

Operating lease liability is summarized below:

Summary of operating lease liability

September 30, 2022

December 31, 2022

Tuscaloosa Lease

Birmingham Lease

Tuscaloosa Additional Lease

Total

Discontinued Operations

Tuscaloosa Additional Lease

Total

Office lease

~~126~~316,~~152~~109

~~217~~63,~~888~~505

66379,~~778~~614

~~410,818~~

Less: current portion

(62118,~~812~~942

)

(5313,~~206~~939

)

(13132,~~597~~881

)

~~(129,615~~

)

Long term portion

63197,~~340~~167

~~164~~49,~~682~~566

53246,~~181~~733

~~281,203~~

Maturity of the lease liability is as follows:

Schedule of maturity of the lease liability

September 30, 2022

December 31, 2022

Tuscaloosa Lease

Birmingham Lease

Tuscaloosa Additional Lease

Total

Discontinued Operations

Tuscaloosa Additional Lease

Total

Fiscal year ending March 31, 2023

36,000

364,~~000~~875

940,~~750~~875

~~81,750~~

Fiscal year ending March 31, 2024

72144,000

7219,~~000~~500

19163,500

~~163,500~~

Fiscal year ending March 31, 2025

30102,000

7219,~~000~~500

19121,500

~~121,500~~

Fiscal year ending March 31, 2026

–72,000

7219,~~000~~500

1991,500

~~91,500~~

Fiscal year ending March 31, 2027

–6,000

613,000

1319,000

~~19,000~~

Present value discount

(1143,~~848~~891

)

(4012,~~112~~870

)

(1456,~~472~~761

)

~~(66,432~~

)

Lease liability

~~126~~316,~~152~~109

~~217~~63,~~888~~505

66379,~~778~~614

~~410,818~~

26NOTE 14 – COMMITMENTS AND CONTINGENCIES

~~B2Digital~~During the normal course of business, ~~Incorporated~~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, 2022, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements.

Notes to Consolidated Financial Statements

September 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 September 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 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 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 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 $180,000 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~~ 23

~~Notes~~NOTE ~~payable~~15 – SUBSEQUENT EVENTS

OnConvertible ~~October 7, 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 $94,000. The note has a maturity date of October 7, 2023, and the Company has agreed to principal payments that shall be made in ten (10) installments each in the amount of $10,152 commencing on the ninetieth (90th) day anniversary following the issue date and continuing thereafter each thirty (30) days for ten (10) months.Notes

On ~~October~~January 213, ~~2022~~2023, the Company entered into an an agreement with GSMast ~~Capital~~Hill ~~Partners~~ pursuant to which the ~~Company~~company issued to GSMast ~~Capital~~Hill ~~Partners~~ a Promissory Note in the aggregate principal amount of $86335,~~500~~000. The ~~note~~Note has a maturity date of ~~October~~January 213, ~~2023~~2024, and the Company has agreed to ~~principal~~pay ~~payments~~interest ~~that~~on ~~shall~~the beunpaid ~~made~~principal balance of the note inat ~~ten~~the rate of (1012%) ~~installments~~per ~~each~~annum infrom the ~~amount~~date ofon ~~$9,342~~which ~~commencing~~the onnote is issued until the ~~ninetieth~~same ~~(90th)~~becomes ~~day~~due ~~anniversary~~and ~~following~~payable, ~~the~~whether ~~issue~~at maturity or ~~date~~upon ~~and~~acceleration ~~continuing~~or ~~thereafter~~by ~~each~~prepayment ~~thirty~~or ~~(30)~~otherwise. ~~days~~The ~~for~~Company ~~ten~~shall ~~(10)~~have ~~months~~the right to prepay the note, provided it makes a payment to Mast Hill as set forth in the note.

On ~~November~~February 210, ~~2022~~2023, the Company entered into an agreement with GSMast ~~Capital~~Hill ~~Partners~~ pursuant to which the ~~Company~~company issued to GSMast ~~Capital~~Hill ~~Partners~~ a Promissory Note in the aggregate principal amount of $60221,~~000~~500. The ~~note~~Note has a maturity date of ~~November~~February 210, ~~2023~~2024, and the Company has agreed to ~~principal~~pay ~~payments~~interest ~~that~~on ~~shall~~the beunpaid ~~made~~principal balance of the note inat ~~ten~~the rate of (1012%) ~~installments~~per ~~each~~annum infrom the ~~amount~~date ofon ~~$6,480~~which ~~commencing~~the onnote is issued until the ~~ninetieth~~same ~~(90th)~~becomes ~~day~~due ~~anniversary~~and ~~following~~payable, ~~the~~whether ~~issue~~at maturity or ~~date~~upon ~~and~~acceleration ~~continuing~~or ~~thereafter~~by ~~each~~prepayment ~~thirty~~or ~~(30)~~otherwise. ~~days~~The ~~for~~Company ~~ten~~shall ~~(10)~~have ~~months~~the right to prepay the note, provided it makes a payment to Mast Hill as set forth in the note.

Stock

OnBetween ~~October~~January 171, ~~2022~~2023, ~~1800~~and ~~Diagonal~~the ~~Lending~~filing ~~converted~~date the ~~$15,200~~Company inhas ~~principal~~issued ~~into 80~~2,~~000~~657,~~000~~682,155 shares of common stock atin aconnection ~~conversion~~with ~~price~~the conversion of $~~0.00019~~220,560 ~~per~~in ~~share~~principal and $11,293 in accrued interest pursuant to ~~Note~~various 48notes ~~dated~~outstanding ~~February 24~~as of December 31, 2022.

On ~~October~~January 1724, ~~2022~~2023, ~~Mast~~with ~~Hill~~Mr. ~~converted~~Bell $5abstaining,~~420.27~~ inthe ~~principal~~board of directors of the Company approved the filing of an amendment to the Certificate of Designation of the Series B Convertible Stock pursuant to which the section titled “Voting, $5Liquidation,~~391.77~~ inDividends, ~~accrued~~and ~~interest~~Redemption” ~~and~~was $1revised to the following: “Voting,~~000~~ inLiquidation, ~~fees~~Dividends, ~~totaling~~and ~~$11~~Redemption. On all matters to be voted on by the holders of Common Stock,~~812~~ the Holders of Series B Preferred Stock shall be entitled to three hundred and sixty (360) votes for each share of Series B Preferred Stock held of record.04 ~~into~~On 59all such matters,~~060,194~~ ~~shares~~the holders of ~~common~~Common ~~stock~~Stock atand the Holders of Series B Preferred Stock shall vote together as a ~~conversion~~single class. ~~price~~If the Company effects a stock split which either increases or decreases the number of ~~$0.0002~~shares ~~per~~of ~~share~~Common Stock outstanding and entitled to vote, ~~pursuant~~the voting rights of the Series B Preferred Stock shall not be subject to ~~Note~~adjustments 52unless ~~dated~~specifically ~~March~~authorized. 22The shares of Series B Convertible Preferred Stock shall (i) not have a liquidation preference; (ii) not accrue, ~~2022~~earn, or participate in any dividends; and (iii) not be subject to redemption by the Corporation.”

2724

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, 2022 filed on September 19, 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 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 Tuscaloosa LLC, One More Gym Birmingham, Inc. and B2 Productions LLC.

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

2825

	·	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 months ended ~~September~~December 3031, 2022 are not necessarily indicative of the results to be expected for the year ending March 31, 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 at ~~September~~December 3031, 2022 and March 31, 2022, respectively.

2926

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.

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.

Long-Lived Assets

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.

Discontinued Operations

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, 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~~During ~~were~~the nothree ~~impairment~~months ~~charges~~ended ~~recorded~~December ~~during~~31, 2022, the ~~three~~Company ~~months~~classified ~~ended~~the ~~September~~two ~~30,~~remaining ~~2022~~gyms as discontinued operations and ~~2021~~recorded an impairment loss of $300,475.

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 ~~September~~December 3031, 2022 and March 31, 2022, the Company did not carry any finished goods inventory.

Earnings Per Share (EPS)

The Company utilize FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. As of ~~September~~December 3031, 2022, the convertible notes are indexed to 2186,~~938~~458,~~722~~200,~~500~~000 shares of common stock.

The following table sets for the computation of basic and diluted earnings per share the ~~six~~three months ended ~~September~~December 3031, 2022 and 2021:

	September 30, 2022			September 30, 2021
	December 31, 2022			December 31, 2021
Basic and diluted
Net loss	$	(9,109,756	)	$	(3,618,523	)
Net loss from continuing operations	$	(10,153,004	)	$	(2,556,102	)
Net loss per share
Net loss from discontinued operations	$	(606,950	)	$	(137,015	)
Basic	$	(0.004	)	$	(0.003	)
Net loss from operations	$	(10,760,485	)	$	(2,693,117	)
Diluted	$	(0.004	)	$	(0.003	)
Net loss per share from continuing operations
Basic	$	(0.003	)	$	(0.002	)
Diluted	$	(0.003	)	$	(0.002	)
Net loss per share from discontinued operations
Basic	$	(0.000	)	$	(0.000	)
Diluted	$	(0.000	)	$	(0.000	)
Net loss per share from operations
Basic	$	(0.003	)	$	(0.002	)
Diluted	$	(0.003	)	$	(0.002	)
Weighted average number of shares outstanding:
Basic & diluted		23,~~063~~207,~~438~~338,~~543~~338			1,~~289~~452,~~383~~481,~~719~~989

3229

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 ~~September~~December 3031, 2022, there were no options outstanding.

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.

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.

3330

Recent 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 MMA. We operate in two major branded businesses: The B2 Fighting Series and The Official B2 Training Facilities 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.

The Live Events 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 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 2018 U.S. states to operate LIVE MMA Fights. Most B2 Fighting Series events sell out at the gate.

The B2 Training Facilities business operates primarily through our ONE More Gym Facilities brand. We currently operate two ONE More Gym 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 10-Q. We have included our website address in this 10-Q solely as an inactive textual reference.

34Results of Operations for the three months ended December 31, 2022 compared to the three months ended December 31, 2021

Results of Operations for the three months ended September 30, 2022 compared to the three months ended September 30, 2021

Revenue

We had total revenues of $~~235~~77,~~476~~847 for the three months ended ~~September~~December 3031, 2022, versus revenues of $~~660~~263,~~010~~782 for the three months ended ~~September~~December 3031, 2021. ~~There~~ There was a decrease in live event revenue of $~~122~~185,~~702~~935, or 4370%, due to a decrease in the number of live events held during the period. ~~There was a decrease in gym revenue of $301,832 or 80%, due to the sale of the gym locations.~~

Operating Expenses

Operating expenses are all expenses including merchant fees, payroll, utilities, professional fees, all costs associated with marketing, press releases, public relations, rent, sponsorships, and other expenses. We incurred operating expenses of $~~948~~242,~~082~~009 for the three months ended ~~September~~December 3031, 2022, versus operating expenses of $2,~~245~~305,~~625~~240 for the three months ended ~~September~~December 3031, 2021. The decrease of $12,~~297~~063,~~543~~231 was primarily ~~due~~ due to a decrease in the number of live events, ~~and~~ the sale of three gym locations and the classification of the remaining gyms in discontinued operations.

Depreciation and Amortization Expense

We incurred depreciation and amortization expense of $7172,~~868~~090 for the three months ended ~~September~~December 3031, 2022, versus depreciation expense of $98102,~~470~~713 for the three months ended ~~September~~December 3031, 2021. The decrease of $2630,~~602~~623 was due to a decrease in capitalized assets and intangible assets as a result of the disposal of gym assets. Also, the Company did not purchase any capital assets during the quarter.

Other Income (Expense)

Our other income and expenses include ~~gain on forgiveness of loan,~~ loss on ~~sale of assets, 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 $29,~~827~~988,~~508~~842 for the three months ended ~~September~~December 3031, 2022, versus other expense of $~~971~~514,~~561~~644 for the three months ended ~~September~~December 3031, 2021. The increase in other expenses of $19,~~855~~474,~~947~~198 was primarily due to ~~increases~~a decrease in the fair value of derivatives, and increases in day-one derivative expense, loss on extinguishment of debt, and interest expense.

Net Losses

We incurred a net loss from continuing operations of $310,~~540~~153,~~114~~004 for the three months ended ~~September~~December 3031, 2022, versus a net loss offrom continuing operations of $2,~~557~~556,~~176~~102 for the three months ended ~~September~~December 3031, 2021. The $7,596,903 additional loss is a result of the Company’s net operating loss and other expense related to the change in fair value of derivatives associated with Convertible Promissory Notes.

Results of Operations for the ~~six months~~nine months ended ~~September~~December 3031, 2022 compared to the ~~six~~nine months ended ~~September~~December 3031, 2021

Revenue

We had total revenues of $~~935~~576,~~817~~138 for the ~~six~~nine months ended ~~September~~December 3031, 2022, versus revenues of $1782,~~228,775~~544 for the ~~six~~nine months ended ~~September~~December 3031, 2021. There was a decrease in live event revenue of $20206,~~471~~406, or 426%, due to a decrease in live events held during the period. ~~There was a decrease in gym revenue of $272,487 or 38%, due to the disposal of the gym locations.~~

Operating Expenses

Operating expenses are all expenses including merchant fees, payroll, utilities, professional fees, all costs associated with marketing, press releases, public relations, rent, sponsorships, and other expenses. We incurred operating expenses of $3,~~455~~225,~~503~~595 for the ~~six~~nine months ended ~~September~~December 3031, 2022, versus operating expenses of $45,~~091~~501,~~056~~137 for the ~~six~~nine months ended ~~September~~December 3031, 2021. The decrease of $~~635~~2,~~553~~275,542 was primarily due to a decrease in the number of live events, ~~and~~ decreased operations as a result of the disposal of three gym ~~dispositions~~locations and the classification of the remaining gyms as discontinued operations.

Depreciation and Amortization Expense

We incurred depreciation and amortization expense of $~~143~~215,~~627~~717 for the ~~six~~nine months ended ~~September~~December 3031, 2022, versus depreciation expense of $~~186~~289,~~519~~232 for the ~~six~~nine months ended ~~September~~December 3031, 2021. The decrease of $4273,~~892~~515 was due to a reduction of capital assets purchased and the disposition of ~~gym~~three gym locations over the period.

Other Income (Expense)

Our other income and expenses include gain on ~~forgiveness of loan, loss on~~ sale of assets, 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 $616,~~590~~571,~~070~~954 for the ~~six~~ nine months ended ~~September~~December 3031, 2022, versus other expense of $~~756~~1,~~242~~241,121 for the ~~six~~nine months ended ~~September~~December 3031, 2021. The increase in other expenses of $515,~~833~~330,~~828~~833 was primarily due to ~~increases~~a decrease in the fair value of derivatives, and increases in day-one derivative expense and interest expense.

Net Losses

We incurred a net loss from continuing operations of $919,~~109~~221,~~756~~411 for the ~~six~~nine months ended ~~September~~December 3031, 2022, versus a net loss of $35,~~618~~959,~~523~~714 for the ~~six~~nine months ended ~~September~~December 3031, 2021. The $13,261,698 additional loss is a result of the company’s net operating loss and other expense related to the change in fair value of derivatives associated with Convertible Promissory Notes.

~~Current Liquidity and Capital Resources for the six months ended September 30, 2022 compared to the six months ended September 30, 2021~~32

	September 30,
	2022			2021
Summary of Cash Flows:
Net cash used in operating activities	$	(2,210,066	)	$	(2,634,963	)
Net cash provided by (used in) investing activities		63,413			(421,156	)
Net cash provided by financing activities		2,210,066			3,207,855
Net increase in cash and cash equivalents		86,707			151,736
Beginning cash and cash equivalents		39,623			122,176
Ending cash and cash equivalents	$	126,330		$	273,912

Current Liquidity and Capital Resources for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021

	December 31,
	2022			2021
Summary of Cash Flows:
Net cash used in operating activities	$	(2,786,451	)	$	(4,561,880	)
Net cash provided by (used in) investing activities		63,413			(577,892	)
Net cash provided by financing activities		2,683,679			5,026,790
Net decrease in cash and cash equivalents		(39,359	)		(112,982	)
Beginning cash and cash equivalents		39,623			122,176
Ending cash and cash equivalents	$	264		$	9,194

Operating Activities

Cash used in operations of $2,~~210~~786,~~066~~451 during the ~~six~~nine months ended ~~September~~December 3031, 2022 was primarily a result of our $919,~~109~~869,~~756~~710 net loss from operations reconciled with our net non-cash expenses relating to depreciation 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 deferred revenue. Cash used in operations of of $24,~~634~~561,~~963~~880 during the ~~six~~nine months ended ~~September~~December 3031, 2021 was primarily a result of our $36,~~618~~311,~~523~~640 net loss ~~reconciled~~from operations reconciled with our net non-cash expenses relating to stock compensation, depreciation expense, prepaid expenses, accounts payable, accrued liabilities, amortization of debt discount, changes in fair value of derivative liabilities and deferred revenue.

Investing Activities

Net cash provided by investing activities for the ~~six~~nine months ended ~~September~~December 3031, 2022 of $63,413 resulted from the disposition of gym locations partially offset by capital expenditures. Net cash used in investing activities for the ~~six~~nine months ended ~~September~~December 3031, 2021 of $~~421~~577,~~156~~892 resulted from business acquisitions and capital expenditures.

Financing Activities

Net cash provided by financing activities was $2,~~210~~683,~~066~~679 for ~~six~~nine months ended ~~September~~December 3031, 2022, which consisted primarily of proceeds from notes payable less ~~repayments~~repayment of notes ~~payable~~ ~~and from the conversion of existing notes~~ payable, . Net cash provided by financing activities was $35,~~207~~026,~~855~~790 for ~~six~~nine months ended ~~September~~ 30December 31, 2021, which consisted primarily of proceeds from notes payable less repayments of notes payable, proceeds from the conversion of existing notes payable and 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~~2023 and for ~~2023~~2024 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 ~~six~~nine months ended ~~September~~December 3031, 2022, the Company had a net loss offrom operations of $919,~~109~~869,~~756~~710, had net cash used in operating activities of $2,~~210~~786,~~066~~451, had negative working capital of $1929,~~705~~223,~~656~~126, accumulated deficit of $2940,~~583~~343,~~823~~777 and stockholders’ deficit of $1828,~~969~~828,~~720~~556. 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.

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 and accounting officer, as appropriate to allow timely decisions regarding required disclosure. Mr. Bell, evaluated the effectiveness of the Company’s ~~disclosure~~ disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of ~~September~~December 3031, 2022. Based on his evaluation, Mr. Bell concluded that the Company’s disclosure controls and procedures were effective as of ~~September~~December 3031, 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 ~~September~~December 3031, 2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

3835

PART 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

~~Between~~From ~~April~~October 1, 2022, ~~and~~through ~~September~~December 3031, 2022, the Company issued to an “accredited ~~investors~~investor,” a Convertible Promissory ~~Notes~~Note ~~aggregating~~in athe principal amount of $1266,~~476,403~~000. The ~~Company~~ Company received an aggregate net proceeds of $1215,~~213,989~~250 after $~~255~~26,~~414~~600 in original note discount and $724,~~000~~150 in legal fees. The Company has ~~agreed~~ 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~~ until the same becomes due and payable, whether at maturity or upon acceleration, prepayment or otherwise. The Company shall have the ~~right~~ right to prepay the Notes, provided it makes a payment as set forth in the agreements.

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

Shares Issued Pursuant to Note Conversions

During the ~~six~~three months ended ~~September~~December 3031, 2022, lenders converted an aggregate of $~~186~~654,~~042~~347 in principal and accrued and unpaid interest of their promissory notes into an aggregate of ~~321~~3,~~614~~366,~~678~~581,899 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.

Miscellaneous Share Issuances

On December 12, 2022, Company issued 25,000,000 shares of stock to New to the Street Group in exchange for services rendered. 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.

Item 6.

Exhibits.

SEC Ref. No.	Title of Document
31.1*	Rule 13a-14(a) Certification by Principal Executive and Financial Officer
32.1**	Section 1350 Certification of Principal Executive and Financial Officer
101.INS	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 inline XBRL, and included in exhibit 101).

__________________

*Filed with this Report.

**Furnished with this Report.

3937

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: November 14, 2022	By	/s/ Greg P. Bell
Date: February 21, 2023	By	/s/ Greg P. Bell
		Greg P. Bell, Chief Executive Officer
		(Principal Executive Officer and Principal
		Financial Officer)
		Financial and Accounting Officer)

4038

Filing Compare · B2Digital, Inc.