{"url_path":"/sec/sund/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-29","source_url":"https://www.sec.gov/Archives/edgar/data/1171838/0001493152-26-031046-index.html","accession_number":"0001493152-26-031046","cik":"0001171838","ticker":"SUND","issuer_name":"Sundance Strategies, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1171838/0001493152-26-031046-index.html","primary_entity_key":"0001171838","primary_entity_name":"Sundance Strategies, Inc."},"word_count":1909,"has_tables":true,"body_markdown":"**Item\n7. Management’s Discussion and Analysis of Financial Condition and Results of Operations**\n\n \n\n**Overview**\n\n \n\n**Legacy\nBusiness (Overview):**\n\n** **\n\nOur\nhistorical business model focused on purchasing or acquiring life insurance policies and related residual interests, such as net insurance\nbenefits (NIBs). These NIBs provided us with the right to receive a portion of settlement proceeds from third-party-held policy portfolios,\nafter associated servicing and financing costs. As of the date of this report, we no longer directly hold NIBs or life insurance policies.\n\n \n\n25\n\n \n\n** **\n\n**Current\nFocus:**\n\n** **\n\nSince\nthe latter part of fiscal 2021, our efforts have shifted toward providing professional services to specialty finance groups, bond issuers,\nand aggregators in the life settlement space. Our role includes advising on portfolio construction and applying proprietary analytics\nto help structure bond offerings secured by life insurance assets and managed cash. We aim to assist clients with asset assembly, cash\nmanagement, and support for both investment- and non-investment-grade credit ratings. In exchange, we will be reimbursed for structuring\nexpenses, earn an advisory fee upon closing, and retain residual rights to certain underlying assets post-maturity.\n\n \n\nFor\nthe fiscal year ended March 31, 2026, the Company earned no revenue from bond advisory or portfolio consulting services. Management continues\nto pursue opportunities, but no definitive engagements were in place as of the date of this report.\n\n \n\n**Results\nof Operations**\n\n \n\n**Fiscal\nyear ended March 31, 2026 compared to March 31, 2025**\n\n \n\n**General\n& Administrative Expenses**\n\n \n\nGeneral\nand administrative expenses totaled $436,110 and $604,167 during the years ended March 31, 2026, and 2025, respectively. A significant\nportion of these expenses were professional fees, payroll, and rent. The decrease in general and administrative expenses is mostly due\nto decreased professional fees during 2026.\n\n \n\n**Other\nIncome and Expenses**\n\n \n\nDuring\nthe years ended March 31, 2026 and 2025, we recognized losses on extinguishment of debt totaling $989,968 and $435,199, respectively,\nin connection with related party debt arrangements. The increase in loss for the year ended March 31, 2026, reflects a higher volume\nof debt extensions or modifications that resulted in extinguishment accounting treatment compared to the prior year.\n\n \n\nFor\nthe years ended March 31, 2026, and 2025, interest expense totaled $372,847 and $349,016 , respectively.\n\n \n\nFor\nthe years ended March 31, 2026, and 2025, expenses incurred pursuing potential financing alternatives totaled $15,000 and $215,000, respectively.\nThe decrease in financing-related expenses is primarily attributable to decreased costs incurred in connection with bond structuring\nand placement efforts.\n\n \n\n**Income\nTaxes**\n\n \n\nDuring\nthe years ended March 31, 2026, and 2025, the Company recorded a net loss before income taxes of $1,813,964 and $1,603,382,\nrespectively. The income tax provision for both periods was also $0.\n\n \n\n**Liquidity\nand Capital Resources**\n\n \n\nSince\nour inception, our operations have been primarily financed through sales of equity instruments, debt financing, lines of credit and notes\npayable from related parties, and the issuance of convertible debentures. As of March 31, 2026, we had $32,035 of cash, compared to $168,648\nas of March 31, 2025. As of March 31, 2026, the Company had access to draw an additional $4,257,253 on the notes payable, related party,\n$55,000 on a promissory note, and $3,000,000 on the Convertible Debenture Agreement. Our monthly expenses average approximately $37,000,\nwhich includes the salary of our employee, policy servicing expenses, consulting agreements and contract labor, general and administrative\nexpenses, and estimated legal and accounting expenses. Outstanding Accounts Payable as of March 31, 2026, totaled $451,372, and other\naccrued liabilities totaled $ 2,470,347. We believe that the available capacity under our existing related party lines of credit, together\nwith our current capital resources, will be sufficient to fund our operating and working capital needs for at least the 12-month period\nfollowing the issuance of these financial statements.\n\n \n\n26\n\n \n\n** **\n\n**2026\nCash Flows Compared to 2025 Cash Flows**\n\n \n\nFor\nthe year ended March 31, 2026, we recorded net cash used in operating activities of $390,302, compared to $916,212 during the prior year.\nThe decrease in cash used is primarily attributable to a reduction in financing expenses and a reduction in operating expenses, as well\nas higher non-cash accrual of interest payable which resulted in a larger adjustment to reconcile net loss to operating cash.\n\n \n\nFor\nthe years ended March 31, 2026, and 2025 no cash was used in or provided by investing activities.\n\n \n\nDuring\nthe years ended March 31, 2026, and 2025 net cash provided by financing activities was $253,689, and $755,000, respectively. The Company\nborrowed on new related-party promissory notes and existing notes payable and lines-of-credit in the amounts of $8,689 during the year\nended March 31, 2026. Additionally, during the years ended March 31, 2026, and 2025, the Company received $0 and $805,000 in proceeds\nraised by issuance of our common stock through private placement memorandums, respectively.\n\n \n\n**Debt**\n\n \n\nAt\nMarch 31, 2026, we owed $5,978,126, including accrued interest, for debt obligations. We owed $3,298,747 in principal pursuant to notes\npayable and lines-of-credits from related parties and $545,000 in other notes payable. As of March 31, 2026, one note payable had a principal\nbalance of $1,168,197 and has been extended to be due on May 31, 2027 or when the Company completes a successful equity raise (if earlier\nthan the due date), at which time principal and interest is due in full. The second note payable and line-of-credit had a principal balance\nof $1,304,550, and the line of credit and has been extended to be due May 31, 2028. The third series of related-party promissory notes\nhad a total principal balance of $826,000 and is due on April 30, 2027. The convertible debenture agreement, which has no principal balance\ndue as of March 31, 2026, is open through August 31, 2026. As of June 29, 2026, there was $4,257,253 available under the lines-of-credit\nwe currently have with related parties and $3,000,000 available under the 8% convertible debenture agreement, and $55,000 available under\nthe 7.5% promissory note.\n\n \n\nWe\nmay borrow money in the future to finance our operations but can make no guarantees that such credit will be made available to us. Any\nsuch borrowing will increase the risk of loss to the debt holder in the event we are unsuccessful in repaying such loans.\n\n \n\nThe\naccompanying financial statements have been prepared assuming the Company will continue as a going concern, which assumes the Company\nwill continue to operate and meet its obligations in the ordinary course of business. As the Company does not currently generate revenue,\nit will need to rely on related party debt financing and/or additional capital raises to meet its financial obligations.\n\n \n\nManagement\nbelieves that existing capital resources, along with availability under related party debt agreements and convertible debentures, will\nbe sufficient to fund operations for at least the next 12 months from the issuance date of these financial statements. Based on these factors, management has concluded that there is no substantial doubt about\nthe Company’s ability to continue as a going concern through June 2026.\n\n \n\n27\n\n \n\n** **\n\n**Contractual\nObligations and Contingencies**\n\n \n\nThe\nfollowing table sets forth payments due by period for fixed contractual obligations by maturity date as of March 31, 2026:\n\n \n\n  \n   \nMaturity Date \n\n  \nTotal  \n\nYear Ended\n\nMarch 31, 2027\n  \n\nYear Ended\n\nMarch 31, 2028\n  \nThereafter \n\nDebt Obligations (1) \n$3,843,747  \n$245,000  \n$2,294,197  \n$1,304,550 \n\nInterest Payable \n 2,134,379  \n 6,512  \n 1,528,824  \n 599,043 \n\nTotal \n$5,978,126  \n$251,512  \n$3,823,021  \n$1,903,593 \n\n \n\n(1)\nDebt obligations consist of the principal pursuant to the notes payable\nfrom related parties and non-related parties (as mentioned above)\n\n \n\n**Critical\nAccounting Policies and Estimates**\n\n \n\n*Estimates,*the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America\nrequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent\nassets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting\nperiod. Actual results could differ from those estimates.\n\n \n\n*Going\nConcern Evaluation,* management evaluates the Company’s ability to continue as a going concern in accordance with ASC 205-40. This\nevaluation requires significant judgment regarding the Company’s expected cash requirements, available sources of liquidity, the availability\nof funding under existing financing arrangements, the expected extension or renewal of certain debt obligations, and the likelihood of\nobtaining additional financing necessary to support operations. Management also considers its operating plans and other events and conditions\nthat may affect liquidity during the one-year period following the issuance of the financial statements. Changes in these assumptions\nor the occurrence of unforeseen events could materially affect management’s conclusions regarding the Company’s ability to continue as\na going concern and the related financial statement disclosures.\n\n \n\n*Stock-Based\nCompensation and Financing Costs*, we measure stock-based compensation expense related to employee stock-based awards and stock-based\nexpense associated with certain financing costs based on the estimated fair value of the awards as determined on the date of grant and\nis recognized as expense over the remaining requisite service period or vesting period of the warrant. We utilize the Black-Scholes pricing\nmodel to estimate the fair value of stock options issued as compensation and warrants issued as financing costs. The Black-Scholes model\nrequires the input of highly subjective and complex assumptions, including the estimated fair value of our common stock on the date of\ngrant, the expected term of the stock option and warrant, and the expected volatility of our common stock over the period equal to the\nexpected term of the grant or warrant. Uncontrollable uncertainties, such as fluctuation in interest rates, can have an effect on our\nBlack-Scholes estimate calculations. Such fluctuations and other unforeseen changes in inputs could have a material impact on the general\nand administrative expenses within our financial statements. We estimate forfeitures at the date of grant and revise the estimates, if\nnecessary, in subsequent periods if actual forfeitures differ from those estimates.\n\n \n\n*Fair\nValue,* As defined by ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), fair value is\nthe price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants\nat the measurement date. ASC 820 also requires the consideration of differing levels of inputs in the determination of fair values.\n\n \n\nThose\nlevels of input are summarized as follows:\n\n \n\n●\nLevel 1: Quoted prices in active markets for identical assets and liabilities.\n\n \n\n●\nLevel 2: Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets, quoted\nprices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant\nassumptions are observable in the market.\n\n \n\n●\nLevel 3: Unobservable inputs that are supported by little or no market activity. Level 3 assets and liabilities include financial instruments\nwhose value is determined using pricing models, discounted cash flow methodologies, or similar techniques as well as instruments for\nwhich the determination of fair value requires significant management judgment or estimation.\n\n \n\nThe\nlevel in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that\nis significant to the fair value measurement in its entirety.\n\n \n\nWe\ndid not have any transfers of assets and liabilities between Levels 1, 2 and 3 of the fair value measurement hierarchy during the years\nended March 31, 2026, and 2025. \n\n \n\nOur\nrecorded values of cash and cash equivalents, accounts payable and accrued liabilities approximate their fair values based on their short-term\nnature. The recorded values of the Notes Payable, Related Parties and Convertible Debenture approximate the fair values as the interest\nrate approximates market interest rates."}