Business Warrior Corp (BZWR)

[Edward]

BZWR has to get past their pending litigation and Commitments and Contingencies.
Also the Series C PFD. share concern. These are holding off potential new investors.



COMMITMENTS AND CONTINGENCIES

During the second quarter of fiscal 2023, the Company determined that the three-million-dollar penalty would occur. This penalty would be payable by the Company to the partner by March 1, 2024. As of the date of these financial statements, the Company is actively exploring potential solutions to assist the partner in achieving the three-million-dollar target, including the possibility of resuming the program once macroeconomic conditions improve. This may involve negotiating an extension and amending the current agreement to extend the terms. The ultimate outcome of these negotiations cannot be determined at this time. Accordingly, a contingent liability of three million dollars, discounted to present value at an imputed interest rate of 17.97%, has been recognized in the financial statements. The Company will continue to assess this contingency and will update the financial statements accordingly as new information becomes available.


PENDING LITIGATION


MBOCAL and JKB FINANCIAL, INC. dba LEVEL FINANCE, v. FLUIDFI, INC., dba ALCHEMY TECHNOLOGIES; BUSINESS WARRIOR, INC., and BUSINESS WARRIOR FUNDING, INC



Case No. 30-2023-01322081-CU-FR-CJC, Superior Court of California, Orange County, California



On April 25, 2023, MBOCAL and JKB Financial Inc. filed a lawsuit against FluidFi and two of the Company’s subsidiaries regarding a contract entered into by FluidFi prior to the Company’s acquisition of FluidFi. Plaintiffs are alleging fraud, fraudulent business practices, and breach of written contract. The complaint alleges that the contract at issue was entered into by Fluidfi and the Plaintiffs on August 10, 2020.



The Company intends to vigorously defend this matter and if necessary seek indemnification pursuant to the acquisition agreement with Constellation Fintech Holdings.


Series C Preferred Shares ( not litigation, but under resolution).


As part of the acquisition of FluidFi, Inc., on June 8, 2022, the Company authorized 50,000 shares of the Series C preferred stock with a stated value of $100 per share and a par value of $.001, with a dividend equal to seven percent (7%) per annum of the Original issuance of $100. As of May 31, 2023 and August 31,2022, the Company has 50,000 Preferred C shares issued and outstanding. As of May 31, 2023, the dividend due was $320,833.



The Company is disputing the issuance of Series C preferred shares and the related ongoing dividend payments. The dispute stems from issues that arose after the closing of the acquisition of FluidFi, Inc. The Company believes that these amounts will be offset against outstanding obligations owed to it by the previous owners of FluidFi. The ultimate resolution of this matter may impact the Company's financial position and results, but the outcome remains uncertain at this time.