NAME REFERENCES

In this Quarterly Report, references to the “Registrant,” “Sundance Strategies,” the “Company,” “we,” “our,” “us” and words of similar import, refer to “Sundance Strategies, Inc.,” the Registrant, and where applicable, include the current and intended business operations of ANEW LIFE, INC., a Utah corporation and our wholly-owned subsidiary (“ANEW LIFE”), our acquisition of which, by merger, occurred on March 29, 2013.  

FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Quarterly Report. These factors include, but are not limited to, economic conditions generally in the United States and internationally and in the industry and markets in which we have and may participate in the future, competition within our chosen industry, our current and intended business, our assets and plans, the effect of applicable United States and foreign laws, rules and regulations on our business and our failure to successfully develop, compete in and finance our current and intended business operations.

You should read any other cautionary statements made in this Quarterly Report as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report. We cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate, and therefore, prospective investors are encouraged not to place undue reliance on forward-looking statements. You should read this Quarterly Report completely, and it should be considered in light of all other information contained in the reports or registration statement that we file with the Securities and Exchange Commission (the “SEC”), including all risk factors outlined therein.  Most recently, a list of risk factors was outlined in our 10-K Annual Report for the fiscal year ended March 31, 2015, and filed with the SEC on June 15, 2015, on pages 25 through 39 thereof, which is referenced in Part II, Item 6, below.  Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

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JUMPSTART OUR BUSINESS STARTUPS ACT DISCLOSURE

We qualify as an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act by the Jumpstart Our Business Startups Act (the “JOBS Act”). An issuer qualifies as an “emerging growth company” if it has total annual gross revenues of less than $1.0 billion during its most recently completed fiscal year, and will continue to be deemed an emerging growth company until the earliest of:

As an emerging growth company, we are exempt from various reporting requirements. Specifically, we are exempt from the following provisions:

Under the JOBS Act, emerging growth companies may delay adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies.  We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

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PART I

Item 1.  Financial Statements

The Condensed Consolidated Financial Statements of the Company required to be filed with this Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Condensed Consolidated Financial Statements fairly present the financial condition of the Company and include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s Condensed Consolidated Financial Statements. The results from operations for the three and six month period ended September 30, 2015, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2016. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the March 31, 2015, Consolidated Financial Statements and footnotes thereto included in the Company’s 10-K Annual Report for the fiscal year ended March 31, 2015, which was filed with the SEC on June 15, 2015, and which is referenced in Part II, Item 6, below.

SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2015

(Unaudited)

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As mentioned in Note 3, the Company transferred $3,368,380 from advance for investment in NIBs into investment in NIBs on September 30, 2015.

The investment in NIBs is a residual economic beneficial interest in a portfolio of life insurance contracts that have been financed by an independent third party via a loan from a senior lender and insured via a mortality risk insurance product or mortality re-insurance (“MRI”).  Future expected cash flow is defined as the net insurance proceeds from death benefits after senior debt repayment, mortality risk repayment and service provider or other third-party payments.  The Company is not responsible for maintaining premiums or other expenses related to maintaining the underlying life insurance contracts. Therefore, the investment in NIBs balance on the Company’s balance sheet does not increase when premiums or other expenses are paid.   The Company holds a 100% interest in the NIBs relating to the underlying life insurance policies as of March 31, 2015. The Company holds between 81% and 100% in the NIBs relating to the underlying life insurance policies as of September 30, 2015.

The Company accounts for its investment in NIBs at the initial investment value increased for interest income and decreased for cash receipts received by the Company.  At the time of transfer or purchase of an investment in NIBs, we estimate the future expected cash flows and determine the effective interest rate based on these estimated cash flows and our initial investment. Based on this effective interest rate, the Company calculates accretable income, which is recorded as interest income on investment in NIBs in the statement of operations.  Subsequent to the purchase and on a regular basis, these future estimated cash flows are evaluated for changes. If the determination is made that the future estimated cash flows should be significantly adjusted, a revised effective yield is calculated prospectively based on the current amortized cost of the investment, including accrued accretion.  Any positive or adverse change in cash flows that does not result in the recognition of an “other-than-temporary impairment” (“OTTI”) results in a prospective increase or decrease in the effective interest rate used to recognize interest income. We have not recognized any significant adverse change in future estimated cash flows relating to our investment in NIBs from January 31, 2013 (inception) to the period ended September 30, 2015.

During July, 2015, a group of persons located in the United States (the “Purchasers”) acquired the entities that owned all of the portfolios of life insurance contracts underlying the Company’s NIBs.   The Purchasers have also agreed to amend the NIBs agreements to provide greater disclosure to the Company and limit permitted expenses to be paid prior to payments to the NIBs holders, pending certain regulatory and tax approvals.  In connection with this purchase, the Purchasers and the respective owners of these portfolios entered into a Settlement Agreement releasing such owners and their managers from liability related to their ownership and management of the entities that owned the respective portfolios of life insurance contracts.  The Purchasers further required releases from the 

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SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

September 30, 2015

(4) INVESTMENT IN NET INSURANCE BENEFITS (continued)

Company and the payment of certain accrued expenses.  Accordingly, effective as of July 17, 2015, the Purchasers acquired all of the ownership interests in the entities that owned all of the portfolios of life insurance contracts underlying the Company’s NIBs from their prior owners and executed a Settlement Agreement with such owners and the Company in relation to these matters.  The NIBs amendments are in process, and the Company believes the NIBs amendments will be in effect within the next six months. The Company and Purchasers agreed to indemnify the prior owners of such portfolios against future claims in connection with the issuance of the NIBs or their ownership or management of the entities sold, based on actions that occurred prior to this sale to the Purchasers.  Management of the Company is presently not aware of the existence of any such claims.  Neither the purchase of these entities nor the Settlement Agreement resulted in any material change in our NIBs ownership interest. The Company was supportive of the Purchasers acquiring the entities that owned the portfolios of life insurance contracts underlying the Company’s NIBs and was willing to provide the indemnification because it believes this ownership change will result in a reduction of costs and expenses associated with ownership of the NIBs, which should increase their intrinsic value. 

(5) NOTES PAYABLE AND LINES-OF-CREDIT-- RELATED PARTY

As of September 30, 2015, the Company had borrowed $2,132,000, from related parties under notes payable and lines-of-credit Agreements that allow for borrowings of up to $3,245,000 through the earlier of June 30, 2017, or when the Company completes a successful equity raise, at which time principal and interest is due in full.  The notes payable and lines-of-credit incur interest at 7.5 percent, allow for origination fees and are collateralized by Advance for Investment in NIBs.  The Company borrowed $832,000 under these agreements during the six months ended September 30, 2015. The Company also repaid $200,000 during the six months ended September 30, 2015.  The related parties include a person who is a member of the Board of Directors and a stockholder and an entity partially owned by this person.    

(6) NOTES PAYABLE TRANSFERRED TO TEMPORARY EQUITY

At March 31, 2014, the Company owed $1,455,904, including accrued interest for notes payable.  During the year ended March 31, 2015, the Company had accrued an additional $37,350 in interest.  The note incurred interest at 4%, was collateralized by NIBs and was due April 2015.  During the three months ended June 30, 2015, the note payable and related accrued interest was converted to temporary equity through the issuance of 187,500 shares of common stock with a redemption feature (See Part II, Item 5, below).  On June 9, 2015, the holder of the redemption feature exercised a portion of the redemption right relating to 93,750 shares and, as a result, the holder accepted the Company’s redemption payment of $750,000.  The redemption feature on the remaining 93,750 shares was eligible to be exercised by the holders on October 31, 2015.  See Note 10, for an explanation of activities associated with this redemption feature subsequent to September 30, 2015.

(7) CONVERTIBLE DEBENTURE AGREEMENT

On June 2, 2015, the Company entered into an 8% Convertible Debenture Agreement that allows for borrowings of up to $3,000,000 through December 31, 2016, at which time principal and interest is due in full. On June 2, 2016, the holder can elect to convert the outstanding principal and accrued interest to unregistered, restricted common stock of the Company.  The number of shares issuable at conversion shall be determined by the quotient obtained by dividing the outstanding principal and accrued and unpaid interest by 90% of the 90 day average closing price of the Company’s common stock from the date the notice of conversion is received; and the price at which the Debenture may be converted will be no lower than $1.00 per share.

As of September 30, 2015, the Company owed $700,000 under the agreement. Management has concluded there is currently no beneficial conversion feature associated with this instrument, as the conversion date is a year after the agreement was initiated and is also contingent.

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SUNDANCE STRATEGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

September 30, 2015

(8)  LIQUIDITY AND CAPITAL REQUIREMENTS

Under the current business plan, the Company purchases life insurance policies and residual interests in or financial products tied to life insurance policies when they fit its model and its cash flows are sufficient to fund those purchases (with exception of the Del Mar ATA wherein the Company committed to purchase a certain number of Qualified NIBs as Del Mar made them available).  The Company expects to finance NIB purchases, as well as its operating working capital requirements, with proceeds from planned public and/or private offerings of its securities and debt financing. There can be no assurance that the Company will be successful in the anticipated equity and debt offerings or that it will be successful in raising additional capital in the future on terms acceptable to the Company, or at all.

If the Company is unable to raise sufficient capital through the planned securities and debt offerings or other alternative sources of financing, management will curtail NIB purchases. Under this plan, expenditures for NIBs will be curtailed. The Company believes that it will be able to fund its operating working capital requirements with existing lines-of-credit and debentures agreements.

The accompanying financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. To continue as a going concern beyond the period ended September 30, 2016, and in order to continue to purchase NIBs, the Company will need to complete planned equity and debt offerings or obtain alternative sources of financing. Absent additional financing, the Company will not have the resources to execute its current business plan.

(9) STOCK OPTIONS

On July 22, 2015, the Board of Directors approved an amendment to modify the vesting schedule for stock options issued to an executive.  The amendment clarified that the option to purchase 400,000 shares of the Company’s $0.001 par value common stock at $5.00 per share, with a five year term, expiring March 31, 2018, was at a vesting rate of 11,111 stock options monthly, commencing with October, 2013, and ending with September 30, 2016, subject to continued employment with the Company.  As a result of this modification, the Company recorded a true-up amortization expense of $98,655 during the three months ended September 30, 2015, to adjust the amortization of the stock options to the amended vesting schedule as of the modification date of July 22, 2015.  In addition, the Company adjusted the going forward quarterly amortization, beginning with the three months ended September 30, 2015, of the stock options from $73,202 to $78,728.  No incremental value was applied to the amended stock options and, therefore, the original grant date fair value continues to be applicable.

(10) SUBSEQUENT EVENTS

The holders of the redemption feature (see Note 6 above and Part II, Item 5.01(iii), below) exercised the redemption feature on October 31, 2015, thus requiring the Company to pay the redemption feature, and the Company has elected to exercise its 45 day Cure Period to make the redemption payment of $750,000 on or before December 15, 2015, in consideration of the cancellation of the 93,750 common shares.

Item 2. Management’s Discussions and Analysis of Financial Condition and Results of Operations.

Forward-looking Statements

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made to the caption “Forward-Looking Statements” at the forepart of this Quarterly Report, which information is incorporated herein by reference.

Plan of Operations

We are engaged in the business of purchasing or acquiring life insurance policies and residual interests in or financial products tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace, often referred to as the “life settlements market.” These life insurance interests are anticipated to be held to maturity. Our plan of operation for the next 12 months is to continue the acquisition of these life insurance interests whereby we will acquire the interests in life insurance policies at a discount to their face value for investment purposes. We began purchasing the net insurance benefits in life insurance policies (“NIBs”) during our fiscal year ended March 31, 2013. This is not a market sector without competition, and at present, we are a minor competitor. We will need substantial additional funds to effectively compete in this industry, and no assurance can be given that we will be able to adequately fund our current and intended operations, whether through revenues generated from our current interest in the NIBs or Qualified NIBs or through debt or equity financing. We may be required to expend not less than approximately $112.9 million on premiums, interest and servicing costs over the next five years to protect our interest in our NIBs, though we have no legal responsibility or adequate funds for these payments. These payments are currently being made through an unrelated senior lending facility.

We currently estimate proceeds of approximately $115.3 million on the NIBs owned as of September 30, 2015, and acquired from PCH Financial S.a.r.l., a société à responsabilité limitée incorporated and existing under the laws of the Grand Duchy of Luxembourg (“PCH”), Del Mar Financial S.a.r.l., a société à responsabilité limitée incorporated and existing under the laws of the Grand Duchy of Luxembourg (“Del Mar”) and HFII Assets Solutions, LLC, a Delaware limited liability company (“HFII”). This amount is based on the estimated proceeds from polices of approximately $401.9 million in face value, which includes estimated return of premiums; less the senior loan debt or MRI repayments outstanding of approximately $98.2 million, expected premium payments of approximately $113.8 million over the life expectancies of the insured persons in these portfolios and estimated expenses and interest of approximately $74.6 million over the term of the senior loans.

We use an estimation methodology to project cash flows and returns as presented. The estimation model required many assumptions, including, but not limited to the following: (i) an assumption that the distinct number of lives in our portfolio would exhibit similar experience to a statistically diverse portfolio based upon which the mortality tables have been created; (ii) an assumption that the life expectancies (the “LE” or “LE’s”) provided by LE providers represent the actuarial mean of the life expectancies of the insureds in our portfolio, (iii) the weighted average of the LEs provided by the LE providers represents an appropriate method for adjusting for discrepancies in the LE’s; (iv) life expectancy tables and projections are accurate; (v) the minimum premiums calculated based on the in-force illustrations provided by life insurance carriers are accurate and will not change over the course of the lifetime of our portfolio; and the senior lender fees, MRI fees, and insurance, servicing and custodial fees do not change materially over time. While this method of modeling cash flows is helpful in providing a theoretical expectation of potential returns that might be produced from our NIBs portfolio, actual cash flows and returns inevitably will be different (possibly materially) due to the fact that predicting the exact date of death of any individual is virtually impossible. The provision of a theoretical cash flow model is by no means any guarantee of any results. The actual performance of these NIB interests (as well as our future expectations as to what such performance might be) may differ substantially from our expectations, especially if any of the assumptions change or differ from our initial assumptions. These portfolios currently contain only 130 fractionalized policies on 71 individual insureds, though insurance rating agencies have stated that at least 1,000 lives are required to achieve actuarial stability. Many risk factors beyond these assumptions may result in our expectations being incorrect; therefore, no assurance can be given that these estimated results will occur.

Results of Operations

Income Recognition

Interest income on investment in NIBs represents the excess of all cash flows attributable to the investment in net insurance benefits greater than the initial investment over the life of each pool of net insurance benefits using the effective yield method.  Changes in the estimate of expected cash flows from investments in NIBs are adjusted prospectively.    

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Interest income on investment in NIBs totaled $863,440 and $592,653 for the three months ended September 30, 2015, and 2014, respectively.  The increase is primarily due to the additional interest income generated by the additional NIBs we acquired in March, 2015.

Interest income on investment in NIB totaled $1,687,469 and $1,156,151 for the six months ended September 30, 2015, and 2014, respectively.  The increase is primarily due to the additional interest income generated by the additional NIBs we acquired in March, 2015.

General & Administrative Expenses

General and administrative expenses totaled $897,637 and $583,006 during the three months ended September 30, 2015, and 2014, respectively.  During the six months ended September 30, 2015, and 2014, general and administrative expenses totaled $1,493,591 and $1,199,372, respectively.  A significant portion of these expenses were professional fees, payroll and travel expenses.

Other Income and Expenses

Other income and expenses primarily consist of interest on the notes payable and lines-of-credits due to related-parties and a convertible debenture. During the three months ended September 30, 2015, and 2014, interest expense had accrued in the amount of $51,390 and $17,031, respectively.   During the six months ended September 30, 2015, and 2014, interest expense had accrued in the amount of $90,592 and $33,172, respectively

Income Taxes

During the three and six months ended September 30, 2014, and the three months ended September 30, 2015, we recorded no taxable income and elected to not record deferred tax assets relating to tax net operating loss carryforwards. During the three and six months ended September 30, 2015, we recorded taxable income, but utilized the unrecorded tax net operating loss carryforwards to offset set taxable income.

Liquidity and Capital Resources

From our inception on January 31, 2013, through the six months ended September 30, 2015, we incurred cumulative net losses of $349,001.  Management has expressed its belief that we need to raise approximately $40 million to $50 million in additional funds through equity or debt financing to continue our business model and to effectively compete in the life settlement industry during fiscal 2016 and beyond.  We raised $11,942,500 (gross) in our private placement of shares of our common stock that commenced in April 2013, and ended in November, 2014. Our monthly expenses are between approximately $140,000 and $290,000, which includes salaries of our employees, consulting agreements and contract labor, general and administrative expenses and estimated legal and accounting expenses. We believe we will have adequate cash resources for our estimated monthly expenses through November 15, 2016, excluding any other acquisitions of additional NIBs and other life settlement products.  

We held cash assets at September 30, 2015, and March 31, 2015, of $93,237 and $336,370, respectively.  We have only common stock as our capital resource. We will be reliant upon stockholder loans or private placements of equity or debt to fund any future operations. Although management is actively pursuing opportunities to raise additional equity and debt capital, we have secured no sources of loans, and there is no assurance that we will be able to raise any required debt or equity financing. We do not anticipate having adequate revenues from operations for three to four years, and until a revenue stream has been established, we will require debt or equity funding to fund our current and intended business. If management is unsuccessful in these efforts, discontinuance of operations is a possibility.

For the six months ended September 30, 2015, and 2014, we recorded net cash used in operating activities of $1,036,133 and $1,595,550, respectively. During September 2015, we obtained ownership and control of a portfolio of policies due to the cancellation of the Del Mar ATA.  On September 10, 2015, the Company received $1,094,335 as a result of the rights associated with a matured policy in the newly obtained portfolio.  These proceeds were allocated $547,308 to reimburse the Company for expense payments made to or on behalf of Del Mar, $239,415 to pay off a note receivable (including interest) and $307,612 as a refund of advance payments previously made to or on behalf of Del Mar as part of the Del Mar ATA.

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During March 2015, we agreed to pay cash, issue common stock and forgive a note receivable in exchange for relief of a $1,493,254 note payable (explained in Debt, below) and the receipt of NIBs.  The net consideration given for the relief of note payable and receipt of NIBs totaled $1,493,254 and $7,846,746, respectively, for a total of $9,340,000 (of which $150,000 is cash, $150,000 is forgiveness of a note receivable and $9,040,000 is common stock consideration).  Of the 1,130,000 common shares to be issued, 187,500 shares contained a redemption feature that required the Company to buy back the shares for $8 per share ($1,500,000 in total) at the option of the holder. The 1,130,000 common shares, including the 187,500 shares containing a redemption feature, were issued on June 9, 2015.  On June 9, 2015, the redemption feature on 93,750 of these shares was exercised, and the Company paid the holders $750,000 and such 93,750 shares were cancelled.  The holders of the redemption feature exercised the redemption feature on the remaining 93,750 shares on October 31, 2015, thus requiring the Company to pay the redemption feature, and the Company has elected to exercise its 45 day Cure Period to make the redemption payment of $750,000 on or before December 15, 2015, in consideration of the cancellation of the remaining 93,750 shares.  See Note 6 above and Part II, Item 5.01(iii), below.

Net cash provided by financing activities totaled $582,000 and $790,000 for the six months ended September 30, 2015, and 2014, respectively.  During the six months ended September 30, 2015, we drew $700,000 on the an 8% Convertible Debenture dated June 2, 2015, as well as borrowed $632,000 from related parties, which amounts were offset by a $750,000 payment made on the exercise of the redemption feature on 93,750 common shares.

Under our current business plan, we purchase NIBs only when they fit our model and our cash flows are sufficient to fund those purchases (with exception of the Del Mar ATA wherein we committed to purchase a certain number of Qualified NIBs as Del Mar made them available).  We expect to finance our NIBs purchases, as well as our operating working capital requirements, with proceeds from planned public and/or private offerings of our securities and debt financing. There can be no assurance that we will be successful in the anticipated equity and debt offerings or that we will be successful in raising additional capital in the future on terms acceptable to us, or at all.

If we are unable to raise sufficient capital through the planned equity and debt offerings or other alternative sources of financing, management will curtail NIB purchases.  We believe that we will be able to fund our operating working capital requirements for at least the next 12 months through November 15, 2016, by leveraging our existing notes payable and lines-of-credit from related parties and an 8% Convertible Debenture Agreement, which together totaled $6,245,000 in available liquidity, of which $3,102,000 is available at November 9, 2015.

The accompanying financial statements have been prepared on a going concern basis under which we are expected to be able to realize our assets and satisfy our liabilities in the normal course of business. To continue as a going concern beyond the period ending November 15, 2016, and in order to continue to acquire life insurance policies and residual interests in or financial products tied to life insurance policies we will need to complete the planned securities and debt offerings or obtain alternative sources of financing. Absent additional financing, we will not have the resources to execute our business plan.

Debt

At September 30, 2015, we owed $2,881,505, including accrued interest, for debt obligations. At September 30, 2015, we held notes payable and lines-of-credits from related parties of $2,132,000, excluding accrued interest, and an 8% Convertible Debenture of $700,000, excluding accrued interest. The notes payable with related parties are due June 30, 2017, the lines-of-credit with related parties are due June 30, 2017, or when the Company completes a successful equity raise, at which time principal and interest is due in full, and the Convertible Debenture is due December 31, 2016.  We may borrow money in the future to finance our operations. Any such borrowing will increase the risk of loss to the debt holder in the event we are unsuccessful in repaying such loans.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires that we make estimates and judgments. We base these on historical experience and on other assumptions that we believe to be reasonable.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

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Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

Not required.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on that evaluation, our President, who is also deemed to be our principal executive officer and our acting Chief Financial Officer (“CFO”), concluded that our disclosure controls and procedures as of the end of the period covered by the Quarterly Report were effective as of September 30, 2015, and that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our President and our acting CFO, as appropriate to allow timely decisions regarding disclosure.  A controls system cannot provide absolute assurance, however, that the objectives of the controls system will be met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Prior to the period covered by the Quarterly Report for the period ended September 30, 2015, our President and our acting CFO, had concluded the that our disclosure controls and procedures were not effective.  Prior to the period ended September 30, 2015, we appointed a Chief Operating Officer and hired advisors to help us adopt new measures to improve upon our disclosure controls.  Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies which may be identified during this process.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are not party to any material legal proceedings.

Item 1A.  Risk Factors.

Not required; however, for information about risk factors affecting us, our business and our common stock, see our 10-K Annual Report for the fiscal year ended March 31, 2015, and filed with the SEC on June 15, 2015, on pages 25 though 39 thereof, which is referenced in Part II, Item 6, below.

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

Sales of Unregistered Securities

There were no sales by us of unregistered securities during the quarter ended September 30, 2015.

Purchases of Equity Securities by Us or our Affiliates

There were no purchases by us or any affiliated persons of any shares of our equity securities during the quarter ended September 30, 2015.

Item 3. Defaults upon Senior Securities.

None; not applicable.

Item 4. Mine Safety Disclosures.

None; not applicable.

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Item 5. Other Information.

(i)

On June 7, 2013, we entered into an Asset Transfer Agreement (the “Del Mar ATA”) with Del Mar that involved the purchase of certain life settlement assets consisting of 100% of the legal and net beneficial ownership interest in a portfolio of life insurance policies or NIBs, among other assets that are consideration and collateral for certain cash advances and expense payments made by us. As part of the Del Mar ATA, the Company entered into a Structuring and Consulting Agreement with Europa Settlement Advisors Ltd. (respectively, the “Europa Agreement” and “Europa”). The original end result of the Del Mar ATA and the advance was not to purchase the NIBs provided as collateral, but instead to provide sufficient capital to Del Mar for the conversion of a portion of the NIBs and other potential NIBs into “Qualified NIBs.”  The original due date for the conversion was December 31, 2013, which date was subsequently been extended several times, with the most recent extension being to August 31, 2015.  A complete description of the Del Mar ATA and the Europa Agreement, both as amended, is contained in our 8-KA-5 Current Report date June 7, 2014, which was filed with the SEC on July 10, 2014.  See Part II, Item 6 below.

During January 2014, we completed the closing of Qualified NIBs with associated death benefits of $90.6 million for $5,436,000. These Qualified NIBs are part of the $400,000,000 Qualified NIBs commitment under the Del Mar ATA.

The Del Mar ATA and the Europa Agreement were terminated for non-performance, effective September 1, 2015.  See Note 3 of our Condensed Consolidated Financial Statements that accompany this Quarterly Report for additional information.

 (ii)

Certain founding shareholders of the Company owning approximately 32,824,500 shares of our common stock who had executed and delivered Lock-Up/Leak-Out Agreements restricting the sale of their respective shares of common stock of the Company until on or about October 5, 2014, and who had extended these Lock-Up/Leak-Out Agreements to October 5, 2015, have executed and delivered Agreements that have extended the Lock-Up Period under these Lock-Up/Leak-Out Agreements for an additional year, to on or about October 5, 2016, and the Leak-Out Period in their initial Lock-Up/Leak-Out Agreements will now commence on the expiration of the new Lock-Up Period, or October 5, 2016.  These persons received their respective shares of common stock of the Company on the organization of ANEW LIFE and its subsequent merger into the Company on a share for share basis.  Certain other smaller founding shareholders or their transferees who collectively own approximately 305,500 shares of our common stock, each of whom owns less than 100,000 shares of our common stock, have also agreed to extend their respective Lock-Up Periods from October 5, 2015, to October 5, 2016.  See Part II, Item 6, below, for reference to the form of the Lock-Up/Leak-Out Agreement.

(iii)

On December 5, 2014, we executed a binding Letter of Intent (“LOI”) to memorialize the intent of HFII HFII, which resulted in the execution of an Asset Purchase Agreement with us dated March 2, 2015 (and as amended on March 31, 2015), whereby we agreed to pay cash, issue 1,130,000 shares of our common stock, subject to a redemption feature on 187,000 of these shares at $8.00 per share, and forgive a note receivable, in exchange for two portfolios of Qualified NIBs then held by HFII in Hyperion Funds II plc. The life settlement policies underlying these Qualified NIBs had a combined face value at maturity of approximately $124,375,000, and are collateral for our obligations under the Asset Purchase Agreement.  The 1,130,000 common shares, including the 187,500 shares containing a redemption feature, were issued on June 9, 2015.  On June 9, 2015, the redemption feature on 93,750 of these shares was exercised, and the Company paid the holders $750,000 and such 93,750 shares were cancelled.  The holders of the redemption feature exercised the redemption feature on the remaining 93,750 shares on October 31, 2015, thus requiring the Company to pay the redemption feature, and the Company has elected to exercise its 45 day Cure Period to make the redemption payment of $750,000 on or before December 15, 2015, in consideration of the cancellation of the remaining 93,750 shares.  See Note 6 of our Condensed Consolidated Financial Statements that accompany this Quarterly Report for additional information. A complete description of the HFII LOI and Asset Transfer Agreement, as amended, is contained in our 8-KA-2 Current Report dated December 5, 2014, which was filed with the SEC on April 7, 2015.  See Part II, Item 6, below.

(iv)

During July, 2015, a group of persons located in the United States (the “Purchasers”) acquired the entities that owned all of the portfolios of life insurance contracts underlying our NIBs.  We were supportive of the purchase because we believe this ownership change will result in a reduction of costs and expenses associated with ownership of the NIBs, which should increase their intrinsic value.  The Purchasers have also agreed to amend the NIBs agreements to provide greater disclosure to us and limit permitted expenses to be paid prior to payments to the NIBs holders, pending certain regulatory and tax approvals.  In connection with this purchase, the Purchasers and the

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respective owners of these portfolios entered into a Settlement Agreement releasing such owners and their managers from liability related to their ownership and management of the entities that owned the respective portfolios of life insurance contracts.  The Purchasers further required releases from us and the payment of certain accrued expenses.  Accordingly, effective as of July 17, 2015, the Purchasers acquired all of the ownership interests in the entities that owned all of the portfolios of life insurance contracts underlying the Company’s NIBs from their prior owners and executed a Settlement Agreement with such owners and the Company in relation to these matters.  The NIBs Amendments are in process, and we believe the NIBs amendments will be in effect within the next six months.  In addition, we and Purchasers agreed to indemnify the prior owners of such portfolios against future claims in connection with the issuance of the NIBs or their ownership by, or management of, the entities sold, based on actions that occurred prior to this sale to the Purchasers, as we believed these changes would result in a reduction of costs and expenses associated with the ownership of our NIBs, with the result being an increase in their intrinsic value.  Management is presently not aware of the existence of any such claims.  Neither the purchase of these entities nor the Settlement Agreement resulted in any material change in our NIBs ownership interest.

(v)

On July 22, 2015, we entered into a Line-of-Credit agreement with a related party, stockholder and Board member that allows for borrowings of up to $1,115,000.  The note incurs interest at 7.5 percent, allows for origination fees, has a due date of June 30, 2017, or at the immediate time when the anticipated raise in equity funds is successful, and is collateralized by Advance for Investment in NIBs.  At June 30, 2016, we had borrowed $375,000. During the three months ended September 30, 2015, we borrowed an additional $457,000 and made a principal repayment of $200,000 bringing the total borrowed to $632,000.  Subsequent to September 30, 2015, we drew an additional $281,000 on the Line-of-Credit, for a total of $913,000 drawn on the Line-of-Credit as of the date of the filing of this Quarterly Report.

Item 6. Exhibits.

Exhibit No.                         Identification of Exhibit