SUBSEQUENT EVENTS

9 Months Ended

May 31, 2024

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

22. SUBSEQUENT EVENTS

On June 21, 2024, the Company entered into a Secured Convertible Promissory Note in the total principal amount of $300,000. This note does not include an Original Issue Discount (OID) and is structured as a traditional loan with principal and interest payments due. The note bears interest at a rate equal to eighteen percent per annum and has a term of thirty-six months. The convertible terms of this note are consistent with those previously mentioned, but the aggregate amount that may be converted into Common Stock shall be equal to the outstanding principal and interest plus $15,000 with conversion at a price per share equal to the Closing Price for the Company’s Common Stock as reported by its Principal Market on the trading day immediately prior to closing. Furthermore, if Thirty (30) calendar days, Sixty (60) calendar days, Ninety (90) calendar days, One Hundred Twenty (120) calendar days, One Hundred Fifty (150) calendar days, or One Hundred Eighty (180) calendar days after the date the Company’s stock is listed on a national market system exchange (the “Adjustment Dates”), the Optional Conversion Price then in effect exceeds the Market Price then in effect (the “Adjustment Price”), on the Adjustment Date the Optional Conversion Price shall automatically lower to the Adjustment Price. Notwithstanding the foregoing, the Adjustment Price shall not be less than 150% of the minimum bid price requirement of the Principal Market for the Company’s Common Stock.

Additionally, the Company entered into the following additional Unsecured Promissory Notes:

	·	$30,000 principal amount: Interest rate equal to eight percent per annum, with a balloon payment due on November 1, 2024. There are no convertible terms associated with this note.
	·	$35,000 principal amount on August 9, 2024: Interest rate equal to eight percent per annum, with a balloon payment due on January 1, 2025. There are no convertible terms associated with this note.
	·	$50,000 principal amount on September 6, 2024: Interest rate equal to eight percent per annum, with a balloon payment due on February 1, 2025. There are no convertible terms associated with this note.
	·	$15,000 principal amount on September 10, 2024: Interest rate equal to eight percent per annum, with a balloon payment due on February 1, 2024. There are no convertible terms associated with this note.
	·	$50,000 principal amount on November 27, 2024: Interest rate equal to eight percent per annum, with a balloon payment due on April 27, 2025. There are no convertible terms associated with this note.

As of the date of this filing, the Company has not repaid any of the matured notes and has been notified by IPSI that it is in default on the outstanding obligations. The Company plans to work with IPSI to negotiate mutually agreeable terms for a consolidated note that would restructure the outstanding balances and establish revised repayment terms. Management believes that restructuring these obligations will provide the Company with additional flexibility in managing its liquidity while maintaining a positive relationship with the lender. However, there is no assurance that the Company will reach an agreement with IPSI on revised terms. If an agreement is not reached, IPSI may pursue additional remedies available under the terms of the notes.

From time-to-time after the Company’s fiscal year end, certain directors loaned the Company a total of $120,000 in the form of non-convertible promissory notes accruing interest at 10% per annum.

On August 2, 2024, the Company filed an 8-K report outlining the terms of a merger with Innovative Payment Solutions (IPSI). On January 22, 2025, the Company and IPSI mutually agreed to terminate the Agreement and Plan of Merger, which was originally signed on July 28, 2024. This decision was made in the best interest of both parties and reflects a shared understanding that discontinuing the merger is the most prudent course of action. The termination of the Merger Agreement also includes the termination of agreements among certain stockholders of Business Warrior, including CEO Rhett Doolittle and President Jonathan Brooks, regarding their commitment to vote in favor of the merger and related transactions. The Company does not anticipate any material adverse effects from the termination of the merger, and management will continue to focus on its core operations and strategic initiatives.

In a recent settlement on September 24, 2024, Business Warrior Corporation (BWC) and multiple associated parties have resolved ongoing disputes across several legal cases. This settlement includes actions filed in both federal and state courts involving claims and counterclaims among BWC, FluidFi, Constellation, Timothy Li, and other parties. The terms encompass the dismissal of all claims and the mutual release of all parties from further liability, effectively bringing closure to a series of protracted litigations.

Key Settlement Terms and Case Details

	·	Federal Action:
		o	Case Number: United States District Court, Central District of California, Case No. 8:22-CV-02144-DOC-ADS.
		o	Background: This federal lawsuit was initiated by BWC against Constellation, Li, and others, with a Second Amended Complaint filed on May 22, 2024. Constellation and Li responded with counterclaims and cross-claims on June 12, 2024.
	·	State Action:
		o	Case Number: Superior Court of California, County of Orange, Case No. 30-2023-01322081-CU-FR-CJC.
		o	Background: This state case was filed by MBOCAL and LEVEL against FluidFi, BWC, and Li, with a Second Amended Complaint submitted on August 18, 2023. Both FluidFi/BWC and Constellation/Li filed cross-complaints against each other.

Settlement Highlights

	·	BZWR Series C Preferred Stock: Constellation will surrender, and Business Warrior Corporation will cancel, 50,000 shares of Series C Preferred Stock. Additionally, Constellation waives all past and future dividends associated with these shares. As of November 30, 2024, the Company recorded a $495,833 Accrued Dividends Payable that would have been due if the original terms of the agreement were met. However, this will be cancelled which will result in a zero accrued dividends payable balance, along with the reduction of the 50,000 shares of Series C Preferred Stock, to zero.
	·	Release of Claims: Timothy Li will release all wage and hour claims against BWC, FluidFi, and other parties. Constellation also releases BWC and FluidFi from any claims related to the lease of the property at 732 East Utah Valley Drive, Suite 400, American Fork, Utah, which had an amount due of $9,248 in Accounts Payable and Accrued Liabilities which is now zero.
	·	Settlement Payments: Constellation and Li will pay $100,000 to MBOCAL and LEVEL. Separately, BWC will make a $60,000 payment to these parties.
	·	Finalization and Dismissal: The agreement, fully executed on September 24, 2024, requires all parties to file for dismissal with prejudice in both the federal and state actions, effectively concluding these cases

On February 14, 2025, the Company entered into an Exclusive License Agreement with a third party (the "Licensee"), granting them the exclusive right to market, sell, and distribute the Company's proprietary financial technology platform, PayPlan, along with associated marketing services and legacy software.

Under the terms of the agreement, the Licensee will assume the Company’s existing customers and pay the Company a license fee that covers the Company’s employee and technology costs plus 30% of the Licensee’s net margin derived from the licensed products each month. Additionally, the Company received an initial fee of $200,000 as part of the licensing agreement.

The initial term of the agreement is twelve (12) months, with automatic renewal for up to two additional twelve-month terms, unless either party provides at least sixty (60) days' notice of termination. The agreement also includes a right of first refusal for licensing opportunities outside of the United States.

This agreement is intended to allow the Company to focus on scaling PayPlan, improving financial performance, and working toward SEC filing regulations and recommencing trading with the submission and approval of a 15c-211 by FINRA filed through a market maker.

The Company retains ownership of all intellectual property related to PayPlan and its associated products. The agreement also allows the Licensee to sublicense the products on a Software-as-a-Service (SaaS) basis. Furthermore, the agreement includes provisions for confidentiality, compliance, financial reporting, and a buyback option, under which the Company may repurchase the license after six months under specified conditions.

Subsequent to the period ended May 31, 2024, Business Warrior Corporation entered into several promissory notes with Innovative Payment Systems, Inc. (“IPSI”), as follows:

June 19, 2024 – The Company issued a $30,000 promissory note bearing 8% annual interest, maturing on November 1, 2024

August 9, 2024 – The Company issued a $35,000 promissory note bearing 8% annual interest, maturing on January 1, 2025

September 6, 2024 – The Company issued a $50,000 promissory note bearing 8% annual interest, maturing on February 1, 2025

September 10, 2024 – The Company issued a $15,000 promissory note bearing 8% annual interest, maturing on February 1, 2025

November 27, 2024 – The Company issued a $50,000 promissory note bearing 8% annual interest, maturing on April 27, 2025