S-1 1 forms-1.htm

 

As filed with the Securities and Exchange Commission on February [__], 2020.

 

Registration No. 333-__________

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

Investview, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   7389   87-0369205

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

 

234 Industrial Way West, Ste. A202, Eatontown, New Jersey 07224

Telephone 732-889-4300

(Address, including zip code and telephone number, including area code, of registrant’s principal executive offices)

 

Joseph Cammarata, Chief Executive Officer

Investview, Inc.

234 Industrial Way West, Ste. A202, Eatontown, New Jersey 07724

Telephone: 732-889-4300

(Name, address, including zip code and telephone number, including area code, of agent for service)

 

Copy to:

The Lonergan Law Firm, LLC

Lawrence R. Lonergan, Esq.

96 Park Street

Montclair, NJ 07042

Telephone: 973-641-4012

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. [  ]

 

If this Form is filed to register additional securities for an Offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same Offering. [  ]

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same Offering. [  ]

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same Offering. [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 [X]
  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 7(a)(2)(B) of the Securities Act. [  ]

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities to be Registered  Amount to be Registered   Proposed Maximum Offering Price per Share   Proposed Maximum Aggregate Offering Price   Amount of Registration Fee(1) 
Units consisting of shares of Series B Preferred Stock, par value $0.001 per share, and Warrants to purchase shares of Common Stock, par value $0.001 per share   2,000,000   $25.00   $50,000,000      
                     
Shares of Series B Preferred Stock, included as part of the Units   2,000,000                
                     

Common Stock Purchase Warrants to purchase common stock, included as part of the Units (2)

   10,000,000                
                     
Shares of Common Stock, par value $0.001 per share, issuable upon exercise of the Warrants (3)(4)   10,000,000   $0.10   $1,000,000      
                     
Total            $51,000,000   $6,619.80 

 

 

(1)  Calculated pursuant to Rule 457(a) based on an estimate of the proposed maximum aggregate Offering price.
(2)  In accordance with Rule 457(i) promulgated under the Securities Act, because the shares of our common stock underlying the Warrants are registered hereby, no separate registration fee is required with respect to the Warrants registered hereby.
(3) We are issuing five (5) Common Stock Purchase Warrants (the “Warrants”) each exercisable to purchase one (1) share of our common stock, par value $0.001 (“Common Stock”) as part of the units offered hereunder (the “Units”). Each Unit consists of: (i) one (1) share of 13% Series B Preferred Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred”); and (ii) five (5) Warrants. The Warrants are exercisable for a period of five (5) years from the date of issuance to purchase one (1) additional share of Common Stock at a price of $0.10 per share.
(4)  No additional registration fee is payable pursuant to Rule 457(g) promulgated under the Securities Act.

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended (the “Securities Act”), or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

   
   

 

PRELIMINARY PROSPECTUS

Subject to completion, dated February __, 2020

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

INVESTVIEW, INC.

2,000,000 Units

Each Unit Consisting of

One Share of 13% Series B Cumulative Redeemable Perpetual Preferred Stock and

Five Warrants Each Exercisable to Purchase One Share of Common Stock

 

Pursuant to this registration statement, of which this prospectus is a part, we are offering (the “Offering”) a total of 2,000,000 units (each a “Unit” and collectively, the “Units”), each Unit consisting of: (i) one share of our newly authorized 13% Series B Cumulative Redeemable Perpetual Preferred Stock (the “Series B Preferred”); and (ii) five (5) warrants (the “Warrants”) each exercisable to purchase one (1) share of common stock, par value $0.001 per share (“Common Stock” or “Warrant Shares”), at an exercise price of $0.10 (the “Exercise Price”) per Warrant Share . Each Warrant offered hereby as part of the Units is immediately exercisable on the date of issuance and will expire on February[_________], 2025 the date that is five (5) years from the date of issuance (the “Warrant Expiration Date”).

 

Dividends on the Series B Preferred, having a stated value of $25 per share (“Stated Value”), which are offered hereby as part of the Units, are cumulative from the first day of the calendar month in which they are issued, and will be payable on the 15th day of each calendar month, when, as and if declared by our Board of Directors (“Board”). Dividends will be payable out of amounts legally available therefor at a rate equal to 13% per annum per $25, the Stated Value per share, or $3.25 per share of Series B Preferred per year. We will reserve the amount equal to the first three years of dividend payments, or $9.75 per share of Series B Preferred, from the proceeds from this Offering (the “Dividend Reserve”) in an escrow account (the “Escrow Account”) maintained by International Financial Enterprise Bank (“IFEB Bank”), with offices in Dallas, TX, also referred to hereinafter as the “Escrow Agent.”

 

Commencing on three years from the dates of issuance, we may redeem, at our option, the shares of Series B Preferred, in whole or in part, at a cash redemption price equal to: (i) of $25 per share, plus all accrued and unpaid dividends to, but not including, the redemption date. The Series B Preferred has no stated maturity, will not be subject to any sinking fund or other mandatory redemption, and will not be convertible into or exchangeable for any of our other securities.

 

Holders of the Series B Preferred will have no voting rights, except as set forth below in section “Voting Rights” under subheading “Description of Offered Securities”.

 

Prior to this Offering, there has been no public market for the Units, the Series B Preferred or the Warrants. We anticipate that upon the SEC declaring the registration statement effective, and FINRA approving the symbols we request for the Units, shares of Series B Preferred, and the Warrants, that these securities will initially be subject to quotation and trading on the OTC Market including, possibly, the OTCQB or OTCQX, of which there can be no assurance, under the symbols “INVUU,” “INVUB” and “INVUW,” respectively. Our Common Stock is currently quoted on the OTCQB market under the symbol “INVU.”

 

We may use broker-dealers, referred to as placement agents to use their best efforts to solicit offers to purchase the Units in this Offering. If any placement agents sell Units, they will be deemed “underwriters” as that term is defined by Section 2(a)(11) of the Securities Exchange Act of 1933 (the “Securities Act”). We will pay any placement agent’s commissions not to exceed 10% of the gross proceeds from any Units they sell. Referenced is made to the Form of Placement Agent Agreement, attached as Exhibit 10.56 to the registration statement, of which this prospectus is a part.

 

This Offering may be closed without further notice to you. Other than as described above, we have not arranged to place any funds from investors in an escrow, trust or similar account.

 

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 8 of this prospectus. You should carefully consider these risk factors, as well as the information contained in this prospectus, before purchasing any of the securities offered by this prospectus.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

   Per Unit  Total
Public Offering price  $25.00   $50,000,000 
Placement agent fees (1)  $2.50   $5,000,000 
Proceeds, before expenses, to the Company  $22.50   $45,000,000 

 

(1) See “Plan of Distribution” for a description of commissions payable to the placement agent. We estimate our other expenses to be $100,000.

(2) Assumes no Units will be sold by any placement agents.

 

[______________]

 

The date of this prospectus is ______, 2020

 

   
   

 

TABLE OF CONTENTS

 

  Page
   
Cautionary Note Regarding Forward-Looking Statements 3
Prospectus Summary 4
The Offering 5
Risk Factors 8
Use of Proceeds 20
Dividend Policy 20
Capitalization 21
Financial Information 22
Business 70
Management’s Discussion and Analysis of Financial Condition and Results of Operations 43
Management 75
Executive and Director Compensation 76
Related Person Transactions 77
Principal Stockholders 80
Description of our Securities 81
Description of Offered Securities 82
Certain U.S. Federal Income Tax Considerations 89
Plan of Distribution 94
Legal Matters 94
Experts 94
Where You Can Find Additional Information 94
Disclosure of Commission Position on Indemnification for Securities Act Liabilities 94

 

You should rely only on the information contained in this prospectus. Neither we nor the placement agent have authorized anyone to provide any information or to make any representations other than those contained in this prospectus we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date. You should also read this prospectus together with the additional information described under “Additional Information.”

 

Unless the context otherwise requires, we use the terms “we,” “us,” “the Company” and “our” to refer to Investview, Inc. and its consolidated subsidiaries.

 

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CAUTIONARY Note Regarding Forward-Looking Statements

 

This prospectus contains statements about the future, sometimes referred to as “forward-looking” statements. Forward-looking statements are typically identified by the use of the words “believe,” “may,” “could,” “should,” “expect,” “anticipate,” “estimate,” “project,” “propose,” “plan,” “intend,” and similar words and expressions. Statements that describe our future strategic goals, plans, objectives, and predictions are also forward-looking statements. This prospectus contains forward-looking statements relating to future products or product development; future selling, general and administrative costs and research and development spending; future performance of our network marketing efforts; our expectations regarding ongoing litigation; international growth; and future financial performance, results of operations, capital expenditures, and sufficiency of capital resources to fund our operating requirements.

 

This forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include those relating to:

 

  noncompliance by our independent distributors with applicable legal requirements or our policies and procedures;
  potential adverse effects on our business and stock price due to ineffective internal controls over financial reporting;
  inability to manage financial reporting and internal control systems and processes;
  inability to properly motivate and manage our independent distributors;
  inability to manage existing markets, open new international markets, or expand our operations;
  inability of new products to gain distributor or market acceptance;
  inability to execute our product launch process due to increased pressure on our supply chain, information systems, and management;
  disruptions in our information technology systems;
  inability to protect against cybersecurity risks and to maintain the integrity of data;
  international trade or foreign exchange restrictions, increased tariffs, foreign currency exchange fluctuations;
  deterioration of global economic conditions;
  inability to raise additional capital if needed;
  inability to retain independent distributors or to attract new independent distributors on an ongoing basis;
  government regulations on direct selling activities in our various markets prohibiting or severely restricting our business;
  unfavorable publicity on our business or products;
  a finding that our direct selling program is not in compliance with current or newly adopted laws or regulations in various markets;
  expensive and time-consuming legal proceedings;
  potential for investigatory and enforcement action by the Federal Trade Commission;
  failure to comply with anti-corruption laws;
  inability to build and integrate our management team;
  loss of, or inability to attract, key personnel;
  unexpected tax or other assessments relating to the activity of our independent distributors;
  economic, political, foreign exchange, and other risks associated with international operations; and
  volatility of the market price of our common stock.

 

These forward-looking statements are only predictions, are uncertain and involve substantial known and unknown risks, uncertainties and other factors which may cause our (or our industry’s) actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. The “Risk Factors” section of this prospectus sets forth detailed risks, uncertainties and cautionary statements regarding our business and these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing regulatory environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus.

 

We cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the U.S., we do not intend to update any of the forward-looking statements to conform these statements to reflect actual results, later events or circumstances or to reflect the occurrence of unanticipated events. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or other investments or strategic transactions we may engage in.

 

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Prospectus Summary

 

This prospectus summary contains an overview of the information from this prospectus, but may not contain all of the information that is important to you. This prospectus includes specific terms of the offering of our common stock, information about our business, and financial data. We encourage you to read this prospectus, including the “Risk Factors” section beginning on page 8, in its entirety before making an investing decision. You should read this prospectus together with additional information described below under the heading “Where You Can Find Additional Information.” As used in this prospectus, the terms “we,” “us,” and “our” refer to Investview, Inc., a corporation organized under the laws of the state of Nevada, including our subsidiaries, and our predecessors, unless the context indicates a different meaning.

 

Our Business

 

Nature of Business

 

Investview owns a number of companies that each operate independently but are accretive to one another. Investview is establishing a portfolio of wholly owned subsidiaries delivering leading edge technologies, services and research, dedicated primarily to the individual consumer. Following is a description of each of our companies.

 

Kuvera, LLC provides research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research, trade alerts, and live trading rooms that include instruction in equities, options, FOREX, ETFs, binary options, crowdfunding and cryptocurrency sector education. In addition to trading tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product subscription includes a core set of trading tools/research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. Different packages are available through a monthly subscription that can be cancelled at any time at the discretion of the customer. A unique component of the product marketing plan is the distribution method whereby all subscriptions are sold via current participating customers who choose to distribute and sell the services by participating in the bonus plan. The bonus plan participation is purely optional but enables individuals to create an additional income stream to further support their personal financial goals and objectives.

 

Kuvera France S.A.S. is our entity in France that will distribute Kuvera products and services throughout the European Union.

 

S.A.F.E. Management, LLC is a Registered Investment Adviser and Commodity Trading Adviser that has been established to deliver automated trading strategies to individuals who find they lack the time to trade for themselves.

 

United League, LLC owns a number of proprietary technologies including FIREFAN a social app for sports enthusiasts. Technologies created to support any of the Investview companies are held under the United League structure.

 

United Games, LLC is the distribution network for United League technologies. Since the acquisition of United Games in July of 2018, we are working to combine the distributors of Kuvera and United Games. This is an on-going process that is not yet complete.

 

SAFETek, LLC (formerly WealthGen Global, LLC) is a new addition that we are currently establishing for expansion plans in the high-speed processing and cloud computing environment.

 

Apex Tek, LLC (formerly Razor Data, LLC) is the sales and distribution company for APEX packages and technology. It offers a unique passive income model for those interested in earning through the purchase and leaseback of high-speed specialized data processing equipment. This model has drawn considerable institutional interest.

 

Investment Tools & Training, LLC currently has no operations or activities

 

Our Address

 

Our principal executive offices are located at 234 Industrial Way West, Ste. A202, Eatontown, New Jersey 07224, and our telephone number is 732-889-4300.

 

Before you invest in our Units, you should carefully consider all the information in this Prospectus, including matters set forth under the heading “Risk Factors.”

 

Our Filing Status as a “Smaller Reporting Company”

 

We are a “smaller reporting company,” meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. As a “smaller reporting company,” the disclosure we will be required to provide in our SEC filings are less than it would be if we were not considered a “smaller reporting company.” Specifically, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act of 2002 requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2013; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, being permitted to provide two years of audited financial statements in annual reports rather than three years. Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.

 

 

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The Offering

 

The following summary contains basic terms about this Unit Offering including the Series B Preferred and the Warrants and is not intended to be complete. It may not contain all of the information that is important to you. You should read the more detailed information contained in this prospectus, including but not limited to, the risk factors beginning on page 8. For a more complete description of the terms of the Units, see “Description of the Securities Offered.” Reference is also made to the “Certificate of Designations, Preferences and Rights of 13% Series B Cumulative Redeemable Perpetual Preferred Stock,” filed as Exhibit 10.55 to this Registration Statement (the Series B Certificate of Designation.”

 

Issuer  

Investview, Inc.

 

Securities Offered   2,000,000 Units, each Unit consisting of: (i) one share of 13% Series B Preferred, having a Stated Value of $25; and (ii) five Warrants each exercisable to purchase one share of our Common Stock (the “Warrant Shares”) at an exercise price of $0.10 (the “Exercise Price”). The shares of Series B Preferred and the Warrants comprising the Units are immediately separable upon issuance and will be issued separately upon the closing of this Offering.
     
Shares of Series B Preferred Offered   2,000,000
     
Warrants Offered  

Warrants to purchase up to 10,000,000 shares of Common Stock (the “Warrant Shares”), which will be exercisable during the period commencing on the date of their issuance and ending five years from such date (the “Warrant Expiration Date”) at an exercise price of $0.10 per Warrant Share (the “Exercise Price”). This Prospectus also relates to the Offering of the shares of Common Stock issuable upon exercise of the Warrants, referred to herein as the Warrant Shares. There is no established public trading market for the Warrants, and we cannot assure you an active trading market will develop or be sustained, if at all. In addition, the exercise price of the Warrants is subject to adjustment in the event during the five year exercise period from the original issuance of the Warrants, if we sell any shares of our Common Stock or securities exchangeable or exercisable or convertible into our Common Stock, subject to certain exceptions, at a price per share less than the exercise price of the Warrants then in effect or without consideration. Reference is made to Exhibit 10.57, Form of Common Stock Purchase Warrant. 

     
Series B Preferred to be Outstanding after this Offering   2,000,000 shares
     
Offering Price   $25 per Unit
     
Dividends  

Holders of the Series B Preferred will be entitled to receive cumulative cash dividends at a rate of 13% per annum on the stated value, $25 per share, of the Series B Preferred (equivalent to $3.25 per annum per share).

 

Dividends will be payable monthly in arrears on the 15th day of each month (each, a “Dividend Payment Date”), provided that if any Dividend Payment Date is not a business day, then the dividend that would otherwise have been payable on that Dividend Payment Date may be paid on the next succeeding business day without adjustment in the amount of the dividend. Dividends will be payable to holders of record as they appear on our stock records for the Series B Preferred at the close of business on the corresponding record date, which shall be the last day of the calendar month, whether or not a business day, immediately preceding the month in which the applicable Dividend Payment Date falls (each, a “Dividend Record Date”). As a result, holders of shares of Series B Preferred will not be entitled to receive dividends on a Dividend Payment Date if such shares were not issued and outstanding on the applicable dividend record date.

 

Any dividend payable on the Series B Preferred, including dividends payable for any partial dividend period, will be computed on the basis of a 360-day year consisting of twelve 30-day months; however, the shares of Series B Preferred offered hereby will be credited as having accrued dividends since the first day of the calendar month in which they are issued.

 

 

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Dividend Escrow   We will allocate and pay from the proceeds from this Offering an amount equal to the first three years of dividend payments, or $9.75 per share of Series B Preferred, to IFEB Bank (the “Escrow Agent”). The dividends on the Series B Preferred paid by the Company from the proceeds of the Offering into the Escrow Account and will be held by the Escrow Agent, which monies will be the sole property, and for the sole benefit, of the investors and will not be deemed for any purposes whatsoever the property of the Company. For three years after issuance, without further authorization from our Board, the Escrow Agent will pay dividends to investors on a monthly basis as set forth above. Although, dividends will accrue separately for each investor, the Escrow Agent will not pay dividend payments to any investor unless it pays all investors who are listed as Series B Preferred stockholders on our transfer records as of each Dividend Record Date. See “Description of Offered Securities - Dividends.”
     
No Maturity, Sinking Fund or Mandatory Redemption   The Series B Preferred has no stated maturity and will not be subject to any sinking fund or mandatory redemption. Shares of the Series B Preferred will remain outstanding indefinitely unless we decide to redeem or otherwise repurchase them as provided under Optional Redemption and Special Optional Redemption below. We are not required to set aside funds to redeem the Series B Preferred.
     
Optional Redemption  

The Series B Preferred is not redeemable by us prior to the three-year anniversary of each issuance of Series B Preferred. We may, at our option, redeem the Series B Preferred, in whole or in part, at any time or from time to time, for cash at a redemption price equal to the Stated Value of $25 per share of Series B Preferred, plus any accumulated and unpaid dividends to, but not including, the redemption date. See “Description of the Series B Preferred - Redemption - Optional Redemption” for further details. If we redeem any Series B Preferred, we will only do so by treating all investors equally. In order to do that, we will deposit all redemption proceeds in an escrow account, since we expect the three-year periods to vary. The only exception to escrowing funds will be if the redemption date is more than three years after issuance of all Series B Preferred in which case, we will simply pay all investors at the same time.

 

Special Optional Redemption  

Upon the occurrence of a Change of Control, we may, at our option, redeem the Series B Preferred, in whole or in part, within 120 days after notice of such Change of Control, for cash at a redemption price equal to the Stated Value of $25 per share of Series B Preferred, plus any accumulated and unpaid dividends to, but not including, the redemption date.

 

A “Change of Control” is deemed to occur when any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions shall have acquired our stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of our directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition).

 

 

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Ranking   The Series B Preferred will rank, with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up, senior to all classes or series of our Common Stock or our issued and outstanding Series A Preferred Stock and to all other equity securities issued by us other than equity securities on a parity with all equity securities issued by us with terms specifically providing that those equity securities rank on a parity with the Series B Preferred with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up; junior to all equity securities issued by us with terms specifically providing that those equity securities rank senior to the Series B Preferred with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up, including any other series of Preferred Stock; and effectively junior to all of our existing and future indebtedness (including indebtedness convertible into our Common Stock or Preferred Stock) and to the indebtedness and other liabilities of (as well as any preferred equity interests held by others in) our existing subsidiaries and any future subsidiaries. See “Description of the Series B Preferred–Ranking” for further information.
     
Limited Voting Rights   Holders of Series B Preferred will have no voting rights except for the limited instance where the Series B Preferred may vote. See the section entitled “Description of the Series B Preferred—Voting Rights,” and the Series B Certificate of Designation, filed as Exhibit 10.55 to this Registration Statement.
     
Use of Proceeds   After escrowing proceeds equal to $9.75 per share of Series B Preferred with the Escrow Agent for the payment of the initial three years of dividends, we plan to use the net proceeds from this Offering to repay our outstanding debt to repay our loans which we estimate is $2,190,000 as of the date of this Prospectus. And the balance for working capital, general corporate purposes and growth initiatives, including potential future acquisitions, although the Company has no present plans, arrangements or agreements for any such acquisitions.
     
Risk Factors   Please read the disclosure under the section entitled “Risk Factors” beginning on page 8 for a discussion of some of the factors you should carefully consider before deciding to invest in our Series B Preferred and Warrants.
     
Trading Market   Our Common Stock is quoted on the OTCQB under the INVU symbol. We expect the Units, the Series B Preferred, and the Warrants will be quoted under the symbols “INVUU,” “INVUB” and “INVUW,” respectively, pending assignment by FINRA of trading symbols, following the date the SEC declares the Registration Statement effective under the Act. We intend to initially apply to the OTCQB Market (“OTCQB”) to make these securities become subject to quotation although we may determine to apply for quotation on the OTCQX although there can be no assurance that we will qualify for quotation of these securities on the OTCQX. See “Description of Offered Securities - Trading Market.”
     
Transfer Agent   Standard Registrar and Transfer Co., Inc. will act as the registrar, transfer agent and dividend and redemption price disbursing agent in respect of the Units, Series B Preferred and Warrants.
     
Certain U.S. Federal Income Tax Considerations  

For a discussion of the federal income tax consequences of purchasing, owning and disposing of the Series B Preferred, please see the section entitled “Certain U.S. Federal Income Tax Considerations.” You should consult your tax advisor with respect to the U.S. federal income tax consequences of owning the Series B Preferred in light of your own particular situation and with respect to any tax consequences arising under the laws of any state, local, foreign or other taxing jurisdiction.

 

Book Entry and Form   The Units, the Series B Preferred and the Warrants will be represented by one or more global certificates in definitive, fully registered form deposited with a custodian for, and registered in the name of, a nominee of The Depository Trust Company (“DTC”).

 

 

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Risk Factors

 

Investing in our securities involves a high degree of risk. You should carefully consider and evaluate all of the information contained in this prospectus before you decide to purchase the Units. The risks and uncertainties described in this prospectus are not the only ones we may face. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material may also adversely affect our business, business prospects, results of operations or financial condition. Any of the risks and uncertainties set forth herein, could materially and adversely affect our business, results of operations and financial condition. This could cause the market price of the Units, the Series B Preferred and the Warrants to decline, perhaps significantly, and you may lose part or all of your investment.

 

Risks Related to our Financial Condition

 

Because this is a best effort Offering, investors who invest initially will be subject to more risk than later investors.

 

We are seeking to raise up to $50,000,000 from the sale of the Units. We intend to escrow approximately 39% of the gross proceeds in order to provide investors a 13% return through dividend payments for three years from the date of issuance to each investor. The remaining proceeds will be first used to pay our indebtedness which is expected to be approximately $2,050,000 as of the date of this prospectus and we intend to use the remaining proceeds for working capital, general corporate purposes and growth initiatives, including potential future acquisitions, although the Company has no present plans, arrangements or agreements for any such acquisitions. See “Description of Offered Securities – Series B Preferred.” Because this is a best effort Offering, the earlier investors invest in this Offering, the greater degree of risk they will incur. For example, if the Company raises an immaterial amount, investors will be subject to more risk than if all or substantially all of the $50,000,000 is raised. This is because there is no minimum amount of proceeds we must raise. If we do not raise a substantial amount of proceeds, we may not have sufficient working capital to be able to carry out our business since we are continuing to lose money. In that event, we will be required to seek other financing which, if available, may be very dilutive and expensive. In that event, your investment will be adversely affected. In order to qualify for the OTCQB, we will need to generate net proceeds of $1.7 million from the sale of 68,000 Units, at which time we will have the initial closing, following which we will continue the Offering of Units until all of the units are sold or we terminate the Offering. There can be no assurance that we will be successful in selling 68,000 Units and our Series B Preferred becoming subject to quotation of the OTCQB.

 

Our Independent Registered Public Accounting Firm has expressed substantial doubt as to our ability to continue as a going concern.

 

The audited financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result if we cease to continue as a going concern. We believe that to continue as a going concern we will need approximately $1,00,000 per year simply to cover the administrative, legal and accounting fees. We plan to fund these expenses primarily through cash flow from operations, if and when we generate positive cash flow, of which there can be no assurance, the sale of restricted shares of our Common Stock, and the issuance of convertible notes, as well as funds raised from this Offering, if it is successful, of which there can be no assurance

 

Based on our financial statements for the years ended March 31, 2019 and 2018, our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern.

 

Investing in our securities involves a great deal of risk. Careful consideration should be made of the following factors as well as other information included in this Prospectus before deciding to purchase the Units subject of this Offering or of our Common Stock in the open market or otherwise. Our business, financial condition or results of operations could be affected materially and adversely by any or all the risks set forth under “Risk Factors” and elsewhere in this Prospectus.

 

We may need to raise additional capital to fund continuing operations and an inability to raise the necessary capital or to do so on acceptable terms could threaten the success of our business.

 

To date, our operations have been funded entirely from the proceeds from equity and debt financings or loans from our management. We currently anticipate that our available capital resources will be insufficient to meet our expected working capital and capital expenditure requirements for the near future. We anticipate that we will require an additional $1.5 million during the next twelve months to fulfill our business plan. However, such resources may not be sufficient to fund the long-term growth of our business. If we determine that it is necessary to raise additional funds, we may choose to do so through strategic collaborations, licensing arrangements through our “White Labeling” strategy, public or private equity or debt financing, a bank line of credit, or other arrangements.

 

We cannot be sure that any additional funding will be available on terms favorable to us or at all. Any additional equity financing may be dilutive to our shareholders, new equity securities may have rights, preferences or privileges senior to those of existing holders of our shares of Common stock. Debt or equity financing may subject us to restrictive covenants and significant interest costs. If we obtain funding through a strategic collaboration or licensing arrangement, we may be required to relinquish our rights to our product or marketing territories. If we are unable to obtain the financing necessary to support our operations, we may be required to defer, reduce or eliminate certain planned expenditures or significantly curtail our operations.

 

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We have a history of net losses; we may never achieve or sustain profitability or positive cash flow from operations.

 

We have incurred net losses in each fiscal year since our inception, including net losses of $5,011,036 for the year ended March 31, 2019 and $14,913,016 for the year ended March 31, 2018, and a net loss of $8,587,449 for the nine months ended December 31, 2019. As of December 31, 2019, we had an accumulated deficit of approximately $33,684,432. We expect to continue to incur substantial expenditures to develop and market our services and could continue to incur losses and negative operating cash flow for the foreseeable future. We may never achieve profitability or positive cash flow in the future, and even if we do, we may not be able to continue being profitable.

 

We have a limited operating history; it is difficult to evaluate our business and future prospects and increases the risks associated with investment in our securities.

 

We have only limited prior business operations. Because of our limited operating history, investors may not have adequate information on which they can base an evaluation of our business and prospects. Investors should be aware of the difficulties, delays, and expenses normally encountered by an enterprise in its early stage, many of which are beyond our control, including unanticipated research and development expenses, employment costs, and administrative expenses. We cannot assure our investors that our proposed business plans as described herein will materialize or prove successful, or that we will be able to finalize development of our products or operate profitably. We may not be successful in addressing these and other challenges we may face in the future, and our business and future prospects may be materially and adversely affected if we do not manage these and other risks successfully. Given our limited operating history, we may be unable to effectively implement our business plan which could materially harm our business or cause us to scale down or cease our operations.

 

Risks Related to our Business

 

We may not be able to manage our growth effectively, which could slow or prevent our ability to achieve profitability.

 

The ability to manage and operate our business as we execute our development and growth strategy will require effective planning. Significant rapid growth could strain our internal resources and delay or prevent our efforts to achieve profitability. We expect that our efforts to grow will place a significant strain on our personnel, management systems, infrastructure, and other resources. Our ability to manage future growth effectively will also require us to successfully attract, train, motivate, retain, and manage new employees and continue to update and improve our operational, financial, and management controls and procedures. If we do not manage our growth effectively, slower growth is likely to occur, thereby slowing or negating our ability to achieve and sustain profitability.

 

We may not be able to fully protect our proprietary rights and we may infringe the proprietary rights of others, which could result in costly litigation.

 

Our future success depends on our ability to protect and preserve the proprietary rights related to our products. We cannot assure that we will be able to prevent third parties from using our intellectual property rights and technology without our authorization. We also rely on trade secrets, common law trademark rights, and trademark registrations, as well as confidentiality and work for hire, development, assignment, and license agreements with employees, consultants, third-party developers, licensees, and customers. Our protective measures for these intangible assets afford only limited protection and may be flawed or inadequate.

 

Policing unauthorized use of our technology is difficult and some foreign laws do not provide the same level of protection as U.S. laws. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or patents that we may obtain, or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of resources and have a material adverse effect on our future operating results.

 

In recent years, there has been significant litigation in the United States involving patents and other intellectual property rights. In particular, there has been an increase in the filing of suits alleging infringement of intellectual property rights, which pressures defendants into entering settlement arrangements quickly to dispose of such suits, regardless of their merits. Other companies or individuals may allege that we infringe on their intellectual property rights. Litigation, particularly in the area of intellectual property rights, is costly and the outcome is inherently uncertain. In the event of an adverse result, we could be liable for substantial damages and we may be forced to discontinue our use of the intellectual property in question or obtain a license to use those rights or develop non-infringing alternatives.

 

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Our business could be negatively affected by any adverse economic developments in the securities markets or the economy in general.

 

We depend on the interest of individuals in obtaining financial information and securities trading strategies to assist them in making their own investment decisions. Significant downturns in the securities markets or in general economic and political conditions may cause individuals to be reluctant to make their own investment decisions and, thus, decrease the demand for our products. Significant upturns in the securities markets or in general economic and political conditions may cause individuals to be less proactive in seeking ways to improve the returns on their trading or investment decisions and, thus, decrease the demand for our products.

 

We may encounter risks relating to security or other system disruptions and failures that could reduce the attractiveness of our sites and that could harm our business.

 

Although we have implemented various security mechanisms, our business is vulnerable to computer viruses, physical or electronic break-ins, and similar disruptions, which could lead to interruptions, delays, or loss of data. For instance, because a portion of our revenue is based on individuals using credit cards to purchase subscriptions over the Internet and a portion from advertisers that seek to encourage people to use the Internet to purchase goods or services, our business could be adversely affected by these break-ins or disruptions.

 

Additionally, our operations depend on our ability to protect systems against damage from fire, earthquakes, power loss, telecommunications failure, and other events beyond our control. Moreover, our website may experience slower response times or other problems for a variety of reasons, including hardware and communication line capacity restraints, software failures, or significant increases in traffic when there have been important business or financial news stories. These strains on our systems could cause customer dissatisfaction and could discourage visitors from becoming paying subscribers. Our websites could experience disruptions or interruptions in service due to the failure or delay in the transmission or receipt of information from us. These types of occurrences could cause users to perceive our website and technology solutions as not functioning properly and cause them to use other methods or services of our competitors. Any disruption resulting from these actions may harm our business and may be very expensive to remedy, may not be fully covered by our insurance, could damage our reputation, and discourage new and existing users from using our products and services. Any disruptions could increase costs and make profitability even more difficult to achieve.

 

We will need to introduce new products and services and enhance existing products and services to remain competitive.

 

Our future success depends in part on our ability to develop and enhance our products and services. In addition, the adoption of new Internet, networking, or telecommunications technologies or other technological changes could require us to incur substantial expenditures to enhance or adapt our services or infrastructure. There are significant technical and financial costs and risks in the development of new or enhanced products and services, including the risk that we might be unable to effectively use new technologies, adapt our services to emerging industry standards, or develop, introduce, and market enhanced or new products and services. An inability to develop new products and services, or enhance existing offerings, could have a material adverse effect on our profitability.

 

We rely on external service providers to perform certain key functions.

 

We rely on a number of external service providers for certain key technology, processing, service, and support functions. External content providers provide us with financial information, market news, charts, option and stock quotes, research reports, and other fundamental data that we offer to clients. These service providers face technological and operational risks of their own. Any significant failures by them, including improper use or disclosure of our confidential client, employee, or company information, could cause us to incur losses and could harm our reputation.

 

We cannot assure that any external service providers will be able to continue to provide these services in an efficient, cost-effective manner or that they will be able to adequately expand their services to meet our needs. An interruption in or the cessation of service by any external service provider as a result of systems failures, capacity constraints, financial constraints or problems, unanticipated trading market closures, or for any other reason, and our inability to make alternative arrangements in a smooth and timely manner, if at all, could have a material adverse effect on our business, results of operations, and financial condition.

 

We could face liability and other costs relating to storage and use of personal information about its users.

 

Users provide us with personal information, including credit card information, which we do not share without the user’s consent. Despite this policy of obtaining consent, however, if third persons were able to penetrate our network security or otherwise misappropriate our users’ personal or credit card information, we could be subject to liability, including claims for unauthorized purchases with credit card information, impersonation or other similar fraud claims, and misuses of personal information, such as for unauthorized marketing purposes. New privacy legislation may further increase this type of liability. Furthermore, we could incur additional expenses if additional regulations regarding the use of personal information were introduced or if federal or state agencies were to investigate our privacy practices.

 

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Our business could be negatively affected if we are required to defend allegations of unfair competition and unfair false or deceptive acts or practices in or affecting commerce.

 

Advertising and marketing of our products in the United States are also subject to regulation by the Federal Trade Commission (“FTC”) under the Federal Trade Commission Act, or FTC Act. Among other things, the FTC Act prohibits unfair methods of competition and unfair false or deceptive acts or practices in or affecting commerce. The FTC Act also makes it illegal to disseminate or cause to be disseminated any false advertisement. The FTC routinely reviews websites to identify questionable advertising claims and practices. Competitors sometimes inform the FTC when they believe other competitors are violating the FTC Act and consumers also notify the FTC of what they believe may be wrongful advertising. The FTC may initiate a nonpublic investigation that focuses on our advertising claims, which usually involves nonpublic, pre-lawsuit, extensive formal discovery. Such an investigation may be lengthy and expensive to defend and result in a publicly disclosed consent decree or settlement agreement. If no settlement can be reached, the FTC may start an administrative proceeding or a federal court lawsuit against us or our principal officers. The FTC often seeks to recover from the defendants, whether in a consent decree or a proceeding, any or all of the following: (i) consumer redress in the form of monetary relief or disgorgement of profits; (ii) significant reporting requirements for several years; and (iii) injunctive relief. In addition, most, if not all, states have statutes prohibiting deceptive and unfair acts and practices. The requirements under these state statutes are similar to those of the FTC Act.

 

We accept and hold cryptocurrencies, which may subject us to exchange risk and additional tax and regulatory requirements.

 

We have recently begun accepting cryptocurrencies bitcoin and etherium as a form of payment. Cryptocurrencies are not considered legal tender or backed by any government and have experienced significant price volatility, technological glitches, and various law enforcement and regulatory interventions. If we fail to comply with regulations or prohibitions applicable to us, we could face regulatory or other enforcement actions and potential fines and other consequences. We also hold cryptocurrencies directly, subjecting us to exchange rate risk as well as the risk that regulatory or other developments and the recent price volatility may adversely affect the value of the cryptocurrencies we hold. The uncertainties regarding legal and regulatory requirements relating to cryptocurrencies or transactions using cryptocurrencies, as well as potential accounting and tax issues or other requirements relating to cryptocurrencies, could have a material adverse effect on our business.

 

Our business could be negatively affected if we are required to defend allegations that our direct selling activities are fraudulent or deceptive schemes, are against public interest, or are the sale of unregistered securities.

 

Direct selling activities are regulated by the FTC, as well as various federal, state, and local governmental agencies in the United States and foreign countries. These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, often referred to as “pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on product sales. Regulators may take the position that some or all of our products are deemed to be securities, the sale of which has not been registered. The laws and regulations governing direct selling are modified from time to time, and like other direct selling companies, we may be subject from time to time to government investigations related to our direct selling activities. This may require us to make changes to our business model and our compensation plan.

 

Our independent distributors could fail to comply with applicable legal requirements or our distributor policies and procedures, which could result in claims against us that could harm our business.

 

Our independent distributors are independent contractors and, accordingly, we are not in a position to directly provide the same oversight, direction, and motivation as we could if they were our employees. As a result, we cannot assure that our independent distributors will comply with applicable laws or regulations or our distributor policies and procedures.

 

Extensive federal, state, local, and international laws regulate our business, products, and direct selling activities. Because we have expanded into foreign countries, our policies and procedures for our independent distributors differ slightly in some countries due to the different legal requirements of each country in which we do business.

 

Our proprietary systems may be compromised by hackers.

 

Our current products and other products and services that we may develop in the future will be based on proprietary software and customer-specific data that we protect by routine measures such as password protection, confidentiality and nondisclosure agreements with employees, and similar measures. Any unauthorized access to our software or data could materially disrupt our business and result in financial loss and damages to our business reputation.

 

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Our future success is largely dependent on our current management.

 

Our business was built by the vision, dedication, and expertise of our executive officers, who are responsible for our day-to-day operations and creative development. Our success is dependent upon the continued efforts of these people. If it became necessary to replace them, it is unlikely new management could be found that would have the same level of knowledge and dedication to our success. The loss of the services of these professionals, especially in the development of future proprietary software, patents, or applications, would adversely affect our business.

 

Risks Related to this Offering and Ownership of the Units, Series B Preferred and the Warrants.

 

The Series B Preferred ranks junior to all of our indebtedness and other liabilities

 

In the event of our bankruptcy, liquidation, dissolution or winding-up of our affairs, our assets will be available to pay obligations on the Series B Preferred only after all of our indebtedness and other liabilities have been paid. The rights of holders of the Series B Preferred to participate in the distribution of our assets will rank junior to the prior claims of our current and future creditors, existing preferred stock and Common Stock, and any future series or class of preferred stock we may issue that ranks senior to the Series B Preferred. Also, the Series B Preferred effectively ranks junior to all our existing and future indebtedness and to the indebtedness and other liabilities of our existing subsidiaries and any future subsidiaries. Our existing subsidiaries are, and future subsidiaries would be, separate legal entities and have no legal obligation to pay any amounts to us in respect of dividends due on the Series B Preferred. If we are forced to liquidate our assets to pay our creditors, we may not have sufficient assets to pay amounts due on any or all of the Series B Preferred then outstanding. We may in the future incur debt and other obligations that will rank senior to the Series B Preferred. At December 31, 2019, we had total liabilities of $17,465,617. Nevertheless, the three years of dividends on the Series B Preferred, which total $9.75 per share of Series B Preferred, that will be paid by the Company from the proceeds of the Offering into the Escrow Account, will not be the property of the Company but rather will be for the sole benefit of the investors, payable to the investors on a monthly basis. As a result, these dividends will not, in the ordinary course, be accessible to third-party creditors of the Company.

 

Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of the Series B Preferred and may result in dilution to owners of the Series B Preferred. We and, indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future Offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future Offerings. The holders of the Series B Preferred will bear the risk of our future Offerings, which may reduce the market price of the Series B Preferred and will dilute the value of their holdings in us.

 

We may not be able to declare and pay dividends on the Series B Preferred if we fail to comply with the conditions imposed by the applicable Nevada law requirements.

 

Section 78.288 “Distributions to stockholders” of the Nevada Revised Statute provide that we may only declare and pay cash dividends on the Series B Preferred if (a) the corporation would not be able to pay its debts as they become due in the usual course of business; or (b) except as otherwise specifically allowed by the articles of incorporation, the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. There can be no assurance that we will satisfy such requirements in any given year.

 

There is no established market for the Units, the Series B Preferred or the Warrants, a market may never develop.

 

There is no established trading market for the Units, the Series B Preferred or the Warrants and we do not know if a market will develop on the OTCQB or, if it does, how active it will be or whether it will be sustained. Further, if in the future we believe we meet the quantitative requirements for listing our Common Stock on Nasdaq, we intend to apply to have the Common Stock, the Units, the Series B Preferred and the Warrants listed. We cannot assure you that we will meet the quantitative listing requirements or that any application will be approved. The liquidity of the market for the Units, the Series B Preferred, and the Warrants depends on a number of factors, including prevailing interest rates, our financial condition and operating results, the number of holders of these securities, the market for similar securities and the interest of securities dealers in making a market in these securities. The market for the Warrants will be linked to the price and the liquidity of our Common Stock. We cannot predict with certainty the extent of investor interest in the Units, the Series B Preferred, and the Warrants, or how liquid that market will be. Without an active trading market, the liquidity of these securities will be limited.

 

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We may issue additional shares of Series B Preferred and additional series of preferred stock that rank on parity with or senior to the Series B Preferred as to dividend rights, rights upon liquidation or voting rights.

 

We are allowed to issue additional shares of Series B Preferred and additional series of preferred stock that would rank on parity with or junior to the Series B Preferred as to dividend payments and rights upon our liquidation, dissolution or winding up of our affairs pursuant to our Certificate of Incorporation, including the Certificate of Designations relating to the Series B Preferred without any vote of the holders of the Series B Preferred. Upon the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series B Preferred (voting together as a class with all other series of parity preferred stock we may issue upon which like voting rights have been conferred and are exercisable), we are allowed to issue additional series of preferred stock that would rank senior to the Series B Preferred as to dividend payments and rights upon our liquidation, dissolution or the winding up pursuant to our Certificate of Incorporation and the Certificate of Designations relating to the Series B Preferred. The issuance of additional shares of Series B Preferred and additional series of preferred stock could have the effect of reducing the amounts available to the holders of Series B Preferred upon our liquidation or dissolution or the winding up of our affairs.

 

Also, although holders of Series B Preferred are entitled to limited voting rights, as described in this prospectus under “Description of the Series B Preferred - Voting Rights,” with respect to the circumstances under which the holders of Series B Preferred are entitled to vote, the Series B Preferred votes separately as a class along with all other series of our preferred stock that we may issue upon which like voting rights have been conferred and are exercisable. As a result, the voting rights of the holders of Series B Preferred may be significantly diluted, and the holders of such other series of preferred stock that we may issue may be able to control or significantly influence the outcome of any vote.

Future issuances and sales of senior or parity preferred stock, or the perception that such issuances and sales could occur, may cause prevailing market prices for the Series B Preferred and our Common Stock to decline and may adversely affect our ability to raise additional capital in the financial markets at times and prices favorable to us.

 

Holders of the Units may be unable to use the dividends-received deduction and may not be eligible for the preferential tax rates applicable to “qualified dividend income.”

 

Dividends paid to corporate U.S. holders of the Series B Preferred, which is being offered in this Offering as part of the Units, may be eligible for the dividends-received deduction, and dividends paid to non-corporate U.S. holders of the Series B Preferred may be subject to tax at the preferential tax rates applicable to “qualified dividend income,” if we have current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. We do not currently have accumulated earnings and profits. Additionally, we may not have sufficient current earnings and profits during future fiscal years for the distributions on the Series B Preferred to qualify as dividends for U.S. federal income tax purposes. If the distributions fail to qualify as dividends, U.S. holders would be unable to use the dividends-received deduction and may not be eligible for the preferential tax rates applicable to “qualified dividend income.” If any distributions on the Series B Preferred with respect to any fiscal year are not eligible for the dividends-received deduction or preferential tax rates applicable to “qualified dividend income” because of insufficient current or accumulated earnings and profits, the market value of the Units and the Series B Preferred could decline.

 

If we redeem the Series B Preferred, investors will no longer be entitled to dividends.

 

On or after three years after the first sale of Series B Preferred in or 2023, we may, at our option, redeem the Series B Preferred, in whole or in part, at any time or from time-to-time, based upon the payment of the Stated Value of $25 per share of Series B Preferred plus accrued dividends. Also, upon the occurrence of a Change of Control (as defined below under “Description of the Series B Preferred – Redemption”), we may, at our option, upon not less than 30 and nor more than 60 days’ written notice, redeem the Series B Preferred, in whole or in part, within 120 days after the date of such written notice. We may have an incentive to redeem the Series B Preferred voluntarily if market conditions allow us to issue other preferred stock or debt securities at a rate that is lower than the dividend on the Series B Preferred. If we redeem the Series B Preferred, then from and after the redemption date, dividends will cease to accrue on the shares of Series B Preferred, that have been redeemed, such shares of Series B Preferred shall no longer be deemed outstanding and all rights as a holder of those shares will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption.

 

The market price of the Units, the Series B Preferred and the Warrants could be substantially affected by various factors.

 

The market price of the Units, the Series B Preferred and the Warrants could be subject to wide fluctuations in response to numerous factors. The price of the Units and the Series B Preferred that will prevail in the market after this Offering may be higher or lower than the Offering price depending on many factors, some of which are beyond our control and may not be directly related to our operating performance.

 

These factors include, but are not limited to, the following:

 

prevailing interest rates, increases in which may have an adverse effect on the market price of the Series B Preferred;
trading prices of similar securities;
our history of timely dividend payments;
the annual yield from dividends on the Series B Preferred as compared to yields on other financial instruments;
general economic and financial market conditions;
government action or regulation;
the financial condition, performance and prospects of us and our competitors;

 

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changes in financial estimates or recommendations by securities analysts with respect to us or our competitors  in our industry;
our issuance of additional equity or debt securities; and
actual or anticipated variations in quarterly operating results of us and our competitors.

 

The Warrants are likely to trade in the same manner as our Common Stock.

 

As a result of these and other factors, investors who purchase the Units in this Offering may experience a decrease, which could be substantial and rapid, in the market price of the Units, the Series B Preferred and the Warrants, including decreases unrelated to our operating performance or prospects.

 

If you purchase the Units, you will have no voting rights except for extremely limited voting rights for the Series B Preferred.

 

The voting rights of a holder of Series B Preferred are limited. Our shares of Common Stock are the only classes of our securities that carry full voting rights.

The holders of Series B Preferred have no voting rights except with respect to voting on amendments to our Series B Preferred Certificate of Designation that materially and adversely affect the rights of the holders of Series B Preferred or authorize, increase or create additional classes or series of our capital stock that are senior to the Series B Preferred. Other than the limited circumstances described in the Prospectus and except to the extent required by law, holders of Series B Preferred do not have any voting rights. See “Description of the Series B Preferred—Voting Rights.”

 

The Series B Preferred is not convertible into our common stock, investors will not benefit if the price of our common stock increases.

 

The Series B Preferred is not convertible into our Common Stock and earns dividends at a fixed rate. Accordingly, an increase in market price of our Common Stock will not necessarily result in an increase in the market price of our Series B Preferred. The market value of the Series B Preferred may depend more on dividend and interest rates for other preferred stock, commercial paper and other investment alternatives and our actual and perceived ability to pay dividends on, and in the event of dissolution satisfy the liquidation preference with respect to, the Series B Preferred.

 

Management will have broad discretion in using the proceeds of this Offering.

 

We intend to use the net proceeds of this Offering (after putting the dividends for the initial three years into an escrow account) to pay our indebtedness and thereafter for working capital and general corporate purposes to support our growth. We have not allocated any specific portion of the net proceeds to any particular purpose, and our management will have the discretion to allocate the proceeds as it determines. We will have significant flexibility and broad discretion in applying the net proceeds of this Offering. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds, and you will not have the opportunity to influence our decisions on how to use our net proceeds from this Offering.

 

Risks Relating to Our Common Stock

 

We have a history of operating losses and expect to report future losses that may cause our stock price to decline.

 

We have incurred net losses in each fiscal year since our inception, including net losses of $5,011,036 for the year ended March 31, 2019 and $14,913,016 for the year ended March 31, 2018, and a net loss of $8,587,449 for the nine months ended December 31, 2019. As of December 31, 2019, we had an accumulated deficit of approximately $33,684,432. We cannot be certain whether we will ever be profitable, or if we do, that we will be able to continue to be profitable. Also, any economic weakness or global recession may limit our ability to market our products. Any of these factors could cause our stock price to decline and result in our stockholders losing a portion or all of their investments.

 

We will need to raise additional capital. If we are unable to raise additional capital, our business may fail.

 

Because our revenues are not yet sufficient to cover expenses or fund our growth, we need to secure ongoing funding. If we are unable to obtain adequate additional financing, we may not be able to successfully market and sell our products, our business operations will most likely be discontinued, and we will cease to be a going concern. To secure additional financing, we may need to borrow money or sell more securities. Under these circumstances, we may be unable to secure additional financing on favorable terms or at all. Selling additional stock, either privately or publicly, would dilute the equity interests of our stockholders. If we borrow money, we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail business operations, which would have a material negative effect on operating results and most likely result in a lower stock price.

 

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Our common stock price has been and may continue to be extremely volatile.

 

Our common stock has closed as low as $0.006 per share and as high as $.036 per share during the fiscal year preceding the date of this prospectus. We believe this volatility may be caused, in part, by variations in our quarterly operating results, delays in development of our technologies, changes in market valuations of similar companies, and the volume of our stock in the market.

 

Additionally, in recent years the stock market in general, and the OTC Markets and technology stocks in particular, have experienced extreme price and volume fluctuations. In some cases, these fluctuations are unrelated or disproportionate to the operating performance of the underlying company. These market and industry factors may materially and adversely affect our stock price regardless of our operating performance. The historical trading of our common stock is not necessarily an indicator of how it will trade in the future and our trading price as of the date of this prospectus is not necessarily an indicator of what the trading price of our common stock might be in the future.

 

In the past, class action litigation has often been brought against companies following periods of volatility in the market price of those companies’ common stock. If we become involved in this type of litigation in the future it could result in substantial costs and diversion of management attention and resources, which could have a further negative effect on our stock price.

 

Shares of our common stock may never become eligible for trading on Nasdaq or a national securities exchange.

 

We cannot assure that we will ever be listed on the Nasdaq Stock Market or on another national securities exchange. Listing on one of the Nasdaq markets or one of the national securities exchanges is subject to a variety of requirements, including minimum trading price and minimum public “float” requirements. There are also continuing eligibility requirements for companies listed on national securities exchanges. If we are unable to satisfy the initial or continuing eligibility requirements of any such market, then our stock may not be listed or could be delisted. This could result in a lower trading price for our common stock and may limit the ability of our stockholders to sell their shares, which could result in a loss of some or all of their investments.

 

If we fail to file periodic reports with the U.S. Securities and Exchange Commission, our common stock will not be able to be traded on the OTCQB.

 

Although our common stock trades on the OTCQB, a regular trading market for our common stock may not be sustained in the future. OTC Markets limits quotation on the OTCQB to securities of issuers that are current in their reports filed with the Securities and Exchange Commission. If we fail to remain current in the filing of our reports with the Securities and Exchange Commission, our common stock will not be able to be traded on the OTCQB. The OTCQB is an inter-dealer market that provides significantly less liquidity than a national securities exchange or automated quotation system.

 

Because we have no plans to pay dividends on our common stock, stockholders must look solely to appreciation of our common stock to realize a gain on their investments.

 

We do not anticipate paying any dividends on our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the expansion of our business. Our future dividend policy is within the discretion of our board of directors and will depend upon various factors, including our business, financial condition, results of operations, capital requirements, and investment opportunities. Accordingly, stockholders must look solely to appreciation of our common stock to realize a gain on their investment. This appreciation may not occur.

 

Certain provisions of Nevada law and of our corporate charter may inhibit a potential acquisition of our Company, and this could depress our stock price.

 

Nevada corporate law includes provisions that could delay, defer, or prevent a change in control of our company or our management. These provisions could discourage information contests and make it more difficult for our stockholders to elect directors and take other corporate actions. As a result, these provisions could limit the price that investors are willing to pay in the future for shares of our common stock. For example:

 

  (i) without prior stockholder approval, our board of directors has the authority to issue one or more classes of preferred stock with rights senior to those of our common stock and to determine the rights, privileges, and inference of that preferred stock;
  (ii) there is no cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; and
  (iii) stockholders cannot call a special meeting of stockholders.

 

 15 
 

 

Our indemnification of our directors and officers may limit the rights of our stockholders.

 

While our board of directors and officers are generally accountable to our stockholders and us, the liability of our directors and officers to all parties is limited in certain respects under applicable state law and our articles of incorporation and bylaws, as in effect. Further, we have agreed or may agree to indemnify our directors and officers against liabilities not attributable to certain limited circumstances. This limitation of liability and indemnity may limit rights that our stockholders would otherwise have to seek redress against our directors and officers.

 

Additional issuances of stock options and warrants, convertible notes, and stock grants will cause additional substantial dilution to our stockholders.

 

Given our limited cash, liquidity, and revenues, it is likely that in the future, as in the past, we will issue additional warrants, stock grants, and convertible debt to finance our future business operations and acquisitions and strategic relationships. The issuance of additional shares of common stock, the exercise of warrants, and the conversion of debt to stock could cause additional dilution to our stockholders and could have further adverse effects on the market price for our securities or on our ability to obtain future financing. The 2018 increase in our authorized shares from two billion to ten billion increased the magnitude of this risk substantially.

 

The amount of authorized common stock may result in management implementing anti-takeover procedures by issuing new securities.

 

The proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect, for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of our board of directors or contemplating a tender offer or other transaction for the combination of our company with another entity. Although, we have no current plans to issue additional stock for this purpose, management could use the additional shares that are now available or that may be available after a possible further recapitalization to resist or frustrate a third-party transaction. Generally, no stockholder approval would be necessary for the issuance of all or any portion of the additional shares of common stock unless required by law or any rules or regulations to which we are subject.

 

Depending upon the consideration per share for any subsequent issuance of common stock, such issuance could have a dilutive effect on those stockholders who paid a higher consideration per share for their stock. Also, future issuances of common stock will increase the number of outstanding shares, thereby decreasing the percentage ownership—for voting, distributions, and all other purposes—represented by existing shares of common stock. The availability for issuance of the additional shares of common stock may be viewed as having the effect of discouraging an unsolicited attempt by another person or entity to acquire control of us. Although our board has no present intention of doing so, our authorized but unissued common stock could be issued in one or more transactions that would make a takeover of us more difficult or costly and, therefore, less likely. Holders of our common stock do not have any preemptive rights to acquire any additional securities issued by us.

 

Our stockholders may not recoup all or any portion of their investment upon our dissolution.

 

In the event of a liquidation, dissolution, or winding-up of our company, whether voluntary or involuntary, our net remaining proceeds and/or assets, after paying all of our debts and liabilities, will be distributed to the holders of common stock on a pro-rata basis. We cannot assure that we will have available assets to pay to the holders of common stock any amounts upon such a liquidation, dissolution, or winding-up of our company. In this event, our stockholders could lose some or all of their investment.

 

The sale of any additional shares of our common stock to Triton may cause dilution, and the sale of the shares of common stock acquired by Triton, or the perception that such sales may occur, could cause the price of our common stock to fall.

 

On December 29, 2018, we entered into certain agreements with Triton Funds, which agreements were amended April 11, 2019. Under these agreements we have the ability to require Triton to purchase up to $1.0 million of our common stock between the date that the effective registration statement. Up to 100,000,000 shares of our common stock are being offered for resale under the respective prospectus. The shares will be purchased at 85% of the lowest closing price of the common stock in the five consecutive trading days immediately preceding the delivery of a purchase notice to Triton from us. The purchase of shares by Triton is subject to certain limitations, including that Investor cannot purchase any shares that would result in it owning more than 4.9% of our common stock.

 

After Triton has acquired our shares, it may sell all, some, or none of those shares. Therefore, sales to Triton by us could result in substantial dilution to the interests of other holders of our common stock. Additionally, the sale of a substantial number of shares of our common stock to Triton, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish. In addition, the per-share purchase price for these shares will be equal to 85% of the lowest closing price of the common stock for the five consecutive trading days immediately preceding our delivery of a purchase notice to Investor. Depending on market liquidity at the time, sales of these shares may cause the trading price of our common stock to fall. To date, Triton has purchased 39,215,648 shares of our common stock for $325,000.

 

As of June 27, 2019 the Company has ceased selling additional shares of our common stock to Triton by mutual agreement between the Company and Triton.

 

 16 
 

 

There is a limited market for our Common Stock, and there may never be an active and sustained market for our common stock and we cannot assure you that the common stock will remain liquid or that it will continue to be listed on a securities exchange.

 

Our Common Stock is subject to quotation on the OTCQB under the trading symbol “INVU”. An investor may find it difficult to obtain accurate quotations as to the market value of the Common Stock and trading of our Common Stock may be extremely sporadic. A more active market for the Common Stock may never develop. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling the Common Stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital.

 

Until our Common Stock is listed on the NASDAQ or another stock exchange, we expect that our Common Stock will continue to be eligible to trade on the OTCQB market where our stockholders may find it more difficult to dispose of shares or obtain accurate quotations as to the market value of our Common Stock. Furthermore, in order to remain subject to quotation on the OTCQB, the trading price of our Common Stock must maintain certain trading levels, which, in not maintained, could result in our Common Stock being relegated to the OTC Pink. In such event, we will have to again qualify and make applications for quotation on the OTCQB, and there can be no assurance that our Common Stock will be accepted for the OTCQB.

 

Our Common stock is subject to the “Penny Stock” rules of the SEC and the trading market in our stock is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment.

 

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

 

That a broker or dealer approve a person’s account for transactions in penny stocks; and
The broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

 

Obtain financial information and investment experience objectives of the person; and
Make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

 

Sets forth the basis on which the broker or dealer made the suitability determination; and
That the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our Common stock and cause a decline in the market value of our stock.

 

Disclosure also must be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

Financial Industry Regulatory Authority, Inc. (“FINRA”) sales practice requirements may limit a shareholder’s ability to buy and sell our common stock.

 

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

 

 17 
 

 

Our common stock may be thinly traded, sale of your holding may take a considerable amount of time.

 

The shares of our Common Stock, from time-to-time, may be thinly-traded on the OTCQB Market, meaning that the number of persons interested in purchasing our Common Stock at or near bid prices at any given time may be relatively small or non-existent. Consequently, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our Common Stock will develop or be sustained, or that current trading levels will be sustained. Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need money or otherwise desire to liquidate your shares.

 

Shares eligible for future sale may adversely affect the market.

 

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to amended Rule 144, non-affiliate stockholders may sell freely after six months subject only to the current public information requirement. Affiliates may sell after six months subject to the Rule 144 volume, manner of sale (for equity securities), current public information and notice requirements. To date, there were 121,345,168 shares reserved underlying outstanding convertible notes, which represent a significant multiple of from 4 to 10 times the number of shares actually subject to conversion under the terms of the outstanding convertible notes. Any substantial sales of our Common Stock pursuant to Rule 144 may have a material adverse effect on the market price of our Common Stock.

 

If we fail to maintain effective internal controls over financial reporting, the price of our common stock may be adversely affected.

 

Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our Common Stock. We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations. In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our Common Stock.

 

Our annual and quarterly results may fluctuate, which may cause substantial fluctuations in our common stock price.

 

Our annual and quarterly operating results may in the future fluctuate significantly depending on factors including the timing of purchase orders, new product releases by us and other companies, gain or loss of significant customers, price discounting of our product, the timing of expenditures, product delivery requirements and economic conditions. Revenues related to our product are required to be recognized upon satisfaction of all applicable revenue recognition criteria. The recognition of revenues from our product is dependent on several factors, including, but not limited to, the terms of any license agreement and the timing of implementation of our products by our customers.

 

Any unfavorable change in these or other factors could have a material adverse effect on our operating results for a particular quarter or year, which may cause downward pressure on our Common stock price. We expect quarterly and annual fluctuations to continue for the foreseeable future.

 

We are subject to compliance with securities law, which exposes us to potential liabilities, including potential rescission rights.

 

We have offered and sold our Common Stock to investors pursuant to certain exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Act”) as well as those of various state securities laws. The basis for relying on such exemptions is factual; that is, the applicability of such exemptions depends upon our conduct and that of those persons contacting prospective investors and making the Offering. We have not received a legal opinion to the effect that any of our prior Offerings were exempt from registration under any federal or state law. Instead, we have relied upon the operative facts as the basis for such exemptions, including information provided by investors themselves.

 

If any prior offering did not qualify for such exemption, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. A comparable situation prevails under state law in those states where the securities may be offered without registration in reliance on the partial preemption from the registration or qualification provisions of such state statutes. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did not in fact qualify for the exemptions upon which it has relied, we may become subject to significant fines and penalties imposed by the SEC and state securities agencies.

 

 18 
 

 

The availability of a large number of authorized but unissued shares of common stock may, upon their issuance, lead to dilution of existing stockholders.

 

We are authorized to issue 10,000,000,000 shares of Common Stock, $0.001 par value per share. To date, there were 3,013,490,408 shares of Common Stock outstanding. Additional shares may be issued upon the conversion of any outstanding convertible notes or convertible notes issued in the future, or otherwise authorized for issuance by our board of directors, from time-to-time, without further stockholder approval. The issuance of large numbers of shares of Common Stock, possibly at below market prices, is likely to result in substantial dilution to the interests of other stockholders. In addition, issuances of large numbers of shares may adversely affect the market price of our Common stock.

 

Our Articles of Incorporation, as amended, authorize 50,000,000 shares of preferred stock, $0.001 par value. The Board of Directors is authorized to provide for the issuance of unissued shares of preferred stock in one or more series, and to fix the number of shares and to determine the rights, preferences and privileges thereof. Accordingly, the board of directors may issue preferred stock which may convert into large numbers of shares of Common Stock and consequently lead to further dilution of other shareholders.

 

As of the date of this prospectus, we had 2,000,000 authorized but unissued shares of Series B Preferred. The Series B Preferred offered hereby will be fully paid and nonassessable. Our Board may, without the approval of holders of the Series B Preferred or our Common Stock, designate additional series of authorized preferred stock ranking junior to or on parity with the Series B Preferred and authorize the issuance of such shares. Designation of preferred stock ranking senior to the Series B Preferred will require approval of the holders of Series B Preferred, as described below in “Voting Rights.”

 

We have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future.

 

We have never declared or paid cash dividends on our Common Stock. We currently plan to retain any earnings to finance the growth of our business rather than to pay cash dividends on our Common Stock. Nevertheless, we are required to pay cash dividends of 13% on our Series B Preferred, based upon the Stated Value of $25 per share. Payments of any cash dividends in the future, other than on our shares of Series B Preferred, will depend on our financial condition, results of operations and capital requirements, as well as other factors deemed relevant by our board of directors.

 

The Nevada Revised Statute contains provisions that could discourage, delay or prevent a change in control of our company, prevent attempts to replace or remove current management and reduce the market price of our stock.

 

Provisions in our articles of incorporation and bylaws may discourage, delay or prevent a merger or acquisition that our stockholders may consider favorable. For example, our certificate of incorporation authorizes our board of directors to issue up to ten million shares of “blank check” preferred stock. As a result, without further stockholder approval, the board of directors has the authority to attach special rights, including voting and dividend rights, to this preferred stock. With these rights, preferred stockholders could make it more difficult for a third party to acquire us.

 

We are also subject to the anti-takeover provisions of the NRS. Depending on the number of residents in the state of Nevada who own our shares, we could be subject to the provisions of Sections 78.378 et seq. of the Nevada Revised Statutes which, unless otherwise provided in the Company’s articles of incorporation or by-laws, restricts the ability of an acquiring person to obtain a controlling interest of 20% or more of our voting shares. Our articles of incorporation and by-laws do not contain any provision which would currently keep the change of control restrictions of Section 78.378 from applying to us.

 

We are subject to the provisions of Sections 78.411 et seq. of the Nevada Revised Statutes. In general, this statute prohibits a publicly held Nevada corporation from engaging in a “combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the combination or the transaction by which the person became an interested stockholder is approved by the corporation’s board of directors before the person becomes an interested stockholder. After the expiration of the three-year period, the corporation may engage in a combination with an interested stockholder under certain circumstances, including if the combination is approved by the board of directors and/or stockholders in a prescribed manner, or if specified requirements are met regarding consideration. The term “combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years did own, 10% or more of the corporation’s voting stock. A Nevada corporation may “opt out” from the application of Section 78.411 et seq. through a provision in its articles of incorporation or by-laws. We have not “opted out” from the application of this section.

 

Our publicly filed reports are subject to review by the SEC, and any significant changes or amendments required as a result of any such review may result in material liability to us and may have a material adverse impact on the trading price of the Company’s common stock.

 

The reports of publicly traded companies are subject to review by the SEC from time to time for the purpose of assisting companies in complying with applicable disclosure requirements, and the SEC is required to undertake a comprehensive review of a company’s reports at least once every three years under the Sarbanes-Oxley Act of 2002. SEC reviews may be initiated at any time. We could be required to modify, amend or reformulate information contained in prior filings as a result of an SEC review. Any modification, amendment or reformulation of information contained in such reports could be significant and result in material liability to us and have a material adverse impact on the trading price of the Company’s Common Stock.

 

 19 
 

 

Use of Proceeds

 

We estimate that the net proceeds to us from the sale of all of the 2 million Units in this Offering will be approximately $45,500,000, based on the public Unit Offering Price of $25 per Unit, after deducting our estimated Offering expenses, including placement agent commissions, of approximately $4,500,000. We will immediately pay the Escrow Agent an amount equal to 39% of the gross proceeds (or $9.75 per Unit), to be held by the Escrow Agent, which amount is equal to the dividends of 13% per annum of $3.25 per share of Series B Preferred, for a period of three years, for the purpose of ensuring a fund will be available to pay investors the dividends of 13% during the first three years from the date of issuance on the shares of Series B Preferred.

 

We plan to use the remaining net proceeds to pay our indebtedness of approximately $2,190,000 as of the date of this Prospectus and any balance will be used for working capital and other general corporate purposes, which may include platform development, general and administrative matters, and capital expenditures. We may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions, or businesses that complement our business. As of the date of this prospectus, we do not have any understandings to acquire any businesses. Because this is a best effort Offering with no minimum, we cannot predict how much money we will ultimately raise. Our plan is to have an initial closing of the Offering after the sale of 200,000 Units, resulting in gross proceeds of $5.0 million, in order to qualify for quotation of our Units, Series B Preferred and Warrants on the OTCQB.

 

We anticipate an approximate allocation of the use of net proceeds assuming we raise 25%, 50%, 75% or 100% of the maximum offering amount as follows:

 

   25%   50%   75%   100%   %(1)(2) 
Dividend Reserves (3 Years)  $4,875,000   $9,750,000   $14,625,000   $19,500,000    39%
Repay existing indebtedness, including interest thereon  $

2,190,000

   $

2,190,000

   $

2,190,000

   $

2,190,000

    5%
Fund working capital and general corporate purposes  $

4,085,000

   $

10,460,000

   $

16,385,000

   $

33,210,000

    56%
Offering Expenses  $100,000   $100,000   $100,000   $100,000    0%
Subtotal – net proceeds  $11,150,000   $22,400,000   $33,650,000   $44,900,000    90%
Total – gross proceeds  $12,500,000   $25,000,000   $37,500,000   $50,000,000    100.00%

 

Other than as discussed above, we have not allocated any specific portion of the net proceeds to any particular purpose, and our management will have broad discretion in the allocation of the net proceeds. Furthermore, the amount and timing of our actual expenditures will depend on numerous factors, including the cash used in or generated by our operations, the level of our expected sales and marketing activities and the attractiveness of any additional acquisitions or investments. Pending these uses, we intend to invest the net proceeds that we receive from this Offering in short-term, investment-grade interest-bearing securities, such as money market accounts, certificates of deposit, commercial paper, and guaranteed obligations of the U.S. government.

 

If in the future we receive proceeds from the exercise of the Warrants, we expect such proceeds will be contributed to working capital and will be used for general corporate purposes.

 

DIVIDEND POLICY

 

We have never declared or paid any cash dividends on our Common Stock or any other shares of capital stock. Except for the 13% dividends payable to the holders of Series B Preferred from the Escrow Account on a monthly basis, equal to $3.25 per share on an annual basis, we currently intend to retain any future earnings and do not expect to pay any dividends on any other securities, including Common Stock for the foreseeable future. Any future determination to declare cash dividends (other than on the Series B Preferred) will be made at the discretion of our Board, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our Board may deem relevant. Further Nevada law limits when we can pay dividends on our securities. Further our continuing losses require us to use funds we receive in financings to meet our working capital needs. See “Description of Offered Securities – Dividends.”

 

 20 
 

 

Capitalization

 

Set forth below is our cash and capitalization as of December 31, 2019:

 

● on an actual basis;

 

● on a pro forma as adjusted basis, reflecting the issuance of 2,000,000 shares of Series B Preferred and 10,000,000 Warrants offered by this prospectus, at $25 per share, assuming net proceeds of approximately $45,500,000 million, after deducting our estimated Offering expenses payable by us.

 

You should read the information in the below table together with our consolidated financial statements and related notes, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each included elsewhere in this prospectus.

 

   As of December 31, 2019 
   Actual   Pro Forma as Adjusted 
         
Cash   263,600    25,763,600 
Restricted cash  $-   $19,500,000 
Total cash  $263,500   $45,263,600 
           
Derivative liability  $383,670     
Total liabilities   17,465,617    17,465,619 
           
Stockholders’ Equity (Deficit):          
Preferred stock, Series B Preferred, par value $0.001 per share; no shares authorized, issued and outstanding, actual; 2,000,000 shares issued and outstanding, pro forma as adjusted;   -    2,000 
Common stock, par value $0.001 per share; 10,000,000,000 shares authorized; actual 3,003,490,408 shares issued and outstanding, as of 12-31-2019   3,003,490    3,003,490 
Additional paid-in capital   24,618,312    69,116,312 
Accumulated deficit   (33,684,432)   (38,684,432)
Total stockholders’ equity (deficit)   (6,059,200)   33,937,370 
Total liabilities and stockholders’ equity (deficit)  $11,406,417    51,402,989 

 

The table above is based on 3,003,490,408 shares of common stock outstanding as of December 31, 2019, and excludes, as of such date:

 

10,043,480 shares of our common stock issuable upon conversion of convertible debt, with a weighted-average exercise price of $0.023 per share;

 

100,000,000 shares of common stock reserved for future issuance under our 2020 Equity Incentive Plan (the “2020 Plan”).

 

 21 
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1 – FINANCIAL STATEMENTS

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   December 31,   March 31, 
   2019   2019 
   (Unaudited)     
ASSETS          
Current assets:          
Cash and cash equivalents  $263,600   $133,644 
Prepaid assets   3,619,317    6,685,970 
Receivables   623,203    724,995 
Short-term advances   145,000    10,000 
Short-term advances - related party   7,500    500 
Other current assets   156,448    142,061 
Total current assets   4,815,068    7,697,170 
           
Fixed assets, net   3,864,341    13,528 
           
Other assets:          
Intangible assets, net   736,051    1,576,685 
Long term license agreement, net   1,869,905    1,983,220 
Operating lease right-of-use asset   112,564    - 
Deposits   8,488    4,500 
Total other assets   2,727,008    3,564,405 
           
Total assets  $11,406,417   $11,275,103 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)          
Current liabilities:          
Accounts payable and accrued liabilities  $2,543,328   $3,008,836 
Payroll liabilities   23,575    888,177 
Customer advance   607,205    265,000 
Deferred revenue   731,578    1,876,727 
Derivative liability   383,670    1,358,901 
Operating lease liability, current   59,064    - 
Other current liabilities   7,576,800    - 
Related party payables, net of discounts   1,646,893    545,489 
Debt, net of discounts   2,181,578    1,977,030 
Total current liabilities   15,753,691    9,920,160 
           
Operating lease liability, long term   59,333    - 
Other long term liabilities, net   1,652,593    - 
Total long term liabilities   1,711,926    - 
           
Total liabilities   17,465,617    9,920,160 
           
Commitments and contingencies   -    - 
           
Stockholders’ equity (deficit):          
Preferred stock, par value: $0.001; 10,000,000 shares authorized, none issued and outstanding as of December 31, 2019 and March 31, 2019   -    - 
Common stock, par value $0.001; 10,000,000,000 shares authorized; 3,003,490,408 and 2,640,161,318 shares issued and outstanding as of December 31, 2019 and March 31, 2019, respectively   3,003,490    2,640,161 
Additional paid in capital   24,618,312    23,758,917 
Accumulated other comprehensive income (loss)   3,430    1,363 
Accumulated deficit   (33,684,432)   (25,096,983)
Total Investview stockholders’ equity (deficit)   (6,059,200)   1,303,458 
Noncontrolling interest   -    51,485 
Total stockholders equity (deficit)   6,059,200

 

   1,353,943 
           
Total liabilities and stockholders’ equity (deficit)  $11,406,417   $11,275,103 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

 22 
 

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME

(Unaudited)

 

   Three Months Ended December 31,   Nine Months Ended December 31, 
   2019   2018   2019   2018 
                 
Revenue:                    
Subscription revenue, net of refunds, incentives, credits, and chargebacks  $4,578,623   $7,003,802   $19,327,091   $20,835,048 
Equipment sales, net of refunds   -    694,954    -    694,954 
Cryptocurrency mining service revenue, net of refunds and amounts paid to supplier   -    34,278    -    1,812,601 
Mining revenue   380,871    -    380,871    - 
Fee revenue   4,117    -    9,486    - 
Total revenue, net   4,963,611    7,733,034    19,717,448    23,342,603 
                     
Operating costs and expenses:                    
Cost of sales and service   560,145    493,591    1,092,643    924,588 
Commissions   1,605,925    5,087,053    10,822,072    17,316,319 
Selling and marketing   575,199    109,265    1,389,666    634,671 
Salary and related   1,721,970    1,059,660    5,433,416    3,075,862 
Professional fees   474,287    284,586    1,130,070    1,355,182 
General and administrative   1,765,381    940,767    4,487,137    2,921,073 
Total operating costs and expenses   6,702,907    7,974,922    24,355,004    26,227,695 
                     
Net loss from operations   (1,739,296)   (241,888)   (4,637,556)   (2,885,092)
                     
Other income (expense):                    
Gain (loss) on debt extinguishment   443,907    -    1,725,384    19,387 
Gain (loss) on fair value of derivative liability   (94,622)   -    504,635    - 
Gain (loss) on bargain purchase   -    -    -    2,005,282 
Gain (loss) on deconsolidation   -    -    53,739    - 
Realized gain (loss) on cryptocurrency   10    (1,091)   (657)   16,363 
Unrealized gain (loss) on cryptocurrency   (16,885)   (116)   8,445    95,810 
Impairment expense   (627,452)   -    (627,452)   - 
Interest expense   (1,427,433)   (206,007)   (3,918,070)   (210,154)
Interest expense, related parties   (367,190)   -    (1,618,284)   (5,000)
Other income (expense)   3,231    (606)   (68,053)   (2,449)
Total other income (expense)   (2,086,434)   (207,820)   (3,940,313)   1,919,239 
                     
Income (loss) before income taxes   (3,825,730)   (449,708)   (8,577,869)   (965,853)
Income tax expense   (2,198)   (2,655)   (9,580)   (44,844)
                     
Net income (loss)   (3,827,928)   (452,363)   (8,587,449)   (1,010,697)
Less: net income (loss) attributable to the noncontrolling interest   -    27,613    -    (5,399)
                     
Net income (loss) attributable to Investview stockholders  $(3,827,928)  $(479,976)  $(8,587,449)  $(1,005,298)
                     
Income (loss) per common share, basic and diluted  $(0.00)  $(0.00)  $(0.00)  $(0.00)
                     
Weighted average number of common shares outstanding, basic and diluted   2,840,281,449    2,213,661,318    2,748,911,300    2,197,588,591 
                     
Other comprehensive income, net of tax:                    
Foreign currency translation adjustments  $22,627   $3,470   $2,067   $7,211 
Total other comprehensive income   22,627    3,470    2,067    7,211 
Comprehensive income (loss)   (3,805,301)   (448,893)   (8,585,382)   (1,003,486)
Less: comprehensive income attributable to the noncontrolling interest   (22,627)   (3,470)   -    (7,211)
Comprehensive income (loss) attributable to Investview shareholders  $(3,827,928)  $(452,363)  $(8,585,382)  $(1,010,697)

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

 23 
 

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

 

               Accumulated             
           Additional   Other             
   Common stock   Paid in   Comprehensive   Accumulated   Noncontrolling     
   Shares   Amount   Capital   Income   Deficit   Interest   Total 
Balance, March 31, 2018   2,169,661,318   $2,169,661   $16,137,945   $(2,483)  $(20,085,947)  $18,544   $(1,762,280)
Foreign currency translation adjustment   -    -    -    3,618    -    -    3,618 
Net income (loss)   -    -    -    -    (1,375,113)   (16,224)   (1,391,337)
Balance, June 30, 2018   2,169,661,318    2,169,661    16,137,945    1,135    (21,461,060)   2,320    (3,149,999)
Common stock issued for acquisition   50,000,000    50,000    1,050,000    -    -    -    1,100,000 
Common stock issued for services and compensation   1,000,000    1,000    9,000    -    -    -    10,000 
Common stock repurchase   (7,000,000)   (7,000)   (84,000)   -    -    -    (91,000)
Foreign currency translation adjustment   -    -    -    123    -    -    123 
Net income (loss)   -    -    -    -    849,791    (16,788)   833,003 
Balance, September 30, 2018   2,213,661,318    2,213,661    17,112,945    1,258    (20,611,269)   (14,468)   (1,297,873)
Foreign currency translation adjustment   -    -    -    3,470    -    -    3,470 
Net income (loss)   -    -    -    -    (479,976)   27,613    (452,363)
Balance, December 31, 2018   2,213,661,318   $2,213,661   $17,112,945   $4,728   $(21,091,245)  $13,145   $(1,746,766)
                                    
Balance, March 31, 2019   2,640,161,318   $2,640,161   $23,758,917   $1,363   $(25,096,983)  $51,485   $1,354,943 
Common stock issued for cash   39,215,648    39,216    285,784    -    -    -    325,000 
Offering costs   -    -    101,387    -    -    -    101,387 
Deconsolidation of Kuvera LATAM   -    -    -    -    -    (51,485)   (51,485)
Foreign currency translation adjustment   -    -    -    (18,975)   -    -    (18,975)
Net income (loss)   -    -    -    -    (3,005,955)   -    (3,005,955)
Balance, June 30, 2019   2,679,376,966    2,679,377    24,146,088    (17,612)   (28,102,938)   -    (1,295,085)
Common stock issued for cash   13,000,000    13,000    312,000    -    -    -    325,000 
Common stock issued for services and compensation   241,000,000    241,000    1,274,915    -    -    -    1,515,915 
Common stock repurchase   (5,150)   (5)   (97)   -    -    -    (102)
Common stock cancelled   (222,500,000)   (222,500)   (3,157,500)   -    -    -    (3,380,000)
Beneficial conversion feature   -    -    1,000,000    -    -    -    1,000,000 
Foreign currency translation adjustment   -    -    -    (1,585)   -    -    (1,585)
Net income (loss)   -    -    -    -    (1,753,566)   -    (1,753,566)
Balance, September 30, 2019   2,710,871,816    2,710,872    23,575,406    (19,197)   (29,856,504)   -    (3,589,423)
Common stock issued for cash   7,000,000    7,000    168,000    -    -    -    175,000 
Common stock issued for services and compensation   285,618,592    285,618    874,906    -    -    -    1,160,524 
Foreign currency translation adjustment   -    -    -    22,627    -    -    22,627 
Net income (loss)   -    -    -    -    (3,827,928)   -    (3,827,928)
Balance, December 31, 2019     3,003,490,408   $  3,003,490   $  24,618,312   $3,430   $  (33,684,432)  $-   $  (6,059,200)

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

 24 
 

 

INVESTVIEW INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Nine Months Ended December 31, 
   2019   2018 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(8,587,449)  $(1,010,697)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
Depreciation   320,528    4,126 
Amortization of debt discount   2,916,917    161,154 
Amortization of long-term license agreement   113,315    113,315 
Amortization of intangible assets   213,182    256,509 
Stock issued for services and compensation   2,676,439    8,333 
Loan fees on new borrowings   841,139    - 
Lease cost, net of repayment   5,833    - 
Impairment   627,452    - 
(Gain) loss on bargain purchase   -    (2,005,282)
(Gain) loss on deconsolidation   (53,739)   - 
(Gain) loss on debt extinguishment   (1,725,384)   (19,387)
(Gain) loss on fair value of derivative liability   (504,635)   - 
Realized (gain) loss on cryptocurrency   657    (16,363)
Unrealized (gain) loss on cryptocurrency   (8,445)   (95,810)
Changes in operating assets and liabilities:          
Receivables   101,792    316,455 
Prepaid assets   (313,347)   (4,762)
Short-term advances   (135,000)   - 
Short-term advances from related parties   (7,000)   36,010 
Other current assets   40,170    585,158 
Deposits   (3,988)   (11,603)
Accounts payable and accrued liabilities   (284,836)   (1,375,229)
Payroll liabilities   (864,602)   - 
Customer advance   342,205    265,000 
Deferred revenue   (1,145,149)   181,255 
Other liabilities   9,229,393    - 
Accrued interest   180,026    26,000 
Accrued interest, related parties   714,999    5,000 
Net cash provided by (used in) operating activities   4,690,473    (2,580,818)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Cash received in acquisition   -    3,740 
Cash paid for fixed assets   (4,171,341)   - 
Net cash provided by (used in) investing activities   (4,171,341)   3,740 
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from related parties   2,164,500    1,480,777 
Repayments for related party payables   (1,754,500)   (996,169)
Proceeds from debt   2,177,452    1,955,000 
Repayments for debt   (3,801,562)   (1,164,396)
Payments for share repurchase   (102)   (91,000)
Proceeds from the sale of stock   825,000    - 
Net cash provided by (used in) financing activities   (389,212)   1,184,212 
           
Effect of exchange rate translation on cash   36    (4,251)
           
Net increase (decrease) in cash and cash equivalents   129,956    (1,397,117)
Cash and cash equivalents-beginning of period   133,644    1,490,686 
Cash and cash equivalents-end of period  $263,600   $93,569 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION          
Cash paid during the period for:          
Interest  $51,000   $- 
Income taxes  $9,580   $44,844 
Non cash investing and financing activities:          
Common stock issued for acquisition  $-   $1,100,000 
Beneficial conversion feature  $1,000,000   $- 
Stock issued for prepaid services  $-   $1,667 
Cancellation of shares  $3,380,000   $- 
Changes in equity for offering costs accrued  $101,387   $- 
Accounts payable reclassified to related party debt  $75,000   $- 
Derivative liability recorded as a debt discount  $365,000   $- 
Recognition of lease liability and ROU asset at lease commencement  $131,244   $- 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

 25 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Organization

 

Investview, Inc. was incorporated on January 30, 1946, under the laws of the state of Utah as the Uintah Mountain Copper Mining Company. In January 2005 the Company changed domicile to Nevada, and changed its name to Voxpath Holding, Inc. In September of 2006 the Company merged The Retirement Solution Inc. through a Share Purchase Agreement into Voxpath Holdings, Inc. and then changed its name to TheRetirementSolution.Com, Inc. In October 2008 the Company changed its name to Global Investor Services, Inc., before changing its name to Investview, Inc., on March 27, 2012.

 

On March 31, 2017, we entered into a Contribution Agreement with the members of Wealth Generators, LLC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of our common stock. The closing of the Contribution Agreement was effective April 1, 2017, and Wealth Generators became our wholly owned subsidiary and the former members of Wealth Generators became our stockholders and control the majority of our outstanding common stock.

 

On June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former members of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth Generators and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption of $419,139 in pre-merger liabilities.

 

On February 28, 2018, we filed a name change for Wealth Generators, LLC to Kuvera, LLC (“Kuvera”) and on May 7, 2018 we established WealthGen Global, LLC as a Utah limited liability company and a wholly owned subsidiary of Investview, Inc.

 

On July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock.

 

On November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European Union.

 

On December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities Trading Advisor, Commodity Pool Operator, and approved for over the counter FOREX advisory services.

 

On January 17, 2019 we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SafeTek, LLC, a Utah Limited Liability Company.

 

Effective July 22, 2019 we renamed our non-operating wholly owned subsidiary Razor Data, LLC to APEX Tek, LLC, a Utah Limited Liability Company.

 

Nature of Business

 

Investview owns a number of companies that each operate independently but are accretive to one another. Investview is establishing a portfolio of wholly owned subsidiaries delivering leading edge technologies, services and research, dedicated primarily to the individual consumer. Following is a description of each of our companies.

 

Kuvera, LLC provides research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research, trade alerts, and live trading rooms that include instruction in equities, options, FOREX, ETFs, binary options, crowdfunding and cryptocurrency sector education. In addition to trading tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product subscription includes a core set of trading tools/research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. Different packages are available through a monthly subscription that can be cancelled at any time at the discretion of the customer. A unique component of the product marketing plan is the distribution method whereby all subscriptions are sold via current participating customers who choose to distribute and sell the services by participating in the bonus plan. The bonus plan participation is purely optional but enables individuals to create an additional income stream to further support their personal financial goals and objectives.

 

 26 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

Kuvera France S.A.S. is our entity in France that will distribute Kuvera products and services throughout the European Union.

 

S.A.F.E. Management, LLC is a Registered Investment Adviser and Commodity Trading Adviser that has been established to deliver automated trading strategies to individuals who find they lack the time to trade for themselves.

 

United League, LLC owns a number of proprietary technologies including FIREFAN a social app for sports enthusiasts. Technologies created to support any of the Investview companies are held under the United League structure.

 

United Games, LLC is the distribution network for United League technologies. Since the acquisition of United Games in July of 2018, we are working to combine the distributors of Kuvera and United Games. This is an on-going process that is not yet complete.

 

SAFETek, LLC (formerly WealthGen Global, LLC) is a new addition that we are currently establishing for expansion plans in the high-speed processing and cloud computing environment.

 

Apex Tek, LLC (formerly Razor Data, LLC) is the sales and distribution company for APEX packages and technology. It offers a unique passive income model for those interested in earning through the purchase and leaseback of high-speed specialized data processing equipment. This model has drawn considerable institutional interest.

 

Investment Tools & Training, LLC currently has no operations or activities.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the nine months ended December 31, 2019, are not necessarily indicative of the operating results that may be expected for the year ending March 31, 2020. These unaudited condensed consolidated financial statements should be read in conjunction with the March 31, 2019 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended March 31, 2019.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC, Investment Tools & Training, LLC, Apex Tek, LLC (formerly Razor Data, LLC), S.A.F.E. Management, LLC, SafeTek, LLC (formerly WealthGen Global, LLC), United Games, LLC, United League, LLC, and Kuvera France S.A.S. Through March 31, 2019 we had determined that one affiliated entity, Kuvera LATAM S.A.S., which we previously conducted business with, was a variable interest entity and we were the primary beneficiary of the entity’s activities, which are similar to those of Kuvera, LLC. As a result, through March 31, 2019 we had consolidated the accounts of this variable interest entity into the accompanying consolidated financial statements. Further, because the Company did not have any ownership interest in this variable interest entity, the Company had allocated the contributed capital in the variable interest entity as a component of noncontrolling interest. As of April 1, 2019 Kuvera LATAM S.A.S. had no operations and ceased to exist, therefore, as of that date, no consolidation of the entity is necessary and we recorded a gain on deconsolidation of $53,739 to eliminate the intercompany account with Kuvera LATAM S.A.S. All intercompany transactions and balances have been eliminated in consolidation.

 

Financial Statement Reclassification

 

Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.

 

 27 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

Use of Estimates

 

The preparation of these unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Foreign Exchange

 

We have consolidated the accounts of Kuvera France S.A.S. into our consolidated financial statements and have consolidated the accounts of Kuvera LATAM S.A.S. through March 31, 2019. The operations of Kuvera France S.A.S. are conducted in France and its functional currency is the Euro. The operations of Kuvera LATAM S.A.S. were conducted in Colombia and its functional currency is the Colombian Peso.

 

The financial statements of Kuvera France S.A.S. and Kuvera LATAM S.A.S. are prepared using their respective functional currency and have been translated into U.S. dollars (“USD”). Assets and liabilities are translated into USD at the applicable exchange rates at period-end. Stockholders’ equity is translated using historical exchange rates. Revenue and expenses are translated at the average exchange rates for the period. Any translation adjustments are included as foreign currency translation adjustments in accumulated other comprehensive income in our stockholders’ equity (deficit).

 

The following rates were used to translate the accounts of Kuvera France S.A.S. and Kuvera LATAM S.A.S. into USD at the following balance sheet dates.

 

   December 31, 2019   March 31, 2019 
Euro to USD   1.12165    1.12200 
Colombian Peso to USD   n/a    0.00031 

 

The following rates were used to translate the accounts of Kuvera France S.A.S. and Kuvera LATAM S.A.S. into USD for the following operating periods.

 

   Nine Months Ended December 31, 
   2019   2018 
Euro to USD   1.11443    n/a 
Colombian Peso to USD   n/a    0.00034 

 

Cryptocurrencies

 

We hold cryptocurrency-denominated assets (“cryptocurrencies”) and include them in our consolidated balance sheet as other current assets. We record cryptocurrencies at fair market value and recognize the change in the fair value of our cryptocurrencies as an unrealized gain or loss in the consolidated statement of operations. As of December 31, 2019 and March 31, 2019 the fair value of our cryptocurrencies was $156,448 and $142,061, respectively. During the nine months ended December 31, 2019 we recorded $(657) and $8,445 as a total realized and unrealized gain (loss) on cryptocurrency, respectively. During the nine months ended December 31, 2018 we recorded $16,363 and $95,810 as a total realized and unrealized gain (loss) on cryptocurrency, respectively. During the three months ended December 31, 2019 we recorded $10 and $(16,885) as a total realized and unrealized gain (loss) on cryptocurrency, respectively. During the three months ended December 31, 2018 we recorded $10 and $(16,885) as a total realized and unrealized gain (loss) on cryptocurrency, respectively.

 

Fixed Assets

 

Fixed assets are stated at cost and depreciated using the straight-line method over their estimated useful lives. When retired or otherwise disposed, the carrying value and accumulated depreciation of the fixed asset is removed from its respective accounts and the net difference less any amount realized from disposition is reflected in earnings. Expenditures for maintenance and repairs which do not extend the useful lives of the related assets are expensed as incurred.

 

 28 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

As of December 31, 2019 fixed assets were made up of the following:

 

   Estimated     
   Useful     
   Life     
   (years)   Value 
Furniture, fixtures, and equipment   10   $11,372 
Computer equipment   3    19,533 
Data processing equipment   3    4,166,470 
         4,197,375 
Accumulated amortization as of December 31, 2019        (333,034)
Net book value, December 31, 2019       $3,864,341 

 

Total depreciation expense for the nine months ended December 31, 2019 and 2018, was $320,528 and $4,126, respectively.

 

Long-Lived Assets – Intangible Assets & License Agreement

 

We account for our intangible assets and long-term license agreement in accordance with ASC Subtopic 350-30, General Intangibles Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-30 requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Further, ASC Subtopic 350-30 requires an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.

 

In June of 2017 we issued 80,000,000 shares of common stock with a value of $2,256,000 for a 15-year license agreement. Annual amortization over the 15-year life is expected to be $150,400 per year. Amortization recognized for the nine months ended December 31, 2019 and 2018 was $113,315 and $113,315, respectively, and the long-term license agreement was recorded at a net value of $1,869,905 and $1,983,220 as of December 31, 2019 and March 31, 2019, respectively.

 

In June of 2018 we purchased United Games, LLC and United League, LLC and recorded the transaction as a business combination. Intangible assets acquired in the business combination were recorded at fair value on the date of acquisition and are being amortized on a straight-line method over their estimated useful lives. During the nine months ended December 31, 2019 we impaired the value of the customer contracts/relationships originally acquired.

 

   Estimated     
   Useful     
   Life     
   (years)   Value 
FireFan mobile application   4   $331,000 
Back office software   10    408,000 
Tradename/trademark - FireFan   5    248,000 
Tradename/trademark - United Games   0.45    4,000 
Customer contracts/relationships   n/a    - 
         991,000 
Accumulated amortization as of December 31, 2019        (254,949)
Net book value, December 31, 2019       $736,051 

 

 29 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

Amortization expense is expected to be as follows:

 

Remainder of 2020  $43,169 
Fiscal year ending March 31, 2021   173,150 
Fiscal year ending March 31, 2022   173,150 
Fiscal year ending March 31, 2023   115,338 
Fiscal year ending March 31, 2024   55,748 
Fiscal year ending March 31, 2025 and beyond   175,496 
   $736,051 

 

Impairment of Long-Lived Assets

 

We have adopted ASC Subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or when the historical cost carrying value of an asset may no longer be appropriate. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.

 

The Company evaluates the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. During the nine months ended December 31, 2019 and 2018 impairment of $627,452 and $0 was recognized, respectively.

 

Fair Value of Financial Instruments

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on our principal or, in the absence of a principal, most advantageous market for the specific asset or liability.

 

U.S. generally accepted accounting principles provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

 

  Level 1:   Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.
       
  Level 2:   Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

 

  - quoted prices for similar assets or liabilities in active markets;
  - quoted prices for identical or similar assets or liabilities in markets that are not active;
  - inputs other than quoted prices that are observable for the asset or liability; and
  - inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

  Level 3:   Inputs that are unobservable and reflect management’s own assumptions about the inputs market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows).

 

Our financial instruments consist of cash, accounts receivable, accounts payable, and debt. We have determined that the book value of our outstanding financial instruments as of December 31, 2019 and March 31, 2019, approximates the fair value due to their short-term nature.

 

Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of December 31, 2019:

 

   Level 1   Level 2   Level 3   Total 
Cryptocurrencies  $156,448   $-   $-   $156,448 
Total Assets  $156,448   $-   $-   $156,448 
                     
Derivative liability  $-   $-   $383,670   $383,670 
Total Liabilities  $-   $-   $383,670   $383,670 

 

 30 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2019:

 

   Level 1   Level 2   Level 3   Total 
Cryptocurrencies  $142,061   $-   $-   $142,061 
Total Assets  $142,061   $-   $-   $142,061 
                     
Derivative liability  $-   $-   $1,358,901   $1,358,901 
Total Liabilities  $-   $-   $1,358,901   $1,358,901 

 

Sale and Leaseback

 

Through our wholly-owned subsidiary, APEX Tex, LLC, we sell high powered data processing equipment (“APEX”) to our customers and they lease the equipment back to SAFETek, LLC, another of our wholly-owned subsidiaries. We account for these transactions under ASC 842-40 where the leaseback has been deemed a sales-type lease due to the lease term generally covering the entire economic life of the equipment and our likelihood to purchase the asset at the end of the lease term. In accordance with ASC 842-40 we have recorded the data processing equipment as a fixed asset on our balance sheet and we have accounted for the amounts received for the equipment as a financial liability, in other liabilities on our balance sheet. Further, we will recognize interest on the financial liability over the term of the lease to ensure the financial liability equates to the total amounts to be paid over the life of the lease.

 

During the nine months ended December 31, 2019 we had the following activity related to our sale and leaseback transactions:

 

Proceeds from sales of APEX  $9,693,141 
Interest recognized on financial liability   877,352 
Payments made for leased equipment   (1,341,100)
Total financial liability   9,229,393 
Other current liabilities [1]   (7,576,800)
Other long-term liabilities  $1,652,593 

 

[1] Represents lease payments to be made in the next 12 months

 

As of December 31, 2019, we have received proceeds of $607,205 in additional deposits for APEX sales, which has been recorded in the customer advance amount shown on our balance sheet.

 

Revenue Recognition

 

Subscription Revenue

 

The majority of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed subscription period, therefore we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial period to subscription customers, during which a full refund can be requested if a customer does not like the product. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks.

 

 31 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

Equipment Sales

 

We generate revenue from the sale of high-speed computer processing equipment that is used for any of the following intense processing activities: protein folding, CGI rendering, Game Streaming, Machine & Deep Learning, Mining, Independent Financial Verification, and general high-speed computing. We recognize equipment sales revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver an equipment package to our customers which includes hardware, software, and firmware and is drop-shipped to a hosting data center. We receive payment at the time of purchase and recognize revenue when the equipment package is delivered and ready for maintenance and hosting, which our customers arrange for, and obtain, from a separate third party that provides such services.

 

Cryptocurrency Mining Service Revenue

 

We generate revenue from the sale of cryptocurrency mining services to our customers through an arrangement with a third-party supplier. We recognize cryptocurrency mining service revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to arrange for the third-party to provide mining services to our customers and payment is received at the time of purchase, therefore revenue is recognized upon receipt of payment. We recognize revenue in the amount of the fee to which we are entitled to as an agent, or the amount of consideration that we retain after paying the third-party the consideration received in exchange for the services the third-party is to provide.

 

Mining Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, we lease equipment under a sales-type lease and use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of our mining activities.

 

Fee Revenue

 

We generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we receive payment for such advisory fees in the month following recognition.

 

Revenue generated for the nine months ended December 31, 2019 is as follows:

 

  

Subscription

Revenue

   Equipment Sales  

Cryptocurrency

Mining Service

Revenue

   Mining Revenue   Fee Revenue   Total 
Gross billings/receipts  $21,214,747   $-   $-   $380,871   $9,486   $21,605,104 
Refunds, incentives, credits, and chargebacks   (1,887,656)   -    -    -    -    (1,887,656)
Amounts paid to supplier   -    -    -    -    -    - 
Net revenue  $19,327,091   $-   $-   $380,871   $9,486   $19,717,448 

 

Revenue generated for the nine months ended December 31, 2018 is as follows:

 

  

Subscription

Revenue

   Equipment Sales   Cryptocurrency Mining Service Revenue   Mining Revenue   Fee Revenue   Total 
Gross billings/receipts  $21,882,005   $698,954   $5,690,380   $-   $-   $28,271,389 
Refunds, incentives, credits, and chargebacks   (1,047,007)   (4,000)   (6,501)   -    -    (1,057,508)
Amounts paid to supplier   -    -    (3,871,278)   -    -    (3,871,278 
Net revenue  $20,835,048   $694,954   $1,812,601   $-   $-   $23,342,603 

 

 32 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

Revenue generated for the three months ended December 31, 2019 is as follows:

 

  

Subscription

Revenue

   Equipment Sales   Cryptocurrency Mining Service Revenue   Mining Revenue   Fee Revenue   Total 
Gross billings/receipts  $5,096,886   $-   $-   $380,871   $4,117   $5,481,874 
Refunds, incentives, credits, and chargebacks   (518,263)   -    -    -    -    (518,263)
Amounts paid to supplier   -    -    -    -    -    - 
Net revenue  $4,578,623   $-   $-   $380,871   $4,117   $4,963,611 

 

Revenue generated for the three months ended December 31, 2018 is as follows:

 

  

Subscription

Revenue

   Equipment Sales   Cryptocurrency Mining Service Revenue   Mining Revenue   Fee Revenue   Total 
Gross billings/receipts  $7,204,415   $698,954   $40,779   $-   $-   $7,944,148 
Refunds, incentives, credits, and chargebacks   (200,613)   (4,000)   (6,501)   -    -    (211,114)
Amounts paid to supplier   -    -    -    -    -    - 
Net revenue  $7,003,802   $694,954   $34,278   $-   $-   $7,773,034 

 

Net Income (Loss) per Share

 

We follow ASC subtopic 260-10, Earnings per Share (“ASC 260-10”), which specifies the computation, presentation, and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Convertible debt, stock options, and warrants have been excluded as common stock equivalents in the diluted loss per share because their effect is anti-dilutive on the computation.

 

Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:

  

   December 31, 2019   December 31, 2018 
Options to purchase common stock   -    35,000 
Warrants to purchase common stock   125,000    6,052,497 
Notes convertible into common stock   11,080,447    - 
Totals   11,205,447    6,087,497 

 

Lease Obligation

 

We determine if an arrangement is a lease at inception. Operating leases are included in the operating lease right-of-use asset account, the operating lease liability, current account, and the operating lease liability, long term account in our balance sheet. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

 

Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For leases in which the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have elected to not apply the recognition requirements of ASC 842 to short-term leases (leases with terms of twelve months or less). Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term. We have elected the practical expedient and will not separate non-lease components from lease components and will instead account for each separate lease component and non-lease component associated with the lease components as a single lease component.

 

 33 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

 

There are no recently issued accounting pronouncements that the Company has not yet adopted that they believe are applicable or would have a material impact on the financial statements of the Company.

 

NOTE 4 – GOING CONCERN AND LIQUIDITY

 

Our financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have incurred significant recurring losses, which have resulted in an accumulated deficit of $33,684,432 as of December 31, 2019, along with a net loss of $8,587,449 for the nine months ended December 31, 2019. Additionally, as of December 31, 2019, we had cash of $263,600 and a working capital deficit of $10,938,623. These factors raise substantial doubt about our ability to continue as a going concern.

 

Historically we have relied on increasing revenues and new debt and equity financing to pay for operational expenses and debt as it came due. During the nine months ended December 31, 2019, we raised $2,177,452 in cash proceeds from new debt arrangements, raised $2,164,500 in cash proceeds from related parties, and received $825,000 from the sale of our common stock. Additionally, net cash provided by operations was $4,690,473 for the nine months ended December 31, 2019.

 

Since our acquisition of Wealth Generators in April of 2017 we have implemented a number of initiatives and we are beginning to see the positive impact of these actions. First, our largest subsidiary, Kuvera, has a bonus plan structure for distributors of our services which consistently paid out beyond our maximum threshold. Adjustments to this bonus plan have been made over the last 12 months. This resulted in a gradual reduction in bonus payouts which reduced our losses. Second, we expanded the objectives of Investview through the acquisition and creation of additional subsidiaries to increase our sources of income and creating business activities in new sectors which includes:

 

  Fully licensing SAFE Management LLC as a Registered Investment Advisor and Commodities Trading Advisor. This was done so SAFE Management could offer fully managed trading services to individuals who lacked the time to trade for themselves and provide reasonable advisory fees and minimum investment amounts to service individuals who do not meet the requirements of Qualified Investors.
     
  We acquired the assets of United Games LLC and United League LLC which provided us highly experienced management, programmers, marketing and compliance personnel along with key technology components such as a fully coded back office and trademarked FIREFAN app. We are still in the process of adapting their technology to Kuvera operations and working on various distribution plans for FIREFAN.
     
  We changed the name of our subsidiary WealthGen Global, which was an unused entity, to SAFETek LLC in preparation for our entry into the high-performance computing space to meet the needs of 4IR (Fourth Industrial Revolution) business needs which includes mining, blockchain technologies, gaming, artificial intelligence and 3-Dimensional rendering. This will enable us to provide HPC services to small, medium and startup entities who require specialized high-speed processing but cannot afford the infrastructure. By leasing our processing to these companies, we will aid these entities in bringing their products, inventions, improvements to market.
     
  We have designed a program known as APEX which enables individuals to purchase highly customized data processing equipment which SAFETek will lease from the purchasers for a fixed period of time at a fixed monthly lease payment. This enables individuals to participate in emerging growth without experiencing the volatility and potential loss experienced in the sector.
     
  We have renamed our subsidiary Razor Data LLC to APEX Tek LLC. APEX Tek will be solely responsible for the sales and marketing of the APEX Package.

 

These companies provide Investview a stake in 4IR, HPC, app development, fintech, blockchain and personal money management sectors. Each of these are areas that are targeted for significant growth spurred by innovations through technology.

 

While our liabilities are larger than our assets it is important to note that we seek to keep operating expenses low. The assets we have acquired and will continue to seek out are those of technology, mobile apps, and human resources. These assets are not easily defined on our balance sheet but represent our ability to carry out our objectives which we believe will ultimately generating positive cash flow, reduced debt and then profitability.

 

 34 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

Further, while we have reported reoccurring losses and have an operating capital deficiency, we have been able to establish multiple companies to create various revenue streams as we move forward. Our largest challenge is operational cash flow as lending arrangements continue to be expensive causing us to deploy incoming cash to prior debt. We continue to seek short term capital in arrangements that are partnership-based with elements of debt and equity combined. Additionally, our immediate focus is the continued reduction in losses by controlling expenses, increasing revenue, and generating additional revenue streams.

 

Accordingly, the accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

 

NOTE 5 – RELATED-PARTY TRANSACTIONS

 

Our related-party payables consisted of the following:

 

   December 31, 2019   March 31, 2019 
Short-term advances [1]  $668,608   $440,489 
Short-term Promissory Note entered into on 8/17/18 [2]   -    105,000 
Convertible Promissory Note entered into on 7/23/19 [3]   903,285    - 
Accounts payable – related party [4]   75,000    - 
   $1,646,893   $545,489 

 

 

[1]We periodically receive advances for operating funds from our current majority shareholders and other related parties, including entities that are owned, controlled, or influenced by our owners or management. These advances are due on demand and are unsecured. During the nine months ended December 31, 2019, we received $1,164,500 in cash proceeds from advances, incurred $714,999 in interest expense on the advances, and repaid related parties $1,649,500. Also during the nine months ended December 31, 2019 we settled $1,880 of amounts that were recorded as due prior to March 31, 2018.
  
[2]A member of the senior management team advanced funds of $100,000 on August 17, 2018, under a short-term promissory note due to be repaid on August 31, 2018. On August 31, 2018 the note was amended to be due on demand or, in absence of a demand, due on August 31, 2019. The note had a fixed interest payment of $5,000 which was recorded as interest expense in the statement of operations during the year ended March 31, 2019. During the nine months ended December 31, 2019 we made repayments of $105,000 on the note.
  
[3]We entered into a $3,600,000 convertible promissory note with a member of the senior management team on July 23, 2019. We received proceeds of $1,000,000 from the note, including $900,000 in cash and $100,000 which offset amounts owing to the lender. In accordance with the terms of the note we are required to repay a monthly minimum payment of $50,000 beginning January of 2020 through June of 2020 and a monthly minimum payment of $100,000 beginning July of 2020 until the total principal amount has been repaid. The lender has the right to convert up to $2,600,000 of the outstanding and unpaid principal amount into shares of our common stock at a conversion price of $0.005 per share, subject to adjustment. During the nine months ended December 31, 2019 we recorded a beneficial conversion feature of $1,000,000 as a debt discount (see Note 8). Additionally, we recorded $2,600,000 as a debt discount, representing the difference between the face value of the note and the proceeds received. During the nine months ended December 31, 2019 we amortized $903,285 of the debt discount into interest expense.
  
[4]During the nine months ended December 31, 2019 we entered into an employment agreement with Jayme McWidener as our Chief Financial Officer. At the date we entered into the employment agreement we owed her firm, Mac Accounting Group, LLP, $75,000, which was reclassified as a related party accounts payable balance on our balance sheet.

 

 35 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

NOTE 6 – DEBT

 

Our debt consisted of the following:

 

   December 31, 2019   March 31, 2019 
Short-term advance received on 8/31/18 [1]  $65,000   $75,000 
Secured merchant agreement for future receivables entered into on 2/14/19 [2]   -    641,687 
Secured merchant agreement for future receivables entered into on 2/14/19 [3]   -    468,790 
Secured merchant agreements for future receivables entered into on 2/14/19 [4]   -    597,060 
Promissory note entered into on 1/16/19 [5]   -    60,000 
Secured merchant agreements for future receivables entered into on 3/28/19 [6]   -    25,650 
Convertible promissory note entered into on 1/11/19 [7]   -    26,600 
Convertible promissory note entered into on 2/6/19 [8]   -    76,686 
Convertible promissory note entered into on 3/14/19 [9]   -    5,557 
Secured merchant agreement for future receivables entered into on 8/16/19 and refinanced on 12/10/19 [10]   1,594,423    - 
Secured merchant agreement for future receivables entered into on 8/16/19 [11]   454,378    - 
Convertible promissory note entered into on 8/30/19 [12]   31,948    - 
Convertible promissory note entered into on 9/11/19 [13]   35,829    - 
   $2,181,578   $1,977,030 

 

 

[1]In August 2018, we received a $75,000 short-term advance. The advance is due on demand, has no interest rate, and is unsecured. During the nine months ended December 31, 2019 we made payments of $10,000

 

[2]During September 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On September 28, 2018, we received proceeds from this arrangement of $570,000. In accordance with the terms of the agreement, we were required to repay $839,400 by making ACH payments in the amount of 10% of our daily cash receipts. Accordingly, we recorded $269,400 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $233,501 of amounts owed to a new agreement. However, prior to the terminating the September agreement, we made payments of $605,899 and amortized $269,400 into interest expense.

 

During January 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On January 11, 2019, we received proceeds from this arrangement of $349,851. In accordance with the terms of the agreement, we were required to repay $489,650 by making daily ACH payments of $1,000 for the first 30 days following the date of the agreement and daily ACH payments of $2,999 thereafter. Accordingly, we recorded $139,799 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $449,657 of amounts owed to a new agreement. However, prior to the terminating the January agreement, we made payments of $39,993 and amortized $139,799 into interest expense.

 

During February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On February 15, 2019, we received proceeds from this arrangement of $73,801 after paying off $233,501 from a September 2018 agreement (see above) and $449,657 from a January 2019 agreement (see above). In accordance with the terms of the agreement, we were required to repay $909,350 by making daily ACH payments of $5,049. Accordingly, we recorded $152,391 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $141,372 and amortized $26,100 into interest expense.

 

Effective August 16, 2019 this debt was refinanced and the outstanding balance of $316,093 was rolled into a new debt arrangement, see notation [10] below. During the nine months ended December 31, 2019, prior to the refinance, we repaid $451,886 and amortized $126,292 into interest expense.

 

[3]During December 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On December 17, 2018, we received proceeds from this arrangement of $380,000. In accordance with the terms of the agreement, we were required to repay $559,600 by making daily ACH payments of $3,000. Accordingly, we recorded $179,600 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $421,600 of amounts owed to a new agreement. However, prior to the terminating the December agreement, we made payments of $138,000 and amortized $179,600 into interest expense.

 

 36 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

During February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On February 15, 2019, we received proceeds from this arrangement of $126,932 after paying off $421,600 from a December 2018 agreement (see above). In accordance with the terms of the agreement, we are required to repay $840,000 by making daily ACH payments of $4,649. Accordingly, we recorded $291,468 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $129,388 and amortized $49,646 into interest expense.

 

Effective August 16, 2019 this debt was refinanced and the outstanding balance of $297,033 was rolled into a new debt arrangement, see notation [10] below. During the nine months ended December 31, 2019, prior to the refinance, we repaid $413,580 and amortized $241,823 into interest expense.

 

[4]During October 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. During October 2018, we received proceeds from this arrangement of $77,260. In accordance with the terms of the agreement, we were required to repay $699,500 by making daily ACH payments of $4,372. Accordingly, we recorded $224,500 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $327,880 of amounts owed to a new agreement. However, prior to the terminating the October agreement, we made payments of $371,620 and amortized $224,500 into interest expense.

 

During February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On February 15, 2019, we received proceeds from this arrangement of $126,932 after paying off $327,880 from an October 2018 agreement (see above). In accordance with the terms of the agreement, we are required to repay $629,550 by making daily ACH payments of $3,498. Accordingly, we recorded $224,410 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. Also during February 2019, we entered into a second Secured Merchant Agreement with this same entity, receiving proceeds of $288,000. In accordance with the terms of the agreement, we are required to repay $419,700 by making daily ACH payments of $2,332. Accordingly, we recorded $131,700 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $157,410 on these two agreements and amortized $61,330 into interest expense.

 

Effective August 16, 2019 this debt was refinanced and the outstanding balance of $382,000 was rolled into a new debt arrangement, see notation [11] below. During the nine months ended December 31, 2019, prior to the refinance, we repaid $509,840 and amortized $294,780 into interest expense.

 

[5]In January 2019, we received funds of $631,617 and repaid $511,617 in a series of transactions representing short-term advances. On January 16, 2019, we entered into a short-term promissory note for the resulting $120,000 owed as a result of the transactions. The note had a zero percent interest rate and was due within the shorter of three months or the receipt of cash from a $1 million financing arrangement. During the nine months ended December 31, 2019, we repaid $60,000 of the amount due under the note.

 

[6]During March 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On March 29, 2019, we received proceeds from this arrangement of $28,500. In accordance with the terms of the agreement, we were required to repay $45,000 by making daily ACH payments of $4,500. Accordingly, we recorded $16,500 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $4,500 and amortized $1,650 into interest expense. During the nine months ended December 31, 2019, we repaid $40,500 and amortized $14,850 into interest expense.

 

[7]In January 2019, we entered into a Convertible Promissory Note and received proceeds of $135,000 after incurring loan fees of $3,000. The note incurred interest at 12% per annum and had a maturity date of April 11, 2020. The Convertible Promissory Note had a variable conversion rate that was 65% of the lowest closing price during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see Note 7). At inception, we recorded a debt discount of $138,000 and captured loan fees, recorded as interest expense, of $450,005. During the year ended March 31, 2019, we recorded amortization of the debt discount of $23,152 into interest expense and recorded additional interest expense on the note of $3,448. During the nine months ended December 31, 2019, we amortized $114,848 into interest expense, recorded additional interest expense on the note of $40,977 (inclusive of a prepayment penalty), and paid off the note, accrued interest, and prepayment penalties for $182,425.

 

[8]In February 2019, we entered into a Convertible Promissory Note and received proceeds of $240,000. The note was issued with a $30,000 original issue discount and loan fees of $3,000, incurred interest at 12% per annum, and had a maturity date of August 6, 2019. In accordance with the terms of the note, we issued 22,500,000 shares of common stock (the “Returnable Shares”) to the note holder as a commitment fee, provided, however, the Returnable Shares must be returned to us if the note is fully repaid and satisfied prior to the date which is 180 days following the issue date. The Convertible Promissory Note had a variable conversion rate that is 65% of the lowest trading price during the previous 20-trading-day period, subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see Note 7). We allocated the proceeds of the note to the common stock issued and to the fair value of the note, taking into consideration the fair value of the conversion feature. As a result, the common stock was valued at $69,871, we recorded a debt discount of $270,000, and captured loan fees, recorded as interest expense, of $120,128. During the year ended March 31, 2019, we recorded amortization of the debt discount of $72,514 into interest expense and recorded additional interest expense on the note of $4,172. During the nine months ended December 31, 2019, we amortized $197,486 into interest expense, recorded additional interest expense on the note of $11,136, and paid off the note and accrued interest for $285,308. In accordance with the terms of the agreement the 22,500,000 Returnable Shares were returned and cancelled (see Note 8).

 

 37 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

[9]In March 2019, we entered into a Convertible Promissory Note and received proceeds of $135,000 after incurring loan fees of $3,000. The note incurred interest at 12% per annum and had a maturity date of June 14, 2020. The Convertible Promissory Note had a variable conversion rate that was 65% of the average of the two lowest closing prices during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see Note 7). At inception, we recorded a debt discount of $138,000 and captured loan fees, recorded as interest expense, of $64,492. During the year ended March 31, 2019, we recorded amortization of the debt discount of $4,831 into interest expense and recorded additional interest expense on the note of $726. During the nine months ended December 31, 2019, we amortized $133,168 into interest expense, recorded additional interest expense on the note of $43,983 (inclusive of a prepayment penalty), and paid off the note, accrued interest, and prepayment penalties for $182,708.

 

[10]During August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On August 15, 2019, we received proceeds from this arrangement of $339,270 after paying off $316,093 from a February 2018 agreement (see notation [2] above) and $297,033 from a second February 2019 agreement (see notation [3] above). In accordance with the terms of the agreement, we were required to repay $1,399,000 by making daily ACH payments of $6,823. Accordingly, we recorded $446,604 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid.

 

Effective December 10, 2019 this debt was refinanced and the outstanding balance of $839,514 was rolled into a new Secured Merchant Agreement for future receivables. During the nine months ended December 31, 2019, prior to the refinance, we repaid $559,486 and amortized $446,605 into interest expense related to the August 2019 arrangement. As a result of the refinancing arrangement we received proceeds of $854,801. In accordance with the terms of the agreement, we were required to repay $2,448,250 by making daily ACH payments of $10,999. Accordingly, we recorded $753,935 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the nine months ended December 31, 2019, after the refinance, we repaid $153,986 and amortized $54,094 into interest expense related to the new December 2019 arrangement.

 

[11]During August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. In August 2019, we received proceeds from this arrangement of $418,381 after paying off $382,000 from a October 2018 agreement (see notation [4] above). In accordance with the terms of the agreement, we were required to repay $1,189,150 by making daily ACH payments of $5,801. Accordingly, we recorded $388,769 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the nine months ended December 31, 2019, we repaid $533,750 and amortized $187,747 into interest expense.

 

[12]In August 2019, we entered into a Convertible Promissory Note and received proceeds of $100,000 after incurring loan fees of $3,000. The note incurs interest at 12% per annum and has a maturity date of November 28, 2020. The Convertible Promissory Note has a variable conversion rate that is 65% of the average of the two lowest trading prices during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 7). At inception, we recorded a debt discount of $103,000 and captured loan fees, recorded as interest expense, of $69,048. During the nine months ended December 31, 2019, we amortized $27,783 into interest expense, and recorded additional interest expense on the note of $4,165.

 

[13]In September 2019, we entered into a Convertible Promissory Note and received proceeds of $125,000 after incurring loan fees of $3,000. The note incurs interest at 12% per annum and has a maturity date of December 10, 2020. The Convertible Promissory Note has a variable conversion rate that is 65% of the average of the two lowest trading prices during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 7). At inception, we recorded a debt discount of $128,000 and captured loan fees, recorded as interest expense, of $53,573. During the nine months ended December 31, 2019, we amortized $31,158 into interest expense, and recorded additional interest expense on the note of $4,671.

 

In addition to the above debt transactions that were outstanding as of September 30, 2019 and March 31, 2019, during the nine months ended December 31, 2019, we also received proceeds of $200,000 from two additional short-term notes ($100,000 each) and received proceeds of $140,000 from a convertible promissory note. During the nine months ended December 31, 2019, we recorded interest expense of $30,000 for fixed interest and extension fees on the short-term notes and made total cash payments of $230,000 to extinguish the interest and principal amounts due on the short-term notes. During the nine months ended December 31, 2019, we accounted for the conversion feature in the convertible note as a derivative instrument, therefore at inception recorded a debt discount of $143,000 and captured loan fees, recorded as interest expense, of $718,518. By the time we repaid the convertible note in December of 2019 we had amortized the full $143,000 into interest expense, recorded additional interest expense on the note of $45,094 (inclusive of a prepayment penalty), and paid off the note, accrued interest, and prepayment penalties for $188,094.

 

 38 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

NOTE 7 – DERIVATIVE LIABILITY

 

During the nine months ended December 31, 2019, we had the following activity in our derivative liability account:

 

Derivative liability at March 31, 2019  $1,358,901 
Derivative liability recorded on new instruments   1,206,139 
Derivative liability reduced by debt settlement   (1,676,735)
Change in fair value   (504,635)
Derivative liability at December 31, 2019  $383,670 

 

We use the binomial option pricing model to estimate fair value for those instruments convertible into common stock, at inception, at conversion date, and at each reporting date. During the nine months ended December 31, 2019, the assumptions used in our binomial option pricing model were in the following range:

 

Risk free interest rate   1.53% - 2.13%
Expected life in years   0.03 - 1.25 
Expected volatility   250% - 381%

 

NOTE 8 – STOCKHOLDERS’ EQUITY (DEFICIT)

 

Preferred Stock

 

We are authorized to issue up to 50,000,000 shares of preferred stock with a par value of $0.001 and our Board of Directors has the authority to issue one or more classes of preferred stock with rights senior to those of common stock and to determine the rights, privileges and preferences of that preferred stock.

 

As of December 31, 2019 and March 31, 2019 we had no preferred stock issued or outstanding.

 

Common Stock

 

During the nine months ended December 31, 2019, we issued 59,215,648 shares of common stock in exchange for net proceeds of $825,000.

 

In conjunction with the sale of common stock during the year ended March 31, 2018, we provided a guarantee to certain individuals such that we would issue additional shares of our common stock if the average closing price of our common stock fell below $0.02 per share on the 20 days preceding the 18-month anniversary of the date the shares were originally sold. As a result of this guarantee, we had recorded $626,388 in accounts payable and accrued liabilities on our balance sheet as of March 31, 2018. During the year ended March 31, 2019, the 18-month anniversary passed without the common stock falling below the set threshold, therefore, we were released from the guarantee, and we increased additional paid-in capital by $525,000 to remove the previously recorded offering costs. During the nine months ended December 31, 2019, the 18-month anniversary passed without the common stock falling below the set threshold, therefore, we were released from the guarantee, and we increased additional paid-in capital by $101,387 to remove the previously recorded offering costs.

 

Also during the nine months ended December 31, 2019, we issued 241,000,000 shares of common stock, valued at $3,865,500 based on the market value on the day of issuance, to multiple employees for services and compensation, which is subject to forfeiture if the employee is not in good standing at the time the shares are fully vested. Of the $3,865,500 value we recognized $1,844,639 as an expense during the nine months ending December 31, 2019 and the remaining $2,020,861 will be recognized ratably over the vesting term. In addition to the shares issued to employees, we also issued an additional 285,618,592 shares of common stock, valued at $831,800 based on the market value on the day of issuance, for services.

 

During the nine months ended December 31, 2019 we repurchased 5,150 shares of common stock for $102 and we cancelled 22,500,000 shares that were returned in accordance with the terms of a Convertible Promissory Note (see Note 6), reducing common stock by $22,500 and increasing additional paid in capital by the same. We also cancelled 200,000,000 shares returned in conjunction with the termination of a Joint Venture Agreement entered into in March of 2019, reducing common stock by $200,000, reducing additional paid in capital by $3,180,000, offset with a reduction in our prepaid asset of $3,380,000. During the nine months ended December 31, 2019 we recorded a beneficial conversion feature of $1,000,000 related to a convertible promissory note entered into with a related party (see Note 5).

 

 39 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

As of December 31, 2019 and March 31, 2019, the Company had 3,003,490,408 and 2,640,161,318 shares of common stock issued and outstanding, respectively.

 

Employee Stock Options

 

The nonqualified plan adopted in 2007 authorized 65,000 shares, of which 47,500 had been granted as of March 31, 2018. The qualified plan adopted in October of 2008 authorizes 125,000 shares and was approved by a majority of our shareholders on September 16, 2009. As of March 31, 2018, 42,500 shares had been granted under the 2008 plan. Effective April 1, 2018 we cancelled both the 2007 and 2008 plans, as well as any shares that were allocated under the plans and were not yet issued.

 

The following table summarizes the changes in employee stock options outstanding and the related prices for the shares of our common stock issued to employees under two employee stock option plans:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
   Number of   Exercise   Contractual   Intrinsic 
   Shares   Price   Life (years)   Value 
Options outstanding at March 31, 2018   35,000   $10.00    1.51   $- 
Granted   -   $-           
Exercised   -   $-           
Canceled / expired   -   $-           
Options outstanding at March 31, 2019   35,000   $10.00    0.51   $- 
Granted   -   $-           
Exercised   -   $-           
Canceled / expired   (35,000)  $10.00           
Options outstanding at December 31, 2019   -   $-    -   $- 
Options exercisable at December 31, 2019   -   $-    -   $- 

 

Stock-based compensation expense in connection with options granted to employees for the three months ended December 31, 2019 and 2018, was $0.

 

Warrants

 

The following table summarizes the warrants outstanding and the related prices for the shares of our common stock as of December 31, 2019:

 

    Warrants Outstanding   Warrants Exercisable 
        Weighted             
        Average   Weighted       Weighted 
        Remaining   Average       Average 
Exercise   Number   Contractual   Exercise   Number   Exercise 
Price   Outstanding   Life (Years)   Price   Exercisable   Price 
$1.50    125,000    0.46   $1.50    125,000   $1.50 

 

 40 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

Transactions involving our warrant issuance are summarized as follows:

 

       Weighted 
   Number of   Average 
   Shares   Exercise Price 
Warrants outstanding at March 31, 2018   6,169,497   $1.50 
Granted / restated   -   $- 
Canceled   -   $- 
Expired   (1,117,000)  $1.48 
Warrants outstanding at March 31, 2019   5,052,497   $1.50 
Granted   -   $- 
Canceled   -   $- 
Expired   (4,927,497)  $1.50 
Warrants outstanding at December 31, 2019   125,000   $1.50 

 

NOTE 9 – COMMITMENTS AND CONTINGENCIES

 

Litigation

 

In the ordinary course of business, we may be or have been involved in legal proceedings from time to time. Below is a description of all legal proceedings we were involved in during the nine months ended December 31, 2019.

 

  In February 2018, we received a subpoena from the United States Commodity Futures Trading Commission (“CFTC”). We complied with the terms of the subpoena, negotiated a resolution of this matter with the CFTC staff, and a final order was issued on September 14, 2018. Under the order, we are not admitting or denying any of the allegations, will pay a fine of $150,000, and have agreed not to act as an unregistered Commodities Trading Advisor in the future. As of December 31, 2019 we have paid all amounts owed to CFTC and no unpaid balance remains.
     
  In April of 2019, we received a Summons and Complaint from Fibernet Corp making claims of unpaid invoices and breach of contracts entered into in February 2012 and January 2015 as RazorData Corp. Without admitting fault or liability, in June of 2019, we entered into an agreement with Fibernet Corp to settle all claims and release us from any future claims in exchange for a payment of $35,160 to avoid ongoing litigation related to this matter.

 

NOTE 10 – OPERATING LEASE

 

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases. Leases are classified as either finance or operating with classification affecting the pattern of expense recognition in the statement of operations. We adopted ASU No. 2016-02 on April 1, 2019. We did not record a lease asset and lease liability as of the adoption date as we had no lease arrangements or lease obligation at that time.

 

During the nine months ended December 31, 2019 we entered two operating leases for office space in Eatontown, New Jersey (the “Eatontown Lease”) and Kaysville, Utah (the “Kaysville Lease”). We have the option to extend the three year lease term of the Eatontown Lease for a period of one year. In addition, we are obligated to pay twelve monthly installments to cover an annual utility charge of $1.75 per rentable square foot for electric usage within the demised premises. As the lessor has the right to digitally meter and charge us accordingly, these payments were deemed variable and will be expensed as incurred. During the three and nine months ended December 31, 2019 the variable lease costs amounted to $831 and $1,385, respectively. At commencement of the Eatontown Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $110,097. We have the option to extend the twelve-and-a-half-month lease term of the Kaysville Lease for a period of one year. At commencement of the Kaysville Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $21,147.

 

Operating lease expense was $16,397 and $24,630 for the three and nine months ended December 31, 2019, respectively. Operating cash flows used for the operating leases during the three and nine months ended December 31, 2019 were $12,897 and $18,797, respectively. As of December 31, 2019, the weighted average remaining lease term was 2.34 years and the weighted average discount rate was 12%.

 

 41 
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019

(Unaudited)

 

Future minimum lease payments under non-cancellable leases as of December 31, 2019 were as follows:

 

Remainder of 2020  $14,897 
2021   56,794 
2022   48,000 
2023   16,000 
Total   135,691 
Less: Interest   (17,294)
Present value of lease liability   118,397 
Operating lease liability, current [1]   (59,064)
Operating lease liability, long term  $59,333 

 

[1] Represents lease payments to be made in the next 12 months

 

NOTE 11 – SUBSEQUENT EVENTS

 

Subsequent to December 31, 2019 we received $1,070,000 in proceeds from related party advances and issued 10,000,000 shares of our common stock for services.

 

In accordance with ASC Topic 855, Subsequent Events, we have evaluated subsequent events through the date of this filing and have determined that there are no additional subsequent events that require disclosure.

 

 42 
 

 

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-Looking Statements

 

The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. When the words “believe,” “expect,” “plan,” “project,” “estimate,” and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on management’s current beliefs and assumptions and information currently available to management, and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Information concerning factors that could cause our actual results to differ materially from these forward-looking statements can be found in our periodic reports filed with the Securities and Exchange Commission (“SEC”). The forward-looking statements included in this report are made only as of the date of this report. We disclaim any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise.

 

Business Overview

 

We are an emerging leader in the financial technology (FINTECH) sector, leveraging the latest innovations in technology for financial education, services and interactive tools. Our family of subsidiaries focus on delivering products that serve individuals around the world. From personal money management, to advancements in blockchain technologies, our companies are forging a path for individuals to take advantage of financial and technical innovations.

 

Under our parent company, Investview, Inc., our significant operating subsidiaries include:

 

Kuvera, LLC and Kuvera France S.A.S. – provides financial education and cost savings tools for individuals worldwide.

 

S.A.F.E. Management, LLC – trade advisory services for those who lack the time to trade for themselves.

 

SAFETek, LLC – deploying next generation processing technologies for artificial intelligence, data mining and blockchain technologies.

 

APEX Tek, LLC – sells and distributes the APEX program which is a passive income model for those who seek to purchase assets that will generate monthly cash flow. This model has drawn considerable institutional interest.

 

Results of Operations

 

Three Months Ended December 31, 2019 Compared to Three Months Ended December 31, 2018

 

Revenues

 

We recorded net revenue of $4,963,611 for the three months ended December 31, 2019, which was a decrease of $2,769,423 or 36%, from the prior period revenue of $7,733,034. This decrease was due to a minor loss of repeat subscription customers coupled with our lack of cryptocurrency service revenue. The lack of cryptocurrency revenue can be explained by our termination of the agent arrangement with a third-party supplier of crypotocurrency mining services.

 

Operating Costs and Expenses

 

We recorded operating costs and expenses of $6,702,907 for the three months ended December 31, 2019, which was a decrease of $1,272,015, or 16%, from the prior period’s operating costs and expenses of $7,974,922. The decrease can be fully explained by the decrease in commissions, which was a result of our bonus plans paying out beyond our maximum threshold in the prior period due to certain bonus programs in place, which has since been adjusted to reduce such payouts. For the three months ended December 31, 2019 commissions as a percent of total net revenue was 32%, versus 66% in the prior period.

 

Other Income and Expenses

 

We recorded other expense of $2,086,434 for the three months ended December 31, 2019, which was a difference of $1,878,614, or 904%, from the prior period other expense of $207,820. The change is due to the interest expense incurred in the three months ended December 31, 2019 of $1,794,623 versus only $206,007 incurred in the prior period.

 

 43 
 

 

Nine Months Ended December 31, 2019 Compared to Nine Months Ended December 31, 2018

 

Revenues

 

We recorded net revenue of $19,717,448 for the nine months ended December 31, 2019, which was a decrease of $3,625,155 or 16%, from the prior period revenue of $23,342,603. This decrease was due to a minor loss of repeat subscription customers coupled with our lack of cryptocurrency service revenue. The lack of cryptocurrency revenue can be explained by our termination of the agent arrangement with a third-party supplier of crypotocurrency mining services.

 

Operating Costs and Expenses

 

We recorded operating costs and expenses of $24,355,004 for the nine months ended December 31, 2019, which was a decrease of $1,872,691, or 7%, from the prior period’s operating costs and expenses of $26,227,695. This change is principally a result of a decrease of $6,494,247, or 38%, in commissions which was a result of our bonus plans paying out beyond our maximum threshold in the prior period due to certain bonus programs in place, which has since been adjusted to reduce such payouts. The decrease was offset by an increase in salary and related costs which was due to the Company recording $2,676,439 worth of stock for services and compensation.

 

Other Income and Expenses

 

We recorded other expense of $3,940,313 for the nine months ended December 31, 2019, which was a difference of $5,859,552, or 305%, from the prior period other income of $1,919,239. The change is due to the gain on bargain purchase recorded as a result of the United Games, LLC and United League, LLC acquisition that took place during the nine months ended December 31, 2018, as compared to no such gain in the prior period. Additionally, in the current period there was interest expense recorded of $5,536,354 offset by a gain on debt extinguishment of $1,725,384, whereas in the prior period interest expense was only $215,154 and there was a gain on debt extinguishment of $19,387.

 

Liquidity and Capital Resources

 

During the nine months ended December 31, 2019, we incurred a net loss of $8,587,449. This loss was funded by cash provided by operating activities of $4,690,473 offset by cash used in investing activities of $4,171,341 and cash used in financing activities of $389,212. As a result, our cash and cash equivalents increased by $129,956 to $263,600 as compared to $133,644 at the beginning of the fiscal year.

 

Our current liabilities exceeded our current assets (working capital deficit) by $10,938,623 as of December 31, 2019, as compared to $2,222,990 at March 31, 2019. The increase in the working capital deficit is due to an increase in our other current liabilities of $7,576,800 which is due to cash received for our APEX program, which results in the Company recording financial liabilities for amounts to be repaid under the program.

 

During the nine months ended December 31, 2019, we raised $2,177,452 in cash proceeds from new debt arrangements, raised $2,164,500 in cash proceeds from related parties, and received $825,000 from the sale of our common stock. Additionally, net cash provided by operations was $4,690,473 for the nine months ended December 31, 2019 due mostly do the receipt of $9,693,141 of cash received in from our APEX program.

 

Going Concern

 

These interim unaudited financial statements have been prepared on the going concern basis, which assumes that adequate sources of financing will be obtained as required and that our assets will be realized and liabilities settled in the ordinary course of business. Accordingly, the interim unaudited financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should we not be unable to continue as a going concern.

 

Our audited consolidated financial statements for the year ended March 31, 2019, state that our historical losses, accumulated deficit, cash balance, and working capital deficit raise substantial doubts about our ability to continue as a going concern. Historically we have relied on increasing revenues and new debt and equity financing to pay for operational expenses and debt as it came due. Going forward, we plan to reduce obligations with cash flow provided by operational growth as we have been, and plan to continue, reducing bonus payouts, increasing sources of income and business activities in new sectors, and utilizing our acquired assets to generate positive cash flow and reduce debt. Additionally, we plan to pursue additional debt and equity financing and to find short term capital in arrangements that are partnership based with elements of debt and equity combined.

 

 44 
 

 

Critical Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the three and nine months ended December 31, 2019, are not necessarily indicative of the operating results that may be expected for the year ending March 31, 2020. These unaudited condensed consolidated financial statements should be read in conjunction with the March 31, 2019 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended March 31, 2019.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC, Investment Tools & Training, LLC, Apex Tek, LLC (formerly Razor Data, LLC), S.A.F.E. Management, LLC, SafeTek, LLC (formerly WealthGen Global, LLC), United Games, LLC, United League, LLC, and Kuvera France S.A.S. Through March 31, 2019 we had determined that one affiliated entity, Kuvera LATAM S.A.S., which we previously conducted business with, was a variable interest entity and we were the primary beneficiary of the entity’s activities, which are similar to those of Kuvera, LLC. As a result, through March 31, 2019 we had consolidated the accounts of this variable interest entity into the accompanying consolidated financial statements. Further, because the Company did not have any ownership interest in this variable interest entity, the Company had allocated the contributed capital in the variable interest entity as a component of noncontrolling interest. As of April 1, 2019 Kuvera LATAM S.A.S. had no operations and ceased to exist, therefore, as of that date, no consolidation of the entity is necessary and we recorded a gain on deconsolidation of $53,739 to eliminate the intercompany account with Kuvera LATAM S.A.S. All intercompany transactions and balances have been eliminated in consolidation.

 

Use of Estimates

 

The preparation of these unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Sale and Leaseback

 

Through our wholly-owned subsidiary, APEX Tex, LLC, we sell high powered data processing equipment (“APEX”) to our customers and they lease the equipment back to SAFETek, LLC, another of our wholly-owned subsidiaries. We account for these transactions under ASC 842-40 where the leaseback has been deemed a sales-type lease due to the lease term generally covering the entire economic life of the equipment and our likelihood to purchase the asset at the end of the lease term. In accordance with ASC 842-40 we have recorded the data processing equipment as a fixed asset on our balance sheet and we have accounted for the amounts received for the equipment as a financial liability, in other liabilities on our balance sheet. Further, we will recognize interest on the financial liability over the term of the lease to ensure the financial liability equates to the total amounts to be paid over the life of the lease.

 

During the nine months ended December 31, 2019 we had the following activity related to our sale and leaseback transactions:

 

Proceeds from sales of APEX  $9,693,141 
Interest recognized on financial liability   877,352 
Payments made for leased equipment   (1,341,100)
Total financial liability   9,229,393 
Other current liabilities [1]   (7,576,800)
Other long-term liabilities  $1,652,593 

 

[1] Represents lease payments to be made in the next 12 months

 

As of December 31, 2019 we have received proceeds of $607,205 in additional deposits for APEX sales, which has been recorded in the customer advance amount shown on our balance sheet.

 

 45 
 

 

Revenue Recognition

 

Subscription Revenue

 

The majority of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed subscription period, therefore we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial period to subscription customers, during which a full refund can be requested if a customer does not like the product. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks.

 

Equipment Sales

 

We generate revenue from the sale of high-speed computer processing equipment that is used for any of the following intense processing activities: protein folding, CGI rendering, Game Streaming, Machine & Deep Learning, Mining, Independent Financial Verification, and general high-speed computing. We recognize equipment sales revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver an equipment package to our customers which includes hardware, software, and firmware and is drop-shipped to a hosting data center. We receive payment at the time of purchase and recognize revenue when the equipment package is delivered and ready for maintenance and hosting, which our customers arrange for, and obtain, from a separate third party that provides such services.

 

Cryptocurrency Mining Service Revenue

 

We generate revenue from the sale of cryptocurrency mining services to our customers through an arrangement with a third-party supplier. We recognize cryptocurrency mining service revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to arrange for the third-party to provide mining services to our customers and payment is received at the time of purchase, therefore revenue is recognized upon receipt of payment. We recognize revenue in the amount of the fee to which we are entitled to as an agent, or the amount of consideration that we retain after paying the third-party the consideration received in exchange for the services the third-party is to provide.

 

Mining Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, we lease equipment under a sales-type lease and use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of our mining activities.

 

Fee Revenue

 

We generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we receive payment for such advisory fees in the month following recognition.

 

Revenue generated for the nine months ended December 31, 2019 is as follows:

 

  

Subscription

Revenue

   Equipment Sales   Cryptocurrency Mining Service Revenue   Mining Revenue   Fee Revenue   Total 
Gross billings/receipts  $21,214,747   $-   $-   $380,871   $9,486   $21,605,104 
Refunds, incentives, credits, and chargebacks   (1,887,656)   -    -    -    -    (1,887,656)
Amounts paid to supplier   -    -    -    -    -    - 
Net revenue  $19,327,091   $         -   $             -   $  380,871   $9,486   $  19,717,448 

 

 46 
 

 

Revenue generated for the nine months ended December 31, 2018 is as follows:

 

  

Subscription

Revenue

   Equipment Sales   Cryptocurrency Mining Service Revenue   Mining Revenue   Fee Revenue   Total 
Gross billings/receipts  $21,882,005   $698,954   $5,690,380   $-   $-   $28,271,389 
Refunds, incentives, credits, and chargebacks   (1,047,007)   (4,000)   (6,501)   -    -    (1,057,508)
Amounts paid to supplier   -    -    (3,871,278)          -          -    (3,871,278 
Net revenue  $20,835,048   $694,954   $1,812,601   $-   $-   $  23,342,603 

 

Revenue generated for the three months ended December 31, 2019 is as follows:

 

  

Subscription

Revenue

   Equipment Sales   Cryptocurrency Mining Service Revenue   Mining Revenue   Fee Revenue   Total 
Gross billings/receipts  $5,096,886   $-   $-   $380,871   $4,117   $5,481,874 
Refunds, incentives, credits, and chargebacks   (518,263)   -    -    -    -    (518,263)
Amounts paid to supplier   -    -    -    -    -    - 
Net revenue  $4,578,623   $          -   $            -   $  380,871   $4,117   $  4,963,611 

 

Revenue generated for the three months ended December 31, 2018 is as follows:

 

  

Subscription

Revenue

   Equipment Sales   Cryptocurrency Mining Service Revenue   Mining Revenue   Fee Revenue   Total 
Gross billings/receipts  $7,204,415   $698,954   $40,779   $-   $-   $7,944,148 
Refunds, incentives, credits, and chargebacks   (200,613)   (4,000)   (6,501)   -    -    (211,114)
Amounts paid to supplier   -    -    -    -    -    - 
Net revenue  $7,003,802   $694,954   $    34,278   $       -   $       -   $  7,773,034 

 

Recently Issued Accounting Pronouncements

 

There are no recently issued accounting pronouncements that the Company has not yet adopted that they believe are applicable or would have a material impact on the financial statements of the Company.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity, or capital expenditures.

 

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this item.

 

ITEM 4 – CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer and Acting Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

 

 47 
 

 

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Our Chief Executive Officer and Acting Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure controls and procedures were not effective.

 

Changes in Internal Controls

 

There were no changes in our internal controls over financial reporting during the fiscal quarter ended December 31, 2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

ITEM 1 – LEGAL PROCEEDINGS

 

In the ordinary course of business, we may be or have been involved in legal proceedings from time to time. Below is a description of all legal proceedings we were involved in during the nine months ended December 31, 2019.

 

  In February 2018, we received a subpoena from the United States Commodity Futures Trading Commission (“CFTC”). We complied with the terms of the subpoena, negotiated a resolution of this matter with the CFTC staff, and a final order was issued on September 14, 2018. Under the order, we are not admitting or denying any of the allegations, will pay a fine of $150,000, and have agreed not to act as an unregistered Commodities Trading Advisor in the future. As of December 31, 2019 we have paid all amounts owed to CFTC and no unpaid balance remains.
     
  In April of 2019, we received a Summons and Complaint from Fibernet Corp making claims of unpaid invoices and breach of contracts entered into in February 2012 and January 2015 as RazorData Corp. Without admitting fault or liability, in June of 2019, we entered into an agreement with Fibernet Corp to settle all claims and release us from any future claims in exchange for a payment of $35,160 to avoid ongoing litigation related to this matter.

 

ITEM 1.A – RISK FACTORS

 

N/A

 

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

In October 2019 we received $175,000 in proceeds from the sale of 7,000,000 shares of our common stock and issued 12,400,000 shares of our common stock for services.

 

In December 2019 we issued 3,218,592 shares of our common stock for services that has not been previously reported in any of our SEC filings.

 

In January and February 2020 we issued 10,000,000 shares of our common stock for services.

 

The securities represented by each of the transactions described above were issued in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving any public offering. Each of the investors is either an “accredited investor” as defined in Rule 501(a) of Regulation D or a sophisticated investor able to bear the risks of the investment. Each investor confirmed the foregoing and acknowledged that the securities must be acquired and held for investment. All certificates evidencing the shares of common stock issued or issuable upon conversion of the notes, issuances under the restricted stock grants, or upon the exercise of the warrants will bear a restrictive legend. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith.

 

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4 – MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5 – OTHER INFORMATION

 

None.

 

 48 
 

 

FINANCIAL STATEMENTS FOR THE YEARS ENDED MARCH 31, 2019 AND 2018

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and

Stockholders of Investview, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Investview, Inc. (the Company) as of March 31, 2019, and 2018, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended March 31, 2019, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2019, and 2018, and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

 

Consideration of the Company’s Ability to Continue as a Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has suffered losses from operations and its current cash flow is not enough to meet current needs. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to this matter are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Haynie & Company  
   
Salt Lake City, Utah  
June 28, 2019  

 

 49 
 

 

INVESTVIEW, INC.

CONSOLIDATED BALANCE SHEETS

 

   March 31,   March 31, 
   2019   2018 
         
ASSETS          
Current assets:          
Cash and cash equivalents  $133,644   $1,490,686 
Prepaid assets   6,685,970    3,555 
Receivables   724,995    472,557 
Short-term advances   10,000    10,000 
Short-term advances - related party   500    36,510 
Other current assets   142,061    480,370 
Total current assets   7,697,170    2,493,678 
           
Fixed assets, net   13,528    18,860 
           
Other assets:          
Intangible assets, net   1,576,685    - 
Long term license agreement, net   1,983,220    2,133,620 
Deposits   4,500    4,500 
Total other assets   3,564,405    2,138,120 
           
Total assets  $11,275,103   $4,650,658 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)          
Current liabilities:          
Accounts payable and accrued liabilities  $3,897,013   $5,352,073 
Customer advance   265,000    - 
Deferred revenue   1,876,727    863,740 
Derivative liability   1,358,901    - 
Related party payables   545,489    1,880 
Debt, net of discounts   1,977,030    195,245 
Total current liabilities   9,920,160    6,412,938 
           
Total liabilities   9,920,160    6,412,938 
           
Commitments and contingencies   -    - 
           
Stockholders’ equity (deficit):          
Preferred stock, par value: $0.001; 10,000,000 shares authorized, none issued and outstanding as of March 31, 2019 and 2018   -    - 
Common stock, par value $0.001; 10,000,000,000 shares authorized; 2,640,161,318 and 2,169,661,318 shares issued and outstanding as of March 31, 2019 and 2018, respectively   2,640,161    2,169,661 
Additional paid in capital   23,758,917    16,137,945 
Accumulated other comprehensive income (loss)   1,363    (2,483)
Accumulated deficit   (25,096,983)   (20,085,947)
Total Investview stockholders’ equity (deficit)   1,303,458    (1,780,824)
Noncontrolling interest   51,485    18,544 
Total stockholders’ equity (deficit)   1,354,943    (1,762,280)
           
Total liabilities and stockholders’ equity (deficit)  $11,275,103   $4,650,658 

 

The accompanying notes are an integral part of these consolidated financial statements

 

 50 
 

 

INVESTVIEW, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME

 

    Year Ended March 31,  
    2019     2018  
             
Revenue:                
Subscription revenue, net of refunds, incentives, credits, and chargebacks   $ 27,023,202     $ 13,899,579  
Equipment sales, net of refunds     694,954       -  
Cryptocurrency mining service revenue, net of refunds and amounts paid to supplier     1,940,925       4,017,853  
Total revenue, net     29,659,081       17,917,432  
                 
Operating costs and expenses:                
Cost of sales and service     1,180,671       6,713,097  
Commissions     21,526,326       14,271,926  
Selling and marketing     878,936       454,225  
Salary and related     4,272,355       2,270,479  
Professional fees     1,620,370       2,572,831  
General and administrative     4,121,279       2,311,028  
Total operating costs and expenses     33,599,937       28,593,586  
                 
Net loss from operations     (3,940,856 )     (10,676,154 )
                 
Other income (expense):                
Gain (loss) on debt extinguishment     19,387       (2,767,422 )
Loss on fair value of derivative liability     (214,376 )     -  
Loss on spin-off of operations     -       (1,118,609 )
Gain on bargain purchase     971,282       -  
Realized gain (loss) on cryptocurrency     16,241       (10,939 )
Unrealized gain (loss) on cryptocurrency     106,488       (135,729 )
Interest expense - related parties     (20,000 )     (104,105 )
Interest expense     (1,842,461 )     (74,976 )
Other income (expense)     (3,032 )     (493 )
Total other income (expense)     (966,471 )     (4,212,273 )
                 
Income (loss) before income taxes     (4,907,327 )     (14,888,427 )
Income tax expense     (70,768 )     (24,589 )
                 
Net income (loss)     (4,978,095 )     (14,913,016 )
Less: net income (loss) attributable to the noncontrolling interest     32,941       -  
                 
Net income (loss) attributable to Investview stockholders   $ (5,011,036 )   $ (14,913,016 )
                 
Income (loss) per common share, basic and diluted   $ (0.00 )   $ (0.01 )
                 
Weighted average number of common shares outstanding, basic and diluted     2,234,117,482       1,911,786,477  
                 
Other comprehensive income, net of tax:                
Foreign currency translation adjustments   $ 3,846     $ -  
Total other comprehensive income     3,846       -  
Comprehensive income (loss)     (4,974,249 )     (14,913,016 )
Less: comprehensive income attributable to the noncontrolling interest     (3,846 )     -  
Comprehensive income (loss) attributable to Investview shareholders   $ (4,978,095 )   $ (14,913,016 )

 

The accompanying notes are an integral part of these consolidated financial statements

 

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