0001493152-23-040281.txt : 20231113 0001493152-23-040281.hdr.sgml : 20231113 20231113063217 ACCESSION NUMBER: 0001493152-23-040281 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 65 CONFORMED PERIOD OF REPORT: 20230930 FILED AS OF DATE: 20231113 DATE AS OF CHANGE: 20231113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Investview, Inc. CENTRAL INDEX KEY: 0000862651 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 870369205 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-27019 FILM NUMBER: 231394890 BUSINESS ADDRESS: STREET 1: 234 INDUSTRIAL WAY WEST STREET 2: STE A202 CITY: EATONTOWN STATE: NJ ZIP: 07724 BUSINESS PHONE: 732-889-4300 MAIL ADDRESS: STREET 1: 234 INDUSTRIAL WAY WEST STREET 2: STE A202 CITY: EATONTOWN STATE: NJ ZIP: 07724 FORMER COMPANY: FORMER CONFORMED NAME: Global Investor Services, Inc. DATE OF NAME CHANGE: 20081001 FORMER COMPANY: FORMER CONFORMED NAME: TheRetirementSolution.com, Inc. DATE OF NAME CHANGE: 20060918 FORMER COMPANY: FORMER CONFORMED NAME: Voxpath Holdings, Inc. DATE OF NAME CHANGE: 20060619 10-Q 1 form10-q.htm
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U.S. Securities and Exchange Commission

Washington, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED

 

September 30, 2023

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from__________________ to _______________________.

 

Commission File Number 000-27019

 

Investview, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   87-0369205
(State or other jurisdiction of incorporation)   (I.R.S. Employer Identification No.)

 

521 West Lancaster Avenue

Second Floor

Haverford, Pennsylvania, 19041

(Address of principal executive offices)

 

Issuer’s telephone number: 732-889-4300

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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
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 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

 

Yes No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 10, 2023, there were 2,333,356,496 shares of common stock, $0.001 par value, outstanding.

 

 

 

 
 

 

INVESTVIEW, INC.

 

Form 10-Q for the Nine Months Ended September 30, 2023

 

Table of Contents

 

PART I – FINANCIAL INFORMATION 3
ITEM 1 – FINANCIAL STATEMENTS 3
Condensed Consolidated Balance Sheets as of September 30, 2023 (Unaudited) and December 31, 2022 3
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) 4
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements as of September 30, 2023 (Unaudited) 7
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 23
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 30
ITEM 4 – CONTROLS AND PROCEDURES 30
PART II – OTHER INFORMATION 31
ITEM 1 – LEGAL PROCEEDINGS 31
ITEM 1.A – RISK FACTORS 31
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 31
ITEM 3 – DEFAULTS UPON SENIOR SECURITIES 31
ITEM 4 – MINE SAFETY DISCLOSURES 31
ITEM 5 – OTHER INFORMATION 31
ITEM 6 – EXHIBITS 32
SIGNATURE PAGE 33

 

2
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1 – FINANCIAL STATEMENTS

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   September 30,   December 31, 
   2023   2022 
   (unaudited)     
ASSETS          
Current assets:          
Cash and cash equivalents  $22,512,638   $20,317,253 
Restricted cash, current   390,119    931,540 
Prepaid assets   1,031,876    366,561 
Receivables   1,925,758    1,255,542 
Inventory   -    249,480 
Income tax paid in advance   84,533    535,932 
Other current assets   2,047,582    2,360,957 
Total current assets   27,992,506    26,017,265 
           
Fixed assets, net   7,736,196    8,508,274 
           
Other assets:          
Restricted cash, long term   -    240,105 
Other restricted assets, long term   135,670    113,139 
Operating lease right-of-use asset   134,419    223,692 
Deposits   2,588,127    473,598 
Total other assets   2,858,216    1,050,534 
           
Total assets  $38,586,918   $35,576,073 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)          
Current liabilities:          
Accounts payable and accrued liabilities  $6,270,194   $4,608,786 
Payroll liabilities   83,461    197,300 
Income tax payable   245,402    240,603 
Customer advance   -    96,609 
Deferred revenue   2,803,982    2,074,574 
Derivative liability   8,827    24,426 
Dividend liability   240,410    236,630 
Operating lease liability, current   115,901    148,226 
Related party debt, net of discounts, current   1,202,917    1,201,927 
Debt, net of discounts, current   2,938,757    2,938,757 
Total current liabilities   13,909,851    11,767,838 
           
Operating lease liability, long term   30,132    79,432 
Accrued liabilities, long term   1,586,190    - 
Related party debt, net of discounts, long term   1,077,213    824,581 
Debt, net of discounts, long term   3,335,519    5,529,646 
Total long term liabilities   6,029,054    6,433,659 
           
Total liabilities   19,938,905    18,201,497 
           
Commitments and contingencies   -    - 
           
Stockholders’ equity (deficit):          
Preferred stock, par value: $0.001; 50,000,000 shares authorized, 252,192 and 252,192 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively   252    252 
Common stock, par value $0.001; 10,000,000,000 shares authorized; 2,333,356,496 and 2,636,275,489 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively   2,333,356    2,636,275 
Additional paid in capital   103,527,994    104,350,746 
Accumulated other comprehensive income (loss)   (23,218)   (23,218)
Accumulated deficit   (87,190,371)   (89,589,479)
Total stockholders’ equity (deficit)   18,648,013    17,374,576 
           
Total liabilities and stockholders’ equity (deficit)  $38,586,918   $35,576,073 

 

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

 

3
 

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND OTHER COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

   2023   2022   2023   2022 
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2023   2022   2023   2022 
                 
Revenue:                    
Subscription revenue, net of refunds, incentives, credits, and chargebacks  $16,117,992   $11,823,581   $41,659,185   $36,658,790 
Mining revenue   2,905,182    2,777,634    7,798,279    9,412,751 
Cryptocurrency revenue   146,466    351,433    513,285    1,308,809 
Mining equipment repair revenue   -    43,511    23,378    123,621 
Digital wallet revenue   -    -    -    5,868 
Total revenue, net   19,169,640    14,996,159    49,994,127    47,509,839 
                     
Operating costs and expenses:                    
Cost of sales and service   3,147,890    2,144,733    7,614,768    5,873,214 
Commissions   9,272,024    6,551,195    24,005,229    20,380,676 
Selling and marketing   7,410    17,874    536,464    53,139 
Salary and related   1,714,299    2,359,225    5,416,292    5,215,833 
Professional fees   285,133    601,367    1,202,674    2,350,687 
Impairment expense   -    625    -    7,008 
Loss (gain) on disposal of assets   -    (118,041)   184,221    (389,550)
General and administrative   2,500,129    2,916,167    7,190,383    7,611,867 
Total operating costs and expenses   16,926,885    14,473,145    46,150,031    41,102,874 
                     
Net income (loss) from operations   2,242,755    523,014    3,844,096    6,406,965 
                     
Other income (expense):                    
Gain (loss) on debt extinguishment   -    -    -    455 
Gain (loss) on fair value of derivative liability   11,939    2,319    15,596    40,155 
Realized gain (loss) on cryptocurrency   (58,401)   (318,000)   170,444    (1,338,597)
Interest expense   (4,726)   (4,726)   (14,024)   (14,024)
Interest expense, related parties   (310,594)   (310,595)   (929,008)   (2,339,729)
Other income (expense)   431,603    49,872    1,027,108    107,725 
Total other income (expense)   69,821    (581,130)   270,116    (3,544,015)
                     
Income (loss) before income taxes   2,312,576    (58,116)   4,114,212    2,862,950 
Income tax expense   (304,262)   (362,563)   (1,100,599)   (1,004,308)
                     
Net income (loss)   2,008,314    (420,679)   3,013,613    1,858,642 
                     
Dividends on Preferred Stock   (204,835)   (204,835)   (614,505)   (614,505)
                     
Net income (loss) applicable to common shareholders  $1,803,479   $(625,514)  $2,399,108   $1,244,137 
                     
Other comprehensive income (loss), net of tax:                    
Foreign currency translation adjustments  $-   $-   $-   $(218)
Total other comprehensive income (loss)   -    -    -    (218)
Comprehensive income (loss)  $2,008,314   $(420,679)  $3,013,613   $1,858,424 
                     
Basic income (loss) per common share  $0.00   $(0.00)  $0.00   $0.00 
Diluted income (loss) per common share  $0.00   $(0.00)  $0.00   $0.00 
                     
Basic weighted average number of common shares outstanding   2,632,983,119    2,641,275,489    2,635,166,049    2,690,146,350 
Diluted weighted average number of common shares outstanding   3,669,411,690    2,641,275,489    3,671,594,620    3,726,574,921 

 

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

 

4
 

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

 

   Shares   Amount   Shares   Amount   Capital   Income (Loss)   Deficit   Total 
                       Accumulated         
                   Additional   Other         
   Preferred stock   Common stock   Paid in   Comprehensive   Accumulated     
   Shares   Amount   Shares   Amount   Capital   Income (Loss)   Deficit   Total 
                                 
Balance, December 31, 2021        252,192   $          252      2,904,210,762   $  2,904,211   $  101,883,573   $(23,000)  $(75,825,195)  $28,939,841 
Common stock issued for services and other stock based compensation   -    -    -    -    255,163    -    -    255,163 
Common stock repurchased from related parties   -    -    (43,101,939)   (43,102)   (1,680,906)   -    -    (1,724,008)
Common stock cancelled   -    -    (150,000,000)   (150,000)   150,000    -    -    - 
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Foreign currency translation adjustment   -    -    -    -    -    380    -    380 
Net income (loss)   -    -    -    -    -    -    2,379,029    2,379,029 
Balance, March 31, 2022   252,192    252    2,711,108,823    2,711,109    100,607,830    (22,620)   (73,651,001)   29,645,570 
Common stock issued for services and other stock based compensation   -    -    -    -    242,024    -    -    242,024 
Common stock cancelled   -    -    (69,833,334)   (69,834)   69,834    -    -    - 
Contribution of crypto currency from related party   -    -    -    -    1,185,821    -    -    1,185,821 
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Foreign currency translation adjustment   -    -    -    -    -    (598)   -    (598)
Net income (loss)   -    -    -    -    -    -    (99,708)   (99,708)
Balance, June 30, 2022   252,192    252    2,641,275,489    2,641,275    102,105,509    (23,218)   (73,955,544)   30,768,274 
Common stock issued for services and other stock based compensation   -    -    -    -    1,274,615    -    -    1,274,615 
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Net income (loss)   -    -    -    -    -    -    (420,679)   (420,679)
Balance, September 30, 2022   252,192   $252    2,641,275,489   $2,641,275   $103,380,124   $(23,218)  $(74,581,058)  $31,417,375 
                                         
Balance, December 31, 2022   252,192   $252    2,636,275,489   $2,636,275   $104,350,746   $(23,218)  $(89,589,479)  $17,374,576 
Common stock issued for services and other stock based compensation   -    -    -    -    768,613    -    -    768,613 
Warrant Exercise   -    -    230    -    23    -    -    23 
Derivative liability extinguished with warrant exercise   -    -    -    -    3    -    -    3 
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Net income (loss)   -    -    -    -    -    -    407,894    407,894 
Balance, March 31, 2023   252,192    252    2,636,275,719    2,636,275    105,119,385    (23,218)   (89,386,420)   18,346,274 
Common stock issued for services and other stock based compensation   -    -    -    -    628,615    -    -    628,615 
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Net income (loss)   -    -    -    -    -    -    597,405    597,405 
Balance, June 30, 2023   252,192    252    2,636,275,719    2,636,275    105,748,000    (23,218)   (88,993,850)   19,367,459 
Common stock issued for services and other stock based compensation   -    -    -    -    649,455    -    -    649,455 
Common stock purchased and canceled   -    -    (302,919,223)   (302,919)   (2,869,461)   -    -    (3,172,380)
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Net income (loss)   -    -    -    -    -    -    2,008,314    2,008,314 
Balance, September 30, 2023   252,192   $252    2,333,356,496   $2,333,356   $103,527,994   $(23,218)  $(87,190,371)  $18,648,013 

 

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

 

5
 

 

INVESTVIEW INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   2023   2022 
   Nine Months Ended September, 
   2023   2022 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income (loss)  $3,013,613   $1,858,642 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:          
Depreciation   3,258,738    4,251,122 
Amortization of debt discount   252,632    1,643,726 
Stock issued for services and other stock based compensation   2,046,683    1,771,802 
Lease cost, net of repayment   7,648    (23,419)
(Gain) loss on debt extinguishment   -    (455)
(Gain) loss on disposal of assets   184,221    (389,550)
(Gain) loss on fair value of derivative liability   (15,596)   (40,155)
Realized (gain) loss on cryptocurrency   (170,444)   1,338,597 
Impairment expense   -    7,008 
Changes in operating assets and liabilities:          
Receivables   (670,216)   (68,826)
Inventory   74,645    (371,796)
Prepaid assets   (665,315)   (164,124)
Income tax paid in advance   451,399    (611,584)
Other current assets   (1,142,470)   (2,907,972)
Deposits   (2,114,529)   - 
Accounts payable and accrued liabilities   (38,621)   1,320,583 
Income tax payable   4,799    (807,827)
Customer advance   (96,609)   66,368 
Deferred revenue   729,408    (1,242,000)
Deferred tax liability   -    994,308 
Accrued interest   14,024    14,024 
Accrued interest, related parties   676,377    696,002 
Net cash provided by (used in) operating activities   5,800,387    7,334,474 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Cash received for the disposal of fixed assets   23,278    1,044,492 
Cash paid for fixed assets   (2,529,237)   (15,265,360)
Net cash provided by (used in) investing activities   (2,505,959)   (14,220,868)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Repayments for related party debt   (675,387)   (2,718,142)
Repayments for debt   (724,130)   (729,016)
Payments for share repurchase   -    (1,724,008)
Dividends paid   (481,075)   (470,563)
Proceeds from the exercise of warrants   23    - 
Net cash provided by (used in) financing activities   (1,880,569)   (5,641,729)
           
Effect of exchange rate translation on cash   -    (218)
           
Net increase (decrease) in cash, cash equivalents, and restricted cash   1,413,859    (12,528,341)
Cash, cash equivalents, and restricted cash - beginning of period   21,488,898    32,616,906 
Cash, cash equivalents, and restricted cash - end of period  $22,902,757   $20,088,565 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:          
Cash paid during the period for:          
Interest  $699,757   $828,142 
Income taxes  $645,500   $1,429,411 
Non-cash investing and financing activities:          
Common stock purchased and canceled  $3,172,380   $219,834 
Derivative liability extinguished with warrant exercise  $3   $- 
Dividends declared  $614,505   $614,505 
Dividends paid with cryptocurrency  $129,650   $129,817 
Debt and related party debt extinguished in exchange for cryptocurrency  $1,484,021   $1,487,797 
Recognition of lease liability and ROU assets at lease commencement  $23,520   $- 
Cryptocurrency received from sale of fixed assets  $9,913   $- 
Purchase of fixed assets with cryptocurrrency  $-   $259,916 
Transfer of fixed assets to inventory  $-   $567,522 
Contribution of cryptocurrency from related party  $-   $1,185,821 

 

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

 

6
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(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, we changed domicile to Nevada and changed our name to Voxpath Holding, Inc. In September of 2006, we merged with The Retirement Solution Inc. and then changed our name to The Retirement Solution.Com, Inc. Subsequently, in October 2008, we changed our name to Global Investor Services, Inc., before changing our name to Investview, Inc., on March 27, 2012.

 

Effective April 1, 2017, we closed on a Contribution Agreement with the members of Wealth Generators, LLC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators members contributed 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of our common stock. Following this transaction, Wealth Generators became our wholly owned subsidiary, and the former members of Wealth Generators became our stockholders and controlled 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”).

 

On January 17, 2019, we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SAFETek, LLC, a Utah limited liability company.

 

On January 11, 2021, we filed a name change for Kuvera, LLC to iGenius, LLC (“iGenius”) and on February 2, 2021, we filed a name change for Kuvera (N.I.) Limited to iGenius Global LTD.

 

On September 20, 2021, the Board of Directors approved a change in our fiscal year from March 31 to December 31.

 

Nature of Business

 

We operate a financial technology (FinTech) services company in several different businesses. We deliver multiple products and services through a direct selling network, also known as multi-level marketing, of independent distributors that offer our products and services through a subscription-based revenue model to our distributors, as well as by our distributors to a large base of customers that we refer to as “members”. Through this business, we provide research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research and education regarding equities, options, FOREX, ETFs, binary options, and cryptocurrency. In addition to trading research and education, we also offer 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 and 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. In addition to our education subscriptions, through a distribution arrangement we have with a third party, we provided our members with an opportunity to purchase through such third party, a specialty form of adaptive digital currency called “ndau”. The sale of ndau was discontinued during the quarter ended September 30, 2023. Through our direct selling model, we compensate our distributors with commissions under a standard bonus plan that allows for discretionary bonuses based on performance.

 

We also operate a blockchain technology business that provides leading-edge research, development, and FinTech services involving the management of digital asset technologies with a focus on Bitcoin mining and the new generation of digital assets. We currently own and manage over 5,000 next-generation Bitcoin application-specific integrated circuit (“ASIC”) miner machines, with 100% of such machines being powered by renewable energy sources, mainly hydropower plants and geothermal. We are also developing new and more efficient ways to mine cryptocurrencies through innovations in hardware, firmware, and additional ways to develop and utilize renewable energy sources, to increase the hash rate, uptime, profitability, and overall ROI of our crypto currency mining operations.

 

7
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

Since 2021, we have attempted to develop a brokerage and financial markets business. This was originally designed to, among other things, commercialize on the proprietary trading platform we acquired in September 2021 from MPower Trading Systems, LLC (“MPower”), to provide self-directed (DIY) investors with low pricing, a powerful trading platform, research, analytical tools, real-time data & news, insights and support for investing and trading in stocks, options, ETFs and mutual funds. Towards that end, in March 2021, we agreed to acquire a brokerage firm owned by an affiliate of our former chief executive officer. However, having been unable to secure the requisite FINRA approval by the expiration of that agreement, we terminated the transaction on June 14, 2022, and have since then continued our search for alternative acquisitions within the brokerage industry. Further, until we are able to start this business, we recently elected to wind down the registration of a dormant investment advisor and commodity trading advisor we own as we concluded there to be no material benefit to retaining an interest in these regulated businesses until we are able to launch our broader-based financial services model.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Accounting

 

Our policy is to prepare our financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

 

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 September 30, 2023, are not necessarily indicative of the operating results that may be expected for the filing of our December 31, 2023 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2022 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC (formerly Kuvera, LLC), Apex Tek, LLC (formerly Razor Data, LLC), SAFETek, LLC (formerly WealthGen Global, LLC), United Games, LLC, United League, LLC, iGenius Global LTD (formerly Kuvera (N.I.) LTD), Investview Financial Group Holdings, LLC, Investview MTS, LLC, MyLife Wellness Company, and S.A.F.E Management, LLC. 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.

 

Use of Estimates

 

The preparation of these 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.

 

8
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

Foreign Exchange

 

We have consolidated the accounts of Kuvera France S.A.S. into our consolidated financial statements. The operations of Kuvera France S.A.S. were conducted in France through its closure date in June of 2021 and its functional currency is the Euro. Subsequent to June 2021 we maintained a Euro bank account in France that had minimal transactions. The Euro bank account was closed in April 2022.

 

Prior to June 2021, the financial statements of Kuvera France S.A.S. were prepared using their functional currency and were translated into U.S. dollars (“USD”). Assets and liabilities were translated into USD at the applicable exchange rates at period-end. Stockholders’ equity was translated using historical exchange rates. Revenue and expenses were translated at the average exchange rates for the period. Any translation adjustments were included as foreign currency translation adjustments in accumulated other comprehensive income in our stockholders’ equity (deficit).

 

Subsequent to June 2021 and prior to the closure of the Euro bank account in April 2022, we translated all transactions in our Euro bank account into USD and translated the ending bank balance into USD at the applicable exchange rate at period-end.

 

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

 

   Nine Months Ended
September 30, 2022
 
Euro to USD   1.1118 

 

Concentration of Credit Risk

 

Financial instruments that potentially expose us to concentration of credit risk include cash, accounts receivable, and advances. We place our cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit of $250,000. As of September 30, 2023 and December 31, 2022, cash balances that exceeded FDIC limits were $5,306,536 and $18,202,860, respectively. We have not experienced significant losses relating to these concentrations in the past.

 

Cash Equivalents and Restricted Cash

 

For purposes of reporting cash flows, we consider all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. As of September 30, 2023 and December 31, 2022, we had no highly liquid debt instruments.

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows.

 

   September 30, 2023   December 31, 2022 
Cash and cash equivalents  $22,512,638   $20,317,253 
Restricted cash, current   390,119    931,540 
Restricted cash, long term   -    240,105 
Total cash, cash equivalents, and restricted cash shown on the statement of cash flows  $22,902,757   $21,488,898 

 

Amount included in restricted cash represent funds required to be held in an escrow account by a contractual agreement and will be used for paying dividends to our Series B Preferred Stockholders and funds required to be held in an account as collateral for business charges on our Company credit card.

 

Receivables

 

Receivables are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. We had an allowance for doubtful accounts of $722,324 and $719,342 as of September 30, 2023 and December 31, 2022, respectively. A portion of our receivables balance is for amounts held in reserve by our merchant processors for future returns and chargebacks. The amount held in reserve was $500,000 and $775,000 as of September 30, 2023 and December 31, 2022, respectively.

 

9
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

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.

 

Fixed assets were made up of the following at each balance sheet date:

 

   Estimated Useful Life (years)   September 30, 2023   December 31, 2022 
Furniture, fixtures, and equipment   10   $2,970   $76,716 
Computer equipment   3    10,440    12,869 
Leasehold improvements   Remaining Lease Term    -    40,528 
Data processing equipment   3    14,179,769    13,187,312 
Mining repair tools and equipment   1    -    13,627 
         14,193,179    13,331,052 
Accumulated depreciation        (6,456,983)   (4,822,778)
Net book value       $7,736,196   $8,508,274 

 

Total depreciation expense for the nine months ended September 30, 2023 and 2022, was $3,258,738 and $4,251,122, respectively, all of which was recorded in our general and administrative expenses on our statement of operation. During the nine months ended September 30, 2023, we sold assets with a total net book value of $26,729 for cash of $23,278 and bitcoin worth $9,913, therefore recognized a gain on disposal of assets of $6,462. This gain was offset by loss on disposal of assets with a net book value of $15,848. During the nine months ended September 30, 2022, we sold assets with a total net book value of $654,942 for cash of $1,044,492, therefore recognized a gain on disposal of assets of $389,550.

 

Long-Lived Assets – Intangible Assets & License Agreement

 

We account for our cryptocurrencies and intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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, which 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. Our cryptocurrencies are deemed to have an indefinite useful life; therefore, amounts are not amortized, but rather are assessed for impairment as further discussed in our impairment policy. Under ASC Subtopic 350-30 any intangible asset with a useful life is required to be amortized over that life and the useful life is 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.

 

We hold cryptocurrency-denominated assets and include them in our consolidated balance sheet as other assets. The value of our cryptocurrencies as of September 30, 2023 and December 31, 2022, were $2,183,252 ($2,047,582 current and $135,670 restricted long term) and $2,474,096 ($2,360,957 current and $113,139 restricted long term), respectively. Cryptocurrencies purchased or received for payment from customers are recorded in accordance with ASC 350-30 and cryptocurrencies awarded to the Company through its mining activities ($7,798,279 and $9,412,751 for the nine months ended September 30, 2023 and 2022, respectively) are accounted for in connection with the Company’s revenue recognition policy. The use of cryptocurrencies is accounted for in accordance with the first in first out method of accounting. For the nine months ended September 30, 2023 and 2022, we recorded realized gains (losses) on our cryptocurrency transactions of $170,444 and $(1,338,597), respectively.

 

On March 22, 2021, we entered into Securities Purchase Agreement to acquire the operating assets and intellectual property rights of MPower Trading Systems LLC, a company controlled and partially owned by David B. Rothrock and James R. Bell, two of our board members. As a result, we obtained Prodigio, a proprietary software-based trading platform with applications within the brokerage industry, which was valued at $7,240,000 and recorded on our balance sheet as an intangible asset as of December 31, 2021. The intangible asset was expected to have a definite life, however, during the year ended December 31, 2022, the software had not been placed in service, therefore a useful life had not been assigned and no amortization had been recorded. Instead, as of December 31, 2022, the intangible asset was conservatively impaired due to a question on the recoverability of the value recorded.

 

10
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

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.

 

We evaluate 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 September 30, 2023, no impairment was recorded. During the nine months ended September 30, 2022, we impaired our fixed assets with a cost basis of $15,772 due to the lack of use. We had recorded accumulated depreciation and accumulated amortization of $8,764 for the impaired assets through the date of impairment, therefore we recorded impairment expense of $7,008 during the nine months ended September 30, 2022.

 

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 and accounts payable, and debt. We have determined that the book value of our outstanding financial instruments as of September 30, 2023 and December 31, 2022, approximates the fair value due to their short-term nature or interest rates that approximate prevailing market rates.

 

Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of September 30, 2023:

 

   Level 1   Level 2   Level 3   Total 
Total Assets  $    -   $    -   $-   $- 
                     
Derivative liability  $-   $-   $8,827   $8,827 
Total Liabilities  $-   $-   $8,827   $8,827 

 

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, 2022:

 

   Level 1   Level 2   Level 3   Total 
Total Assets  $     -   $     -   $-   $- 
                     
Derivative liability  $-   $-   $24,426   $24,426 
Total Liabilities  $-   $-   $24,426   $24,426 

 

11
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

Revenue Recognition

 

Subscription Revenue

 

Most 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 designated trial period to first time subscription customers, during which a full refund can be requested if a customer does not wish to continue with the subscription. 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. As of September 30, 2023 and December 31, 2022, our deferred revenues were $2,803,982 and $2,074,574, respectively.

 

Mining Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, we leased equipment under a sales-type lease through June of 2020. In June of 2020 we cancelled all leases and purchased all of the rights and obligations under the leases, which included obtaining ownership of all equipment. We 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.

 

Cryptocurrency Revenue

 

We generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with a third-party supplier. The various packages included different amounts of coin with differing rates of returns and terms. The coin is delivered by a third-party supplier. The sale of cryptocurrency packages was discontinued during the quarter ended September 30, 2023.

 

We recognize cryptocurrency 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 coin to our customers and payment is received from our customers at the time of order placement. All customers are given two weeks to request a refund, therefore we record a customer advance on our balance sheet upon receipt of payment. After the two weeks have passed from order placement, we request our third-party supplier to deliver the coin, at which time we recognize revenue and the amounts due to our supplier on our books. As of September 30, 2023 and December 31, 2022, our customer advances related to cryptocurrency revenue were $0 and $96,609, respectively.

 

Mining Equipment Repair Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, we repair broken mining equipment for sale to third-party customers. Our mining equipment repair business was discontinued during the quarter ended June 30, 2023.

 

We recognize miner repair 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 the promised goods to our customers.

 

12
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

Digital Wallet Revenue

 

We generate revenue from the sale of digital wallets to our customers through an arrangement with a third-party supplier. We offer three tiers of wallets which include different features. The digital wallets are delivered by a third-party supplier. The sale of digital wallets to our customers was discontinued during the year ended December 31, 2022.

 

We recognize digital wallet 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-parties to provide the wallet to our customers and payment is received from our customers at the time of order placement.

 

Revenue generated for the nine months ended September 30, 2023, was as follows:

 

   Subscription
Revenue
   Cryptocurrency
Revenue
   Mining
Revenue
   Miner Repair
Revenue
   Total 
Gross billings/receipts  $45,284,739   $990,785   $7,798,279   $23,378   $54,097,181 
Refunds, incentives, credits, and chargebacks   (3,625,554)   -    -    -    (3,625,554)
Amounts paid to providers   -    (477,500)   -    -    (477,500)
Net revenue  $41,659,185   $513,285   $7,798,279   $23,378   $49,994,127 

 

For the nine months ended September 30, 2023, foreign and domestic revenues were approximately $38.1 million and $11.9 million, respectively.

 

Revenue generated for the nine months ended September 30, 2022, was as follows:

 

   Subscription
Revenue
   Cryptocurrency Revenue   Mining Revenue   Miner Repair Revenue   Digital Wallet Revenue   Total 
Gross billings/receipts  $  39,087,141   $           2,548,316   $9,412,751   $        123,621   $              7,157   $51,178,986 
Refunds, incentives, credits, and chargebacks   (2,428,351)   -    -    -    -    (2,428,351)
Amounts paid to providers   -    (1,239,507)   -    -    (1,289)   (1,240,796)
Net revenue  $36,658,790   $1,308,809   $9,412,751   $123,621   $5,868   $47,509,839 

 

For the nine months ended September 30, 2022 foreign and domestic revenues were approximately $32.2 million and $15.3 million, respectively.

 

Revenue generated for the three months ended September 30, 2023, was as follows:

 

   Subscription
Revenue
   Cryptocurrency
Revenue
   Mining
Revenue
   Total 
Gross billings/receipts  $17,499,805   $258,466   $2,905,182   $20,663,453 
Refunds, incentives, credits, and chargebacks   (1,381,813)   -    -    (1,381,813)
Amounts paid to providers   -    (112,000)   -    (112,000)
Net revenue  $16,117,992   $146,466   $2,905,182   $19,169,640 

 

13
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

For the three months ended September 30, 2023, foreign and domestic revenues were approximately $14.7 million and $4.5 million, respectively.

 

Revenue generated for the three months ended September 30, 2022, was as follows:

 

   Subscription
Revenue
   Cryptocurrency
Revenue
   Mining
Revenue
   Miner Repair
Revenue
   Digital Wallet
Revenue
   Total 
Gross billings/receipts  $12,638,375   $673,933   $    2,777,634   $          43,511   $                     -   $16,133,453 
Refunds, incentives, credits, and chargebacks   (814,794)   -    -    -    -    (814,794)
Amounts paid to providers   -    (322,500)   -    -    -    (322,500)
Net revenue  $11,823,581   $351,433   $2,777,634   $43,511   $-   $14,996,159 

 

For the three months ended September 30, 2022 foreign and domestic revenues were approximately $10.3 million and $4.7 million, respectively.

 

Advertising, Selling, and Marketing Costs

 

We expense advertising, selling, and marketing costs as incurred. Advertising, selling, and marketing costs include costs of promoting our product worldwide, including promotional events. Advertising, selling, and marketing expenses for the nine months ended September 30, 2023 and 2022, totaled $536,464 and $53,139, respectively.

 

Cost of Sales and Service

 

Included in our costs of sales and services are amounts paid to our trading and market experts that provide financial education content and tools to our subscription customers, hosting and energy fees that we pay to vendors at third-party sites in order to generate mining revenue, and the costs associated with our miner repair revenue. Costs of sales and services for the nine months ended September 30, 2023 and 2022, totaled $7,614,768 and $5,873,214, respectively.

 

Inventory

 

Inventory consists of finished goods to be sold as part of our miner repair revenue and materials that were purchased for refurbishment but will be sold as purchased due to the Company winding down the refurbishment and sale of repaired miners. Inventory is valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method and is inclusive of any shipping and tax costs. During the nine months ended September 30, 2023, we recognized a loss on disposal of assets of $174,835. As of September 30, 2023 and December 31, 2022 the net realizable value of our inventory was $0 and $249,480, respectively.

 

Income Taxes

 

Income taxes are recorded in accordance with ASC Topic 740, Income Taxes, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities, including operating losses and credit carryforwards, using enacted tax rates in effect for the year in which the differences are expected to reverse.

 

Management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our deferred tax assets. Deferred tax assets are reduced by a valuation allowance if, based on the consideration of all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Changes in assumptions in future periods may require we adjust our valuation allowance, which could materially impact our financial position and results of operations. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on its income tax return, if such a position is more likely than not to be sustained.

 

14
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

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 income (loss) per share has been calculated based upon the weighted average number of common shares outstanding. Diluted income (loss) per share reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.

 

The following table illustrates the computation of diluted earnings per share for the three months ended September 30, 2023. Due to the net loss for the three months ended September 30, 2022 there were 1,036,428,571 potentially dilutive securities that were excluded from the diluted income per common share computation, as the effect of including these shares would be antidilutive.

 

   September 30, 2023 
Net income (loss)  $2,008,314 
Less: preferred dividends   (204,835)
Add: interest expense on convertible debt   225,129 
Net income available to common shareholders (numerator)  $2,028,608 
      
Basic weighted average number of common shares outstanding   2,632,983,119 
Dilutive impact of convertible notes   471,428,571 
Dilutive impact of non-voting membership interest   565,000,000 
Diluted weighted average number of common shares outstanding (denominator)   3,669,411,690 
      
Diluted income per common share  $0.00 

 

The following table illustrates the computation of diluted earnings per share for the nine months ended September 30, 2023 and 2022, where no potentially dilutive securities were excluded from the computation:

 

   September 30, 2023   September 30, 2022 
Net income (loss)  $3,013,613   $1,858,642 
Less: preferred dividends   (614,505)   (614,505)
Add: interest expense on convertible debt   675,387    469,884 
Net income available to common shareholders (numerator)  $3,074,495   $1,714,021 
           
Basic weighted average number of common shares outstanding   2,635,166,049    2,690,146,350 
Dilutive impact of convertible notes   471,428,571    471,428,571 
Dilutive impact of non-voting membership interest   565,000,000    565,000,000 
Diluted weighted average number of common shares outstanding (denominator)   3,671,594,620    3,726,574,921 
           
Diluted income per common share  $0.00   $0.00 

 

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.

 

15
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

 

We have noted no recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.

 

NOTE 4 – 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.

 

During the nine months ended September 30, 2023, we recorded a net income from operations of $3,844,096 and net income of $3,013,613. As of September 30, 2023, we have unrestricted cash and cash equivalents of $22,512,638 and a working capital balance of $14,082,655. As of September 30, 2023, our unrestricted cryptocurrency balance was reported at a cost basis of $2,047,582. Management does not believe there are any liquidity issues as of September 30, 2023.

 

NOTE 5 – RELATED-PARTY TRANSACTIONS

 

Related Party Debt

 

Our related-party payables consisted of the following:

 

   September 30, 2023   December 31, 2022 
Convertible Promissory Note entered into on 4/27/20, net of debt discount of $855,038 as of September 30, 2023 [1]  $444,962   $347,782 
Convertible Promissory Note entered into on 5/27/20, net of debt discount of $464,219 as of September 30, 2023 [2]   235,781    183,020 
Convertible Promissory Note entered into on 11/9/20, net of debt discount of $903,530 as of September 30, 2023 [3]   396,470    293,779 
Working Capital Promissory Note entered into on 3/22/21 [4]   1,202,917    1,201,927 
Total related-party debt   2,280,130    2,026,508 
Less: Current portion   (1,202,917)   (1,201,927)
Related-party debt, long term  $1,077,213   $824,581 

 

 

[1]On April 27, 2020, we received proceeds of $1,300,000 from DBR Capital, LLC, an entity controlled by our Chairman, and entered into a convertible promissory note. The note is secured by collateral of the Company and its subsidiaries and certain Company shares pledged by non-affiliated shareholders. The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. Per the original terms of the agreement, the note was convertible into common stock at a conversion price of $0.01257 per share, which was amended on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded a beneficial conversion feature and debt discount of $1,300,000. During the nine months ended September 30, 2023, we recognized $97,180 of the debt discount into interest expense, as well as expensed an additional $195,012 of interest expense on the note, all of which was repaid during the period.
  
[2]On May 27, 2020, we received proceeds of $700,000 from DBR Capital, LLC, and entered into a convertible promissory note. The note is secured by collateral of the Company and its subsidiaries, and certain Company shares pledged by non-affiliated shareholders. The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. Per the original terms of the agreement, the note was convertible into common stock at a conversion price of $0.01257 per share, which was amended on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded a beneficial conversion feature and debt discount of $700,000. During the nine months ended September 30, 2023, we recognized $52,761 of the debt discount into interest expense as well as expensed an additional $105,003 of interest expense on the note, all of which was repaid during the period.

 

16
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

[3]On November 9, 2020, we received proceeds of $1,300,000 from DBR Capital, LLC, and entered into a convertible promissory note. The note is secured by collateral of the Company and its subsidiaries, and certain Company shares pledged by non-affiliated shareholders. The note bears interest at 38.5% per annum, made up of a 25% interest rate per annum and a facility fee of 13.5% per annum, payable monthly beginning February 1, 2021, and the principal is due and payable on April 27, 2030. Per the terms of the agreement, the note is convertible into common stock at a conversion price of $0.007 per share. At inception we recorded a beneficial conversion feature and debt discount of $1,300,000. During the nine months ended September 30, 2023, we recognized $102,691 of the debt discount into interest expense as well as expensed an additional $375,372 of interest expense on the note, all of which was repaid during the period.
  
[4]On March 22, 2021, we entered into Securities Purchase Agreements to purchase 100% of the operating assets of SSA Technologies LLC, an entity that owns and operates a FINRA-registered broker-dealer. SSA is controlled and partially owned by Joseph Cammarata, our former Chief Executive Officer. (See Note 10). Commencing upon execution of the agreements and through the closing of the transactions, we agreed to provide certain transition service arrangements to SSA. In connection with the transactions, we entered into a Working Capital Promissory Note with SSA under which SSA was to have advanced to us up to $1,500,000 before the end of 2021; however, SSA only provided advances of $1,200,000, to date. The note bears interest at the rate of 0.11% per annum. The note was due and payable by January 31, 2022; however, has not yet been repaid as we consider our legal options in light of SSA’s failure to complete its funding obligations. During the nine months ended September 30, 2023, we recorded interest expense of $990 on the note. The note was to have been secured by the pledge of 12,000,000 shares of our common stock; however, it remains unsecured as the pledge of shares was not implemented at the closing of the loan.

 

Other Related Party Arrangements

 

On January 6, 2022, we entered into a Separation and Release Agreement (the “Separation Agreements”) with Mario Romano and Annette Raynor, two of the Company’s founders and former members of management and the Board of Directors, and Wealth Engineering, LLC, an affiliate of Mr. Romano and Ms. Raynor. Under the Separation Agreements, Mr. Romano and Ms. Raynor resigned their positions as officers and directors of the Company effective immediately upon execution of the Separation Agreements as they each transitioned to the roles of consultants to the Company. Mr. Romano and Ms. Raynor provided consulting services to the Company in their roles from January 6, 2022, through the elimination of these positions on or about July 14, 2023. In conjunction with the Separation Agreements, Mr. Romano and Ms. Raynor forfeited 150,000,000 shares, in total, which were returned to the Company and cancelled. The Company also repurchased a total of 43,101,939 shares from Mr. Romano and Ms. Raynor in exchange for cash of $1,724,008, which was paid to federal and state taxing authorities on behalf of Wealth Engineering, LLC as payment for the estimated federal and state taxes that Wealth Engineering, LLC may be subject to in connection with the vesting of 63,333,333 Company restricted shares that vested on July 22, 2021 (see NOTE 9).

 

On September 29, 2023, we closed on the purchase in a private transaction of shares of our common stock under the terms of a Stock Purchase and Release Agreement dated September 18, 2023 (the “Agreement”). Under the Agreement, the Company purchased for surrender in a series of private transactions, an aggregate of 302,919,223 shares of the Company’s common stock (the “Purchased Shares”) from sellers consisting of Mario Romano, Annette Raynor, and a series of their family members and related entities (collectively, the “Sellers”). The Purchased Shares were purchased for aggregate consideration of $2,922,380, representing a price of $0.00964739 per share. One-eighth of the purchase price is to be paid within seven (7) days of the closing, with the balance payable in a series of equal quarterly payments over seven (7) consecutive quarters thereafter.

 

In addition to the cash consideration for the Purchased Shares, the Company also agreed to cover a limited amount of the legal fees incurred by the Sellers in the transaction, as well as provide Mr. Romano and Ms. Raynor with a $250,000 expense allowance, payable in installments, to cover legal fees and other expenses on a non-accountable basis, in connection with any matters that may arise in which either or both of Mr. Romano and/or Ms. Raynor served as officers and directors of the Company. In return, Mr. Romano and Ms. Raynor agreed to waive any future entitlement, if at all, to indemnification of costs and expenses, including legal fees under Nevada law or otherwise arising from or relating to any period in which Romano or Raynor were officers and directors of the Company.

 

The consideration paid for the Purchased Shares of $2,922,380 plus the $250,000 expense allowance was allocated to the share purchase for a total of $3,172,380 (see NOTE 9).

 

The loans referenced in footnotes 1-3 above, were advanced under a Securities Purchase Agreement we entered into on April 27, 2020, with DBR Capital. Under the Securities Purchase Agreement (which was subsequently amended and restated), DBR Capital agreed to advance up to $11 million to us in a series of up to five closings through December 31, 2022, of which the amounts advanced covered in footnotes 1-3 above constituted the first three closings.

 

On August 12, 2022, we and DBR Capital, entered into a Fourth Amendment to the now Amended and Restated Securities Purchase Agreement that extends the deadlines for the fourth and fifth closings under that Agreement from December 31, 2022, to December 31, 2024. The fourth and fifth closings remain at the sole discretion of DBR Capital and we cannot provide any assurance that they will occur when contemplated or ever.

 

17
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

NOTE 6 – DEBT

 

Our debt consisted of the following:

 

   September 30, 2023   December 31, 2022 
Loan with the U.S. Small Business Administration dated 4/19/20 [1]  $532,891   $543,237 
Long term notes for APEX lease buyback [2]   5,741,385    7,925,166 
Total debt   6,274,276    8,468,403 
Less: Current portion   2,938,757    2,938,757 
Debt, long term portion  $3,335,519   $5,529,646 

 

 

[1]In April 2020, we received proceeds of $500,000 from a loan entered into with the U.S. Small Business Administration. Under the terms of the loan interest is to accrue at a rate of 3.75% per annum. We began making installment payments of $2,437 in October 2022. All interest and principal is due and payable thirty years from the date of the loan. During the nine months ended September 30, 2023 and 2022 we recorded $14,024 and $14,024, respectively, worth of interest on the loan. During the nine months ended September 30, 2023 we made interest payments on the loan of $24,370.
  
[2]During the year ended March 31, 2021, we entered into notes with third parties for $19,089,500 in exchange for the cancellation of APEX leases previously entered into, which resulted in our purchase of all rights and obligations under the leases. We agreed to settle a portion of the debt during the year ended March 31, 2021, at a discount to the original note terms offered, by making lump sum payments, issuing shares of our common stock, issuing shares of our preferred stock, and issuing cryptocurrency. The remaining notes are all due December 31, 2024 and have a fixed monthly payment that is equal to 75% of the face value of the note, divided by 48 months. The monthly payments began the last day of January 2021 and continue until December 31, 2024 when the last monthly payment will be made, along with a balloon payment equal to 25% of the face value of the note, to extinguish the debt. During the nine months ended September 30, 2023, we repaid a portion of the debt with cash payments of $699,760 and issuances of cryptocurrency valued at $1,484,021. During the nine months ended September 30, 2022, we repaid a portion of the debt with cash payments of $729,016 and issuances of cryptocurrency valued at $1,487,797.

 

NOTE 7 – DERIVATIVE LIABILITY

 

During the nine months ended September 30, 2023, we had the following activity in our derivative liability account relating to our warrants:

 

Derivative liability at December 31, 2022  $24,426 
Derivative liability recorded on new instruments   - 
Derivative liability reduced by warrant exercise (see NOTE 9)   (3)
(Gain) loss on fair value   (15,596)
Derivative liability at September 30, 2023  $8,827 

 

We use the binomial option pricing model to estimate fair value for those instruments at inception, at warrant exercise, and at each reporting date. During the nine months ended September 30, 2023, the assumptions used in our binomial option pricing model were in the following range:

 

Risk free interest rate   4.80-5.03%
Expected life in years   1.84 - 2.75 
Expected volatility   117 - 143%

 

18
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

NOTE 8 – OPERATING LEASE

 

In August 2019, we entered an operating lease for office space in Eatontown, New Jersey (the “Eatontown Lease”), in September 2019 we entered an operating lease for office space in Kaysville, Utah (the “Kaysville Lease”), in May 2021 we entered an operating lease for office space in Conroe, Texas (the “Conroe Lease”), in July 2021 we entered an operating lease for office space in Wyckoff, New Jersey (the “Wyckoff Lease”), and in September 2021, we assumed an operating lease for office space in Haverford, Pennsylvania (the “Haverford Lease”) in connection with the MPower acquisition. This facility is now being used as the headquarters of the company.

 

At commencement of the Eatontown Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $110,097. The three-year lease term of the Eatontown Lease was extended on a month-to-month basis commencing August 1, 2022 and was terminated in February 2023. Under the lease, we were 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 were expensed as incurred.

 

At commencement of the Conroe Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $174,574. This lease was terminated in June 2023.

 

At commencement of the Wyckoff Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $22,034. The original 24.5-month term of the Wyckoff Lease was extended through July 2025 with an option for the Company to terminate with 60 days’ written notice beginning June 1, 2024. The earliest termination date is July 31, 2024. At the extension of the Wyckoff Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $23,520.

 

At date of acquisition of the Haverford Lease, right-of-use assets and lease liabilities obtained amounted to $125,522 and $152,961, respectively. The term of the Haverford Lease was extended through December 2024. At the extension of the Haverford Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $172,042.

 

Operating lease expense was $128,583 for the nine months ended September 30, 2023. Operating cash flows used for the operating leases during the nine months ended September 30, 2023, was $120,935. As of September 30, 2023, the weighted average remaining lease term was 1.34 years and the weighted average discount rate was 12%.

 

Future minimum lease payments under non-cancellable leases as of September 30, 2023, were as follows:

 

      
Remainder of 2023  $23,808 
2024   116,027 
2025   7,835 
Total   147,670 
Less: Interest   (1,637)
Present value of lease liability   146,033 
Operating lease liability, current [1]   (115,901)
Operating lease liability, long term  $30,132 

 

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

 

NOTE 9 – 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.

 

Our Board of Directors approved the designation of 2,000,000 of the Company’s shares of preferred stock as Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), each with a stated value of $25 per share. Our Series B Preferred Stockholders are entitled to receive cumulative dividends at the annual rate of 13% per annum of the stated value, equal to $3.25 per annum per share. The Series B Preferred Stock is redeemable at our option or upon certain change of control events.

 

19
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

During the year ended March 31, 2021, we commenced a public securities offering to sell a total of 2,000,000 units at $25 per unit (“Unit Offering”), with each unit consisting of: (i) one share of our newly authorized Series B Preferred Stock and (ii) five warrants each exercisable to purchase one share of common stock at an exercise price of $0.10 per warrant share. Each Warrant offered is immediately exercisable on the date of issuance, will expire 5 years from the date of issuance, and its value has been classified as a fair value liability due to the terms of the instrument (see NOTE 7). The Unit Offering was completed on or about August 17, 2021, having resulted in the public offer and sale of 252,192 Units.

 

As of September 30, 2023 and December 31, 2022, we had 252,192 shares of preferred stock issued and outstanding.

 

Preferred Stock Dividends

 

During the nine months ended September 30, 2023, we recorded $614,505 for the cumulative cash dividends due to the shareholders of our Series B Preferred Stock. We made payments of $481,075 in cash and issued $129,650 worth of cryptocurrency to reduce the amounts owed. As a result, we recorded $240,410 as a dividend liability on our balance sheet as of September 30, 2023.

 

During the nine months ended September 30, 2022, we recorded $614,505 for the cumulative cash dividends due to the shareholders of our Series B Preferred Stock. We made payments of $470,563 in cash and issued $129,817 worth of cryptocurrency to reduce the amounts owed.

 

Common Stock Transactions

 

During the nine months ended September 30, 2023, we issued 230 shares of common stock as a result of warrants exercised, resulting in proceeds of $23 and an increase in additional paid in capital of $3 for the derivative liability extinguished with the exercise (see NOTE 7). Also, during the nine months ended September 30, 2023, we repurchased 302,919,223 shares from two of the original founders of the Company and a series of their family members and related entities in exchange for cash of $3,172,380 (see NOTE 5). We also recognized $2,046,683 in stock-based compensation based on grant date fair values and vesting terms of awards granted in prior periods.

 

During the nine months ended September 30, 2022, we cancelled 219,833,334 shares of our common stock that had been issued but were forfeited voluntarily by the holders thereof, consisting of: 150,000,000 shares collectively surrendered by Mario Romano and Annette Raynor under the Separation Agreements (see NOTE 5); and 69,833,334 outstanding unvested restricted shares that were surrendered by senior management prior to vesting in consideration of the issuance of replacement options (discussed below). As a result, we decreased common stock by $219,834 and increased additional paid in capital by the same. Further, 33,333,333 shares of common stock formerly held by Joseph Cammarata were forfeited as of December 31, 2021 in connection with his termination by the Company (relating primarily to his then ongoing legal proceedings). All forfeited shares were deemed cancelled as of June 30, 2022. Also, during the nine months ended September 30, 2022, we repurchased 43,101,939 shares from members of our then management team and Board of Directors in exchange for cash of $1,724,008 to pay for tax withholdings (see NOTE 5). We also recognized $383,906 in stock-based compensation based on grant date fair values and vesting terms of awards granted in prior periods.

 

As of September 30, 2023 and December 31, 2022, we had 2,333,356,496 and 2,636,275,489 shares of common stock issued and outstanding, respectively.

 

Options

 

During the year ended December 31, 2022, we restructured unvested incentive equity awards previously granted to our senior leadership team. The Company’s senior management team and board of directors unanimously agreed to surrender and terminate an aggregate of 68,533,334 outstanding unvested restricted shares of our common stock and 218,500,000 shares of our common stock that we agreed to issue, subject to conditions of issuance, in exchange for the issuance of options to purchase 360,416,665 shares of our common stock, vesting in equal amounts over a five-year period, at an exercise price of $0.05 per share, with a seven-year life. The third-party valuation firm we engaged to value these options utilized the Black Scholes Model to value these options and the expense related to these options is being recognized over their vesting terms. Total stock compensation expense related to the options for the nine months ended September 30, 2023 and 2022, was $2,036,345 and $1,384,210, respectively.

 

20
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

Warrants

 

Transactions involving our warrants are summarized as follows:

 

       Weighted 
   Number of   Average 
   Shares   Exercise Price 
Warrants outstanding at December 31, 2022   1,178,320   $0.10 
Granted   -   $- 
Canceled/Expired   -   $- 
Exercised   (230)  $0.10 
Warrants outstanding at September 30, 2023   1,178,090   $0.10 

 

Details of our warrants outstanding as of September 30, 2023, is as follows:

 

Exercise Price   Warrants Outstanding   Warrants Exercisable   Weighted Average Contractual Life (Years) 
$0.10    1,178,090    1,178,090    2.40 

 

Class B Units of Investview Financial Group Holdings, LLC

 

As of September 30, 2023, and December 31, 2022, there were 565,000,000 Units of Class B Investview Financial Group Holdings, LLC issued and outstanding. These units were issued as consideration for the purchase of operating assets and intellectual property rights of MPower, a company controlled and partially owned by David B. Rothrock and James R. Bell, two of our board members. The Class B Redeemable Units have no voting rights but can be exchanged at any time, within 5 years from the date of issuance, for 565,000,000 shares of our common stock on a one-for-one basis and are subject to significant restrictions upon resale through 2025 under the terms of a lock up agreement entered into as part of the purchase agreement. In order to properly account for the purchase transaction on the Company’s financial statements, we were required by applicable financial reporting standards to value the Class B Units issued to MPower in the transaction as of the closing date of the MPower sale transaction (September 3, 2021). For these accounting purposes, we concluded that the “fair value” of the consideration for financial accounting purposes, at the if-converted market value of the underlying common shares was $58.9 million, based on the closing market price of $0.1532 on the closing date of September 3, 2021, as discounted from $86.6 million by 32% (or $27.7 million) to reflect the significant lock up period. The “fair value” valuation of the Class B Units, however, was completed relying on a certain set of methodologies that are accepted for accounting purposes, and is not necessarily indicative of the “fair market value” that may be implied relative to such Units in a commercial transaction not governed by financial reporting standards. In particular, the methodology used to value the Class B Units at their “fair value” did not take into account any blockage discounts that may otherwise apply after the expiration of the lock-up period in 2025; while other valuation methodologies, not bound by financial reporting codifications, would possibly determine that the blockage discount associated with the resale of 565 million shares after the expiration of the lock-up period, into a marketplace that has limited market liquidity, could possibly have a material downward influence on the valuation.

 

NOTE 10 – COMMITMENTS AND CONTINGENCIES

 

In the ordinary course of business, we may be, or have been, involved in legal proceedings. During the nine months ended September 30, 2023, we were not involved in any material legal proceedings, however, during November 2021 we received a subpoena from the United States Securities and Exchange Commission (“SEC”) for the production of documents. We have reason to believe that the focus of the SEC’s inquiry involves whether certain federal securities laws were violated in connection with, among other things, the offer and sale of our now discontinued Apex sale and leaseback program, the operation of our direct selling network now known as iGenius, and the offer and sale of cryptocurrency products. In the subpoena, the SEC advised that the investigation does not mean that the SEC has concluded that we or anyone else has violated federal securities laws and or any other law. We believe that we have complied at all times with the federal securities laws. However, we are aware of the evolving SEC commentary and rulemaking process relative to the characterization of cryptocurrency products under federal securities laws that is sweeping through a large number of businesses that operate within the cryptocurrency sector. We have to date and continue to cooperate fully with the SEC’s investigation and will continue to work with outside counsel to review the matter.

 

We generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with a third-party supplier, certain of which, until January 2022, included a product protection option provided by a third-party provider. According to marketing and legal documents provided by such third-party provider, the product protection would allow the purchaser to protect its initial purchase price by obtaining 50% of its purchase price at five years or 100% of its purchase price at ten years. In January 2022, we suspended any further offering of the product protection option in the cryptocurrency packages after the third-party provider was unable to comply with our standard vendor compliance protocols, citing certain offshore confidentiality entitlements. That suspension will remain in place until we are able to further validate the continued integrity of the product protection and the vendor’s ability to honor its commitments to our members. We cannot ensure that such third-party provider will comply with its contractual requirements, which could cause our members to not achieve the level of return on their investments expected, and possibly expose us to claims that could have an adverse effect on our business, financial condition, and operating results.

 

21
 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2023

(Unaudited)

 

Joseph Cammarata served as an officer and director of the Company from December 2019 through his termination for cause on or about December 7, 2021. Mr. Cammarata was terminated following the announcement of civil and criminal charges filed against him in connection with his involvement with a class action claims aggregator unrelated to the Company. The Company was unaware of these outside business interests. Based on public reporting of the matter, the Company believes that Mr. Cammarata was convicted of certain of these criminal charges and is presently incarcerated.

 

Prior to his termination, Mr. Cammarata and the Company engaged in certain transactions as described below:

 

We issued a promissory note to Mr. Cammarata, which, following certain modifications, on or about March 30, 2021, was restated in the principal amount of $1,550,000 (the “Cammarata Note”). Although not originally convertible, as per the March 30, 2021, amendment, the Cammarata Note became convertible at $0.02 per share, Thereafter, effective September 21, 2021, and following another modification, the conversion price under the Cammarata Note was reduced to $0.008 per share. During February 2022, we provided 30 days’ notice of our intent to retire and repay the Cammarata Note in cash. Having not timely received a properly executed conversion notice within the proscribed period and citing certain breaches of Mr. Cammarata’s fiduciary duty to us, as well as damages incurred by us arising from Mr. Cammarata’s then ongoing legal proceedings, on or about March 31, 2022, we tendered to Mr. Cammarata cash payment in full for the Cammarata Note. As of the date of this Report, Mr. Cammarata has not accepted our tender of the cash payment, and through his then counsel, has asserted his entitlement to exercise his right to convert the Cammarata Note into our common shares. Although we believe that our cash tender was appropriate under the terms of the Cammarata Note and our claims for damages by Mr. Cammarata have merit, if Mr. Cammarata elects to challenge our cash tender in a court proceeding, and if we are unable to sustain our legal position on the matter, Mr. Cammarata could receive up to approximately 203 million shares of our common stock upon conversion of the Cammarata Note. As a result of his recent incarceration, the Company has been unable to further adjudicate these issues with Mr. Cammarata.

 

On March 22, 2021, we entered into Securities Purchase Agreements to purchase 100% of the operating assets of SSA Technologies LLC, an entity that owns and operates a FINRA-registered broker-dealer. SSA is controlled and partially owned by Joseph Cammarata, our former Chief Executive Officer. Commencing upon execution of the agreements and through the closing of the transactions, we agreed to provide certain transition service arrangements to SSA. In connection with the transactions, we entered into a Working Capital Promissory Note with SSA under which SSA was to have advanced to us up to $1,500,000 before the end of 2021; however, SSA has only provided advances of $1,200,000 to date. The note bears interest at the rate of 0.11% per annum therefore we recognized $990 worth of interest expense on the loan during the nine months ended September 30, 2023. The note was due and payable by January 31, 2022; however, has not yet been repaid as we consider our legal options in light of SSA’s failure to complete its funding obligations. The note was to have been secured by the pledge of 12,000,000 shares of our common stock; however, it remains unsecured as the pledge of shares was not implemented at the closing of the loan. As a result of his recent incarceration, the Company has been unable to further adjudicate these issues with Mr. Cammarata.

 

NOTE 11 – INCOME TAXES

 

For the periods ended September 30, 2023, and September 30, 2022, the Company used a discrete effective tax rate method for recording income taxes, as compared to an estimated full year annual effective tax rate method, as an estimate of the annual effective tax rate cannot be made.

 

Provision for income taxes for the three and nine months ended September 30, 2023, was $304,262 and $1,100,599, respectively, resulting in an effective tax rate of 13.2% and 26.8%, respectively. Provision for income taxes for the three and nine months ended September 30, 2022 was $362,563 and $1,004,308, respectively, resulting in an effective tax rate of (623.9%) and 35.1%, respectively. The provision for income taxes was primarily impacted by pretax book income, permanent differences, and by the change in valuation allowance on deferred tax assets.

 

NOTE 12 – SUBSEQUENT EVENTS

 

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 subsequent events that require disclosure.

 

22
 

 

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 operate a financial technology (FinTech) services company in several different businesses. We deliver multiple products and services through a direct selling network, also known as multi-level marketing, of independent distributors that offer our products and services through a subscription-based revenue model to our distributors, as well as by our distributors to a large base of customers that we refer to as “members”. Through this business, we provide research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research and education regarding equities, options, FOREX, ETFs, binary options, and cryptocurrency. In addition to trading research and education, we also offer 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 and 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. In addition to our education subscriptions, through a distribution arrangement we have with a third party, we provided our members with an opportunity to purchase through such third party, a specialty form of adaptive digital currency called “ndau”. The sale of ndau was discontinued during the quarter ended September 30, 2023. Through our direct selling model, we compensate our distributors with commissions under a standard bonus plan that allows for discretionary bonuses based on performance.

 

We also operate a blockchain technology business that provides leading-edge research, development, and FinTech services involving the management of digital asset technologies with a focus on Bitcoin mining and the new generation of digital assets. We own and manage over 5,000 next-generation Bitcoin application-specific integrated circuit (“ASIC”) miner machines, with 100% of such machines being powered by renewable energy sources, mainly hydropower plants and geothermal. We are also developing new and more efficient ways to mine cryptocurrencies through innovations in hardware, firmware, and additional ways to develop and utilize renewable energy sources, to increase the hash rate, uptime, profitability, and overall ROI of our crypto currency mining operations.

 

Since 2021, we have attempted to develop a brokerage and financial markets business. This was originally designed to, among other things, commercialize on the proprietary trading platform we acquired in September 2021 from MPower Trading Systems, LLC (“MPower”), to provide self-directed (DIY) investors with low pricing, a powerful trading platform, research, analytical tools, real-time data & news, insights and support for investing and trading in stocks, options, ETFs and mutual funds. Towards that end, in March 2021, we agreed to acquire a brokerage firm owned by an affiliate of our former chief executive officer. However, having been unable to secure the requisite FINRA approval by the expiration of that agreement, we terminated the transaction on June 14, 2022, and have since then continued our search for alternative acquisitions within the brokerage industry. Further, until we are able to start this business, we recently elected to wind down the registration of a dormant investment advisor and commodity trading advisor we own as we concluded there to be no material benefit to retaining an interest in these regulated businesses until we are able to launch our broader-based financial services model.

 

23
 

 

Results of Operations

 

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

 

Revenues

 

   Three Months Ended September 30,   Increase 
   2023   2022   (Decrease) 
   (unaudited)   (unaudited)     
Subscription revenue, net of refunds, incentives, credits, and chargebacks  $16,117,992   $11,823,581   $4,294,411 
Mining revenue   2,905,182    2,777,634    127,548 
Cryptocurrency revenue   146,466    351,433    (204,967)
Miner equipment repair revenue   -    43,511    (43,511)
Total revenue, net  $19,169,640   $14,996,159   $4,173,481 

 

Revenue, net, increased $4,173,481 or 28%, from $14,996,159 for the three months ended September 30, 2022, to $19,169,640 for the three months ended September 30, 2023. The increase can be explained by $4.3 million and $128 thousand increases in our subscription revenue and mining revenue, offset by a $205 thousand and $44 thousand decrease in our cryptocurrency revenue and miner repair revenue, respectively. The $4.3 million or 36% increase in subscription revenue was due to significant product enhancements and expansion into new markets globally, resulting in substantial growth in our membership; the $128 thousand or 5% increase in mining revenue was primarily the result of a 32% increase in the average value of Bitcoin and further enhanced by the replacement of older less efficient Bitcoin mining equipment with new generation higher performing miners which was partially offset by an 81% increase in Bitcoin mining difficulty and higher power and hosting rates during the same period; and the $205 thousand or (58%) decrease in cryptocurrency revenue was due to an overall decrease in the number of sales of NDAU packages.

 

Operating Costs and Expenses

 

   Three Months Ended September 30,   Increase 
   2023   2022   (Decrease) 
   (unaudited)   (unaudited)     
Cost of sales and service  $3,147,890   $2,144,733   $1,003,157 
Commissions   9,272,024    6,551,195    2,720,829 
Selling and marketing   7,410    17,874    (10,464)
Salary and related   1,714,299    2,359,225    (644,926)
Professional fees   285,133    601,367    (316,234)
Impairment expense   -    625    (625)
Loss (gain) on disposal of assets   -    (118,041)   118,041 
General and administrative   2,500,129    2,916,167    (416,038)
Total operating costs and expenses  $16,926,885   $14,473,145   $2,453,740 

 

Operating costs increased $2,453,740, or 17%, from $14,473,145 for the three months ended September 30, 2022, to $16,926,885 for the three months ended September 30, 2023. The increase can be explained by an increase in commissions of $2.7 million, which was a result of increases in our subscription revenue, an increase in cost of sales and services of $1 million, which was a result of an increase in the cost of mining, and an increase in loss (gain) on disposal of assets of $118 thousand, which was a result of a loss recognized during the prior period from the sale of mining equipment from our repair business. These increases were offset by a decrease in salary and related costs of $645 thousand, which was a result of the recognition of more stock-based compensation during the prior period, a decrease in general and administrative, which was a result of a decrease in depreciation expense, and a decrease in professional fees of $316 thousand due to decreased legal expenses.

 

24
 

 

Other Income and Expenses

 

   Three Months Ended September 30,     
   2023   2022   Change 
   (unaudited)   (unaudited)     
Gain (loss) on fair value of derivative liability   11,939    2,319    9,620 
Realized gain (loss) on cryptocurrency   (58,401)   (318,000)   259,599 
Interest expense   (4,726)   (4,726)   - 
Interest expense, related parties   (310,594)   (310,595)   1 
Other income (expense)   431,603    49,872    381,731 
Total other income (expense)  $69,821   $(581,130)  $650,951 

 

We recorded other income of $69,821 for the three months ended September 30, 2023, which was a difference of $650,951, or 112%, from the prior period other expense of $581,130. The change is due to a decrease in the realized loss recorded on cryptocurrency in the current period of $58 thousand compared to a realized loss of $318 thousand in the prior period and an increase in Other income (expense) in the current period of $432 thousand compared to $50 thousand in the prior period, which was a result of earning more interest income due to our cash balances being held in higher interest bearing accounts in the current period compared to the prior period and lease payments received under a structured equipment lease agreement.

 

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

 

Revenues

 

   Nine Months Ended September 30,   Increase 
   2023   2022   (Decrease) 
   (unaudited)   (unaudited)     
Subscription revenue, net of refunds, incentives, credits, and chargebacks  $41,659,185   $36,658,790   $5,000,395 
Mining revenue   7,798,279    9,412,751    (1,614,472)
Cryptocurrency revenue   513,285    1,308,809    (795,524)
Miner equipment repair revenue   23,378    123,621    (100,243)
Digital wallet revenue   -    5,868    (5,868)
Total revenue, net  $49,994,127   $47,509,839   $2,484,288 

 

Revenue, net, increased $2,484,288, or 5%, from $47,509,839 for the nine months ended September 30, 2022, to $49,994,127 for the nine months ended September 30, 2023. The increase can be explained by a $5 million increase in our subscription revenue, offset by a $1.6 million, $796 thousand, and $100 thousand decrease in our mining revenue, cryptocurrency revenue, and miner equipment repair revenue, respectively. The $5 million or 14% increase in subscription revenue was due to significant product enhancements and expansion into new markets globally, resulting in substantial growth in our membership; the $1.6 million or (17%) decrease in mining revenue was a result of a (17%) decrease in the average value of Bitcoin, a 67% increase in the average Bitcoin mining difficulty levels, the migration of mining servers to a new data center and increased power and hosting costs, partially offset by the replacement of older less efficient Bitcoin mining equipment with new generation higher performing miners; the $796 thousand decrease in cryptocurrency revenue was due to an overall decrease in the number of sales of NDAU and the discontinuation of the NDAU program offering; and the $100 thousand or (81%) decrease in miner equipment repair revenue was due to the discontinuance of our miner repair business during the quarter ended June 30, 2023.

 

Operating Costs and Expenses

 

    Nine Months Ended September 30,     Increase  
    2023     2022     (Decrease)  
    (unaudited)     (unaudited)        
Cost of sales and service   $ 7,614,768     $ 5,873,214     $ 1,741,554  
Commissions     24,005,229       20,380,676       3,624,553  
Selling and marketing     536,464       53,139       483,325  
Salary and related     5,416,292       5,215,833       200,459  
Professional fees     1,202,674       2,350,687       (1,148,013 )
Impairment expense     -       7,008       (7,008 )
Loss (gain) on disposal of assets     184,221       (389,550 )     573,771  
General and administrative     7,190,383       7,611,867       (421,484 )
Total operating costs and expenses   $ 46,150,031     $ 41,102,874     $ 5,047,157  

 

Operating costs increased $5,047,157, or 12%, from $41,102,874 for the nine months ended September 30, 2022, to $46,150,031 for the nine months ended September 30, 2023. The increase can be explained by an increase in commissions of $3.6 million, which was a result of increases in our subscription revenue, an increase in cost of sales and services of $1.7 million, which was a result of an increase in the cost of mining, an increase in loss (gain) on disposal of assets of $574 thousand, which was a result of a loss recognized during the current period after the discontinuance of our mining equipment repair business, an increase in salary and related costs of $200 thousand, which was a result of the recognition of more stock-based compensation during the current period, and an increase in selling and marketing costs of $483 thousand, which was mainly driven by an iGenius sales and marketing event. These increases were offset by a decrease in professional fees of $1.1 million due to decreased legal expenses.

 

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Other Income and Expenses

 

   Nine Months Ended September 30,     
   2023   2022   Change 
   (unaudited)   (unaudited)     
Gain (loss) on debt extinguishment  $-   $455   $(455)
Gain (loss) on fair value of derivative liability   15,596    40,155    (24,559)
Realized gain (loss) on cryptocurrency   170,444    (1,338,597)   1,509,041 
Interest expense   (14,024)   (14,024)   - 
Interest expense, related parties   (929,008)   (2,339,729)   1,410,721 
Other income (expense)   1,027,108    107,725    919,383 
Total other income (expense)  $270,116   $(3,544,015)  $3,814,131 

 

We recorded other income of $270,116 for the nine months ended September 30, 2023, which was a difference of $3,814,131, or 108%, from the prior period other expense of $3,544,015. The change is due to a realized gain recorded on cryptocurrency in the current period of $170 thousand compared to a realized loss of $1.3 million in the prior period, less related party interest expense recorded in current period versus the prior period ($929 thousand for the nine months ended September 30, 2023 compared to $2.3 million for the nine months ended September 30, 2022), and an increase in Other income (expense) in the current period of $1 million compared to $108 thousand in the prior period, which was a result of ticket sales from a promotional event iGenius held during the nine months ended September 30, 2023, earning more interest income due to our cash balances being held in higher interest bearing accounts in the current period compared to the prior period, and lease payments received under a structured equipment lease agreement. Amounts recorded in related party interest expense included the amortization of debt discounts, which was being recognized over the term of the debt, however, during the nine months ended September 30, 2022, we repaid two of our related party notes early, which resulted in the recognition of $1.2 million of the amortization of the related debt discount amounts into interest.

 

Liquidity and Capital Resources

 

During the nine months ended September 30, 2023, we recorded net income from operations of $3,844,096 and net income of $3,013,613. We used this cash, as well as other cash on hand, to fund operations, fund the purchase of $2,529,237 worth of fixed assets, to repay $675,387 worth of related party debt, and to repay $724,130 worth of debt. As a result, our cash, cash equivalents, and restricted cash increased by $1,413,859 to $22,902,757 as compared to $21,488,898 at the beginning of the fiscal year. As of September 30, 2023, our current assets exceeded our current liabilities to result in working capital of $14,082,655. We believe we will have sufficient resources, including cash flow from operations and access to capital markets, to meet debt service obligations in a timely manner and be able to meet our short-term business objectives.

 

Critical Accounting Policies

 

Basis of Accounting

 

Our policy is to prepare our financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

 

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 September 30, 2023, are not necessarily indicative of the operating results that may be expected for the filing of our December 31, 2023 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2022 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K.

 

26
 

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC (formerly Kuvera, LLC), Apex Tek, LLC (formerly Razor Data, LLC), SAFETek, LLC (formerly WealthGen Global, LLC), United Games, LLC, United League, LLC, iGenius Global LTD (formerly Kuvera (N.I.) LTD), Investview Financial Group Holdings, LLC, Investview MTS, LLC, MyLife Wellness Company, and S.A.F.E Management, LLC. All intercompany transactions and balances have been eliminated in consolidation.

 

Use of Estimates

 

The preparation of these 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.

 

Long-Lived Assets – Intangible Assets & License Agreement

 

We account for our cryptocurrencies and intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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, which 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. Our cryptocurrencies are deemed to have an indefinite useful life; therefore, amounts are not amortized, but rather are assessed for impairment as further discussed in our impairment policy. Under ASC Subtopic 350-30 any intangible asset with a useful life is required to be amortized over that life and the useful life is 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.

 

We hold cryptocurrency-denominated assets and include them in our consolidated balance sheet as other assets. The value of our cryptocurrencies as of September 30, 2023 and December 31, 2022, were $2,183,252 ($2,047,582 current and $135,670 restricted long term) and $2,474,096 ($2,360,957 current and $113,139 restricted long term), respectively. Cryptocurrencies purchased or received for payment from customers are recorded in accordance with ASC 350-30 and cryptocurrencies awarded to the Company through its mining activities ($7,798,279 and $9,412,751 for the nine months ended September 30, 2023 and 2022, respectively) are accounted for in connection with the Company’s revenue recognition policy. The use of cryptocurrencies is accounted for in accordance with the first in first out method of accounting. For the nine months ended September 30, 2023 and 2022, we recorded realized gains (losses) on our cryptocurrency transactions of $170,444 and $(1,338,597), respectively.

 

On March 22, 2021, we entered into Securities Purchase Agreement to acquire the operating assets and intellectual property rights of MPower Trading Systems LLC, a company controlled and partially owned by David B. Rothrock and James R. Bell, two of our board members. As a result, we obtained Prodigio, a proprietary software-based trading platform with applications within the brokerage industry, which was valued at $7,240,000 and recorded on our balance sheet as an intangible asset as of December 31, 2021. The intangible asset was expected to have a definite life, however, during the year ended December 31, 2022, the software had not been placed in service, therefore a useful life had not been assigned and no amortization had been recorded. Instead, as of December 31, 2022, the intangible asset was conservatively impaired due to a question on the recoverability of the value recorded.

 

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.

 

We evaluate 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 September 30, 2023, no impairment was recorded. During the nine months ended September 30, 2022, we impaired our fixed assets with a cost basis of $15,772 due to the lack of use. We had recorded accumulated depreciation and accumulated amortization of $8,764 for the impaired assets through the date of impairment, therefore we recorded impairment expense of $7,008 during the nine months ended September 30, 2022.

 

27
 

 

Subscription Revenue

 

Most 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 designated trial period to first time subscription customers, during which a full refund can be requested if a customer does not wish to continue with the subscription. 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. As of September 30, 2023 and December 31, 2022, our deferred revenues were $2,803,982 and $2,074,574, respectively.

 

Mining Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, we leased equipment under a sales-type lease through June of 2020. In June of 2020 we cancelled all leases and purchased all of the rights and obligations under the leases, which included obtaining ownership of all equipment. We 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.

 

Cryptocurrency Revenue

 

We generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with a third-party supplier. The various packages included different amounts of coin with differing rates of returns and terms. The coin is delivered by a third-party supplier. The sale of cryptocurrency packages was discontinued during the quarter ended September 30, 2023.

 

We recognize cryptocurrency 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 to our customers and payment is received from our customers at the time of order placement. All customers are given two weeks to request a refund, therefore we record a customer advance on our balance sheet upon receipt of payment. After the two weeks have passed from order placement, we request our third-party supplier to deliver coin, at which time we recognize revenue and the amounts due to our supplier on our books. As of September 30, 2023 and December 31, 2022, our customer advances related to cryptocurrency revenue were $0 and $96,609, respectively.

 

Mining Equipment Repair Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, we repair broken mining equipment for sale to third-party customers. Our mining equipment repair business was discontinued during the quarter ended June 30, 2023.

 

We recognize miner repair 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 the promised goods to our customers.

 

Digital Wallet Revenue

 

We generate revenue from the sale of digital wallets to our customers through an arrangement with a third-party supplier. We offer three tiers of wallets which include different features. The digital wallets are delivered by a third-party supplier. The sale of digital wallets to our customers was discontinued during the year ended December 31, 2022.

 

We recognize digital wallet 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-parties to provide the wallet to our customers and payment is received from our customers at the time of order placement.

 

28
 

 

Revenue generated for the nine months ended September 30, 2023, was as follows:

 

   Subscription
Revenue
   Cryptocurrency Revenue   Mining Revenue   Miner Repair Revenue   Total 
Gross billings/receipts  $45,284,739   $990,785   $7,798,279   $23,378   $54,097,181 
Refunds, incentives, credits, and chargebacks   (3,625,554)   -    -    -    (3,625,554)
Amounts paid to providers   -    (477,500)   -    -    (477,500)
Net revenue  $41,659,185   $513,285   $7,798,279   $23,378   $49,994,127 

 

For the nine months ended September 30, 2023, foreign and domestic revenues were approximately $38.1 million and $11.9 million, respectively.

 

Revenue generated for the nine months ended September 30, 2022, was as follows:

 

   Subscription
Revenue
   Cryptocurrency
Revenue
   Mining
Revenue
   Miner Repair
Revenue
   Digital Wallet
Revenue
   Total 
Gross billings/receipts  $39,087,141   $2,548,316   $9,412,751   $         123,621   $                7,157   $51,178,986 
Refunds, incentives, credits, and chargebacks   (2,428,351)   -    -    -    -    (2,428,351)
Amounts paid to providers   -    (1,239,507)   -    -    (1,289)   (1,240,796)
Net revenue  $36,658,790   $1,308,809   $9,412,751   $123,621   $5,868   $47,509,839 

 

For the nine months ended September 30, 2022 foreign and domestic revenues were approximately $32.2 million and $15.3 million, respectively.

 

Revenue generated for the three months ended September 30, 2023, was as follows:

 

   Subscription
Revenue
   Cryptocurrency
Revenue
   Mining
Revenue
   Total 
Gross billings/receipts  $17,499,805   $258,466   $2,905,182   $20,663,453 
Refunds, incentives, credits, and chargebacks   (1,381,813)   -    -    (1,381,813)
Amounts paid to providers   -    (112,000)   -    (112,000)
Net revenue  $16,117,992   $146,466   $2,905,182   $19,169,640 

 

For the three months ended September 30, 2023, foreign and domestic revenues were approximately $14.7 million and $4.5 million, respectively.

 

29
 

 

Revenue generated for the three months ended September 30, 2022, was as follows:

 

   Subscription
Revenue
   Cryptocurrency Revenue   Mining Revenue   Miner Repair Revenue   Digital Wallet Revenue   Total 
Gross billings/receipts  $12,638,375   $673,933   $  2,777,634   $          43,511   $                      -   $16,133,454 
Refunds, incentives, credits, and chargebacks   (814,794)   -    -    -    -    (814,794)
Amounts paid to providers   -    (322,500)   -    -    -    (322,500)
Net revenue  $11,823,581   $351,433   $2,777,634   $43,511   $-   $14,996,159 

 

For the three months ended September 30, 2022 foreign and domestic revenues were approximately $10.3 million and $4.7 million, respectively.

 

Recent Accounting Pronouncements

 

We have noted no recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.

 

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 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.

 

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 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 effective.

 

Changes in Internal Controls

 

There were no changes in our internal controls over financial reporting during the fiscal quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

30
 

 

PART II – OTHER INFORMATION

 

ITEM 1 – LEGAL PROCEEDINGS

 

There have been no material changes to this information since reported on in the Annual Report on Form 10-K for the year ended December 31, 2022.

 

ITEM 1.A – RISK FACTORS

 

Other than as set forth below, there have been no material changes in the risk factors disclosed by us under Part I, Item 1A. Risk Factors contained in the Annual Report on Form 10-K for the year ended December 31, 2022.

 

The costs associated with our bitcoin mining operations could be subject to significant increase in the future should there occur an increase in the VAT tax imposed on our hosting services.

 

The Company’s bitcoin mining operations are hosted in a Northern European country that imposes a broadly-based consumption tax assessed on the value added to goods and services within its country (a “VAT tax”). However, upon the advice of local tax advisors, the Company has concluded that the imposition of a VAT tax upon in-country hosting services is subject to uncertainty. Rather than paying no VAT tax pending clarification of this uncertainty, and upon the advice of local tax advisors, the Company has implemented a structured leasing arrangement with its hosting counterparty in which lease payments to be received will be subject to a VAT tax upon which the Company will remit payment. While the Company believes that by adopting this type of structured arrangement, it can avoid any penalties or fines in the future should the local tax laws be modified or interpreted to apply to the local hosting services, there can be no assurances to this effect as the tax laws and interpretations thereof are subject to change, particularly in response to the tremendous growth in the high-powered computing industry. Further, there can be no assurances that if and to the extent that local tax laws are interpreted in the future to apply to hosting services, that the amount of VAT tax imposed upon the Company may not substantially exceed the amount payable under the currently contemplated structured leasing arrangement. A substantial increase in the amount of VAT tax due upon these local hosting operations, if it occurs, would increase the costs associated with the Company’s bitcoin operations, which could have a materially adverse effect on the Company’s business and operating results.

 

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

 

On September 29, 2023, Investview, Inc. (the “Company”) closed on the purchase in a private transaction of shares of its common stock under the terms of a Stock Purchase and Release Agreement dated September 18, 2023 (the “Agreement”). Under the Agreement, the Company purchased for surrender in a series of private transactions, an aggregate of 302,919,223 shares of the Company’s common stock (the “Purchased Shares”) from sellers consisting of Mario Romano, Annette Raynor, and a series of their family members and related entities (collectively, the “Sellers”). The Purchased Shares were purchased for aggregate consideration of $2,922,380, representing a price of $0.00964739 per share. One-eighth of the purchase price is to be paid within seven (7) days of the closing, with the balance payable in a series of equal quarterly payments over seven (7) consecutive quarters thereafter.

 

In addition to the cash consideration for the Purchased Shares, the Company also agreed to cover a limited amount of the legal fees incurred by the Sellers in the transaction, as well as provide Mr. Romano and Ms. Raynor with a $250,000 expense allowance, payable in installments, to cover legal fees and other expenses on a non-accountable basis, in connection with any matters that may arise in which either or both of Mr. Romano and/or Ms. Raynor served as officers and directors of the Company. In return, Mr. Romano and Ms. Raynor agreed to waive any future entitlement, if at all, to indemnification of costs and expenses, including legal fees under Nevada law or otherwise arising from or relating to any period in which Romano or Raynor were officers and directors of the Company.

 

Under the Agreement, the Sellers represented to the Company that the Purchased Shares represent one hundred percent (100%) of the common equity ownership in the Company of Mr. Romano, Ms. Raynor, and their respective family members and related entities. The Purchased Shares represent approximately 11.49% of the Company’s outstanding shares. As adjusted to reflect the surrender, the Company’s outstanding shares have been reduced from 2,636,275,719 to 2,333,356,496 shares of common stock.

 

Mr. Romano and Ms. Raynor were two of the original founders of the Company. They served as officers and directors of the Company through their resignations from those positions in January 2022. From January 2022 through August 2023, Mr. Romano and Ms. Raynor served as consultants to the Company. The Purchased Shares had been the subject of a lock-up agreement which limited resales until April 2025, the terms of which were waived to allow the transaction with the Company under the Agreement.

 

In addition to customary purchase and sale terms, under the Agreement, the Sellers, including Mr. Romano and Ms. Raynor, agreed to provide a customary release to the Company and its affiliates; as well, they agreed to certain customary standstill, non-disparagement, non-competition, and non-solicitation covenants.

 

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4 – MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5 – OTHER INFORMATION

 

None.

 

31
 

 

ITEM 6 – EXHIBITS

 

The following exhibits are filed as a part of this report:

 

Exhibit
Number*
  Title of Document   Location
         
Item 10   Material Contracts    
         
10.124   Stock Purchase and Release Agreement dated September 18, 2023   Incorporated by reference to the Current Report on Form 8-K filed on October 4, 2023
         
Item 31   Rule 13a-14(a)/15d-14(a) Certifications    
         
31.01   Certification of Principal Executive Officer Pursuant to Rule 13a-14   This filing.
         
31.02   Certification of Principal Financial Officer Pursuant to Rule 13a-14   This filing.
         
Item 32   Section 1350 Certifications