Blueprint
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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Amendment No. 3 to
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FORM S-1/A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933
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INVESTVIEW, INC.
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(Exact
name of registrant as specified in its charter)
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Nevada
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7389
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87-0369205
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(State
or other jurisdiction of incorporation or
organization)
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(Primary
Standard Industrial Classification Code Number)
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(I.R.S.
Employer Identification No.)
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12 South 400 West, Salt Lake City, UT 84101
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Telephone 888-778-5372
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(Address,
including zip code and telephone number, including area code, of
registrant’s principal executive offices)
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Ryan Smith, Chief Executive Officer
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Investview, Inc.
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12 South 400 West, Salt Lake City, UT 84101
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Telephone: 888-778-5372
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(Name,
address, including zip code and telephone number, including area
code, of agent for service)
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Copy to:
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Kevin C. Timken
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Michael Best & Friedrich LLP
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170 South Main Street, Suite 1000, Salt Lake City, UT
84101
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Telephone: 385-695-6450
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From time to time after the effectiveness of this registration
statement.
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(Approximate
date of commencement of proposed sale to the public)
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If any
of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box.
☒
If this
Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. ☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering.
☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering.
☐
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, 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 ☐
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Accelerated
filer ☐
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Non-accelerated
filer ☐
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Smaller
reporting company ☒
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Emerging
growth company ☐
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If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 7(a)(2)(B) of the Securities Act.
☐
CALCULATION OF REGISTRATION FEE
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Amount to be
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Proposed Maximum
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Proposed Maximum
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Amount of
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Title of Each Class of Securities to be Registered
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Registered(1)(2)
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Offering Price per Share(2)
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Aggregate Offering Price
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Registration Fee
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Common
stock, $0.001 par value
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103,000,000
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$0.0122
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$1,256,600
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$152.30
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(1)
The shares of our
common stock being registered hereunder are being registered for
sale by the selling stockholders, as defined in the accompanying
prospectus.
(2)
Pursuant to
Rule 416, the securities being registered hereunder include such
indeterminate number of additional securities as may be issuable to
prevent dilution resulting from stock splits, stock dividends, or
similar transactions.
(3)
Estimated solely
for the purpose of computing the amount of the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, based on the average of the high and low trading prices of
$0.0122 per share for the issuer’s common stock on January
16, 2019, as reported on the OTCQB tier of the OTC Markets
Group..
(4)
100,000,000 shares
of our common stock are being registered hereunder for resale by
TRITON FUNDS LP in accordance with the terms of a Common Stock
Purchase Agreement and this number represents a good–faith
estimate of the number of our shares of common stock issuable under
that agreement. Should the number of shares being registered be an
insufficient number to fully use the credit facility, we will not
rely on Rule 416, but will file a new registration statement to
cover the resale of such additional shares.
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until
the registrant files a further amendment that specifically states
that this registration statement will thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933 or
until the registration statement becomes effective on such date as
the U.S. Securities and Exchange Commission, acting pursuant to
Section 8(a), may determine.
PRELIMINARY PROSPECTUS
Subject to Completion, Dated March 25,
2019
The information contained in this preliminary prospectus is not
complete and may be changed. The selling stockholders may not sell
these securities until the registration statement filed with the
U.S. Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
INVESTVIEW, INC.
103,000,000 Shares of Common Stock
This
prospectus relates to the resale, from time to time, of up to
103,000,000 shares of the common stock of Investview, Inc., a
Nevada corporation (“Investview”), 100,000,000 of which
may be issued pursuant to the Common Stock Purchase Agreement,
as amended, which we refer to in this prospectus as
the “CSPA,” and the Registration Rights Agreement,
which we refer to in this prospectus as the “RRA,” that
we entered into with TRITON FUNDS LP, a Delaware limited
partnership (“Investor”), and 3,000,000 of which were
donated to TRITON FUNDS LLC, an affiliate of Investor. Please refer
to the sections of this prospectus entitled “The Equity
Purchase Transactions” for descriptions of the CSPA and the
RRA and “Selling Stockholders” for additional
information regarding the selling stockholders.
We are
not selling any shares of common stock in this offering. We,
therefore, will not receive any proceeds from the sale of the
shares by the selling stockholders. We will, however, receive
proceeds from the sale of securities under the CSPA.
Investor
is an “underwriter” within the meaning of the Section
2(a)(11) of the Securities Act of 1933, as amended (the
“Securities Act”).
The
selling stockholders may offer and sell, from time to time, common
stock using this prospectus in transactions:
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on the
OTC Markets or otherwise;
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at
market prices, which may vary during the offering period, or at
negotiated prices; and
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in
ordinary brokerage transactions, in block transactions, in
privately negotiated transactions, or otherwise.
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See
“Plan of Distribution” for more information about how
the selling stockholders may sell the shares of common stock being
registered pursuant to the registration statement that includes
this prospectus. The selling stockholders have informed us that
they do not have any agreement or understanding, directly or
indirectly, with any person to distribute the common
stock.
The
selling stockholders will receive all of the proceeds from the sale
of the shares and will pay all underwriting discounts and selling
commissions relating to the sale of the shares. We have agreed to
pay the legal, accounting, printing, and other expenses related to
the registration of the sale of the shares.
Our
common stock is quoted on the OTCQB tier of the OTC Markets under
the symbol “INVU.” On March 22, 2019, the
last reported sale price of our common stock was
$0.025.
An
investment in our shares involves certain risks. We urge you to
read the “Risk Factors” section beginning on page 4 and
the remainder of this prospectus before making an investment
decision.
Neither the U.S. Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is ____________, 2019
Table of Contents
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Page
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Prospectus
Summary
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1
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Forward-Looking
Statements
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3
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Risk
Factors
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4
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Price
Range of Common Stock and Dividend Policy
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12
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Use of
Proceeds
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13
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Capitalization
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13
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Dilution
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14
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operation
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14
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Business
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21
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Management
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26
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Executive
Compensation
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28
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Principal
Stockholders
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30
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Transactions
with Related Persons, Promoters, and Control Persons
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31
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The
Equity Purchase Transactions
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32
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Selling
Stockholders
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34
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Plan of
Distribution
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35
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Description
of Capital Stock
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36
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Where
You Can Find Additional Information
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37
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Legal
Matters
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37
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Experts
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38
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Index
to Financial Statements
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F-1
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You
should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to
provide you with different information.
We have
not authorized any underwriters, brokers, or dealers to make an
offer of the securities in any jurisdiction where the offer is not
permitted.
You
should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of this
prospectus.
PROSPECTUS SUMMARY
This prospectus summary contains an overview of the information
from this prospectus, but may not contain all of the information
that is important to you. This prospectus includes specific terms
of the offering of our common stock, information about our
business, and financial data. We encourage you to read this
prospectus, including the “Risk Factors” section
beginning on page 4, in its entirety before making an investing
decision. You should read this prospectus together with additional
information described below under the heading “Where You Can
Find Additional Information.” As used in this prospectus, the
terms “we,” “us,” and “our”
refer to Investview, Inc., a corporation organized under the laws
of the state of Nevada, including our subsidiaries, and our
predecessors, unless the context indicates a different
meaning.
Our Business
We own
a number of companies that each operate independently, but are
accretive to one another. We are establishing a portfolio of wholly
owned subsidiaries delivering leading-edge technologies, services,
and research dedicated primarily to the individual
consumer.
Through
our wholly owned subsidiary, Kuvera, we provide research,
education, and investment tools designed to assist the
self-directed investor in successfully navigating the financial
markets. These services include research, trade alerts, and live
trading rooms that include instruction in equities, options, Forex,
ETFs, binary options, crowdfunding, cryptocurrency mining services,
and sector education. In addition to trading tools and research, we
also offer full education and software applications to assist the
individual in debt reduction, increased savings, budgeting, and
proper tax management. Each product subscription includes a core
set of trading tools/research along with the personal finance
management suite to provide an individual with complete access to
the information necessary to cultivate and manage his or her
financial situation. Different packages are available through a
monthly subscription that can be cancelled at any time at the
discretion of the customer. A unique component of the product
marketing plan is the distribution method whereby all subscriptions
are sold via current participating customers who choose to
distribute and sell the services by participating in the bonus
plan. The bonus plan participation is purely optional but enables
individuals to create an additional income stream to further
support their personal financial goals and objectives.
In
January 2019, we launched Kuvera France in Paris to handle the
demand for Kuvera products in the European Union.
In
February 2019, we entered the trade automation space with the
launch of two new robo trading products offered to Kuvera
subscribers through our wholly owned subsidiary, SAFE Management,
which is a registered investment adviser. SAFE Management can make
investments to the trading signals and research products of Kuvera;
put and call options and alternative investments; and investments
in privately held startups for the benefit of individuals who
desire to participate in new venture startup
opportunities.
Our Address
Our
principal executive offices are located at 12 South 400 West, Salt
Lake City, UT 84101, and our telephone number is
888-778-5372.
The Offering
This
prospectus relates to the resale of up to 100,000,000 shares of our
common stock by TRITON FUNDS LP (Investor) and 3,000,000 shares of
our common stock by TRITON FUNDS LLC, together the selling
stockholders.
On
December 29, 2018, we entered into the CSPA and RRA with Investor.
The RRA requires us to file a registration statement registering
the resale of Investor’s shares within 15 days of the CSPA.
Under the CSPA, Investor is obligated to purchase $1.0 million of
our common stock within the 60 days following the date that the
registration statement becomes effective. Up to 100,000,000 shares
of our common stock are being offered for resale under this
prospectus. The shares will be purchased at 85% of the lowest
closing price of the common stock in the five consecutive trading
days immediately preceding the
delivery of a purchase notice from Investor to us. The purchase of
shares by Investor is subject to certain limitations,
including that Investor cannot purchase any shares that would
result in it owning more than 4.9% of our common
stock.
In
connection with the CSPA, we paid a document preparation fee of
$10,000 and donated 3,000,000 shares
of our common stock to TRITON FUNDS LLC, an affiliate of
Investor. This registration
statement also registers the resale of those 3,000,000
shares.
If all
103 million shares offered were sold, they would represent 3.8% of
the total number of shares of our common stock outstanding and 5.7%
of the total number of outstanding shares held by nonaffiliates as
of the date of this prospectus.
Issuances
of our common stock in this offering will not affect the rights or
privileges of our existing stockholders, except that the economic
and voting interests of each of our existing stockholders will be
diluted as a result of any such issuances. Although the number of
shares of common stock that our existing stockholders own will not
decrease, the shares owned by our existing stockholders will
represent a smaller percentage of our total outstanding shares
after any issuances to Investor.
Securities Offered
Common
stock offered by the selling stockholders:
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Up to
100,000,000 shares by Investor and 3,000,000 shares by TRITON FUNDS
LLC
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Common
stock outstanding before the offering:
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2,639,161,318
shares, which includes the 3,000,000 shares held by TRITON FUNDS
LLC
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Common
stock to be outstanding after giving effect to the issuance of the
offered shares registered hereunder:
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2,739,161,318
shares
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Shares
issuable upon exercise of outstanding options and
warrants:
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The
total number of shares of our common stock outstanding before the
offering, and to be outstanding after giving effect to the issuance
of 100,000,000 shares registered hereunder, excludes about 35,000
shares of common stock reserved for the exercise of outstanding
options and 5,587,497 shares
issuable on the exercise of outstanding options and
warrants.
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Use of
proceeds:
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We will
not receive any proceeds from the sale of the shares of common
stock by the selling stockholders in this offering. However,
we will receive $1.0 million from Investor’s purchase
of shares as required under the CSPA. Proceeds
that we receive from sales under the CSPA will be used to further
develop our products, reduce current liabilities, and fund general
corporate purposes. See
“Use of Proceeds.”
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Risk
factors:
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This
investment involves a high degree of risk. See “Risk Factors” for a
discussion of factors you should consider carefully before making
an investment decision.
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OTC
Markets (OTCQB) symbol:
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INVU
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FORWARD-LOOKING STATEMENTS
This prospectus contains statements about the future, sometimes
referred to as “forward-looking” statements.
Forward-looking statements are typically identified by the use of
the words “believe,” “may,”
“could,” “should,” “expect,”
“anticipate,” “estimate,”
“project,” “propose,” “plan,”
“intend,” and similar words and expressions. Statements
that describe our future strategic goals, plans, objectives, and
predictions are also forward-looking statements. This prospectus
contains forward-looking statements relating to future products or
product development; future selling, general and administrative
costs and research and development spending; future performance of
our network marketing efforts; our expectations regarding ongoing
litigation; international growth; and future financial performance,
results of operations, capital expenditures, and sufficiency of
capital resources to fund our operating requirements.
This forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results
in the future, and accordingly, such results may differ from those
expressed in any forward-looking statements made herein. These
risks and uncertainties include those relating to:
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noncompliance by our independent distributors with applicable legal
requirements or our policies and procedures;
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potential adverse effects on our business and stock price due to
ineffective internal controls over financial
reporting;
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inability to manage financial reporting and internal control
systems and processes;
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inability to properly motivate and manage our independent
distributors;
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inability to manage existing markets, open new international
markets, or expand our operations;
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inability of new products to gain distributor or market
acceptance;
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inability to execute our product launch process due to increased
pressure on our supply chain, information systems, and
management;
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disruptions in our information technology systems;
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inability to protect against cybersecurity risks and to maintain
the integrity of data;
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international trade or foreign exchange restrictions, increased
tariffs, foreign currency exchange fluctuations;
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deterioration of global economic conditions;
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inability to raise additional capital if needed;
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inability to retain independent distributors or to attract new
independent distributors on an ongoing basis;
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government regulations on direct selling activities in our various
markets prohibiting or severely restricting our
business;
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unfavorable publicity on our business or products;
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a finding that our direct selling program is not in compliance with
current or newly adopted laws or regulations in various
markets;
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expensive and time-consuming legal proceedings;
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potential for investigatory and enforcement action by the Federal
Trade Commission;
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failure to comply with anti-corruption laws;
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inability to build and integrate our management team;
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loss of, or inability to attract, key personnel;
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unexpected tax or other assessments relating to the activity of our
independent distributors;
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economic, political, foreign exchange, and other risks associated
with international operations; and
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volatility of the market price of our common stock.
Any forward-looking statements, including those regarding our or
our management’s current beliefs, expectations,
anticipations, estimations, projections, proposals, plans, or
intentions, are not guarantees of future performance or results or
events and involve risks and uncertainties, such as those discussed
in this prospectus.
The forward-looking statements in this prospectus are based on
present circumstances and on our predictions respecting events that
have not occurred, that may not occur, or that may occur with
different consequences from those we now assume or anticipate.
Actual events or results may differ materially from those discussed
in the forward-looking statements as a result of various factors,
including the risk factors discussed in this prospectus. These
cautionary statements are intended to be applicable to all related
forward-looking statements wherever they appear in this prospectus.
Any forward-looking statements are made only as of the date of this
prospectus, and we assume no obligation to update forward-looking
statements to reflect subsequent events or
circumstances.
RISK FACTORS
An investment in our securities involves a high degree of risk. You
should carefully consider the following risk factors, together with
the other information about these risks contained in this
prospectus, as well as the other information contained in this
prospectus generally, before deciding to buy our securities. Any of
the risks we describe below could adversely affect our business,
financial condition, operating results, or prospects. The market
prices for our securities could decline if one or more of these
risks and uncertainties develop into actual events and you could
lose all or part of your investment. Additional risks and
uncertainties that we do not yet know of, or that we currently
think are immaterial, may also impair our business operations. You
should also refer to the other information contained in this
prospectus, including our financial statements and the related
notes.
Risks Related to our Business
We have a limited operating history and, therefore, there is an
elevated risk of potential business failure unless we can overcome
the various obstacles inherent to an early-stage
business.
We have
only limited prior business operations. Because of our limited
operating history, you may not have adequate information on which
you can base an evaluation of our business and prospects. Investors
should be aware of the difficulties, delays, and expenses normally
encountered by an enterprise in its early stage, many of which are
beyond our control, including unanticipated research and
development expenses, employment costs, and administrative
expenses. We cannot assure our investors that our proposed business
plans as described herein will materialize or prove successful, or
that we will be able to finalize development of our products or
operate profitably.
We have incurred substantial operating losses since inception
(August 1, 2005), and we may never achieve
profitability.
From
our inception on August 1, 2005 through December 31, 2018, we have
incurred cumulative losses of $21,091,245. Net losses from
operations were $2,885,092 for the nine months ended December 31,
2018, and our cash balance at December 31, 2018, was $93,569.
Accordingly, we cannot assure that we will achieve profitability in
the immediate future or at all.
Our independent auditors have expressed substantial doubt about our
ability to continue as a going concern.
In
their audit opinion issued in connection with our consolidated
balance sheet as of March 31, 2018, and our related consolidated
statements of operations, deficiency in stockholders’ equity,
and cash flows for the year ended March 31, 2018, our auditors
have expressed substantial doubt about our ability to continue as a
going concern given our recurring net losses, negative cash flows
from operations, and the limited amount of funds on our balance
sheet. We have prepared our consolidated financial statements on a
going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities and commitments in the normal
course of business. The consolidated financial statements do not
include any adjustments that might be necessary should we be unable
to continue in existence. This could make it more difficult to
raise capital in the future.
We may not be able to manage our growth effectively, which could
slow or prevent our ability to achieve profitability.
The
ability to manage and operate our business as we execute our
development and growth strategy will require effective planning.
Significant rapid growth could strain our internal resources and
delay or prevent our efforts to achieve profitability. We expect
that our efforts to grow will place a significant strain on our
personnel, management systems, infrastructure, and other resources.
Our ability to manage future growth effectively will also require
us to successfully attract, train, motivate, retain, and manage new
employees and continue to update and improve our operational,
financial, and management controls and procedures. If we do not
manage our growth effectively, slower growth is likely to occur,
thereby slowing or negating our ability to achieve and sustain
profitability.
We may not be able to fully protect our proprietary rights and we
may infringe the proprietary rights of others, which could result
in costly litigation.
Our
future success depends on our ability to protect and preserve the
proprietary rights related to our products. We cannot assure that
we will be able to prevent third parties from using our
intellectual property rights and technology without our
authorization. We also rely on trade secrets, common law trademark
rights, and trademark registrations, as well as confidentiality and
work for hire, development, assignment, and license agreements with
employees, consultants, third-party developers, licensees, and
customers. Our protective measures for these intangible assets
afford only limited protection and may be flawed or
inadequate.
Policing
unauthorized use of our technology is difficult and some foreign
laws do not provide the same level of protection as U.S. laws.
Litigation may be necessary in the future to enforce our
intellectual property rights, to protect our trade secrets or
patents that we may obtain, or to determine the validity and scope
of the proprietary rights of others. Such litigation could result
in substantial costs and diversion of resources and have a material
adverse effect on our future operating results.
In
recent years, there has been significant litigation in the United
States involving patents and other intellectual property rights. In
particular, there has been an increase in the filing of suits
alleging infringement of intellectual property rights, which
pressures defendants into entering settlement arrangements quickly
to dispose of such suits, regardless of their merits. Other
companies or individuals may allege that we infringe on their
intellectual property rights. Litigation, particularly in the area
of intellectual property rights, is costly and the outcome is
inherently uncertain. In the event of an adverse result, we could
be liable for substantial damages and we may be forced to
discontinue our use of the intellectual property in question or
obtain a license to use those rights or develop noninfringing
alternatives.
Our business could be negatively affected by any adverse economic
developments in the securities markets or the economy in
general.
We
depend on the interest of individuals in obtaining financial
information and securities trading strategies to assist them in
making their own investment decisions. Significant downturns in the
securities markets or in general economic and political conditions
may cause individuals to be reluctant to make their own investment
decisions and, thus, decrease the demand for our products.
Significant upturns in the securities markets or in general
economic and political conditions may cause individuals to be less
proactive in seeking ways to improve the returns on their trading
or investment decisions and, thus, decrease the demand for our
products.
We may encounter risks relating to security or other system
disruptions and failures that could reduce the attractiveness of
our sites and that could harm our business.
Although we have implemented various security mechanisms, our
business is vulnerable to computer viruses, physical or electronic
break-ins, and similar disruptions, which could lead to
interruptions, delays, or loss of data. For instance, because a
portion of our revenue is based on individuals using credit cards
to purchase subscriptions over the Internet and a portion from
advertisers that seek to encourage people to use the Internet to
purchase goods or services, our business could be adversely
affected by these break-ins or disruptions.
Additionally, our operations depend on our ability to protect
systems against damage from fire, earthquakes, power loss,
telecommunications failure, and other events beyond our control.
Moreover, our website may experience slower response times or other
problems for a variety of reasons, including hardware and
communication line capacity restraints, software failures, or
significant increases in traffic when there have been important
business or financial news stories. These strains on our systems
could cause customer dissatisfaction and could discourage visitors
from becoming paying subscribers. Our websites could experience
disruptions or interruptions in service due to the failure or delay
in the transmission or receipt of information from us. These types
of occurrences could cause users to perceive our website and
technology solutions as not functioning properly and cause them to
use other methods or services of our competitors. Any disruption
resulting from these actions may harm our business and may be very
expensive to remedy, may not be fully covered by our insurance,
could damage our reputation, and discourage new and existing users
from using our products and services. Any disruptions could
increase costs and make profitability even more difficult to
achieve.
We will need to introduce new products and services and enhance
existing products and services to remain competitive.
Our future success depends in part on our ability to develop and
enhance our products and services. In addition, the adoption of new
Internet, networking, or telecommunications technologies or other
technological changes could require us to incur substantial
expenditures to enhance or adapt our services or infrastructure.
There are significant technical and financial costs and risks in
the development of new or enhanced products and services, including
the risk that we might be unable to effectively use new
technologies, adapt our services to emerging industry standards, or
develop, introduce, and market enhanced or new products and
services. An inability to develop new products and services, or
enhance existing offerings, could have a material adverse effect on
our profitability.
We rely on external service providers to perform certain key
functions.
We rely on a number of external service providers for certain key
technology, processing, service, and support functions. External
content providers provide us with financial information, market
news, charts, option and stock quotes, research reports, and other
fundamental data that we offer to clients. These service providers
face technological and operational risks of their own. Any
significant failures by them, including improper use or disclosure
of our confidential client, employee, or company information, could
cause us to incur losses and could harm our
reputation.
We cannot assure that any external service providers will be able
to continue to provide these services in an efficient,
cost-effective manner or that they will be able to adequately
expand their services to meet our needs. An interruption in or the
cessation of service by any external service provider as a result
of systems failures, capacity constraints, financial constraints or
problems, unanticipated trading market closures, or for any other
reason, and our inability to make alternative arrangements in a
smooth and timely manner, if at all, could have a material adverse
effect on our business, results of operations, and financial
condition.
We could face liability and other costs relating to storage and use
of personal information about its users.
Users provide us with personal information, including credit card
information, which we do not share without the user’s
consent. Despite this policy of obtaining consent, however, if
third persons were able to penetrate our network security or
otherwise misappropriate our users’ personal or credit card
information, we could be subject to liability, including claims for
unauthorized purchases with credit card information, impersonation
or other similar fraud claims, and misuses of personal information,
such as for unauthorized marketing purposes. New privacy
legislation may further increase this type of liability.
Furthermore, we could incur additional expenses if additional
regulations regarding the use of personal information were
introduced or if federal or state agencies were to investigate our
privacy practices.
Our business could be negatively affected if we are required to
defend allegations of unfair competition and unfair false or
deceptive acts or practices in or affecting commerce.
Advertising and marketing of our products in the United States are
also subject to regulation by the Federal Trade Commission
(“FTC”) under the Federal Trade Commission Act, or FTC
Act. Among other things, the FTC Act prohibits unfair methods of
competition and unfair false or deceptive acts or practices in or
affecting commerce. The FTC Act also makes it illegal to
disseminate or cause to be disseminated any false advertisement.
The FTC routinely reviews websites to identify questionable
advertising claims and practices. Competitors sometimes inform the
FTC when they believe other competitors are violating the FTC Act
and consumers also notify the FTC of what they believe may be
wrongful advertising. The FTC may initiate a nonpublic
investigation that focuses on our advertising claims, which usually
involves nonpublic, pre-lawsuit, extensive formal discovery. Such
an investigation may be lengthy and expensive to defend and result
in a publicly disclosed consent decree or settlement agreement. If
no settlement can be reached, the FTC may start an administrative
proceeding or a federal court lawsuit against us or our principal
officers. The FTC often seeks to recover from the defendants,
whether in a consent decree or a proceeding, any or all of the
following: (i) consumer redress in the form of monetary relief
or disgorgement of profits; (ii) significant reporting
requirements for several years; and (iii) injunctive relief.
In addition, most, if not all, states have statutes prohibiting
deceptive and unfair acts and practices. The requirements under
these state statutes are similar to those of the FTC
Act.
We accept and hold cryptocurrencies, which may subject us to
exchange risk and additional tax and regulatory
requirements.
We have recently begun accepting cryptocurrencies bitcoin and
etherium as a form of payment. Cryptocurrencies are not considered
legal tender or backed by any government and have experienced
significant price volatility, technological glitches, and various
law enforcement and regulatory interventions. If we fail to comply
with regulations or prohibitions applicable to us, we could face
regulatory or other enforcement actions and potential fines and
other consequences. We also hold cryptocurrencies directly,
subjecting us to exchange rate risk as well as the risk that
regulatory or other developments and the recent price volatility
may adversely affect the value of the cryptocurrencies we hold. The
uncertainties regarding legal and regulatory requirements relating
to cryptocurrencies or transactions using cryptocurrencies, as well
as potential accounting and tax issues or other requirements
relating to cryptocurrencies, could have a material adverse effect
on our business.
Our business could be negatively affected if we are required to
defend allegations that our direct selling activities are
fraudulent or deceptive schemes, are against public interest, or
are the sale of unregistered securities.
Direct selling activities are regulated by the FTC, as well as
various federal, state, and local governmental agencies in the
United States and foreign countries. These laws and regulations are
generally intended to prevent fraudulent or deceptive schemes,
often referred to as “pyramid” schemes, which
compensate participants primarily for recruiting additional
participants without significant emphasis on product sales.
Regulators may take the position that some or all of our products
are deemed to be securities, the sale of which has not been
registered. The laws and regulations governing direct selling are
modified from time to time, and like other direct selling
companies, we may be subject from time to time to government
investigations related to our direct selling activities. This may
require us to make changes to our business model and our
compensation plan.
Our independent distributors could fail to comply with applicable
legal requirements or our distributor policies and procedures,
which could result in claims against us that could harm our
business.
Our
independent distributors are independent contractors and,
accordingly, we are not in a position to directly provide the same
oversight, direction, and motivation as we could if they were our
employees. As a result, we cannot assure that our independent
distributors will comply with applicable laws or regulations or our
distributor policies and procedures.
Extensive
federal, state, local, and international laws regulate our
business, products, and direct selling activities. Because we have
expanded into foreign countries, our policies and procedures for
our independent distributors differ slightly in some countries due
to the different legal requirements of each country in which we do
business.
Our proprietary systems may be compromised by hackers.
Our
current products and other products and services that we may
develop in the future will be based on proprietary software and
customer-specific data that we protect by routine measures such as
password protection, confidentiality and nondisclosure agreements
with employees, and similar measures. Any unauthorized access to
our software or data could materially disrupt our business and
result in financial loss and damages to our business
reputation.
Our future success is largely dependent on our current
management.
Our
business was built by the vision, dedication, and expertise of our
officers Ryan Smith, Annette Raynor, Chad Miller, Mario Romano, and
William Kosoff, who are responsible for our day-to-day operations
and creative development. Our success is dependent upon the
continued efforts of these people. If it became necessary to
replace them, it is unlikely new management could be found that
would have the same level of knowledge and dedication to our
success. The loss of the services of these professionals,
especially in the development of future proprietary software,
patents, or applications, would adversely affect our
business.
Risks Related to Our Common Stock
We have a history of operating losses and expect to report future
losses that may cause our stock price to decline.
For the
operating period through December 31, 2018, we have reported an
accumulated deficit of $21,091,245. We reported a net loss of
$1,010,697 for the nine months ended December 31, 2018, and a net
loss from operations of $2,885,092. We cannot be certain whether we
will ever be profitable, or if we do, that we will be able to
continue to be profitable. Also, any economic weakness or global
recession may limit our ability to market our products.
Any of these factors could cause our
stock price to decline and result in our stockholders losing a
portion or all of their investments.
We will need to raise additional capital. If we are unable to raise
additional capital, our business may fail.
Because our revenues are not yet sufficient to cover expenses or
fund our growth, we need to secure ongoing funding. If we are
unable to obtain adequate additional financing, we may not be able
to successfully market and sell our products, our business
operations will most likely be discontinued, and we will cease to
be a going concern. To secure additional financing, we may need to
borrow money or sell more securities. Under these circumstances, we
may be unable to secure additional financing on favorable terms or
at all. Selling additional stock, either privately or publicly,
would dilute the equity interests of our stockholders. If we borrow
money, we will have to pay interest and may also have to agree to
restrictions that limit our operating flexibility. If we are unable
to obtain adequate financing, we may have to curtail business
operations, which would have a material negative effect on
operating results and most likely result in a lower stock
price.
Our common stock price has been and may continue to be extremely
volatile.
Our common stock has closed as low as $0.006 per share and as high
as $.0649 per share during the year preceding the date of this
prospectus. We believe this volatility may be caused, in part, by
variations in our quarterly operating results, delays in
development of our technologies, changes in market valuations of
similar companies, and the volume of our stock in the
market.
Additionally, in recent years the stock market in general, and the
OTC Markets and technology stocks in particular, have experienced
extreme price and volume fluctuations. In some cases, these
fluctuations are unrelated or disproportionate to the operating
performance of the underlying company. These market and industry
factors may materially and adversely affect our stock price
regardless of our operating performance. The historical trading of
our common stock is not necessarily an indicator of how it will
trade in the future and our trading price as of the date of this
prospectus is not necessarily an indicator of what the trading
price of our common stock might be in the future.
In the past, class action litigation has often been brought against
companies following periods of volatility in the market price of
those companies’ common stock. If we become involved in this
type of litigation in the future it could result in substantial
costs and diversion of management attention and resources, which
could have a further negative effect on our stock
price.
Shares of our common stock may never become eligible for trading on
Nasdaq or a national securities exchange.
We cannot assure that we will ever be listed on the Nasdaq Stock
Market or on another national securities exchange. Listing on one
of the Nasdaq markets or one of the national securities exchanges
is subject to a variety of requirements, including minimum trading
price and minimum public “float” requirements. There
are also continuing eligibility requirements for companies listed
on national securities exchanges. If we are unable to satisfy the
initial or continuing eligibility requirements of any such market,
then our stock may not be listed or could be delisted. This could
result in a lower trading price for our common stock and may limit
the ability of our stockholders to sell their shares, which could
result in a loss of some or all of their investments.
If we fail to file periodic reports with the U.S. Securities and
Exchange Commission, our common stock will not be able to be traded
on the OTCQB.
Although our common stock trades on the OTCQB, a regular trading
market for our common stock may not be sustained in the future. OTC
Markets limits quotation on the OTCQB to securities of issuers that
are current in their reports filed with the Securities and Exchange
Commission. If we fail to remain current in the filing of our
reports with the Securities and Exchange Commission, our common
stock will not be able to be traded on the OTCQB. The OTCQB is an
inter-dealer market that provides significantly less liquidity than
a national securities exchange or automated quotation
system.
Because our common stock is considered a “penny stock,”
any investment in our shares is considered to be a high-risk
investment and is subject to restrictions on
marketability.
Our common stock is considered a “penny stock” on the
OTC Markets as it currently trades for less than $5.00 per share.
The OTC Market system is generally regarded as a less efficient
trading market than the Nasdaq Capital or Global Markets. The
Securities and Exchange Commission has adopted rules that regulate
broker-dealer practices in connection with transactions in
“penny stocks.” Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume
information respecting transactions in these securities is provided
by the exchange or system). The penny stock rules require a
broker-dealer, prior to effecting a transaction in a penny stock
not otherwise exempt from those rules, to deliver a standardized
risk disclosure document prepared by the Securities and Exchange
Commission, which specifies information about penny stocks and the
nature and significance of risks of the penny stock market. The
broker-dealer also must provide the customer with bid and offer
quotations for the penny stock, the compensation of the
broker-dealer and any salesperson in the transaction, and monthly
account statements indicating the market value of each penny stock
held in the customer’s account. In addition, the penny stock
rules require that, prior to effecting a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must
make a special written determination that the penny stock is a
suitable investment for the purchaser and receive the
purchaser’s written agreement to the transaction. These
disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our common stock.
Because we have no plans to pay dividends on our common stock,
stockholders must look solely to appreciation of our common stock
to realize a gain on their investments.
We do not anticipate paying any dividends on our common stock in
the foreseeable future. We currently intend to retain future
earnings, if any, to finance the expansion of our business. Our
future dividend policy is within the discretion of our board of
directors and will depend upon various factors, including our
business, financial condition, results of operations, capital
requirements, and investment opportunities. Accordingly,
stockholders must look solely to appreciation of our common stock
to realize a gain on their investment. This appreciation may not
occur.
Certain provisions of Nevada law and of our corporate charter may
inhibit a potential acquisition of our Company, and this could
depress our stock price.
Nevada corporate law includes provisions that could delay, defer,
or prevent a change in control of our company or our management.
These provisions could discourage information contests and make it
more difficult for our stockholders to elect directors and take
other corporate actions. As a result, these provisions could limit
the price that investors are willing to pay in the future for
shares of our common stock. For example:
(i)
without
prior stockholder approval, our board of directors has the
authority to issue one or more classes of preferred stock with
rights senior to those of our common stock and to determine the
rights, privileges, and inference of that preferred
stock;
(ii)
there
is no cumulative voting in the election of directors, which would
otherwise allow less than a majority of stockholders to elect
director candidates; and
(iii)
stockholders
cannot call a special meeting of stockholders.
Our indemnification of our directors and officers may limit the
rights of our stockholders.
While our board of directors and officers are generally accountable
to our stockholders and us, the liability of our directors and
officers to all parties is limited in certain respects under
applicable state law and our articles of incorporation and bylaws,
as in effect. Further, we have agreed or may agree to indemnify our
directors and officers against liabilities not attributable to
certain limited circumstances. This limitation of liability and
indemnity may limit rights that our stockholders would otherwise
have to seek redress against our directors and
officers.
Additional issuances of stock options and warrants, convertible
notes, and stock grants will cause additional substantial dilution
to our stockholders.
Given our limited cash, liquidity, and revenues, it is likely that
in the future, as in the past, we will issue additional warrants,
stock grants, and convertible debt to finance our future business
operations and acquisitions and strategic relationships. The
issuance of additional shares of common stock, the exercise of
warrants, and the conversion of debt to stock could cause
additional dilution to our stockholders and could have further
adverse effects on the market price for our securities or on our
ability to obtain future financing. The 2018 increase in our
authorized shares from two billion to ten billion increased the
magnitude of this risk substantially.
The amount of authorized common stock may result in management
implementing anti-takeover procedures by issuing new
securities.
The proportion of unissued authorized shares to issued shares
could, under certain circumstances, have an anti-takeover effect,
for example, by permitting issuances that would dilute the stock
ownership of a person seeking to effect a change in the composition
of our board of directors or contemplating a tender offer or other
transaction for the combination of our company with another entity.
Although, we have no current plans to issue additional stock for
this purpose, management could use the additional shares that are
now available or that may be available after a possible further
recapitalization to resist or frustrate a third-party transaction.
Generally, no stockholder approval would be necessary for the
issuance of all or any portion of the additional shares of common
stock unless required by law or any rules or regulations to which
we are subject.
Depending upon the consideration per share for any subsequent
issuance of common stock, such issuance could have a dilutive
effect on those stockholders who paid a higher consideration per
share for their stock. Also, future issuances of common stock will
increase the number of outstanding shares, thereby decreasing the
percentage ownership—for voting, distributions, and all other
purposes—represented by existing shares of common stock. The
availability for issuance of the additional shares of common stock
may be viewed as having the effect of discouraging an unsolicited
attempt by another person or entity to acquire control of us.
Although our board has no present intention of doing so, our
authorized but unissued common stock could be issued in one or more
transactions that would make a takeover of us more difficult or
costly and, therefore, less likely. Holders of our common stock do
not have any preemptive rights to acquire any additional securities
issued by us.
Our stockholders may not recoup all or any portion of their
investment upon our dissolution.
In the event of a liquidation, dissolution, or winding-up of our
company, whether voluntary or involuntary, our net remaining
proceeds and/or assets, after paying all of our debts and
liabilities, will be distributed to the holders of common stock on
a pro-rata basis. We cannot assure that we will have available
assets to pay to the holders of common stock any amounts upon such
a liquidation, dissolution, or winding-up of our company. In this
event, our stockholders could lose some or all of their
investment.
The sale of our common stock to
Investor may cause dilution, and the
sale of the shares of common stock acquired by the selling
stockholders, or the perception that such sales may occur, could
cause the price of our common stock to fall.
Under our CSPA, we will sell shares to TRITON FUNDS LP (Investor)
upon receiving a purchase notice setting forth the number of shares
that the Investor intends to require us to sell pursuant to the
terms of the CSPA, except that, pursuant to the terms of the CSPA,
we would be unable to sell shares to Investor if such purchase
would result in its beneficial ownership of more than 4.9% of our
outstanding common stock. After Investor has acquired our shares,
it may sell all, some, or none of those shares. Therefore, sales to
Investor by us could result in substantial dilution to the
interests of other holders of our common stock. Additionally, the
sale of a substantial number of shares of our common stock to
Investor, or the anticipation of such sales, could make it more
difficult for us to sell equity or equity-related securities in the
future at a time and at a price that we might otherwise
wish. In addition, the
per-share purchase price for these shares will be equal to 85% of
the lowest closing price of the common stock for the five
consecutive trading days immediately preceding Investor’s
delivery of a purchase notice. Depending on market liquidity at the
time, sales of these shares may cause the trading price of our
common stock to fall.
Investor will pay less than the then-prevailing market price for
our common stock.
We will sell common stock to Investor pursuant to the CSPA at 85%
of the lowest closing price of the common stock in the five
consecutive trading days immediately preceding the delivery of a
purchase notice from Investor. Investor has a financial incentive
to sell our common stock immediately upon receiving the shares to
realize the profit equal to the difference between the discounted
price and the market price. If Investor sells the shares, the price
of our common stock could decrease. If our stock price decreases,
Investor may have a further incentive to sell the shares of our
common stock that it holds and purchase additional shares to sell.
These sales may have a further impact on our stock
price.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
Market Information
The following table sets forth the range of low and high closing
sale prices for our common stock for each of the periods indicated
as reported and summarized by the OTCQB:
|
Low
|
|
High
|
2019:
|
|
|
|
Fourth
Quarter (through March 22)
|
$0.008
|
|
$0.028
|
Third
Quarter
|
0.006
|
|
0.02
|
Second
Quarter
|
0.030
|
|
0.01
|
First
Quarter
|
0.011
|
|
0.03
|
|
|
|
|
2018:
|
|
|
|
Fourth
Quarter
|
0.024
|
|
0.07
|
Third
Quarter
|
0.051
|
|
0.10
|
Second
Quarter
|
0.064
|
|
0.08
|
First
Quarter
|
0.005
|
|
0.07
|
|
|
|
|
2017:
|
|
|
|
Fourth
Quarter
|
0.002
|
|
0.01
|
Third
Quarter
|
0.002
|
|
0.01
|
Second
Quarter
|
0.003
|
|
0.01
|
First
Quarter
|
0.007
|
|
0.10
|
On
March 22, 2019, the closing price per share of our common stock on
the OTCQB was $0.025. As of March 25, 2019, we had
approximately 570 stockholders of record of our common stock and
2,639,161,318 shares of common stock issued and
outstanding.
Dividends
Holders of shares of common stock are entitled to share pro rata in
dividends and distributions for the common stock when, as, and if
declared by the board of directors out of funds legally available
therefor. We have not paid any dividends on our common stock and
intend to retain earnings, if any, to finance the development and
expansion of our business. Future dividend policy is subject to the
discretion of the board of directors and will depend upon a number
of factors, including future revenues, capital requirements,
overall financial condition, and such other factors as our board of
directors deems relevant.
Equity Compensation Plans
The following table summarizes the equity compensation plans under
which our securities may be issued as of December 31,
2018:
|
|
|
|
|
|
Number of Securities
|
|
|
Number of
|
|
|
|
Remaining Available
|
|
|
Securities To Be
|
|
Weighted-Average
|
|
for Future Issuance under
|
|
|
Issued upon Exercise of
|
|
Exercise Price of
|
|
Equity Compensation Plans
|
|
|
Outstanding Options,
|
|
Outstanding Options,
|
|
(excluding securities
|
|
|
Warrants and Rights
|
|
Warrants and Rights
|
|
reflected in column (a))
|
Plan Category
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
|
|
|
|
|
Equity
compensation plans
|
|
|
|
|
|
|
approved by
security holders
|
|
--
|
|
--
|
|
--
|
Equity
compensation plans
|
|
|
|
|
|
|
approved by
security holders
|
|
35,000
|
|
$10
|
|
--
|
USE OF PROCEEDS
This prospectus relates to shares of our common stock that may be
offered and sold from time to time by the selling stockholders. We
will not receive any proceeds upon the sale of shares by the
selling stockholders in this offering. However, we will
receive $1.0 million under Investor’s purchase of shares as
required by the CSPA. See “Plan of Distribution” on
page 36 in this prospectus for more
information.
We currently expect to use the net proceeds from the sale of shares
to Investor under the CSPA to further develop our products, reduce
current liabilities, and fund other general corporate purposes. We
will have broad discretion in determining how we will allocate the
proceeds from any sales to Investor.
Even if we sell $1.0 million in shares of our common stock to
Investor pursuant to the CSPA, we will need to obtain additional
financing in the future in order to fully fund all of our planned
activities. We may seek additional capital in the private and
public equity or debt markets and pursue business development
activities and business combinations to continue and expand our
operations, respond to competitive pressures, develop new products
and services, and support new strategic partnerships. We are
evaluating additional equity financing opportunities on an ongoing
basis and may execute them when appropriate. However, we cannot
assure that we can consummate such a transaction or consummate a
transaction at favorable pricing.
CAPITALIZATION
The following table sets forth our capitalization as of December
31, 2018, without giving effect to any changes subsequent to such
date, as adjusted to reflect the subsequent sale of 100,000,000
shares to the selling stockholders. This information should be read
in conjunction with our consolidated financial statements and
related notes included elsewhere in this prospectus:
____________
*
Under
the CSPA, Investor is not required to purchase more than $1.0
million in securities so that, depending on the market price at the
time of sale and the resulting price at which we sell stock, the
number of shares will be limited to that number that results in an
aggregate sales price of $1.0 million.
The number of outstanding shares shown above excludes an aggregate
of 5,587,497 shares that may be issued on the exercise of options
and warrants outstanding as of the date of this
prospectus.
The sale of additional common stock to Investor in accordance with
the CSPA will substantially increase the number of shares we will
have outstanding and correspondingly dilute the percentage interest
in us of our existing stockholders, including persons purchasing
common stock in this offering.
DILUTION
Our net
tangible book value on December 31, 2018, not adjusted to reflect
any changes in our financial condition since that date, was
$(6,660,562), or approximately $(0.003) per share.
“Net tangible book value” is total assets minus the sum
of liabilities and intangible assets. “Net tangible book
value per share” is net tangible book value divided by the
total number of shares outstanding before the
offering.
The
following table illustrates the dilution, or the difference between
the offering price per share, assuming an offering price of
$0.025 per share, and the net tangible book value per share
as of December 31, 2018, as adjusted to reflect the receipt of net
proceeds from the sale of 100,000,000 shares to Investor at a price
equivalent to 85% of the lowest closing price of the common stock
in the five consecutive trading days immediately preceding the
delivery of a purchase notice, but to no other events subsequent to
December 31, 2018:
Trading
price on the date immediately preceding the date of this
prospectus
|
|
$0.025
|
Net
tangible book value deficit per share as of December 31,
2018
|
$(0.003)
|
|
Benefit
to existing stockholders attributable to sale of stock in this
offering
|
(0.005)
|
|
Pro
forma net tangible book deficit per share after the offering, as
adjusted
|
(0.002)
|
|
Dilution
per share to purchasers in this offering
|
|
$0.027
|
The
sale of additional common stock to Investor in accordance with the CSPA will
have a dilutive impact on our stockholders. Under the CSPA,
Investor is not required to purchase more than $1.0 million in
securities, so that, depending on the market price at the time of
sale and the resulting price at which we sell stock, the number of
shares will be limited to that number that results in an aggregate
sales price of $1.0 million. In future periods our net loss per
share could increase, the net tangible book value of our common
stock could decrease, and the market price of our common stock
could decline. In addition, the lower our stock price is at the
time Investor exercises its purchase notice, the more shares of our
common stock we will have to issue to Investor in order to drawdown pursuant to
the CSPA. If our stock price decreases during the pricing period,
then our existing stockholders would experience greater
dilution.
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 prospectus. 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 U.S.
Securities and Exchange Commission. The forward-looking statements
included are made only as of the date of this prospectus. We
disclaim any obligation to update any forward-looking statements
whether as a result of new information, future events, or
otherwise.
Acquisition
On July 20, 2018, we entered into a Purchase Agreement with United
Games Marketing LLC, a Utah limited liability company, to purchase
its wholly owned subsidiaries United Games, LLC and United League,
LLC (collectively “United Games”) for 50,000,000 shares
of our common stock. The deal includes the purchase of the
Utah-based companies’ wholly owned technology, staff, and
trademarks, including the well-known FireFan mobile
app.
United
Games is a social gaming environment accessed through its FireFan
mobile app and sold primarily through United Games affiliates. This
acquisition provides us a wholly owned subsidiary that provides key
synergies to our largest subsidiary, Kuvera, LLC. The acquisition
of United Games brings these key benefits:
Customizable back
office
Customizable
commission engine
FireFan
game/mobile app
FireFan
brand (registered and trademarked)
In-house
development team to deliver new and integrated
technologies
Existing incoming
revenue
Multiple newly
engaged affiliates
An
extensive network of contacts, customers, and
affiliates
19,000
active paying members
Access
to a 1.5-million-person database
Our management team is working through the transition to a common
operations and development team for all of our companies and
subsidiaries.
Results of Operations
Three Months Ended December 31, 2018, Compared to Three Months
Ended December 31, 2017
Revenues
We
recorded net revenue of $7,733,034 for the three months ended
December 31, 2018, which was an increase of $3,797,136, or 96%,
from the prior period revenue of $3,935,898. The increase is due to
the introduction of equipment package sales during the quarter of
$694,954, plus a substantial increase in our customer base
resulting in increased subscription revenues of $3,607,910, of
which an estimated $600,000 relates to the customers generated as a
result of the United Games, LLC and United League, LLC acquisition,
offset by a decrease in our cryptocurrency mining revenue of
$505,728. Our gross billings increased by 69% ($7,944,148 in the
three months ended December 31, 2018, versus $4,691,102 in the
three months ended December 31, 2017); however, this was offset by
refunds, incentives, credits, chargebacks, and amounts paid to
suppliers.
Operating Costs and Expenses
We
recorded operating costs and expenses of $7,974,922 for the three
months ended December 31, 2018, which was a decrease of $3,346,557,
or 30%, from the prior period’s operating costs and expenses
of $11,321,479. This change is principally a result of a decrease
of $5,714,248, or 92%, in cost of sales and service. In the three
months ended December 31, 2017, we recorded costs of $6,041,500 for 85 million shares being issued,
valued at the market price on the date of issuance, in exchange for
entering into certain license agreements and a cloud mining
agreement, with no similar costs or shares issuances in the three
months ended December 31, 2018. This decrease was offset by
an increase of $2,145,811 in commissions due to increasing
revenues, the growth of the distribution network, and bonus
programs in place that did not exist in the prior
year.
The
largest component of our operating costs is commissions, which are
amounts paid out to our customers participating in our distribution
program through a bonus plan (“distributors”). The
bonus plan allows for our distributors to sell our products and
services and is structured to pay out commissions based on a
pre-set value for each product or service sold. Additionally, bonus
commission amounts are awarded when distributors obtain certain
volume levels. Commissions as a percent of revenue for the three
months ended December 31, 2018, were 65.78% versus 74.73% for the
three months ended December 31, 2017. The decrease of almost 9%
relates to our implementation of a maximum payout rule in the
current period that limits the amount of commission that can be
earned as a percent of sales.
Other Income and Expenses
We
recorded other expense of $207,820 for the three months ended
December 31, 2018, which was a difference of $458,315, or 183%,
from the prior period other income of $250,495. The change is due
to $206,007 recorded as interest expense for the Secured Merchant
Agreements entered into during the current period, versus no such
agreements entered into during the prior period, along with the
$264,486 gain on cryptocurrency recognized in the prior period
compared to a $1,091 loss recognized in the current
period.
Nine Months Ended December 31, 2018, Compared to Nine Months Ended
December 31, 2017
Revenues
We
recorded net revenue of $23,342,603 for the nine months ended
December 31, 2018, which was an increase of $12,813,598, or 122%,
from the prior period net revenue of $10,529,005. The increase is
due to the introduction of equipment package sales of $694,954,
plus the introduction of cryptocurrency education, research, and
mining packages as new products of $1,272,595, and a substantial
increase in our customer base, which explains $10,846,049 of the
increase, of which an estimated $600,000 relates to the customers
generated as a result of the United Games, LLC and United League,
LLC acquisition. Our gross billings increased by 141% ($28,271,389
in the nine months ended December 31, 2018, versus $11,708,779 in
the nine months ended December 31, 2017); however, this was offset
by refunds, incentives, credits, chargebacks, and amounts paid to
suppliers.
Operating Costs and Expenses
We
recorded operating costs and expenses of $26,227,695 for the nine
months ended December 31, 2018, which was an increase of
$6,367,852, or 32%, from the prior period’s operating costs
and expenses of $19,859,843. This change is principally a result of
an increase of $8,936,512, or 107%, in commissions due to
increasing revenues, the growth of the distribution network, and
bonus programs in place that did not exist in the prior year. This
was offset by a decrease of $5,600,547, or 86%, in cost of sales
and service, which is due to 85
million shares being issued in the prior period, valued at
$6,041,500 based on the market price on the date of issuance, in
exchange for entering into certain license agreements and a cloud
mining agreement, versus no such shares issued, or similar costs
incurred, in the current period.
The
largest component of our operating costs is commissions, which are
amounts paid out to our customers participating in our distribution
program through a bonus plan (“distributors”). The
bonus plan allows for our distributors to sell our products and
services and is structured to pay out commissions based on a
pre-set value for each product or service sold. Additionally, bonus
commission amounts are awarded when distributors obtain certain
volume levels. Commissions as a percent of revenue for the nine
months ended December 31, 2018, were 74.18% versus 79.59% for the
nine months ended December 31, 2017. The decrease of over 5%
relates to our implementation of a maximum payout rule in the
current period that limits the amount of commission that can be
earned as a percent of sales.
Other Income and Expenses
We
recorded other income of $1,919,239 for the nine months ended
December 31, 2018, which was a difference of $5,651,380, or 151%,
from the prior period other expenses of $3,732,141. The change is
due to the $2,005,282 gain on bargain purchase recorded as a result
of the United Games, LLC and United League, LLC acquisition that
took place during the current period, as compared to no such gain
in the prior period. Additionally, in the prior period there was a
loss on debt extinguishment of $2,767,422 and the loss on spin-off
of operations of $1,118,609, compared to no such expense in the
current period.
Year Ended March 31, 2018, Compared to Year Ended March 31,
2017
Revenues
Revenue,
net, increased $5,044,485, or 39%, from $12,872,947 for the year
ended March 31, 2017, to $17,917,432 for the year ended March 31,
2018. The majority of the increase
($4,017,853) can be explained by our introduction of cryptocurrency
mining services as a new product. The remainder of the increase was
due to a decrease in chargebacks and refunds from the prior year.
Our gross billings increased by 62%, or $9,066,248, to $23,644,412
in the year ended March 31, 2018, versus $14,578,164 in the year
ended March 31, 2017; however, this was offset by refunds,
incentives, credits, chargebacks, and amounts paid to
suppliers.
Operating Costs
Operating
costs increased $13,782,979, or 93%, from $14,810,607 for the year
ended March 31, 2017, to $28,593,586 for the year ended March 31,
2018. This was due to an increase in our cost of sales and service
of $5,850,248, an increase in commissions of $4,859,271, an
increase in professional fees of $1,655,523, and an increase in
general and administrative costs of $1,111,464. The increases could
mostly be explained by our issuance of 174,375,333 shares being issued in exchange for
entering into a license agreement, a cloud mining agreement, and
several consulting agreements, resulting in $6,846,059 worth of
expense being recorded during the year ended March 31, 2018.
Additionally, there were increases in commissions due to increasing
revenues, the growth of the distribution network, and bonus
programs in place that did not exist in the prior year. Lastly,
there were increases due to larger amounts paid for increasing
marketing and development efforts, as well as increases in
accounting, audit, and legal fees associated with our reverse
acquisition that was effective April 1, 2017, our public company
filing requirements, and our agreements entered into during the
period.
Other Income (Expense)
Other
income (expense) went from $(485,504) for the year ended March 31,
2017, to $(4,212,273) for the year ended March 31, 2018.
The increase is due to the loss on
debt extinguishment and the loss on spin-off of operations during
the year ended March 31, 2018, as compared to no such expense in
the prior period. Additionally, during the year ended March 31,
2018, we issued 239,575,884 shares of our common stock in
settlement of debt, wherein accrued liabilities, principal, accrued
interest, and derivative liabilities were extinguished in the
amounts of $430,892, $2,348,606, $20,696, and $38,557,
respectively, and we recognized a loss on the settlement of debt in
the amount of $3,186,394 in the statement of
operations.
Additionally, on June 6, 2017, under an Acquisition Agreement with
Market Trend Strategies, we spun-off the operations that existed
prior to the merger with Wealth Generators, LLC and sold the
intangible assets used in those premerger operations in exchange
for Market Trend assuming $419,139 in liabilities that had been on
the books premerger. Accordingly, we recorded a gain on the
settlement of debt of $419,139 for the liabilities assumed by
Market Trend and wrote off goodwill of $1,118,609 as a loss on
spin-off of operations.
Liquidity and Capital Resources
During
the nine months ended December 31, 2018, we incurred a net loss of
$1,010,697. This loss was funded by our cash on hand, advances of
$1,480,777 from related parties, and $1,955,000 of proceeds from
new debt arrangements, offset by repayments on related-party
payables of $996,169 and repayments on debt of $1,164,396. As a
result, our cash and cash equivalents decreased by $1,397,117 to
$93,569, as compared to $1,490,686 at the beginning of the fiscal
year.
Our
current liabilities exceeded our current assets (working capital
deficit) by $6,691,399 as of December 31, 2018, as compared to
$3,919,260 at March 31, 2018. The increase in the working capital
deficit is due to the reduction of cash during the period along
with an increase in debt and an increase in in deferred revenues
due to increasing revenues during the period.
Going Concern
These
interim unaudited financial statements have been prepared on the
going concern basis, which assumes that adequate sources of
financing will be obtained as required and that our assets will be
realized and liabilities settled in the ordinary course of
business. Accordingly, the interim unaudited financial statements
do not include any adjustments related to the recoverability of
assets and classification of assets and liabilities that might be
necessary should we not be unable to continue as a going
concern.
Our
audited consolidated financial statements for the year ended March
31, 2018, state that our historical losses, accumulated deficit,
cash balance, and working capital deficit raise substantial doubts
about our ability to continue as a going concern. Historically, we
have relied on increasing revenues and new debt financing to pay
for operational expenses and debt as they came due. Going forward,
we plan to reduce obligations with cash flow provided by operations
and pursue additional debt and equity financing; however, we cannot
assure that funds will be available on terms acceptable to us or
will be sufficient to enable us to fully complete our development
activities or sustain operations. Nevertheless, the shortage of
working capital adversely affects our ability to develop or
participate in activities that promote our business, because a
substantial portion of cash flow goes to reduce debt rather than to
advance operating activities. To
address this, we have implemented a series of adjustments to our
affiliate/distributor bonus plan. These adjustments are designed to
bring the maximum payout percentage in line with company
objectives. During prior periods, the bonus plan had exceeded
maximum payouts and consistently paid out near the maximum
percentage. We believe the adjustments initiated will reduce the
payout over time with payout percentages closer to
60%.
Critical Accounting Policies
Basis of Presentation
The
accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the rules and regulations
(Regulation S-X) of the Securities and Exchange Commission (the
“SEC”) and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The results
of operations for the three and nine months ended December 30,
2018, are not necessarily indicative of the operating results that
may be expected for the year ending March 31, 2019. These unaudited
condensed consolidated financial statements should be read in
conjunction with the March 31, 2018, consolidated financial
statements and notes thereto included in our Annual Report on Form
10-K for the year ended March 31, 2018.
Principles of Consolidation
The
consolidated financial statements include the accounts of
Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC,
Investment Tools & Training, LLC, Razor Data Corp., S.A.F.E.
Management, LLC, SafeTek, LLC (formerly WealthGen Global, LLC),
United Games, LLC, United League, LLC, and Kuvera France S.A.S. We
have determined that one affiliated entity, Kuvera LATAM S.A.S.,
which we conduct business with, is a variable interest entity and
we are the primary beneficiary of the entity’s activities. As
a result, we have consolidated the accounts of this variable
interest entity into the accompanying consolidated financial
statements. Further, because we do not
have any ownership interest in this variable interest entity, we
have allocated the contributed capital in the variable interest
entity as a component of noncontrolling interest. All
intercompany transactions and balances have been eliminated in
consolidation.
Use of Estimates
The
preparation of these unaudited condensed consolidated financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ
from those estimates.
Revenue Recognition
Effective
April 1, 2018, we adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification
(“ASC”) Subtopic 606-10, Revenue from Contracts with
Customers (“ASC 606-10”). The adoption of ASC 606-10
had no impact on prior-year or previously disclosed amounts. In
accordance with ASC 606-10, 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.
The
majority of our revenue is generated by subscription sales and
payment is received at the time of purchase. Our performance
obligation is to provide services over a fixed subscription period;
therefore, we recognize revenue ratably over the subscription
period and deferred revenue is recorded for the portion of the
subscription period subsequent to each reporting date.
Additionally, we offer a 10-day trial period to subscription
customers, during which a full refund can be requested if a
customer does not like the product. Revenues are deferred during
the trial period as collection is not probable until that time has
passed. Revenues are presented net of refunds, sales incentives,
credits, and known and estimated credit card
chargebacks.
We
generate revenue from the sale of cryptocurrency mining services
(“mining packages”) to our customers through an
arrangement with a third-party supplier. The third-party supplier
has agreed to provide programming, installation, provisioning, and
ongoing hosting for mining equipment that allows our customer to
mine cryptocurrency for a period of five years plus 1,000 days or
the operating lifetime of the equipment, whichever is greater. The
mining packages are offered at different price points relative the
speed at which the equipment can mine cryptocurrency. Our
performance obligation is to arrange for the third-party to provide
mining services to our customers in our role as an agent. We
receive payment from our customer at the time of purchase and
coordinate the execution of the agreement between our customer and
the supplier, therefore revenue is recognized at the time our
performance obligation is met. Monthly, we remit a fee to the
third-party supplier equal to 60% of the mining package sold to our
customer plus $99 per package. We record revenue net, equal to the
amount of the fee to which we are entitled to as an agent or the
amount of consideration that we retain after paying the third-party
the consideration received in exchange for the services the
third-party is to provide.
Revenue
generated for the nine months ended December 31, 2018, is as
follows:
|
|
Subscription
Revenue
|
|
|
Equipment Sales
|
|
|
Cryptocurrency Mining Revenue
|
|
|
Total
|
|
Gross
billings
|
|
$
|
21,882,055
|
|
|
$
|
698,954
|
|
|
$
|
5,690,380
|
|
|
$
|
28,258,639
|
|
Refunds,
incentives, credits, and chargebacks
|
|
|
(1,047,007
|
)
|
|
|
(4,000
|
)
|
|
|
(6,501
|
)
|
|
|
(1,057,508
|
)
|
Amounts
paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,871,278
|
)
|
|
|
(3,858,528
|
)
|
Net
revenue
|
|
$
|
20,835,048
|
|
|
$
|
694,954
|
|
|
$
|
1,812,601
|
|
|
$
|
23,342,603
|
|
Revenue
generated for the nine months ended December 31, 2017, is as
follows:
|
|
Subscription
Revenue
|
|
|
Equipment Sales
|
|
|
Cryptocurrency Mining Revenue
|
|
|
Total
|
|
Gross
billings
|
|
$
|
10,371,884
|
|
|
$
|
-
|
|
|
$
|
1,336,895
|
|
|
$
|
11,708,779
|
|
Refunds,
incentives, credits, and chargebacks
|
|
|
(382,885
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(382,885
|
)
|
Amounts
paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
(796,889
|
)
|
|
|
(796,889
|
)
|
Net
revenue
|
|
$
|
9,988,999
|
|
|
$
|
-
|
|
|
$
|
540,006
|
|
|
$
|
10,529,005
|
|
Revenue
generated for the three months ended December 31, 2018, is as
follows:
|
|
Subscription
Revenue
|
|
|
Equipment Sales
|
|
|
Cryptocurrency Mining Revenue
|
|
|
Total
|
|
Gross
billings
|
|
$
|
7,204,415
|
|
|
$
|
698,954
|
|
|
$
|
40,779
|
|
|
$
|
7,944,148
|
|
Refunds,
incentives, credits, and chargebacks
|
|
|
(200,613
|
)
|
|
|
(4,000
|
)
|
|
|
(6,501
|
)
|
|
|
(211,114
|
)
|
Amounts
paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net
revenue
|
|
$
|
7,003,802
|
|
|
$
|
694,954
|
|
|
$
|
34,278
|
|
|
$
|
7,733,034
|
|
Revenue
generated for the three months ended December 31, 2017, is as
follows:
|
|
Subscription
Revenue
|
|
|
Equipment Sales
|
|
|
Cryptocurrency Mining Revenue
|
|
|
Total
|
|
Gross
billings
|
|
$
|
3,660,708
|
|
|
$
|
-
|
|
|
$
|
1,336,895
|
|
|
$
|
4,997,603
|
|
Refunds,
incentives, credits, and chargebacks
|
|
|
(264,816
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(264,816
|
)
|
Amounts
paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
(796,889
|
)
|
|
|
(796,889
|
)
|
Net
revenue
|
|
$
|
3,395,892
|
|
|
$
|
-
|
|
|
$
|
540,006
|
|
|
$
|
3,935,898
|
|
Recently Issued Accounting Pronouncements
There
are 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.
BUSINESS
Overview
We own
a number of companies that each operate independently, but are
accretive to one another. We are establishing a portfolio of wholly
owned subsidiaries delivering leading-edge technologies, services,
and research dedicated primarily to the individual
consumer.
Through
our wholly owned subsidiaries, we provide affordable access to
financial education, current market research, and cutting-edge
technology that enables individuals to increase and cultivate their
own financial resources, enjoy life, and plan for the future. The
services include basic financial educational, expense and debt
reduction tools, research, newsletter alerts, and live education
rooms that include instruction on the subjects of equities,
options, Forex, ETFs, binary options, crowdfunding, and the
emerging cryptocurrency market.
We seek
to provide a completely transparent and unique experience
specifically designed to enhance the financial knowledge and
improve the overall well-being of individuals worldwide. Our goal
is to invest in the education, research, and technology essential
to helping the financially motivated secure lasting and balanced
success for today and the future.
Each
product subscription includes a core set of tools/research along
with the personal finance management suite providing an individual
complete access to the information necessary to cultivate and
manage his or her financial situation. We offer packages available
through a monthly subscription that can be cancelled at any time at
the discretion of the customer. A unique component of the product
marketing plan is the distribution method whereby all subscriptions
are sold via current participating customers who choose to
distribute and sell the services. The bonus plan participation is
purely optional but enables individuals the ability to create an
additional income stream to further support their personal
financial goals and objectives.
We
recently entered the trade automation space with the launch of two
new robo trading products offered to Kuvera subscribers through our
wholly owned subsidiary, SAFE Management, which is a registered
investment adviser. SAFE Management can make investments to the
trading signals and research products of Kuvera; put and call
options and alternative investments; and investments in privately
held startups for the benefit of individuals who desire to
participate in new venture startup opportunities.
Our Companies
Kuvera Entities
Our
largest subsidiary is Kuvera LLC, which delivers financial
education, technology, and research to individuals through a
subscription-based model. Kuvera provides research, education, and
investment tools designed to assist the self-directed investor in
successfully navigating the financial markets. These services
include research, trade alerts, and live trading rooms that include
instruction in equities, options, FOREX, ETFs, binary options,
crowdfunding, and cryptocurrency sector education. In addition to
trading tools and research, we also offer full education and
software applications to assist the individual in debt reduction,
increased savings, budgeting, and proper tax management. Each
product subscription includes a core set of trading tools/research
along with the personal finance management suite to provide an
individual with complete access to the information necessary to
cultivate and manage his or her financial situation. Kuvera
operations are located at our Salt Lake City, Utah headquarters
location and its website address is kuveraglobal.com.
Kuvera
France S.A.S. is our entity in France that will distribute Kuvera
products and services throughout the European Union.
Kuvera
and Kuvera France provide affordable access to financial education,
current market research, and cutting-edge technology that enable
individuals to increase and cultivate their own financial
resources, enjoy life, and plan for the future. The services
include basic financial educational, expense and debt reduction
tools, research, newsletter alerts, and live education rooms that
include instruction on the subjects of equities, options, Forex,
ETFs, binary options, crowdfunding, and the emerging cryptocurrency
market.
Each
product subscription includes a core set of tools/research along
with the personal finance management suite providing an individual
with complete access to the information necessary to cultivate and
manage his or her financial situation. We offer packages available
through a monthly subscription that can be cancelled at any time at
the discretion of the customer. A unique component of the product
marketing plan is the distribution method whereby all subscriptions
are sold via current participating customers who choose to
distribute and sell the services. The bonus plan participation is
purely optional but enables individuals to create an additional
income stream to further support their personal financial goals and
objectives.
By
enabling the marriage of technology and knowledge, we are able to
deliver innovative solutions directly to individuals around the
world. Personal and general financial instruction and information
are largely overlooked in all levels of education. An ongoing cycle
of debt accumulation, inability to save, lack of planning, and
inadequate knowledge on how to cultivate our “capital”
is passed from generation to generation.
By creating easy
access, focused tutorials, and step-by-step planning, our education
and technology tools provide individuals with the necessary
information to understand the power of proper utilization of money
along with the ability to design their own path toward financial
fitness.
Money—Money
is a financial education tool designed to help you eliminate debt
and improve your personal financial behaviors. Money includes
education by Ross Jardine, America’s Money Mentor and
educator. The goal of Mr. Jardine’s videos and articles is to
teach the user how to reduce debt, decrease spending, and find
money he did not know he had. Money is comprised of four sections:
Cash Flow Quick Start (11 videos and assignments for immediate
changes); Debt Freedom System (digital version of The 60-Day Money
Miracle by Ross Jardine, which includes 12 chapters and a road map
to debt-free living); Financial Tips and Strategies (videos,
assignments, and suggestions for major life purchases, including
housing, schooling, marriage etc.); and Money Media, which contains
additional articles addressing current financial market trends tips
and tools.
Deductr—Deductr
is a personal money management tool that we provide to all members
through a partnership with Deductr. The Deductr personal finance
manager allows its users to manage all of their personal finances
from a single view. With this tool, the user can create and monitor
his or her budget and financial goals in a matter of minutes.
Deductr Pro also includes a tax assistance feature making it easy
to maximize both common and lesser-known tax benefits. Deductr can
help you capture, document, and organize the expenses related to
running your business right on your phone.
FXOne—FXOne
includes live Forex binary options sessions with our market
experts, as well as Forex newsletter alerts delivered right to your
phone. FXOne also offers unique strategies and in-depth Forex
training.
Binary
Options—FXOne binary options session leverage very
short-term strategies that give you immediate results in a small
amount of time. Live sessions are often as quick as 15 minutes. The
live session provides real-time strategies that the user can follow
as the experts identify setups and provide commentary to his or her
activity. The user can then determine whether to act on that
information.
Newsletter
Alerts—FXOne gives the user the opportunity to follow
market experts while maintaining complete control of his or her
money. With FXOne Forex Alerts, our experts do the research and
analysis and deliver that information to the user via email alerts.
The alerts include entry criteria, exit parameters, and position
adjustments.
CRYPTOone—CRYPTOone
offers a library of cryptocurrency resources as well as live
education, analysis, and research in the cryptocurrency market.
With CRYPTOone, users can learn as little or as much as they would
like about the cryptocurrency universe. CRYPTOone also provides
digital alerts that identify cryptocurrency opportunities. Our
experts do the research and analysis, and the customer decides if
he or she wants to take action with the information. With just a
few clicks, users can participate in the cryptocurrency market with
minimal effort. CRYPTOone is the perfect way for someone to dip a
toe or jump in all the way and start benefiting from the growing
cryptocurrency universe.
CRYPTO
Mining Packages—We offer cryptocurrency mining
packages that consist of computer/GPU hardware and operation and
maintenance services to provide individuals access to
cryptocurrency mining. Our mining hardware (hosting) facility is
arranged through a contractual partnership and located in Romania.
Each GPU processing card is specific to the package purchased and
is individually serial numbered, and the customer may request his
or her hardware to be shipped to him or her at any time. There is
no guarantee or estimate of mining output provided as mining
conditions change constantly and cryptocurrency is subject to a
number of risks associated with emerging markets. We believe our
mining services, which are physically housed, monitored, and
maintained in a dedicated facility, eliminate variables associated
with other mining services that are typically
cloud-based.
Equity
Markets—Our equity market education with alerts is our
core offering and brings the knowledge and expertise of individuals
who have been involved in the market for years directly to the
user. Our equity services are now included in every subscription
service. Our market experts provide the financial technology,
education, and research that allow the user to make decisions
concerning his or her money in the market. The user maintains
complete control of his or her money by using an online brokerage
of his or her choosing. Most equity pack strategies require a
margin account, and users need at least level four options
approval.
Startups—Startups
provides an opportunity for the user to identify and participate in
early-stage businesses that may have potential to grow quickly.
Michael Markowski is our Startups expert. With Startups, the user
will receive newsletter alerts providing information about
companies that Michael Markowski thinks could be potential winners.
The user can participate in one of these companies by adding it to
his or her personal crowd-funding portfolio.
Kuvera
University—We are committed to providing “best
in class” education across a variety of topics. Kuvera
University provides exclusive access to our market education
library, live monthly webinars with our market experts, in-depth
distributor training, personal development training, with ongoing
additional content. After watching and studying the videos and
materials in Kuvera University, the user will have a foundation in
the global financial markets, a deeper understanding of effective
financial management, and additional skills that will help the
user’s entrepreneurial and professional endeavors. Kuvera
University is included with all customer subscriptions to ensure an
ever-increasing value to our monthly access
price.
Continual
expansion and enhancement to these services and their delivery is
the key to the longevity of the program. With a focus to increase
convenience through the use of technology and by offering a wide
variety of market approaches, our products are designed to meet the
needs of the passive, moderately active, and highly motivated
self-directed investors.
S.A.F.E. Management
S.A.F.E.
Management, LLC is a Registered Investment Adviser and Commodity
Trading Adviser that has been established to deliver automated
trading strategies to individuals who find they lack the time to
trade for themselves. S.A.F.E. is committed to bringing innovative
trade methodologies, strategies, and algorithms for all worldwide
financial markets. S.A.F.E. Management is a state registered
investment adviser and operations are located at our Eatontown, New
Jersey corporate finance location and its website address is
safeadvglobal.com.
United Entities
United
League, LLC owns a number of proprietary technologies including
FIREFAN, a social app for sports enthusiasts. Technologies created
to support any of our companies are held under the United League
structure.
United
Games, LLC is the distribution network for United League
technologies. Since the acquisition of United Games in July of
2018, we are working to combine the distributors of Kuvera and
United Games. This is an ongoing process that is not targeted for
completion until the end of calendar year 2019.
SAFETek
SAFETek,
LLC (formerly WealthGen Global, LLC) is a new addition that we are
currently establishing for expansion plans in the high-speed
processing computing space. SAFETek will deploy a large-scale
processing operation that is used for any of the following intense
processing activities: protein folding, CGI rendering, game
streaming, machine and deep learning, mining, independent financial
verification, and general high-speed computing. Key trending
markets for data computation include Internet of Things, Smart
Homes, smart cities, smart devices, artificial intelligence,
blockchain technology, virtual reality, 3D animation, and health
technology data to name a few.
Our Vision
We
envision an ongoing integration of the latest technologies with
emerging needs to deliver leading edge products and services
worldwide.
Distribution Method
We use
an affiliate model to sell our product subscriptions. Anyone with
an interest can participate in our bonus plan, which rewards them
for selling product subscriptions. We believe this component of our
offering is extremely powerful as it provides an additional income
stream for the customer who decides to become a distributor.
Individuals are much more comfortable discussing financial matters
with people they know. The network becomes a support system for the
customers as they learn together and share their experiences. The
affiliate distribution model, while powerful, requires strict
policies and procedures to ensure the company’s presentation
and messaging are accurate and compliant. An affiliate/distributor
is not required to be a customer to sell our products.
Competition
We face
competition for each of our product categories, but do not have a
similar competitor with the full suite of services offered. Each of
the financial education products, alerts, tools, and newsletters
face competition from similar product companies such as
TheStreet.com, The Motley Fool, Jim Cramer, and like
subscription-based financial research services. The personal money
management education and tools face competition from free mobile
apps designed for the same purpose although our personal money
management does not advertise or entice the user to refinance or
secure new loans and is a pure management tool that serves the
individual and not the advertiser. Our tax management tools and
education have limited competition, and we have deployed Deductr
Pro as our tool of choice. Unique to our company is not the
individual product but the combined suite of products for one
monthly subscription price, cancellable at any time by the user and
distributed exclusively by the active members through the optional
bonus plan for those who choose to sell the service to
others.
We
believe our competitive advantages include:
●
|
a
generous bonus program for independent affiliates;
|
●
|
a
management team with extensive experience in financial education
and market strategy research/technology;
|
●
|
a young
and motivated distributor base;
|
●
|
a large
demographic that services all genders, races, religions, and
nationalities; and
|
●
|
a
delivery platform enabling us to launch new products quickly and
efficiently worldwide.
|
Our
competitive weaknesses include translation challenges as we
continue international expansion and components of our distributor
backend that are programmed by third-party providers.
Intellectual Property
Our
success is predicated on the adoption of new and innovative
technology, education, and research along with constantly improving
convenience tools. The delivery of alerts and financial information
through our platform provides various levels of automation that is
programmed and designed by us exclusively for our products and
modified to enable the individual to initiate action on alerts they
desire. We own the intellectual property for many of our products
strategies and platform delivery mechanisms while we make other
products available through licensed arrangements. In this way, we
can continually offer a full suite of “best of breed”
services to ensure our members are receiving the most value and
leading-edge programs for their monthly subscription.
Expansion
We are
in the process of expanding the business internationally.
International planning and restructuring is taking place as a
result of the recent name change to Kuvera. Our affiliated entity,
WG LATAM S.A.S., which has been reestablished to Kuvera LATAM
S.A.S., distributes tour products and services in Colombia and
surrounding Latin American countries. International operations can
be impacted by international regulations and economic conditions,
although all are continuously monitored.
Government Regulation
We have
historically positioned the company as a knowledge provider and
educator that seeks to augment a user’s informed
decision-making process, rather than to act as a conductor of
investment decisions or a representative of investment services. As
such, most of our activities do not fall within the scope of
securities industry regulation. Most of our products and services
also do not require that any representative distributing our
services conduct themselves as an investment advisor or broker.
However, our subsidiary S.A.F.E.
Management, LLC, recently received its registration and disclosure
approval from the National Futures Association. S.A.F.E.
Management, LLC is now a New Jersey State Registered Investment
Adviser (“RIA”), Commodities Trading Advisor
(“CTA”), and Commodity Pool Operator, and is approved
for over the counter FOREX advisory
services.
We
have established these registrations and the advisory structure to
offer automated trade execution, which is managed by the RIA for
equities and equity options and the CTA for commodities, futures,
and OTC Forex. In addition, SAFE provides traditional advisory
services for clients who do not wish to trade for themselves.
Automation of trades is only available through S.A.F.E. Management.
No additional approvals are required for any of our current
business activities. The cost of maintaining this additional
regulated entity could have a material adverse effect on our
business and could subject us to regulatory enforcement
actions.
We are
subject to government regulation in connection with securities laws
and regulations applicable to all publicly owned companies as well
as laws and regulations applicable to businesses generally. We are
also increasingly subject to governmental regulation and
legislation specifically targeting Internet companies, such as
privacy regulations adopted at the local, state, national and
international levels and taxes levied at the state level. Due to
the increasing use of the internet, enforcement of existing laws,
such as consumer protection regulations, in connection with
web-based activities has become more aggressive, and it is expected
that new laws and regulations will continue to be enacted at the
local, state, national, and international levels. Such new
legislation, alone or combined with increasingly aggressive
enforcement of existing laws, could have a material adverse effect
on our future operating performance and business.
Employees
As
of March 25, 2019, we had 32 employees.
Internet Address
Additional
information concerning our business can be found on our website at
www.investview.com
for the most up-to-date corporate financial information,
presentation announcements, transcripts, and archives. Information
regarding our products and services offered by our wholly owned
subsidiary, Kuvera LLC, may be found at www.kuveraglobal.com. Web site
links provided in may change in the future. We make available free
of charge on our website our annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on
Form 8-K, and amendments to those reports, as soon as
reasonably practicable after we electronically file such material
with or furnish it to the Securities and Exchange
Commission.
Corporate History
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. through a Share Purchase Agreement into
Voxpath Holdings, Inc. and then changed our name to
TheRetirementSolution.Com, Inc. and in October 2008 changed our
name to Global Investor Services, Inc., before changing our name to
Investview, Inc., on March 27, 2012.
On
March 31, 2017, we entered into a Contribution Agreement with the
members of Wealth Generators, LCC, a limited liability company,
pursuant to which the Wealth Generators members agreed to
contribute 100% of its outstanding securities in exchange for an
aggregate of 1,358,670,942 shares of our common stock. This closing
occurred after close of business on March 31, 2017, therefore,
effective April 1, 2017, Wealth Generators became our wholly owned
subsidiary. On February 28, 2018, we filed a name change for Wealth
Generators LLC to Kuvera LLC. This did not affect our tax and
federal identification.
MANAGEMENT
Directors and Executive Officers
The
following table sets forth certain information for our directors
and executive officers:
Name
|
|
Age
|
|
Position
|
Ryan
Smith
|
|
52
|
|
Chief
Executive Officer and Director
|
Annette
Raynor
|
|
55
|
|
Chief
Operating Officer and Director
|
Chad
Miller
|
|
53
|
|
Director
|
William
C. Kosoff
|
|
77
|
|
Acting
Chief Financial Officer
|
Ryan Smith—Mr.
Smith has served as a director and chief executive officer since
March 31, 2017. From 2013 through our acquisition of Wealth
Generators, LLC (nka Kuvera, LLC), Mr. Smith served as its chief
executive officer. Mr. Smith earned his BS from Brigham Young
University, Provo, Utah, in 2003.
Annette Raynor—Ms. Raynor has served as our
chief operating officer since March 31, 2017 and as a director
since June 6, 2017. From 2013 through our acquisition of Wealth
Generators, LLC (nka Kuvera, LLC), Ms. Raynor served as its chief
operating officer. Ms. Raynor holds her Series 65-Uniform
Investment Adviser License and is a licensed realtor in the state
of New Jersey.
Chad Miller—Mr.
Miller was appointed as a director on June 6, 2017. Mr. Miller
co-founded Kuvera, LLC, formerly Wealth Generators, LLC in 2013.
Prior to 2013, Mr. Miller held his Series 63-Uniform Securities
License, Series 7-General Securities License, and Series 24-General
Securities Principal License and was employed by various brokerage
firms from 1999 through 2010.
William C. Kosoff –Since September 2006, Mr.
Kosoff has served in various positions, including chief financial
officer, secretary, and treasurer. He had a break in service as an
officer and employee from December 2012 to April 2013, when he
returned began serving again as acting chief financial officer. He
was also formerly a director. He has worked in the high technology
industry for 45 years, serving in engineering, marketing, sales,
and senior management positions with Rockwell International from
1960 to 1984. In 1984, he co-founded Telenetics Corp and served as
its president and chief executive officer. In 1987, Telenetics
became public through an IPO on NASDAQ and was acquired in 2006 by
a private firm. Mr. Kosoff received his Bachelor of Arts in Physics
from California State University in 1978 and earned a Professional
Certificate in Accounting from New York University in
2010.
Our
directors are elected for a term of one year and until their
successors are qualified, nominated, and elected.
Role of the Board
It is
the paramount duty of the board to oversee our management in the
competent and ethical operation of the company on a day-to-day
basis and to assure that the long-term interests of the
shareholders are being served. To satisfy this duty, the directors
take a proactive, focused approach to their position, and set
standards to ensure that we are committed to business success
through maintenance of ambitious standards of responsibility and
ethics.
Committees
Our
business, property, and affairs are managed by or under the
direction of the board of directors. Members of the board are kept
informed of our business through discussion with the chief
executive and financial officers and other officers, by reviewing
materials provided to them, and by participating at meetings of the
board and its committees.
Audit Committee
We
currently do not have a designated audit committee, and
accordingly, our board of directors preapproves all audit and
permissible non-audit services provided by the independent auditor,
including audit, audit-related, tax, and other services.
Preapproval is generally provided for up to one year, detailed as
to the particular service or category of services, and subject to a
specific budget. The independent auditor and management are
required to periodically report to our board of directors regarding
the extent of services provided by the independent auditor in
accordance with this preapproval and the fees for the services
performed to date. The board of directors may also preapprove
particular services on a case-by-case basis.
Compensation Committee
We
currently do not have a designated compensation committee, and
accordingly, our board of directors will approve all compensation
matters until such committee is established and
approved.
Code of Ethics
We have
a code of ethics that applies to all of our employees, including
our principal executive officer, principal financial officer,
principal accounting officer, and the directors, a copy of which is
available in the Employee Handbook. We intend to disclose any
changes in or waivers from our code of ethics by posting such
information on our website or by filing a Form 8-K.
Section 16(a) Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), requires our directors, executive
officers, and persons who own more than 10% of our common stock to
file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of our common stock
and other equity securities. During the year ended March 31, 2018,
our officers, directors and 10% stockholders made the required
filings pursuant to Section 16(a).
Directors’ Compensation
There
was no compensation paid to our three directors during the year
ending March 31, 2018, except for
reimbursement of reasonable and ordinary
expenses.
EXECUTIVE COMPENSATION
The
following table sets forth information concerning the annual and
long-term compensation earned by or paid to our chief executive
officer and to other persons who served as executive officers as at
and/or during the fiscal year ended March 31, 2018, or who earned
compensation exceeding $100,000 during fiscal year 2018 (the
“named executive officers”), for services as executive
officers for the last two fiscal years:
Summary Compensation Table
Name and Principal Position
|
Fiscal Year
|
Salary
|
Stock Awards
|
Option Awards
|
Non-Equity Incentive Plan Compensation
|
Change in Pension Value and Non Qualified Deferred Compensation
Earnings
|
All Other Compensation
|
Total
|
|
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
Ryan Smith
|
2018
|
217,500
[1]
|
-
|
-
|
-
|
-
|
111,935
[1]
|
329,435
|
CEO
and Director
|
2017
|
80,000
[1]
|
-
|
-
|
-
|
115,000
|
-
|
195,000
|
Annette
Raynor
|
2018
|
207,500
[2]
|
-
|
-
|
-
|
-
|
103,935
[2]
|
311,435
|
COO and
Director
|
2017
|
80,000
[2]
|
-
|
-
|
-
|
115,000
|
-
|
195,000
|
Chad
Miller
|
2018
|
217,500
[3]
|
-
|
-
|
-
|
-
|
106,935
[3]
|
324,435
|
Director
|
2017
|
40,000
[3]
|
-
|
-
|
-
|
155,000
|
-
|
195,000
|
Mario
Romano
|
2018
|
207,500
[4]
|
-
|
-
|
-
|
-
|
103,935
[4]
|
311,435
|
Director of
Finance
|
2017
|
80,000
[4]
|
-
|
-
|
-
|
115,000
|
-
|
195,000
|
William
C. Kosoff
|
2018
|
52,000
[5]
|
-
|
-
|
-
|
-
|
-
|
52,000
|
Acting
CFO
|
2017
|
95,704
[5]
|
-
|
-
|
-
|
27,500
|
-
|
127,250
|
Dr.
Joseph J. Louro
|
2017
|
150,000
[6]
|
-
|
-
|
-
|
|
-
|
150,000
|
Former
CEO and Chairman
|
|
|
|
|
|
|
|
|
_________________
[1]
|
A portion of Mr. Smith’s compensation was paid to Kays Creek
Capital, an entity in which he is an owner.
|
[2]
|
A portion of Ms. Raynor’s compensation was paid to Wealth
Engineering LLC, an entity in which she is a 50%
owner.
|
[3]
|
A portion of Mr. Miller’s compensation was paid to Kays Creek
Capital and MILCO, entities in which he is an owner.
|
[4]
|
A portion of Mr. Romano’s compensation was paid to Wealth
Engineering LLC, an entity in which he is a 50% owner.
|
[5]
|
Mr. Kosoff was not compensated with any cash for salary during the
year ending March 31, 2017. He accrued $95,704, which was settled
for 1,914,080 shares of our restricted common stock.
|
[6]
|
Dr. Louro did not receive any cash compensation during the year
ended March 31, 2017, and settled his accrued $150,000 for
3,000,000 shares of our restricted common stock. On April 6, 2017,
Dr. Louro voluntarily resigned as chairman and CEO and received no
compensation during the year ended March 31, 2018.
|
Outstanding Equity Awards at Fiscal Year-End
No
stock option awards were exercisable or unexercisable as of March
31, 2018, for any executive officer.
Employee Stock Options
The
nonqualified plan adopted in 2007 authorizes 65,000 shares, of
which 47,500 have been granted as of March 31, 2018. The qualified
plan adopted in October of 2008 authorizes 125,000 shares and was
approved by a majority of our shareholders on September 16, 2009.
As of March 31, 2018, 42,500 shares have been granted under the
2008 plan.
The
following table summarizes the changes in employee stock options
outstanding and the related prices for the shares of our common
stock issued to employees under two employee stock option
plans:
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
|
Aggregate
|
|
|
|
Number of
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Intrinsic
|
|
|
|
Shares
|
|
|
Price
|
|
|
Life (years)
|
|
|
Value
|
|
Options
outstanding at March 31, 2016
|
|
|
37,500
|
|
|
$
|
10.20
|
|
|
|
3.33
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled
/ expired
|
|
|
(2,500
|
)
|
|
$
|
12.00
|
|
|
|
|
|
|
|
|
|
Options
outstanding at March 31, 2017
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
2.51
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled
/ expired
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Options
outstanding at March 31, 2018
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
1.51
|
|
|
$
|
-
|
|
Options
exercisable at March 31, 2018
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
1.51
|
|
|
$
|
-
|
|
Stock-based
compensation expense in connection with options granted to
employees for the year ended March 31, 2018 and 2017, was
$0.
Employment Agreements and Revenue Share Agreements
The
four founders of Wealth Generators, LLC, Ryan Smith, chief
executive officer; Chad Miller, chief visionary officer; Annette
Raynor, chief operating officer; and Mario Romano, director of
finance and investor relations, all entered into Founder Employment
Agreements effective October 1, 2017. The terms and covenants in
the four agreements are the same for each of the founders and have
a term of five years that automatically renews for three successive
five-year terms unless terminated prior to the 90th day following
the expiration of the applicable term. The agreements provide for
an annual salary of $225,000 with annual reviews by the board of
directors or the designated compensation committee to determine
whether an increase in salary is appropriate based on our results
of operations, increased activities, or responsibilities of the
founder, or such other factors as the board of directors or the
designated compensation committee thereof may deem appropriate. In
addition, the founders are entitled to receive health fringe
benefits that are generally available to our
employees.
On
October 11, 2017, we entered into Founder’s Revenue
Agreements with Chad Miller, Annette Raynor, Mario Romano, and Ryan
Smith. As consideration for their efforts in founding Wealth
Generators LLC, beginning January 1, 2018, for the month ended
December 31, 2017, each of the founders has the right to receive
three-quarters of one percent (0.75%) of our top-line revenue,
which will be calculated and paid on a monthly basis. This right is
permanent and irrevocable, is not connected in any manner to the
founder’s employment with us, and will be treated as a
portion of the founder’s estate if it has not been assigned
by the founder prior to his or her death.
As of
April 3, 2017, upon the reverse acquisition of Wealth Generators
LLC, Mr. Kosoff was appointed as the acting chief financial officer
and resumed payroll as an employee at a mutually agreed reduced
rate. In the event he resigns without good reason with 90
days’ written notice or is terminated for cause (willful
misconduct) with 30 days’ written notice, he is entitled to
all accrued and unpaid compensation as of the date of such
termination and expense reimbursement.
On
April 6, 2017, Dr. Joseph Louro voluntarily resigned as Chairman
and CEO and as a result, his employment agreement was
terminated.
PRINCIPAL STOCKHOLDERS
The
following table sets forth certain information, as of March
25, 2019, respecting the beneficial ownership of our
outstanding common stock by: (i) any holder of more than 5%;
(ii) each of the Named Executive Officers and directors; and
(iii) our directors and Named Executive Officers as a group,
based on 2,739,161,318 shares of common stock outstanding and after
giving effect to the sale of all 103,000,000 shares of common stock
in this offering. Except as otherwise indicated, each stockholder
listed below has sole voting and investment power over the shares
beneficially owned:
Name of Beneficial Owner(1)
|
|
Common StockBeneficiallyOwned
|
|
Percentage ofCommon Stock Before Offering (2)
|
|
Percentage ofCommon Stock After Offering(2)
|
|
|
|
|
|
|
|
Principal Stockholders:
|
|
|
|
|
|
|
CR
Capital Holdings LLC(3)
|
|
621,874,710
|
|
23.6%
|
|
22.7%
|
|
|
|
|
|
|
|
Directors and Officers:
|
|
|
|
|
|
|
Chad
Miller, Chairman(3)
|
|
621,874,710
|
|
23.6
|
|
22.7
|
Ryan
Smith, CEO and Director(3)
|
|
621,874,710
|
|
23.6
|
|
22.7
|
Annette
Raynor, COO and Director(4)(5)
|
|
215,356,942
|
|
8.2
|
|
7.9
|
Mario
Romano, Treasurer(4)(6)
|
|
215,356,942
|
|
8.2
|
|
7.9
|
William
C. Kosoff, Acting CFO
|
|
3,970,680
|
|
*
|
|
*
|
|
|
|
|
|
|
|
All Officers and Directors
as a group (5
persons)(3)(4)(5)(6)
|
|
946,202,332
|
|
35.9%
|
|
34.5%
|
_______________
*
|
Less
than 1%.
|
(1)
|
Except
as otherwise indicated, the address of each beneficial owner is c/o
InvestView Inc., 12 South 400 West, Salt Lake City, UT
84101.
|
(2)
|
Applicable
percentage ownership is based on 2,639,161,318 shares of common
stock outstanding as of March 25, 2019, together with
securities exercisable or convertible into shares of common stock
within 60 days of that date, for each stockholder.
|
(3)
|
Our
directors Ryan Smith and Chad Miller each own 50% of CR Capital
Holdings LLC and, as a result, have voting and dispositive control
of these shares. Therefore, they are deemed to be the beneficial
owners of our shares of common stock.
|
(4)
|
The
members of Wealth Engineering LLC, 745 Hope Road, Eatontown, NJ
07724, own 110,356,942 shares of our common stock. Our officers
Mario Romano and Annette Raynor are two of its members. In
addition, Mr. Romano is the CEO and Ms. Raynor serves as the COO of
Wealth Engineering LLC. Combined Mr. Romano and Ms. Raynor have
voting and shared dispositive control of these shares.
|
(5)
|
In
addition to the 110,356,942 shares owned by Wealth Engineering LLC,
Ms. Raynor owns 105,000,000 shares personally.
|
(6)
|
In
addition to the 110,356,942 shares owned by Wealth Engineering LLC,
Mr. Romano owns 105,000,000 shares personally.
|
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS, AND CERTAIN CONTROL
PERSONS
Our
related-party payables consisted of the following:
|
|
Year Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
Short
term advances [1]
|
|
$
|
1,880
|
|
|
$
|
100,000
|
|
Revenue-based
funding agreement entered into on 11/8/15 [2]
|
|
|
-
|
|
|
|
180,000
|
|
Short-term
promissory note entered into on 9/13/16 [3]
|
|
|
-
|
|
|
|
150,000
|
|
Promissory
note entered into on 11/15/16 [4]
|
|
|
-
|
|
|
|
895
|
|
Promissory
note entered into on 3/15/17 [5]
|
|
|
-
|
|
|
|
375,000
|
|
|
|
$
|
1,880
|
|
|
$
|
805,895
|
|
[1]
|
We periodically receive advances for operating funds from our
current majority shareholders (former members of Wealth Generators
prior to the reverse acquisition) and other related parties,
including entities that are owned, controlled, or influenced by our
owners or management. These advances are due on demand, generally
have no set interest rates, and are unsecured. During the year
ended March 31, 2018, we received $498,380 in cash proceeds from
advances, incurred $64,605 in interest, and repaid related parties a total of
$661,105.
|
[2]
|
On November 16, 2015, then a majority member of Wealth Generators
(pre-reverse acquisition) and currently a majority shareholder
advanced funds of $150,000 under a Revenue-based Funding Agreement,
which required that beginning December 30, 2015, we would pay an
amount equal to 2% of our top-line revenue generated from the prior
month to reduce the loan until the lender had received $450,000.
During the year ended March 31, 2018, we agreed to issue 10,000,000
shares of common stock to extinguish $90,000 in debt and to pay
$15,000 per month for six months, for a total of $90,000, under a
Conversion Agreement. We repaid $90,000 in cash during the year
ended March 31, 2018.
|
[3]
|
A member of the senior management team has continuously advanced
funds of $150,000 at various times, beginning on September 14,
2016, under short-term promissory notes and their applicable
amendments. All of the notes carry the same terms, have a fixed
interest payment of $7,500, and are generally due in less than four
weeks. Under this arrangement, during the year ended March 31,
2018, we incurred $27,000 of interest and repaid a total of
$177,000.
|
[4]
|
We entered into a promissory note for $94,788 with a company owned
by immediate family members of two members of our executive
management team. Funds were advanced to us on November 16 and
December 16, 2016, in the amounts of $78,750 and $16,038,
respectively. The promissory note had a 12-month term, an annual
interest rate of 8%, and no prepayment penalty. During the year
ended March 31, 2017, we incurred $895 in interest expense on the
note and repaid the entire principal balance of $94,788. During the
year ended March 31, 2018, we repaid the remaining interest balance
of $895.
|
[5]
|
A company that was a majority member of Wealth Generators
(pre-reverse acquisition) and is currently a majority shareholder
entered into a promissory note in the amount of $300,000, advancing
funds on March 17, 2017. The note had a fixed interest amount of
$75,000 and matured on September 16, 2017, but was extended
initially through November 16, 2017, and then extended a second
time through December 31, 2017. An additional $12,500 in interest
was incurred for the second extension and total repayments of
$387,500 were made on this arrangement during the year ended March
31, 2018.
|
Our
related-party payables subsequent to March 31, 2018, consisted of
the following:
|
|
December 31,2018
|
|
|
March 31,2018
|
|
Short-term
advances [1]
|
|
$
|
386,488
|
|
|
$
|
1,880
|
|
Short-term
Promissory Note entered into on 8/17/18 [2]
|
|
|
105,000
|
|
|
|
-
|
|
|
|
$
|
699,380
|
|
|
$
|
1,880
|
|
[1]
|
We periodically receive advances for operating funds from our
current majority shareholders and other related parties, including
entities that are owned, controlled, or influenced by our owners or
management. These advances are due on demand, generally have no
interest or fees associated with them, and are unsecured. During
the nine months ended December 31, 2018, we received $1,380,777 in
cash proceeds from advances and repaid related parties
$966,169.
|
[2]
|
A member of the senior management team advanced funds of $100,000
on August 17, 2018, under a short-term promissory note due to be
repaid on August 31, 2018. On August 31, 2018, the note was
amended to be due on demand or, in absence of a demand, due on
August 31, 2019. The note has a fixed
interest payment of $5,000, which was recorded as interest expense
in the statement of operations during the nine months ended
December 31, 2018.
|
THE EQUITY PURCHASE TRANSACTIONS
General
On
December 29, 2018, we entered into a Common Stock Purchase
Agreement (the CSPA) and a Registration Rights Agreement (RRA) with
TRITON FUNDS LP, a Delaware limited partnership (Investor).
Investor is not our affiliate. The RRA requires us to file a
registration statement registering Investor’s resale of the
shares within 15 calendar days. On March 22, 2019, the CSPA
was amended to remove any ambiguity about Investor’s
obligation to purchase our shares under the
CSPA.
Under
the CSPA, Investor is obligated to purchase $1.0 million of our
common stock during the 60 days after the registration statement
becomes effective, and the resale of these shares is included in
this registration statement. The shares will be purchased at 85% of
the lowest closing price of the common stock in the five
consecutive trading days preceding Investor’s delivery of a
purchase notice, subject to certain limitations, including that
Investor cannot purchase any shares that would result in it owning
more than 4.9% of our common stock. We paid a document preparation
fee of $10,000 shares upon signing of the agreement. We also
donated 3,000,000 shares of our common stock to TRITON FUNDS LLC,
an affiliate of Investor, and the resale of those shares is also
included in this registration statement. If we elect to issue and
sell more than the 103,000,000 shares offered under this
prospectus, we must first register for resale any such additional
shares under the Securities Act. The number of shares ultimately
offered for resale by Investor is dependent upon the number of
shares we sell to it under the CSPA, which in turn is a function of
the market price for our common stock at the time of
sale.
If all
of the 103,000,000 shares offered under this prospectus were sold,
they would represent 3.8% of the total number of shares of our
common stock outstanding as of the date of this prospectus and 5.7%
of the total number of outstanding shares held by nonaffiliates as
of the date of this prospectus.
Under
the CSPA, the following conditions must be satisfied in order for
us to sell shares of our common stock to Investor:
●
|
Our
representations and warranties contained in the CSPA must be true
and correct in all material respects.
|
|
|
●
|
The
registration statement of which this prospectus forms a part, and
any amendment or supplement thereto, must be effective for the
resale of the shares to be purchased by Investor. We will have
filed with the SEC all reports, notices, and other documents
required under the Exchange Act and applicable SEC
regulations.
|
|
|
●
|
No
“Material Adverse Effect” (as that term is defined in
the CSPA) will have occurred and be continuing.
|
|
|
●
|
We will
have performed, satisfied, and complied in all material respects
with all covenants, agreements, and conditions required by the CSPA
to be performed, satisfied, or complied with by us at or prior to
each condition satisfaction date.
|
|
|
●
|
No
statute, rule, regulation, executive order, decree, ruling, or
injunction will have been enacted, entered, promulgated, or
endorsed by any court or governmental authority of competent
jurisdiction that prohibits or directly and adversely affects any
of the transactions contemplated by the CSPA, and no proceeding
will have been commenced that may have a Material Adverse
Effect.
|
|
|
●
|
The
common stock is quoted trading on a “principal market”
(as that term is defined in the CSPA) and all of the shares
issuable pursuant to a purchase notice will be listed or quoted for
trading on such principal market. The issuance of common stock for
the applicable purchase notice will not violate the shareholder
approval requirements of the principal market. We will not have
received any notice threatening the continued quotation of the
common stock on the principal market.
|
|
|
●
|
There
is a sufficient number of authorized but unissued and otherwise
unreserved common stock for the issuance of all of the shares
issuable under the purchase notice.
|
Our Termination Rights
We may
terminate the CSPA at any time by written notice to the Investor in
the event of a material breach of the CSPA by the Investor. The
CSPA will automatically terminate on the earliest of the end of:
(i) the 60-day commitment period; (ii) the date that
Investor purchases $1.0 million of our common stock; or
(iii) the date on which the registration statement is no
longer effective.
Effect of Performance of the CSPA on Our Stockholders
All
shares of common stock registered in this offering are expected to
be freely tradable. It is anticipated that shares registered in
this offering will be sold over a period commencing on the date
that the registration statement, including this prospectus, becomes
effective through the next 60 days. The sale by the selling
stockholders of a significant amount of shares registered in this
offering at any given time could cause the market price of our
common stock to decline and to be highly volatile.
Investor
is obligated to purchase $1.0 million in shares from us under the
CSPA. After we sell those shares to Investor, Investor may sell
all, some, or none of its shares. If we sell these shares to
Investor, it may sell all, some, or none of such shares. Therefore,
sales to Investor by us under the CSPA may result in substantial
dilution to the interests of other stockholders. In addition, if we
sell a substantial number of shares to Investor under the CSPA, or
if investors expect that we will do so, the actual sales of shares
or the mere existence of our arrangement with Investor may make it
more difficult for us to sell equity or equity-related securities
in the future at a time and at a price at which we might otherwise
wish to effect such sales.
Depending
on the price per share at which we sell our common stock to
Investor, we may be authorized to issue and sell to Investor more
shares of our common stock than are offered under this prospectus.
If we choose to do so, we must first register for resale under the
Securities Act any such additional shares, which could cause
additional substantial dilution to our stockholders. The number of
shares ultimately offered for resale by Investor under this
prospectus is dependent upon the number of shares we issue to
Investor under the CSPA.
SELLING STOCKHOLDERS
This
prospectus relates to the possible resale of up to 100,000,000
shares of our common stock by TRITON FUNDS LP (Investor) and
3,000,000 shares of our common stock by TRITON FUNDS LLC, the
selling stockholders. We are filing the registration statement of
which this prospectus forms a part pursuant to the provisions of
the Common Stock Purchas Agreement (CSPA) executed in connection
with Investor’s agreement to purchase $1.0 million in shares
of our common stock.
Pursuant
to the Registration Rights Agreement (RRA), which we entered into
on December 29, 2018, concurrently with our execution of the CSPA,
we agreed to provide certain registration rights respecting sales
by Investor of the shares of our common stock issued to it under
the CSPA. See the description under the heading “The Equity
Purchase Transactions” for more information.
The
selling stockholders may, from time to time pursuant to this
prospectus, offer and sell any or all of the shares that we have
sold or may sell to them. The selling stockholders may sell some,
all, or none of their shares. We do not know how long the selling
stockholders will hold the shares before selling them, and we
currently have no agreements, arrangements, or understandings with
the selling stockholders regarding the sale of any of the
shares.
The
following table presents information regarding the selling
stockholders and the shares that they may offer and sell from time
to time under this prospectus. The table is prepared based on
information supplied to us by the selling stockholders and reflects
their holdings as of March 25, 2019. Except as
described herein, neither the selling stockholders nor any of their
respective affiliates have held a position or office, or had any
other material relationship, with our company or any of our
predecessors or affiliates. As used in this prospectus, the term
“selling stockholders” includes the selling
stockholders and any of its respective donees, pledgees,
transferees, or other successors-in-interest selling shares
received after the date of this prospectus from the selling
stockholders as a gift, pledge, or other non-sale-related transfer.
Beneficial ownership is determined in accordance with Rule 13d-3(d)
promulgated by the SEC under the Exchange Act.
The
percentage of shares beneficially owned before the offering is
based on 2,639,161,318 shares of our common stock actually
outstanding as of March 25, 2019:
Selling stockholders
|
Shares
Beneficially
Owned Before
this Offering
|
Percentage of
Outstanding
Shares
Beneficially
Owned Before
this Offering(1)
|
Shares to be Sold in this
Offering(2)
|
Number Of
Shares
Beneficially
Owned After this
Offering
|
Percentage of
Outstanding
Shares
Beneficially
Owned After this
Offering
|
|
|
|
|
|
|
TRITON
FUNDS LP(3)
|
-
|
-%
|
100,000,000
|
--
|
--
|
TRITON
FUNDS LLC(3)
|
3,000,000
|
<1
|
3,000,000
|
--
|
--
|
__________________
(1)
Based on
2,639,161,318 outstanding shares of our common stock as of
March 25, 2019. Although we will issue to Investor an
aggregate amount of $1 million in our common stock under the CSPA,
such shares are not included in determining the percentage of
shares beneficially owned before this offering.
(2)
Assumes that
selling stockholders will sell all shares available for sale in
this offering.
(3)
Yash Thukral, Sam
Yaffa, and Nathan Yee have voting and dispositive power over the
shares prospectively to be owned by TRITON FUNDS LP and the shares
held by TRITON FUNDS LLC.
PLAN OF DISTRIBUTION
The
selling stockholders and any of their respective pledgees,
assignees, and successors-in-interest may, from time to time, sell
any or all of their common stock on the OTC Markets or any other
stock exchange, market, or trading facility on which the shares are
traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more
of the following methods when selling shares:
●
ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;
●
block trades in
which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
●
purchases by a
broker-dealer as principal and resale by the broker-dealer for its
account;
●
an exchange
distribution in accordance with the rules of the applicable
exchange;
●
privately
negotiated transactions;
●
an agreement with
broker-dealers to sell a specified number of shares at a stipulated
price per share;
●
through the writing
or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
●
a combination of
any such methods of sale; or
●
any other method
permitted pursuant to applicable law.
The
selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this
prospectus.
Investor
is an “underwriter” within the meaning of Section
2(a)(11) of the Securities Act.
Broker-dealers
engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated but, except as set forth in
a supplement to this prospectus, in the case of an agency
transaction, not in excess of a customary brokerage commission in
compliance with FINRA Rule 2121.
Investor
is, and any broker-dealers or agents that are involved in selling
the shares may be deemed to be, “underwriters” within
the meaning of the Securities Act in connection with such sales. In
such event, any commissions received by the broker-dealers or
agents and any profit on the resale of the shares purchased by them
may be deemed to be underwriting commissions or discounts under the
Securities Act. The selling stockholders have informed us that they
do not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the common
stock. In no event will any broker-dealer receive fees,
commissions, and markups that, in the aggregate, would exceed
8%.
Because
Investor is an “underwriter” within the meaning of the
Securities Act, it is subject to the prospectus delivery
requirements of the Securities Act, including Rule 172 thereunder.
In addition, any securities covered by this prospectus that qualify
for sale pursuant to Rule 144 under the Securities Act may be sold
under Rule 144 rather than under this prospectus. There is no
underwriter (other than Investor) or coordinating broker acting in
connection with the proposed sale of the resale shares by the
selling stockholders.
We have
agreed to keep this prospectus effective until the earlier of:
(i) the date on which the shares may be resold by the selling
stockholders without registration and without regard to any volume
limitations by reason of Rule 144 under the Securities Act or any
other rule of similar effect; or (ii) all of the shares have been
sold pursuant to this prospectus or Rule 144 under the Securities
Act or any other rule of similar effect. The resale shares will be
sold only through registered or licensed brokers or dealers if
required under applicable state securities laws. In addition, in
certain states, the resale shares may not be sold unless they have
been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is
available and is complied with.
Expenses, Indemnification
We will
not receive any of the proceeds from the sale of the common stock
sold by the selling stockholders and will bear all expenses related
to the registration of this offering, but will not pay for any
commissions, fees, or discounts, if any, relating to the sale of
the common stock sold by the selling stockholders. We have agreed
to indemnify the selling stockholders against certain losses,
claims, damages, and liabilities, including liabilities under the
Securities Act.
Supplements
In the
event of a material change in the plan of distribution disclosed in
this prospectus, the selling stockholders will not be able to
effect transactions in the shares pursuant to this prospectus until
such time as a post-effective amendment to the registration
statement is filed with, and declared effective by, the Securities
and Exchange Commission.
Regulation M
We have
informed the selling stockholders that they are required to comply
with Regulation M promulgated under the Exchange Act for any
purchase or sale of our common stock. In general, Rule 102 under
Regulation M prohibits any person connected with a distribution of
our common stock from directly or indirectly bidding for, or
purchasing for any account in which it has a beneficial interest,
any of the shares or any right to purchase the shares, for a period
of one business day before and after completion of its
participation in the distribution.
During
any distribution period, Regulation M prohibits the selling
stockholders and any other persons engaged in the distribution from
engaging in any stabilizing bid or purchasing our common stock
except for the purpose of preventing or retarding a decline in the
open market price of the common stock. None of these persons may
affect any stabilizing transaction to facilitate any offering at
the market.
We have
also advised the selling stockholders that they should be aware
that the anti-manipulation provisions of Regulation M under the
Exchange Act will apply to purchases and sales of common stock by
them, and that there are restrictions on market-making activities
by persons engaged in the distribution of the shares. Under
Regulation M, the selling stockholders or their agents may not bid
for, purchase, or attempt to induce any person to bid for or
purchase, shares of our common stock while the selling stockholders
are distributing shares covered by this prospectus. Regulation M
may prohibit the selling stockholders from covering short sales by
purchasing shares while the distribution is taking place, despite
any contractual rights to do so under the CSPA. We have advised the
selling stockholders that they should consult with their own legal
counsel to ensure compliance with Regulation M.
DESCRIPTION OF CAPITAL STOCK
Our
articles of incorporation, as amended, authorize us to issue
10,010,000,000 shares of capital stock, consisting of
10,000,000,000 shares of common stock, par value $0.001, and
10,000,000 shares of preferred stock, par value
$0.001.
Common Stock
The
holders of common stock are entitled to one vote per share on each
matter submitted to a vote at any meeting of stockholders. Shares
of common stock do not carry cumulative voting rights and,
therefore, a majority of the shares of outstanding common stock
will be able to elect the entire board of directors and, if they do
so, minority stockholders would not be able to elect any persons to
the board of directors. Our bylaws provide that a majority of our
issued and outstanding shares constitutes a quorum for
stockholders’ meetings, except respecting certain matters for
which a greater percentage quorum is required by statute or the
bylaws.
Our
stockholders have no preemptive rights to acquire additional shares
of common stock or other securities. The common stock is not
subject to redemption and carries no subscription or conversion
rights. In the event of our liquidation, the shares of common stock
are entitled to share equally in corporate assets after
satisfaction of all liabilities.
Holders
of common stock are entitled to receive such dividends as the board
of directors may, from time to time, declare out of funds legally
available for the payment of dividends. We seek growth and
expansion of our business through the reinvestment of profits, if
any, and do not anticipate that we will pay dividends in the
foreseeable future.
Preferred Stock
Our
amended and restated articles of incorporation authorize the
issuance of 10,000,000 shares of preferred stock. The board of
directors is empowered, without stockholder approval, to designate
and issue additional series of preferred stock with dividend,
liquidation, conversion, voting, or other rights or restrictions,
including the right to issue convertible securities with no
limitations on conversion, which could adversely affect the voting
power or other rights of the holders of our common stock,
substantially dilute a common stockholder’s interest, and
depress the price of our common stock.
Authority to Issue Stock
The
board of directors has the authority to issue the authorized but
unissued shares of common stock without action by the stockholders.
The issuance of such shares would reduce the percentage ownership
held by current stockholders.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have
filed with the SEC, Washington, D.C. 20549, under the Securities
Act, a registration statement on Form S-1 relating to the shares
offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the
exhibits and schedules thereto. For further information respecting
our company and the shares offered by this prospectus, you should
refer to the registration statement, including the exhibits and
schedules thereto. The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information
regarding registrants that file electronically with the SEC. The
SEC’s internet address is http://www.sec.gov.
Statements
contained in this prospectus as to the contents of any contract or
other document that we have filed as an exhibit to the registration
statement are qualified in their entirety by reference to the
exhibits for a complete statement of their terms and
conditions.
The
representations, warranties, and covenants made by us in any
agreement that is filed as an exhibit to the registration statement
of which this prospectus is a part were made solely for the benefit
of the parties to such agreement, including, in some cases, for the
purpose of allocating risk among the parties to such agreements,
and should not be deemed to be a representation, warranty, or
covenant to you. Moreover, such representations, warranties, or
covenants were made as of an earlier date. Accordingly, such
representations, warranties, and covenants should not be relied on
as accurately representing the current state of our
affairs.
We file
periodic reports, proxy statements, and other information with the
SEC in accordance with requirements of the Exchange Act. We make
available through our website, free of charge, copies of these
reports as soon as reasonably practicable after we electronically
file or furnish them to the SEC. Our website is located at
http://www.InvestView.com. You can also request copies of such
documents, free of charge, by contacting us at
888-217-8720.
Information
contained on our website is not a prospectus and does not
constitute a part of this prospectus.
LEGAL MATTERS
Certain
legal matters respecting the validity under Nevada law of the
common stock to be sold by the selling stockholders have been
passed upon for us by Michael Best & Friedrich
LLP.
EXPERTS
The
consolidated financial statements as of March 31, 2018, and for the
year in the period ended March 31, 2017, included in this Form S-1
have been so included in reliance upon the report of Haynie &
Company, an independent registered public accounting firm, given on
the authority of said firm as an expert in auditing and accounting.
Haynie & Company also audited the financial statements of
Wealth Generators, LLC, for the fiscal years ended March 31, 2018
and 2017.
INVESTVIEW, INC.
INDEX TO FINANCIAL STATEMENTS
|
Page
|
|
|
|
|
|
|
Report of Independent Registered Public Accounting
Firm
|
F-2
|
|
|
Consolidated Balance Sheets as of March 31, 2018 and
2017
|
F-3
|
|
|
Consolidated Statements of Operations for the years ended March 31,
2017 and 2016
|
F-4
|
|
|
Consolidated Statements of Stockholders’ Equity (Deficit) for
the years ended March 31, 2018 and 2017
|
F-5
|
|
|
Consolidated Statements of Cash Flows for years ended March 31,
2018 and 2017
|
F-6
|
|
|
Notes to the Consolidated Financial Statements
|
F-7
|
|
|
Condensed Consolidated Balance Sheets as of December 31, 2018
(unaudited) and March 31, 2018
|
F-24
|
|
|
Condensed Consolidated Statements of Operations for
the
|
|
Nine Months ended of December 31, 2018 and 2017
(unaudited)
|
F-25
|
|
|
Condensed Consolidated Statements of Cash Flows for
the
|
|
Nine Months Ended of December 31, 2018 and 2017
(unaudited)
|
F-26
|
|
|
Notes to Condensed Consolidated Financial Statements
(unaudited)
|
F-27
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and
Stockholders
of Investview, Inc.
Opinion on the Financial Statements
We have
audited the accompanying balance sheets of Investview, Inc. (the
Company) as of March 31, 2018 and 2017, and the related
consolidated statements of operations, stockholders’ deficit,
and cash flows for each of the years in the two-year period ended
March 31, 2018, and the related notes (collectively referred to as
the financial statements). In our opinion, the financial statements
present fairly, in all material respects, the financial position of
the Company as of March 31, 2018 and 2017, and the results of its
operations and its cash flows for each of the years in the two-year
period ended March 31, 2018, in conformity with accounting
principles generally accepted in the United States of
America.
Basis for Opinion
These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a
public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the
PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting.
As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the
purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis
for our opinion.
Consideration of the Company’s Ability to Continue as a Going
Concern
The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note
4 to the financial statements, the Company has suffered losses from
operations and its current cash flow is not enough to meet current
needs. This raises substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans in
regards to this matter are also described in Note 4. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/
Haynie & Company
Haynie
& Company
Salt
Lake City, Utah
June
29, 2018
We have
served as the Company’s auditor since 2017.
INVESTVIEW, INC.
CONSOLIDATED BALANCE SHEETS
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
1,490,686
|
|
|
$
|
1,616
|
|
Prepaid
assets
|
|
|
3,555
|
|
|
|
-
|
|
Receivables
|
|
|
472,557
|
|
|
|
444,610
|
|
Short
term advances
|
|
|
10,000
|
|
|
|
10,000
|
|
Short
term advances - related party
|
|
|
36,510
|
|
|
|
-
|
|
Other
current assets
|
|
|
480,370
|
|
|
|
-
|
|
Total
current assets
|
|
|
2,493,678
|
|
|
|
456,226
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets, net
|
|
|
18,860
|
|
|
|
10,235
|
|
|
|
|
|
|
|
|
|
|
Other
assets:
|
|
|
|
|
|
|
|
|
Long
term license agreement, net
|
|
|
2,133,620
|
|
|
|
-
|
|
Deposits
|
|
|
4,500
|
|
|
|
6,000
|
|
Total
other assets
|
|
|
2,138,120
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
4,650,658
|
|
|
$
|
472,461
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$
|
5,352,073
|
|
|
$
|
1,370,972
|
|
Deferred
revenue
|
|
|
863,740
|
|
|
|
433,298
|
|
Related
party payables
|
|
|
1,880
|
|
|
|
805,895
|
|
Debt,
current portion
|
|
|
195,245
|
|
|
|
2,093,745
|
|
Total
current liabilities
|
|
|
6,412,938
|
|
|
|
4,703,910
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
6,412,938
|
|
|
|
4,703,910
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
Preferred
stock, par value: $0.001; 10,000,000 shares authorized, none issued
and outstanding as of March 31, 2018 and 2017
|
|
|
-
|
|
|
|
-
|
|
Common
stock, par value $0.001; 10,000,000,000 shares authorized;
2,169,661,318 and 125,889,455 issued and 2,169,661,318 and
125,888,155 outstanding as of March 31, 2018 and 2017,
respectively
|
|
|
2,169,661
|
|
|
|
125,890
|
|
Additional
paid in capital
|
|
|
16,137,945
|
|
|
|
805,637
|
|
Treasury
stock, 0 and 1,300 shares outstanding as of March 31, 2018 and
2017, respectively
|
|
|
-
|
|
|
|
(8,589
|
)
|
Accumulated
other comprehensive income
|
|
|
(2,483
|
)
|
|
|
-
|
|
Accumulated
deficit
|
|
|
(20,067,403
|
)
|
|
|
(5,154,387
|
)
|
Total
stockholders' equity (deficit)
|
|
|
(1,762,280
|
)
|
|
|
(4,231,449
|
)
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity (deficit)
|
|
$
|
4,650,658
|
|
|
$
|
472,461
|
|
The
accompanying notes are an integral part of these consolidated
financial statements.
INVESTVIEW, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Year Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Subscription
revenue, net of refunds, incentives, credits, and
chargebacks
|
|
$
|
13,899,579
|
|
|
$
|
12,872,947
|
|
Cryptocurrency
mining service revenue, net of amounts paid to
supplier
|
|
|
4,017,853
|
|
|
|
-
|
|
Total
revenue, net
|
|
|
17,917,432
|
|
|
|
12,872,947
|
|
|
|
|
|
|
|
|
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales and service
|
|
|
6,713,097
|
|
|
|
862,849
|
|
Commissions
|
|
|
14,271,926
|
|
|
|
9,412,655
|
|
Selling
and marketing
|
|
|
454,225
|
|
|
|
500,032
|
|
Salary
and related
|
|
|
2,270,479
|
|
|
|
1,918,199
|
|
Professional
fees
|
|
|
2,572,831
|
|
|
|
917,308
|
|
General
and administrative
|
|
|
2,311,028
|
|
|
|
1,199,564
|
|
Total
operating costs and expenses
|
|
|
28,593,586
|
|
|
|
14,810,607
|
|
|
|
|
|
|
|
|
|
|
Net
loss from operations
|
|
|
(10,676,154
|
)
|
|
|
(1,937,660
|
)
|
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
Loss on
debt extinguishment
|
|
|
(2,767,422
|
)
|
|
|
-
|
|
Loss on
spin-off of operations
|
|
|
(1,118,609
|
)
|
|
|
-
|
|
Realized
loss on cryptocurrency
|
|
|
(10,939
|
)
|
|
|
-
|
|
Unrealized
loss on cryptocurrency
|
|
|
(135,729
|
)
|
|
|
-
|
|
Interest
expense - related parties
|
|
|
(104,105
|
)
|
|
|
(274,057
|
)
|
Interest
expense
|
|
|
(74,976
|
)
|
|
|
(205,327
|
)
|
Other
income (expense)
|
|
|
(493
|
)
|
|
|
(6,120
|
)
|
Total
other income (expense)
|
|
|
(4,212,273
|
)
|
|
|
(485,504
|
)
|
|
|
|
|
|
|
|
|
|
Loss
before income taxes
|
|
|
(14,888,427
|
)
|
|
|
(2,423,164
|
)
|
|
|
|
|
|
|
|
|
|
Income
tax expense
|
|
|
(24,589
|
)
|
|
|
(4,039
|
)
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(14,913,016
|
)
|
|
$
|
(2,427,203
|
)
|
|
|
|
|
|
|
|
|
|
Loss
per common share, basic and diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding, basic and
diluted
|
|
|
1,911,786,477
|
|
|
|
32,921,458
|
|
The
accompanying notes are an integral part of these consolidated
financial statements.
INVESTVIEW, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Stock
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Common stock
|
|
|
Paid in
|
|
|
Subscription
|
|
|
Treasury
|
|
|
Accumulated
|
|
|
Comprehensive
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Receivable
|
|
|
Stock
|
|
|
Deficit
|
|
|
Income
|
|
|
Total
|
|
Balance,
March 31, 2016
|
|
|
14,966,911
|
|
|
$
|
14,967
|
|
|
$
|
(686,028
|
)
|
|
$
|
(250,000
|
)
|
|
$
|
(8,589
|
)
|
|
$
|
(2,727,184
|
)
|
|
$
|
-
|
|
|
$
|
(3,656,834
|
)
|
Common
stock issued for cash
|
|
|
10,670,840
|
|
|
|
10,671
|
|
|
|
146,829
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
157,500
|
|
Common
stock issued for services
|
|
|
6,072,200
|
|
|
|
6,072
|
|
|
|
25,703
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
31,775
|
|
Common
stock issued in payment of compensation
|
|
|
21,069,580
|
|
|
|
21,070
|
|
|
|
962,666
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
983,736
|
|
Common
stock issued for director fees
|
|
|
400,000
|
|
|
|
400
|
|
|
|
25,400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25,800
|
|
Common
stock issued in settlement of debt
|
|
|
72,709,924
|
|
|
|
72,710
|
|
|
|
303,289
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
375,999
|
|
Reclass
derivative liability to equity upon convertible note
payoff
|
|
|
-
|
|
|
|
-
|
|
|
|
277,778
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
277,778
|
|
Contributed
capital
|
|
|
-
|
|
|
|
-
|
|
|
|
(250,000
|
)
|
|
|
250,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,427,203
|
)
|
|
|
-
|
|
|
|
(2,427,203
|
)
|
Balance,
March 31, 2017
|
|
|
125,889,455
|
|
|
|
125,890
|
|
|
|
805,637
|
|
|
|
-
|
|
|
|
(8,589
|
)
|
|
|
(5,154,387
|
)
|
|
|
-
|
|
|
|
(4,231,449
|
)
|
Common
stock issued for cash
|
|
|
267,127,500
|
|
|
|
267,128
|
|
|
|
2,854,648
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,121,776
|
|
Common
stock issued for license agreement
|
|
|
80,000,000
|
|
|
|
80,000
|
|
|
|
2,176,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,256,000
|
|
Common
stock issued for services
|
|
|
94,375,333
|
|
|
|
94,375
|
|
|
|
6,632,860
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,727,235
|
|
Common
stock issued in settlement of debt
|
|
|
239,575,884
|
|
|
|
239,576
|
|
|
|
5,377,558
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,617,134
|
|
Wealth
Generators reverse acquisition
|
|
|
1,358,670,942
|
|
|
|
1,358,670
|
|
|
|
(804,759
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
553,911
|
|
Offering
costs
|
|
|
4,273,504
|
|
|
|
4,273
|
|
|
|
(269,273
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(265,000
|
)
|
Cancellation
of stock
|
|
|
(250,000
|
)
|
|
|
(250
|
)
|
|
|
250
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancellation
of treasury stock
|
|
|
(1,300
|
)
|
|
|
(1
|
)
|
|
|
(8,588
|
)
|
|
|
-
|
|
|
|
8,589
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Price
protection guarantee
|
|
|
-
|
|
|
|
-
|
|
|
|
(626,388
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(626,388
|
)
|
Foreign
currency translation adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,483
|
)
|
|
|
(2,483
|
)
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(14,913,016
|
)
|
|
|
-
|
|
|
|
(14,913,016
|
)
|
Balance,
March 31, 2018
|
|
|
2,169,661,318
|
|
|
$
|
2,169,661
|
|
|
$
|
16,137,945
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(20,067,403
|
)
|
|
$
|
(2,483
|
)
|
|
$
|
(1,762,280
|
)
|
The
accompanying notes are an integral part of these consolidated
financial statements.
INVESTVIEW, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Year Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(14,913,016
|
)
|
|
$
|
(2,427,203
|
)
|
Adjustments
to reconcile net loss to net cash (used in) provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
2,639
|
|
|
|
2,270
|
|
Stock
issued for services and license agreement
|
|
|
6,846,059
|
|
|
|
-
|
|
Debt
issuance costs - related party
|
|
|
-
|
|
|
|
274,057
|
|
Debt
issuance costs
|
|
|
-
|
|
|
|
205,327
|
|
Loss on
spin-off of operations
|
|
|
1,118,609
|
|
|
|
-
|
|
Loss on
debt settlement
|
|
|
2,767,422
|
|
|
|
-
|
|
Realized
loss on cryptocurrency
|
|
|
10,939
|
|
|
|
-
|
|
Unrealized
loss on cryptocurrency
|
|
|
135,729
|
|
|
|
-
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
122,053
|
|
|
|
(327,630
|
)
|
Prepaid
assets
|
|
|
-
|
|
|
|
-
|
|
Deposits
|
|
|
1,500
|
|
|
|
(1,500
|
)
|
Short
term advances from related parties
|
|
|
(36,510
|
)
|
|
|
-
|
|
Other
current assets
|
|
|
(627,038
|
)
|
|
|
-
|
|
Accounts
payable and accrued liabilities
|
|
|
2,924,522
|
|
|
|
656,458
|
|
Deferred
revenue
|
|
|
422,369
|
|
|
|
(24,056
|
)
|
Accrued
interest
|
|
|
74,953
|
|
|
|
-
|
|
Accrued
interest - related parties
|
|
|
104,105
|
|
|
|
-
|
|
Net
cash used in operating activities
|
|
|
(1,045,665
|
)
|
|
|
(1,642,277
|
)
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds
from short term advances
|
|
|
-
|
|
|
|
100,000
|
|
Repayments
for short term advances
|
|
|
-
|
|
|
|
(110,000
|
)
|
Repayments
for related party advances
|
|
|
-
|
|
|
|
194,977
|
|
Cash
received in reverse acquisition
|
|
|
3,550
|
|
|
|
-
|
|
Payments
for fixed assets
|
|
|
(11,264
|
)
|
|
|
-
|
|
Net
cash provided by (used in) investing activities
|
|
|
(7,714
|
)
|
|
|
184,977
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds
from related parties
|
|
|
498,380
|
|
|
|
1,370,788
|
|
Repayments
for related party payables
|
|
|
(1,316,500
|
)
|
|
|
(1,360,044
|
)
|
Proceeds
from debt
|
|
|
1,675,000
|
|
|
|
1,824,965
|
|
Repayments
for debt
|
|
|
(1,424,578
|
)
|
|
|
(267,577
|
)
|
Proceeds
from the sale of stock
|
|
|
3,121,776
|
|
|
|
-
|
|
Proceeds
from the sale of members interests
|
|
|
-
|
|
|
|
25,000
|
|
Payments
for offering cost
|
|
|
(15,000
|
)
|
|
|
-
|
|
Distributions
to members
|
|
|
-
|
|
|
|
(204,514
|
)
|
Net
cash provided by financing activities
|
|
|
2,539,078
|
|
|
|
1,388,618
|
|
|
|
|
|
|
|
|
|
|
Effect
of exchange rate translation on cash
|
|
|
3,371
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
1,489,070
|
|
|
|
(68,682
|
)
|
Cash
and cash equivalents-beginning of period
|
|
|
1,616
|
|
|
|
70,298
|
|
Cash
and cash equivalents-end of period
|
|
$
|
1,490,686
|
|
|
$
|
1,616
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
Cash
paid during the period for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
117,500
|
|
|
$
|
198,162
|
|
Income
taxes
|
|
$
|
24,589
|
|
|
$
|
4,039
|
|
Non
cash investing and financing activities:
|
|
|
|
|
|
|
|
|
Common
stock issued for reverse acquisition
|
|
$
|
662,048
|
|
|
$
|
-
|
|
Common
stock issued in settlement of related party payables
|
|
$
|
90,000
|
|
|
$
|
-
|
|
Common
stock issued in settlement of debt
|
|
$
|
2,232,606
|
|
|
$
|
-
|
|
Common
stock issued for prepaid services and long term license
agreement
|
|
$
|
2,137,175
|
|
|
$
|
-
|
|
Cancellation
of Shares
|
|
$
|
250
|
|
|
$
|
-
|
|
Cancellation
of Treasury Shares
|
|
$
|
8,589
|
|
|
$
|
-
|
|
Liability
for offering cost
|
|
$
|
250,000
|
|
|
$
|
-
|
|
Shares
issued for offering cost
|
|
$
|
4,274
|
|
|
$
|
-
|
|
Price
protection guarantee
|
|
$
|
626,388
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these consolidated
financial statements.
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Organization
Investview,
Inc. was incorporated on January 30, 1946, under the laws of the
state of Utah as the Uintah Mountain Copper Mining Company. In
January 2005 the Company changed domicile to Nevada, and changed
its name to Voxpath Holding, Inc. In September of 2006 the Company
merged The Retirement Solution Inc. through a Share Purchase
Agreement into Voxpath Holdings, Inc. and then changed its name to
TheRetirementSolution.Com, Inc. and in October 2008 changed its
name to Global Investor Services, Inc., before changing its name to
Investview, Inc., on March 27, 2012.
On
March 31, 2017, we entered into a Contribution Agreement with the
members of Wealth Generators, LLC, a limited liability company
(“Wealth Generators”), pursuant to which the Wealth
Generators members agreed to contribute 100% of the outstanding
securities of Wealth Generators in exchange for an aggregate of
1,358,670,942 shares of our common stock. The closing of the
Contribution Agreement was effective April 1, 2017, and Wealth
Generators became our wholly owned subsidiary and the former
members of Wealth Generators became our stockholders and control
the majority of our outstanding common stock (see Note
5).
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”).
Nature of Business
Through
our wholly owned subsidiary, Kuvera, we provide research,
education, and investment tools designed to assist the
self-directed investor in successfully navigating the financial
markets. These services include research, trade alerts, and live
trading rooms that include instruction in equities, options, FOREX,
ETFs, binary options, crowdfunding, cryptocurrency mining services
and sector education. In addition to trading tools and research, we
also offer full education and software applications to assist the
individual in debt reduction, increased savings, budgeting, and
proper tax management. Each product subscription includes a core
set of trading tools/research along with the personal finance
management suite to provide an individual with complete access to
the information necessary to cultivate and manage his or her
financial situation. Different packages are available through a
monthly subscription that can be cancelled at any time at the
discretion of the customer. A unique component of the product
marketing plan is the distribution method whereby all subscriptions
are sold via current participating customers who choose to
distribute and sell the services by participating in the bonus
plan. The bonus plan participation is purely optional but enables
individuals to create an additional income stream to further
support their personal financial goals and objectives.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Accounting
The Company’s policy is to prepare its financial
statements on
the accrual basis
of accounting in accordance with accounting principles
generally accepted in
the United States of America.
Principles of Consolidation
The
consolidated financial statements include the accounts of
Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC,
Investment Tools & Training, LLC, Razor Data Corp., and SAFE
Management, LLC. We have determined that one affiliated entity,
Kuvera LATAM S.A.S., which we conduct business with, is a variable
interest entity and we are the primary beneficiary of the entities
activities. As a result, we have consolidated the accounts of this
variable interest entity into the accompanying consolidated
financial statements. 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.
Foreign Exchange
We have
consolidated the accounts of Kuvera LATAM S.A.S. into our
consolidated financial statements. The operations of Kuvera LATAM
S.A.S. are conducted in Colombia and its functional currency is the
Colombian Peso.
The
financial statements of Kuvera LATAM S.A.S. are prepared using the
Colombian Peso and have been translated into U.S. dollars
(“USD”). Assets and liabilities are translated into USD
at the applicable exchange rates at period-end. Stockholders’
equity is translated using historical exchange rates. Revenue and
expenses are translated at the average exchange rates for the
period. Any translation adjustments are included as foreign
currency translation adjustments in accumulated other comprehensive
income in our stockholders’ equity (deficit).
The
following rates were used to translate the accounts of Kuvera LATAM
S.A.S. into USD at the following balance sheet dates.
|
|
March 31,
2018
|
|
|
March 31,
2017
|
|
Colombian Peso to USD
|
|
|
0.00036
|
|
|
|
n/a
|
|
The following rates were used to translate the accounts of
Kuvera LATAM S.A.S. into USD for the
following operating periods.
|
|
Year ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
Colombian Peso to USD
|
|
|
0.00034
|
|
|
|
n/a
|
|
Concentration of Credit Risk
Financial
instruments that potentially expose the Company to concentration of
credit risk include cash, accounts receivable, and advances. The
Company places its 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 March 31, 2018 and
2017, cash balances that exceeded FDIC limits were $1,095,329 and
$0, respectively, and the Company has not experienced significant
losses relating to these concentrations in the past.
Cash and Cash Equivalents
For purposes of reporting cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents. As of March 31, 2018 and
2017, the Company had no cash equivalents.
Receivables
Receivable
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. The Company had no allowance for doubtful accounts as of
March 31, 2018 and 2017.
Cryptocurrencies
We hold
cryptocurrency-denominated assets (“cryptocurrencies”)
and include them in our consolidated balance sheet as other current
assets. We record cryptocurrencies at fair market value and
recognize the change in the fair value of our cryptocurrencies as
an unrealized gain or loss in the consolidated statement of
operations. As of March 31, 2018 and March 31, 2017, the fair value
of our cryptocurrencies was $480,370 and $0, respectively. During
the year ended March 31, 2018, we recorded $(10,939) and $(135,729)
as realized and unrealized gain (loss) on cryptocurrency,
respectively. We recorded no realized or unrealized gain (loss) on
cryptocurrencies during the year ended March 31, 2017.
Fixed Assets
Fixed assets are stated at cost and depreciated using the
straight-line method over their estimated useful lives as
follows:
Furniture, fixtures, and equipment
|
|
10 years
|
Computer equipment
|
|
3 years
|
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 are presented net of accumulated depreciation of
$7,173 and $4,534, as of March 31, 2018 and 2017, respectively.
Total depreciation expense for the years ended March 31, 2018 and
2017, was $2,639 and $2,270, respectively.
Long Term License Agreement
We
account for our long-term license agreement in accordance with ASC
350-30, General Intangibles Other Than Goodwill (“ASC
350-30”). ASC 350-30 requires assets to be measured based on
the fair value of the consideration given or the fair value of the
assets (or net assets) acquired, whichever is more clearly evident
and, thus, more reliably measurable. Further, ASC 350-30 requires
an intangible asset to be amortized over its useful life, which we
have determined to be 15 years. Annual amortization is expected to
be $150,400 related to our long-term license
agreement.
Impairment of Long-Lived Assets
We have
adopted ASC Subtopic 360-10, Property, Plant and Equipment
(“ASC 360-10”). ASC 360-10 requires that long-lived
assets and certain identifiable intangibles held and used by the
Company be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not
be recoverable or when the historical cost carrying value of an
asset may no longer be appropriate. Events relating to
recoverability may include significant unfavorable changes in
business conditions, recurring losses, or a forecasted inability to
achieve break-even operating results over an extended
period.
The
Company evaluates the recoverability of long-lived assets based
upon future net cash flows expected to result from the asset,
including eventual disposition. Should impairment in value be
indicated, the carrying value of intangible assets will be adjusted
and an impairment loss is recorded equal to the difference between
the asset’s carrying value and fair value or disposable
value.
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. We have determined that the book value of our
outstanding financial instruments as of March 31, 2018 and March
31, 2017, approximates the fair value due to their short-term
nature.
Items
recorded or measured at fair value on a recurring basis in the
accompanying consolidated financial statements consisted of the
following items as of March 31, 2018:
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Cryptocurrencies
|
|
$
|
480,370
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
480,370
|
|
Total
Assets
|
|
$
|
480,370
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
480,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Items
recorded or measured at fair value on a recurring basis in the
accompanying consolidated financial statements consisted of the
following items as of March 31, 2017:
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Total
Assets
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Revenue Recognition
We
recognize revenue in accordance with FASB ASC Subtopic 605-10,
Revenue Recognition, which requires that four basic criteria must
be met before revenue can be recognized: (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred
or services have been rendered; (3) the selling price is fixed
and determinable; and (4) collectability is reasonably
assured.
The
majority of our revenue is generated by subscription sales and
payment is received at the time of purchase. We recognize revenue
for subscription sales over the subscription period and deferred
revenue is recorded for the portion of the subscription period
subsequent to each reporting date. Additionally, we offer a 10-day
trial period to subscription customers, during which a full refund
can be requested if a customer does not like the product. Revenues
are deferred during the trial period as collectability cannot be
reasonably assured until that time has passed. Revenues are
presented net of sales incentives, credits, known and estimated
refunds, and known and estimated credit card
chargebacks.
We
generate revenue from the sale of cryptocurrency mining services to
our customers through our arrangement with a third-party supplier.
We report net revenue retained at the time of purchase which
represents our fees earned as an agent.
Revenue
generated for the years ended March 31, 2018 and 2017, is as
follows:
|
|
March 31, 2018
|
|
|
March 31, 2017
|
|
|
|
Subscription
Revenue
|
|
|
Cryptocurrency
Mining
Revenue
|
|
|
Total
|
|
|
Subscription
Revenue
|
|
|
Cryptocurrency
Mining
Revenue
|
|
|
Total
|
|
Gross
billings
|
|
$
|
14,758,614
|
|
|
$
|
8,885,798
|
|
|
$
|
23,644,412
|
|
|
$
|
14,578,164
|
|
|
$
|
-
|
|
|
$
|
14,578,164
|
|
Refunds,
incentives, credits, and chargebacks
|
|
|
(859,035
|
)
|
|
|
-
|
|
|
|
(859,035
|
)
|
|
|
(1,705,217
|
)
|
|
|
-
|
|
|
|
(1,705,217
|
)
|
Amounts
paid to supplier
|
|
|
-
|
|
|
|
(4,867,945
|
)
|
|
|
(4,867,945
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net
revenue
|
|
$
|
13,899,579
|
|
|
$
|
4,017,853
|
|
|
$
|
17,917,432
|
|
|
$
|
12,872,947
|
|
|
$
|
-
|
|
|
$
|
12,872,947
|
|
Advertising, Selling, and Marketing Costs
The
Company expenses 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 years ended March 31, 2018 and 2017, totaled
$454,225 and $500,032, respectively.
Income
Taxes
The
Company has adopted ASC Subtopic 740-10, 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 using enacted tax rates in effect for the year in
which the differences are expected to reverse. Temporary
differences between taxable income reported for financial reporting
purposes and income tax purposes consist primarily of derivative
liability and stock compensation accounting versus basis
differences.
Net Income (Loss) per Share
We
follow ASC Subtopic 260-10, Earnings per Share, which specifies the
computation, presentation, and disclosure requirements of earnings
per share information. Basic loss per share has been calculated
based upon the weighted average number of common shares
outstanding. Convertible debt, stock options, and warrants have
been excluded as common stock equivalents in the diluted loss per
share because their effect is anti-dilutive on the
computation.
Potentially
dilutive securities excluded from the computation of basic and
diluted net loss per share are as follows:
|
|
March 31,
2018
|
|
|
March 31,
2017
|
|
Convertible
notes payable
|
|
|
-
|
|
|
|
17,045,455
|
|
Options
to purchase common stock
|
|
|
35,000
|
|
|
|
35,000
|
|
Warrants
to purchase common stock
|
|
|
6,169,497
|
|
|
|
6,534,810
|
|
Total
|
|
|
6,204,497
|
|
|
|
23,615,265
|
|
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
In May
2014, the FASB issued Accounting Standards Update
(“ASU”) 2014-09, Revenue from Contracts with Customers
(Topic 606). ASU 2014-09 creates a new topic in the ASC Topic 606
and establishes a new control-based revenue recognition model,
changes the basis for deciding when revenue is recognized over time
or at a point in time, provides new and more detailed guidance on
specific topics, and expands and improves disclosures about
revenue. In addition, ASU 2014-09 adds a new Subtopic to the
Codification, ASC 340-40, Other Assets and Deferred Costs:
Contracts with Customers, to provide guidance on costs related to
obtaining a contract with a customer and costs incurred in
fulfilling a contract with a customer that are not in the scope of
another ASC Topic. The guidance in ASU 2014-09 is effective for
public entities for annual reporting periods beginning after
December 15, 2016, including interim periods therein. Early
application is not permitted. Management is in the process of
assessing the impact of ASU 2014-09 on the Company’s
financial statements.
NOTE 4 – GOING CONCERN AND LIQUIDITY
Our financial statements are prepared using generally accepted
accounting principles applicable to a going concern that
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. We have incurred
significant recurring losses, which have resulted in an accumulated
deficit of $20,067,403 as of March 31, 2018, along with a net loss
of $14,913,016 and net cash used in operations of $1,045,665 for
the year ended March 31, 2018. Additionally, as of March 31, 2018,
we had a working capital deficit of $3,919,260. These factors raise
substantial doubt about our ability to continue as a going
concern.
Historically we have relied on increasing revenues and new debt
financing to pay for operational expenses and debt as it came due.
During the year ended March 31, 2018, we raised $498,380 in cash
proceeds from related parties, $1,675,000 in cash proceeds from new
lending arrangements, and $3,121,776 from the sale of common stock.
Additionally, during the year ended March 31, 2018, we exchanged
$2,322,606 worth of debt into shares of common stock. Going forward
we plan to reduce obligations with cash flow provided by operations
and pursue additional debt and equity financing; however, we cannot
assure that funds will be available on terms acceptable to us, or
if available, will be sufficient to enable us to fully complete our
development activities or sustain operations. Nevertheless, the
shortage of working capital adversely affects our ability to
develop or participate in activities that promote our business,
because a substantial portion of cash flow goes to reduce debt
rather than to advance operating activities. To address this, we
have implemented a series of adjustments to our
affiliate/distributor bonus plan. These adjustments are designed to
bring the maximum payout percentage in line with company
objectives. During the year ended March 31, 2018, the bonus
plan exceeded maximum payout on three occasions and consistently
paid out near the maximum percentage. We believe the adjustments
initiated will reduce the payout slowly over a three-month period
with payout percentages closer 60%.
Accordingly, the accompanying financial statements have been
prepared in conformity with accounting principles generally
accepted in the United States of America, which contemplate our
continuation as a going concern and the realization of assets and
satisfaction of liabilities in the normal course of business. The
carrying amounts of assets and liabilities presented in the
financial statements do not necessarily purport to represent
realizable or settlement values. The financial statements do not
include any adjustment that might result from the outcome of this
uncertainty.
NOTE 5 – REVERSE ACQUISITION
Effective
April 1, 2017, we entered into a Contribution Agreement with Wealth
Generators, pursuant to which the Wealth Generators members agreed
to contribute 100% of the outstanding securities of Wealth
Generators in exchange for an aggregate of 1,358,670,942 shares of
our common stock. Following the closing, Wealth Generators became
our wholly owned subsidiary and the Wealth Generators members
became our stockholders and control the majority of our outstanding
common stock.
The
transaction was accounted for as a reverse acquisition using the
acquisition method of accounting in accordance with FASB ASC Topic
805. Wealth Generators is the acquirer solely for financial
accounting purposes. The following table summarizes the purchase
accounting for the fair value of the assets acquired and
liabilities assumed at the date of the reverse
acquisition.
Cash
|
|
$
|
3,550
|
|
Receivables
|
|
|
150,000
|
|
Total
assets acquired
|
|
|
153,550
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
|
456,599
|
|
Due to
former management
|
|
|
127,199
|
|
Debt
|
|
|
26,314
|
|
Total
liabilities assumed [1]
|
|
|
610,112
|
|
|
|
|
|
|
Net
liabilities assumed
|
|
|
456,562
|
|
|
|
|
|
|
Consideration
[2]
|
|
|
662,047
|
|
|
|
|
|
|
Goodwill
|
|
$
|
1,118,609
|
|
[1]
|
In
conjunction with the reverse acquisition, we entered into an
assignment and assumption agreement wherein we issued 24,914,348
shares of our common stock to Alpha Pro Asset Management Group, LLC
(“Alpha Pro”), an entity affiliated with the prior
members of management, in exchange for Alpha Pro’s assumption
of $482,588 in liabilities. Accordingly, the shares issued for debt
were accounted for the moment before the reverse acquisition, and
the $482,588 in liabilities have been excluded from the total
liabilities assumed shown here.
|
[2]
|
The
fair value of the consideration effectively transferred was
measured based on the fair value of 150,465,339 shares that were
outstanding immediately before the transaction. Using the closing
market price of $0.0044 per share on March 31, 2017, consideration
was valued at $662,047
|
The
table below represents the pro forma financial statements for the
year ended March 31, 2017, assuming the reverse acquisition had
occurred on April 1, 2016, pursuant to ASC Subtopic 805-10-50.
The historical financial information
has been derived from the audited financial statements of Wealth
Generators as filed on June 30, 2017 in the Company’s Form
8K-A and the audited financial statements of INVU. The financial
information has been adjusted to give pro forma effect to events
that are directly attributable to the reverse merger, are factually
supportable and, in the case of the pro forma statements of
operations, have a recurring impact. The pro forma adjustments are
based upon available information and assumptions that the Company
believes are reasonable.
This
pro forma information does not purport to represent what the actual
results of our operations would have been had the reverse
acquisition occurred on April 1, 2016.
Pro
Forma Consolidated Balance Sheet as of March 31,
2017
|
|
Wealth Generators, LLC
|
|
|
Investview, Inc.
|
|
|
Adjustments
|
|
|
|
Consolidated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
1,616
|
|
|
$
|
3,550
|
|
|
$
|
-
|
|
|
|
$
|
5,166
|
|
Receivables
|
|
|
444,610
|
|
|
|
150,000
|
|
|
|
(162,430
|
)
|
[1]
|
|
|
432,180
|
|
Short
term advances
|
|
|
10,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
10,000
|
|
Total
current assets
|
|
|
456,226
|
|
|
|
153,550
|
|
|
|
(162,430
|
)
|
|
|
|
447,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets, net
|
|
|
10,235
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
10,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
6,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
6,000
|
|
Goodwill
|
|
|
-
|
|
|
|
-
|
|
[3]
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,118,609
|
)
|
[4]
|
|
|
|
|
Total
other assets
|
|
|
6,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
472,461
|
|
|
$
|
153,550
|
|
|
$
|
(162,430
|
)
|
|
|
$
|
463,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$
|
1,370,972
|
|
|
$
|
417,025
|
|
|
$
|
(162,430
|
)
|
[1]
|
|
$
|
1,385,010
|
|
|
|
|
|
|
|
|
|
|
|
|
(86,500
|
)
|
[2]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(154,057
|
)
|
[4]
|
|
|
|
|
Deferred
revenue
|
|
|
433,298
|
|
|
|
5,807
|
|
|
|
(5,807
|
)
|
[4]
|
|
|
433,298
|
|
Related
party payable
|
|
|
805,895
|
|
|
|
132,199
|
|
|
|
(5,000
|
)
|
[2]
|
|
|
805,895
|
|
|
|
|
|
|
|
|
|
|
|
|
(127,199
|
)
|
[4]
|
|
|
|
|
Settlement
payable
|
|
|
-
|
|
|
|
344,392
|
|
|
|
(344,392
|
)
|
[2]
|
|
|
-
|
|
Debt
|
|
|
2,093,745
|
|
|
|
73,011
|
|
|
|
(46,696
|
)
|
[2]
|
|
|
2,102,476
|
|
|
|
|
|
|
|
|
|
|
|
|
(17,583
|
)
|
[4]
|
|
|
|
|
Current
liabilities of discontinued operations
|
|
|
-
|
|
|
|
120,266
|
|
|
|
(120,266
|
)
|
[4]
|
|
|
-
|
|
Derivative
liability, short term portion
|
|
|
-
|
|
|
|
37,157
|
|
|
|
(37,157
|
)
|
[2]
|
|
|
-
|
|
Total
current liabilities
|
|
|
4,703,909
|
|
|
|
1,129,857
|
|
|
|
(1,107,088
|
)
|
|
|
|
4,726,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
term liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
4,703,909
|
|
|
|
1,129,857
|
|
|
|
(1,107,088
|
)
|
|
|
|
4,726,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
deficit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
Common
stock
|
|
|
-
|
|
|
|
125,889
|
|
[2]
|
|
1,509,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[3]
|
|
|
|
|
|
|
|
|
Additional
paid in capital
|
|
|
-
|
|
|
|
97,774,514
|
|
[2]
|
|
(1,250,112
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(99,108,184
|
)
|
[3]
|
|
|
|
|
Treasury
stock
|
|
|
-
|
|
|
|
(8,589
|
)
|
|
|
-
|
|
|
|
|
(8,589
|
)
|
Members’
deficit
|
|
|
(4,231,449
|
)
|
|
|
-
|
|
[5]
|
|
|
|
|
|
|
|
|
Accumulated
deficit
|
|
|
-
|
|
|
|
(98,868,122
|
)
|
[2]
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[3]
|
|
(4,513,534
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(693,697
|
)
|
[4]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,231,449
|
)
|
[5]
|
|
|
|
|
Total
stockholders’ deficit
|
|
|
(4,231,449
|
)
|
|
|
(976,307
|
)
|
|
|
944,657
|
|
|
|
|
4,263,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders’ deficit
|
|
$
|
472,461
|
|
|
$
|
153,550
|
|
|
$
|
(162,430
|
)
|
|
|
$
|
463,580
|
|
Pro Forma Consolidated Income Statement for the year ended March
31, 2017
|
|
Wealth Generators, LLC
|
|
|
Investview, Inc.
|
|
|
Adjustments
|
|
|
|
Consolidated
|
|
Revenue,
net
|
|
$
|
12,872,947
|
|
|
$
|
131,465
|
|
|
$
|
(131,465
|
)
|
[4]
|
|
$
|
12,872,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
862,849
|
|
|
|
3,257
|
|
|
|
(3,257
|
)
|
[4]
|
|
|
862,849
|
|
Commissions
|
|
|
9,412,655
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
9,412,655
|
|
Selling
and marketing
|
|
|
500,032
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
500,032
|
|
Salary
and related
|
|
|
1,918,199
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
1,918,199
|
|
Professional
fees
|
|
|
917,308
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
917,308
|
|
General
and administrative
|
|
|
1,199,564
|
|
|
|
980,579
|
|
|
|
(779,611
|
)
|
[4]
|
|
|
1,400,532
|
|
Total
operating costs and expenses
|
|
|
14,810,607
|
|
|
|
983,836
|
|
|
|
(782,869
|
)
|
|
|
|
15,011,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss from operations
|
|
|
(1,937,660
|
)
|
|
|
(852,371
|
)
|
|
|
651,404
|
|
|
|
|
(2,138,627
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, related parties
|
|
|
(274,057
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(274,057
|
)
|
Interest
expense
|
|
|
(205,327
|
)
|
|
|
(648,573
|
)
|
|
|
-
|
|
|
|
|
(839,525
|
)
|
Other
income (expense)
|
|
|
(6,120
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(6,120
|
)
|
Gain
(loss) on change in fair value of derivative
liabilities
|
|
|
-
|
|
|
|
84,284
|
|
|
|
-
|
|
|
|
|
84,284
|
|
Gain
(loss) on debt extinguishment
|
|
|
-
|
|
|
|
3,170,326
|
|
[2]
|
|
3,581,938
|
|
|
|
|
|
|
Total
other income (expense)
|
|
|
(485,504
|
)
|
|
|
2,606,038
|
|
|
|
411,612
|
|
|
|
|
2,532,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations before taxes
|
|
|
(2,423,164
|
)
|
|
|
1,753,666
|
|
|
|
1,063,015
|
|
|
|
|
393,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
expense
|
|
|
(4,039
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(4,039
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(2,427,203
|
)
|
|
$
|
1,753,666
|
|
|
$
|
1,063,015
|
|
|
|
$
|
389,479
|
|
[1]
|
During
the year ended March 31, 2017 Wealth Generators, LLC ("WG") was
utilizing the INVU merchant account to process a number of the WG
sales transactions. In exchange for the use of the account, WG was
making payments on an INVU note payable on INVU's behalf. As of
March 31, 2017 INVU was holding $162,430 in their merchant account
that belonged to WG, therefore had a liability recorded on their
books while WG had a corresponding receivable. This entry
eliminates those intercompany balances as if the entities had been
consolidated as of March 31, 2017.
|
[2]
|
In
conjunction with the Acquisition, INVU
entered into an assignment and assumption agreement wherein they
issued 24,914,348 shares of their common stock to Alpha Pro Asset
Management Group, LLC ("Alpha Pro"), an entity affiliated with the
prior members of management, in exchange for Alpha Pro's assumption
of $482,588 worth of liabilities. This entry records the issuance
of shares, the extinguishment of debt, and the gain on the
transaction. One of the notes assumed by Alpha Pro had a derivative
liability recorded on the INVU’s books for $31,157, therefore
that liability was also extinguished with the execution of the
agreement.
|
[3]
|
INVU
issued 1,358,670,942 shares of their
common stock to the members of Wealth Generators, LLC in exchange
for 100% of the outstanding securities of WG. This entry records
the issuance of shares to ensure the capital accounts reflects that
of the legal acquirer (INVU), records goodwill for the excess of
the purchase price over the assets acquired and liabilities assumed
and eliminates INVU's historical stockholders' deficit. The fair
value of the consideration effectively transferred was measured
based on the fair value of INVU’s shares that were
outstanding immediately before the transaction of 150,465,339.
Using the closing market price of INVU’s shares on March 31,
2017 of $0.0044 consideration was valued at
$662,047.
|
[4]
|
On June
6, 2017 INVU entered into an Acquisition Agreement with Market
Trend Strategies, LLC ("Market"), a company whose members are also
former members of management of INVU. In accordance with the
Acquisition Agreement, INVU spun-off the operations of INVU that
existed prior to the merger with Wealth Generators, LLC and sold
the intangible assets used in the operations of INVU pre-merger in
exchange for Market assuming $419,139 worth of liabilities that had
been on the books pre-merger. Because there was goodwill that was
recorded in conjunction with the merger, and it therefore related
to the INVU operations that were acquired, this spin-off entry
effectively reduced the goodwill to zero, reduced the liabilities
that had been assumed, removed the expenses related to the spun-off
operations of INVU pre-merger, and resulted in a gain on spin-off
of operations.
|
[5]
|
This
entry reclasses the members deficit of
Wealth Generators, LLC to accumulated deficit of the consolidated
entity.
|
NOTE 6 – RELATED PARTY TRANSACTIONS
Our
related party payables consisted of the following:
|
|
Year Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
Short
term advances [1]
|
|
$
|
1,880
|
|
|
$
|
100,000
|
|
Revenue-based
funding agreement entered into on 11/8/15 [2]
|
|
|
-
|
|
|
|
180,000
|
|
Short-term
promissory note entered into on 9/13/16 [3]
|
|
|
-
|
|
|
|
150,000
|
|
Promissory
note entered into on 11/15/16 [4]
|
|
|
-
|
|
|
|
895
|
|
Promissory
note entered into on 3/15/17 [5]
|
|
|
-
|
|
|
|
375,000
|
|
|
|
$
|
1,880
|
|
|
$
|
805,895
|
|
[1]
|
We periodically receive advances for operating funds from our
current majority shareholders (former members of Wealth Generators
prior to the reverse acquisition) and other related parties,
including entities that are owned, controlled, or influenced by our
owners or management. These advances are due on demand, generally
have no set interest rates associated with them, and are unsecured.
During the year ended March 31, 2018, we received $498,380 in cash
proceeds from advances, incurred $64,605 in interest,
and repaid related parties a total of
$661,105.
|
[2]
|
On November 16, 2015, then a majority member of Wealth Generators
(pre-reverse acquisition) and currently a majority shareholder
advanced funds of $150,000 under a Revenue-based Funding Agreement,
which required that beginning December 30, 2015, we would pay an
amount equal to 2% of our top-line revenue generated from the prior
month to reduce the loan until the lender had received $450,000.
During the year ended March 31, 2018, we agreed to issue 10,000,000
shares of common stock to extinguish $90,000 in debt and to pay
$15,000 per month for six months, for a total of $90,000, under a
Conversion Agreement. We repaid $90,000 in cash during the year
ended March 31, 2018.
|
[3]
|
A member of the senior management team has continuously advanced
funds of $150,000 at various times, beginning on September 14,
2016, under short-term Promissory Notes and their applicable
amendments. All of the notes carry the same terms, have a fixed
interest payment of $7,500, and are generally due in less than four
weeks. Under this arrangement, during the year ended March 31,
2018, we incurred $27,000 of interest and repaid a total of
$177,000.
|
[4]
|
We entered into a Promissory Note for $94,788 with a company owned
by immediate family members of two members of our executive
management team. Funds were advanced to us on November 16 and
December 16, 2016, in the amounts of $78,750 and $16,038,
respectively. The Promissory Note had a 12-month term, an annual
interest rate of 8%, and no prepayment penalty. During the year
ended March 31, 2017, we incurred $895 in interest expense on the
note and repaid the entire principal balance of $94,788. During the
year ended March 31, 208 we repaid the remaining interest balance
of $895.
|
[5]
|
A company that was a majority member of Wealth Generators
(pre-reverse acquisition) and is currently a majority shareholder
entered into a Promissory Note in the amount of $300,000, advancing
funds on March 17, 2017. The note had a fixed interest amount of
$75,000 and matured on September 16, 2017, but was extended
initially through November 16, 2017, and then extended a second
time through December 31, 2017. An additional $12,500 in interest
was incurred for the second extension and total repayments of
$387,500 were made on this arrangement during the year ended March
31, 2018.
|
NOTE 7 – DEBT
Our
debt consisted of the following:
|
|
Year Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
Revenue
based funding arrangement entered into on 8/31/15 [1]
|
|
$
|
-
|
|
|
$
|
263,641
|
|
Revenue
share agreement entered into on 6/28/16 [2]
|
|
|
195,245
|
|
|
|
525,000
|
|
Purchase
and sale agreement for future receivables entered into on 9/30/16
[3]
|
|
|
-
|
|
|
|
220,652
|
|
Short-term
advance received on 1/11/17 [4]
|
|
|
|
|
|
|
1,000,000
|
|
Short-term
advance received on 3/16/17 [5]
|
|
|
-
|
|
|
|
50,000
|
|
Promissory
note entered into on 3/31/17 [6]
|
|
|
-
|
|
|
|
34,452
|
|
|
|
$
|
195,245
|
|
|
$
|
2,093,745
|
|
[1]
|
We entered into a Revenue-based Funding Agreement and
received proceeds of $50,000 on December 18, 2015, $25,000 on April
17, 2015, and $25,000 September 1, 2015. The agreement required
that beginning September 30, 2015, we would pay an amount equal to
2% of our top-line revenue generated from the prior month to reduce
the loan until the lender had received an amount that was three
times the amount advanced. During the year ended March 31, 2018, we
agreed to issue 10,000,000 shares of common stock to extinguish
$263,641 in debt.
|
[2]
|
During April 2016, we entered into a Royalty Agreement,
which was replaced with a Revenue Share Agreement dated June 28,
2016, which was amended in October of 2016. Cash receipts were
received of $100,000, $150,000, and $250,000 on April 19, May 11,
and June 29, 2016, respectively. In accordance with the terms of
the final amended agreement, we are required to make payments of
$25,000 per month or a 3% royalty for the previous month’s
sales, whichever is greater, beginning February 15, 2017, until the
lender has been repaid $600,000. During the year ended March 31,
2018, we repaid $329,755.
|
[3]
|
We entered into a Purchase and Sale Agreement for future
receivables with an entity that provides quick access to working
capital. On October 6, 2016, we received proceeds from this
arrangement of $250,000. In accordance with the terms of the
agreement, we are required to repay $345,600 over a 16-month period
by making ACH payments in the amount of $1,052 per business day.
Accordingly, we recorded $95,000 as interest expense at inception
of the agreement, which was the difference between the funds
received and the amount that was to be repaid. During the year
ended March 31, 2018, we repaid $221,092 on the debt and recorded
$440 for eleven monthly maintenance fees of $40 per
month.
|
[4]
|
We received funds of $1,000,000 on January 11, 2017, and
funds of $800,000 on April 10, 2017, as a result of short-term
advances in which the lender was anticipating converting such funds
into shares of common stock upon our acquisition by a publicly
traded company. On June 6, 2017, we formalized a Conversion
Agreement wherein the total of these funds, or $1,800,000, was
exchanged for 180,000,000 shares of our common stock.
|
[5]
|
We received funds of $50,000 on March 16, 2017, as a result
of a short-term advance. Such advance has no interest rate or due
date, thus was shown as due on demand. During the year ended March
31, 2018, we entered into a Conversion Agreement and issued
5,000,000 shares of common stock in exchange for the $50,000 in
debt.
|
[6]
|
We
received a short-term advance of $24,965 on March 3, 2017 and
entered into a Promissory Note with the lender on March 31, 2017,
to formalize the lending arrangements for this advance. Per the
Promissory Note, $50,000 was to be advanced on or before April 3,
2017, therefore, we received $25,000 in proceeds during the year
ended March 31, 2018. The Promissory Note provided for a fixed
interest amount of $19,000 and matured on December 31, 2017. During
the year ended March 31, 2018, we recorded $9,513 as interest
expense. On September 10, 2017, we agreed to issue 5,000,000 shares
of common stock in exchange for the full $68,965 in
debt.
|
In
addition to the above debt transactions that were outstanding as of
March 31, 2018 and 2017, during the year ended March 31, 2018, we
also received proceeds of $50,000 from short-term advances and
$800,000 from short-term notes. During the year ended March 31,
2018, we recorded interest expense of $65,000 for fixed interest
amounts due on the notes, entered into a Conversion Agreement to
issue 5,000,000 shares of stock to extinguish the short-term
advance of $50,000, and made total cash payments of $565,000 to
extinguish the interest and principal amounts due on the notes.
Also during the year ended March 31, 2018, we settled $250,000 of
note principal and $50,000 of interest in exchange for a
distributor position and subscription, therefore, the debt was
written off to revenue.
NOTE 8 – STOCKHOLDERS’ EQUITY
Preferred Stock
We are authorized to issue up to 10,000,000 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 inference of that preferred stock, which has not yet
been done. As of March 31, 2018 and 2017, we had no preferred
stock issued or outstanding.
Common Stock Transactions
During
the year ended March 31, 2018, we issued 267,127,500 shares of
common stock for net proceeds of $2,495,338. We issued 125,000
shares of common stock with a value of $7,500 for a one-year
consulting agreement, 80,000,000 shares of common stock with a
value of $2,256,000 for a 15-year license agreement, and 94,250,333
shares of common stock with a value of $6,719,734 for consulting
and service agreements; of the value of the shares issued for
services and the license agreement $6,846,060 was recorded as
expense, $3,555 was recorded as a prepaid asset, and $2,133,620 was
recorded as a long-term license agreement during the year ended
March 31, 2018. We also issued 239,575,884 shares of our common
stock in settlement of debt, wherein accrued liabilities,
principal, accrued interest, and derivative liabilities were
extinguished in the amounts of $435,892, $2,348,606, $20,696, and
$38,557, respectively, and we recognized a loss on the settlement
of debt in the amount of $3,186,394 in the statement of operations
for the year ended March 31, 2018. In conjunction with the shares
issued for the settlement of debt, a gain of $413,012 related to
the period prior to the reverse acquisition with Wealth Generators
was excluded from the statement of operations. As a result of the
reverse acquisition, we issued 1,358,670,942 shares of common stock
(see Note 5). During the year ended March 31, 2018, we entered into
an equity distribution agreement that provides for cash advances up
to $5,000,000 in exchange for shares of our common stock, to be
fulfilled at our request. Pursuant to that agreement, we issued
4,273,504 shares of common stock as a commitment fee, recorded a
liability of $250,000 for future commitment fees to be paid, and
paid cash of $15,000 for due diligence costs. As a result, common
stock increased $4,274 and additional paid in capital decreased by
$269,274 to offset any proceeds from future equity transactions
resulting from the agreement. During the year ended March 31, 2018,
we cancelled 250,000 shares of common stock and 1,300 shares of
treasury stock, resulting in a decrease in common stock of $251, a
decrease in additional paid in capital of $8,338, and a decrease in
treasury stock of $8,589.
In
conjunction with the sale of common stock during the year ended
March 31, 2018, we provided a guarantee to certain individuals such
that we would issue additional shares of our common stock if the
average closing price of our common stock fell below $0.02 per
share on the 20 days preceding the 18-month anniversary of the date
the shares were originally sold. As a result of this guarantee we
have recorded $626,388 in accounts payable and accrued liabilities
on our balance sheet as of March 31, 2018.
During
the year ended March 31, 2017 we issued 10,670,840 shares of common
stock in exchange for $157,500 of cash proceeds. We issued
6,072,200 shares of common stock with a value of $31,775 for legal
and consulting services, of which $18,390 was for current year
services and $173,647 was for services incurred in previous
periods, therefore we recorded a gain on settlement of debt for
$160,262. We issued 21,069,580 and 400,000 shares of stock valued
at $983,735 and $25,800 for compensation and director fees,
respectively, of which $536,575 was for current year services and
$472,960 was for amounts previously accrued. We also issued
72,709,924 shares of common stock in settlement of debt, wherein
principal, accrued interest, and derivative liabilities were
extinguished in the amounts of $1,994,362, $414,160, and $128,490,
respectively, and we recognized a gain on the settlement of debt in
the amount of $2,163,813. We also wrote off $250,000 worth of
Common Stock Subscription Receivable to Additional Paid in Capital
during the year ended March 31, 2017 due to the amounts being
uncollectible.
As of
March 31, 2018 and 2017, we had 2,169,661,318 and 125,889,455
shares of common stock issued and 2,169,661,318 and 125,888,155
shares of common stock outstanding, respectively.
Employee Stock Options
The
nonqualified plan adopted in 2007 authorizes 65,000 shares, of
which 47,500 have been granted as of March 31, 2018. The qualified
plan adopted in October of 2008 authorizes 125,000 shares and was
approved by a majority of our shareholders on September 16, 2009.
As of March 31, 2018, 42,500 shares have been granted under the
2008 plan.
The
following table summarizes the changes in employee stock options
outstanding and the related prices for the shares of our common
stock issued to employees under two employee stock option
plans:
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
|
Aggregate
|
|
|
|
Number of
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Intrinsic
|
|
|
|
Shares
|
|
|
Price
|
|
|
Life (years)
|
|
|
Value
|
|
Options
outstanding at March 31, 2016
|
|
|
37,500
|
|
|
$
|
10.20
|
|
|
|
3.33
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled
/ expired
|
|
|
(2,500
|
)
|
|
$
|
12.00
|
|
|
|
|
|
|
|
|
|
Options
outstanding at March 31, 2017
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
2.51
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled
/ expired
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Options
outstanding at March 31, 2018
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
1.51
|
|
|
$
|
-
|
|
Options
exercisable at March 31, 2018
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
1.51
|
|
|
$
|
-
|
|
Stock-based
compensation expense in connection with options granted to
employees for the year ended March 31, 2018 and 2017, was
$0.
Non-Employee Stock Options
The
following table summarizes the changes in options outstanding and
the related prices for the shares of the Company’s common
stock issued to consultants and non-employees of the
Company:
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
|
Aggregate
|
|
|
|
Number of
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Intrinsic
|
|
|
|
Shares
|
|
|
Price
|
|
|
Life (years)
|
|
|
Value
|
|
Options
outstanding at March 31, 2016
|
|
|
2,500
|
|
|
$
|
84.00
|
|
|
|
0.08
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled
/ expired
|
|
|
(2,500
|
)
|
|
$
|
84.00
|
|
|
|
|
|
|
|
|
|
Options
outstanding at March 31, 2017
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled
/ expired
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Options
outstanding at March 31, 2018
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
Options
exercisable at March 31, 2018
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
Warrants
The
following table summarizes the warrants outstanding and the related
prices for the shares of the Company’s common stock as of
March 31, 2018:
Warrants Outstanding
|
|
|
Warrants Exercisable
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Remaining
|
|
|
Average
|
|
|
|
|
|
Average
|
|
Exercise
|
|
|
Number
|
|
|
Contractual
|
|
|
Exercise
|
|
|
Number
|
|
|
Exercise
|
|
Price
|
|
|
Outstanding
|
|
|
Life (Years)
|
|
|
Price
|
|
|
Exercisable
|
|
|
Price
|
|
$
|
0.50
|
|
|
|
30,000
|
|
|
|
0.01
|
|
|
$
|
0.50
|
|
|
|
350,000
|
|
|
$
|
0.50
|
|
$
|
1.50
|
|
|
|
6,127,497
|
|
|
|
1.24
|
|
|
$
|
1.50
|
|
|
|
6,127,497
|
|
|
$
|
1.50
|
|
$
|
2.50
|
|
|
|
12,000
|
|
|
|
0.30
|
|
|
$
|
2.50
|
|
|
|
12,000
|
|
|
$
|
2.50
|
|
|
Total
|
|
|
|
6,169,497
|
|
|
|
1.23
|
|
|
$
|
1.50
|
|
|
|
6,169,497
|
|
|
$
|
1.50
|
|
Transactions
involving the Company’s warrant issuance are summarized as
follows:
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
|
Number of
|
|
|
Exercise
|
|
|
|
Shares
|
|
|
Price
|
|
Warrants
outstanding at March 31, 2016
|
|
|
6,504,810
|
|
|
$
|
1.48
|
|
Granted
/ restated
|
|
|
30,000
|
|
|
$
|
0.50
|
|
Canceled
|
|
|
-
|
|
|
$
|
-
|
|
Expired
|
|
|
-
|
|
|
$
|
-
|
|
Warrants
outstanding at March 31, 2017
|
|
|
6,534,810
|
|
|
$
|
1.48
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
Canceled
|
|
|
-
|
|
|
$
|
-
|
|
Expired
|
|
|
(365,313
|
)
|
|
$
|
(1.18
|
)
|
Warrants
outstanding at March 31, 2018
|
|
|
6,169,497
|
|
|
$
|
1.50
|
|
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Litigation
In the ordinary course of business, we may be or have been involved
in legal proceedings from time to time. Below is a description of
all legal proceedings we were involved in as of March 31,
2018.
●
|
On
November 1, 2017, we filed a lawsuit in the Fourth Judicial
District Court for Utah County, State of Utah, Wealth Generators,
LLC, v. Evan Cabral, Daniel Lopez, John Legarreta, Johnathan Lopez,
Julian Kuschner, Nick Gomez, Luke Shulla, Nestor Velazquez,
Christopher Terry, Isis De La Torre, Alex Morton, Ivan Briongos,
Brandon Boyd, and International Markets Live Ltd. d/b/a
iMarketslive, Civil No. 170401615, alleging corporate espionage and
misappropriation of corporate information. The lawsuit alleges that
International Markets Live Ltd., dba iMarketslive, conspired with a
number of individuals affiliated with Wealth Generators to steal
our confidential information, intellectual property, and trade
secrets. We are seeking injunctive relief to protect our business
and damages of not less than $300,000.
|
●
|
In
February 2018, we received a subpoena from the United States
Commodity Futures Trading Commission (“CFTC”). We
complied with the terms of the subpoena and have negotiated a
resolution of this matter with the CFTC staff. Under the proposed
resolution, we will not admit or deny any of the allegations, will
pay a fine of $150,000, and will agree not to act as an
unregistered Commodities Trading Advisor in the future. We cannot
provide any assurance that the resolution we have negotiated with
the CFTC staff will be approved by the CFTC. We await the
acceptance of the resolution from the CFTC.
|
●
|
Jim
Westphal filed a wage claim against Wealth Generators, LLC, in the
United States District Court for the District of Utah, Central
Division (Case No. 2:18-cv-00080, District Judge Dale A. Kimball
and Magistrate Judge Evelyn J. Furse) in the amount of $6,500 plus
liquidated damages. Plaintiff is claiming unpaid overtime wages.
Wealth Generators contends that Mr. Westphal was an independent
contractor, hired on a limited basis to perform software services,
and is accordingly not entitled to overtime payments under the Fair
Labor Standards Act. Moreover, Plaintiff never provided the
promised software pursuant to the parties’ agreement. The
Magistrate Judge ordered both parties to provide specific
disclosures to the other side and both parties have complied. The
Parties were ordered to meet and confer in a good faith effort to
settle the matter on or before June 12, 2018. The parties were
unable to settle the matter and as of June 19, 2018, we are filing
a countersuit to proceed.
|
NOTE 10 – INCOME TAXES
Deferred
taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences and
operating loss and tax credit carryforwards and deferred tax
liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment. The Company used an effective
tax rate of 30% when calculating the deferred tax assets and
liabilities and income tax provision below.
Net
deferred tax assets consist of the following components as of March
31, 2018 and 2017:
|
|
Year Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
Deferred
tax assets:
|
|
|
|
|
|
|
NOL
carryover
|
|
$
|
1,146,200
|
|
|
$
|
18,372,400
|
|
Amortization
|
|
|
335,600
|
|
|
|
-
|
|
Contingent
Liability
|
|
|
45,000
|
|
|
|
-
|
|
Related
party accrued payroll
|
|
|
-
|
|
|
|
2,200
|
|
Deferred
tax liabilities
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
(2,900
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Valuation
allowance
|
|
|
(1,523,900
|
)
|
|
|
(18,374,600
|
)
|
Total
long-term deferred income tax assets
|
|
$
|
-
|
|
|
$
|
-
|
|
The
income tax provision differs from the amount of income tax
determined by applying the U.S. federal income tax rate to pretax
income from continuing operations for the years ended March 31,
2018 and 2017, due to the following:
|
|
Year Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
Book
income (loss)
|
|
$
|
(4,473,900
|
)
|
|
$
|
754,100
|
|
Stock
for services
|
|
|
2,048,200
|
|
|
|
239,800
|
|
Gain on
settlement – derivative and equity derived
|
|
|
955,900
|
|
|
|
(1,006,900
|
)
|
Amortization
|
|
|
313,200
|
|
|
|
-
|
|
Contingent
liability
|
|
|
45,000
|
|
|
|
-
|
|
Unrealized
loss on cryptocurrency
|
|
|
40,700
|
|
|
|
-
|
|
Meals
and entertainment
|
|
|
6,200
|
|
|
|
-
|
|
Non-cash
interest expense
|
|
|
5,700
|
|
|
|
387,400
|
|
Depreciation
|
|
|
(2,800
|
)
|
|
|
-
|
|
Related
party accruals
|
|
|
(1,500
|
)
|
|
|
(220,600
|
)
|
Stock
for payables
|
|
|
-
|
|
|
|
278,000
|
|
Gain on
derivative liability
|
|
|
-
|
|
|
|
(36,200
|
)
|
Fines
and penalties
|
|
|
-
|
|
|
|
3,900
|
|
NOL
utilization
|
|
|
-
|
|
|
|
(399,500
|
)
|
Valuation
allowance
|
|
|
1,063,300
|
|
|
|
-
|
|
Total
long-term deferred income tax assets
|
|
$
|
-
|
|
|
$
|
-
|
|
At
March 31, 2018, the Company had net operating loss carryforwards of
approximately $3,821,000 that may be offset against future taxable
income for the year 2019 through 2038. However, due to the change
in ownership provisions of the Tax Reform Act of 1986, the NOL
accumulated prior to the April 1, 2017, acquisition can only offset
future income of up to $13,837 per year until expired. Should
additional changes in ownership occur, net operating loss
carryforwards in future years may be further limited.
No tax
benefit from continuing or discontinued operations have been
reported in the March 31, 2018, consolidated financial statements
since the potential tax benefit is offset by a valuation allowance
of the same amount.
The
Company complies with the provisions of FASB ASC 740 in accounting
for its uncertain tax positions. ASC 740 addresses the
determination of whether tax benefits claimed or expected to be
claimed on a tax return should be recorded in the financial
statements. Under ASC 740, the Company may recognize the tax
benefit from an uncertain tax position only if it is more likely
that not that the tax position will be sustained on examination by
the taxing authorities, based on the technical merits of the
position. The Company has determined that the Company has no
significant uncertain tax positions requiring recognition under ASC
740.
The
Company recognizes interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses.
The Company had no accruals for interest and tax penalties at March
31, 2018 and 2017.
The
Company does not expect the amount of unrecognized tax benefits to
materially change within the next twelve months.
The
Company is required to file income tax returns in the U.S. Federal
jurisdiction, in New York State, New Jersey, and in Utah. The
Company is no longer subject to income tax examinations by tax
authorities for tax years ending before March 31,
2014.
NOTE
11 – SUBSEQUENT EVENTS
On June
15, 2018, we completed state registration for SAFE Management LLC
as a Registered Investment Advisor and await final approval from
the State of New Jersey Bureau of Securities.
On May
7, 2018, we established WealthGen Global LLC as a Utah limited
liability company and a wholly owned subsidiary of Investview, Inc.
WealthGen Global LLC will operate as a computer hardware and
services re-seller.
INVESTVIEW, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
December 31,
|
|
|
March 31,
|
|
|
|
|
|
|
2018
|
|
|
2018
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
93,569
|
|
|
$
|
1,490,686
|
|
|
|
|
Prepaid
assets
|
|
|
9,984
|
|
|
|
3,555
|
|
|
|
|
Receivables
|
|
|
517,447
|
|
|
|
472,557
|
|
|
|
|
Short
term advances
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
|
Short
term advances - related party
|
|
|
500
|
|
|
|
36,510
|
|
|
|
|
Other
current assets
|
|
|
7,385
|
|
|
|
480,370
|
|
|
|
|
Total
current assets
|
|
|
638,885
|
|
|
|
2,493,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets, net
|
|
|
14,734
|
|
|
|
18,860
|
|
|
|
|
Other
assets:
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets, net
|
|
|
2,893,491
|
|
|
|
-
|
|
|
|
|
Long
term license agreement, net
|
|
|
2,020,305
|
|
|
|
2,133,620
|
|
|
|
|
Deposits
|
|
|
16,103
|
|
|
|
4,500
|
|
|
|
|
Total
other assets
|
|
|
4,929,899
|
|
|
|
2,138,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
5,583,518
|
|
|
$
|
4,650,658
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$
|
4,359,347
|
|
|
$
|
5,352,073
|
|
|
|
|
Customer
advance
|
|
|
265,000
|
|
|
|
-
|
|
|
|
|
Deferred
revenue
|
|
|
1,041,446
|
|
|
|
863,740
|
|
|
|
|
Related
party payables
|
|
|
491,488
|
|
|
|
1,880
|
|
|
|
|
Debt
|
|
|
1,173,003
|
|
|
|
195,245
|
|
|
|
|
Total
current liabilities
|
|
|
7,330,284
|
|
|
|
6,412,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
7,330,284
|
|
|
|
6,412,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock, par value: $0.001; 10,000,000 shares authorized, none issued
and outstanding as of December 31, 2018 and March 31,
2018
|
|
|
-
|
|
|
|
-
|
|
|
|
|
Common
stock, par value $0.001; 10,000,000,000 shares authorized;
2,213,661,318 and 2,169,661,318 shares issued and outstanding as of
December 31, 2018 and March 31, 2018, respectively
|
|
|
2,213,661
|
|
|
|
2,169,661
|
|
|
|
|
Additional
paid in capital
|
|
|
17,112,945
|
|
|
|
16,137,945
|
|
|
|
|
Accumulated
other comprehensive income (loss)
|
|
|
4,728
|
|
|
|
(2,483
|
)
|
|
|
|
Accumulated
deficit
|
|
|
(21,091,245
|
)
|
|
|
(20,085,947
|
)
|
|
|
|
Total
Investview stockholders' equity (deficit)
|
|
|
(1,759,911
|
)
|
|
|
(1,780,824
|
)
|
|
|
|
Noncontrolling
interest
|
|
|
13,145
|
|
|
|
18,544
|
|
|
|
|
Total
stockholders' equity (deficit)
|
|
|
(1,746,766
|
)
|
|
|
(1,762,280
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity (deficit)
|
|
$
|
5,583,518
|
|
|
$
|
4,650,658
|
|
|
|
|
The
accompanying notes are an integral part of these condensed
consolidated financial statements.
INVESTVIEW, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
COMPREHENSIVE INCOME
(Unaudited)
|
|
Three Months Ended
December 31,
|
|
|
Nine Months Ended
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
revenue, net of refunds, incentives, credits, and
chargebacks
|
|
$
|
7,003,802
|
|
|
$
|
3,395,892
|
|
|
$
|
20,835,048
|
|
|
$
|
9,988,999
|
|
Equipment
sales, net of refunds
|
|
|
694,954
|
|
|
|
-
|
|
|
|
694,954
|
|
|
|
-
|
|
Cryptocurrency
mining service revenue, net of refunds and amounts paid to
supplier
|
|
|
34,278
|
|
|
|
540,006
|
|
|
|
1,812,601
|
|
|
|
540,006
|
|
Total
revenue, net
|
|
|
7,733,034
|
|
|
|
3,935,898
|
|
|
|
23,342,603
|
|
|
|
10,529,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales and service
|
|
|
493,591
|
|
|
|
6,207,839
|
|
|
|
924,588
|
|
|
|
6,525,135
|
|
Commissions
|
|
|
5,087,053
|
|
|
|
2,941,242
|
|
|
|
17,316,319
|
|
|
|
8,379,807
|
|
Selling
and marketing
|
|
|
109,265
|
|
|
|
55,906
|
|
|
|
634,671
|
|
|
|
324,502
|
|
Salary
and related
|
|
|
1,059,660
|
|
|
|
449,779
|
|
|
|
3,075,862
|
|
|
|
1,306,272
|
|
Professional
fees
|
|
|
284,586
|
|
|
|
1,144,239
|
|
|
|
1,355,182
|
|
|
|
1,969,265
|
|
General
and administrative
|
|
|
940,767
|
|
|
|
522,474
|
|
|
|
2,921,073
|
|
|
|
1,354,862
|
|
Total
operating costs and expenses
|
|
|
7,974,922
|
|
|
|
11,321,479
|
|
|
|
26,227,695
|
|
|
|
19,859,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss from operations
|
|
|
(241,888
|
)
|
|
|
(7,385,581
|
)
|
|
|
(2,885,092
|
)
|
|
|
(9,330,838
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
(loss) on debt extinguishment
|
|
|
-
|
|
|
|
-
|
|
|
|
19,387
|
|
|
|
(2,767,422
|
)
|
Loss on
spin-off of operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,118,609
|
)
|
Gain on
bargain purchase
|
|
|
-
|
|
|
|
-
|
|
|
|
2,005,282
|
|
|
|
-
|
|
Realized
gain (loss) on cryptocurrency
|
|
|
(1,091
|
)
|
|
|
264,486
|
|
|
|
16,363
|
|
|
|
264,486
|
|
Unrealized
gain (loss) on cryptocurrency
|
|
|
(116
|
)
|
|
|
-
|
|
|
|
95,810
|
|
|
|
-
|
|
Interest
expense - related parties
|
|
|
-
|
|
|
|
(12,500
|
)
|
|
|
(5,000
|
)
|
|
|
(30,500
|
)
|
Interest
expense
|
|
|
(206,007
|
)
|
|
|
(1,710
|
)
|
|
|
(210,154
|
)
|
|
|
(78,613
|
)
|
Other
income (expense)
|
|
|
(606
|
)
|
|
|
219
|
|
|
|
(2,449
|
)
|
|
|
(1,483
|
)
|
Total
other income (expense)
|
|
|
(207,820
|
)
|
|
|
250,495
|
|
|
|
1,919,239
|
|
|
|
(3,732,141
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
|
(449,708
|
)
|
|
|
(7,135,086
|
)
|
|
|
(965,853
|
)
|
|
|
(13,062,979
|
)
|
Income
tax expense
|
|
|
(2,655
|
)
|
|
|
(7,736
|
)
|
|
|
(44,844
|
)
|
|
|
(21,076
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
|
(452,363
|
)
|
|
|
(7,142,822
|
)
|
|
|
(1,010,697
|
)
|
|
|
(13,084,055
|
)
|
Less:
net income (loss) attributable to the noncontrolling
interest
|
|
|
27,613
|
|
|
|
-
|
|
|
|
(5,399
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Investview stockholders
|
|
$
|
(479,976
|
)
|
|
$
|
(7,142,822
|
)
|
|
$
|
(1,005,298
|
)
|
|
$
|
(13,084,055
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) per common share, basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding,
basic and diluted
|
|
|
2,213,661,318
|
|
|
|
2,074,489,983
|
|
|
|
2,197,588,591
|
|
|
|
1,828,597,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments
|
|
$
|
3,470
|
|
|
$
|
-
|
|
|
$
|
7,211
|
|
|
$
|
-
|
|
Total
other comprehensive income
|
|
|
3,470
|
|
|
|
-
|
|
|
|
7,211
|
|
|
|
-
|
|
Comprehensive
income (loss)
|
|
|
(448,893
|
)
|
|
|
(7,142,822
|
)
|
|
|
(11,003,486
|
)
|
|
|
(13,084,055
|
)
|
Less:
comprehensive income attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
the
noncontrolling interest
|
|
|
(3,470
|
)
|
|
|
-
|
|
|
|
(7,211
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) attributable to Investview shareholders
|
|
$
|
(452,363
|
)
|
|
$
|
(7,142,822
|
)
|
|
$
|
(1,010,697
|
)
|
|
$
|
(13,084,055
|
)
|
The
accompanying notes are an integral part of these condensed
consolidated financial statements.
INVESTVIEW, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Nine Months Ended
December 31,
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(1,010,697
|
)
|
|
$
|
(13,084,055
|
)
|
|
|
|
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
4,126
|
|
|
|
1,710
|
|
|
|
|
Amortization of
debt discount
|
|
|
161,154
|
|
|
|
-
|
|
|
|
|
Amortization of
long-term license agreement
|
|
|
113,315
|
|
|
|
-
|
|
|
|
|
Amortization of
intangible assets
|
|
|
256,509
|
|
|
|
-
|
|
|
|
|
Stock
issued for services, compensation, and license
agreement
|
|
|
8,333
|
|
|
|
6,788,449
|
|
|
|
|
Loss on
spin-off of operations
|
|
|
-
|
|
|
|
1,118,609
|
|
|
|
|
Gain on
bargain purchase
|
|
|
(2,005,282
|
)
|
|
|
-
|
|
|
|
|
(Gain)
loss on debt extinguishment
|
|
|
(19,387
|
)
|
|
|
2,767,422
|
|
|
|
|
Realized gain on
cryptocurrency
|
|
|
(16,363
|
)
|
|
|
(264,486
|
)
|
|
|
|
Unrealized gain on
cryptocurrency
|
|
|
(95,810
|
)
|
|
|
-
|
|
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
316,455
|
|
|
|
329,397
|
|
|
|
|
Prepaid
assets
|
|
|
(4,762
|
)
|
|
|
-
|
|
|
|
|
Short
term advances from related parties
|
|
|
36,010
|
|
|
|
(24,994
|
)
|
|
|
|
Other
current assets
|
|
|
585,158
|
|
|
|
(231,690
|
)
|
|
|
|
Deposits
|
|
|
(11,603
|
)
|
|
|
1,500
|
|
|
|
|
Accounts payable
and accrued liabilities
|
|
|
(1,375,229
|
)
|
|
|
(80,907
|
)
|
|
|
|
Customer
advance
|
|
|
265,000
|
|
|
|
-
|
|
|
|
|
Deferred
revenue
|
|
|
181,255
|
|
|
|
159,982
|
|
|
|
|
Accrued
interest
|
|
|
26,000
|
|
|
|
76,722
|
|
|
|
|
Accrued
interest - related parties
|
|
|
5,000
|
|
|
|
30,500
|
|
|
|
|
Net
cash used in operating activities
|
|
|
(2,580,818
|
)
|
|
|
(2,411,841
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
Cash
received in acquisition
|
|
|
3,740
|
|
|
|
3,550
|
|
|
|
|
Net
cash provided by investing activities
|
|
|
3,740
|
|
|
|
3,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from related parties
|
|
|
1,480,777
|
|
|
|
473,380
|
|
|
|
|
Repayments
for related party payables
|
|
|
(996,169
|
)
|
|
|
(1,000,750
|
)
|
|
|
|
Proceeds
from debt
|
|
|
1,955,000
|
|
|
|
1,675,000
|
|
|
|
|
Repayments
for debt
|
|
|
(1,164,396
|
)
|
|
|
(1,272,559
|
)
|
|
|
|
Payments
for share repurchase
|
|
|
(91,000
|
)
|
|
|
-
|
|
|
|
|
Proceeds
from the sale of stock
|
|
|
-
|
|
|
|
2,696,776
|
|
|
|
|
Payments
for offering cost
|
|
|
-
|
|
|
|
(15,000
|
)
|
|
|
|
Net
cash provided by financing activities
|
|
|
1,184,212
|
|
|
|
2,556,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of exchange rate translation on cash
|
|
|
(4,251
|
)
|
|
|
-
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
(1,397,117
|
)
|
|
|
148,556
|
|
|
|
|
Cash
and cash equivalents-beginning of period
|
|
|
1,490,686
|
|
|
|
1,616
|
|
|
|
|
Cash
and cash equivalents-end of period
|
|
$
|
93,569
|
|
|
$
|
150,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid during the period for:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
117,500
|
|
|
|
|
Income
taxes
|
|
$
|
44,844
|
|
|
$
|
21,076
|
|
|
|
|
Non
cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for acquisition
|
|
$
|
1,100,000
|
|
|
$
|
662,048
|
|
|
|
|
Common
stock issued in settlement of related party payables
|
|
$
|
-
|
|
|
$
|
90,000
|
|
|
|
|
Common
stock issued in settlement of debt
|
|
$
|
-
|
|
|
$
|
2,322,606
|
|
|
|
|
Common
stock issued for prepaid services and long term license
agreement
|
|
$
|
1,667
|
|
|
$
|
2,176,109
|
|
|
|
|
Cancellation
of shares
|
|
$
|
-
|
|
|
$
|
250
|
|
|
|
|
Liability
for offering costs
|
|
$
|
-
|
|
|
$
|
250,000
|
|
|
|
|
Shares
issued for offering costs
|
|
$
|
-
|
|
|
$
|
4,274
|
|
|
|
|
The
accompanying notes are an integral part of these condensed
consolidated financial statements.
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Organization
Investview,
Inc. was incorporated on January 30, 1946, under the laws of the
state of Utah as the Uintah Mountain Copper Mining Company. In
January 2005 the Company changed domicile to Nevada, and changed
its name to Voxpath Holding, Inc. In September of 2006 the Company
merged The Retirement Solution Inc. through a Share Purchase
Agreement into Voxpath Holdings, Inc. and then changed its name to
TheRetirementSolution.Com, Inc. In October 2008 the Company changed
its name to Global Investor Services, Inc., before changing its
name to Investview, Inc., on March 27, 2012.
On
March 31, 2017, we entered into a Contribution Agreement with the
members of Wealth Generators, LLC, a limited liability company
(“Wealth Generators”), pursuant to which the Wealth
Generators members agreed to contribute 100% of the outstanding
securities of Wealth Generators in exchange for an aggregate of
1,358,670,942 shares of our common stock. The closing of the
Contribution Agreement was effective April 1, 2017, and Wealth
Generators became our wholly owned subsidiary and the former
members of Wealth Generators became our stockholders and control
the majority of our outstanding common stock.
On June
6, 2017, we entered into an Acquisition Agreement with Market Trend
Strategies, LLC, a company whose members are also former members of
our management. Under the Acquisition Agreement, we spun-off our
operations that existed prior to the merger with Wealth Generators
and sold the intangible assets used in those pre-merger operations
in exchange for Market Trend Strategies’ assumption of
$419,139 in pre-merger liabilities.
On
February 28, 2018, we filed a name change for Wealth Generators,
LLC to Kuvera, LLC (“Kuvera”) and on May 7, 2018,
we established WealthGen Global, LLC as a Utah limited liability
company and a wholly owned subsidiary of Investview,
Inc.
On July 20, 2018, we entered into a Purchase Agreement
with United Games Marketing LLC, a Utah limited liability
company, to purchase its wholly owned subsidiaries United Games,
LLC and United League, LLC for 50,000,000 shares of our common
stock (see Note 9).
On November 12, 2018, we established Kuvera France, S.A.S. to
handle sales of our financial education and research in the
European Union.
On December 30, 2018, our wholly owned subsidiary S.A.F.E.
Management, LLC received its registration and disclosure approval
from the National Futures Association. S.A.F.E. Management, LLC is
now a New Jersey State Registered Investment Adviser, Commodities
Trading Advisor, Commodity Pool Operator, and approved for over the
counter FOREX advisory services.
On January 17, 2019, we renamed our non-operating wholly owned
subsidiary WealthGen Global, LLC to SafeTek, LLC, a Utah limited
liability company.
Nature of Business
Investview
owns a number of companies that each operate independently but are
accretive to one another. Investview is establishing a portfolio of
wholly owned subsidiaries delivering leading edge technologies,
services, and research, dedicated primarily to the individual
consumer. Following is a description of each of our
companies.
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
Kuvera, LLC provides research, education, and investment
tools designed to assist the self-directed investor in successfully
navigating the financial markets. These services include research,
trade alerts, and live trading rooms that include instruction in
equities, options, FOREX, ETFs, binary options, crowdfunding and
cryptocurrency sector education. In addition to trading tools and
research, we also offer full education and software applications to
assist the individual in debt reduction, increased savings,
budgeting, and proper tax management. Each product subscription
includes a core set of trading tools/research along with the
personal finance management suite to provide an individual with
complete access to the information necessary to cultivate and
manage his or her financial situation. Different packages are
available through a monthly subscription that can be cancelled at
any time at the discretion of the customer. A unique component of
the product marketing plan is the distribution method whereby all
subscriptions are sold via current participating customers who
choose to distribute and sell the services by participating in the
bonus plan. The bonus plan participation is purely optional but
enables individuals to create an additional income stream to
further support their personal financial goals and
objectives.
Kuvera France S.A.S. is our entity in France that will
distribute Kuvera products and services throughout the European
Union.
S.A.F.E. Management, LLC is a Registered Investment Adviser
and Commodity Trading Adviser that has been established to deliver
automated trading strategies to individuals who find they lack the
time to trade for themselves.
United League, LLC owns a number of proprietary technologies
including FIREFAN a social app for sports enthusiasts. Technologies
created to support any of the Investview companies are held under
the United League structure.
United Games, LLC is the distribution network for United
League technologies. Since the acquisition of United Games in July
of 2018, we are working to combine the distributors of Kuvera and
United Games. This is an on-going process that is not targeted for
completion until the end of calendar year 2018.
SafeTek, LLC (formerly WealthGen Global, LLC) is a new
addition that we are currently establishing for expansion plans in
the high-speed processing and cloud computing
environment.
Investment Tools & Training, LLC and Razor Data Corp. currently have no
operations or activities.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The
accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the rules and regulations
(Regulation S-X) of the Securities and Exchange Commission (the
“SEC”) and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The results
of operations for the three and nine months ended December 30,
2018, are not necessarily indicative of the operating results that
may be expected for the year ending March 31, 2019. These unaudited
condensed consolidated financial statements should be read in
conjunction with the March 31, 2018, consolidated financial
statements and notes thereto included in our Annual Report on Form
10-K for the year ended March 31, 2018.
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
Principles of Consolidation
The
consolidated financial statements include the accounts of
Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC,
Investment Tools & Training, LLC, Razor Data Corp., S.A.F.E.
Management, LLC, SafeTek, LLC (formerly WealthGen Global, LLC),
United Games, LLC, United League, LLC, and Kuvera France S.A.S. We
have determined that one affiliated entity, Kuvera LATAM S.A.S.,
which we conduct business with, is a variable interest entity and
we are the primary beneficiary of the entity’s activities,
which are similar to those of Kuvera, LLC. As a result, we have
consolidated the accounts of this variable interest entity into the
accompanying consolidated financial statements. Further, because we do not have any ownership
interest in this variable interest entity, we have allocated the
contributed capital in the variable interest entity as a component
of noncontrolling interest. 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 unaudited condensed consolidated financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ
from those estimates.
Foreign Exchange
We have
consolidated the accounts of Kuvera France S.A.S. and Kuvera LATAM
S.A.S. into our consolidated financial statements. The operations
of Kuvera France S.A.S. are conducted in France and its functional
currency is the Euro. The operations of Kuvera LATAM S.A.S. are
conducted in Colombia and its functional currency is the Colombian
Peso.
The
financial statements of Kuvera France S.A.S. and Kuvera LATAM
S.A.S. are prepared using their respective functional currency and
have been translated into U.S. dollars (“USD”). Assets
and liabilities are translated into USD at the applicable exchange
rates at period-end. Stockholders’ equity is translated using
historical exchange rates. Revenue and expenses are translated at
the average exchange rates for the period. Any translation
adjustments are included as foreign currency translation
adjustments in accumulated other comprehensive income in our
stockholders’ equity (deficit).
The
following rates were used to translate the accounts of Kuvera
France S.A.S. and Kuvera LATAM S.A.S. into USD at the following
balance sheet dates.
|
|
December 31, 2018
|
|
|
March 31,
2018
|
|
Euro to USD
|
|
|
1.16
|
|
|
|
n/a
|
|
Colombian Peso to USD
|
|
|
0.00031
|
|
|
|
0.00036
|
|
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
The following rates were used to translate the accounts of
Kuvera France S.A.S. and Kuvera LATAM S.A.S. into USD for the following operating
periods.
|
|
Nine Months Ended
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
Euro to USD
|
|
|
n/a
|
|
|
|
n/a
|
|
Colombian Peso to USD
|
|
|
0.00034
|
|
|
|
n/a
|
|
Cryptocurrencies
We hold
cryptocurrency-denominated assets (“cryptocurrencies”)
and include them in our consolidated balance sheet as other current
assets. We record cryptocurrencies at fair market value and
recognize the change in the fair value of our cryptocurrencies as
an unrealized gain or loss in the consolidated statement of
operations. As of December 31, 2018, and March 31, 2018, the fair
value of our cryptocurrencies was $7,385 and $480,370,
respectively. During the nine months ended December 31, 2018, we
recorded $16,320 and $95,810 as a total realized and unrealized
gain (loss) on cryptocurrency, respectively. We recorded a $264,486
realized gain on cryptocurrencies during the nine months ended
December 31, 2017. During the three months ended December 31, 2018,
we recorded $(1,134) and $(116) as a total realized and unrealized
gain (loss) on cryptocurrency, respectively. We recorded a $264,486
realized gain on cryptocurrencies during the three months ended
December 31, 2017.
Long-Lived Assets – Intangible Assets & License
Agreement
We
account for our intangible assets and long-term license agreement
in accordance with ASC Subtopic 350-30, General Intangibles Other
Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the
Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-30
requires assets to be measured based on the fair value of the
consideration given or the fair value of the assets (or net assets)
acquired, whichever is more clearly evident and, thus, more
reliably measurable. Further, ASC Subtopic 350-30 requires an
intangible asset to be amortized over its useful life and for the
useful life to be evaluated every reporting period to determine
whether events or circumstances warrant a revision to the remaining
period of amortization. If the estimate of useful life is changed
the remaining carrying amount of the intangible asset is amortized
prospectively over the revised remaining useful life. Costs of
internally developing, maintaining, or restoring intangible
assets are recognized as an expense when incurred.
In June
of 2017 we issued 80,000,000 shares of common stock with a value of
$2,256,000 for a 15-year license agreement. Annual amortization
over the 15-year life is expected to be $150,400 per year.
Amortization recognized for the nine months ended December 31, 2018
and 2017, was $113,315 and $85,295, respectively, and the long-term
license agreement was recorded at a net value of $2,020,305 and
$2,133,620 as of December 31, 2018, and March 31, 2018,
respectively.
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
In June
of 2018, we purchased United Games, LLC and United League, LLC and
recorded the transaction as a business combination (see Note 9).
Intangible assets acquired in the business combination were
recorded at fair value on the date of acquisition and are being
amortized on a straight-line method over their estimated useful
lives.
|
|
Estimated
|
|
|
|
|
|
|
Useful
|
|
|
|
|
|
|
Life
|
|
|
|
|
|
|
(years)
|
|
|
Value
|
|
FireFan
mobile application
|
|
|
4
|
|
|
$
|
804,000
|
|
Back
office software
|
|
|
10
|
|
|
|
1,074,000
|
|
Tradename/trademark
- FireFan
|
|
|
5
|
|
|
|
472,000
|
|
Tradename/trademark
- United Games
|
|
|
0.45
|
|
|
|
4,000
|
|
Customer
contracts/relationships
|
|
|
5
|
|
|
|
796,000
|
|
|
|
|
|
|
|
|
3,150,000
|
|
Accumulated
amortization as of December 31, 2018
|
|
|
|
|
|
|
(256,509
|
)
|
Net
book value, December 31, 2108
|
|
|
|
|
|
$
|
2,893,491
|
|
Amortization
expense is expected to be as follows:
Remainder
of 2019
|
|
$
|
138,582
|
|
Fiscal
year ending March 31, 2020
|
|
|
562,000
|
|
Fiscal
year ending March 31, 2021
|
|
|
562,000
|
|
Fiscal
year ending March 31, 2022
|
|
|
562,000
|
|
Fiscal
year ending March 31, 2023
|
|
|
422,126
|
|
Fiscal
year ending March 31, 2020 and beyond
|
|
|
646,783
|
|
|
|
$
|
2,893,491
|
|
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 us 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 December 31, 2018 and 2017, no
impairment was recognized.
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.
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
U.S.
generally accepted accounting principles provide for a three-level
hierarchy of inputs to valuation techniques used to measure fair
value, defined as follows:
Level
1:
|
Inputs
that are quoted prices (unadjusted) for identical assets or
liabilities in active markets that the entity can
access.
|
Level
2:
|
Inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or
indirectly, for substantially the full term of the asset or
liability, including:
|
–
|
quoted
prices for similar assets or liabilities in active
markets;
|
–
|
quoted
prices for identical or similar assets or liabilities in markets
that are not active;
|
–
|
inputs
other than quoted prices that are observable for the asset or
liability; and
|
–
|
inputs
that are derived principally from or corroborated by observable
market data by correlation or other means.
|
Level
3:
|
Inputs
that are unobservable and reflect management’s own
assumptions about the inputs market participants would use in
pricing the asset or liability based on the best information
available in the circumstances (e.g., internally derived
assumptions surrounding the timing and amount of expected cash
flows).
|
Our
financial instruments consist of cash, accounts receivable,
accounts payable, and debt. We have determined that the book value
of our outstanding financial instruments as of December 31, 2018,
and March 31, 2018, approximates the fair value due to their
short-term nature.
Items
recorded or measured at fair value on a recurring basis in the
accompanying consolidated financial statements consisted of the
following items as of December 31, 2018:
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Cryptocurrencies
|
|
$
|
7,385
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
7,385
|
|
Total
Assets
|
|
$
|
7,385
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
7,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Items
recorded or measured at fair value on a recurring basis in the
accompanying consolidated financial statements consisted of the
following items as of March 31, 2018:
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Cryptocurrencies
|
|
$
|
480,370
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
480,370
|
|
Total
Assets
|
|
$
|
480,370
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
480,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
Revenue Recognition
Effective
April 1, 2018, we adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification
(“ASC”) Subtopic 606-10, Revenue from Contracts with
Customers (“ASC 606-10”). The adoption of ASC 606-10
had no impact on prior year or previously disclosed amounts. In
accordance with ASC 606-10, 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.
The
majority of our revenue is generated by subscription sales and
payment is received at the time of purchase. Our performance
obligation is to provide services over a fixed subscription period,
therefore we recognize revenue ratably over the subscription period
and deferred revenue is recorded for the portion of the
subscription period subsequent to each reporting date.
Additionally, we offer a 10-day trial period to subscription
customers, during which a full refund can be requested if a
customer does not like the product. Revenues are deferred during
the trial period as collection is not probable until that time has
passed. Revenues are presented net of refunds, sales incentives,
credits, and known and estimated credit card
chargebacks.
We
generate revenue from the sale of cryptocurrency mining services
(“mining packages”) to our customers through an
arrangement with a third-party supplier. The third-party supplier
has agreed to provide programming, installation, provisioning, and
ongoing hosting for mining equipment that allows our customer to
mine cryptocurrency for a period of five years plus 1,000 days or
the operating lifetime of the equipment, whichever is greater. The
mining packages are offered at different price points relative the
speed at which the equipment can mine cryptocurrency. Our
performance obligation is to arrange for the third-party to provide
mining services to our customers in our role as an agent. We
receive payment from our customer at the time of purchase and
coordinate the execution of the agreement between our customer and
the supplier, therefore revenue is recognized at the time our
performance obligation is met. Monthly, we remit a fee to the
third-party supplier equal to 60% of the mining package sold to our
customer plus $99 per package. We record revenue net, equal to the
amount of the fee to which we are entitled to as an agent or the
amount of consideration that we retain after paying the third-party
the consideration received in exchange for the services the
third-party is to provide.
We
generate revenue from the sale of high-speed computer processing
equipment that is used for any of the following intense processing
activities: protein folding, CGI rendering, Game Streaming, Machine
& Deep Learning, Mining, Independent Financial Verification,
and general high-speed computing. Our performance obligation is to
deliver an equipment package to our customers which includes
hardware, software, and firmware and is drop-shipped to a hosting
data center. We receive payment at the time of purchase and
recognize revenue when the equipment package is delivered and ready
for maintenance and hosting, which our customers arrange for, and
obtain, from a separate third party that provides such
services.
Revenue
generated for the nine months ended December 31, 2018, is as
follows:
|
|
Subscription
Revenue
|
|
|
Equipment Sales
|
|
|
Cryptocurrency Mining Revenue
|
|
|
Total
|
|
Gross
billings
|
|
$
|
21,882,055
|
|
|
$
|
698,954
|
|
|
$
|
5,690,380
|
|
|
$
|
28,258,639
|
|
Refunds,
incentives, credits, and chargebacks
|
|
|
(1,047,007
|
)
|
|
|
(4,000
|
)
|
|
|
(6,501
|
)
|
|
|
(1,057,508
|
)
|
Amounts
paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,871,278
|
)
|
|
|
(3,858,528
|
)
|
Net
revenue
|
|
$
|
20,835,048
|
|
|
$
|
694,954
|
|
|
$
|
1,812,601
|
|
|
$
|
23,342,603
|
|
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
Revenue
generated for the nine months ended December 31, 2017, is as
follows:
|
|
Subscription
Revenue
|
|
|
Equipment Sales
|
|
|
Cryptocurrency Mining Revenue
|
|
|
Total
|
|
Gross
billings
|
|
$
|
10,371,884
|
|
|
$
|
-
|
|
|
$
|
1,336,895
|
|
|
$
|
11,708,779
|
|
Refunds,
incentives, credits, and chargebacks
|
|
|
(382,885
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(382,885
|
)
|
Amounts
paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
(796,889
|
)
|
|
|
(796,889
|
)
|
Net
revenue
|
|
$
|
9,988,999
|
|
|
$
|
-
|
|
|
$
|
540,006
|
|
|
$
|
10,529,005
|
|
Revenue
generated for the three months ended December 31, 2018, is as
follows:
|
|
Subscription
Revenue
|
|
|
Equipment Sales
|
|
|
Cryptocurrency Mining Revenue
|
|
|
Total
|
|
Gross
billings
|
|
$
|
7,204,415
|
|
|
$
|
698,954
|
|
|
$
|
40,779
|
|
|
$
|
7,944,148
|
|
Refunds,
incentives, credits, and chargebacks
|
|
|
(200,613
|
)
|
|
|
(4,000
|
)
|
|
|
(6,501
|
)
|
|
|
(211,114
|
)
|
Amounts
paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net
revenue
|
|
$
|
7,003,802
|
|
|
$
|
694,954
|
|
|
$
|
34,278
|
|
|
$
|
7,733,034
|
|
Revenue
generated for the three months ended December 31, 2017, is as
follows:
|
|
Subscription
Revenue
|
|
|
Equipment Sales
|
|
|
Cryptocurrency Mining Revenue
|
|
|
Total
|
|
Gross
billings
|
|
$
|
3,660,708
|
|
|
$
|
-
|
|
|
$
|
1,336,895
|
|
|
$
|
4,997,603
|
|
Refunds,
incentives, credits, and chargebacks
|
|
|
(264,816
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(264,816
|
)
|
Amounts
paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
(796,889
|
)
|
|
|
(796,889
|
)
|
Net
revenue
|
|
$
|
3,395,892
|
|
|
$
|
-
|
|
|
$
|
540,006
|
|
|
$
|
3,935,898
|
|
Net Income (Loss) per Share
We
follow ASC subtopic 260-10, Earnings per Share (“ASC
260-10”), which specifies the computation, presentation, and
disclosure requirements of earnings per share information. Basic
loss per share has been calculated based upon the weighted average
number of common shares outstanding. Convertible debt, stock
options, and warrants have been excluded as common stock
equivalents in the diluted loss per share because their effect is
anti-dilutive on the computation.
Potentially
dilutive securities excluded from the computation of basic and
diluted net loss per share are as follows:
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
Options
to purchase common stock
|
|
|
35,000
|
|
|
|
35,000
|
|
Warrants
to purchase common stock
|
|
|
5,552,497
|
|
|
|
6,552,310
|
|
Totals
|
|
|
5,587,497
|
|
|
|
6,557,310
|
|
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
There
are 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.
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
NOTE 4 – GOING CONCERN AND LIQUIDITY
Our
financial statements are prepared using generally accepted
accounting principles applicable to a going concern that
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. We have incurred
significant recurring losses, which have resulted in an accumulated
deficit of $21,091,245 as of December 31, 2018, along with a net
loss of $1,010,697 and net cash used in operations of $2,580,818
for the nine months ended December 31, 2018. Additionally, as of
December 31, 2018, we had cash of $93,569 and a working capital
deficit of $6,691,399. These factors raise substantial doubt about
our ability to continue as a going concern.
Historically
we have relied on increasing revenues and new debt financing to pay
for operational expenses and debt as it came due. During the nine
months ended December 31, 2018, we raised $1,955,000 in cash
proceeds from new debt arrangements and raised $1,480,777 in cash
proceeds from related parties. Going forward we plan to reduce
obligations with cash flow provided by operations and pursue
additional debt and equity financing; however, we cannot assure
that funds will be available on terms acceptable to us, or if
available, will be sufficient to enable us to fully complete our
development activities or sustain operations. Nevertheless, the
shortage of working capital adversely affects our ability to
develop or participate in activities that promote our business,
because a substantial portion of cash flow goes to reduce debt
rather than to advance operating activities. To address this, we have implemented a series of
adjustments to our affiliate/distributor bonus plan. These
adjustments are designed to bring the maximum payout percentage in
line with company objectives. During prior periods, the bonus plan
had exceeded maximum payouts and consistently paid out near the
maximum percentage. We believe the adjustments initiated will
reduce the payout over time with payout percentages closer to
60%.
Accordingly,
the accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in the
United States of America, which contemplate our continuation as a
going concern and the realization of assets and satisfaction of
liabilities in the normal course of business. The carrying amounts
of assets and liabilities presented in the financial statements do
not necessarily purport to represent realizable or settlement
values. The financial statements do not include any adjustment that
might result from the outcome of this uncertainty.
NOTE 5 – RELATED-PARTY TRANSACTIONS
Our
related-party payables consisted of the following:
|
|
December 31,
2018
|
|
|
March 31,
2018
|
|
Short-term
advances [1]
|
|
$
|
386,488
|
|
|
$
|
1,880
|
|
Short-term
Promissory Note entered into on 8/17/18 [2]
|
|
|
105,000
|
|
|
|
-
|
|
|
|
$
|
491,488
|
|
|
$
|
1,880
|
|
_______________
[1]
|
We
periodically receive advances for operating funds from our current
majority shareholders and other related parties, including entities
that are owned, controlled, or influenced by our owners or
management. These advances are due on demand, generally have no
interest or fees associated with them, and are unsecured. During
the nine months ending December 31, 2018, we received $1,380,777 in
cash proceeds from advances and repaid related parties
$966,169.
|
[2]
|
A
member of the senior management team advanced funds of $100,000 on
August 17, 2018, under a short-term promissory note due to be
repaid on August 31, 2018. On August 31, 2018, the note was amended
to be due on demand or, in absence of a demand, due on August 31,
2019. The note had a fixed interest payment of $5,000 which was
recorded as interest expense in the statement of operations during
the nine months ending December 31, 2018.
|
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
NOTE 6 – DEBT
Our
debt consisted of the following:
|
|
December 31,
2018
|
|
|
March 31,
2018
|
|
Revenue
share agreement entered into on 6/28/16 [1]
|
|
$
|
-
|
|
|
$
|
195,245
|
|
Secured
merchant agreement for future receivables entered into on 9/28/18
[2]
|
|
|
249,445
|
|
|
|
-
|
|
Secured
merchant agreement for future receivables entered into on 10/3/18
[3]
|
|
|
325,454
|
|
|
|
-
|
|
Promissory
note entered into on 11/13/18 [4]
|
|
|
120,000
|
|
|
|
-
|
|
Promissory
note entered into on 12/12/18 [5]
|
|
|
118,500
|
|
|
|
-
|
|
Secured
merchant agreement for future receivables entered into on 12/17/18
[6]
|
|
|
359,604
|
|
|
|
-
|
|
|
|
$
|
1,173,003
|
|
|
$
|
195,245
|
|
_______________
[1]
|
During
April 2016, we entered into a Royalty Agreement, which was replaced
with a Revenue Share Agreement dated June 28, 2016, which was
amended in October of 2016. Cash receipts were received of
$100,000, $150,000, and $250,000 on April 19, May 11, and June 29,
2016, respectively. In accordance with the terms of the final
amended agreement, we are required to make payments of $25,000 per
month or a 3% royalty for the previous month’s sales,
whichever is greater, beginning February 15, 2017, until the lender
has been repaid $600,000. During the nine months ended December 31,
2018, we repaid $195,245.
|
[2]
|
During
September 2018, we entered into a Secured Merchant Agreement for
future receivables with an entity that provides quick access to
working capital. On September 28, 2018, we received proceeds from
this arrangement of $570,000. In accordance with the terms of the
agreement, we are required to repay $839,400 by making ACH payments
in the amount of 10% of our daily cash receipts. Accordingly, we
recorded $269,400 as a debt discount at the inception of the
agreement, which was the difference between the funds received and
the amount that was to be repaid. We amortized $69,380 into
interest expense during the nine months ended December 31,
2018.
|
[3]
|
In October 2018, we entered into a Secured Merchant Agreement for
future receivables with an entity that provides quick access to
working capital. We received proceeds from this arrangement of
$465,000 on October 10, 2018, $5,000 on October 23, 2018, and
$5,000 on October 25, 2018. In accordance with the terms of the
agreement, we are required to repay $699,500 by making ACH payments
in the amount of $4,372 per business day. Accordingly, we recorded
$224,500 as a debt discount at the inception of the agreement,
which was the difference between the funds received and the amount
that was to be repaid. We amortized $82,170 into interest expense
during the nine months ended December 31, 2018, which was based on
the estimated term of repayment.
|
[4]
|
On
November 14, 2018, we received proceeds of $150,000 in accordance
with a short-term promissory note that was to be repaid in three
equal monthly installments of $60,000, due on December 20, 2018,
January 20, 2019, and February 20, 2019. In accordance with this
note we recorded $30,000 as a fixed interest amount and repaid
$60,000 during the nine months ended December 31,
2018.
|
[5]
|
On
December 13, 2018, we received proceeds of $150,000 in accordance
with a short-term promissory note that had a fixed interest amount
of $8,000 and a maturity date of January 21, 2019. The $8,000 of
fixed interest was included in interest expense during the nine
months ended December 31, 2018, and we made one payment of $39,500
on the debt during the period.
|
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
[6]
|
In December 2018, we entered into a Secured Merchant Agreement for
future receivables with an entity that provides quick access to
working capital. We received proceeds from this arrangement of
$380,000 on December 17, 2018, and are required to repay $559,600
by making ACH payments in the amount of $3,000 per business day.
Accordingly, we recorded $179,600 as a debt discount at the
inception of the agreement, which was the difference between the
funds received and the amount that was to be repaid. We amortized
$9,604 into interest expense during the nine months ended December
31, 2018, which was based on the estimated term of
repayment.
|
In addition to the above debt transactions that were outstanding as
of December 31, 2018, and March 31, 2018, during the nine months
ended December 31, 2018, we also received proceeds of $230,000 from
short-term notes. During the nine months ended December 31, 2017,
we recorded interest expense of $11,000 for fixed interest amounts
due on the notes and made total cash payments of $241,000 to
extinguish the interest and principal amounts due on the
notes.
NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
We are authorized to issue up to 10,000,000 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 inference of that preferred stock, which has not yet
been done. As of December 31 and March 31, 2018, we had no
preferred stock issued or outstanding.
Common Stock
During
the nine months ended December
31, 2018, we had issued 50,000,000 shares of common stock
for the acquisition of United Games, LLC and United League, LLC
(see Note 9). We also issued 1,000,000 shares of common stock,
valued at $10,000 based on the market price on the day of issuance,
to an employee for compensation, which is subject to forfeiture if
the employee is not in good standing 6 months after the date of
issuance. Of the $10,000 value we recognized $8,333 as an expense
during the nine months ending December
31, 2018, and $1,667 was recorded as a prepaid asset. Also
during the nine months ended December
31, 2018, we repurchased 7,000,000 shares of common stock
for $91,000. As of December 31
and March 31, 2018, we had 2,213,661,318 and 2,169,661,318 shares
of common stock issued and outstanding, respectively.
Employee Stock Options
The
nonqualified plan adopted in 2007 authorized 65,000 shares, of
which 47,500 had been granted as of March 31, 2018. The qualified
plan adopted in October of 2008 authorizes 125,000 shares and was
approved by a majority of our shareholders on September 16, 2009.
As of March 31, 2018, 42,500 shares had been granted under the 2008
plan. Effective April 1, 2018 we cancelled both the 2007 and 2008
plans, as well as any shares that were allocated under the plans
and were not yet issued.
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
The
following table summarizes the changes in employee stock options
outstanding and the related prices for the shares of our common
stock issued to employees under two employee stock option
plans:
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
|
Aggregate
|
|
|
|
Number of
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Intrinsic
|
|
|
|
Shares
|
|
|
Price
|
|
|
Life (years)
|
|
|
Value
|
|
Options
outstanding at March 31, 2017
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
2.51
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled
/ expired
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Options
outstanding at March 31, 2018
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
1.51
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled
/ expired
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Options
outstanding at December 31, 2018
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
0.76
|
|
|
$
|
-
|
|
Options
exercisable at December 31, 2018
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
0.76
|
|
|
$
|
-
|
|
Stock-based
compensation expense in connection with options granted to
employees for the three and nine months ended December 31, 2018 and
2017, was $0.
Warrants
The
following table summarizes the warrants outstanding and the related
prices for the shares of our common stock as of December 31,
2018:
|
|
Warrants Outstanding
|
|
Warrants Exercisable
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
|
Weighted
|
|
|
|
|
Remaining
|
|
Average
|
|
|
|
Average
|
Exercise
|
|
Number
|
|
Contractual
|
|
Exercise
|
|
Number
|
|
Exercise
|
Price
|
|
Outstanding
|
|
Life (Years)
|
|
Price
|
|
Exercisable
|
|
Price
|
$
|
1.50
|
|
5,552,497
|
|
0.55
|
|
$
|
1.50
|
|
5,552,497
|
|
$
|
1.50
|
Transactions
involving our warrant issuance are summarized as
follows:
|
|
|
|
|
Weighted
|
|
|
|
Number of
|
|
|
Average
|
|
|
|
Shares
|
|
|
Exercise Price
|
|
Warrants
outstanding at March 31, 2017
|
|
|
6,534,810
|
|
|
$
|
1.48
|
|
Granted
/ restated
|
|
|
-
|
|
|
$
|
-
|
|
Canceled
|
|
|
-
|
|
|
$
|
-
|
|
Expired
|
|
|
(365,313
|
)
|
|
$
|
1.18
|
|
Warrants
outstanding at March 31, 2018
|
|
|
6,169,497
|
|
|
$
|
1.50
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
Canceled
|
|
|
-
|
|
|
$
|
-
|
|
Expired
|
|
|
(617,000
|
)
|
|
$
|
1.47
|
|
Warrants
outstanding at December 31, 2018
|
|
|
5,552,497
|
|
|
$
|
1.50
|
|
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
NOTE 8 – COMMITMENTS AND CONTINGENCIES
Litigation
In the ordinary course of business, we may be or have been involved
in legal proceedings from time to time. Below is a description of
all legal proceedings we were involved in during the nine months
ended December 31, 2018.
●
|
On
November 1, 2017, we filed a lawsuit in the Fourth Judicial
District Court for Utah County, State of Utah, Wealth Generators,
LLC, v. Evan Cabral, Daniel Lopez, John Legarreta, Johnathan Lopez,
Julian Kuschner, Nick Gomez, Luke Shulla, Nestor Velazquez,
Christopher Terry, Isis De La Torre, Alex Morton, Ivan Briongos,
Brandon Boyd, and International Markets Live Ltd. d/b/a
iMarketslive, Civil No. 170401615, alleging corporate espionage and
misappropriation of corporate information. The lawsuit alleges that
International Markets Live Ltd., dba iMarketslive, conspired with a
number of individuals affiliated with Wealth Generators to steal
our confidential information, intellectual property, and trade
secrets. On September 27, 2018, the court issued its ruling
granting in part and denying in part our motion for preliminary
injunction. The court found that Wealth Generators will likely
succeed on its claim that John Legarreta is bound by the
confidentiality provision of the Company's policies and procedures;
that we will suffer irreparable harm if Legarreta is allowed to use
the information; that restricting Legarreta's use of such
information is not contrary to public policy; and that potential
harm to us by Legarreta's use of such information outweighs any
potential harm caused by prohibiting Legarreta's use of the
information. We are currently in settlement discussions regarding
this matter.
|
●
|
In
February 2018, we received a subpoena from the United States
Commodity Futures Trading Commission (“CFTC”). We
complied with the terms of the subpoena, negotiated a resolution of
this matter with the CFTC staff, and a final order was issued on
September 14, 2018. Under the order, we are not admitting or
denying any of the allegations, will pay a fine of $150,000, and
have agreed not to act as an unregistered Commodities Trading
Advisor in the future. As of December 31, 2018 we have paid $60,000
to CFTC and the remaining unpaid balance has been included in
Accounts Payable and Accrued Liabilities on our consolidated
balance sheet.
|
●
|
Jim
Westphal filed a wage claim against Kuvera, LLC (at the time named
Wealth Generators, LLC), in the United States District Court for
the District of Utah, Central Division (Case No. 2:18-cv-00080) in
the amount of $6,500 plus liquidated damages. Mr. Westphal is
claiming unpaid overtime wages. We contend that Mr. Westphal was an
independent contractor, hired on a limited basis to perform
software services, and is accordingly not entitled to overtime
payments under the Fair Labor Standards Act. Moreover, Mr. Westphal
never provided the promised software pursuant to the parties’
agreement. We filed a counterclaim on July 12, 2018, seeking
damages of approximately $20,000 and demanding a jury trial. In
December 2018 the parties settled the matter with a joint motion.
As a result of the settlement we paid Mr. Westphal $1,500 and the
case was dismissed.
|
NOTE 9 – ACQUISITION
On July 20, 2018, we entered into a Purchase Agreement with United
Games Marketing LLC, a Utah limited liability company, to purchase
its wholly owned subsidiaries United Games, LLC and United League,
LLC for 50,000,000 shares of our common stock. United Games, LLC
and United League, LLC provide distributor marketing back-office and
commission tools and online sports gaming experience for users of
their applications distributed through their networks of affiliates
therefore we expect significant synergies to exist as a result of
combining operations.
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018
(Unaudited)
The
transaction was accounted for as a business combination using the
acquisition method of accounting in accordance with the FASB (ASC
Topic 805). The following table summarizes the purchase accounting
for the fair value of the assets acquired and liabilities assumed
at the date of the acquisition and the gain on bargain purchase
which resulted from the fair value of the intangible assets
acquired exceeding the fair value of our common stock given as
consideration. The initial accounting for the business combination
is currently incomplete, therefore all amounts presented below are
provisional and subject to final review and
adjustment:
Cash
|
|
$
|
3,740
|
|
Receivables
|
|
|
361,345
|
|
Intangible
assets (see Note 2)
|
|
|
3,150,000
|
|
Total
assets acquired
|
|
|
3,515,085
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
|
409,803
|
|
Total
liabilities assumed
|
|
|
409,803
|
|
|
|
|
|
|
Net
assets acquired
|
|
|
3,105,282
|
|
|
|
|
|
|
Consideration
|
|
|
1,100,000
|
|
|
|
|
|
|
Gain on
bargain purchase
|
|
$
|
2,005,282
|
|
United
Games, LLC and United League, LLC recorded combined revenue of
$912,163 and a combined net loss of $55,687 since the July 20, 2018
acquisition date, which were included in our consolidated statement
of operations for the nine months ended December 31,
2018.
The
table below represents the pro forma revenue and net income (loss)
for the three and nine months ended December 31, 2018 and 2017,
assuming the acquisition had occurred on April 1, 2017, pursuant to
ASC Subtopic 805-10-50. This pro forma information does not purport
to represent what the actual results of our operations would have
been had the acquisition occurred on this date nor does it purport
to predict the results of operations for future
periods:
|
|
Three months
ended
December 31,
|
|
|
Nine months ended
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Revenues
|
|
$
|
6,998,654
|
|
|
$
|
4,535,491
|
|
|
$
|
21,768,049
|
|
|
$
|
14,621,592
|
|
Net
(loss)
|
|
$
|
(348,863
|
)
|
|
$
|
(7,710,557
|
)
|
|
$
|
(1,217,837
|
)
|
|
$
|
(14,161,648
|
)
|
Loss
per common share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.01
|
)
|
NOTE 10 – SUBSEQUENT EVENTS
In
January 2019 we entered into a Convertible Promissory Note and
received proceeds of $138,000. The note incurs interest at 12% per
annum and has a maturity date of April 11, 2020.
In
January 2019 we donated 3,000,000 shares of our common stock to
Triton Funds, LLC.
In
February 2019 we entered into a Convertible Promissory Note and
received proceeds of $243,000. The note incurs interest at 12% per
annum and has a maturity date of August 6, 2019. In accordance with
the terms of the note we issued 22,500,000 shares of common stock
(the “Returnable Shares”) to the note holder as a
commitment fee, provided, however, the Returnable Shares must be
returned to us if the Note is fully repaid and satisfied prior to
the date which is one hundred eighty days following the issue
date.
On
March 6, 2019, we entered into a joint venture agreement with AI
Data Consulting LLC and Freedom Enterprise LLC under which the
parties will operate a joint venture acquiring, reselling, and
operating high-speed computer processing equipment. Under the terms
of that agreement, we issued an aggregate of 400,000,000 shares of
our common stock to those two entities, all of which are subject to
forfeiture if the joint venture does not reach certain milestones
established in the agreement.
In accordance with ASC Topic 855, Subsequent Events, we have
evaluated subsequent events through the date of this filing and
have determined that there are no additional subsequent events that
require disclosure.
PART II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution
The
following table sets forth the estimated expenses payable by the
Registrant in connection with the offering (excluding underwriting
discounts and commissions):
Nature of Expense
|
Amount(1)
|
SEC
registration fee
|
$ 152
|
Transfer
agent’s, and registrars’ fees and
expenses
|
2,000
|
Accounting
fees and expenses
|
10,000
|
Legal
fees and expenses
|
15,000
|
Miscellaneous
|
2,848
|
Total
|
$30,000
|
_______________
(1) All
amounts except SEC registration fee are estimates.
Item 14. Indemnification of Directors and Officers
Section
78.7502 of the Nevada Revised Statures and “Article
VII—Indemnification of Officers, Directors, and Others”
of the Registrant’s amended and restated articles of
incorporation provide for indemnification of the Registrant’s
directors and officers in a variety of circumstances, which may
include liabilities under the Securities Act of 1933, as
amended.
Insofar
as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling
persons pursuant to the foregoing provisions, the Registrant has
been informed that in the opinion of the SEC such indemnification
is contrary to public policy as expressed in the Securities Act,
and therefore, is unenforceable. See “Item 17.
Undertakings.”
Item 15. Recent Sales Unregistered Securities
During
the year ended March 31, 2018, we issued 267,127,500 shares of
common stock for net proceeds of $2,495,338. We issued 125,000
shares of common stock with a value of $7,500 for a one-year
consulting agreement, 80,000,000 shares of common stock with a
value of $2,256,000 for a 15-year license agreement, and 94,250,333
shares of common stock with a value of $6,719,734 for consulting
and service agreements; of the value of the shares issued for
services and the license agreement $6,846,060 was recorded as
expense, $3,555 was recorded as a prepaid asset, and $2,133,620 was
recorded as a long-term license agreement during the year ended
March 31, 2018. We also issued 239,575,884 shares of our common
stock in settlement of debt, wherein accrued liabilities,
principal, accrued interest, and derivative liabilities were
extinguished in the amounts of $435,892, $2,348,606, $20,696, and
$38,557, respectively, and we recognized a loss on the settlement
of debt in the amount of $3,186,394 in the statement of operations
for the year ended March 31, 2018. In conjunction with the shares
issued for the settlement of debt, a gain of $413,012 related to
the period prior to the reverse acquisition with Wealth Generators
was excluded from the statement of operations. As a result of the
reverse acquisition, we issued 1,358,670,942 shares of common
stock. During the year ended March 31, 2018, we entered into an
equity distribution agreement that provides for cash advances up to
$5,000,000 in exchange for shares of our common stock, to be
fulfilled at our request. Pursuant to that agreement, we issued
4,273,504 shares of common stock as a commitment fee, recorded a
liability of $250,000 for future commitment fees to be paid, and
paid cash of $15,000 for due diligence costs. As a result, common
stock increased $4,274 and additional paid in capital decreased by
$269,274 to offset any proceeds from future equity transactions
resulting from the agreement. During the year ended March 31, 2018,
we cancelled 250,000 shares of common stock and 1,300 shares of
treasury stock, resulting in a decrease in common stock of $251, a
decrease in additional paid in capital of $8,338, and a decrease in
treasury stock of $8,589.
In
conjunction with the sale of common stock during the year ended
March 31, 2018, we provided a guarantee to certain individuals such
that we would issue additional shares of our common stock if the
average closing price of our common stock fell below $0.02 per
share on the 20 days preceding the 18-month anniversary of the date
the shares were originally sold. As a result of this guarantee we
have recorded $626,388 in accounts payable and accrued liabilities
on our balance sheet as of March 31, 2018.
During
the year ended March 31, 2017, we issued 10,670,840 shares of
common stock in exchange for $157,500 of cash proceeds. We issued
6,072,200 shares of common stock with a value of $31,775 for legal
and consulting services, of which $18,390 was for current year
services and $173,647 was for services incurred in previous
periods, therefore we recorded a gain on settlement of debt for
$160,262. We issued 21,069,580 and 400,000 shares of stock valued
at $983,735 and $25,800 for compensation and director fees,
respectively, of which $536,575 was for current year services and
$472,960 was for amounts previously accrued. We also issued
72,709,924 shares of common stock in settlement of debt, wherein
principal, accrued interest, and derivative liabilities were
extinguished in the amounts of $1,994,362, $414,160, and $128,490,
respectively, and we recognized a gain on the settlement of debt in
the amount of $2,163,813. We also wrote off $250,000 worth of
Common Stock Subscription Receivable to Additional Paid in Capital
during the year ended March 31, 2017, due to the amounts being
uncollectible.
During the six months ended September 30, 2018, we issued
50,000,000 shares of common stock for the acquisition of United
Games, LLC and United League, LLC. We also issued 1,000,000 shares
of common stock, valued at $10,000 based on the market date on the
day of issuance, to an employee for compensation, which is subject
to forfeiture if the employee is not in good standing six months
after the date of issuance. Also during the six months ended
September 30, 2018, we repurchased 7,000,000 shares of common stock
for $91,000.
On
December 29, 2018, we issued 3,000,000 shares of our common stock
to TRITON FUNDS LLC as a donation as agreed in the Common Stock
Purchase Agreement with TRITON FUNDS LP.
On
January 11, 2019, we entered into a convertible promissory note in
the amount of $138,000, with Power Up Lending Group, Ltd. and
received proceeds of $138,000. The note incurs interest at 12% per
annum and has a maturity date of April 11, 2020.
In
February 2019, we entered into a securities purchase agreement and
convertible promissory note in the amount of $270,000, with Labrys
Fund, LP and received proceeds of $243,000. The note incurs
interest at 12% per annum and has a maturity date of August 6,
2019. In accordance with the terms of the note, we issued
22,500,000 shares of common stock to the note holder as a
commitment fee, provided,
however, these shares must
be returned to us if the note is fully repaid and satisfied prior
to the date that is 180 days following the issue date.
On
March 6, 2019, we entered into a joint venture agreement with AI
Data Consulting LLC and Freedom Enterprise LLC under which the
parties will operate a joint venture acquiring, reselling, and
operating high-speed computer processing equipment. Under the terms
of that agreement, we issued an aggregate of 400,000,000 shares of
our common stock to those two entities, all of which are subject to
forfeiture if the joint venture does not reach certain milestones
established in the agreement.
The
securities represented by each of the transactions described above
were issued in reliance on the exemption from registration provided
in Section 4(a)(2) of the Securities Act of 1933, as amended, for
transactions not involving any public offering. Each of the
investors is either an “accredited investor” as defined
in Rule 501(a) of Regulation D or a sophisticated investor able to
bear the risks of the investment. Each investor confirmed the
foregoing and acknowledged that the securities must be acquired and
held for investment. All certificates evidencing the shares of
common stock on conversion of the notes, issuances under the
restricted stock grants, or upon the exercise of the warrants will
bear a restrictive legend. No underwriter participated in the offer
and sale of these securities, and no commission or other
remuneration was paid or given directly or indirectly in connection
therewith.
Item 16. Exhibits and Financial Statement Schedules
Exhibit Number*
|
|
Title of Document
|
|
Location
|
|
|
|
|
|
Item 2
|
|
Plan
of Acquisition, Reorganization, Arrangement, Liquidation or
Succession
|
|
|
2.01
|
|
Contribution
Agreement between Investview, Inc., Wealth Generators, LLC,
and the members of Wealth Generators, LLC dated March 31,
2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed April 6,
2017
|
|
|
|
|
|
Item 3
|
|
Articles
of Incorporation and Bylaws
|
|
|
3.01
|
|
Articles of
Incorporation
|
|
Incorporated
by reference to the Form 10SB12G filed August 12, 1999
|
|
|
|
|
|
3.02
|
|
Articles of
Amendments to the Articles of Incorporation
|
|
Incorporated
by reference to the Form 10SB12G filed August 12, 1999
|
|
|
|
|
|
3.03
|
|
Bylaws
|
|
Incorporated
by reference to the Form 10SB12G filed August 12, 1999
|
|
|
|
|
|
3.04
|
|
Amendment to
Articles of Incorporation or by-laws
|
|
Incorporated
by reference to the Current Report on Form 8-K filed February 15,
2007
|
|
|
|
|
|
3.05
|
|
Certificate of
Change filed pursuant to NRS 78.209
|
|
Incorporated
by reference to the Current Report on Form 8-K filed April 6,
2012
|
|
|
|
|
|
3.06
|
|
Articles of Merger
filed pursuant to NRS 92.A.200
|
|
Incorporated
by reference to the Current Report on Form 8-K filed April 6,
2012
|
|
|
|
|
|
3.07
|
|
Certificate of
Amendment to Articles of Incorporation
|
|
Incorporated
by reference to the Definitive Information Statement filed December
20, 2017
|
|
|
|
|
|
Item 4
|
|
Instruments
Defining the Rights of Security Holders, including
indentures
|
|
|
4.01
|
|
Common
Stock Specimen
|
|
Incorporated
by reference to the Registration Statement on Form S-1 filed
January 12, 2018
|
|
|
|
|
|
Item 5
|
|
Opinion
re Legality
|
|
|
5.01
|
|
Opinion
of Michael Best & Friedrich LLP
|
|
This
filing.
|
|
|
|
|
|
Item 10
|
|
Material
Contracts
|
|
|
|
|
|
|
|
10.01
|
|
Form of
Common Stock Purchase Warrant dated July 7, 2011
|
|
Incorporated
by reference to the Current Report on Form 8-K filed July 13,
2011
|
|
|
|
|
|
10.02
|
|
Form of
Common Stock Purchase Warrant – August 2012
|
|
Incorporated
by reference to the Current Report on Form 8-K filed August 20,
2012
|
|
|
|
|
|
10.03
|
|
2012
Incentive Stock Plan**
|
|
Incorporated
by reference to the Registration Statement on Form S-8 filed July
25, 2012
|
|
|
|
|
|
10.04
|
|
Form of
Common Stock Purchase Warrant issued to Allied Global Ventures
LLC
|
|
Incorporated by
reference to the Current Report on Form 8-K filed October 8,
2013
|
|
|
|
|
|
10.05
|
|
Form of
Common Stock Purchase Warrant
|
|
Incorporated by
reference to the Current Report on Form 8-K filed June 11,
2014
|
|
|
|
|
|
10.06
|
|
Form of
Common Stock Purchase Warrant – September 30,
2014
|
|
Incorporated by
reference to the Current Report on Form 8-K filed October 7,
2014
|
|
|
|
|
|
10.22
|
|
Form of
Conversion Agreement dated June 6, 2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed June 12,
2017
|
|
|
|
|
|
10.23
|
|
Agreement entered
into with CTB Rise International Inc. dated June 7,
2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed June 12,
2017
|
|
|
|
|
|
10.24
|
|
Founder
Employment Agreement between Investview, Inc. and Ryan Smith,
entered October 10, 2017**
|
|
Incorporated
by reference to the Current Report on Form 8-K filed October 13,
2017
|
|
|
|
|
|
10.25
|
|
Founder
Employment Agreement between Investview, Inc. and Annette Raynor,
entered October 10, 2017**
|
|
Incorporated
by reference to the Current Report on Form 8-K filed October 13,
2017
|
|
|
|
|
|
10.26
|
|
Founder
Employment Agreement between Investview, Inc. and Chad Miller,
entered October 10, 2017**
|
|
Incorporated
by reference to the Current Report on Form 8-K filed October 13,
2017
|
|
|
|
|
|
10.27
|
|
Founder
Employment Agreement between Investview, Inc. and Mario Romano,
entered October 10, 2017**
|
|
Incorporated
by reference to the Current Report on Form 8-K filed October 13,
2017
|
|
|
|
|
|
10.28
|
|
Founder
Revenue Agreement among Investview, Inc. and Chad Miller, Annette
Raynor, Mario Romano, and Ryan Smith**
|
|
Incorporated
by reference to the Current Report on Form 8-K filed October 13,
2017
|
|
|
|
|
|
10.29
|
|
Contribution and
Exchange Agreement between Investview, Inc. and HODO-mania, Inc.,
entered October 20, 2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed October 27,
2017
|
|
|
|
|
|
10.30
|
|
Product
Contribution Agreement between Investview, Inc. and Priam
Technologies, Inc., entered November 13, 2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed November 15,
2017
|
|
|
|
|
|
10.31
|
|
Exclusive License
Agreement between Investview, Inc. and Binnacle Research Marketing,
Inc., entered November 13, 2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed November 15,
2017
|
|
|
|
|
|
10.32
|
|
Product
Contribution Agreement between Investview, Inc. and WestMyn
Technology Services, Inc., entered November 13, 2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed November 15,
2017
|
|
|
|
|
|
10.33
|
|
Securities
Purchase Agreement between InvestView, Inc., and D-Beta One EQ,
Ltd., entered December 6, 2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed December 13,
2017
|
|
|
|
|
|
10.34
|
|
Registration
Rights Agreement between InvestView, Inc., and D-Beta One EQ, Ltd.,
entered December 6, 2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed December 13,
2017
|
|
|
|
|
|
10.35
|
|
Standby
Equity Distribution Agreement between InvestView, Inc., and YAII
PN, Ltd., entered December 6, 2017
|
|
Incorporated
by reference to the Current Report on Form 8-K filed December 13,
2017
|
|
|
|
|
|
10.36
|
|
Purchase Agreement between United Marketing, LLC
and Investview, Inc., entered July 20,
2018
|
|
Incorporated
by reference from Current Report on Form 8-K filed July 25,
2018
|
|
|
|
|
|
10.37
|
|
Product
Contribution Agreement between Investview, Inc. and WestMyn
Technology Services, Inc., entered May 1, 2018
|
|
Incorporated
by reference from the Quarterly Report on Form 10-Q/A for the
quarter ended June 30, 2018, filed September 5,
2018
|
|
|
|
|
|
10.38
|
|
Capital
Crypto Mining Agreement between Investview, Inc. and WestMyn
Technology Services, Inc., entered May 1, 2018
|
|
Incorporated
by reference from the Quarterly Report on Form 10-Q/A for the
quarter ended June 30, 2018, filed September 5,
2018
|
|
|
|
|
|
10.39
|
|
Master
Services Agreement between Investview, Inc., its assigns, and
BYOBitcoin LLC
|
|
Incorporated
by reference from Current Report on Form 8-K filed
September 25, 2018
|
|
|
|
|
|
10.41
|
|
Stock
Buyback Letter Agreement between Investview, Inc. and Yorkville
Advisors Global, LP and its subsidiaries dated September 13,
2018
|
|
Incorporated
by reference from Current Report on Form 8-K filed
September 26, 2018
|
|
|
|
|
|
10.42
|
|
Common
Stock Purchase Agreement between Investview, Inc. and TRITON FUNDS,
LP., entered December 29, 2018
|
|
Incorporated
by reference to the Current Report on Form 8-K filed January 7,
2019
|
|
|
|
|
|
10.43
|
|
Registration Rights
Agreement between Investview, Inc. and TRITON FUNDS, LP., entered
December 29, 2018
|
|
Incorporated
by reference to the Current Report on Form 8-K filed January 7,
2019
|
|
|
|
|
|
10.44
|
|
Share
Donation Agreement between Investview, Inc. and TRITON FUNDS, LP,
Ltd., entered December 29, 2018
|
|
Incorporated
by reference to the Current Report on Form 8-K filed January 7,
2019
|
|
|
|
|
|
10.45
|
|
Joint
Venture Agreement among Investview, Inc. and AI Data Consulting,
LLC, and Freedom Enterprise, LLC
|
|
Incorporated
by reference to the Current Report on Form 8-K/A filed March 8,
2019
|
|
|
|
|
|
10.46
|
|
Amended
Common Stock Purchase Agreement between Investview, Inc. and TRITON
FUNDS LP entered March 22, 2019
|
|
Incorporated
by reference to the Current Report on Form 8-K filed March 26,
2019
|
|
|
|
|
|
10.47
|
|
Form of
Kuvera, LLC Crypto Mining Agreement
|
|
This
filing
|
|
|
|
|
|
Item 21
|
|
Subsidiaries
of the Registrant
|
|
|
21.01
|
|
Schedule of
Subsidiaries
|
|
Incorporated
by reference to Amendment No. 2 to the Registration Statement on
Form S-1/A filed March 11, 2019
|
|
|
|
|
|
Item 23
|
|
Consents
of Experts and Counsel
|
|
|
|
|
Consent
of Haynie & Company
|
|
This
filing.
|
|
|
|
|
|
|
|
Consent
of Michael Best & Friedrich LLP
|
|
Included
in exhibit 5.01.
|
|
|
|
|
|
Item 24
|
|
Power
of Attorney
|
|
|
24.01
|
|
Power
of Attorney
|
|
See
signature page to this filing.
|
|
|
|
|
|
Item 101
|
|
Interactive
Data Files***
|
|
|
101.INS
|
|
XBRL
Instance Document
|
|
Incorporated
by reference to Amendment No. 2 to the Registration Statement on
Form S-1/A filed March 11, 2019
|
|
|
|
|
|
101.SCH
|
|
XBRL
Taxonomy Extension Schema
|
|
Incorporated
by reference to Amendment No. 2 to the Registration Statement on
Form S-1/A filed March 11, 2019
|
|
|
|
|
|
101.CAL
|
|
XBRL
Taxonomy Extension Calculation Linkbase
|
|
Incorporated
by reference to Amendment No. 2 to the Registration Statement on
Form S-1/A filed March 11, 2019
|
|
|
|
|
|
101.DEF
|
|
XBRL
Taxonomy Extension Definition Linkbase
|
|
Incorporated
by reference to Amendment No. 2 to the Registration Statement on
Form S-1/A filed March 11, 2019
|
|
|
|
|
|
101.LAB
|
|
XBRL
Taxonomy Extension Label Linkbase
|
|
Incorporated
by reference to Amendment No. 2 to the Registration Statement on
Form S-1/A filed March 11, 2019
|
|
|
|
|
|
101.PRE
|
|
XBRL
Taxonomy Extension Presentation Linkbase
|
|
Incorporated
by reference to Amendment No. 2 to the Registration Statement on
Form S-1/A filed March 11, 2019
|
_______________________
*
All exhibits are
numbered with the number preceding the decimal indicating the
applicable SEC reference number in Item 601 and the number
following the decimal indicating the sequence of the particular
document. Omitted numbers in the sequence refer to documents
previously filed as an exhibit.
**
Identifies each
management contract or compensatory plan or arrangement required to
be filed as an exhibit, as required by Item 15(a)(3) of Form
10-K.
***
Users of this data
are advised that, pursuant to Rule 406T of Regulation S-T, these
interactive data files are deemed not filed or part of a
registration statement or Annual Report for purposes of Sections 11
or 12 of the Securities Act of 1933 or Section 18 of the Exchange
Act of 1934 and otherwise are not subject to
liability.
Item 17. Undertakings
The
undersigned registrant hereby undertakes:
(1)
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
|
|
|
|
|
(i)
|
to
include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
|
|
|
|
|
(ii)
|
to
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the “Calculation of Registration Fee” table in the
effective registration statement; and
|
|
(iii)
|
to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
|
|
|
|
(2)
|
That,
for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment will be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be
deemed to be the initial bona fide offering thereof.
|
|
|
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
|
|
|
|
|
(4)
|
That,
for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying
on Rule 430B or other than prospectuses filed in reliance on Rule
430A, will be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first
use.
|
|
|
|
|
(5)
|
That,
for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:
|
|
|
|
|
|
The
undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used
to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities
to such purchaser:
|
|
|
|
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
|
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
|
|
|
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
|
Insofar
as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant
to the requirements of Securities Act of 1933, the registrant has
duly caused this amendment no. 3 to registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in Denver, Colorado, on the 28th day of March,
2019.
|
INVESTVIEW, INC.
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
Ryan Smith
|
|
|
Ryan
Smith
|
|
|
Chief
Executive Officer
|
|
|
|
|
By:
|
/s/
William C. Kosoff
|
|
|
William
C. Kosoff
|
|
|
Acting
Chief Financial Officer
|
|
|
|
POWER OF ATTORNEY
Pursuant
to the requirements of the Securities Act of 1933, this amendment
no. 3 to registration statement has been signed below by the
following persons in the capacities and on the dates
indicated.
Name and Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Ryan Smith
|
|
|
|
|
Ryan
Smith
|
|
Chief
Executive Officer and Director
|
|
03/28/19
|
|
|
|
|
|
/s/
Ryan Smith
|
|
|
|
|
attorney-in-fact
|
|
|
|
|
Annette
Raynor
|
|
Chief
Operating Officer and Director
|
|
03/28/19
|
|
|
|
|
|
/s/
Ryan Smith
|
|
|
|
|
attorney-in-fact
|
|
|
|
|
Chad
Miller
|
|
Director
|
|
03/28/19
|
|
|
|
|
|
|
|
|
|
|
/s/
William C. Kosoff
|
|
|
|
|
William
C. Kosoff
|
|
Acting
Chief Financial Officer and Principal Accounting
Officer
|
|
03/28/19
|