U.S. Securities and Exchange Commission
Washington, DC 20549
FORM
FOR THE QUARTERLY PERIOD ENDED
For the transition period from__________________ to _______________________.
Commission
File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
Issuer’s
telephone number:
Securities registered pursuant to Section 12(b) of the Act: None
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| ☒ | No | ☐ |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
| ☒ | No | ☐ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
reporting company | ||
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
| Yes | ☐ | ☒ |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of August 12, 2021, there were shares of common stock, $0.001 par value, outstanding.
INVESTVIEW, INC.
Form 10-Q for the Three Months Ended June 30, 2021
Table of Contents
| 2 |
PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
INVESTVIEW, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30 | March 31, | |||||||
| 2021 | 2021 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash, current | ||||||||
| Prepaid assets | ||||||||
| Receivables | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Fixed assets, net | ||||||||
| Other assets: | ||||||||
| Restricted cash, long term | ||||||||
| Other restricted assets, long term | ||||||||
| Operating lease right-of-use asset | ||||||||
| Deposits | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Payroll liabilities | ||||||||
| Customer advance | ||||||||
| Deferred revenue | ||||||||
| Derivative liability | ||||||||
| Dividend liability | ||||||||
| Operating lease liability, current | ||||||||
| Related party payables, net of discounts, current | ||||||||
| Debt, net of discounts, current | ||||||||
| Total current liabilities | ||||||||
| Operating lease liability, long term | ||||||||
| Related party payables, net of discounts, long term | ||||||||
| Debt, net of discounts, long term | ||||||||
| Total long term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, par value: $; shares authorized, and issued and outstanding as of June 30, 2021 and March 31, 2021, respectively | ||||||||
| Common stock, par value $; shares authorized; and shares issued and outstanding as of June 30, 2021 and March 31, 2021, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
INVESTVIEW, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND OTHER COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| Three Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Revenue: | ||||||||
| Subscription revenue, net of refunds, incentives, credits, and chargebacks | $ | $ | ||||||
| Mining revenue | ||||||||
| Cryptocurrency revenue | - | |||||||
| Fee revenue | - | |||||||
| Total revenue, net | ||||||||
| Operating costs and expenses: | ||||||||
| Cost of sales and service | ||||||||
| Commissions | ||||||||
| Selling and marketing | ||||||||
| Salary and related | ||||||||
| Professional fees | ||||||||
| General and administrative | ||||||||
| Total operating costs and expenses | ||||||||
| Net income (loss) from operations | ( | ) | ||||||
| Other income (expense): | ||||||||
| Gain (loss) on debt extinguishment | ||||||||
| Gain (loss) on fair value of derivative liability | ||||||||
| Realized gain (loss) on cryptocurrency | ( | ) | ||||||
| Interest expense | ( | ) | ( | ) | ||||
| Interest expense, related parties | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ||||
| Income (loss) before income taxes | ( | ) | ||||||
| Income tax expense | ( | ) | ( | ) | ||||
| Net income (loss) | ( | ) | ||||||
| Dividends on Preferred Stock | ( | ) | - | |||||
| Net income (loss) applicable to common shareholders | $ | $ | ( | ) | ||||
| Other comprehensive income (loss), net of tax: | ||||||||
| Foreign currency translation adjustments | $ | ( | ) | $ | ||||
| Total other comprehensive income (loss) | ( | ) | ||||||
| Comprehensive income (loss) | $ | $ | ( | ) | ||||
| Basic income (loss) per common share | $ | $ | ( | ) | ||||
| Diluted income (loss) per common share | $ | $ | ( | ) | ||||
| Basic weighted average number of common shares outstanding | ||||||||
| Diluted weighted average number of common shares outstanding | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 4 |
INVESTVIEW, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
THREE MONTHS ENDED JUNE 30, 2021 AND 2020
(Unaudited)
| Accumulated | ||||||||||||||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||||||||||||||
| Preferred stock | Common stock | Paid in | Comprehensive | Accumulated | Noncontrolling | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income (Loss) | Deficit | Interest | Total | ||||||||||||||||||||||||||||
| Balance, March 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||
| Common stock issued for services | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Share repurchase | - | - | ( | ) | ( | ) | ( | ) | - | - | - | ( | ) | |||||||||||||||||||||||
| Beneficial conversion feature | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net income (loss) | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||
| Balance, June 30, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||
| Balance, March 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||
| Preferred stock issued for cash | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Preferred stock issued for cryptocurrency | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Common stock issued for services and compensation | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Common stock issued for warrant exercise | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Derivative liability recorded for warrants issued with preferred stock | - | - | - | - | ( | ) | - | - | - | ( | ) | |||||||||||||||||||||||||
| Derivative liability extinguished for warrants exercised | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Dividends | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||||||||
| Net income (loss) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Balance, June 30, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
INVESTVIEW INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of debt discount | ||||||||
| Amortization of intangible assets | - | |||||||
| Stock issued for services and compensation | ||||||||
| Lease cost, net of repayment | ||||||||
| (Gain) loss on debt extinguishment | ( | ) | ( | ) | ||||
| (Gain) loss on fair value of derivative liability | ( | ) | ( | ) | ||||
| Realized (gain) loss on cryptocurrency | ( | ) | ||||||
| Changes in operating assets and liabilities: | - | |||||||
| Receivables | ( | ) | ( | ) | ||||
| Prepaid assets | ( | ) | ( | ) | ||||
| Other current assets | ( | ) | ||||||
| Deposits | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
| Customer advance | ( | ) | ||||||
| Deferred revenue | ||||||||
| Other liabilities | - | |||||||
| Accrued interest | ||||||||
| Accrued interest, related parties | ||||||||
| Net cash provided by (used in) operating activities | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Cash paid for fixed assets | ( | ) | ( | ) | ||||
| Net cash provided by (used in) investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from related party payables | ||||||||
| Repayments for related party payables | ( | ) | ( | ) | ||||
| Proceeds from debt | - | |||||||
| Repayments for debt | ( | ) | ( | ) | ||||
| Payments for share repurchase | - | ( | ) | |||||
| Dividends paid | ( | ) | - | |||||
| Proceeds from the sale of preferred stock | - | |||||||
| Proceeds from the exercise of warrants | - | |||||||
| Net cash provided by (used in) financing activities | ||||||||
| Effect of exchange rate translation on cash | ( | ) | - | |||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | ||||||||
| Cash, cash equivalents, and restricted cash - beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash - end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Prepaid assets reclassified to fixed assets | $ | $ | ||||||
| Beneficial conversion feature | $ | $ | ||||||
| Derivative liability recorded for warrants issued | $ | $ | ||||||
| Derivative liability extinguished with warrant exercise | $ | $ | ||||||
| Preferred shares issued in exchange for cryptocurrency | $ | $ | ||||||
| Dividends declared | $ | $ | ||||||
| Dividends paid with cryptocurrency | $ | $ | ||||||
| Debt and related party debt extinguished in exchange for cryptocurrency | $ | $ | ||||||
| Related party debt extinguished in exchange for cryptocurrency | $ | $ | ||||||
| Initial right of use asset and lease liability | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Organization
Investview,
Inc. (“we”, “our”, the “Company”) was incorporated on
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 % of the outstanding securities of Wealth Generators in exchange for an aggregate of 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 $
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 shares of our common stock.
On November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European Union.
On December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities Trading Advisor, Commodity Pool Operator, and approved for over-the-counter FOREX advisory services.
On January 17, 2019, we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SAFETek, LLC, a Utah Limited Liability Company.
On March 26, 2019, we established Kuvera (N.I.) LTD, a Northern Ireland entity as a wholly owned subsidiary of Kuvera, LLC, however, to date the subsidiary has had no operations.
Effective July 22, 2019, we renamed our non-operating wholly owned subsidiary Razor Data, LLC to APEX Tek, LLC, a Utah Limited Liability Company.
On January 11, 2021, we filed a name change for Kuvera, LLC to iGenius, LLC (“iGenius”) and on February 2, 2021, we filed a name change for Kuvera (N.I.) Limited to iGenius Global LTD.
On March 18, 2021, we established Investview Financial Group Holdings, LLC and Investview MTS, LLC as wholly owned subsidiaries of Investview, Inc. On March 22, 2021, Investview, Inc. entered into Securities Purchase Agreements to purchase 100% of the equity interests of SSA Technologies LLC, an entity that owns and operates LevelX Capital LLC, a FINRA registered broker-dealer and LevelX Advisors LLC, a registered investment advisor, as well as the operating assets, intellectual property rights and overall business of MPower Trading Systems LLC, the developer and owner of Prodigio, a proprietary software-based trading platform with applications in the brokerage industry. Investview Financial Group Holdings, LLC will own 100% of SSA Technologies LLC and Investview MTS, LLC will own 100% of the operating assets, intellectual property rights, and overall business of MPower Trading Systems LLC. Both transactions are expected to close between the third and fourth quarters of 2021. To date the subsidiaries have had no operations.
| 7 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
Nature of Business
Our portfolio of wholly owned subsidiaries operates in the financial technology (FINTECH) sector, leveraging the latest innovations in technology for financial education, services and interactive tools. Our subsidiaries focus on delivering products that serve individuals around the world. From personal money management to advancements in blockchain technologies, our companies are forging a path for individuals to take advantage of financial and technical innovations. Each of our subsidiaries are designed to work in tandem with one another generating a worldwide presence.
Our largest subsidiary is iGenius, LLC which delivers multiple products through a subscription-based multi-level marketing model. iGenius, 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. In addition to our education subscriptions, through our agreement with a third party, iGenius is able to sell cryptocurrency packages to its global customer base. Through our multi-level marketing model, we reward our distributors with commissions under a standard bonus plan that allows for discretionary bonuses based on performance.
Kuvera France S.A.S. was our entity in France and iGenius Global LTD is our entity in Northern Ireland. These entities were responsible for distributing our products and services throughout the European Union. Kuvera France S.A.S. was closed in June of 2021.
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. SAFE is committed to bringing innovative trade methodologies, strategies and algorithms for all worldwide financial markets.
SAFETek, LLC operates in the high-speed processing computing space and utilizes next generation processing technologies to focus on artificial intelligence, data mining and blockchain technologies. SAFETek, LLC’s processing operation can be 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. 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. SAFETek has deployed a large-scale processing operation that is currently dedicated to high speed BTC mining operations. SAFETek has recently established a research, development and repair facility dedicated to repairing, improving and refurbishing high speed mining processors.
Apex Tek, LLC was the entity responsible for sales of the APEX program. Launched in September 2019, the APEX product pack included hardware, firmware, software and insurance that was purchased and then leased to SAFETek LLC. We have currently ceased selling the APEX package and bought back all leases associated with the business. There are currently no operations or activity in Apex Tek, LLC.
United Games, LLC, United League, LLC, and Investment Tools & Training, LLC have had no operations and will be restructured or eliminated. Investview Financial Group Holdings, LLC, and Investview MTS, LLC, will be used in conjunction with our anticipated acquisitions of SSA Technologies LLC, an entity that owns and operates LevelX Capital LLC, a FINRA registered broker-dealer and LevelX Advisors LLC, a registered investment advisor, as well as MPower Trading Systems LLC, the developer and owner of Prodigio, a proprietary software-based trading platform with applications in the brokerage industry, respectively.
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 months ended June 30, 2021, are not necessarily indicative of the operating results that may be expected for the year ending March 31, 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the March 31, 2021 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended March 31, 2021.
| 8 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
Principles of Consolidation
The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC, Kuvera France S.A.S., Apex Tek, LLC, SAFETek, LLC, S.A.F.E. Management, LLC, United Games, LLC, United League, LLC, Investment Tools & Training, LLC, iGenius Global LTD, Investview Financial Group Holdings, LLC, and Investview MTS, LLC. All intercompany transactions and balances have been eliminated in consolidation.
Financial Statement Reclassification
Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.
Use of Estimates
The preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Foreign Exchange
We have consolidated the accounts of Kuvera France S.A.S. into our consolidated financial statements. The operations of Kuvera France S.A.S. are conducted in France and its functional currency is the Euro.
The financial statements of Kuvera France S.A.S. are prepared using their 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. into USD at the following balance sheet dates.
| June
30, 2020 | March
31, 2021 | |||||||
| Euro to USD | ||||||||
The following rates were used to translate the accounts of Kuvera France S.A.S. into USD for the following operating periods.
| Three Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Euro to USD | ||||||||
Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows.
| June
30, 2021 | March 31, 2021 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash, current | ||||||||
| Restricted cash, long term | ||||||||
| Total cash, cash equivalents, and restricted cash shown on the statement of cash flows | $ | $ | ||||||
| 9 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
Amount included in restricted cash represent funds required to be held in an escrow account by a contractual agreement and will be used for paying dividends to our Series B Preferred Stockholders.
Fixed Assets
Fixed assets are stated at cost and depreciated using the straight-line method over their estimated useful lives. When retired or otherwise disposed, the carrying value and accumulated depreciation of the fixed asset is removed from its respective accounts and the net difference less any amount realized from disposition is reflected in earnings. Expenditures for maintenance and repairs which do not extend the useful lives of the related assets are expensed as incurred.
Fixed assets were made up of the following at each balance sheet date:
| Estimated
Useful Life (years) | June
30, 2021 | March 31, 2021 | ||||||||
| Furniture, fixtures, and equipment | $ | $ | ||||||||
| Computer equipment | ||||||||||
| Leasehold improvements | ||||||||||
| Data processing equipment | ||||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||||
| Net book value | $ | $ | ||||||||
Total
depreciation expense for the three months ended June 30, 2021 and 2020, was $
Long-Lived Assets – Intangible Assets & License Agreement
We account for our cryptocurrencies, intangible assets and long-term license agreement in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-30 requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Our cryptocurrencies are deemed to have an indefinite useful life; therefore, amounts are not amortized, but rather are assessed for impairment as further discussed in our impairment policy. Under ASC Subtopic 350-30 any intangible asset with a useful life is required to be amortized over that life and the useful life is to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.
We
hold cryptocurrency-denominated assets and include them in our consolidated balance sheet as other assets. The value of our cryptocurrencies
as of June 30, 2021 and March 31, 2021 were $
In
June of 2018 we purchased United Games, LLC and United League, LLC and recorded the transaction as a business combination. Intangible
assets acquired in the business combination were recorded at fair value on the date of acquisition and were being amortized on a straight-line
method over their estimated useful lives. The intangible assets were impaired during the year ended March 31, 2021 due to a lack of recoverability,
therefore we had
| 10 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
Impairment of Long-Lived Assets
We have adopted ASC Subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or when the historical cost carrying value of an asset may no longer be appropriate. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.
We evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.
During
the three months ended June 30, 2021 and 2020
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on our principal or, in the absence of a principal, most advantageous market for the specific asset or liability.
U.S. generally accepted accounting principles provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:
| Level 1: | Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access. | |
| Level 2: | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including: |
| - | quoted prices for similar assets or liabilities in active markets; | |
| - | quoted prices for identical or similar assets or liabilities in markets that are not active; | |
| - | inputs other than quoted prices that are observable for the asset or liability; and | |
| - | inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| Level 3: | Inputs that are unobservable and reflect management’s own assumptions about the inputs market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). |
Our financial instruments consist of cash, accounts receivable, accounts payable, and debt. We have determined that the book value of our outstanding financial instruments as of June 30, 2021 and March 31, 2021, approximates the fair value due to their short-term nature or interest rates that approximate prevailing market rates.
Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of June 30, 2021:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
| Derivative liability | $ | $ | $ | $ | ||||||||||||
| Total Liabilities | $ | $ | $ | $ | ||||||||||||
| 11 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2021:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
| Derivative liability | $ | $ | $ | $ | ||||||||||||
| Total Liabilities | $ | $ | $ | $ | ||||||||||||
Revenue Recognition
Subscription Revenue
The
majority of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription
revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and
recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over
a fixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for
the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial period to first time
subscription customers, during which a full refund can be requested if a customer does not wish to continue with 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. As of June 30, 2021 and March 31, 2021 and 2020 our deferred
revenues were $
Mining Revenue
Through our wholly owned subsidiary, SAFETek, LLC, we leased equipment under a sales-type lease through June of 2020. In June of 2020 we cancelled all leases and purchased all of the rights and obligations under the leases, which included obtaining ownership of all equipment. We use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation for mining, we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of our mining activities.
Cryptocurrency Revenue
We
generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with third-party suppliers. The various
packages include different amounts of coin with differing rates of returns and terms and, in some cases, include a product protection
option that allows the purchaser to protect their initial purchase price.
We
recognize cryptocurrency revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract
with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to
arrange for the third-parties to provide coin and protection (if applicable) to our customers and payment is received from our customers
at the time of order placement. All customers are given two weeks to request a refund, therefore we record a customer advance on our
balance sheet upon receipt of payment. After the two weeks have passed from order placement, we request our third-party suppliers to
deliver coin and protection (if applicable), at which time we recognize revenue and the amounts due to our suppliers on our books. As
of June 30, 2021 and March 31, 2021 our customer advances related to cryptocurrency revenue were $
Fee Revenue
We generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we receive payment for such advisory fees in the month following recognition.
| 12 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
Revenue generated for the three months ended June 30, 2021 is as follows:
| Subscription
Revenue | Cryptocurrency Revenue | Mining Revenue | Fee Revenue | Total | ||||||||||||||||
| Gross billings/receipts | $ | $ | $ | $ | $ | |||||||||||||||
| Refunds, incentives, credits, and chargebacks | ( | ) | ( | ) | ||||||||||||||||
| Amounts paid to supplier | ( | ) | ( | ) | ||||||||||||||||
| Net revenue | $ | $ | $ | $ | $ | |||||||||||||||
For
the three months ended June 30, 2021 foreign and domestic revenues were approximately $
Revenue generated for the three months ended June 30, 2020 is as follows:
| Subscription
Revenue | Cryptocurrency Revenue | Mining Revenue | Fee Revenue | Total | ||||||||||||||||
| Gross billings/receipts | $ | $ | $ | $ | $ | |||||||||||||||
| Refunds, incentives, credits, and chargebacks | ( | ) | ( | ) | ||||||||||||||||
| Amounts paid to supplier | ||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | $ | |||||||||||||||
For
the three months ended June 30, 2020 foreign and domestic revenues were approximately $
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. Diluted earnings (loss) per share reflect the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.
| June
30, 2021 | June
30, 2020 | |||||||
| Options to purchase common stock | ||||||||
| Warrants to purchase common stock | ||||||||
| Notes convertible into common stock | ||||||||
| Totals | ||||||||
Lease Obligation
We determine if an arrangement is a lease at inception. Operating leases are included in the operating lease right-of-use asset account, the operating lease liability, current account, and the operating lease liability, long term account in our balance sheet. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.
| 13 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For leases in which the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have elected to not apply the recognition requirements of ASC 842 to short-term leases (leases with terms of twelve months or less). Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term. We have elected the practical expedient and will not separate non-lease components from lease components and will instead account for each separate lease component and non-lease component associated with the lease components as a single lease component.
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. Under current GAAP, there are five accounting models for convertible debt instruments. ASU 2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (2) a convertible debt instrument was issued at a substantial premium. Additionally, for convertible debt instruments with substantial premiums accounted for as paid-in capital, the FASB decided to add disclosures about (1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium amount recorded as paid-in capital. ASU 2020-06 will be effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of the adoption of this accounting pronouncement to its financial statements.
We have noted no other recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.
NOTE 4 – RELATED-PARTY TRANSACTIONS
Our related-party payables consisted of the following:
June 30,2021 | March 31, 2021 | |||||||
| Convertible Promissory Note entered into on 4/27/20, net of debt discount of $ | $ | $ | ||||||
| Convertible Promissory Note entered into on 5/27/20, net of debt discount of $ | ||||||||
| Convertible Promissory Note entered into on 11/9/20, net of debt discount of $ | ||||||||
| Accounts payable – related party [4] | ||||||||
| Notes for APEX lease buyback [5] | - | |||||||
| Promissory note entered into on 12/15/20, net of debt discount of $ | ||||||||
| Convertible Promissory Note entered into on 3/30/21, net of debt discount of $ | ||||||||
| Working Capital Promissory Note entered into on 3/22/21 | - | |||||||
| Total related-party debt | ||||||||
| Less: Current portion | ( | ) | ( | ) | ||||
| Related-party debt, long term | $ | $ | ||||||
| [1] |
| 14 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
| [2] | |
| [3] | |
| [4] | |
| [5] | |
| [6] | |
| [7] | |
| [8] |
| 15 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
In
addition to the above related party debt transactions that were outstanding as of June 30, 2021 and March 31, 2021, during the three
months ended June 30, 2021 we obtained a short-term advance of $
In
addition to the above-mentioned related-party lending arrangements, during the three months ended June 30, 2021 we sold cryptocurrency
packages to related parties for gross proceeds of $
NOTE 5 – DEBT
Our debt consisted of the following:
| June 30, 2021 | March 31, 2021 | |||||||
| Short-term advance received on 8/31/18 [1] | $ | $ | ||||||
| Note issued under the Paycheck Protection Program on 4/17/20 [2] | ||||||||
| Loan with the U.S. Small Business Administration dated 4/19/20 [3] | ||||||||
| Long term notes for APEX lease buyback [3] | ||||||||
| Total debt | ||||||||
| Less: Current portion [12] | ( | ) | ( | ) | ||||
| Debt, long term portion | $ | $ | ||||||
| [1] | |
| [2] | |
| [3] | |
| [4] |
NOTE 6 – DERIVATIVE LIABILITY
During the three months ended June 30, 2021, we had the following activity in our derivative liability account:
| Debt | Warrants | Total | ||||||||||
| Derivative liability at March 31, 2021 | $ | $ | $ | |||||||||
| Derivative liability recorded on new instruments | ||||||||||||
| Derivative liability reduced by warrant exercise (see NOTE 7) | ( | ) | ( | ) | ||||||||
| (Gain) loss on fair value | ( | ) | ( | ) | ||||||||
| Derivative liability at December 31, 2020 | $ | $ | $ | |||||||||
| 16 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
We use the binomial option pricing model to estimate fair value for those instruments convertible into common stock, at inception, at conversion or settlement date, and at each reporting date. During the three months ended June 30, 2021, the assumptions used in our binomial option pricing model were in the following range:
| Debt | Warrants | |||||||
| Risk free interest rate | n/a | |||||||
| Expected life in years | n/a | |||||||
| Expected volatility | n/a |
NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
We are authorized to issue up to shares of preferred stock with a par value of $ and our board of directors has the authority to issue one or more classes of preferred stock with rights senior to those of common stock and to determine the rights, privileges, and preferences of that preferred stock.
During
the year ended March 31, 2020 our Board of Directors approved the designation of
As of March 31, 2020, we had preferred stock issued or outstanding.
During
the year ended March 31, 2021 we commenced a security offering to sell a total of units at $ per unit (“Unit Offering”),
such that each unit consisted of:
During
the three months ended June 30, 2021 we sold units for a total of $
Preferred Stock Dividends
During
the three months ended June 30, 2021 we recorded $
Common Stock Transactions
During
the three months ended June 30, 2021, we issued shares of common stock for services and compensation and recognized a total
of $ in stock-based compensation based on grant date fair values and vesting terms of the awards granted in the current and prior
periods. We also issued shares of common stock as a result of warrants exercised, resulting in proceeds of $
As of June 30, 2021 and March 31, 2021, we had shares of common stock issued and outstanding, respectively.
Warrants
During
the three months ended June 30, 2021 we granted warrants in conjunction with our Unit Offering. The warrants, valued at $
| 17 |
INVESTVIEW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
(Unaudited)
Transactions involving our warrants are summarized as follows:
| Weighted | ||||||||
| Number of | Average | |||||||
| Shares | Exercise Price | |||||||
| Warrants outstanding at March 31, 2021 | $ | |||||||
| Granted | $ | |||||||
| Canceled/Expired | $ | |||||||
| Exercised | ( | ) | $ | |||||
| Warrants outstanding at June 30, 2021 | $ | |||||||
Details of our warrants outstanding as of June 30, 2021 is as follows:
| Exercise Price | Warrants Outstanding | Warrants Exercisable | Weighted Average Contractual Life (Years) | |||||||||||
| $ | ||||||||||||||
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. During the three months ended June 30, 2021 we were not involved in any material legal proceedings.
NOTE 10 – OPERATING LEASE
In
August 2019 we entered an operating lease for office space in Eatontown, New Jersey (the “Eatontown Lease”), in September
2019 we entered an operating lease for office space in Kaysville, Utah (the “Kaysville Lease”), and in May 2021 we entered
an operating lease for office space in Conroe, Texas (the “Conroe Lease”). We have the option to extend the
Operating
lease expense was $
Future minimum lease payments under non-cancellable leases as of June 30, 2021were as follows:
| Remainder of 2021 | $ | |||
| 2022 | ||||
| 2023 | ||||
| Total | ||||
| Less: Interest | ( | ) | ||
| Present value of lease liability | ||||
| Operating lease liability, current [1] | ( | ) | ||
| Operating lease liability, long term | $ |
| [1] |
NOTE 11 – SUBSEQUENT EVENTS
In accordance with ASC Topic 855, Subsequent Events, we have evaluated subsequent events through the date of this filing and have determined that there are no subsequent events that require disclosure.
| 18 |
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. When the words “believe,” “expect,” “plan,” “project,” “estimate,” and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on management’s current beliefs and assumptions and information currently available to management, and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Information concerning factors that could cause our actual results to differ materially from these forward-looking statements can be found in our periodic reports filed with the Securities and Exchange Commission (“SEC”). The forward-looking statements included in this report are made only as of the date of this report. We disclaim any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise.
Business Overview
Investview, Inc. (“we”, “our”, the “Company”) is a publicly traded diversified financial technology company with the symbol OTCQB:INVU. We operate through our family of wholly owned subsidiaries to provide dynamic financial education, diversified investment tools, global market research, self-directed brokerage services, institutional trade execution services, innovative advisory services (RIA, CTA), codeless algorithmic trading technologies, crypto mining, optimization, and repair solutions, and adaptive blockchain technologies.
Investview, Inc., under the leadership of CEO Joseph Cammarata, has spent the majority of fiscal 2021 establishing the company as a FINTECH provider of services. The Company’s objective is to provide a suite of offerings that advance financial technology initiatives in the personal finance, global markets, high speed processing and decentralized finance.
Our largest subsidiary is iGenius, LLC which delivers financial education, technology and research to individuals, as well as cryptocurrency packages, through a subscription-based multi-level marketing model. iGenius, 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 and research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage their financial situation. iGenius operations are located at Salt Lake City, Utah and more information can be found at igeniusglobal.com.
Kuvera France S.A.S. was our entity in France and iGenius Global LTD is our entity in Northern Ireland. These entities were responsible for distributing our products and services throughout the European Union. Kuvera France S.A.S. was closed in June of 2021.
S.A.F.E. Management, LLC (“SAFE”) 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. SAFE is committed to bringing innovative trade methodologies, strategies and algorithms for all worldwide financial markets. SAFE is a state registered investment adviser and Commodity Trading Advisor with operations are located in our Eatontown, New Jersey Corporate Finance location. More information regarding S.A.F.E. Management, LLC can be found at safeadvglobal.com. SAFE will be joining the Investview Financial Group Holdings companies as we finalize the acquisition of SSA Technologies and MPower.
SAFETek, LLC (“SAFETek”) operates in the high-speed processing computing space and utilizes next generation processing technologies to focus on artificial intelligence, data mining and blockchain technologies. SAFETek’s processing operation can be 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. 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. SAFETek has deployed a large-scale processing operation that is currently dedicated to high speed BTC mining operations. SAFETek has recently established a Texas based research, development and repair facility dedicated to repairing, improving and refurbishing high speed mining processors.
| 19 |
Apex Tek, LLC was the entity responsible for sales of the APEX program. Launched in September 2019, the APEX product pack included hardware, firmware, software and insurance that was purchased and then leased to SAFETek, LLC. We have currently ceased selling the APEX package and bought back all leases associated with the business. There are currently no operations or activity in Apex Tek, LLC.
United Games, LLC, United League, LLC, and Investment Tools & Training, LLC have had no operations and will be restructured or eliminated. Investview Financial Group Holdings, LLC, and Investview MTS, LLC, will be used in conjunction with our anticipated acquisitions of SSA Technologies LLC, an entity that owns and operates LevelX Capital LLC, a FINRA registered broker-dealer and LevelX Advisors LLC, a registered investment advisor, as well as MPower Trading Systems LLC, the developer and owner of Prodigio, a proprietary software-based trading platform with applications in the brokerage industry, respectively.
Results of Operations
Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020
Revenues
We recorded net revenue of $25,626,565 for the three months ended June 30, 2021, which was an increase of $20,036,749 or 658%, from the prior period net revenue of $5,589,816. The increase can be explained by an increase of Bitcoin value, a 114% increase in active Bitcoin miners, the introduction of NDAU, the world’s first adaptive digital currency product and improvements to our iGenius product offerings and distribution in new markets.
Our gross billings increased by 506%, or $29,872,681, to $35,779,200 in the three months ended June 30, 2021, versus $5,906,519 in the three months ended June 30, 2020, as a result of the activity noted above.
Operating Costs and Expenses
We recorded operating costs and expenses of $15,089,115 for the three months ended June 30, 2021, which was an increase of $6,492,501, or 76%, from the prior period’s operating costs and expenses of $8,596,614. The increase can be explained, in general, by the growth of our operations and increases in our revenue. Specifically, there was an increase in our cost of sales and service of $1,273,828, or 140%, from $912,324 for the three months ended June 30, 2020, to $2,186,152 for the three months ended June 30, 2021, and there was an increase in our commissions of $5,408,590, or 160%, from $3,373,831 for the three months ended June 30, 2020, to $8,782,421 for the three months ended June 30, 2021. The increase in cost of sales and service was a result of mining costs incurred in the current period as it related to the increase in mining revenue and the increase in commissions was a result of the increase in subscription revenue.
Other Income and Expenses
We recorded other income (expense) of $(1,761,603) for the three months ended June 30, 2021, which was a difference of $144,401, or 8%, from the prior period other income (expense) of $(1,906,004). The change is due a decrease in interest expense from $2,247,098 in the three months ended June 30, 2020 compared to interest expense of $5,934 in the three months ended June 30, 2021, offset by the $1,374,456 difference between recording a realized gain on cryptocurrency of $91,486 for the three months ended June 30, 2020 versus recording a realized loss on cryptocurrency of $1,282,970 for the three months ended June 30, 2021. The decrease in the interest expense from the prior period was due to our efforts to restructure debt and payoff high-interest borrowings and the change in the realized gain (loss) on cryptocurrency was simply due to the change in market value of cryptocurrency from the point at which we obtain the digital coins versus when we use the digital coins.
Liquidity and Capital Resources
During the three months ended June 30, 2021, we recorded net income of $8,567,823, generated $6,764,171 in cash through our operating activities, and generated $2,289,982 through financing activities. We used this cash to fund operations and fund the purchase of $61,578 worth of fixed assets. As a result, our cash, cash equivalents, and restricted cash increased by $8,991,767 to $15,653,594 as compared to $6,661,827 at the beginning of the fiscal year.
As of June 30, 2021, our current assets exceeded our current liabilities to result in working capital of $12,359,439, which was an increase from the working capital of $2,005,538 as of March 31, 2021.
| 20 |
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 months ended June 30, 2021, are not necessarily indicative of the operating results that may be expected for the year ending March 31, 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the March 31, 2021 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended March 31, 2021.
Principles of Consolidation
The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC, Kuvera France S.A.S., Apex Tek, LLC, SAFETek, LLC, S.A.F.E. Management, LLC, United Games, LLC, United League, LLC, Investment Tools & Training, LLC, iGenius Global LTD, Investview Financial Group Holdings, LLC, and Investview MTS, LLC. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
Subscription Revenue
The majority of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial period to first time subscription customers, during which a full refund can be requested if a customer does not wish to continue with 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. As of June 30, 2021 and March 31, 2021 and 2020 our deferred revenues were $2,235,980 and $1,561,188, respectively.
Mining Revenue
Through our wholly owned subsidiary, SAFETek, LLC, we leased equipment under a sales-type lease through June of 2020. In June of 2020 we cancelled all leases and purchased all of the rights and obligations under the leases, which included obtaining ownership of all equipment. We use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation for mining, we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of our mining activities.
Cryptocurrency Revenue
We generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with third-party suppliers. The various packages include different amounts of coin with differing rates of returns and terms and, in some cases, include a product protection option that allows the purchaser to protect their initial purchase price. The protection allows the purchaser to obtain 50% of their purchase price at five years or 100% of their purchase price at ten years. Both the coin and the protection option are delivered by third-party suppliers.
We recognize cryptocurrency revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to arrange for the third-parties to provide coin and protection (if applicable) to our customers and payment is received from our customers at the time of order placement. All customers are given two weeks to request a refund, therefore we record a customer advance on our balance sheet upon receipt of payment. After the two weeks have passed from order placement, we request our third-party suppliers to deliver coin and protection (if applicable), at which time we recognize revenue and the amounts due to our suppliers on our books. As of June 30, 2021 and March 31, 2021 our customer advances related to cryptocurrency revenue were $430,097 and $2,067,313, respectively.
| 21 |
Fee Revenue
We generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we receive payment for such advisory fees in the month following recognition.
Revenue generated for the three months ended June 30, 2021 is as follows:
| Subscription Revenue | Cryptocurrency Revenue | Mining Revenue | Fee Revenue | Total | ||||||||||||||||
| Gross billings/receipts | $ | 11,532,061 | $ | 15,875,577 | $ | 8,371,562 | $ | - | $ | 35,779,200 | ||||||||||
| Refunds, incentives, credits, and chargebacks | (682,364 | ) | - | - | - | (682,364 | ) | |||||||||||||
| Amounts paid to supplier | - | (9,470,271 | ) | - | - | (9,470,271 | ) | |||||||||||||
| Net revenue | $ | 10,849,697 | $ | 6,405,306 | $ | 8,371,562 | $ | - | $ | 25,626,565 | ||||||||||
For the three months ended June 30, 2021 foreign and domestic revenues were approximately $11.8 million and $13.8 million, respectively.
Revenue generated for the three months ended June 30, 2020 is as follows:
| Subscription Revenue | Cryptocurrency Revenue | Mining Revenue | Fee Revenue | Total | ||||||||||||||||
| Gross billings/receipts | $ | 4,559,960 | $ | - | $ | 1,342,546 | $ | 4,013 | $ | 5,906,519 | ||||||||||
| Refunds, incentives, credits, and chargebacks | (316,703 | ) | - | - | - | (316,703 | ) | |||||||||||||
| Amounts paid to supplier | - | - | - | - | - | |||||||||||||||
| Net revenue | $ | 4,243,257 | $ | - | $ | 1,342,546 | $ | 4,013 | $ | 5,589,816 | ||||||||||
For the three months ended June 30, 2020 foreign and domestic revenues were approximately $4.0 million and $1.6 million, respectively.
Recently Issued Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. Under current GAAP, there are five accounting models for convertible debt instruments. ASU 2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (2) a convertible debt instrument was issued at a substantial premium. Additionally, for convertible debt instruments with substantial premiums accounted for as paid-in capital, the FASB decided to add disclosures about (1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium amount recorded as paid-in capital. ASU 2020-06 will be effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of the adoption of this accounting pronouncement to its financial statements.
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We have noted no other recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity, or capital expenditures.
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this item.
ITEM 4 – CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Our Chief Executive Officer and Chief Accounting Officer have concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure controls and procedures were effective.
Changes in Internal Controls
There were no changes in our internal controls over financial reporting during the fiscal quarter ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
In the ordinary course of business, we may be or have been involved in legal proceedings from time to time; however we do not anticipate that the outcome of such matters and disputes will materially affect our financial statements.
None of our directors, officers, or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.
ITEM 1.A – RISK FACTORS
N/A
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
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ITEM 3 – DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 – MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 – OTHER INFORMATION
None.
ITEM 6 – EXHIBITS
The following exhibits are filed as a part of this report:
| Exhibit Number* |
Title of Document | Location | ||
| Item 10 | Material Contracts | |||
| 10.79 | Promissory Note in the amount of $1,000,000 with Joe Cammarata, dated January 30, 2020, First Amendment to the $1,000,000 Promissory Note dated January 31, 2020 and Second Amendment to the $1,000,000 Promissory Note dated January 30, 2021 | Incorporated by reference to the periodic report on Form 10-Q filed February 26, 2021 | ||
| 10.88 | Second Amendment to Amended and Restated Securities Purchase Agreement dated as of November 9, 2020 | Incorporated by reference to the Current Report on Form 8K filed on June 2, 2021 | ||
| 10.89 | Employment Agreement between Investview, Inc., and Ralph R. Valvano, effective as of June 7, 2021 | Incorporated by reference to the Current Report on Form 8K filed on June 9, 2021 | ||
| 10.90 | Amendment to Employment Agreement between Investview, Inc., and Jayme McWidener, effective as of June 7, 2021 | Incorporated by reference to the Current Report on Form 8K filed on June 9, 2021 | ||
| Item 31 | Rule 13a-14(a)/15d-14(a) Certifications | |||
| 31.01 | Certification of Principal Executive Officer Pursuant to Rule 13a-14 | This filing. | ||
| 31.02 | Certification of Principal Financial Officer Pursuant to Rule 13a-14 | This filing. | ||
| Item 32 | Section 1350 Certifications | |||
| 32.01 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | This filing. | ||
| 32.02 | Certification of Acting Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | This filing. | ||
| Item 101*** | Interactive Data File | |||
| 101.INS | XBRL Instance Document | This filing. | ||
| 101.SCH | XBRL Taxonomy Extension Schema | This filing. | ||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | This filing. | ||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | This filing. | ||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | This filing. | ||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | This filing. |
| * | 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. |
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SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INVESTVIEW, INC. | ||
| Dated: August 13, 2021 | By: | /s/ Joseph Cammarata |
| Joseph Cammarata | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Dated: August 13, 2021 | By: | /s/ Jayme L. McWidener |
| Jayme L. McWidener | ||
| Chief Accounting Officer | ||
| (Principal Financial Officer and Accounting Officer) | ||
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