NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Organization
Investview,
Inc. (“we”, “our”, the “Company”) was incorporated on January 30, 1946, under the laws
of the state of Utah as the Uintah Mountain Copper Mining Company. In January 2005 the Company changed domicile to Nevada, and
changed its name to Voxpath Holding, Inc. In September of 2006 the Company merged The Retirement Solution Inc. through a Share
Purchase Agreement into Voxpath Holdings, Inc. and then changed its name to TheRetirementSolution.Com, Inc. In October 2008 the
Company changed its name to Global Investor Services, Inc., before changing its name to Investview, Inc., on March 27, 2012.
On
March 31, 2017, we entered into a Contribution Agreement with the members of Wealth Generators, LLC, a limited liability company
(“Wealth Generators”), pursuant to which the Wealth Generators members agreed to contribute 100% of the outstanding
securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of our common stock. The closing of the Contribution
Agreement was effective April 1, 2017, and Wealth Generators became our wholly owned subsidiary and the former members of Wealth
Generators became our stockholders and control the majority of our outstanding common stock.
On
June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former
members of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth
Generators and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption
of $419,139 in pre-merger liabilities.
On
February 28, 2018, we filed a name change for Wealth Generators, LLC to Kuvera, LLC (“Kuvera”) and on May 7, 2018
we established WealthGen Global, LLC as a Utah limited liability company and a wholly owned subsidiary of Investview, Inc.
On
July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase
its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock.
On
November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European
Union.
On
December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from
the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities
Trading Advisor, Commodity Pool Operator, and approved for over the counter FOREX advisory services.
On
January 17, 2019, we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SafeTek, LLC, a Utah Limited Liability
Company.
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.
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.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
Our
largest subsidiary is iGenius, LLC (formerly Kuvera LLC), which delivers financial education, technology and research to individuals
through a subscription-based 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.
Kuvera
France S.A.S. is our entity in France that distributes our 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. 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 net 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.
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.
United
Games, LLC, United League, LLC, Investment Tools & Training, LLC, and iGenius Global LTD have had no operations and will
be restructured or eliminated completely as we continue to streamline operations.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations
(Regulation S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. The results of operations for the nine months ended December 31, 2020, are not necessarily
indicative of the operating results that may be expected for the year ending March 31, 2021. These unaudited condensed consolidated
financial statements should be read in conjunction with the March 31, 2020 consolidated financial statements and notes thereto
included in our Annual Report on Form 10-K for the year ended March 31, 2020.
Principles
of Consolidation
The
consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC (formerly
Kuvera, LLC), Kuvera France S.A.S., Apex Tek, LLC (formerly Razor Data, LLC), SafeTek, LLC (formerly WealthGen Global, LLC), S.A.F.E.
Management, LLC, United Games, LLC, United League, LLC, Investment Tools & Training, LLC, and iGenius Global LTD (formerly
Kuvera (N.I.) LTD). Through March 31, 2019 we had determined that one affiliated entity, Kuvera LATAM S.A.S., which we previously
conducted business with, was a variable interest entity and we were the primary beneficiary of the entity’s activities,
which, at the time, were similar to those of Kuvera, LLC (now iGenius, LLC). As a result, through March 31, 2019 we had consolidated
the accounts of this variable interest entity into the consolidated financial statements. Further, because the Company did not
have any ownership interest in this variable interest entity, the Company had allocated the contributed capital in the variable
interest entity as a component of noncontrolling interest. As of April 1, 2019, Kuvera LATAM S.A.S. had no operations and
ceased to exist, therefore, as of that date, no consolidation of the entity was necessary and we recorded a gain on deconsolidation
of $53,739 to eliminate the intercompany account with Kuvera LATAM S.A.S. All intercompany transactions and balances have been
eliminated in consolidation.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
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.
Further, it should be noted that because
there is currently no specific definitive guidance under GAAP, or any alternative accounting framework, for the accounting for
cryptocurrencies recognized as revenue or held, we have exercised significant judgment in determining the appropriate accounting
treatment for our cryptocurrency transactions. In the event authoritative guidance is enacted by the FASB, we may be required
to change our policies, which could have an effect on our consolidated financial position and results from operations.
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.
|
|
December
31, 2020
|
|
|
March
31, 2020
|
|
Euro to USD
|
|
|
1.22160
|
|
|
|
1.10314
|
|
The
following rates were used to translate the accounts of Kuvera France S.A.S. into USD for the following operating periods.
|
|
Nine
Months Ended December 30,
|
|
|
|
2020
|
|
|
2019
|
|
Euro to USD
|
|
|
1.15480
|
|
|
|
1.11443
|
|
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.
|
|
December
31, 2020
|
|
|
March
31, 2020
|
|
Cash and cash equivalents
|
|
$
|
1,110,960
|
|
|
$
|
137,177
|
|
Restricted cash, current
|
|
|
180,550
|
|
|
|
-
|
|
Restricted
cash, long term
|
|
|
262,939
|
|
|
|
-
|
|
Total cash,
cash equivalents, and restricted cash shown on the statement of cash flows
|
|
$
|
1,554,449
|
|
|
$
|
137,177
|
|
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 Stock holders.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
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 statements of operations. As of December 31, 2020 and March 31, 2020
the fair value of our cryptocurrencies was $655,059 and $96,022, respectively. During the nine months ended December 31, 2020
we recorded $(27,582) and $458,037 as a total realized and unrealized gain (loss) on cryptocurrency, respectively. During the
nine months ended December 31, 2019 we recorded $(657) and $8,445 as a total realized and unrealized gain (loss) on cryptocurrency,
respectively. During the three months ended December 31, 2020 we recorded $(28,678) and $281,220 as a total realized and unrealized
gain (loss) on cryptocurrency, respectively. During the three months ended December 31, 2019 we recorded $10 and $(16,885) as
a total realized and unrealized gain (loss) on cryptocurrency, respectively.
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.
As
of December 31, 2020 fixed assets were made up of the following:
|
|
Estimated
|
|
|
|
|
|
|
Useful
|
|
|
|
|
|
|
Life
|
|
|
|
|
|
|
(years)
|
|
|
Value
|
|
Furniture, fixtures, and
equipment
|
|
|
10
|
|
|
$
|
12,792
|
|
Computer equipment
|
|
|
3
|
|
|
|
21,143
|
|
Data processing
equipment
|
|
|
3
|
|
|
|
7,684,627
|
|
|
|
|
|
|
|
|
7,718,562
|
|
Accumulated depreciation as of
December 31, 2020
|
|
|
|
|
|
|
(1,826,090
|
)
|
Net book value, December 31, 2020
|
|
|
|
|
|
$
|
5,892,472
|
|
Total
depreciation expense for the nine months ended December 31, 2020 and 2019, was $1,597,464 and $320,528, respectively.
Long-Lived
Assets – Intangible Assets & License Agreement
We
account for our intangible assets and long-term license agreement in accordance with ASC Subtopic 350-30, General Intangibles
Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic
350-30 requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net
assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Further, ASC Subtopic 350-30 requires
an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period to determine
whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is
changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life.
Costs of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.
In
June of 2017 we issued 80,000,000 shares of common stock with a value of $2,256,000 for a 15-year license agreement. Amortization
recognized for the nine months ended December 31, 2020 and 2019 was $0 and $113,315, respectively, and the long-term license agreement
was recorded at a net value of $0 as of December 31, 2020 and March 31, 2020 due to the asset being impaired as of March 31, 2020.
In
June of 2018 we purchased United Games, LLC and United League, LLC and recorded the transaction as a business combination. Intangible
assets acquired in the business combination were recorded at fair value on the date of acquisition and are being amortized on
a straight-line method over their estimated useful lives. As of December 31, 2020 intangible assets were made up of the following:
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
|
|
Estimated
|
|
|
|
|
|
|
Useful
|
|
|
|
|
|
|
Life
|
|
|
|
|
|
|
(years)
|
|
|
Value
|
|
FireFan mobile application
|
|
|
4
|
|
|
$
|
331,000
|
|
Back office software
|
|
|
10
|
|
|
|
408,000
|
|
Tradename/trademark - FireFan
|
|
|
5
|
|
|
|
248,000
|
|
Tradename/trademark
- United Games
|
|
|
0.45
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
991,000
|
|
Accumulated amortization as of
December 31, 2020
|
|
|
|
|
|
|
(428,573
|
)
|
Net book value, December 31, 2020
|
|
|
|
|
|
$
|
562,427
|
|
Amortization
expense for the nine months ended December 31, 2020 and 2019 was $130,455 and $213,182, respectively. Amortization expense is
expected to be as follows:
Remainder of 2021
|
|
$
|
42,694
|
|
Fiscal year ending March 31, 2022
|
|
|
173,150
|
|
Fiscal year ending March 31, 2023
|
|
|
173,150
|
|
Fiscal year ending March 31, 2024
|
|
|
32,589
|
|
Fiscal year ending March 31, 2025
|
|
|
6,148
|
|
Fiscal year
ending March 31, 2026 and beyond
|
|
|
134,696
|
|
|
|
$
|
562,427
|
|
Impairment
of Long-Lived Assets
We
have adopted ASC Subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived
assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable or when the historical cost carrying value
of an asset may no longer be appropriate. Events relating to recoverability may include significant unfavorable changes in business
conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.
We
evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including
eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an
impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.
During
the nine months ended December 31, 2020 we fully impaired data processing equipment that had a cost basis of $84,939 and we fully
impaired a computer that had a cost basis of $1,609 because the assets were no longer in use. The accumulated depreciation of
the assets at the time they were written off was $19,903, therefore we recognized impairment expense of $66,645 for the nine months
ended December 31, 2020. During the nine months ended December 31, 2019 we impaired the value of the customer contracts/relationships
originally acquired in our purchase of United Games, LLC and United League, LLC, therefore recognizing impairment expense of $627,452.
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:
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
|
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, 2020 and March 31, 2020, 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 December 31, 2020:
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Cryptocurrencies
|
|
$
|
655,059
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
655,059
|
|
Total Assets
|
|
$
|
655,059
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
655,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
41,390
|
|
|
$
|
41,390
|
|
Total Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
41,390
|
|
|
$
|
41,390
|
|
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, 2020:
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Cryptocurrencies
|
|
$
|
96,022
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
96,022
|
|
Total Assets
|
|
$
|
96,022
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
96,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
793,495
|
|
|
$
|
793,495
|
|
Total Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
793,495
|
|
|
$
|
793,495
|
|
Sale
and Leaseback
Through
our wholly-owned subsidiary, APEX Tex, LLC, we sold high powered data processing equipment (“APEX”) to our customers
and they leased the equipment back to SAFETek, LLC, another of our wholly-owned subsidiaries. We accounted for these transactions
under ASC 842-40 where the leaseback has been deemed a sales-type lease due to the lease term generally covering the entire economic
life of the equipment and our likelihood to purchase the asset at the end of the lease term. In accordance with ASC 842-40 we
recorded the data processing equipment as a fixed asset on our balance sheet and we accounted for the amounts received for the
equipment as a financial liability, in other liabilities on our balance sheet. Further, we recognized interest on the financial
liability over the term of the lease to ensure the financial liability equates to the total amounts to be paid over the life of
the lease.
On
June 30, 2020, we temporarily discontinued the APEX program to assess the delays, audit the transaction and determine our ability
to meet the lease commitments. The assessment took place in July and August and indicated we would not be able to meet the APEX
lease obligations and would be in default to the lease holders. In September, our board of directors voted to approve a buyback
program wherein all APEX purchasers were offered a 48-month promissory note to ensure a 125% return of their purchase price in
exchange for cancellation of the lease and our purchase of all rights and obligations under the lease. The buyback program also
ensured all APEX purchasers were able to purchase a protection plan from a third-party provider, wherein each purchaser could
protect their initial purchase price and obtain 50% of their APEX purchase price at five years or 100% of the APEX purchase price
at ten years. As a result of the buyback program we were able to enter into notes with third parties totaling $19,149,500 (see
NOTE 6) and notes with related parties of $237,720 (see NOTE 5) in exchange for $474,155 worth of customer advances on the APEX
leases and $22,889,331 of the net APEX lease liability (see table below). The exchange resulted in a gain on settlement of debt
of $117,805 with related parties, recorded as contributed capital (see NOTE 8) and a gain on settlement of debt of $3,858,461
with third parties, recorded on our income statement.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
During
the nine months ended December 31, 2020 we had the following activity related to our sale and leaseback transactions:
|
|
Total
Financial Liability
|
|
|
Contra-Liability
|
|
|
Net
Financial Liability
|
|
|
Current
[1]
|
|
|
Long
Term
|
|
Balance as of March 31, 2020
|
|
$
|
53,828,000
|
|
|
$
|
(38,535,336
|
)
|
|
$
|
15,292,664
|
|
|
$
|
11,407,200
|
|
|
$
|
3,885,464
|
|
Proceeds from sales of APEX
|
|
|
5,001,623
|
|
|
|
-
|
|
|
|
5,001,623
|
|
|
|
|
|
|
|
|
|
Interest recorded on financial liability
|
|
|
8,348,378
|
|
|
|
(8,348,378
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Payments made for leased equipment
|
|
|
(2,145,900
|
)
|
|
|
-
|
|
|
|
(2,145,900
|
)
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
-
|
|
|
|
4,740,944
|
|
|
|
4,740,944
|
|
|
|
|
|
|
|
|
|
Lease buyback
and cancellation
|
|
|
(65,032,101
|
)
|
|
|
42,142,770
|
|
|
|
(22,889,331
|
)
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2020
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
[1]
Represented lease payments that were to be made in the subsequent 12 months
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 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.
Mining
Revenue
Through
our wholly owned subsidiary, SAFETek, LLC, we lease equipment under a sales-type lease and use the equipment on blockchain networks
to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation
for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us.
Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor
do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately
granted to us as a result of our mining activities.
Fee
Revenue
We
generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and
Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration
specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract.
Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified
Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we
receive payment for such advisory fees in the month following recognition.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
Revenue
generated for the nine months ended December 31, 2020 is as follows:
|
|
Subscription
Revenue
|
|
|
Mining
Revenue
|
|
|
Fee
Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
14,205,328
|
|
|
$
|
7,863,649
|
|
|
$
|
10,675
|
|
|
$
|
22,079,652
|
|
Refunds, incentives,
credits, and chargebacks
|
|
|
(861,461
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(861,461
|
)
|
Net revenue
|
|
$
|
13,343,867
|
|
|
$
|
7,863,649
|
|
|
$
|
10,675
|
|
|
$
|
21,218,191
|
|
For
the nine months ended December 31, 2020 foreign and domestic revenues were approximately $12.6 million and $8.6 million, respectively.
Revenue
generated for the nine months ended December 31, 2019 is as follows:
|
|
Subscription
Revenue
|
|
|
Mining
Revenue
|
|
|
Fee
Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
21,214,747
|
|
|
$
|
380,871
|
|
|
$
|
9,486
|
|
|
$
|
21,605,104
|
|
Refunds, incentives,
credits, and chargebacks
|
|
|
(1,887,656
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,887,656
|
)
|
Net revenue
|
|
$
|
19,327,091
|
|
|
$
|
380,871
|
|
|
$
|
9,486
|
|
|
$
|
19,717,448
|
|
For
the nine months ended December 31, 2019 foreign and domestic revenues were approximately $18.3 million and $1.5 million, respectively.
Revenue
generated for the three months ended December 31, 2020 is as follows:
|
|
Subscription
Revenue
|
|
|
Mining
Revenue
|
|
|
Fee
Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
4,046,213
|
|
|
$
|
4,027,364
|
|
|
$
|
2,952
|
|
|
$
|
8,076,529
|
|
Refunds, incentives,
credits, and chargebacks
|
|
|
(201,491
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(201,491
|
)
|
Net revenue
|
|
$
|
3,844,722
|
|
|
$
|
4,027,364
|
|
|
$
|
2,952
|
|
|
$
|
7,875,038
|
|
For
the three months ended December 31, 2020 foreign and domestic revenues were approximately $7.4 million and $433,000, respectively.
Revenue
generated for the three months ended December 31, 2019 is as follows:
|
|
Subscription
Revenue
|
|
|
Mining
Revenue
|
|
|
Fee
Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
5,096,886
|
|
|
$
|
380,871
|
|
|
$
|
4,117
|
|
|
$
|
5,481,874
|
|
Refunds, incentives,
credits, and chargebacks
|
|
|
(518,263
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(518,263
|
)
|
Net revenue
|
|
$
|
4,578,623
|
|
|
$
|
380,871
|
|
|
$
|
4,117
|
|
|
$
|
4,963,611
|
|
For
the three months ended December 31, 2019 foreign and domestic revenues were approximately $4.3 million and $637,000, respectively.
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,
2020
|
|
|
December
31,
2019
|
|
Options to purchase common stock
|
|
|
-
|
|
|
|
-
|
|
Warrants to purchase common
stock
|
|
|
277,770
|
|
|
|
125,000
|
|
Notes convertible
into common stock
|
|
|
481,810,758
|
|
|
|
11,080,447
|
|
Totals
|
|
|
482,088,528
|
|
|
|
11,205,447
|
|
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
Lease
Obligation
We
determine if an arrangement is a lease at inception. Operating leases are included in the
operating lease right-of-use asset account, the operating lease liability, current account, and the operating lease liability,
long term account in our balance sheet. Right-of-use assets represent our right to use an underlying asset for the lease term
and lease liabilities represent our obligation to make lease payments arising from the lease.
Operating
lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over
the lease term. For leases in which the rate implicit in the lease is not readily determinable, we use our incremental borrowing
rate based on the information available at commencement date in determining the present value of lease payments. We
have elected to not apply the recognition requirements of ASC 842 to short-term leases (leases with terms of twelve months or
less). Lease terms include options to extend or terminate the lease when it is reasonably
certain that we will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis
over the lease term. We have elected the practical expedient and will not separate non-lease components from lease components
and will instead account for each separate lease component and non-lease component associated with the lease components
as a single lease component.
NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS
There
are no recently issued accounting pronouncements that the Company has not yet adopted that they believe are applicable or would
have a material impact on the financial statements of the Company.
NOTE
4 – GOING CONCERN AND LIQUIDITY
Our
financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates
the realization of assets and liquidation of liabilities in the normal course of business. We have incurred significant recurring
losses, which have resulted in an accumulated deficit of $50,855,326 as of December 31, 2020, along with a net loss of $4,375,768
for the nine months ended December 31, 2020. Additionally, as of December 31, 2020, we had a working capital deficit of $4,713,286.
These factors raise substantial doubt about our ability to continue as a going concern.
Historically
we have relied on increasing revenues and new debt and equity financing to pay for operational expenses and debt as it came due.
During the nine months ended December 31, 2020, we raised $1,405,300 in cash proceeds from new debt arrangements and raised $5,928,137
in cash proceeds from related parties. Additionally, net cash provided by operations was $1,669,219 for the nine months ended
December 31, 2020. Subsequent to December 31, 2020, we received gross proceeds of $432,475 in connection with our Unit
Offering (see NOTE 11). Additionally, subject to a Securities Purchase agreement entered into in April 2020 and amended in
November 2020, we have a commitment from a related party investor to purchase an additional $7.7 million in
promissory notes on or before August 31, 2021, subject to certain conditions.
On
January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International
Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread
of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of
public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue
to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the
Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst
other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic.
It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect
will be to the company.
During
the nine months ended December 31, 2020 COVID negatively impacted our distribution channel as all of our distributors were unable
to conduct in person meetings, trainings, or events. The distributors did hold on-line events, virtual meetings and ultimately
stabilized our subscription sales. Further, our APEX program, administered by APEX Tek, LLC, could not sustain operations nor
withstand the worldwide supply issues experienced by COVID. As a result, the Company was forced to permanently cancel the APEX
program. While SAFETek, LLC will continue to operate our digital mining operations, we have entered buy back agreements for each
of the APEX leases.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
During
the year ended March 31, 2020 we made significant strides and wide sweeping changes. While we believe they will be beneficial
to our bottom line, there is no assurance of this. Some of the concerns we face going forward will continue, including but not
limited to:
|
●
|
Supply
chain issues for Apex Tek, LLC and the sourcing of miners due to the worldwide COVID pandemic and manufacturing slow downs
caused us to permanently discontinue the APEX program and may leas to the closure of APEX Tek, LLC
|
|
|
|
|
●
|
SAFETek,
LLC operations not scaling according to projections with decreased output due to mining difficulty and operational cost
|
|
|
|
|
●
|
Regulatory
reform that could adversely impact the use and demand of digital currencies
|
|
|
|
|
●
|
The
recent Bitcoin (BTC) halving event that further reduced mining output in addition to the supply chain issues
|
While
our liabilities are larger than our assets it is important to note that we seek to further reduce our operating expense. The assets
we have acquired and will continue to seek out are those of technology, mobile apps, and human resources. These assets are not
easily defined on our balance sheet but represent our ability to carry out our objectives which we believe will ultimately lead
to positive cash flow, reduced debt and then profitability.
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,
2020
|
|
|
March
31,
2020
|
|
Short-term advances [1]
|
|
$
|
350,000
|
|
|
$
|
876,427
|
|
Promissory Note entered into on 1/30/20
[2]
|
|
|
1,183,606
|
|
|
|
1,033,333
|
|
Convertible Promissory Note entered
into on 4/27/20, net of debt discount of $1,211,720 as of December 31, 2020 [3]
|
|
|
88,280
|
|
|
|
-
|
|
Convertible Promissory Note entered
into on 5/27/20, net of debt discount of $657,869 as of December 31, 2020 [4]
|
|
|
42,131
|
|
|
|
-
|
|
Convertible Promissory Note entered
into on 11/9/20, net of debt discount of $1,280,440 and including $72,675 of accrued interest as of December 31, 2020 [5]
|
|
|
92,236
|
|
|
|
-
|
|
Accounts payable – related party
[6]
|
|
|
105,000
|
|
|
|
55,000
|
|
Notes for APEX lease buyback [7]
|
|
|
172,000
|
|
|
|
-
|
|
Promissory note
entered into on 12/15/20, net of debt discount of $438,175 [8]
|
|
|
141,825
|
|
|
|
-
|
|
Total related-party debt
|
|
|
2,175,078
|
|
|
|
1,964,760
|
|
Less: Current
portion [9]
|
|
|
(2,025,106
|
)
|
|
|
-
|
|
Related-party
debt, long term
|
|
$
|
149,972
|
|
|
$
|
1,964,760
|
|
[1]
|
We
periodically receive advances for operating funds from our current majority shareholders and other related parties, including
entities that are owned, controlled, or influenced by our owners or management. These advances are due on demand and are unsecured.
During the nine months ended December 31, 2020, we received $2,406,137 in cash proceeds from advances, incurred $76,649 in
interest expense on the advances, and repaid related parties $3,037,883.
|
|
|
[2]
|
We
entered into a $1,000,000 promissory note with Joseph Cammarata, our Chief Executive Officer, on January 30, 2020. The
note is collateralized by 62.5 million of our common shares. The term of the note was one year, which was amended on January
30, 2021 to have a due date of February 28, 2021, at which time the principal and interest of 20%, or $200,000 will be due.
During the nine months ended December 31, 2020 we recognized $150,273 of interest expense on the note.
|
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
[3]
|
On
April 27, 2020 we received proceeds of $1,300,000 from DBR Capital, LLC, an entity controlled by members of our Board of Directors,
and entered into a convertible promissory note. The note is secured by shares held by officers and majority shareholders
of the Company. The note
bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. Per the original
terms of the agreement the note was convertible into common stock at a conversion price of $0.01257 per share, which was amended
on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded a beneficial conversion feature
and debt discount of $1,300,000 (see NOTE 8). During the nine months ended December 31, 2020 we recognized $88,280 of the
debt discount into interest expense as well as expensed an additional $176,224 of interest expense on the note, all of which
was repaid during the period.
|
|
|
[4]
|
On
May 27, 2020 we received proceeds of $700,000 from DBR Capital, LLC, an entity controlled by members of our Board of Directors,
and entered into a convertible promissory note. The note is secured by shares held by officers and majority shareholders
of the Company. The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April
27, 2030. Per the original terms of the agreement the note was convertible into common stock at a conversion price of $0.01257
per share, which was amended on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded
a beneficial conversion feature and debt discount of $700,000 (see NOTE 8). During the nine months ended December 31, 2020
we recognized $42,131 of the debt discount into interest expense as well as expensed an additional $83,615 of interest expense
on the note, all of which was repaid during the period.
|
|
|
[5]
|
On
November 9, 2020 we received proceeds of $1,300,000 from DBR Capital, LLC, an entity controlled by members of our Board of
Directors, and entered into a convertible promissory note. The note is secured by shares held by officers and majority
shareholders of the Company. The note bears interest at 38.5% per annum, made up of a 25% interest rate per annum and
a facility fee of 13.5% per annum, payable monthly beginning February 1, 2021, and the principal is due and payable on April
27, 2030. Per the terms of the agreement the note is convertible into common stock at a conversion price of $0.007 per share.
At inception we recorded a beneficial conversion feature and debt discount of $1,300,000 (see NOTE 8). During the nine months
ended December 31, 2020 we recognized $19,560 of the debt discount into interest expense as well as expensed an additional
$72,675 of interest expense on the note, none of which was repaid during the period.
|
|
|
[6]
|
During
the nine months ended December 31, 2020 we paid $40,000 to an accounting firm owned by our Chief Financial Officer to reduce
amounts previously owed ($55,000 as of March 31, 2020). We also incurred $68,000 to reimburse DBR Capital, LLC, for amounts
paid on our behalf. The entire amount was repaid during the nine months ended December 31, 2020. Also during the nine months
ended December 31, 2020 we repurchased 106,000,000 shares of our common stock from CR Capital Holdings, LLC, a shareholder
that owns over 10% of our outstanding stock, for $120,000 (see NOTE 8). We agreed to pay $10,000 per month for the repurchase,
therefore during the nine months ended December 31, 2020 we repaid $30,000 of the debt.
|
|
|
[7]
|
During
the year ended March 31, 2020 we sold 83 APEX units to related parties for proceeds of $182,720, $100,000 of which was offset
against short term advances that has been provided to us. Under the same terms of all other APEX unit sales, the 83 units
were to pay out $500 per month for 60 months, resulting in a total amount to be repaid of $2,490,000. During the year ended
March 31, 2020 we made 238 lease payments to these related parties, or $119,000, reducing the total amount to be repaid to
$2,371,000 as of March 31, 2020. The liability, net of discounts, was presented as part of the total APEX financial liability
on the balance sheet at March 31, 2020. During the nine months ended December 31, 2020 we made $126,100 worth of lease payments
to related parties. In September of 2020 we initiated the APEX buyback program and agreed to pay our related parties $237,720
in exchange for all rights and obligations under the APEX lease (see NOTE 2). At the time of the buyback the liability owed
to related parties was $355,525, which was equal to a total liability of $2,244,900 offset by a contra-liability of $1,889,375,
thus we recorded a gain on the extinguishment of debt of $117,805 as contributed capital (see NOTE 8). After the buyback we
repaid our related parties $65,720 of the $237,720 owed.
|
|
|
[8]
|
On
December 15, 2020 we received proceeds of $154,000 from Wealth Engineering, an entity controlled by members of our management
team and Board of Directors, and entered into a promissory note for $600,000. The term of the note requires monthly repayments
of $20,000 per month for 30 months. At inception we recorded a debt discount of $446,000 representing the difference between
the cash received and the total amount to be repaid. During the nine months ended December 31, 2020 we recognized $7,825 of
the debt discount into interest expense and made one monthly repayment of $20,000.
|
|
|
[9]
|
Represents
payments that are to be made in the subsequent 12 months
|
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
NOTE
6 – DEBT
Our
debt consisted of the following:
|
|
December
31,
2020
|
|
|
March
31,
2020
|
|
Short-term advance received
on 8/31/18 [1]
|
|
$
|
5,000
|
|
|
$
|
65,000
|
|
Secured merchant agreement for future
receivables entered into on 8/16/19 and
refinanced on 12/10/19 [2]
|
|
|
-
|
|
|
|
1,223,615
|
|
Secured merchant agreement for future
receivables entered into on 8/16/19 [3]
|
|
|
-
|
|
|
|
260,090
|
|
Convertible promissory note entered
into on 3/5/20 [4]
|
|
|
-
|
|
|
|
13,072
|
|
Convertible promissory note entered
into on 3/11/20 [5]
|
|
|
-
|
|
|
|
7,549
|
|
Short-term advance received on 3/25/20
[6]
|
|
|
81,250
|
|
|
|
150,000
|
|
Promissory note entered into on 4/10/20
[7]
|
|
|
-
|
|
|
|
-
|
|
Note issued under the Paycheck Protection
Program on 4/17/20 [8]
|
|
|
508,872
|
|
|
|
-
|
|
Loan with the U.S. Small Business Administration
dated 4/19/20 [9]
|
|
|
513,048
|
|
|
|
-
|
|
Long term notes for APEX lease buyback
[10]
|
|
|
17,137,774
|
|
|
|
-
|
|
Short-term note
for APEX lease buyback [11]
|
|
|
30,000
|
|
|
|
-
|
|
Total debt
|
|
|
18,275,944
|
|
|
|
1,719,326
|
|
Less: Current
portion [12]
|
|
|
(3,349,987
|
)
|
|
|
-
|
|
Debt, long term
portion
|
|
$
|
14,925,957
|
|
|
$
|
1,719,326
|
|
[1]
|
In
August 2018, we received a $75,000 short-term advance. The advance is due on demand, has no interest rate, and is unsecured.
During the nine months ended December 31, 2020 we made repayments of $60,000 on the debt.
|
|
|
[2]
|
During
August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. On August 15, 2019, we received proceeds from this arrangement of $339,270 after paying off $316,093 and
$297,033 from two separate February 2018 agreements. In accordance with the terms of the new agreement, we were required to
repay $1,399,000 by making daily ACH payments of $6,823. Accordingly, we recorded $446,604 as a debt discount at the inception
of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that
was to be repaid.
|
|
|
|
Effective
December 10, 2019 this debt was refinanced and the outstanding balance of $839,514 was rolled into a new Secured Merchant
Agreement for future receivables. Prior to the refinance, we repaid $559,486 and amortized $446,605 into interest expense
related to the August 2019 arrangement. As a result of the refinancing arrangement we received proceeds of $854,801. In accordance
with the terms of the agreement, we were required to repay $2,448,250 by making daily ACH payments of $10,999. Accordingly,
we recorded $753,935 as a debt discount at the inception of the agreement, which was the difference between the funds received
plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2020, after the refinance,
we repaid $747,932 and amortized $277,232 into interest expense related to the new December 2019 agreement. During the nine
months ended December 31, 2020 we amortized $442,894 into interest expense and repaid $1,071,996 to pay the debt off in full,
which resulted in a gain on settlement of debt being recorded for $594,513.
|
|
|
[3]
|
During
August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. In August 2019, we received proceeds from this arrangement of $418,381 after paying off $382,000 from
an October 2018 agreement. In accordance with the terms of the agreement, we were required to repay $1,189,150 by making daily
ACH payments of $5,801. Accordingly, we recorded $388,769 as a debt discount at the inception of the agreement, which was
the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the
year ended March 31, 2020, we repaid $853,203 and amortized $312,912 into interest expense. During the nine months ended December
31, 2020 we repaid $330,013, recorded a $5,934 gain on settlement of debt, and amortized $75,857 into interest expense
|
|
|
[4]
|
In
March 2020, we entered into a Convertible Promissory Note and received proceeds of $200,000 after incurring loan fees of $3,000.
The note incurred interest at 10% per annum and had a maturity date of June 2, 2021. The Convertible Promissory Note had a
variable conversion rate that was 65% of the average of the two lowest trading prices during the previous 15-trading-day period,
subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see NOTE 7). At inception,
we recorded a debt discount of $203,000 and captured loan fees, recorded as interest expense, of $116,077. During the year
ended March 31, 2020, we amortized $11,626 into interest expense, and recorded additional interest expense on the note of
$1,446. During the nine months ended December 31, 2020, we amortized $59,916 into interest expense, and recorded additional
interest expense on the note of $7,453 before we repaid the note in full for $262,649 and wrote off the derivative liability
associated with the debt of $265,584 (see NOTE 7), resulting in a net gain on settlement of debt being recorded for $83,376.
|
|
|
[5]
|
In
March 2020, we entered into a Convertible Promissory Note and received proceeds of $150,000 after incurring loan fees of $3,000.
The note incurred interest at 10% per annum and had a maturity date of June 10, 2021. The Convertible Promissory Note had
a variable conversion rate that was 65% of the average of the two lowest trading prices during the previous 15-trading-day
period, subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see NOTE 7).
At inception, we recorded a debt discount of $153,000 and captured loan fees, recorded as interest expense, of $148,432. During
the year ended March 31, 2020, we amortized $6,711 into interest expense, and recorded additional interest expense on the
note of $838. During the nine months ended December 31, 2020, we amortized $44,960 into interest expense and recorded additional
interest expense on the note of $5,617 before we repaid the note in full for $197,351 and wrote off the derivative liability
associated with the debt of $203,357 (see NOTE 7), resulting in a net gain on settlement of debt being recorded for $64,132.
|
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
[6]
|
In
March 2020, we received a $150,000 short-term advance. The advance is due on demand, has no interest rate, and is unsecured.
During the nine months ended December 31, 2020 we made repayments of $68,750 on the debt.
|
|
|
[7]
|
In
April 2020, we received proceeds of $400,000 after entering into a promissory note that is due six months from the funding
date. Under the note six interest only payments of $16,667 are to be made on the 20th of each month beginning in
May 2020. Collateral for the note, in priority order, is: the reserve and current balance in one of our merchant accounts,
the reserve account in a second separate merchant accounts, shares of our common stock, and high-speed computer processing
equipment. During the nine months ended December 31, 2020 we recorded $100,002 worth of interest expense and made repayments
of $500,002.
|
|
|
[8]
|
In
April 2020 we received $505,300 in proceeds from the Paycheck Protection Program as established by the CARES Act as a result
of a Note entered into with the U.S. Small Business Administration (“SBA”). The note has an interest rate of 1%
and matures on April 1, 2022. Under the Note we were required to make monthly payments beginning November 1, 2020, however,
the SBA extended the deferral period to 10 months therefore the first payment would not be due until March 2, 2021. Further,
under the terms of the CARES Act the loan may be forgiven if funds are used for qualifying expenses. During the nine months
ended December 31, 2020 we recorded $3,572 worth of interest expense on the Note.
|
|
|
[9]
|
In
April 2020 we received proceeds of $500,000 from a loan entered into with the U.S. Small Business Administration. Under the
terms of the loan interest is to accrue at a rate of 3.75% per annum and installment payments of $2,437 monthly will begin
twelve months from the date of the loan, with all interest and principal due and payable thirty years from the date of the
loan. During the nine months ended December 31, 2020 we recorded $13,048 worth of interest on the loan.
|
|
|
[10]
|
During
the nine months ended December 31, 2020 we entered into notes with third parties for $19,089,500 in exchange for the cancellation
of APEX leases previously entered into, which resulted in our purchase of all rights and obligations under the leases (see
NOTE 2). We agreed to settle approximately $1,952,000 of the debt during the nine months ended December 31, 2020, at a discount
to the original note terms offered, by making payments of approximately $576,000 and issuing 48,000,000 shares of our common
stock (see NOTE 8). The remaining notes are all due December 31, 2024 and have a fixed monthly payment that is equal to 75%
of the face value of the note, divided by 48 months. The monthly payments are to begin the last day of January 2021 and continue
until December 31, 2024 when the last monthly payment will be made, along with a balloon payment equal to 25% of the face
value of the note, to extinguish the debt.
|
|
|
[11]
|
During
the nine months ended December 31, 2020 we entered into a note dated November 30, 2020 with a third party for $60,000 in exchange
for the cancellation of APEX leases previously entered into, which resulted in our purchase of all rights and obligations
under the leases (see NOTE 2). The note is to be repaid with two equal payments of $30,000 each. We made one $30,000 payment
during December 2020 and the second $30,000 payment is due by January 30, 2021.
|
NOTE
7 – DERIVATIVE LIABILITY
During
the nine months ended December 31, 2020, we had the following activity in our derivative liability account:
|
|
Debt
|
|
|
Warrants
|
|
|
Total
|
|
Derivative liability at March 31, 2020
|
|
$
|
793,495
|
|
|
$
|
-
|
|
|
$
|
793,495
|
|
Derivative liability recorded on new
instruments
|
|
|
-
|
|
|
|
8,135
|
|
|
|
8,135
|
|
Derivative liability reduced by debt
settlement (see NOTE 6)
|
|
|
(468,941
|
)
|
|
|
-
|
|
|
|
(468,941
|
)
|
(Gain) loss on
fair value
|
|
|
(324,554
|
)
|
|
|
33,255
|
|
|
|
(291,299
|
)
|
Derivative liability at December
31, 2020
|
|
$
|
-
|
|
|
$
|
41,390
|
|
|
$
|
41,390
|
|
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 nine months ended December 31, 2020, the assumptions
used in our binomial option pricing model were in the following range:
|
|
|
Debt
|
|
|
|
Warrants
|
|
Risk free
interest rate
|
|
|
0.11
- 0.17
|
%
|
|
|
0.21
- 0.38
|
%
|
Expected life in years
|
|
|
0.80
- 1.11
|
|
|
|
4.84
- 5.00
|
|
Expected volatility
|
|
|
128%
- 239
|
%
|
|
|
259%
- 306
|
%
|
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
NOTE
8 – STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred
Stock
We
are authorized to issue up to 50,000,000 shares of preferred stock with a par value of $0.001 and our board of directors has the
authority to issue one or more classes of preferred stock with rights senior to those of common stock and to determine the rights,
privileges, and preferences of that preferred stock.
As
of March 31, 2020, we had no preferred stock issued or outstanding.
During
the year ended March 31, 2020 our Board of Directors approved the designation of 2,000,000 of the Company’s shares of preferred
stock as Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), each with a stated
value of $25 per share. Our Series B Preferred Stock holders are entitled to 500 votes per share and are entitled to receive cumulative
dividends at the annual rate of 13% per annum of the stated value, equal to $3.25 per annum per share.
During
the nine months ended December 31, 2020 we commenced a security offering to sell a total of 2,000,000 units at $25 per unit (“Unit
Offering”), such that each unit consisted of: (i) one share of our newly authorized Series B Preferred Stock and (ii) five
warrants each exercisable to purchase one share of common stock at an exercise price of $0.10 per warrant share. Each Warrant
offered is immediately exercisable on the date of issuance, will expire 5 years from the date of issuance, and its value has been
classified as a fair value liability due to the terms of the instrument (see NOTE 7). During the nine months ended December 31,
2020 we sold 55,554 units for gross proceeds of $1,388,850, therefore recorded the issuance of 55,554 shares of Series B Preferred
Stock and the grant of 277,770 warrants during the period. Of the gross proceeds, $8,135 was allocated to the warrants and recorded
as a derivative liability and $1,380,715 was allocated to the preferred stock ($56 recorded as the par value and $1,380,659 allocated
to additional paid in capital). Also in conjunction with the Unit Offering we paid $22,500 of offering costs which was allocated
between the preferred stock and warrants. The $22,388 allocated to the preferred stock decreased additional paid in capital due
to the underlying instrument being classified as equity and the $112 allocated to the warrants was immediately expensed as offering
costs due to the underlying instrument being classified as a fair value liability.
Preferred
Stock Dividends
During
the nine months ended December 31, 2020 we recorded $97,384 for the cumulative cash dividends due to the shareholders of our Series
B Preferred Stock and paid $26,868 of these amounts owing. As a result we recorded $70,516 as a dividend liability on our balance
sheet as of December 31, 2020.
Common
Stock
During
the nine months ended December 31, 2020, we issued 82,000,000 shares of common stock and recognized professional fees of $1,640,000
based on the market value on the day of issuance. We also issued 196,000,000 shares of common stock, valued at $3,794,000 based
on the market value on the day of issuance, for services and compensation, which is subject to forfeiture if the employee or contractor
is not in good standing at the time the shares are fully vested. Of the $3,794,000 value we recognized $363,120 as an expense
during the nine months ended December 31, 2020 and the remaining $3,430,880 will be recognized rateably over the
vesting term. In addition, during the nine months ended December 31, 2020, we recognized $990,714 as expense due to the vesting
of shares of common stock issued prior to March 31, 2020 and we expect to recognize an additional $733,943 subsequent to December
31, 2020 as we expense the value of the stock over the remaining vesting term.
During
the nine months ended December 31, 2020, we repurchased 9,079 shares of our common stock from a third party for $272 and repurchased
106,000,000 shares of our common stock from an entity that owns over 10% of our common stock for $120,000 (see NOTE 5). These
shares repurchased were immediately cancelled. Also, during the nine months ended December 31, 2020 we recorded an increase
in Additional Paid in Capital of $3,300,000 related to beneficial conversion features on our related party debt (see NOTE 5),
recorded an increase in Additional Paid in Capital of $373,832 for accrued payroll forgiven by a member of our senior management
team at the time his employment with the Company ended, and recorded an increase in Additional Paid in Capital of $117,805 for
contributed capital (see NOTE 5).
During
the nine months ended December 31, 2020 we cancelled 200,000,000 shares returned in conjunction with the termination of a Joint
Venture Agreement entered into in March of 2019, reducing common stock by $200,000, reducing additional paid in capital by $3,180,000,
offset with a reduction in our prepaid asset of $2,428,044 and a reversal of previously recorded expense of $951,956. Also during
the nine months ended December 31, 2020 we issued 51,000,000 shares of our common stock to settle $1,375,238 worth of debt and
$56,977 worth of accounts payable. The shares were valued at $1,065,900 based on the market value at the time of issuance, therefore
we recorded a gain on settlement of debt of $366,315.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
As
of December 31, 2020 and March 31, 2020, we had 3,237,481,329 and 3,214,490,408 shares of common stock issued and outstanding,
respectively.
Warrants
During
the nine months ended December 31, 2020 we granted 277,770 warrants in conjunction with our Unit Offering. The warrants are classified
as a derivative liability on our balance sheet in accordance with ASC 480, Distinguishing Liabilities from Equity, based on the
warrants terms that indicate a fundamental transaction could give rise to an obligation for us to pay cash to our warrant holders
(see NOTE 7).
Details
of our warrants outstanding as of December 31, 2020 is as follows:
Exercise
Price
|
|
|
Warrants
Outstanding
|
|
|
Warrants
Exercisable
|
|
|
Weighted
Average Contractual Life (Years)
|
|
$
|
0.10
|
|
|
|
277,770
|
|
|
|
277,770
|
|
|
|
4.59
|
|
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 nine months
ended December 31, 2020 we were not involved in any material legal proceedings.
NOTE
10 – OPERATING LEASE
In
February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (“ROU”)
model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases. Leases are classified
as either finance or operating with classification affecting the pattern of expense recognition in the statement of operations.
We adopted ASU No. 2016-02 on April 1, 2019. We did not record a lease asset and lease liability as of the adoption date as we
had no lease arrangements or lease obligation at that time.
In
August 2019 we entered an operating lease for office space in Eatontown, New Jersey (the “Eatontown Lease”) and in
September 2019 we entered an operating lease for office space in Kaysville, Utah (the “Kaysville Lease”). We have
the option to extend the three year lease term of the Eatontown Lease for a period of one year. In addition, we are obligated
to pay twelve monthly installments to cover an annual utility charge of $1.75 per rentable square foot for electric usage within
the demised premises. As the lessor has the right to digitally meter and charge us accordingly, these payments were deemed variable
and will be expensed as incurred. During the three and nine months ended December 31, 2020 the variable lease costs amounted to
$831 and $2,494, respectively. At commencement of the Eatontown Lease, right-of-use assets obtained in exchange for new operating
lease liabilities amounted to $110,097. At commencement of the Kaysville Lease, right-of-use assets obtained in exchange for new
operating lease liabilities amounted to $21,147. On September 30, 2020, the Kaysville Lease expired and as of October 1, 2020,
the Company began leasing the property located in Kaysville on a month to month basis.
Operating
lease expense was $11,000 and $43,794 for the three and nine months ended December 31, 2020. Operating cash flows used for the
operating leases during the three and nine months ended December 31, 2020 were $12,000 and $44,794. As of December 31, 2020, the
weighted average remaining lease term was 1.58 years and the weighted average discount rate was 12%.
INVESTVIEW,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2020
(Unaudited)
Future
minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows:
Remainder of 2021
|
|
$
|
12,000
|
|
2022
|
|
|
48,000
|
|
2023
|
|
|
16,000
|
|
Total
|
|
|
76,000
|
|
Less:
Interest
|
|
|
(6,407
|
)
|
Present value of lease liability
|
|
|
69,593
|
|
Operating
lease liability, current [1]
|
|
|
(48,000
|
)
|
Operating
lease liability, long term
|
|
$
|
21,593
|
|
[1]
Represents lease payments to be made in the next 12 months
NOTE
11 – SUBSEQUENT EVENTS
Subsequent
to December 31, 2020, we paid $58,421 of dividends that were accrued as of December 31, 2020. Also, subsequent to December
31, 2020, we received gross proceeds of $432,475 in connection with our Unit Offering.
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.