PART
I
Item
1. Business
Corporate
History
Investview,
Inc. was incorporated on January 30, 1946, under the laws of the state of Utah as the Uintah Mountain Copper Mining Company. In
January 2005, we changed domicile to Nevada and changed our name to Voxpath Holding, Inc. In September of 2006, we merged The
Retirement Solution Inc. through a Share Purchase Agreement into Voxpath Holding, Inc. and then changed our name to TheRetirementSolution.Com,
Inc. and in October 2008 changed our name to Global Investor Services, Inc., before changing our name to Investview, Inc., on
March 27, 2012.
On
March 31, 2017, we entered into a Contribution Agreement with the members of Wealth Generators, 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. This closing occurred
after close of business on March 31, 2017, therefore, effective April 1, 2017, Wealth Generators became our wholly owned subsidiary.
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”), this did not affect
the company’s tax and federal identification.
On
May 7, 2018, we established WealthGen Global, LLC as a Utah limited liability company and our wholly owned subsidiary.
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 nonoperating wholly owned subsidiary WealthGen Global, LLC to SAFETek, LLC, a Utah limited liability
company.
Effective
July 22, 2019 we renamed our non-operating wholly owned subsidiary Razor Data, LLC to Apex Tek, LLC, a Utah Limited Liability
Company.
Overview
Investview
has established a portfolio of wholly owned subsidiaries that deliver leading edge technologies, services and research, primarily
dedicated to the individual consumer. As financial technologies evolve, Investview seeks to deliver innovative methods and products
to enable participation in emerging markets and information technology advancements for individuals and companies. Each of its
subsidiaries are designed to work in tandem with one another generating a worldwide presence for Investview.
Our
largest subsidiary is Kuvera LLC, which delivers financial education, technology and research to individuals through a subscription-based
model. Kuvera, LLC provides research, education, and investment tools designed to assist the self-directed investor in successfully
navigating the financial markets. These services include research, trade alerts, and live trading rooms that include instruction
in equities, options, FOREX, ETFs, binary options, crowdfunding and cryptocurrency sector education. In addition to trading tools
and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings,
budgeting, and proper tax management. Each product subscription includes a core set of trading tools/research along with the personal
finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his
or her financial situation. Kuvera operations are located at Salt Lake City, Utah and more information can be found at kuveraglobal.com.
Kuvera
France S.A.S. is our entity in France that distributes Kuvera products and services throughout the European Union.
S.A.F.E. Management, LLC is a Registered
Investment Adviser and Commodity Trading Adviser that has been established to deliver automated trading strategies to individuals
who find they lack the time to trade for themselves. SAFE is committed to bringing innovative trade methodologies, strategies
and algorithms for all worldwide financial markets. SAFE Management is a state registered investment adviser and 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.
SAFETek,
LLC (formerly WealthGen Global, LLC) is a new addition that we established for expansion plans in the high-speed processing computing
space. SAFETek, LLC is in the process of deploying a large scale processing operation that 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. More information regarding SAFETek, LLC can be found at safeteksolutions.com.
Apex
Tek, LLC (formerly Razor Data, LLC) is the entity responsible for sales of the Apex program. Launched in September 2019, the Apex
product pack includes hardware, firmware, software and insurance that can be purchased and then leased to SAFETek LLC. Apex is
a technology asset that creates passive income for those who desire to diversify their holdings. More information can be found
at apextekglobal.com.
Government
Regulation
We
have historically positioned the company as a knowledge provider and educator that seeks to augment a user’s informed decision-making
process, rather than to act as a conductor of investment decisions or a representative of investment services. As such, most of
our activities do not fall within the scope of securities industry regulation. Most of our products and services also do not require
that any representative distributing our services conduct themselves as an investment advisor or broker. However, our subsidiary
S.A.F.E. Management, LLC, recently received its registration and disclosure approval from the National Futures Association. S.A.F.E.
Management, LLC is now a New Jersey State Registered Investment Adviser (“RIA”), Commodities Trading Advisor (“CTA”),
and Commodity Pool Operator registered with the U.S. Commodity Futures Trading Commission (“CFTC”), and is approved
by the CFTC for over the counter FOREX advisory services. As a New Jersey-registered RIA, we are required to comply with the laws
and regulations of those states in which we have the requisite number of customers governing the activities of investment advisers
and the fees they can charge, as well as certain provisions of the Investment Adviser Act of 1940. As a CFTC registered CTA, Commodity
Pool Operator, and FOREX adviser, we are required to comply with federal law and CFTC rules regulating those activities.
We
have established these registrations and the advisory structure to offer automated trade execution, which is managed by S.A.F.E.
Management, LLC, in its capacity as an RIA, for equities and equity options and in its capacity as a CTA for commodities, futures,
and OTC Forex. In addition, SAFE provides traditional advisory services for clients who do not wish to trade for themselves. Automation
of trades is only available through S.A.F.E. Management. No additional approvals are required for any of our current business
activities. The cost of maintaining this additional regulated entity could have a material adverse effect on our business and
could subject us to regulatory enforcement actions.
We
are subject to government regulation in connection with securities laws and regulations applicable to all publicly owned companies
as well as laws and regulations applicable to businesses generally. We are also increasingly subject to governmental regulation
and legislation specifically targeting Internet companies, such as privacy regulations adopted at the local, state, national and
international levels and taxes levied at the state level. Due to the increasing use of the internet, enforcement of existing laws,
such as consumer protection regulations, in connection with web-based activities has become more aggressive, and it is expected
that new laws and regulations will continue to be enacted at the local, state, national, and international levels. Such new legislation,
alone or combined with increasingly aggressive enforcement of existing laws, could have a material adverse effect on our future
operating performance and business.
Employees
As
of June 26, 2020, we had 22 employees.
Internet
Address
Additional
information concerning our business can be found on our website at www.investview.com for the most up-to-date corporate
financial information, presentation announcements, transcripts, and archives. Information regarding our products and services
offered by our wholly owned subsidiary, Kuvera LLC, may be found at www.kuveraglobal.com. SAFE Management LLC services
can be viewed at www.safeadvglobal.com. Apex Tek LLC product information can be found at: www.apextekglobal.com
and SAFETek, LLC information is available at www.safeteksolutions.com. Web site links provided in may change in
the future. We make available free of charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we electronically file such material
with or furnish it to the Securities and Exchange Commission.
Item
1A. Risk Factors
Investors
should carefully consider the following material risk factors as well as all other information set forth or referred to in this
report before purchasing shares of our common stock. Investing in our common stock involves a high degree of risk. We believe
all material risk factors have been presented below. If any of the following events or outcomes actually occurs, our business
operating results and financial condition would likely suffer. As a result, the trading price of our common stock could decline,
and investors may lose all or part of the money paid to purchase our common stock.
Risks
Related to our Business
We
have a limited operating history and, therefore, there is an elevated risk of potential business failure unless we can overcome
the various obstacles inherent to an early stage business.
We
have only limited prior business operations. Because of our limited operating history, investors may not have adequate information
on which they can base an evaluation of our business and prospects. Investors should be aware of the difficulties, delays, and
expenses normally encountered by an enterprise in its early stage, many of which are beyond our control, including unanticipated
research and development expenses, employment costs, and administrative expenses. We cannot assure our investors that our proposed
business plans as described herein will materialize or prove successful, or that we will be able to finalize development of our
products or operate profitably.
We
have incurred substantial operating losses since inception (August 1, 2005), and we may never achieve profitability.
From
our inception on August 1, 2005, through March 31, 2020, we have incurred cumulative losses of $46,382,174, recorded net losses
from operations of $21,285,191 for the year ended March 31, 2020, and our cash balance on March 31, 2020, was $137,177. Accordingly,
we cannot assure that we will achieve profitability in the immediate future or at all.
Our
independent auditors have expressed substantial doubt about our ability to continue as a going concern.
In
their audit opinion issued in connection with our consolidated balance sheet as of March 31, 2020, and our related consolidated
statements of operations, stockholders’ deficit, and cash flows for the year ended March 31, 2020, our auditors have expressed
substantial doubt about our ability to continue as a going concern given our recurring net losses, negative cash flows from operations,
and the limited amount of funds on our balance sheet. We have prepared our consolidated financial statements on a going concern
basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of
business. The consolidated financial statements do not include any adjustments that might be necessary should we be unable to
continue in existence. This could make it more difficult to raise capital in the future.
Our
operations and financial condition may be adversely impacted by the COVID-19 pandemic.
In
December 2019, a strain of novel coronavirus, or COVID-19, was first reported in Wuhan, China, resulting in thousands of confirmed
cases of the disease in China. By January, the Chinese government implemented a quarantine protocol for Wuhan and implemented
other restrictions for other major Chinese cities, including mandatory business closures, social distancing measures, and various
travel restrictions, all of which have subsequently been adopted in countries throughout the world. On March 11, 2020, as COVID-19
spread outside of China, the World Health Organization designated the outbreak as a global pandemic. This pandemic could affect
our business, employees, operating results, ability to obtain additional funding, product development programs, research and development
programs, suppliers and third-party manufacturers.
We
anticipate that COVID-19 and a prolonged public health crisis may negatively impact our financial condition and operating results;
however, given the evolving health, economic, social, and governmental environments, the breadth and duration of the impact remains
uncertain. Given the dynamic nature of these circumstances, the duration of any business disruption or potential impact to our
business resulting from the COVID-19 coronavirus is difficult to predict, but it may increase our costs or expenses.
We
may not be able to fully protect our proprietary rights and we may infringe the proprietary rights of others, which could result
in costly litigation.
Our
future success depends on our ability to protect and preserve the proprietary rights related to our products. We cannot assure
that we will be able to prevent third parties from using our intellectual property rights and technology without our authorization.
We also rely on trade secrets, common law trademark rights, and trademark registrations, as well as confidentiality and work for
hire, development, assignment, and license agreements with employees, consultants, third-party developers, licensees, and customers.
Our protective measures for these intangible assets afford only limited protection and may be flawed or inadequate.
Policing
unauthorized use of our technology is difficult and some foreign laws do not provide the same level of protection as U.S. laws.
Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or patents
that we may obtain, or to determine the validity and scope of the proprietary rights of others. Such litigation could result in
substantial costs and diversion of resources and have a material adverse effect on our future operating results.
In
recent years, there has been significant litigation in the United States involving patents and other intellectual property rights.
In particular, there has been an increase in the filing of suits alleging infringement of intellectual property rights, which
pressure defendants into entering settlement arrangements quickly to dispose of such suits, regardless of their merits. Other
companies or individuals may allege that we infringe on their intellectual property rights. Litigation, particularly in the area
of intellectual property rights, is costly and the outcome is inherently uncertain. In the event of an adverse result, we could
be liable for substantial damages and we may be forced to discontinue our use of the subject matter in question or obtain a license
to use those rights or develop non-infringing alternatives.
Our
business could be negatively affected by any adverse economic developments in the securities markets or the economy in general.
We
depend on the interest of individuals in obtaining financial information and securities trading strategies to assist them in making
their own investment decisions. Significant downturns in the securities markets or in general economic and political conditions
may cause individuals to be reluctant to make their own investment decisions and thus decrease the demand for our products. Significant
upturns in the securities markets or in general economic and political conditions may cause individuals to be less proactive in
seeking ways to improve the returns on their trading or investment decisions and, thus, decrease the demand for our products.
We
may encounter risks relating to security or other system disruptions and failures that could reduce the attractiveness of our
sites and that could harm our business.
Although
we have implemented various security mechanisms, our business is vulnerable to computer viruses, physical or electronic break-ins,
and similar disruptions, which could lead to interruptions, delays, or loss of data. For instance, because a portion of our revenue
is based on individuals using credit cards to purchase subscriptions over the Internet and a portion from advertisers that seek
to encourage people to use the Internet to purchase goods or services, our business could be adversely affected by these break-ins
or disruptions. Additionally, our operations depend on our ability to protect systems against damage from fire, earthquakes, power
loss, telecommunications failure, and other events beyond our control. Moreover, our website may experience slower response times
or other problems for a variety of reasons, including hardware and communication line capacity restraints, software failures,
or significant increases in traffic when there have been important business or financial news stories. These strains on our systems
could cause customer dissatisfaction and could discourage visitors from becoming paying subscribers. Our websites could experience
disruptions or interruptions in service due to the failure or delay in the transmission or receipt of information from us. These
types of occurrences could cause users to perceive our website and technology solutions as not functioning properly and cause
them to use other methods or services of our competitors. Any disruption resulting from these actions may harm our business and
may be very expensive to remedy, may not be fully covered by our insurance, could damage our reputation, and discourage new and
existing users from using our products and services. Any disruptions could increase costs and make profitability even more difficult
to achieve.
We
will need to introduce new products and services and enhance existing products and services to remain competitive.
Our
future success depends in part on our ability to develop and enhance our products and services. In addition, the adoption of new
Internet, networking or telecommunications technologies or other technological changes could require us to incur substantial expenditures
to enhance or adapt our services or infrastructure. There are significant technical and financial costs and risks in the development
of new or enhanced products and services, including the risk that we might be unable to effectively use new technologies, adapt
our services to emerging industry standards, or develop, introduce and market enhanced or new products and services. An inability
to develop new products and services, or enhance existing offerings, could have a material adverse effect on our profitability.
We
rely on external service providers to perform certain key functions.
We
rely on a number of external service providers for certain key technology, processing, service, and support functions. External
content providers provide us with crypto mining services, financial information, market news, charts, option and stock quotes,
research reports, and other fundamental data that we offer to clients. These service providers face technological and operational
risks of their own. Any significant failures by them, including improper use or disclosure of our confidential client, employee,
or company information, could cause us to incur losses and could harm our reputation.
We
cannot assure that any external service providers will be able to continue to provide these services in an efficient, cost-effective
manner or that they will be able to adequately expand their services to meet our needs. An interruption in or the cessation of
service by any external service provider as a result of systems failures, capacity constraints, financial constraints or problems,
unanticipated trading market closures, or for any other reason, and our inability to make alternative arrangements in a smooth
and timely manner, if at all, could have a material adverse effect on our business, results of operations, and financial condition.
We
could face liability and other costs relating to storage and use of personal information about our users.
Users
provide us with personal information, including tax identification numbers, which we do not share without the user’s consent.
Despite this policy of obtaining consent, however, if third persons were able to penetrate our network security or otherwise misappropriate
our users’ personal information, we could be subject to liability, including claims for unauthorized purchases with credit
card information, impersonation or other similar fraud claims, and misuses of personal information, such as for unauthorized marketing
purposes. New privacy legislation may further increase this type of liability. Furthermore, we could incur additional expenses
if additional regulations regarding the use of personal information were introduced or if federal or state agencies were to investigate
our privacy practices. We do not store user credit card information and rely upon our merchant processing partners to collect
and store this information with the necessary Payment Card Industry Security Standards compliance in place. However, a breach
of the merchant’s security standards could create liability for us.
Our
business could be negatively affected if we are required to defend allegations of unfair competition and unfair false or deceptive
acts or practices in or affecting commerce.
Advertising
and marketing of our products in the United States are also subject to regulation by the Federal Trade Commission (“FTC”)
under the Federal Trade Commission Act, or FTC Act. Among other things, the FTC Act prohibits unfair methods of competition and
unfair false or deceptive acts or practices in or affecting commerce. The FTC Act also makes it illegal to disseminate or cause
to be disseminated any false advertisement. The FTC routinely reviews websites to identify questionable advertising claims and
practices. Competitors sometimes inform the FTC when they believe other competitors are violating the FTC Act and consumers also
notify the FTC of what they believe may be wrongful advertising. The FTC may initiate a nonpublic investigation that focuses on
our advertising claims, which usually involves nonpublic, pre-lawsuit, extensive formal discovery. Such an investigation may be
lengthy and expensive to defend and result in a publicly disclosed consent decree or settlement agreement. If no settlement can
be reached, the FTC may start an administrative proceeding or a federal court lawsuit against us or our principal officers. The
FTC often seeks to recover from the defendants, whether in a consent decree or a proceeding, any or all of the following: (i)
consumer redress in the form of monetary relief or disgorgement of profits; (ii) significant reporting requirements for several
years; and (iii) injunctive relief. In addition, most, if not all, states have statutes prohibiting deceptive and unfair acts
and practices. The requirements under these state statutes are similar to those of the FTC Act.
We
accept and hold cryptocurrencies, which may subject us to exchange risk and additional tax and regulatory requirements
We
have recently begun accepting cryptocurrencies bitcoin and etherium as a form of payment. Cryptocurrencies are not considered
legal tender or backed by any government and have experienced significant price volatility, technological glitches, and various
law enforcement and regulatory interventions. If we fail to comply with regulations or prohibitions applicable to us, we could
face regulatory or other enforcement actions and potential fines and other consequences. We also hold cryptocurrencies directly,
subjecting us to exchange rate risk as well as the risk that regulatory or other developments and the recent price volatility
may adversely affect the value of the cryptocurrencies we hold. The uncertainties regarding legal and regulatory requirements
relating to cryptocurrencies or transactions using cryptocurrencies, as well as potential accounting and tax issues or other requirements
relating to cryptocurrencies, could have a material adverse effect on our business.
Our
business could be negatively affected if we are required to defend allegations that our direct selling activities are fraudulent
or deceptive schemes, are against public interest, or are the sale of unregistered securities.
Direct
selling activities are regulated by the FTC, as well as various federal, state, and local governmental agencies in the United
States and foreign countries. These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, often
referred to as “pyramid” schemes, which compensate participants primarily for recruiting additional participants without
significant emphasis on product sales. Regulators may take the position that some or all of our products are deemed to be securities,
the sale of which has not been registered. The laws and regulations governing direct selling are modified from time to time, and
like other direct selling companies, we may be subject from time to time to government investigations related to our direct selling
activities. This may require us to make changes to our business model and our compensation plan.
Our
independent distributors could fail to comply with applicable legal requirements or our distributor policies and procedures, which
could result in claims against us that could harm our business.
Our
independent distributors are independent contractors and, accordingly, we are not in a position to directly provide the same oversight,
direction, and motivation as we could if they were our employees. As a result, we cannot assure that our independent distributors
will comply with applicable laws or regulations or our distributor policies and procedures.
Extensive
federal, state, local, and international laws regulate our business, products and direct selling activities. Because we have expanded
into foreign countries, our policies and procedures for our independent distributors differ slightly in some countries due to
the different legal requirements of each country in which we do business.
Our
proprietary systems may be compromised by hackers.
Our
current products and other products and services that we may develop in the future will be based on proprietary software and customer-specific
data that we protect by routine measures such as password protection, confidentiality and nondisclosure agreements with employees,
and similar measures. Any unauthorized access to our software or data could materially disrupt our business and result in financial
loss and damages to our business reputation.
Risks
Related to Our Common Stock
We
have a history of operating losses and expect to report future losses that may cause our stock price to decline.
For
the operating period since inception through March 31, 2020, we have reported an accumulated deficit of $46,382,174. We reported
a net loss of $21,285,191 for the year ended March 31, 2020, and a net loss from operations of $9,093,419. We cannot be certain
whether we will ever become profitable, or if we do, that we will be able to continue to be profitable. Also, any economic weakness
or global recession may limit our ability to market our products. Any of these factors could cause our stock price to decline
and result in investors losing a portion or all of their investment.
We
will need to raise additional capital. If we are unable to raise additional capital, our business may fail.
Because
our revenues are not yet sufficient to cover expenses or fund our growth, we need to secure ongoing funding. If we are unable
to obtain adequate additional financing, we may not be able to successfully market and sell our products, our business operations
will most likely be discontinued, and we will cease to be a going concern. To secure additional financing, we may need to borrow
money or sell more securities. Under these circumstances, we may be unable to secure additional financing on favorable terms or
at all. Selling additional stock, either privately or publicly, would dilute the equity interests of our stockholders. If we borrow
money, we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are
unable to obtain adequate financing, we may have to curtail business operations, which would have a material negative effect on
operating results and most likely result in a lower stock price.
Our
common stock price has been and may continue to be extremely volatile.
Our
common stock has closed as low as $0.005 per share and as high as $0.043 per share during the most recent fiscal year. We believe
this volatility may be caused, in part, by variations in our quarterly operating results, delays in development of our technologies,
changes in market valuations of similar companies, and the volume of our stock in the market.
Additionally,
in recent years the stock market in general, and the OTC Markets and technology stocks in particular, have experienced extreme
price and volume fluctuations. In some cases, these fluctuations are unrelated or disproportionate to the operating performance
of the underlying company. These market and industry factors may materially and adversely affect our stock price regardless of
our operating performance. The historical trading of our common stock is not necessarily an indicator of how it will trade in
the future and our trading price as of the date of this report is not necessarily an indicator of what the trading price of our
common stock might be in the future.
In
the past, class action litigation has often been brought against companies following periods of volatility in the market price
of those companies’ common stock. If we become involved in this type of litigation in the future it could result in substantial
costs and diversion of management attention and resources, which could have a further negative effect on our stock price.
Shares
of our common stock may never become eligible for trading on Nasdaq or a national securities exchange.
We
cannot assure that we will ever be listed on the Nasdaq Stock Market or on another national securities exchange. Listing on one
of the Nasdaq markets or one of the national securities exchanges is subject to a variety of requirements, including minimum trading
price and minimum public “float” requirements. There are also continuing eligibility requirements for companies listed
on national securities exchanges. If we are unable to satisfy the initial or continuing eligibility requirements of any such market,
then our stock may not be listed or could be delisted. This could result in a lower trading price for our common stock and may
limit the ability of our stockholders to sell their shares, which could result in a loss of some or all of their investments.
If
we fail to file periodic reports with the U.S. Securities and Exchange Commission, our common stock will not be able to be traded
on the OTCQB.
Although
our common stock trades on the OTCQB, a regular trading market for our common stock may not be sustained in the future. OTC Markets
limits quotation on the OTCQB to securities of issuers that are current in their reports filed with the Securities and Exchange
Commission. If we fail to remain current in the filing of our reports with the Securities and Exchange Commission, our common
stock will not be able to be traded on the OTCQB. The OTCQB is an inter-dealer market that provides significantly less liquidity
than a national securities exchange or automated quotation system.
Because
we have no plans to pay dividends on our common stock, stockholders must look solely to appreciation of our common stock to realize
a gain on their investments.
We
do not anticipate paying any dividends on our common stock in the foreseeable future. We currently intend to retain future earnings,
if any, to finance the expansion of our business. Our future dividend policy is within the discretion of our board of directors
and will depend upon numerous factors, including our business, financial condition, results of operations, capital requirements,
and investment opportunities. Accordingly, stockholders must look solely to appreciation of our common stock to realize a gain
on their investment. This appreciation may not occur.
Certain
provisions of Nevada law and of our corporate charter may inhibit a potential acquisition of our company, and this could depress
our stock price.
Nevada
corporate law includes provisions that could delay, defer, or prevent a change in control of our company or our management. These
provisions could discourage information contests and make it more difficult for our stockholders to elect directors and take other
corporate actions. As a result, these provisions could limit the price that investors are willing to pay in the future for shares
of our common stock. For example:
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without
prior stockholder approval, our board of directors has the authority to issue one or more classes of preferred stock with
rights senior to those of our common stock and to determine the rights, privileges, and preferences of that preferred stock;
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there
is no cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to
elect director candidates; and
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stockholders
cannot call a special meeting of stockholders.
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Our
indemnification of our directors and officers may limit the rights of our stockholders.
While
our board of directors and officers are generally accountable to our stockholders and us, the liability of our directors and officers
to all parties is limited in certain respects under applicable state law and our articles of incorporation and bylaws, as in effect.
Further, we have agreed or may agree to indemnify our directors and officers against liabilities not attributable to certain limited
circumstances. This limitation of liability and indemnity may limit rights that our stockholders would otherwise have to seek
redress against our directors and officers.
Additional
issuances of stock options and warrants, convertible notes, and stock grants will cause additional substantial dilution to our
stockholders.
Given
our limited cash, liquidity, and revenues, it is likely that in the future, as in the past, we will issue additional warrants,
stock grants, and convertible debt to finance our future business operations and acquisitions and strategic relationships. The
issuance of additional shares of common stock, the exercise of warrants, and the conversion of debt to stock could cause additional
dilution to our stockholders and could have further adverse effects on the market price for our securities or on our ability to
obtain future financing. The 2018 increase in our authorized shares from two billion to ten billion increased the magnitude of
this risk substantially.
The
amount of authorized common stock may result in management implementing anti-takeover procedures by issuing new securities.
The
proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect, for
example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition
of our board of directors or contemplating a tender offer or other transaction for the combination of our company with another
entity. Although, we have no current plans to issue additional stock for this purpose, management could use the additional shares
that are now available or that may be available after a possible further recapitalization to resist or frustrate a third-party
transaction. Generally, no stockholder approval would be necessary for the issuance of all or any portion of the additional shares
of common stock unless required by law or any rules or regulations to which we are subject.
Item
1B. Unresolved Staff Comments
None.
Item
2. Properties
Our
corporate headquarters are located at 234 Industrial Way West, Ste A202, Eatontown, New Jersey 07724 and are being leased under
a three-year lease agreement that will expire in June 2022. Our Apex Tek, LLC headquarters are located at 459 North 300
West, #15, Kaysville, Utah 84037 and are being leased under a one-year lease agreement that will expire at the end of September
2020. Our Kuvera, LLC headquarters are located at 2940 West Maple Loop Drive, Suite 303, Office A, C, & D, Lehi, Utah 84043
and are being lease on a month-to-month basis. We also lease office space in France located at 4 D rue du Lieutenant-Colonel Dubois,
350000 Rennes on a month-to-month basis.
Item
3. 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
4. Mine Safety Disclosure
Not
applicable
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Organization
Investview,
Inc. was incorporated on January 30, 1946, under the laws of the state of Utah as the Uintah Mountain Copper Mining Company. In
January 2005, we changed domicile to Nevada and changed our name to Voxpath Holding, Inc. In September of 2006, we merged The
Retirement Solution Inc. through a Share Purchase Agreement into Voxpath Holdings, Inc. and then changed our name to TheRetirementSolution.Com,
Inc. and in October 2008 changed our name to Global Investor Services, Inc., before changing our name to Investview, Inc., on
March 27, 2012.
On
March 31, 2017, we entered into a Contribution Agreement with the members of Wealth Generators, 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”). This did not affect
the company’s tax and federal identification.
On
May 7, 2018, we established WealthGen Global, LLC as a Utah limited liability company and our wholly owned subsidiary.
On
July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase
its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock (see Note 5).
On
November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European
Union.
On
December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from
the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities
Trading Advisor, Commodity Pool Operator, and approved for over the counter FOREX advisory services.
On
January 17, 2019, we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SAFETek, LLC, a Utah limited
liability company.
Effective
July 22, 2019 we renamed our non-operating wholly owned subsidiary Razor Data, LLC to Apex Tek, LLC, a Utah Limited Liability
Company.
Nature
of Business
We
own a number of companies that each operate independently, but are accretive to one another. We are establishing a portfolio of
wholly owned subsidiaries delivering leading-edge technologies, services, and research, dedicated primarily to the individual
consumer. Following is a description of each of our companies.
Kuvera,
LLC provides research, education, and investment tools designed to assist the self-directed investor in successfully navigating
the financial markets. These services include research, trade alerts, and live trading rooms that include instruction in equities,
options, FOREX, ETFs, binary options, crowdfunding and cryptocurrency sector education. In addition to trading tools and research,
we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting,
and proper tax management. Each product subscription includes a core set of trading tools/research along with the personal finance
management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her
financial situation. Different packages are available through a monthly subscription that can be cancelled at any time at the
discretion of the customer. A unique component of the product marketing plan is the distribution method whereby all subscriptions
are sold via current participating customers who choose to distribute and sell the services by participating in the bonus plan.
The bonus plan participation is purely optional but enables individuals to create an additional income stream to further support
their personal financial goals and objectives.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
Kuvera
France S.A.S. is our entity in France that will distribute Kuvera products and services throughout the European Union.
S.A.F.E.
Management, LLC is a Registered Investment Adviser and Commodity Trading Adviser that has been established to deliver automated
trading strategies to individuals who find they lack the time to trade for themselves.
United
League, LLC owns a number of proprietary technologies including FIREFAN a social app for sports enthusiasts. Technologies
created to support any of the Investview companies are held under the United League structure.
United
Games, LLC is the distribution network for United League technologies. Since the acquisition of United Games in July of 2018,
we are working to combine the distributors of Kuvera and United Games. The operations of United Games and United League are currently
being assessed now that we have completed our integration of their software and personnel. These entities may be eliminated or
re-structured in the future as we are currently assessing the potential future for social gaming app known as FIREFAN.
SAFETek,
LLC (formerly WealthGen Global, LLC) is a new addition
that we are currently establishing for expansion plans in the high-speed processing and cloud computing environment.
Apex
Tek, LLC (formerly Razor Data, LLC) is the sales and distribution company for APEX packages and technology. It offers a unique
passive income model for those interested in earning through the purchase and leaseback of high-speed specialized data processing
equipment. This model has drawn considerable institutional interest.
Investment
Tools & Training, LLC currently has no operations or activities.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Accounting
Our
policy is to prepare our financial statements on the accrual basis of accounting in accordance with accounting principles generally
accepted in the United States of America.
Principles
of Consolidation
The
consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC, Investment
Tools & Training, LLC, Apex Tek, LLC (formerly Razor Data, LLC), S.A.F.E. Management, LLC, SAFETek, LLC (formerly WealthGen
Global, LLC), United Games, LLC, United League, LLC, and Kuvera France S.A.S. Through March 31, 2019 we had determined that one
affiliated entity, Kuvera LATAM S.A.S., which we previously conducted business with, was a variable interest entity and we were
the primary beneficiary of the entity’s activities, which are similar to those of Kuvera, LLC. As a result, through March
31, 2019 we had consolidated the accounts of this variable interest entity into the accompanying consolidated financial statements.
Further, because the Company did not have any ownership interest in this variable interest entity, the Company had allocated the
contributed capital in the variable interest entity as a component of noncontrolling interest. As of April 1, 2019 Kuvera LATAM
S.A.S. had no operations and ceased to exist, therefore, as of that date, no consolidation of the entity is necessary and we recorded
a gain on deconsolidation of $53,739 to eliminate the intercompany account with Kuvera LATAM S.A.S. All intercompany transactions
and balances have been eliminated in consolidation.
Financial
Statement Reclassification
Certain
account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period
classifications.
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.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
Foreign
Exchange
We
have consolidated the accounts of Kuvera France S.A.S. into our consolidated financial statements and have consolidated the accounts
of Kuvera LATAM S.A.S. through March 31, 2019. The operations of Kuvera France S.A.S. are conducted in France and its functional
currency is the Euro. The operations of Kuvera LATAM S.A.S. were conducted in Colombia and its functional currency is the Colombian
Peso.
The
financial statements of Kuvera France S.A.S. and Kuvera LATAM S.A.S. are prepared using their respective functional currency and
have been translated into U.S. dollars (“USD”). Assets and liabilities are translated into USD at the applicable exchange
rates at period-end. Stockholders’ equity is translated using historical exchange rates. Revenue and expenses are translated
at the average exchange rates for the period. Any translation adjustments are included as foreign currency translation adjustments
in accumulated other comprehensive income in our stockholders’ equity (deficit).
The
following rates were used to translate the accounts of Kuvera France S.A.S. and Kuvera LATAM S.A.S. into USD at the following
balance sheet dates.
|
|
March 31, 2020
|
|
|
March 31, 2019
|
|
Euro to USD
|
|
|
1.10314
|
|
|
|
1.12200
|
|
Colombian Peso to USD
|
|
|
n/a
|
|
|
|
0.00031
|
|
The
following rates were used to translate the accounts of Kuvera France S.A.S. and Kuvera LATAM S.A.S. into USD for the following
operating periods:
|
|
Year ended March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Euro to USD
|
|
|
1.11122
|
|
|
|
1.13580
|
|
Colombian Peso to USD
|
|
|
n/a
|
|
|
|
0.00033
|
|
Concentration
of Credit Risk
Financial
instruments that potentially expose us to concentration of credit risk include cash, accounts receivable, and advances. We place
our cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of the FDIC
insurance limit of $250,000. As of March 31, 2020 and 2019, cash balances that exceeded FDIC limits were $0, and we have not experienced
significant losses relating to these concentrations in the past.
Cash
and Cash Equivalents
For
purposes of reporting cash flows, we consider all highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents. As of March 31, 2020 and 2019, we had no cash equivalents.
Receivables
Receivables
are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review
of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables
and receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when
received. We had no allowance for doubtful accounts as of March 31, 2020 and 2019.
Cryptocurrencies
We
hold cryptocurrency-denominated assets (“cryptocurrencies”) and include them in our consolidated balance sheet as
other current assets. We record cryptocurrencies at fair market value and recognize the change in the fair value of our cryptocurrencies
as an unrealized gain or loss in the consolidated statement of operations. As of March 31, 2020 and March 31, 2019, the fair value
of our cryptocurrencies was $101,610 and $142,061, respectively. During the year ended March 31, 2020, we recorded $(815) and
$113,369 as realized and unrealized gain (loss) on cryptocurrency, respectively. During the year ended March 31, 2019, we recorded
$16,241 and $106,488 as realized and unrealized gain (loss) on cryptocurrency, respectively.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
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 March 31, 2020 and 2019 fixed assets were made up of the following:
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
Useful
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
(years)
|
|
|
2020
|
|
|
2019
|
|
Furniture, fixtures, and equipment
|
|
10
|
|
|
$
|
12,792
|
|
|
$
|
11,372
|
|
Computer equipment
|
|
3
|
|
|
|
19,533
|
|
|
|
14,661
|
|
Data processing equipment
|
|
3
|
|
|
|
3,213,815
|
|
|
|
-
|
|
|
|
|
|
|
|
3,246,140
|
|
|
|
26,033
|
|
Accumulated amortization
|
|
|
|
|
|
(248,529
|
)
|
|
|
(12,505
|
)
|
Net book value
|
|
|
|
|
$
|
2,997,611
|
|
|
$
|
13,528
|
|
Total
depreciation expense for the years ended March 31, 2020 and 2019, was $490,642 and $5,332, respectively.
Long-Lived
Assets – Intangible Assets & License Agreement
We
account for our 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. Further, ASC Subtopic 350-30 requires an intangible asset to be amortized
over its useful life and for the useful life to be evaluated every reporting period to determine whether events or circumstances
warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount
of the intangible asset is amortized prospectively over the revised remaining useful life. Costs of internally developing, maintaining,
or restoring intangible assets are recognized as an expense when incurred.
In
June of 2017 we issued 80,000,000 shares of common stock with a value of $2,256,000 for a 15-year license agreement. Annual amortization
over the 15-year life is expected to be approximately $150,400 per year. Amortization recognized for the year ended March 31,
2020 and 2019, was $150,812 and $150,400, respectively, and the long-term license agreement was recorded at a net value of $0
and $1,983,220 as of March 31, 2020 and 2019, respectively.
In
June of 2018 we purchased United Games, LLC and United League, LLC and recorded the transaction as a business combination (see
Note 5). 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 March 31, 2020 and 2019 intangible assets were
made up of the following:
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
Useful
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
(years)
|
|
|
2020
|
|
|
2019
|
|
FireFan mobile application
|
|
4
|
|
|
$
|
331,000
|
|
|
$
|
331,000
|
|
Back office software
|
|
10
|
|
|
|
408,000
|
|
|
|
408,000
|
|
Tradename/trademark - FireFan
|
|
5
|
|
|
|
248,000
|
|
|
|
248,000
|
|
Tradename/trademark - United Games
|
|
0.45
|
|
|
|
4,000
|
|
|
|
4,000
|
|
Customer contracts/relationships
|
|
5
|
|
|
|
-
|
|
|
|
825,000
|
|
|
|
|
|
|
|
991,000
|
|
|
|
1,816,000
|
|
Accumulated amortization
|
|
|
|
|
|
(298,118
|
)
|
|
|
(239,315
|
)
|
Net book value
|
|
|
|
|
$
|
692,882
|
|
|
$
|
1,576,685
|
|
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
Amortization
expense is expected to be as follows:
Fiscal year ending March 31, 2021
|
|
$
|
173,150
|
|
Fiscal year ending March 31, 2022
|
|
|
173,150
|
|
Fiscal year ending March 31, 2023
|
|
|
115,338
|
|
Fiscal year ending March 31, 2024
|
|
|
55,748
|
|
Fiscal year ending March 31, 2025 and beyond
|
|
|
175,496
|
|
|
|
$
|
692,882
|
|
Impairment
of Long-Lived Assets
We
have adopted ASC Subtopic 360-10, Property, Plant and Equipment. ASC 360-10 requires that long-lived assets and certain identifiable
intangibles held and used by us be reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable or when the historical cost carrying value of an asset may no longer be appropriate.
Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted
inability to achieve break-even operating results over an extended period.
We
evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including
eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an
impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.
Effective
March 31, 2020 we fully impaired data processing equipment that had a cost basis of $2,025,500 and we fully impaired our long-term
license agreement that had a cost basis of $2,256,000 because we deemed the assets carrying amount was not recoverable as
of that date. As a result, impairment expense of $1,770,881 and $1,832,408 for the equipment and the license agreement, respectively,
was recorded for the year ended March 31, 2020. During the year ended March 31, 2020 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:
|
Level
1:
|
Inputs
that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.
|
|
|
|
|
Level
2:
|
Inputs
other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly,
for substantially the full term of the asset or liability, including:
|
|
|
-
|
quoted
prices for similar assets or liabilities in active markets;
|
|
|
-
|
quoted
prices for identical or similar assets or liabilities in markets that are not active;
|
|
|
-
|
inputs
other than quoted prices that are observable for the asset or liability; and
|
|
|
-
|
inputs
that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
|
|
|
Level
3:
|
Inputs
that are unobservable and reflect management’s own assumptions about the inputs market participants would use in pricing
the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions
surrounding the timing and amount of expected cash flows).
|
Our
financial instruments consist of cash, accounts receivable, and accounts payable. We have determined that the book value of our
outstanding financial instruments as of March 31, 2020 and March 31, 2019, approximates the fair value due to their short-term
nature.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
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
|
|
$
|
101,610
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
101,610
|
|
Total Assets
|
|
$
|
101,610
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
101,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
793,495
|
|
|
$
|
793,495
|
|
Total Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
793,495
|
|
|
$
|
793,495
|
|
Items
recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the
following items as of March 31, 2019:
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Cryptocurrencies
|
|
$
|
142,061
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
142,061
|
|
Total Assets
|
|
$
|
142,061
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
142,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,358,901
|
|
|
$
|
1,358,901
|
|
Total Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,358,901
|
|
|
$
|
1,358,901
|
|
Sale
and Leaseback
Through
our wholly-owned subsidiary, APEX Tex, LLC, we sell high powered data processing equipment (“APEX”) to our customers
and they lease the equipment back to SAFETek, LLC, another of our wholly-owned subsidiaries. We account for these transactions
under ASC 842-40 where the leaseback has been deemed a sales-type lease due to the lease term generally covering the entire economic
life of the equipment and our likelihood to purchase the asset at the end of the lease term. In accordance with ASC 842-40 we
have recorded the data processing equipment as a fixed asset on our balance sheet and we have accounted for the amounts received
for the equipment as a financial liability, in other liabilities on our balance sheet. Further, we will recognize interest on
the financial liability over the term of the lease to ensure the financial liability equates to the total amounts to be paid over
the life of the lease. During the year ended March 31, 2020 we recorded deferred interest of $40,792,735 as a contra-liability,
of which $2,257,399 was recognized into interest, resulting in $38,535,336 expected to be recognized into interest as follows:
Fiscal year ending March 31, 2021
|
|
$
|
8,081,463
|
|
Fiscal year ending March 31, 2022
|
|
|
8,158,547
|
|
Fiscal year ending March 31, 2023
|
|
|
8,158,547
|
|
Fiscal year ending March 31, 2024
|
|
|
8,158,547
|
|
Fiscal year ending March 31, 2025 and beyond
|
|
|
5,978,232
|
|
|
|
$
|
38,535,336
|
|
During
the year ended March 31, 2020 we had the following activity related to our sale and leaseback transactions:
Proceeds from sales of APEX
|
|
$
|
16,143,265
|
|
Debt extinguished with the issuance of APEX
|
|
|
100,000
|
|
Interest recognized on financial liability
|
|
|
2,257,399
|
|
Payments made for leased equipment
|
|
|
(3,208,000
|
)
|
Total financial liability
|
|
|
15,292,664
|
|
Other current liabilities [1]
|
|
|
(11,407,200
|
)
|
Other long-term liabilities, net of deferred interest
|
|
$
|
3,885,464
|
|
[1]
Represents lease payments to be made in the next 12 months
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
As
of March 31, 2020 we have received proceeds of $392,310 in additional deposits for APEX sales, which has been recorded in the
customer advance amount shown on our balance sheet.
Revenue
Recognition
Subscription
Revenue
The
majority of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription
revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer
and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide
services over a fixed subscription period, therefore we recognize revenue ratably over the subscription period and deferred revenue
is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial
period to 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.
Equipment
Sales
We
generate revenue from the sale of high-speed computer processing equipment that is used for any of the following intense processing
activities: protein folding, CGI rendering, Game Streaming, Machine & Deep Learning, Mining, Independent Financial Verification,
and general high-speed computing. We recognize equipment sales revenue in accordance with ASC 606-10 where revenue is measured
based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified
in each contract. Our performance obligation is to deliver an equipment package to our customers which includes hardware, software,
and firmware and is drop-shipped to a hosting data center. We receive payment at the time of purchase and recognize revenue when
the equipment package is delivered and ready for maintenance and hosting, which our customers arrange for, and obtain, from a
separate third party that provides such services.
Cryptocurrency
Mining Service Revenue
In
the past we generated revenue from the sale of cryptocurrency mining services to our customers through an arrangement with a third-party
supplier. We recognized cryptocurrency mining service revenue in accordance with ASC 606-10 where revenue is measured based on
a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in
each contract. Our performance obligation was to arrange for the third-party to provide mining services to our customers and payment
is received at the time of purchase, therefore revenue was recognized upon receipt of payment. We recognized revenue in the amount
of the fee to which we are entitled to as an agent, or the amount of consideration that we retained after paying the third-party
the consideration received in exchange for the services the third-party was to provide.
Mining
Revenue
Through
our wholly owned subsidiary, SAFETek, LLC, we lease equipment under a sales-type lease and use the equipment on blockchain networks
to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation
for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us.
Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor
do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately
granted to us as a result of our mining activities.
Fee
Revenue
We
generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and
Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration
specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract.
Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified
Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we
receive payment for such advisory fees in the month following recognition.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
Revenue
generated for the year ended March 31, 2020, was as follows:
|
|
Subscription Revenue
|
|
|
Equipment
Sales
|
|
|
Cryptocurrency Mining Service Revenue
|
|
|
Mining Revenue
|
|
|
Fee Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
24,471,532
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,745,138
|
|
|
$
|
13,279
|
|
|
$
|
26,229,949
|
|
Refunds, incentives, credits, and chargebacks
|
|
|
(2,046,359
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,046,359
|
)
|
Amounts paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net revenue
|
|
$
|
22,425,173
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,745,138
|
|
|
$
|
13,279
|
|
|
$
|
24,183,590
|
|
Foreign
revenues for the year ended March 31, 2020 were $21,191,788 while domestic revenue for the year ended March 31, 2020 was $2,991,802.
Revenue
generated for the year ended March 31, 2019 was as follows:
|
|
Subscription Revenue
|
|
|
Equipment
Sales
|
|
|
Cryptocurrency Mining Service Revenue
|
|
|
Mining Revenue
|
|
|
Fee Revenue
|
|
|
Total
|
|
Gross billings/receipts
|
|
$
|
28,518,660
|
|
|
$
|
698,954
|
|
|
$
|
5,775,269
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
34,992,883
|
|
Refunds, incentives, credits, and chargebacks
|
|
|
(1,495,458
|
)
|
|
|
(4,000
|
)
|
|
|
(6,501
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,505,959
|
)
|
Amounts paid to supplier
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,827,843
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,827,843
|
)
|
Net revenue
|
|
$
|
27,023,202
|
|
|
$
|
694,954
|
|
|
$
|
1,940,925
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
29,659,081
|
|
Foreign
revenues for the year ended March 31, 2019 were approximately $27.3 million while domestic revenue for the year ended March 31,
2019 was approximately $2.3 million.
Advertising,
Selling, and Marketing Costs
We
expense advertising, selling, and marketing costs as incurred. Advertising, selling, and marketing costs include costs of promoting
our product worldwide, including promotional events. Advertising, selling, and marketing expenses for the years ended March 31,
2020 and 2019, totaled $1,696,133 and $878,936, respectively.
Income
Taxes
We
have adopted ASC Subtopic 740-10, Income Taxes, which requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets
and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences
between taxable income reported for financial reporting purposes and income tax purposes consist primarily of derivative liability
and stock compensation accounting versus basis differences.
Net
Income (Loss) per Share
We
follow ASC Subtopic 260-10, Earnings per Share, which specifies the computation, presentation, and disclosure requirements of
earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares
outstanding. Convertible debt, stock options, and warrants have been excluded as common stock equivalents in the diluted loss
per share because their effect is anti-dilutive on the computation.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
Potentially
dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:
|
|
March 31,
2020
|
|
|
March 31,
2019
|
|
Options to purchase common stock
|
|
|
-
|
|
|
|
35,000
|
|
Warrants to purchase common stock
|
|
|
-
|
|
|
|
5,052,497
|
|
Notes convertible into common stock
|
|
|
45,743,298
|
|
|
|
52,162,055
|
|
Total
|
|
|
45,743,298
|
|
|
|
57,249,552
|
|
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 we have not yet adopted that we believe are applicable or would have a material
impact on our financial statements.
NOTE
4 – GOING CONCERN AND LIQUIDITY
Our
financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates
the realization of assets and liquidation of liabilities in the normal course of business. We have incurred significant recurring
losses, which have resulted in an accumulated deficit of $46,382,174 as of March 31, 2020, along with a net loss of $21,285,191
for the year ended March 31, 2020. Additionally, as of March 31, 2020, we had a working capital deficit of $14,123,625. These
factors raise substantial doubt about our ability to continue as a going concern.
During
the year ended March 31, 2020, we raised $4,484,979 in cash proceeds from related parties, $2,527,452 in cash proceeds from new
lending arrangements, and $825,000 from the sale of common stock. Subsequent to March 31, 2020, we obtained $10,049,435 in cash
proceeds from new lending arrangements (see Note 13). Additionally, subject to a Securities Purchase agreement entered into in
April 2020 we have a commitment from an investor to purchase a $9 million promissory note on or before October 31, 2020, 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. To date, the Company
is experiencing challenges in multiple areas of the organization and the full economic impact is yet to be established.
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
|
|
|
|
|
●
|
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
|
Apex
Tek, LLC and SAFETek, LLC carry additional risk and generated recent losses, however, they also provide Investview a stake in
4IR, HPC, app development, fintech, blockchain and personal money management sectors. Each of these are areas that are targeted
for significant growth spurred by innovations through technology which solidify our position in the fintech space.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
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 – ACQUISITIONS
Acquisition
of United Games, LLC and United League, LLC
On
July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase
its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock. United Games,
LLC and United League, LLC provide distributor marketing back-office and commission tools and online sports gaming experience
for users of their applications distributed through their networks of affiliates therefore we expect significant synergies to
exist as a result of combining operations.
The
transaction was accounted for as a business combination using the acquisition method of accounting in accordance with the FASB
(ASC Topic 805). The following table summarizes the purchase accounting for the fair value of the assets acquired and liabilities
assumed at the date of the acquisition and the gain on bargain purchase which resulted from the fair value of the intangible assets
acquired exceeding the fair value of our common stock given as consideration:
Cash
|
|
$
|
3,740
|
|
Receivables
|
|
|
361,345
|
|
Intangible assets (see Note 2)
|
|
|
1,816,000
|
|
Total assets acquired
|
|
|
2,181,085
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
409,803
|
|
Total liabilities assumed
|
|
|
409,803
|
|
|
|
|
|
|
Net assets acquired
|
|
|
1,771,282
|
|
|
|
|
|
|
Consideration [1]
|
|
|
800,000
|
|
|
|
|
|
|
Gain on bargain purchase
|
|
$
|
971,282
|
|
|
[1]
|
The
50,000,000 shares of our common stock transferred as consideration in accordance with the Purchase Agreement was valued on
July 20, 2018, the date of acquisition, based on the weighted equity fair value of $0.016 per share as determined by a third-party
valuation firm.
|
United
Games, LLC and United League, LLC recorded combined revenue of $1,331,542 and a combined net income of $26,059 since the July
20, 2018 acquisition date, which were included in our consolidated statement of operations for the year ended March 31, 2019.
The
table below represents the pro forma revenue and net income (loss) for the years ended March 31, 2020 and 2019,
assuming the acquisition had occurred on April 1, 2017, pursuant to ASC Subtopic 805-10-50. This pro forma information does not
purport to represent what the actual results of our operations would have been had the acquisition occurred on this date nor does
it purport to predict the results of operations for future periods:
|
|
Year Ended March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Revenues
|
|
$
|
24,225,208
|
|
|
$
|
27,961,351
|
|
Net (loss)
|
|
$
|
(19,429,574
|
)
|
|
$
|
(5,288,735
|
)
|
Loss per common share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
NOTE
6 – RELATED PARTY TRANSACTIONS
Our
related party payables consisted of the following:
|
|
Year Ended March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Short-term advances [1]
|
|
$
|
1,526,427
|
|
|
$
|
440,489
|
|
Short-term promissory note entered into on 8/17/18 [2]
|
|
|
-
|
|
|
|
105,000
|
|
Promissory note entered into on 1/30/20 [3]
|
|
|
1,033,333
|
|
|
|
-
|
|
Accounts payable – related party [4]
|
|
|
55,000
|
|
|
|
-
|
|
|
|
$
|
2,114,760
|
|
|
$
|
545,489
|
|
[1]
|
We
periodically receive advances for operating funds from our current majority shareholders, officers, directors and other related
parties, including entities that are owned, controlled, or influenced by our owners or management. These advances are due
on demand, generally have no set interest rates associated with them, and are unsecured. During the year ended March 31, 2020,
we received $2,484,979 in cash proceeds from advances, incurred $769,999 in interest, and repaid related parties a total of
$1,292,160. Also during the year ended March 31, 2020 we settled $1,880 of amounts that were recorded as due prior to March
31, 2018, settled $100,000 by issuing APEX units, and settled $500,000 with the issuance of common stock.
|
|
|
[2]
|
A
member of the senior management team advanced funds of $100,000 on August 17, 2018, under a short-term promissory note due
to be repaid on August 31, 2018. On August 31, 2018 the note was amended to be due on demand or, in absence of a demand, due
on August 31, 2019. The note had a fixed interest payment of $5,000, which was recorded as interest expense in the statement
of operations during the year ended March 31, 2019. During the year ended March 31, 2020 we made repayments of $105,000 on
the note.
|
|
|
[3]
|
We
entered into a $1,000,000 promissory note with Joeseph Cammarata, our Chief Executive Officer, on January 30, 2020. The term
of the note is one year, at which time the principal and interest of 20%, or $200,000 will be due. During the year ended March
31, 2020 we recognized $33,333 of interest expense on the note.
|
|
|
[4]
|
During
the year ended March 31, 2020 we entered into an employment agreement with Jayme McWidener as our Chief Financial Officer.
At the date we entered into the employment agreement we owed her firm, Mac Accounting Group, LLP, $75,000, which was reclassified
as a related party accounts payable balance on our balance sheet. We made repayments on the liability of $20,000 since the
date we entered into the employment agreement.
|
In
addition to the above related party debt transactions that were outstanding as of March 31, 2020 and 2019 we entered into a $3,600,000
convertible promissory note with a member of the senior management team on July 23, 2019. We received proceeds of $1,000,000 from
the note, including $900,000 in cash and $100,000 which offset amounts owing to the lender. In accordance with the terms of the
note we were required to repay a monthly minimum payment of $50,000 beginning January of 2020 through June of 2020 and a monthly
minimum payment of $100,000 beginning July of 2020 until the total principal amount has been repaid. The lender had the right
to convert up to $2,600,000 of the outstanding and unpaid principal amount into shares of our common stock at a conversion price
of $0.005 per share, subject to adjustment. At inception we recorded a beneficial conversion feature of $1,000,000 as a debt discount
(see Note 10) and we recorded $2,600,000 as a debt discount, representing the difference between the face value of the note and
the proceeds received. Effective March 31, 2020 we entered into a settlement agreement to issue 200,000,000 shares of our common
stock (see Note 10) to repay the $3,600,000 convertible promissory note and $500,000 worth of short-term advances (see [1] above),
for a total of $4,100,000 worth of related party debt settled. In conjunction with the settlement the full debt discount of $3,600,000
was recognized into interest expense during the year ended March 31, 2020.
In
addition to the above-mentioned related-party lending arrangements, during the year ended March 31, 2020 we sold 57 APEX units
to related parties for proceeds of $122,720, $100,000 of which was offset against short term advances (see [1] above). We made
233 lease payments to these related parties during the year ended March 31, 2020, equating to $116,500. During the year ended
March 31, 2019, we sold $41,500 worth of high-speed computer processing equipment to our then chief executive officer. This revenue
was included in the equipment sales reported on our statement of operations.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
NOTE
7 – DEBT
Our
debt consisted of the following:
|
|
Year Ended March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Short-term advance received on 8/31/18 [1]
|
|
$
|
65,000
|
|
|
$
|
75,000
|
|
|
|
|
|
|
|
|
|
|
Secured merchant agreement for future receivables entered into on 2/14/19 [2]
|
|
|
-
|
|
|
|
641,687
|
|
Secured merchant agreement for future receivables entered into on 2/14/19 [3]
|
|
|
-
|
|
|
|
468,790
|
|
Secured merchant agreements for future receivables entered into on 2/14/19 [4]
|
|
|
-
|
|
|
|
597,060
|
|
Promissory note entered into on 1/16/19 [5]
|
|
|
-
|
|
|
|
60,000
|
|
Secured merchant agreements for future receivables entered into on 3/28/19 [6]
|
|
|
-
|
|
|
|
25,650
|
|
Convertible promissory note entered into on 1/11/19 [7]
|
|
|
-
|
|
|
|
26,600
|
|
Convertible promissory note entered into on 2/6/19 [8]
|
|
|
-
|
|
|
|
76,686
|
|
Convertible promissory note entered into on 3/14/19 [9]
|
|
|
-
|
|
|
|
5,557
|
|
Secured merchant agreement for future receivables entered into on 8/16/19 and refinanced on 12/10/19 [10]
|
|
|
1,223,615
|
|
|
|
-
|
|
Secured merchant agreement for future receivables entered into on 8/16/19 [11]
|
|
|
260,090
|
|
|
|
-
|
|
Convertible promissory note entered into on 3/5/20 [12]
|
|
|
13,072
|
|
|
|
-
|
|
Convertible promissory note entered into on 3/11/20 [13]
|
|
|
7,549
|
|
|
|
-
|
|
|
|
$
|
1,569,326
|
|
|
$
|
1,977,030
|
|
[1]
|
In
August 2018, we received a $75,000 short-term advance. The advance is due on demand, has no interest rate, and is unsecured.
During the year ended March 31, 2020 we made repayments of $10,000.
|
|
|
[2]
|
During
September 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. On September 28, 2018, we received proceeds from this arrangement of $570,000. In accordance with the
terms of the agreement, we were required to repay $839,400 by making ACH payments in the amount of 10% of our daily cash receipts.
Accordingly, we recorded $269,400 as a debt discount at the inception of the agreement, which was the difference between the
funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant
Agreement (see below), therefore transferring $233,501 of amounts owed to a new agreement. However, prior to the terminating
the September agreement, we made payments of $605,899 and amortized $269,400 into interest expense.
|
During
January 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to
working capital. On January 11, 2019, we received proceeds from this arrangement of $349,851. In accordance with the terms of
the agreement, we were required to repay $489,650 by making daily ACH payments of $1,000 for the first 30 days following the date
of the agreement and daily ACH payments of $2,999 thereafter. Accordingly, we recorded $139,799 as a debt discount at the inception
of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we
replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $449,657 of amounts owed to
a new agreement. However, prior to the terminating the January agreement, we made payments of $39,993 and amortized $139,799 into
interest expense.
During
February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to
working capital. On February 15, 2019, we received proceeds from this arrangement of $73,801 after paying off $233,501 from a
September 2018 agreement (see above) and $449,657 from a January 2019 agreement (see above). In accordance with the terms of the
agreement, we were required to repay $909,350 by making daily ACH payments of $5,049. Accordingly, we recorded $152,391 as a debt
discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off,
and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $141,372 and amortized $26,100 into interest
expense.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
Effective
August 16, 2019 this debt was refinanced and the outstanding balance of $316,093 was rolled into a new debt arrangement, see notation
[10] below. During the year ended March 31, 2020, prior to the refinance, we repaid $451,886 and amortized $126,291 into interest
expense.
[3]
|
During
December 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. On December 17, 2018, we received proceeds from this arrangement of $380,000. In accordance with the terms
of the agreement, we were required to repay $559,600 by making daily ACH payments of $3,000. Accordingly, we recorded $179,600
as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that
was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore
transferring $421,600 of amounts owed to a new agreement. However, prior to the terminating the December agreement, we made
payments of $138,000 and amortized $179,600 into interest expense.
|
During
February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to
working capital. On February 15, 2019, we received proceeds from this arrangement of $126,932 after paying off $421,600 from a
December 2018 agreement (see above). In accordance with the terms of the agreement, we are required to repay $840,000 by making
daily ACH payments of $4,649. Accordingly, we recorded $291,468 as a debt discount at the inception of the agreement, which was
the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the year
ended March 31, 2019, we repaid $129,388 and amortized $49,646 into interest expense.
Effective
August 16, 2019 this debt was refinanced and the outstanding balance of $297,033 was rolled into a new debt arrangement, see notation
[10] below. During the year ended March 31, 2020, prior to the refinance, we repaid $413,580 and amortized $241,822 into interest
expense.
[4]
|
During
October 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. During October 2018, we received proceeds from this arrangement of $77,260. In accordance with the terms
of the agreement, we were required to repay $699,500 by making daily ACH payments of $4,372. Accordingly, we recorded $224,500
as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that
was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore
transferring $327,880 of amounts owed to a new agreement. However, prior to the terminating the October agreement, we made
payments of $371,620 and amortized $224,500 into interest expense.
|
During
February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to
working capital. On February 15, 2019, we received proceeds from this arrangement of $126,932 after paying off $327,880 from an
October 2018 agreement (see above). In accordance with the terms of the agreement, we were required to repay $629,550 by making
daily ACH payments of $3,498. Accordingly, we recorded $224,410 as a debt discount at the inception of the agreement, which was
the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. Also during February
2019, we entered into a second Secured Merchant Agreement with this same entity, receiving proceeds of $288,000. In accordance
with the terms of the agreement, we were required to repay $419,700 by making daily ACH payments of $2,332. Accordingly, we recorded
$131,700 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount
that was to be repaid. During the year ended March 31, 2019, we repaid $157,410 on these two agreements and amortized $61,330
into interest expense.
Effective
August 16, 2019 this debt was refinanced and the outstanding balance of $382,000 was rolled into a new debt arrangement, see notation
[11] below. During the year ended March 31, 2020, prior to the refinance, we repaid $509,840 and amortized $294,780 into interest
expense.
[5]
|
In
January 2019, we received funds of $631,617 and repaid $511,617 in a series of transactions representing short-term advances.
On January 16, 2019, we entered into a short-term promissory note for the resulting $120,000 owed as a result of the transactions.
The note had a zero percent interest rate and was due within the shorter of three months or the receipt of cash from a $1
million financing arrangement. During the year ended March 31, 2020, we repaid $60,000 of the amount due under the note.
|
|
|
[6]
|
During
March 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. On March 29, 2019, we received proceeds from this arrangement of $28,500. In accordance with the terms
of the agreement, we were required to repay $45,000 by making daily ACH payments of $4,500. Accordingly, we recorded $16,500
as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that
was to be repaid. During the year ended March 31, 2019, we repaid $4,500 and amortized $1,650 into interest expense. During
the year ended March 31, 2020, we repaid $40,500 and amortized $14,850 into interest expense.
|
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
[7]
|
In
January 2019, we entered into a Convertible Promissory Note and received proceeds of $135,000 after incurring loan fees of
$3,000. The note incurs interest at 12% per annum and has a maturity date of April 11, 2020. The Convertible Promissory Note
has a variable conversion rate that is 65% of the lowest closing price during the previous 15-trading-day period, subject
to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 8). At inception, we
recorded a debt discount of $138,000 and captured loan fees, recorded as interest expense, of $450,005. During the year ended
March 31, 2019, we recorded amortization of the debt discount of $23,152 into interest expense and recorded additional interest
expense on the note of $3,448. During the year ended March 31, 2020, we amortized $114,848 into interest expense, recorded
additional interest expense on the note of $40,977 (inclusive of a prepayment penalty), and paid off the note, accrued interest,
and prepayment penalties for $182,425.
|
|
|
[8]
|
In
February 2019, we entered into a Convertible Promissory Note and received proceeds of $240,000. The note was issued with a
$30,000 original issue discount and loan fees of $3,000, incurred interest at 12% per annum, and had a maturity date of August
6, 2019. In accordance with the terms of the note, we issued 22,500,000 shares of common stock (the “Returnable Shares”)
to the note holder as a commitment fee (see Note 10), provided, however, the Returnable Shares must be returned to us if the
note is fully repaid and satisfied prior to the date which is 180 days following the issue date. The Convertible Promissory
Note had a variable conversion rate that was 65% of the lowest trading price during the previous 20-trading-day period, subject
to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see Note 8). We allocated the
proceeds of the note to the common stock issued and to the fair value of the note, taking into consideration the fair value
of the conversion feature. As a result, the common stock was valued at $69,871, we recorded a debt discount of $270,000, and
captured loan fees, recorded as interest expense, of $120,128. During the year ended March 31, 2019, we recorded amortization
of the debt discount of $72,514 into interest expense and recorded additional interest expense on the note of $4,172. During
the year ended March 31, 2020, we amortized $197,486 into interest expense, recorded additional interest expense on the note
of $11,136, and paid off the note and accrued interest for $285,308. In accordance with the terms of the agreement the 22,500,000
Returnable Shares were returned and cancelled (see Note 10).
|
|
|
[9]
|
In
March 2019, we entered into a Convertible Promissory Note and received proceeds of $135,000 after incurring loan fees of $3,000.
The note incurred interest at 12% per annum and had a maturity date of June 14, 2020. The Convertible Promissory Note had
a variable conversion rate that was 65% of the average of the two lowest closing prices during the previous 15-trading-day
period, subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see Note 8).
At inception, we recorded a debt discount of $138,000 and captured loan fees, recorded as interest expense, of $64,492. During
the year ended March 31, 2019, we recorded amortization of the debt discount of $4,831 into interest expense and recorded
additional interest expense on the note of $726. During the year ended March 31, 2020, we amortized $133,168 into interest
expense, recorded additional interest expense on the note of $43,983 (inclusive of a prepayment penalty), and paid off the
note, accrued interest, and prepayment penalties for $182,708.
|
|
|
[10]
|
During
August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. On August 15, 2019, we received proceeds from this arrangement of $339,270 after paying off $316,093 from
a February 2018 agreement (see notation [2] above) and $297,033 from a second February 2019 agreement (see notation [3] above).
In accordance with the terms of the agreement, we were required to repay $1,399,000 by making daily ACH payments of $6,823.
Accordingly, we recorded $446,604 as a debt discount at the inception of the agreement, which was the difference between the
funds received plus the earlier debt paid off, and the amount that was to be repaid.
|
Effective
December 10, 2019 this debt was refinanced and the outstanding balance of $839,514 was rolled into a new Secured Merchant Agreement
for future receivables. During the year ended March 31, 2020, 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 arrangement.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
[11]
|
During
August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access
to working capital. In August 2019, we received proceeds from this arrangement of $418,381 after paying off $382,000 from
an October 2018 agreement (see notation [4] above). In accordance with the terms of the agreement, we were required to repay
$1,189,150 by making daily ACH payments of $5,801. Accordingly, we recorded $388,769 as a debt discount at the inception of
the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was
to be repaid. During the year ended March 31, 2020, we repaid $853,203 and amortized $312,912 into interest expense.
|
|
|
[12]
|
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 incurs interest at 10% per annum and has a maturity date of June 2, 2021. The Convertible Promissory Note has a variable
conversion rate that is 65% of the average of the two lowest trading prices during the previous 15-trading-day period, subject
to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 8). 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.
|
|
|
[13]
|
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 incurs interest at 10% per annum and has a maturity date of June 10, 2021. The Convertible Promissory Note has a
variable conversion rate that is 65% of the average of the two lowest trading prices during the previous 15-trading-day period,
subject to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 8). 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.
|
In
addition to the above debt transactions that were outstanding as of March 31, 2020 and 2019, during the year ended March 31, 2020,
we also received proceeds of $200,000 from two additional short-term notes ($100,000 each) and received proceeds of $140,000,
$100,000, and $125,000 from three separate convertible promissory notes. During the year ended March 31, 2020, we recorded interest
expense of $30,000 for fixed interest and extension fees on the short-term notes and made total cash payments of $230,000 to extinguish
the interest and principal amounts due on the short-term notes. During the year ended March 31, 2020, we accounted for the conversion
features in the convertible notes as a derivative instrument, therefore at inception recorded a debt discounts of $374,000 and
captured loan fees, recorded as interest expense, of $945,060. By the time we repaid the convertible notes we had amortized the
full debt discount of $374,000 into interest expense, recorded additional interest expense on the notes of $119,931 (inclusive
of prepayment penalties), and paid off the notes, accrued interest, and prepayment penalties for $493,931.
NOTE
8 – DERIVATIVE LIABILITY
During
the years ended March 31, 2020 and 2019, we had the following activity in our derivative liability account:
Derivative liability at March 31, 2018
|
|
$
|
-
|
|
Derivative liability recorded on new instruments
|
|
|
1,144,525
|
|
Change in fair value
|
|
|
214,376
|
|
Derivative liability at March 31, 2019
|
|
|
1,358,901
|
|
Derivative liability recorded on new instruments
|
|
|
1,924,569
|
|
Derivative liability extinguished with notes settled
|
|
|
(1,918,744
|
)
|
Change in fair value
|
|
|
(571,231
|
)
|
Derivative liability at March 31, 2020
|
|
$
|
793,495
|
|
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 year ended March 31, 2020 and 2019, the assumptions used
in our binomial option pricing model were in the following range:
|
|
|
Year Ended March 31,
|
|
|
|
|
2020
|
|
|
|
2019
|
|
Risk free interest rate
|
|
|
0.17% - 2.13
|
%
|
|
|
2.40% - 2.58
|
%
|
Expected life in years
|
|
|
0.03 - 1.25
|
|
|
|
0.35 - 1.25
|
|
Expected volatility
|
|
|
224%
- 381
|
%
|
|
|
222% - 268
|
%
|
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
NOTE
9 – OPERATING LEASE
In
February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (“ROU”)
model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases. Leases are classified
as either finance or operating with classification affecting the pattern of expense recognition in the statement of operations.
We adopted ASU No. 2016-02 on April 1, 2019. We did not record a lease asset and lease liability as of the adoption date as we
had no lease arrangements or lease obligation at that time.
During
the year ended March 31, 2020 we entered two operating leases for office space in Eatontown, New Jersey (the “Eatontown
Lease”) and Kaysville, Utah (the “Kaysville Lease”). We have the option to extend the three-year lease term
of the Eatontown Lease for a period of one year. In addition, we are obligated to pay twelve monthly installments to cover an
annual utility charge of $1.75 per rentable square foot for electric usage within the demised premises. As the lessor has the
right to digitally meter and charge us, these payments were deemed variable and will be expensed as incurred. During the year
ended March 31, 2020 the variable lease costs amounted to $2,217. At commencement of the Eatontown Lease, right-of-use assets
obtained in exchange for new operating lease liabilities amounted to $110,097. We have the option to extend the twelve-and-a-half-month
lease term of the Kaysville Lease for a period of one year. At commencement of the Kaysville Lease, right-of-use assets obtained
in exchange for new operating lease liabilities amounted to $21,147.
Operating
lease expense was $41,027 for the year ended March 31, 2020. Operating cash flows used for the operating leases during the year
ended March 31, 2020 was $33,694. As of March 31, 2020, the weighted average remaining lease term was 2.15 years and the weighted
average discount rate was 12%.
Future
minimum lease payments under non-cancellable leases as of March 31, 2020 were as follows:
2021
|
|
$
|
56,794
|
|
2022
|
|
|
48,000
|
|
2023
|
|
|
16,000
|
|
Total
|
|
|
120,794
|
|
Less: Interest
|
|
|
(13,996
|
)
|
Present value of lease liability
|
|
|
106,798
|
|
Operating lease liability, current [1]
|
|
|
(56,530
|
)
|
Operating lease liability, long term
|
|
$
|
50,268
|
|
[1]
Represents lease payments to be made in the next 12 months
NOTE
10 – STOCKHOLDERS’ EQUITY
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.
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 Convertible
Preferred Stock. Our Series B Convertible Preferred Stock holders are entitled to 500 votes per share, are entitled to receive
cumulative dividends at the annual rate of 12% per annum of the liquidation price, equal to $1.20 per share, and can convert one
Series B Preferred Stock share into 500 shares of our common stock. As of March 31, 2020 and 2019, we had no preferred stock issued
or outstanding.
Common
Stock Transactions
During
the year ended March 31, 2020, we issued 59,215,648 shares of common stock in exchange for net proceeds of $825,000. Effective
March 31, 2020 we entered into a settlement agreement to issue 200,000,000 shares of our common stock to repay a $3,600,000 convertible
promissory note and $500,000 worth of short-term advances, for a total of $4,100,000 worth of related party debt settled (see
Note 6).
During
the year ended March 31, 2020 we issued 522,000,000 shares of common stock, valued at $4,561,500 based on the market value on
the day of issuance, to multiple employees for services and compensation, which is subject to forfeiture if the employee is not
in good standing at the time the shares are fully vested, or in some cases, if certain milestones are not met. Of the $4,561,500
value we recognized $2,836,843 as an expense during the year ending March 31, 2020 and the remaining $1,724,657 will be recognized
ratably over the vesting term. In addition to the shares issued to employees, we also issued an additional 15,618,592 shares of
common stock, valued at $261,800 based on the market value on the day of issuance, for services.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
During
the year ended March 31, 2020 we repurchased 5,150 shares of common stock for $102 and we cancelled 22,500,000 shares that were
returned in accordance with the terms of a Convertible Promissory Note (see Note 6), reducing common stock by $22,500 and increasing
additional paid in capital by the same. We also cancelled 200,000,000 shares returned in conjunction with the termination of a
Joint Venture Agreement entered into in March of 2019, reducing common stock by $200,000, reducing additional paid in capital
by $3,180,000, offset with a reduction in our prepaid asset of $3,380,000. During the year ended March 31, 2020 we recorded a
beneficial conversion feature of $1,000,000 related to a convertible promissory note entered into with a related party (see Note
6).
In
conjunction with the sale of common stock during the year ended March 31, 2018, we provided a guarantee to certain individuals
such that we would issue additional shares of our common stock if the average closing price of our common stock fell below $0.02
per share on the 20 days preceding the 18-month anniversary of the date the shares were originally sold. As a result of this guarantee,
we had recorded $626,388 in accounts payable and accrued liabilities on our balance sheet as of March 31, 2018. During the year
ended March 31, 2019, the 18-month anniversary passed without the common stock falling below the set threshold, therefore, we
were released from the guarantee, and we increased additional paid-in capital by $525,000 to remove the previously recorded offering
costs. During the year ended March 31, 2020, the 18-month anniversary passed without the common stock falling below the set threshold,
therefore, we were released from the guarantee, and we increased additional paid-in capital by $101,387 to remove the previously
recorded offering costs.
During
the year ended March 31, 2019, we issued 50,000,000 shares of common stock for the acquisition of United Games, LLC and United
League, LLC (see Note 5). We also issued 1,000,000 shares of common stock in August and 1,000,000 shares of common stock in March,
valued at $10,000 and $17,600, respectively, based on the market price on the day of issuance, to an employee for compensation.
The shares are subject to forfeiture if the employee is not in good standing six months after the date of issuance. During the
year ended March 31, 2019, the $10,000 was recognized as expense and of the $17,600 we recognized $2,933 as an expense and $14,667
was recorded as a prepaid asset. Also during the year ended March 31, 2019, we issued 400,000,000 shares of common stock with
a value of $6,760,000 based on the market price on the date of issuance, for an agreement to partner with a third party to generate
future revenues. The 400,000,000 shares are subject to forfeiture for five years from the date of issuance, such that shares will
be deemed earned upon meeting certain milestones. We are recognizing the expense ratably over the five-year term and recorded
$96,307 in expense during the year ended March 31, 2019, while recording $6,663,693 as a prepaid asset as of March 31, 2019. During
the year ended March 31, 2019, we entered into a common stock purchase agreement that provides cash of $1,000,000 in exchange
for shares of our common stock. In conjunction with that agreement, we issued 3,000,000 shares of common stock that was accounted
for as offering costs, increasing common stock by $3,000 and decreasing additional paid-in capital by $3,000, to offset any proceeds
from the future equity transactions resulting from the agreement. During the year ended March 31, 2019, we issued 22,500,000 shares
as a commitment fee in conjunction with a debt arrangement, whereby the shares were valued at $69,871 based on the allocation
of debt proceeds (see Note 7). Also during the year ended March 31, 2019, we repurchased 7,000,000 shares of common stock for
$91,000.
As
of March 31, 2020 and 2019, we had 3,214,490,408 and 2,640,161,318 shares of common stock issued and outstanding, respectively.
Employee
Stock Options
The
nonqualified plan adopted in 2007 authorizes 65,000 shares, of which 47,500 have been granted as of March 31, 2020. The qualified
plan adopted in October of 2008 authorizes 125,000 shares and was approved by a majority of our shareholders on September 16,
2009. As of March 31, 2020, 42,500 shares have been granted under the 2008 plan. During the year ended March 31, 2020 all previously
outstanding options expired and no new options were granted.
The
following table summarizes the changes in employee stock options outstanding and the related prices for the shares of our common
stock issued to employees under two employee stock option plans:
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
|
Aggregate
|
|
|
|
Number of
|
|
|
Exercise
|
|
|
Contractual
|
|
|
Intrinsic
|
|
|
|
Shares
|
|
|
Price
|
|
|
Life (years)
|
|
|
Value
|
|
Options outstanding at March 31, 2018
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
1.51
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled / expired
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Options outstanding at March 31, 2019
|
|
|
35,000
|
|
|
$
|
10.00
|
|
|
|
0.51
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Canceled / expired
|
|
|
(35,000
|
)
|
|
$
|
10.00
|
|
|
|
|
|
|
|
|
|
Options outstanding at March 31, 2020
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
Options exercisable at March 31, 2020
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
Stock-based
compensation expense in connection with options granted to employees for the year ended March 31, 2020 and 2019, was $0.
Warrants
During
the year ended March 31, 2020 all previously outstanding warrants expired and no new warrants were granted. Transactions involving
our warrants are summarized as follows:
|
|
|
|
|
Weighted
|
|
|
|
Number of
|
|
|
Average
|
|
|
|
Shares
|
|
|
Exercise Price
|
|
Warrants outstanding at March 31, 2018
|
|
|
6,169,497
|
|
|
$
|
1.50
|
|
Granted / restated
|
|
|
-
|
|
|
$
|
-
|
|
Canceled
|
|
|
-
|
|
|
$
|
-
|
|
Expired
|
|
|
(1,117,000
|
)
|
|
$
|
(1.48
|
)
|
Warrants outstanding at March 31, 2019
|
|
|
5,052,497
|
|
|
$
|
1.50
|
|
Granted
|
|
|
-
|
|
|
$
|
-
|
|
Canceled
|
|
|
-
|
|
|
$
|
-
|
|
Expired
|
|
|
(5,052,497
|
)
|
|
$
|
(1.50
|
)
|
Warrants outstanding at March 31, 2020
|
|
|
-
|
|
|
$
|
-
|
|
NOTE
11 – COMMITMENTS AND CONTINGENCIES
Litigation
In
the ordinary course of business, we may be or have been involved in legal proceedings from time to time. Below is a description
of all legal proceedings we were involved in during the year ended March 31, 2020 and 2019:
|
●
|
In
February 2018, we received a subpoena from the United States Commodity Futures Trading Commission (“CFTC”). We
complied with the terms of the subpoena, negotiated a resolution of this matter with the CFTC staff, and a final order was
issued on September 14, 2018. Under the order, we did not admit or deny any of the allegations, agreed to pay a fine of $150,000,
and agreed not to act as an unregistered Commodities Trading Advisor in the future. As of March 31, 2020, we have paid all
amounts owed to CFTC and no unpaid balance remains.
|
|
|
|
|
●
|
In
April of 2019, we received a Summons and Complaint from Fibernet Corp making claims of unpaid invoices and breach of contracts
entered into in February 2012 and January 2015 as RazorData Corp. Without admitting fault or liability, in June of 2019, we
entered into an agreement with Fibernet Corp to settle all claims and release us from any future claims in exchange for a
payment of $35,160 to avoid ongoing litigation related to this matter.
|
NOTE
12 – INCOME TAXES
Deferred
taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment. The Company used an effective tax rate of 30% when calculating the deferred tax assets and liabilities
and income tax provision below.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
Net
deferred tax assets consist of the following components as of March 31, 2020 and 2019:
|
|
2020
|
|
|
2019
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
NOL carryover
|
|
$
|
7,215,400
|
|
|
$
|
2,363,900
|
|
Accrued Payroll
|
|
|
207,100
|
|
|
|
209,100
|
|
Amortization
|
|
|
275,700
|
|
|
|
49,100
|
|
Related party accruals
|
|
|
10,000
|
|
|
|
1,500
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
(899,300
|
)
|
|
|
(1,200
|
)
|
Valuation allowance
|
|
|
(6,808,900
|
)
|
|
|
(2,622,400
|
)
|
Total long-term deferred income tax assets
|
|
$
|
-
|
|
|
$
|
-
|
|
The
income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income
from continuing operations for the years ended March 31, 2020 and 2019, due to the following:
|
|
2020
|
|
|
2019
|
|
Book income (loss)
|
|
$
|
(6,385,600
|
)
|
|
$
|
(1,493,400
|
)
|
Stock for services
|
|
|
929,600
|
|
|
|
32,800
|
|
Amortization
|
|
|
38,400
|
|
|
|
(33,100
|
)
|
Contingent liability
|
|
|
-
|
|
|
|
(45,000
|
)
|
Unrealized gain on cryptocurrency
|
|
|
(34,000
|
)
|
|
|
(31,900
|
)
|
Meals and entertainment
|
|
|
15,900
|
|
|
|
12,400
|
|
Non-cash interest expense
|
|
|
765,700
|
|
|
|
315,800
|
|
Depreciation
|
|
|
(821,700
|
)
|
|
|
(7,200
|
)
|
Related party accruals
|
|
|
8,500
|
|
|
|
1,500
|
)
|
Related party accrued payroll
|
|
|
(2,000
|
)
|
|
|
174,600
|
|
Gain on deconsolidation of WG LATAM
|
|
|
(16,100
|
)
|
|
|
-
|
|
Gain on bargain purchase
|
|
|
-
|
|
|
|
(291,400
|
)
|
(Gain)/Loss on value of derivative liabilities
|
|
|
(171,400
|
)
|
|
|
64,300
|
|
Stock issued for loan fees
|
|
|
-
|
|
|
|
21,000
|
|
Impairment of prepaid paid for with equity
|
|
|
549,700
|
|
|
|
-
|
|
Amortization of prepaid paid for with equity
|
|
|
248,600
|
|
|
|
45,100
|
|
Valuation allowance
|
|
|
4,874,400
|
|
|
|
1,234,500
|
|
Total long-term deferred income tax assets
|
|
$
|
-
|
|
|
$
|
-
|
|
At
March 31, 2020, we had net operating loss carryforwards of approximately $24,051,000 that may be offset against future taxable
income for the year 2021 through 2040. However, due to the change in ownership provisions of the Tax Reform Act of 1986, the NOL
accumulated prior to the April 1, 2017, acquisition can only offset future income of up to $13,837 per year until expired. Should
additional changes in ownership occur, net operating loss carryforwards in future years may be further limited.
No
tax benefit from continuing or discontinued operations have been reported in the March 31, 2020, consolidated financial statements
since the potential tax benefit is offset by a valuation allowance of the same amount.
We
comply with the provisions of FASB ASC 740 in accounting for our uncertain tax positions. ASC 740 addresses the determination
of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under
ASC 740, we may recognize the tax benefit from an uncertain tax position only if it is more likely that not that the tax position
will be sustained on examination by the taxing authorities, based on the technical merits of the position. We have determined
that we have no significant uncertain tax positions requiring recognition under ASC 740.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH
31, 2020 AND 2019
We
recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. We had
no accruals for interest and tax penalties at March 31, 2020 and 2019.
We
do not expect the amount of unrecognized tax benefits to materially change within the next 12 months.
We
are required to file income tax returns in the U.S. Federal jurisdiction, in New York State, New Jersey, and in Utah. We are no
longer subject to income tax examinations by tax authorities for tax years ending before March 31, 2016. During the year ended
March 31, 2020 and 2019 we paid income taxes of $7,383 and $70,768, respectively.
NOTE
13 – SUBSEQUENT EVENTS
Subsequent
to March 31, 2020, we received proceeds of $2,091,135 in short-term advances from related parties, $2,000,000 from a short-term
promissory note with a related party, and $400,000 from a short-term promissory note with a non-related party. Additionally, we
received $505,300 in proceeds from the Paycheck Protection Program as established by the CARES Act, along with an additional $500,000
in proceeds from a loan with the U.S. Small Business Administration.
Subsequent
to March 31, 2020, we repurchased 9,079 shares of our common stock from a third party. These shares were immediately canceled.
Also subsequent to March 31, 2020 we issued 21,000,000 shares of our common stock for services and compensation.
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.