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U.S. Securities and Exchange Commission

Washington, DC 20549

 

FORM 10-Q

 

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

 

FOR THE QUARTERLY PERIOD ENDED

 

March 31, 2022

 

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

 

For the transition period from__________________ to _______________________.

 

Commission File Number 000-27019

 

Investview, Inc.

(Exact name of registrant as specified in its charter)

 

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

 

234 Industrial Way West, Ste A202

Eatontown, New Jersey 07724

(Address of principal executive offices)

 

Issuer’s telephone number: 732-889-4300

 

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

 

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

 

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

Yes No

 

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

Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer Smaller reporting company
Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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

Yes No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 23, 2022, there were 2,711,108,823 shares of common stock, $0.001 par value, outstanding.

 

 

 

 

 

 

INVESTVIEW, INC.

 

Form 10-Q for the Three Months Ended March 31, 2022

 

Table of Contents

 

PART I – FINANCIAL INFORMATION 3
ITEM 1 – FINANCIAL STATEMENTS 3
Condensed Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021 3
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the Three Months Ended March 31, 2022 and 2021 (Unaudited) 4
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2021 and 2020 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements as of March 31, 2022 (Unaudited) 7
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 21
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 25
ITEM 4 – CONTROLS AND PROCEDURES 25
PART II – OTHER INFORMATION 25
ITEM 1 – LEGAL PROCEEDINGS 25
ITEM 1.A – RISK FACTORS 26
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 26
ITEM 3 – DEFAULTS UPON SENIOR SECURITIES 26
ITEM 4 – MINE SAFETY DISCLOSURES 26
ITEM 5 – OTHER INFORMATION 26
ITEM 6 – EXHIBITS 26
SIGNATURE PAGE 28

 

2

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1 – FINANCIAL STATEMENTS

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

      March 31       December 31,  
    2022     2021  
    (unaudited)        
ASSETS                
Current assets:                
Cash and cash equivalents   $ 24,866,231     $ 30,995,283  
Restricted cash, current     819,338       819,338  
Prepaid assets     194,470       164,254  
Receivables     1,793,982       1,920,069  
Inventory     55,570       -  
Other current assets     2,229,943       2,018,324  
Total current assets     29,959,534       35,917,268  
                 
Fixed assets, net     11,785,127       6,682,877  
                 
Other assets:                
Restricted cash, long term     597,451       802,285  
Other restricted assets, long term     129,648       122,769  
Operating lease right-of-use asset     209,739       264,846  
Intangible asset, net     7,240,000       7,240,000  
Deposits     473,598       473,598  
Total other assets     8,650,436       8,903,498  
                 
Total assets   $ 50,395,097     $ 51,503,643  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                
Current liabilities:                
Accounts payable and accrued liabilities   $ 3,378,697     $ 3,904,681  
Payroll liabilities     47,501       176,604  
Income tax payable     806,516       807,827  
Customer advance     249,433       75,702  
Deferred revenue     3,293,498       3,288,443  
Derivative liability     93,214       69,371  
Dividend liability     230,984       219,705  
Operating lease liability, current     216,649       255,894  
Related party payables, net of discounts, current     1,200,937       1,832,642  
Debt, net of discounts, current     2,909,513       2,947,013  
Total current liabilities     12,426,942       13,577,882  
                 
Operating lease liability, long term     19,597       43,460  
Related party payables, net of discounts, long term     570,099       486,814  
Debt, net of discounts, long term     7,732,889       8,455,646  
Total long term liabilities     8,322,585       8,985,920  
                 
Total liabilities     20,749,527       22,563,802  
                 
Commitments and contingencies     -       -  
                 
Stockholders’ equity (deficit):                
Preferred stock, par value: $0.001; 50,000,000 shares authorized, 252,192 and 252,192 issued and outstanding as of March 31, 2021 and December 31, 2021, respectively     252       252  
Common stock, par value $0.001; 10,000,000,000 shares authorized; 2,711,108,823 and 2,904,210,762 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively     2,711,109       2,904,211  
Additional paid in capital     100,607,830       101,883,573  
Accumulated other comprehensive income (loss)     (22,620 )     (23,000 )
Accumulated deficit     (73,651,001 )     (75,825,195 )
Total stockholders’ equity (deficit)     29,645,570       28,939,841  
                 
Total liabilities and stockholders’ equity (deficit)   $ 50,395,097     $ 51,503,643  

 

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

 

3

 

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND OTHER COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

      2022       2021  
    Three Months Ended March 31,  
    2022     2021  
             
Revenue:                
Subscription revenue, net of refunds, incentives, credits, and chargebacks   $ 13,730,670     $ 7,949,717  
Mining revenue     3,576,973       8,337,359  
Cryptocurrency revenue     440,416       764,862  
Fee revenue     -       2,032  
Total revenue, net     17,748,059       17,053,970  
                 
Operating costs and expenses:                
Cost of sales and service     1,830,341       2,898,507  
Commissions     7,383,688       5,084,879  
Selling and marketing     11,754       27,651  
Salary and related     1,215,263       1,190,141  
Professional fees     978,975       650,481  
Impairment expense     -       534,438  
Loss (gain) on disposal of assets     (24,300 )     -  
General and administrative     2,067,816       1,817,397  
Total operating costs and expenses     13,463,537       12,203,494  
                 
Net income (loss) from operations     4,284,522       4,850,476  
                 
Other income (expense):                
Gain (loss) on debt extinguishment     -       407,802  
Gain (loss) on fair value of derivative liability     (23,843 )     (184,737 )
Realized gain (loss) on cryptocurrency     (182,789 )     524,212  
Interest expense     (4,623 )     (5,869 )
Interest expense, related parties     (1,719,465 )     (374,080 )
Other income (expense)     31,227       (133,240 )
Total other income (expense)     (1,899,493 )     234,088  
                 
Income (loss) before income taxes     2,385,029       5,084,564  
Income tax expense     (6,000 )     (143,003 )
                 
Net income (loss)     2,379,029       4,941,561  
                 
Dividends on Preferred Stock     (204,835 )     (124,506 )
                 
Net income (loss) applicable to common shareholders   $ 2,174,194     $ 4,817,055  
                 
Other comprehensive income (loss), net of tax:                
Foreign currency translation adjustments   $ 380     $ 273  
Total other comprehensive income (loss)     380       273  
Comprehensive income (loss)   $ 2,379,409     $ 4,941,834  
                 
Basic income (loss) per common share   $ 0.00     $ 0.00  
Diluted income (loss) per common share   $ 0.00     $ 0.00  
                 
Basic weighted average number of common shares outstanding     2,723,982,285       3,237,481,329  
Diluted weighted average number of common shares outstanding     3,760,410,856       3,710,787,154  

 

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

 

4

 

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(Unaudited)

 

                                                 
                                  Accumulated              
                            Additional     Other              
    Preferred stock     Common stock     Paid in     Comprehensive     Accumulated        
    Shares     Amount     Shares     Amount     Capital     Income (Loss)     Deficit     Total  
Balance, December 31, 2020     55,554     $ 56       3,237,481,329     $ 3,237,481     $ 34,615,895     $ (19,330 )   $ (50,855,326 )   $ (13,021,224 )
Preferred stock issued for cash     47,953       48       -       -       1,198,777       -       -       1,198,825  
Preferred stock issued for cryptocurrency     392       -       -       -       9,800       -       -       9,800  
Preferred stock issued for debt     49,418       49       -       -       1,235,401       -       -       1,235,450  
Derivative liability recorded for warrants issued with preferred stock     -       -       -       -       (80,940 )     -       -       (80,940 )
Common stock cancelled     -       -       (255,000,000 )     (255,000 )     255,000       -       -       -  
Common stock issued for services     -       -       -       -       592,978       -       -       592,978  
Beneficial conversion feature     -       -       -       -       1,550,000       -       -       1,550,000  
Dividends     -       -       -       -       -       -       (124,506 )     (124,506 )
Foreign currency translation adjustment     -       -       -       -       -       273       -       273  
Net income (loss)     -       -       -       -       -       -       4,941,561       4,941,561  
Balance, March 31, 2021     153,317     $ 153       2,982,481,329     $ 2,982,481     $ 39,376,911     $ (19,057 )   $ (46,038,271 )   $ (3,697,783 )
                                                                 
Balance, December 31, 2021     252,192     $ 252       2,904,210,762     $ 2,904,211     $ 101,883,573     $ (23,000 )   $ (75,825,195 )   $ 28,939,841  
Common stock issued for services and compensation     -       -       -       -       255,163       -       -       255,163  
Common stock repurchased from related parties     -       -       (43,101,939 )     (43,102 )     (1,680,906 )     -       -       (1,724,008 )
Common stock cancelled     -       -       (150,000,000 )     (150,000 )     150,000       -       -       -  
Dividends     -       -       -       -       -       -       (204,835 )     (204,835 )
Foreign currency translation adjustment     -       -       -       -       -       380       -       380  
Net income (loss)     -       -       -       -       -       -       2,379,029       2,379,029  
Balance, March 31, 2022     252,192     $ 252       2,711,108,823     $ 2,711,109     $ 100,607,830     $ (22,620 )   $ (73,651,001 )   $ 29,645,570  

 

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

 

5

 

 

INVESTVIEW INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

             
    Three Months Ended March 31,  
    2022     2021  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net income (loss)   $ 2,379,029     $ 4,941,561  
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                
Depreciation     909,955       659,179  
Amortization of debt discount     1,474,380       131,545  
Amortization of intangible assets     -       27,989  
Stock issued for services and compensation     255,163       592,978  
Lease cost, net of repayment     (8,001 )     (1,000 )
(Gain) loss on debt extinguishment     -       (407,802 )
(Gain) loss on disposal of fixed assets     (24,300 )     -  
(Gain) loss on fair value of derivative liability     23,843       184,737  
Realized (gain) loss on cryptocurrency     182,789       (524,212 )
Impairment expense     -       534,438  
Changes in operating assets and liabilities:                
Receivables     126,087       (595,727 )
Inventory     (55,570 )     -  
Prepaid assets     (30,216 )     727,122  
Short-term advances     -       145,000  
Short-term advances from related parties     -       500  
Other current assets     (933,540 )     (4,200,038 )
Deposits     -       (433,040 )
Accounts payable and accrued liabilities     (655,087 )     640,794  
Income tax payable     (1,311 )     -  
Customer advance     173,731       2,067,313  
Deferred revenue     5,055       591,462  
Accrued interest     4,623       5,869  
Accrued interest, related parties     245,085       242,535  
Net cash provided by (used in) operating activities     4,071,715       5,331,203  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Cash received for the disposal of fixed assets     28,305       -  
Cash paid for fixed assets     (6,016,210 )     (627,497 )
Net cash provided by (used in) investing activities     (5,987,905 )     (627,497 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Repayments for related party payables     (2,267,885 )     (450,604 )
Repayments for debt     (269,362 )     (328,578 )
Payments for shares repurchased from related parties     (1,724,008 )     -  
Dividends paid     (156,821 )     (16,244 )
Proceeds from the sale of preferred stock     -       1,198,825  
Net cash provided by (used in) financing activities     (4,418,076 )     403,399
                 
Effect of exchange rate translation on cash     380       273  
                 
Net increase (decrease) in cash, cash equivalents, and restricted cash     (6,333,886 )     5,107,378  
Cash, cash equivalents, and restricted cash - beginning of period     32,616,906       1,554,449  
Cash, cash equivalents, and restricted cash - end of period   $ 26,283,020     $ 6,661,827  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                
Cash paid during the period for:                
Interest   $ 337,884     $ 298,603  
Income taxes   $ 7,311     $ 143,003  
Non-cash investing and financing activities:                
Cancellation of shares   $ 150,000     $ 255,000  
Beneficial conversion feature   $ -     $ 1,550,000  
Derivative liability recorded for warrants issued   $ -     $ 80,940  
Preferred shares issued in exchange for cryptocurrency   $ -     $ 9,800  
Preferred shares issued in exchange for debt   $ -     $ 1,235,450  
Dividends declared   $ 204,835     $ 124,506  
Dividends paid with cryptocurrency   $ 36,735     $ 43,833  
Debt and related party debt extinguished in exchange for cryptocurrency   $ 495,518     $ 488,798  
Related party debt extinguished in exchange for cryptocurrency   $ -     $ 82,000  

 

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

 

6

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Organization

 

Investview, Inc. was incorporated on January 30, 1946, under the laws of the state of Utah as the Uintah Mountain Copper Mining Company. In January 2005, we changed domicile to Nevada and changed our name to Voxpath Holding, Inc. In September of 2006, we merged with The Retirement Solution Inc. and then changed our name to TheRetirementSolution.Com, Inc. Subsequently, in October 2008 we changed our name to Global Investor Services, Inc., before changing our name to Investview, Inc., on March 27, 2012.

 

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

 

On June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former members of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth Generators and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption of $419,139 in pre-merger liabilities.

 

On February 28, 2018, we filed a name change for Wealth Generators, LLC to Kuvera, LLC (“Kuvera”).

 

On 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 December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities Trading Advisor, Commodity Pool Operator, and approved for over-the-counter FOREX advisory services.

 

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

 

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

 

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

 

Nature of Business

 

We operate a financial technology (FinTech) services company in several different businesses. We deliver multiple products and services through a direct selling network, also known as multi-level marketing, of independent distributors that offer our products and services through a subscription-based revenue model to our distributors, as well as by our distributors to a large base of customers that we refer to as “members”. Through this business, we provide research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research and trade alerts regarding equities, options, FOREX, ETFs, binary options, and cryptocurrency sector education. In addition to trading tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product subscription includes a core set of trading tools and research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. In addition to our education subscriptions, through a distribution arrangement we have with a third party, we have provided our members with an opportunity to purchase through such third party, a specialty form of adaptive digital currency called “ndau”. Through our direct selling model, we reward our distributors with commissions under a standard bonus plan that allows for discretionary bonuses based on performance.

 

7

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

We also operate a blockchain technology business that provides leading-edge research, development, and FinTech services involving the management of digital asset technologies with a focus on Bitcoin mining and the new generation of digital assets. As well, in order to, among other things, commercialize on the proprietary trading platform we recently acquired from MPower Trading Systems, LLC, take advantage of the market’s increasing acceptance and expansion of the ownership and use of digital currencies as an investable asset class, subject to applicable regulatory limitations, and to proactively respond to increasing regulatory scrutiny relative to cryptocurrency products, we have adopted a growth plan that contemplates the establishment of a suite of financial service companies that will include self-directed brokerage services, institutional trade execution services, innovative advisory services (RIA, CTA), and codeless algorithmic trading technologies, which will operate under our recently formed subsidiary, Investview Financial Group Holdings, LLC (“IFGH”). Towards that end, we have entered into an agreement to acquire the LevelX brokerage firm from an affiliate of the former Chief Executive Officer of the Company. However, the closing of that transaction is contingent upon securing FINRA approval which has not yet been obtained. If FINRA approval is not shortly forthcoming, we are likely to abandon the LevelX acquisition and search for alternative acquisitions within the brokerage industry. Further, our wholly owned subsidiary, SAFE Management, LLC (“SAFE Management”), owns a currently dormant registered investment advisor and a commodity trading advisor registered with the National Futures Association (NFA). However, we plan to relaunch its services under the IFGH umbrella in 2022 to primarily focus on commodities and FOREX.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

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. Prior to September 20, 2021 we operated the Company on a March 31, fiscal year end. Effective September 30, 2021 we changed our fiscal year to December 31.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the three months ended March 31, 2022, are not necessarily indicative of the operating results that may be expected for the filing of our December 31, 2022 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2021 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC (formerly Kuvera, LLC), Kuvera France S.A.S (through its closure date in June of 2021), Apex Tek, LLC (formerly Razor Data, LLC), SAFETek, LLC (formerly WealthGen Global, LLC), S.A.F.E. Management, LLC, United Games, LLC, United League, LLC, Investment Tools & Training, LLC, iGenius Global LTD (formerly Kuvera (N.I.) LTD), Investview Financial Group Holdings, LLC, and Investview MTS, LLC. All intercompany transactions and balances have been eliminated in consolidation.

 

Financial Statement Reclassification

 

Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.

 

Use of Estimates

 

The preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

8

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

Foreign Exchange

 

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

 

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

 

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

 

The following rates were used to translate our Euro bank account into USD at the following balance sheet dates.

 

    March 31,
2022
    December 31,
2021
 
Euro to USD     1.1074       1.1371  

 

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

 

    2022     2021  
    Three Months Ended March 31,  
    2022     2021  
Euro to USD     1.1219       1.2052  

 

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, 2022 and December 31, 2021, cash balances that exceeded FDIC limits were $23,637,360 and $19,336,350, respectively. We have not experienced significant losses relating to these concentrations in the past.

 

Cash Equivalents and Restricted Cash

 

For purposes of reporting cash flows, we consider all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. As of March 31, 2022 and December 31, 2021, we had no cash equivalents.

 

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

 

    March 31,
2022
    December 31,
2021
 
Cash and cash equivalents   $ 24,866,231     $ 30,995,283  
Restricted cash, current     819,338       819,338  
Restricted cash, long term     597,451       802,285  
Total cash, cash equivalents, and restricted cash shown on the statement of cash flows   $ 26,283,020     $ 32,616,906  

 

Amount included in restricted cash represent funds required to be held in an escrow account by a contractual agreement and will be used for paying dividends to our Series B Preferred Stockholders.

 

9

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

Receivables

 

Receivables are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. We had an allowance for doubtful accounts of $719,342 as of March 31, 2022 and December 31, 2021, respectively.

 

Fixed Assets

 

Fixed assets are stated at cost and depreciated using the straight-line method over their estimated useful lives. When retired or otherwise disposed, the carrying value and accumulated depreciation of the fixed asset is removed from its respective accounts and the net difference less any amount realized from disposition is reflected in earnings. Expenditures for maintenance and repairs which do not extend the useful lives of the related assets are expensed as incurred.

 

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

 

    Estimated Useful Life
(years)
  March 31,
2022
    December 31,
2021
 
Furniture, fixtures, and equipment   10   $ 82,942     $ 82,942  
Computer equipment   3     15,241       15,241  
Leasehold improvements   Remaining Lease Term     40,528       40,528  
Data processing equipment   3     16,506,939       10,638,619  
Construction in progress   N/A     529,806       391,583  
          17,175,456       11,168,913  
Accumulated depreciation         (5,390,329 )     (4,486,036 )
Net book value       $ 11,785,127     $ 6,682,877  

 

Total depreciation expense for the three months ended March 31, 2022 and 2021, was $909,955 and $659,179, respectively. During the quarter ended March 31, 2022 we sold assets with a total net book value of $4,008 for cash of $28,308, therefore recognized a gain on disposal of assets of $24,300.

 

Long-Lived Assets – Intangible Assets & License Agreement

 

We account for our cryptocurrencies, intangible assets and long-term license agreement in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-30 requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Our cryptocurrencies are deemed to have an indefinite useful life; therefore, amounts are not amortized, but rather are assessed for impairment as further discussed in our impairment policy. Under ASC Subtopic 350-30 any intangible asset with a useful life is required to be amortized over that life and the useful life is to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.

 

We hold cryptocurrency-denominated assets and include them in our consolidated balance sheet as other assets. The value of our cryptocurrencies as of March 31, 2022 and December 31, 2021 were $2,359,591 ($2,229,943 current and $129,648 restricted long term) and $2,141,093 ($2,018,324 current and $122,769 restricted long term), respectively. Cryptocurrencies purchased or received for payment from customers are recorded in accordance with ASC 350-30 and cryptocurrencies awarded to the Company through its mining activities ($3,576,973 and $8,337,359 for the three months ended March 31, 2022 and 2021, respectively) are accounted for in connection with the Company’s revenue recognition policy. The use of cryptocurrencies is accounted for in accordance with the first in first out method of accounting. For the three months ended March 31, 2022 and 2021 we recorded realized gains (losses) on our cryptocurrency transactions of $(182,789) and $524,212, respectively.

 

In June of 2018 we purchased United Games, LLC and United League, LLC and recorded the transaction as a business combination. Intangible assets acquired in the business combination were recorded at fair value on the date of acquisition and were being amortized on a straight-line method over their estimated useful lives. The intangible assets were impaired during the year ended March 31, 2021 due to a lack of recoverability.

 

10

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

On March 22, 2021, we entered into Securities Purchase Agreement to acquire the operating assets and intellectual property rights of MPower Trading Systems LLC, a company controlled and partially owned by David B. Rothrock and James R. Bell, two of our board members (see NOTE 12). As a result, we obtained Prodigio, a proprietary software-based trading platform with applications within the brokerage industry, which was valued at $7,240,000 and recorded on our balance sheet as an intangible asset. The intangible asset will have a definite life, however, as of the date of this filing the software has not yet been placed in service, therefore a useful life had not yet been determined and no amortization was recorded during the three months ended March 31, 2022.

 

Impairment of Long-Lived Assets

 

We have adopted ASC Subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or when the historical cost carrying value of an asset may no longer be appropriate. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.

 

We evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.

 

During the quarter ended March 31, 2022 no impairment was recorded. During the quarter ended March 31, 2021 we impaired our intangible assets with a cost basis of $991,000 due to the lack of recoverability. We had recorded accumulated depreciation and accumulated amortization of $456,562 for the impaired assets through the date of impairment, therefore we recorded impairment expense of $534,438 for the quarter ended March 31, 2021.

 

Fair Value of Financial Instruments

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on our principal or, in the absence of a principal, most advantageous market for the specific asset or liability.

 

U.S. generally accepted accounting principles provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

 

  Level 1: Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.
     
  Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

 

  - quoted prices for similar assets or liabilities in active markets;
  - quoted prices for identical or similar assets or liabilities in markets that are not active;
  - inputs other than quoted prices that are observable for the asset or liability; and
  - inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

  Level 3: Inputs that are unobservable and reflect management’s own assumptions about the inputs market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows).

 

Our financial instruments consist of cash, accounts receivable, accounts payable, and debt. We have determined that the book value of our outstanding financial instruments as of March 31, 2022 and December 31, 2021, approximates the fair value due to their short-term nature or interest rates that approximate prevailing market rates.

 

11

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2022:

 

    Level 1     Level 2     Level 3     Total  
Total Assets   $ -     $ -     $ -     $ -  
                                 
Derivative liability   $ -     $ -     $ 93,214     $ 93,214  
Total Liabilities   $ -     $ -     $ 93,214     $ 93,214  

 

Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of December 31, 2021:

 

    Level 1     Level 2     Level 3     Total  
Total Assets   $ -     $ -     $ -     $ -  
                                 
Derivative liability   $ -     $ -     $ 69,371     $ 69,371  
Total Liabilities   $ -     $ -     $ 69,371     $ 69,371  

 

Revenue Recognition

 

Subscription Revenue

 

Most of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a designated trial period to first time subscription customers, during which a full refund can be requested if a customer does not wish to continue with the subscription. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks. As of March 31, 2022 and December 31, 2021 our deferred revenues were $3,293,498 and $3,288,443, respectively.

 

Mining Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, we leased equipment under a sales-type lease through June of 2020. In June of 2020 we cancelled all leases and purchased all of the rights and obligations under the leases, which included obtaining ownership of all equipment. We use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of our mining activities.

 

Cryptocurrency Revenue

 

We generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with third-party suppliers. The various packages include different amounts of coin with differing rates of returns and terms and, in some cases, include a product protection option that allows the purchaser to protect their initial purchase price. The protection allows the purchaser to obtain 50% of their purchase price at five years or 100% of their purchase price at ten years. Both the coin and the protection option are delivered by third-party suppliers.

 

We recognize cryptocurrency revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to arrange for the third-parties to provide coin and protection (if applicable) to our customers and payment is received from our customers at the time of order placement. All customers are given two weeks to request a refund, therefore we record a customer advance on our balance sheet upon receipt of payment. After the two weeks have passed from order placement, we request our third-party suppliers to deliver coin and protection (if applicable), at which time we recognize revenue and the amounts due to our suppliers on our books. As of March 31, 2022 and December 31, 2021 our customer advances related to cryptocurrency revenue were $249,433 and $75,702, respectively.

 

12

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

Fee Revenue

 

We generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we receive payment for such advisory fees in the month following recognition.

 

Revenue generated for the three months ended March 31, 2022 is as follows:

 

      Subscription
Revenue
      Cryptocurrency
Revenue
      Mining
Revenue
      Fee Revenue       Total  
Gross billings/receipts   $ 14,693,972     $ 838,422     $ 3,576,973     $ -     $ 19,109,367  
Refunds, incentives, credits, and chargebacks     (963,302 )     -       -       -       (963,302 )
Amounts paid to providers     -       (398,006 )     -       -       (398,006 )
Net revenue   $ 13,730,670     $ 440,416     $ 3,576,973     $ -     $ 17,748,059  

 

For the three months ended March 31, 2022 foreign and domestic revenues were approximately $12.0 million and $5.7 million, respectively.

 

Revenue generated for the three months ended March 31, 2021 is as follows:

 

      Subscription
Revenue
      Cryptocurrency
Revenue
      Mining
Revenue
      Fee Revenue       Total  
Gross billings/receipts   $ 8,407,522     $ 1,877,186     $ 8,337,359     $                   2,032     $ 18,624,099  
Refunds, incentives, credits, and chargebacks     (457,805 )     -       -       -       (457,805 )
Amounts paid to providers     -       (1,112,324 )     -       -       (1,112,324 )
Net revenue   $ 7,949,717     $ 764,862     $ 8,337,359     $ 2,032     $ 17,053,970  

 

For the three months ended March 31, 2021 foreign and domestic revenues were approximately $7.6 million and $9.4 million, respectively.

 

Advertising, Selling, and Marketing Costs

 

We expense advertising, selling, and marketing costs as incurred. Advertising, selling, and marketing costs include costs of promoting our product worldwide, including promotional events. Advertising, selling, and marketing expenses for the three months ended March 31, 2022 and 2021, totaled $11,754 and $27,651, respectively.

 

Cost of Sales and Service

 

Included in our costs of sales and services is amounts paid to our trading and market experts that provide financial education content and tools to our subscription customers and hosting fees that we pay to vendors to set up our mining equipment at third-party sites in order to generate mining revenue. Costs of sales and services for the three months ended March 31, 2022 and 2021, totaled $1,830,341 and $2,898,507, respectively.

 

13

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

Income Taxes

 

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

 

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

 

Net Income (Loss) per Share

 

We follow ASC subtopic 260-10, Earnings per Share (“ASC 260-10”), which specifies the computation, presentation, and disclosure requirements of earnings per share information. Basic income (loss) per share has been calculated based upon the weighted average number of common shares outstanding. Diluted income (loss) per share reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.

 

The following table illustrates the computation of diluted earnings per share for the three months ended March 31, 2022 and 2021, where no potentially dilutive securities were excluded from the computation:

 SCHEDULE OF DILUTED EARNINGS PER SHARE

    March 31,
2022
    March 31,
2021
 
Net income (loss)   $ 2,379,029     $ 4,941,561  
Less: preferred dividends     (204,835 )     (124,506 )
Add: interest expense on convertible debt     244,755       226,140  
Net income available to common shareholders for dilution purposes   $ 2,418,949     $ 5,043,195  
                 
Basic weighted average number of common shares outstanding     2,723,982,285       3,237,481,329  
Dilutive impact of warrants     -       128,532  
Dilutive impact of convertible notes     471,428,571       473,177,294  
Dilutive impact of non-voting membership interest     565,000,000       -  
Diluted weighted average number of common shares outstanding (denominator)     3,760,410,856       3,710,787,154  
                 
Diluted income per common share   $ 0.00     $ 0.00  

 

Lease Obligation

 

We determine if an arrangement is a lease at inception. Operating leases are included in the operating lease right-of-use asset account, the operating lease liability, current account, and the operating lease liability, long term account in our balance sheet. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

 

Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For leases in which the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have elected to not apply the recognition requirements of ASC 842 to short-term leases (leases with terms of twelve months or less). Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term. We have elected the practical expedient and will not separate non-lease components from lease components and will instead account for each separate lease component and non-lease component associated with the lease components as a single lease component.

 

Inventory

 

Inventory is valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method and is inclusive of any shipping and tax costs.

 

Inventory was made up of the following at each balance sheet date:

 

                 
    March 31,
2022
    December 31,
2021
 
Raw materials   $ 55,570     $                    -  
Finished goods     -       -  
 Inventory Net   $ 55,570     $ -  

 

During the quarter ended March 31, 2022 we acquired raw materials to be used for future operations.

 

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

 

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

 

14

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

NOTE 4 – LIQUIDITY

 

Our financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

 

During the three months ended March 31, 2022 we reported $4,071,715 in cash provided by operating activities, $4,284,522 of income from operations, and net income of $2,379,029. As of March 31, 2022 we have cash and cash equivalents of $24,866,231 and a working capital balance of $17,532,592. As of March 31, 2022 our unrestricted cryptocurrency balance was reported at a cost basis of $2,229,943. Management does not believe there are any liquidity issues as of March 31, 2022.

 

NOTE 5 – RELATED-PARTY TRANSACTIONS

 

Our related-party payables consisted of the following:

 

      March 31,
2022
      December 31,
2021
 
Convertible Promissory Note entered into on 4/27/20, net of debt discount of $1,050,110 as of March 31, 2022 [1] $ 249,890     $ 239,521  
Convertible Promissory Note entered into on 5/27/20, net of debt discount of $570,127 as of March 31, 2022 [2]     129,877       124,149  
Convertible Promissory Note entered into on 11/9/20, net of debt discount of $1,109,664 as of March 31, 2022 [3]     190,332       198,187  
Promissory note entered into on 12/15/20 [4]     -       80,322  
Convertible Promissory Note entered into on 3/30/21 [5]     -       476,670  
Working Capital Promissory Note entered into on 3/22/21 [6]     1,200,937       1,200,607  
Total related-party debt     1,771,036       2,319,456  
Less: Current portion     (1,200,937 )     (1,832,642 )
Related-party debt, long term   $ 570,099     $ 486,814  

 

 

 

[1] On April 27, 2020 we received proceeds of $1,300,000 from DBR Capital, LLC, an entity controlled by members of our Board of Directors, and entered into a convertible promissory note. The note is secured by shares held by officers and majority shareholders of the Company. The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. Per the original terms of the agreement the note was convertible into common stock at a conversion price of $0.01257 per share, which was amended on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded a beneficial conversion feature and debt discount of $1,300,000. During the three months ended March 31, 2022 we recognized $32,037 of the debt discount into interest expense, as well as expensed an additional $65,004 of interest expense on the note, all of which was repaid during the period.
   
[2] On May 27, 2020 we received proceeds of $700,000 from DBR Capital, LLC, an entity controlled by members of our Board of Directors, and entered into a convertible promissory note. The note is secured by shares held by officers and majority shareholders of the Company. The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. Per the original terms of the agreement the note was convertible into common stock at a conversion price of $0.01257 per share, which was amended on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded a beneficial conversion feature and debt discount of $700,000. During the three months ended March 31, 2022 we recognized $17,394 of the debt discount into interest expense as well as expensed an additional $35,001 of interest expense on the note, all of which was repaid during the period.
   
[3] On November 9, 2020 we received proceeds of $1,300,000 from DBR Capital, LLC, an entity controlled by members of our Board of Directors, and entered into a convertible promissory note. The note is secured by shares held by officers and majority shareholders of the Company. The note bears interest at 38.5% per annum, made up of a 25% interest rate per annum and a facility fee of 13.5% per annum, payable monthly beginning February 1, 2021, and the principal is due and payable on April 27, 2030. Per the terms of the agreement the note is convertible into common stock at a conversion price of $0.007 per share. At inception we recorded a beneficial conversion feature and debt discount of $1,300,000. During the three months ended March 31, 2022 we recognized $33,854 of the debt discount into interest expense as well as expensed an additional $125,124 of interest expense on the note, all of which was repaid during the period.
   
[4] On December 15, 2020 we received proceeds of $154,000 from Wealth Engineering, an entity controlled by members of our management team and Board of Directors, and entered into a promissory note for $600,000. The term of the note requires monthly repayments of $20,000 per month for 30 months. At inception we recorded a debt discount of $446,000 representing the difference between the cash received and the total amount to be repaid. During the three months ended March 31, 2022 we recognized the remaining $259,678 of the debt discount into interest expense and repaid the remaining $340,000 of the debt.

 

15

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

[5] Effective March 30, 2021 we restructured a $1,000,000 promissory note with $200,000 of accrued interest, along with a $350,000 short-term advance, with Joseph Cammarata, our then Chief Executive Officer. The new note had a principal balance of $1,550,000, had a 5% interest rate, and was convertible at $0.02 per share. As a result of the fixed conversion price we recorded a beneficial conversion feature and debt discount of $1,550,000 on March 30, 2021, which was equal to the face value of the note. Effective September 21, 2021 we entered into an amendment to the note to extend the due date to September 30, 2022, allow for partial conversions, and change the conversion price to $0.008 per share. As the terms of the note changed substantially, we accounted for the amendment as an extinguishment and new note. Through September 21, 2021 we recognized $738,904 of the initial debt discount into interest expense, removed $806,849 of the remaining debt discount from the books, recorded a beneficial conversion feature due to the fixed conversion price and a debt discount of $1,550,000, which was equal to the face value of the amended note, and recorded a net $743,151 into additional paid in capital as a gain due to the extinguishment transaction being between related parties and thus a capital transaction. During the three months ended March 31, 2022 we recognized the remaining $1,131,417 of the $1,550,000 debt discount into interest expense. Also, during the three months ended March 31, 2022 we expensed $19,626 of interest expense on the debt. During February 2022, we provided 30 days’ notice of our intent to retire and repay the Cammarata Note in cash. Having not timely received a properly executed conversion notice within the proscribed period, and citing certain other damages incurred by us arising from Mr. Cammarata’s legal proceedings, on March 30, 2022, we tendered to Mr. Cammarata cash payment in full for the Cammarata Note. As of the date of this filing, Mr. Cammarata has not yet accepted our tender of the cash payment, and instead has asserted his entitlement to exercise his right to convert the Cammarata Note into our common shares (see NOTE 13).
   
[6] On March 22, 2021, we entered into Securities Purchase Agreements to purchase 100% of the operating assets of SSA Technologies LLC, an entity that owns and operates a FINRA-registered broker-dealer. SSA is controlled and partially owned by Joseph Cammarata, our former Chief Executive Officer. Commencing upon execution of the agreements and through the closing of the transactions, we agreed to provide certain transition service arrangements to SSA. In connection with the transactions, we entered into a Working Capital Promissory Note with SSA under which SSA was to have advanced to us up to $1,500,000 before the end of 2021; however, SSA has only provided advances of $1,200,000 to date. The note bears interest at the rate of 0.11% per annum therefore we recognized $330 worth of interest expense on the loan during the three months ended March 31, 2022. The note was due and payable by January 31, 2022; however, has not yet been repaid as we consider our legal options in light of SSA’s failure to complete its funding obligations. The note was to have been secured by the pledge of 12,000,000 shares of our common stock; however, it remains unsecured as the pledge of shares was not implemented at the closing of the loan.

 

In addition to the above-mentioned related-party lending arrangements, during the three months ended March 31, 2022 we entered into a Separation and Release Agreement (the “Separation Agreements”) with Mario Romano and Annette Raynor, two of the Company’s founders and former members of management and the Board of Directors, and Wealth Engineering, LLC, an affiliate of Mr. Romano and Ms. Raynor. Under the Separation Agreements, Mr. Romano and Ms. Raynor agreed to resign their positions as officers and directors of the Company effective immediately as they each transition to the roles of strategic advisors to the Company. In conjunction with the Separation Agreements Mr. Romano and Ms. Raynor forfeited 75,000,000 shares each, which were returned to the Company and cancelled, and we repurchased a total of 43,101,939 shares from Mr. Romano and Ms. Raynor in exchange for cash of $1,724,008, which was paid to federal and state taxing authorities on behalf of Wealth Engineering, LLC as payment for the estimated federal and state taxes that Wealth Engineering, LLC may be subject to in connection with the vesting of 63,333,333 Company restricted shares that vested on July 22, 2021 (see NOTE 9).

 

NOTE 6 – DEBT

 

Our debt consisted of the following:

 

    March 31,
2022
    December 31,
2021
 
Loan with the U.S. Small Business Administration dated 4/19/20 [1]   $ 536,421     $ 531,798  
Long term notes for APEX lease buyback [2]     10,105,981       10,870,861  
Total debt     10,642,402       11,402,659  
Less: Current portion [12]     (2,909,513 )     (2,947,013 )
Debt, long term portion   $ 7,732,889     $ 8,455,646  

 

[1] In April 2020 we received proceeds of $500,000 from a loan entered into with the U.S. Small Business Administration. Under the terms of the loan interest is to accrue at a rate of 3.75% per annum and installment payments of $2,437 monthly will begin twelve months from the date of the loan, with all interest and principal due and payable thirty years from the date of the loan. During the three months ended March 31, 2022 we recorded $4,623 worth of interest on the loan.
   
[2] During the year ended March 31, 2021 we entered into notes with third parties for $19,089,500 in exchange for the cancellation of APEX leases previously entered into, which resulted in our purchase of all rights and obligations under the leases. We agreed to settle a portion of the debt during the year ended March 31, 2021, at a discount to the original note terms offered, by making lump sum payments, issuing shares of our common stock, issuing shares of our preferred stock, and issuing cryptocurrency. The remaining notes are all due December 31, 2024 and have a fixed monthly payment that is equal to 75% of the face value of the note, divided by 48 months. The monthly payments began the last day of January 2021 and continue until December 31, 2024 when the last monthly payment will be made, along with a balloon payment equal to 25% of the face value of the note, to extinguish the debt. During the three months ended March 31, 2022 we repaid a portion of the debt with cash payments of $269,362 and issuances of cryptocurrency valued at $495,518.

 

16

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

NOTE 7 – DERIVATIVE LIABILITY

 

During the three months ended March 31, 2022, we had the following activity in our derivative liability account relating to our warrants:

 

Derivative liability at December 31, 2021   $ 69,371  
Derivative liability recorded on new instruments     -  
Derivative liability reduced by warrant exercise (see NOTE 7)     -  
(Gain) loss on fair value     23,843  
Derivative liability at March 31, 2022   $ 93,214  

 

We use the binomial option pricing model to estimate fair value for those instruments at inception, at warrant exercise, and at each reporting date. During the three months ended March 31, 2022, the assumptions used in our binomial option pricing model were in the following range:

 

Risk free interest rate     0.97 - 1.26 %
Expected life in years     3.34 - 4.25  
Expected volatility     199% - 207 %

 

NOTE 8 – OPERATING LEASE

 

In August 2019 we entered an operating lease for office space in Eatontown, New Jersey (the “Eatontown Lease”), in September 2019 we entered an operating lease for office space in Kaysville, Utah (the “Kaysville Lease”), in May 2021 we entered an operating lease for office space in Conroe, Texas (the “Conroe Lease”), in July 2021 we entered an operating lease for office space in Wyckoff, New Jersey (the “Wyckoff Lease”), and in September 2021 we acquired an operating lease for office space in Haverford, Pennsylvania (the “Haverford Lease”) in connection with the MPower acquisition (See NOTE 12).

 

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 three-year lease term of the Eatontown Lease for a period of one year. In addition, we are obligated to pay twelve monthly installments to cover an annual utility charge of $1.75 per rentable square foot for electric usage within the demised premises. As the lessor has the right to digitally meter and charge us accordingly, these payments were deemed variable and will be expensed as incurred. During the three months ended March 31, 2022 the variable lease costs amounted to $831.

 

At commencement of the Kaysville Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $21,147. On September 30, 2020, the Kaysville Lease expired and as of October 1, 2020, the Company began leasing the property located in Kaysville on a month-to-month basis.

 

At commencement of the Conroe Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $174,574. We have the option to extend the 24-month term of the Conroe Lease for three additional terms of 24 months.

 

At commencement of the Wyckoff Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $22,034. The term of the Wyckoff Lease is 24.5 months.

 

At date of acquisition of the Haverford lease, right-of-use assets and lease liabilities obtained amounted to $125,522 and $152,961, respectively. The term of the Haverford lease expires on December 31, 2022.

 

Operating lease expense was $62,753 for the three months ended March 31, 2022. Operating cash flows used for the operating leases during the three months ended March 31, 2022 was $70,755. As of March 31, 2022, the weighted average remaining lease term was 1.01 years and the weighted average discount rate was 12%.

 

17

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

Future minimum lease payments under non-cancellable leases as of March 31, 2022 were as follows:

 

         
Remainder of 2022   $ 182,175  
2023     57,045  
Total     239,220  
Less: Interest     (2,974 )
Present value of lease liability     236,246  
Operating lease liability, current [1]     (216,649 )
Operating lease liability, long term   $ 19,597  

 

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

 

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)

 

Preferred Stock

 

We are authorized to issue up to 50,000,000 shares of preferred stock with a par value of $0.001 and our board of directors has the authority to issue one or more classes of preferred stock with rights senior to those of common stock and to determine the rights, privileges, and preferences of that preferred stock.

 

Our Board of Directors approved the designation of 2,000,000 of the Company’s shares of preferred stock as Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), each with a stated value of $25 per share. Our Series B Preferred Stockholders are entitled to 500 votes per share and are entitled to receive cumulative dividends at the annual rate of 13% per annum of the stated value, equal to $3.25 per annum per share. The Series B Preferred Stock is redeemable at our option or upon certain change of control events.

 

During the year ended March 31, 2021 we commenced a security offering to sell a total of 2,000,000 units at $25 per unit (“Unit Offering”), such that each unit consisted of: (i) one share of our newly authorized Series B Preferred Stock and (ii) five warrants each exercisable to purchase one share of common stock at an exercise price of $0.10 per warrant share. Each Warrant offered is immediately exercisable on the date of issuance, will expire 5 years from the date of issuance, and its value has been classified as a fair value liability due to the terms of the instrument (see NOTE 7).

 

During the three months ended March 31, 2021 we sold 97,763 units for a total of $2,444,075: 47,953 units for cash proceeds of $1,198,825, 392 units for bitcoin proceeds of $9,800, and 49,418 units for debt of $1,235,450. In conjunction with the sale of the units we issued 97,763 shares of Series B Preferred Stock and granted 488,815 warrants during the period.

 

As of March 31, 2022 and December 31, 2021, we had 252,192 shares of preferred stock issued and outstanding.

 

Preferred Stock Dividends

 

During the three months ended March 31, 2022 we recorded $204,835 for the cumulative cash dividends due to the shareholders of our Series B Preferred Stock. We made payments of $156,821 in cash and issued $36,735 worth of cryptocurrency to reduce the amounts owed. As a result, we recorded $230,984 as a dividend liability on our balance sheet as of March 31, 2022.

 

Common Stock

 

During the three months ended March 31, 2022 we cancelled 150,000,000 shares that had been issued but were forfeited (see NOTE 5). As a result, we decreased common stock by $150,000 and increased additional paid in capital by the same. As of the date of this filing, 33,333,333 shares of common stock forfeited as of December 31, 2021 had not yet been physically cancelled due to administrative delays. All forfeited shares have been deemed cancelled as of March 31, 2022. Also during the three months ended March 31, 2022, we repurchased 43,101,939 shares from members of our then management team and Board of Directors in exchange for cash of $1,724,008 to pay for tax withholdings (see NOTE 5).

 

During the three months ended March 31, 2021, we cancelled 255,000,000 shares that had been issued but were subject to certain forfeiture conditions. As a result of the forfeiture, we decreased common stock by $255,000 and increased additional paid in capital by the same.

 

As of March 31, 2022 and December 31, 2021, we had 2,711,108,823 and 2,904,210,762 shares of common stock issued and outstanding, respectively.

 

18

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

Warrants

 

Transactions involving our warrants are summarized as follows:

  

          Weighted  
    Number of     Average  
    Shares     Exercise Price  
Warrants outstanding at December 31, 2021     1,178,320     $ 0.10  
Granted     -     $ -  
Canceled/Expired     -     $ -  
Exercised     -     $ -  
Warrants outstanding at March 31, 2022     1,178,320     $ 0.10  

 

Details of our warrants outstanding as of March 31, 2022 is as follows:

 

Exercise Price     Warrants Outstanding     Warrants Exercisable     Weighted Average Contractual Life (Years)  
$ 0.10       1,178,320       1,178,320       3.90  

 

Class B Redeemable Units of Investview Financial Group Holdings, LLC

 

As of March 31, 2022 and December 31, 2021 there were 565,000,000 Units of Class B Investview Financial Group Holdings, LLC issued and outstanding. These units were issued as consideration for the purchase of operating assets and intellectual property rights of MPower Trading Systems, LLC, a company controlled and partially owned by David B. Rothrock and James R. Bell, two of our board members (see NOTE 12). The Class B Redeemable Units have no voting rights but can be exchanged at any time, within 5 years from the date of issuance, for 565,000,000 shares of our common stock on a one-for-one basis, and are subject to significant restrictions upon resale through 2025 under the terms of a lock up agreement. The fair value of the consideration at the if-converted market value of the common shares was $58.9 million based on the closing market price of $0.1532 on the closing date of September 3, 2021 as discounted from $86.6 million by 32% (or $27.7 million) to reflect the significant lock up period.

 

NOTE 10 – COMMITMENTS AND CONTINGENCIES

 

Legal Proceedings

 

In the ordinary course of business, we may be, or have been, involved in legal proceedings. During the three months ended March 31, 2022 we were not involved in any material legal proceedings, however, during November 2021 we received a subpoena from the United States Securities and Exchange Commission (“SEC”) for the production of documents. We have reason to believe that the focus of the SEC’s inquiry involves whether certain federal securities laws were violated in connection with, among other things, the offer and sale of cryptocurrency products and the operation of our subscription-based multi-level marketing business now known as iGenius. In the subpoena, the SEC advised that the investigation does not mean that the SEC has concluded that we or anyone else has violated federal securities laws and or any other law. We believe that we have complied at all times with the federal securities laws. However, we are aware of the evolving SEC commentary and rulemaking process relative to the characterization of cryptocurrency products under federal securities laws that is sweeping through a large number of businesses that operate within the cryptocurrency sector. We intend to cooperate fully with the SEC’s investigation and will continue to work with outside counsel to review the matter.

 

NOTE 11 – INCOME TAXES

 

For the periods ended March 31 2022, and March 31, 2021, the Company used a discrete effective tax rate method for recording income taxes, as compared to an estimated full year annual effective tax rate method, as an estimate of the annual effective tax rate cannot be made.

 

Provision for income taxes for the three months ended March 31, 2022 was $6,000, resulting in an effective tax rate of 0.3%. Provision for income taxes for the three months ended March 31, 2021 was $143,003, resulting in an effective tax rate of 2.8%. The provision for income taxes was primarily impacted by the change in valuation allowance on deferred tax assets.

 

NOTE 12 – ACQUISITION & NONCONTROLLING INTEREST IN SUBSIDIARY

 

On March 22, 2021, we entered into a Securities Purchase Agreement to purchase the operating assets and intellectual property rights of MPower Trading Systems, LLC, a company controlled and partially owned by David B. Rothrock and James R. Bell, two of our board members, in exchange for 565,000,000 nonvoting Class B Units of Investview Financial Group Holdings, LLC (“Units”). This acquisition closed on September 3, 2021 and we acquired an office lease, furniture and fixtures, and Prodigio, a proprietary software-based trading platform with applications in the brokerage industry. The Units can be exchanged at any time, within 5 years from the date of issuance, for 565,000,000 shares of our common stock on a one-for-one basis and are subject to a lock up period through 2025. The fair value of the consideration at the if-converted market value of the common shares was $58.9 million based on the closing market price of $0.1532 on the closing date of September 3, 2021 as discounted from $86.6 million by 32% (or $27.7 million) to reflect the significant lock up period.

 

19

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

(Unaudited)

 

The Company determined that as of the date of the acquisition, the fair value of the Prodigio Trading Platform software was $7.2 million. The difference between the value of the software asset and the consideration issued was driven by an increase in the valuation of the Class B Units between the execution of the original Securities Purchase Agreement in March 2021 which set the number of units to be issued as consideration and the closing of the transaction in September 2021, as well as the software’s lack of revenue generation and a readily available path to monetization through synergies with a broker-dealer partner. Accordingly, the Company recorded a non-cash loss on acquisition of $51.6 million as illustrated below.

  

         
Purchase price (fair value of Units)   $ 58,859,440  
Intangible asset (Prodigio software)     7,240,000  
Loss on asset acquisition   $ 51,619,440  

 

NOTE 13 – SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, Subsequent Events, we have evaluated subsequent events through the date of this filing and have determined that there are no subsequent events that require disclosure except as noted below.

 

20

 

 

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-Looking Statements

 

The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. When the words “believe,” “expect,” “plan,” “project,” “estimate,” and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on management’s current beliefs and assumptions and information currently available to management, and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Information concerning factors that could cause our actual results to differ materially from these forward-looking statements can be found in our periodic reports filed with the Securities and Exchange Commission (“SEC”). The forward-looking statements included in this report are made only as of the date of this report. We disclaim any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise.

 

Business Overview

 

We operate a financial technology (FinTech) services company in several different businesses. We deliver multiple products and services through a direct selling network, also known as multi-level marketing, of independent distributors that offer our products and services through a subscription-based revenue model to our distributors, as well as by our distributors to a large base of customers that we refer to as “members”. Through this business, we provide research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research and trade alerts regarding equities, options, FOREX, ETFs, binary options, and cryptocurrency sector education. In addition to trading tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product subscription includes a core set of trading tools and research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. In addition to our education subscriptions, through a distribution arrangement we have with a third party, we have provided our members with an opportunity to purchase through such third party, a specialty form of adaptive digital currency called “ndau”. Through our direct selling model, we reward our distributors with commissions under a standard bonus plan that allows for discretionary bonuses based on performance.

 

We also operate a blockchain technology business that provides leading-edge research, development, and FinTech services involving the management of digital asset technologies with a focus on Bitcoin mining and the new generation of digital assets. As well, in order to, among other things, commercialize on the proprietary trading platform we recently acquired from MPower Trading Systems, LLC, take advantage of the market’s increasing acceptance and expansion of the ownership and use of digital currencies as an investable asset class, subject to applicable regulatory limitations, and to proactively respond to increasing regulatory scrutiny relative to cryptocurrency products, we have adopted a growth plan that contemplates the establishment of a suite of financial service companies that will include self-directed brokerage services, institutional trade execution services, innovative advisory services (RIA, CTA), and codeless algorithmic trading technologies, which will operate under our recently formed subsidiary, Investview Financial Group Holdings, LLC (“IFGH”). Towards that end, we have entered into an agreement to acquire the LevelX brokerage firm from an affiliate of the former Chief Executive Officer of the Company. However, the closing of that transaction is contingent upon securing FINRA approval which has not yet been obtained. If FINRA approval is not shortly forthcoming, we are likely to abandon the LevelX acquisition and search for alternative acquisitions within the brokerage industry. Further, our wholly owned subsidiary, SAFE Management, LLC (“SAFE Management”), owns a currently dormant registered investment advisor and a commodity trading advisor registered with the National Futures Association (NFA). However, we plan to relaunch its services under the IFGH umbrella in 2022 to primarily focus on commodities and FOREX.

 

21

 

 

Results of Operations

 

Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

 

Revenues

 

    Three Months Ended March 31,     Increase  
    2022     2021     (Decrease)  
    (unaudited)     (unaudited)        
Subscription revenue, net of refunds, incentives, credits, and chargebacks   $ 13,730,670     $ 7,949,717     $ 5,780,953  
Mining revenue     3,576,973       8,337,359       (4,760,386 )
Cryptocurrency revenue     440,416       764,862       (324,446 )
Fee revenue     -       2,032       (2,032 )
Total revenue, net   $ 17,748,059     $ 17,053,970     $ 694,089  

 

Revenue, net, increased $694,089, or 4%, from $17,053,970 for the three months ended March 31, 2021, to $17,748,059 for the three months ended March 31, 2022. The increase can be explained by a $5.8 million increase in our net subscription revenue, offset by a $4.8 million decrease in our mining revenue, and a $324 thousand decrease in our cryptocurrency revenue. The $5.8 million (73%) increase in subscription revenue was due to significant product enhancements and expansion into new markets globally, resulting in substantial growth in our membership; the $4.8 million (57%) decrease in mining revenue was a result of a 27% increase in the average global Bitcoin mining difficulty rate, scheduled equipment maintenance and upgrades and over a 9% decrease in the average value of Bitcoin; and the $324 thousand decrease in cryptocurrency revenue was due to an overall decrease in the number of sales of NDAU, the world’s first adaptive digital currency.

 

Operating Costs and Expenses

 

    Three Months Ended March 31,     Increase  
    2022     2021     (Decrease)  
    (unaudited)     (unaudited)        
Cost of sales and service   $ 1,830,341     $ 2,898,507     $ (1,068,166 )
Commissions     7,383,688       5,084,879       2,298,809  
Selling and marketing     11,754       27,651       (15,897 )
Salary and related     1,215,263       1,190,141       25,122  
Professional fees     978,975       650,481       328,494  
Impairment expense     -       534,438       (534,438 )
Loss (gain) on disposal of assets     (24,300 )     -       (24,300 )
General and administrative     2,067,816       1,817,397       250,419  
Total operating costs and expenses   $ 13,463,537     $ 12,203,494     $ 1,260,043  

 

Operating costs increased $1,260,043, or 10%, from $12,203,494 for the three months ended March 31, 2021, to $13,463,537 for the three months ended March 31, 2022. We experienced an increase in commissions of $2.3 million, which was a result of increases in our subscription revenue. This was offset by a decrease in our cost of sales and services of $1.1 million due to the relocation of our miners and a related decrease in our mining costs that included hosting, electrical, and power costs. We also recorded an increase in professional fees of $329 thousand due to higher legal fees. We recorded an increase in general and administrative costs of $250 thousand that could be fully explained by our increase in depreciation expense, as we had more miners that were placed in service during the current period when compared to the prior period. These increases were offset by a decrease in impairment expense of $534 thousand, where in the prior period we wrote-off intangible assets as a result of recoverability issues, with no similar write-offs occurring in the current period.

 

Other Income and Expenses

 

    Three Months Ended March 31,        
    2022     2021     Change  
    (unaudited)     (unaudited)        
Gain (loss) on debt extinguishment   $ -     $ 407,802     $ (407,802 )
Gain (loss) on fair value of derivative liability     (23,843 )     (184,737 )     160,894  
Realized gain (loss) on cryptocurrency     (182,789 )     524,212       (707,001 )
Interest expense     (4,623 )     (5,869 )     1,246  
Interest expense, related parties     (1,719,465 )     (374,080 )     (1,345,385 )
Other income (expense)     31,227       (133,240 )     164,467  
Total other income (expense)   $ (1,899,493 )   $ 234,088     $ (2,133,581 )

 

22

 

 

We recorded other expense of $1,899,493 for the three months ended March 31, 2022, which was a difference of $2,133,581, or 911%, from the prior period other income of $234,088. The change is due to no gain on debt extinguishment recorded in the current period compared to a gain of $408 thousand recorded in the prior period, a realized loss recorded on cryptocurrency in the current period of $183 thousand compared to a realized gain of $524 thousand in the prior period, and more related party interest expense recorded in current period versus the prior period ($1.7 million for the three months ended March 31, 2022 compared to $374 thousand for the three months ended March 31, 2021). Amounts recorded in related party interest expense included the amortization of debt discounts, which was being recognized over the term of the debt, however, during the three months ended March 31, 2022 we repaid two of our related party notes early, which resulted in the recognition of $1.2 million of the amortization of the related debt discount amounts into interest.

 

Liquidity and Capital Resources

 

During the three months ended March 31, 2022, we recorded net income of $2,379,029 and generated $4,071,715 in cash through our operating activities. We used this cash to fund operations, fund the purchase of $6,016,210 worth of fixed assets, to repay $2,267,885 worth of related party payable, and to repurchase shares for $1,724,008. As a result, our cash, cash equivalents, and restricted cash decreased by $6,333,886 to $26,283,020 as compared to $32,616,906 at the beginning of the fiscal year. As of March 31, 2022, our current assets exceeded our current liabilities to result in working capital of $17,532,592.

 

Critical Accounting Policies

 

Basis of Presentation

 

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. Prior to September 20, 2021 we operated the Company on a March 31, fiscal year end. Effective September 30, 2021 we changed our fiscal year to December 31.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the three months ended March 31, 2022, are not necessarily indicative of the operating results that may be expected for the filing of our December 31, 2022 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2021 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC (formerly Kuvera, LLC), Kuvera France S.A.S (through its closure date in June of 2021), Apex Tek, LLC (formerly Razor Data, LLC), SAFETek, LLC (formerly WealthGen Global, LLC), S.A.F.E. Management, LLC, United Games, LLC, United League, LLC, Investment Tools & Training, LLC, iGenius Global LTD (formerly Kuvera (N.I.) LTD), Investview Financial Group Holdings, LLC, and Investview MTS, LLC. All intercompany transactions and balances have been eliminated in consolidation.

 

Use of Estimates

 

The preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue Recognition

 

Subscription Revenue

 

Most of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a designated trial period to first time subscription customers, during which a full refund can be requested if a customer does not wish to continue with the subscription. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks. As of March 31, 2022 and December 31, 2021 our deferred revenues were $3,293,498 and $3,288,443, respectively.

 

23

 

 

Mining Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, we leased equipment under a sales-type lease through June of 2020. In June of 2020 we cancelled all leases and purchased all of the rights and obligations under the leases, which included obtaining ownership of all equipment. We use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of our mining activities.

 

Cryptocurrency Revenue

 

We generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with third-party suppliers. The various packages include different amounts of coin with differing rates of returns and terms and, in some cases, include a product protection option that allows the purchaser to protect their initial purchase price. The protection allows the purchaser to obtain 50% of their purchase price at five years or 100% of their purchase price at ten years. Both the coin and the protection option are delivered by third-party suppliers.

 

We recognize cryptocurrency revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to arrange for the third-parties to provide coin and protection (if applicable) to our customers and payment is received from our customers at the time of order placement. All customers are given two weeks to request a refund, therefore we record a customer advance on our balance sheet upon receipt of payment. After the two weeks have passed from order placement, we request our third-party suppliers to deliver coin and protection (if applicable), at which time we recognize revenue and the amounts due to our suppliers on our books. As of March 31, 2022 and December 31, 2021 our customer advances related to cryptocurrency revenue were $249,433 and $75,702, respectively.

 

Fee Revenue

 

We generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we receive payment for such advisory fees in the month following recognition.

 

Revenue generated for the three months ended March 31, 2022 is as follows:

 

    Subscription
Revenue
    Cryptocurrency Revenue     Mining Revenue     Fee Revenue     Total  
Gross billings/receipts   $ 14,693,972     $ 838,422     $    3,576,973     $ -     $ 19,109,367  
Refunds, incentives, credits, and chargebacks     (963,302 )     -       -       -       (963,302 )
Amounts paid to providers     -       (398,006 )     -       -       (398,006 )
Net revenue   $ 13,730,670     $ 440,416     $ 3,576,973     $ -     $ 17,748,059  

 

For the three months ended March 31, 2022 foreign and domestic revenues were approximately $12.0 million and $5.7 million, respectively.

 

Revenue generated for the three months ended March 31, 2021 is as follows:

 

    Subscription
Revenue
    Cryptocurrency
Revenue
    Mining
Revenue
    Fee Revenue     Total  
Gross billings/receipts   $ 8,407,522     $ 1,877,186     $ 8,337,359     $ 2,032     $ 18,624,099  
Refunds, incentives, credits, and chargebacks     (457,805 )     -       -       -       (457,805 )
Amounts paid to providers     -       (1,112,324 )     -       -       (1,112,324 )
Net revenue   $ 7,949,717     $ 764,862     $ 8,337,359     $ 2,032     $ 17,053,970  

 

24

 

 

For the three months ended March 31, 2021 foreign and domestic revenues were approximately $7.6 million and $9.4 million, respectively.

 

Recently Issued Accounting Pronouncements

 

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

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity, or capital expenditures.

 

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this item.

 

ITEM 4 – CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our acting Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

 

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Our acting Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure controls and procedures were effective.

 

Changes in Internal Controls

 

There were no changes in our internal controls over financial reporting during the fiscal quarter ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

ITEM 1 – LEGAL PROCEEDINGS

 

From time to time, the Company and our operating subsidiaries are involved in claims, proceedings and litigation, and subject to certain material risk factors, including those matters set forth in Item 3 of our Annual Report on Form 10-KT for the nine months ended December 31, 2021, as well as in any other reports filed by us with the Securities and Exchange Commission.

 

25

 

 

ITEM 1.A – RISK FACTORS

 

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-KT for the nine months ended December 31, 2021.

 

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

 

None

 

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4 – MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5 – OTHER INFORMATION

 

None.

 

ITEM 6 – EXHIBITS

 

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

 

Exhibit
Number*
  Title of Document   Location
         
Item 10   Material Contracts    
         
10.98   Separation and Release Agreement by and among Investview, Inc., and Mario Romano and Wealth Engineering, LLC, dated as of January 6, 2022   Incorporated by reference to the Current Report on Form 8-K filed on January 10, 2022
         
10.99   Separation and Release Agreement by and among Investview, Inc., and Annette Raynor and Wealth Engineering, LLC, dated as of January 6, 2022   Incorporated by reference to the Current Report on Form 8-K filed on January 10, 2022
         
10.100   Employment Agreement between Investview, Inc., and Victor M. Oviedo, dated as of February 10, 2022   Incorporated by reference to the Current Report on Form 8-K filed on February 23, 2022

 

26

 

 

Exhibit
Number*
  Title of Document   Location
         
10.101   Indemnification Agreement between Investview, Inc., and Victor M. Oviedo, dated as of February 10, 2022   Incorporated by reference to the Current Report on Form 8-K filed on February 23, 2022
         
10.102   Victor M. Oviedo Joinder to Lock-Up Agreement dated March 22, 2021   Incorporated by reference to the Current Report on Form 8-K filed on February 23, 2022
         
10.103   Employment Agreement between Investview, Inc., and James R. Bell, dated as of February 22, 2022   Incorporated by reference to the Current Report on Form 8-K filed on February 23, 2022
         
10.104   Employment Agreement between Investview, Inc., and Myles Gill, dated as of February 21, 2022   Incorporated by reference to the Current Report on Form 8-K filed on February 23, 2022
         
10.105   Myles P. Gill Joinder to Lock-Up Agreement dated March 22, 2021   Incorporated by reference to the Current Report on Form 8-K filed on February 23, 2022
         
10.106   Form of Executive Indemnification Agreement in Use as of February 2022   Incorporated by reference to the Current Report on Form 8-K filed on February 23, 2022
         
10.107   Investview, Inc., 2022 Incentive Plan    
         
Item 31   Rule 13a-14(a)/15d-14(a) Certifications    
         
31.01   Certification of Acting Principal Executive Officer Pursuant to Rule 13a-14   This filing.
         
31.02   Certification of Principal Financial Officer Pursuant to Rule 13a-14   This filing.
         
Item 32   Section 1350 Certifications    
   
32.01   Certification of Acting Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   This filing.
         
32.02   Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   This filing.
         
Item 101***   Interactive Data File    
         
101.INS   Inline XBRL Instance Document   This filing.
         
101.SCH   Inline XBRL Taxonomy Extension Schema   This filing.
         
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase   This filing.
         
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase   This filing.
         
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase   This filing.
         
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase   This filing.
         
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)   This filing.

 

 

 

* All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. Omitted numbers in the sequence refer to documents previously filed as an exhibit.
   
*** Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or Annual Report for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability.

 

27

 

 

SIGNATURE PAGE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  INVESTVIEW, INC.
     
Dated: May 23, 2022 By: /s/ Victor M. Oviedo
    Victor M. Oviedo
    Chief Executive Officer
    (Principal Executive Officer)
     
Dated: May 23, 2022 By: /s/ Ralph R. Valvano
    Ralph R. Valvano
    Chief Financial Officer
    (Principal Financial Officer and Accounting Officer)

 

28

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