NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Organization
Investview,
Inc. (“we”, “our”, the “Company”) was incorporated on January 30, 1946, under the laws of the state
of Utah as the Uintah Mountain Copper Mining Company. In January 2005 the Company changed domicile to Nevada, and changed its name to
Voxpath Holding, Inc. In September of 2006 the Company merged The Retirement Solution Inc. through a Share Purchase Agreement into Voxpath
Holdings, Inc. and then changed its name to TheRetirementSolution.Com, Inc. In October 2008 the Company changed its name to Global Investor
Services, Inc., before changing its name to Investview, Inc., on March 27, 2012.
On
March 31, 2017, we entered into a Contribution Agreement with the members of Wealth Generators, LLC, a limited liability company (“Wealth
Generators”), pursuant to which the Wealth Generators members agreed to contribute 100% of the outstanding securities of Wealth
Generators in exchange for an aggregate of 1,358,670,942 shares of our common stock. The closing of the Contribution Agreement was effective
April 1, 2017, and Wealth Generators became our wholly owned subsidiary and the former members of Wealth Generators became our stockholders
and control the majority of our outstanding common stock.
On
June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former members
of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth Generators
and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption of $419,139
in pre-merger liabilities.
On
February 28, 2018, we filed a name change for Wealth Generators, LLC to Kuvera, LLC (“Kuvera”) and on May 7, 2018 we established
WealthGen Global, LLC as a Utah limited liability company and a wholly owned subsidiary of Investview, Inc.
On
July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase its
wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock.
On
November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European Union.
On
December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from the National
Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities Trading Advisor, Commodity
Pool Operator, and approved for over-the-counter FOREX advisory services.
On
January 17, 2019, we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SAFETek, LLC, a Utah Limited Liability
Company.
On
March 26, 2019, we established Kuvera (N.I.) LTD, a Northern Ireland entity as a wholly owned subsidiary of Kuvera, LLC, however, to
date the subsidiary has had no operations.
Effective
July 22, 2019, we renamed our non-operating wholly owned subsidiary Razor Data, LLC to APEX Tek, LLC, a Utah Limited Liability Company.
On
January 11, 2021, we filed a name change for Kuvera, LLC to iGenius, LLC (“iGenius”) and on February 2, 2021, we filed a
name change for Kuvera (N.I.) Limited to iGenius Global LTD.
On
March 18, 2021, we established Investview Financial Group Holdings, LLC and Investview MTS, LLC as wholly owned subsidiaries of Investview,
Inc. On March 22, 2021, we entered into a Securities Purchase Agreement with SSA Technologies LLC to purchase 97% of the equity interests
of LevelX Capital LLC, a FINRA registered broker-dealer, and a Securities Purchase Agreement with SSA Technologies LLC to purchase 100%
of the equity interests of LevelX Advisors LLC, a registered investment advisor. On March 24, 2021, we entered into an agreement with
Apex Clearing Corporation to purchase the remaining 3% of the equity interests of LevelX Capital LLC. At completion, Investview Financial
Group Holdings, LLC will own 100% of each of LevelX Capital LLC and LevelX Advisors LLC. The transaction is expected to close within
the next 6 months. Also on March 22, 2021, we entered into a Securities Purchase Agreement to purchase certain operating assets and intellectual
property rights of MPower Trading Systems LLC (“MPower”), the developer and owner of Prodigio, a proprietary software-based
trading platform with applications in the brokerage industry. This acquisition closed on September 3, 2021, with Investview Financial
Group Holdings, LLC (through its subsidiary Investview MTS, LLC) now owning the operating assets and intellectual property rights conveyed
by MPower (see NOTE 10). To date the subsidiaries have had no operations.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
Nature
of Business
Our
portfolio of wholly owned subsidiaries operates in the financial technology (FINTECH) sector, leveraging the latest innovations in technology
for financial education, services and interactive tools. Our subsidiaries focus on delivering products that serve individuals around
the world. From personal money management to advancements in blockchain technologies, our companies are forging a path for individuals
to take advantage of financial and technical innovations. Each of our subsidiaries are designed to work in tandem with one another generating
a worldwide presence.
Our
largest subsidiary in terms of revenue is iGenius, LLC. iGenius leverages a worldwide distribution network, also known as a multi-level
marketing network, to provide financial education, technology and tools geared towards self-directed retail investors. Each iGenius
membership provides a core set of financial education resources including live market training sessions, a robust library of financial
education videos and courses, market calendars, and a variety of research and trade alert channels. These tools provide access to the
information necessary to manage and improve one’s financial position. In addition to the financial education technology and tools,
iGenius members also gain access to a variety of benefits provided through third party partnerships and arrangements. Some of these third-party
products and services include cryptocurrency packages, discounted travel, crypto trading software and a digital wallet platform. iGenius
members who choose to distribute the iGenius products and services can qualify to earn commissions and bonuses for selling memberships
and retaining customers under the framework of a network marketing bonus plan.
Kuvera
France S.A.S. was our entity in France and iGenius Global LTD is our entity in Northern Ireland. These entities were responsible for
distributing our products and services throughout the European Union. Kuvera France S.A.S. was closed in June 2021.
S.A.F.E.
Management, LLC (“SAFE”) is a Registered Investment Adviser and Commodity Trading Adviser that has been established to deliver
automated trading strategies to individuals who find they lack the time to trade for themselves. SAFE is committed to bringing innovative
trade methodologies, strategies, and algorithms for all worldwide financial markets. SAFE will be structured under the Investview Financial
Group Holdings, LLC and is planned to relaunch their services primarily focused on commodities and FOREX as a Commodity Trading Advisor.
SAFETek,
LLC is a Blockchain technology company that provides leading-edge research, development, and management of digital asset technologies
with a focus on Bitcoin mining and the new generation of digital assets. SAFETek’s Bitcoin mining operations in North America and
other international locations aim to maintain optimal efficiency and profitability while running on sustainable, low-cost, and/or renewable
energy sources. At these locations, SAFETek manages nearly 10,000 next-generation Bitcoin ASIC miner machines, with over 80% powered
by renewable energy. SAFETek is also developing new and more efficient ways to mine cryptocurrencies through innovations in hardware,
liquid immersion, firmware, and additional ways to develop and utilize renewable energy sources. The majority of this development and
innovation work occurs at SAFETek’s 20,000 square foot facility in Texas that was opened in May 2021. At this facility, SAFETek
operates a 24/7/365 Managed Network Operation Center (NOC) to achieve higher efficiency, productivity, and availability, a Bitcoin ASIC
Miner Repair Service to clean, refurbish and optimize existing Bitcoin Mining Servers, a research and development center to test and
develop new Bitcoin Mining firmware and liquid immersion systems, and a manufacturing facility to build mobile Bitcoin Mining Data Center
Facilities. With these products and services, SAFETek aims to increase the hashrate, uptime, profitability, and overall ROI of crypto
currency mining operations for ourselves and for our customers.
Apex
Tek, LLC was the entity responsible for sales of the APEX program. Launched in September 2019, the APEX product pack included hardware,
firmware, software and purchase protection that was purchased and then leased to SAFETek LLC. We have currently ceased selling the APEX
package and bought back all leases associated with the business. There are currently no operations or activity in Apex Tek, LLC.
United
Games, LLC, United League, LLC, and Investment Tools & Training, LLC have had no operations and will be restructured or eliminated.
Investview Financial Group Holdings, LLC and Investview MTS, LLC will be used in conjunction with our anticipated acquisition of the
operating assets of SSA Technologies LLC, an entity that owns and operates LevelX Capital LLC, a FINRA registered broker-dealer and LevelX
Advisors LLC, a registered investment advisor. Investview Financial Group Holdings, LLC owns Prodigio, a proprietary software-based trading
platform with applications in the brokerage industry.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
Our
financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in
the United States of America (“GAAP”). Prior to September 20, 2021, we operated the Company on a March 31 fiscal year end.
Effective September 20, 2021, our Board of Directors acted by unanimous written consent to change our fiscal year end 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 six months ended September 30, 2021, are not necessarily indicative of the operating
results that may be expected for the filing of our December 31, 2021 Form 10-K that will cover the transition period for our new fiscal
year. These unaudited condensed consolidated financial statements should be read in conjunction with the March 31, 2021 consolidated
financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended March 31, 2021.
Principles
of Consolidation
The
consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC, Kuvera France
S.A.S., Apex Tek, LLC, SAFETek, LLC, S.A.F.E. Management, LLC, United Games, LLC, United League, LLC, Investment Tools & Training,
LLC, iGenius Global LTD, Investview Financial Group Holdings, LLC, and Investview MTS, LLC. All intercompany transactions and balances
have been eliminated in consolidation.
Financial
Statement Reclassification
Certain
account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.
Use
of Estimates
The
preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ
from those estimates.
Foreign
Exchange
We
have consolidated the accounts of Kuvera France S.A.S. into our consolidated financial statements. The operations of Kuvera France S.A.S.
are conducted in France and its functional currency is the Euro.
The
financial statements of Kuvera France S.A.S. are prepared using their functional currency and have been translated into U.S. dollars
(“USD”). Assets and liabilities are translated into USD at the applicable exchange rates at period-end. Stockholders’
equity is translated using historical exchange rates. Revenue and expenses are translated at the average exchange rates for the period.
Any translation adjustments are included as foreign currency translation adjustments in accumulated other comprehensive income in our
stockholders’ equity (deficit).
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
The
following rates were used to translate the accounts of Kuvera France S.A.S. into USD at the following balance sheet dates.
SCHEDULE OF EXCHANGE RATES
| | |
September 30, 2021 | | |
March 31, 2021 | |
| Euro to USD | |
| 1.15810 | | |
| 1.17260 | |
The
following rates were used to translate the accounts of Kuvera France S.A.S. into USD for the following operating periods.
| | |
Six Months Ended September 30, | |
| | |
2021 | | |
2020 | |
| Euro to USD | |
| 1.19190 | | |
| 1.13571 | |
Restricted
Cash
The
following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to
the total of the same such amounts shown in the statement of cash flows.
SCHEDULE OF RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
| | |
September 30, 2021 | | |
March 31, 2021 | |
| Cash and cash equivalents | |
$ | 20,607,138 | | |
$ | 5,389,654 | |
| Restricted cash, current | |
| 819,338 | | |
| 498,020 | |
| Restricted cash, long term | |
| 1,007,120 | | |
| 774,153 | |
| Total cash, cash equivalents, and restricted cash shown on the statement of cash flows | |
$ | 22,433,596 | | |
$ | 6,661,827 | |
Amount
included in restricted cash represent funds required to be held in an escrow account by a contractual agreement and will be used for
paying dividends to our Series B Preferred Stockholders.
Fixed
Assets
Fixed
assets are stated at cost and depreciated using the straight-line method over their estimated useful lives. When retired or otherwise
disposed, the carrying value and accumulated depreciation of the fixed asset is removed from its respective accounts and the net difference
less any amount realized from disposition is reflected in earnings. Expenditures for maintenance and repairs which do not extend the
useful lives of the related assets are expensed as incurred.
Fixed
assets were made up of the following at each balance sheet date:
SCHEDULE OF FIXED ASSETS
| | |
Estimated Useful Life
(years) | |
September 30, 2021 | | |
March 31, 2021 | |
| Furniture, fixtures, and equipment | |
10 | |
$ | 72,139 | | |
$ | 12,792 | |
| Computer equipment | |
3 | |
| 12,159 | | |
| 22,528 | |
| Leasehold improvements | |
Remaining Lease Term | |
| 37,599 | | |
| - | |
| Trailers | |
10 | |
| 147,107 | | |
| - | |
| Data processing equipment | |
3 | |
| 9,803,671 | | |
| 8,310,739 | |
| | |
| |
| 10,072,675 | | |
| 8,346,059 | |
| Accumulated depreciation | |
| |
| (3,670,493 | ) | |
| (2,485,269 | ) |
| Net book value | |
| |
$ | 6,402,182 | | |
$ | 5,860,790 | |
Total
depreciation expense for the six months ended September 30, 2021 and 2020, was $1,452,154 and $982,819, respectively.
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.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
We
hold cryptocurrency-denominated assets and include them in our consolidated balance sheet as other assets. The value of our cryptocurrencies
as of September 30, 2021 and March 31, 2021 were $6,534,195 ($6,418,431 current and $115,764 restricted long term) and $4,774,478 ($4,679,256
current and $95,222 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 ($16,710,321 and $3,836,285 for
the six months ended September 30, 2021 and 2020, 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 six months
ended September 30, 2021 and 2020 we recorded realized gains (losses) on our cryptocurrency transactions of $368,054 and $177,913, 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,
therefore we had no intangible assets as of September 30, 2021 and March 31, 2021. Amortization expense for the six months ended September
30, 2021 and 2020 was $0 and $86,812, respectively.
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
10). As a result, upon the closing of the transaction on September 3, 2021, 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 September 30, 2021 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 six months ended September 30,
2021.
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 six months ended September 30, 2021 we fully impaired data processing equipment that had a cost basis of $392,500 and we removed
$14,661 worth of computers because the assets were no longer in use. The accumulated depreciation of the assets at the time they were
written off was $266,928, therefore we recognized impairment expense of $140,233 for the six months ended September 30, 2021.
During
the six months ended September 30, 2020 we fully impaired data processing equipment that had a cost basis of $84,939 and we fully impaired
a computer that had a cost basis of $1,609 because the assets were no longer in use. The accumulated depreciation of the assets at the
time they were written off was $19,903, therefore we recognized impairment expense of $66,645 for the six months ended September 30,
2020.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
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 September 30, 2021 and March 31, 2021, approximates the fair value due to their short-term nature
or interest rates that approximate prevailing market rates.
Items
recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following
items as of September 30, 2021:
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS
| | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
| Total Assets | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Derivative liability | |
$ | - | | |
$ | - | | |
$ | 138,637 | | |
$ | 138,637 | |
| Total Liabilities | |
$ | - | | |
$ | - | | |
$ | 138,637 | | |
$ | 138,637 | |
Items
recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following
items as of March 31, 2021:
| | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
| Total Assets | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Derivative liability | |
$ | - | | |
$ | - | | |
$ | 307,067 | | |
$ | 307,067 | |
| Total Liabilities | |
$ | - | | |
$ | - | | |
$ | 307,067 | | |
$ | 307,067 | |
Revenue
Recognition
Subscription
Revenue
The
majority of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription
revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and
recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over
a fixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for
the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial period to first time
subscription customers, during which a full refund can be requested if a customer does not wish to continue with the product. Revenues
are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds,
sales incentives, credits, and known and estimated credit card chargebacks. As of September 30, 2021 and March 31, 2021 our deferred
revenues were $2,820,120 and $1,561,188, respectively.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
Mining
Revenue
Through
our wholly owned subsidiary, SAFETek, LLC, we leased computer 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 computer
equipment. We use the computer equipment to validate and process public blockchain transactions (commonly referred to as “mining”).
As compensation for mining, we are issued block rewards and transaction fees from public blockchain networks in the form of newly created
cryptocurrency units. Our mining activities constitute the 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 providers. 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
providers.
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 providers to
deliver coin and protection (if applicable), at which time we recognize revenue and the amounts due to our providers on our books. As
of September 30, 2021 and March 31, 2021 our customer advances related to cryptocurrency revenue were $870,168 and $2,067,313, 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 six months ended September 30, 2021 is as follows:
SCHEDULE OF REVENUE GENERATED
| | |
Subscription
Revenue | | |
Cryptocurrency Revenue | | |
Mining Revenue | | |
Fee Revenue | | |
Total | |
| Gross billings/receipts | |
$ | 26,436,065 | | |
$ | 18,205,143 | | |
$ | 16,710,321 | | |
$ | - | | |
$ | 61,351,529 | |
| Refunds, incentives, credits, and chargebacks | |
| (1,552,154 | ) | |
| - | | |
| - | | |
| - | | |
| (1,552,154 | ) |
| Amounts paid to providers | |
| - | | |
| (10,801,710 | ) | |
| - | | |
| - | | |
| (10,801,710 | ) |
| Net revenue | |
$ | 24,883,911 | | |
$ | 7,403,433 | | |
$ | 16,710,321 | | |
$ | - | | |
$ | 48,997,665 | |
For
the six months ended September 30, 2021 foreign and domestic revenues were approximately $25.5 million and $23.5 million, respectively.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
Revenue
generated for the six months ended September 30, 2020 is as follows:
| | |
Subscription
Revenue | | |
Cryptocurrency Revenue | | |
Mining Revenue | | |
Fee Revenue | | |
Total | |
| Gross billings/receipts | |
$ | 10,159,115 | | |
$ | - | | |
$ | 3,836,285 | | |
$ | 7,723 | | |
$ | 14,003,123 | |
| Refunds, incentives, credits, and chargebacks | |
| (659,970 | ) | |
| - | | |
| - | | |
| - | | |
| (659,970 | ) |
| Amounts paid to providers | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Net revenue | |
$ | 9,499,145 | | |
$ | - | | |
$ | 3,836,285 | | |
$ | 7,723 | | |
$ | 13,343,153 | |
For
the six months ended September 30, 2020 foreign and domestic revenues were approximately $8.9 million and $4.4 million, respectively.
Revenue
generated for the three months ended September 30, 2021 is as follows:
| | |
Subscription
Revenue | | |
Cryptocurrency Revenue | | |
Mining Revenue | | |
Fee Revenue | | |
Total | |
| Gross billings/receipts | |
$ | 14,904,004 | | |
$ | 2,329,566 | | |
$ | 8,338,759 | | |
$ | - | | |
$ | 25,572,329 | |
| Refunds, incentives, credits, and chargebacks | |
| (869,790 | ) | |
| - | | |
| - | | |
| - | | |
| (869,790 | ) |
| Amounts paid to providers | |
| - | | |
| (1,331,439 | ) | |
| - | | |
| - | | |
| (1,331,439 | ) |
| Net revenue | |
$ | 14,034,214 | | |
$ | 998,127 | | |
$ | 8,338,759 | | |
$ | - | | |
$ | 23,371,100 | |
For
the three months ended September 30, 2021 foreign and domestic revenues were approximately $13.6 million and $9.8 million, respectively.
Revenue
generated for the three months ended September 30, 2020 is as follows:
| | |
Subscription
Revenue | | |
Cryptocurrency Revenue | | |
Mining Revenue | | |
Fee Revenue | | |
Total | |
| Gross billings/receipts | |
$ | 5,599,155 | | |
$ | - | | |
$ | 2,493,739 | | |
$ | 3,710 | | |
$ | 8,096,604 | |
| Refunds, incentives, credits, and chargebacks | |
| (343,267 | ) | |
| - | | |
| - | | |
| - | | |
| (343,267 | ) |
| Amounts paid to providers | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Net revenue | |
$ | 5,255,888 | | |
$ | - | | |
$ | 2,493,739 | | |
$ | 3,710 | | |
$ | 7,753,337 | |
For
the three months ended September 30, 2020 foreign and domestic revenues were approximately $7.3 million and $0.5 million, respectively.
Net
Income (Loss) per Share
We
follow ASC subtopic 260-10, Earnings per Share (“ASC 260-10”), which specifies the computation, presentation, and disclosure
requirements of earnings per share information. Basic 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.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
Potentially
dilutive securities excluded from the computation of diluted net loss per share are as follows:
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE
| | |
September 30, 2021 | | |
September 30, 2020 | |
| Warrants to purchase common stock | |
| 1,178,320 | | |
| 233,060 | |
| Notes convertible into common stock | |
| 680,776,772 | | |
| 161,742,478 | |
| Class B Redeemable Units of Investview Financial Group Holdings, LLC | |
| 565,000,000 | | |
| - | |
| Totals | |
| 1,246,955,092 | | |
| 161,975,538 | |
Lease
Obligation
We
determine if an arrangement is a lease at inception. Operating leases are included in the operating
lease right-of-use asset account, the operating lease liability, current account, and the operating lease liability, long term account
in our balance sheet. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent
our obligation to make lease payments arising from the lease.
Operating
lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease
term. For leases in which the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on
the information available at commencement date in determining the present value of lease payments. We
have elected to not apply the recognition requirements of ASC 842 to short-term leases (leases with terms of twelve months or less).
Lease terms include options to extend or terminate the lease when it is reasonably certain that
we will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term.
We have elected the practical expedient and will not separate non-lease components from lease components and will instead account for
each separate lease component and non-lease component associated with the lease components as a single lease component.
NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS
In
August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. ASU 2020-06,
Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s
Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies
the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and
contracts on an entity’s own equity. Under current GAAP, there are five accounting models for convertible debt instruments. ASU
2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments
with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present in equity
an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible
preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features
that require bifurcation as a derivative under ASC 815 or (2) a convertible debt instrument was issued at a substantial premium. Additionally,
for convertible debt instruments with substantial premiums accounted for as paid-in capital, the FASB decided to add disclosures about
(1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium
amount recorded as paid-in capital. ASU 2020-06 will be effective for public business entities that meet the definition of a Securities
and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal
years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments
are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption
is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.
The Company is currently evaluating the potential impact of the adoption of this accounting pronouncement to its financial statements.
We
have noted no other recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have
a material impact on our financial statements.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
NOTE
4 – RELATED-PARTY TRANSACTIONS
Our
related-party payables consisted of the following:
SCHEDULE OF RELATED PARTY PAYABLES
| | |
September 30, 2021 | | |
March 31, 2021 | |
| Convertible Promissory Note entered into on 4/27/20, net of debt
discount of $1,114,896 as of September 30, 2021 [1] | |
$ | 206,772 | | |
$ | 120,318 | |
| Convertible Promissory Note entered into on 5/27/20, net of debt discount of $605,301 as of September
30, 2021 [2] | |
| 106,367 | | |
| 59,525 | |
| Convertible Promissory Note entered into on 11/9/20, net of debt discount of $1,178,125 as of September
30, 2021 [3] | |
| 163,582 | | |
| 53,414 | |
| Accounts payable – related party [4] | |
| 10,000 | | |
| 60,000 | |
| Notes for APEX lease buyback [5] | |
| - | | |
| 43,000 | |
| Promissory note entered into on 12/15/20, net of debt discount of $304,669
as of September 30, 2021 [6] | |
| 95,331 | | |
| 125,838 | |
| Convertible Promissory Note entered into on 3/30/21, net of debt discount of $1,512,700
as of September 30, 2021 [7] | |
| 76,322 | | |
| 4,459 | |
| Working Capital Promissory Note entered into on 3/22/21 [8] | |
| 900,291 | | |
| - | |
| Total related-party debt | |
| 1,558,665 | | |
| 466,554 | |
| Less: Current portion | |
| (1,156,987 | ) | |
| (233,296 | ) |
| Related-party debt, long term | |
$ | 401,678 | | |
$ | 233,258 | |
| [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 six months ended September 30, 2021 we recognized $64,786 of the debt discount into interest
expense, as well as expensed an additional $108,340 of interest expense on the note, all of which was repaid during the period except
for $21,668 which was outstanding in the balance shown here. |
| |
|
| [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 six months ended September 30, 2021 we recognized $35,174 of the debt discount into interest
expense as well as expensed an additional $70,002 of interest expense on the note, all of which was repaid during the period except
for $11,668 which was outstanding in the balance shown here. |
| |
|
| [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 six months ended September 30, 2021 we recognized $68,461 of the debt discount into interest
expense as well as expensed an additional $250,248 of interest expense on the note, all of which was repaid during the period except
for $41,707 which was outstanding in the balance shown here. |
| |
|
| [4] |
In
August of 2020 we repurchased 106,000,000 shares of our common stock from CR Capital Holdings, LLC, a shareholder that previously
owned over 10% of our outstanding stock and has owners that used to be members of our executive management team, for $120,000. We
agreed to pay $10,000 per month for the repurchase. During the six months ended September 30, 2021 we repaid $50,000 of the debt. |
| |
|
| [5] |
During
the year ended March 31, 2020 we sold 83 APEX units to related parties which included the sale of high-powered data processing equipment,
which they then leased back to us. In September of 2020, our board of directors voted to approve a buyback program wherein all APEX
purchasers were offered a promissory note in exchange for cancellation of the lease and our purchase of all rights and obligations
under the lease. At that time, we agreed to pay our related parties $237,720 in exchange for all rights and obligations under the
APEX lease. After the buyback we repaid our related parties $112,720 in cash and extinguished $82,000 of the amount owed with the
issuance of BTC, therefore as of March 31, 2021 we owed related parties $43,000 as a result of the APEX buyback program. During the
six months ended September 30, 2021 we repaid $43,000 to extinguish the debt in full. |
| |
|
| [6] |
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 six months ended September 30, 2021 we recognized $89,493 of the debt discount into
interest expense and repaid $120,000 of the debt. |
| |
|
| [7] |
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 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. From September
21, 2021, the date of the amendment and through September 30, 2021 we recognized $37,299 of the $1,550,000 debt discount into interest
expense. Also during the six months ended September 30, 2021 we expensed $38,810 of interest expense on the debt, resulting in an
accrued interest balance of $39,022 as of September 30, 2021. |
| |
|
| [8] |
On
March 22, 2021, Investview, Inc., entered into Securities Purchase Agreements to purchase 100% of the operating assets of SSA Technologies
LLC (“SSA”), an entity that owns and operates a FINRA-registered broker-dealer. SSA is controlled and partially owned
by Joseph Cammarata, our 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 will advance up to $1,500,000 before the end of 2021. The note is due and payable
by January 31, 2022, bears interest at the rate of 0.11% per annum, and is secured by the pledge of 12,000,000 shares of our common
stock. During the six months ended September 30, 2021 we received proceeds of $900,000 from the Working Capital Promissory note and
recognized $291 of interest expense. |
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
In
addition to the above related party debt transactions that were outstanding as of September 30, 2021 and March 31, 2021, during the six
months ended September 30, 2021 we obtained a short-term advance of $100,000 from Wealth Engineering, an entity controlled by members
of our management team and Board of Directors, and repaid the amount in full.
In
addition to the above-mentioned related-party lending arrangements, during the six months ended September 30, 2021 we sold cryptocurrency
packages to related parties for gross proceeds of $1,000, we paid related parties $2,289,969 worth of commissions, we paid consulting
fees to related parties of $245,450, and made dividend payments to related parties of $4,323. We also paid expenses of MPower and SSA
Technologies, LLC in the amounts of $251,405 and $197,523, respectively, under the terms of the Security Purchase Agreements entered
into on March 22, 2021 and we closed on the acquisition of MPower’s net assets on September 3, 2021 (see NOTE 10). We also recorded
6,666,667 shares as forfeited as a result of our CAO returning the shares to the Company prior to their vesting date. As a result of
the forfeiture, we reversed previously recognized compensation cost of $121,461 during the six months ended September 30, 2021.
NOTE
5 – DEBT
Our
debt consisted of the following:
SCHEDULE OF DEBT
| | |
September 30, 2021 | | |
March 31, 2021 | |
| Short-term advance received on 8/31/18 [1] | |
$ | 5,000 | | |
$ | 5,000 | |
| Note issued under the Paycheck Protection Program on 4/17/20 [2] | |
| 512,651 | | |
| 510,118 | |
| Loan with the U.S. Small Business Administration dated 4/19/20 [3] | |
| 527,072 | | |
| 517,671 | |
| Long term notes for APEX lease buyback [4] | |
| 11,673,209 | | |
| 14,795,145 | |
| Total debt | |
| 12,717,932 | | |
| 15,827,934 | |
| Less: Current portion [12] | |
| (2,989,513 | ) | |
| (3,143,513 | ) |
| Debt, long term portion | |
$ | 9,728,419 | | |
$ | 12,684,421 | |
| [1] |
In
August 2018, we received a $75,000 short-term advance. The advance is due on demand, has no interest rate, and is unsecured. During
the six months ended September 30, 2021 we made no repayments on the debt. |
| |
|
| [2] |
In
April 2020 we received $505,300 in proceeds from the Paycheck Protection Program as established by the CARES Act as a result of a
Note entered into with the U.S. Small Business Administration (“SBA”). The note has an interest rate of 1% and matures
on April 1, 2022, however, under the terms of the CARES Act the loan may be forgiven if funds are used for qualifying expenses. Under
the original note we were required to make monthly payments beginning November 1, 2020, however, the SBA extended the deferral period
to 10 months and prior to the payments coming due we applied for loan forgiveness with the SBA, which was approved in November 2021
(see NOTE 11). As no loan payments are due during the SBA review process, we have made no payments on the note to date. During the
six months ended September 30, 2021 we recorded $2,533 worth of interest on the loan. |
| |
|
| [3] |
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 six
months ended September 30, 2021 we recorded $9,401 worth of interest on the loan. |
| |
|
| [4] |
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 six months ended
September 30, 2021 we repaid a portion of the debt with cash payments of $591,125 and issuances of cryptocurrency valued at $2,530,811. |
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
NOTE
6 – DERIVATIVE LIABILITY
During
the six months ended September 30, 2021, we had the following activity in our derivative liability account:
SCHEDULE OF DERIVATIVE LIABILITY
| | |
Debt | | |
Warrants | | |
Total | |
| Derivative liability at March 31, 2021 | |
$ | - | | |
$ | 307,067 | | |
$ | 307,067 | |
| Derivative liability recorded on new instruments | |
| - | | |
| 127,520 | | |
| 127,520 | |
| Derivative liability reduced by warrant exercise (see NOTE 7) | |
| - | | |
| (12,285 | ) | |
| (12,285 | ) |
| (Gain) loss on fair value | |
| - | | |
| (283,665 | ) | |
| (283,665 | ) |
| Derivative liability at September 30, 2021 | |
$ | - | | |
$ | 138,637 | | |
$ | 138,637 | |
We
use the binomial option pricing model to estimate fair value for those instruments convertible into common stock, at inception, at conversion
or settlement date, and at each reporting date. During the six months ended September 30, 2021, the assumptions used in our binomial
option pricing model were in the following range:
SCHEDULE OF ASSUMPTIONS USED IN BINOMINAL OPTION PRICING MODEL
| | |
Debt | | |
Warrants | |
| Risk free interest rate | |
| n/a | | |
| 0.53 - 0.98% | |
| Expected life in years | |
| n/a | | |
| 3.84 - 5.00 | |
| Expected volatility | |
| n/a | | |
| 204% - 260% | |
NOTE
7 – 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.
During
the year ended March 31, 2020 our Board of Directors approved the designation of 2,000,000 of the Company’s shares of preferred
stock as Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), each with a stated value
of $25 per share. Our Series B Preferred Stockholders have liquidation rights ranking senior to our common stockholders, do not have
any voting or conversion rights, 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.
As
of March 31, 2020, we had no preferred stock issued or outstanding.
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 6).
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
During
the six months ended September 30, 2021 we sold 98,875 units for a total of $2,471,875: 97,669 units for cash proceeds of $2,441,725
and 1,206 units for bitcoin proceeds of $30,150. In conjunction with the sale of the units we issued 98,875 shares of Series B Preferred
Stock and granted 494,375 warrants during the period.
Preferred
Stock Dividends
During
the six months ended September 30, 2021 we recorded $409,670 for the cumulative cash dividends due to the shareholders of our Series
B Preferred Stock. We made payments of $241,971 in cash and issued $80,905 worth of cryptocurrency to reduce the amounts owed. As a result,
we recorded $221,739 as a dividend liability on our balance sheet as of September 30, 2021.
Common
Stock
During
the six months ended September 30, 2021, we issued 11,500,000 shares of common stock for services and compensation and recognized a total
of $1,350,353 in stock-based compensation based on grant date fair values and vesting terms of the awards granted in the current and
prior periods. We also issued 82,640 shares of common stock as a result of warrants exercised, resulting in proceeds of $8,264, and we
recorded 6,666,667 shares as forfeited (see NOTE 4).
As
of September 30, 2021 and March 31, 2021, we had 2,987,397,303 and 2,982,481,329 shares of common stock issued and outstanding, respectively.
Warrants
During
the six months ended September 30, 2021 we granted 494,375 warrants in conjunction with our Unit Offering. The warrants, valued at $127,520,
are classified as a derivative liability on our balance sheet in accordance with ASC 480, Distinguishing Liabilities from Equity, based
on the warrants terms that indicate a fundamental transaction could give rise to an obligation for us to pay cash to our warrant holders
(see NOTE 6). Also during the six months ended September 30, 2021, 82,640 warrants were exercised in exchange for common shares, resulting
in cash proceeds of $8,264 and a reduction in our derivative liabilities of $12,285.
Transactions
involving our warrants are summarized as follows:
SUMMARY OF WARRANTS ISSUED
| | |
| | |
Weighted | |
| | |
Number of | | |
Average | |
| | |
Shares | | |
Exercise Price | |
| Warrants outstanding at March 31, 2021 | |
| 766,585 | | |
$ | 0.10 | |
| Granted | |
| 494,375 | | |
$ | 0.10 | |
| Canceled/Expired | |
| - | | |
$ | - | |
| Exercised | |
| (82,640 | ) | |
$ | 0.10 | |
| Warrants outstanding at September 30, 2021 | |
| 1,178,320 | | |
$ | 0.10 | |
Details
of our warrants outstanding as of September 30, 2021 is as follows:
SUMMARY OF WARRANTS OUTSTANDING
| Exercise Price | | |
Warrants Outstanding | | |
Warrants Exercisable | | |
Weighted Average Contractual Life (Years) | |
| $ | 0.10 | | |
| 1,178,320 | | |
| 1,178,320 | | |
| 4.40 | |
Class
B Redeemable Units of Investview Financial Group Holdings, LLC
During
the nine months ended December 31, 2021 we issued 565,000,000 Class B Redeemable Units of Investview Financial Group Holdings, LLC 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 10). 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. The Company recorded a non-cash loss of $51.6 million arising as a result of this transaction as described in
Note 10 below.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
NOTE
8 – COMMITMENTS AND CONTINGENCIES
Litigation
In
the ordinary course of business, we may be, or have been, involved in legal proceedings from time to time.
During
the six months ended September 30, 2021 we were not involved in any material legal proceedings, however, we have recently 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
9 – 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 10).
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 six months ended September 30, 2021 the variable lease costs amounted to $1,662.
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 $70,922 for the six months ended September 30, 2021. Operating cash flows used for the operating leases during the
six months ended September 30, 2021 was $61,180. As of September 30, 2021, the weighted average remaining lease term was 1.46 years and
the weighted average discount rate was 12%.
Future
minimum lease payments under non-cancellable leases as of September 30, 2021were as follows:
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES
| | |
| | |
| Remainder of 2022 | |
$ | 141,510 | |
| 2023 | |
| 210,180 | |
| 2024 | |
| 29,040 | |
| Total | |
| 380,730 | |
| Less: Interest | |
| (20,121 | ) |
| Present value of lease liability | |
| 360,609 | |
| Operating lease liability, current [1] | |
| (273,364 | ) |
| Operating lease liability, long term | |
$ | 87,245 | |
| [1] |
Represents lease payments to be made in the next 12 months. |
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
NOTE
10 – 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 44 month lock up period. 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.
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.
SCHEDULE
OF ASSETS ACQUISITION
| | |
| | |
| Purchase price (fair value of Units) | |
$ | 58,859,440 | |
| Intangible asset (Prodigio software) | |
| 7,240,000 | |
| Loss on asset acquisition | |
$ | 51,619,440 | |
NOTE
11 – SUBSEQUENT EVENTS
In
accordance with ASC Topic 855, Subsequent Events, we have evaluated subsequent events through the date of this filing and have determined
that there are no subsequent events that require disclosure except as noted below.
In
November 2021 we were notified that the U.S. Small Business Administration had approved the forgiveness of our Paycheck Protection Program
loan, in the amount of $505,300.
NOTE
12 – RESTATEMENT
The
Company has restated its condensed consolidated interim financial statements for September 30, 2021 that were originally presented
in a Form 10-Q filed on November 22, 2021. The nature and impact of these adjustments are described below and detailed in the tables
below.
During
the preparation of our financial statements for the nine months ended December 31, 2021, we determined we would change the way we accounted
for the acquisition of the operating assets, intellectual property rights and liabilities of MPower Trading Systems, LLC, a related party,
which was consummated in September 2021 (the “Acquisition”). Originally, for the three and six ended September 30, 2021,
we accounted for the Acquisition of all the assets and liabilities acquired at the nominal carrying value on MPower’s books. However,
after further consideration, we determined it reasonable to increase additional paid in capital for the appraised value of the Class
B Redeemable Units issued to MPower in the Acquisition and to record an intangible asset on our books for the appraised value of the
MPower assets acquired as of September 3, 2021. This resulted in a non-cash charge to operating expenses of $51,619,440, which was the
difference between the two appraised values that had no impact on the Company’s cash flow or liquidity and capital resources. The
impact of the restatement is illustrated in the tables below.
INVESTVIEW,
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
(Unaudited)
Changes
to the Balance Sheet
SCHEDULE OF ERROR CORRECTIONS AND PRIOR PERIOD ADJUSTMENTS
| | |
| | | |
| | | |
| | |
| | |
As of September 30, 2021 (unaudited) | |
| | |
As Previously Reported | | |
Adjustment | | |
As Restated | |
| Intangible asset, net | |
$ | - | | |
$ | 7,240,000 | | |
$ | 7,240,000 | |
| Total assets | |
$ | 40,071,802 | | |
$ | 7,240,000 | | |
$ | 47,311,802 | |
| Additional paid in capital | |
$ | 43,830,303 | | |
$ | 58,859,440 | | |
$ | 102,689,743 | |
| Accumulated deficit | |
$ | (29,300,692 | ) | |
$ | (51,619,440 | ) | |
$ | (80,920,132 | ) |
| Total stockholders’ equity (deficit) | |
$ | 17,496,521 | | |
$ | 7,240,000 | | |
$ | 24,736,521 | |
Changes
to the Statement of Operations
| | |
| | | |
| | | |
| | |
| | |
Six Months Ended September 30, 2021 (unaudited) | |
| | |
As Previously Reported | | |
Adjustment | | |
As Restated | |
| General and administrative expenses | |
$ | 4,524,624 | | |
$ | 51,619,440 | | |
$ | 56,144,064 | |
| Total operating costs and expenses | |
$ | 31,056,633 | | |
$ | 51,619,440 | | |
$ | 82,676,073 | |
| Net income (loss) from operations | |
$ | 17,941,032 | | |
$ | (51,619,440 | ) | |
$ | (33,678,408 | ) |
| Net income (loss) | |
$ | 17,147,249 | | |
$ | (51,619,440 | ) | |
$ | (34,472,191 | ) |
| Net income (loss) applicable to common shareholders | |
$ | 16,737,579 | | |
$ | (51,619,440 | ) | |
$ | (34,881,861 | ) |
| Comprehensive income (loss) applicable to common shareholders | |
$ | 17,145,567 | | |
$ | (51,619,440 | ) | |
$ | (34,473,873 | ) |
| Basic income (loss) per common share | |
$ | 0.01 | | |
$ | (0.02 | ) | |
$ | (0.01 | ) |
| Diluted income (loss) per common share | |
$ | 0.00 | | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
| | |
| | | |
| | | |
| | |
| | |
Three Months Ended September 30, 2021 (unaudited) | |
| | |
As Previously Reported | | |
Adjustment | | |
As Restated | |
| General and administrative expenses | |
$ | 2,478,140 | | |
$ | 51,619,440 | | |
$ | 54,097,580 | |
| Total operating costs and expenses | |
$ | 15,967,518 | | |
$ | 51,619,440 | | |
$ | 67,586,958 | |
| Net income (loss) from operations | |
$ | 7,403,582 | | |
$ | (51,619,440 | ) | |
$ | (44,215,858 | ) |
| Net income (loss) | |
$ | 8,374,591 | | |
$ | (51,619,440 | ) | |
$ | (43,244,849 | ) |
| Net income (loss) applicable to common shareholders | |
$ | 8,169,756 | | |
$ | (51,619,440 | ) | |
$ | (43,449,684 | ) |
| Comprehensive income (loss) applicable to common shareholders | |
$ | 8,373,717 | | |
$ | (51,619,440 | ) | |
$ | (43,245,723 | ) |
| Basic income (loss) per common share | |
$ | 0.01 | | |
$ | (0.02 | ) | |
$ | (0.01 | ) |
| Diluted income (loss) per common share | |
$ | 0.00 | | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
Changes
to the Statement of Cash Flows
| | |
| | | |
| | | |
| | |
| | |
Six Months Ended September 30, 2021 (unaudited) | |
| | |
As Previously Reported | | |
Adjustment | | |
As Restated | |
| Net income (loss) | |
$ | 17,147,249 | | |
$ | (51,619,440 | ) | |
$ | (34,472,191 | ) |
| (Gain) loss on Class B Units of subsidiary issued to a related party for asset acquisition | |
$ | - | | |
$ | 51,619,440 | | |
$ | 51,619,440 | |
| Non-cash investing and financing activities: | |
| | | |
| | | |
| | |
| Class B units of subsidiary issued to a related party for asset acquisition | |
$ | - | | |
$ | 7,240,000 | | |
$ | 7,240,000 | |