Exhibit 23.1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
March 31, 2020
[ ] 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 | ||
Securities registered pursuant to Section 12(g) of the Act:
| Common Stock, $0.001 Par Value Per Share |
| (Title of Class) |
Indicate by check mark whether the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
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 [X] 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 (§ 229.405 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 [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. (Check one):
| Large accelerated filer [ ] | Accelerated filer [ ] |
| Non-accelerated filer [X] | Smaller Reporting Company [X] |
| 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 by Rule 12b-2 of the Exchange Act) Yes [ ] No [X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. As of September 30, 2019, the aggregate market value of the issued and outstanding common stock held by non-affiliates of the registrant, based upon the closing price per share of $0.0119 of the common stock as traded on the OTCQB was approximately $14,386,770.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of June 26, 2020, there were 3,235,481,329 shares of common stock par value $0.001 per share, outstanding.
Documents incorporated by reference: NONE
INVESTVIEW, INC.
2020 FORM 10-K ANNUAL REPORT
Table of Contents
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS CONTAINED IN THIS REPORT AND THE INFORMATION INCORPORATED BY REFERENCE HEREIN MAY CONTAIN “FORWARD-LOOKING STATEMENTS.” THESE STATEMENTS, WHICH INVOLVE RISKS AND UNCERTAINTIES, REFLECT OUR CURRENT EXPECTATIONS, INTENTIONS, OR STRATEGIES REGARDING OUR POSSIBLE FUTURE RESULTS OF OPERATIONS, PERFORMANCE, AND ACHIEVEMENTS. FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION: STATEMENTS REGARDING FUTURE PRODUCTS OR PRODUCT DEVELOPMENT; STATEMENTS REGARDING FUTURE SELLING, GENERAL AND ADMINISTRATIVE COSTS AND RESEARCH AND DEVELOPMENT SPENDING; STATEMENTS REGARDING THE FUTURE PERFORMANCE OF OUR NETWORK MARKETING EFFORTS; STATEMENTS REGARDING OUR EXPECTATIONS REGARDING ONGOING LITIGATION; STATEMENTS REGARDING INTERNATIONAL GROWTH; AND STATEMENTS REGARDING FUTURE FINANCIAL PERFORMANCE, RESULTS OF OPERATIONS, CAPITAL EXPENDITURES AND SUFFICIENCY OF CAPITAL RESOURCES TO FUND OUR OPERATING REQUIREMENTS.
THESE FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED IN THIS REPORT AND THE INFORMATION INCORPORATED BY REFERENCE BY WORDS SUCH AS “ANTICIPATE”, “BELIEVE”, “COULD”, “ESTIMATE”, “EXPECT”, “INTEND”, “PLAN”, “PREDICT”, “PROJECT”, “SHOULD” AND SIMILAR TERMS AND EXPRESSIONS, INCLUDING REFERENCES TO ASSUMPTIONS AND STRATEGIES. THESE STATEMENTS REFLECT OUR CURRENT BELIEFS AND ARE BASED ON INFORMATION CURRENTLY AVAILABLE TO US. ACCORDINGLY, THESE STATEMENTS ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES, AND CONTINGENCIES, WHICH COULD CAUSE OUR ACTUAL RESULTS, PERFORMANCE, OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN, OR IMPLIED BY, SUCH STATEMENTS.
The following factors are among those that may cause actual results to differ materially from our forward-looking statements:
| ● | noncompliance by our independent distributors with applicable legal requirements or our policies and procedures; | |
| ● | potential adverse effects on our business and stock price due to ineffective internal controls over financial reporting; | |
| ● | the impact of the COVID-19 pandemic on our business, employees, members, operating results, and ability to obtain additional funding; | |
| ● | inability to manage financial reporting and internal control systems and processes; | |
| ● | inability to properly motivate and manage our independent distributors; | |
| ● | inability to manage existing markets, open new international markets, or expand our operations; | |
| ● | inability of new products to gain distributor or market acceptance; | |
| ● | inability to execute our product launch process due to increased pressure on our supply chain, information systems, and management; | |
| ● | disruptions in our information technology systems; | |
| ● | inability to protect against cybersecurity risks and to maintain the integrity of data; | |
| ● | international trade or foreign exchange restrictions, increased tariffs, and foreign currency exchange fluctuations; | |
| ● | deterioration of global economic conditions; | |
| ● | inability to raise additional capital if needed; | |
| ● | inability to retain independent distributors or to attract new independent distributors on an ongoing basis; | |
| ● | government regulations on direct selling activities in our various markets prohibiting or severely restricting our business; | |
| ● | unfavorable publicity on our business or products; | |
| ● | a finding that our direct selling program is not in compliance with current or newly adopted laws or regulations in various markets; | |
| ● | expensive and time-consuming legal proceedings; | |
| ● | potential for investigatory and enforcement action by the federal and state regulatory authorities; | |
| ● | failure to comply with anti-corruption laws; | |
| ● | inability to build and integrate our management team; | |
| ● | loss of, or inability to attract, key personnel; | |
| ● | unexpected tax or other assessments relating to the activity of our independent distributors; | |
| ● | economic, political, foreign exchange, and other risks associated with international operations; and | |
| ● | volatility of the market price of our common stock. |
When considering these forward-looking statements, investors should keep in mind the cautionary statements in this report and the documents incorporated by reference. Except as required by law, we have no obligation and do not undertake to update or revise any such forward-looking statements to reflect events or circumstances after the date of this report.
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Corporate History
Investview, Inc. was incorporated on January 30, 1946, under the laws of the state of Utah as the Uintah Mountain Copper Mining Company. In January 2005, we changed domicile to Nevada and changed our name to Voxpath Holding, Inc. In September of 2006, we merged The Retirement Solution Inc. through a Share Purchase Agreement into Voxpath Holding, Inc. and then changed our name to TheRetirementSolution.Com, Inc. and in October 2008 changed our name to Global Investor Services, Inc., before changing our name to Investview, Inc., on March 27, 2012.
On March 31, 2017, we entered into a Contribution Agreement with the members of Wealth Generators, LLC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators Members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of our common stock. This closing occurred after close of business on March 31, 2017, therefore, effective April 1, 2017, Wealth Generators became our wholly owned subsidiary.
On June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former members of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth Generators and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption of $419,139 in pre-merger liabilities.
On February 28, 2018, we filed a name change for Wealth Generators LLC to Kuvera LLC (“Kuvera”), this did not affect the company’s tax and federal identification.
On May 7, 2018, we established WealthGen Global, LLC as a Utah limited liability company and our wholly owned subsidiary.
On July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock.
On November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European Union.
On December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities Trading Advisor, Commodity Pool Operator, and approved for over the counter FOREX advisory services.
On January 17, 2019, we renamed our nonoperating wholly owned subsidiary WealthGen Global, LLC to SAFETek, LLC, a Utah limited liability company.
Effective July 22, 2019 we renamed our non-operating wholly owned subsidiary Razor Data, LLC to Apex Tek, LLC, a Utah Limited Liability Company.
Overview
Investview has established a portfolio of wholly owned subsidiaries that deliver leading edge technologies, services and research, primarily dedicated to the individual consumer. As financial technologies evolve, Investview seeks to deliver innovative methods and products to enable participation in emerging markets and information technology advancements for individuals and companies. Each of its subsidiaries are designed to work in tandem with one another generating a worldwide presence for Investview.
Our largest subsidiary is Kuvera LLC, which delivers financial education, technology and research to individuals through a subscription-based model. Kuvera, LLC provides research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research, trade alerts, and live trading rooms that include instruction in equities, options, FOREX, ETFs, binary options, crowdfunding and cryptocurrency sector education. In addition to trading tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product subscription includes a core set of trading tools/research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. Kuvera operations are located at Salt Lake City, Utah and more information can be found at kuveraglobal.com.
Kuvera France S.A.S. is our entity in France that distributes Kuvera products and services throughout the European Union.
S.A.F.E. Management, LLC is a Registered Investment Adviser and Commodity Trading Adviser that has been established to deliver automated trading strategies to individuals who find they lack the time to trade for themselves. SAFE is committed to bringing innovative trade methodologies, strategies and algorithms for all worldwide financial markets. SAFE Management is a state registered investment adviser and operations are located in our Eatontown, New Jersey Corporate Finance location. More information regarding S.A.F.E. Management, LLC can be found at safeadvglobal.com.
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SAFETek, LLC (formerly WealthGen Global, LLC) is a new addition that we established for expansion plans in the high-speed processing computing space. SAFETek, LLC is in the process of deploying a large scale processing operation that can be used for any of the following intense processing activities: protein folding, CGI rendering, Game Streaming, Machine & Deep Learning, Mining, Independent Financial Verification, and general high-speed computing. Key trending markets for Data Computation include Internet of Things, Smart Homes, smart cities, smart devices, Artificial intelligence, blockchain technology, Virtual Reality, 3D animation, and health technology data to name a few. More information regarding SAFETek, LLC can be found at safeteksolutions.com.
Apex Tek, LLC (formerly Razor Data, LLC) is the entity responsible for sales of the Apex program. Launched in September 2019, the Apex product pack includes hardware, firmware, software and insurance that can be purchased and then leased to SAFETek LLC. Apex is a technology asset that creates passive income for those who desire to diversify their holdings. More information can be found at apextekglobal.com.
Government Regulation
We have historically positioned the company as a knowledge provider and educator that seeks to augment a user’s informed decision-making process, rather than to act as a conductor of investment decisions or a representative of investment services. As such, most of our activities do not fall within the scope of securities industry regulation. Most of our products and services also do not require that any representative distributing our services conduct themselves as an investment advisor or broker. However, our subsidiary S.A.F.E. Management, LLC, recently received its registration and disclosure approval from the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser (“RIA”), Commodities Trading Advisor (“CTA”), and Commodity Pool Operator registered with the U.S. Commodity Futures Trading Commission (“CFTC”), and is approved by the CFTC for over the counter FOREX advisory services. As a New Jersey-registered RIA, we are required to comply with the laws and regulations of those states in which we have the requisite number of customers governing the activities of investment advisers and the fees they can charge, as well as certain provisions of the Investment Adviser Act of 1940. As a CFTC registered CTA, Commodity Pool Operator, and FOREX adviser, we are required to comply with federal law and CFTC rules regulating those activities.
We have established these registrations and the advisory structure to offer automated trade execution, which is managed by S.A.F.E. Management, LLC, in its capacity as an RIA, for equities and equity options and in its capacity as a CTA for commodities, futures, and OTC Forex. In addition, SAFE provides traditional advisory services for clients who do not wish to trade for themselves. Automation of trades is only available through S.A.F.E. Management. No additional approvals are required for any of our current business activities. The cost of maintaining this additional regulated entity could have a material adverse effect on our business and could subject us to regulatory enforcement actions.
We are subject to government regulation in connection with securities laws and regulations applicable to all publicly owned companies as well as laws and regulations applicable to businesses generally. We are also increasingly subject to governmental regulation and legislation specifically targeting Internet companies, such as privacy regulations adopted at the local, state, national and international levels and taxes levied at the state level. Due to the increasing use of the internet, enforcement of existing laws, such as consumer protection regulations, in connection with web-based activities has become more aggressive, and it is expected that new laws and regulations will continue to be enacted at the local, state, national, and international levels. Such new legislation, alone or combined with increasingly aggressive enforcement of existing laws, could have a material adverse effect on our future operating performance and business.
Employees
As of June 26, 2020, we had 22 employees.
Internet Address
Additional information concerning our business can be found on our website at www.investview.com for the most up-to-date corporate financial information, presentation announcements, transcripts, and archives. Information regarding our products and services offered by our wholly owned subsidiary, Kuvera LLC, may be found at www.kuveraglobal.com. SAFE Management LLC services can be viewed at www.safeadvglobal.com. Apex Tek LLC product information can be found at: www.apextekglobal.com and SAFETek, LLC information is available at www.safeteksolutions.com. Web site links provided in may change in the future. We make available free of charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we electronically file such material with or furnish it to the Securities and Exchange Commission.
Investors should carefully consider the following material risk factors as well as all other information set forth or referred to in this report before purchasing shares of our common stock. Investing in our common stock involves a high degree of risk. We believe all material risk factors have been presented below. If any of the following events or outcomes actually occurs, our business operating results and financial condition would likely suffer. As a result, the trading price of our common stock could decline, and investors may lose all or part of the money paid to purchase our common stock.
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Risks Related to our Business
We have a limited operating history and, therefore, there is an elevated risk of potential business failure unless we can overcome the various obstacles inherent to an early stage business.
We have only limited prior business operations. Because of our limited operating history, investors may not have adequate information on which they can base an evaluation of our business and prospects. Investors should be aware of the difficulties, delays, and expenses normally encountered by an enterprise in its early stage, many of which are beyond our control, including unanticipated research and development expenses, employment costs, and administrative expenses. We cannot assure our investors that our proposed business plans as described herein will materialize or prove successful, or that we will be able to finalize development of our products or operate profitably.
We have incurred substantial operating losses since inception (August 1, 2005), and we may never achieve profitability.
From our inception on August 1, 2005, through March 31, 2020, we have incurred cumulative losses of $46,382,174, recorded net losses from operations of $21,285,191 for the year ended March 31, 2020, and our cash balance on March 31, 2020, was $137,177. Accordingly, we cannot assure that we will achieve profitability in the immediate future or at all.
Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.
In their audit opinion issued in connection with our consolidated balance sheet as of March 31, 2020, and our related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended March 31, 2020, our auditors have expressed substantial doubt about our ability to continue as a going concern given our recurring net losses, negative cash flows from operations, and the limited amount of funds on our balance sheet. We have prepared our consolidated financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue in existence. This could make it more difficult to raise capital in the future.
Our operations and financial condition may be adversely impacted by the COVID-19 pandemic.
In December 2019, a strain of novel coronavirus, or COVID-19, was first reported in Wuhan, China, resulting in thousands of confirmed cases of the disease in China. By January, the Chinese government implemented a quarantine protocol for Wuhan and implemented other restrictions for other major Chinese cities, including mandatory business closures, social distancing measures, and various travel restrictions, all of which have subsequently been adopted in countries throughout the world. On March 11, 2020, as COVID-19 spread outside of China, the World Health Organization designated the outbreak as a global pandemic. This pandemic could affect our business, employees, operating results, ability to obtain additional funding, product development programs, research and development programs, suppliers and third-party manufacturers.
We anticipate that COVID-19 and a prolonged public health crisis may negatively impact our financial condition and operating results; however, given the evolving health, economic, social, and governmental environments, the breadth and duration of the impact remains uncertain. Given the dynamic nature of these circumstances, the duration of any business disruption or potential impact to our business resulting from the COVID-19 coronavirus is difficult to predict, but it may increase our costs or expenses.
We may not be able to fully protect our proprietary rights and we may infringe the proprietary rights of others, which could result in costly litigation.
Our future success depends on our ability to protect and preserve the proprietary rights related to our products. We cannot assure that we will be able to prevent third parties from using our intellectual property rights and technology without our authorization. We also rely on trade secrets, common law trademark rights, and trademark registrations, as well as confidentiality and work for hire, development, assignment, and license agreements with employees, consultants, third-party developers, licensees, and customers. Our protective measures for these intangible assets afford only limited protection and may be flawed or inadequate.
Policing unauthorized use of our technology is difficult and some foreign laws do not provide the same level of protection as U.S. laws. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or patents that we may obtain, or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of resources and have a material adverse effect on our future operating results.
In recent years, there has been significant litigation in the United States involving patents and other intellectual property rights. In particular, there has been an increase in the filing of suits alleging infringement of intellectual property rights, which pressure defendants into entering settlement arrangements quickly to dispose of such suits, regardless of their merits. Other companies or individuals may allege that we infringe on their intellectual property rights. Litigation, particularly in the area of intellectual property rights, is costly and the outcome is inherently uncertain. In the event of an adverse result, we could be liable for substantial damages and we may be forced to discontinue our use of the subject matter in question or obtain a license to use those rights or develop non-infringing alternatives.
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Our business could be negatively affected by any adverse economic developments in the securities markets or the economy in general.
We depend on the interest of individuals in obtaining financial information and securities trading strategies to assist them in making their own investment decisions. Significant downturns in the securities markets or in general economic and political conditions may cause individuals to be reluctant to make their own investment decisions and thus decrease the demand for our products. Significant upturns in the securities markets or in general economic and political conditions may cause individuals to be less proactive in seeking ways to improve the returns on their trading or investment decisions and, thus, decrease the demand for our products.
We may encounter risks relating to security or other system disruptions and failures that could reduce the attractiveness of our sites and that could harm our business.
Although we have implemented various security mechanisms, our business is vulnerable to computer viruses, physical or electronic break-ins, and similar disruptions, which could lead to interruptions, delays, or loss of data. For instance, because a portion of our revenue is based on individuals using credit cards to purchase subscriptions over the Internet and a portion from advertisers that seek to encourage people to use the Internet to purchase goods or services, our business could be adversely affected by these break-ins or disruptions. Additionally, our operations depend on our ability to protect systems against damage from fire, earthquakes, power loss, telecommunications failure, and other events beyond our control. Moreover, our website may experience slower response times or other problems for a variety of reasons, including hardware and communication line capacity restraints, software failures, or significant increases in traffic when there have been important business or financial news stories. These strains on our systems could cause customer dissatisfaction and could discourage visitors from becoming paying subscribers. Our websites could experience disruptions or interruptions in service due to the failure or delay in the transmission or receipt of information from us. These types of occurrences could cause users to perceive our website and technology solutions as not functioning properly and cause them to use other methods or services of our competitors. Any disruption resulting from these actions may harm our business and may be very expensive to remedy, may not be fully covered by our insurance, could damage our reputation, and discourage new and existing users from using our products and services. Any disruptions could increase costs and make profitability even more difficult to achieve.
We will need to introduce new products and services and enhance existing products and services to remain competitive.
Our future success depends in part on our ability to develop and enhance our products and services. In addition, the adoption of new Internet, networking or telecommunications technologies or other technological changes could require us to incur substantial expenditures to enhance or adapt our services or infrastructure. There are significant technical and financial costs and risks in the development of new or enhanced products and services, including the risk that we might be unable to effectively use new technologies, adapt our services to emerging industry standards, or develop, introduce and market enhanced or new products and services. An inability to develop new products and services, or enhance existing offerings, could have a material adverse effect on our profitability.
We rely on external service providers to perform certain key functions.
We rely on a number of external service providers for certain key technology, processing, service, and support functions. External content providers provide us with crypto mining services, financial information, market news, charts, option and stock quotes, research reports, and other fundamental data that we offer to clients. These service providers face technological and operational risks of their own. Any significant failures by them, including improper use or disclosure of our confidential client, employee, or company information, could cause us to incur losses and could harm our reputation.
We cannot assure that any external service providers will be able to continue to provide these services in an efficient, cost-effective manner or that they will be able to adequately expand their services to meet our needs. An interruption in or the cessation of service by any external service provider as a result of systems failures, capacity constraints, financial constraints or problems, unanticipated trading market closures, or for any other reason, and our inability to make alternative arrangements in a smooth and timely manner, if at all, could have a material adverse effect on our business, results of operations, and financial condition.
We could face liability and other costs relating to storage and use of personal information about our users.
Users provide us with personal information, including tax identification numbers, which we do not share without the user’s consent. Despite this policy of obtaining consent, however, if third persons were able to penetrate our network security or otherwise misappropriate our users’ personal information, we could be subject to liability, including claims for unauthorized purchases with credit card information, impersonation or other similar fraud claims, and misuses of personal information, such as for unauthorized marketing purposes. New privacy legislation may further increase this type of liability. Furthermore, we could incur additional expenses if additional regulations regarding the use of personal information were introduced or if federal or state agencies were to investigate our privacy practices. We do not store user credit card information and rely upon our merchant processing partners to collect and store this information with the necessary Payment Card Industry Security Standards compliance in place. However, a breach of the merchant’s security standards could create liability for us.
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Our business could be negatively affected if we are required to defend allegations of unfair competition and unfair false or deceptive acts or practices in or affecting commerce.
Advertising and marketing of our products in the United States are also subject to regulation by the Federal Trade Commission (“FTC”) under the Federal Trade Commission Act, or FTC Act. Among other things, the FTC Act prohibits unfair methods of competition and unfair false or deceptive acts or practices in or affecting commerce. The FTC Act also makes it illegal to disseminate or cause to be disseminated any false advertisement. The FTC routinely reviews websites to identify questionable advertising claims and practices. Competitors sometimes inform the FTC when they believe other competitors are violating the FTC Act and consumers also notify the FTC of what they believe may be wrongful advertising. The FTC may initiate a nonpublic investigation that focuses on our advertising claims, which usually involves nonpublic, pre-lawsuit, extensive formal discovery. Such an investigation may be lengthy and expensive to defend and result in a publicly disclosed consent decree or settlement agreement. If no settlement can be reached, the FTC may start an administrative proceeding or a federal court lawsuit against us or our principal officers. The FTC often seeks to recover from the defendants, whether in a consent decree or a proceeding, any or all of the following: (i) consumer redress in the form of monetary relief or disgorgement of profits; (ii) significant reporting requirements for several years; and (iii) injunctive relief. In addition, most, if not all, states have statutes prohibiting deceptive and unfair acts and practices. The requirements under these state statutes are similar to those of the FTC Act.
We accept and hold cryptocurrencies, which may subject us to exchange risk and additional tax and regulatory requirements
We have recently begun accepting cryptocurrencies bitcoin and etherium as a form of payment. Cryptocurrencies are not considered legal tender or backed by any government and have experienced significant price volatility, technological glitches, and various law enforcement and regulatory interventions. If we fail to comply with regulations or prohibitions applicable to us, we could face regulatory or other enforcement actions and potential fines and other consequences. We also hold cryptocurrencies directly, subjecting us to exchange rate risk as well as the risk that regulatory or other developments and the recent price volatility may adversely affect the value of the cryptocurrencies we hold. The uncertainties regarding legal and regulatory requirements relating to cryptocurrencies or transactions using cryptocurrencies, as well as potential accounting and tax issues or other requirements relating to cryptocurrencies, could have a material adverse effect on our business.
Our business could be negatively affected if we are required to defend allegations that our direct selling activities are fraudulent or deceptive schemes, are against public interest, or are the sale of unregistered securities.
Direct selling activities are regulated by the FTC, as well as various federal, state, and local governmental agencies in the United States and foreign countries. These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, often referred to as “pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on product sales. Regulators may take the position that some or all of our products are deemed to be securities, the sale of which has not been registered. The laws and regulations governing direct selling are modified from time to time, and like other direct selling companies, we may be subject from time to time to government investigations related to our direct selling activities. This may require us to make changes to our business model and our compensation plan.
Our independent distributors could fail to comply with applicable legal requirements or our distributor policies and procedures, which could result in claims against us that could harm our business.
Our independent distributors are independent contractors and, accordingly, we are not in a position to directly provide the same oversight, direction, and motivation as we could if they were our employees. As a result, we cannot assure that our independent distributors will comply with applicable laws or regulations or our distributor policies and procedures.
Extensive federal, state, local, and international laws regulate our business, products and direct selling activities. Because we have expanded into foreign countries, our policies and procedures for our independent distributors differ slightly in some countries due to the different legal requirements of each country in which we do business.
Our proprietary systems may be compromised by hackers.
Our current products and other products and services that we may develop in the future will be based on proprietary software and customer-specific data that we protect by routine measures such as password protection, confidentiality and nondisclosure agreements with employees, and similar measures. Any unauthorized access to our software or data could materially disrupt our business and result in financial loss and damages to our business reputation.
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Risks Related to Our Common Stock
We have a history of operating losses and expect to report future losses that may cause our stock price to decline.
For the operating period since inception through March 31, 2020, we have reported an accumulated deficit of $46,382,174. We reported a net loss of $21,285,191 for the year ended March 31, 2020, and a net loss from operations of $9,093,419. We cannot be certain whether we will ever become profitable, or if we do, that we will be able to continue to be profitable. Also, any economic weakness or global recession may limit our ability to market our products. Any of these factors could cause our stock price to decline and result in investors losing a portion or all of their investment.
We will need to raise additional capital. If we are unable to raise additional capital, our business may fail.
Because our revenues are not yet sufficient to cover expenses or fund our growth, we need to secure ongoing funding. If we are unable to obtain adequate additional financing, we may not be able to successfully market and sell our products, our business operations will most likely be discontinued, and we will cease to be a going concern. To secure additional financing, we may need to borrow money or sell more securities. Under these circumstances, we may be unable to secure additional financing on favorable terms or at all. Selling additional stock, either privately or publicly, would dilute the equity interests of our stockholders. If we borrow money, we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail business operations, which would have a material negative effect on operating results and most likely result in a lower stock price.
Our common stock price has been and may continue to be extremely volatile.
Our common stock has closed as low as $0.005 per share and as high as $0.043 per share during the most recent fiscal year. We believe this volatility may be caused, in part, by variations in our quarterly operating results, delays in development of our technologies, changes in market valuations of similar companies, and the volume of our stock in the market.
Additionally, in recent years the stock market in general, and the OTC Markets and technology stocks in particular, have experienced extreme price and volume fluctuations. In some cases, these fluctuations are unrelated or disproportionate to the operating performance of the underlying company. These market and industry factors may materially and adversely affect our stock price regardless of our operating performance. The historical trading of our common stock is not necessarily an indicator of how it will trade in the future and our trading price as of the date of this report is not necessarily an indicator of what the trading price of our common stock might be in the future.
In the past, class action litigation has often been brought against companies following periods of volatility in the market price of those companies’ common stock. If we become involved in this type of litigation in the future it could result in substantial costs and diversion of management attention and resources, which could have a further negative effect on our stock price.
Shares of our common stock may never become eligible for trading on Nasdaq or a national securities exchange.
We cannot assure that we will ever be listed on the Nasdaq Stock Market or on another national securities exchange. Listing on one of the Nasdaq markets or one of the national securities exchanges is subject to a variety of requirements, including minimum trading price and minimum public “float” requirements. There are also continuing eligibility requirements for companies listed on national securities exchanges. If we are unable to satisfy the initial or continuing eligibility requirements of any such market, then our stock may not be listed or could be delisted. This could result in a lower trading price for our common stock and may limit the ability of our stockholders to sell their shares, which could result in a loss of some or all of their investments.
If we fail to file periodic reports with the U.S. Securities and Exchange Commission, our common stock will not be able to be traded on the OTCQB.
Although our common stock trades on the OTCQB, a regular trading market for our common stock may not be sustained in the future. OTC Markets limits quotation on the OTCQB to securities of issuers that are current in their reports filed with the Securities and Exchange Commission. If we fail to remain current in the filing of our reports with the Securities and Exchange Commission, our common stock will not be able to be traded on the OTCQB. The OTCQB is an inter-dealer market that provides significantly less liquidity than a national securities exchange or automated quotation system.
Because we have no plans to pay dividends on our common stock, stockholders must look solely to appreciation of our common stock to realize a gain on their investments.
We do not anticipate paying any dividends on our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the expansion of our business. Our future dividend policy is within the discretion of our board of directors and will depend upon numerous factors, including our business, financial condition, results of operations, capital requirements, and investment opportunities. Accordingly, stockholders must look solely to appreciation of our common stock to realize a gain on their investment. This appreciation may not occur.
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Certain provisions of Nevada law and of our corporate charter may inhibit a potential acquisition of our company, and this could depress our stock price.
Nevada corporate law includes provisions that could delay, defer, or prevent a change in control of our company or our management. These provisions could discourage information contests and make it more difficult for our stockholders to elect directors and take other corporate actions. As a result, these provisions could limit the price that investors are willing to pay in the future for shares of our common stock. For example:
| ● | without prior stockholder approval, our board of directors has the authority to issue one or more classes of preferred stock with rights senior to those of our common stock and to determine the rights, privileges, and preferences of that preferred stock; | |
| ● | there is no cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; and | |
| ● | stockholders cannot call a special meeting of stockholders. |
Our indemnification of our directors and officers may limit the rights of our stockholders.
While our board of directors and officers are generally accountable to our stockholders and us, the liability of our directors and officers to all parties is limited in certain respects under applicable state law and our articles of incorporation and bylaws, as in effect. Further, we have agreed or may agree to indemnify our directors and officers against liabilities not attributable to certain limited circumstances. This limitation of liability and indemnity may limit rights that our stockholders would otherwise have to seek redress against our directors and officers.
Additional issuances of stock options and warrants, convertible notes, and stock grants will cause additional substantial dilution to our stockholders.
Given our limited cash, liquidity, and revenues, it is likely that in the future, as in the past, we will issue additional warrants, stock grants, and convertible debt to finance our future business operations and acquisitions and strategic relationships. The issuance of additional shares of common stock, the exercise of warrants, and the conversion of debt to stock could cause additional dilution to our stockholders and could have further adverse effects on the market price for our securities or on our ability to obtain future financing. The 2018 increase in our authorized shares from two billion to ten billion increased the magnitude of this risk substantially.
The amount of authorized common stock may result in management implementing anti-takeover procedures by issuing new securities.
The proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect, for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of our board of directors or contemplating a tender offer or other transaction for the combination of our company with another entity. Although, we have no current plans to issue additional stock for this purpose, management could use the additional shares that are now available or that may be available after a possible further recapitalization to resist or frustrate a third-party transaction. Generally, no stockholder approval would be necessary for the issuance of all or any portion of the additional shares of common stock unless required by law or any rules or regulations to which we are subject.
Item 1B. Unresolved Staff Comments
None.
Our corporate headquarters are located at 234 Industrial Way West, Ste A202, Eatontown, New Jersey 07724 and are being leased under a three-year lease agreement that will expire in June 2022. Our Apex Tek, LLC headquarters are located at 459 North 300 West, #15, Kaysville, Utah 84037 and are being leased under a one-year lease agreement that will expire at the end of September 2020. Our Kuvera, LLC headquarters are located at 2940 West Maple Loop Drive, Suite 303, Office A, C, & D, Lehi, Utah 84043 and are being lease on a month-to-month basis. We also lease office space in France located at 4 D rue du Lieutenant-Colonel Dubois, 350000 Rennes on a month-to-month basis.
In the ordinary course of business, we may be or have been involved in legal proceedings from time to time; however we do not anticipate that the outcome of such matters and disputes will materially affect our financial statements.
None of our directors, officers, or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.
Item 4. Mine Safety Disclosure
Not applicable
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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is traded on the OTCQB under the symbol “INVU.” The following table sets forth the range of low and high closing sale prices for our common stock for each of the periods indicated as reported and summarized by the OTCQB:
| Low | High | |||||||
| 2020: | ||||||||
| Fourth Quarter | $ | 0.012 | $ | 0.043 | ||||
| Third Quarter | $ | 0.010 | $ | 0.015 | ||||
| Second Quarter | $ | 0.010 | $ | 0.012 | ||||
| First Quarter | $ | 0.005 | $ | 0.010 | ||||
| 2019: | ||||||||
| Fourth Quarter | $ | 0.008 | $ | 0.037 | ||||
| Third Quarter | $ | 0.006 | $ | 0.020 | ||||
| Second Quarter | $ | 0.030 | $ | 0.010 | ||||
| First Quarter | $ | 0.011 | $ | 0.030 | ||||
As of June 26, 2020, we had approximately 613 stockholders of record of our common stock and 3,214,481,329 shares of common stock issued and outstanding.
Dividends
Holders of shares of common stock are entitled to share pro rata in dividends and distributions for the common stock when, as, and if declared by the board of directors out of funds legally available therefor. We have not paid any dividends on our common stock and intend to retain earnings, if any, to finance the development and expansion of our business. Future dividend policy is subject to the discretion of the board of directors and will depend upon a number of factors, including future revenues, capital requirements, overall financial condition, and such other factors as our board of directors deems relevant.
Recent Sales of Unregistered Securities
In March 2020, we entered into a two separate Convertible Promissory Notes and received proceeds of $200,000 and $150,000 after incurring loan fees of $3,000 for each. The notes incur interest at 10% per annum and have maturity dates in June of 2021. The Convertible Promissory Notes have variable conversion rates that are 65% of the average of the two lowest trading prices during the previous 15-trading-day period, subject to adjustment.
In the fourth quarter of the year ending March 31 2020, we issued a total of 11,000,000 shares of our common stock to two employees as compensation.
Effective March 31, 2020 we entered into a settlement agreement with a member of our senior management team to issue 200,000,000 shares of our common stock to repay a $3,600,000 convertible promissory note and $500,000 worth of short-term advances for a total of $4,100,000 worth of related party debt settled. In conjunction with the settlement the full debt discount associated with the note, in the amount of $3,600,000, was recognized into interest expense during the year ended March 31, 2020.
The securities represented by each of the transactions described above were issued in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving any public offering. Each of the investors is either an “accredited investor” as defined in Rule 501(a) of Regulation D or a sophisticated investor able to bear the risks of the investment. Each investor confirmed the foregoing and acknowledged that the securities must be acquired and held for investment. All certificates evidencing the shares of common stock on conversion of the notes, issuances under the restricted stock grants, or upon the exercise of the warrants will bear a restrictive legend. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith.
Item 6. Selected Financial Data
We are not required to provide the information under this item.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 U.S. Securities and Exchange Commission. The forward-looking statements included 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.
Plan of Operations
During the period from April 1, 2019 to March 31, 2020, the executive management team set a primary objective of reaching profitability. We were in final phases of the establishment of Apex Tek, LLC, SAFETek, LLC and the full registration of SAFE Management LLC, our Registered Investment Advisory and Commodity Trading Advisor.
During this time each of our companies suffered several difficulties and setbacks which prevented us from achieving our goal and generated increased losses for our shareholders. We made significant changes that naturally caused us to step backward but we believe these changes have made us stronger and in a better position to reach our goal of profitability in fiscal 2021.
The explanation for these changes and associated benefit is as follows:
In August of 2019, we raised additional funds which came with specific actions the company agreed to take. These actions installed Annette Raynor as Chief Executive Officer and a new management team to run Kuvera. Annette’s tenure would be short lived, ending on December 3, 2019 when the Company installed Joseph Cammarata as Chief Executive Officer. The objective of the executive management team in August was to properly structure Investview, decrease operating expenses of the subsidiaries, create an institutional financing structure for proper growth and source highly experienced and seasoned Executives to bring the company forward.
Kuvera LLC – our financial education platform that services the individual consumer and is distributed via network marketing continued to pay out higher than expected commissions in spite of numerous bonus payout adjustments over a three-year period. In August of 2019, a new team of managers were installed to completely overhaul the Kuvera product subscription, bonus plan, back office and operating team. During this time of significant change, which began on October 1, 2019 and was not completed until February 1, 2020, we lost $3 million in subscription revenue due to Kuvera cancellations. We anticipated a greater decrease and were surprised to see that it was only $3 million for the year. The Kuvera bonus plan is now aligned with the company objectives; it rewards retention, new customers, and volume growth while maintaining proper payout ratios. Kuvera is once again growing revenue month over month and retaining more customers. During this same period, Kuvera cut their overhead, eliminated staff and streamlined daily operations.
SAFE Management – our RIA/CTA launched the EquityPro and Wealth Builder investment strategies in March of 2019 and the FX Global strategy in October of 2019 after completing their NFA on-site exam. SAFE currently has assets under management of $800,000. Regulatory filings and conformance have prevented the firm from meeting their growth objectives. The management team is in the process of streamlining the strategies offered and will re-structure the firm to enable scalable growth. These changes are planned to commence during August 2020 with full implementation by calendar year end.
Apex Tek, LLC / SAFETek, LLC – our subsidiary that sells the APEX package saw rapid growth during fiscal 2020. However, the sales of the product outpaced the company’s ability to source and SAFETek, LLC’s ability to properly deploy the APEX operating units. This was further impacted during the Covid pandemic which stopped manufacturing processes in China as early as December of 2019. Nearly $5 million of hardware was held up and did not arrive until February of 2019. Shortly after arrival, the United States went into quarantine further impacting our ability to implement, test, operate and scale SAFETek, LLC operations. We have taken a number of actions to preserve capital while ramping up operations including reduced lease payments and planned changes to the APEX program for the future. The supply chain issues were systemic and beyond the scope of management control. The executive management team could only work to minimize losses while working to resume operations. We plan to deploy processes to increase efficiency of in place operating units, continue to test and evaluate new technologies to increase mining output while establishing multiple supply sources for equipment.
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We completed our integration of United Games and United League assets into operations. These entities may be eliminated or re-structured in the future as we are currently assessing the potential future for social gaming app known as FIREFAN.
Additional changes implemented by Investview during fiscal 2020 included the naming of Jayme McWidener as Chief Financial Officer, John Tabacco as Consultant and Chief Digital Officer, the withdrawal of Jeremy Roma as President of SAFETek, LLC, and the early retirement of Chad Miller, Founder and Director.
Investview has transformed dramatically over the last twelve months and these changes negatively impacted our financial performance. However, we believe these changes were necessary to reach our ultimate objective of profitability.
Some of the benefits of these actions include:
| ● | Reduction in Kuvera bonus payout percentages as previously noted | |
| ● | Debt carrying charges of $360,000 monthly have been eliminated | |
| ● | The retirement of $6.5 million in debt for the first quarter of 2021 | |
| ● | Our operating expenses for fiscal 2021 are tracking at $18 million versus the $33 million noted for fiscal 2020 |
We believe Kuvera and Kuvera France will lead our initial march towards profitability due to their increased margins, reduction in overhead, and continued growth of the customer base. SAFE Management will continue to maintain its current strategy offerings and management while finalizing the scalable solution planned for January 2021. Apex Tek, LLC will focus on the creation of a new APEX package and structure while SAFETek, LLC will continue to increase production until it reaches planned capacity. It is unknown at this time, how long it will take SAFETek, LLC to meet this objective.
Subsequent to this reporting period, Investview closed a multi-part financing agreement with DBR Capital LLC and installed James Bell and David Rothrock to Investview’s Board of Directors. The capital from this arrangement is dedicated to SAFETek, LLC operations and scalability. Most important is the consultation and guidance of DBR management and their willingness to function as a member of our Board.
Results of Operations
Year Ended March 31, 2020, Compared to Year Ended March 31, 2019
Revenues
Revenue, net, decreased $5,475,491, or 18%, from $29,659,081 for the year ended March 31, 2019, to $24,183,590 for the year ended March 31, 2020. The majority of the decrease can be explained by our decrease in subscription sales of $4,598,029, which was due to attrition and an overhaul in the compensation plan of Kuvera during the third quarter, which resulted in a loss of repeat subscription customers. The remainder of the decrease was due to our sales of equipment and cryptocurrency mining service revenue fees earned in the prior year, versus no such sales in the current year, explaining $2,635,879 of the decrease. These decreases were offset by an increase in mining revenue and fees earned in the current year, versus no such sales in the prior year, explaining $1,758,417 of the offsetting increase. Our gross billings decreased by 25%, or $8,762,934, to $26,229,949 in the year ended March 31, 2020, versus $34,992,883 in the year ended March 31, 2019; however, this was offset by refunds, incentives, credits, chargebacks, and amounts paid to suppliers.
Operating Costs
Operating costs decreased $322,928, or 1%, from $33,599,937 for the year ended March 31, 2019, to $33,277,009 for the year ended March 31, 2020, mainly because of a decrease in our commissions of $7,961,708, or 37%, from $21,526,326 for the year ended March 31, 2019, to $13,564,618 for the year ended March 31, 2020 offset by the increase in our general and administrative expenses of $3,437,913, or 83%, from $4,121,279 for the year ended March 31, 2019, to $7,559,192 for the year ended March 31, 2020 and in our salary and related expenses of $2,321,066, or 54%, from $4,272,355 for the year ended March 31, 2019, to $6,593,421 for the year ended March 31, 2020. The decrease in commissions was a result of our bonus plans paying out beyond our maximum threshold in the prior period due to certain bonus programs in place, which has since been adjusted to reduce such payouts. For the year ended March 31, 2020 commissions as a percent of total net revenue was 56%, versus 73% in the prior year. The increase in general and administrative and salary and related expenses can be explained by the Company recording $3,098,643 worth of stock for services and compensation and by incurring administrative costs for the APEX program that was launched during the year ended March 31, 2020.
Other Income (Expense)
We recorded other expense of $12,184,389 for the year ended March 31, 2020, which was a difference of $11,217,918, or 1,161%, from the prior period other expense of $966,471. The change is due to the gain on bargain purchase recorded as a result of the United Games, LLC and United League, LLC acquisition that took place during the year ended March 31, 2019, as compared to no such gain in the current period. Additionally, in the current period there was interest expense recorded of $10,677,768 offset by a gain on debt extinguishment of $2,018,791 and a gain on fair value of derivative liability of $571,231, whereas in the prior period interest expense was only $1,862,461, there was a gain on debt extinguishment of $19,387, and a loss on fair value of derivative liability of $214,376.
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Liquidity and Capital Resources
During the year ended March 31, 2020, we incurred a loss of $21,285,191. However, we were able to generate $4,624,767 in cash through our operating activities. We used this cash, along with $624,374 of cash generated from financing activities to fund the purchase of $5,245,606 worth of fixed assets. As a result, our cash and cash equivalents increased by $3,533 to $137,177 as compared to $133,644 at the beginning of the fiscal year.
As of March 31, 2020, our current liabilities exceeded our current assets equal to a working capital deficit of $14,123,625. A year ago, at March 31, 2019, the working capital deficit was $2,222,990.
The above matters, among others, raise substantial doubt about our ability to continue as a going concern. During the year ended March 31, 2020, we raised $4,484,979 in cash proceeds from related parties, $2,527,452 in cash proceeds from new lending arrangements, and $825,000 from the sale of common stock. Subsequent to March 31, 2020, we obtained $10,049,435 in cash proceeds from new lending arrangements. Additionally, subject to a Securities Purchase agreement entered into in April 2020, we have a commitment from an investor to purchase a $9 million promissory note on or before October 31, 2020, subject to certain conditions.
On January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic. It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the company. To date, the Company is experiencing challenges in multiple areas of the organization and the full economic impact is yet to be established.
During the year ended March 31, 2020 we made significant strides and wide sweeping changes. While we believe they will be beneficial to our bottom line, there is no assurance of this. Some of the concerns we face going forward will continue, including but not limited to:
| ● | Supply chain issues for Apex Tek, LLC and the sourcing of miners due to the worldwide COVID pandemic and manufacturing slow downs | |
| ● | SAFETek, LLC operations not scaling according to projections with decreased output due to mining difficulty and operational cost | |
| ● | Regulatory reform that could adversely impact the use and demand of digital currencies | |
| ● | The recent Bitcoin (BTC) halving event that further reduced mining output in addition to the supply chain issues |
Apex Tek, LLC and SAFETek, LLC carry additional risk and generated recent losses, however, they also provide Investview a stake in 4IR, HPC, app development, fintech, blockchain and personal money management sectors. Each of these are areas that are targeted for significant growth spurred by innovations through technology which solidify our position in the fintech space.
While our liabilities are larger than our assets it is important to note that we seek to further reduce our operating expense. The assets we have acquired and will continue to seek out are those of technology, mobile apps, and human resources. These assets are not easily defined on our balance sheet but represent our ability to carry out our objectives which we believe will ultimately lead to positive cash flow, reduced debt and then profitability.
Critical Accounting Policies
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements; we believe the following critical accounting policy involves the most complex, difficult, and subjective estimates and judgments.
Basis of Accounting
Our policy is to prepare our financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
Principles of Consolidation
The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC, Investment Tools & Training, LLC, Apex Tek, LLC (formerly Razor Data, LLC), S.A.F.E. Management, LLC, SAFETek, LLC (formerly WealthGen Global, LLC), United Games, LLC, United League, LLC, and Kuvera France S.A.S. Through March 31, 2019 we had determined that one affiliated entity, Kuvera LATAM S.A.S., which we previously conducted business with, was a variable interest entity and we were the primary beneficiary of the entity’s activities, which are similar to those of Kuvera, LLC. As a result, through March 31, 2019 we had consolidated the accounts of this variable interest entity into the accompanying consolidated financial statements. Further, because the Company did not have any ownership interest in this variable interest entity, the Company had allocated the contributed capital in the variable interest entity as a component of noncontrolling interest. As of April 1, 2019 Kuvera LATAM S.A.S. had no operations and ceased to exist, therefore, as of that date, no consolidation of the entity is necessary and we recorded a gain on deconsolidation of $53,739 to eliminate the intercompany account with Kuvera LATAM S.A.S. All intercompany transactions and balances have been eliminated in consolidation.
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Use of Estimates
The preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
Subscription Revenue
The majority of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed subscription period, therefore we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial period to first time subscription customers, during which a full refund can be requested if a customer does not like the product. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks.
Equipment Sales
We generate revenue from the sale of high-speed computer processing equipment that is used for any of the following intense processing activities: protein folding, CGI rendering, Game Streaming, Machine & Deep Learning, Mining, Independent Financial Verification, and general high-speed computing. We recognize equipment sales revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver an equipment package to our customers which includes hardware, software, and firmware and is drop-shipped to a hosting data center. We receive payment at the time of purchase and recognize revenue when the equipment package is delivered and ready for maintenance and hosting, which our customers arrange for, and obtain, from a separate third party that provides such services.
Cryptocurrency Mining Service Revenue
In the past we generated revenue from the sale of cryptocurrency mining services to our customers through an arrangement with a third-party supplier. We recognized cryptocurrency mining service revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation was to arrange for the third-party to provide mining services to our customers and payment is received at the time of purchase, therefore revenue was recognized upon receipt of payment. We recognized revenue in the amount of the fee to which we are entitled to as an agent, or the amount of consideration that we retained after paying the third-party the consideration received in exchange for the services the third-party was to provide.
Mining Revenue
Through our wholly owned subsidiary, SAFETek, LLC, we lease equipment under a sales-type lease and use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of our mining activities.
Fee Revenue
We generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we receive payment for such advisory fees in the month following recognition.
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Revenue generated for the year ended March 31, 2020, was as follows:
| Subscription Revenue | Equipment Sales | Cryptocurrency Mining Service Revenue | Mining Revenue | Fee Revenue | Total | |||||||||||||||||||
| Gross billings/receipts | $ | 24,471,532 | $ | - | $ | - | $ | 1,745,138 | $ | 13,279 | $ | 26,229,949 | ||||||||||||
| Refunds, incentives, credits, and chargebacks | (2,046,359 | ) | - | - | - | - | (2,046,359 | ) | ||||||||||||||||
| Amounts paid to supplier | - | - | - | - | - | - | ||||||||||||||||||
| Net revenue | $ | 22,425,173 | $ | - | $ | - | $ | 1,745,138 | $ | 13,279 | $ | 24,183,590 | ||||||||||||
Foreign revenues for the year ended March 31, 2020 were $21,191,788 while domestic revenue for the year ended March 31, 2020 was $2,991,802.
Revenue generated for the year ended March 31, 2019 was as follows:
| Subscription Revenue | Equipment Sales | Cryptocurrency Mining Service Revenue | Mining Revenue | Fee Revenue | Total | |||||||||||||||||||
| Gross billings/receipts | $ | 28,518,660 | $ | 698,954 | $ | 5,775,269 | $ | - | $ | - | $ | 34,992,883 | ||||||||||||
| Refunds, incentives, credits, and chargebacks | (1,495,458 | ) | (4,000 | ) | (6,501 | ) | - | - | (1,505,959 | ) | ||||||||||||||
| Amounts paid to supplier | - | - | (3,827,843 | ) | - | - | (3,827,843 | ) | ||||||||||||||||
| Net revenue | $ | 27,023,202 | $ | 694,954 | $ | 1,940,925 | $ | - | $ | - | $ | 29,659,081 | ||||||||||||
Foreign revenues for the year ended March 31, 2019 were approximately $27.3 million while domestic revenue for the year ended March 31, 2019 was approximately $2.3 million.
Recent Accounting Pronouncements
There are no recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.
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.
Trends, Risks, and Uncertainties
We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.
Cautionary Factors That May Affect Future Results
We have sought to identify what we believe are significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise.
Potential Fluctuations in Annual Operating Results
Our annual operating results may fluctuate significantly in the future as a result of a variety of factors, most of which are outside our control, including: the demand for our products and services; seasonal trends in purchasing, the amount and timing of capital expenditures and other costs relating to the commercial and consumer financing; price competition or pricing changes in the market; technical difficulties or system downtime; general economic conditions; and economic conditions specific to the consumer financing sector.
Our annual results may also be significantly impacted by the accounting treatment of acquisitions, financing transactions, or other matters. Particularly at our early stage of development, such accounting treatment can have a material impact on the results for any quarter. Due to the foregoing factors, among others, it is likely that our operating results may fall below our expectations or those of investors in some future quarter.
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Management of Growth
We may experience growth, which will place a strain on our managerial, operational, and financial systems resources. To accommodate our current size and manage growth if it occurs, we must devote management attention and resources to improve our financial strength and our operational systems. Further, we will need to expand, train, and manage our sales and distribution base. There is no guarantee that we will be able to effectively manage our existing operations or the growth of our operations, or that our facilities, systems, procedures, or controls will be adequate to support any future growth. Our ability to manage our operations and any future growth will have a material effect on our stockholders.
If we fail to remain current on our reporting requirements, we could be removed from the OTCQB tier of OTC Markets, which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.
Companies trading on the OTCQB tier of OTC Markets, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTCQB tier. If we fail to remain current on our reporting requirements, we could be removed from the OTCQB tier. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are not required to provide the information required by this item.
Item 8. Financial Statements AND SUPPLEMENTARY DATA
The financial statements begin on Page F-1.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the Exchange Act, as of the end of the period covered by this report. Based on this evaluation management concluded that our disclosure controls and procedures were effective as of March 31, 2020.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of our financial statements in accordance with U.S. generally accepted accounting principles, or GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
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With the participation of our Chief Executive Officer and Chief Financial Officer (principal financial officer), our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2020 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our evaluation management concluded that we maintained effective internal control over financial reporting as of March 31, 2020, based on the COSO framework criteria. Management believes our processes and controls are sufficient to ensure the consolidated financial statements for the year ended March 31, 2020, included in this Annual Report on Form 10-K, were fairly stated in accordance with US GAAP.
Management’s report on internal control over financial reporting was not subject to attestation by our registered public accounting firm pursuant to Securities and Exchange Commission rules that permit us to provide only management’s report in this Annual Report on Form 10-K.
Limitations on Effectiveness of Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Changes in Internal Controls
During the fiscal quarter ended March 31, 2020, we implemented numerous changes to our accounting processes and our accounting resources, which have materially affected our internal controls over financial reporting and significantly improved our financial reporting. During the period we hired more accounting staff and better segregated duties within the accounting department. We implemented changes to the communication process throughout the organization and within the finance department. Further, with the appointment of our contract CPA as our full time CFO we were able to implement processes, reviews, and monitoring activities that were not previously in place. Lastly, we implemented a new back-end operating system which had better tracking and reporting functions to ensure transactions were properly matched within our accounting system.
None.
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Item 10. Directors, Executive Officers and Corporate Governance
Directors and Executive Officers
The following table sets forth certain information with respect to our directors and executive officers:
| Name | Age | Position | ||
| Joseph Cammarata | 45 | Chief Executive Officer and Director | ||
| Annette Raynor | 55 | Chief Operations Officer and Director | ||
| Mario Romano | 55 | Director of Finance and Director | ||
| David B. Rothrock | 55 | Director | ||
| James Bell | 54 | Director | ||
| Jayme L. McWidener | 40 | Chief Financial Officer |
Joseph Cammarata began his career in the financial industry over 25 years ago at Datech where he pioneered NASDAQ market orders and the “first off”-exchange electronic trading system. While at Datek he developed an internal cross that would eventually become the Island ECN. He then started and orchestrated the growth of Datek Online - which was later sold to Ameritrade. As co-founder and CEO of Sonic Trading he architected the first ECN aggregator and Smart Routing system that would serve as its core product. Recognized for its innovative query handling, superior market data processing, and all-around reliability, the Sonic system served more than twenty-four Institutional clients and Broker/Dealers before being acquired in 2004 by the Bank of New York. After the acquisition, he served as Managing Director for BNY Brokerage and its spin-off BNY ConvergEx as the head of Electronic Trading and Strategic Planning and Development. In 2010 he started SpeedRoute LLC and Pro Securities ATS LLC. As President and CEO he has launched a broker-dealer routing system, SpeedRoute and an ATS, Pro Securities. SpeedRoute is currently routing for some of the largest Banks, Broker Dealers and Stock Exchanges in the United States, currently averaging 2% of the US Exchange volumes and has plans for continued growth across a robust product suite. Speedroute and its affiliates were acquired by OverStock.com in September of 2015 to help drive OverStock.com’s financial technology businesses, leading the push into Crypto Securities and Blockchain settlement systems. Mr. Cammarata served as President of tZERO a Subsidiary of Overstock.com from January 2016 to May of 2018 and remains a director of tZERO. He was founder and CEO of SpeedRoute, LLC from November 2010 to April 2018.
Annette Raynor has served as our chief operating officer since March 31, 2017, and as a director since June 6, 2017. Annette briefly served as the company’s Chief Executive Officer from August 2019 through December 3, 2019 when Joseph Cammarata was installed as the CEO. Since 2013, Ms. Raynor has served as the chief operating officer of Kuvera, LLC, formerly Wealth Generators, LLC, our wholly owned subsidiary. Ms. Raynor holds her Series 65 Registered Investment Advisor license, Series 3 Commodity Futures, Series 34 Retail Off-Exchange Forex, and is a licensed realtor in the state of New Jersey. Ms. Raynor is the general manager and licensed representative of SAFE Management LLC.
Mario Romano was elected as a Director of the Corporation and serves as director of finance of Investview, Inc as well. He co-founded Wealth Generators in 2013 (now part of Investview) and continues as director of finance for Investview. He received his Bachelors in Business/Finance from St John’s University of New York. He began his career in finance with a select group of Wall Street Institutions including Lehman Brothers during the period from the late 1980’s through early 2000. He continues his key management role as Director of Finance for Investview.
David B. Rothrock has extensive executive management, board, and operational expertise in the automobile industry, fintech, financial services, residential and commercial real estate, property management, corporate financing, private equity, utility technology, environmental remediation services, insurance, wine retail operations and distribution, and wealth management. Mr. Rothrock is the chief executive officer of DBR Capital, LLC. Through his key roles as president and chief executive officer of DBR Capital LLC, MPower Trading Systems, Cedar Crest Partners G.P. LLC, and Rothrock Motors Sales, Inc. (a group of franchised automobile dealerships), , which collectively generate over $150 million in annual sales revenue. Mr. Rothrock is an active board member of charitable organizations that support breast cancer research and women’s health and fitness as well as the arts and theater in Lehigh Valley, PA. Mr. Rothrock has a B.S. in Business Management graduating Magna Cum Laude from Widener University, and holds a J.D. from the New York Law School with Bar admittance to New York, New Jersey, and Pennsylvania.
James Bell specializes in financial management with more than 30 years of experience in the capital markets. As co-founder and chief executive officer of MPower Trading Systems, Mr. Bell is responsible for charting the company’s business course and overseeing all principal functions of the firm, including corporate strategy and deployment of initiatives, product, and partnerships. Mr. Bell has been at the forefront of online trading since its infancy. Prior to co-founding MPower in 2004, Mr. Bell served as managing director of trading development of thinkorswim-TD Ameritrade, Inc. from 2002-2011, where he led the company’s product and technology team to develop client digital content. Mr. Bell is co-founder and managing partner of ShadowTrader Technologies, which provides real-time digital financial research and education content to TD Ameritrade, Inc. (2004-present). Prior to MPower, Mr. Bell also co-founded B/C Interactive Trading Technologies in 2001, which was ultimately sold to MPower in 2004. Prior to B/C, Mr. Bell served as SVP of Janney Montgomery Scott, and before that position, with Morgan Stanley. Mr. Bell studied economics and business management at Frostburg State University. Mr. Bell holds multiple business accreditations and securities licenses, including FINRA Series 7, FINRA Series 55, and FINRA Series 63.
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Jayme L. McWidener earned her bachelor’s degree and Masters of Business Administration from Drake University and became an auditor for Cahaba GBA in 2001 before joining HJ & Associates, LLC (“HJ”) in January 2004 as an audit staff member. She obtained her CPA license in 2007 and worked at HJ focusing on auditing SEC reporting companies, eventually being promoted to an audit senior and audit manager before she became a partner at HJ in January 2014. Ms. McWidener spent just over 2 years as a partner with HJ and with its successor, Haynie & Company. In April of 2016 she established Mac Accounting Group, LLP, specializing in PCAOB audits for SEC reporting companies and AICPA audits for private companies in a variety of industries.
Our directors are elected for a term of one year and until their successors qualified, nominated, and elected.
Role of the Board
It is the paramount duty of the board to oversee our management in the competent and ethical operation of the company on a day-to-day basis and to assure that the long-term interests of the shareholders are being served. To satisfy this duty, the directors take a proactive, focused approach to their position, and set standards to ensure that we are committed to business success through maintenance of ambitious standards of responsibility and ethics.
The board of directors met formally four times during fiscal 2020.
Committees
Our business, property, and affairs are managed by or under the direction of the board of directors. Members of the board are kept informed of our business through discussion with the chief executive and financial officers and other officers, by reviewing materials provided to them, and by participating at meetings of the board and its committees.
Audit Committee
We currently do not have a designated audit committee, and accordingly, our board of directors preapproves all audit and permissible non-audit services provided by the independent auditor, including audit, audit-related, tax, and other services. Preapproval is generally provided for up to one year, detailed as to the particular service or category of services, and subject to a specific budget. The independent auditor and management are required to periodically report to our board of directors regarding the extent of services provided by the independent auditor in accordance with this preapproval and the fees for the services performed to date. The board of directors may also preapprove particular services on a case-by-case basis.
Compensation Committee
We currently do not have a designated compensation committee, and accordingly, our board of directors will approve all compensation matters until such committee is established and approved.
Code of Ethics
We have a code of ethics that applies to all of our employees, including our principal executive officer, principal financial officer, principal accounting officer, and the directors, a copy of which is available in the Employee Handbook. We intend to disclose any changes in or waivers from our code of ethics by posting such information on our website or by filing a Form 8-K.
Section 16(a) Compliance
Section 16(a) of the Exchange Act requires our directors, executive officers, and persons who own more than 10% of our common stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and other of our equity securities. During the year ended March 31, 2019, our officers, directors, and 10% stockholders made the required filings pursuant to Section 16(a).
Item 11. Executive Compensation
Directors’ Compensation
There was no compensation for our directors, acting in their capacity as directors, during the year ending March 31, 2020.
Executive Officers’ Compensation
The following table sets forth information concerning the annual and long-term compensation earned by or paid to our chief executive officer and to other persons who served as executive officers as, at, or during the fiscal year ended March 31, 2020, or who earned compensation exceeding $100,000 during fiscal year 2020 (the “named executive officers”), for services as executive officers for the last two fiscal years.
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Summary Compensation Table
| Name and Principal Position | Fiscal Year |
Salary |
Stock Awards |
Option Awards |
Non-Equity Incentive Plan Compensation | Change in Pension Value and Non Qualified Deferred Compensation Earnings |
All Other Compensation |
Total | ||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||
| Joseph Cammarata | 2020 | - | 570,000 | [5] | - | - | - | - | 570,000 | |||||||||||||||||||||||
| Chief Executive Officer and Director | 2019 | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| Annette Raynor [1] | 2020 | 225,000 | 847,140 | [6] | - | - | - | 240,360 | [10] | 1,312,500 | ||||||||||||||||||||||
| Chief Operations Officer and Director | 2019 | 225,000 | - | - | - | - | 297,442 | [11] | 1,312,500 | |||||||||||||||||||||||
| Mario Romano [2] | 2020 | 225,000 | 847,140 | [7] | - | - | - | 240,360 | [12] | 812,167 | ||||||||||||||||||||||
| Director of Finance and Director | 2019 | 225,000 | - | - | - | - | 297,442 | [13] | 522,442 | |||||||||||||||||||||||
| Ryan Smith [3] | 2020 | 225,000 | - | - | - | - | 193,995 | [14] | 418,995 | |||||||||||||||||||||||
| President of Apex Tek, LLC and former Director | 2019 | 225,000 | - | - | - | - | 293,242 | [15] | 518,242 | |||||||||||||||||||||||
| Chad Miller [4] | 2020 | 178,125 | - | - | - | - | 201,495 | [16] | 379,620 | |||||||||||||||||||||||
| Co-Founder and former Director | 2019 | 225,000 | - | - | - | - | 293,242 | [17] | 518,242 | |||||||||||||||||||||||
| Jayme L. McWidener | 2020 | 84,792 | 195,379 | [8] | - | - | - | 4,500 | [18] | 284,671 | ||||||||||||||||||||||
| Chief Financial Officer | 2019 | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| William C. Kosoff | 2020 | 82,000 | 89,173 | [9] | - | - | - | 6,596 | [19] | 177,769 | ||||||||||||||||||||||
| Corporate Secretary | 2019 | 60,000 | - | - | - | - | - | 60,000 | ||||||||||||||||||||||||
| [1] | A portion of Ms. Raynor’s compensation was paid to Wealth Engineering LLC, an entity in which she is a 50% owner. |
| [2] | A portion of Mr. Romano’s compensation was paid to Wealth Engineering LLC, an entity in which he is a 50% owner. |
| [3] | A portion of Mr. Smith’s compensation was paid to Kays Creek Capital, an entity in which he is an owner. |
| [4] | A portion of Mr. Miller’s compensation was paid to Kays Creek Capital and MILCO, entities in which he is an owner. |
| [5] | During the fiscal year ending 3/31/20, PB Trade, LLC, an entity owned by Mr. Cammarata, was issued a total of 270,000,000 shares of common stock. 20,000,000 shares were awarded upon the execution of his employment agreement, 62,500,000 were issued as collateral to a $1,000,000 promissory note, and 187,500,000 were issued as an incentive to meet certain performance obligations. Upon the repayment of the $1,000,000 promissory note and if the performance obligations are not met, the 62,500,000 and 187,500,000 shares, respectively, will be returned to the Company. The fair market value of the 20,000,000 shares awarded upon the execution of Mr. Cammarata’s employment agreement was $570,000 or $0.0285 per share (the per share price on 11/29/19, the date of issuance). |
| [6] | On 7/24/19, Wealth Engineering, LLC, an entity owned 50% by Ms. Raynor, was awarded 190,000,000 shares of common stock. In accordance with the agreement one third of the shares vested upon execution of the agreement and the remaining two thirds vest over two years, contingent upon Ms. Raynor and Mr. Romano’s continued employment by the Company. The fair market value of half these shares was $1,501,000 or $0.0158 per share (the per share price on the date of issuance). The expense related to this issuance is being recognized based the vesting terms per the agreement which resulted in $847,140 of recognized expense during fiscal year 2020. |
| [7] | On 7/24/19, Wealth Engineering, LLC, an entity owned 50% by Mr. Romano, was awarded 190,000,000 shares of common stock. In accordance with the agreement one third of the shares vested upon execution of the agreement and the remaining two thirds vest over two years, contingent upon Ms. Raynor and Mr. Romano’s continued employment by the Company. The fair market value of half these shares was $1,501,000 or $0.0158 per share (the per share price on the date of issuance). The expense related to this issuance is being recognized based the vesting terms per the agreement which resulted in $847,140 of recognized expense during fiscal year 2020. |
| [8] | On 9/15/19, Jayme McWidener was awarded 20,000,000 shares of common stock as part of her employment agreement. In accordance with the agreement, one third of the shares vested upon execution of the agreement and the remaining two thirds vest over two years, contingent upon Ms. McWidener’s continued employment by the Company. The fair market value of these shares was $380,000 or $0.019 per share (the per share price on the date of issuance). The expense related to this issuance is being recognized based the vesting terms per the agreement which resulted in $195,379 of recognized expense during fiscal year 2020. |
| [9] | On 7/22/19, William Kosoff was awarded 10,000,000 shares of common stock as part of his employment agreement. In accordance with the agreement, one third of the shares vested upon execution of the agreement and the remaining two thirds vest over two years, contingent upon Mr. Kosoff’s continued employment by the Company. The fair market value of these shares was $158,000 or $0.0158 per share (the per share price on the date of issuance). The expense related to this issuance is being recognized based the vesting terms per the agreement which resulted in $89,173 of recognized expense during fiscal year 2020. |
| [10] | Includes $61,364 in medical reimbursements, $37,770 for fiscal year 2020 revenue under the Founder Revenue Agreements discussed below, and $141,226 that was accrued but unpaid under the Founder Revenue Agreements. |
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| [11] | Includes $34,200 in medical reimbursements, $108,512 for fiscal year 2019 revenue under the Founder Revenue Agreements discussed below, and $154,730 that was accrued but unpaid under the Founder Revenue Agreements. |
| [12] | Includes $61,364 in medical reimbursements, $37,770 for fiscal year 2020 revenue under the Founder Revenue Agreements discussed below, and $141,226 that was accrued but unpaid under the Founder Revenue Agreements. |
| [13] | Includes $34,200 in medical reimbursements, $108,512 for fiscal year 2019 revenue under the Founder Revenue Agreements discussed below, and $154,730 that was accrued but unpaid under the Founder Revenue Agreements. |
| [14] | Includes $15,000 in medical reimbursements and $178,995 that was accrued but unpaid under the Founder Revenue Agreements. |
| [15] | Includes $30,000 in medical reimbursements, $69,512 for fiscal year 2019 revenue under the Founder Revenue Agreements discussed below, and $193,730 that was accrued but unpaid under the Founder Revenue Agreements. |
| [16] | Includes $22,500 in medical reimbursements and $178,995 that was accrued but unpaid under the Founder Revenue Agreements. |
| [17] | Includes $30,000 in medical reimbursements, $69,512 for fiscal year 2019 revenue under the Founder Revenue Agreements discussed below, and $193,730 that was accrued but unpaid under the Founder Revenue Agreements. |
| [18] | Includes $4,500 in medical reimbursements. |
| [19] | Includes $6,596 in medical reimbursements. |
Outstanding Equity Awards at Fiscal Year-End
No stock option awards were exercisable or unexercisable as of March 31, 2020, for any executive officer.
Employee Stock Options
The nonqualified plan adopted in 2007 authorizes 65,000 shares, of which 47,500 have been granted as of March 31, 2020. The qualified plan adopted in October of 2008 authorizes 125,000 shares and was approved by a majority of our shareholders on September 16, 2009. As of March 31, 2020, 42,500 shares have been granted under the 2008 plan. During the year ended March 31, 2020 all previously outstanding options expired and no new options were granted.
The following table summarizes the changes in employee stock options outstanding and the related prices for the shares of our common stock issued to employees under two employee stock option plans:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Contractual | Intrinsic | |||||||||||||
| Shares | Price | Life (years) | Value | |||||||||||||
| Options outstanding at March 31, 2018 | 35,000 | $ | 10.00 | 1.51 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | - | $ | - | |||||||||||||
| Options outstanding at March 31, 2019 | 35,000 | $ | 10.00 | 0.51 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | (35,000 | ) | $ | 10.00 | ||||||||||||
| Options outstanding at March 31, 2020 | - | $ | - | - | $ | - | ||||||||||
| Options exercisable at March 31, 2020 | - | $ | - | - | $ | - | ||||||||||
Stock-based compensation expense in connection with options granted to employees for the year ended March 31, 2020 and 2019, was $0.
Employment Agreements and Revenue Share Agreements
The four founders of Wealth Generators, LLC, Ryan Smith, chief executive officer; Chad Miller, chief visionary officer; Annette Raynor, chief operating officer; and Mario Romano, director of finance and investor relations, all entered into Founder Employment Agreements effective October 1, 2017. The terms and covenants in the four agreements are the same for each of the founders and have a term of five years that automatically renews for three successive five-year terms unless terminated prior to the 90th day following the expiration of the applicable term. The agreements provide for an annual salary of $225,000 with annual reviews by the board of directors or the designated compensation committee to determine whether an increase in salary is appropriate based on our results of operations, increased activities, or responsibilities of the founder, or such other factors as the board of directors or the designated compensation committee thereof may deem appropriate. In addition, the founders are entitled to receive health fringe benefits that are generally available to our employees. During April 2020, Chad Miller retired from the Company, effectively terminating his employment agreement at that time.
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On October 11, 2017, we entered into Founder’s Revenue Agreements with Chad Miller, Annette Raynor, Mario Romano, and Ryan Smith. As consideration for their efforts in founding Wealth Generators LLC, beginning January 1, 2018, for the month ended December 31, 2017, each of the founders has the right to receive three-quarters of one percent (0.75%) of our top-line revenue, which will be calculated and paid on a monthly basis. This right is permanent and irrevocable, is not connected in any manner to the founder’s employment with us, and will be treated as a portion of the founder’s estate if it has not been assigned by the founder prior to his or her death.
On September 6, 2019, the Company entered into an Employment Agreement with Jayme McWidener that became effective September 15, 2019, appointing her as Chief Financial Officer of Investview, Inc. The Contract has a term of two years commencing on the effective date and automatically renews for one-year periods for three consecutive years, unless terminated prior to the 90th day following the expiration of the applicable term. Compensation for the position is $175,000 per year plus expenses. Other consideration is 20,000,000 restricted shares of the Company’s common stock vesting over a two year period with one third vesting upon issuance and one third vesting on each of the next two anniversaries.
On November 29, 2019 an Employment Agreement was entered between the newly appointed Chief Executive Officer, Joseph Cammarata and Investview, Inc. that became effective on December 1, 2019. The contract is for a term of five years and provides a salary compensation of $1 per year, 20,000,000 shares to be issued that will vest immediately, and additional equity awards of up to 250,000,000 shares in four equal increments of 62,500,000 shares each with the first increment to be earned upon the successful capital raise of $5 Million and the balance based on earnings milestones for the “APEX Pack” product line. Additional cash compensation will be provided based on personal sales of the APEX Pack products.
Item 12. Security Ownership of Certain Beneficial Owners, Management and Related Stockholder Matters
The following table sets forth certain information, as of June 29, 2020, respecting the beneficial ownership of our outstanding common stock by: (i) any holder of more than 5%; (ii) each of the Named Executive Officers and directors; and (iii) our directors and Named Executive Officers as a group, based on 3,214,481,329 shares of common stock outstanding as of June 26, 2020. Except as otherwise indicated, each stockholder listed below has sole voting and investment power over the shares beneficially owned:
| Name of Beneficial Owner(1) | Common
Stock Beneficially Owned | Percentage
of Common Stock(2) | ||||||
| Principal Stockholders: | ||||||||
| CR Capital Holdings LLC(3) | 590,624,710 | 18.37 | % | |||||
| Joseph Hagan(7) | 177,488,760 | 5.52 | % | |||||
| Directors and Officers: | ||||||||
| Joseph Cammarata, CEO and Director | 270,000,000 | 8.40 | % | |||||
| Annette Raynor, COO and Director(4)(5) | 215,456,942 | 6.70 | % | |||||
| Mario Romano, Treasurer and Director(4)(6) | 215,456,942 | 6.70 | % | |||||
| David Rothrock, Director (8) | 159,090,909 | 4.95 | % | |||||
| James Bell, Director | NONE | 0 | % | |||||
| Jayme McWidener, CFO | 20,000,000 | * | ||||||
| William Kosoff, Corporate Secretary | 13,936,875 | * | ||||||
All Officers and Directors as a group (7 persons)(3)(4)(5)(6) )(8) | 964,734,726 | 27.81 | % | |||||
| * | Less than 1%. |
| (1) | Except as otherwise indicated, the address of each beneficial owner is c/o InvestView Inc., 234 Industrial Way West, Ste., A202, Eatontown, NJ 07724 |
| (2) | Applicable percentage ownership is based on 3,214,481,329 shares of common stock outstanding as of June 26, 2019, together with securities exercisable or convertible into shares of common stock within 60 days of that date, for each stockholder. |
| (3) | Our co-founders Ryan Smith and Chad Miller each own 50% of CR Capital Holdings LLC and, as a result, have voting and dispositive control of these shares. Therefore, they are deemed to be the beneficial owners of our shares of common stock. |
| (4) | The members of Wealth Engineering LLC, 745 Hope Road, Eatontown, NJ 07724, own 110,356,942 shares of our common stock. Our officers Mario Romano and Annette Raynor are two of its members. In addition, Mr. Romano is the CEO and Ms. Raynor serves as the COO of Wealth Engineering LLC. Combined Mr. Romano and Ms. Raynor have voting and shared dispositive control of these shares. |
| (5) | In addition to the 110,356,942 shares owned by Wealth Engineering LLC, Ms. Raynor owns 105,000,000 shares personally. |
| (6) | In addition to the 110,356,942 shares owned by Wealth Engineering LLC, Mr. Romano owns 105,000,000 shares personally. |
| (7) | Joseph Hagan owns 177,488,760 shares through three entities he controls, plus 4,298,671 shares owned personally |
| (8) | David Rothrock beneficially owns 159,090,909 shares through Convertible Notes for $2,000,000 issued to DBR Capital, LLC of which Mr. Rothrock is the owner of DBR Capital. |
No director, executive officer, affiliate, or any owner of record or beneficial owner of more than 5% of any class of our voting securities is a party adverse to us or has a material interest adverse to us.
| 23 |
Equity Compensation Plans
The following table summarizes the equity compensation plans under which our securities may be issued as of March 31, 2020:
| Number of Securities To Be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) | ||||||||||
| Plan Category | (a) | (b) | (c) | |||||||||
| Equity compensation plans | ||||||||||||
| approved by security holders | — | — | — | |||||||||
| Equity compensation plans | ||||||||||||
| approved by security holders | — | — | — | |||||||||
Item 13. Certain Relationships and Related Transactions, and Director Independence
Our related party payables consisted of the following:
| Year Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Short-term advances [1] | $ | 1,526,427 | $ | 440,489 | ||||
| Short-term promissory note entered into on 8/17/18 [2] | - | 105,000 | ||||||
| Promissory note entered into on 1/30/20 [3] | 1,033,333 | - | ||||||
| Accounts payable – related party [4] | 55,000 | - | ||||||
| $ | 2,114,760 | $ | 545,489 | |||||
| [1] | We periodically receive advances for operating funds from our current majority shareholders, officers, directors and other related parties, including entities that are owned, controlled, or influenced by our owners or management. These advances are due on demand, generally have no set interest rates associated with them, and are unsecured. During the year ended March 31, 2020, we received $2,484,979 in cash proceeds from advances, incurred $769,999 in interest, and repaid related parties a total of $1,292,160. Also during the year ended March 31, 2020 we settled $1,880 of amounts that were recorded as due prior to March 31, 2018, settled $100,000 by issuing APEX units, and settled $500,000 with the issuance of common stock. |
| [2] | A member of the senior management team advanced funds of $100,000 on August 17, 2018, under a short-term promissory note due to be repaid on August 31, 2018. On August 31, 2018 the note was amended to be due on demand or, in absence of a demand, due on August 31, 2019. The note had a fixed interest payment of $5,000, which was recorded as interest expense in the statement of operations during the year ended March 31, 2019. During the year ended March 31, 2020 we made repayments of $105,000 on the note. |
| [3] | We entered into a $1,000,000 promissory note with Joeseph Cammarata, our Chief Executive Officer, on January 30, 2020. The term of the note is one year, at which time the principal and interest of 20%, or $200,000 will be due. During the year ended March 31, 2020 we recognized $33,333 of interest expense on the note. |
| [4] | During the year ended March 31, 2020 we entered into an employment agreement with Jayme McWidener as our Chief Financial Officer. At the date we entered into the employment agreement we owed her firm, Mac Accounting Group, LLP, $75,000, which was reclassified as a related party accounts payable balance on our balance sheet. We made repayments on the liability of $20,000 since the date we entered into the employment agreement. |
In addition to the above related party debt transactions that were outstanding as of March 31, 2020 and 2019 we entered into a $3,600,000 convertible promissory note with a member of the senior management team on July 23, 2019. We received proceeds of $1,000,000 from the note, including $900,000 in cash and $100,000 which offset amounts owing to the lender. In accordance with the terms of the note we were required to repay a monthly minimum payment of $50,000 beginning January of 2020 through June of 2020 and a monthly minimum payment of $100,000 beginning July of 2020 until the total principal amount has been repaid. The lender had the right to convert up to $2,600,000 of the outstanding and unpaid principal amount into shares of our common stock at a conversion price of $0.005 per share, subject to adjustment. At inception we recorded a beneficial conversion feature of $1,000,000 as a debt discount and we recorded $2,600,000 as a debt discount, representing the difference between the face value of the note and the proceeds received. Effective March 31, 2020 we entered into a settlement agreement to issue 200,000,000 shares of our common stock to repay the $3,600,000 convertible promissory note and $500,000 worth of short-term advances (see [1] above), for a total of $4,100,000 worth of related party debt settled. In conjunction with the settlement the full debt discount of $3,600,000 was recognized into interest expense during the year ended March 31, 2020.
| 24 |
In addition to the above-mentioned related-party lending arrangements, during the year ended March 31, 2020 we sold 57 APEX units to related parties for proceeds of $122,720, $100,000 of which was offset against short term advances (see [1] above). We made 233 lease payments to these related parties during the year ended March 31, 2020, equating to $116,500. During the year ended March 31, 2019, we sold $41,500 worth of high-speed computer processing equipment to our then chief executive officer. This revenue was included in the equipment sales reported on our statement of operations.
Item 14. Principal Accountant Fees and Services
The following is a summary of the fees billed to us for professional services rendered for the fiscal years ended March 31, 2020 and 2019:
| March 31, 2020 | March 31, 2019 | |||||||
| Audit Fees | $ | 111,500 | $ | 115,400 | ||||
| Audit Related Fees | 9,000 | 15,500 | ||||||
| Tax Fees | 4,000 | 4,000 | ||||||
| All Other Fees | - | - | ||||||
| Total | $ | 124,500 | $ | 134,900 | ||||
Audit Fees. Consists of fees billed for professional services rendered for the audit of our consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports and services in connection with statutory and regulatory filings or engagements.
Audit-Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.”
Tax Fees. Consists of fees billed for professional services for tax compliance, tax advice, and tax planning.
All Other Fees. Consists of fees for products and services other than the services reported above.
Policy on Audit Committee Preapproval of Audit and Permissible Non-Audit Services of Independent Auditors
We do not have a designated Audit Committee, and accordingly, our board of directors’ policy is to preapprove all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services, and other services. Preapproval is generally provided for up to one year and any preapproval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Company’s board of directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The board of directors may also preapprove particular services on a case-by-case basis.
| 25 |
| Exhibit Number* |
Title of Document |
Location | ||
| Item 2 | Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession | |||
| 2.01 | Contribution Agreement between Investview, Inc., Wealth Generators, LLC, and the members of Wealth Generators, LLC dated March 31, 2017 | Incorporated by reference to the Current Report on Form 8-K filed April 6, 2017 | ||
| Item 3 | Articles of Incorporation and Bylaws | |||
| 3.01 | Articles of Incorporation | Incorporated by reference to the Form 10SB12G filed August 12, 1999 | ||
| 3.02 | Articles of Amendments to the Articles of Incorporation | Incorporated by reference to the Form 10SB12G filed August 12, 1999 | ||
| 3.03 | Bylaws | Incorporated by reference to the Form 10SB12G filed August 12, 1999 | ||
| 3.04 | Amendment to Articles of Incorporation or by-laws | Incorporated by reference to the Current Report on Form 8-K filed February 15, 2007 | ||
| 3.05 | Certificate of Change filed pursuant to NRS 78.209 | Incorporated by reference to the Current Report on Form 8-K filed April 6, 2012 | ||
| 3.06 | Articles of Merger filed pursuant to NRS 92.A.200 | Incorporated by reference to the Current Report on Form 8-K filed April 6, 2012 | ||
| 3.07 | Certificate of Amendment to Articles of Incorporation | Incorporated by reference to the Definitive Information Statement filed December 20, 2017 | ||
| Item 4 | Instruments Defining the Rights of Security Holders, including indentures | |||
| 4.01 | Common Stock Specimen | Incorporated by reference to the Registration Statement on Form S-1 filed January 12, 2018 | ||
| Item 10 | Material Contracts | |||
| 10.24 | Founder Employment Agreement between Investview, Inc. and Ryan Smith, entered October 10, 2017** | Incorporated by reference to the Current Report on Form 8-K filed October 13, 2017 | ||
| 10.25 | Founder Employment Agreement between Investview, Inc. and Annette Raynor, entered October 10, 2017** | Incorporated by reference to the Current Report on Form 8-K filed October 13, 2017 | ||
| 10.26 | Founder Employment Agreement between Investview, Inc. and Chad Miller, entered October 10, 2017** | Incorporated by reference to the Current Report on Form 8-K filed October 13, 2017 | ||
| 10.27 | Founder Employment Agreement between Investview, Inc. and Mario Romano, entered October 10, 2017** | Incorporated by reference to the Current Report on Form 8-K filed October 13, 2017 | ||
| 10.28 | Founder Revenue Agreement among Investview, Inc. and Chad Miller, Annette Raynor, Mario Romano, and Ryan Smith** | Incorporated by reference to the Current Report on Form 8-K filed October 13, 2017 | ||
| 10.49 | Securities Purchase and Royalty Agreement between Investview, Inc., and Brian McMullen, dated as of July 23, 2019 | Incorporated by reference to the Current Report on Form 8-K filed August 1, 2019 | ||
| 10.50 | Convertible Promissory Note, dated as of July 23, 2019 | Incorporated by reference to the Current Report on Form 8-K filed August 1, 2019 |
| 26 |
| 27 |
| Exhibit Number* |
Title of Document |
Location | ||
| Item 101 | Interactive Data Files*** | |||
| 101.INS | XBRL Instance Document | This filing. | ||
| 101.SCH | XBRL Taxonomy Extension Schema | This filing. | ||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | This filing. | ||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | This filing. | ||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | This filing. | ||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | This filing. |
| * | All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. Omitted numbers in the sequence refer to documents previously filed as an exhibit. |
| ** | Identifies each management contract or compensatory plan or arrangement required to be filed as an exhibit, as required by Item 15(a)(3) of Form 10-K. |
| *** | Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of this annual report for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act and otherwise are not subject to liability. |
Not included.
| 28 |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Investview Inc. | ||
| Dated: June 29, 2020 | By: | /s/ Joseph Cammarata |
| Joseph Cammarata | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Dated: June 29, 2020 | By: | /s/ Jayme L. McWidener |
| Jayme L. McWidener | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Accounting Officer) | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| SIGNATURE | TITLE | DATE | ||
| /s/ Joseph Cammarata | Chief Executive Officer and Director | June 29, 2020 | ||
| Joseph Cammarata | (Principal Executive Officer) | |||
| /s/ Jayme L. McWidener | Chief Financial Officer | June 29, 2020 | ||
| Jayme L. McWidener | (Principal Financial and Accounting Officer) | |||
| /s/ Annette Raynor | Chief Operating Officer and Director | June 29, 2020 | ||
| Annette Raynor | ||||
| /s/ Mario Romano | VP of Finance and Director | June 29, 2020 | ||
| Mario Romano | ||||
| /s/ James Bell | Director | June 29, 2020 | ||
| James Bell | ||||
| /s/ David B. Rothrock | Director | June 29, 2020 | ||
| David B. Rothrock |
| 29 |
MARCH 31, 2020 AND 2019
FORMING A PART OF ANNUAL REPORT
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934
INVESTVIEW, INC.
Index to Consolidated Financial Statements
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Investview, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Investview, Inc. (the Company) as of March 31, 2020, and 2019, and the related consolidated statements of operations and other comprehensive income, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended March 31, 2020, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2020, and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Consideration of the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has suffered losses from operations and its current cash flow is not enough to meet current needs. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to this matter are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
| /s/ Haynie & Company | |
| Salt Lake City, Utah | |
| June 29, 2020 |
We have served as the company’s auditor since 2017.
| F-2 |
CONSOLIDATED BALANCE SHEETS
| March 31, | ||||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 137,177 | $ | 133,644 | ||||
| Prepaid assets | 5,309,512 | 6,685,970 | ||||||
| Receivables | 905,058 | 724,995 | ||||||
| Short-term advances | 145,000 | 10,000 | ||||||
| Short-term advances - related party | 500 | 500 | ||||||
| Other current assets | 101,610 | 142,061 | ||||||
| Total current assets | 6,598,857 | 7,697,170 | ||||||
| Fixed assets, net | 2,997,611 | 13,528 | ||||||
| Other assets: | ||||||||
| Intangible assets, net | 692,882 | 1,576,685 | ||||||
| Long term license agreement, net | - | 1,983,220 | ||||||
| Operating lease right-of-use asset | 99,465 | - | ||||||
| Deposits | 11,173 | 4,500 | ||||||
| Total other assets | 803,520 | 3,564,405 | ||||||
| Total assets | $ | 10,399,988 | $ | 11,275,103 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 3,774,536 | $ | 3,008,836 | ||||
| Payroll liabilities | 1,825 | 888,177 | ||||||
| Customer advance | 392,310 | 265,000 | ||||||
| Deferred revenue | 612,500 | 1,876,727 | ||||||
| Derivative liability | 793,495 | 1,358,901 | ||||||
| Operating lease liability, current | 56,530 | - | ||||||
| Other current liabilities | 11,407,200 | - | ||||||
| Related party payables, net of discounts | 2,114,760 | 545,489 | ||||||
| Debt, net of discounts | 1,569,326 | 1,977,030 | ||||||
| Total current liabilities | 20,722,482 | 9,920,160 | ||||||
| Operating lease liability, long term | 50,268 | - | ||||||
| Other long term liabilities, net of deferred interest | 3,885,464 | - | ||||||
| Total long term liabilities | 3,935,732 | - | ||||||
| Total liabilities | 24,658,214 | 9,920,160 | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, par value: $0.001; 50,000,000 shares authorized, none issued and outstanding as of March 31, 2020 and 2019 | - | - | ||||||
| Common stock, par value $0.001; 10,000,000,000 shares authorized; 3,214,490,408 and 2,640,161,318 shares issued and outstanding as of March 31, 2020 and 2019, respectively | 3,214,490 | 2,640,161 | ||||||
| Additional paid in capital | 28,929,516 | 23,758,917 | ||||||
| Accumulated other comprehensive income (loss) | (20,058 | ) | 1,363 | |||||
| Accumulated deficit | (46,382,174 | ) | (25,096,983 | ) | ||||
| Total Investview stockholders’ equity (deficit) | (14,258,226 | ) | 1,303,458 | |||||
| Noncontrolling interest | - | 51,485 | ||||||
| Total stockholders’ equity (deficit) | (14,258,226 | ) | 1,354,943 | |||||
| Total liabilities and stockholders’ equity (deficit) | $ | 10,399,988 | $ | 11,275,103 | ||||
The accompanying notes are an integral part of these consolidated financial statements
| F-3 |
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
| Year Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Revenue: | ||||||||
| Subscription revenue, net of refunds, incentives, credits, and chargebacks | $ | 22,425,173 | $ | 27,023,202 | ||||
| Equipment sales, net of refunds | - | 694,954 | ||||||
| Cryptocurrency mining service revenue, net of refunds and amounts paid to supplier | - | 1,940,925 | ||||||
| Mining revenue | 1,745,138 | - | ||||||
| Fee revenue | 13,279 | - | ||||||
| Total revenue, net | 24,183,590 | 29,659,081 | ||||||
| Operating costs and expenses: | ||||||||
| Cost of sales and service | 2,507,071 | 1,180,671 | ||||||
| Commissions | 13,564,618 | 21,526,326 | ||||||
| Selling and marketing | 1,696,133 | 878,936 | ||||||
| Salary and related | 6,593,421 | 4,272,355 | ||||||
| Professional fees | 1,356,574 | 1,620,370 | ||||||
| General and administrative | 7,559,192 | 4,121,279 | ||||||
| Total operating costs and expenses | 33,277,009 | 33,599,937 | ||||||
| Net loss from operations | (9,093,419 | ) | (3,940,856 | ) | ||||
| Other income (expense): | ||||||||
| Gain (loss) on debt extinguishment | 2,018,791 | 19,387 | ||||||
| Gain (loss) on fair value of derivative liability | 571,231 | (214,376 | ) | |||||
| Gain (loss) on bargain purchase | - | 971,282 | ||||||
| Gain (loss) on deconsolidation | 53,739 | - | ||||||
| Realized gain (loss) on cryptocurrency | (815 | ) | 16,241 | |||||
| Unrealized gain (loss) on cryptocurrency | 113,369 | 106,488 | ||||||
| Impairment expense | (4,230,741 | ) | - | |||||
| Interest expense | (6,274,436 | ) | (1,842,461 | ) | ||||
| Interest expense, related parties | (4,403,332 | ) | (20,000 | ) | ||||
| Other income (expense) | (32,195 | ) | (3,032 | ) | ||||
| Total other income (expense) | (12,184,389 | ) | (966,471 | ) | ||||
| Income (loss) before income taxes | (21,277,808 | ) | (4,907,327 | ) | ||||
| Income tax expense | (7,383 | ) | (70,768 | ) | ||||
| Net income (loss) | (21,285,191 | ) | (4,978,095 | ) | ||||
| Less: net income (loss) attributable to the noncontrolling interest | - | 32,941 | ||||||
| Net income (loss) attributable to Investview stockholders | $ | (21,285,191 | ) | $ | (5,011,036 | ) | ||
| Income (loss) per common share, basic and diluted | $ | (0.01 | ) | $ | (0.00 | ) | ||
| Weighted average number of common shares outstanding, basic and diluted | 2,937,880,878 | 2,234,117,482 | ||||||
| Other comprehensive income (loss), net of tax: | ||||||||
| Foreign currency translation adjustments | $ | (21,421 | ) | $ | 3,846 | |||
| Total other comprehensive income (loss) | (21,421 | ) | 3,846 | |||||
| Comprehensive income (loss) | (21,306,612 | ) | (4,974,249 | ) | ||||
| Less: comprehensive income (loss) attributable to the noncontrolling interest | - | (3,846 | ) | |||||
| Comprehensive income (loss) attributable to Investview shareholders | $ | (21,306,612 | ) | $ | (4,978,095 | ) | ||
The accompanying notes are an integral part of these consolidated financial statements
| F-4 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
| Accumulated | ||||||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||||||
| Common stock | Paid in | Comprehensive | Accumulated | Noncontrolling | ||||||||||||||||||||||||
| Shares | Amount | Capital | Income | Deficit | Interest | Total | ||||||||||||||||||||||
| Balance, March 31, 2018 | 2,169,661,318 | $ | 2,169,661 | $ | 16,137,945 | $ | (2,483 | ) | $ | (20,085,947 | ) | $ | 18,544 | $ | (1,762,280 | ) | ||||||||||||
| Common stock issued for acquisition | 50,000,000 | 50,000 | 750,000 | - | - | - | 800,000 | |||||||||||||||||||||
| Common stock issued for services and compensation | 402,000,000 | 402,000 | 6,385,600 | - | - | - | 6,787,600 | |||||||||||||||||||||
| Common stock repurchase | (7,000,000 | ) | (7,000 | ) | (84,000 | ) | - | - | - | (91,000 | ) | |||||||||||||||||
| Common stock issued as commitment fees | 22,500,000 | 22,500 | 47,372 | - | - | - | 69,872 | |||||||||||||||||||||
| Offering costs | 3,000,000 | 3,000 | 522,000 | - | - | - | 525,000 | |||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | 3,846 | - | - | 3,846 | |||||||||||||||||||||
| Net income (loss) | - | - | - | - | (5,011,036 | ) | 32,941 | (4,978,095 | ) | |||||||||||||||||||
| Balance, March 31, 2019 | 2,640,161,318 | 2,640,161 | 23,758,917 | 1,363 | (25,096,983 | ) | 51,485 | 1,354,943 | ||||||||||||||||||||
| Common stock issued for cash | 59,215,648 | 59,216 | 765,784 | - | - | - | 825,000 | |||||||||||||||||||||
| Common stock issued for services and compensation | 537,618,592 | 537,618 | 2,561,025 | - | - | - | 3,098,643 | |||||||||||||||||||||
| Common stock repurchase | (5,150 | ) | (5 | ) | (97 | ) | - | - | - | (102 | ) | |||||||||||||||||
| Common stock cancelled | (222,500,000 | ) | (222,500 | ) | (3,157,500 | ) | - | - | - | (3,380,000 | ) | |||||||||||||||||
| Common stock issued for debt | 200,000,000 | 200,000 | 3,900,000 | - | - | - | 4,100,000 | |||||||||||||||||||||
| Beneficial conversion feature | - | - | 1,000,000 | - | - | - | 1,000,000 | |||||||||||||||||||||
| Offering costs | - | - | 101,387 | - | - | - | 101,387 | |||||||||||||||||||||
| Deconsolidation of Kuvera LATAM | - | - | - | - | - | (51,485 | ) | (51,485 | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | (21,421 | ) | - | - | (21,421 | ) | |||||||||||||||||||
| Net income (loss) | - | - | - | - | (21,285,191 | ) | - | (21,285,191 | ) | |||||||||||||||||||
| Balance, March 31, 2020 | 3,214,490,408 | $ | 3,214,490 | $ | 28,929,516 | $ | (20,058 | ) | $ | (46,382,174 | ) | $ | - | $ | (14,258,226 | ) | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-5 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (21,285,191 | ) | $ | (4,978,095 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | 490,642 | 5,332 | ||||||
| Amortization of debt discount | 6,152,329 | 1,052,523 | ||||||
| Amortization of long-term license agreement | 150,812 | 150,400 | ||||||
| Amortization of intangible assets | 256,351 | 239,315 | ||||||
| Stock issued for services and compensation | 3,098,643 | 109,240 | ||||||
| Loan fees on new borrowings | 1,209,569 | 704,397 | ||||||
| Lease cost, net of repayment | 7,333 | - | ||||||
| Impairment | 4,230,741 | - | ||||||
| (Gain) loss on bargain purchase | - | (971,282 | ) | |||||
| (Gain) loss on deconsolidation | (53,739 | ) | - | |||||
| (Gain) loss on debt extinguishment | (2,018,791 | ) | (19,387 | ) | ||||
| (Gain) loss on fair value of derivative liability | (571,231 | ) | 214,376 | |||||
| Realized (gain) loss on cryptocurrency | 815 | (16,241 | ) | |||||
| Unrealized (gain) loss on cryptocurrency | (113,369 | ) | (106,488 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | (180,063 | ) | 108,907 | |||||
| Prepaid assets | (2,003,542 | ) | (4,055 | ) | ||||
| Short-term advances | (135,000 | ) | - | |||||
| Short-term advances from related parties | - | 36,010 | ||||||
| Other current assets | 205,362 | 461,038 | ||||||
| Deposits | (12,301 | ) | - | |||||
| Accounts payable and accrued liabilities | 974,360 | (1,314,971 | ) | |||||
| Payroll liabilities | (886,352 | ) | - | |||||
| Customer advance | 127,310 | 265,000 | ||||||
| Deferred revenue | (1,264,227 | ) | 1,016,385 | |||||
| Other liabilities | 15,192,664 | - | ||||||
| Accrued interest | 248,310 | 59,345 | ||||||
| Accrued interest, related parties | 803,332 | 5,000 | ||||||
| Net cash provided by (used in) operating activities | 4,624,767 | (2,983,251 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Cash received in acquisition | - | 3,740 | ||||||
| Cash paid for fixed assets | (5,245,606 | ) | - | |||||
| Net cash provided by (used in) investing activities | (5,245,606 | ) | 3,740 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from related parties | 4,484,979 | 1,905,777 | ||||||
| Repayments for related party payables | (2,192,160 | ) | (1,367,168 | ) | ||||
| Proceeds from debt | 2,527,452 | 4,115,961 | ||||||
| Repayments for debt | (5,020,795 | ) | (2,936,044 | ) | ||||
| Payments for share repurchase | (102 | ) | (91,000 | ) | ||||
| Proceeds from the sale of stock | 825,000 | - | ||||||
| Net cash provided by (used in) financing activities | 624,374 | 1,627,526 | ||||||
| Effect of exchange rate translation on cash | (2 | ) | (5,057 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 3,533 | (1,357,042 | ) | |||||
| Cash and cash equivalents-beginning of period | 133,644 | 1,490,686 | ||||||
| Cash and cash equivalents-end of period | $ | 137,177 | $ | 133,644 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 51,000 | $ | 51,000 | ||||
| Income taxes | $ | 7,383 | $ | 70,768 | ||||
| Non cash investing and financing activities: | ||||||||
| Common stock issued for acquisition | $ | - | $ | 800,000 | ||||
| Beneficial conversion feature | $ | 1,000,000 | $ | - | ||||
| Stock issued for prepaid services and long term license agreement | $ | - | $ | 6,678,360 | ||||
| Cancellation of shares | $ | 3,380,000 | $ | - | ||||
| Changes in equity for offering costs accrued | $ | 101,387 | $ | 525,000 | ||||
| Shares issued for offering costs | $ | - | $ | 3,000 | ||||
| Accounts payable reclassified to related party debt | $ | 75,000 | $ | - | ||||
| Related party debt extinguished with APEX Units | $ | (100,000 | ) | $ | - | |||
| Derivative liability recorded as a debt discount | $ | 715,000 | $ | 510,000 | ||||
| Recognition of lease liability and ROU asset at lease commencement | $ | 131,244 | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial statements
| F-6 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Organization
Investview, Inc. was incorporated on January 30, 1946, under the laws of the state of Utah as the Uintah Mountain Copper Mining Company. In January 2005, we changed domicile to Nevada and changed our name to Voxpath Holding, Inc. In September of 2006, we merged The Retirement Solution Inc. through a Share Purchase Agreement into Voxpath Holdings, Inc. and then changed our name to TheRetirementSolution.Com, Inc. and in October 2008 changed our name to Global Investor Services, Inc., before changing our name to Investview, Inc., on March 27, 2012.
On March 31, 2017, we entered into a Contribution Agreement with the members of Wealth Generators, LLC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of our common stock. The closing of the Contribution Agreement was effective April 1, 2017, and Wealth Generators became our wholly owned subsidiary and the former members of Wealth Generators became our stockholders and control the majority of our outstanding common stock.
On June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former members of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth Generators and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption of $419,139 in pre-merger liabilities.
On February 28, 2018, we filed a name change for Wealth Generators, LLC to Kuvera, LLC (“Kuvera”). This did not affect the company’s tax and federal identification.
On May 7, 2018, we established WealthGen Global, LLC as a Utah limited liability company and our wholly owned subsidiary.
On July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock (see Note 5).
On November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European Union.
On December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities Trading Advisor, Commodity Pool Operator, and approved for over the counter FOREX advisory services.
On January 17, 2019, we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SAFETek, LLC, a Utah limited liability company.
Effective July 22, 2019 we renamed our non-operating wholly owned subsidiary Razor Data, LLC to Apex Tek, LLC, a Utah Limited Liability Company.
Nature of Business
We own a number of companies that each operate independently, but are accretive to one another. We are establishing a portfolio of wholly owned subsidiaries delivering leading-edge technologies, services, and research, dedicated primarily to the individual consumer. Following is a description of each of our companies.
Kuvera, LLC provides research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research, trade alerts, and live trading rooms that include instruction in equities, options, FOREX, ETFs, binary options, crowdfunding and cryptocurrency sector education. In addition to trading tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product subscription includes a core set of trading tools/research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. Different packages are available through a monthly subscription that can be cancelled at any time at the discretion of the customer. A unique component of the product marketing plan is the distribution method whereby all subscriptions are sold via current participating customers who choose to distribute and sell the services by participating in the bonus plan. The bonus plan participation is purely optional but enables individuals to create an additional income stream to further support their personal financial goals and objectives.
| F-7 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Kuvera France S.A.S. is our entity in France that will distribute Kuvera products and services throughout the European Union.
S.A.F.E. Management, LLC is a Registered Investment Adviser and Commodity Trading Adviser that has been established to deliver automated trading strategies to individuals who find they lack the time to trade for themselves.
United League, LLC owns a number of proprietary technologies including FIREFAN a social app for sports enthusiasts. Technologies created to support any of the Investview companies are held under the United League structure.
United Games, LLC is the distribution network for United League technologies. Since the acquisition of United Games in July of 2018, we are working to combine the distributors of Kuvera and United Games. The operations of United Games and United League are currently being assessed now that we have completed our integration of their software and personnel. These entities may be eliminated or re-structured in the future as we are currently assessing the potential future for social gaming app known as FIREFAN.
SAFETek, LLC (formerly WealthGen Global, LLC) is a new addition that we are currently establishing for expansion plans in the high-speed processing and cloud computing environment.
Apex Tek, LLC (formerly Razor Data, LLC) is the sales and distribution company for APEX packages and technology. It offers a unique passive income model for those interested in earning through the purchase and leaseback of high-speed specialized data processing equipment. This model has drawn considerable institutional interest.
Investment Tools & Training, LLC currently has no operations or activities.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
Our policy is to prepare our financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
Principles of Consolidation
The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC, Investment Tools & Training, LLC, Apex Tek, LLC (formerly Razor Data, LLC), S.A.F.E. Management, LLC, SAFETek, LLC (formerly WealthGen Global, LLC), United Games, LLC, United League, LLC, and Kuvera France S.A.S. Through March 31, 2019 we had determined that one affiliated entity, Kuvera LATAM S.A.S., which we previously conducted business with, was a variable interest entity and we were the primary beneficiary of the entity’s activities, which are similar to those of Kuvera, LLC. As a result, through March 31, 2019 we had consolidated the accounts of this variable interest entity into the accompanying consolidated financial statements. Further, because the Company did not have any ownership interest in this variable interest entity, the Company had allocated the contributed capital in the variable interest entity as a component of noncontrolling interest. As of April 1, 2019 Kuvera LATAM S.A.S. had no operations and ceased to exist, therefore, as of that date, no consolidation of the entity is necessary and we recorded a gain on deconsolidation of $53,739 to eliminate the intercompany account with Kuvera LATAM S.A.S. All intercompany transactions and balances have been eliminated in consolidation.
Financial Statement Reclassification
Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.
Use of Estimates
The preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
| F-8 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Foreign Exchange
We have consolidated the accounts of Kuvera France S.A.S. into our consolidated financial statements and have consolidated the accounts of Kuvera LATAM S.A.S. through March 31, 2019. The operations of Kuvera France S.A.S. are conducted in France and its functional currency is the Euro. The operations of Kuvera LATAM S.A.S. were conducted in Colombia and its functional currency is the Colombian Peso.
The financial statements of Kuvera France S.A.S. and Kuvera LATAM S.A.S. are prepared using their respective functional currency and have been translated into U.S. dollars (“USD”). Assets and liabilities are translated into USD at the applicable exchange rates at period-end. Stockholders’ equity is translated using historical exchange rates. Revenue and expenses are translated at the average exchange rates for the period. Any translation adjustments are included as foreign currency translation adjustments in accumulated other comprehensive income in our stockholders’ equity (deficit).
The following rates were used to translate the accounts of Kuvera France S.A.S. and Kuvera LATAM S.A.S. into USD at the following balance sheet dates.
| March 31, 2020 | March 31, 2019 | |||||||
| Euro to USD | 1.10314 | 1.12200 | ||||||
| Colombian Peso to USD | n/a | 0.00031 | ||||||
The following rates were used to translate the accounts of Kuvera France S.A.S. and Kuvera LATAM S.A.S. into USD for the following operating periods:
| Year ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Euro to USD | 1.11122 | 1.13580 | ||||||
| Colombian Peso to USD | n/a | 0.00033 | ||||||
Concentration of Credit Risk
Financial instruments that potentially expose us to concentration of credit risk include cash, accounts receivable, and advances. We place our cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit of $250,000. As of March 31, 2020 and 2019, cash balances that exceeded FDIC limits were $0, and we have not experienced significant losses relating to these concentrations in the past.
Cash and Cash Equivalents
For purposes of reporting cash flows, we consider all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. As of March 31, 2020 and 2019, we had no cash equivalents.
Receivables
Receivables are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. We had no allowance for doubtful accounts as of March 31, 2020 and 2019.
Cryptocurrencies
We hold cryptocurrency-denominated assets (“cryptocurrencies”) and include them in our consolidated balance sheet as other current assets. We record cryptocurrencies at fair market value and recognize the change in the fair value of our cryptocurrencies as an unrealized gain or loss in the consolidated statement of operations. As of March 31, 2020 and March 31, 2019, the fair value of our cryptocurrencies was $101,610 and $142,061, respectively. During the year ended March 31, 2020, we recorded $(815) and $113,369 as realized and unrealized gain (loss) on cryptocurrency, respectively. During the year ended March 31, 2019, we recorded $16,241 and $106,488 as realized and unrealized gain (loss) on cryptocurrency, respectively.
| F-9 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Fixed Assets
Fixed assets are stated at cost and depreciated using the straight-line method over their estimated useful lives. When retired or otherwise disposed, the carrying value and accumulated depreciation of the fixed asset is removed from its respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Expenditures for maintenance and repairs which do not extend the useful lives of the related assets are expensed as incurred.
As of March 31, 2020 and 2019 fixed assets were made up of the following:
| Estimated | |||||||||||
| Useful | |||||||||||
| Life | March 31, | March 31, | |||||||||
| (years) | 2020 | 2019 | |||||||||
| Furniture, fixtures, and equipment | 10 | $ | 12,792 | $ | 11,372 | ||||||
| Computer equipment | 3 | 19,533 | 14,661 | ||||||||
| Data processing equipment | 3 | 3,213,815 | - | ||||||||
| 3,246,140 | 26,033 | ||||||||||
| Accumulated amortization | (248,529 | ) | (12,505 | ) | |||||||
| Net book value | $ | 2,997,611 | $ | 13,528 | |||||||
Total depreciation expense for the years ended March 31, 2020 and 2019, was $490,642 and $5,332, respectively.
Long-Lived Assets – Intangible Assets & License Agreement
We account for our intangible assets and long-term license agreement in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-30 requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Further, ASC Subtopic 350-30 requires an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.
In June of 2017 we issued 80,000,000 shares of common stock with a value of $2,256,000 for a 15-year license agreement. Annual amortization over the 15-year life is expected to be approximately $150,400 per year. Amortization recognized for the year ended March 31, 2020 and 2019, was $150,812 and $150,400, respectively, and the long-term license agreement was recorded at a net value of $0 and $1,983,220 as of March 31, 2020 and 2019, respectively.
In June of 2018 we purchased United Games, LLC and United League, LLC and recorded the transaction as a business combination (see Note 5). Intangible assets acquired in the business combination were recorded at fair value on the date of acquisition and are being amortized on a straight-line method over their estimated useful lives. As of March 31, 2020 and 2019 intangible assets were made up of the following:
| Estimated | |||||||||||
| Useful | |||||||||||
| Life | March 31, | March 31, | |||||||||
| (years) | 2020 | 2019 | |||||||||
| FireFan mobile application | 4 | $ | 331,000 | $ | 331,000 | ||||||
| Back office software | 10 | 408,000 | 408,000 | ||||||||
| Tradename/trademark - FireFan | 5 | 248,000 | 248,000 | ||||||||
| Tradename/trademark - United Games | 0.45 | 4,000 | 4,000 | ||||||||
| Customer contracts/relationships | 5 | - | 825,000 | ||||||||
| 991,000 | 1,816,000 | ||||||||||
| Accumulated amortization | (298,118 | ) | (239,315 | ) | |||||||
| Net book value | $ | 692,882 | $ | 1,576,685 | |||||||
| F-10 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Amortization expense is expected to be as follows:
| Fiscal year ending March 31, 2021 | $ | 173,150 | ||
| Fiscal year ending March 31, 2022 | 173,150 | |||
| Fiscal year ending March 31, 2023 | 115,338 | |||
| Fiscal year ending March 31, 2024 | 55,748 | |||
| Fiscal year ending March 31, 2025 and beyond | 175,496 | |||
| $ | 692,882 |
Impairment of Long-Lived Assets
We have adopted ASC Subtopic 360-10, Property, Plant and Equipment. ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by us be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or when the historical cost carrying value of an asset may no longer be appropriate. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.
We evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.
Effective March 31, 2020 we fully impaired data processing equipment that had a cost basis of $2,025,500 and we fully impaired our long-term license agreement that had a cost basis of $2,256,000 because we deemed the assets carrying amount was not recoverable as of that date. As a result, impairment expense of $1,770,881 and $1,832,408 for the equipment and the license agreement, respectively, was recorded for the year ended March 31, 2020. During the year ended March 31, 2020 we impaired the value of the customer contracts/relationships originally acquired in our purchase of United Games, LLC and United League, LLC, therefore recognizing impairment expense of $627,452.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on our principal or, in the absence of a principal, most advantageous market for the specific asset or liability.
U.S. generally accepted accounting principles provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:
| Level 1: | Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access. | ||
| Level 2: | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including: | ||
| - | quoted prices for similar assets or liabilities in active markets; | ||
| - | quoted prices for identical or similar assets or liabilities in markets that are not active; | ||
| - | inputs other than quoted prices that are observable for the asset or liability; and | ||
| - | inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||
| Level 3: | Inputs that are unobservable and reflect management’s own assumptions about the inputs market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). | ||
Our financial instruments consist of cash, accounts receivable, and accounts payable. We have determined that the book value of our outstanding financial instruments as of March 31, 2020 and March 31, 2019, approximates the fair value due to their short-term nature.
| F-11 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2020:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Cryptocurrencies | $ | 101,610 | $ | - | $ | - | $ | 101,610 | ||||||||
| Total Assets | $ | 101,610 | $ | - | $ | - | $ | 101,610 | ||||||||
| Derivative liability | $ | - | $ | - | $ | 793,495 | $ | 793,495 | ||||||||
| Total Liabilities | $ | - | $ | - | $ | 793,495 | $ | 793,495 | ||||||||
Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2019:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Cryptocurrencies | $ | 142,061 | $ | - | $ | - | $ | 142,061 | ||||||||
| Total Assets | $ | 142,061 | $ | - | $ | - | $ | 142,061 | ||||||||
| Derivative liability | $ | - | $ | - | $ | 1,358,901 | $ | 1,358,901 | ||||||||
| Total Liabilities | $ | - | $ | - | $ | 1,358,901 | $ | 1,358,901 | ||||||||
Sale and Leaseback
Through our wholly-owned subsidiary, APEX Tex, LLC, we sell high powered data processing equipment (“APEX”) to our customers and they lease the equipment back to SAFETek, LLC, another of our wholly-owned subsidiaries. We account for these transactions under ASC 842-40 where the leaseback has been deemed a sales-type lease due to the lease term generally covering the entire economic life of the equipment and our likelihood to purchase the asset at the end of the lease term. In accordance with ASC 842-40 we have recorded the data processing equipment as a fixed asset on our balance sheet and we have accounted for the amounts received for the equipment as a financial liability, in other liabilities on our balance sheet. Further, we will recognize interest on the financial liability over the term of the lease to ensure the financial liability equates to the total amounts to be paid over the life of the lease. During the year ended March 31, 2020 we recorded deferred interest of $40,792,735 as a contra-liability, of which $2,257,399 was recognized into interest, resulting in $38,535,336 expected to be recognized into interest as follows:
| Fiscal year ending March 31, 2021 | $ | 8,081,463 | ||
| Fiscal year ending March 31, 2022 | 8,158,547 | |||
| Fiscal year ending March 31, 2023 | 8,158,547 | |||
| Fiscal year ending March 31, 2024 | 8,158,547 | |||
| Fiscal year ending March 31, 2025 and beyond | 5,978,232 | |||
| $ | 38,535,336 |
During the year ended March 31, 2020 we had the following activity related to our sale and leaseback transactions:
| Proceeds from sales of APEX | $ | 16,143,265 | ||
| Debt extinguished with the issuance of APEX | 100,000 | |||
| Interest recognized on financial liability | 2,257,399 | |||
| Payments made for leased equipment | (3,208,000 | ) | ||
| Total financial liability | 15,292,664 | |||
| Other current liabilities [1] | (11,407,200 | ) | ||
| Other long-term liabilities, net of deferred interest | $ | 3,885,464 |
[1] Represents lease payments to be made in the next 12 months
| F-12 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
As of March 31, 2020 we have received proceeds of $392,310 in additional deposits for APEX sales, which has been recorded in the customer advance amount shown on our balance sheet.
Revenue Recognition
Subscription Revenue
The majority of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed subscription period, therefore we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial period to first time subscription customers, during which a full refund can be requested if a customer does not like the product. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks.
Equipment Sales
We generate revenue from the sale of high-speed computer processing equipment that is used for any of the following intense processing activities: protein folding, CGI rendering, Game Streaming, Machine & Deep Learning, Mining, Independent Financial Verification, and general high-speed computing. We recognize equipment sales revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver an equipment package to our customers which includes hardware, software, and firmware and is drop-shipped to a hosting data center. We receive payment at the time of purchase and recognize revenue when the equipment package is delivered and ready for maintenance and hosting, which our customers arrange for, and obtain, from a separate third party that provides such services.
Cryptocurrency Mining Service Revenue
In the past we generated revenue from the sale of cryptocurrency mining services to our customers through an arrangement with a third-party supplier. We recognized cryptocurrency mining service revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation was to arrange for the third-party to provide mining services to our customers and payment is received at the time of purchase, therefore revenue was recognized upon receipt of payment. We recognized revenue in the amount of the fee to which we are entitled to as an agent, or the amount of consideration that we retained after paying the third-party the consideration received in exchange for the services the third-party was to provide.
Mining Revenue
Through our wholly owned subsidiary, SAFETek, LLC, we lease equipment under a sales-type lease and use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of our mining activities.
Fee Revenue
We generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and Commodities Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified Investors and who lack the time to trade for themselves. We recognize fee revenue as our performance obligation is met and we receive payment for such advisory fees in the month following recognition.
| F-13 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Revenue generated for the year ended March 31, 2020, was as follows:
| Subscription Revenue | Equipment Sales | Cryptocurrency Mining Service Revenue | Mining Revenue | Fee Revenue | Total | |||||||||||||||||||
| Gross billings/receipts | $ | 24,471,532 | $ | - | $ | - | $ | 1,745,138 | $ | 13,279 | $ | 26,229,949 | ||||||||||||
| Refunds, incentives, credits, and chargebacks | (2,046,359 | ) | - | - | - | - | (2,046,359 | ) | ||||||||||||||||
| Amounts paid to supplier | - | - | - | - | - | - | ||||||||||||||||||
| Net revenue | $ | 22,425,173 | $ | - | $ | - | $ | 1,745,138 | $ | 13,279 | $ | 24,183,590 | ||||||||||||
Foreign revenues for the year ended March 31, 2020 were $21,191,788 while domestic revenue for the year ended March 31, 2020 was $2,991,802.
Revenue generated for the year ended March 31, 2019 was as follows:
| Subscription Revenue | Equipment Sales | Cryptocurrency Mining Service Revenue | Mining Revenue | Fee Revenue | Total | |||||||||||||||||||
| Gross billings/receipts | $ | 28,518,660 | $ | 698,954 | $ | 5,775,269 | $ | - | $ | - | $ | 34,992,883 | ||||||||||||
| Refunds, incentives, credits, and chargebacks | (1,495,458 | ) | (4,000 | ) | (6,501 | ) | - | - | (1,505,959 | ) | ||||||||||||||
| Amounts paid to supplier | - | - | (3,827,843 | ) | - | - | (3,827,843 | ) | ||||||||||||||||
| Net revenue | $ | 27,023,202 | $ | 694,954 | $ | 1,940,925 | $ | - | $ | - | $ | 29,659,081 | ||||||||||||
Foreign revenues for the year ended March 31, 2019 were approximately $27.3 million while domestic revenue for the year ended March 31, 2019 was approximately $2.3 million.
Advertising, Selling, and Marketing Costs
We expense advertising, selling, and marketing costs as incurred. Advertising, selling, and marketing costs include costs of promoting our product worldwide, including promotional events. Advertising, selling, and marketing expenses for the years ended March 31, 2020 and 2019, totaled $1,696,133 and $878,936, respectively.
Income Taxes
We have adopted ASC Subtopic 740-10, Income Taxes, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes consist primarily of derivative liability and stock compensation accounting versus basis differences.
Net Income (Loss) per Share
We follow ASC Subtopic 260-10, Earnings per Share, which specifies the computation, presentation, and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Convertible debt, stock options, and warrants have been excluded as common stock equivalents in the diluted loss per share because their effect is anti-dilutive on the computation.
| F-14 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:
| March 31, 2020 | March 31, 2019 | |||||||
| Options to purchase common stock | - | 35,000 | ||||||
| Warrants to purchase common stock | - | 5,052,497 | ||||||
| Notes convertible into common stock | 45,743,298 | 52,162,055 | ||||||
| Total | 45,743,298 | 57,249,552 | ||||||
Lease Obligation
We determine if an arrangement is a lease at inception. Operating leases are included in the operating lease right-of-use asset account, the operating lease liability, current account, and the operating lease liability, long term account in our balance sheet. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.
Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For leases in which the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have elected to not apply the recognition requirements of ASC 842 to short-term leases (leases with terms of twelve months or less). Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term. We have elected the practical expedient and will not separate non-lease components from lease components and will instead account for each separate lease component and non-lease component associated with the lease components as a single lease component.
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
There are no recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.
NOTE 4 – GOING CONCERN AND LIQUIDITY
Our financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have incurred significant recurring losses, which have resulted in an accumulated deficit of $46,382,174 as of March 31, 2020, along with a net loss of $21,285,191 for the year ended March 31, 2020. Additionally, as of March 31, 2020, we had a working capital deficit of $14,123,625. These factors raise substantial doubt about our ability to continue as a going concern.
During the year ended March 31, 2020, we raised $4,484,979 in cash proceeds from related parties, $2,527,452 in cash proceeds from new lending arrangements, and $825,000 from the sale of common stock. Subsequent to March 31, 2020, we obtained $10,049,435 in cash proceeds from new lending arrangements (see Note 13). Additionally, subject to a Securities Purchase agreement entered into in April 2020 we have a commitment from an investor to purchase a $9 million promissory note on or before October 31, 2020, subject to certain conditions.
On January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic. It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the company. To date, the Company is experiencing challenges in multiple areas of the organization and the full economic impact is yet to be established.
During the year ended March 31, 2020 we made significant strides and wide sweeping changes. While we believe they will be beneficial to our bottom line, there is no assurance of this. Some of the concerns we face going forward will continue, including but not limited to:
| ● | Supply chain issues for Apex Tek, LLC and the sourcing of miners due to the worldwide COVID pandemic and manufacturing slow downs | |
| ● | SAFETek, LLC operations not scaling according to projections with decreased output due to mining difficulty and operational cost | |
| ● | Regulatory reform that could adversely impact the use and demand of digital currencies | |
| ● | The recent Bitcoin (BTC) halving event that further reduced mining output in addition to the supply chain issues |
Apex Tek, LLC and SAFETek, LLC carry additional risk and generated recent losses, however, they also provide Investview a stake in 4IR, HPC, app development, fintech, blockchain and personal money management sectors. Each of these are areas that are targeted for significant growth spurred by innovations through technology which solidify our position in the fintech space.
| F-15 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
While our liabilities are larger than our assets it is important to note that we seek to further reduce our operating expense. The assets we have acquired and will continue to seek out are those of technology, mobile apps, and human resources. These assets are not easily defined on our balance sheet but represent our ability to carry out our objectives which we believe will ultimately lead to positive cash flow, reduced debt and then profitability.
Accordingly, the accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
NOTE 5 – ACQUISITIONS
Acquisition of United Games, LLC and United League, LLC
On July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock. United Games, LLC and United League, LLC provide distributor marketing back-office and commission tools and online sports gaming experience for users of their applications distributed through their networks of affiliates therefore we expect significant synergies to exist as a result of combining operations.
The transaction was accounted for as a business combination using the acquisition method of accounting in accordance with the FASB (ASC Topic 805). The following table summarizes the purchase accounting for the fair value of the assets acquired and liabilities assumed at the date of the acquisition and the gain on bargain purchase which resulted from the fair value of the intangible assets acquired exceeding the fair value of our common stock given as consideration:
| Cash | $ | 3,740 | ||
| Receivables | 361,345 | |||
| Intangible assets (see Note 2) | 1,816,000 | |||
| Total assets acquired | 2,181,085 | |||
| Accounts payable and accrued liabilities | 409,803 | |||
| Total liabilities assumed | 409,803 | |||
| Net assets acquired | 1,771,282 | |||
| Consideration [1] | 800,000 | |||
| Gain on bargain purchase | $ | 971,282 |
| [1] | The 50,000,000 shares of our common stock transferred as consideration in accordance with the Purchase Agreement was valued on July 20, 2018, the date of acquisition, based on the weighted equity fair value of $0.016 per share as determined by a third-party valuation firm. |
United Games, LLC and United League, LLC recorded combined revenue of $1,331,542 and a combined net income of $26,059 since the July 20, 2018 acquisition date, which were included in our consolidated statement of operations for the year ended March 31, 2019.
The table below represents the pro forma revenue and net income (loss) for the years ended March 31, 2020 and 2019, assuming the acquisition had occurred on April 1, 2017, pursuant to ASC Subtopic 805-10-50. This pro forma information does not purport to represent what the actual results of our operations would have been had the acquisition occurred on this date nor does it purport to predict the results of operations for future periods:
| Year Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Revenues | $ | 24,225,208 | $ | 27,961,351 | ||||
| Net (loss) | $ | (19,429,574 | ) | $ | (5,288,735 | ) | ||
| Loss per common share | $ | (0.01 | ) | $ | (0.00 | ) | ||
| F-16 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
NOTE 6 – RELATED PARTY TRANSACTIONS
Our related party payables consisted of the following:
| Year Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Short-term advances [1] | $ | 1,526,427 | $ | 440,489 | ||||
| Short-term promissory note entered into on 8/17/18 [2] | - | 105,000 | ||||||
| Promissory note entered into on 1/30/20 [3] | 1,033,333 | - | ||||||
| Accounts payable – related party [4] | 55,000 | - | ||||||
| $ | 2,114,760 | $ | 545,489 | |||||
| [1] | We periodically receive advances for operating funds from our current majority shareholders, officers, directors and other related parties, including entities that are owned, controlled, or influenced by our owners or management. These advances are due on demand, generally have no set interest rates associated with them, and are unsecured. During the year ended March 31, 2020, we received $2,484,979 in cash proceeds from advances, incurred $769,999 in interest, and repaid related parties a total of $1,292,160. Also during the year ended March 31, 2020 we settled $1,880 of amounts that were recorded as due prior to March 31, 2018, settled $100,000 by issuing APEX units, and settled $500,000 with the issuance of common stock. |
| [2] | A member of the senior management team advanced funds of $100,000 on August 17, 2018, under a short-term promissory note due to be repaid on August 31, 2018. On August 31, 2018 the note was amended to be due on demand or, in absence of a demand, due on August 31, 2019. The note had a fixed interest payment of $5,000, which was recorded as interest expense in the statement of operations during the year ended March 31, 2019. During the year ended March 31, 2020 we made repayments of $105,000 on the note. |
| [3] | We entered into a $1,000,000 promissory note with Joeseph Cammarata, our Chief Executive Officer, on January 30, 2020. The term of the note is one year, at which time the principal and interest of 20%, or $200,000 will be due. During the year ended March 31, 2020 we recognized $33,333 of interest expense on the note. |
| [4] | During the year ended March 31, 2020 we entered into an employment agreement with Jayme McWidener as our Chief Financial Officer. At the date we entered into the employment agreement we owed her firm, Mac Accounting Group, LLP, $75,000, which was reclassified as a related party accounts payable balance on our balance sheet. We made repayments on the liability of $20,000 since the date we entered into the employment agreement. |
In addition to the above related party debt transactions that were outstanding as of March 31, 2020 and 2019 we entered into a $3,600,000 convertible promissory note with a member of the senior management team on July 23, 2019. We received proceeds of $1,000,000 from the note, including $900,000 in cash and $100,000 which offset amounts owing to the lender. In accordance with the terms of the note we were required to repay a monthly minimum payment of $50,000 beginning January of 2020 through June of 2020 and a monthly minimum payment of $100,000 beginning July of 2020 until the total principal amount has been repaid. The lender had the right to convert up to $2,600,000 of the outstanding and unpaid principal amount into shares of our common stock at a conversion price of $0.005 per share, subject to adjustment. At inception we recorded a beneficial conversion feature of $1,000,000 as a debt discount (see Note 10) and we recorded $2,600,000 as a debt discount, representing the difference between the face value of the note and the proceeds received. Effective March 31, 2020 we entered into a settlement agreement to issue 200,000,000 shares of our common stock (see Note 10) to repay the $3,600,000 convertible promissory note and $500,000 worth of short-term advances (see [1] above), for a total of $4,100,000 worth of related party debt settled. In conjunction with the settlement the full debt discount of $3,600,000 was recognized into interest expense during the year ended March 31, 2020.
In addition to the above-mentioned related-party lending arrangements, during the year ended March 31, 2020 we sold 57 APEX units to related parties for proceeds of $122,720, $100,000 of which was offset against short term advances (see [1] above). We made 233 lease payments to these related parties during the year ended March 31, 2020, equating to $116,500. During the year ended March 31, 2019, we sold $41,500 worth of high-speed computer processing equipment to our then chief executive officer. This revenue was included in the equipment sales reported on our statement of operations.
| F-17 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
NOTE 7 – DEBT
Our debt consisted of the following:
| Year Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Short-term advance received on 8/31/18 [1] | $ | 65,000 | $ | 75,000 | ||||
| Secured merchant agreement for future receivables entered into on 2/14/19 [2] | - | 641,687 | ||||||
| Secured merchant agreement for future receivables entered into on 2/14/19 [3] | - | 468,790 | ||||||
| Secured merchant agreements for future receivables entered into on 2/14/19 [4] | - | 597,060 | ||||||
| Promissory note entered into on 1/16/19 [5] | - | 60,000 | ||||||
| Secured merchant agreements for future receivables entered into on 3/28/19 [6] | - | 25,650 | ||||||
| Convertible promissory note entered into on 1/11/19 [7] | - | 26,600 | ||||||
| Convertible promissory note entered into on 2/6/19 [8] | - | 76,686 | ||||||
| Convertible promissory note entered into on 3/14/19 [9] | - | 5,557 | ||||||
| Secured merchant agreement for future receivables entered into on 8/16/19 and refinanced on 12/10/19 [10] | 1,223,615 | - | ||||||
| Secured merchant agreement for future receivables entered into on 8/16/19 [11] | 260,090 | - | ||||||
| Convertible promissory note entered into on 3/5/20 [12] | 13,072 | - | ||||||
| Convertible promissory note entered into on 3/11/20 [13] | 7,549 | - | ||||||
| $ | 1,569,326 | $ | 1,977,030 | |||||
| [1] | In August 2018, we received a $75,000 short-term advance. The advance is due on demand, has no interest rate, and is unsecured. During the year ended March 31, 2020 we made repayments of $10,000. |
| [2] | During September 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On September 28, 2018, we received proceeds from this arrangement of $570,000. In accordance with the terms of the agreement, we were required to repay $839,400 by making ACH payments in the amount of 10% of our daily cash receipts. Accordingly, we recorded $269,400 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $233,501 of amounts owed to a new agreement. However, prior to the terminating the September agreement, we made payments of $605,899 and amortized $269,400 into interest expense. |
During January 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On January 11, 2019, we received proceeds from this arrangement of $349,851. In accordance with the terms of the agreement, we were required to repay $489,650 by making daily ACH payments of $1,000 for the first 30 days following the date of the agreement and daily ACH payments of $2,999 thereafter. Accordingly, we recorded $139,799 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $449,657 of amounts owed to a new agreement. However, prior to the terminating the January agreement, we made payments of $39,993 and amortized $139,799 into interest expense.
During February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On February 15, 2019, we received proceeds from this arrangement of $73,801 after paying off $233,501 from a September 2018 agreement (see above) and $449,657 from a January 2019 agreement (see above). In accordance with the terms of the agreement, we were required to repay $909,350 by making daily ACH payments of $5,049. Accordingly, we recorded $152,391 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $141,372 and amortized $26,100 into interest expense.
| F-18 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Effective August 16, 2019 this debt was refinanced and the outstanding balance of $316,093 was rolled into a new debt arrangement, see notation [10] below. During the year ended March 31, 2020, prior to the refinance, we repaid $451,886 and amortized $126,291 into interest expense.
| [3] | During December 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On December 17, 2018, we received proceeds from this arrangement of $380,000. In accordance with the terms of the agreement, we were required to repay $559,600 by making daily ACH payments of $3,000. Accordingly, we recorded $179,600 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $421,600 of amounts owed to a new agreement. However, prior to the terminating the December agreement, we made payments of $138,000 and amortized $179,600 into interest expense. |
During February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On February 15, 2019, we received proceeds from this arrangement of $126,932 after paying off $421,600 from a December 2018 agreement (see above). In accordance with the terms of the agreement, we are required to repay $840,000 by making daily ACH payments of $4,649. Accordingly, we recorded $291,468 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $129,388 and amortized $49,646 into interest expense.
Effective August 16, 2019 this debt was refinanced and the outstanding balance of $297,033 was rolled into a new debt arrangement, see notation [10] below. During the year ended March 31, 2020, prior to the refinance, we repaid $413,580 and amortized $241,822 into interest expense.
| [4] | During October 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. During October 2018, we received proceeds from this arrangement of $77,260. In accordance with the terms of the agreement, we were required to repay $699,500 by making daily ACH payments of $4,372. Accordingly, we recorded $224,500 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $327,880 of amounts owed to a new agreement. However, prior to the terminating the October agreement, we made payments of $371,620 and amortized $224,500 into interest expense. |
During February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On February 15, 2019, we received proceeds from this arrangement of $126,932 after paying off $327,880 from an October 2018 agreement (see above). In accordance with the terms of the agreement, we were required to repay $629,550 by making daily ACH payments of $3,498. Accordingly, we recorded $224,410 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. Also during February 2019, we entered into a second Secured Merchant Agreement with this same entity, receiving proceeds of $288,000. In accordance with the terms of the agreement, we were required to repay $419,700 by making daily ACH payments of $2,332. Accordingly, we recorded $131,700 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $157,410 on these two agreements and amortized $61,330 into interest expense.
Effective August 16, 2019 this debt was refinanced and the outstanding balance of $382,000 was rolled into a new debt arrangement, see notation [11] below. During the year ended March 31, 2020, prior to the refinance, we repaid $509,840 and amortized $294,780 into interest expense.
| [5] | In January 2019, we received funds of $631,617 and repaid $511,617 in a series of transactions representing short-term advances. On January 16, 2019, we entered into a short-term promissory note for the resulting $120,000 owed as a result of the transactions. The note had a zero percent interest rate and was due within the shorter of three months or the receipt of cash from a $1 million financing arrangement. During the year ended March 31, 2020, we repaid $60,000 of the amount due under the note. |
| [6] | During March 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On March 29, 2019, we received proceeds from this arrangement of $28,500. In accordance with the terms of the agreement, we were required to repay $45,000 by making daily ACH payments of $4,500. Accordingly, we recorded $16,500 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $4,500 and amortized $1,650 into interest expense. During the year ended March 31, 2020, we repaid $40,500 and amortized $14,850 into interest expense. |
| F-19 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
| [7] | In January 2019, we entered into a Convertible Promissory Note and received proceeds of $135,000 after incurring loan fees of $3,000. The note incurs interest at 12% per annum and has a maturity date of April 11, 2020. The Convertible Promissory Note has a variable conversion rate that is 65% of the lowest closing price during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 8). At inception, we recorded a debt discount of $138,000 and captured loan fees, recorded as interest expense, of $450,005. During the year ended March 31, 2019, we recorded amortization of the debt discount of $23,152 into interest expense and recorded additional interest expense on the note of $3,448. During the year ended March 31, 2020, we amortized $114,848 into interest expense, recorded additional interest expense on the note of $40,977 (inclusive of a prepayment penalty), and paid off the note, accrued interest, and prepayment penalties for $182,425. |
| [8] | In February 2019, we entered into a Convertible Promissory Note and received proceeds of $240,000. The note was issued with a $30,000 original issue discount and loan fees of $3,000, incurred interest at 12% per annum, and had a maturity date of August 6, 2019. In accordance with the terms of the note, we issued 22,500,000 shares of common stock (the “Returnable Shares”) to the note holder as a commitment fee (see Note 10), provided, however, the Returnable Shares must be returned to us if the note is fully repaid and satisfied prior to the date which is 180 days following the issue date. The Convertible Promissory Note had a variable conversion rate that was 65% of the lowest trading price during the previous 20-trading-day period, subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see Note 8). We allocated the proceeds of the note to the common stock issued and to the fair value of the note, taking into consideration the fair value of the conversion feature. As a result, the common stock was valued at $69,871, we recorded a debt discount of $270,000, and captured loan fees, recorded as interest expense, of $120,128. During the year ended March 31, 2019, we recorded amortization of the debt discount of $72,514 into interest expense and recorded additional interest expense on the note of $4,172. During the year ended March 31, 2020, we amortized $197,486 into interest expense, recorded additional interest expense on the note of $11,136, and paid off the note and accrued interest for $285,308. In accordance with the terms of the agreement the 22,500,000 Returnable Shares were returned and cancelled (see Note 10). |
| [9] | In March 2019, we entered into a Convertible Promissory Note and received proceeds of $135,000 after incurring loan fees of $3,000. The note incurred interest at 12% per annum and had a maturity date of June 14, 2020. The Convertible Promissory Note had a variable conversion rate that was 65% of the average of the two lowest closing prices during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature was accounted for as a derivative instrument (see Note 8). At inception, we recorded a debt discount of $138,000 and captured loan fees, recorded as interest expense, of $64,492. During the year ended March 31, 2019, we recorded amortization of the debt discount of $4,831 into interest expense and recorded additional interest expense on the note of $726. During the year ended March 31, 2020, we amortized $133,168 into interest expense, recorded additional interest expense on the note of $43,983 (inclusive of a prepayment penalty), and paid off the note, accrued interest, and prepayment penalties for $182,708. |
| [10] | During August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On August 15, 2019, we received proceeds from this arrangement of $339,270 after paying off $316,093 from a February 2018 agreement (see notation [2] above) and $297,033 from a second February 2019 agreement (see notation [3] above). In accordance with the terms of the agreement, we were required to repay $1,399,000 by making daily ACH payments of $6,823. Accordingly, we recorded $446,604 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. |
Effective December 10, 2019 this debt was refinanced and the outstanding balance of $839,514 was rolled into a new Secured Merchant Agreement for future receivables. During the year ended March 31, 2020, prior to the refinance, we repaid $559,486 and amortized $446,605 into interest expense related to the August 2019 arrangement. As a result of the refinancing arrangement we received proceeds of $854,801. In accordance with the terms of the agreement, we were required to repay $2,448,250 by making daily ACH payments of $10,999. Accordingly, we recorded $753,935 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2020, after the refinance, we repaid $747,932 and amortized $277,232 into interest expense related to the new December 2019 arrangement.
| F-20 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
| [11] | During August 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. In August 2019, we received proceeds from this arrangement of $418,381 after paying off $382,000 from an October 2018 agreement (see notation [4] above). In accordance with the terms of the agreement, we were required to repay $1,189,150 by making daily ACH payments of $5,801. Accordingly, we recorded $388,769 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2020, we repaid $853,203 and amortized $312,912 into interest expense. |
| [12] | In March 2020, we entered into a Convertible Promissory Note and received proceeds of $200,000 after incurring loan fees of $3,000. The note incurs interest at 10% per annum and has a maturity date of June 2, 2021. The Convertible Promissory Note has a variable conversion rate that is 65% of the average of the two lowest trading prices during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 8). At inception, we recorded a debt discount of $203,000 and captured loan fees, recorded as interest expense, of $116,077. During the year ended March 31, 2020, we amortized $11,626 into interest expense, and recorded additional interest expense on the note of $1,446. |
| [13] | In March 2020, we entered into a Convertible Promissory Note and received proceeds of $150,000 after incurring loan fees of $3,000. The note incurs interest at 10% per annum and has a maturity date of June 10, 2021. The Convertible Promissory Note has a variable conversion rate that is 65% of the average of the two lowest trading prices during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 8). At inception, we recorded a debt discount of $153,000 and captured loan fees, recorded as interest expense, of $148,432. During the year ended March 31, 2020, we amortized $6,711 into interest expense, and recorded additional interest expense on the note of $838. |
In addition to the above debt transactions that were outstanding as of March 31, 2020 and 2019, during the year ended March 31, 2020, we also received proceeds of $200,000 from two additional short-term notes ($100,000 each) and received proceeds of $140,000, $100,000, and $125,000 from three separate convertible promissory notes. During the year ended March 31, 2020, we recorded interest expense of $30,000 for fixed interest and extension fees on the short-term notes and made total cash payments of $230,000 to extinguish the interest and principal amounts due on the short-term notes. During the year ended March 31, 2020, we accounted for the conversion features in the convertible notes as a derivative instrument, therefore at inception recorded a debt discounts of $374,000 and captured loan fees, recorded as interest expense, of $945,060. By the time we repaid the convertible notes we had amortized the full debt discount of $374,000 into interest expense, recorded additional interest expense on the notes of $119,931 (inclusive of prepayment penalties), and paid off the notes, accrued interest, and prepayment penalties for $493,931.
NOTE 8 – DERIVATIVE LIABILITY
During the years ended March 31, 2020 and 2019, we had the following activity in our derivative liability account:
| Derivative liability at March 31, 2018 | $ | - | ||
| Derivative liability recorded on new instruments | 1,144,525 | |||
| Change in fair value | 214,376 | |||
| Derivative liability at March 31, 2019 | 1,358,901 | |||
| Derivative liability recorded on new instruments | 1,924,569 | |||
| Derivative liability extinguished with notes settled | (1,918,744 | ) | ||
| Change in fair value | (571,231 | ) | ||
| Derivative liability at March 31, 2020 | $ | 793,495 |
We use the binomial option pricing model to estimate fair value for those instruments convertible into common stock, at inception, at conversion or settlement date, and at each reporting date. During the year ended March 31, 2020 and 2019, the assumptions used in our binomial option pricing model were in the following range:
| Year Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Risk free interest rate | 0.17% - 2.13 | % | 2.40% - 2.58 | % | ||||
| Expected life in years | 0.03 - 1.25 | 0.35 - 1.25 | ||||||
| Expected volatility | 224% 381 | % | 222% - 268 | % | ||||
| F-21 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
NOTE 9 – OPERATING LEASE
In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases. Leases are classified as either finance or operating with classification affecting the pattern of expense recognition in the statement of operations. We adopted ASU No. 2016-02 on April 1, 2019. We did not record a lease asset and lease liability as of the adoption date as we had no lease arrangements or lease obligation at that time.
During the year ended March 31, 2020 we entered two operating leases for office space in Eatontown, New Jersey (the “Eatontown Lease”) and Kaysville, Utah (the “Kaysville Lease”). We have the option to extend the three-year lease term of the Eatontown Lease for a period of one year. In addition, we are obligated to pay twelve monthly installments to cover an annual utility charge of $1.75 per rentable square foot for electric usage within the demised premises. As the lessor has the right to digitally meter and charge us, these payments were deemed variable and will be expensed as incurred. During the year ended March 31, 2020 the variable lease costs amounted to $2,217. At commencement of the Eatontown Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $110,097. We have the option to extend the twelve-and-a-half-month lease term of the Kaysville Lease for a period of one year. At commencement of the Kaysville Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $21,147.
Operating lease expense was $41,027 for the year ended March 31, 2020. Operating cash flows used for the operating leases during the year ended March 31, 2020 was $33,694. As of March 31, 2020, the weighted average remaining lease term was 2.15 years and the weighted average discount rate was 12%.
Future minimum lease payments under non-cancellable leases as of March 31, 2020 were as follows:
| 2021 | $ | 56,794 | ||
| 2022 | 48,000 | |||
| 2023 | 16,000 | |||
| Total | 120,794 | |||
| Less: Interest | (13,996 | ) | ||
| Present value of lease liability | 106,798 | |||
| Operating lease liability, current [1] | (56,530 | ) | ||
| Operating lease liability, long term | $ | 50,268 |
[1] Represents lease payments to be made in the next 12 months
NOTE 10 – STOCKHOLDERS’ EQUITY
Preferred Stock
We are authorized to issue up to 50,000,000 shares of preferred stock with a par value of $0.001 and our board of directors has the authority to issue one or more classes of preferred stock with rights senior to those of common stock and to determine the rights, privileges, and preferences of that preferred stock.
During the year ended March 31, 2020 our Board of Directors approved the designation of 2,000,000 of the Company’s shares of preferred stock as Series B Convertible Preferred Stock. Our Series B Convertible Preferred Stock holders are entitled to 500 votes per share, are entitled to receive cumulative dividends at the annual rate of 12% per annum of the liquidation price, equal to $1.20 per share, and can convert one Series B Preferred Stock share into 500 shares of our common stock. As of March 31, 2020 and 2019, we had no preferred stock issued or outstanding.
Common Stock Transactions
During the year ended March 31, 2020, we issued 59,215,648 shares of common stock in exchange for net proceeds of $825,000. Effective March 31, 2020 we entered into a settlement agreement to issue 200,000,000 shares of our common stock to repay a $3,600,000 convertible promissory note and $500,000 worth of short-term advances, for a total of $4,100,000 worth of related party debt settled (see Note 6).
During the year ended March 31, 2020 we issued 522,000,000 shares of common stock, valued at $4,561,500 based on the market value on the day of issuance, to multiple employees for services and compensation, which is subject to forfeiture if the employee is not in good standing at the time the shares are fully vested, or in some cases, if certain milestones are not met. Of the $4,561,500 value we recognized $2,836,843 as an expense during the year ending March 31, 2020 and the remaining $1,724,657 will be recognized ratably over the vesting term. In addition to the shares issued to employees, we also issued an additional 15,618,592 shares of common stock, valued at $261,800 based on the market value on the day of issuance, for services.
| F-22 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
During the year ended March 31, 2020 we repurchased 5,150 shares of common stock for $102 and we cancelled 22,500,000 shares that were returned in accordance with the terms of a Convertible Promissory Note (see Note 6), reducing common stock by $22,500 and increasing additional paid in capital by the same. We also cancelled 200,000,000 shares returned in conjunction with the termination of a Joint Venture Agreement entered into in March of 2019, reducing common stock by $200,000, reducing additional paid in capital by $3,180,000, offset with a reduction in our prepaid asset of $3,380,000. During the year ended March 31, 2020 we recorded a beneficial conversion feature of $1,000,000 related to a convertible promissory note entered into with a related party (see Note 6).
In conjunction with the sale of common stock during the year ended March 31, 2018, we provided a guarantee to certain individuals such that we would issue additional shares of our common stock if the average closing price of our common stock fell below $0.02 per share on the 20 days preceding the 18-month anniversary of the date the shares were originally sold. As a result of this guarantee, we had recorded $626,388 in accounts payable and accrued liabilities on our balance sheet as of March 31, 2018. During the year ended March 31, 2019, the 18-month anniversary passed without the common stock falling below the set threshold, therefore, we were released from the guarantee, and we increased additional paid-in capital by $525,000 to remove the previously recorded offering costs. During the year ended March 31, 2020, the 18-month anniversary passed without the common stock falling below the set threshold, therefore, we were released from the guarantee, and we increased additional paid-in capital by $101,387 to remove the previously recorded offering costs.
During the year ended March 31, 2019, we issued 50,000,000 shares of common stock for the acquisition of United Games, LLC and United League, LLC (see Note 5). We also issued 1,000,000 shares of common stock in August and 1,000,000 shares of common stock in March, valued at $10,000 and $17,600, respectively, based on the market price on the day of issuance, to an employee for compensation. The shares are subject to forfeiture if the employee is not in good standing six months after the date of issuance. During the year ended March 31, 2019, the $10,000 was recognized as expense and of the $17,600 we recognized $2,933 as an expense and $14,667 was recorded as a prepaid asset. Also during the year ended March 31, 2019, we issued 400,000,000 shares of common stock with a value of $6,760,000 based on the market price on the date of issuance, for an agreement to partner with a third party to generate future revenues. The 400,000,000 shares are subject to forfeiture for five years from the date of issuance, such that shares will be deemed earned upon meeting certain milestones. We are recognizing the expense ratably over the five-year term and recorded $96,307 in expense during the year ended March 31, 2019, while recording $6,663,693 as a prepaid asset as of March 31, 2019. During the year ended March 31, 2019, we entered into a common stock purchase agreement that provides cash of $1,000,000 in exchange for shares of our common stock. In conjunction with that agreement, we issued 3,000,000 shares of common stock that was accounted for as offering costs, increasing common stock by $3,000 and decreasing additional paid-in capital by $3,000, to offset any proceeds from the future equity transactions resulting from the agreement. During the year ended March 31, 2019, we issued 22,500,000 shares as a commitment fee in conjunction with a debt arrangement, whereby the shares were valued at $69,871 based on the allocation of debt proceeds (see Note 7). Also during the year ended March 31, 2019, we repurchased 7,000,000 shares of common stock for $91,000.
As of March 31, 2020 and 2019, we had 3,214,490,408 and 2,640,161,318 shares of common stock issued and outstanding, respectively.
Employee Stock Options
The nonqualified plan adopted in 2007 authorizes 65,000 shares, of which 47,500 have been granted as of March 31, 2020. The qualified plan adopted in October of 2008 authorizes 125,000 shares and was approved by a majority of our shareholders on September 16, 2009. As of March 31, 2020, 42,500 shares have been granted under the 2008 plan. During the year ended March 31, 2020 all previously outstanding options expired and no new options were granted.
The following table summarizes the changes in employee stock options outstanding and the related prices for the shares of our common stock issued to employees under two employee stock option plans:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Contractual | Intrinsic | |||||||||||||
| Shares | Price | Life (years) | Value | |||||||||||||
| Options outstanding at March 31, 2018 | 35,000 | $ | 10.00 | 1.51 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | - | $ | - | |||||||||||||
| Options outstanding at March 31, 2019 | 35,000 | $ | 10.00 | 0.51 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | (35,000 | ) | $ | 10.00 | ||||||||||||
| Options outstanding at March 31, 2020 | - | $ | - | - | $ | - | ||||||||||
| Options exercisable at March 31, 2020 | - | $ | - | - | $ | - | ||||||||||
| F-23 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Stock-based compensation expense in connection with options granted to employees for the year ended March 31, 2020 and 2019, was $0.
Warrants
During the year ended March 31, 2020 all previously outstanding warrants expired and no new warrants were granted. Transactions involving our warrants are summarized as follows:
| Weighted | ||||||||
| Number of | Average | |||||||
| Shares | Exercise Price | |||||||
| Warrants outstanding at March 31, 2018 | 6,169,497 | $ | 1.50 | |||||
| Granted / restated | - | $ | - | |||||
| Canceled | - | $ | - | |||||
| Expired | (1,117,000 | ) | $ | (1.48 | ) | |||
| Warrants outstanding at March 31, 2019 | 5,052,497 | $ | 1.50 | |||||
| Granted | - | $ | - | |||||
| Canceled | - | $ | - | |||||
| Expired | (5,052,497 | ) | $ | (1.50 | ) | |||
| Warrants outstanding at March 31, 2020 | - | $ | - | |||||
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Litigation
In the ordinary course of business, we may be or have been involved in legal proceedings from time to time. Below is a description of all legal proceedings we were involved in during the year ended March 31, 2020 and 2019:
| ● | In February 2018, we received a subpoena from the United States Commodity Futures Trading Commission (“CFTC”). We complied with the terms of the subpoena, negotiated a resolution of this matter with the CFTC staff, and a final order was issued on September 14, 2018. Under the order, we did not admit or deny any of the allegations, agreed to pay a fine of $150,000, and agreed not to act as an unregistered Commodities Trading Advisor in the future. As of March 31, 2020, we have paid all amounts owed to CFTC and no unpaid balance remains. | |
| ● | In April of 2019, we received a Summons and Complaint from Fibernet Corp making claims of unpaid invoices and breach of contracts entered into in February 2012 and January 2015 as RazorData Corp. Without admitting fault or liability, in June of 2019, we entered into an agreement with Fibernet Corp to settle all claims and release us from any future claims in exchange for a payment of $35,160 to avoid ongoing litigation related to this matter. |
NOTE 12 – INCOME TAXES
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company used an effective tax rate of 30% when calculating the deferred tax assets and liabilities and income tax provision below.
| F-24 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
Net deferred tax assets consist of the following components as of March 31, 2020 and 2019:
| 2020 | 2019 | |||||||
| Deferred tax assets: | ||||||||
| NOL carryover | $ | 7,215,400 | $ | 2,363,900 | ||||
| Accrued Payroll | 207,100 | 209,100 | ||||||
| Amortization | 275,700 | 49,100 | ||||||
| Related party accruals | 10,000 | 1,500 | ||||||
| Deferred tax liabilities | ||||||||
| Depreciation | (899,300 | ) | (1,200 | ) | ||||
| Valuation allowance | (6,808,900 | ) | (2,622,400 | ) | ||||
| Total long-term deferred income tax assets | $ | - | $ | - | ||||
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the years ended March 31, 2020 and 2019, due to the following:
| 2020 | 2019 | |||||||
| Book income (loss) | $ | (6,385,600 | ) | $ | (1,493,400 | ) | ||
| Stock for services | 929,600 | 32,800 | ||||||
| Amortization | 38,400 | (33,100 | ) | |||||
| Contingent liability | - | (45,000 | ) | |||||
| Unrealized gain on cryptocurrency | (34,000 | ) | (31,900 | ) | ||||
| Meals and entertainment | 15,900 | 12,400 | ||||||
| Non-cash interest expense | 765,700 | 315,800 | ||||||
| Depreciation | (821,700 | ) | (7,200 | ) | ||||
| Related party accruals | 8,500 | 1,500 | ) | |||||
| Related party accrued payroll | (2,000 | ) | 174,600 | |||||
| Gain on deconsolidation of WG LATAM | (16,100 | ) | - | |||||
| Gain on bargain purchase | - | (291,400 | ) | |||||
| (Gain)/Loss on value of derivative liabilities | (171,400 | ) | 64,300 | |||||
| Stock issued for loan fees | - | 21,000 | ||||||
| Impairment of prepaid paid for with equity | 549,700 | - | ||||||
| Amortization of prepaid paid for with equity | 248,600 | 45,100 | ||||||
| Valuation allowance | 4,874,400 | 1,234,500 | ||||||
| Total long-term deferred income tax assets | $ | - | $ | - | ||||
At March 31, 2020, we had net operating loss carryforwards of approximately $24,051,000 that may be offset against future taxable income for the year 2021 through 2040. However, due to the change in ownership provisions of the Tax Reform Act of 1986, the NOL accumulated prior to the April 1, 2017, acquisition can only offset future income of up to $13,837 per year until expired. Should additional changes in ownership occur, net operating loss carryforwards in future years may be further limited.
No tax benefit from continuing or discontinued operations have been reported in the March 31, 2020, consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
We comply with the provisions of FASB ASC 740 in accounting for our uncertain tax positions. ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, we may recognize the tax benefit from an uncertain tax position only if it is more likely that not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We have determined that we have no significant uncertain tax positions requiring recognition under ASC 740.
| F-25 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
We recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. We had no accruals for interest and tax penalties at March 31, 2020 and 2019.
We do not expect the amount of unrecognized tax benefits to materially change within the next 12 months.
We are required to file income tax returns in the U.S. Federal jurisdiction, in New York State, New Jersey, and in Utah. We are no longer subject to income tax examinations by tax authorities for tax years ending before March 31, 2016. During the year ended March 31, 2020 and 2019 we paid income taxes of $7,383 and $70,768, respectively.
NOTE 13 – SUBSEQUENT EVENTS
Subsequent to March 31, 2020, we received proceeds of $2,091,135 in short-term advances from related parties, $2,000,000 from a short-term promissory note with a related party, and $400,000 from a short-term promissory note with a non-related party. Additionally, we received $505,300 in proceeds from the Paycheck Protection Program as established by the CARES Act, along with an additional $500,000 in proceeds from a loan with the U.S. Small Business Administration.
Subsequent to March 31, 2020, we repurchased 9,079 shares of our common stock from a third party. These shares were immediately canceled. Also subsequent to March 31, 2020 we issued 21,000,000 shares of our common stock for services and compensation.
In accordance with ASC Topic 855, Subsequent Events, we have evaluated subsequent events through the date of this filing and have determined that there are no additional subsequent events that require disclosure.
| F-26 |
Exhibit 23.1
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Joseph Cammarata, certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended March 31, 2020, of Investview, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, and evaluated the effectiveness of our internal control over financial reporting, and printed in this report our conclusions about the effectiveness of our internal control over financial reporting, as of the end of the period covered by this report based on such evaluation;
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
| Dated: June 29, 2020 | |
| /s/ Joseph Cammarata | |
| Joseph Cammarata | |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Jayme L. McWidener , certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended March 31, 2020, of Investview, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, and evaluated the effectiveness of our internal control over financial reporting, and printed in this report our conclusions about the effectiveness of our internal control over financial reporting, as of the end of the period covered by this report based on such evaluation;
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
| Dated: June 29, 2020 | |
| /s/ Jayme L. McWidener | |
| Jayme L. McWidener | |
| Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report on Form 10-K of Investview, Inc. (the “Company”) for the year ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph Cammarata, the Chief Executive Officer, of the Company, do hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: June 29, 2020
| /s/ Joseph Cammarata | |
| Joseph Cammarata | |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report on Form 10-K of Investview, Inc. (the “Company”) for the year ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jayme L. McWidener, the Chief Financial Officer, of the Company, do hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: June 29, 2020
| /s/ Jayme L. McWidener | |
| Jayme L. McWidener | |
| Chief Financial Officer (Principal Financial and Accounting Officer) |