NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Organization
Investview,
Inc. was incorporated on January 30,
1946, under the laws of the state of Utah as
the Uintah Mountain Copper Mining Company. In January 2005, we changed domicile to Nevada and changed our name to Voxpath Holding, Inc.
In September of 2006, we merged with The Retirement Solution Inc. and then changed our name to TheRetirementSolution.Com, Inc.
Subsequently, in October 2008 we changed our name to Global Investor Services, Inc., before changing our name to Investview,
Inc., on March 27, 2012.
Effective
April 1, 2017, we closed on a Contribution
Agreement with the members of Wealth Generators, LLC, a limited liability company (“Wealth Generators”), pursuant to which
the Wealth Generators members contributed 100%
of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942
shares of our common stock. Following this
transaction, Wealth Generators became our wholly owned subsidiary and the former members of Wealth Generators became our stockholders
and controlled the majority of our outstanding common stock.
On
June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former members
of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth Generators
and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption of $419,139
in pre-merger liabilities.
On
February 28, 2018, we filed a name change for Wealth Generators, LLC to Kuvera, LLC (“Kuvera”).
On
July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase its
wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock.
On
December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from the National
Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities Trading Advisor, Commodity
Pool Operator, and approved for over-the-counter FOREX advisory services.
On
January 17, 2019, we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SAFETek, LLC, a Utah limited liability
company.
On
January 11, 2021, we filed a name change for Kuvera, LLC to iGenius, LLC (“iGenius”) and on February 2, 2021, we filed a
name change for Kuvera (N.I.) Limited to iGenius Global LTD.
On
September 20, 2021, the Board of Directors approved a change in our fiscal year from March 31 to December 31.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
Nature
of Business
We
operate a financial technology (FinTech) services company in several different businesses. We deliver multiple products and services
through a direct selling network, also known as multi-level marketing, of independent distributors that offer our products and
services through a subscription-based revenue model to our distributors, as well as by our distributors to a large base of customers
that we refer to as “members”. Through this business, we provide research, education, and investment tools designed to assist
the self-directed investor in successfully navigating the financial markets. These services include research and trade alerts
regarding equities, options, FOREX, ETFs, binary options, and cryptocurrency sector education. In addition to trading
tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings,
budgeting, and proper tax management. Each product subscription includes a core set of trading tools and research along with the personal
finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her
financial situation. In addition to our education subscriptions, through a distribution arrangement we have with a third party, we have
provided our members with an opportunity to purchase through such third party, a specialty form of adaptive digital currency called “ndau”.
Through our direct selling model, we reward our distributors with commissions under a standard bonus plan that allows for discretionary
bonuses based on performance.
We also operate a blockchain technology business
that provides leading-edge research, development, and FinTech services involving the management of digital asset technologies
with a focus on Bitcoin mining and the new generation of digital assets. As well, in order to, among other things, commercialize on the
proprietary trading platform we recently acquired from MPower Trading Systems, LLC, take advantage of the market’s increasing
acceptance and expansion of the ownership and use of digital currencies as an investable asset class, subject to applicable regulatory
limitations, and to proactively respond to increasing regulatory scrutiny relative to cryptocurrency products, we have adopted a
growth plan that contemplates the establishment of a suite of financial service companies that will include self-directed brokerage services,
institutional trade execution services, innovative advisory services (RIA, CTA), and codeless algorithmic trading technologies, which
will operate under our recently formed subsidiary, Investview Financial Group Holdings, LLC (“IFGH”). Towards that end, we
have entered into an agreement to acquire the LevelX brokerage firm from an affiliate of the former Chief Executive Officer of the Company.
However, the closing of that transaction is contingent upon securing FINRA approval which has not yet been obtained. If FINRA approval
is not shortly forthcoming, we are likely to abandon the LevelX acquisition and search for alternative acquisitions within the brokerage
industry. Further, our wholly owned subsidiary, SAFE Management, LLC (“SAFE Management”), owns a currently dormant registered
investment advisor and a commodity trading advisor registered with the National Futures Association (NFA). However, we plan to relaunch
its services under the IFGH umbrella in 2022 to primarily focus on commodities and FOREX.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of 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. Prior to September 20, 2021 we operated the Company on a March 31, fiscal year end. Effective September
30, 2021 we changed our fiscal year to December 31.
Principles
of Consolidation
The
consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC (formerly
Kuvera, LLC), Kuvera France S.A.S (through its closure date in June of 2021), Apex Tek, LLC (formerly Razor Data, LLC), SAFETek, LLC
(formerly WealthGen Global, LLC), S.A.F.E. Management, LLC, United Games, LLC, United League, LLC, Investment Tools & Training, LLC,
iGenius Global LTD (formerly Kuvera (N.I.) LTD), Investview Financial Group Holdings, LLC, and Investview MTS, LLC. All intercompany
transactions and balances have been eliminated in consolidation.
Financial
Statement Reclassification
Certain
account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.
Use
of Estimates
The
preparation of these financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ
from those estimates.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
Foreign
Exchange
We
have consolidated the accounts of Kuvera France S.A.S. into our consolidated financial statements. The operations of Kuvera France S.A.S.
were conducted in France through its closure date in June of 2021 and its functional currency is the Euro. Subsequent to June 2021 we
maintained a Euro bank account in France that had minimal transactions.
Prior
to June 2021, the financial statements of Kuvera France S.A.S. were prepared using their functional currency and were translated into
U.S. dollars (“USD”). Assets and liabilities were translated into USD at the applicable exchange rates at period-end. Stockholders’
equity was translated using historical exchange rates. Revenue and expenses were translated at the average exchange rates for the period.
Any translation adjustments were included as foreign currency translation adjustments in accumulated other comprehensive income in our
stockholders’ equity (deficit).
Subsequent
to June 2021, we translated all transactions in our Euro bank account into USD and translated the ending bank balance into USD at the
applicable exchange rate at period-end.
The
following rates were used to translate the accounts of Kuvera France S.A.S. and our Euro bank account into USD at the following balance
sheet dates.
SCHEDULE OF EXCHANGE RATES
| |
|
December 31, 2021 | | |
|
March 31, 2021 | |
Euro to USD | |
| 1.1371 | | |
| 1.17260 | |
The
following rates were used to translate the accounts of Kuvera France S.A.S. and the activity from our Euro bank account into USD for
the following operating periods:
| |
|
Nine Months ended December 31, 2021 | | |
|
Year ended March 31, 2021 | |
Euro to USD | |
| 1.1757 | | |
| 1.16719 | |
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 December 31, 2021 and March 31, 2021, cash balances that exceeded FDIC limits were $19,336,350 and $5,140,796,
respectively. We have not experienced significant losses relating to these concentrations in the past.
Cash
Equivalents and Restricted Cash
For
purposes of reporting cash flows, we consider all highly liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents. As of December 31, 2021 and March 31, 2021, we had no cash equivalents.
The
following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to
the total of the same such amounts shown in the statement of cash flows.
SCHEDULE OF RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
| |
|
December 31, 2021 | | |
|
March 31, 2021 | |
Cash and cash equivalents | |
$ | 30,995,283 | | |
$ | 5,389,654 | |
Restricted cash, current | |
| 819,338 | | |
| 498,020 | |
Restricted cash, long term | |
| 802,285 | | |
| 774,153 | |
Total cash, cash equivalents, and restricted cash shown on the statement of cash flows | |
$ | 32,616,906 | | |
$ | 6,661,827 | |
Amount
included in restricted cash represent funds required to be held in an escrow account by a contractual agreement and will be used for
paying dividends to our Series B Preferred Stockholders.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
Receivables
Receivables
are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of
all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and
receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. We
had an allowance for doubtful accounts of $719,342 and $0 as of December 31, 2021 and March 31, 2021, respectively.
Fixed
Assets
Fixed
assets are stated at cost and depreciated using the straight-line method over their estimated useful lives. When retired or otherwise
disposed, the carrying value and accumulated depreciation of the fixed asset is removed from its respective accounts and the net difference
less any amount realized from disposition, is reflected in earnings. Expenditures for maintenance and repairs which do not extend the
useful lives of the related assets are expensed as incurred.
As
of December 31, 2021 and March 31, 2021 fixed assets were made up of the following:
SCHEDULE OF FIXED ASSETS
| |
Estimated | | |
| | |
| |
| |
Useful | | |
| | |
| |
| |
Life | | |
| | |
| |
| |
(years) | | |
December 31, 2021 | | |
March 31, 2021 | |
Furniture, fixtures, and equipment | |
| 10 | | |
$ | 82,942 | | |
$ | 12,792 | |
Computer equipment | |
| 3 | | |
| 15,241 | | |
| 22,528 | |
Leasehold improvements | |
| Remaining Lease Term | | |
| 40,528 | | |
| - | |
Data processing equipment | |
| 3 | | |
| 10,638,619 | | |
| 8,310,739 | |
Construction in progress | |
| N/A | | |
| 391,583 | | |
| - | |
| |
| | | |
| 11,168,913 | | |
| 8,346,059 | |
Accumulated depreciation | |
| | | |
| (4,486,036 | ) | |
| (2,485,269 | ) |
Net book value | |
| | | |
$ | 6,682,877 | | |
$ | 5,860,790 | |
Total
depreciation expense for the nine months ended December 31, 2021 and the year ended March 31, 2021, was $2,271,224 and $2,256,643, respectively,
all of which was recorded in our general and administrative expenses on our statement of operations. During the nine months ended December
31, 2021 we sold assets with a total net book value of $2,899 for cash of $15,826, therefore recognized a gain on disposal of assets
of $12,927.
Long-Lived
Assets – Cryptocurrencies, Intangible Assets & License Agreement
We
account for our cryptocurrencies, intangible assets and long-term license agreement in accordance with Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill,
and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-30 requires assets to be
measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more
clearly evident and, thus, more reliably measurable. Our cryptocurrencies are deemed to have an indefinite useful life; therefore,
amounts are not amortized, but rather are assessed for impairment as further discussed in our impairment policy. Under ASC Subtopic
350-30 any intangible asset with a useful life is required to be amortized over that life and the useful life is to be evaluated every
reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate
of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining
useful life. Costs of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
We
hold cryptocurrency-denominated assets and include them in our consolidated balance sheet as other assets. The value of our cryptocurrencies
as of December 31, 2021 and March 31, 2021 were $2,141,093 ($2,018,324 current and $122,769 restricted long term) and $4,774,478 ($4,679,256
current and $95,222 restricted long term), respectively. Cryptocurrencies purchased or received for payment from customers are recorded
in accordance with ASC 350-30 and cryptocurrencies awarded to the Company through its mining activities ($23,056,457 for the nine months
ended December 31, 20216 and $16,201,008 for the year ended March 31, 2021) are accounted for in connection with the Company’s
revenue recognition policy. The use of cryptocurrencies is accounted for in accordance with the first in first out method of accounting.
For the nine months ended December 31, 2021 and the year ended March 31, 2021 we recorded realized gains on our cryptocurrency transactions
of $1,291,082 and $954,667, respectively.
In
June of 2018 we purchased United Games, LLC and United League, LLC and recorded the transaction as a business combination. Intangible
assets acquired in the business combination were recorded at fair value on the date of acquisition and were being amortized on a straight-line
method over their estimated useful lives. Amortization expense for the year ended March 31, 2021 was $158,444, and the intangible assets
were impaired during the year ended March 31, 2021.
On March 22, 2021, we entered into Securities Purchase Agreement to acquire the
operating assets and intellectual property rights of MPower Trading Systems LLC, a company controlled and partially owned by David
B. Rothrock and James R. Bell, two of our board members (see NOTE 12). As a result, we obtained Prodigio, a proprietary
software-based trading platform with applications within the brokerage industry, which was valued at $7,240,000
and recorded on our balance sheet as an intangible asset. The intangible asset will have a definite life, however, as of the date of
this filing the software has not yet been placed in service, therefore a useful life had not yet been determined and no amortization
was recorded during the year ended December 31, 2021.
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.
During
the nine months ended December 31, 2021 we impaired computer equipment with a cost basis of $14,661 and we impaired data processing equipment
with a cost basis of $392,500 due to disposals. We had recorded accumulated depreciation for the impaired assets of $266,928 through
the date of disposal, therefore we recorded $140,233 as impairment expense during the period.
During
the year ended March 31, 2021 we impaired computer equipment with a cost basis of $1,609, we impaired data processing equipment with
a cost basis of $84,940, and we fully impaired our intangible assets with a cost basis of $991,000 due to disposals and the lack of recoverability.
We had recorded accumulated depreciation and accumulated amortization of $476,466 for the impaired assets through the date of impairment,
therefore we recorded impairment expense of $601,083 for the year ended March 31, 2021.
Fair
Value of Financial Instruments
Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, based on our principal or, in the absence of a principal, most advantageous market for the
specific asset or liability.
U.S.
generally accepted accounting principles provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value,
defined as follows:
|
Level
1: |
Inputs
that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access. |
|
|
|
|
Level
2: |
Inputs
other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for
substantially the full term of the asset or liability, including: |
|
|
- |
quoted
prices for similar assets or liabilities in active markets; |
|
|
- |
quoted
prices for identical or similar assets or liabilities in markets that are not active; |
|
|
- |
inputs
other than quoted prices that are observable for the asset or liability; and |
|
|
- |
inputs
that are derived principally from or corroborated by observable market data by correlation or other means. |
|
Level
3: |
Inputs
that are unobservable and reflect management’s own assumptions about the inputs market participants would use in pricing the
asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding
the timing and amount of expected cash flows). |
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
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.
Items
recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following
items as of December 31, 2021:
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS
| |
|
Level 1 | | |
|
Level 2 | | |
|
Level 3 | | |
|
Total | |
Total Assets | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | | |
| | |
Derivative liability | |
$ | - | | |
$ | - | | |
$ | 69,371 | | |
$ | 69,371 | |
Total Liabilities | |
$ | - | | |
$ | - | | |
$ | 69,371 | | |
$ | 69,371 | |
Items
recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following
items as of March 31, 2021:
| |
|
Level 1 | | |
|
Level 2 | | |
|
Level 3 | | |
|
Total | |
Total Assets | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | | |
| | |
Derivative liability | |
$ | - | | |
$ | - | | |
$ | 307,067 | | |
$ | 307,067 | |
Total Liabilities | |
$ | - | | |
$ | - | | |
$ | 307,067 | | |
$ | 307,067 | |
Sale
and Leaseback
Through
our wholly owned subsidiary, APEXTek, LLC, we sold high powered data processing equipment (“APEX”) to our customers
and they leased the equipment back to SAFETek, LLC, another of our wholly owned subsidiaries, on terms sufficient for the customers to
recover their investment and an agreed upon return on their investment. Included in the now discontinued Apex sale and leaseback program
was a total protection plus (“TPP”) program administered and managed by a third-party provider, an affiliate of a global
insurance brokerage firm. According to marketing and legal documents provided by the third-party provider, the TPP program would function
as a supplemental financial guaranty by providing the Apex program customers with protection for the purchase price of such equipment,
which could be redeemed by the customer by exercising an option for a cash payout to be paid by the third-party provider after a certain
period of time, either 5 or 10 years.
We
accounted for these transactions under ASC 842-40 where the leaseback has been deemed a sales-type lease due to the lease term generally
covering the entire economic life of the equipment and our likelihood to purchase the asset at the end of the lease term. In accordance
with ASC 842-40 we recorded the data processing equipment as a fixed asset on our balance sheet and we accounted for the amounts received
for the equipment as a financial liability, in other liabilities on our balance sheet. Further, we recognized interest on the financial
liability over the term of the lease to ensure the financial liability equates to the total amounts to be paid over the life of the lease.
On
June 30, 2020, we temporarily discontinued the APEX program to assess the delays, audit the transaction and determine our ability to
meet the lease commitments. The assessment took place in July and August and indicated we would not be able to meet the APEX lease obligations
and would be in default to the lease holders. In
September 2020, our board of directors voted to approve a buyback program wherein all APEX purchasers were offered a 48-month promissory
note to provide for an agreed-upon return of their purchase price in exchange for cancellation of the lease and our purchase of
all rights and obligations under the lease. As
a result of the buyback program, we were able to enter into notes with third parties totaling $19,089,500
(see NOTE 6) and notes with related parties of
$237,720
(see NOTE 5) in exchange for $474,155
worth of customer advances on the APEX leases
and $22,889,331
of the net APEX lease liability (see table below).
The exchange resulted in a gain on settlement of debt of $117,805
with related parties, recorded as contributed
capital (see NOTE 9) and a gain on settlement of debt of $3,858,462
with third parties, recorded on our income statement
for the year ended March 31, 2021.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
During
the year ended March 31, 2021 we had the following activity related to our sale and leaseback transactions:
SUMMARY OF ACTIVITY RELATED TO SALE AND LEASEBACK TRANSACTIONS
| |
Total Financial Liability | | |
Contra-Liability | | |
Net Financial Liability | | |
Current [1] | | |
Long Term | |
Balance as of March 31, 2020 | |
$ | 53,828,000 | | |
$ | (38,535,336 | ) | |
$ | 15,292,664 | | |
$ | 11,407,200 | | |
$ | 3,885,464 | |
Proceeds from sales of APEX | |
| 5,001,623 | | |
| - | | |
| 5,001,623 | | |
| | | |
| | |
Interest recorded on financial liability | |
| 8,348,378 | | |
| (8,348,378 | ) | |
| - | | |
| | | |
| | |
Payments made for leased equipment | |
| (2,145,900 | ) | |
| - | | |
| (2,145,900 | ) | |
| | | |
| | |
Interest expense | |
| - | | |
| 4,740,944 | | |
| 4,740,944 | | |
| | | |
| | |
Lease buyback and cancellation | |
| (65,032,101 | ) | |
| 42,142,770 | | |
| (22,889,331 | ) | |
| | | |
| | |
Balance as of March 31, 2021 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
[1] |
Represented lease payments that were to be made in the subsequent
12 months. |
Revenue
Recognition
Subscription
Revenue
Most
of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue
in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized
when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed
subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion
of the subscription period subsequent to each reporting date. Additionally, we offer a designated trial period to first time subscription
customers, during which a full refund can be requested if a customer does not wish to continue with the subscription. Revenues
are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds,
sales incentives, credits, and known and estimated credit card chargebacks. As of December 31, 2021 and March 31, 2021 our deferred revenues
were $3,288,443 and
$1,561,188,
respectively.
Mining
Revenue
Through
our wholly owned subsidiary, SAFETek, LLC, we leased equipment under a sales-type lease through June of 2020. In June of 2020 we cancelled
all leases and purchased all of the rights and obligations under the leases, which included obtaining ownership of all equipment. We
use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”).
As compensation for mining we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted
to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor
do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted
to us as a result of our mining activities.
Cryptocurrency
Revenue
We
generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with third-party suppliers. The various
packages include different amounts of coin with differing rates of returns and terms and, in some cases, include a product protection
option that allows the purchaser to protect their initial purchase price. The protection allows the purchaser to obtain 50% of their
purchase price at five years or 100% of their purchase price at ten years. Both the coin and the protection option are delivered by third-party
suppliers.
We
recognize cryptocurrency revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract
with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to
arrange for the third-parties to provide coin and protection (if applicable) to our customers and payment is received from our customers
at the time of order placement. All customers are given two weeks to request a refund, therefore we record a customer advance on our
balance sheet upon receipt of payment. After the two weeks have passed from order placement, we request our third-party suppliers to
deliver coin and protection (if applicable), at which time we recognize revenue and the amounts due to our suppliers on our books. As
of December 31, 2021 and March 31, 2021 our customer advances related to cryptocurrency revenue were $75,702 and $2,067,313, respectively.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
Fee
Revenue
We
generate fee revenue from our customers through SAFE Management, our subsidiary licensed as a Registered Investment Advisor and Commodities
Trading Advisor. We recognize fee revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified
in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation
is to deliver fully managed trading services to individuals who do not meet the requirements of Qualified Investors and who lack the
time to trade for themselves. We recognize fee revenue as our performance obligation is met and we receive payment for such advisory
fees in the month following recognition.
Revenue
generated for the nine months ended December 31, 2021, was as follows:
SCHEDULE OF REVENUE GENERATED
Foreign
revenues for the nine months ended December 31, 2021 were approximately $41.3
million while domestic revenue for the nine months
ended December 31, 2021 was approximately $30.9
million.
Foreign
revenues for the year ended March 31, 2021 were approximately $20.3 million while domestic revenue for the year ended March 31, 2021
was approximately $18.0 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 9 months ended December 31, 2021
and the year ended March 31, 2021, totaled $46,662 and $891,198, respectively.
Cost
of Sales and Service
Included
in our costs of sales and services is amounts paid to our trading and market experts that provide financial education content and tools
to our subscription customers and hosting fees that we pay to vendors to set up our mining equipment at third-party sites in order to
generate mining revenue. Costs of sales and services for the 9 months ended December 31, 2021 and the year ended March 31, 2021, totaled
$6,107,358 and $7,591,019, 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.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
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.
Diluted income (loss) per share reflects the potential dilution that could occur if stock options or other contracts to issue common
stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share
are excluded from the calculation.
As of December 31, 2021 basic and diluted income
per share were the same, as all securities had an antidilutive effect, therefore 851,048,640 securities were excluded from the dilutive
income per common share calculation (463,210 for warrants, 604,069,975 for convertible notes, and 246,545,455 for Class B Redeemable
Units of subsidiary).
As
of March 31, 2021 basic and diluted income per share were the same, as all securities had an antidilutive effect, therefore 549,705,748
securities were excluded from the dilutive income per common share calculation (766,585 for warrants and 548,939,163 for convertible
notes).
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.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS
In
August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. ASU 2020-06,
Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s
Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies
the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and
contracts on an entity’s own equity. Under current GAAP, there are five accounting models for convertible debt instruments. ASU
2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments
with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present in equity
an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible
preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features
that require bifurcation as a derivative under ASC 815 or (2) a convertible debt instrument was issued at a substantial premium. Additionally,
for convertible debt instruments with substantial premiums accounted for as paid-in capital, the FASB decided to add disclosures about
(1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium
amount recorded as paid-in capital. ASU 2020-06 will be effective for public business entities that meet the definition of a Securities
and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal
years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments
are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption
is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.
The Company is currently evaluating the potential impact of the adoption of this accounting pronouncement to its financial statements.
We
have noted no other recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have
a material impact on our financial statements.
NOTE
4 – LIQUIDITY
Our
financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates the
realization of assets and liquidation of liabilities in the normal course of business.
During
the nine months ended December 31, 2021 we raised $1,300,000
in cash proceeds from related parties and $2,441,725
in cash proceeds from the sale of preferred stock.
Additionally, we reported $27,651,343
in cash provided by operating activities.
During the nine months ended December 31, 2021 we reported a net loss of $29,172,420, however, this was a result of a one-time non-cash
charge of $51,619,440 arising from the issuance of Class B Redeemable Units in one of our subsidiaries (see NOTE 12). This non-cash charge
had no impact on our cash flow or our liquidity and capital resources and related purely to the value imbalance determined for accounting
purposes between the appraised value of the Class B Redeemable Units versus the appraised value of the assets acquired. Excluding the
non-cash charge, we recorded $23,244,205 of
income from operations and net income of $22,447,020.
As of December 31, 2021 we have cash and cash
equivalents of $30,995,283 and
a working capital balance of $23,147,213.
As of December 31, 2021 our unrestricted cryptocurrency balance was reported at a cost basis of $2,018,324.
Management does not believe there are any liquidity issues as of December 31, 2021.
NOTE
5 – RELATED PARTY TRANSACTIONS
Our
related party payables consisted of the following:
SCHEDULE OF RELATED PARTY PAYABLES
| |
|
December 31, 2021 | | |
|
March 31, 2021 | |
Convertible Promissory Note entered into on 4/27/20, net of debt discount of $1,082,147
as of December 31, 2021 [1] | |
$ | 239,521 | | |
$ | 120,318 | |
Convertible Promissory Note entered into on 5/27/20, net of debt discount
of $587,521
as of December 31, 2021 [2] | |
| 124,149 | | |
| 59,525 | |
Convertible Promissory Note entered into on 11/9/20, net of debt discount
of $1,143,519
as of December 31, 2021 [3] | |
| 198,187 | | |
| 53,414 | |
Accounts payable – related party [4] | |
| - | | |
| 60,000 | |
Notes for APEX lease buyback [5] | |
| - | | |
| 43,000 | |
Promissory note entered into on 12/15/20, net of debt discount of $259,678
as of December 31, 2021 [6] | |
| 80,322 | | |
| 125,838 | |
Convertible Promissory Note entered into on 3/30/21, net of debt discount
of $1,131,417
as of December 31, 2021 [7] | |
| 476,670 | | |
| 4,459 | |
Working Capital Promissory Note entered into on 3/22/21
[8] | |
| 1,200,607 | | |
| - | |
Total related-party debt | |
| 2,319,456 | | |
| 466,554 | |
Less: Current portion | |
| (1,832,642 | ) | |
| (233,258 | ) |
Related-party debt, long term | |
$ | 486,814 | | |
$ | 233,296 | |
[1] |
On
April 27, 2020 we received proceeds of $1,300,000 from DBR Capital, LLC, an entity controlled by a member of our Board of Directors,
and entered into a convertible promissory note. The note is secured by shares held by officers and majority shareholders of the Company.
The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. Per the original
terms of the agreement the note was convertible into common stock at a conversion price of $0.01257 per share, which was amended
on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded a beneficial conversion feature
and debt discount of $1,300,000 (see NOTE 9). During the year ended March 31, 2021 we recognized $120,318 of the debt discount into
interest expense as well as expensed an additional $241,225 of interest expense on the note, all of which was repaid during the period.
During the nine months ended December 31, 2021 we recognized $97,536 of the debt discount into interest expense as well as expensed
an additional $195,012 of interest expense on the note, of which $173,344 was repaid during the period, leaving $21,668 of accrued
interest in the balance shown here. |
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
[2] |
On
May 27, 2020 we received proceeds of $700,000 from DBR Capital, LLC, an entity controlled by a member of our Board of Directors,
and entered into a convertible promissory note. The note is secured by shares held by officers and majority shareholders of the Company.
The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. Per the original
terms of the agreement the note was convertible into common stock at a conversion price of $0.01257 per share, which was amended
on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded a beneficial conversion feature
and debt discount of $700,000 (see NOTE 9). During the year ended March 31, 2021 we recognized $59,525 of the debt discount into
interest expense as well as expensed an additional $118,616 of interest expense on the note, all of which was repaid during the period.
During the nine months ended December 31, 2021 we recognized $52,954 of the debt discount into interest expense as well as expensed
an additional $105,003 of interest expense on the note, of which $93,333 was repaid during the period, leaving $11,669 of accrued
interest in the balance shown here. |
|
|
[3] |
On
November 9, 2020 we received proceeds of $1,300,000
from DBR Capital, LLC, an entity controlled by a member of our Board of Directors, and entered into a convertible promissory note. The note is secured by
shares held by officers and majority shareholders of the Company. The note bears interest at 25%
interest rate per annum and carries a facility fee of 13.5%
per annum, payable monthly beginning February 1, 2021, and the principal is due and payable on April
27, 2030. Per the terms of the agreement the note is convertible into common stock at a conversion price of $0.007
per share. At inception we recorded a beneficial conversion feature and debt discount of $1,300,000
(see NOTE 9). During the year ended March 31, 2021 we recognized $53,414
of the debt discount into interest expense as well as expensed an additional $198,601
of interest expense on the note, all of which was repaid during the period. During the nine months ended December 31, 2021 we recognized $103,067
of the debt discount into interest expense as well as expensed an additional $375,372 of
interest expense on the note, of which $333,667
was repaid during the period, leaving $41,706
of accrued interest in the balance shown here. |
|
|
[4] |
During
the year ended March 31, 2021 we repurchased 106,000,000 shares of our common stock from CR Capital Holdings, LLC, a shareholder
that, at the time, owned over 10% of our outstanding stock, for $120,000 (see NOTE 9). We agreed to pay $10,000 per month for the
repurchase, therefore during the year ended March 31, 2021 we repaid $60,000 of the debt and during the nine months ended December
31, 2021 we repaid $60,000 to pay the debt in full. |
|
|
[5] |
During
the year ended March 31, 2020 we sold 83 APEX units to related parties for proceeds of $182,720, $100,000 of which was offset against
short term advances that has been provided to us. Under the same terms of all other APEX unit sales, the 83 units were to pay out
$500 per month for 60 months, resulting in a total amount to be repaid of $2,490,000. During the year ended March 31, 2020 we made
238 lease payments to these related parties, or $119,000, reducing the total amount to be repaid to $2,371,000 as of March 31, 2020.
During the year ended March 31, 2021 we made $126,100 worth of lease payments to related parties. In September of 2020 we initiated
the APEX buyback program and agreed to pay our related parties $237,720 in exchange for all rights and obligations under the APEX
lease (see NOTE 2). At the time of the buyback the liability owed to related parties was $355,525, which was equal to a total liability
of $2,244,900 offset by a contra-liability of $1,889,375, thus we recorded a gain on the extinguishment of debt of $117,805 as contributed
capital (see NOTE 9). After the buyback, during the year ended March 31, 2021 we repaid our related parties $112,720 in cash and
extinguished $82,000 of the amount owed with the issuance of BTC. During the nine months ended December 31, 2021 we repaid our related
parties $12,000 in cash and extinguished $31,000 of the amount owed with the issuance of BTC to pay the debt in full. |
|
|
[6] |
On
December 15, 2020 we received proceeds of $154,000
from Wealth Engineering,
an entity controlled by members of our management team and Board of Directors, and entered into a promissory note for $600,000.
The term of the note requires monthly repayments of $20,000
per month for 30
months. At inception we
recorded a debt discount of $446,000
representing the difference
between the cash received and the total amount to be repaid. During the year ended March 31, 2021 we recognized $51,838
of the debt discount into
interest expense and made four monthly repayments totaling $80,000.
During the nine months ended December 31, 2021 we recognized $134,485
of the debt discount into
interest expense and made nine monthly repayments totaling $180,000.
Subsequent to December 31, 2021 we repaid this note in full (see NOTE 13). |
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
[7] |
Effective
March 30, 2021 we restructured a $1,000,000
promissory note with $200,000
of accrued interest, along
with a $350,000
short-term advance, with
Joseph Cammarata, our then Chief Executive Officer. The new note (the “Cammarata Note”) had a principal balance
of $1,550,000,
was given a 5%
interest rate, and was convertible at $0.02
per share. As a result
of the fixed conversion price we recorded a beneficial conversion feature and debt discount of $1,550,000
(see NOTE 9), which was
equal to the face value of the note. During the year ended March 31, 2021 we recognized $4,247
of the debt discount into
interest expense as well as expensed $212
of interest expense on
the new debt. Effective September 21, 2021 we entered into an amendment to the Cammarata note to extend the due date to September
30, 2022, allow for partial conversions, and change the conversion price to $0.008
per share. As the terms
of the note changed substantially, we accounted for the amendment as an extinguishment and new note. Through September 21, 2021 we
recognized $738,904
of the initial debt discount
into interest expense, removed $806,849
of the remaining debt
discount from the books, recorded a beneficial conversion feature due to the fixed conversion price and a debt discount of $1,550,000,
which was equal to the face value of the amended note, and recorded a net $743,151
into additional paid in
capital as a gain due to the extinguishment transaction being between related parties and thus a capital transaction (see NOTE 9).
From September 21, 2021, the date of the amendment and through December 31, 2021 we recognized $418,583
of the $1,550,000
debt discount into interest
expense. Also, during the nine months ended December 31, 2021 we expensed $57,874
of interest expense on
the debt, resulting in an accrued interest balance of $58,086
as of December 31, 2021.
During February 2022, we provided 30 days’ notice of our intent to retire and repay the Cammarata Note in cash. Having not
timely received a properly executed conversion notice within the proscribed period, and citing certain other damages incurred by
us arising from Mr. Cammarata’s legal proceedings, on or about March 31, 2022, we tendered to Mr. Cammarata cash payment in
full for the Cammarata Note. As of the date of this Report, Mr. Cammarata has not yet accepted our tender of the cash payment, and
instead has asserted his entitlement to exercise his right to convert the Cammarata Note into our common shares (see NOTE 13). |
|
|
[8] |
On
March 22, 2021, we entered into Securities Purchase Agreements to purchase 100%
of the operating assets of SSA Technologies LLC, an entity that owns and operates a FINRA-registered broker-dealer.
SSA is controlled and partially owned by Joseph Cammarata, our former Chief Executive Officer. Commencing upon execution of the agreements
and through the closing of the transactions, we agreed to provide certain transition service arrangements to SSA. In connection with
the transactions, we entered into a Working Capital Promissory Note with SSA under which SSA was to have advanced to us up to
$1,500,000
before the end of 2021; however,
SSA has only provided advances of $1,200,000 to date. The note bears interest at the rate of 0.11%
per annum therefore we recognized $607 worth of interest expense on the loan during the nine months ended December 31, 2021. The note
was due and payable by January 31, 2022; however, has not yet been repaid as we consider our legal options in light of SSA’s failure
to complete its funding obligations. The note was to have been secured by the pledge of 12,000,000
shares of our common stock;
however, it remains unsecured as the pledge of shares was not implemented at the closing of the loan. |
In
addition to the above related party debt transactions that were outstanding as of December 31, 2021 and March 31, 2021, during the nine
months ended December 31, 2021 we obtained a short-term advance of $100,000 from Wealth Engineering, an entity controlled by Mario Romano
and Annette Raynor, former members of our management team and Board of Directors, and repaid the amount in full.
In
addition to the above-mentioned related-party lending arrangements, during the year ended March 31, 2021 we sold cryptocurrency packages
to related parties for gross proceeds of $300,000, of which $100,000 was purchased by family members of Mario Romano, our former Director
of Finance and former director, $100,000 was purchased by The Financial University, LLC (“TFU”), an entity owned by the children
of Mario Romano, our former Director of Finance and former director, and Annette Raynor, our former Chief Operations Officer and former
director, and $100,000 was purchased by Gravitas Holdings, LLC (“Gravitas”), an entity owned by the spouse of Annette Raynor.
Also during the year ended March 31, 2021, we paid related parties $916,125 worth of commissions on the sales of our products. Of the
$916,125 in commissions, $402,900 was paid to TFU, $259,728 was paid to Fidelis Funds, an entity owned by the spouse of Annette Raynor,
$196,796 was paid to Kays Creek, an entity owned by Ryan Smith and Chad Miller, our former founders, officers, and directors, $12,500
was paid to Ryan Smith, and $44,200 was paid to the children of Mario Romano and Annette Raynor.
In
addition to the above-mentioned related-party lending arrangements, during the nine months ended December 31, 2021 we sold
cryptocurrency packages to related parties for gross proceeds of $1,000 to
Gravitas and we paid related parties $2,289,969 worth
of commissions on the sales of our products. Of the $2,289,969 in
commissions, $1,750,860 was
paid to TFU, $200,947 was
paid to Fidelis Funds, $311,163 was
paid to Marketing Mavens, LLC, an entity owned by the spouse of Annette Raynor, and $27,000 was
paid to the children of Mario Romano and Annette Raynor. Also during the nine months ended December 31, 2021, we paid consulting
fees to Wealth Engineering, LLC, an entity owned by Mario Romano and Annette Raynor, of $245,450,
and made dividend payments to the children of Mario Romano of $4,323.
We also paid expenses of MPower and SSA in the amounts of $251,405 and
$197,523,
respectively, under the terms of the Security Purchase Agreements entered into on March 22, 2021 and we closed on the acquisition of
MPower’s net assets on September 3, 2021 (see NOTE 12). We also recorded 59,999,999 shares
as forfeited (see NOTE 9) as a result of 1) our Chief Accounting Officer returning 6,666,666 shares
to the Company prior to their vesting date and 2) Joseph Cammarata, Mario Romano, and Annette Raynor, three former members of
our management team and Board of Directors, that resigned from their positions with the Company; thus losing their
rights to 53,333,333 shares
that were to have vested upon the annual anniversaries of their award grant date, had they still been directors at
such a date. As a result of the forfeitures, we reversed previously recognized compensation cost of $163,982 during
the nine months ended December 31, 2021. Also during the nine months ended December 31, 2021, 12,998,630 shares were
surrendered by members of our then Board of Directors in exchange for our agreement to cover $519,945 in
tax withholdings (see NOTE 9).
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
NOTE
6 – DEBT
Our
debt consisted of the following:
SCHEDULE OF DEBT
| |
December 31, 2021 | | |
March 31, 2021 | |
Short-term advance received on 8/31/18 [1] | |
$ | - | | |
$ | 5,000 | |
Note issued under the Paycheck Protection Program on 4/17/20 [2] | |
| - | | |
| 510,118 | |
Loan with the U.S. Small Business Administration dated 4/19/20 [3] | |
| 531,798 | | |
| 517,671 | |
Long term notes for APEX lease buyback [4] | |
| 10,870,861 | | |
| 14,795,145 | |
Total debt | |
| 11,402,659 | | |
| 15,827,934 | |
Less: Current portion | |
| 2,947,013 | | |
| 3,143,513 | |
Debt, long term portion | |
$ | 8,455,646 | | |
$ | 12,684,421 | |
[1] |
In August 2018, we received a $75,000 short-term advance. The advance was due on demand, had no interest rate, and was unsecured. During the nine months ended December 31, 2021 we made repayments of $5,000 to repay the debt in full. |
|
|
[2] |
In
April 2020 we received $505,300 in proceeds from the Paycheck Protection Program as established by the CARES Act as a result of a
Note entered into with the U.S. Small Business Administration (“SBA”). The note had an interest rate of 1% and was to
mature on April 1, 2022. Under the Note we were required to make monthly payments beginning November 1, 2020, however, the SBA extended
the deferral period to 10 months and prior to the payments coming due we applied for loan forgiveness with the SBA, which was approved
in November 2021. Accordingly, during the nine months ended December 31, 2021 we recognized a gain on debt extinguishment of $505,300
for principal and $7,351 for accrued interest. |
|
|
[3] |
In
April 2020 we received proceeds of $500,000 from a loan entered into with the U.S. Small Business Administration. Under the terms
of the loan interest is to accrue at a rate of 3.75% per annum and installment payments of $2,437 monthly will begin twelve months
from the date of the loan, with all interest and principal due and payable thirty years from the date of the loan. During the nine
months ended December 31, 2021 we recorded $14,127 worth of interest on the loan. |
|
|
[4] |
During
the year ended March 31, 2021 we entered into notes with third parties for $19,089,500 in exchange for the cancellation of APEX leases
previously entered into, which resulted in our purchase of all rights and obligations under the leases (see NOTE 2). We agreed to
settle a portion of the debt during the year ended March 31, 2021, at a discount to the original note terms offered, by making lump
sum payments, issuing 48,000,000 shares of our common stock (see NOTE 9), issuing 49,418 shares of our preferred stock (see NOTE
9), and issuing cryptocurrency. The remaining notes are all due December 31, 2024 and have a fixed monthly payment that is equal
to 75% of the face value of the note, divided by 48 months. The monthly payments began the last day of January 2021 and continue
until December 31, 2024 when the last monthly payment will be made, along with a balloon payment equal to 25% of the face value of
the note, to extinguish the debt. During the nine months ended December 31, 2021 we repaid a portion of the debt with cash payments
of $892,583 and issuances of cryptocurrency valued at $3,036,701. |
NOTE
7 – DERIVATIVE LIABILITY
During
the nine months ended December 31, 2021 and the year ended March 31, 2021, we had the following activity in our derivative liability
account:
SCHEDULE OF DERIVATIVE LIABILITY
| |
Debt | | |
Warrants | | |
Total | |
Derivative liability at March 31, 2020 | |
$ | 793,495 | | |
$ | - | | |
$ | 793,495 | |
Derivative liability recorded on new instruments (see NOTE 9) | |
| - | | |
| 89,075 | | |
| 89,075 | |
Derivative liability extinguished with notes settled | |
| (468,941 | ) | |
| - | | |
| (468,941 | ) |
Change in fair value | |
| (324,554 | ) | |
| 217,992 | | |
| (106,562 | ) |
Derivative liability at March 31, 2021 | |
| - | | |
| 307,067 | | |
| 307,067 | |
Derivative liability recorded on new instruments (see NOTE 9) | |
| - | | |
| 127,520 | | |
| 127,520 | |
Derivative extinguished with warrant exercise (see NOTE 9) | |
| - | | |
| (12,285 | ) | |
| (12,285 | ) |
Change in fair value | |
| - | | |
| (352,931 | ) | |
| (352,931 | ) |
Derivative liability at December 31, 2021 | |
$ | - | | |
$ | 69,371 | | |
$ | 69,371 | |
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
We
use the binomial option pricing model to estimate fair value for those instruments convertible into common stock, at inception, at conversion
or settlement date, and at each reporting date. During the nine months ended December 31, 2021 and the year ended March 31, 2021, the
assumptions used in our binomial option pricing model were in the following range:
SCHEDULE OF ASSUMPTIONS USED IN BINOMINAL OPTION PRICING MODEL
| |
| Nine Months Ended December 31, 2021 | | |
| Year Ended March 31, 2021 |
| |
| Debt | | |
| Warrants | | |
| Debt | | |
| Warrants | |
Risk free interest rate | |
| N/A | | |
| 0.79% - 1.26 | % | |
| 0.11%
- 0.17 | % | |
| 0.21%
- 0.92 | % |
Expected life in years | |
| N/A | | |
| 3.58 – 5.00 | | |
| 0.80 - 1.11 | | |
| 4.34 – 5.00 | |
Expected volatility | |
| N/A | | |
| 201%
- 260 | % | |
| 128%
- 239 | % | |
| 232%
- 306 | % |
NOTE
8 – OPERATING LEASE
In
August 2019 we entered an operating lease for office space in Eatontown, New Jersey (the “Eatontown Lease”), in September
2019 we entered an operating lease for office space in Kaysville, Utah (the “Kaysville Lease”), in May 2021 we entered an
operating lease for office space in Conroe, Texas (the “Conroe Lease”), in July 2021 we entered an operating lease for office
space in Wyckoff, New Jersey (the “Wyckoff Lease”), and in September 2021 we acquired an operating lease for office space
in Haverford, Pennsylvania (the “Haverford Lease”) in connection with the MPower acquisition (See NOTE 12).
At
commencement of the Eatontown Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $110,097.
We have the option to extend the three-year lease term of the Eatontown Lease for a period of one year. In addition, we are obligated
to pay twelve monthly installments to cover an annual utility charge of $1.75 per rentable square foot for electric usage within the
demised premises. As the lessor has the right to digitally meter and charge us accordingly, these payments were deemed variable and will
be expensed as incurred. During the nine months ended December 31, 2021 the variable lease costs amounted to $2,494.
At
commencement of the Kaysville Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $21,147.
On September 30, 2020, the Kaysville Lease expired and as of October 1, 2020, the Company began leasing the property located in Kaysville
on a month-to-month basis.
At
commencement of the Conroe Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $174,574.
We have the option to extend the 24-month term of the Conroe Lease for three additional terms of 24 months.
At
commencement of the Wyckoff Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $22,034.
The term of the Wyckoff Lease is 24.5 months.
At
date of acquisition of the Haverford lease, right-of-use assets and lease liabilities obtained amounted to $125,522 and $152,961, respectively.
The term of the Haverford lease expires on December 31, 2022.
Operating
lease expense was $134,173 for the nine months ended December 31, 2021. Operating cash flows used for the operating leases during the
nine months ended December 31, 2021 was $132,433. As of December 31, 2021, the weighted average remaining lease term was 1.22 years and
the weighted average discount rate was 12%.
Future
minimum lease payments under non-cancellable leases as of December 31, 2021 were as follows:
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELLABLE LEASES
| |
| | |
2022 | |
$ | 252,930 | |
2023 | |
| 57,042 | |
Total | |
| 309,972 | |
Less: Interest | |
| (10,618 | ) |
Present value of lease liability | |
| 299,354 | |
Operating lease liability, current [1] | |
| (255,894 | ) |
Operating lease liability, long term | |
$ | 43,460 | |
[1] | Represents lease
payments to be made in the next 12 months. |
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
NOTE
9 – 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.
Our
Board of Directors approved the designation of 2,000,000
of the Company’s shares of preferred stock
as Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), each with a stated value of $25
per share. Our Series B Preferred Stockholders
are entitled to 500
votes per share and are entitled to receive cumulative
dividends at the annual rate of 13%
per annum of the stated value, equal to $3.25
per annum per share. The Series B Preferred
Stock is redeemable at our option or upon certain change of control events.
During
the year ended March 31, 2021 we commenced a security offering to sell a total of 2,000,000
units at $25
per unit (“Unit Offering”), where
each unit consisted of: (i)
one share of our newly authorized Series B Preferred Stock and (ii) five warrants each exercisable to purchase one share of common stock
at an exercise price of $0.10 per warrant share.
Each Warrant offered is immediately exercisable on the date of issuance, will expire 5
years from the date of issuance, and its value
has been classified as a fair value liability due to the terms of the instrument (see NOTE 7).
During
the year ended March 31, 2021 we sold 153,317 units for a total of $3,832,924: 78,413 units for cash proceeds of $1,960,325, 23,486 units
for bitcoin proceeds of $587,149, 2,000 units for related party debt of $50,000, and 49,418 units for debt of $1,235,450. In conjunction
with the sale of the units we issued 153,317 shares of Series B Preferred Stock and granted 766,585 warrants during the period. Also,
in conjunction with the Unit Offering we paid $22,500 of offering costs which was allocated between the preferred stock and warrants.
The $22,388 allocated to the preferred stock decreased additional paid in capital due to the underlying instrument being classified as
equity and the $112 allocated to the warrants was immediately expensed as offering costs due to the underlying instrument being classified
as a fair value liability.
During
the nine months ended December 31, 2021 we sold 98,875 units for a total of $2,471,875: 97,669 units for cash proceeds of $2,441,725
and 1,206 units for bitcoin proceeds of $30,150. In conjunction with the sale of the units we issued 98,875 shares of Series B Preferred
Stock and granted 494,375 warrants during the period.
As
of December 31, 2021 and March 31, 2021, we had 252,192 and 153,317 shares of preferred stock issued and outstanding, respectively.
Preferred
Stock Dividends
During
the year ended March 31, 2021 we recorded $221,890 for the cumulative cash dividends due to the shareholders of our Series B Preferred
Stock. We made payments of $25,456 in cash and issued $61,489 worth of cryptocurrency to reduce the amounts owing. As a result, we recorded
$134,945 as a dividend liability on our balance sheet as of March 31, 2021.
During
the nine months ended December 31, 2021 we recorded $614,504 for the cumulative cash dividends due to the shareholders of our Series
B Preferred Stock. We made payments of $402,427 in cash and issued $127,317 worth of cryptocurrency to reduce the amounts owing. As a
result, we recorded $219,705 as a dividend liability on our balance sheet as of December 31, 2021.
Common
Stock Transactions
During
the year ended March 31, 2021, we issued 278,000,000 shares of common stock for services and compensation and recognized a total of $3,586,813
in stock-based compensation based on grant date fair values and vesting terms of the awards granted in the current and prior periods.
Also during the year ended March 31, 2021, we issued 51,000,000 shares of common stock, valued at $1,065,900 based on the market value
on the day of issuance, to settle $1,375,238 worth of debt and $56,977 worth of accounts payable. The shares were valued at $1,065,900
based on the market value at the time of issuance, therefore we recorded a gain on settlement of debt of $366,315.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
During
the year ended March 31, 2021, we repurchased 9,079 shares of our common stock from a third-party for $272 and repurchased 106,000,000
shares of our common stock from an entity that owned, at the time, over 10% of our common stock for $120,000 (see NOTE 5). These shares
repurchased were immediately cancelled. Also, during the year ended March 31, 2021 we recorded an increase in additional paid in capital
of $4,850,000 related to beneficial conversion features on our related party debt (see NOTE 5), recorded an increase in additional paid
in capital of $373,832 for accrued payroll forgiven by a member of our senior management team at the time his employment with the Company
ended, and recorded an increase in additional paid in capital of $117,805 for contributed capital (see NOTE 5 and NOTE 2).
During
the year ended March 31, 2021 we cancelled 200,000,000 shares returned in conjunction with the termination of a Joint Venture Agreement
entered into in March of 2019, reducing common stock by $200,000, reducing additional paid in capital by $3,180,000, offset with a reduction
in our prepaid asset of $2,653,945 and a reversal of previously recorded expense of $726,055. We also cancelled 255,000,000 shares that
had been issued but were subject to certain forfeiture conditions. As a result of the forfeiture, we decreased common stock by $255,000
and increased additional paid in capital by the same.
During
the nine months ended December 31, 2021 we issued 11,500,000 shares of common stock for services and compensation and recognized a total
of $1,655,124 in stock-based compensation based on grant date fair values and vesting terms of the awards granted in the current and
prior periods. We also issued 82,640 shares of common stock as a result of warrants exercised, resulting in proceeds of $8,264 and an
increase in additional paid in capital of $12,285 for the derivative liability extinguished with the exercise (see NOTE 7), and we recorded
an increase in additional paid in capital of $743,151 for contributed capital (see NOTE 5).
During
the nine months ended December 31, 2021 we cancelled 59,999,999 shares that had been issued but were forfeited by choice or as a result
of certain forfeiture conditions (see NOTE 5). As of the date of this filing, all of the forfeited shares had been returned and cancelled
with our transfer agent with exception to 33,333,333 shares that had not yet been physically cancelled due to administrative delays.
All forfeited shares have been deemed cancelled as of December 31, 2021 and as a result, we decreased common stock by $60,000 and increased
additional paid in capital by the same. Also during the nine months ended December 31, 2021, we repurchased 12,998,630 shares from members
of our then Board of Directors in exchange for cash of $519,945 to pay for tax withholdings (see NOTE 5) and repurchased 16,854,578 shares
in exchange for cash of $674,183 to pay for tax withholdings.
As
of December 31, 2021 and March 31, 2021, we had 2,904,210,762 and 2,982,481,329 shares of common stock issued and outstanding, respectively.
Warrants
During
the year ended March 31, 2021 and during the nine months ended December 31, 2021 we granted 766,585 and 494,375 warrants, respectively,
in conjunction with our Unit Offering, which were valued at $89,075 and $127,520, respectively. The warrants are classified as a derivative
liability on our balance sheet in accordance with ASC 480, Distinguishing Liabilities from Equity, based on the warrants terms that indicate
a fundamental transaction could give rise to an obligation for us to pay cash to our warrant holders (see NOTE 7). Transactions involving
our warrants are summarized as follows:
SUMMARY OF WARRANTS ISSUED
| |
| | |
Weighted | |
| |
Number of | | |
Average | |
| |
Shares | | |
Exercise Price | |
Warrants outstanding at March 31, 2020 | |
| - | | |
$ | - | |
Granted | |
| 766,585 | | |
$ | 0.10 | |
Canceled/Expired | |
| - | | |
$ | - | |
Exercised | |
| - | | |
$ | - | |
Warrants outstanding at March 31, 2021 | |
| 766,585 | | |
$ | 0.10 | |
Granted | |
| 494,375 | | |
$ | 0.10 | |
Canceled/Expired | |
| - | | |
$ | - | |
Exercised | |
| (82,640 | ) | |
$ | (0.10 | ) |
Warrants outstanding at December 31, 2021 | |
| 1,178,320 | | |
$ | 0.10 | |
Details
of our warrants outstanding as of March 31, 2021 is as follows:
SUMMARY OF WARRANTS OUTSTANDING
Exercise Price | | |
Warrants Outstanding | | |
Warrants Exercisable | | |
Weighted Average Contractual Life (Years) | |
$ | 0.10 | | |
| 1,178,320 | | |
| 1,178,320 | | |
| 4.14 | |
Class B Redeemable Units of Investview
Financial Group Holdings, LLC
During the nine months ended December 31, 2021
we issued 565,000,000
Class B Redeemable Units of Investview Financial Group Holdings, LLC as consideration for the purchase of operating assets and
intellectual property rights of MPower Trading Systems, LLC, a company controlled and partially owned by David B. Rothrock and James
R. Bell, two of our board members (see NOTE 12). The Class B Redeemable Units have no voting rights but can be exchanged at any time,
within 5
years from the date of issuance, for 565,000,000
shares of our common stock on a one-for-one basis. The Company recorded a non-cash loss of $51.6 million arising as a result
of this transaction as described in Note 12 below.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
NOTE
10 – COMMITMENTS AND CONTINGENCIES
Litigation
In
the ordinary course of business, we may be, or have been, involved in legal proceeding. During the nine months ended December 31, 2021
we were not involved in any material legal proceedings, however, we have received a subpoena from the United States Securities and Exchange
Commission (“SEC”) for the production of documents. We have reason to believe that the focus of the SEC’s inquiry involves
whether certain federal securities laws were violated in connection with, among other things, the offer and sale of cryptocurrency products
and the operation of our subscription-based multi-level marketing business now known as iGenius. In the subpoena, the SEC advised that
the investigation does not mean that the SEC has concluded that we or anyone else has violated federal securities laws and or any other
law. We believe that we have complied at all times with the federal securities laws. However, we are aware of the evolving SEC commentary
and rulemaking process relative to the characterization of cryptocurrency products under federal securities laws that is sweeping through
a large number of businesses that operate within the cryptocurrency sector. We intend to cooperate fully with the SEC’s investigation
and will continue to work with outside counsel to review the matter.
NOTE
11 – INCOME TAXES
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’s income (loss) before income taxes were broken down as follows:
SCHEDULE
OF INCOME BEFORE INCOME TAXES
| |
Nine Months Ended December 31, 2021 | | |
Year Ended March 31, 2021 | |
Domestic | |
$ | (28,278,452 | ) | |
$ | 674,604 | |
Foreign | |
| (86,141 | ) | |
| (108,811 | ) |
The
Company’s tax provision (benefit) as of December 31, 2021 and March 31, 2021 is summarized as follows:
SCHEDULE
OF TAX PROVISION BENEFIT
| |
December 31, 2021 | | |
March 31, 2021 | |
Current | |
| | | |
| | |
Federal | |
$ | 797,827 | | |
$ | - | |
State | |
| 10,000 | | |
| - | |
Foreign | |
| - | | |
| - | |
Total current income tax expense | |
| 807,827 | | |
| - | |
| |
| | | |
| | |
Deferred | |
| | | |
| | |
Federal | |
| - | | |
| - | |
State | |
| - | | |
| - | |
Foreign | |
| - | | |
| - | |
Total current income tax expense | |
| 807,827 | | |
| - | |
| |
| | | |
| | |
Total income tax expense | |
$ | 807,827 | | |
$ | - | |
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
Net
deferred tax assets consist of the following components as of December 31, 2021 and March 31, 2021:
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
| |
December 31, 2021 | | |
March 31, 2021 | |
Deferred tax assets | |
| | | |
| | |
NOL carryover | |
$ | 3,029,286 | | |
$ | 7,604,600 | |
Amortization | |
| 416,195 | | |
| 445,100 | |
Other accruals | |
| 325,049 | | |
| 100 | |
Investment in partnership | |
| 15,485,830 | | |
| - | |
Deferred tax liabilities | |
| | | |
| | |
Depreciation | |
| (2,004,863 | ) | |
| (1,758,200 | ) |
Valuation allowance | |
| (17,251,497 | ) | |
| (6,291,600 | ) |
Net deferred tax asset | |
$ | - | | |
$ | - | |
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 nine months ended December 31, 2021 and the year ended March 31, 2021, due to the following:
SCHEDULE
OF INCOME FROM CONTINUING OPERATIONS
| |
Nine months ended December 31, 2021 | | |
Year ended March 31, 2021 | |
Income taxes at statutory rate | |
$ | (5,956,565 | ) | |
$ | 118,817 | |
State taxes – net of federal benefit | |
| 7,900 | | |
| - | |
Valuation allowance | |
| 6,942,273 | | |
| (881,771 | ) |
Gain on settlement from debt discount and derivative liability | |
| (74,116 | ) | |
| (12,171 | ) |
Stock based compensation | |
| (903,800 | ) | |
| 753,231 | |
Interest | |
| 478,546 | | |
| 191,724 | |
Other | |
| 313,589 | | |
| (169,829 | ) |
Total income tax provision (benefit) | |
$ | 807,827 | | |
$ | - | |
At
December 31, 2021, we had net operating loss carryforwards of approximately $40.7 million portions of which will begin to expire in 2025.
Utilization of some of the federal and state net operating losses carryforwards are subject to annual limitations due to the “change
in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in
the expiration of net operating losses before utilization.
The
Company will recognize interest accrued related to unrecognized tax benefits as interest expense and penalties as a component of operating
expenses. As of December 31, 2021 and March 31, 2021, the Company had no accrued interest and penalties related to uncertain tax positions
and no amounts have been recognized in the Company’s statements of operations.
We
are required to file income tax returns in the U.S. Federal jurisdiction, in New Jersey, Colorado, Texas, and in Utah. The Company is
subject to income tax examinations by federal and state taxing authorities. The taxable years that are open under federal and state statute
of limitations are 2017 through 2021. Due to net operating loss carryforwards that remain unutilized, such loss carryforwards remain
subject to review until utilized.
INVESTVIEW,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2021 AND MARCH 31, 2021
NOTE
12 – ACQUISITION AND NONCONTROLLING INTEREST IN SUBSIDIARY
On
March 22, 2021, we entered into a Securities Purchase Agreement to purchase the operating assets and intellectual property rights of
MPower Trading Systems, LLC, a company controlled and partially owned by David B. Rothrock and James R. Bell, two of our board members,
in exchange for 565,000,000 nonvoting Class B Units of Investview Financial Group Holdings, LLC (“Units”). This acquisition
closed on September 3, 2021 and we acquired an office lease, furniture and fixtures, and Prodigio, a proprietary software-based trading
platform with applications in the brokerage industry. The Units can be exchanged at any time, within 5
years from the date of issuance, for 565,000,000
shares of our common stock on a one-for-one basis
and are subject to a 44 month lock up period. The fair value of the consideration at the if-converted market value of the common
shares was $58.9
million based on the closing market price
of $0.1532
on the closing date of September 3, 2021 as
discounted from $86.6 million by 32% (or $27.7 million) to reflect the significant lock up period.
The
Company determined that as of the date of the acquisition, the fair value of the Prodigio Trading Platform software was $7.2
million. The
difference between the value of the software asset and the consideration issued was driven by an increase in the valuation of the
Class B Units between the execution of the original Securities Purchase Agreement in March 2021 which set the number of units to be
issued as consideration and the closing of the transaction in September 2021, as well
as the software’s lack of revenue generation and a readily available path to monetization through synergies with a
broker-dealer partner. Accordingly, the Company recorded a non-cash loss on acquisition of $51.6
million as illustrated below.
SCHEDULE
OF ASSETS ACQUISITION
| |
| | |
Purchase price (fair value of Units) | |
$ | 58,859,440 | |
Intangible asset (Prodigio software) | |
| 7,240,000 | |
Loss on asset acquisition | |
$ | 51,619,440 | |
NOTE
13 – SUBSEQUENT EVENTS
Subsequent
to December 31, 2021 we made repayments of $340,000 on our related party debt principal, and repaid $75,043 of accrued interest that
was recorded in our related party payables as of December 31, 2021. We also made repayments of $514,570 on our debt balance that was
recorded as of December 31, 2021.
On
January 6, 2022 we entered into a Separation and Release Agreement (the “Separation Agreements”) with Mario Romano and Annette
Raynor, two of the Company’s founders and former members of management and the Board of Directors, and Wealth Engineering, LLC,
an affiliate of Mr. Romano and Ms. Raynor. Under the Separation Agreements, Mr. Romano and Ms. Raynor agreed to resign their positions
as officers and directors of the Company effective immediately as they each transition to the roles of strategic advisors to the Company.
In conjunction with the Separation Agreements Mr. Romano and Ms. Raynor forfeited 75,000,000 shares each, which were returned to the
Company and cancelled, and we repurchased a total of 43,101,939 shares from Mr. Romano and Ms. Raynor in exchange for cash of $1,724,008,
which was paid to federal and state taxing authorities on behalf of Wealth Engineering, LLC as payment for the estimated federal and
state taxes that Wealth Engineering, LLC may be subject to in connection with the vesting of 63,333,333 Company restricted shares that
vested on July 22, 2021.
On
February 23, 2022 we announced the restructuring of our executive leadership team and appointment of Victor M. Oviedo as the Company’s
Chief Executive Officer and granted Mr. Oviedo 60,000,000
shares of restricted common stock for his service
as an executive officer and an additional 20,000,000
shares of restricted common stock for his service
as a director. All of those shares will vest over a five-year
period but will not be issued until an S-8 registration statement is filed and deemed effective. Further, James R. Bell agreed to serve
in the newly created role as President and Acting Chief Operating Officer and was granted 60,000,000
shares of restricted common stock for his service
as an executive officer and the Board of Directors appointed Myles P. Gill as the Company’s Director of Operations and agreed
to grant Mr. Gill 20,000,000
shares of restricted common stock for his service
as an executive officer. The shares issued to Mr. Bell and Mr. Gill will vest over a five-year period but will not be issued until an
S-8 registration statement is filed and deemed effective.
During
February 2022, we provided 30 days’ notice of our intent to retire and repay the Cammarata Note in cash. Having not timely received
a properly executed conversion notice within the proscribed period, and citing certain other damages incurred by us arising from Mr.
Cammarata’s legal proceedings, on or about March 31, 2022, we tendered to Mr. Cammarata cash payment in full for the Cammarata
Note. As of the date of this Report, Mr. Cammarata has not yet accepted our tender of the cash payment, and instead has asserted his
entitlement to exercise his right to convert the Cammarata Note into our common shares.
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.