10-Q 1 form10-q.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

FOR THE QUARTERLY PERIOD ENDED

 

June 30, 2024

 

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 or organization)

 

(I.R.S. Employer

Identification No.)

 

521 West Lancaster Avenue, Second Floor, Haverford, Pennsylvania  

19041

(Address of principal executive offices)   (Zip Code)

 

Issuer’s telephone number: 732-889-4300

 

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

 

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

 

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

 

Yes No

 

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

 

Yes No

 

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

 

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

 

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

 

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

 

Yes No

 

As of August 13, 2024, there were 1,860,981,786 shares of common stock, $0.001 par value, outstanding.

 

 

 

 

 

 

INVESTVIEW, INC.

 

Form 10-Q for the Six Months Ended June 30, 2024

 

Table of Contents

 

PART I – FINANCIAL INFORMATION 3
ITEM 1 – FINANCIAL STATEMENTS 3
Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023 3
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited) 4
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements as of June 30, 2024 (Unaudited) 7
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 24
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 29
ITEM 4 – CONTROLS AND PROCEDURES 29
PART II – OTHER INFORMATION 29
ITEM 1 – LEGAL PROCEEDINGS 29
ITEM 1.A – RISK FACTORS 29
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 29
ITEM 3 – DEFAULTS UPON SENIOR SECURITIES 30
ITEM 4 – MINE SAFETY DISCLOSURES 30
ITEM 5 – OTHER INFORMATION 30
ITEM 6 – EXHIBITS 30
SIGNATURE PAGE 31

 

2

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1 – FINANCIAL STATEMENTS

 

Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   June 30, 2024   December 31, 2023 
   (unaudited)     
ASSETS          
Current assets:          
Cash and cash equivalents  $23,659,262   $20,912,276 
Restricted cash, current   150,026    230,354 
Prepaid assets   186,062    492,607 
Receivables   2,320,012    2,232,725 
Deposits, current   2,533,538    - 
Income tax paid in advance   538,578    - 
Other current assets   86,276    585,632 
Total current assets   29,473,754    24,453,594 
           
Fixed assets, net   4,061,336    6,536,823 
           
Other assets:          
Operating lease right-of-use asset   60,813    110,427 
Deposits   41,954    2,588,127 
Total other assets   102,767    2,698,554 
           
Total assets  $33,637,857   $33,688,971 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)          
Current liabilities:          
Accounts payable and accrued liabilities  $8,119,562   $5,854,093 
Payroll liabilities   198,943    187,419 
Income tax payable   307,160    1,004,535 
Deferred revenue   2,018,834    2,703,398 
Derivative liability   2,332    5,732 
Dividend liability   247,521    256,392 
Operating lease liability, current   73,624    109,628 
Related party debt, net of discounts, current   1,203,907    1,203,247 
Debt, net of discounts, current   465,852    715,127 
Total current liabilities   12,637,735    12,039,571 
           
Operating lease liability, long term   285    6,048 
Accrued liabilities, long term   1,289,334    1,189,643 
Related party debt, net of discounts, long term   1,330,770    1,162,349 
Debt, net of discounts, long term   495,789    501,062 
Total long-term liabilities   3,116,178    2,859,102 
           
Total liabilities   15,753,913    14,898,673 
           
Commitments and contingencies   -    - 
           
Stockholders’ equity (deficit):          
Preferred stock, par value: $0.001; 50,000,000 shares authorized, 252,192 and 252,192 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   252    252 
Common stock, par value $0.001; 10,000,000,000 shares authorized; 1,860,981,786 and 2,333,356,496 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   1,860,982    2,333,356 
Additional paid in capital   101,829,710    104,056,807 
Accumulated other comprehensive income (loss)   (23,218)   (23,218)
Accumulated deficit   (85,783,782)   (87,576,899)
Total stockholders’ equity (deficit)   17,883,944    18,790,298 
           
Total liabilities and stockholders’ equity (deficit)  $33,637,857   $33,688,971 

 

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

 

3

 

 

Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND OTHER COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

   2024   2023   2024   2023 
   Three Months Ended June 30,   Six Months Ended June 30, 
   2024   2023   2024   2023 
                 
Revenue:                    
Subscription revenue, net of refunds, incentives, credits, and chargebacks  $12,027,904   $14,349,082   $25,057,222   $25,541,193 
Mining revenue   1,078,777    2,822,278    3,721,376    4,893,097 
Cryptocurrency revenue   -    86,519    -    366,819 
Mining equipment repair revenue   -    -    -    23,378 
Total revenue, net   13,106,681    17,257,879    28,778,598    30,824,487 
                     
Operating costs and expenses:                    
Cost of sales and service   1,303,610   $2,588,950    3,445,944    4,466,878 
Commissions   6,442,844    8,204,112    13,718,054    14,733,205 
Selling and marketing   520,013    276,620    531,808    529,054 
Salary and related   1,758,844    1,777,796    3,387,814    3,701,993 
Professional fees   378,467    423,657    784,996    917,541 
Loss (gain) on disposal of assets   180,223    163,951    180,223    184,221 
General and administrative   2,067,598    2,613,824    4,404,253    4,690,254 
Total operating costs and expenses   12,651,599    16,048,910    26,453,092    29,223,146 
                     
Net income (loss) from operations   455,082    1,208,969    2,325,506    1,601,341 
                     
Other income (expense):                    
Gain (loss) on fair value of derivative liability   3,326    (5,099)   3,400    3,657 
Realized gain (loss) on cryptocurrency   6,327    (13,727)   282,554    228,845 
Interest expense   (4,675)   (4,675)   (9,350)   (9,298)
Interest expense, related parties   (309,670)   (309,670)   (619,340)   (618,414)
Other income (expense)   651,524    422,882    989,159    595,505 
Total other income (expense)   346,832    89,711    646,423    200,295 
                     
Income (loss) before income taxes   801,914    1,298,680    2,971,929    1,801,636 
Income tax expense   (269,067)   (701,275)   (769,142)   (796,337)
                     
Net income (loss)   532,847    597,405    2,202,787    1,005,299 
                     
Dividends on Preferred Stock   (204,835)   (204,835)   (409,670)   (409,670)
                     
Net income (loss) applicable to common shareholders  $328,012   $392,570   $1,793,117   $595,629 
                     
Basic income (loss) per common share  $0.00   $0.00   $0.00   $0.00 
Diluted income (loss) per common share  $0.00   $0.00   $0.00   $0.00 
                     
Basic weighted average number of common shares outstanding   1,860,981,786    2,636,275,719    1,957,014,007    2,636,275,605 
Diluted weighted average number of common shares outstanding   2,897,410,357    3,672,704,290    2,993,442,578    3,672,704,176 

 

 

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

 

4

 

 

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)

 

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(Unaudited)

 

   Shares   Amount   Shares   Amount   Capital   Income (Loss)   Deficit   Total 
                       Accumulated         
                   Additional   Other         
   Preferred stock   Common stock   Paid in   Comprehensive   Accumulated     
   Shares   Amount   Shares   Amount   Capital   Income (Loss)   Deficit   Total 
                                 
Balance, December 31, 2022   252,192   $252    2,636,275,489   $2,636,275   $104,350,746   $(23,218)  $(89,589,479)  $17,374,576 
Common stock issued for services and other stock-based compensation   -    -    -    -    768,613    -    -    768,613 
Warrant Exercise   -    -    230    -    23    -    -    23 
Derivative liability extinguished with warrant exercise   -    -    -    -    3    -    -    3 
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Net income (loss)   -    -    -    -    -    -    407,894    407,894 
Balance, March 31, 2023   252,192   $252    2,636,275,719   $2,636,275   $105,119,385   $(23,218)  $(89,386,420)  $18,346,274 
Common stock issued for services and other stock-based compensation   -    -    -    -    628,615    -    -    628,615 
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Net income (loss)   -    -    -    -    -    -    597,405    597,405 
Balance, June 30, 2023   252,192   $252    2,636,275,719   $2,636,275   $105,748,000   $(23,218)  $(88,993,850)  $19,367,459 
                                         
Balance, December 31, 2023   252,192   $252    2,333,356,496   $2,333,356   $104,056,807   $(23,218)  $(87,576,899)  $18,790,298 
Common stock issued for services and other stock-based compensation   -    -    -    -    430,760    -    -    430,760 
Common stock repurchased from former related parties and canceled   -    -    (472,374,710)   (472,374)   (3,098,772)   -    -    (3,571,146)
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Net income (loss)   -    -    -    -    -    -    1,669,940    1,669,940 
Balance, March 31, 2024   252,192   $252    1,860,981,786   $1,860,982   $101,388,795   $(23,218)  $(86,111,794)  $17,115,017 
Common stock issued for services and other stock-based compensation   -    -    -    -    440,915    -    -    440,915 
Common stock repurchased from former related parties and canceled   -    -    -    -    -    -    -    - 
Dividends   -    -    -    -    -    -    (204,835)   (204,835)
Net income (loss)   -    -    -    -    -    -    532,847    532,847 
Balance, June 30, 2024   252,192   $252    1,860,981,786   $1,860,982   $101,829,710   $(23,218)  $(85,783,782)  $17,883,944 

 

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

 

5

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited)

 

INVESTVIEW INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   2024   2023 
   Six Months Ended June 30, 
   2024   2023 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income (loss)  $2,202,787   $1,005,299 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:          
Depreciation   2,301,620    2,076,605 
Amortization of debt discount   168,421    167,496 
Stock issued for services and other stock-based compensation   871,675    1,397,228 
Lease cost, net of repayment   7,847    14,055 
(Gain) loss on disposal of assets   180,223    184,221 
(Gain) loss on fair value of derivative liability   (3,400)   (3,657)
Realized (gain) loss on cryptocurrency   (282,554)   (228,845)
Changes in operating assets and liabilities:          
Receivables   (87,287)   93,932 
Inventory   -    74,645 
Prepaid assets   306,545    132,030 
Income tax paid in advance   (538,578)   535,932 
Other current assets   621,858    (421,958)
Deposits   12,635    (2,088,809)
Accounts payable and accrued liabilities   491,418    (193,832)
Income tax payable   (697,375)   121,004 
Customer advance   -    (28,566)
Deferred revenue   (684,564)   693,962 
Accrued interest   9,349    9,298 
Accrued interest, related parties   450,918    450,918 
Net cash provided by (used in) operating activities   5,331,538    3,990,958 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Cash received for the disposal of fixed assets   

-

   23,278 
Cash paid for fixed assets   (6,356)   (2,408,658)
Net cash provided by (used in) investing activities   (6,356)   (2,385,380)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Repayments for related party debt   (450,258)   (450,258)
Repayments for debt   (186,359)   (483,566)
Payments for shares repurchased from former related parties   (1,685,880)   - 
Dividends paid   (336,027)   (321,585)
Proceeds from the exercise of warrants   -    23 
Net cash provided by (used in) financing activities   (2,658,524)   (1,255,386)
           
Effect of exchange rate translation on cash   -    - 
           
Net increase (decrease) in cash, cash equivalents, and restricted cash   2,666,658    350,192 
Cash, cash equivalents, and restricted cash - beginning of period   21,142,630    21,488,898 
Cash, cash equivalents, and restricted cash - end of period  $23,809,288   $21,839,090 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:          
Cash paid during the period for:          
Interest  $464,880   $467,317 
Income taxes  $2,005,095   $140,500 
Non-cash investing and financing activities:          
Common stock repurchased for payables  $3,571,146   $- 
Derivative liability extinguished with warrant exercise  $-   $3 
Dividends declared  $409,670   $409,670 
Dividends paid with cryptocurrency  $82,514   $88,056 
Debt extinguished in exchange for cryptocurrency  $77,538   $989,898 
Recognition of lease liability and ROU assets at lease commencement  $-   $23,520 
Cryptocurrency received from sale of fixed assets  $-   $9,913 

 

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

 

6

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Organization

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Nature of Business

 

We operate a diversified financial technology company that through its subsidiaries and global distribution network provides financial technology, education tools, content, research, and a digital asset technology company, which develops, operates, and supports blockchain technologies, with a focus on the Bitcoin blockchain ecosystem and the generation of digital assets. In addition, we are planning to expand our business into the retail brokerage and financial markets industry by integrating the online brokerage trading platform we acquired in connection with our recent acquisition of Opencash Securities, LLC (“Opencash”), with the proprietary algorithmic trading platform we acquired in September 2021. Opencash is an early-stage registered broker-dealer that plans to offer investors an online trading platform to enable self-directed retail brokerage services and develop synergies with the educational content and products offered by one of our other business units.

 

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.

 

7

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the operating results that may be expected for our year ending December 31, 2024, as will be included in the filing of our Annual Report on Form 10-K for the year ending December 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2023 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC, SAFETek, LLC, Investview Financial Group Holdings, LLC, Opencash Finance, Inc., Opencash Securities, LLC, Investview MTS, LLC, and MyLife Wellness Company. 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.

 

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 June 30, 2024 and December 31, 2023, cash balances that exceeded FDIC limits were $7,073,960 and $3,778,085, 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 June 30, 2024 and December 31, 2023, we had no highly liquid debt instruments.

 

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.

 

   June 30, 2024   December 31, 2023 
Cash and cash equivalents  $23,659,262   $20,912,276 
Restricted cash, current   150,026    230,354 
Total cash, cash equivalents, and restricted cash shown on the statement of cash flows  $23,809,288   $21,142,630 

 

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 and funds required to be held in an account as collateral for business charges on our Company credit card.

 

8

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

Receivables

 

Receivables are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. We had an allowance for doubtful accounts of $0 and $722,324 as of June 30, 2024 and December 31, 2023, respectively. A portion of our receivables balance is for amounts held in reserve by our merchant processors for future returns and chargebacks. The amount held in reserve was $1,872,000 and $500,000 as of June 30, 2024 and December 31, 2023, respectively. We have recently, however, had to pursue collection efforts through litigation against one of our credit card processors and its clearing bank, as efforts to collect approximately $1.87 million of our credit card receivables, has not proven timely. See “NOTE 10-Commitments and Contingencies.”

 

Deposits

 

We contract with service providers for hosting of our data processing equipment and operational support in data centers where the Company’s data processing equipment is deployed. These arrangements typically require advance payments to vendors pursuant to the contractual obligations associated with these services. Additionally, from time to time, our vendors require deposits be paid by us and held by them in the normal course of business. The Company classifies these payments as “Deposits, current” or “Deposits” in the Consolidated Balance Sheets. As of June 30, 2024 and December 31,2023, such deposits totaled $2,575,492 and $2,533,538, respectively. During the second quarter of 2024, deposits in the amount of $2,533,538 were reclassified from long-term assets to current assets, a result of our hosting and energy agreement ending in March 2025.

 

Fixed Assets

 

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

 

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

 

   Estimated Useful Life
(years)
  June 30, 2024   December 31, 2023 
Furniture, fixtures, and equipment  10  $717   $717 
Computer equipment  3   17,663    11,308 
Data processing equipment  3   13,596,451    14,084,670 
       13,614,831    14,096,695 
Accumulated depreciation      (9,553,495)   (7,559,872)
Net book value     $4,061,336   $6,536,823 

 

Total depreciation expense for the six months ended June 30, 2024 and 2023, was $2,301,620 and $2,076,605, respectively, all of which was recorded in our general and administrative expenses on our consolidated statement of operations. During the six months ended June 30, 2024, we recognized a loss on disposal of assets with a net book value of $180,223. During the six months ended June 30, 2023, we sold assets with a total net book value of $26,729 for cash of $23,278 and bitcoin worth $9,913, therefore recognized a gain on disposal of assets of $6,462. This gain was offset by loss on disposal of assets with a net book value of $15,847.

 

Long-Lived Assets – Cryptocurrencies

 

We account for our cryptocurrencies and intangible assets 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.

 

9

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

We hold cryptocurrency-denominated assets and include them in our consolidated balance sheet as Other current assets. The value of our cryptocurrencies as of June 30, 2024 and December 31, 2023, were $86,276 and $585,632, respectively. Cryptocurrencies purchased or received for payment from customers are recorded in accordance with ASC 350-30 and cryptocurrencies awarded to the Company through its mining activities ($3,721,376 and $4,893,097 for the six months ended June 30, 2024 and 2023, respectively) are accounted for in connection with the Company’s revenue recognition policy. The use of cryptocurrencies is accounted for in accordance with the first in first out method of accounting.

 

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 six months ended June 30, 2024 and June 30, 2023, no impairment was recorded.

 

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, and debt. We have determined that the book value of our outstanding financial instruments as of June 30, 2024 and December 31, 2023, approximates the fair value due to their short-term nature or interest rates that approximate prevailing market rates.

 

10

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of June 30, 2024:

 

   Level 1   Level 2   Level 3   Total 
Total Assets  $-   $-   $-   $- 
                     
Derivative liability  $-   $-   $2,332   $2,332 
Total Liabilities  $-   $-   $2,332   $2,332 

 

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, 2023:

 

   Level 1   Level 2   Level 3   Total 
Total Assets  $-   $-   $-   $- 
                     
Derivative liability  $-   $-   $5,732   $5,732 
Total Liabilities  $-   $-   $5,732   $5,732 

 

Revenue Recognition

 

Subscription Revenue

 

Most of our revenue is generated by membership and 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 June 30, 2024 and December 31, 2023, our deferred revenues were $2,018,834 and $2,703,398, respectively.

 

Mining Revenue

 

We generate revenue from mining bitcoin. The Company has entered into a digital asset mining pool by executing a contract, as amended from time to time, with the mining pool operator to provide computing power to the mining pool. The contract is terminable at any time by either party without penalty and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, we are entitled to a Full-Pay-Per-Share payout of Bitcoin based on a contractual formula, which primarily calculates the hash rate provided by us to the mining pool as a percentage of total network hash rate, and other inputs. We are entitled to consideration even if a block is not successfully placed by the mining pool operator.

 

11

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contract with the mining pool operator. The transaction consideration the Company receives is net of a contractually agreed upon “pool fee percentage” charged and kept by the mining pool operator and is noncash, in the form of Bitcoin, which the Company measures at fair value on the date Bitcoin is received. This value is not materially different than the fair value at the moment we meet the performance obligation, which can be recalculated based on the contractual formula. The consideration is variable. The amount of consideration recognized is constrained to the amount of consideration received, which is when it is probable a significant reversal will not occur. There is no significant financing component or risk of a significant revenue reversal in these transactions due to the performance obligations and settlement of the transactions being on a daily basis.

 

Cryptocurrency Revenue

 

During 2023, we generated revenue from the sale of cryptocurrency packages to our customers through an arrangement with a third-party supplier. The various packages included different amounts of coin with differing rates of returns and terms. The coin is delivered by a third-party supplier. The sale of cryptocurrency packages was discontinued during the year ended December 31, 2023.

 

During 2023, we recognized 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 was to arrange for the third parties to provide coin and protection (if applicable) to our customers and payment was received from our customers at the time of order placement. All customers were given two weeks to request a refund, therefore we would 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 supplier to deliver coin and protection (if applicable), at which time we recognize revenue and the amounts due to our supplier on our books. During the six months ended June 30, 2024, we generated no revenue from the sale of cryptocurrency packages.

 

Mining Equipment Repair Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, prior to June 30, 2023, we repaired broken mining equipment for sale to third-party customers. Our mining equipment repair business was discontinued during the quarter ended June 30, 2023.

 

Prior to June 30, 2023, we recognized miner repair 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 deliver the promised goods to our customers.

 

Revenue generated for the six months ended June 30, 2024, was as follows:

 

   Subscription
Revenue
   Mining Revenue   Total 
Gross billings/receipts  $26,557,528   $3,721,376   $30,278,904 
Refunds, incentives, credits, and chargebacks   (1,500,306)   -    (1,500,306)
Net revenue  $25,057,222   $3,721,376   $28,778,598 

 

For the six months ended June 30, 2024, foreign and domestic revenues were approximately $22.9 million and $5.9 million, respectively.

 

12

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

Revenue generated for the six months ended June 30, 2023, was as follows:

 

   Subscription
Revenue
   Cryptocurrency Revenue   Mining Revenue   Miner Repair Revenue   Total 
Gross billings/receipts  $27,784,934   $732,319   $4,893,097   $23,378   $33,433,728 
Refunds, incentives, credits, and chargebacks   (2,243,741)   -    -    -    (2,243,741)
Amounts paid to providers   -    (365,500)   -    -    (365,500)
Net revenue  $25,541,193   $366,819   $4,893,097   $23,378   $30,824,487 

 

For the six months ended June 30, 2023, foreign and domestic revenues were approximately $21.9 million and $8.9 million, respectively.

 

Revenue generated for the three months ended June 30, 2024, was as follows:

 

   Subscription
Revenue
   Mining Revenue   Total 
Gross billings/receipts  $12,706,234   $1,078,777   $13,785,011 
Refunds, incentives, credits, and chargebacks   (678,330)   -    (678,330)
Net revenue  $12,027,904   $1,078,777   $13,106,681 

 

For the three months ended June 30, 2024, foreign and domestic revenues were approximately $11.1 million and $2.0 million, respectively.

 

Revenue generated for the three months ended June 30, 2023, was as follows:

 

   Subscription
Revenue
   Cryptocurrency Revenue   Mining Revenue   Total 
Gross billings/receipts  $15,632,412   $173,019   $2,822,278   $18,627,709 
Refunds, incentives, credits, and chargebacks   (1,283,330)   -    -    (1,283,330)
Amounts paid to providers   -    (86,500)   -    (86,500)
Net revenue  $14,349,082   $86,519   $2,822,278   $17,257,879 

 

For the three months ended June 30, 2023, foreign and domestic revenues were approximately $12.2 million and $5.1 million, respectively.

 

Advertising, Selling, and Marketing Costs

 

We expense advertising, selling, and marketing costs as incurred. Advertising, selling, and marketing costs include costs of promoting our product worldwide, including promotional events. Advertising, selling, and marketing expenses for the six months ended June 30, 2024 and 2023, totaled $531,808 and $529,054, respectively.

 

Cost of Sales and Service

 

Included in our costs of sales and services are amounts paid to our trading and market experts that provide financial education content and tools to our subscription customers and hosting and electricity fees that we pay to a third-party vendor in order to generate mining revenue. Costs of sales and services for the six months ended June 30, 2024 and 2023, totaled $3,445,944 and $4,466,878, respectively.

 

13

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

Inventory

 

Inventory is valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method and is inclusive of any shipping and tax costs. Due to the discontinuance of our miner repair business during the quarter ended June 30, 2023, all inventory was sold. During the six months ended June 30, 2023, we recognized a loss on disposal on assets of $174,836. As of June 30, 2024 and December 31, 2023, the net realizable value of our inventory was $0 and $0, respectively.

 

Income Taxes

 

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

 

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

 

Net Income (Loss) per Share

 

We follow ASC Subtopic 260-10, Earnings per Share, 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.

 

The following table illustrates the computation of diluted earnings per share for the six months ended June 30, 2024 and 2023.

 

   June 30, 2024   June 30, 2023 
Net income  $2,202,787    1,005,299 
Less: preferred dividends   (409,670)   (409,670)
Add: interest expense on convertible debt   450,258    450,258 
Net income available to common shareholders (numerator)  $2,243,375    1,045,887 
           
Basic weighted average number of common shares outstanding   1,957,014,007    2,636,275,605 
Dilutive impact of convertible notes   471,428,571    471,428,571 
Dilutive impact of non-voting membership interest   565,000,000    565,000,000 
Diluted weighted average number of common shares outstanding (denominator)   2,993,442,578    3,672,704,176 
           
Diluted income per common share  $0.00    0.00 

 

The following table presents potentially dilutive securities that were not included in the computation of diluted net income per share as their inclusion would be anti-dilutive.

 

   June 30, 2024   June 30, 2023 
Options to purchase common stock   361,015,566    360,416,665 
Warrants to purchase common stock   1,178,090    1,178,169 

 

14

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

The following table illustrates the computation of diluted earnings per share for the three months ended June 30, 2024 and 2023, where no potentially dilutive securities were excluded from the computation:

 

   June 30, 2024   June 30, 2023 
Net income (loss)  $532,847   $597,405 
Less: preferred dividends   (204,835)   (204,835)
Add: interest expense on convertible debt   225,129    225,129 
Net income available to common shareholders (numerator)  $553,141   $617,699 
           
Basic weighted average number of common shares outstanding   1,860,981,786    2,636,275,719 
Dilutive impact of convertible notes   471,428,571    471,428,571 
Dilutive impact of non-voting membership interest   565,000,000    565,000,000 
Diluted weighted average number of common shares outstanding (denominator)   2,897,410,357    3,672,704,290 
           
Diluted income per common share  $0.00   $0.00 

 

The following table presents potentially dilutive securities that were not included in the computation of diluted net income per share as their inclusion would be anti-dilutive.

 

   June 30, 2024   June 30, 2023 
Options to purchase common stock   361,416,665    360,416,665 
Warrants to purchase common stock   1,178,090    1,178,090 

 

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.

 

15

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

 

In December 2023, the FASB issued ASU No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. The amendments in ASU No. 2023-08 are intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. The amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. ASU No. 2023-08 requires a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets) as of the beginning of the annual reporting period in which an entity adopts the amendments. The Company has not yet adopted ASU No. 2023-08 and is currently evaluating the impact that the adoption will have on the Company’s financial statement presentation and disclosures.

 

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 six months ended June 30, 2024, we recorded net income from operations of $2,325,506 and net income of $2,202,787. As of June 30, 2024, we have unrestricted cash and cash equivalents of $23,659,262 and a working capital balance of $16,836,019. As of June 30, 2024, our cryptocurrency balance was reported at a cost basis of $86,276. Management does not believe there are any liquidity issues as of June 30, 2024.

 

NOTE 5 – RELATED-PARTY TRANSACTIONS

 

Related Party Debt

 

Our related-party payables consisted of the following:

 

   June 30, 2024   December 31, 2023 
Convertible Promissory Note entered into on 4/27/20, net of debt discount of $757,502 as of June 30, 2023 [1]  $542,498   $477,711 
Convertible Promissory Note entered into on 5/27/20, net of debt discount of $411,263 as of June 30, 2023 [2]   288,737    253,566 
Convertible Promissory Note entered into on 11/9/20, net of debt discount of $800,465 as of June 30, 2023 [3]   499,535    431,072 
Working Capital Promissory Note entered into on 3/22/21 [4]   1,203,907    1,203,247 
Total related-party debt   2,534,677    2,365,596 
Less: Current portion   (1,203,907)   (1,203,247)
 Related-party debt, long term  $1,330,770   $1,162,349 

 

 

[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 collateral of the Company and its subsidiaries. The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. Per the original terms of the agreement, the note was convertible into common stock at a conversion price of $0.01257 per share, which was amended on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded a beneficial conversion feature and debt discount of $1,300,000. During the six months ended June 30, 2024, we recognized $64,787 of the debt discount into interest expense, as well as expensed an additional $130,008 of interest expense on the note, all of which was repaid during the period.

 

16

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

[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 collateral of the Company and its subsidiaries. The note bears interest at 20% per annum, payable monthly, and the principal is due and payable on April 27, 2030. Per the original terms of the agreement, the note was convertible into common stock at a conversion price of $0.01257 per share, which was amended on November 9, 2020 to reduce the conversion price to $0.007 per share. At inception we recorded a beneficial conversion feature and debt discount of $700,000. During the six months ended June 30, 2024, we recognized $35,171 of the debt discount into interest expense as well as expensed an additional $70,002 of interest expense on the note, all of which was repaid during the period.
  
[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 collateral of the Company and its subsidiaries. The note bears interest at 38.5% per annum, made up of a 25% interest rate per annum and a facility fee of 13.5% per annum, payable monthly beginning February 1, 2021, and the principal is due and payable on April 27, 2030. Per the terms of the agreement, the note is convertible into common stock at a conversion price of $0.007 per share. At inception we recorded a beneficial conversion feature and debt discount of $1,300,000. During the six months ended June 30, 2024, we recognized $68,463 of the debt discount into interest expense as well as expensed an additional $250,248 of interest expense on the note, all of which was repaid during the period.
  
[4]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. (See Note 10). 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 only provided advances of $1,200,000, to date. The note bears interest at the rate of 0.11% per annum. 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. During the six months ended June 30, 2024 and 2023, we recorded interest expense of $660 on the note. 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.

 

The loans referenced in footnotes 1-3 above, were advanced under a Securities Purchase Agreement we entered into on April 27, 2020, with DBR Capital. Under the Securities Purchase Agreement (which was subsequently amended and restated), DBR Capital agreed to advance up to $11 million to us in a series of up to five closings through December 31, 2022, of which the amounts advanced covered in footnotes 1-3 above constituted the first three closings.

 

On August 12, 2022, we and DBR Capital, entered into a Fourth Amendment to the now Amended and Restated Securities Purchase Agreement that extends the deadlines for the fourth and fifth closings under that Agreement from December 31, 2022, to December 31, 2024. The fourth and fifth closings remain at the sole discretion of DBR Capital, and we cannot provide any assurance that they will occur when contemplated or ever.

 

Other Related Party Arrangements

 

On September 29, 2023, we closed on the purchase in a private transaction of shares of our common stock under the terms of a Stock Purchase and Release Agreement dated September 18, 2023 (the “Romano/Raynor Agreement”). Under the Romano/Raynor Agreement, the Company purchased for surrender in a series of private transactions, an aggregate of 302,919,223 shares of the Company’s common stock (the “Romano/Raynor Purchased Shares”) from sellers consisting of Mario Romano, Annette Raynor, and a series of their family members and related entities (collectively, the “Sellers”). The Romano/Raynor Purchased Shares were purchased for aggregate consideration of $2,922,380, representing a price of $0.00964739 per share. One-eighth of the purchase price is to be paid within seven (7) days of the closing, with the balance payable in a series of equal quarterly payments over seven (7) consecutive quarters thereafter. As of June 30, 2024, we owed $1,982,738 under the Romano/Raynor Agreement of which $1,586,191 is included in Accounts payable and accrued liabilities and $396,547 is included in Accrued liabilities, long term on the Consolidated Balance Sheets.

 

In addition to the cash consideration for the Purchased Shares, the Company also agreed to cover a limited amount of the legal fees incurred by the Sellers in the transaction, as well as provide Mr. Romano and Ms. Raynor with a $250,000 expense allowance, payable in installments, to cover legal fees and other expenses on a non-accountable basis, in connection with any matters that may arise in which either or both of Mr. Romano and/or Ms. Raynor served as officers and directors of the Company. In return, Mr. Romano and Ms. Raynor agreed to waive any future entitlement, if at all, to indemnification of costs and expenses, including legal fees under Nevada law or otherwise arising from or relating to any period in which Romano or Raynor were officers and directors of the Company.

 

17

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

The consideration paid for the Purchased Shares of $2,922,380 plus the $250,000 expense allowance was allocated to the share purchase for a total of $3,172,380.

 

On February 7, 2024, we closed on the purchase in a private transaction of shares of our common stock under the terms of a Stock Purchase and Release Agreement dated February 6, 2024 (the “Smith/Miller Agreement”). Under the Smith/Miller Agreement, the Company purchased for surrender and cancellation a total of 472,374,710 shares of the Company’s common stock (the “Smith/Miller Purchased Shares”) from Ryan Smith and Chad Miller and certain of their respective affiliates and family members. The Smith/Miller Purchased Shares were purchased for aggregate purchase price of $3,571,144, representing a price of $0.007559985 per share. One-eighth of the purchase price was paid within seven (7) days of the closing, with the balance payable in a series of equal quarterly payments over seven (7) consecutive quarters thereafter. As of June 30, 2024, we owed $2,678,360 under the Smith/Miller Agreement of which $1,785,573 is included in Accounts payable and accrued liabilities and $892,787 is included in Accrued liabilities, long term on the Consolidated Balance Sheets.

 

The consideration paid for the Purchased Shares of $3,571,146 was allocated to the share purchase (see NOTE 9).

 

NOTE 6 – DEBT

 

Our debt consisted of the following:

 

   June 30, 2024   December 31, 2023 
Loan with the U.S. Small Business Administration dated 4/19/20 [1]  $525,033   $530,306 
Long term notes for APEX lease buyback [2]   436,608    685,883 
Total debt   961,641    1,216,189 
Less: Current portion   465,852    715,127 
Debt, long term portion  $495,789   $501,062 

 

 

[1]In April 2020, we received proceeds of $500,000 from a loan entered into with the U.S. Small Business Administration. Under the terms of the loan interest is to accrue at a rate of 3.75% per annum and installment payments of $2,437 monthly will begin twelve months from the date of the loan, with all interest and principal due and payable thirty years from the date of the loan. During the six months ended June 30, 2024 and 2023 we recorded $9,349 and $9,298, respectively, worth of interest on the loan. During the six months ended June 30, 2024 and 2023, we made repayments on the loan of $14,622 and $17,059, respectively.

 

[2]In November of 2020, we entered into notes with third parties for $19,089,500 in exchange for the cancellation of APEX leases previously entered into, which resulted in our purchase of all rights and obligations under the leases. We agreed to settle a portion of the debt during the year ended March 31, 2021, at a discount to the original note terms offered, by making lump sum payments, issuing 48,000,000 shares of our common stock, issuing 49,418 shares of our preferred stock, and issuing cryptocurrency. The remaining notes are all due December 31, 2024, and have a fixed monthly payment that is equal to 75% of the face value of the note, divided by 48 months. The monthly payments began the last day of January 2021 and continue until December 31, 2024, when the last monthly payment will be made, along with a balloon payment equal to 25% of the face value of the note, to extinguish the debt. During the fourth quarter ended December 31, 2023, we offered all note holders an early payoff option. During the year ended December 31, 2023, we repaid a portion of the debt with cash payments of $1,917,225 and issuances of cryptocurrency then valued at $5,322,058. During the six months ended June 30, 2024, we repaid a portion of the debt with cash payments of $171,737 and issuances of cryptocurrency then valued at $77,538. During the six months ended June 30, 2023, we repaid a portion of the debt with cash payments of $466,507 and issuances of cryptocurrency then valued at $989,898.

 

18

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

NOTE 7 – DERIVATIVE LIABILITY

 

During the six months ended June 30, 2024, we had the following activity in our derivative liability account relating to our warrants:

 

Derivative liability at December 31, 2023  $5,732 
Derivative liability recorded on new instruments   - 
Derivative liability reduced by warrant exercise   - 
(Gain) loss on fair value   (3,400)
Derivative liability at June 30, 2024  $2,332 

 

We use the binomial option pricing model to estimate fair value for those instruments at inception, at warrant exercise, and at each reporting date. During the six months ended June 30, 2024, the assumptions used in our binomial option pricing model were in the following range:

 

Risk free interest rate   4.71-5.09%
Expected life in years   1.08 - 2.00 
Expected volatility   104 - 121%

 

NOTE 8 – OPERATING LEASE

 

In July 2021, we entered an operating lease for office space in Wyckoff, New Jersey (the “Wyckoff Lease”), and in September 2021 we assumed an operating lease for office space in Haverford, Pennsylvania (the “Haverford Lease”) in connection with the MPower acquisition. This facility now serves as the headquarters of the company.

 

At commencement of the Wyckoff Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $22,034. The original 24.5-month term of the Wyckoff Lease was extended through July 2025 with an option for the Company to terminate with 60 days’ written notice beginning June 1, 2024. The earliest termination date is July 31, 2024. At the extension of the Wyckoff Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $23,520.

 

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 was extended through December 2024. At the extension of the Haverford Lease, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $172,042.

 

Operating lease expense was $55,464 for the six months ended June 30, 2024. Operating cash flows used for the operating leases during the six months ended June 30, 2024, was $47,617. As of June 30, 2024, the weighted average remaining lease term was 0.61 years, and the weighted average discount rate was 12%.

 

Future minimum lease payments under non-cancellable leases as of June 30, 2024, were as follows:

 

      
Remainder of 2024  $68,411 
2025   7,833 
Total   76,244 
Less: Interest   (2,335)
Present value of lease liability   73,909 
Operating lease liability, current [1]   (73,624)
Operating lease liability, long term  $285 

 

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

 

19

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)

 

Preferred Stock

 

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

 

Our Board of Directors approved the designation of 2,000,000 of the Company’s shares of preferred stock as Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), each with a stated value of $25 per share. Our Series B Preferred Stockholders are entitled to 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 P Preferred Stock is redeemable at our option or upon certain change of control events.

 

On or about August 17, 2021, we completed a public offering of 252,192 units at $25 per unit, with each unit consisting 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).

 

As of June 30, 2024 and December 31, 2023, we had 252,192 shares of preferred stock issued and outstanding.

 

Preferred Stock Dividends

 

During the six months ended June 30, 2024, we recorded $409,670 for the cumulative cash dividends due to the shareholders of our Series B Preferred Stock. We made payments of $336,027 in cash and issued $82,514 worth of cryptocurrency to reduce the amounts owed. As a result, we recorded $247,521 as a dividend liability on our balance sheet as of June 30, 2024.

 

During the six months ended June 30, 2023, we recorded $409,670 for the cumulative cash dividends due to the shareholders of our Series B Preferred Stock. We made payments of $321,585 in cash and issued $88,056 worth of cryptocurrency to reduce the amounts owed.

 

Common Stock Transactions

 

During the six months ended June 30, 2024, we repurchased 472,374,710 shares from two of the original founders of the Company and a series of their family members and related entities in exchange for cash of $446,391 and payables of $3,124,755 (see NOTE 5). We also recognized $17,018 in stock-based compensation based on grant date fair values and vesting terms of awards granted in prior periods.

 

During the six months ended June 30, 2023, we issued 230 shares of common stock as a result of warrants exercised, resulting in proceeds of $23 and an increase in additional paid in capital of $3 for the derivative liability extinguished with the exercise (see NOTE 7). We also recognized $7,252 in stock-based compensation based on grant date fair values and vesting terms of awards granted in prior periods.

 

As of June 30, 2024 and December 31, 2023, we had 1,860,981,786 and 2,333,356,496 shares of common stock issued and outstanding, respectively.

 

20

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

Options

 

The 2022 Incentive Plan authorizes a variety of incentive awards consisting of stock options, restricted stock, restricted stock units, and reserves for issuance up to 600,000,000 shares of the Company’s common stock.

 

During the six months ended June 30, 2024, we issued 1,000,000 stock options as part of the acquisition of Opencash Finance, Inc. The options vest in equal amounts over a five-year period, at an exercise price of $0.05 per share, with a seven-year life. We utilized the Black Scholes Model to value these options and the expense related to these options is being recognized over the vesting term.

 

Transactions involving our options are summarized as follows:

 

           Weighted 
           Average 
       Weighted   Grant-Date 
   Number of   Average   Per Share 
   Options   Exercise Price   Fair Value 
Options outstanding at December 31, 2023   360,416,665   $0.05   $0.03 
Granted   1,000,000   $0.05   $0.02 
Canceled/Expired   -   $-   $- 
Exercised   -   $-   $- 
Options outstanding at June 30, 2024   361,416,665   $0.05   $0.03 

 

Details of our options outstanding as of June 30, 2023, is as follows:

 

Options Exercisable  Weighted Average Exercise Price of Options Exercisable  Weighted Average Contractual Life of Options Exercisable (Years)  Weighted Average Contractual Life of Options Outstanding (Years)
193,291,665  0.05  4.99  4.99

 

Total stock compensation expense related to the options for the six months ended June, 2024 and 2023, was $854,657 and $1,389,976, respectively. As of June 30, 2024 there was approximately $4.4 million of unrecognized compensation cost related to the Options, which is expected to be recognized over a remaining weighted-average vesting period of approximately 2.6 years.

 

Warrants

 

Transactions involving our warrants are summarized as follows:

 

       Weighted 
   Number of   Average 
   Shares   Exercise Price 
Warrants outstanding at December 31, 2023   1,178,090   $0.10 
Granted   -   $- 
Canceled/Expired   -   $- 
Exercised   -   $- 
Warrants outstanding at June 30, 2024   1,178,090   $0.10 

 

Details of our warrants outstanding as of June 30, 2024, is as follows:

 

Warrants Exercisable  Weighted Average Contractual Life of Warrants Outstanding and Exercisable (Years)
1,178,090  1.65

 

21

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

Class B Units of Investview Financial Group Holdings, LLC

 

As of June 30, 2024, and December 31, 2023, there were 565,000,000 Units of Class B Investview Financial Group Holdings, LLC issued and outstanding. These units were issued as consideration for the purchase of operating assets and intellectual property rights of MPower, a company controlled and partially owned by David B. Rothrock and James R. Bell, two of our board members. The Class B Redeemable Units have no voting rights but can be exchanged at any time, within 5 years from the date of issuance, for 565,000,000 shares of our common stock on a one-for-one basis and are subject to significant restrictions upon resale through 2025 under the terms of a lock up agreement entered into as part of the purchase agreement. In order to properly account for the purchase transaction on the Company’s financial statements, we were required by applicable financial reporting standards to value the Class B Units issued to MPower in the transaction as of the closing date of the MPower sale transaction (September 3, 2021). For these accounting purposes, we concluded that the “fair value” of the consideration for financial accounting purposes, at the if-converted market value of the underlying 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 “fair value” valuation of the Class B Units, however, was completed relying on a certain set of methodologies that are accepted for accounting purposes, and is not necessarily indicative of the “fair market value” that may be implied relative to such Units in a commercial transaction not governed by financial reporting standards. In particular, the methodology used to value the Class B Units at their “fair value” did not take into account any blockage discounts that may otherwise apply after the expiration of the lock-up period in 2025; while other valuation methodologies, not bound by financial reporting codifications, would possibly determine that the blockage discount associated with the resale of 565 million shares after the expiration of the lock-up period, into a marketplace that has limited market liquidity, could possibly have a material downward influence on the valuation.

 

NOTE 10 – COMMITMENTS AND CONTINGENCIES

 

Litigation

 

In the ordinary course of business, we may be, or have been, involved in legal proceedings. During November 2021, we received a subpoena from the United States Securities and Exchange Commission (“SEC”) for the production of documents. 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. Following our own internal review, we believe that we have complied at all times with the federal securities laws. Through the end of our second quarter in 2024, with the exception of a follow-up request to provide supplemental documentation during May 2024, we have received no follow-up communications from the SEC following our original production of documents in 2022. The Company continues to provide its full cooperation to the Commission. We have cooperated fully with the SEC’s investigation and will continue to work with outside counsel to respond to any further inquiries of the SEC, if, and to the extent they arise.

 

Through August 2023, we generated revenue from the sale of cryptocurrency packages to our customers through an arrangement with a third-party supplier, certain of which, until January 2022, included a product protection option provided by a third-party provider. According to marketing and legal documents provided by such third-party provider, the product protection would allow the purchaser to protect its initial purchase price by obtaining 50% of its purchase price at five years or 100% of its purchase price at ten years. In January 2022, we suspended any further offering of the product protection option in the cryptocurrency packages after the third-party provider was unable to comply with our standard vendor compliance protocols, citing certain offshore confidentiality entitlements. That suspension will remain in place until we are able to further validate the continued integrity of the product protection and the vendor’s ability to honor its commitments to our members. We cannot ensure that such third-party provider will comply with its contractual requirements, which could cause our members to not achieve the level of return on their investments expected. While we do not believe that we should have any legal responsibility to the customers who participated in the TPP Program offered and administered by TPP, there is a risk that any failure of TPP to perform its obligations to our customers, could expose us to claims of our customers that could have an adverse effect on our business, financial condition, and operating results.

 

The Company’s financial statements as of June 30, 2024, reflect a receivables balance of $2.32 million. Of that balance, $2.31 million represents receivables that arise out of credit card transactions generated by the Company’s iGenius subsidiary. The credit card transactions that arise out of the ordinary course operations of the Company’s iGenius subsidiary, are processed by the Company’s credit card processors, in conjunction with their clearing banks. Over time, the balance of credit card collections being held by one of our credit card processors and its clearing bank, which are legally supposed to be held for the benefit of the Company, subject to coverage for chargebacks and other normal course collection issues, has increased to approximately $1.87 million. As they had been unresponsive to our repeated demands for payment, claiming that they were in the process of concluding their internal accounting of the amounts due and status of our accounts, in March 2024, the Company instituted a lawsuit against this credit card processor and its clearing bank seeking, among other things, an accounting for and repayment of the withheld funds. In August 2024, the credit card processor advised us that it had concluded its internal accounting process and had agreed that approximately $1.87 million was due to us. Having agreed upon the amount due to us, the credit card processor has also recently proposed repayment of the amount due to us on an instalment basis, the terms of which we are considering. Should the Company be unable to collect some or all of the funds owed, it will be caused to incur a corollary bad debt expense of up to the uncollected amount which is currently approximately $1.87 million. Furthermore, the Company may be caused under generally accepted accounting principles, to incur a bad debt expense if it is determined that the amounts owed to the Company are unlikely to be collected, although the Company has not yet reached that conclusion. A charge of up to $1.87 million, which represents less than 10% of the Company’s current assets, would not have a material adverse effect upon the Company’s long-term liquidity, however, could have a material adverse effect upon the Company’s net earnings in the period incurred.

 

22

 

 

INVESTVIEW, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Unaudited)

 

Joseph Cammarata served as an officer and director of the Company from December 2019 through his termination for cause on or about December 7, 2021. Mr. Cammarata was terminated following the announcement of civil and criminal charges filed against him in connection with his involvement with a class action claims aggregator unrelated to the Company. The Company was unaware of these outside business interests. Based on public reporting of the matter, the Company believes that Mr. Cammarata was convicted of certain of these criminal charges and is presently incarcerated.

 

Prior to his termination, Mr. Cammarata and the Company engaged in certain transactions as described below:

 

We issued a promissory note to Mr. Cammarata, which, following certain modifications, on or about March 30, 2021, was restated in the principal amount of $1,550,000 (the “Cammarata Note”). Although not originally convertible, as per the March 30, 2021, amendment, the Cammarata Note became convertible at $0.02 per share, Thereafter, effective September 21, 2021, and following another modification, the conversion price under the Cammarata Note was reduced to $0.008 per share. 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 breaches of Mr. Cammarata’s fiduciary duty to us, as well as damages incurred by us arising from Mr. Cammarata’s then ongoing 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 accepted our tender of the cash payment, and through his then counsel, has asserted his entitlement to exercise his right to convert the Cammarata Note into our common shares. Although we believe that our cash tender was appropriate under the terms of the Cammarata Note and our claims for damages by Mr. Cammarata have merit, if Mr. Cammarata elects to challenge our cash tender in a court proceeding, and if we are unable to sustain our legal position on the matter, Mr. Cammarata could receive up to approximately 203 million shares of our common stock upon conversion of the Cammarata Note. As a result of his recent incarceration, the Company has been unable to further adjudicate these issues with Mr. Cammarata.

 

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 $660 worth of interest expense on the loan during the six months ended June 30, 2024. 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. As a result of his recent incarceration, the Company has been unable to further adjudicate these issues with Mr. Cammarata.

 

NOTE 11 – INCOME TAXES

 

For the periods ended June 30, 2024, and June 30, 2023, the Company used a discrete effective tax rate method for recording income taxes, as compared to an estimated full year annual effective tax rate method, as an estimate of the annual effective tax rate cannot be made.

 

Provision for income taxes for the three and six months ended June 30, 2024, was $269,067 and $769,142, respectively, resulting in an effective tax rate of 33.6% and 25.9%, respectively. Provision for income taxes for the three and six months ended June 30, 2023 was $701,275 and $796,337, respectively, resulting in an effective tax rate of 54.0% and 42.2%, respectively. The provision for income taxes was primarily impacted by pretax book income, permanent differences, and by the change in valuation allowance on deferred tax assets.

 

NOTE 12 – SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, Subsequent Events, we have evaluated subsequent events through the date of this filing and have determined that the following events require disclosure.

 

On August 7, 2024, we entered an amendment to extend the Haverford Lease through December 31, 2025.

 

23

 

 

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

 

Forward-Looking Statements

 

The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, as noted by use of the words “believe,” “expect,” “plan,” “project,” “estimate,” and any variations thereof that are intended to 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 elsewhere in this Report and 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. 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 the report.

 

Business Overview

 

We operate a diversified financial technology company that through our subsidiaries and global distribution network provides financial technology, education tools, content, research, and a digital asset technology business, which develops, operates, and supports blockchain technologies, with a focus on the Bitcoin blockchain ecosystem and the generation of digital assets. In addition, we are planning to expand our business into the retail brokerage and financial markets industry by integrating the online brokerage trading platform we acquired in connection with our recent acquisition of Opencash Securities, LLC (“Opencash”), with the proprietary algorithmic trading platform we acquired in September 2021. Opencash is an early-stage registered broker-dealer that plans to offer investors an online trading platform to enable self-directed retail brokerage services and develop synergies with the educational content and products offered by other of our business units.

 

Results of Operations

 

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

 

Revenues

 

   Three Months Ended June 30,   Increase 
   2024   2023   (Decrease) 
   (unaudited)   (unaudited)     
Subscription revenue, net of refunds, incentives, credits, and chargebacks  $12,027,904   $14,349,082   $(2,321,178)
Mining revenue   1,078,777    2,822,278    (1,743,501)
Cryptocurrency revenue   -    86,519    (86,519)
Total revenue, net  $13,106,681   $17,257,879   $(4,151,198)

 

Revenue, net, decreased $4,151,198 or 24%, from $17,257,879 for the three months ended June 30, 2023, to $13,106,681 for the three months ended June 30, 2024. The decrease can be explained by a $2.3 million decrease in our subscription revenue, $1.7 million decrease in our mining revenue, and $87 thousand decrease in our cryptocurrency revenue. The $2.3 million (16%) decrease in subscription revenue was driven by the continued adverse impact of global inflation which caused a general slowdown in the direct sales and home based business industry; the $1.7 million (62%) decrease in mining revenue was a result of a number of factors, including, the “Bitcoin Halving” which occurred on April 19th, 2024, and increase in Bitcoin Network Difficulty and a mandated power curtailment enforced by the government-controlled utility company in Iceland, partially offset by an increase in the price of Bitcoin,; and the $87 thousand (100%) decrease in cryptocurrency revenue was due to the discontinuation of our distribution of NDAU during the year ended December 31, 2023.

 

24

 

 

Operating Costs and Expenses

 

   Three Months Ended June 30,   Increase 
   2024   2023   (Decrease) 
   (unaudited)   (unaudited)     
Cost of sales and service  $1,303,610   $2,588,950   $(1,285,340)
Commissions   6,442,844    8,204,112    (1,761,268)
Selling and marketing   520,013    276,620    243,393 
Salary and related   1,758,844    1,777,796    (18,952)
Professional fees   378,467    423,657    (45,190)
Loss (gain) on disposal of assets   180,223    163,951    16,272 
General and administrative   2,067,598    2,613,824    (546,226)
Total operating costs and expenses  $12,651,599   $16,048,910   $(3,397,311)

 

Operating costs decreased $3,397,311, or 21%, from $16,048,910 for the three months ended June 30, 2023, to $12,651,599 for the three months ended June 30, 2024. The decrease can be explained by a decrease in commissions of $1.8 million, which was a result of decreases in our subscription revenue, a decrease in cost of sales and services of $1.3 million, which was a result of a power curtailment mandated by the government-controlled utility companies in Iceland, and a decrease in general and administrative expenses, which was a result of decreases in credit card processing fees due to the decreases in our subscription revenue and decreases in costs related to our mining operations. These decreases were offset by an increase in selling and marketing expenses of $243 thousand due to an increase in costs associated with promotional events iGenius held during the three months ended June 30, 2024 and 2023.

 

Other Income and Expenses

 

   Three Months Ended June 30,     
   2024   2023   Change 
   (unaudited)   (unaudited)     
Gain (loss) on fair value of derivative liability  $3,326   $(5,099)  $8,425 
Realized gain (loss) on cryptocurrency   6,327    (13,727)   20,054 
Interest expense   (4,675)   (4,675)   - 
Interest expense, related parties   (309,670)   (309,670)   - 
Other income (expense)   651,524    422,882    228,642 
Total other income (expense)  $346,832   $89,711   $257,121 

 

We recognized other income of $346,832 for the three months ended June 30, 2024. This reflected an increase of $257,121, or 287%, from other income of $89,711 recognized for the three months ended June 30, 2023. The change is due to a realized gain recorded on cryptocurrency in the current period of $6 thousand compared to a realized loss of $14 thousand in the equivalent prior year period and an increase in Other income (expense) in the current period of $229 thousand, as we recognized more interest income in the current period due to our cash balances being held in higher interest-bearing accounts, as compared to the equivalent prior year period, and as a result of an increase in ticket sales from certain promotional events iGenius held during the three months ended June 30, 2024 and 2023.

 

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

 

Revenues

 

   Six Months Ended June 30,   Increase 
   2024   2023   (Decrease) 
   (unaudited)   (unaudited)     
Subscription revenue, net of refunds, incentives, credits, and chargebacks  $25,057,222   $25,541,193   $(483,971)
Mining revenue   3,721,376    4,893,097    (1,171,721)
Cryptocurrency revenue   -    366,819    (366,819)
Miner equipment repair revenue   -    23,378    (23,378)
Total revenue, net  $28,778,598   $30,824,487   $(2,045,889)

 

Revenue, net, decreased $2,045,889, or 7%, from $30,824,487 for the six months ended June 30, 2023, to $28,778,598 for the six months ended June 30, 2024. The decrease can be explained by $484 thousand, $1.2 million, and $366 thousand decreases in our subscription revenue, mining revenue, and cryptocurrency revenue, respectively. The $484 thousand (2%) decrease in subscription revenue was driven by the continued adverse impact of global inflation which caused a general slowdown in the direct sales and home based business industry; the $1.2 million (24%) decrease in mining revenue was a result of “Bitcoin Halving” which occurred on April 19th, 2024, an increase in Bitcoin Network Difficulty and a mandated power curtailment enforced by the government-controlled utility companies in Iceland, partially offset by an increase in the price of Bitcoin,; and the $367 thousand decrease in cryptocurrency revenue was due to the discontinuation of our distribution of NDAU during the year ended December 31, 2023.

 

25

 

 

Operating Costs and Expenses

 

   Six Months Ended June 30,   Increase 
   2024   2023   (Decrease) 
   (unaudited)   (unaudited)     
Cost of sales and service  $3,445,944   $4,466,878   $(1,020,934)
Commissions   13,718,054    14,733,205    (1,015,151)
Selling and marketing   531,808    529,054    2,754 
Salary and related   3,387,814    3,701,993    (314,179)
Professional fees   784,996    917,541    (132,545)
Loss (gain) on disposal of assets   180,223    184,221    (3,998)
General and administrative   4,404,253    4,690,254    (286,001)
Total operating costs and expenses  $26,453,092   $29,223,146   $(2,770,054)

 

Operating costs decreased $2,770,054, or 9%, from $29,223,146 for the six months ended June 30, 2023, to $26,453,092 for the six months ended June 30, 2024. The decrease can be explained by a decrease in commissions of $1.0 million, which was a result of decreases in our subscription revenue, a decrease in cost of sales and services of $1.0 million, which was a result of a power curtailment mandated by the government-controlled utility companies in Iceland, a decrease in salary and related of $314 thousand, which was a result of a decrease in stock based compensation, a decrease in professional fees, which was a result of a decrease in amounts paid to consultants, and a decrease in general and administrative expenses, which was a result of decreases in credit card processing fees due to the decreases in our subscription revenue and decreases in costs related to our mining operations.

 

Other Income and Expenses

 

   Six Months Ended June 30,     
   2024   2023   Change 
   (unaudited)   (unaudited)     
Gain (loss) on fair value of derivative liability  $3,400   $3,657   $(257)
Realized gain (loss) on cryptocurrency   282,554    228,845    53,709 
Interest expense   (9,350)   (9,298)   (52)
Interest expense, related parties   (619,340)   (618,414)   (926)
Other income (expense)   989,159    595,505    393,654 
Total other income (expense)  $646,423   $200,295   $446,128 

 

We recognized other income of $646,423 for the six months ended June 30, 2024. This reflects an increase of $446,128, or 223%, from other income of $200,295 recognized for the six months ended June 30, 2023. The change is due to a realized gain on cryptocurrency in the current period of $283 thousand compared to a realized gain of $229 thousand in the equivalent prior year period and an increase in Other income (expense) in the current period of $446 thousand, as we recognized more interest income in the current period due to our cash balances being held in higher interest-bearing accounts, as compared to the equivalent prior year period, and as a result of an increase in ticket sales from certain promotional events iGenius held during the six months ended June 30, 2024 and 2023.

 

Liquidity and Capital Resources

 

During the six months ended June 30, 2024, we met our short- and long-term working capital and capital expenditure requirements, including funding for operations, capital expenditures, growth initiatives, and for debt service on our outstanding indebtedness and dividends on our Series B Preferred Stock, through net cash flows provided by operating activities. We believe we will have sufficient resources, including cash flow from operations and access to capital markets, to meet debt service obligations in a timely manner and be able to meet our objectives.

 

During the six months ended June 30, 2024, we recorded net income from operations of $2,325,506 and net income of $2,202,787. As of June 30, 2024, we have unrestricted cash of $23,659,262. Also, as of June 30, 2024, our current assets exceeded our current liabilities to result in working capital of $16,836,019 and our cryptocurrency balance was reported at a cost basis of $86,276. Management does not believe there are any liquidity issues as of June 30, 2024.

 

26

 

 

Critical 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.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the six months ended June 30, 2024, are not necessarily indicative of the operating results that may be expected for our year ending December 31, 2024, as will be included in the filing of our Annual Report on Form 10-K for the year ending December 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2023, consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC, SAFETek, LLC, Investview Financial Group Holdings, LLC, Opencash Finance, Inc., Opencash Securities, LLC, Investview MTS, LLC, and MyLife Wellness Company. All intercompany transactions and balances have been eliminated in consolidation.

 

Use of Estimates

 

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

 

Long-Lived Assets – Cryptocurrencies

 

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

 

We hold cryptocurrency-denominated assets and include them in our consolidated balance sheet as Other current assets. The value of our cryptocurrencies as of June 30, 2024 and December 31, 2023 were $86,276 and $585,632, respectively. Cryptocurrencies purchased or received for payment from customers are recorded in accordance with ASC 350-30 and cryptocurrencies awarded to the Company through its mining activities ($3,721,376 and $4,893,097 for the six months ended June 30, 2024 and 2023, respectively) are accounted for in connection with the Company’s revenue recognition policy. The use of cryptocurrencies is accounted for in accordance with the first in first out method of accounting. For the six months ended June 30, 2024 and 2023, we recorded realized gains (losses) on our cryptocurrency transactions of $282,554 and $228,845, respectively.

 

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.

 

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We evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. During the six months ended June 30, 2024 and June 30, 2023, no impairment was recorded.

 

Subscription Revenue

 

Most of our revenue is generated by membership and 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 June 30, 2024 and December 31, 2023, our deferred revenues were $2,018,834 and $2,703,398, respectively.

 

Mining Revenue

 

We generate revenue from mining bitcoin. The Company has entered into a digital asset mining pool by executing a contract, as amended from time to time, with the mining pool operator to provide computing power to the mining pool. The contract is terminable at any time by either party without penalty and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, we are entitled to a Full-Pay-Per-Share payout of Bitcoin based on a contractual formula, which primarily calculates the hash rate provided by us to the mining pool as a percentage of total network hash rate, and other inputs. We are entitled to consideration even if a block is not successfully placed by the mining pool operator.

 

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contract with the mining pool operator. The transaction consideration the Company receives is net of a contractually agreed upon “pool fee percentage” charged and kept by the mining pool operator and is noncash, in the form of Bitcoin, which the Company measures at fair value on the date Bitcoin is received. This value is not materially different than the fair value at the moment we meet the performance obligation, which can be recalculated based on the contractual formula. The consideration is variable. The amount of consideration recognized is constrained to the amount of consideration received, which is when it is probable a significant reversal will not occur. There is no significant financing component or risk of a significant revenue reversal in these transactions due to the performance obligations and settlement of the transactions being on a daily basis.

 

Cryptocurrency Revenue

 

During 2023, we generated revenue from the sale of cryptocurrency packages to our customers through an arrangement with a third-party supplier. The various packages included different amounts of coin with differing rates of returns and terms. The coin is delivered by a third-party supplier. The sale of cryptocurrency packages was discontinued during the year ended December 31, 2023.

 

During 2023, we recognized 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 was to arrange for the third-parties to provide coin and protection (if applicable) to our customers and payment was received from our customers at the time of order placement. All customers were given two weeks to request a refund, therefore we would 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 supplier to deliver coin and protection (if applicable), at which time we recognize revenue and the amounts due to our supplier on our books. During the quarter ended June 30, 2024, we generated no revenue from the sale of cryptocurrency packages.

 

Mining Equipment Repair Revenue

 

Through our wholly owned subsidiary, SAFETek, LLC, prior to June 30, 2023, we repaired broken mining equipment for sale to third-party customers. Our mining equipment repair business was discontinued during the quarter ended June 30, 2023.

 

Prior to June 30, 2023, we recognized miner repair revenue in accordance with ASC 606-10 where revenue was 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 the promised goods to our customers.

 

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Revenue generated for the six months ended June 30, 2024, was as follows:

 

   Subscription
Revenue
   Mining Revenue   Total 
Gross billings/receipts  $26,557,528   $3,721,376   $30,278,904 
Refunds, incentives, credits, and chargebacks   (1,500,306)   -    (1,500,306)
Net revenue  $25,057,222   $3,721,376   $28,778,598 

 

For the six months ended June 30, 2024, foreign and domestic revenues were approximately $22.9 million and $5.9 million, respectively.

 

Revenue generated for the six months ended June 30, 2023, was as follows:

 

   Subscription
Revenue
   Cryptocurrency Revenue   Mining Revenue   Miner Repair Revenue   Total 
Gross billings/receipts  $27,784,934   $732,319   $4,893,097   $23,378   $33,433,728 
Refunds, incentives, credits, and chargebacks   (2,243,741)   -    -    -    (2,243,741)
Amounts paid to providers   -    (365,500)   -    -    (365,500)
Net revenue  $25,541,193   $366,819   $4,893,097   $23,378   $30,824,487 

 

For the six months ended June 30, 2023, foreign and domestic revenues were approximately $21.9 million and $8.9 million, respectively.

 

Revenue generated for the three months ended June 30, 2024, was as follows:

 

   Subscription
Revenue
   Mining Revenue   Total 
Gross billings/receipts  $12,706,234   $1,078,777   $13,785,011 
Refunds, incentives, credits, and chargebacks   (678,330)   -    (6,78,330)
Net revenue  $12,027,904   $1,078,777   $13,106,681 

 

For the three months ended June 30, 2024, foreign and domestic revenues were approximately $11.1 million and $2.0 million, respectively.

 

Revenue generated for the three months ended June 30, 2023, was as follows:

 

   Subscription
Revenue
   Cryptocurrency Revenue   Mining Revenue   Total 
Gross billings/receipts  $15,632,412   $173,019   $2,822,278   $18,627,709 
Refunds, incentives, credits, and chargebacks   (1,283,330)   -    -    (1,283,330)
Amounts paid to providers   -    (86,500)   -    (86,500)
Net revenue  $14,349,082   $86,519   $2,822,278   $17,257,879 

 

For the three months ended June 30, 2023, foreign and domestic revenues were approximately $12.2 million and $5.1 million, respectively.

 

Recent Accounting Pronouncements

 

In December 2023, the FASB issued ASU No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. The amendments in ASU No. 2023-08 are intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. The amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. ASU No. 2023-08 requires a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets) as of the beginning of the annual reporting period in which an entity adopts the amendments. The Company has not yet adopted ASU No. 2023-08 and is currently evaluating the impact that the adoption will have on the Company’s financial statement presentation and disclosures.

 

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.

 

Off-Balance Sheet Arrangements

 

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

 

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

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

 

ITEM 4 – CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

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

 

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

 

Changes in Internal Controls

 

There were no changes in our internal controls over financial reporting during the fiscal quarter ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

ITEM 1 – LEGAL PROCEEDINGS

 

There have been no material changes to this information since reported on in the Annual Report on Form 10-K for the year ended December 31, 2023.

 

ITEM 1.A – RISK FACTORS

 

Except as set forth below, there have been no material changes in the risk factors disclosed by us under Part I, Item 1A. Risk Factors contained in the Annual Report on Form 10-K for the year ended December 31, 2023.

 

We have recently instituted collection efforts through litigation against one of our credit card processors and its clearing bank as efforts to account for and collect approximately $1.87 million of our credit card receivables that were supposed to have been held by them in reserve, have not proven successful.

 

The Company’s financial statements as of June 30, 2024, reflect a receivables balance of $2.32 million. Of that balance, $2.31 million represents receivables that arise out of credit card transactions generated by the Company’s iGenius subsidiary. The credit card transactions that arise out of the ordinary course operations of the Company’s iGenius subsidiary, are processed by the Company’s credit card processors, in conjunction with their clearing banks. Over time, the balance of credit card collections being held by one of our credit card processors and its clearing bank, which are legally supposed to be held for the benefit of the Company, subject to coverage for chargebacks and other normal course collection issues, has increased to approximately $1.87 million. As they had been unresponsive to our repeated demands for payment, claiming that they were in the process of concluding their internal accounting of the amounts due and status of our accounts, in March 2024, the Company instituted a lawsuit against this credit card processor and its clearing bank seeking, among other things, an accounting for and repayment of the withheld funds. In August 2024, the credit card processor advised us that it had concluded its internal accounting process and had agreed that approximately $1.87 million was due to us. Having agreed upon the amount due to us, the credit card processor has also recently proposed repayment of the amount due to us on an instalment basis, the terms of which we are considering. Should the Company be unable to collect some or all of the funds owed, it will be caused to incur a corollary bad debt expense of up to the uncollected amount which is currently approximately $1.87 million. Furthermore, the Company may be caused under generally accepted accounting principles, to incur a bad debt expense if it is determined that the amounts owed to the Company are unlikely to be collected, although the Company has not yet reached that conclusion. A charge of up to $1.87 million, which represents less than 10% of the Company’s current assets, would not have a material adverse effect upon the Company’s long-term liquidity, however, could have a material adverse effect upon the Company’s net earnings in the period incurred.

 

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

 

None.

 

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ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4 – MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5 – OTHER INFORMATION

 

During the first six months of the fiscal year ended December 31, 2024, no director of “officer” as defined in Rule 16a-1(f) under the Exchange Act adopted or terminated any Rule 10b5-1 trading plan or arrangements or any non-Rule 10b5-1 trading plan or arrangements, in both cases as defined in Item 408(a) of Regulation S-K.

 

ITEM 6 – EXHIBITS

 

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

 

Exhibit
Number*
  Title of Document   Location
         
Item 21   Subsidiaries of the Registrant    
         
21.01   Schedule of Subsidiaries   This filing.
         
Item 31   Rule 13a-14(a)/15d-14(a) Certifications    
         
31.01   Certification of Principal Executive Officer Pursuant to Rule 13a-14   This filing.
         
31.02   Certification of Principal Financial Officer Pursuant to Rule 13a-14   This filing.
         
Item 32   Section 1350 Certifications    
         
32.01   Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   This filing.
         
32.02   Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   This filing.
         
Item 101***   Interactive Data File    
         
101.INS   Inline XBRL Instance Document   This filing.
         
101.SCH   Inline XBRL Taxonomy Extension Schema   This filing.
         
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase   This filing.
         
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase   This filing.
         
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase