Investview, Inc. - Quarter Report: 2012 December (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended December 31, 2012

For the transition period from ________________ to _______________

000-27019

(Commission file number)

InvestView, Inc.

(Exact name of registrant as specified in its charter)

54 Broad Street, Suite 301

Red Bank, New Jersey 07701

(732) 380-7271

(Issuer's telephone number)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 x  No ¨

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

As of February 14, 2012, there were 5,629,055 shares of common stock, (of which 1,300 shares are in treasury), par value $.001 per share, outstanding.

INVESTVIEW, INC.

FORM 10-Q

QUARTERLY PERIOD ENDED DECEMBER 31, 2012

TABLE OF CONTENTS

INVESTVIEW, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

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

CONSOLIDATED STATEMENT OF (DEFICIENCY IN) STOCKHOLDERS' EQUITY

FROM APRIL 1, 2012 THROUGH DECEMBER 31, 2012

(unaudited)

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

INVESTVIEW INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

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

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying unaudited condensed consolidated financial statements follows:

Business and Basis of Presentation

InvestView, Inc. (the "Company") was formed on August 19, 2005 under the laws of the State of Nevada. On September 18, 2006, the Company changed its name to TheRetirementSolution.Com, Inc., on October 1, 2008 to Global Investor Services, Inc. and on March 27, 2012 to InvestView, Inc. The Company currently markets directly and through its marketing partners as well as online, certain investor products and services that provide financial and educational information to its prospective customers and to its subscribers.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Investment Tools & Training, LLC ("ITT"), Razor Data Corp ("Razor"), Instilend Technologies, Inc. ("Instilend") and SAFE Management LLC ("Safe"). All significant inter-company transactions and balances have been eliminated in consolidation.

Interim Financial Statements

The following (a) condensed consolidated balance sheet as of September 30, 2012, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP 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. Operating results for the nine months ended December 31, 2012 are not necessarily indicative of results that may be expected for the year ending March 31, 2013. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended March 31, 2012 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on June 29, 2012.

Acquisitions

Instilend Technologies, Inc.

On October 24, 2012, the Company acquired Instilend Technologies Inc., pursuant to the terms of that certain Share Exchange Agreement entered into between the Company, Instilend, Todd Tabacco, Derek Tabacco and Rich L’Insalata, the former shareholders of Instilend, dated September 13, 2012.

Upon Closing, the Company acquired 100% of the outstanding securities of Instilend in consideration of 500,000 shares of common stock of the Company and convertible promissory notes in the aggregate principal amount of $541,496 (the “Instilend Notes”)(par value $500,000) for a total purchase price of $2,700,734.

The Instilend Notes bears 5% interest per annum and the interest may be paid in cash or shares of common stock. The Instilend Notes mature three years from the date of issuance and converts into common stock at a price of $8.00 per share. The Company withheld 50,000 shares of common stock to satisfy certain tax liabilities of Instilend.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

In addition, each of the Sellers entered into employment agreements, non-compete agreements and lock-ups agreements with the Company. Pursuant to the employment agreements, each of the Sellers have been retained as Vice Presidents of the Company for terms of three years, receiving annual salaries of $156,000. In the event the Company’s monthly revenue is less than the targeted monthly revenue then the Sellers, in lieu of receiving cash, will receive a pro-rata portion of their salary in shares of common stock.

A summary of consideration is as follows:

Instilend owns the Matador platform and LendEQS platform, client list of a software program known as Stock Locate and the related website, www.locatestock.com.

The following summarizes the current estimates of fair value of assets acquired and liabilities assumed:

Safe Management LLC

On November 27, 2012, the Company acquired SAFE Management LLC, pursuant to the terms of that certain Share Exchange Agreement entered into between the Company and Gina Romano and Annette Raynor, the former owners of Safe.

Upon Closing, the Company acquired 100% of the outstanding securities of Safe in consideration of 35,714 shares of common stock of the Company for a total purchase price of $125,000.

A summary of consideration is as follows:

The following summarizes the current estimates of fair value of assets acquired:

SAFE Management, LLC is a Registered Investment Advisor (RIA) in the state of New Jersey. SAFE Management provides their clients unique investment products and advisory services that are created and managed by their in-house team of professionals using state of the art analysis tools and the experience of their CFA, Edward Hosinger.

Excluded from the sale is the private fund Secure Acquisition Financial Entity, LP (SAFE LP). In conjunction with the acquisition the Company entered into a two year employment agreement with SAFE’s principal and Investment Advisor Representative and General Partner, Annette Raynor.

The purchase price allocation for the above acquisitions is subject to further refinement as management completes its assessment of the valuation of certain assets and liabilities.

Pro Forma Information

The Pro Forma Condensed Combined Financial Statements Unaudited of the Company, including the Instilend acquisition for the six months ended September 30, 2013, are included in the Form 8-K/A dated February 13, 2013.  The Pro Forma Condensed Combined Financial Statements Unaudited of the Company for the nine months ended December 31, 2012, including the acquisition of Instilend, which closed October 24, 2012, were deemed immaterial.  The activity for Instilend for the 24 days of October was to record approximately $69,000 of revenue and approximately $97,000 of expenses.   The net assets on the balance sheet were approximately $50,000 higher or approximately $57,000.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

The Company accounts for acquisitions in accordance with the provisions of ASC 805-10.  The Company assigns to all identifiable assets acquired, a portion of the cost of the acquired company equal to the estimated fair value of such assets at the date of acquisition. The Company records the excess of the cost of the acquired company over the sum of the amounts assigned to identifiable assets acquired as goodwill.

The Company does not amortize goodwill. The Company recorded goodwill in the aggregate amount of $576,989 as a result of the acquisitions of Instilend and Safe during the nine months ended December 31, 2012.

The Company accounts for and reports acquired goodwill under Accounting Standards Codification subtopic 350-10, Intangibles-Goodwill and Other (“ASC 350-10”). In accordance with ASC 350-10, annually the Company tests its intangible assets for impairment or more often if events and circumstances warrant. Any write-downs will be included in results from operations.

Revenue Recognition

For revenue from product sales and services, the Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product or services has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Revenue arises from subscriptions to the websites/software, workshops, online workshops and training and coaching/counseling services where the customers are charged a monthly subscription fee for access to the online training and courses and website/data.  Revenues are recognized in the month the product and services are delivered.

The Company sells its products separately and in various bundles that contain multiple deliverables that include website/data subscriptions, educational workshops, online workshops and training, one-on-one coaching and counseling sessions, along with other products and services. In accordance with ASC 605-25, sales arrangements with multiple deliverables are divided into separate units of accounting if the deliverables in the arrangement meet the following criteria: (i) the product has value to the customer on a standalone basis; (ii) there is objective and reliable evidence of the fair value of undelivered items; and (iii) delivery or performances of any undelivered item is probable and substantially in our control. The fair value of each separate element is generally determined by prices charged when sold separately. In certain arrangements, we offer these products bundled together.  As per ASC 605-25, if fair value of all undelivered elements in an arrangement exists, but fair value does not exist for a delivered element, then revenue is recognized using the residual method. Under the residual method, the fair value of undelivered elements is deferred and the remaining portion of the arrangement fee (after allocation of 100 percent of any discount to the delivered item) is recognized as revenue.  The deferral policy for each of the different types of revenues is summarized as follows:

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

Cost of Sales and Service

The cost of sales and service consists of the cost of the data feeds that supply real time and stock market data to the Company’s stock analysis software based tool, external partner commissions and other costs associated with the repair or maintenance of the website.

Fair Value of Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2012 and March 31, 2012. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Stock-Based Compensation

The Company accounts for its stock based awards in accordance with Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”), which requires a fair value measurement and recognition of compensation expense for all share-based payment awards made to its employees and directors, including employee stock options and restricted stock awards. The Company estimates the fair value of stock options granted using the Black-Scholes valuation model. This model requires the Company to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of our common stock price and the number of options that will be forfeited prior to vesting. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. Changes in these estimates and assumptions can materially affect the determination of the fair value of stock-based compensation and consequently, the related amount recognized in the Company’s condensed consolidated statements of operations.

For the nine months ended December 31, 2012 and 2011, the Company did not grant stock options to employees. The fair value of vesting options granted in previous years and vested during the three and nine months ended December 31, 2012 of $-0- and $53,947, respectively, and $26,974 and $80,922 for the three and nine months ended December 31, 2011 was recorded as a current period charge to earnings.

In addition, the Company issued restricted stock units ("RSU") during the nine months ended December 31, 2012. The fair value of the vesting RSUs of $300,656 and $511,033 was recorded as a current period charge to earnings during the three and nine months ended December 31, 2012.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

Net Loss per Share

The Company follows Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying 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. The Company excluded 540,250 and 430,459 shares of common stock equivalents, that would be resulted from conversion of convertible debt, or exercise of stock options and warrants, from the diluted loss per share because their effect is anti-dilutive on the computation for the nine months ended December 31, 2012 and 2011, respectively.

Reliance on Key Personnel and Consultants

The Company has only 18 full-time employees and no part-time employees.  Additionally, there are approximately 8 consultants performing various specialized services.  The Company is heavily dependent on the continued active participation of these current executive officers, employees and key consultants. The loss of any of the senior management or key consultants could significantly and negatively impact the business until adequate replacements can be identified and put in place.

Use of Estimates

The preparation of consolidated 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.

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

2. GOING CONCERN MATTERS

The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred significant recurring losses which have resulted in an accumulated deficit of $81,553,265, net loss of $5,685,524 and net cash used in operations of $532,221 for the nine months ended December 31, 2012 which raises substantial doubt about the Company’s ability to continue as a going concern.

Continuation as a going concern is dependent upon obtaining additional capital and upon the Company’s attaining profitable operations. The Company will require a substantial amount of additional funds to complete the development of its products, to build a sales and marketing organization, and to fund additional losses which the Company expects to incur over the next few years. In order to improve the Company's liquidity, the Company's management is actively pursuing additional financing through discussions with investment bankers, financial institutions and private investors. There can be no assurance that the Company will be successful in its effort to secure additional financing. The Company recognizes that, if it is unable to raise additional capital, it may find it necessary to substantially reduce or cease operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

3.  PREPAID EXPENSES

From time to time, the Company issues shares of its common stock for services to be performed.  The fair value of the common stock is determined at the date of the contract for services and is amortized ratably over the term of the contract.  As of December 31, 2012 and March 31, 2012, prepaid expenses of this nature were $154,600 and $82,516, respectively.  During the three and nine months ended December 31, 2012 and 2011, the Company charged to operations an aggregate of $39,272 and $135,837, respectively, and an aggregate of $132,364 and $608,531 during the three and nine months ended December 31, 2011, respectively.

4. PROPERTY AND EQUIPMENT

The Company’s property and equipment at December 31, 2012 and March 31, 2012:

Depreciation expense charged to operations amounted to approximately $118,000 and $53,000, respectively, for the three months ended December 31, 2012 and 2011, respectively; and approximately $222,000 and $158,000 for the nine months ended December 31, 2012 and 2011, respectively.

5. INTANGIBLE ASSETS

In connection with the acquisitions of Instilend Technologies, Inc. and Safe Management, as described above, the Company acquired certain intangible assets. A summary of the acquired intangible assets and their estimated useful lives are as follows:

Amortization expense charged to operations amounted to approximately $38,789 for the three and nine months ended December 31, 2012.

The Company accounts for and reports acquired goodwill under Accounting Standards Codification subtopic 350-10, Intangibles-Goodwill and Other (“ASC 350-10”). In accordance with ASC 350-10, the Company tests its intangible assets for impairment on an annual or more often if events and circumstances warrant. Any write-downs will be included in results from operations.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following at December 31, 2012 and March 31, 2012:

7. NOTES PAYABLE

A summary of notes payable at December 31, 2012 and March 31, 2012 are as follows:

On January 20, 2009, the Company received $200,000 in exchange for a promissory note, payable, due July 20, 2009 with interest due monthly at 20% per annum. The note is secured by common stock of the Company and is personally guaranteed by certain officers of the Company. The note contains certain first right of payment should the Company be successful in raising $500,000 to $1,500,000 in a Private Placement Offering before any payments can be distributed from the escrow at the offering. In connection with the issuance of the promissory note payable, the Company issued warrants to purchase its common stock at $2.00 per share for five years. The fair value of the warrants of $101,183, representing debt discount, has been fully amortized. This Note is currently in default. Interest on this note has been fully accrued.

On March 31, 2011, the Company issued a $227,049 unsecured promissory note, subsequently increased to $279,098 during the year ended March 31, 2012, due March 31, 2013 at 8% per annum in exchange for accrued data fees. On August 24, 2012, the Company settled the $279,098 outstanding unsecured promissory note and $23,141 related accrued interest for $30,000 recognizing a gain on settlement of debt of $272,239.

On September 30, 2010, the Company issued an aggregate of $120,000 in unsecured promissory notes due five years from issuance at 8% per annum payable at maturity in exchange for the cancellation of 15,000 previously issued warrants.  The fair value of the exchanged warrants, approximately equaled the fair value of the issued notes at the date of the exchange.

On September 30, 2011, the Company issued an aggregate of $20,000 in unsecured promissory notes due September 30, 2014 at 8% per annum payable at maturity in exchange for the return and cancellation of 2,500 reset warrants to purchase the Company's common stock.  In conjunction with the exchange of promissory notes for warrant cancelation, the Company recorded a loss on warrant liability of $5,100.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

At December 31, 2012 and March 31, 2012, balances consist of the following:

8. CONVERTIBLE NOTES

Convertible Notes # 1

On June 30, 2011, the Company issued $1,200,000 in secured Convertible Promissory Notes ($300,000 related party, officers of the Company) that matures June 30, 2014. The Promissory Notes bears interest at a rate of 8% and can be convertible into 300,000 shares of the Company’s common stock, at a conversion rate of $4.00 per share. Interest will also be converted into common stock at the conversion rate of $4.00 per share. In connection with the issuance of the Convertible Promissory Notes, the Company issued 150,000 warrants to purchase the Company’s common stock at $6.00 per share over five years.

In accordance ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the note. The Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The Company recognized and measured an aggregate of $735,334 of the proceeds, which is equal to the intrinsic value of the embedded beneficial conversion feature, to additional paid-in capital and a discount against the note. The debt discount attributed to the beneficial conversion feature is amortized over the note’s maturity period (three years) as interest expense.

As indicated above, the Company issued detachable warrants granting the holder the right to acquire an aggregate of 150,000 shares of the Company’s common stock at $6.00 per share. The warrants expire five years from the issuance. In accordance with ASC 470-20, the Company recognized the value attributable to the warrants in the amount of $464,666 to additional paid in capital and a discount against the note. The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing model and the following assumptions: contractual terms of 5 years, an average risk free interest rate of 1.76%, a dividend yield of 0%, and volatility of 166.12%. The debt discount attributed to the value of the warrants issued is amortized over the note’s maturity period (three years) as interest expense.

The Company allocated proceeds based on the relative fair values of the debt and warrants, measured at an aggregate of $1,200,000, to the warrant and debt conversion provision liabilities and a discount to Convertible Promissory Notes. The remaining proceeds are apportioned between the value of the note and the embedded beneficial conversion feature.

For the nine months ended December 31, 2012 and 2011, the Company amortized $301,095 and $202,555 of debt discount to current period operations as interest expense, respectively.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

Convertible Note # 2

The Company issued a $21,000 unsecured convertible promissory note that matures on July 31, 2013 in exchange for a previously issued convertible promissory note.  The note bears interest at a rate of 8% per annum due at maturity and can be convertible into 5,250 shares of the Company’s common stock, at a conversion rate of $4.00 per share. Interest will also be converted into common stock at the conversion rate of $4.00 per share.

In accordance ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the note. The Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The Company recognized and measured an aggregate of $6,300 of the proceeds, which is equal to the intrinsic value of the embedded beneficial conversion feature, to additional paid-in capital and a discount against the note. The debt discount attributed to the beneficial conversion feature is amortized over the note’s maturity period (three years) as interest expense.

For the nine months ended December 31, 2012 and 2011, the Company amortized $2,574 and $889 of debt discount to current period operations as interest expense, respectively.

Convertible Notes # 3

During the month of December 2011, the Company issued an aggregate of $200,000 in secured Convertible Promissory Notes ($100,000 related party, officers of the Company) that matures December 2014. The Promissory Notes bear interest at a rate of 8% and can be convertible into 50,000 shares of the Company’s common stock, at a conversion rate of $4.00 per share. Interest will also be converted into common stock at the conversion rate of $4.00 per share. In connection with the issuance of the Convertible Promissory Notes, the Company issued 25,000 warrants to purchase the Company’s common stock at $6.00 per share over five years.

The Company did not record an embedded beneficial conversion feature in the note since the fair value of the common stock did not exceed the conversion rate at the date of issuance.

In connection with the issuance of the promissory notes, the Company issued detachable warrants granting the holder the right to acquire an aggregate of 25,000 shares of the Company’s common stock at $6.00 per share. The warrants expire five years from the issuance. In accordance with ASC 470-20, the Company recognized the value attributable to the warrants in the amount of $37,201 to additional paid in capital and a discount against the note. The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing model and the following assumptions: contractual terms of 5 years, an average risk free interest rate of 0.88% to 0.91%, a dividend yield of 0%, and volatility of 173.57% to 173.81%. The debt discount attributed to the value of the warrants issued is amortized over the note’s maturity period (three years) as interest expense.

For the nine months ended December 31, 2012 and 2011, the Company amortized $9,334 and $85 of debt discount to current period operations as interest expense, respectively.

Convertible Notes # 4

On March 5, 2012, the Company issued a $100,000 in secured Convertible Promissory Note that matures June 30, 2014. The Promissory Note bears interest at a rate of 8% and can be convertible into 50,000 shares of the Company’s common stock, at a conversion rate of $2.00 per share. Interest will also be converted into common stock at the conversion rate of $2.00 per share. In connection with the issuance of the Convertible Promissory Notes, the Company issued 12,500 warrants to purchase the Company’s common stock at $6.00 per share over five years.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

In accordance ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the note. The Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The Company recognized and measured an aggregate of $62,113 of the proceeds, which is equal to the intrinsic value of the embedded beneficial conversion feature, to additional paid-in capital and a discount against the note. The debt discount attributed to the beneficial conversion feature is amortized over the note’s maturity period (three years) as interest expense.

In connection with the issuance of the promissory notes, the Company issued detachable warrants granting the holder the right to acquire an aggregate of 12,500 shares of the Company’s common stock at $6.00 per share. The warrants expire five years from the issuance. In accordance with ASC 470-20, the Company recognized the value attributable to the warrants in the amount of $37,887 to additional paid in capital and a discount against the note. The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing model and the following assumptions: contractual terms of 5 years, an average risk free interest rate of 0.87%, a dividend yield of 0%, and volatility of 370.41%. The debt discount attributed to the value of the warrants issued is amortized over the note’s maturity period (three years) as interest expense.

The Company allocated proceeds based on the relative fair values of the conversion provisions of the debt and warrants, measured at an aggregate of $100,000, to the warrant and debt conversion provision liabilities and a discount to Convertible Promissory Notes.

For the nine months ended December 31, 2012, the Company amortized $32,468 of debt discount to current period operations as interest expense.

Convertible Notes # 5

During the month of August 2012, the Company issued an aggregate of $700,000 in secured Convertible Promissory Notes ($200,000 related party, officers of the Company) that mature August 2015, of which $500,000 of the Notes were funded as of September 30, 2012. The Promissory Notes bear interest at a rate of 8% and can be convertible into 125,000 shares of the Company’s common stock, at a conversion rate of $4.00 per share. Interest will also be converted into common stock at the conversion rate of $4.00 per share. In connection with the issuance of the Convertible Promissory Notes, the Company issued 50,000 warrants to purchase the Company’s common stock at $6.00 per share over five years.

In connection with the issuance of the promissory notes, the Company issued detachable warrants granting the holder the right to acquire an aggregate of 62,500 shares of the Company’s common stock at $6.00 per share. The warrants expire five years from the issuance. In accordance with ASC 470-20, the Company recognized the value attributable to the warrants and the conversion feature in the amount of $353,085 to additional paid in capital and a discount against the notes. The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing model and the following assumptions: contractual terms of 5 years, an average risk free interest rate of 0.65% to 0.81%, a dividend yield of 0%, and volatility of 418.96% to 419.54%. The debt discount attributed to the value of the warrants issued is amortized over the note’s maturity period (three years) as interest expense.

For the nine months ended December 31, 2012, the Company amortized $43,829 of debt discount to current period operations as interest expense.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

Convertible Notes # 6

On October 24, 2012, in conjunction with the acquisition of Instilend Technologies, Inc., the Company issued an aggregate of $541,496 in secured Convertible Promissory Notes that mature October 2015. The Promissory Notes bear interest at a rate of 5% and can be convertible into 67,687 shares of the Company’s common stock, at a conversion rate of $8.00 per share. Interest will also be converted into common stock at the conversion rate of 8.00 per share.

The Company did not record an embedded beneficial conversion feature in the note since the fair value of the common stock did not exceed the conversion rate at the date of issuance.

At December 31, 2012 and March 31, 2012, convertible note balances consisted of the following:

Aggregate maturities of long-term debt as of December 31, 2012 are as follows:

9. WARRANT DERIVATIVE LIABILITY

The Company issued warrants in conjunction with the issuance of Convertible Promissory Notes.  These warrants contain certain reset provisions. Therefore, in accordance with ASC 815-40, the Company reclassified the fair value of the warrant from equity to a liability at the date of issuance.  Subsequent to the initial issuance date, the Company is required to adjust to fair value the warrant as an adjustment to current period operations.

The Company recorded a gain on change in fair value of warrant liability of $2,475 and $53,801 for the nine months ended December 31, 2012 and 2011, respectively.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

At December 31, 2012, the fair value of the 2,500 warrants containing certain reset provisions were determined using the Black Scholes Option Pricing Model with the following assumptions:

10. RELATED PARTY TRANSACTIONS

Due to Related Party

The Company is periodically advanced noninterest bearing operating funds from related parties and shareholders.  The advances are due on demand and unsecured. At December 31, 2012 and March 31, 2012, due to related party was $207,700 and 105,975, respectively. In addition, as of December 31, 2012, the Company accrued an aggregate of $1,145,541 of unpaid officer salaries and wages.

Convertible Notes Payable, long term portion-related party

As described in Note 8 above, on June 30, 2011, the Company issued a $200,000 convertible promissory note with interest at 8% per annum, due June 30, 2014 to the Company's CEO.  The note is convertible into the Company's common stock at $4.00 per share. In connection with the issuance of the note, the Company issued 25,000 warrants to purchase the Company’s common stock at $6.00 per share over five years.

As described in Note 8 above, on June 30, 2011, the Company issued a $100,000 convertible promissory note with interest at 8% per annum, due June 30, 2014 to the Company's CFO.  The note is convertible into the Company's common stock at $4.00 per share. In connection with the issuance of the note, the Company issued 12,500 warrants to purchase the Company’s common stock at $6.00 per share over five years.

As described in Note 8 above, on December 29, 2011, the Company issued a $100,000 convertible promissory note with interest at 8% per annum, due December 2014 to the Company's CEO.  The note is convertible into the Company's common stock at $4.00 per share. In connection with the issuance of the note, the Company issued 12,500 warrants to purchase the Company’s common stock at $6.00 per share over five years.

As described in Note 8 above, on August 6, 2012, the Company issued a $100,000 convertible promissory note with interest at 8% per annum, due August 6, 2015 to the Company's CEO.  The note is convertible into the Company's common stock at $4.00 per share. In connection with the issuance of the note, the Company issued 12,500 warrants to purchase the Company’s common stock at $6.00 per share over five years.

As described in Note 8 above, on August 12, 2012, the Company issued a $100,000 convertible promissory note with interest at 8% per annum, due August 12, 2015 to the Company's COO.  The note is convertible into the Company's common stock at $4.00 per share. In connection with the issuance of the note, the Company issued 12,500 warrants to purchase the Company’s common stock at $6.00 per share over five years.

11. CAPITAL STOCK 

Common stock

On January 30, 2013, the Company amended its Articles of Incorporation to increase the number of authorized shares of its common stock from 7.5 million to 15 million shares.

On April 9, 2012, the Company affected a two hundred-to-one (200 to 1) reverse stock split of its issued and outstanding shares of common stock, $0.001 par value (whereby every two hundred shares of Company’s common stock will be exchanged for one share of the Company's common stock). All references in the consolidated financial statements and the notes to consolidated financial statements, number of shares, and share amounts have been retroactively restated to reflect the reverse split.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

In May 2012, the Company issued an aggregate of 20,145 shares of its common stock in exchange for $100,876 of services rendered.

In May 2012, the Company issued an aggregate of 6,167 shares of its common stock, valued at $37,886 in settlement of $14,000 accounts payable, and charged $23,886 to current operations.

In June 2012, the Company issued 16,667 shares of its common stock, valued at $62,501 in settlement of $50,000 accounts payable, and charged $12,501 to current operations.

In September 2012, the Company issued an aggregate of 40,030 shares of its common stock, valued at $168,000 for services to be rendered.

In September 2012, the Company issued 150,000 shares of its common stock valued at $600,000 in settlement of accrued salary and bonus due the Company's CEO for fiscal year 2012.

In October 2012, the Company issued an aggregate of 38,335 shares of its common stock, valued at $153,340 for services to be rendered.

In November 2012, the Company issued an aggregate of 450,000 shares of its common stock, valued at $1,800,000 for the acquisition of Instilend Technologies, Inc.

In November 2012, the Company issued to the CEO 250,000 shares of its common stock, valued at $1,000,000, as a bonus for services rendered.

In November 2012, the Company issued an aggregate of 3,775 shares of its common stock, valued at $14,345 for services to be rendered.

In December 2012, the Company issued 35,714 shares of its common stock, valued at $125,000 for the acquisition of Safe Management.

In December 2012, the Company issued an aggregate of 44,919 shares of its common stock, valued at $164,741 for services to be rendered.

The letter of intent with respect to the “Quick & Reilly” brand entered between First National Boston Corporation (“FNBC”) and the Company expired pursuant to its terms. The parties have verbally agreed to again commence discussions with respect to the Company’s acquisition of the brand pending FNBC obtaining Federal agency approval with respect to the brand. In September 2012, the Company issued 70,000 shares of its common stock, valued at $284,200, to FNBC as payment for the waiver of a non-circumvent agreement. The fair value of the common stock was charged to current period operations. In conjunction with the issuance, the Company agreed to grant a right to FNBC, which expired unexercised on December 31, 2012, to purchase a secured note paying 8% per annum and warrants in the amount no less than $200,000 and up to $500,000 where the note and warrants have identical terms and conditions issued to Dr. Louro (the Company's CEO) on August 6, 2012.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

12. STOCK OPTIONS AND WARRANTS

Employee Stock Options

The following table summarizes the changes in employee stock options outstanding and the related prices for the shares of the Company’s common stock issued to employees of the Company under two employee stock option plans. The nonqualified plan adopted in 2007 is for 65,000 shares of which 47,500 have been granted as of December 31, 2012. The qualified plan adopted in October of 2008 authorizing 125,000 shares was approved by a majority of the Shareholders on September 16, 2009. To date 42,500 shares have been granted as of December 31, 2012.

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to employees of the Company at December 31, 2012:

Transactions involving stock options issued to employees are summarized as follows:

Stock-based compensation expense in connection with options granted to employees for the three and nine months ended December 31, 2012 was $-0- and $53,947, respectively, and $26,974 and $80,922 for the three and nine months ended December 31, 2011, respectively.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

Non-Employee Stock Options

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to consultants and non-employees of the Company at December 31, 2012:

Transactions involving stock options issued to consultants and non-employees are summarized as follows:

Restricted Stock Units ("RSU")

The Company has issued RSUs to certain employees.  RSUs issued to date vest in up to 6 to 24 months.

Transactions involving employee RSUs are summarized as follows:

During the three and nine months ended December 31, 2012, the Company charged the vesting portion of the RSU's $300,656 and $511,033 to current operations.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

Warrants

The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company’s common stock issued to shareholders at December 31, 2012:

Transactions involving the Company’s warrant issuance are summarized as follows:

In August 2012, warrants of 50,000 were issued in connection with the issuance of Convertible Promissory Notes (see Note 7). The warrants are exercisable for five years from the date of issuance at an exercise price of $6.00 per share. The Company valued the warrants using the Black-Scholes pricing model and the following assumptions: contractual terms of 5 years, an average risk free interest rate of 0.65% to 0.81%, a dividend yield of 0%, and volatility of 418.96% to 419.54%.

13.  COMMITMENTS AND CONTINGENCIES

In August 2012 the Company entered into Subscription Agreements with five accredited investors. One of the investors funded $100,000 of a $300,000 subscription agreement. We expect the additional $200,000 to be funded in the March 2013 quarter. See Note 8, Convertible Note 5.

To obtain additional funding for working capital, Investview entered into Subscription Agreements during the period from October 22, 2012 through October 24, 2012, with two accredited investors (the “October 2012 Investors”) for the sale of an aggregate of (i) $800,000 in 8% Secured Convertible Promissory Notes (the “Notes”) and (ii) Common Stock Purchase Warrants (the “Warrants”) to purchase an aggregate of 87,500 shares of our common stock. The closings occurred during the period from October 22, 2012 through October 24, 2012. One of the notes for $100,000 has a forward funding date of not later than December 15, 2012. A second note for $300,000 has a forward funding date of no later than March 15, 2013. The third note for $400,000 has a forward funding date of no later than April 15, 2013.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

The Notes bear interest at 8%, mature three years from the date of issuance, and are convertible into our common stock, at the October 2012 Investor’s option, at a conversion price of $4.00 per share. Based on this conversion price, the Notes in an aggregate amount of $800,000 excluding interest are convertible into an aggregate of 200,000 shares of the Company’s common stock.

The Company may prepay the Notes only with the written consent of the holder. The full principal amount of the Notes is due upon default under the terms of Notes. In addition, we have granted the October 2012 Investors a security interest in substantially all of our assets and intellectual property.

The Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $6.00 per share.

The final sale of the Notes was completed on October 24, 2012. As of the date hereof, the Company is obligated on $800,000 in face amount of Note issued to the October 2012 Investors. The Notes are a debt obligation arising other than in the ordinary course of business which constitute a direct financial obligation of the Company.

The Notes and Warrants were offered and sold to the October 2012 Investors in a private placement transaction made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933 and Rule 506 promulgated thereunder.

14.  FAIR VALUE MEASUREMENT

The Company adopted the provisions of Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) on January 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the consolidated financial statements.

INVESTVIEW, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity.

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of December 31, 2012:

15. OFFICER COMPENSATION

During the nine months ended December 31, 2012, the Company recognized $412,500 of accrued salary and bonus pursuant to the employment agreement of the chief executive. The CEO’s salary increased from $300,000 to $400,000 beginning with the September 2012 quarter. In respect of the CEO’s salary and bonus not being paid during fiscal year 2012, the CEO and the board agreed to award the CEO 150,000 restricted shares. The cost of this award was $600,000, which was charged to earnings in the June 2012 quarter. In addition, in the December 2012 quarter, the board awarded the CEO 250,000 restricted shares for his successful efforts in performing certain activities approved by the Board of Directors. The cost of this bonus of $1,000,000 was recognized during the December 2012 quarter. The COO and CFO have not been paid since their employment dates. We have accrued salary and bonus of approximately $340,000 for the COO and CFO. Additionally, approximately $490,000 has been charged to earnings for the nine months ended December 31, 2012 for RSUs granted to the COO and CFO. These RSUs are currently unvested.

On December 6, 2012, we terminated our former acting CFO who is also a Director on our Board of Directors. We accrued $325,000 in severance payments. We anticipate paying this out over the remaining term of his agreement of two years.

16. SUBSEQUENT EVENTS

On January 31, 2013, the holder of Convertible Note #4 effected conversion of this note under its stated conversion terms.

On, February 7, 2013, the Company entered into a Letter of Intent with a third party (“Licensee”) who wishes to obtain exclusive rights in the United States to use the Instilend technology (“Software”) for use in a mini-prime execution and clearing business (“Joint Venture”). Two items are binding on the Licensee:

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report Form 10-Q, including this discussion and analysis by management, contains or incorporates forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” “anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations. For factors that may cause actual results to differ from management’s expectations, reference should be made to the Company’s Form 10-K for the year ended March 31, 2012 filed with the Securities and Exchange Commission and our other periodic filings with the Securities and Exchange Commission.

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Corporate History

InvestView, Inc. (hereinafter referred to as the “Company”, “InvestView” or “INVU”) was formed in the State of Nevada on August 19, 2005. Effective September 16, 2006, the Company changed its name to TheRetirementSolution.com, Inc., on October 1, 2008 the Company changed its name to Global Investor Services, Inc. and on March 27, 2012, the Company changed its name to InvestView, Inc. The Company was initially formed to market portfolios of stocks via subscription. In 2007, a new chief executive officer was installed and a strategy was developed to create and market a diverse portfolio of products and services for the financial education and financial information industry. This strategy included strategic acquisitions, such as the acquisitions of Razor Data, LLC and Investment Tools and Training, LLC, which have provided the Company with an integrated platform in which it can market and deliver investor education products and investor services. In June 2011 a new CEO was installed. The stock symbol is INVU.

Business Overview

As an investor technology and education company, we provide a broad suite of state-of-the-art products that allow the individual investor to find, analyze, track and manage his or her portfolio. Our educational services focus on empowering investors with the skills that allow them to rely on their own investing knowledge to make intelligent and sound investment decisions. Our flagship product is InvestView, an all-inclusive on-line education, analysis and application platform. InvestView is equipped with in-house, qualified professionals who have collectively taught over a quarter of a million students in the past decade on how to trade in the stock market.

These tools and educational programs arm the common investor and provide them with the ability to traverse today's turbulent marketplace, regardless of the direction of the market - whether it is moving up, down or sideways.

It is our opinion that now, more than ever before, it is critical that the individual investor come to understand the forces that influence the marketplace. We specialize in assisting common investors through this process by offering them the tools, training and confidence that is required to successfully navigate the market in these trying times.

Regardless of investors' ages or varying backgrounds, we help the everyday investor turn market uncertainty into opportunity. We do this by providing powerful investment tools and training, coupled with a rules-based system that allows individuals to make more intelligent and disciplined investment decisions.

We are committed to the education and support of the individual investor. Our innovative products, proprietary tools and all-inclusive platform are cost effective and engineered to meet the needs of investors world-wide.

The Company’s unique offerings include:

The Company believes that offering financial information and financial education, in one integrated operating platform, is a viable business strategy, but needs to evolve for greater diversification and shareholder value. Currently, our business model monetizes our products and services primarily from subscription revenues. Online brokers bundle the cost of their education platform into the commission and spreads they charge. To better monetize the value of our scalable platform, we believe our business strategy needs to evolve to be more like the online brokerage model.

Choice Trade

On October 16, 2012, Investview entered a joint venture with ChoiceTrade Holdings Inc. (“ChoiceTrade Holding”), the parent company of LetsGoTrade, Inc. d/b/a ChoiceTrade, an online brokerage firm. Pursuant to the joint venture, Investview will provide ChoiceTrade Holding with its investor education platform as well as related marketing services. In consideration for such services, Investview will receive a cash fee from ChoiceTrade Holding and may also receive ownership interest in ChoiceTrade Holdings depending upon activity generated following the execution of the joint venture.

White Label with Broker

In October 2012, we entered into a software license and marketing agreement with a broker-dealer. The broker will use our “Newsletter” products (e.g., our 7 Minute ideas) and our “software” (e.g., electronic stock market and trading research tools) on a white label basis for their clients. Starting in January 2013 we will receive a subscription fee. For the first six months, we will receive subscription royalties of $7,500 per month. For the second six months, the Company will also receive success fees for hitting certain milestones. The agreement is for one year and may be renewed if both parties agree with the new term and value.

Results of Operations

Three months ended December 31, 2012 compared to three months ended December 31, 2011:

Revenues:

We realized a drop in our revenues of 20% for the three months ended December 31, 2012 from the prior year as we continue to transition to our online based modeling. We proactively introduced both new products and a new marketing strategy to improve the lifetime value of our accounts. We are now emphasizing our online based business model which provides subscription based services including trading ideas, tools and education through live and recorded webinars and is marketed through a number of online media channels. Our trading and education tools are located at www.investview.com whereas our 7 minute trader product has its own website at www.7minute trader.com.

As we measured the attrition rates of the trading and education offerings we determined that their lifetime value was approximating our cost of acquisition. As clients move through the education modules they tend to exhaust their interest and either attrite or shift to the lower priced trading modules. Introduction of the 7 minute trader has resulted in a better adoption rate, a markedly improved retention rate and significantly lower acquisition costs. As a result we decreased our advertising spend about 30% from the same quarter last year or about $309,000.

This quarter also included about $114,000 more accretion of deferred revenues than the same quarter last year.

Operating Costs and Expenses:

A summary of significant operating costs and expenses for the three months ended December 31, 2012 and the three months ended December 31, 2011 follows:

Operating costs were substantially higher this quarter versus the same quarter last year, primarily from an increase of selling, general and administrative expenses.

During the three months ended December 31, 2012, our cost of sales and service was $121,815 as compared to $159,640 during the three months ended December 31, 2011. Most of this expense is composed of stock market data feeds to the Company’s core educational product line’s stock analysis tools. As a percentage of revenues, the operating margin increased to 74% in the current quarter from 73% in the same quarter last year. Beginning with the new calendar year we have eliminated the need for real time data costs. We, therefore, expect to see a marked improvement in this cost element.

Our selling, general and administrative expenses increased from $2,083,643 for the three months ended December 31, 2011 to $3,515,137 in current 2012 period or $1,431,494 (69%). Last year the Company incurred approximately $1,481,000 in compensation expense as compared to $3,141,893 for the current period. In addition, professional fees increased over the same quarter last year by approximately $239,000 primarily related to the various transactions we have been involved in. We also had a decrease in our marketing and advertising this quarter versus the same quarter last year of approximately $305,000, as described in our net revenues.

Depreciation and amortization increased from $52,717 to $156,909 or an increase of $104,192 primarily to the acquisition of depreciable and amortizable assets acquired in connection with the Instilend Technologies, Inc. acquisition.

Other:

A summary of significant other income (expenses) for the three months ended December 31, 2012 and the three months ended December 31, 2012 follows:

Interest expense increased from $165,161 to $203,506, a $38,345 or 23% increase.  The increase is because of the significant recapitalization of the Company over the past year along with added debt with our Instilend acquisition.

During the year ended March 31, 2010, we issued promissory notes and related warrants that contain certain reset provisions.  As such, we are required to record these reset provisions as a liability and mark them to market each reporting period.  For the three months ended December 31, 2012, we recorded a gain of $2,612 in change in the fair value of these reset provisions vs. a gain for the three months ended December 31, 2011 of $6,836. The volatility of our stock price decreased in fiscal year 2012 from the prior fiscal year. This decrease in volatility caused the value of the warrants to decrease and resulted in some of the loss in the current period.

In addition, during the year ended March 31, 2012, we modified a significant number of these outstanding warrants and reduced the number of warrants with reset provisions to 2,500 warrants.

Nine months ended December 31, 2012 compared to nine months ended December 31, 2011:

Revenues:

We realized a drop in our revenues of 16% for the nine months ended December 31, 2012 from the same period last year as we continue to transition to our online based modeling. We proactively introduced both new products and a new marketing strategy to improve the lifetime value of our accounts. We are now emphasizing our online based business model which provides subscription based services including trading ideas, tools and education through live and recorded webinars and is marketed through a number of online media channels. Our trading and education tools are located at www.investview.com whereas our 7 minute trader product has its own website at www.7minute trader.com.

As we measured the attrition rates of the trading and education offerings we determined that their lifetime value was approximating our cost of acquisition. As clients move through the education modules they tend to exhaust their interest and either attrite or shift to the lower priced trading modules. Introduction of the 7 minute trader has resulted in a better adoption rate, a markedly improved retention rate and significantly lower acquisition costs. As result we decreased our advertising spend about $1.1 million from the same period last year.

This period also included about $98,000 more accretion of deferred revenues than the same period last.

Operating Costs and Expenses:

A summary of significant operating costs and expenses for the nine months ended December 31, 2012 and the nine months ended December 31, 2011 follows:

Operating costs were higher year over year, primarily from an increase in of selling, general and administrative expenses and depreciation and amortization.

During the nine months ended December 31, 2012, our cost of sales and service was $447,177 as compared to $548,727 during the nine months ended December 31, 2011. Most of this expense is composed of stock market data feeds to the Company’s core educational product line’s stock analysis tools. As a percentage of revenues, the operating margin improved to 68% in the current quarter from 67% in the same quarter last year primarily because the reduction in revenue. Beginning with the new calendar year we have eliminated the need for real time data costs. We, therefore, expect to see a marked improvement in this cost element.

Our selling, general and administrative expenses increased from $5,834,019 for the nine months ended December 31, 2011 to $6,106,894 in current 2012 period or $272,875 (5%). Last year the Company incurred approximately $3,414,451 as compensation expense as compared to $4,986,852 for the current period. In addition, for the nine months ended December 31, 2011, we incurred additional professional fees of approximately $280,000 primarily related to the various transactions we have been involved in. We also had a decrease in marketing and advertising expense when comparing the current nine months of this year to the same period last year of approximately $1,101,000.

Depreciation and amortization increased from $158,152 to $260,576 or an increase of $102,424 primarily due to the acquisition of depreciable and amortizable assets acquired in connection with the Instilend Technologies, Inc. acquisition.

Other:

A summary of significant other income (expenses) for the nine months ended December 31, 2012 and the nine months ended December 31, 2012 follows:

Interest expense decreased from $2,217,361 to $551,109, a $1,666,252 or 75% decrease.  The decrease is because of the significant recapitalization of the Company over the past year.

During the year ended March 31, 2010, we issued promissory notes and related warrants that contain certain reset provisions.  As such, we are required to record these reset provisions as a liability and mark them to market each reporting period.  For the nine months ended December 31, 2012, we recorded a gain of $2,475 in change in the fair value of these reset provisions vs. a gain for the nine months ended December 31, 2011 of $53,801. The volatility of our stock price increased in fiscal year 2012 from the prior fiscal year. This increase in volatility caused the value of the warrants to increase and resulted in some of the gain in the current period.

In addition, during the year ended March 31, 2012, we modified a significant number of these outstanding warrants and reduced the number of warrants with reset provisions to 2,500 warrants.

In addition, for the nine months ended December 31, 2011, we settled or restructured a significant portion of our outstanding convertible debt obligations and warrants containing reset provisions.  As such, we incurred a loss on debt settlement of $1,911,211 as compared to a gain of $267,678 for the nine months ended December 31, 2012 as a primary result of settlement of an outstanding note payable.

Cash Used in Operating Activities:

During the nine months ended December 31, 2012, we were able to decrease our rate of usage of cash on a monthly basis from operations to approximately $59,000 as compared to approximately $140,000 in the same period last year. In the quarter ended December 31, cash used in operations was down to $70,249 or about $24,000 per month.

Liquidity and Capital Resources

During nine months ended December 31, 2012, the Company incurred a loss from operations of $5,685,524. However, only $532,221 was cash related. This negative cash flow was funded by existing cash, issuance and closing of $500,000 of additional convertible notes payable and borrowing from related parties. As a result, our cash and cash equivalents increased by $67,594 to $112,327 from the beginning of the fiscal year of $179,921.

The Company's current liabilities exceeded its current assets (working capital deficit) by $2,641,036 as of December 31, 2012 as compared to $952,214 at March 31, 2012. The increase in the working capital deficit is primarily due to the combination of increased accounts payable and accrued expenses of $528,378 and due to related parties of $1,247,266 (primarily composed of accrued salaries and wages). We anticipate funding and closing of the remaining $200,000 of August convertible notes in the March 2013 quarter. We also anticipate the funding and closing of the remaining October convertible notes of $700,000 in March and April of 2013. In addition we no longer anticipate $100,000 of the October convertible notes funding and closing.

Auditor’s Opinion Expresses Doubt About the Company’s Ability to Continue as a “Going Concern”

The independent auditors report on our March 31, 2012 consolidated financial statements states that the Company's historical losses and accumulated deficiency raise substantial doubts about the Company's ability to continue as a going concern, due to the losses incurred and deficiency. If we are unable to develop our business, we will have to reduce, discontinue operations or cease to exist, which would be detrimental to the value of the Company's common stock. We can make no assurances that our business operations will develop and provide us with significant cash to continue operations.

In order to improve the Company's liquidity, the Company's management is actively pursuing additional financing through discussions with investment bankers, financial institutions and private investors. There can be no assurance that the Company will be successful in its effort to secure additional financing.

Critical Accounting Policies

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements; we believe the following critical accounting policy involves the most complex, difficult and subjective estimates and judgments.

Revenue Recognition

For revenue from product sales and services, the Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Revenue arises from subscriptions to the websites/software, workshops, online workshops and training and coaching/counseling services where the customers are charged a monthly subscription fee for access to the online training and courses and website/data.  All revenues are recognized in the month the products and services are delivered.

We sell our products separately and in various bundles that contain multiple deliverables that include website/data subscriptions, educational workshops, online workshops and training, one-on-one coaching and counseling sessions, along with other products and services. In accordance with 605-25, sales arrangements with multiple deliverables are divided into separate units of accounting if the deliverables in the arrangement meet the following criteria: (i) the product has value to the customer on a standalone basis; (ii) there is objective and reliable evidence of the fair value of undelivered items; and (iii) delivery or performances of any undelivered item is probable and substantially in our control. The fair value of each separate element is generally determined by prices charged when sold separately. In certain arrangements, we offer these products bundled together.  If there is any discount from the combined fair value of the individual elements, the discount is allocated to the portion of the revenues that is attributed to the online courses and training. As per 605-25, if fair value of all undelivered elements in an arrangement exists, but fair value does not exist for a delivered element, then revenue is recognized using the residual method. Under the residual method, the fair value of undelivered elements is deferred and the remaining portion of the arrangement fee (after allocation of 100 percent of any discount to the delivered item) is recognized as revenue.  The deferral policy for each of the different types of revenues is summarized as follows:

Stock-Based Compensation

The Company has adopted Accounting Standards Codification subtopic 718-10, Compensation-Stock Compensation (“ASC 718-10”) which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, directors and key consultants including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

For the nine months ended December 31, 2012 and 2011, the Company did not grant stock options to employees. The fair value of vesting options granted in previous years and vested during the three and nine months ended December 31, 2012 of $-0- and $53,947, respectively, and $26,974 and $80,922 for the three and nine months ended December 31, 2011 was recorded as a current period charge to earnings.

In addition, the Company issued a restricted stock units ("RSU") during the nine months ended December 31, 2012. The fair value of the vesting RSU of $300,656 and $353,085 was recorded as a current period charge to earnings during the three and nine months ended December 31, 2012.

Derivative Instruments and Fair Value of Financial Instruments

We have evaluated the application of Accounting Standards Codification 815-40, Derivatives and Hedging, Contracts in Entity’s Own Equity (“ASC 815-40”) to certain freestanding warrants and convertible promissory notes that contain exercise price adjustment features known as reset provisions.  Based on the guidance in ASC 815-40, we have concluded these instruments are required to be accounted for as derivatives effective upon issuance.

We have recorded the fair value of the warrants and reset provisions of the convertible promissory notes and classified as derivative liabilities in our balance sheet at fair value with changes in the value of these derivatives reflected in the consolidated statements of operations as gain or loss on derivative liabilities.  These derivative instruments are not designated as hedging instruments under ASC 815-10.

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

Off-Balance Sheet Arrangements

The Company does 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 not effective.

Control Deficiencies and Remediation Plan

Management has identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment. Management of the Company believes that these material weaknesses are due to the small size of the Company’s accounting staff and reliance on outside consultants for external reporting.  The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation.

To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of outside legal and accounting professionals. As we grow, we expect to increase our number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

These control deficiencies could result in a misstatement of account balances that would result in a reasonable possibility that a material misstatement to our consolidated financial statements may not be prevented or detected on a timely basis. Accordingly, we have determined that these control deficiencies as described above together constitute a material weakness.

Changes in Internal Controls

Other than mentioned above, there were no changes in our internal controls over financial reporting during the fiscal quarter ended December 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.  However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not involved in a legal proceeding which commenced or in which there was a material development during the quarter ended December 31, 2012.

None of our directors, officers, or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.

ITEM 1A – RISK FACTORS

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 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In May 2012, the Company issued an aggregate of 20,145 shares of its common stock in exchange for services rendered.

In May 2012, the Company issued an aggregate of 6,167 shares of its common stock in settlement of accounts payable.

In June 2012, the Company issued 16,667 shares of its common stock in settlement of accounts payable.

In September 2012, the Company issued an aggregate of 40,030 shares of its common stock, valued at $168,000 for services to be rendered.

In September 2012, the Company issued 70,000 shares of its common stock, valued at $284,200 as payment for services. The fair value of the common stock was charged to current period operations. In conjunction with the issuance, the Company agreed to grant a right to the settled party, expiring on December 31, 2012 to purchase a secured note paying 8% per annum and warrants in the amount no less than $200,000 and up to $500,000 where the note and warrants have identical terms and conditions issued to Dr. Louro (the Company's CEO) on August 6, 2012.

In September 2012, the Company issued 150,000 shares of its common stock valued at $600,000 in settlement of accrued salary and bonus due the Company's CEO for fiscal 2012.

In August 2012, the Board awarded Dr. Louro 250,000 restricted shares effective with the closing of the Instilend transaction. Dr. Louro’s contract allowed for an award up to 275,000 shares for his efforts to redirect the Company resulting in significant benefits accruing to the Company. The Board cited the following significant benefits that accrued to the Company from Dr. Louro’s first five quarters with the Company; creation of a strategy for diversified revenue streams (i.e., the opportunity for more revenue coming from transactions and/or fees for assets under management versus the current subscription model), significant amounts of capital raised at better terms and longer durations, elimination of costly revenue sharing agreements, reductions in overhead, improvement of cash flow, investing significant amounts of his own money, restructuring the debt at significant discounts and replacing the leverage with stock, identifying and executing on a number of acquisitions, joint ventures and white label agreements, and recruiting some high level management at advantageous compensation levels and, initially, without negative cash flow. The Instilend closing occurred on October 24, 2012. Beginning April 1, 2012, Dr. Louro’s salary increased to $400,000 annually in connection with his employment agreement.

On September 13, 2012, Investview entered into Share Exchange Agreement (the “Instilend Agreement”) with Instilend Inc., a New York corporation (“Instilend”), and Todd Tabacco, Derek Tabacco and Rich L’Insalata, the shareholders of Instilend (the “Sellers”). The parties closed the acquisition on October 24, 2012. Instilend is the exclusive owner of the Matador platform and LendEQS platform, client list of a software program known as Stock Locate and the related website, www.locatestock.com. Instilend is a 100% owned subsidiary of the Company.

Pursuant to the terms of the Instilend Agreement, the Company agreed to acquire, and the Sellers agreed to sell, 100% of the outstanding securities of Instilend in consideration for 500,000 shares of common stock of the Company and a Convertible Promissory Note in the principal amount of $500,000, which will bear 5% interest per annum and may be paid in cash or shares of common stock at the Company’s discretion. The Convertible Promissory Note will mature three years from the date of issuance and converts into common stock at a price of $8.00 per share. In addition, each of the Sellers will enter employment agreements, non-compete agreements and lock-ups agreements, as applicable. Instilend is required to deliver audited financials statement for the year ended March 31, 2012 and unaudited financial statements for the most recent quarter.

In October 2012, the Company issued an aggregate of 38,335 shares of its common stock, valued at $153,340 for services to be rendered.

In November 2012, the Company issued an aggregate of 450,000 shares of its common stock, valued at $1,800,000 for the acquisition of Instilend Technologies, Inc.

In November 2012, the Company issued 250,000 shares of its common stock, valued at $1,000,000, as an officer bonus for services rendered.

In November 2012, the Company issued an aggregate of 3,775 shares of its common stock, valued at $14,345 for services to be rendered.

In December 2012, the Company issued 35,714 shares of its common stock, valued at $125,000 for the acquisition of Safe Management.

In December 2012, the Company issued an aggregate of 44,919 shares of its common stock, valued at $164,741 for services to be rendered.

The above transactions were approved by the Board of Directors of the Company.

All of the above offerings and sales were deemed to be exempt under Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of the Company or executive officers of the Company, and transfer was restricted by the Company in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment. Furthermore, all of the above-referenced persons were provided with access to our Securities and Exchange Commission filings.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

In January of 2009, the Company received $200,000 in exchange for the issuance of a non-convertible Promissory Note that matured on July 20, 2009. The note bears an interest rate of 20% and is in default. The Company has been advised that the US department of Justice is negotiating a settlement with the note holder. Interest payments of approximately $17,334 were made to date and interest continues to be accrued pending settlement with the US Department of Justice.

ITEM 4 – Mine Safety Disclosures.

Not Applicable.

ITEM 5 – OTHER INFORMATION

NONE

ITEM 6 – EXHIBITS

** Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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