Investview, Inc. - Quarter Report: 2017 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended June 30, 2017

For the transition period from ________________ to _______________

000-27019

(Commission file number)

Investview, Inc.

(Exact name of registrant as specified in its charter)

12 South 400 West, 3^rd floor

Salt Lake City, Utah 84101

(888) 778-5372

(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.

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 x

As of August 11, 2017, there were 1,802,136,281 shares of common stock, par value $.001 per share, outstanding.

TABLE OF CONTENTS

PART I –  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INVESTVIEW, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

INVESTVIEW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

INVESTVIEW INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

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

INVESTVIEW INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2017

(Unaudited)

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Organization

Investview, Inc. (the "Company" or “INVU”) was incorporated on August 10, 2005 under the laws of the State of Nevada as Voxpath Holding, Inc. On September 16, 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.

On March 31, 2017, the Company entered into a Contribution Agreement with the members of Wealth Generators, LCC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators Members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of the common stock of the Company. The closing of the Wealth Generators Contribution occurred after close of business on March 31, 2017, therefore, effective April 1, 2017, Wealth Generators became a wholly owned subsidiary of the Company and the former members of Wealth Generators control the majority of the Company’s outstanding common stock (see Note 5).

On June 6, 2017, the Company entered into an Acquisition Agreement with Market Trend Strategies, LLC ("Market"), a company whose members are also former members of management of the Company. In accordance with the Acquisition Agreement, the Company spun-off its operations that existed prior to the acquisition of Wealth Generators and sold the intangible assets used in the operations of the Company pre-acquisition in exchange for Market assuming $419,139 worth of liabilities that had been on the books pre-acquisition.

Nature of Business

Through its wholly owned subsidiary, Wealth Generators, the Company provides research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. The services include research, trade alerts, and live trading rooms that include instruction in equities, options, FOREX, ETF’s and binary options. In addition to trading tools and research, the Company also includes full education and software applications to assist the individual in debt reduction, increased savings, budgeting and proper tax management. Each product subscription includes a core set of trading tools/research along with the personal finance management suite enabling an individual complete access to the information necessary to cultivate and manage their financial situation. The Company offers four packages available through a monthly subscription that can be cancelled at any time at the discretion of the customer. A unique component of the product marketing plan is the distribution method whereby all subscriptions are sold via current participating customers who choose to distribute and sell the services by participating in the bonus plan. The bonus plan participation is purely optional but enables individuals the ability to create an additional income stream to further support their personal financial goals and objectives.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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 months ended June 30, 2017 are not necessarily indicative of the operating results that may be expected for the year ended March 31, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the March 31, 2017 consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on July 13, 2017 as well as the Company’s Form 8-K/A filed on June 30, 2017.

Principles of Consolidation

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

Use of Estimates

The preparation of these unaudited condensed 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.

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.

The majority of the Company’s revenue is generated by subscription sales and payment is received at the time of purchase. The Company recognizes revenue for subscription sales over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, the Company offers a 10-day trial period to their subscription customers, where a full refund can be requested if a customer does not like the product. Revenues are deferred during the trial period as collectability cannot be reasonably assured until that time has passed. Revenues are presented net of refunds, sales incentives, credits and known and estimated credit card chargebacks.  

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 the Company’s principal or, in the absence of a principal, most advantageous market for the specific asset or liability.

GAAP provides 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:

Level 3 – Inputs that are unobservable and reflect the Company’s own assumptions about the assumptions 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).

The Company's financial instruments consist of cash, accounts receivable, and accounts payable. The Company has determined that the book value of its outstanding financial instruments as of June 30, 2017 (unaudited) and March 31, 2017 approximates the fair value due to their short-term nature.

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. Convertible debt, stock options and warrants have been excluded as common stock equivalents in the diluted loss per share because their effect is anti-dilutive on the computation.

Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 creates a new topic in the ASC Topic 606 and establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics, and expands and improves disclosures about revenue. In addition, ASU 2014-09 adds a new Subtopic to the Codification, ASC 340-40, Other Assets and Deferred Costs: Contracts with Customers, to provide guidance on costs related to obtaining a contract with a customer and costs incurred in fulfilling a contract with a customer that are not in the scope of another ASC Topic. The guidance in ASU 2014-09 is effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods therein. Early application is not permitted. Management is in the process of assessing the impact of ASU 2014-09 on the Company’s financial statements.

NOTE 4 – GOING CONCERN AND LIQUIDITY

The Company’s 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 $10,003,223, net loss of $4,848,836 and net cash used in operations of $932,133 for the three months ended June 30, 2017. Additionally, as of June 30, 2017, the Company had cash of $20,198 and a working capital deficit of $3,035,430. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Historically the Company has relied on increasing revenues and new debt financing to pay for operational expenses and debt as it came due. During the three months ended June 30, 2017, the Company raised $316,224 in cash proceeds from related parties, raised $875,000 in cash proceeds from new lending arrangements and raised $30,000 from the sale of common stock.  Additionally, during the three months ended June 30, 2017 the Company has exchanged $2,253,640 worth of debt into shares of common stock. Going forward the Company plans to reduce obligations with cash flow provided by operations and pursue additional debt and equity financing, however, there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. Nevertheless, the shortage of working capital adversely affects our ability to develop or participate in activities that promote our business, because a substantial portion of cash flow goes to reduce debt rather than to advance operating activities.

Accordingly, the accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

NOTE 5 – REVERSE ACQUISITION

Effective April 1, 2017, the Company entered into a Contribution Agreement with Wealth Generators, LLC (“Wealth Generators”), pursuant to which the Wealth Generators members agreed to contribute 100% of the outstanding securities of the Company in exchange for an aggregate of 1,358,670,942 shares of the Company’s common stock. Following the contribution, the Wealth Generators members control the majority of the Company’s outstanding common stock and Wealth Generators became a wholly owned subsidiary of the Company.

The transaction was accounted for as a reverse acquisition using the acquisition method of accounting in accordance with the FASB (ASC 805). Wealth Generators is the acquirer solely for financial accounting purposes. The following table summarizes the purchase accounting for the fair value of the assets acquired and liabilities assumed at the date of the reverse acquisition.

The table below represents the pro forma revenue and net loss for the three months ended June 30, 2017 and 2016 assuming the reverse acquisition had occurred on April 1, 2016 pursuant to ASC 805-10-50. This pro forma information does not purport to represent what the actual results of operations of the Company would have been had the reverse acquisition occurred on this date nor does it purport to predict the result so of operations for future periods.

As a result of the Acquisition Agreement with Market the Company wrote off goodwill of $1,118,609 and recorded a gain on the settlement of debt of $419,139 representing the liabilities assumed by Market.

NOTE 6 – RELATED PARTY TRANSACTIONS

The Company’s related party payables consisted of the following:

NOTE 7 – DEBT

The Company’s debt consisted of the following:

In addition to the above debt transactions that were outstanding as of June 30, 2017 and March 31, 2017, during the three months ended June 30, 2017 the Company also received proceeds of $50,000 from short term advances and entered into a conversion agreement to issue 5,000,000 shares of stock to extinguish that $50,000 debt.

NOTE 8 – CAPITAL STOCK

During the three months ended June 30, 2017 the Company issued 3,000,000 shares of common stock in exchange for $30,000 of cash proceeds. The Company issued 80,000,000 shares of common stock with a value of $2,256,000 for a 15 year license agreement, therefore $9,477 was recorded as expense in the three months ended June 30, 2017 and $2,246,523 was recorded as a prepaid asset. The Company also issued 234,575,884 shares of its common stock in settlement of debt, wherein accrued liabilities, principal, accrued interest, and derivative liabilities were extinguished in the amounts of $435,892, $2,298,641, $1,696, and $38,557, respectively, and the Company recognized a loss on the settlement of debt in the amount of $3,105,359 in the statement of operations for the three months ended July 31, 2017. In conjunction with the shares issued for the settlement of debt a gain of $413,012 related to the period prior to the reverse acquisition with Wealth Generators, thus is excluded from the statement of operations. In conjunction with the reverse acquisition the Company issued 1,358,670,942 shares of common stock (see Note 5).

As of June 30 and March 31, 2017, the Company had 1,802,136,281 and 125,889,455 shares of common stock issued and 1,802,134,981 shares and 125,888,155 shares of common stock outstanding.

NOTE 9 – 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 June 30, 2017. 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 under the 2008 plan as of June 30, 2017.

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:

Stock-based compensation expense in connection with options granted to employees for the three months ended June 30, 2017 and 2016 was $0.

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:

Warrants

The following table summarizes the warrants outstanding and the related prices for the shares of the Company’s common stock as of June 30, 2017:

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

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Litigation

In the ordinary course of business, the Company may be or has been involved in legal proceedings from time to time. As of the date these financial statements were available to be issued there have been no material legal proceedings relating to the Company.

The Company had received notice from the New York State Workers Compensation Board that a judgement was filed against them in the amount of $13,000, along with total penalties of $29,034, however, effective July 5, 2017 the Company confirmed a payment in the amount $4,350 would settle the amounts in full. Additionally, the Company’s wholly owned subsidiary, ITT, has received notice from the New York State Workers Compensation Board that a judgement was filed against them in the amount of $22,000, however, effective July 5, 2017 the Company confirmed a payment in the amount $4,620 would settle the amounts in full. As of the date of this filing all settlement amounts have been paid to extinguish the liabilities and resolve the judgements against the Company.

Other agreements

In conjunction with a lending arrangement for $100,000, entered into on May 11, 2015, the Company agreed to issue minimum monthly payments of $4,000 after the loan was paid in full and for the entire duration of the Company. The Company is expensing the $4,000 additional monthly payments as they have been disbursed, subsequent to the payback of the initial funds borrowed, and currently has these monthly payments committed to into perpetuity. During the three months ended June 30, 2017 the Company made three payments under this arrangement for $12,000.

NOTE 11 – SUBSEQUENT EVENTS

Subsequent to June 30, 2017 the Company entered into and closed three Subscription Agreements with three separate accredited investors pursuant to which $150,000 was received in consideration for 15,000,000 shares of common stock. Additionally, on July 20, 2017 the Company received $100,000 from an individual under a one-month promissory note that had a fixed interest amount of $5,000. Under the terms of the promissory note the Company is to pay the lender four weekly payments of $26,250 each.

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

Forward-Looking Statements

CERTAIN STATEMENTS IN THIS ANNUAL REPORT MAY CONSTITUTE “FORWARDLOOKING STATEMENTS”. WHEN THE WORDS “BELIEVES,” “EXPECTS,” “PLANS,” “PROJECTS,” “ESTIMATES” AND SIMILAR EXPRESSIONS ARE USED, THEY IDENTIFY FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKINGSTATEMENTS 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 WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. INFORMATION CONCERNING FACTORS THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THESE FORWARD-LOOKING STATEMENTS CAN BE FOUND IN OUR PERIODIC REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. WE UNDERTAKE NO OBLIGATION TO PUBLICLY RELEASE REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS OR CIRCUMSTANCES OR REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

Background

Investview, Inc. (the "Company" or “INVU”) was incorporated on August 10, 2005 under the laws of the State of Nevada as Voxpath Holding, Inc. On September 16, 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.

On March 31, 2017, the Company entered into a Contribution Agreement with the members of Wealth Generators, LCC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators Members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of the common stock of the Company. The closing of the Wealth Generators Contribution occurred after close of business on March 31, 2017, therefore, effective April 1, 2017, Wealth Generators became a wholly owned subsidiary of the Company and the former members of Wealth Generators control the majority of the Company’s outstanding common stock.

On June 6, 2017 the Company entered into an Acquisition Agreement with Market Trend Strategies, LLC ("Market"), a company whose members are also former members of management of the Company. In accordance with the Acquisition Agreement, the Company spun-off its operations that existed prior to the acquisition of Wealth Generators and sold the intangible assets used in the operations of the Company pre-acquisition in exchange for Market assuming $419,139 worth of liabilities that had been on the books pre-merger.

Transition Activities

As a result of the acquisition of Wealth Generators, effective April 1, 2017, the Company was in a state of transition. Certain of the assets pertaining to the former Investview services offered prior to the acquisition have been sold or discontinued. Ryan Smith has been named the Chief Executive Officer replacing Dr. Joseph Louro who resigned on April 6, 2017. Annette Raynor has been named Chief Operating Officer replacing Anthony Lotito who resigned on April 3, 2017. William Kosoff remains Acting Chief Financial Officer but resigned from the Board of Directors on April 16, 2017. Nicholas Maturo and Louis Sagar resigned from the Board of Directors on March 31, 2017. On June 6, 2017 Annette Raynor and Chad Miller were named to the Board of Directors. On April 7, 2017, the Company replaced the auditors Liggett & Webb PA and engaged Haynie and Company as its independent registered public accounting firm for the Company’s fiscal year ended March 31, 2017.

Business Overview

Investview Inc. through its wholly owned subsidiary Wealth Generators provides education, and technology designed to assist individuals in navigating the financial markets. The services include research, newsletter alerts, and live education rooms that include instruction on the subjects of equities, options, FOREX, ETF’s and binary options. In addition, to tools and research, Wealth Generators also includes education and technology applications to assist individuals in debt reduction, increased savings, budgeting and proper tax expense management.

Each product subscription includes a core set of tools/research along with the personal finance management suite providing an individual complete access to the information necessary to cultivate and manage their financial situation. Wealth Generators offers four packages available through a monthly subscription that can be cancelled at any time at the discretion of the customer. A unique component of the product marketing plan is the distribution method whereby all subscriptions are sold via current participating customers who choose to distribute and sell the services. The bonus plan participation is purely optional but enables individuals the ability to create an additional income stream to further support their personal financial goals and objectives 

Plan of Operations

With the acquisition of Wealth Generators, Investview plans to focus entirely on the expansion and growth of the Wealth Generators product and distribution model. Investview, Inc. also maintains ownership of SAFE Management LLC a registered investment advisory firm in the state of New Jersey which lapsed in reporting. Plans to bring reporting current and re-establishing its registration is being undertaken. All former products offered by Investview are replaced entirely by the Wealth Generators product line. 

The Company’s target market is comprised of individuals who seek to learn how to improve their financial condition. They have an interest and need to learn how to reduce debt, budget, increase savings and allocate their financial resource to create additional income both active and passive.

The Company’s marketing strategy for their subscription based offering is unique in that it deploys a network marketing distribution method where current members may optionally choose to participate in the company’s bonus plan and sell the Company’s subscriptions to others.

Customer acquisition is realized through word of mouth marketing by those customers who actively distribute the product through home meetings, in person presentations, one-on-one interaction and large seminars organized and delivered by the distributors in conjunction with the company.

The Company’s plan is to continue to develop the in-place network and is actively pursuing sales initiatives in Germany and Mexico.

Over the past few years, Wealth Generators has intentionally increased expenses to prepare the Company’s platform to handle the steadily increasing subscription memberships.

Investview will still need to address the larger undertaking of language translation and continued international expansion which will require additional funding.

Results of Operations

Three months ended June 30, 2017 compared to three months ended June 30, 2016:

Revenues

The Company recorded revenue for the three months ended June 30, 2017 of $2,977,802, which was an increase of $259,193, or 10%, from the prior period revenue of $2,718,609. This increase was due to increased interest in our new products including FOREX, an increase in international interest, and a maturing distributor base capable of creating retention and additional new members in the current period. Additionally, in the prior period there was a loss of members due to poor strategy performance and general attrition.

Operating Costs and Expenses

The Company recorded operating costs and expenses for the three months ended June 30, 2017 of $3,999,036, which was a decrease of $283,142, or 7%, from the prior period operating costs and expenses of $4,282,178. This could mostly be explained with a $418,488 decrease in commissions expense during the period which was due to the Company having an unusual number of chargebacks applied to the three months ended June 30, 2017, but the Company paying out commissions on the gross revenue amounts prior to taking into account those chargebacks. The decrease in commissions was offset by an increase of $201,434 in the professional fees expense due to costs incurred in the three months ended June 30, 2017 related to the Company’s audit and reverse acquisition that was effective April 1, 2017.

Other Income and Expenses

The Company recorded other income and (expenses) for the three months ended June 30, 2017 of $(3,821,141), which was an increase of $3,787,915, or 11,400%, from the prior period other income and (expenses) of $(33,226). The increase can fully be explained by the loss on debt extinguishment and the loss on spin-off of operations during the three months ended June 30, 2017 versus no such expense in the prior period.

During the three months ended June 30, 2017 the Company issued 234,575,884 shares of its common stock in settlement of debt, wherein accrued liabilities, principal, accrued interest, and derivative liabilities were extinguished in the amounts of $435,892, $2,298,641, $1,696, and $38,557, respectively, and the Company recognized a loss on the settlement of debt in the amount of $3,105,359. Additionally, on June 6, 2017 INVU entered into an Acquisition Agreement with Market Trend Strategies, LLC ("Market"), a company whose members are also former members of management of INVU. In accordance with the Acquisition Agreement, INVU spun-off the operations of INVU that existed prior to the merger with Wealth Generators, LLC and sold the intangible assets used in the operations of INVU pre-merger in exchange for Market assuming $419,139 worth of liabilities that had been on the books pre-merger. Accordingly, the Company recorded a gain on the settlement of debt of $419,139 for the liabilities assumed by Market and wrote off goodwill of $1,118,609 as a loss on spin-off of operations.

Liquidity and Capital Resources

During the three months ended June 30, 2017, the Company incurred a loss of $4,848,836. However, only $932,133 was cash related. This negative cash flow was funded by borrowing from related parties ($316,224), proceeds from new lending arrangements ($875,000), and proceeds from the sale of common stock ($30,000) offset by repayments to related parties ($148,000) and repayments on debt ($126,059). As a result, our cash and cash equivalents increased by $18,582 to $20,198 from the beginning of the fiscal year of $1,616.

The Company's current liabilities exceeded its current assets (working capital deficit) by $788,907 as of June 30, 2017 as compared to $4,247,684 at March 31, 2017. The decrease in the working capital deficit is primarily due to the reduction of debt through the issuance of common stock.

The independent auditor’s report on our March 31, 2017 consolidated financial statements states that the Company's historical losses, accumulated deficit, cash balance, and working capital deficit raise substantial doubts about the Company's ability to continue as a going concern. Historically the Company has relied on increasing revenues and new debt financing to pay for operational expenses and debt as it came due. Going forward the Company plans to reduce obligations with cash flow provided by operations and pursue additional debt and equity financing, however, there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. Nevertheless, the shortage of working capital adversely affects our ability to develop or participate in activities that promote our business, because a substantial portion of cash flow goes to reduce debt rather than to advance operating activities.

Critical Accounting Policies

Basis of Presentation

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 months ended June 30, 2017 are not necessarily indicative of the operating results that may be expected for the year ended March 31, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the March 31, 2017 consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on July 13, 2017 as well as the Company’s Form 8-K/A filed on June 30, 2017.

Principles of Consolidation

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

Use of Estimates

The preparation of these unaudited condensed 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.

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.

The majority of the Company’s revenue is generated by subscription sales and payment is received at the time of purchase. The Company recognizes revenue for subscription sales over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, the Company offers a 10-day trial period to their subscription customers, where a full refund can be requested if a customer does not like the product. Revenues are deferred during the trial period as collectability cannot be reasonably assured until that time has passed. Revenues are presented net of refunds, sales incentives, credits and known and estimated credit card chargebacks.  

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 Acting 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 Acting 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.

Changes in Internal Controls

There were no changes in our internal controls over financial reporting during the fiscal quarter ended June 30, 2017 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

In the ordinary course of business, the Company may be or has been involved in legal proceedings from time to time. As of the date these financial statements were available to be issued there have been no material legal proceedings relating to the Company.

The Company had received notice from the New York State Workers Compensation Board that a judgement was filed against them in the amount of $13,000, along with total penalties of $29,034, however, effective July 5, 2017 the Company confirmed a payment in the amount $4,350 would settle the amounts in full. Additionally, the Company’s wholly owned subsidiary, ITT, has received notice from the New York State Workers Compensation Board that a judgement was filed against them in the amount of $22,000, however, effective July 5, 2017 the Company confirmed a payment in the amount $4,620 would settle the amounts in full. As of the date of this filing all settlement amounts have been paid to extinguish the liabilities and resolve the judgements against the Company.

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. The material risk factors faced by our company are set forth on our Form 10-K Annual Report for the year ended March 31, 2017 filed with the SEC on July 13, 2017 as well as the Company’s Form 8-K/A filed on June 30, 2017.

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

On March 31, 2017, the Company entered into a Contribution Agreement with the members of Wealth Generators, LCC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators Members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of the common stock of the Company. The closing of the Wealth Generators Contribution occurred after close of business on March 31, 2017, therefore, effective April 1, 2017, Wealth Generators became a wholly owned subsidiary of the Company and the former members of Wealth Generators control the majority of the Company’s outstanding common stock

During the three months ended June 30, 2017, the Company entered into Conversion Agreements with several accredited investors pursuant to which each of the parties agreed to convert all amounts of debt accrued and payable to such person by Wealth Generators into shares of Company common stock. The Conversion Agreements resulted in the conversion of an aggregate of $2,253,641 into 210,000,000 shares of Company common stock.

In addition, the Company entered an agreement with a licensor of various products for a term of 15 years pursuant to which the licensor agreed to waive its rights for future payments in exchange of 80,000,000 shares of common stock of the Company, which may be increased an additional 20,000,000 shares of common stock if the products provides a return in excess of 2% on invested capital for three consecutive months. The additional issuances shall not exceed 40,000,000 shares of common stock.  

On April 26, 2017, the Company entered into and closed a Subscription Agreement with an accredited investor pursuant to which the investor invested $30,000 in consideration of 3,000,000 shares of common stock.

For each of the above issuance, CR Capital Holdings LLC (“CR Capital”), which is owned by Chad Miller and Ryan Smith, executive officers and directors of the Company, agreed to provide price protection. At the end of 18 months from the date of such agreement, if the average closing price of the Company’s common stock over the previous 20 trading days (the “Trading Price”) is below $0.02 per share, subject to any adjustments resulting from any recapitalization, reverse split, or similar actions, CR Capital will issue the investor additional shares of common stock until the cumulative value of the shares issued to the shareholder is equal to double the aggregate purchase price of the shares, up to a maximum of 100% of the shares of common stock purchased under this agreement.

On June 6, 2017, the Company and Alpha Pro Asset Management Group, LLC (“Alpha”) entered into an Assignment and Assumption Agreement (the “Assumption Agreement”) whereby debt payable by the Company in the amount of $482,588 was assigned to Alpha in consideration of 24,575,884 shares of common stock of the Company. Market Trend Strategies, LLC (“Market”) subsequently replaced Alpha as party to the Assumption Agreement. On June 6, 2017, Market and the Company entered into an Acquisition Agreement pursuant to which the Company sold certain non-essential assets pertaining to various education products to Market in consideration of Market assuming debt payable by the Company in the amount of $419,135.

The above offers and sales of the securities were made to accredited investors and the Company relied upon the exemptions contained in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated there under with regards to the sales. No advertising or general solicitation was employed in offerings the securities. The offers and sales were made to accredited investors and transfer of the securities was restricted by the Company in accordance with the requirements of the Securities Act of 1933.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 – MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5 – OTHER INFORMATION

As a result of the acquisition of Wealth Generators, effective April 1, 2017, the Company was in a state of transition. Certain of the assets pertaining to the former Investview services offered prior to the acquisition have been sold or discontinued. Ryan Smith has been named the Chief Executive Officer replacing Dr. Joseph Louro who resigned on April 6, 2017. Annette Raynor has been named Chief Operating Officer replacing Anthony Lotito who resigned on April 3, 2017. William Kosoff remains Acting Chief Financial Officer but resigned from the Board of Directors on April 16, 2017. Nicholas Maturo and Louis Sagar resigned from the Board of Directors on March 31, 2017. On June 6, 2017 Annette Raynor and Chad Miller were named to the Board of Directors. On April 7, 2017, the Company replaced the auditors Liggett & Webb PA and engaged Haynie and Company as its independent registered public accounting firm for the Company’s fiscal year ended March 31, 2017.

ITEM 6 – EXHIBITS

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.