# Investview, Inc.: Form 10-Q for the period ended Sep 30, 2023

- Company: [Investview, Inc.](/companies/invu.md) (CIK 862651)
- Form: 10-Q
- Filed: 2023-11-13
- Accepted by EDGAR: Nov 13, 2023, 06:32 ET
- Period: 2023-09-30
- Accession: 0001493152-23-040281
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/862651/000149315223040281/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/862651/000149315223040281/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-07-01 to 2023-09-30 | $19.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2023-01-01 to 2023-09-30 | $50.0m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Selling, general and administrative | 9 months, 2023-01-01 to 2023-09-30 | $536.5k | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2023-07-01 to 2023-09-30 | $2.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-01-01 to 2023-09-30 | $3.8m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2023-07-01 to 2023-09-30 | $304.3k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-01-01 to 2023-09-30 | $1.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | $2.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | $3.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-07-01 to 2023-09-30 | $0.00 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-01-01 to 2023-09-30 | $0.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-07-01 to 2023-09-30 | $0.00 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-01-01 to 2023-09-30 | $0.00 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-07-01 to 2023-09-30 | 3,669,411,690 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-01-01 to 2023-09-30 | 3,671,594,620 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | $5.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2023-01-01 to 2023-09-30 | $2.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2023-01-01 to 2023-09-30 | $481.1k | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2023-09-30 | $22.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-09-30 | $28.0m | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $38.6m | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $13.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-09-30 | $19.9m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-09-30 | $18.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 31,347 characters.

### Forward-Looking Statements

The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. When the words “believe,” “expect,” “plan,” “project,” “estimate,” and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on management’s current beliefs and assumptions and information currently available to management, and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Information concerning factors that could cause our actual results to differ materially from these forward-looking statements can be found in our periodic reports filed with the Securities and Exchange Commission (“SEC”). The forward-looking statements included in this report are made only as of the date of this report. We disclaim any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise.

### Business Overview

We operate a financial technology (FinTech) services company in several different businesses. We deliver multiple products and services through a direct selling network, also known as multi-level marketing, of independent distributors that offer our products and services through a subscription-based revenue model to our distributors, as well as by our distributors to a large base of customers that we refer to as “members”. Through this business, we provide research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research and education regarding equities, options, FOREX, ETFs, binary options, and cryptocurrency. In addition to trading research and education, we also offer software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product subscription includes a core set of trading tools and research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. In addition to our education subscriptions, through a distribution arrangement we have with a third party, we provided our members with an opportunity to purchase through such third party, a specialty form of adaptive digital currency called “ndau”. The sale of ndau was discontinued during the quarter ended September 30, 2023. Through our direct selling model, we compensate our distributors with commissions under a standard bonus plan that allows for discretionary bonuses based on performance.

We also operate a blockchain technology business that provides leading-edge research, development, and FinTech services involving the management of digital asset technologies with a focus on Bitcoin mining and the new generation of digital assets. We own and manage over 5,000 next-generation Bitcoin application-specific integrated circuit (“ASIC”) miner machines, with 100% of such machines being powered by renewable energy sources, mainly hydropower plants and geothermal. We are also developing new and more efficient ways to mine cryptocurrencies through innovations in hardware, firmware, and additional ways to develop and utilize renewable energy sources, to increase the hash rate, uptime, profitability, and overall ROI of our crypto currency mining operations.

Since 2021, we have attempted to develop a brokerage and financial markets business. This was originally designed to, among other things, commercialize on the proprietary trading platform we acquired in September 2021 from MPower Trading Systems, LLC (“MPower”), to provide self-directed (DIY) investors with low pricing, a powerful trading platform, research, analytical tools, real-time data & news, insights and support for investing and trading in stocks, options, ETFs and mutual funds. Towards that end, in March 2021, we agreed to acquire a brokerage firm owned by an affiliate of our former chief executive officer. However, having been unable to secure the requisite FINRA approval by the expiration of that agreement, we terminated the transaction on June 14, 2022, and have since then continued our search for alternative acquisitions within the brokerage industry. Further, until we are able to start this business, we recently elected to wind down the registration of a dormant investment advisor and commodity trading advisor we own as we concluded there to be no material benefit to retaining an interest in these regulated businesses until we are able to launch our broader-based financial services model.

### Results of Operations

### Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

Revenues

*(unaudited)*

*(unaudited)*

|  | Three Months Ended September 30, 2023 | 2022 | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| Subscription revenue, net of refunds, incentives, credits, and chargebacks | $16,117,992 | $11,823,581 | $4,294,411 |
| Mining revenue | 2,905,182 | 2,777,634 | 127,548 |
| Cryptocurrency revenue | 146,466 | 351,433 | (204,967) |
| Miner equipment repair revenue | - | 43,511 | (43,511) |
| Total revenue, net | $19,169,640 | $14,996,159 | $4,173,481 |

Revenue, net, increased $4,173,481 or 28%, from $14,996,159 for the three months ended September 30, 2022, to $19,169,640 for the three months ended September 30, 2023. The increase can be explained by $4.3 million and $128 thousand increases in our subscription revenue and mining revenue, offset by a $205 thousand and $44 thousand decrease in our cryptocurrency revenue and miner repair revenue, respectively. The $4.3 million or 36% increase in subscription revenue was due to significant product enhancements and expansion into new markets globally, resulting in substantial growth in our membership; the $128 thousand or 5% increase in mining revenue was primarily the result of a 32% increase in the average value of Bitcoin and further enhanced by the replacement of older less efficient Bitcoin mining equipment with new generation higher performing miners which was partially offset by an 81% increase in Bitcoin mining difficulty and higher power and hosting rates during the same period; and the $205 thousand or (58%) decrease in cryptocurrency revenue was due to an overall decrease in the number of sales of NDAU packages.

Operating Costs and Expenses

*(unaudited)*

*(unaudited)*

|  | Three Months Ended September 30, 2023 | 2022 | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| Cost of sales and service | $3,147,890 | $2,144,733 | $1,003,157 |
| Commissions | 9,272,024 | 6,551,195 | 2,720,829 |
| Selling and marketing | 7,410 | 17,874 | (10,464) |
| Salary and related | 1,714,299 | 2,359,225 | (644,926) |
| Professional fees | 285,133 | 601,367 | (316,234) |
| Impairment expense | - | 625 | (625) |
| Loss (gain) on disposal of assets | - | (118,041) | 118,041 |
| General and administrative | 2,500,129 | 2,916,167 | (416,038) |
| Total operating costs and expenses | $16,926,885 | $14,473,145 | $2,453,740 |

Operating costs increased $2,453,740, or 17%, from $14,473,145 for the three months ended September 30, 2022, to $16,926,885 for the three months ended September 30, 2023. The increase can be explained by an increase in commissions of $2.7 million, which was a result of increases in our subscription revenue, an increase in cost of sales and services of $1 million, which was a result of an increase in the cost of mining, and an increase in loss (gain) on disposal of assets of $118 thousand, which was a result of a loss recognized during the prior period from the sale of mining equipment from our repair business. These increases were offset by a decrease in salary and related costs of $645 thousand, which was a result of the recognition of more stock-based compensation during the prior period, a decrease in general and administrative, which was a result of a decrease in depreciation expense, and a decrease in professional fees of $316 thousand due to decreased legal expenses.

Other Income and Expenses

*(unaudited)*

*(unaudited)*

|  | Three Months Ended September 30, 2023 | 2022 | Change |
| --- | ---: | ---: | ---: |
| Gain (loss) on fair value of derivative liability | 11,939 | 2,319 | 9,620 |
| Realized gain (loss) on cryptocurrency | (58,401) | (318,000) | 259,599 |
| Interest expense | (4,726) | (4,726) | - |
| Interest expense, related parties | (310,594) | (310,595) | 1 |
| Other income (expense) | 431,603 | 49,872 | 381,731 |
| Total other income (expense) | $69,821 | $(581,130) | $650,951 |

We recorded other income of $69,821 for the three months ended September 30, 2023, which was a difference of $650,951, or 112%, from the prior period other expense of $581,130. The change is due to a decrease in the realized loss recorded on cryptocurrency in the current period of $58 thousand compared to a realized loss of $318 thousand in the prior period and an increase in Other income (expense) in the current period of $432 thousand compared to $50 thousand in the prior period, which was a result of earning more interest income due to our cash balances being held in higher interest bearing accounts in the current period compared to the prior period and lease payments received under a structured equipment lease agreement.

### Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

Revenues

*(unaudited)*

*(unaudited)*

|  | Nine Months Ended September 30, 2023 | 2022 | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| Subscription revenue, net of refunds, incentives, credits, and chargebacks | $41,659,185 | $36,658,790 | $5,000,395 |
| Mining revenue | 7,798,279 | 9,412,751 | (1,614,472) |
| Cryptocurrency revenue | 513,285 | 1,308,809 | (795,524) |
| Miner equipment repair revenue | 23,378 | 123,621 | (100,243) |
| Digital wallet revenue | - | 5,868 | (5,868) |
| Total revenue, net | $49,994,127 | $47,509,839 | $2,484,288 |

Revenue, net, increased $2,484,288, or 5%, from $47,509,839 for the nine months ended September 30, 2022, to $49,994,127 for the nine months ended September 30, 2023. The increase can be explained by a $5 million increase in our subscription revenue, offset by a $1.6 million, $796 thousand, and $100 thousand decrease in our mining revenue, cryptocurrency revenue, and miner equipment repair revenue, respectively. The $5 million or 14% increase in subscription revenue was due to significant product enhancements and expansion into new markets globally, resulting in substantial growth in our membership; the $1.6 million or (17%) decrease in mining revenue was a result of a (17%) decrease in the average value of Bitcoin, a 67% increase in the average Bitcoin mining difficulty levels, the migration of mining servers to a new data center and increased power and hosting costs, partially offset by the replacement of older less efficient Bitcoin mining equipment with new generation higher performing miners; the $796 thousand decrease in cryptocurrency revenue was due to an overall decrease in the number of sales of NDAU and the discontinuation of the NDAU program offering; and the $100 thousand or (81%) decrease in miner equipment repair revenue was due to the discontinuance of our miner repair business during the quarter ended June 30, 2023.

Operating Costs and Expenses

*(unaudited)*

*(unaudited)*

|  | Nine Months Ended September 30, 2023 | 2022 | Increase (Decrease) |
| --- | ---: | ---: | ---: |
| Cost of sales and service | $7,614,768 | $5,873,214 | $1,741,554 |
| Commissions | 24,005,229 | 20,380,676 | 3,624,553 |
| Selling and marketing | 536,464 | 53,139 | 483,325 |
| Salary and related | 5,416,292 | 5,215,833 | 200,459 |
| Professional fees | 1,202,674 | 2,350,687 | (1,148,013) |
| Impairment expense | - | 7,008 | (7,008) |
| Loss (gain) on disposal of assets | 184,221 | (389,550) | 573,771 |
| General and administrative | 7,190,383 | 7,611,867 | (421,484) |
| Total operating costs and expenses | $46,150,031 | $41,102,874 | $5,047,157 |

Operating costs increased $5,047,157, or 12%, from $41,102,874 for the nine months ended September 30, 2022, to $46,150,031 for the nine months ended September 30, 2023. The increase can be explained by an increase in commissions of $3.6 million, which was a result of increases in our subscription revenue, an increase in cost of sales and services of $1.7 million, which was a result of an increase in the cost of mining, an increase in loss (gain) on disposal of assets of $574 thousand, which was a result of a loss recognized during the current period after the discontinuance of our mining equipment repair business, an increase in salary and related costs of $200 thousand, which was a result of the recognition of more stock-based compensation during the current period, and an increase in selling and marketing costs of $483 thousand, which was mainly driven by an iGenius sales and marketing event. These increases were offset by a decrease in professional fees of $1.1 million due to decreased legal expenses.

Other Income and Expenses

*(unaudited)*

*(unaudited)*

|  | Nine Months Ended September 30, 2023 | 2022 | Change |
| --- | ---: | ---: | ---: |
| Gain (loss) on debt extinguishment | $- | $455 | $(455) |
| Gain (loss) on fair value of derivative liability | 15,596 | 40,155 | (24,559) |
| Realized gain (loss) on cryptocurrency | 170,444 | (1,338,597) | 1,509,041 |
| Interest expense | (14,024) | (14,024) | - |
| Interest expense, related parties | (929,008) | (2,339,729) | 1,410,721 |
| Other income (expense) | 1,027,108 | 107,725 | 919,383 |
| Total other income (expense) | $270,116 | $(3,544,015) | $3,814,131 |

We recorded other income of $270,116 for the nine months ended September 30, 2023, which was a difference of $3,814,131, or 108%, from the prior period other expense of $3,544,015. The change is due to a realized gain recorded on cryptocurrency in the current period of $170 thousand compared to a realized loss of $1.3 million in the prior period, less related party interest expense recorded in current period versus the prior period ($929 thousand for the nine months ended September 30, 2023 compared to $2.3 million for the nine months ended September 30, 2022), and an increase in Other income (expense) in the current period of $1 million compared to $108 thousand in the prior period, which was a result of ticket sales from a promotional event iGenius held during the nine months ended September 30, 2023, earning more interest income due to our cash balances being held in higher interest bearing accounts in the current period compared to the prior period, and lease payments received under a structured equipment lease agreement. Amounts recorded in related party interest expense included the amortization of debt discounts, which was being recognized over the term of the debt, however, during the nine months ended September 30, 2022, we repaid two of our related party notes early, which resulted in the recognition of $1.2 million of the amortization of the related debt discount amounts into interest.

### Liquidity and Capital Resources

During the nine months ended September 30, 2023, we recorded net income from operations of $3,844,096 and net income of $3,013,613. We used this cash, as well as other cash on hand, to fund operations, fund the purchase of $2,529,237 worth of fixed assets, to repay $675,387 worth of related party debt, and to repay $724,130 worth of debt. As a result, our cash, cash equivalents, and restricted cash increased by $1,413,859 to $22,902,757 as compared to $21,488,898 at the beginning of the fiscal year. As of September 30, 2023, our current assets exceeded our current liabilities to result in working capital of $14,082,655. We believe we will have sufficient resources, including cash flow from operations and access to capital markets, to meet debt service obligations in a timely manner and be able to meet our short-term business objectives.

### Critical Accounting Policies

Basis of Accounting

Our policy is to prepare our financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the three and nine months ended September 30, 2023, are not necessarily indicative of the operating results that may be expected for the filing of our December 31, 2023 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2022 consolidated financial statements and notes thereto included in our Annual Report on Form 10-K.

Principles of Consolidation

The consolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries: iGenius, LLC (formerly Kuvera, LLC), Apex Tek, LLC (formerly Razor Data, LLC), SAFETek, LLC (formerly WealthGen Global, LLC), United Games, LLC, United League, LLC, iGenius Global LTD (formerly Kuvera (N.I.) LTD), Investview Financial Group Holdings, LLC, Investview MTS, LLC, MyLife Wellness Company, and S.A.F.E Management, LLC. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

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

Long-Lived Assets – Intangible Assets & License Agreement

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

We hold cryptocurrency-denominated assets and include them in our consolidated balance sheet as other assets. The value of our cryptocurrencies as of September 30, 2023 and December 31, 2022, were $2,183,252 ($2,047,582 current and $135,670 restricted long term) and $2,474,096 ($2,360,957 current and $113,139 restricted long term), respectively. Cryptocurrencies purchased or received for payment from customers are recorded in accordance with ASC 350-30 and cryptocurrencies awarded to the Company through its mining activities ($7,798,279 and $9,412,751 for the nine months ended September 30, 2023 and 2022, respectively) are accounted for in connection with the Company’s revenue recognition policy. The use of cryptocurrencies is accounted for in accordance with the first in first out method of accounting. For the nine months ended September 30, 2023 and 2022, we recorded realized gains (losses) on our cryptocurrency transactions of $170,444 and $(1,338,597), respectively.

On March 22, 2021, we entered into Securities Purchase Agreement to acquire the operating assets and intellectual property rights of MPower Trading Systems LLC, a company controlled and partially owned by David B. Rothrock and James R. Bell, two of our board members. As a result, we obtained Prodigio, a proprietary software-based trading platform with applications within the brokerage industry, which was valued at $7,240,000 and recorded on our balance sheet as an intangible asset as of December 31, 2021. The intangible asset was expected to have a definite life, however, during the year ended December 31, 2022, the software had not been placed in service, therefore a useful life had not been assigned and no amortization had been recorded. Instead, as of December 31, 2022, the intangible asset was conservatively impaired due to a question on the recoverability of the value recorded.

Impairment of Long-Lived Assets

We have adopted ASC Subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or when the historical cost carrying value of an asset may no longer be appropriate. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.

We evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.

During the nine months ended September 30, 2023, no impairment was recorded. During the nine months ended September 30, 2022, we impaired our fixed assets with a cost basis of $15,772 due to the lack of use. We had recorded accumulated depreciation and accumulated amortization of $8,764 for the impaired assets through the date of impairment, therefore we recorded impairment expense of $7,008 during the nine months ended September 30, 2022.

Subscription Revenue

Most of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a designated trial period to first time subscription customers, during which a full refund can be requested if a customer does not wish to continue with the subscription. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks. As of September 30, 2023 and December 31, 2022, our deferred revenues were $2,803,982 and $2,074,574, respectively.

Mining Revenue

Through our wholly owned subsidiary, SAFETek, LLC, we leased equipment under a sales-type lease through June of 2020. In June of 2020 we cancelled all leases and purchased all of the rights and obligations under the leases, which included obtaining ownership of all equipment. We use the equipment on blockchain networks to validate and add blocks of transactions to blockchain ledgers (commonly referred to as “mining”). As compensation for mining, we are issued fees from processors and/or block rewards that are newly created cryptocurrency units granted to us. Our mining activities constitute our ongoing major and central operations of SAFETek, LLC. Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of our mining activities.

Cryptocurrency Revenue

We generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with a third-party supplier. The various packages included different amounts of coin with differing rates of returns and terms. The coin is delivered by a third-party supplier. The sale of cryptocurrency packages was discontinued during the quarter ended September 30, 2023.

We recognize cryptocurrency revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to arrange for the third-party to provide to our customers and payment is received from our customers at the time of order placement. All customers are given two weeks to request a refund, therefore we record a customer advance on our balance sheet upon receipt of payment. After the two weeks have passed from order placement, we request our third-party supplier to deliver coin, at which time we recognize revenue and the amounts due to our supplier on our books. As of September 30, 2023 and December 31, 2022, our customer advances related to cryptocurrency revenue were $0 and $96,609, respectively.

Mining Equipment Repair Revenue

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

We recognize miner repair revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to deliver the promised goods to our customers.

Digital Wallet Revenue

We generate revenue from the sale of digital wallets to our customers through an arrangement with a third-party supplier. We offer three tiers of wallets which include different features. The digital wallets are delivered by a third-party supplier. The sale of digital wallets to our customers was discontinued during the year ended December 31, 2022.

We recognize digital wallet revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to arrange for the third-parties to provide the wallet to our customers and payment is received from our customers at the time of order placement.

Revenue generated for the nine months ended September 30, 2023, was as follows:

|  | Subscription Revenue | Cryptocurrency Revenue | Mining Revenue | Miner Repair Revenue | Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| Gross billings/receipts | $45,284,739 | $990,785 | $7,798,279 | $23,378 | $54,097,181 |
| Refunds, incentives, credits, and chargebacks | (3,625,554) | - | - | - | (3,625,554) |
| Amounts paid to providers | - | (477,500) | - | - | (477,500) |
| Net revenue | $41,659,185 | $513,285 | $7,798,279 | $23,378 | $49,994,127 |

For the nine months ended September 30, 2023, foreign and domestic revenues were approximately $38.1 million and $11.9 million, respectively.

Revenue generated for the nine months ended September 30, 2022, was as follows:

|  | Subscription Revenue | Cryptocurrency Revenue | Mining Revenue | Miner Repair Revenue | Digital Wallet Revenue | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Gross billings/receipts | $39,087,141 | $2,548,316 | $9,412,751 | $123,621 | $7,157 | $51,178,986 |
| Refunds, incentives, credits, and chargebacks | (2,428,351) | - | - | - | - | (2,428,351) |
| Amounts paid to providers | - | (1,239,507) | - | - | (1,289) | (1,240,796) |
| Net revenue | $36,658,790 | $1,308,809 | $9,412,751 | $123,621 | $5,868 | $47,509,839 |

For the nine months ended September 30, 2022 foreign and domestic revenues were approximately $32.2 million and $15.3 million, respectively.

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

|  | Subscription Revenue | Cryptocurrency Revenue | Mining Revenue | Total |
| --- | ---: | ---: | ---: | ---: |
| Gross billings/receipts | $17,499,805 | $258,466 | $2,905,182 | $20,663,453 |
| Refunds, incentives, credits, and chargebacks | (1,381,813) | - | - | (1,381,813) |
| Amounts paid to providers | - | (112,000) | - | (112,000) |
| Net revenue | $16,117,992 | $146,466 | $2,905,182 | $19,169,640 |

For the three months ended September 30, 2023, foreign and domestic revenues were approximately $14.7 million and $4.5 million, respectively.

Revenue generated for the three months ended September 30, 2022, was as follows:

|  | Subscription Revenue | Cryptocurrency Revenue | Mining Revenue | Miner Repair Revenue | Digital Wallet Revenue | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Gross billings/receipts | $12,638,375 | $673,933 | $2,777,634 | $43,511 | $- | $16,133,454 |
| Refunds, incentives, credits, and chargebacks | (814,794) | - | - | - | - | (814,794) |
| Amounts paid to providers | - | (322,500) | - | - | - | (322,500) |
| Net revenue | $11,823,581 | $351,433 | $2,777,634 | $43,511 | $- | $14,996,159 |

For the three months ended September 30, 2022 foreign and domestic revenues were approximately $10.3 million and $4.7 million, respectively.

### Recent Accounting Pronouncements

We have noted no recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.

### Off-Balance Sheet Arrangements

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

## Market risk

As filed, 173 characters.

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.

## Controls and procedures

As filed, 1,733 characters.

### Evaluation of Disclosure Controls and Procedures

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

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

### Changes in Internal Controls

There were no changes in our internal controls over financial reporting during the fiscal quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Filed Nov 13, 2023.
Source: SEC EDGAR, the filing index for accession 0001493152-23-040281. Last ingested by Listed: Oct 24, 2026, 14:58 ET. No prices; not investment advice.