INVESTVIEW, INC. The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, as noted by use of the words "believe," "expect," "plan," "project," "estimate," and 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 elsewhere in this Report and in our periodic reports filed with theU.S. Securities and Exchange Commission . The forward-looking statements included are made only as of the date of this report. Except as required by law, we have no obligation and do not undertake to update or revise any such forward-looking statements to reflect events or circumstances after the date of the report.
Overview We operate a financial technology (FinTech) services company in several different businesses. We deliver multiple products and services through a direct selling network of independent distributors that offer our products and services through a subscription-based revenue model to a large base of customers that we refer to as "members". Through this business we provide research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research and trade alerts regarding equities, options, FOREX, ETFs, binary options, and cryptocurrency sector education. In addition to trading tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product subscription includes a core set of trading tools and research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. In addition to our education subscriptions, through a distribution arrangement we have with a third party, we have provided our members with an opportunity to purchase through such third party, a specialty form of adaptive digital currency called "ndau". Through our direct selling network, we reward our distributors with commissions under a standard bonus plan that allows for discretionary bonuses based on performance. We also operate a blockchain technology business that provides leading-edge research, development, and FinTech services involving the management of digital asset technologies with a focus on Bitcoin mining and the new generation of digital assets. As well, in order to, among other things, commercialize on the proprietary trading platform we recently acquired fromMPower Trading Systems, LLC , take advantage of the market's increasing acceptance and expansion of the ownership and use of digital currencies as an investable asset class, subject to applicable regulatory limitations, and to proactively respond to increasing regulatory scrutiny relative to cryptocurrency products, we have adopted a growth plan that contemplates the creation of a financial services business that will include self-directed brokerage services, institutional trade execution services, innovative advisory services (RIA, CTA), and codeless algorithmic trading technologies, which will operate under our recently formed subsidiary,Investview Financial Group Holdings, LLC ("IFGH"). Towards that end, duringMarch 2021 , we entered into an agreement to acquire a brokerage firm from an affiliate of our former Chief Executive Officer. However, due to complications relating toMr. Cammarata's then ongoing legal proceedings, even though unrelated to the Company, we were caused to terminate this agreement during 2022, and continue our search for alternative acquisitions within the brokerage industry. Impact of COVID-19 While COVID-19 related supply chain issues continue to create challenges for us in acquiring supplies and equipment for SAFETek, we have successfully sourced new equipment, repaired existing equipment and expanded our operations to include repair of third-party equipment and the creation of mobile mining trailers and containers.
COVID-19 related travel challenges also impacted iGenius distribution and marketing operations, however, the member base quickly adapted and leveraged on-line meeting services which in turn expanded interest and attention.
Both the supply chain issues and travel-related challenges as a result of the worldwide pandemic remain today, but we anticipate these lessening as worldwide vaccines increase and employees return to work.
Recent Planned and Completed Acquisitions
During 2021, we planned a series of transformational acquisitions as part of our overall strategy to expand the scope of our business into the financial services sector. First, onMarch 22, 2021 , we entered into agreements to purchase 100% of the operating assets ofSSA Technologies LLC ("SSA"), an entity that owns and operates aFINRA -registered broker-dealer controlled and partially owned byJoseph Cammarata , our former Chief Executive Officer. Pursuant to these agreements, we agreed to acquire the SSA assets, including, principally, the broker-dealer, for the issuance of non-voting membership interests in our wholly owned subsidiary,Investview Financial Group Holdings, LLC ("IFGH"), which are in the future redeemable for 242,000,000Investview common shares on a one-for-one basis. 20
Contemporaneously, we entered into Securities Purchase Agreement to acquire the operating assets and intellectual property rights ofMPower Trading Systems LLC ("MPower"), a company controlled and partially owned byDavid B. Rothrock andJames R. Bell , two of our board members. Included within the acquisition was Prodigio, a proprietary software-based trading platform with applications within the brokerage industry. In consideration for the acquisition of such assets, we agreed to issue non-voting Class B membership interests in our wholly owned subsidiary, IFGH, which are in the future redeemable for 565,000,000Investview common shares on a one-for-one basis (the "Class B Redeemable Units"). The Class B Redeemable Units to be issued in the transaction are being held under and subject to a lock-up agreement in which resale of theInvestview common shares is substantially restricted through 2025. Messrs. Bell and Rothrock, managers and principal equity holders of MPower, are also members of our Board of Directors. Following full disclosure of their interest, the transaction was approved by the full Investview Board of Directors, including unanimous support by its then independent directors. The purchase price for the MPower assets was determined through negotiations with theInvestview directors without a conflicting interest in the transaction, and was based generally on the perceived deeply discounted commercial fair market value of the Class B Redeemable Units exchanged in the transaction on the date of the original Securities Purchase Agreement inMarch 2021 , taking into account, among others, the then limited liquidity and volatility associated with the Company's shares into which the ClassB Units were redeemable, as well as the impact of a cumulative lock-up period that substantially restricted the resale of the shares through 2025.
The acquisition of the operating assets and intellectual property rights of MPower was completed onSeptember 3, 2021 . However, due to delays and complications relating toMr. Cammarata's then ongoing legal proceedings, even though unrelated to the Company, we were caused to terminate the agreement to acquire the SSA assets during 2022 and continue our search for alternative acquisitions within the brokerage industry. The acquisition of MPower was not expected to be immediately accretive to our results; however, together with our planned acquisition of the SSA registered broker-dealer (or another broker-dealer if the SSA acquisition is not consummated), it was expected to become a fundamental part of an overall strategy to create our new Brokerage and Financial Markets business. We still believe this to be possible, however, we will need to acquire a registered broker-dealer, if at all possible, to attempt to realize the expected synergistic value of the MPower assets.
Other material developments during 2021 and 2022
In addition to the achievements above, the Company also completed the following strategic actions:
6/6/2021 -Ralph R. Valvano was hired as the Company's Chief Financial Officer expanding the Corporate Finance Team with Jayme McWidener named as the Chief Accounting Officer.
8/22/2021 - We completed a public offering of approximately$6.3 million of Units consisting of: (i) one share of our Series B Preferred Stock and (ii) five warrants each exercisable to purchase one share of common stock at an exercise price of$0.10 per warrant share. Holders of our Series B Preferred Stock are entitled to receive cumulative dividends at the annual rate of 13% per annum of the stated value, equal to$3.25 per annum per share. Each Warrant is immediately exercisable on the date of issuance and will expire 5 years from the date of issuance. Q1-2022 - We restructured our Board of Directors and executive management team. This occurred as we entered into a Separation and Release Agreement with two of our former Directors and executive officers and following the termination of our former CEO in Q4-2021 in light of pending government charges relating to an outside business venture that was totally unrelated to the Company. This was accomplished in conjunction with the appointment of personnel that offers extensive experience and offer a track record of business achievements that we expect will support the Company's future initiatives. OnFebruary 23, 2022 , we announced the restructuring of our executive leadership with theFebruary 10, 2022 appointment ofVictor M. Oviedo as the Company's new Chief Executive Officer and as a director; the appointment ofDavid B. Rothrock as Chairman of the Board of Directors and chair of our Up-listing Initiative Sub-Committee; the transition ofJames R. Bell from acting Chief Executive Officer to President and Chief Operating Officer, and the appointment ofMyles Gill as Director of Operations, all of which were effective as ofFebruary 22, 2022 . Q1-2022 - Our Board of Directors approved theInvestview, Inc. 2022 Incentive Plan which provides a variety of incentive awards consisting of stock options, restricted stock, restricted stock units, and reserves for issuance up to 600,000,000 shares ofInvestview common stock. Q1-2022 - We adopted a Clawback and Forfeiture Policy in general conformity with the Sarbanes-Oxley Act of 2002 pursuant to which we may recover any bonus or other incentive-based or equity-based compensation and certain profits realized from the sale of our securities from our current and former executives. 21
Q2-2022 -Investview, Inc. (the "Company") we terminated the Stock Purchase Agreements datedMarch 22, 2021 , under which the Company was to acquire a broker-dealer from SSA, an affiliate of the Company's former CEO,Joseph Cammarata , due to complications relating toMr. Cammarata's then ongoing legal proceedings, even though unrelated to the Company, and announced our search for alternative acquisitions within the brokerage industry. Q2-2022 - We restructured unvested incentive equity awards previously granted to our senior leadership team by which our senior management team and board of directors surrendered and terminated an aggregate of approximately 288 million outstanding unvested restricted shares in exchange for the issuance of options to purchase approximately 360 million shares, vesting in equal amounts over a five-year period, at an exercise price of$0.05 per share, or approximately a 66% premium over the closing price of the Company's shares onThursday, June 23, 2022 . Of particular note, the shares issuable, if at all, upon exercise of the options, remain subject to the terms of the Company's existing lock-up agreement throughApril 2025 . Results of Operations
The results of operations presented and marked for the year endedDecember 31, 2021 , as "unaudited" below are based on a pro forma combination of our unaudited results for the quarter endedMarch 31, 2021 , together with the audited results for the nine-months endedDecember 31, 2021 .
Year Ended
Revenues
Year Ended December 31, Increase
2022 2021 (Decrease)
(unaudited)
Subscription revenue, net of refunds,
incentives, credits, and chargebacks $ 48,260,197 $ 48,868,170 $ (607,973 )
Mining revenue 11,796,215 31,393,816 (19,597,601 )
Mining equipment repair revenue 172,056 7,460
164,596
Cryptocurrency revenue 1,614,568 9,014,172 (7,399,604 )
Fee revenue 5,868 2,032 3,836
Total revenue, net $ 61,848,904 $ 89,285,650 $ (27,436,746 ) Revenue, net, decreased$27,436,746 , or 31%, from$89,285,650 for the year endedDecember 31, 2021 , to$61,848,904 for the year endedDecember 31, 2022 . The decrease can be explained by a$608 thousand decrease in our net subscription revenue, a$19.6 million decrease in our mining revenue, and a$7.4 million decrease in our cryptocurrency revenue. The$608 thousand (1%) decrease in subscription revenue and$7.4 million decrease in cryptocurrency revenue was due to the overall global financial markets experiencing unprecedented volatility and decline. With key cryptocurrency players like FTX, Voyager, BlockFi, and Celcius filing chapter 11 or bankruptcy and the S&P returning historic lows in 2022, demand for our iGenius subscription products and services slightly declined. In addition, the consistent negative news cycle regarding inflation and financial markets created increased selling friction for our distributors as they faced the similar market fears and sentiment. The$19.6 million (62%) decrease in mining revenue was primarily the result of the 40.56% decrease in the average price of Bitcoin in 2022 (2022 average price of$28 thousand vs an average price of$47 thousand in 2021) as well as, an increase of 49.56% in the average Bitcoin mining difficulty level from 20.36 terahash in 2021 to 30.45 terahash in 2022. Operating Costs Year Ended December 31, Increase 2022 2021 (Decrease) (unaudited) Cost of sales and service$ 8,249,790 $ 9,005,865 $ (756,075 ) Commissions 26,986,048 34,212,733 (7,226,685 ) Selling and marketing 58,617 104,313 (45,696 ) Salary and related 7,441,829 5,136,292 2,305,537 Professional fees 2,615,016 2,224,773 390,243 Impairment expense 14,632,823 674,671 13,958,152 Bad debt expense 3,975 719,342 (715,367 )
Loss (gain) on disposal of assets (266,838 ) (12,927 ) (253,911 ) General and administrative 10,740,430 60,888,350
(50,147,920 )
Total operating costs and expenses
22 Operating costs decreased$42,491,722 , or 38%, from$112,953,412 for the year endedDecember 31, 2021 , to$70,461,690 for the year endedDecember 31, 2022 . We experienced a decrease in our cost of sales and services of$756 thousand primarily to the closure and consolidation of our Colorado Bitcoin mining facility in 2021 into ourIceland based Bitcoin mining hosting facility. We recorded a decrease in commissions of$7.2 million which was due to overall decreases in subscription and cryptocurrency sales activity during the year. We recorded a decrease in general and administrative costs of$50.1 million which could mostly be explained by$51.6 million worth of general and administrative costs recognized in the year endedDecember 31, 2021 that was attributable to a non-recurring and non-cash charge arising from the manner in which the acquisition of the Prodigio Smart Trading Platform, as well as the other operating assets and intellectual property rights ofMPower Trading Systems, LLC , was accounted for in our financial statements We recorded an increase in salary and related costs of$2.3 million due to additional employees hired during 2022 and the launch of a common stock option program. We recorded$719 thousand in bad debt expense for the year ended 2021 due to one of our merchants going out of business, with no similar scenarios in the current year. We also recorded an increase in our impairment expense of$14 million , as during the year endedDecember 31, 2022 , we impaired$6 million worth of fixed asset mining equipment wrote-off$676 thousand worth of inventory,$690 thousand worth of other assets, and$7.2 million worth of intangible assets due to our concern with recoverability of the Prodigio Smart Trading Platform. Other Income (Expense) Year Ended December 31, 2022 2021 Change (unaudited)
Gain (loss) on debt extinguishment $ 455$ 979,268
$ (978,813 ) Gain (loss) on fair value of derivative liability 44,945 168,194 (123,249 ) Realized gain (loss) on cryptocurrency (1,575,164 ) 1,815,294 (3,390,458 ) Interest expense (18,750 ) (22,529 ) 3,779
Interest expense, related parties (2,650,324 ) (2,653,477 )
3,153
Other income (expense) 193,235 (42,020 ) 235,255
Total other income (expense) $ (4,005,603 ) $ 244,730 $ (4,250,333 )
We recorded other expense of $4,005,603 for the year ended December 31, 2022 ,
which was a difference of $4,250,333 , or 1737%, from the prior period other
income of $244,730 . The changes due to smaller gains on debt extinguishment
($455 for the year ended December 31, 2022 compared to $979 thousand for the
year ended December 31, 2021 ) and on the fair value of derivative liability ($45
thousand for the year ended December 31, 2022 compared to $168 thousand for the
year ended December 31, 2021 ) plus a loss on cryptocurrency of $1.6 million for
the year ended December 31, 2022 versus a $1.8 million gain for the year ended
December 31, 2020 .
Liquidity and Capital Resources
During the year endedDecember 31, 2022 , we met our short-and long-term working capital and capital expenditure requirements, including funding for operations, capital expenditures, growth initiatives, and for dividends on our Series B Preferred Stock, through net cash flows provided by operating activities. We believe we will have sufficient resources, including cash flow from operations and access to capital markets, to meet debt service obligations in a timely manner and be able to meet our objectives. During the year endedDecember 31, 2022 we recorded a net loss of$12,944,944 , however, this was mostly due to our non-cash impairment expense of$14.6 million that was recorded to write-off$6 million worth of fixed assets,$676 thousand worth of inventory,$690 thousand worth of other assets, and$7.2 million worth of intangible assets. The impairment was due to disposals, assets being abandoned, and, in some cases, an estimate of expected future cash flows that was less than the assets carrying value. The impairment expense was a non-cash charge that had no impact on our cash flow or our liquidity and capital resources. After excluding the$14.6 million impairment expense, we were able to show net income from operations of$1.7 million and we showed$9.4 million of cash provided by our operating activities. We used this cash from operations, along with cash on hand, to fund the purchase of$15.3 million worth of fixed assets and to make payments for our financing activities of$6.3 million . As a result, our cash, cash equivalents, and restricted cash decreased by$11,128,008 to$21,488,898 as compared to$32,616,906 at the beginning of the fiscal year. As ofDecember 31, 2022 we have a working capital balance of$14,249,427 and our unrestricted cryptocurrency balance was reported at$2,360,957 . 23 Commitments and Contingencies
AtDecember 31, 2022 , we had related party debt of approximately$2 million and debt of approximately$8.4 million of which we owe$7.9 million to the holders of long-term notes that we issued in connection with a lease buyback program we initiated inSeptember 2020 .
ThroughJune 2020 , we sold high powered data processing equipment ("APEX") to our customers, and they leased the equipment back to us on terms sufficient for the customers to recover their investment and an agreed upon return on their investment. OnJune 30, 2020 , we temporarily discontinued the APEX program to assess the impact on the Company of COVID-19 related delays in the manufacturing and shipping of the APEX processing equipment, and to determine our ability to meet the lease commitments in light of such delays. Having concluded that we would be unable to meet the APEX lease obligations, inSeptember 2020 , we commenced a buyback program in which we offered to repurchase such equipment and cancel the existing lease, by way of a 48-month promissory note that included repayment terms to ensure an agreed-upon return on their initial purchase price. As a result of the buyback program, we entered into notes with third parties totaling$19,089,500 and notes with related parties of$237,720 in exchange for$474,155 worth of customer advances on the APEX leases and the release of$22,889,331 of the net APEX lease liability. We agreed to settle a portion of the debt during the year endedMarch 31, 2021 , at a discount to the original note terms offered, by making lump sum payments, issuing 48,000,000 shares of our common stock, issuing 49,418 shares of our preferred stock, and issuing cryptocurrency. The remaining notes are all dueDecember 31, 2024 and have a fixed monthly payment that is equal to 75% of the face value of the note, divided by 48 months. The monthly payments began the last day ofJanuary 2021 and continue untilDecember 31, 2024 when the last monthly payment will be made, along with a balloon payment equal to 25% of the face value of the note, to extinguish the remaining balance of the debt. During the year endedDecember 31, 2022 we repaid a portion of the debt with cash payments of$973,000 and issuances of cryptocurrency valued at$2.0 million . Included in the then discontinued Apex sale and leaseback program was a total protection plus ("TPP") program administered and managed by a third-party provider, an affiliate of a global insurance brokerage firm. According to marketing and legal documents provided by the third-party provider, theTPP program would function as a supplemental financial guaranty by providing the Apex program customers with protection for the purchase price of such equipment, which could be redeemed by the customer by exercising an option for a cash payout to be paid by the third-party provider after a certain period of time, either 5 or 10 years. The premium for theTPP program was included in the Apex program, at no additional cost to the customer. We have also historically offered our iGenius members the opportunity to participate in aTPP program administered and managed by such third-party provider in connection with such members' purchases of ndau through the Oneiro ndau distribution program. According to marketing and legal documents provided by the third-party provider, theTPP would function to provide a supplemental financial guaranty for the purchase price of the ndau. Customers could redeem such protection by exercising an option for a cash payout to be paid by the third-party provider after 5
or 10 years. During the fourth calendar quarter of 2021, we suspended any further offering of theTPP program in connection with the sale of ndau after the third-party provider was unable to comply with our standard vendor compliance protocols, citing certain offshore confidentiality entitlements. That suspension has remained in place as we have been unable to further validate the continued integrity of theTPP program and the vendor's ability to honor its commitments to our members. We cannot ensure that such third-party provider will comply with its contractual requirements, which could cause our members to not achieve the level of return on their investments expected, and possibly expose us to claims that could have an adverse effect on our business, financial condition, and
operating results. Critical Accounting Policies
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted inthe 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 several significant accounting policies affecting our consolidated financial statements; we believe the following critical accounting policies involves the most complex, difficult, and subjective estimates and judgments. Basis of Accounting Our policy is to prepare our financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted inthe United States of America . Prior toSeptember 20, 2021 we operated the Company on aMarch 31 , fiscal year end. EffectiveSeptember 30, 2021 we changed our fiscal year toDecember 31 . Principles of Consolidation The consolidated financial statements include the accounts ofInvestview, Inc. , and our wholly owned subsidiaries: iGenius, LLC (formerlyKuvera, LLC ), Kuvera France S.A.S (through its closure date in June of 2021),Apex Tek, LLC (formerlyRazor Data, LLC ),SAFETek, LLC (formerlyWealthGen Global, LLC ),United Games, LLC, United League, LLC, Investment Tools & Training, LLC , iGenius Global LTD (formerly Kuvera (N.I.) LTD),Investview Financial Group Holdings, LLC , andInvestview MTS, LLC . All intercompany transactions and balances have been eliminated in consolidation. 24 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. Revenue Recognition Subscription Revenue Most of our revenue is generated by subscription sales and payment is received at the time of purchase. We recognize subscription revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to provide services over a fixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a designated trial period to first time subscription customers, during which a full refund can be requested if a customer does not wish to continue with the subscription. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks. As ofDecember 31, 2022 and 2021 our deferred revenues were$2,074,574 and$3,288,443 , 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 ofSAFETek, LLC . Because we do not have contracts, nor do we have customers associated with our mining revenue, we recognize revenue when fees and/or rewards are settled, or ultimately granted to us as a result of
our mining activities. Cryptocurrency Revenue We generate revenue from the sale of cryptocurrency packages to our customers through an arrangement with third-party suppliers. The various packages include different amounts of coin with differing rates of returns and terms and, in some cases, prior to the fourth quarter 2021, included a product protection option that allows the purchaser to protect their initial purchase price. The protection purportedly allowed the purchaser to obtain 50% of their purchase price at five years or 100% of their purchase price at ten years. Both the coin and the protection option are delivered by third-party suppliers. However, during the fourth calendar quarter of 2021, we suspended any further offering of the product protection option after the third-party provider was unable to comply with our standard vendor compliance protocols, citing certain offshore confidentiality entitlements. That suspension has will remained in place as we have been unable until we are able to further validate the continued integrity of that program and the vendor's ability to honor its commitments to our members. We recognize cryptocurrency revenue in accordance with ASC 606-10 where revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract. Our performance obligation is to arrange for the third-parties to provide coin to our customers and payment is received from our customers at the time of order placement. All customers are given two weeks to request a refund, therefore we record a customer advance on our balance sheet upon receipt of payment. After the two weeks have passed from order placement, we request our third-party suppliers to deliver coin, at which time we recognize revenue and the amounts due to our suppliers on our books. As ofDecember 31, 2022 and 2021 our customer advances related to cryptocurrency revenue were$96,609 and$75,702 , respectively.
Mining Equipment Repair Revenue
Through our wholly owned subsidiary,SAFETek, LLC , we repair broken mining equipment for sale to third-party customers. We recognize miner equipment 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 endedDecember 31, 2022 . 25 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 year ended
Mining
Equipment Digital
Subscription Cryptocurrency Repair Wallet
Revenue Revenue Mining Revenue Revenue Revenue Total Gross billings/receipts
$ 51,454,922 $ 3,189,074 $ 11,796,215 $ 173,980 $ 7,156 $ 66,621,347 Refunds, incentives, credits, and chargebacks (3,194,725 ) - - (1,924 ) - (3,196,649 ) Amounts paid to supplier - (1,574,506 ) - - (1,288 ) (1,575,794 ) Net revenue$ 48,260,197 $ 1,614,568 $ 11,796,215 $ 172,056 $ 5,868 $ 61,848,904
Foreign revenues for the year ended
Revenue generated for the nine months endedDecember 31, 2021 , was as follows: Mining Subscription Cryptocurrency Equipment Revenue Revenue Mining Revenue Repair Revenue Total
Gross billings/receipts$ 43,658,422 $ 20,199,388 $ 23,056,457 $ 7,460$ 86,921,727 Refunds, incentives, credits, and chargebacks (2,739,969 ) - - - (2,739,969 ) Amounts paid to supplier - (11,950,078 ) - - (11,950,078 ) Net revenue$ 40,918,453 $ 8,249,310 $ 23,056,457 $ 7,460$ 72,231,680 Foreign revenues for the nine months endedDecember 31, 2021 were approximately$41.3 million while domestic revenue for the nine months endedDecember 31, 2021 was approximately$30.9 million .
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.
Trends, Risks, and Uncertainties
We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all such risk factors before making an investment decision with respect to our common stock.
Cautionary Factors That May Affect Future Results
We have sought to identify what we believe are significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise.
Potential Fluctuations in Annual Operating Results
Our annual operating results may fluctuate significantly in the future as a result of a variety of factors, most of which are outside our control, including: the demand for our products and services; seasonal trends in purchasing, the amount and timing of capital expenditures; price competition or pricing changes in the market; technical difficulties or system downtime; and general economic conditions. 26 Our annual results may also be significantly impacted by the accounting treatment of acquisitions, financing transactions, or other matters. Particularly at our early stage of development, such accounting treatment can have a material impact on the results for any quarter. Due to the foregoing factors, among others, it is likely that our operating results may fall below our expectations or those of investors in some future quarter. Management of Growth We may experience growth, which will place a strain on our managerial, operational, and financial systems resources. To accommodate our current size and manage growth if it occurs, we must devote management attention and resources to improve our financial strength and our operational systems. Further, we will need to expand, train, and manage our sales and distribution base. There is no guarantee that we will be able to effectively manage our existing operations or the growth of our operations, or that our facilities, systems, procedures, or controls will be adequate to support any future growth. Our ability to manage our operations and any future growth will have a material effect on our stockholders. Companies trading on the OTCQB tier of OTC Markets, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and must be current in their reports under Section 13, to maintain price quotation privileges on the OTCQB tier. If we fail to remain current on our reporting requirements, we could be removed from the OTCQB tier. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.
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