Investview (INVU) Risk Analysis

Nevada corporate law and our governing documents include provisions that could delay, defer, or prevent a change in control of our company or our management. These provisions could discourage information contests and make it more difficult for our stockholders to elect directors and take other corporate actions. As a result, these provisions could limit the price that investors are willing to pay in the future for shares of our common stock. For example: - without prior stockholder approval, our board of directors has the authority to issue one or more classes of preferred stock with rights senior to those of our common stock and to determine the rights, privileges, and preferences of that preferred stock;         - there is no cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; and         - only our board of directors or stockholders holding at least 25% of the outstanding capital stock of the Company can call a special meeting of stockholders.

Regardless of the ultimate outcome, we have experienced unfavorable publicity as a result of the SEC inquiry, even though we have fully cooperated with their inquiry and have received no follow-up from the SEC following our production of documents in 2022. Unfavorable publicity, whether justified or not, continues to have a negative impact on our commercial banking and credit card processing relationships, employees, business, products, and reputation, and could negatively impact our ability to attract, motivate, and retain banking relationships, members and distributors, and our ability to generate revenue.

We (along with those from whom we purchase electricity) are subject to various federal, state, local, and international environmental laws and regulations, including those relating to the generation, storage, handling, and disposal of hazardous substances and wastes. Certain of these laws and regulations also impose joint and several liability, without regard to fault, for investigation and cleanup costs on current and former owners and operators of real property and persons who have disposed of or released hazardous substances into the environment. Our operations may involve the use of hazardous substances and materials, such as petroleum fuel for emergency generators, as well as batteries, cleaning solutions, and other materials. Electricity costs could also be affected due to existing or new regulations on greenhouse gas emissions, whether such regulations apply to all consumers of electricity or just to specified uses, such as Bitcoin mining. There has been interest in the U.S. Congress in addressing climate change, including through regulation of Bitcoin mining. Past legislative proposals to address climate change include measures ranging from taxes on carbon use or generation to federally imposed limits on greenhouse gas emissions. The course of future legislation and regulation in the United States remains difficult to predict, and potential increased costs associated with new legislation or regulation cannot be estimated at this time.

As cryptocurrencies have grown in both popularity and market size, governments around the world have reacted differently to cryptocurrencies; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as in the U.S., subject the mining, ownership and exchange of cryptocurrencies to extensive, and in some cases overlapping, unclear and evolving regulatory requirements. Ongoing and future regulatory actions could have a material adverse effect on our business, prospects or operations.

The Office of Financial Assets Control ("OFAC") of the U.S. Department of Treasury requires us to comply with its sanction program and not conduct business with persons named on its specially designated nationals ("SDN") list. However, because of the pseudonymous nature of blockchain transactions we may inadvertently and without our knowledge engage in transactions with persons named on OFAC's SDN list. Our Company's policy prohibits any transactions with such SDN individuals, but we may not be adequately capable of determining the ultimate identity of the individual with whom we transact with respect to selling cryptocurrency assets; for example, the use of cryptocurrencies, including Bitcoin, as a potential means of avoiding federally imposed sanctions, such as those imposed in connection with the Russian invasion of Ukraine. On March 2, 2022, a group of United States Senators sent the Secretary of the United States Treasury Department a letter asking Secretary Yellen to investigate its ability to enforce such sanctions vis-à-vis Bitcoin, and on March 8, 2022, President Biden announced an executive order on cryptocurrencies which seeks to establish a unified federal regulatory regime for cryptocurrencies. We are unable to predict the nature or extent of new and proposed legislation and regulation affecting the cryptocurrency industry, or the potential impact of the use of cryptocurrencies by SDN or other blocked or sanctioned persons, which could have material adverse effects on our business and our industry more broadly. Further, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties as a result of any regulatory enforcement actions, all of which could harm our reputation and affect the value of our common stock.

Users provide us with personal information, including tax identification numbers, which we do not share without the user's consent. Despite this policy of obtaining consent, however, if third persons were able to penetrate our network security or otherwise misappropriate our users' personal information, we could be subject to liability, including claims for unauthorized purchases with credit card information, impersonation or other similar fraud claims, and misuses of personal information, such as for unauthorized marketing purposes. New privacy legislation may further increase this type of liability. Furthermore, we could incur additional expenses if additional regulations regarding the use of personal information were introduced or if federal or state agencies were to investigate our privacy practices. We do not store user credit card information and rely upon our merchant processing partners to collect and store this information with the necessary Payment Card Industry Security Standards compliance in place. However, a breach of the merchant's security standards could create liability for us.

Through our iGenius membership program and our now discontinued Apex sale and leaseback program, our members gained access to a variety of benefits provided through third party partnerships and affinity arrangements, including products and services provided by third party investment professionals, access to a proprietary digital currency called "ndau" (which was discontinued during August 2023) and a supplemental total protection program offered by a third-party that claims to be an affiliate of a global insurance brokerage firm. We cannot ensure that such third-party providers will comply with their contractual requirements to our members or with applicable laws, rules, and regulations. Any significant failures by them could cause us to incur losses and could harm our reputation. Included in our now discontinued Apex sale and leaseback program was a "guaranteed assets buy-back product" offered, administered and managed by a third-party provider, Total Protection Plus ("TPP"), a purported affiliate of a global insurance brokerage firm. According to marketing and legal documents provided by TPP, the product offered by TPP (the "TPP Program") would function as a supplemental financial guaranty of a return on investment by providing 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. As an accommodation to our customers, the premiums for the TPP Program were paid for directly by the Company at no additional cost to the customer. We have also historically offered our iGenius members the opportunity to access through TPP the right to participate in the TPP Program, in connection with such members' purchases of ndau through the Oneiro ndau distribution program. Even though we suspended the distribution of ndau during August 2023, prior to such suspension, we had distributed over $16.8 million in ndau to our members who purchased ndau in conjunction with the TPP Program. According to marketing and legal documents provided by TPP, the TPP Program was purported by TPP to provide a supplemental financial guaranty of a return on investment in excess of the purchase price of the ndau. In its marketing materials, we believe TPP offered customers the right to receive a supplemental cash payout after 5 or 10 years, of between 50% to 100% of the original price of ndau purchased. As an accommodation to our ndau customers, the premiums paid to participate in the TPP Program, which the Company estimates at approximately $3.6 million, were paid directly by the Company at no additional cost to the customer. During the fourth calendar quarter of 2021, we suspended any further offering of the TPP 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 the TPP 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 offered by TPP. While we do not believe that we have any legal responsibility to the customers who participated in the TPP Program, as it was offered and administered, and to be underwritten by TPP, there is a risk that any failure of TPP to perform its obligations to our customers, could expose us to claims of dissatisfied customers, even though we had no responsibility to underwrite the risk of the TPP Program, for which we paid to TPP premiums of approximately $3.6 million. The possible substantiality of those claims could have an adverse effect on our business, financial condition, and operating results.

We are at risk for cyber-attacks, such as phishing, and other attempts to gain unauthorized access to our systems, and we anticipate continuing to be subject to such attempts. There is an ongoing risk that some or all of our cryptocurrencies could be lost or stolen as a result of one or more of these incursions. As we increase in size, we may become a more appealing target of hackers, malware, cyber-attacks or other security threats, and, despite our implementation of strict security measures and frequent security audits, it is impossible to eliminate all such vulnerability. For instance, we may not be able to ensure the adequacy of the security measures employed by third parties, such as our service providers and any of our Data Center Hosting customers. Additionally, though we provide cybersecurity training for employees, we cannot guarantee that we will not be affected by attempted security breaches. Efforts to limit the ability of malicious actors to disrupt the operations of the internet or undermine our own security efforts may be costly to implement and may not be successful. Such breaches, whether attributable to a vulnerability in our systems or otherwise, could subject us to liability to our customers, suppliers, business partners and others, or give rise to legal and/or regulatory action, which could damage our reputation or otherwise materially harm our business, operating results, and financial condition, and result in claims of liability against us, damage our reputation and materially harm our business. We rely on a well-known U.S. based third-party digital asset-focused custodian to safeguard our Bitcoin. If our third-party service provider experiences a security breach or cyber-attack and unauthorized parties obtain access to our Bitcoin, we may lose some or all of our Bitcoin and our financial condition and results of operations could be materially adversely affected.