SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
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(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______.
Commission File No. 00-22661
INVU, INC.
(Exact name of small business issuer as specified in charter)
Colorado 84-1135638
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation)
The Beren, Blisworth Hill Farm
Stoke Road
Blisworth, Northamptonshire NN7 3DB
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(Address of principal (Postal Code)
executive offices)
Issuer's telephone number, including area code: (01604) 859893
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(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
------- -------
As of June 6, 2002 there were 30,386,539 shares of the common stock, no par
value, of the registrant issued and outstanding.
Transitional Small Business Disclosure Format (check one)
YES NO X
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INVU, INC.
April 30, 2002
INDEX
Page No.
PART I. FINANCIAL INFORMATION.........................................................................................F-1
Item 1. Financial Statements.................................................................................F-1
Consolidated Balance Sheets as of April 30, 2002.....................................................F-2
Consolidated Statements of Operations................................................................F-3
Consolidated Statements of Deficit in Stockholders' Equity...........................................F-4
Consolidated Statements of Cash Flows................................................................F-5
Notes to Financial Statements........................................................................F-6
Item 2. Management's Discussion and Analysis or Plan of Operation..............................................1
PART II. OTHER INFORMATION...............................................................................................7
Item 1. Legal Proceedings......................................................................................7
Item 2. Changes in Securities..................................................................................7
Item 3. Default Upon Senior Securities.........................................................................7
Item 4. Submission of Matters to a Vote of Security Holders....................................................7
Item 5. Other Information......................................................................................7
Item 6. Exhibits and Reports on Form 8-K.......................................................................7
SIGNATURES.............................................................................................................S-1
EXHIBIT INDEX..........................................................................................................E-1
i
CONSOLIDATED FINANCIAL STATEMENTS
INVU, INC. AND SUBSIDIARIES
APRIL 30, 2002
F-1
INVU, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------------------------------------
April 30, January 31,
2002 2002
(unaudited)
$ $
ASSETS
Current assets
Accounts receivable:
Trade, net 762,946 936,442
VAT recoverable and other 20,981 19,582
Inventories 134,077 78,782
Prepaid expenses 98,339 85,796
----------- -----------
Total current assets 1,016,343 1,120,602
----------- -----------
Equipment, furniture and fixtures
Computer equipment 225,641 148,579
Vehicles 296,680 287,722
Office furniture and fixtures 105,517 100,897
----------- -----------
627,838 537,198
Less accumulated depreciation 284,348 244,266
----------- -----------
343,490 292,932
----------- -----------
Intangible assets 109,298 117,775
----------- -----------
1,469,131 1,531,309
=========== ===========
LIABILITIES AND DEFICIT IN STOCKHOLDERS' EQUITY
Current liabilities
Short-term credit facility 262,745 276,203
Current maturities of long-term obligations 3,169,989 2,945,681
Accounts payable 639,685 506,161
Accrued liabilities 610,203 610,290
Deferred revenue 170,049 216,848
----------- -----------
Total current liabilities 4,852,671 4,555,183
----------- -----------
Long-term obligations, less current maturities 2,186,839 2,093,740
Deficit in stockholders' equity
Preferred stock, no par value
Authorised - 20,000,000 shares; nil shares issued and outstanding - -
Common stock, no par value
Authorised - 100,000,000 shares; issued and outstanding - 30,386,539 1,746,223 1,746,223
Accumulated deficit (7,464,242) (7,086,082)
Accumulated other comprehensive income 147,640 222,245
----------- -----------
(5,570,379) (5,117,614)
----------- -----------
1,469,131 1,531,309
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-2
INVU, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------------------------------------------------------------------------
For the three months ended
April 30, April 30,
2002 2001
(unaudited) (unaudited)
$ $
Revenues 412,351 302,016
Expenses:
Production cost 56,490 25,702
Selling and distribution cost 201,909 193,046
Research and development cost 177,191 113,459
Administrative costs 248,820 201,963
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Total operating expenses 684,410 534,170
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Operating loss (272,059) (232,154)
Other income (expense)
Interest, net (106,101) (50,709)
------------ ------------
Total other expense (106,101) (50,709)
------------ ------------
Loss before income taxes (378,160) (282,863)
Income taxes - -
------------ ------------
Net loss (378,160) (282,863)
============ ============
Weighted average shares outstanding:
Basic and Diluted 30,386,539 30,386,539
============ ============
Net loss per common share
Basic and Diluted (0.01) (0.01)
============= ============
The accompanying notes are an integral part of these financial statements.
F-3
INVU, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF DEFICIT IN STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------------------------
Accumulated
other
Common stock Accumulated comprehensive Comprehensive
Shares Amount deficit income Total loss
$ $ $ $ $
Balance at January 31, 2002 30,386,539 1,746,223 (7,086,082) 222,245 (5,117,614)
Comprehensive income (unaudited):
Foreign currency translation
adjustment (unaudited) - - - (74,605) (74,605) (74,605)
Net loss for the period (unaudited) - - (378,160) - (378,160) (378,160)
-------------
Total comprehensive income (unaudited) (452,765)
=============
------------ ------------ ------------- ------------- ------------
Balance at April 30, 2002 (unaudited) 30,386,539 1,746,223 (7,464,242) 147,640 (5,570,379)
============ ============ ============= ============== ============
The accompanying notes are an integral part of these financial statements.
F-4
INVU, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
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For the three months ended
April 30, 2002 April 30, 2001
(unaudited) (unaudited)
$ $
Net cash flows used in operating activities
Net loss during the period (378,160) (282,863)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 43,701 27,143
Loss on disposal of assets - 1,044
Changes in:
Accounts receivable 197,707 (174,687)
Inventories (51,755) (953)
Prepaid expenses (9,667) (20,614)
Accounts payable 115,342 (180,969)
Accrued liabilities (71,142) 22,576
--------- ----------
Net cash used in operating activities (153,974) (609,323)
--------- ----------
Cash flows used in investing activities:
Acquisitions of property and equipment (72,393) (6,942)
--------- ----------
Net cash used in investing activities (72,393) (6,942)
--------- ----------
Cash flows provided by financing activities:
Short-term credit facility (21,602) (353,791)
Borrowings received from notes payable 275,000 1,000,000
Repayment of borrowings (4,759) (9,068)
Principal payments on capital lease (10,900) (10,567)
--------- ----------
Net cash provided by financing activities 237,739 626,574
--------- ----------
Effect of exchange rate changes on cash (11,372) (10,309)
--------- ----------
Net decrease in cash - -
Cash at beginning of period - -
--------- ----------
Cash at end of period - -
========= ==========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest 35,000 38,000
The accompanying notes are an integral part of these financial statements.
F-5
INVU, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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The accompanying financial statements have been prepared without audit pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations. These statements include all adjustments, consisting only of
normal recurring accruals, considered necessary for a fair presentation of
financial position and results of operations. The financial statements included
herein should be read in conjunction with the financial statements and notes
thereto included in the latest annual report on Form 10-KSB. The results of
operations for the three month period ended April 30, 2002 are not necessarily
indicative of the results to be expected for the full year.
NOTE A - COMPANY DESCRIPTION
INVU, Inc. (the Company) is a holding company which operates one subsidiary INVU
Plc, which is a holding company for two subsidiaries of its own, INVU Services
(Services) and INVU International Holdings Limited (Holdings). The Company was
incorporated under the laws of the State of Colorado, United States of America,
in February 1997. INVU Plc, Services and Holdings are companies incorporated
under English Law. The Company operates in one industry segment which includes
developing and selling software for electronic management of many types of
information and documents such as forms, correspondence, literature, faxes,
technical drawings and electronic files. Services is the sales, marketing and
trading company and Holdings holds the intellectual property rights to the INVU
software.
NOTE B - GOING CONCERN
The financial statements have been prepared on a going concern basis which
assumes that the Company can meet its financial obligations as they fall due in
the ordinary course of business. The Company's liabilities exceeded its assets
by $5,570,379 at April 30, 2002 and the Company had negative cash flows from
operations of $153,974 for the three months to April 30, 2002. The Company is
starting to generate revenues from operations and has obtained additional
financing during the three months ended April 30, 2002 of $275,000. Operations
to date have been funded principally by equity capital and borrowings. However,
the Company needs to raise sufficient financing to meet current obligations and
to fund operations until the operations become profitable. The Company is in the
process of negotiating the necessary additional financing to fund its
operations. The Company's ability to continue to develop its operations depends
on its ability to raise further financing. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
NOTE C - SHORT-TERM CREDIT FACILITY
The Company has a $291,460 ((pound)200,000) (January 31, 2002 $282,660
((pound)200,000)), 6% short-term credit facility with an English bank. The
credit facility is collateralized by all assets of the Company and a corporate
guarantee given by Vertical Investments Limited, a company in which a
non-executive director of this Company has an interest. The amount drawn against
the facility at April 30, 2002 was $262,745 ((pound)180,296), (January 31, 2002
$276,203 ((pound)195,431)). The amount drawn is payable on demand at the bank's
discretion. The credit facility is due for review on September 30, 2002.
F-6
NOTE D - LONG-TERM OBLIGATIONS
Long-term obligations at April 30, 2002 and January 31, 2002, consist of the
following:
April 30, January 31,
2002 2002
(unaudited)
$ $
Unsecured loan from an individual, no stated maturity date; bearing interest
of $4,304 per month ((pound)3,000) 760,913 735,818
4% above Libor rate (Libor rate was 4.13% and 4% at April 30, 2002 and January
31, 2002 respectively) notes payable to an English bank, monthly payment
aggregating to (pound)500, matured in March 2002, collateralised by all assets
of the Company and a corporate guarantee given by Vertical Investments
Limited - 940
4% above Libor rate (Libor rate was 4.13% and 4% at April 30, 2002 and January
31, 2002 respectively) notes payable to an English bank, monthly payments
aggregating to (pound)1,333, maturing in June 2004, collateralised by all assets
of the Company, unlimited multilateral guarantees between subsidiary
undertakings and a corporate guarantee given by Vertical Investments Limited; a
quarterly loan guarantee premium of 1.5% per annum is payable on 85%
of the outstanding balance 54,406 56,530
2% above the bank's base rate notes payable to an English bank, monthly payments
aggregating to (pound)50,000, starting in November 2002 and maturing in October
2003, collateralised by all assets of the Company, unlimited multilateral
guarantees between subsidiary undertakings and a corporate
guarantee given by Vertical Investments Limited 874,376 847,980
Convertible A Note 1999-2002, with interest at 6%; interest due in
arrears biannually on January 1 and July 1 600,000 600,000
Convertible B Note 1999-2002, bearing interest of 8% per annum for the first six
months, 9% per annum for the next six months and 10% per annum
thereafter; interest due in arrears biannually on January 1 and July 1 400,000 400,000
Convertible loans 2001-2003 (i) with interest rate per annum of 1.5% above
UK bank base rates 159,000 159,000
Loan notes 2001-2005 (ii) with interest rate per annum of 7% 1,000,000 1,000,000
Loan notes 2001-2005 (iii) with interest rate per annum of 12% 500,000 500,000
Convertible loan 2001-2003 (iv) with interest rate per annum of 1.5% above 300,000 300,000
UK bank base rate
Convertible loan 2001-2005 (v) with interest rate per annum of 12% 550,000 275,000
Capital leases for vehicles, interest ranging from 10.2% - 16.9% with
maturities through 2004 158,133 164,153
------------ -----------
5,356,828 5,039,421
Less current maturities 3,169,989 2,945,681
------------ -----------
2,186,839 2,093,740
============ ===========
F-7
Scheduled maturities of long-term obligation are as follows:
Year ending April 30, $
2003 3,169,989
2004 843,154
2005 7,772
2006 575,000
2007 760,913
--------------
5,356,828
==============
1) Convertible debentures
The A and B Convertible Notes 1999-2002 are held by individuals who are minority
shareholders in the Company. They are convertible into common shares at the rate
of one common share for every US$0.65 of outstanding principal Note converted
for the A Notes and one common share for every US$0.50 of outstanding principal
Note converted for the B Notes. Conversion will take place:
i) immediately prior to a Public Offering
ii) at the option of the investors for the B Notes and automatically for the A
Notes, upon new equity capital resulting in proceeds to the Company of at
least $4,000,000
iii) at the option of the investor giving 30 days notice to the Company.
Interest amounting to $195,447 has been accrued to April 30, 2002 (January 31,
2002 $172,383) in respect of the A and B Convertible Notes 1999-2002.
Any outstanding principal not converted or redeemed by the anniversary date,
which was August 16, 2001, will be redeemed at par plus interest in August 2002
upon receipt of 30 days written notice from the Company or the Investors. At
April 30, 2002 the outstanding principal could have been converted into
1,723,077 common shares.
In consideration of the Investors advancing an aggregate of $1,000,000, the
Company caused Montague Limited the principal shareholder to transfer, and
register in the name of the Investors, 225,000 shares of Common Stock of no par
value.
The convertible debentures are secured by a second charge over the Company's
assets.
F-8
2) Loan notes and convertible loan notes
All of the investors for the loan notes and convertible loan notes detailed
below are a related party of a minority shareholder and non-executive
director of the Company. Each description below corresponds to the same
romanette listed on the first table of Note D.
i) The convertible loan notes are repayable at any time within 2 years from
the date of issue. They are convertible into common stock at the rate of
one share for every US $0.25 of outstanding principal at any time within
the 2 years from the date of issue after 45 days notice has been given to
the Company.
ii) The loan notes are repayable on August 26, 2005. At any time from May 1,
2002 until August 26, 2005, the investor may demand repayment of the entire
loan or any part thereof at any time after three days notice to the
Company. If the Company does not timely repay such amounts after receiving
notice, the investor may convert the repayment amount into shares of the
Company's common stock at a conversion price of $0.2175 per share or
convert the repayment amount into shares of the Company's subsidiaries at
the equivalent per share conversion price. The loan is secured by a second
charge over the Company's assets.
iii) The loan notes are repayable by June 17, 2005. At any time from May 1, 2002
until June 17, 2005, the investor may demand repayment of $475,000 or any
part thereof at any time after three days notice to the Company. If the
Company does not timely repay such amounts after receiving notice, the
investor may convert the repayment amount into shares of the Company's
common stock at a conversion price of $0.13 per share or convert the
repayment amount into shares of the Company's subsidiaries at the
equivalent per share conversion price. The remaining $25,000 is repayable
on June 17, 2005. The loan is secured by a second charge over the Company's
assets.
iv) $250,000 of the convertible loan notes are repayable by May 25, 2003 and
the remaining $50,000 are repayable by July 2, 2003. At any time from May
1, 2002 until July 2, 2003, the investor may convert any amount of the
principal, at any time after three days notice to the Company, into shares
of the Company's common stock at a conversion price of $0.25 per share or
convert any amount of the principal into shares of the Company's
subsidiaries at the equivalent per share conversion price. The loan is
secured by a second charge over the Company's assets.
v) The convertible loan notes are repayable by May 1, 2005. At any time from
May 1, 2002 until May 1, 2005, the investor may convert any amount of the
principal at any time, after three days notice to the Company, into shares
of the Company's common stock at a conversion price of $0.13 per share or
convert any amount of the principal into shares of the Company's
subsidiaries at the equivalent per share conversion price. The loan is
secured by a second charge over the Company's assets.
The investor in the loan notes and convertible loan notes referred to in ii) -
v) above was granted two options in the common stock of the Company. The first
option is for 2,700,000 shares of the Company's common stock that may be
exercised at any time from March 1, 2002 until March 1, 2006 after three days
notice for any amount of shares up to 2,700,000 at an exercise price of $0.25
per share.
F-9
The second option is for 450,000 shares of the Company's common stock that may
be exercised at any time from March 1, 2002 until March 1, 2006 after three days
notice for any amount of shares up to 450,000 at an exercise price of $0.875 per
share.
On the date of issue of all of the convertible loan notes, the conversion rate
was in excess of the market price of the common stock and therefore, no
beneficial conversion feature expense has been recorded in the financial
statements.
3) Capital leases
The Company leases vehicles under noncancellable capitalized leases.
April 30, January 31,
2002 2002
(unaudited)
$ $
Vehicles 296,680 287,722
Less accumulated depreciation (157,138) (134,410)
------------- -----------
139,542 153,312
============= ===========
Scheduled maturities of minimum lease payments are as follows:
Period ending April 30, $
2003 93,338
2004 88,477
----------
181,815
Less amount representing interest 23,682
----------
Present value of net minimum lease payments 158,133
==========
The scheduled net minimum lease payments to maturity are included in the
long-term obligation table above.
F-10
NOTE E - RELATED PARTY TRANSACTIONS
At April 30, 2002 David Morgan owed $20,981 ((pound)14,397) (January 31, 2002
$19,584 ((pound)13,857)) to the Company. The maximum liability during the period
amounted to $20,981 and the interest charge amounted to $Nil (January 31, 2002
$Nil).
The Company made purchases during the period under normal commercial terms from
Impakt Software Limited, a company owned by Paul O'Sullivan who is a potential
beneficiary of a discretionary trust, the rest of which includes beneficial
ownership of the Company's common stock. The percentage of Mr O'Sullivan's
interest in the assets of the trust has not been determined. Total purchases
amounted to $38,965 in the three months to April 30, 2002 (Year to January 31,
2002 $136,340) and the balance owed by the Company at April 30, 2002 was $7,791
(January 31, 2002 $6,477).
NOTE F - RECENT PRONOUNCEMENT
On July 20, 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") 141, Business Combinations
and SFAS 142, Goodwill and Other Intangible Assets. SFAS 141 is effective for
business combinations completed after June 30, 2001. SFAS 142 is effective for
fiscal years beginning after December 15, 2001; however certain provisions of
this Statement apply to goodwill and other intangible assets acquired between
July 1, 2001 and the effective date of SFAS 142.
These statements address how intangible assets that are acquired individually,
with a group of other assets or in connection with a business combination should
be accounted for in financial statements upon and subsequent to their
acquisition. The new statements require that all business combinations initiated
after June 30, 2001 be accounted for using the purchase method and establish
specific criteria for the recognition of intangible assets separately from
goodwill.
The Company will adopt SFAS 141 on February 1, 2002, as permitted by the new
statement. Upon adoption, the Company will no longer amortize goodwill and other
indefinite lived intangible assets. The Company will be required to test its
goodwill and intangible assets that are determined to have an indefinite life
for impairment at least annually. Other than in those periods in which the
Company may record an asset impairment, the Company expects that the adoption of
SFAS 142 will not impact its financial position or its results of operations.
The FASB issued SFAS 143, Accounting for Asset Retirement Obligations in June
2001. SFAS 143 addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. SFAS 143 is effective for fiscal years beginning after
June 15, 2002. While the Company is currently evaluating the impact the adoption
of SFAS 143 will have on its financial position and results of operations, it
does not expect such impact to be material.
The FASB issued SFAS 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, in August 2001. SFAS 144, which addresses financial
accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of, supercedes SFAS 121 and is effective for
fiscal years beginning after December 15, 2001. While the Company is currently
evaluating the impact the adoption of SFAS 144 will have on its financial
position and results of operations, it does not expect such impact to be
material.
F-11
NOTE G - SUBSEQUENT EVENT
A complaint was filed against the Company on February 23, 2001 relating to a
$100,000 demand promissory note dated May 1, 2000 and payable to the order of
GEM Advisors Inc (GEM). The note bears interest at a rate of 3% per annum and if
payment is not made upon demand, the rate increases to 15% per annum. GEM was
entitled to convert the unpaid balance and interest into shares of the Company's
Common Stock if payment was not made on demand. Demand on the note was made by
GEM on September 21, 2000, subsequently GEM sent the Company a conversion notice
on December 18, 2000 electing to convert the note into 179,643 shares of the
Company's Common Stock. The note was subsequently converted and a share
certificate was delivered to GEM, which GEM returned to the Company contending
that the timeliness of the delivery of the share certificate violated the terms
of the note agreements.
The Company has provided for its own legal expenses incurred to April 30, 2002
in respect of this litigation in these financial statements. The Company has no
obligation to pay for the legal expenses of GEM.
In May 2002 the Company and GEM entered into a Settlement Agreement which will
result in the Company paying GEM $25,000 during 2002. In addition the 179,643
shares of the Company's Common Stock will be purchased by an unaffiliated third
party for $25,000.
F-12
Item 2. Management's Discussion and Analysis or Plan of Operation
The following description of "Management's Plan of Operation"
constitutes forward-looking statements for purposes of the Securities Act of
1933, as amended (the "Securities Act"), and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and as such involves known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of INVU, Inc., a Colorado corporation (the
"Company"), to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements. The words
"expect", "estimate", "anticipate", "predict", "believe", "forecast," "plan",
"seek", "objective", and similar expressions are intended to identify
forward-looking statements. Important factors that could cause the actual
results, performance or achievement of the Company to differ materially from the
Company's expectations include the following: (1) one or more of the assumptions
or other cautionary factors discussed in connection with particular
forward-looking statements or elsewhere in the Company's Form 10-KSB for the
fiscal year ending January 31, 2002 or in this Form 10-QSB prove not to be
accurate; (2) the Company is unsuccessful in increasing sales through its
anticipated marketing efforts; (3) mistakes in cost estimates and cost overruns;
(4) the Company's inability to obtain financing for general operations including
the marketing of the Company's products; (5) non-acceptance of one or more
products of the Company in the marketplace for whatever reason; (6) the
Company's inability to supply any product to meet market demand; (7) generally
unfavorable economic conditions which would adversely effect purchasing
decisions by distributors, resellers or consumers; (8) development of a similar
competing product at a similar price point; (9) the inability to successfully
integrate one or more acquisitions, joint ventures or new subsidiaries with the
Company's operations (including the inability to successfully integrate
businesses which may be diverse as to type, geographic area, or customer base
and the diversion of management's attention among several acquired businesses)
without substantial costs, delays, or other problems; (10) if the Company
experiences labor and or employment problems such as the loss of key personnel,
inability to hire and/or retain competent personnel, etc.; and (11) if the
Company experiences unanticipated problems and/or force majeure events
(including but not limited to accidents, fires, acts of God etc.), or is
adversely affected by problems of its suppliers, shippers, customers or others.
All written or oral forward-looking statements attributable to the Company are
expressly qualified in their entirety by such factors. The Company undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
Notwithstanding the foregoing, the Company is not entitled to rely on the safe
harbor for forward looking statements under 27A of the Securities Act or 21E of
the Exchange Act as long as the Company's stock is classified as a penny stock
within the meaning of Rule 3a51-1 of the Exchange Act. A penny stock is
generally defined to be any equity security that has a market price (as defined
in Rule 3a51-1) of less than $5.00 per share, subject to certain exceptions.
The following discussion should be read in conjunction with the
Consolidated Financial Statements, including the notes thereto.
The Company develops, markets and sells fully scalable software (under
the brand name of INVU) for the electronic management of all types of
information and documents, such as forms, correspondence, literature, faxes,
e-mail, technical drawings, electronic files and web pages. Management believes
that the INVU software strongly adheres to the Company's brand values of ease of
use, functionality and price performance.
The Company's objective is to establish itself as a leading global
supplier of information and document management software and services.
Management believes that, as the market matures, the purchase of document
management systems will become increasingly routine as buyers become acquainted
with both the technology and applications. In order to deal with the increased
demand, the Company continues to increase its number of third party value added
resellers. Management considers both branding and product positioning
fundamental to attaining the market share required to profitably achieve its
objective of being a leading supplier of information and document management
software.
For its professional range of products, which include INVU Series 100,
Series 200, Series 250, i200 and CodeFree Integration, the Company continues to
target its sales and marketing efforts on several easily identifiable mature
market channels. These channels include software distributors and resellers who
market to small and medium size enterprises as well as departmental users in
major organizations, strategic alliances with hardware manufacturers and
distributors, and direct sales to major institutions and organizations. All of
the Company's development and marketing resources are now directed at these fast
growing and higher margin markets.
1
In November 1999, management decided to adopt a value added reseller
(VAR) model for sales of its professional range in the UK. The Company is also
pursuing non-exclusive distributors for its products in other territories.
Management is extremely encouraged by the number and quality of the resellers
that have been recruited to date to sell the product. Each VAR is currently
engaged, as an accredited reseller, at an initial fee of approximately $3000,
with a recurring annual fee thereafter. Having now recruited 120 resellers, the
Company continues to monitor all existing resellers to ensure that they meet the
stringent INVU accreditation requirements. The Company continues its aggressive
VAR recruitment campaign, and having recruited 8 new resellers in the quarter
ended April 30, 2002, management expects to recruit a further 20 VARs by January
31, 2003.
Typically in a VAR based route to market, sales success can be
inconsistent. However, the INVU sales management team has implemented an
intensive marketing and sales support program with its resellers, including
sales and technical training, joint seminars, direct mail and joint telephone
marketing campaigns. The success of this ongoing program has provided many of
the recruited resellers with a pipeline of end-user opportunities, which they
are actively pursuing with the involvement of Company sales personnel. Many
newly recruited resellers are taking sales orders within two weeks of
accreditation. The level of end user inquiries continues to grow and these
inquiries are now being converted into sales at a rapidly increasing rate. Even
more satisfying is the increase in average number of users per sale and the
significant reduction in time between first contact and order placement by end
users. Management believes that this reflects the Company's brand values of ease
of use, high quality and price performance.
Together with the steady increase in adoption of the INVU range by
companies in the small/medium enterprise market, management is encouraged by the
continuing level of interest from large organizations with new and repeat orders
being received from, among others, Argos, Kraft Foods, Universal Music Group,
Millfield Partnership Limited (a large firm of financial advisors), Samsung,
Gerrard Private Bank, Close Bank, Greater Glasgow Primary Healthcare Trust, and
Spar.
The Company has made significant progress with regard to an Original
Equipment Manufacture (OEM) opportunity with Xerox. As an Independent Software
Vendor, INVU has been designated as a Xerox Business Partner. Utilizing Xerox
SDK (software development kits), the Company has now developed software that
provides seamless integration with the Xerox Document Centre Range, of which
55,000 machines are currently in use in the UK. INVU has undertaken sales
training of key Xerox sales personnel and joint sales initiatives are now
underway. The INVU enhanced Document Centre has been branded "VU Centre."
Xerox's largest European dealer, Printware Limited, is providing a full priced
five-user version of "VU Centre" with every Xerox Docucentre it sells.
The significant expansion of the sales team in the fiscal year ended
January 31, 2002, under the guidance of Jon Halestrap (VP of Sales and
Marketing), has given INVU an experienced and dedicated team with which to
recruit a reseller base and explore other sales opportunities. Management
believes that the increased experience in the document management sector of its
sales team and resellers together with their proven ability to develop and grow
sales revenue continues to be the key factors in the rapid development of the
Company. Most current resellers have now attended the INVU bespoke sales
training course, which has proved extremely successful in terms of lead
generation and conversion. Management expects continued sales growth during the
fiscal year ended January 31, 2003 (the "Current Fiscal Year") and beyond.
The Company believes its current products, together with planned future
developments, are well matched to its target market, and that its brand values
of ease of use, functionality and price performance have already and will
continue to differentiate its products from its competitors. The international
market for document technologies is forecast to grow from $17.5 billion in 1999
to $41.6 billion in 2003 according to the AIIM Report: State of the Document
Technologies Market 1997-2003 prepared by the Gartner Group, and management
believes that it has the ability to be a major provider of information
management to businesses world-wide. Management believes that the INVU brand
awareness is increasing. Unsolicited inquiries from prospective end users and
resellers are increasing significantly, as are visitor numbers at exhibitions,
trade fair and shows.
Throughout the three months ended April 30, 2002, the Company has
continued to develop its software products.
Version 5.2 of the Company's professional range of products, INVU
Series 100, Series 200 and ViewSafe, contains the newly developed OCR (Optical
Character Recognition) functionality, which works with all Microsoft OfficeTM
and AdobeTM file types and scanned images. This functionality automatically
allows a user to keyword search all existing documents in the system. This
release also contains a Microsoft Office Add-In, which allows integration with
2
Microsoft OfficeTM 2000. This gives INVU the ability to send items from
Microsoft Outlook to a user-selectable in-tray. It also allows users to save
documents from Microsoft WORD, EXCEL and PowerPoint as an INVU filing, even if
these files are created outside of INVU. A separate "Sequential Workflow Module"
has also been released alongside Version 5.2. The "Sequential Workflow Module"
allows documents, forms and files to be "intelligently" routed electronically to
specific departments and individuals in a pre-determined sequence. Individuals
who receive the file may review and revise it, and the file will then be sent to
the next individual in the pre-determined order. The new module is a generic
adaptation of the bespoke program, which is already in use with customers such
as Universal Music Group. The workflow module is designed to be customer
friendly and easy to use. This is a separate 5.2 Module, which, when integrated
with Version 5.2, is sold as INVU Series 250, and charged accordingly.
The Company has successfully developed a highly sophisticated code free
integration tool for use with the INVU professional range of products. This
allows INVU products to be linked to any other Windows(TM) or Windows(TM)
emulation-based applications. For instance, an INVU scanned image of a supplier
invoice can be retrieved directly from an accounts software application, or an
image of an x-ray can be retrieved directly from a patient records application.
This is achieved without the need for further software development and gives
INVU resellers the ability to add considerable value to the INVU product
offering without the difficulty and cost of hiring and managing development
programmers. Management believes the use of this product for Universal Music
Group and other projects has significantly reduced cost and installation
timescales. The Company believes that this product provides a significant
competitive advantage when compared to other information and document management
technologies. Sales of the "codefree" module have increased significantly, with
one in three INVU installations employing this technology. Management expects
this trend to continue particularly when the new enhanced version of "codefree"
is released in quarter two of the Current Fiscal Year.
INVU i200 (formerly codenamed Series 2000 or INVU WEBFAST) allows
global access to retrieve, view, edit, and file information via the web. This
product was also released in beta format to several end users in quarter four of
the last fiscal year and quarter one of the Current Fiscal Year, and the full
product release is scheduled for quarter two of the Current Fiscal Year.
Management believes that this product forms the basis of future developments for
many of its existing and future end users. In the opinion of management, with
this technology INVU now offers key functionality that is comparable to the
world's most established document and content management solutions, but at a
significantly lower price level.
Development of a highly sophisticated content addressable indexing and
retrieval system reached the prototype stage during the second quarter of the
fiscal year ended January 31, 2002 and further development have taken place
during the Current Fiscal Year. This technology allows access to data and
documents through intelligent frequency of word and phrase recognition and
semantic networking. Scanned images can be converted into text using standard
Optical Character Recognition technology, and even poor quality scanned images
can yield words and phrases that INVU's technology will retrieve. The Company
expects this product to further enhance filing and retrieval speeds for
organizations with large multiple data storage requirements across networks,
intranets, extranets and the internet. Management decided not to integrate this
technology within the latest release of INVU products and is instead considering
the further wide-ranging applications for which this advanced technology can be
utilized. Full text retrieval technology is already available within the latest
release of Series 200 and Series 250.
Critical Accounting Policies
Invu's financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles in the United States.
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by management's
application of accounting policies. Critical accounting policies for Invu
include revenue recognition, accounting for research and development costs,
accounting for the impairment of long-lived assets and accounting for
contingencies.
Invu recognizes revenue in accordance with American Institute of
Certified Public Accountants (AICPA) Statement of Position (SOP) 97-2, Software
Revenue Recognition as amended by Statement of Position (SOP) 98-9, Modification
of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions,
(SOP 98-9). Fees for services and maintenance are generally charged to customers
separately from the license of software. Service revenue is recognized when
services are performed. Maintenance revenue is deferred and recognized ratably
3
over the term of the contract, normally twelve months. Revenues from license
fees are recognized upon product shipment when fees are fixed, collectability is
probable and the Company has no significant obligations remaining under the
licensing agreement. In instances where a significant vendor obligation exists,
revenue recognition is delayed until such obligation has been satisfied.
Invu accounts for research and development costs in accordance with
several accounting pronouncements, including SFAS 2, Accounting for Research and
Development Costs, and SFAS 86, Accounting for the Costs of Computer Software to
be Sold, Leased, or Otherwise Marketed. SFAS 86 specifies that costs incurred
internally in creating a computer software product should be charged to expense
when incurred as research and development until technological feasibility has
been established for the product. Once technological feasibility is established,
all software costs should be capitalized until the product is available for
general release to customers. Judgment is required in determining when the
technological feasibility of a product is established. Invu believes that
technological feasibility for its products is reached shortly before the
products are released to manufacturing. Costs incurred after technological
feasibility is established have been insignificant, and accordingly, the Company
has not capitalized any software development costs.
Invu follows the provisions of Statement of Accounting Standards (SFAS
No. 121), Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of. SFAS No. 121 establishes accounting standards for the
impairment of long-lived assets, certain identifiable intangibles and items
related to those assets. The Company reviews long-lived assets to be held and
used for impairment whenever events or changes in circumstances indicate that
the carrying amount of the assets may not be recoverable. If the sum of the
undiscounted expected future cash flows is less than the carrying amount of the
assets, the Company recognizes an impairment loss. Impairment losses are
measured as the amount by which the carrying amount of the assets exceeds the
fair value of the assets. When fair values are not available, the Company
estimates fair value using the expected future cash flows discounted at a rate
commensurate with the risks associated with the recovery of the assets.
Invu has been engaged in legal proceedings with GEM Advisors Inc.
(GEM). An agreement has recently been made, whereby Invu will pay $25,000 to GEM
in full and final settlement. SFAS 5, Accounting for Contingencies, requires
that an estimated loss from a loss contingency should be accrued by a charge to
income if it is probable that an asset has been impaired or a liability has been
incurred and the amount of the loss can be reasonably estimated. Disclosure of a
contingency is required if there is at least a reasonable possibility that a
loss has been incurred. The Company does not consider the sum above to have a
material impact on the Company's financial position or its results of
operations.
Results of Operations
The following is a discussion of the results of operations for the
three months ended April 30, 2002, compared with the three months ended April
30, 2001, together with changes in financial condition during the three month
period ended April 30, 2002.
Total revenues increased by $110,335, or 36%, from $302,016 for the
three months ended April 30, 2001 to $412,351 for the three months ended April
30, 2002. This reflects the Company's continued expansion of its customer base.
The net loss for the three months ended April 30, 2002 was $378,160,
which is $95,297, or 34% higher than the net loss for the corresponding period
in fiscal year 2001 of $282,863 mainly due to increases in interest charges of
$55,392, an increase in professional fees associated with the current
fundraising and the litigation with GEM Advisors, Inc. of $27,002 and
amortization of EasiFile acquisition cost of $11,892.
Production costs consist of royalty fees associated with third party
software, costs related to reproduction, packaging, and despatch of software,
direct costs associated with the implementation of software solutions,
consulting and training services and other costs related to product upgrades for
existing users. Production costs have increased by $30,788 from $25,702 for the
three months ended April 30, 2001 to $56,490 for the three months ended April
30, 2002. Production costs as a percentage of total revenues were 13.7% for the
three months ended April 30, 2002 compared to 8.5% during the same period in
fiscal year 2001. The increase was due to the one time purchase of a $38,553
scanner that was subsequently sold for $47,725, which consequently had a
disproportionate effect on production costs as a percentage of total revenue.
Without this cost and associated sales revenue, production costs would have been
4
only 5% of revenues. This underlying fall in production costs as a proportion of
revenues reflects the fall in production costs per unit due to economies of
scale, and improved supply terms.
Selling and distribution costs consist primarily of personnel costs,
commissions, marketing literature, travel and promotional activities such as
trade shows, seminars, advertising and public relations programs. Selling and
distribution costs increased by $8,863 from $193,046 in the three months to
April 30, 2001 to $201,909 in the three months ended April 30, 2002. Selling and
distribution costs as a percentage of total revenues fell to 49% in the three
months ended April 30, 2002 compared to 64% in the same period in fiscal year
2001. The decrease in the percentage over the comparable three month periods was
due to the Company's sales growth in 2002 and re-focussed marketing, which
concentrated on value added reseller training and development programs.
Research and development costs consist of continued software
development and further enhancements to existing software products. These costs
are expensed as incurred until technical feasibility has been established. To
date, the establishment of technical feasibility and the subsequent general
release to customers have been almost simultaneous, and, therefore, the Company
has not capitalized software development costs. Research and development costs
increased by $63,732, or 56%, from $113,459 in the three months ended April 30,
2001 to $177,191 during the three months ended April 30, 2002. Research and
development costs as a percentage of total revenues rose to 43% in the three
months ended April 30, 2002 compared to 38% in the same period in fiscal year
2001. The increases in the percentage over the comparable three month period
reflected the Company's continued investment in its current and future products.
In particular, the development of Series 200 (version 5.2) and all-new products,
including Series 250 and i200, have occupied the majority of the Company's
development resources throughout the period.
Administrative costs include the personnel and other costs of the
administration, human resources and finance departments, together with property
expenses, amortization of intangibles and depreciation of tangible assets. These
costs increased by $46,857, or 23%, from $201,963 in the three months ended
April 30, 2001 to $248,820 during the three months ended April 30, 2002.
Administrative costs as a percentage of total revenues fell to 60% in the three
months ended April 30, 2002 compared to 67% in the same period in fiscal year
2001. The increase in administrative costs over the comparable three month
period was due to the Company's additional legal fees relating to the now
settled dispute with GEM Advisors, Inc., amortization for the period of
intangible assets acquired in July 2001, and an increase in general
administrative costs.
During the three months ended April 30, 2002, the Company incurred net
interest expense of $106,101 compared to net interest expense of $50,709 during
the corresponding periods in fiscal year 2001. These increases are entirely due
to increased loan facilities. Management expects these costs to fall as soon as
additional investment funding is secured. Interest costs will also decrease when
net revenues are adequate to generate net cash inflows.
The tax rates for the periods in question are zero due to a net loss in
each period.
The total current assets of the Company were $1,016,343 at April 30,
2002, a decrease of $104,259 compared to $1,120,602 at January 31, 2002. Working
capital was negative $3,836,328 as of April 30, 2002, compared with negative
$3,434,581 as of January 31, 2002. These changes are mainly due to decreases in
accounts receivable and increases in current maturities of long term
obligations, together with increases in accounts payable. The Company has
obtained convertible loans from Vertical Investments, an entity in which Daniel
Goldman (a non-executive director) has an interest, totaling $275,000 during the
three month period ended April 30, 2002. Management believes that this amount
will either be repaid from the proceeds of future financings or converted into
common stock of the Company before the end of the Current Fiscal Year, which
although it will significantly reduce the working capital deficit, will also
dilute the holdings of the Company's current shareholders.
Total assets of the Company were $1,469,131 at April 30, 2002, a
decrease of $62,178 compared to $1,531,309 at January 31, 2002. This is
attributable to increases in fixed assets of $50,558, and decreases in current
assets of $104,259, and a decrease in intangible assets of $8,477.
The total current liabilities of the Company increased by $297,488 from
$4,555,183 at January 31, 2002 to $4,852,671 at April 30, 2002. The change in
current liabilities is mainly due to increases in accounts payable of $133,524
and increases in current maturities of long-term obligations of $224,308 and
decreases in short-term credit facility of $13,458 and decreases in deferred
revenue of $46,799. This reflects the Company's continued trading losses and
reliance on loan finance.
5
Total stockholders' equity decreased by $452,765 during the three month
period ended April 30, 2002 from a deficit of $5,117,614 at January 31, 2002 to
a deficit of $5,570,379 at April 30, 2002. The Company continues to evaluate
various financing options, including issuing debt and equity to finance future
development and particularly marketing of products.
Financing Management's Plan of Operation
The Company remains committed to raising the necessary funds to enable
the business to fulfill its potential and is engaged in or presently pursuing
the following financing transactions.
The Company has a $291,460 short-term credit facility with an annual
interest rate currently of 6% with an English bank. The amount drawn against the
facility at April 30, 2002 was $262,745. This facility is due for review on
September 30, 2002. The Company believes that at such maturity date the facility
will be extended. The Company's bank also provided a further credit facility of
$874,376 in October 2001 by way of notes payable with monthly repayments of
$72,865 commencing in November 2002 until October 2003. This facility currently
bears interest at the rate of 6% per annum. All bank credit facilities and notes
payable are collateralized by all assets of the Company and a corporate
guarantee given by Vertical Investments Limited, a company in which Daniel
Goldman, a non-executive director of this Company, has an interest.
In August 1999, the Company received a loan in the aggregate principal
amount of $600,000 and a second loan in the principal amount of $400,000
(together "Loan Stock Instruments") from Alan David Goldman (the father of
Daniel Goldman), Vertical Investments Limited and Tom Maxfield (a non-executive
director of the Company). The Loan Stock Instruments currently bear interest at
the rate of 6% and 10% per annum, respectively, and may be converted into 1
share of common stock for each $0.65 and $0.50, respectively, of outstanding
principal and accrued but unpaid interest. If the Loan Stock Instruments are not
converted, they may be redeemed upon 30 days notice by the Company or the
Investors on or after August 2002. The Company anticipates that the Loan Stock
Instrument will be converted.
In February 2001, Vertical Investments Limited, a company in which
Daniel Goldman, a non-executive director of the Company, has an interest, lent
the Company $1,000,000. Vertical Investments Limited made further advances of
$250,000 in May 2001, $50,000 in July 2001, $500,000 in September 2001, $275,000
in December 2001 and $275,000 in February 2002 (collectively, the "Vertical
Loans"). Effective as of December 2001, the Vertical Loans were restructured to
apply conversion features to enable the loans to be converted into shares of the
Company's common stock at conversion prices ranging from $0.13 to $0.25 per
shares at various times.
In May 2001, the Company received $50,000 from Paysage Investments
Limited and in June 2001, the Company received $84,000 from Pershing Nominees
and $25,000 from Guernroy Limited. Each of these advances referenced in this
paragraph were made by way of convertible loans at an interest rate per annum of
1.5% above the UK bank base rate. Each of the convertible loans has maturity
date 24 months from date of issue, but principal and interest may be repaid at
any time without penalty. The loans are convertible at the rate of $0.25 per
share of Common Stock, and the investor may convert, having given 45 days
notice, at any time during the 24 month period.
As noted above, the Company has continued to raise significant funding
during difficult market conditions. The Company is in the process of seeking
further financing from a number of sources. Assuming that the convertible loans,
including the Vertical Loans and the Loan Stock Instruments, are converted,
management anticipates that a further requirement of $1,000,000 would be
necessary to achieve the break even position and meet all outstanding
obligations. The Company is seeking financing in excess of this amount in order
to maximize the growth potential of the Company. Management estimates the
financing it is seeking, if consummated, would fulfill the Company's working
capital requirements for a period up to the point at which net sales revenues
could sustain the Company's day to day operations and also enable the Company to
further accelerate its growth both organically and through acquisition. There
can, however, be no assurance that the above transaction will be consummated or
that additional debt or equity financing will be available, if and when needed,
or that, if available, such financing could be completed on commercially
favorable terms. Failure to obtain additional financing if and when needed,
could have a material adverse affect on the Company's business, results of
operations and financial condition. Please refer to Note B of the Consolidated
Financial Statements in conjunction with this paragraph regarding the Company's
ability to continue as a going concern.
6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
As reflected in the Company's 10-KSB for the fiscal year ended January 31,
2002, a complaint was filed against the Company on February 23, 2001, in the
United States District Court for the Southern District of New York on behalf of
GEM Advisors, Inc. ("GEM") seeking money damages in the amount of $100,000
together with interest from September 21, 2000, costs, disbursement and
attorneys' fees. The complaint related to a $100,000 demand promissory note (the
"Note") dated May 1, 2000 and payable to the order of GEM. The Note bore
interest at a rate of 3% per annum and if payment was not made upon demand, the
rate increased to 15% per annum from the date of demand through and including
the date of payment. GEM was entitled to convert the unpaid balance and interest
into shares of the Company's Common Stock if payment was not made on demand.
Demand on the Note was made by GEM on September 21, 2000 and GEM sent the
Company a conversion notice on December 18, 2000 electing to convert the Note
into 179,643 shares of the Company's Common Stock. The Note was subsequently
converted and a share certificate was delivered to GEM, which GEM returned to
the Company contending that the timeliness of the delivery of the share
certificate violated the terms of related Note agreements.
In response, the Company filed an answer on or about April 16, 2001,
denying that any amounts were owing under the Note, and denying liability under
GEM's remaining causes of action. It was the Company's position that GEM made a
binding election to convert unpaid amounts due under the Note into shares of the
Company's Common Stock, and that the Company's tender of the share certificate
to GEM, and GEM's acceptance and retention of the share certificate, fully
satisfied the Company's obligations under the Note and discharged the Company
from any further liability under the Note.
The parties entered into a Settlement Agreement in May 2002 that obligates
the Company to pay GEM an aggregate of $50,000 in four equal installments during
2002. GEM in turn has agreed to return the 179,643 shares of the Company's
Common Stock (the "GEM Shares") to the Company. The Company has assigned its
right to acquire the GEM Shares to an unaffiliated third party who will acquire
the GEM Shares directly from GEM for $25,000. Such $25,000 shall reduce the
Company's settlement obligation to $25,000 from $50,000. On May 23, 2002, the
Judge signed an Order that discontinued GEM's action with prejudice.
Item 2. Changes in Securities.
There have been no changes in securities during the period.
Item 3. Default Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
None
7
EXHIBITS
(a) Exhibits
Exhibit
Number Description of Exhibit
------- ----------------------
10.1 Overdraft Facility, dated July 19, 2000, by and between the Company and
the Bank of Scotland (incorporated by reference to Exhibit 10.1 of the
Company's Quarterly Report on Form 10-QSB filed September 19, 2000).
10.2 Corporate Guarantee, dated July 18, 2000, by and among the Company,
Invu Plc, Invu Services Limited, Invu International Holdings Limited
and the Bank of Scotland (incorporated by reference to Exhibit 10.2 of
the Company's Quarterly Report on Form 10-QSB filed September 19,
2000).
10.3 Debenture, dated July 13, 2000, by and between Invu International
Holdings Limited and the Bank of Scotland (incorporated by reference to
Exhibit 10.3 of the Company's Quarterly Report on Form 10-QSB filed
September 19, 2000).
10.4 Overdraft Facility, dated October 29, 2001, by and between the Company
and the Bank of Scotland (incorporated by reference to Exhibit 10.4 of
the Company's Quarterly Report on Form 10-QSB filed December 14, 2001).
10.5 Investment Agreement, dated August 23, 1999, among the Company, David
Morgan, John Agostini, Paul O'Sullivan, Alan David Goldman, and
Vertical Investments Limited (incorporated by reference from Exhibit
10.12 of the Company's Annual Report on Form 10-KSB filed October 15,
1999).
10.6 Loan Stock Instrument, dated as of August 23, 1999, by the Company in
favor of Alan David Goldman and Vertical Investments Limited
(incorporated by reference from Exhibit 10.13 of the Company's Annual
Report on Form 10-KSB filed October 15, 1999).
10.7 Loan Stock Instrument, dated as of August 23, 1999, by the Company in
favor of Alan David Goldman and Vertical Investments Limited
(incorporated by reference from Exhibit 10.14 of the Company's Annual
Report on Form 10-KSB filed October 15, 1999).
10.8 Supplemental Agreement, dated as of August 23, 1999, among the
Company, Vertical Investments Limited, Alan David Goldman, David
Morgan, John Agostini, Paul O'Sullivan, INVU Services Limited and Tom
Maxfield (incorporated by reference from Exhibit 10.15 of the
Company's Annual Report on Form 10-KSB filed October 15, 1999).
10.9 Financing Arrangement, effective as of December 27, 2001, between
Vertical Investments Limited, the Company, Invu Services Limited, Invu
International Holdings Limited and Invu PLC (incorporated by reference
from Exhibit 10.21 of the Company's Annual Report on Form 10-KSB filed
May 1, 2002).
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Quarterly Report to be signed on
its behalf by the undersigned thereunto duly authorized.
INVU, INC.
(Issuer)
Date: June 14, 2002 By: /s/ David Morgan
-----------------------------------
David Morgan, President &
Chief Executive Officer
(Principal Executive Officer)
Date: June 14, 2002 By: /s/ John Agostini
-----------------------------------
John Agostini, Vice President-Chief
Financial Officer & Secretary
(Principal Financial Officer)
S-1
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
------- ----------------------
10.1 Overdraft Facility, dated July 19, 2000, by and between the Company and
the Bank of Scotland (incorporated by reference to Exhibit 10.1 of the
Company's Quarterly Report on Form 10-QSB filed September 19, 2000).
10.2 Corporate Guarantee, dated July 18, 2000, by and among the Company,
Invu Plc, Invu Services Limited, Invu International Holdings Limited
and the Bank of Scotland (incorporated by reference to Exhibit 10.2 of
the Company's Quarterly Report on Form 10-QSB filed September 19,
2000).
10.3 Debenture, dated July 13, 2000, by and between Invu International
Holdings Limited and the Bank of Scotland (incorporated by reference to
Exhibit 10.3 of the Company's Quarterly Report on Form 10-QSB filed
September 19, 2000).
10.4 Overdraft Facility, dated October 29, 2001, by and between the Company
and the Bank of Scotland (incorporated by reference to Exhibit 10.4 of
the Company's Quarterly Report on Form 10-QSB filed December 14, 2001).
10.5 Investment Agreement, dated August 23, 1999, among the Company, David
Morgan, John Agostini, Paul O'Sullivan, Alan David Goldman, and
Vertical Investments Limited (incorporated by reference from Exhibit
10.12 of the Company's Annual Report on Form 10-KSB filed October 15,
1999).
10.6 Loan Stock Instrument, dated as of August 23, 1999, by the Company in
favor of Alan David Goldman and Vertical Investments Limited
(incorporated by reference from Exhibit 10.13 of the Company's Annual
Report on Form 10-KSB filed October 15, 1999).
10.7 Loan Stock Instrument, dated as of August 23, 1999, by the Company in
favor of Alan David Goldman and Vertical Investments Limited
(incorporated by reference from Exhibit 10.14 of the Company's Annual
Report on Form 10-KSB filed October 15, 1999).
10.8 Supplemental Agreement, dated as of August 23, 1999, among the
Company, Vertical Investments Limited, Alan David Goldman, David
Morgan, John Agostini, Paul O'Sullivan, INVU Services Limited and Tom
Maxfield (incorporated by reference from Exhibit 10.15 of the
Company's Annual Report on Form 10-KSB filed October 15, 1999).
10.9 Financing Arrangement, effective as of December 27, 2001, between
Vertical Investments Limited, the Company, Invu Services Limited, Invu
International Holdings Limited and Invu PLC (incorporated by reference
from Exhibit 10.21 of the Company's Annual Report on Form 10-KSB filed
May 1, 2002).
E-1