SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
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(Mark One)
[ ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2001
[ ] 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 December 12, 2001 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.
October 31, 2001
INDEX
Page No.
PART I. FINANCIAL INFORMATION.........................................................................................F-1
Item 1. Financial Statements.................................................................................F-1
Consolidated Balance Sheets as of October 31, 2001...................................................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...............................................................................................6
Item 1. Legal Proceedings......................................................................................6
Item 2. Changes in Securities..................................................................................7
Item 3. Default Upon Senior Securities.........................................................................8
Item 4. Submission of Matters to a Vote of Security Holders....................................................8
Item 5. Other Information......................................................................................8
Item 6. Exhibits and Reports on Form 8-K.......................................................................8
SIGNATURES.............................................................................................................S-1
EXHIBIT INDEX..........................................................................................................E-1
i
CONSOLIDATED FINANCIAL STATEMENTS
INVU, INC. AND SUBSIDIARIES
OCTOBER 31, 2001
F-1
INVU, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
October 31, January 31,
2001 2001
(unaudited)
$ $
ASSETS
Current assets
Accounts receivable:
Trade, net 736,157 310,098
VAT recoverable and other 20,152 5,847
Inventories 33,449 35,150
Prepaid expenses 43,692 105,242
----------- -----------
Total current assets 833,450 456,337
----------- -----------
Equipment, furniture and fixtures
Computer equipment 102,426 82,989
Vehicles 296,069 289,970
Office furniture and fixtures 103,207 102,350
----------- -----------
501,702 475,309
Less accumulated depreciation 222,617 163,364
----------- -----------
279,085 311,945
----------- -----------
Intangible assets 133,311 -
----------- -----------
1,245,846 768,282
=========== ===========
LIABILITIES AND DEFICIT IN STOCKHOLDERS' EQUITY
Current liabilities
Short-term credit facility 1,123,214 1,682,975
Current maturities of long-term obligations 3,050,238 69,624
Accounts payable 398,943 544,524
Accrued liabilities 639,673 415,239
----------- -----------
Total current liabilities 5,212,068 2,712,362
----------- -----------
Long-term obligations, less current maturities 908,544 1,962,635
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 (6,783,698) (5,810,452)
Accumulated other comprehensive income 162,709 157,514
----------- -----------
(4,874,766) (3,906,715)
----------- -----------
1,245,846 768,282
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-2
INVU, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three For the nine
months ended months ended
October 31, October 31, October 31, October 31,
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
$ $ $ $
Revenues 361,672 220,524 1,056,827 274,843
Expenses:
Production cost 58,314 42,455 159,089 65,590
Selling and distribution cost 184,929 288,906 532,968 687,245
Research and development cost 144,608 90,731 374,497 213,333
Administrative costs 242,998 313,173 722,040 799,861
------------ ----------- ------------ -----------
Total operating expenses 630,849 735,265 1,788,594 1,766,029
------------ ----------- ------------ -----------
Operating loss (269,177) (514,741) (731,767) (1,491,186)
Other income (expense)
Interest, net (144,010) (48,513) (241,479) (106,624)
------------ ----------- ------------ -----------
Total other expense (144,010) (48,513) (241,479) (106,624)
------------ ----------- ------------ -----------
Loss before income taxes (413,187) (563,254) (973,246) (1,597,810)
Income taxes - - - -
------------ ----------- ------------ -----------
Net loss (413,187) (563,254) (973,246) (1,597,810)
============ =========== ============ ===========
Weighted average shares outstanding:
Basic and Diluted 30,386,539 30,206,896 30,386,539 30,206,896
============ =========== ============ ===========
Net loss per common share
Basic and Diluted (0.01) (0.02) (0.03) (0.05)
============ =========== ============ ===========
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, 2001 30,386,539 1,746,223 (5,810,452) 157,514 (3,906,715)
Comprehensive income (unaudited):
Foreign currency translation
adjustment (unaudited) - - - 5,195 5,195 5,195
Net loss for the period (unaudited) - - (973,246) - (973,246) (973,246)
-------------
Total comprehensive income (unaudited) 968,051
---------- ---------- ----------- --------- ---------- -------------
Balance at October 31, 2001 (unaudited) 30,386,539 1,746,223 (6,783,698) 162,709 (4,874,766)
========== ========== =========== ========= ==========
The accompanying notes are an integral part of these financial statements.
F-4
INVU, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------------------------------------------------------------------
For the nine
Months ended
October 31, October 31,
2001 2000
(unaudited) (unaudited)
$ $
Net cash flows used in operating activities
Net loss during the period (973,246) (1,597,810)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 95,114 70,200
Loss on disposal of assets 1,049 -
Changes in:
Accounts receivable (436,973) (311,819)
Inventories 1,520 (24,106)
Prepaid expenses 60,392 (61,807)
Accounts payable (141,473) 457,849
Accrued liabilities 223,876 41,120
---------------- --------------
Net cash used in operating activities (1,169,741) (1,426,373)
---------------- --------------
Cash flows used in investing activities:
Acquisitions of property and equipment (20,923) (122,488)
Acquisition of intangible assets (143,830) -
---------------- --------------
Net cash used in investing activities (164,753) (122,488)
---------------- --------------
Cash flows provided by financing activities:
Short-term credit facility (545,856) 964,351
Borrowings received from notes payable 1,959,000 762,570
Repayment of borrowings (22,055) (113,175)
Principal payments on capital lease (37,505) (30,934)
---------------- --------------
Net cash provided by financing activities 1,353,584 1,582,812
---------------- --------------
Effect of exchange rate changes on cash (19,090) (33,951)
---------------- --------------
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 125,879 106,600
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 nine month period ended October 31, 2001 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.
On August 31, 1998, Sunburst Acquisitions I Inc. (Sunburst) (a public
development stage enterprise) acquired all of the outstanding shares of INVU Plc
in exchange for restricted shares of common stock of Sunburst (the Exchange)
pursuant to a Share Exchange Agreement between Sunburst and the principal
shareholders of INVU Plc. Sunburst exchanged 26,506,552 shares of common stock
for all of INVU Plc's issued and outstanding shares of common stock. For
accounting purposes, the Exchange was treated as a recapitalization of INVU Plc
where INVU Plc is the accounting acquirer. All periods have been restated to
give effect to the recapitalization. The historic statements from inception up
to the Exchange are those of INVU Plc.
In connection with the Exchange, the directors and officers of INVU Plc became
the directors and officers of Sunburst. Also, Sunburst changed its name to INVU,
Inc. At the time of the Exchange, the Company issued 1,510,344 shares of Common
Stock of the Company to a consultant pursuant to a consulting agreement for
introducing INVU Plc and Sunburst. The shares were estimated to have a value of
$750,000 and have been treated as a transaction cost in connection with the
Exchange. Immediately after the Exchange, INVU Plc's former shareholders owned
approximately 88% of the outstanding common stock of Sunburst.
F-6
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 total liabilities exceeded its
total assets by $4,874,766 at October 31, 2001 and the Company had negative cash
flows from operations of $1,169,741 for the nine months to October 31, 2001. The
Company is starting to generate revenues from operations and has obtained
additional financing since January 31, 2001 amounting to $1,959,000. 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 - INVENTORIES
Inventories consist of the following:
October 31, January, 31
2001 2001
(unaudited)
$ $
Goods for resale 22,373 35,150
General stock 11,076 -
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33,449 35,150
============= =============
Goods for resale represent the finished consolidated product to be sold to the
end user.
NOTE D - INTANGIBLE ASSET
The Company purchased certain assets comprising software, intellectual property
rights and the customer list from an unaffiliated entity on July 31, 2001 for
$145,430 ((pound)100,000). This intangible is to be amortised, by equal
instalments over a three year period as this is the estimated useful economic
life over which the Company expects to generate revenues from the assets
acquired. Amortisation of $12,119 ((pound)8,333) has been charged during the
period.
NOTE E - SHORT-TERM CREDIT FACILITY
The Company has a $1,163,440 ((pound)800,000) (January 31, 2001 $1,169,000
((pound)800,000)), 6.5% 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 October 31, 2001 was $1,123,214 ((pound)772,340), (January 31,
2001 $1,682,975 ((pound)1,151,855)). The amount drawn is payable on demand at
the bank's discretion.
After the period end, $872,580 ((pound)600,000) of the credit facility was
converted into a medium term loan. This loan carries interest at 2% above the UK
bank base rate and will be repaid at a rate of $72,715 ((pound)50,000) a month
from November 30, 2002.
F-7
NOTE F - LONG-TERM OBLIGATIONS
Long-term obligations at October 31, 2001 and January 31, 2001
October 31, January 31,
2001 2001
(unaudited)
$ $
Non-interest bearing, unsecured loan from an individual,
no stated maturity date 752,799 759,245
4% above Libor rate (Libor rate was 4.19% and 5.72% at October 31, 2001 and
January 31, 2001 respectively) notes payable to an English bank, monthly payment
aggregating to (pound)500, maturing in March 2002, collateralized by all
assets of the Company and a limited personal guarantee by a director 2,909 6,818
4% above Libor rate (Libor rate was 4.19% and 5.72% at October 31, 2001 and
January 31, 2001 respectively) notes payable to an English bank, monthly payment
aggregating to (pound)1,333, maturing in June 2004, collateralized by all assets
of the Company and unlimited multilateral guarantees between subsidiary
undertakings; a quarterly loan guarantee premium of 1.5% per
annum is payable on 85% of the outstanding balance 65,928 81,821
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, with interest rate per annum of 1.5% above
UK bank base rates 459,000 -
Loan advance from a minority shareholder and its related parties with interest
rate per annum of 1.5% above UK bank base rates; due on December 17, 2001 1,000,000 -
Loan advance from a minority shareholder and its related parties with interest
rate per annum of 12%; due on December 17, 2001 500,000 -
Capital leases for vehicles, interest ranging from 10.2% - 16.9% with
maturities through 2004 178,146 184,375
------------ ----------
3,958,782 2,032,259
Less current maturities (3,050,238) (69,624)
------------ ----------
908,544 1,962,635
============ ==========
F-8
Scheduled maturities of long-term obligation are as follows:
Year ending October 31, $
2002 3,050,238
2003 122,598
2004 33,145
2005 -
2006 752,801
-----------
3,958,782
===========
1) Convertible debentures
All corporate and individual investors are minority shareholders in the Company.
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 $215,665 has been accrued to October 31, 2001 (January 31,
2001 $99,241) 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, 2000, will be redeemed at par plus interest in the year
2002 upon receipt of 30 days written notice from the Company or the Investors.
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.
2) Convertible loan notes
The investors are a related party of the minority shareholder of the Company.
The convertible loan notes are repayable at any time within 2 years from the
date of issue. They are convertible into common shares 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 provided that 45 days notice has been given.
F-9
3) Capital leases
The Company leases vehicles under noncancellable capitalized leases.
October 31, January 31,
2001 2001
(unaudited)
$ $
Vehicles 296,069 289,970
Less accumulated depreciation (120,602) (88,902)
----------- -----------
175,467 201,068
=========== ===========
Scheduled maturities of minimum lease payments are as follows:
Period ending October 31, $
2002 85,783
2003 110,673
2004 14,608
---------
211,064
Less amount representing interest (32,918)
---------
Present value of net minimum lease payments 178,146
=========
The scheduled net minimum lease payments to maturity are included in the
long-term obligation table above.
F-10
NOTE G - RELATED PARTY TRANSACTIONS
At October 31, 2001 David Morgan owed $20,152 ((pound)13,857) (January 31, 2001
$5,635 ((pound)3,857)) to the Company. The maximum liability during the period
amounted to $20,152 and the interest charge amounted to $Nil (January 31, 2001
$Nil).
The Company made purchases during the period under normal commercial terms from
Impakt Software Limited, a company owned by Paul O'Sullivan who was a director
of the Company until July 12, 2000 and who is a potential beneficiary of a
discretionary trust, the res 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 $36,927 in the
three months to October 31, 2001 (Year to January 31, 2001 $85,800) and the
balance owed by the Company at October 31, 2001 was $8,714 (January 31, 2001
$2,233).
NOTE H - CONTINGENT LIABILITY
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. Although the Company is unable to predict any outcome of
the litigation, it is 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 fully satisfied the obligations under the note.
NOTE I - STOCK OPTIONS
On September 14, 2001 the Company granted stock options to certain employees to
purchase an aggregate of 1,036,365 shares of its common stock at an exercise
price of $0.50 per share. The stock options contain performance targets over the
next 3 to 4 years which accelerate the vesting of the options to the
individuals. If the performance targets are not met the options would vest to
the individuals on the sixth anniversary of the implementation of the schemes.
On the measurement date of September 14, 2001, the market price of the common
stock was $0.20 per share and accordingly no expense charge has been recorded in
the financial statements.
NOTE J - RECENT PRONOUNCEMENTS
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. The Company does not expect the adoption of SFAS 141 to have a
material impact on its financial position or its results of operations.
The Company will adopt SFAS 142 on February 1, 2002, as required 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.
NOTE K - SUBSEQUENT EVENTS
Subsequent to October 31, 2001 the Company has received a $200,000 loan advance
with no set interest rate or maturity date from a company in which Daniel
Goldman, a non-executive director of this company, has an interest.
F-11
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", "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, 2001 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.; (11) the Company's cross-motion for summary
judgment in its litigation with GEM Advisors, Inc. is not granted; and (12) 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 is simple, intuitive and cost effective, yet powerful.
The Company's objective is to establish itself as a leading global
supplier of information and document management software and services. For its
professional range of products, INVU Series 100, Series 200, ViewSafe, and
Series 2000 (formerly WEBFAST), the Company expects to target its marketing
efforts initially in the United Kingdom and the United States on departmental
users in organizations, distributors and resellers. The majority of the
Company's development and marketing resources are now directed at its fast
growing and higher margin small/medium size enterprise (SME) market and
corporate professional series of products.
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 95 resellers, the
Company continues to monitor existing resellers to ensure that they meet the
1
stringent INVU accreditation requirements. The Company has recently embarked on
an aggressive VAR recruitment campaign, and Management expects to recruit a
further 20 VARs by January 31, 2002.
As is typical in a VAR based route to market, some resellers have
significantly higher early sales success than others. INVU's experience is
similar, with a small number of resellers gaining notable success soon after
product adoption.
The INVU sales management team has implemented an intensive marketing
and sales support program with its resellers, including joint seminars, direct
mail and joint telephone blitz weeks.
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 SME companies, Management is encouraged by the continuing level of
interest from large organizations with orders being received from Lancashire
Fire & Rescue Service, Spring Grove Property Maintenance, States of Jersey
Police, Mansell Construction (a large UK construction company), River Island,
Millfield Partnership Limited (a large firm of financial advisors) and Thales
Contact Solutions.
The Company has also progressed further with regard to two Original
Equipment Manufacture (OEM) opportunities with Xerox and Epson UK. As an
Independent Software Vendor, INVU has been designated as a Xerox Business
Partner. Utilizing Xerox SDK (standard development kits), the Company has been
given the opportunity to develop software for the Xerox Document Centre Range,
of which 70,000 machines are currently in use in the UK. Epson UK and INVU have
agreed to a joint marketing strategy, whereby Epson UK, with the assistance of
INVU personnel, has agreed to introduce the INVU product line to its resellers
at formal events to be followed by roadshows.
During the quarter ended October 31, 2001, the Company held discussions
regarding further requirements from Universal Music Group, a member of the
global music, film and leisure group. The total value of orders received to date
from Universal Music Group now exceeds $258,000, and further orders are
anticipated by the Company throughout the remainder of the fiscal year ended
January 31, 2002 (the "Current Fiscal Year"). INVU's unique code free
integration technology allows it to integrate with Universal Music Group's JD
Edwards system. Development of a web-based solution for Universal Music Group is
currently in progress.
The Company continues to receive repeat orders from other existing end
users. In addition, Management is encouraged by the growing number of SME
companies that are adopting INVU products. This is seen as continued vindication
of the Company's overall strategy. The Company's sales team continues to target
these enterprises, and Management believes that its expanding reseller and
customer base will generate steadily increasing sales levels during the
remainder of the Current Fiscal Year.
Throughout the nine months ended October 31, 2001, the Company has
continued to develop its software products.
The Company's professional range of products, INVU Series 100, Series
200 and ViewSafe, were first introduced in beta format in October 1999. Version
5.1 was released to distributors in May 2000, version 5.1.1 was released to
distributors in March 2001 and the latest version 5.1.2 was released in October
2001. Version 5.2 is scheduled for release in the fourth fiscal quarter of the
Current Fiscal Year. Each subsequent version has built upon the original premise
of ease of use, functionality and price performance. Enhancements have been
added in the light of customer feedback and technical advances achieved by the
Company's development department. Version 5.2 will contain the newly developed
OCR (Optical Character Recognition) functionality, which works with all
Microsoft OfficeTM file types and scanned images. This functionality will
automatically allow a user to keyword search all existing documents in the
system. This release will also contain a Microsoft Office Add-In, which allows
integration with Microsoft OfficeTM 2000. This gives INVU the ability to send
items from Microsoft Outlook to a user-selectable in-tray. It will also allow
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" is also planned for release alongside Version 5.2. The
2
"Sequential Workflow Module" allows documents, forms and files to be 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 will be a generic adoption of the bespoke program, which is already
in use with customers such as Universal Music Group. The workflow module to be
released is designed to be customer friendly and easy to use. This will be a
separate 5.2 Module, which when integrated with Version 5.2 will be 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. 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. During the
quarter ended October 31, 2001, sales of the "codefree" module have again
increased, and Management expects this trend to continue throughout the Current
Fiscal Year and beyond.
INVU Series 2000 (formerly INVU WEBFAST) continues to be developed.
This product allows global access to retrieve, view, create or edit, and file
information via the web. Management believes that this product will form the
basis of future developments for many of its existing and future end users. In
view of customer driven demands for various other unique features for the
existing professional range, Management now estimates that this product will be
released to distributors in early 2002. However, a web browser "view only"
product, "i200," is expected to be released before the end of the Current Fiscal
Year. Management believes this technology will place INVU in direct competition
with the world's most established document management solutions providers, but
at a significantly lower price level.
As previously reported, development of a highly sophisticated content
addressable indexing and retrieval system reached the prototype stage during the
second fiscal quarter of the Current Fiscal Year. Further work has been
undertaken during the current quarter. This development 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. After "beta" trials are concluded,
Management expects to launch this product during the fourth fiscal quarter of
the Current Fiscal Year.
Company software engineers have also successfully developed a
prototype information management internet service. Management believes that this
service will allow advanced internet information management within fully
encrypted secure databases. Management believes that individuals and
corporations will be able to store their documents on an INVU web site and
access and update them in real time, via password and pin number controls, from
anywhere in the world. Management believes that, although important for the long
term strategy of the business, this service has a lower priority than both i200
and Series 2000 in the short term.
INVU's development team has produced a prototype module, which allows
speech files to be stored within the INVU central database. As with all records
stored within INVU, these can be attached to other corresponding files. Using
advanced compression techniques, this application is capable of storing 2,800
hours of recorded sound on a standard 40 gigabyte hard disk. With the addition
of a "raid card" attached to a 10 disk storage system, end users can obtain
28,000 hours of storage space for approximately $2,000. Management believes this
application may appeal to many different users. For instance, hospitals may have
a need for such an application in connection with patient records, lawyers and
police may use the application to record oral statements and call centers may
use it to record conversations. This product now joins the Company's growing
portfolio of modules and enhancements ready for release in the fourth fiscal
quarter of the Current Fiscal Year.
3
During the quarter ended October 31, 2001, sales orders received were
$472,997, which represents an increase of 20% over the previous quarter.
However, an additional $111,325 has been deferred in accordance with
management's position on revenue recognition.
In view of the Company's improving financial position, Management
continues to review its resource requirements for the remainder of the Current
Fiscal Year and the following fiscal year. Management recognizes that additional
sales and technical staff will be required in order to fulfill the Company's
ambitious product development and sales plans. With the expectation that funding
will be available, both of these personnel issues will be addressed with the
engagement of additional technical staff and sales staff.
Results of Operations
The following is a discussion of the results of operations for the nine
months ended October 31, 2001, compared with the nine months ended October 31,
2000, with further comparison between the three months ended October 31, 2001
and the three months ended October 31, 2000, together with changes in financial
condition during the nine month period ended October 31, 2001.
Total revenues increased by $141,148, or 64%, from $220,524 for the
three months ended October 31, 2000 to $361,672 for the three months ended
October 31, 2001, and by $781,984, or 284%, from $274,843 for the nine months
ended October 31, 2000 to $1,056,827 for the nine months ended October 31, 2001.
This reflects the Company's continued expansion of its customer base.
The net loss for the three months ended October 31, 2001 was $413,187,
which is 27% less than the net loss for the corresponding period in fiscal year
2000 of $563,254, mainly due to increased sales of $141,148. The net loss for
the nine months ended October 31, 2001 was $973,246, a reduction of $624,564, or
39%, from the corresponding period in fiscal year 2000 of $1,597,810, mainly due
to increased sales of $781,984.
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 as a percentage of total revenues were 16% and
15%, respectively, during the three and nine months ended October 31, 2001
compared to 19% and 24%, respectively, during the same periods in fiscal year
2000. Production costs increased $15,859, or 37%, and $93,499, or 143%,
respectively, during the three and nine months ended October 31, 2001 compared
to the same periods in fiscal year 2000. The dollar increases mirror the
increases in sales and the decreases in the percentages of total sales reflect
the fall in production costs per unit due to economies of scale, mass production
techniques 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 decreased $103,977, or 36%, during the three months ended
October 31, 2001 and decreased $154,277, or 22%, during the nine months ended
October 31, 2001 compared to the same periods in fiscal year 2000. Selling and
distribution costs as a percentage of total revenues were 51% and 50%,
respectively, during the three and nine months ended October 31, 2001 compared
to 131% and 250%, respectively, during the same periods in fiscal year 2000. The
decreases over the comparable three and nine month periods were due to the
Company's sales growth in 2001 and re-focussed marketing to the SME sector in
2001 rather than to retail markets in fiscal year 2000.
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 $53,877, or 59%, and $161,164, or 75%, respectively, during the three
and nine months ended October 31, 2001 compared to the same periods in fiscal
year 2000. Research and development costs as a percentage of total revenues were
40% and 35%, respectively, during the three and nine months ended October 31,
2001 compared to 41% and 78%, respectively, during the same periods in 2000. The
increases over the comparable three and nine month periods reflected the
Company's continued investment in its current and future products and the move
from the development stage during 2001.
4
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 decreased $70,175, or 22%, during the three months ended October 31, 2001
and decreased $77,821, or 10%, during the nine months ended October 31, 2001,
compared to the same periods in fiscal year 2000. Administrative costs as a
percentage of total revenues were 67% and 68%, respectively, during the three
and nine months ended October 31, 2001 compared to 142% and 291%, respectively,
during the same periods in fiscal year 2000. The decreases over the comparable
three and nine month periods were due to the Company's reduced requirement for
external legal, accounting and consultancy services and the increase in revenues
in those periods.
During the three and nine months ended October 31, 2001, the Company
incurred net interest expense of $144,010 and $241,479, respectively, compared
to net interest expense of $48,513 and $106,624, respectively, during the
corresponding periods in fiscal year 2000. These increases are entirely due to
increased bank and 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 $833,450 at October 31,
2001, an increase of $377,113 compared to $456,337 at January 31, 2001. Working
capital was negative $4,378,618 as of October 31, 2001, compared with negative
$2,256,025 as of January 31, 2001. These changes are mainly due to increases in
accounts receivable and current maturities of long term obligations, together
with decreases in short term facilities and accounts payable. The Company has
obtained loan advances from Daniel Goldman (a non-executive director) and his
related parties and from other entities totaling $1,500,000 and convertible
loans of $459,000 from the same source during the nine month period ended
October 31, 2001. Management believes that these amounts 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 $1,245,846 at October 31, 2001, an
increase of $477,564 compared to $768,282 at January 31, 2001. This is
attributable to decreases in fixed assets of $32,860, an increase in current
assets of $377,113, and an increase in intangible assets of $133,311, which
represents the acquisition of the source code, intellectual property rights and
customer database of the Easifile business from Peopledoc Limited.
The total current liabilities of the Company increased by $2,499,706
from $2,712,362 at January 31, 2001 to $5,212,068 at October 31, 2001. The
change in current liabilities is due to decreases in accounts payable of
$145,581 and short term credit facilities of $559,761 and increases in current
maturities of long-term obligations of $2,980,614 and accrued liabilities of
$224,434. This, together with the decrease in long-term obligations less current
maturities, reflects the replacement of short-term credit facilities with short
term unsecured loans and convertible loans from Daniel Goldman (a non-executive
director) and his affiliates and other unrelated entities of $1,959,000 and the
subsequent repayment of accounts payable. See "Financing Management Plan of
Operation." Long-term obligations less current maturities were $908,544 at
October 31, 2001 compared to $1,962,635 at January 31, 2001.
Total stockholders' equity decreased by $968,051 during the nine month
period ended October 31, 2001 from a deficit of $3,906,715 at January 31, 2001
to a deficit of $4,874,766 at October 31, 2001. The Company continues to
evaluate various financing options, including issuing debt and equity to finance
future development and marketing of products as the Company has now moved to an
operational stage.
Financing Management's Plan of Operation
The Company remains committed to raising the necessary funds and is
engaged in or presently pursuing the following financing transactions.
In February 2001, Vertical Investments Limited, an entity in which
Daniel Goldman, a non-executive director of the Company, has an interest, lent
the Company $1,000,000. Although initially granted with no stated maturity date
or interest rate, this short term loan now bears an annual interest rate of 1.5%
above the UK bank base rate and is due on December 17, 2001. Approximately
$500,000 of the loan was used to reduce the amount owed by the Company under the
short-term credit facility described below with the remaining $500,000 used for
working capital.
5
In May 2001, the Company received loan advances of $250,000 from
Goldman Ventures Limited and $50,000 from Paysage Investments Limited, both
companies in which Daniel Goldman, a non-executive director of the Company, has
an interest. In July 2001, the Company received a further loan advance of
$50,000 from Goldman Ventures Limited, a company in which Daniel Goldman, a
non-executive director of the Company, has an interest. Also in July 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.
A further short-term loan of $500,000 was made on September 25, 2001 by
Goldman Ventures Limited, a company in which Daniel Goldman, a non-executive
director of the Company, has an interest. This loan bears an annual interest
rate of 12% per annum and is due on December 17, 2001.
Management expects that the outstanding short term loans of $1,000,000
and $500,000 from the various Daniel Goldman associated entities will be
satisfactorily restructured on December 17, 2001.
In addition, the Company had a $ 1,163,440 short-term credit facility
with an annual interest rate of 2.0% above UK bank base note with an English
bank. The Company's bank had agreed to a temporary increase in the facility of
$285,040, which was repaid on receipt of the $500,000 from Goldman Ventures
Limited on September 25, 2001. On October 29, 2001, the Company agreed with its
bankers to convert $872,580 of the principal amount of this short-term credit
facility to a term loan facility. This facility will bear annual interest at the
rate of 2% above UK bank base rate with repayments of principal of $72,715 per
month from November 30, 2002 with the last currently scheduled payment to occur
on October 31, 2003. Interest that the Company currently pays will be debited
monthly from the Company's bank current account. The remaining short-term credit
facility of $290,860 will bear annual interest at the rate of 2% above UK bank
base rate and is due on September 30, 2002. Both of these credit facilities 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. The amount drawn against the facility
at October 31, 2001 was $1,123,214. Since October 31, 2001, the Company has
received a $200,000 loan with no established interest rate or maturity date from
a company in which Daniel Goldman, a non-executive director, has an interest.
Management believes that the Company can secure sufficient financing to
fund the operations for a period up to the point at which net sales revenues
could sustain the Company's day to day operations. Management believes that,
subject to this additional investment, break-even will be achieved in the first
fiscal quarter of the next fiscal year ended January 31, 2003. Management's
belief is based on the assumption that its revenue forecast for the fourth
quarter of the Current Fiscal Year and the next fiscal year ended January 31,
2003 is met or exceeded and that the outstanding loans other than the bank
facilities are converted into equity of the Company. To the extent that the
loans are ultimately converted, the Company may be required to recognize an
accounting charge equal to the amount by which the aggregate market value of the
common stock into which the loan could be converted exceeds the value of the
loan. There can, however, be no assurance that the above transaction will be
consummated, that the Company will be able to achieve monthly break-even in the
first fiscal quarter of the next fiscal year ended January 31, 2003, 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.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
As reflected in the Company's 10-KSB for the fiscal year ended January
31, 2001, 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
6
together with interest from September 21, 2000, costs, disbursement and attorney
fees. In response, the Company filed an answer on or about April 16, 2001
denying that any amounts are owing under the Note. It is 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.
On August 9, 2001, GEM filed a Motion for Summary Judgment. The Company
filed a Cross-Motion for Summary Judgment on August 27, 2001. Both motions were
submitted and are presently being considered by the court.
Item 2. Changes in Securities.
The Company granted 17 of its employees, including a director and
executive officer (as described below), options to purchase an aggregate of
1,036,365 shares of its common stock. Four employees were granted options
pursuant to the Invu, Inc. Enterprise Management Share Option Agreement (Group
A) (the "Group A Agreement"). Under each Group A Agreement, 25% of the options
vest and become exercisable each year provided that certain performance targets
are met and the optionee remains an employee of the Company, subject to certain
exceptions. If on the sixth anniversary of the date of grant, the performance
targets have not been met and such optionee continues to remain an employee of
the Company, subject to certain exceptions, the entire number of options shall
vest and become exercisable. Options granted under the Group A Agreement are
exercisable at an exercise price of $.50 per share. The remaining employees were
granted options pursuant to the Invu, Inc. Enterprise Management Share Option
Agreement (Group B) (the "Group B Agreement"). Under each Group B Agreement, the
entire number of options vest on the third anniversary of the date of grant
provided that certain performance goals are met and provided that the optionee
continues to remain an employee of the Company, subject to certain exceptions.
However, if an optionee has been employed by the Company for five years and
terminates employment with the Company before the third anniversary of the date
of grant, the option shall become immediately vested and exercisable on the date
of termination despite the fact that performance goals have not been met. In
addition, if the performance goals have not been met by the sixth anniversary of
the date of grant, the entire option shall become vested and exercisable
provided that the optionee continues to remain employed with the Company,
subject to certain exceptions. Options granted under the Group B Agreement are
also exercisable at an exercise price of $.50 per share. All options granted
under the Group A Agreement and the Group B Agreement shall expire on the tenth
anniversary of the date of grant. In the event of a change in control of the
Company or a liquidation, both Group A and Group B Agreements provide for
accelerated vesting of options.
Jon Halestrap, the Company's Vice-President of Sales and a director,
was granted options under the Group A Agreement to purchase 250,000 shares of
common stock. John Agostini, the Company's Chief Financial Officer, was also
granted options to purchase 250,000 shares of common stock under the Group A
Agreement.
The grant of the options was not registered under the Securities Act
and such options are restricted securities under the Securities Act. In
addition, except as set forth below, the issuance of the shares of the Company's
common stock upon the exercise of the options will not be registered under the
Securities Act and such shares will be restricted securities under the
Securities Act subject to the restrictions on transfer set forth in Rule 144
thereunder. Except as set forth below, the share certificates issuable upon the
exercise of the options will contain a legend with respect to the restrictions
on transfer of such shares. The Company intends to file a registration statement
on Form S-8 under the Securities Act with respect to options granted under
either the Group A or Group B Agreements. If employees exercise their options
after the effectiveness of such registration statement, the issuance of the
shares of common stock upon exercise of the options will have been registered
under the Securities Act.
The grant of the options to the Company's employees was not a "sale"
under the Securities Act, however, if the grant were considered a "sale," the
options were, nonetheless, granted in reliance on the exemption set forth in
Section 4(2) of the Securities Act. The grants were made without any general
solicitation or advertising, to a limited number of individuals, all Company
employees who the Company believes were sophisticated investors and had access
to all information concerning the Company needed to make an informed decision.
7
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
EXHIBITS
Exhibit
Number Description of Exhibit
10.1 Overdraft Facility, dated October 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 for the quarter ended
October 31, 2000).
10.2 Corporate Guarantee, dated October 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 for the quarter ended
October 31, 2000).
10.3 Debenture, dated October 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 for the
quarter ended October 31, 2000).
10.4 Overdraft Facility, dated October 29, 2001, by and between the Company
and the Bank of Scotland.
10.5 Form of Invu, Inc. Enterprise Management Share Option Agreement (Group
A).
10.6 Form of Invu, Inc. Enterprise Management Share Option Agreement (Group
B).
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: December 14, 2001 By: /s/ David Morgan
---------------------------------
David Morgan, President & Chief
Executive Officer
(Principal Executive Officer)
Date: December 14, 2001 By: /s/ John Agostini
---------------------------------
John Agostini, Vice President-
Chief Financial Officer &
Secretary
(Principal Financial Officer)
S-1
INDEX TO EXHIBITS
(a) Exhibits
Exhibit
Number Description of Exhibit
------ ----------------------
10.1 Overdraft Facility, dated October 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 for the quarter ended
October 31, 2000).
10.2 Corporate Guarantee, dated October 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 for the quarter ended
October 31, 2000).
10.3 Debenture, dated October 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 for the
quarter ended October 31, 2000).
10.4 Overdraft Facility, dated October 29, 2001, by and between the Company
and the Bank of Scotland.
10.5 Form of Invu, Inc. Enterprise Management Share Option Agreement (Group
A).
10.6 Form of Invu, Inc. Enterprise Management Share Option Agreement (Group
B).
E-1