Innovest Global Inc. (IVST)

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Full IVST Due Diligence Summary for investors to quickly ascertain IVST's growth by acquisition Holdings Company biz model:

IVST's CEO just tweeted on Sunday May 19th that IVST's Q1 results should be arriving by/b4 the end of this week!

IVST Share Structure:

Authorized Shares: 500,000,000 as of 04/17/2019
Outstanding Shares: 146,672,292 as of 04/17/2019
Float: 11,796,710

IVST Quick Bullet Point Summary:

- In 18 months IVST has grown a $300k market cap "shell" and built a $40mm market cap company with over +100 employees
- IVST acquired approximately $12 million in assets in 2018
- IVST has no aged debt and no convertible debt on their books
- IVST’s gross receipts are pacing at $40 million for 2019
- IVST’s float of 11,796,710 shares remains completely unchanged since Innovest was founded

Additional IVST information as follows:

IVST’s Chairman and CEO is Daniel Martin

Innovest Global is a diversified holdings company in the Conglomerates Industry, utilizing novel technology and marketing to efficiently acquire customers. IVST’s primary growth strategy is to acquire existing companies in a select few industries and get new customers in cost effective ways.

Currently IVST has subsidiary companies in the 2 following divisions: A Commercial & Industrial Division, and a Biotechnology & Health Services Division.

The Company’s business plan includes the focus on acquisition of privately held businesses whose owners are willing to consider merging their businesses in order to establish a public trading market for their common stock, and whose management teams are willing to operate the acquired businesses as divisions or subsidiaries of our Company. The current business operating units operate within the following segments:

Construction and building materials –Two businesses currently operate in this segment. Midwest Curtain Walls (MWC) designs and manufactures non-structural window solutions to commercial building contractors. Authority National Supply (ANS) is currently acting as an agent leveraging the combined purchasing power of its customers in securing vendor pricing for construction related supplies. These businesses are located in Ohio with customers in the Midwestern part of the United States. ANS is currently progressing towards changing its business model to be a distributor and maintaining its own inventory. Energy services – Energy services includes energy broker services for both residential and commercial businesses throughout Ohio from H.P. Technologies Inc. (HP). This business receives commissions from Energy providers based the business secured and energy volumes used. Energy services also include the design and installation of energy efficient lighting solutions from Shepard Energy, LLC (SE). Other – The other business segment includes a safety supplies distributor, which is organized as a division of Innovest, and operates under the name Chagrin Safety Supply (CHA). Additionally the Company has a call center serving the medical supplies sector, Contact Source Solutions (CSS).

The Company's revenues are derived primarily from part sales, services and the design and manufacture of custom products. These revenue streams are described below relative to each operating component. Transaction prices are specified in each contract and are not typically variable. If the consideration agreed to in a contract include a variable amount, the Company will estimate the amount of consideration expected to be entitled to in exchange for transferring the promised goods or services to the customer.

Construction and Building materials

For the construction of custom commercial window solutions, the Company has performance obligations for the window solution that is recognized overtime based on the contract terms. The Company recognizes revenue as costs are incurred (the input method), which best measures progress and results in a right to payment. . The production cycle for customer contracts is generally less than 12 months. The company uses standard, generally accepted payment terms; customers either pay at delivery of the product or are billed upon milestones achieved. Warranty terms cover the product workmanship and guarantee the product work as intended.

In some situations, the Company bills customers and collects cash prior to the satisfaction of the performance obligation which results in the Company recognizing contract liabilities. For some contracts, the Company recognizes revenue before its right to some or all consideration becomes unconditional which results in the Company recording contract assets.

The company also functions as an agent in connecting purchasers of building supplies to vendors and leveraging the purchasing power of the group to those participating. Revenue is recognized at a point in time based on when the products are shipped. As each vendor within the group has the inventory risk, dictates the pricing and has the obligation to fulfill the order, the company is determined to be the agent in the transaction. While Net revenue for the period from November 5, 2018 (date of acquisition) to December 31, 2108 totaled, $28,494, Gross transaction value for the same period totaled $3,414,511.

Energy Services

For Energy services, the Company has performance obligations for providing lighting and installation services. The Company recognizes revenue as costs are incurred (the input method), which best measures progress and results in a right to payment. The production cycle for customer contracts is generally less than 3 months. The Company uses standard, generally accepted payment terms, customers typically pay upon completion of the service or are billed. There are no significant obligations for warranties, refunds or similar obligations.
In some situations, the Company bills customers and collects cash prior to the satisfaction of the performance obligation which results in the Company recognizing contract liabilities.

The Company also acts as an energy broker connecting residential and commercial businesses with the lowest cost provider. This revenue is recorded as earned each month based on the commission schedule agreed to with each energy (gas or electric) distributor.

Other

For call center services, the Company has performance obligations for providing staffing resources, and recognizes revenue on monthly basis based on staff hours spent. The customer is invoiced monthly and has 30-day payment terms.

IVST’s Corporate Website as follows:

https://www.innovestglobal.com/

IVST’s 2018 fiscal year end earnings report as follows:

https://backend.otcmarkets.com/otcapi/company/financial-report/217089/content

The Company has a stockholder’s deficit of $(278,100) as of December 31, 2018. During the year ended December 31, 2018 the Company recognized a net loss of $(3,946,449) and used net cash of $(1,420,948) in operating activities.

Entering 2019, the Company is on a proforma budget that has closed the gap on losses relative to sales, and indicates it could approximately break-even, as a result of operations, if unanticipated expenses do not arise.

Specifically, the acquisition of ANS and Midwest in November and December, respectively; and the meaningful growth of energy sales and other key clients early in 2019 provide profitability that reduce losses.

In addition to that activity, the Company is converting ANS from primarily a Group Purchase Organization with a 1% gross margin, to a distributor with a gross margin potential of 1-7% from the same sales to the same customers, without raising prices.

Additionally, as Midwest revenue is currently originating from one client, a sales effort has been undertaken which has resulted in bids totaling $30 million at commensurate profit levels, which would positively impact the Company's net income if won.

Management plans to additionally increase cash flow by, acquiring and/or developing profitable businesses that will create positive income from operations, obtain debt through loans from directors, and/or issuance of common shares.

Management believes that by taking these actions, the Company will be provided with enough future operations and cash flow to continue as a going concern. However, there can be no assurances or guarantees whatsoever that the Company will be successful in consummating such actions on acceptable terms, if at all. Moreover, any such actions can be expected to result in substantial dilution to the existing shareholders of the Company.

IVST has made the following 6 acquisitions so far:

On October 23, 2017, the Company entered into an asset purchase agreement with Chagrin Safety Supply, LLC (CHA) pursuant to which the Company purchased substantially all the assets and assumed certain liabilities of CHA. The complimentary strength of certain Company businesses are expected to create product and distribution synergies. The Company is expected to gain entry into new product categories by the association with other commercial companies acquired. The purchase price consisted of shares of the Company's restricted common stock.
On January 1, 2018, the Company acquired 100 percent of the equity of Shepherd Energy, LLC ("SEL"). The primary reason for the acquisition was to launch a commercial energy division and further diversify the Company's portfolio. The purchase price consisted of shares of the Company's restricted common stock.

On January 15, 2018, the Company acquired 100 percent of the equity interest of Contact Source Solutions, LLC (CSS). The primary reason for the acquisition was to increase revenue stream as well as a business unit that can provide marketing solutions for the other business units. The purchase price consisted of shares of the Company's restricted common stock.

On March 22, 2018, the Company acquired 100 percent of the outstanding common shares of H.P. Technologies, Inc. ("HPT"). The primary reason for the acquisition was to strengthen the commercial energy division and further diversify the Company's portfolio. The purchase price consisted of shares of the Company's restricted common stock.

On November 5, 2018, the Company acquired 100 percent of the Member units of Authority National Supply, LLC. (A.N.S.). The primary reason for the acquisition was to strategically expand within the building supply distribution industry. The purchase price consisted of shares of the Company's restricted common stock and cash.

On December 1, 2018, the Company acquired 100 percent of the outstanding common shares of Midwest Curtain Walls, Inc. The primary reason for the acquisition was to expand its penetration in the building materials segment as well as geographic reach. At the time of purchase the MWC shares were held in an estate which was not in a position to continue to manage the operations. The purchase price consisted of shares of the Company's restricted common stock.

IVST also acquired the below Cost Method Investment

On July 17, 2018, the Company acquired 20% of StemVax Therapeutics for 2.5 million common IVST shares and a financial commitment of $17,500 related to the anticipated requirements of pending license agreements, presently being negotiated by StemVax with Cedars-Sinai Medical Center (Cedars) in Los Angeles, CA. Cedars owns intellectual property that StemVax requires to effectuate its business plan, and these license agreements would satisfy the business requirements. The license agreements were successfully executed. The cost basis of this investment totals $141,742 which represents the cost incurred related to license agreements plus the value of IVST shares issued based on the trading value of $.05 per share at the time of issuance or $125,000. This holding is not expected to generate revenue in the short term, but represents what the Company believes will be a substantially valuable intellectual property holding.

At December 31, 2018 the Company did not have any potentially dilutive common shares

Weighted average shares totaled 141,466,437 for 2018, resulting in Basic and Diluted net loss per share of $(.0278) per share.

On February 21, 2019,The Company acquired 100% of Innovest Electric Solutions, an Ohio based company. Terms included the issuance of million shares of IVST Restricted Common Stock. The shares issued feature a guarantee from the Company, to be worth an aggregate value of $2,000,000 by the second anniversary of the closing, such guarantee remains in effect unless there is a “Guarantee Disqualifying Event”. Should the guarantee remain in force and not be met, the Company has various remedies which may include the issuance of additional shares of stock.). This acquisition provides our Energy group the ability to directly provide procurement solutions to clients, as Innovest Electric Solutions is fully licensed in all energy deregulated states for commercial and industrial energy brokerage. It is expected to add approximately $ million in annual sales to the Company, and growing.
On March 18, 2019, the Company entered an agreement to issue 1,500,000 restricted common shares in exchange for the cancellation of the stock guarantee related to the Shepherd Energy, LLC acquisition, whereby the 5,790,000 shares were guaranteed to have a trading value of $1 per share by December, 2019. This share issuance settles a stock liability of $2,470,000 at December 31, 2018.