UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended: ~~June~~September 30, 2014

Commission File Number: 814-00720

[f10q093014_10q001.jpg]

INVENT Ventures, INC.

(Exact name of registrant as specified in its charter)


Nevada		20-5655532
(State or Jurisdiction of Incorporation or Organization)		(IRS Employer ID No)

1930 Ocean Avenue #205, Santa Monica, CA 90405 (Address of principal executive office) (zip code) (702) 943-0320 (Issuer’s telephone number) Los Angeles Syndicate of Technology, Inc. (Former name, former address and former fiscal year, if changed since last report)

(702) 943-0320 (Issuer’s telephone number)

Los Angeles Syndicate of Technology, Inc. (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (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 periods as 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 .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to file such files). Yes X . No .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer . Accelerated filer . Non-accelerated filer X . (Do not check if a smaller reporting company) Smaller reporting company X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes . No X .

The number of shares outstanding of registrant’s common stock, par value $.001 per share, as of ~~August~~November 11, 2014 iswas 39,787,001.

INVENT Ventures, Inc.

INDEX

		Page No.	~~Page No.~~
Part I	Financial Information	3
Item 1:	~~Item~~Condensed 1:Financial Statements	~~Condensed Financial Statements~~3	3
		Statements of Net Assets as June 30, 2014 and December 31, 2013	3
	Statements of Net Assets as September 30, 2014 and December 31, 2013	3
		Statements of Operations – For the Three Months Ended June 30, 2014 and 2013	4
	Statements of Operations – For the Three Months Ended September 30, 2014 and 2013	4
		Statements of Operations – For the Six Months Ended June 30, 2014 and 2013	4
	Statements of Operations – For the Nine Months Ended September 30, 2014 and 2013	5
		Statements of Cash Flows – For the Six Months Ended June 30, 2014 and 2013	6
	Statements of Cash Flows – For the Nine Months Ended September 30, 2014 and 2013	6
		Statements of Changes in Net Assets –Six Months Ended June 30, 2014 and 2013	7
	Statements of Changes in Net Assets –Nine Months Ended September 30, 2014 and 2013	7
		Financial Highlights – For the Six Months Ended June 30, 2014 and 2013	8
	Financial Highlights – For the Nine Months Ended September 30, 2014 and 2013	8
		Schedule of Investments as of June 30, 2014	9
	Schedule of Investments as of September 30, 2014	9
	Schedule of Investments as of December 31, 2013	~~Schedule of Investments as of December 31, 2013~~10	10
	Notes to Condensed Financial Statements	~~Notes to Condensed Financial Statements~~11	11
Item 2:	~~Item~~Managements' 2:Discussion and Analysis of Financial Condition and Results of Operations	~~Managements' Discussion and Analysis of Financial Condition and Results of Operations~~23	23
Item 3:	~~Item~~Quantitative 3:and Qualitative Disclosure about Market Risk	~~Quantitative and Qualitative Disclosure about Market Risk~~27	27
Item 4:	~~Item~~Controls 4:and Procedures	~~Controls and Procedures~~27	27
Part II	Other Information	27
Item 1:	~~Item~~Legal 1:Proceedings	~~Legal Proceedings~~27	28
	Item 1A:	Risk Factors	28
Item 1A	Risk Factors	27
Item 2:	~~Item~~Unregistered 2:Sales of Equity Securities and Use of Proceeds	~~Unregistered Sales of Equity Securities and Use of Proceeds~~27	28
Item 3:	~~Item~~Defaults 3:Upon Senior Securities	~~Defaults Upon Senior Securities~~27	28
Item 4:	~~Item~~Mine 4:Safety Disclosures	~~Mine Safety Disclosures~~27	28
Item 5:	~~Item~~Other 5:Information	~~Other Information~~27	28
Item 6:	~~Item 6:~~Exhibits	~~Exhibits~~28	28
Signatures	~~Signatures~~	29	29

PART I: FINANCIAL INFORMATION

ITEM 1: CONDENSED FINANCIAL STATEMENTS

~~FINANCIAL~~INVENT ~~STATEMENTES~~Ventures, Inc.

~~Invent~~(Formerly ~~Ventures~~Known As Los Angeles Syndicate of Technology, Inc.)

(Formerly Known As Los Angeles Syndicate of Technology, Inc.

Statements of Net Assets (Liabilities)

	June 30, 2014		December 31, 2013
	September 30, 2014		December 31, 2013
	(Unaudited)	~~(Unaudited)~~
ASSETS
Investments in portfolio companies:
Controlled (cost $524,202 at June 30, 2014 and $506,387 at December 31, 2013)	$	6,069,832	$	9,629,626
Controlled (cost $541,917 at September 30, 2014 and $506,387 at December 31, 2013)	$	4,981,164	$	9,629,626
Total investments		64,~~069~~981,~~832~~164		9,629,626
Cash		3432,~~421~~599		44,240
Amounts due from portfolio companies		428,800		10,750
Prepaid expenses and deposits		~~186~~171,~~370~~197		163,802
Office furniture and equipment, net		4,~~871~~195		6,491
Purchased Software		-−		262,500
TOTAL ASSETS		65,~~300~~217,~~294~~955		10,117,409
LIABILITIES
Accounts payable, trade		96106,~~897~~530		71,817
Amounts due to related parties, inclusive of notes payable		~~575~~583,~~731~~207		4,965
Advances from non-affiliates		4174,200		41,200
Line of credit		2021,~~590~~249		16,872
Notes payable, net of unamortized discount		2,069		149,979
Derivative instruments		-9,101		107,664
Accrued executive payroll expenses		~~544~~636,~~167~~232		1,098,102
TOTAL LIABILITIES		1,~~280~~432,~~654~~588		1,490,599
NET ASSETS	$	53,~~019~~785,~~640~~367	$	8,626,810
Commitments and contingencies (Note 6)
COMPOSITION OF NET ASSETS:
Common stock, $.001 par value, authorized 100,000,000 shares; 39,787,001 and 36,928,197 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively		39,787		36,928
Common stock, $.001 par value, authorized 100,000,000 shares; 39,787,001 and 36,928,197 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively		39,787		36,928
Additional paid in capital		4,736,904		4,553,223
Stock subscription receivable		(13,300)		(13,300)
Accumulated deficit:
Accumulated net operating loss		(45,~~941~~069,~~157~~046)		(4,725,055)
Net realized (loss) on investments		(344,245)		(344,245)
Net unrealized appreciation of investments		54,~~541~~435,~~651~~267		9,119,259
NET ASSETS	$	53,~~019~~785,~~640~~367	$	8,626,810
NET ASSET VALUE PER SHARE	$	0.1310	$	0.23

See accompanying notes to financial statements.

~~Invent~~INVENT Ventures, Inc.

(Formerly Known As Los Angeles Syndicate of Technology, Inc.)

Statements of Operations

	Three Months Ended,
	June 30, 2014		June 30, 2013
Investment Income:
From controlled investments:
Management fees	$	72,403	$	36,575
Interest		2,238		2,067
Total revenues		74,641		38,642
Expenses:
Officer and employee compensation		136,620		136,620
Professional fees		72,940		75,664
Director fees		-		-
Rent		8,085		3,326
Office supplies and expenses		5,876		1,438
Other general and administrative expense		25,192		42,254
Interest expense		46,734		29,460
Total expenses		295,447		288,762
Other income (expense)		62,592		-
Change in fair market value of derivative liability		78,321		9,946
Loss before income taxes		(79,893)		(240,174)
Net loss from operations		(79,893)		(240,174)
Net realized and unrealized (losses):
Change in unrealized appreciation (depreciation) of investments, net of deferred tax of none
Controlled		(642,796)		(2,334)
Non-controlled / Non-Affiliate		-		-
Net realized and unrealized (losses)		(642,796)		(2,334)
Net (decrease) increase in net assets (liabilities) from operations	$	(722,689)	$	(242,508)
Net (decrease) increase in net assets (liabilities) from operations per share, basic and diluted	$	(0.02)	$	(0.01)
Weighted average common shares outstanding:
Basic		36,928,197		36,928,197
Diluted		36,928,197		37,128,197

(Unaudited)


	Three Months Ended,
	September 30, 2014		September 30, 2013
Investment Income:
From controlled investments:
Management fees	$	72,000	$	31,500
Interest		2,309		2,132
Total revenues		74,309		33,632

Expenses:
Officer and employee compensation		136,620		136,620
Professional fees		29,055		65,177
Director fees		−		−
Rent		10,801		2,844
Office supplies and expenses		8,449		6,988
Other general and administrative expense		15,577		53,389
Interest expense		1,846		30,975
Total expenses		202,348		295,993

Other income (expense)		9,250		−
Change in fair market value of derivative liability		9,101		(3,971)

Loss before income taxes		(127,890)		(266,332)

Net loss from operations		(127,890)		(266,332)

Net realized and unrealized (losses):
Change in unrealized appreciation (depreciation) of investments, net of deferred tax of none
Controlled		(1,106,384)		(4,952)
Non-controlled / Non-Affiliate		−		−
Net realized and unrealized (losses)		(1,106,384)		(4,952)

Net (decrease) increase in net assets (liabilities) from operations	$	(1,234,274)	$	(271,284)

Net (decrease) increase in net assets (liabilities) from operations per share, basic and diluted	$	(0.03)	$	(0.01)

Weighted average common shares outstanding:
Basic		39,787,001		36,928,197
Diluted		39,787,001		36,928,197

See accompanying notes to financial statements.

~~Invent~~INVENT Ventures, Inc.

(Formerly Known As Los Angeles Syndicate of Technology, Inc.)

Statements of Operations

	Six Months Ended,
	June 30, 2014		June 30, 2013
Investment Income:
From controlled investments:
Management fees	$	126,403	$	68,075
Interest		4,409		3,763
Total revenues		130,812		71,838
Expenses:
Officer and employee compensation		273,240		273,240
Professional fees		148,392		112,478
Director fees		-		-
Rent		13,173		7,095
Office supplies and expenses		11,605		4,052
Other general and administrative expense		62,945		71,807
Interest expense		71,011		88,331
Total expenses		580,366		557,003
Other income (expense)		150,092		–
Change in fair market value of derivative liability		83,360		89,515
Loss before income taxes		(216,102)		(395,650)
Net loss from operations		(216,102)		(395,650)
Net realized and unrealized (losses):
Change in unrealized appreciation (depreciation) of investments,
net of deferred tax of none
Controlled		(3,577,608)		(12,698)
Net realized and unrealized (losses)		(3,577,608)		(12,698)
Net (decrease) in net assets (liabilities) from operations	$	(3,793,710)	$	(408,348)
Net (decrease) in net assets (liabilities) from
operations per share, basic and diluted	$	(0.10)	$	(0.01)
Weighted average common shares outstanding:
Basic		36,928,197		36,928,197
Diluted		36,928,197		37,128,197

(Unaudited)


	Nine Months Ended,
	September 30, 2014		September 30, 2013
Investment Income:
From controlled investments:
Management fees	$	198,403	$	99,575
Interest		6,718		5,894
Total revenues		205,121		105,469

Expenses:
Officer and employee compensation		409,860		409,860
Professional fees		177,447		177,655
Director fees		−		−
Rent		23,973		9,939
Office supplies and expenses		20,054		11,040
Other general and administrative expense		78,522		125,196
Interest expense		72,857		119,306
Total expenses		782,713		852,996

Other income (expense)		159,342		−
Change in fair market value of derivative liability		74,259		85,544

Loss before income taxes		(343,991)		(661,983)

Net loss from operations		(343,991)		(661,983)

Net realized and unrealized (losses):
Change in unrealized appreciation (depreciation) of investments, net of deferred tax of none
Controlled		(4,683,992)		(17,650)
Net realized and unrealized (losses)		(4,683,992)		(17,650)

Net (decrease) in net assets (liabilities) from operations	$	(5,027,983)	$	(679,633)

Net (decrease) in net assets (liabilities) from operations per share, basic and diluted	$	(0.13)	$	(0.02)

Weighted average common shares outstanding:
Basic		37,891,604		36,928,197
Diluted		37,891,604		36,928,197

See accompanying notes to financial statements.

~~Invent~~INVENT Ventures, Inc.

(Formerly Known As Los Angeles Syndicate of Technology, Inc.)

Statements of Cash Flows

(Unaudited)

	Six months ended
		Nine Months Ended,
	June 30, 2014		June 30, 2013
		September 30, 2014		September 30, 2013
Cash flows from operating activities:
Net (decrease) in net assets (liabilities) from operations	~~$ (3,793,710)~~	$	$ (~~408~~5,~~938~~027,983)	$	(679,633)
Adjustments to reconcile net increase (decrease) in net assets
Adjustments to reconcile net increase (decrease) in net assets from operations to net cash used by operating activities:
from operations to net cash used by operating activities:
Change in net unrealized depreciation of investments			4,683,992		17,650
Change in net unrealized depreciation
Amortization of debt discount			55,185		82,500
of investments	3,577,608		12,698
Non-cash interest expense			−		29,350
Amortization of debt discount	55,185		27,500
Change in fair market value of derivative liability			(74,259)		(85,544)
Non-cash interest expense	-		56,799
Advances to portfolio companies			(35,530)		(37,261)
Change in fair market value of derivative liability	(83,360)		(89,515)
Other non-cash income			(150,092)		−
Advances to portfolio companies	(17,814)		(16,611)
Depreciation and amortization			2,296		54,914
Other non-cash income	(150,092)		-
Non-cash consulting expenses			120,618		127,266
Depreciation and amortization	1,620		36,603
Changes in operating assets and liabilities:
Non-cash consulting expenses	109,652		42,585
Decrease in prepaid expenses and deposits			6,978		(1,550)
Changes in operating assets and liabilities:
Amounts due from portfolio companies			(18,050)		11,000
Decrease in prepaid expenses and deposits	2,771		18,722
Increase in accounts payable			34,713		3,354
Amounts due from portfolio companies	5,950		-
Increase (Decrease) in accrued liabilities			(466,559)		406,401
Increase in accounts payable	25,080		2,347
Increase (Decrease) in advances from non-affiliates			33,000		(58,800)
Increase (Decrease) in accrued liabilities	(558,624)		263,091
Increase (Decrease) in amounts due to related parties			578,243		(59,644)
Increase (Decrease) in advances from non-affiliates	-		(58,800)
Net cash used in operating activities			(257,448)		(211,997)
Increase (Decrease) in amounts due to related parties	570,767		(51,661)
Cash flows from investing activities:
Net cash used in operating activities	(254,967)		(164,590)
Purchase of furniture and equipment			−		−
Cash flows from investing activities:
Investment in non-affiliated portfolio company			−		−
Purchase of furniture and equipment	-		-
Net cash used in investing activities			−		−
Investment in non-affiliated portfolio company	-		-
Cash flows from financing activities:
Net cash used in investing activities	-		-
Proceeds from issuance of common stock			389,340		−
Cash flows from financing activities:
Collection of stock subscriptions			−		−
Proceeds from issuance of common stock	389,340		-
Borrowings on line of credit			4,377		−
Collection of stock subscriptions	-		-
Increase in notes payable			(147,910)		173,692
Borrowings on line of credit	3,718		-
Net cash provided by financing activities			245,807		173,692
Increase (Decrease) in notes payable	(147,910)		103,670
Net increase (decrease) in cash and cash equivalents			(11,641)		(38,305)
Net cash provided by financing activities	245,148		103,670
Cash, beginning of period			44,240		112,449
Net increase (decrease) in cash and cash equivalents	(9,819)		(60,920)
Cash, end of period		$	32,599	$	74,144
Cash, beginning of period	44,240		112,449
Supplemental Cash Flow Information:
Cash, end of period	$ 34,421		$ 51,529
Non-cash investing and financing activities:
Supplemental Cash Flow Information:
Common stock issued in exchange for:
Non-cash investing and financing activities:
Amounts due related parties			−		−
Common stock issued in exchange for:
Stock subscriptions receivable			−		−
Amounts due related parties			-
Stock subscriptions receivable cancelled			−		−
Stock subscriptions receivable	-		-
Asset purchases			(350,000)		−
Stock subscriptions receivable cancelled	-		-
Promissory Note conversion (Note 4)			389,340		−
Asset purchases	(350,000)		-
Common stock transferred by shareholder in exchange for:
Promissory Note conversion (Note 4)	389,340		-
Consulting services (Note 5)			135,000		240,000
Common stock transferred by shareholder in exchange for:
Consulting services (Note 5)	135,000		240,000

See accompanying notes to financial statements.

~~Invent~~INVENT Ventures, Inc.

(Formerly Known As Los Angeles Syndicate of Technology, Inc.)

Condensed Statements of Changes in Net Assets (Liabilities)

(Unaudited)

	Six months ended
	Nine Months Ended,
	June 30, 2014		June 30, 2013
	September 30, 2014		September 30, 2013
Changes in net assets (liabilities) from operations:
Net loss from operations	$	(~~216~~343,~~102~~991)	$	(~~396~~661,~~240~~983)
Change in net unrealized appreciation (depreciation) of
Change in net unrealized appreciation (depreciation) of investments, net		(4,683,992)		(17,650)
investments, net		(3,577,608)		(12,698)
Unrealized appreciation income tax adjustment (1)		−		−
Net (decrease) in net assets (liabilities) from operations		(35,~~793~~027,~~710~~983)		(~~408~~679,~~938~~633)
Capital stock transactions:
Common stock issued:
Cash		-−		-−
Promissory Note conversion		389,340		-−
Asset purchases		(350,000)		-−
Stock subscriptions collected		-−		-−
Notes Payable adjustment for conversion		12,200		-−
Related party share transfers for non-cash consulting expenses		135,000		240,000
Net increase in net assets from stock transactions		186,540		240,000
Net (decrease) in net assets (liabilities)		(34,~~607~~841,~~170~~443)		(~~168~~439,~~938~~633)
Net assets, beginning of period		8,626,810		10,122,746
Net assets, end of period	$	53,~~019~~785,~~640~~367	$	9,~~953~~683,~~808~~113

See accompanying notes to financial statements.

~~Invent~~INVENT Ventures, Inc.

(Formerly Known As Los Angeles Syndicate of Technology, Inc.)

Financial Highlights

(Unaudited)

	Six months ended
	Nine Months Ended,
	June 30, 2014		June 30, 2013
	September 30, 2014		September 30, 2013
PER SHARE INFORMATION
Net asset (liability) value, beginning of period	$	0.23	$	0.27
Net decrease from operations		(0.0001)		(0.0102)
Net change in realized gains (losses) and unrealized
Net change in realized gains (losses) and unrealized (depreciation) of investments		(0.12)		(0.00)
(depreciation) of investments		(0.10)		(0.00)
Net increase from stock transactions (1)		0.00		0.01
Net asset (liability) value, end of period	$	0.13	$	0.27
Share transfers for non-cash consulting expenses		−		−
Net asset (liability) value, end of period	$	0.10	$	0.26
Per share market value:
Beginning of period	$	0.1519	$	0.2520
End of period	$	0.1910	$	0.2022
Investment return, based on change in market price from beginning to end of period (2)		26(47.74%)		~~(20~~10.0%)
RATIOS/SUPPLEMENTAL DATA
Net assets (liabilities), end of period	$	53,~~019~~785,~~640~~367	$	9,~~954~~683,~~397~~113
Average net assets (liabilities)		6,~~823~~206,~~225~~088		109,~~038~~902,~~572~~929
Annualized expenses		1,~~160~~043,~~732~~618		1,~~114~~137,~~006~~328
Annualized net increase (decrease) in net assets
Annualized net increase (decrease) in net assets (liabilities) from operations		(6,703,978)		(906,178)
(liabilities) from operations		(7,587,420)		(816,697)
Annualized ratio of expenses to average net assets (liabilities)		16.8%		11.5%
Annualized ratio of expenses to average net assets (liabilities)		17.0%		11.1%
Annualized ratio of net increase (decrease) in net assets (liabilities) from operations to average net assets (liabilities)		(108.0%)		(9.2%)
Annualized ratio of net increase (decrease) in net assets
(liabilities) from operations to average net assets (liabilities)		(111.2%)		(8.1%)
Shares outstanding at end of period		39,787,001		36,928,197
Basic weighted average shares outstanding during period		3637,~~928~~891,~~197~~604		36,928,197
(1) Includes the effect of using weighted average shares outstanding during the period for components of net asset (liability) and using actual shares outstanding at the end of the period for net asset (liability) at the end of the period.
(2) Periods of less than one year are not annualized.

⁽¹⁾

Includes the effect of using weighted average shares outstanding during the period for components of net asset (liability) and using actual shares outstanding at the end of the period for net asset (liability) at the end of the period.

⁽²⁾

Periods of less than one year are not annualized.

See accompanying notes to financial statements.

~~Invent~~INVENT Ventures, Inc.

(Formerly Known As Los Angeles Syndicate of Technology, Inc.)

Schedule of Investments

~~June~~September 30, 2014

Percentage

Percent of

Date of

outstanding shares

Number of

Historical

Fair

Investments in controlled portfolio companies:

Date of acquisition

outstanding shares owned

Number of Shares / Units

Historical Cost

Fair Value

acquisition

owned

Shares / Units

cost

value

Investments in controlled portfolio companies:

Common Stock

Preferred Stock

Virurl, Inc.

Jul-10

48%

5,780,000

338,422

9294,~~697~~034

1,277,961

Stockr, Inc.

Jul-10

63%

5,666,667

-−

7386,~~001~~595

21,~~661~~572,~~455~~327

LottoPals, Inc.

Jul-10

99%

6,000,000

-−

83,~~347~~320

Clowd, Inc.

Sep-10

99%

6,000,000

-−

99,~~742~~681

Sanguine Biosciences, Inc.

Jul-10

42%

4,000,000

-−

~~117~~120,~~851~~176

1,889,764

Stocktown Productions, Inc.

Jul-10

81%

16,704,953

-−

5758,~~563~~111

524,202

6,069,832

541,917

4,981,164

Total investments

~~524~~541,~~202~~917

64,~~069~~981,~~832~~164

Cash and other assets, less liabilities

(1,~~050~~195,~~192~~797)

Net asset value at June 30, 2014

5,019,640

Net asset value at September 30, 2014

3,785,367

See accompanying notes to financial statements.

~~Invent~~INVENT Ventures, Inc.

(Formerly Known As Los Angeles Syndicate of Technology, Inc.)

Schedule of Investments

December 31, 2013

		Percent of
	Date of	outstanding shares	Number of		Historical		Fair
Investments in controlled portfolio companies:	Date of acquisition	outstanding shares owned	Number of Shares / Units		Historical Cost		Fair Value
	acquisition	owned	Shares / Units		cost		value
Investments in controlled portfolio companies:
			Common Stock	Preferred Stock
Virurl, Inc.	Jul-10	48%	5,780,000	338,422	$	94,261	$	1,277,958
Stockr, Inc.	Jul-10	63%	5,666,667	-−		72,.695		2,661,455
LottoPals, Inc.	Jul-10	99%	6,000,000	-−		71,734		3,000,000
Clowd, Inc.	Sep-10	50%	6,000,000	-−		97,~~042~~051		743,187
Sanguine Biosciences, Inc.	Jul-10	42%	4,000,000	-−		113,393		1,889,764
Stocktown Productions, Inc.	Jul-10	81%	16,704,953	-−		57,262		57,262
						506,387		9,629,626
		Total investments			$	506,387		9,629,626
		Cash and other assets, less liabilities						(1,002,816)
		Net asset value at December 31, 2013					$	8,626,810
		Net asset value at September 30, 2014					$	8,626,810

See accompanying notes to financial statements.

INVENT Ventures, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1: DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Business and Operations

Overview

INVENT Ventures, Inc. (“INVENT”) is a technology venture fund that creates, builds, and invests in web and mobile technology companies. We develop businesses in the consumer Internet, mobile and biotechnology markets, and own six companies at different stages of development.

We supply our companies with the capital to cultivate their initial product, and provide management and operational support services to reduce startup costs and accelerate time to market. Our services include product development and design, corporate formation and structure, and exposure to additional financing and the public markets. INVENT also provides financial and accounting resources, marketing and branding, and legal guidance. By offering these services, we enable our network of entrepreneurs to focus on developing their products. We believe that this structure offers the most value for entrepreneurs and the highest return potential to investors, and results in efficiencies in how companies are built and brought to market.

INVENT operates as an internally-managed, non-diversified, closed-end investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940. From incorporation through December 31, 2010, the Company was taxed as a corporation under Subchapter C of the Internal Revenue Code of 1986, (the “Code”). Effective January 1, 2011, the Company has elected to be treated for tax purposes as a regulated investment company, or RIC, under the Code (see Note 7).

Our stock is publicly listed on the OTCQB market under the symbol “IDEA”.

History

The Company, formerly Bay Street Capital (“BSC”), Small Cap Strategies (“SCS”), and Photonics Corporation (“Photonics”), was re-domiciled in Nevada through a reverse merger effective on September 30, 2006 where Photonics, a California corporation, merged into Small Cap Strategies, Inc., a Nevada corporation, with SCS being the surviving entity. The effect of this corporate action was to change the Company’s state of incorporation from the State of California to the State of Nevada.

On March 7, 2006, the Company filed a notification under Form N54a with the SEC indicating our election to be regulated as a business development company under the 1940 Act.

On November 24, 2008, the Company filed Form N-54C with the Securities and Exchange Commission (“SEC”) to notify the SEC of the withdrawal of our previous election to be regulated as a Business Development Company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”).

The Board of Directors resolved on November 15, 2009 that the Company would again pursue the business model of an investment and management company. On April 12, 2010, we filed Form N-54a with the SEC to elect to be treated as a BDC governed under the Investment Act of 1940.

On July 20, 2010, the Company’s Board of Directors unanimously approved and a majority of shareholders consented to a Name Change to Bay Street Capital, Inc. and authorized the Company to enact a 1-for-50 reverse stock split of the Company’s outstanding Common Stock. Both corporate actions were effective on August 31, 2010.

On September 24, 2010, the Company’s Board of Directors unanimously approved and a majority of shareholders consented to a name change to Los Angeles Syndicate of Technology, Inc. The name change was effective on October 14, 2010.

On July 20, 2012, the Company’s Board of Directors and stockholders holding a majority of our voting shares authorized the following actions:

The amendment of our Articles of Incorporation to change our corporate name to INVENT Ventures, Inc. (the “Name Change”). The Name Change was effective on Septemer 19, 2012;

Request to FINRA that our stock symbol be changed from “LAST” to “IDEA” (the “Symbol Change”). Our stock symbol was temporarily changed by FINRA to “LASTD” until October 19, 2012 when it permenantly changed to “IDEA”;

The implementation of a forward stock split of our common stock issued and outstanding where ~~every~~everyone ~~one~~ (1) share of our common stock owned by a stockholder automatically changed into and become three (3) new shares of our common stock (the “Forward Stock Split”). The Forward Stock Split became effective on September 19, 2012.

Following the Forward Stock Split, there were 36,800,697 shares outstanding as of September 30, 2012.

The Company currently operates as an internally managed closed-end non-diversified Business Development Company and is traded under the symbol “IDEA”.

Pursuant to Regulation S-X, Rule 6, the Company operates on a non-consolidated basis. Operations of portfolio companies are reported at the portfolio company level and only the appreciation or impairment of these investments is included in the Company’s financial statements.

Unaudited Condensed Interim Financial Statements Basis of Presentation

Interim financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, all adjustments necessary for the fair presentation of financial statements for the interim periods have been included. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the year. The interim unaudited financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2013, as filed with the Securities and Exchange Commission.

The accompanying financial statements reflect the accounts of INVENT and the related results of its operations. In accordance with Article 6 of Regulation S-X under the Securities Act of 1933 and Securities Exchange Act of 1934, the Company does not consolidate portfolio company investments in which the Company has a controlling interest.

GOING CONCERN

The Company incurred a loss from operations of $~~216~~343,~~102~~991 during the ~~six~~nine months ended ~~June~~September 30, 2014. The Company’s only sources of cash flow have been from investments in the Company’s common stock, borrowing on the company’s line of credit, issuances of convertible notes, management fees from portfolio companies, and loans from its CEO. If the Company is unable to continue to raise sufficient capital to meet its operating needs or generate cash flow from operations, substantial doubt exists regarding the Company's ability to continue as a going concern.

The financial statements do not include any adjustments that may result from the outcome of these uncertainties.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Pursuant to Regulation S-X, Rule 6, the Company operates, and will continue to operate on a non-consolidated basis.

Management Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity date of three months or less to be cash equivalents. None of the Company’s cash is restricted.

Net Increase (Decrease) in Net Assets (Liabilities) from Operations Per Share (Earnings (Loss) per Share)

The Company is required to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding, and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potentially dilutive shares outstanding.

Basic EPS is computed by dividing our net increase (decrease) in net assets (liabilities) from operations per share available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At ~~June~~September 30, 2014, the Company had no potentially dilutive shares outstanding.

Valuation of Investments (as an Investment Company)

As a BDC, we are regulated by the Investment Company Act of 1940 (the “Act”). Section 2(a)(41) of the Act defines Value as (i) the market price for those securities for which a market quotation is readily available and (ii) for all other securities and assets, fair value is determined in good faith by the Board of Directors (“BOD”). We expect that few, if any, of our portfolio companies will have market quotations, and as such, we expect to rely on market transactions involving our portfolio companies and the fair value determined in good faith by our BOD for the valuation of our portfolio companies. Prior to our conversion a BDC, only marketable debt and equity securities and certain derivative securities were required to be carried at market value.

Portfolio assets for which market prices are available are valued at those prices. Securities that are traded in the over-the-counter market or on a stock exchange generally will be valued at the prevailing bid price on the valuation date. However, some of the Company’s current investments were acquired in privately negotiated transactions and may have no readily determinable market values. These securities are carried at fair value as determined by the Board of Directors and outside professionals as necessary under the Company’s valuation policy. Currently, the valuation policy provides for management’s review of the products and services, management team and financial conditions of the portfolio company. In situations that warrant such an evaluation, an independent business valuation may be obtained.

Income Taxes

The Company intends to operate so as to qualify to be taxed as a RIC under Subchapter M of the Code and, as such, will not be subject to federal income tax on the portion of taxable income and gains distributed to stockholders (See Note 7).

As of ~~June~~September 30, 2014 and 2013, the Company had no accrued interest or penalties relating to any tax obligations. The Company currently has no federal or state examinations in progress, nor has it had any federal or state tax examinations since its inception. The last three years of the Company's tax returns are subject to federal and state tax examination.

Comprehensive Income

All items required to be recognized under accounting standards as components of comprehensive income are required to be reported in a financial statement that is displayed with the same prominence as other financial statements. Standards require that an enterprise (a) classify items of other comprehensive income by their nature in financial statements and (b) display the accumulated balance of other comprehensive income separately in the equity section of the balance sheet for all periods presented. The Company’s comprehensive income (loss) does not differ from its reported net income (loss).

As an investment company, the Company must report changes in the fair value of its investments outside of its operating income on its statement of operations and reflect the accumulated appreciation or depreciation in the fair value of its investments as a separate component of its stockholders’ deficit.

Fair Value of Financial Instruments

Disclosure of fair value information about financial instruments is required when it is practicable to estimate that value. The carrying amounts of the Company’s cash, marketable equity securities, accounts receivable and accounts payable approximate their estimated fair value due to the short-term maturities of these financial instruments and because related interest rates offered to the Company approximate current rates.

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation or amortization. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets (generally five and seven years). The carrying amount of our fixed assets, primarily consisting of purchased software, computers, electronics and other office furniture, is evaluated periodically to determine if adjustment to the depreciation or amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of any of its fixed assets exist at ~~June~~September 30, 2014 and December 31, 2013. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When fixed assets are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

Stock Based Compensation

The compensation cost relating to share-based payment transactions (including the cost of all employee stock options) is required to be recognized in the financial statements. That cost will be measured based on the estimated fair value of the equity or liability instruments issued. The Company’s financial statements reflect an expense for all share-based compensation arrangements granted on or after January 1, 2006 and for any such arrangements that are modified, cancelled or repurchased after that date, based on the grant-date estimated fair value.

As of ~~June~~September 30, 2014 and December 31, 2013, there were zero options outstanding under any of the Company’s equity compensation plans. These options expired in September 2011.

Concentration of Credit Risk

Cash is maintained at financial institutions. The Federal Deposit Insurance Corporation (“FDIC”) insures accounts at each institution for up to $250,000. At times, cash balances may exceed the FDIC insurance limit of $250,000.

Common Stock Purchase Warrants and Other Derivative Financial Instruments

We classify as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). We classify as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). We assess classification of our common stock purchase warrants and other free standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.

Our derivative instruments consisting of warrants to purchase our common stock were valued using the Black-Scholes option pricing model, using the following assumptions at ~~June~~September 30, 2014:

Estimated dividends		None
Expected volatility		~~156~~188.90% ~~- 268.2%~~
Risk-free interest rate		2.5352%
Expected term		~~Various (0.25 –~~ 1.5429 years)

Recent Accounting Pronouncements

There are several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. At ~~June~~September 30, 2014, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company.

NOTE 3: INVESTMENTS AND VALUATION

~~INVESTMENTS~~The ~~AND~~Company’s ~~VALUATION~~investment securities are summarized as follows at September 30, 2014 and December 31, 2013, the valuation of which are all based on Level 3 inputs:

The Company’s investment securities are summarized as follows at June 30, 2014 and December 31, 2013, the valuation of which are all based on Level 3 inputs:


	September 30, 2014		December 31, 2013

Cost	$	541,917	$	506,387
Unrealized appreciation (depreciation)		4,439,246		9,123,238
Fair market value	$	4,981,163	$	9,629,625

	June 30, 2014		December 31, 2013
Cost	$	524,202	$	506,387
Unrealized appreciation (depreciation)		5,545,630		9,123,238
Fair market value	$	6,069,832	$	9,629,626

We follow Accounting Standards Codification (‘‘ASC’’) Topic 820 — Fair Value Measurements and Disclosures (“Topic 820”) for measuring the fair value of portfolio investments. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve a degree of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

Our fair value analysis includes an analysis of recent capital transactions with unrelated investors, the future cash flow projections of our investments, value of intellectual property and other proprietary assets. Financial investments recorded at fair value in the Company’s financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date. Topic 820 provides the following description of the three levels:

Level 1:

Inputs are unadjusted, quoted prices in active markets for identical financial instruments at the measurement date.

Level 2:

Inputs include quoted prices for similar financial instruments in active markets and inputs that are observable for the financial instruments, either directly or indirectly. Level 2 inputs also include inputs, other than quoted prices, that are observable for the asset or liability being valued, either directly or indirectly.

Level 3:

Inputs include unobservable inputs for the asset or liability. The inputs into the determination of fair value are based upon the best information available and require management judgment.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the investment.

The following section describes the types of inputs we use for level 3 within the fair value hierarchy in which the investment is categorized, and the valuation techniques we use to measure the fair value of our investments.

Level 3 inputs we use include the terms of recent capital transactions with unrelated investors, financial statement metrics of comparable companies, nonfinancial-statement metrics of comparable companies, projected cash flows of our investments, applicable discount rates, the value of developed intellectual property, the value of the domain name and other proprietary assets.

At September 30, 2014, all of our portfolio investments are valued based on level 3 inputs.

At June 30, 2014, all of our portfolio investments are valued based on level 3 inputs.

We measure derivative liabilities at fair value using the Black-Scholes option pricing model with assumptions that include the fair value of the stock underlying the derivative instrument, the exercise or conversion price of the derivative instrument, the risk free interest rate for a term comparable to the term of the derivative instrument and the volatility rate and dividend yield for our common stock. For derivative instruments convertible into or exercisable for shares of our preferred stock, we considered the price per share of $.50 paid by unrelated parties as the fair value of our common stock. For derivative instruments convertible into or exercisable for shares of our common stock, we considered the results of a valuation performed by a third party specialist and other internal analyses performed by management to determine the value of our stock at the commitment dates of applicable transactions. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has not paid dividends to date and does not expect to pay dividends in the foreseeable future due to its substantial accumulated deficit. Accordingly, expected dividends yields are currently zero. Expected volatility is based principally on historical stock price volatility and an analysis of historical volatilities of similarly situated companies in the marketplace for a number of periods that is at least equal to the contractual term or estimated life of the applicable financial instrument.

We also considered the use of the lattice or binomial models with respect to valuing derivative financial instruments that feature anti-dilution price protection; however, the differences in the results are insignificant due to the low probability of triggering price adjustments in such financial instruments.

FASB provides guidance on the determination of fair value. Accounting Standards Codification Topic 820 establishes a framework for measuring fair value that includes three distinct valuation techniques, (i) the Market Approach, (ii) the Income Approach and (iii) the Asset Approach. There is no single standard for determining fair value in good faith under any of these approaches, and as a result, determining fair value requires judgment be applied to the facts and circumstances of each of our portfolio investments. Topic 820 notes that in some cases the use of multiple valuation techniques will be appropriate. Under such circumstances, Topic 820 recommends that the results of the various techniques be evaluated and weighted appropriately. For investments where multiple valuation techniques are used to measure fair value, management evaluates and weights the results, considering the reasonableness of the range indicated by those results.

Following are descriptions of each technique and how we apply them to our portfolio companies.

Market Approach. The market approach uses prices and other relevant information generated by market transactions involving our portfolio companies, or identical or comparable assets or liabilities. Common applications of this approach include our use of the valuation implied by market transactions in our portfolio companies and market multiples derived from a set of comparable companies. When determining fair value under the Market Approach, we often draw from the terms of recent capital transactions with unrelated investors.

Income Approach. The income approach incorporates estimates of future cash flows or earnings and discounts them to a single present value based on current market expectations. Under the Income Approach we apply multiple discounted cash flow (“DCF”) methods to derive estimates of fair value.

Asset Approach. The asset approach is based on the fair value of the portfolio company’s assets less the fair value of its liabilities. When applying this approach, we evaluate (1) the aggregate amount of capital invested by INVENT in such company (our “Cost Basis”), and (2) the fair value of the company’s assets less the fair value of the company’s liabilities.

As an investment company, the Company will invest in illiquid securities including equity securities of private companies. The structure of each equity security is specifically negotiated to enable the Company to protect its investment and maximize its returns. The Company’s investments are generally subject to some restrictions on resale and generally have no established trading market.

We expect that the majority of our investments will continue to be recorded at fair value based on Level 2 and Level 3 inputs and values determined in good faith by our Board of Directors utilizing the input of our management and advisory board. With respect to investments for which market quotations are not readily available, we undertake a disciplined valuation process on a quarterly basis, which is detailed below.

Management considers which fair value techniques are applicable based on the type of investment being valued. If applying the asset approach, our management team aggregates the costs spent to develop the business and estimates the current cost to replicate such technology by another party. Under the market approach, our management team considers all transactions involving the portfolio company, as well as examines the current valuation levels of comparable investments. When applying the income approach, our management team develops cash flow forecasts and utilizes various discounted cash flow valuation techniques to approximate fair value. Management evaluates and weights the resulting valuations, considering the reasonableness of the range indicated by those results.

Preliminary valuation conclusions are discussed with the Board of Directors and subsequently discussed with members of our advisory board.

The Board of Directors considers the proposed valuations and determines the value of our portfolio companies in good faith based on the input of our management team and our advisory board.

We will record unrealized depreciation on investments when we believe that an investment has decreased in value or if the collection of a loan is doubtful. Conversely, we will record unrealized appreciation if we believe that the underlying portfolio company has appreciated in value and, therefore, our investment has also appreciated in value, where appropriate.

At ~~June~~September 30, 2014, 100% of our assets represented investments in portfolio companies recorded at fair value, as determined by our Board of Directors. Due to the inherent uncertainty in determining the fair value of investments that do not have a readily available market value, the fair value of our investments determined in good faith by our Board of Directors may differ significantly from the value that would have been used had a ready market existed for such investments, and the differences could be material. Additionally, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

Our Portfolio of Investments

The following table represents our schedule of our controlled investments as of ~~June~~September 30, 2014.

Company	Industry	Sub-Industry	$% Owned	Market Value
Virurl, Inc.	Web-based tech	Advertising	48%	~~1,277,961~~	1,277,961
Stockr, Inc.	Web-based tech	Financial Services	63%	~~2,661,455~~	1,572,327
LottoPals, Inc.	Web-based tech	Social Gaming	99%	~~83,347~~	83,320
Clowd, Inc.	Web-based tech	Location-based Communication	99%	~~99,742~~	99,681
Sanguine Biosciences, Inc.	Biotechnology	Life Science	42%	~~1,889,764~~	1,889,764
Stocktown Productions, Inc.	Creative Arts	Productions	81%	~~57,563~~	58,111
				$6,069,832
				$	$4,981,164

The following are descriptions of our portfolio companies.

Virurl, Inc. – virurl.com (revenue-generating)

Virurl, Inc. (“VIRURL”) native advertising technology company that allows brands to create instant viral advertising campaigns on the web. VIRURL operates the REVENUE.COM platform, which enables marketers to launch viral campaigns by compensating Internet users to share videos, articles, music, and other media with their friends via email, social networks, and anywhere else on the web.

Stockr, Inc. – stockr.com (LIVE)

Stockr, Inc. (“Stockr”) is a social network for the stock market. Stockr connects investors directly to the people, publishers and companies they care about, enabling users to see and discuss which stocks other users are trading in real-time. Stockr embraces the social element of investing, and brings identity and transparency to an otherwise anonymous environment, unveiling a new layer of market information.

Sanguine Biosciences, Inc. – sanguinebio.com (revenue-generating)

Sanguine Biosciences, Inc. (“Sanguine”) provides highly viable primary human cells and tissues to the academic and industrial life science research community. The product offering spans customers’ needs mainly in the In Vitro Research & Development stage of Drug Development. The organization holds proprietary cryopreservation technology that allows for >90% post-thaw viability of primary human cells and tissues. Sanguine’s vision is to develop into the global leader in high quality cells and tissues for life science research and development.

Clowd, Inc. – clowd.com (stealth)

Clowd, Inc. (“Clowd”) is a real-time mobile communication system that connects people based on proximity and mutual interest.

LottoPals, Inc. – lottopals.com (stealth)

LottoPals, Inc. (“LottoPals”) is developing web and mobile applications to allow people to play state lotteries with their friends online. Every week, millions of people play the lottery, both individually and by forming pools with friends, family and coworkers. LottoPals is bringing the lottery online, making the experience more convenient and fun.

Stocktown Productions, Inc. – stocktownproductions.com (revenue-generating)

Stocktown Productions, Inc. (“Stocktown”) is a creative production company based in Santa Monica, California, specializing in video, animation and visual effects. In addition to video production, Stocktown provides web design, photography and graphic design work- bringing an original style and cutting-edge concepts to each project.

NOTE 4: COMPOSITION OF NET ASSETS (STOCKHOLDERS’ EQUITY)

COMPOSITION OF NET ASSETS (STOCKHOLDERS’ EQUITY)

Common Stock

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001 with each share having one voting right. There are 39,787,001 and 36,928,197 common shares outstanding at ~~June~~September 30, 2014 and December 31, 2013, respectively.

On July 20, 2012, the Company's the Board of Directors approved a resolution implementing a three-for-one forward stock split of the Company's Common Stock, which became effective on September 19, 2012.

On July 27, 2012, the Company issued 1,050,000 shares to purchase various assets that enhance the services we can offer to our portfolio companies and to broaden our reach and exposure to the Northern California technology market, including relationships with entrepreneurs, advisors, angel investors, and investor relations companies (the “GGAA Assets”). On March 21, 2014, the Company and the seller of the GGAA Assets agreed to reverse the transaction, whereby the Company’s shares were returned to the Company and are in the process of being cancelled, and the GGAA Assets were returned to the seller.

On June 30, 2014, the Company received four Notices of Conversion from two ~~Convertible~~convertible ~~Note~~note ~~Holders~~holders notifying the Company that they wished to convert the total outstanding balance due from the Company under each of the ~~Convertible~~convertible ~~Notes~~notes into shares of the Company’s common stock. The four combined Notices of Conversion requested that a total of $158,186 of debt, equal to the total outstanding principle and accrued interest due on the four ~~Convertible~~convertible ~~Notes~~notes, be converted into shares of common stock. Per the terms of the ~~Convertible~~convertible ~~Notes~~notes, the outstanding balance was converted into 1,129,902 shares Company common stock at a price equal to Net Asset Value per Share. The foregoing descriptions of the Notices of Conversion are qualified in its entirety by reference to the complete text of one of the Notices of Conversion, a copy of which is attached to our Form 8-K filed on June 30, 2014.

On June 30, 2014, The Company entered into Debt Conversion Agreements with two ~~Promissory~~promissory ~~Note~~note ~~Holders~~holders that held three separate ~~Promissory~~promissory ~~Notes~~notes issued by the Company to convert the total unpaid balances of those ~~Promissory~~promissory ~~Notes~~notes into common stock of the Company. Pursuant to the Debt Conversion Agreements, the ~~Promissory~~promissory ~~Note~~note ~~Holders~~holders will convert the entire balance of all three ~~Promissory~~promissory ~~Notes~~notes equal to $242,046 into a total of 1,728,902 shares of the Company’s common stock at a price equal to Net Asset Value per Share. The foregoing descriptions of the Debt Conversion Agreements is qualified in its entirety by reference to the complete text of one of Debt Conversion Agreements, a copy of which is attached to our Form 8-K filed on June 30, 2014.

Retroactive Adjustment For Forward Stock Split

On September 19, 2012, the Company effected a three-for-one forward stock split of its Common Stock. Consequently, all earnings per share and other share-related amounts and disclosures have been retroactively adjusted for this action.

NOTE 5: RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

The officer and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities as they become available. The officer and directors may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.

On March 30, 2011, the Company issued its CEO 175,000 shares of its common stock in exchange for $175,000 owed to the CEO.

Officer’s compensation and director’s fees related to the services provided by Bryce Knight, CEO and Director of the Company, are paid directly to Knight Inc. (formerly Knight Enterprises, Inc.), a Nevada corporation 100% owned by Bryce Knight.

During the quarter ended March 31, 2011 Vineet Jindal and Brendon Crawford, previously the Chief Investment Officer and Chief Technology Officer of INVENT, resigned from INVENT to assume the Chief Executive Officer and Chief Technology Officer positions, respectively, at Stockr, Inc., a majority owned portfolio company of INVENT.

On February 12, 2011 the Company’s Board of Directors were notified by Management that the Company would exercise its repurchase option to purchase 8,100,000 shares of Company Common Stock pursuant to its Share Purchase Agreement and Employment Agreement with Mr. Jindal. Per the terms of the agreement, INVENT repurchased 1,800,000 shares at Mr. Jindal’s cost value and then cancelled those shares. The Company transferred its right to repurchase the remaining 6,300,000 shares to employees of INVENT, who repurchased these shares at Mr. Jindal’s original cost value.

On February 23, 2012 and April 11, 2012, Knight, Inc., wholly owned by Bryce Knight, Chief Executive Officer of the Company, transferred 450,000 and 300,000 shares, respectively, to consultants for services to be rendered for the Company. These shares were valued at $0.33 per share representing the price at which shares were sold during the period. The cost is being amortized over the estimated life of the consulting agreements, generally determined to be one year except for one consultant where the cost is being amortized over 33 months.

On July 19, 2013, Knight, Inc., wholly owned by Bryce Knight, Chief Executive Officer of the Company, transferred 1,000,000 shares of INVENT common stock to multiple consultants for investor relations and advisory services to be rendered for the Company. Knight Inc. transferred stock to four (4) consultants in the amounts of 400,000 shares, 400,000 shares, 100,000 shares and 100,000 shares, respectively. These shares were valued at $0.24 per share representing the stock market closing price on May 22, 2013, the day in which the four agreements were originally entered into. The cost is being amortized over the estimated life of the consulting agreements, determined to be one (1) year for the two (2) consultants that received a total of 800,000 shares from Knight Inc. and two (2) years for the two (2) consultants that received a total of 200,000 shares from Knight Inc.

On June 19, 2014, Knight, Inc., wholly owned by Bryce Knight, Chief Executive Officer of the Company, transferred 750,000 shares of INVENT common stock to consultants for investor relations and advisory services to be rendered for the Company. These shares were valued at $0.18 per share representing the stock market closing price on June 18, 2014. The cost is being amortized over the estimated life of the consulting agreement, determined to be one (1) year.

On June 19, 2014, the Company issued four Promissory Notes in the amount of U.S. $175,000 (the “Officer Promissory Notes”) to the Company’s four Officers: Bryce Knight, Tim Symington, James Jago, and Aaron Moore (the “Officers”). The Officer Promissory Notes were issued to each of the Officers in exchange for $175,000 of accrued compensation owed by the Company to the Officers for past services. The Officer Promissory Notes will mature on June 30, 2015 and have a 0% interest rate. The foregoing description of the Officer Promissory Notes is qualified in its entirety by reference to the complete text of the Officer Promissory Notes, copies of which were attached to our Form 8-K filed on June 26, 2014. On June 26, 2014, Bryce Knight transferred $125,000 of the Officer Promissory Notes due to him to two holders of the Company’s Convertible Notes.

At ~~June~~September 30, 2014 and December 31, 2013, the Company owed its CEO $~~731~~8,207 and $4,965, respectively, for loans and expense reimbursements, which is included in due to related parties.

INVENT currently collects $24,000 per month, of which $19,200 is paid in cash, from VIRURL for managerial assistance and operational support provided by the Company to VIRURL.

NOTE 6: COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

General

From time-to-time, some of the Company’s portfolio companies may receive correspondence or other notices of alleged breach of license agreement or other contract. Some of these notifications provide a period of time in which to cure an alleged breach or default. The failure of the Company’s portfolio companies to cure an alleged breach or default may have a material adverse impact on the Company’s results of operations and financial position.

Leases

The Company currently maintains its corporate office at 3651 Lindell Road, Suite D#146, Las Vegas, Nevada 89103 on a month-to-month basis.

We maintain our main office at 1930 Ocean Avenue in Santa Monica, California, which is under a month-to-month lease. Rent expense totaled $810,~~085~~801 and $3,326 in the quarters ended ~~June~~September 30, 2014 and 2013, respectively.

The Company also maintains offices on a month-to-month basis for its portfolio companies at 137 Bay Street, Santa Monica, California. These costs are classified as advances to portfolio companies.

NOTE 7: INCOME TAXES

INCOME TAXES

To qualify as a RIC, we are required to meet certain income and asset diversification tests. In addition, in order to be eligible for pass-through tax treatment as a RIC, we must distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income” as defined by the Code.

Taxable income includes the Company’s taxable interest, dividend and fee income, as well as taxable net capital gains. Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as gains or losses are not included in taxable income until they are realized.

NOTE 8: INDEBTEDNESS

INDEBTEDNESS

On January 14, 2013, the Company converted the $100,000 advance from non-affiliates into a promissory note in the amount of U.S. $110,000 (the “Threshold Note”) to Threshold Financial, LLC, a Wisconsin corporation (“Threshold”). The Threshold Note was priced to Threshold at $100,000, equal to 90.91% of its principal amount. The Threshold Note was due on the earlier of January 14, 2014 or the receipt of no less than U.S. $2,000,000 in funding from any private placement of equity securities (a “Qualified Equity Financing”). The Company is in negotiations with Threshold regarding a resolution for the Threshold Note. During the first six months outstanding, the Threshold Note bore interest at 7% per annum, and increased to 12% for the remaining six months until the Threshold Note was due. All amounts owed by the Company under the Threshold Note become immediately due and payable upon an event of default, which includes the Company’s failure to pay the Threshold Note for 10 days after Threshold’s notice thereof and the Company’s insolvency or failure to pay its debts as they become due.

In conjunction with the Threshold Note, the Company also issued Threshold a warrant to purchase shares of Company common stock (the “Threshold Warrant”). The Threshold Warrant has a term of three years and entitles Threshold to purchase $100,000 of shares of Common Stock at an exercise price equal to the lesser of $0.50 per share or the price per share of the Company’s capital stock sold to investors in its next Qualified Equity Financing. In issuing the Threshold Warrant, the Company relied on the exemption from registration set forth in Section 4(2) of the Securities Act of 1933, as amended, based upon the limited nature of the issuance.

Based on authoritative guidance, we have accounted for the Threshold Warrants as ~~liabilities~~a liability. The liability for the warrants, measured at fair value, based on a Black-Scholes option pricing model, has been offset by a reduction in the carrying value of the related Threshold Note.

On September 27, 2013, the Company issued two convertible promissory notes in the amounts of U.S. $50,000 and U.S. $20,000, and on December 31, 2013, the Company issued a convertible promissory note in the amount of U.S. $30,000, (collectively the “Notes”). The Notes mature one year subsequent to their issuance date (“Maturity”), and are convertible into shares of the Company’s common stock at any time prior to Maturity at the lower of $0.27 per share or the Company’s Net Asset Value Per Share (“NAV/S”) as presented in the Company’s most recent quarterly or annual filing with the Securities and Exchange Commission, subject to conversion limitations set forth in the Convertible Promissory Note agreements executed on September 27, 2013 and December 31, 2013, respectively. On March 31, 2014 the Company received an advance in the amount of U.S. $25,000 from an existing holder of a portion of the Notes. The Company expects to convert the advance into promissory notes with substantially the same terms as the Notes.

The Notes bear interest at the rate of 12% per annum, payable upon the earlier of Maturity, acceleration, or prepayment of the Notes. All amounts owed by the Company under the Notes becomes immediately due and payable upon an event of default, which includes the Company’s failure to pay principal or interest on the Notes when due, the Company’s insolvency or failure to pay its debts as they become due, and the Company’s failure to maintain the listing of its common stock on at least one of the OTCBB or an equivalent exchange.

On June 23, 2014, INVENT issued a convertible promissory note in the amount of U.S. $50,000 (the “June 2014 Convertible Note”). The June 2014 Convertible Note matures on June 23, 2015, and is convertible into shares of the Company’s common stock at any time prior to its maturity at the lower of $0.27 per share or the Company’s Net Asset Value Per Share (“NAV/S”) as presented in the Company’s most recent quarterly or annual filing with the Securities and Exchange Commission, subject to conversion limitations set forth in the Convertible Promissory Note agreements executed on June 23, 2014.

The June 2014 Convertible Note bears interest at the rate of 12% per annum, payable upon the earlier of its maturity, acceleration, or prepayment of the Note. All amounts owed by the Company under the Note become immediately due and payable upon an event of default, which includes the Company’s failure to pay principal or interest on the June 2014 Convertible Note when due, the Company’s insolvency or failure to pay its debts as they become due, and the Company’s failure to maintain the listing of its common stock on at least one of the OTCBB or an equivalent exchange.

The foregoing description of the Notes is qualified in its entirety by reference to the complete text of the Notes, copies of which are attached to our Form 8-Ks filed on October 8, 2013, January 3, 2014, and June 26, 2014.21

~~NOTE~~The 9:foregoing description of the note transactions above are qualified in their entirety by reference to the complete text of the notes, copies of which are attached to our Form 8-Ks filed on October 8, 2013, January 3, 2014, and June 26, 2014.

~~SUBSEQUENT~~On ~~EVENTS~~June 30, 2014, the Company received four Notices of Conversion from two convertible note holders notifying the Company that they wished to convert the total outstanding balance due from the Company under each of the convertible notes into shares of the Company’s common stock. The four combined Notices of Conversion requested that a total of $158,186 of debt, equal to the total outstanding principle and accrued interest due on the four convertible notes, be converted into shares of common stock. Per the terms of the convertible notes, the outstanding balance was converted into 1,129,902 shares Company common stock at a price equal to Net Asset Value per Share. The foregoing descriptions of the Notices of Conversion are qualified in its entirety by reference to the complete text of one of the Notices of Conversion, a copy of which is attached to our Form 8-K filed on June 30, 2014.

On June 30, 2014, The Company ~~has~~entered ~~evaluated~~into ~~events~~Debt ~~occurring~~Conversion ~~after~~Agreements with two promissory note holders that held three separate promissory notes issued by the ~~date~~Company to convert the total unpaid balances of ~~these~~those ~~financial~~promissory ~~statements~~notes ~~through~~into ~~August~~common 11stock of the Company. Pursuant to the Debt Conversion Agreements, ~~2014~~the promissory note holders will convert the entire balance of all three promissory notes equal to $242,046 into a total of 1,728,902 shares of the ~~date~~Company’s ~~that~~common ~~these~~stock ~~financial~~at ~~statements~~a ~~were~~price ~~issued.~~equal ~~There~~to ~~were~~Net noAsset ~~material~~Value ~~subsequent~~per ~~events~~Share. asThe foregoing descriptions of ~~that~~the ~~date~~Debt ~~which~~Conversion ~~would~~Agreements ~~require~~is ~~disclosure~~qualified in orits ~~adjustments~~entirety by reference to ~~these~~the ~~financial~~complete ~~statements.~~text of one of Debt Conversion Agreements, a copy of which is attached to our Form 8-K filed on June 30, 2014.

NOTE 9: SUBSEQUENT EVENTS

The Company has evaluated events occurring after the date of these financial statements through November 11, 2014, the date that these financial statements were issued. There were no material subsequent events as of that date which would require disclosure in or adjustments to these financial statements.

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

Certain statements contained in this report that are not historical fact are "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. The words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "believes," "estimates," "projects" or similar expressions are intended to identify these forward-looking statements. These statements are subject to risks and uncertainties beyond our reasonable control that could cause our actual business and results of operations to differ materially from those reflected in our forward-looking statements. The safe harbor provisions provided in the Securities Litigation Reform Act do not apply to forward-looking statements we make in this report. Forward-looking statements are not guarantees of future performance. Factors that may cause actual results to differ materially from those contemplated by our forward-looking statements include the following:

our limited operating history;

our ability to successfully compete with other venture capital companies in obtaining attractive portfolio companies;

the general economy and its impact on our current and any future portfolio companies and the industries in which they operate;

the financial condition and ability of our current and any future portfolio companies to achieve their objectives;

legislative or regulatory changes may adversely affect our business and that of our portfolio companies;

our operating costs may be greater than expected;

we could lose key personnel, or spend a greater amount of resources attracting, retaining and motivating them than we have projected;

our inability to raise additional capital if needed; and

our ability to maintain our qualification as a regulated investment company and as a business development company.

We based our forward-looking statements on our current expectations about future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee you that these expectations actually will be achieved. We are under no duty to update any of the forward-looking statements after the date of this filing to conform those statements to actual results. In evaluating these statements, you should consider various factors, including the Risk Factors set out in Part I, Item 1.A in our Annual Report on Form 10-K for the year ended December 31, 2013.

Company

Our stock is publicly listed on the OTCQB market under the symbol “IDEA”.

Critical Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an on-going basis, we will evaluate our estimates and judgments, including those related to revenue recognition, valuation of investments in portfolio companies, accrued expenses, financing operations, contingencies and litigation. We will base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We became a non-diversified internally managed, closed-end investment company under the Investment Company Act of 1940, as amended, in November 2009. Accordingly, the most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources, such as the investments in portfolio companies. These accounting policies are described at relevant sections in this discussion and analysis and in the "Notes to Financial Statements" included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Results of Operations

Comparison of the three months ended ~~June~~September 30, 2014 and 2013

Revenues - The Company received $72,~~403~~000 in management fee revenues from its controlled portfolio companies in 2014, ana 98129% increase from the same period of 2013. As the Company's group of portfolio companies expands and matures, the Company expects its management fee income from its portfolio companies will increase. The Company also recorded $2,~~238~~309 of interest income in the second fiscal quarter of 2014 related to the Company’s convertible note holdings in Sanguine.

The following table details expenses for the three months ended September 30, 2014 and 2013:


Expenses:	September 30, 2014		September 30, 2013
Officer and employee compensation		136,620		136,620
Professional fees		29,055		65,177
Director fees		−		−
Rent		10,801		2,844
Office supplies and expenses		8,449		6,988
Other general and administrative expense		15,577		53,389
Interest expense		1,846		30,975
Total expenses		202,348		295,993

~~The~~Officer ~~following~~and ~~table~~employee ~~details~~compensation in the three months ended September 30, 2014 was flat when compared to the same period in 2013. Professional fees declined 56% in the three months ended September 30, 2014 when compared to prior year, primarily driven by decreases in non-cash IR / PR expenses, ~~for~~partially offset by increases in legal fees. Other general and administrative expense declined 71% in the three months ended ~~June~~September 30, 2014: when compared to prior year, due primarily to a decrease in amortization expenses associated with the GGAA Assets, a decline in marketing expenses and reductions in travel and entertainment expenses. Interest expense declined $29,134 or 94% in 2014 due to a reduction in non-cash interest expenses.

Expenses:	June 30, 2014		June 30, 2013
Officer and employee compensation		136,620		136,620
Professional fees		72,940		75,664
Director fees		-		-
Rent		8,085		3,326
Office supplies and expenses		5,876		1,438
Other general and administrative expense		25,192		42,254
Interest expense		46,734		29,460
Total expenses		295,447		288,762

The following table details the net realized and unrealized (losses) for the three months ended September 30, 2014 and 2013:

Officer and employee compensation in the three months ended June 30, 2014 was flat when compared to the same period in 2013. Professional fees declined 4% in the three months ended June 30, 2014 when compared to prior year, driven by decreases in non-cash consulting expenses and other professional fees, partially offset by increases in audit fees and IR / PR expenses. Other general and administrative expense declined approximately 40% in the three months ended June 30, 2014 when compared to prior year, due primarily to a decrease in amortization expenses associated with the GGAA Assets and a decline in marketing expenses.


Net realized and unrealized (losses):	September 30, 2014		September 30, 2013
Net realized loss on investments, net of income taxes of none		−		−
Change in unrealized appreciation (depreciation) of investments, net of deferred tax of none in 2011 and 2010		(1,106,384)		(4,952)
Net realized and unrealized (losses)		(1,106,384)		(4,952)

~~The~~In ~~following~~the ~~table~~quarter ~~details~~ended ~~the~~September ~~net~~30, ~~realized~~2014, ~~and~~the Company incurred unrealized depreciation of $1,106,384. This depreciation is due primarily to a $1,089,127 reduction in the carrying value of Stockr. During our third fiscal quarter, the Company’s Board of Directors determined to write down the carrying value of Stockr due to the impending maturity of a portion of Stockr’s outstanding convertible notes (~~losses~~the “Stockr Notes”) ~~for~~at December 31, 2014 and the ~~three~~implied ~~months~~valuation ~~ended~~at ~~June~~which 30the Stockr Notes will convert into Stockr common stock. At December 31, 2014, ~~and~~the ~~2013:~~Stockr Notes convert into Stockr common stock at a valuation of $0.28, which based on the Company’s holdings of 5,666,667 shares of Stockr implies a carrying value of $1,572,327.

Net realized and unrealized (losses):	June 30, 2014		June 30, 2013
Net realized loss on investments, net of income taxes
of none		-		-
Change in unrealized appreciation (depreciation) of investments,
net of deferred tax of none in 2011 and 2010		(642,796)		(2,334)
Net realized and unrealized (losses)		(642,796)		(2,334)

The additional depreciation is due to increases in the cost basis of our other portfolio companies, excluding Stocktown, LottoPals and Clowd, which we carry at cost. The increase in our cost basis reduces the amount of unrealized appreciation we carry on our balance sheet.

In the quarter ended June 30, 2014, the Company incurred unrealized depreciation of $642,796. This depreciation is due primarily to a $643,445 reduction in the carrying value of Clowd. During the Company’s second fiscal quarter Clowd cancelled all of the shares received by the original owners of Bar.PM, Inc., a Nevada Corp that Clowd merged with to partner and accelerate growth ofthe business. The management of Clowd and the original shareholders of Bar.PM agreed that the partnership was not working out as intended and that the Bar.PM shareholders would agree to cancel their shares in the post-merger Nevada entity, Clowd. In light of this development, as well as other qualitative considerations, the Company’s Board of Directors determined that Clowd would be carried at cost of $99,742, a write-down of $643,445 from the carrying value at December 31, 2013 of $743,187.

The additional depreciation is due to increases in the cost basis of our other portfolio companies, excluding Stocktown and LottoPals which we carry at cost. The increase in our cost basis reduces the amount of unrealized appreciation we carry on our balance sheet.

These adjustments are reflected in the change in unrealized appreciation (depreciation) of investments on our statement of operations.

More detail surrounding unrealized appreciation of investments is discussed in Note 3.

Comparison of the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013

Revenues -– The Company received $~~126~~198,403 in management fee revenues from its controlled portfolio companies in 2014, ana 8699% increase from the same period of 2013. As the Company's group of portfolio companies expands and matures, the Company expects its management fee income from its portfolio companies will increase. The Company also recorded $46,~~409~~718 of interest income in the year-to-date period ended ~~June~~September 30, 2014 related to the Company’s convertible note holdings in Sanguine.

The following table details expenses for the nine months ended September 30, 2014 and 2013:


Expenses:	September 30, 2014		September 30, 2013
Officer and employee compensation		409,860		409,860
Professional fees		177,447		177,655
Director fees		−		−
Rent		23,973		9,939
Office supplies and expenses		20,054		11,040
Other general and administrative expense		78,522		125,196
Interest expense		72,857		119,306
Total expenses		782,713		852,996

Officer and employee compensation in the three months ended September 30, 2014 was flat when compared to the same period in 2013. Professional fees were approximately flat from 2013, with increases in audit and legal fees being offset by declines in consulting expense and other professional fees. Other general and administrative expense declined 37% in the nine months ended September 30, 2014 when compared to prior year, due primarily to a decrease in amortization expenses associated with the GGAA Assets, partially offset by an increase in marketing expenses. Interest expense declined $46,454, or 39% in 2014 due to a reduction in non-cash interest expenses.

The following table details ~~expenses~~the net realized and unrealized (losses) for the ~~three~~nine months ended ~~June~~September 30, 2014 and 2013:

General and Administrative Expenses:	June 30, 2014		June 30, 2013
Net realized and unrealized (losses):	September 30, 2014		September 30, 2013
Officer and employee compensation		136,620		136,620
Net realized loss on investments, net of income taxes of none		−		−
Professional fees		68,815		75,664
Change in unrealized appreciation (depreciation) of investments, net of deferred tax of none in 2011 and 2010		(4,683,992)		(17,650)
Rent		8,085		3,326
Net realized and unrealized (losses)		(4,683,992)		(17,650)
Office supplies and expenses		5,876		1,438
Other general and administrative expense		25,192		42,254
Total General and Administrative Expenses		244,587		259,302

~~Officer~~In ~~and employee compensation in~~ the ~~three~~nine-month ~~months~~period ended ~~June~~September 30, 2014, ~~was~~the ~~flat~~Company ~~when~~incurred ~~compared~~unrealized todepreciation ~~the~~of ~~same period in 2013~~$4,683,992. ~~Professional~~This ~~fees~~depreciation ~~increased~~is ~~30%~~due inprimarily ~~the six months ended June 30, 2014 when compared~~ to ~~prior~~a ~~year~~$2,916,680 ~~driven~~reduction ~~by increases~~ in IRthe /carrying PRvalue ~~expenses~~of ~~and~~LottoPals, ~~audit~~a ~~fees~~$1,089,127 ~~partially~~reduction ~~offset by declines~~ in ~~consulting expenses and other professional fees. Other general and administrative expense declined approximately 12% in~~ the ~~six~~carrying ~~months~~value ~~ended~~of ~~June 30~~Stockr, ~~2014~~and ~~when~~a ~~compared to prior year~~$643,506 ~~due~~reduction ~~primarily to a decrease~~ in ~~amortization~~the ~~expenses~~carrying ~~associated~~value ~~with~~of ~~the GGAA Assets~~Clowd.

~~The~~On ~~following~~May ~~table~~6, ~~details~~2014, the ~~net~~Company’s ~~realized~~portfolio ~~and~~company, ~~unrealized~~LottoPals received notice from Aeon Multi-Opportunity Fund I, LLC (~~losses~~“Aeon”) ~~for~~that the ~~six~~$1,000,000 ~~months~~financing ~~ended~~at ~~June~~a 30pre-investment valuation of $3,000,000 set forth in a Letter of Intent signed by both parties on January 27, 2014 ~~and~~could ~~2013:~~not be completed during the second quarter of 2014, however LottoPals was notified that Aeon still wished to close the financing at a later date. In light of this development, as well as other qualitative considerations, the Company’s Board of Directors determined that LottoPals would be carried at the Company’ cost basis.

Net realized and unrealized (losses):	June 30, 2014		June 30, 2013
Net realized loss on investments, net of income taxes
of none		-		-
Change in unrealized appreciation (depreciation) of investments,
net of deferred tax of none in 2011 and 2010		(3,577,608)		(12,698)
Net realized and unrealized (losses)		(3,577,608)		(12,698)

During our third fiscal quarter, the Company’s Board of Directors determined to write down the carrying value of Stockr by $1,089,127 due to the impending maturity of a portion of Stockr’s outstanding convertible notes (the “Stockr Notes”) at December 31, 2014 and the implied valuation at which the Stockr Notes will convert into Stockr common stock. At December 31, 2014, the Stockr Notes convert into Stockr common stock at a valuation of $0.28, which based on the Company’s holdings of 5,666,667 shares of Stockr implies a carrying value of $1,572,327.

In the ~~six-month~~second ~~period~~fiscal ~~ended~~quarter ~~June~~of ~~30,~~ 2014, the Company ~~incurred~~reduced ~~unrealized depreciation of $3,577,608. This depreciation is due primarily to a $2,918,088 reduction in~~ the carrying value of ~~LottoPals.~~Clowd Onby ~~May 6~~$643,445. ~~2014,~~During the Company’s ~~portfolio~~second ~~company,~~fiscal ~~LottoPals~~quarter ~~received~~Clowd ~~notice~~cancelled ~~from~~all ~~Aeon~~of ~~Multi-Opportunity~~the ~~Fund~~shares I,received ~~LLC~~by ~~(“Aeon”) that~~ the ~~$1,000,000~~original ~~financing~~owners ~~at a pre-investment valuation~~ of $3Bar.PM,~~000~~ Inc.,~~000~~ ~~set~~a ~~forth~~Nevada inCorp athat ~~Letter~~Clowd ofmerged ~~Intent~~with ~~signed~~to bypartner ~~both~~and ~~parties~~accelerate ongrowth ~~January~~of ~~27,~~the ~~2014~~business. The ~~could~~management ~~not~~of beClowd ~~completed~~and ~~during~~ the ~~second~~original ~~quarter~~shareholders of ~~2014~~Bar.PM ~~LottoPals~~agreed ~~was~~that ~~notified~~the ~~that~~partnership ~~Aeon~~was ~~still~~not ~~wished~~working toas ~~close~~intended ~~the~~and ~~financing~~that ~~but~~the itBar.PM shareholders would ~~have~~agree to becancel attheir ashares ~~later~~in ~~date~~the post-merger Nevada entity, Clowd. In light of this development, as well as other qualitative considerations, the Company’s Board of Directors determined that ~~LottoPals~~Clowd would be carried at ~~cost of $81,912, a write-down of $2,918,088 from~~ the ~~carrying~~Company’s ~~value~~cost ~~at December 31, 2013 of $3,000,000~~basis.

~~Additionally~~The inadditional ~~the~~depreciation ~~second~~is ~~fiscal~~due ~~quarter~~to ofincreases ~~2014,~~in the ~~Company~~cost ~~reduced~~basis ~~the carrying value~~ of ~~Clowd~~our byportfolio ~~$643~~companies,~~445.~~ ~~During~~excluding ~~the Company’s second fiscal quarter Clowd cancelled all of the shares received by the original owners of Bar.PM~~Stocktown, ~~Inc.,~~LottoPals aand ~~Nevada Corp that~~ Clowd ~~merged~~which ~~with~~we tocarry ~~partner~~at ~~and accelerate growth of the business~~cost. The ~~management~~increase ~~of Clowd and the original shareholders of Bar.PM agreed that the partnership was not working out as intended and that the Bar.PM shareholders would agree to cancel their shares~~ in ~~the~~our ~~post-merger~~cost ~~Nevada~~basis ~~entity,~~reduces ~~Clowd. In light of this development, as well as other qualitative considerations,~~ the ~~Company’s~~amount ~~Board~~ of ~~Directors~~unrealized ~~determined~~appreciation ~~that~~we ~~Clowd~~carry ~~would~~on beour ~~carried~~balance ~~at cost of $99,742, a write-down of $643,445 from the carrying value at December 31, 2013 of $743,187~~sheet.

These adjustments are reflected in the change in unrealized appreciation (depreciation) of investments on our statement of operations.

More detail surrounding unrealized appreciation of investments is discussed in Note 3.

Liquidity and Capital Resources

The Company incurred a loss from operations of $~~216~~343,~~102~~991 during the ~~six~~nine months ended ~~June~~September 30, 2014.

The Company’s only sources of cash flow have been from investments in the Company’s common stock, borrowing on the company’s line of credit, issuances of convertible notes, management fees from portfolio companies, and loans from its CEO. If the Company is unable to continue to raise sufficient capital to meet its operating needs or generate cash flow from operations, substantial doubt exists regarding the Company's ability to continue as a going concern.

Net Asset Value

As a BDC, certain of our activities and disclosures are made in reference to Net Asset Value (“NAV”) which is the value of our portfolio assets less liabilities and preferred stock. This may be viewed, simply and generalized, as the value of our assets available to our common stockholders. As of the date of the financial information in this report, the value of our portfolio of assets including investments and securities in portfolio companies, other assets and cash is $65,~~164~~217,~~619~~955 and from this, are subtracted liabilities of $1,~~280~~432,~~654~~588. There are no shares of preferred stock outstanding but the rights of preferred stockholders would be included if there were. The resulting NAV at ~~June~~September 30, 2014 is $43,~~883~~785,~~965~~367. The Net Asset Value per Share (“NAV/S”) is calculated by dividing the NAV by the number of common shares outstanding (39,787,001). The NAV/S is $0.1210 at ~~June~~September 30, 2014.

~~ITEM 3:~~26

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from changes in market rates and prices. We are primarily exposed to equity price risk, which arises from exposure to securities that represent an ownership interest in our portfolio companies. The value of our equity securities and our other investments are based on quoted market prices or our Board of Directors’ good faith determination of their fair value (which is based, in part, on quoted market prices). Market prices of common equity securities, in general, are subject to fluctuations, which could cause the amount to be realized upon the sale or exercise of the instruments to differ significantly from the current reported value. The fluctuations may result from perceived changes in the underlying economic characteristics of our portfolio companies, the relative price of alternative investments, general market conditions and supply and demand imbalances for a particular security.

ITEM 4: CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934) as of ~~June~~September 30, 2014. Based on that review and evaluation, the CEO and CFO concluded that the Company’s current disclosure controls and procedures, as designed and implemented, are effective in ensuring that information relating to the Company required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including insuring that such information is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Controls

There have been no changes in internal controls or in other factors that could materially affect these controls during the quarter ended ~~June~~September 30, 2014, including any corrective actions with regard to significant deficiencies and material weaknesses.

27PART II: OTHER INFORMATION

~~PART~~ITEM II1: LEGAL PROCEEDINGS

OTHER INFORMATION

ITEM 1:

LEGAL PROCEEDINGS

Not Applicable.

ITEM 1A: RISK FACTORS

RISK FACTORS

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~UNREGISTERED~~There ~~SALES~~were OFno ~~EQUITY~~common ~~SECURITIES~~stock ~~AND~~shares ~~USE~~sold OFduring ~~PROCEEDS~~the three months ended September 30, 2014.

~~There~~ITEM ~~were~~3: noDEFAULTS ~~common~~UPON ~~stock~~SENIOR ~~shares sold during the three months ended June 30, 2014.~~SECURITIES

ITEM 3:

DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4: MINE SAFETY DISCLOSURES

MINE SAFETY DISCLOSURES

Not applicable

ITEM 5: OTHER INFORMATION

OTHER INFORMATION

Not applicable

~~ITEM 6:~~27

~~EXHIBITS~~ITEM 6: EXHIBITS

The following exhibits are filed with this report on Form 10-Q.


31.1	Certification pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer.

31.2	Certification pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer.

32.1	Certification pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer.

32.2	Certification pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer.

101.INS	XBRL Instance Document.

101.SCH	XBRL Taxonomy Extension Schema Document.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB	XBRL Taxonomy Extension Label Linkbase Document.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INVENT VENTURES, INC.


	INVENT VENTURES, INC.


DATE	SIGNATURE/TITLE

November 11, 2014	By:	/s/ Bryce Knight
		Bryce Knight
		Chief Executive Officer and
		Chairman

November 11, 2014	By:	/s/ James Jago
		James Jago
		Chief Financial Officer

DATE

SIGNATURE/TITLE

August 11, 2014

By:

/s/ Bryce Knight

Bryce Knight

Chief Executive Officer and

Chairman

August 11, 2014

By:

/s/ James Jago

James Jago

Chief Financial Officer

Filing Compare · INVENT Ventures, Inc.