Company Quick10K Filing
Live Current Media
Price0.00 EPS-0
Shares35 P/E-0
MCap0 P/FCF-0
Net Debt-0 EBIT-0
TEV-0 TEV/EBIT3
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-15
10-K 2019-12-31 Filed 2020-03-31
10-Q 2019-09-30 Filed 2019-11-14
10-Q 2019-06-30 Filed 2019-08-14
10-Q 2019-03-31 Filed 2019-05-15
10-K 2018-12-31 Filed 2019-04-01
10-Q 2018-09-30 Filed 2018-11-14
10-Q 2018-06-30 Filed 2018-08-14
10-Q 2018-03-31 Filed 2018-05-16
10-Q 2010-09-30 Filed 2010-11-15
10-Q 2010-06-30 Filed 2010-08-16
10-Q 2010-03-31 Filed 2010-05-14
10-K 2009-12-31 Filed 2010-03-29
8-K 2020-01-29 Enter Agreement, Exhibits
8-K 2019-03-21 Enter Agreement, Exhibits
8-K 2018-12-07 Enter Agreement, Other Events, Exhibits
8-K 2018-11-28 Officers, Other Events
8-K 2018-09-10 Enter Agreement, Exhibits

LIVC 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information
Item 6. Exhibits.
EX-31.1 exhibit31-1.htm
EX-32.1 exhibit32-1.htm

Live Current Media Earnings 2020-03-31

Balance SheetIncome StatementCash Flow

10-Q 1 form10q.htm FORM 10-Q Live Current Media Inc.: Form 10-Q - Filed by newsfilecorp.com

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q

(Mark One)

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

          For the quarterly period ended March 31, 2020

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from ________ to ________

COMMISSION FILE NUMBER  000-29929

LIVE CURRENT MEDIA INC.
(Exact name of registrant as specified in its charter)

NEVADA

 

88-0346310

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

 

 

 

50 West Liberty Street, Suite 880
Reno, Nevada

 

89501

(Address of principal executive offices)

 

(Zip Code)

(604) 648-0501
(Registrant's telephone number, including area code)

_______________________________________________________________
(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 period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ☐ 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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☐ (Do not check if a smaller reporting company)

Smaller reporting company ☒

  Emerging growth company ☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ 

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:  As of May 15, 2020, the Registrant had 34,837,625 shares of common stock outstanding.


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.


The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that can be expected for the year ending December 31, 2020.

As used in this Quarterly Report, the terms "we," "us," "our," "Live Current," and the "Company" mean Live Current Media Inc. and its subsidiaries, unless otherwise indicated.  All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.


LIVE CURRENT MEDIA INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2020

(Expressed in US Dollars)

(Unaudited)



LIVE CURRENT MEDIA INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS
(expressed in US dollars)
(Unaudited)
 

      March 31, 2020     December 31, 2019  
               
ASSETS  
               
Current assets            
  Cash $ 331,303   $ 432,850  
      331,303     432,850  
Non-current assets            
  Intangible assets   142,630     111,951  
  Equity investments   417,537     -  
    $ 891,470   $ 544,801  
               
LIABILITIES AND STOCKHOLDERS' EQUITY  
               
Current liabilities            
  Accounts payable $ 103,294   $ 91,060  
  Other payable   17,696     17,645  
      120,990     108,705  
Stockholders' equity            
  Capital stock            
    Authorized:            
      500,000,000 common shares, par value $0.001 per share          
    Issued and outstanding as of March 31, 2020 and            
      December 31, 2019: 34,837,625  common shares 34,838     34,838  
  Additional paid in capital   18,373,817     18,370,899  
  Deficit   (17,638,175 )   (17,969,641 )
      770,480     436,096  
    $ 891,470   $ 544,801  

The accompanying notes are an integral part of these condensed consolidated financial statements.

 


LIVE CURRENT MEDIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(expressed in US dollars)
(Unaudited)
      March 31, 2020     March 31, 2019  
Operating expense (income)            
  Domain content and registration $ 3,037   $ 5,350  
  General and administrative   15,932     8,562  
  Interest expense   51     51  
  Management fees   32,841     30,000  
  Marketing   13,470     21,282  
  Professional fees   15,120     45,152  
  Transfer agent and regulatory   4,140     5,771  
  Gain on sale of license   (351,134 )    -  
  Fair value change of equity   (66,403 )   -  
  Website development   1,480     -  
Net income (loss) for the period $ 331,466    
$
(116,168 )
             
               
Basic and diluted gain (loss) per share   0.01     (0.00 )
               
Weighted average number of basic common shares outstanding   34,837,625     34,837,625  

The accompanying notes are an integral part of these condensed consolidated financial statements.

 


LIVE CURRENT MEDIA INC.  
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(expressed in US dollars)
(Unaudited)
 
   

     Common Stock     Additional           Total  
    Number           Paid In     Accumulated     Stockholders'  
    of Shares     Amount     Capital     Deficit     Equity  
Balance, December 31, 2018   34,837,625   $ 34,838   $ 18,370,899   $ (17,985,406 ) $ 420,331  
                               
Net loss   -     -     -     (116,168 )   (116,168 )
Balance, March 31, 2019   34,837,625   $ 34,838   $ 18,370,899   $ (18,101,574 ) $ 304,163  
                               
Balance, December 31, 2019   34,837,625   $ 34,838   $ 18,370,899   $ (17,969,641 ) $ 436,096  
Stock-based compensation   -     -     2,918     -     2,918  
Net income   -     -     -     331,466     331,466  
Balance, March 31, 2020   34,837,625   $ 34,838   $ 18,373,817   $ (17,638,175 ) $ 770,480  
                                 

The accompanying notes are an integral part of these condensed consolidated financial statements.



LIVE CURRENT MEDIA INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(expressed in US dollars)
(Unaudited)
 
        For the three months ended  
        March 31, 2020     March 31, 2019  
Cash flows used in operating activities            
  Net income (loss) for the period  $ 331,466   $ (116,168 )
        Non-cash item            
            Accrued interest   51     51  
            Fair value change on equity investments   (66,403 )   -  
         Gain on sale of license   (351,134 )   -  
  Changes in non-cash working capital items            
    Receivable   -     15,000  
    Accounts payable and accrued liabilities   12,234     36,558  
    Cash used in operating activities   (73,786 )   (64,559 )
    Cash flows used in Investing activities            
        Website development   (27,761 )   -  
    Cash used in investing activities   (27,761 )   -  
                 
Change in cash   (101,547 )   (64,559 )
Cash, beginning of period   432,850     388,906  
Cash, end of period $ 331,303   $ 324,347  
             
Supplemental cash flow information:            
Interest paid $ -   $ -  
Income taxes paid $ -   $ -  

The accompanying notes are an integral part of these condensed consolidated financial statements.

 


1. NATURE AND CONTINUANCE OF OPERATIONS

Live Current Media Inc. (the "Company" or "Live Current") was incorporated under the laws of the State of Nevada on October 10, 1995. The Company's wholly owned principal operating subsidiary, Domain Holdings Inc. ("DHI"), was incorporated under the laws of British Columbia on July 4, 1994 under the name "IMEDIAT Digital Creations Inc.". On April 14, 1999, IMEDIAAT Creations, Inc. changed its name to "Communicate.com Inc." and was redomiciled from British Columbia to the jurisdiction of Alberta. On April 5, 2002, Comminicate.com Inc. changed its name to Domain Holding Inc.

On March 13, 2008, the Company incorporated a wholly owned subsidiary in the state of Delaware, Perfume.com Inc. (Perfume Inc.) which is a dormant and inactive company.

Live Current is a technology company involved in the entertainment industry.  Currently developing two projects for release in 2020, Boxing.com FEDERATION and SPRT MTRX, both of which are positioned in the eSports and gaming sector.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of March 31, 2020, the Company has not achieved profitable operations, has incurred recurring operating losses and further losses are possible.  The Company has an accumulated deficit of $17,638,175.  The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to further develop its business. To date, the Company has funded operation through the issuance of capital stock and debt.  Management plans to continue raising additional funds through equity or debt financing and loans from directors.  There is no certainty that further funding will be available as needed.  These directors raise substantial doubt about the ability of the Company to continue operating as a going concern. The ability of the Company to continue its operations as a going concern is dependent upon its ability to raise sufficient new capital to fund its operating commitments and ongoing losses and ultimately on generating profitable operations.  The financial statements do not include any adjustments to be recorded to assets or liabilities that might be necessary shod the Company be unable to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These condensed interim consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United State ("US GAAP"), and are expressed in United States dollars.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the balance sheet; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the financial statements and related notes included in the Company's Annual Report in Form 10-K, for the year ended December 31, 2019, as filed with the SEC on March 31, 2020.

WEBSITE DEVELOPMENT COSTS

The Company has adopted the provision of ASC 985-20-25, Costs of Software to Be Sold, Leased or Marketed, whereby costs incurred to establish the technological feasibility of a computer software product to be sold, leased to marketed are research and development costs. Those costs are expensed as incurred; costs of producing product masters incurred subsequent to establishing technological feasibility are capitalized; and costs incurred when the product is available for general release to the customers are expensed as incurred. Upgrades and enhancements are capitalized if they result in added functionality which enables the software to perform tasks it was previously incapable of performing.  


EQUITY INVESTMENTS

Equity investments are classified as available for sale and are stated at fair market value. Unrealized gains and losses are recognized in the Company's statement of operations.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments include cash, equity investments, accounts payable, and other payable. The carrying value of these financial instruments approximates their fair value based on their short-term nature. The Company is not exposed to significant interest, exchange or credit risk arising from these financial instruments.

The fair value hierarchy under US GAAP is based on the following three levels of inputs, of which the first two are considered observable and the last unobservable:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Observable inputs other than Level I, quoted prices for similar assets or liabilities in active prices whose inputs are observable or whose significant value drivers are observable; and

Level 3: Assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities.

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). There were no assets or liabilities measured at fair value on a nonrecurring basis during the period ended March 31, 2020.

Cash and equity investments are measured at fair value using level 1 inputs and level 2 inputs respectively.

3. INTANGIBLE ASSETS

The Company's portfolio of domain names is considered by management to consist of indefinite life intangible assets not subject to amortization.

During the three months period ended March 31, 2020, the Company entered a consulting agreement with a third-party contractor for the website development for SPRT MRTX. A total of $30,679 related to website development costs was capitalized as intangible assets.


4. EQUITY INVESTMENT AND ROYALTIES

On March 21, 2019, the Company entered an agreement with Cell MedX Corp. ("CMXC") to purchase the direct rights to distribute the eBalance device from CMXC. On January 29, 2020 the Company and CMXC entered a Buyback agreement to sell the exclusive distribution rights to the eBalance microcurrent device back to CMXC.

The sales price included a retained royalty on future sales of the eBalance device capped at US$507,000 and share purchase warrants for 2,000,000 shares of CMXC of which 1,000,000 is exercisable at $0.50 and 1,000,000 exercisable at $1.00.  As at March 31, 2020, the Company’s equity investment consists of 2,000,000 share purchase warrants. Each CMXC’s warrant is exercisable for a period of three years, expiring on January 31, 2023. CMXC has the right to accelerate the expire date of the warrants based on the trading price of CMXC’s shares. 

As at March 31, 2020, the fair value of the equity investment was calculated to be $417,537 based on the market price of $0.26 per CMXC's common share using a Black Scholes Options Pricing model with the following assumptions:

Assumptions:

Risk-free rate (%)

0.29

Expected stock price volatility (%)

183

Expected dividend yield (%)

0

Expected life of options (years)

2.83

The initial recognition of the equity investment in CMXC resulted in $351,134 gain on sale of distribution license from fair value of equity investments received and $66,403 gain on fair value when the CMXC warrants were revalued on March 31, 2020. During the three month period ended March 31, 2020, no CMXC warrants were sold and $nil realized gain or loss from sale of equity investment was realized.

5. SHARE CAPITAL

During the three months period ended March 31, 2020, 200,000 options expired. The Company granted 200,000 incentive stock options to one of its contractors to purchase an aggregate of 200,000 shares of the Company’s common stock at $0.10 per share. These stock options vest as to one-fourth immediately and one-fourth after the first, second and third six months of the date of grant. The fair value of the options granted calculated to be $11,673. The Company recognized a total of $2,918 as share-based compensation related to stock options vested during three month period ended March 31, 2020.  The fair value determined using the Black-Sholes Option Pricing model with the following assumptions:

 Assumptions:

 Risk-free rate (%)

1.34 

 Expected stock price volatility (%)

208 

 Expected dividend yield (%)

 Expected life of options (years)

As at March 31, 2020, the Company had 1,900,000 options outstanding with a weighted average exercise price and weighted average life of $.10 and .77 years, respectively. 1,750,000 options were exercisable with a weighted average price and weighted average life of $.10 and .68 years, respectively. 


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

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report constitute "forward-looking statements." These statements, identified by words such as "plan," "anticipate," "believe," "estimate," "should," "expect" and similar expressions include the Company's expectations and objectives regarding its future financial position, operating results and business strategy. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause its actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, general economic conditions particularly related to demand for the Company's products and services, changes in business strategy, competitive factors (including the introduction or enhancement of competitive services), pricing pressures, changes in operating expenses, fluctuation in foreign currency exchange rates, inability to attract or retain consulting, sales and/or development talent, changes in customer requirements, and/or evolving industry standards, as well as those factors discussed in the section titled "Part II, Item 1A. Risk Factors" in this Quarterly Report.

Forward looking statements are based on a number of material factors and assumptions, including the availability and final receipt of required government licenses, that sufficient working capital is available to complete the proposed activities, that contracted parties provide goods and/or services on the agreed time frames. While the Company considers these assumptions may be reasonable based on information currently available to it, they may prove to be incorrect. Actual results may vary from such forward-looking information for a variety of reasons, including but not limited to risks and uncertainties disclosed in the section titled "Risk Factors" in this Quarterly Report.

The Company intends to discuss in its Quarterly Reports and Annual Reports any events or circumstances that occurred during the period to which such documents relate that are reasonably likely to cause actual events or circumstances to differ materially from those disclosed in this registration statement. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on its business or the extent to which any factor, or combination of such factors, may cause actual results to differ materially from those contained in any forwarding looking statement.  You are advised to carefully review the reports and documents that the Company files from time to time with the United States Securities Exchange Commission (the "SEC"), particularly its periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934 (the "Exchange Act").

OVERVIEW

Live Current Media Inc. (the "Company" or "Live Current") was incorporated under the laws of the State of Nevada on October 10, 1995.  The Company operates a segment of its business through its wholly owned subsidiary, Domain Holdings Inc., originally formed under the laws of British Columbia, Canada on July 4, 1994 and re-domiciled to Alberta, Canada on April 14, 1999 ("DHI").  The Company is also the majority shareholder of Perfume.com Inc. (95% ownership), formed under the laws of the State of Delaware on March 13, 2008.  Perfume.com Inc. is currently dormant and does not carry on an active business.  References herein to the Company include DHI and Perfume.com Inc. (collectively, the "Subsidiaries") unless otherwise stated.

The Company is a development stage, technology company involved in the entertainment industry. Currently developing two projects for release in 2020 and 2021, SPRT MTRX and Boxing.com FEDERATION respectively, management is positioning the Company to take advantage of the exciting and rapidly growing eSports and Gaming sector.

PLAN OF OPERATIONS 

Market.  70% of Americans play games online.  54% of those gamers are male, 46% are female and 52% are college educated.  60% play on their mobile devices.  Gamers play for mental stimulation, relaxation and stress relief, while prize money is a major inducement.


In 2019, eSports prize money topped $1 billion for the first time, increasing 10-fold from prizes awarded in 2010, with expectations that prizes will keep accelerating to reach $1.8 billion by 2022 according to Statista.  Competitions can have prizes ranging far north of $1 million.

In addition, gaming advertising revenue has doubled in the last two years.  The most common platform for playing games is the smartphone leaving no doubt as to why gaming is taking off.

SPRT MTRX

SPRT MTRX is a gaming app, available in both iPhone and Android versions, in which players bid on the final scores of NHL games.  The events are organized as "Challenges" and cover multiple games over one day.  A cash prize is awarded to the player who receives the most points for correctly bidding on the final scores of the hockey games included in the Challenge.  The system for bidding on the final scores is unique in the gaming industry. 

Business Model.  The business model entails offering free prizes to introduce and attract players to the game, developing a large contingent of users and delivering advertisements.  This model has proven popular among gamers as the lure of free money is a very attractive inducement. 

Development.  SPRT MTRX is currently active. The Company will continue to develop and enhance the SPRT MTRX through 2020 by adding additional functionality and more sports such as NFL, MLB, NBA and EPL but does not anticipate generating any significant revenue from SPRT MTRX in fiscal 2020.

Boxing.com FEDERATION

Boxing.com FEDERATION is being developed to mimic what the sport of boxing should be.  However the fights will be fought by gamers on their computers.

League.  FEDERATION will consist of an amateur league where fighters hone their skills and can win amateur belts with small cash prizes and a professional league where fighters win title belts and larger cash prizes.  The top amateurs will automatically join the professional league where fighters can win title belts in nine different weight classes and cash prizes for getting in to the top 10 fighters per weight class.  There will also be title belts for champions in each country in the world just as there is in real boxing.  These champions will also receive cash prizes for winning their belts.

Ranking.  The ranking system will be organized by a digital algorithm designed by Live Current's engineers.  Fighters can challenge other fighters in the FEDERATION by choosing those within 100 of their own placing in the rankings.  Only fighters who are online can be challenged and they must accept the challenge or drop in the rankings to the spot of the challenger.  If they accept the challenge and lose, they only drop one place but get an L on their record.  Rankings will be automatically adjusted monthly to promote activity and discourage inactivity.

Schedule.  FEDERATION is currently in development and is scheduled for release in 2021.  The Company does not anticipate generating revenue from FEDERATION in 2020.

The Company does not believe it has the necessary cash requirements for the next 12 months without having to raise additional funds.

RESULTS OF OPERATIONS

The following selected financial data was derived from the Company's unaudited interim consolidated financial statements for the periods ended March 31, 2020 and March 31, 2019.  The information set forth below should be read in conjunction with the Company's financial statements and related notes included elsewhere in this Quarterly Report. 


Summary of Results

    For the three
month period
ended
March 31, 2020
(unaudited)
    For the three
month period
ended
March 31, 2019
(unaudited)
 
             
Loss from operations $ 331,466   $ (116,168 )
             
Net and comprehensive income (Loss) $ 331,466   $ (116,168 )

Revenue

The Company did not recognize recurring revenues during the three month period ending March 31, 2020 or the three month period ending March 31, 2019.  The Company does not anticipate recognizing recurring revenues in 2020. 

At March 31, 2020 the Company had an accumulated deficit of $17,638,175.  The Company is presently in the development stage of their business and cannot provide any assurances that it will be able to generate regular or recurring revenues in the near future.

Results of Operation

The Company recorded a net income of $331,466 for the quarter ended March 31, 2020 compared to a net loss of $116,168 for the quarter ended March 31, 2019.  The bulk of the difference was attributable to a one time sale of a distribution agreement and the fair value change of the equity investment as part of a sale of marketing rights agreement.

Liquidity and Capital Resources

At March 31, 2020, the Company had working capital of $210,313, a decrease from the Company's working capital of $324,105 at December 31, 2019.  During the three months ended March 31, 2019 the Company had negative operating cash flow.  Due to the fact that the Company has incurred recurring losses and anticipates incurring further losses in the future, there is substantial doubt as to the Company's ability to continue as a going concern.

The Company anticipates that the costs of developing SPRT MTRX and Boxing.com FEDERATION will be significantly greater than its current financial resources. The Company does not believe that it has the necessary cash requirements for the next 12 months without having to raise additional funds.

The Company does not anticipate purchasing any plant or significant equipment in the immediate future

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.

CRITICAL ACCOUNTING POLICIES

The Company reviews individual domain names in the portfolio for potential impairment throughout the fiscal year in determining whether a particular URL should be renewed. Impairment is recognized for names that are not renewed. The Company performs a qualitative assessment of the portfolio of domain names in the fourth quarter of each year, to determine whether it is more likely than not that the fair market value of a domain name is less than its carrying amount. As part of the assessment, certain qualitative factors are considered, including macro-economic conditions, industry and market conditions, non-renewal of names, as well as other factors. If there are indications of impairment following the qualitative impairment testing, further quantitative impairment testing would be necessary. When it is determined that the fair value of a domain name is less than its carrying amount, impairment is recognized.


RECENT ACCOUNTING PRONOUNCEMENTS

There are no new accounting pronouncements that materially impact the Company's condensed consolidated financial statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4.  CONTROLS AND PROCEDURES.

As of March 31, 2020, an evaluation was performed under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures.  These controls and procedures are based on the definition of disclosure controls and procedures in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934.

Based on that evaluation as of March 31, 2020, the Company's management, including its principal executive officer and principal financial officer, concluded that the Company’s disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. 

Management, including the Company's principal financial officer and principal executive officer, have concluded that the Company's disclosure controls and procedures provide reasonable assurance that the controls and procedures will meet management's desired control objectives.  In designing and evaluating the Company's control system, management recognized that any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Further, the design of a control system must reflect the fact that there are resource constraints, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, that may affect the Company's operations have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

During the fiscal quarter ended March 31, 2020, there were no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

The Company was not involved in any material legal proceedings during the interim period ended March 31, 2020.

ITEM 1A.  RISK FACTORS.

An investment in the Company's securities involves a high degree of risk.  You should carefully consider the risks described below and the other information in this registration statement before investing in its common shares. If any of the following risks occur, the Company's business, operating results and financial condition could be seriously harmed. The trading price of its common shares could decline due to any of these risks, and you may lose all or part of your investment.

You should consider each of the following risk factors and the other information in this registration statement, including the Company's financial statements and the related notes, in evaluating its business and prospects. The risks and uncertainties described below are not the only ones that impact on the Company's business. Additional risks and uncertainties not presently known to the Company or that the Company currently consider immaterial may also impair its business operations.  If any of the following risks do occur, its business and financial results could be harmed. In that case, the trading price of its common stock could decline.

Risks Associated with the Company's eSports and Gaming Business

Licensing.  Currently, other than business and operations licenses applicable to most commercial ventures, the Company is not required to obtain any governmental approval for its business operations.  There can be no assurance, however, that governmental institutions will not, in the future, impose licensing or other requirements on the Company.  Additionally, as noted below, there are a variety of laws and regulations that may, directly or indirectly, have an impact on the Company's business.

Privacy Legislation and Regulations.  While the Company is not currently subject to licensing requirements, entities engaged in operations over the Internet, particularly relating to the collection of user information, are subject to limitations on their ability to utilize such information under federal and state legislation and regulation. In 2000, the Gramm-Leach-Bliley Act required that the collection of identifiable information regarding users of financial services be subject to stringent disclosure and "opt-out" provisions. While this law and the regulations enacted by the Federal Trade Commission and others relates primarily to information relating to financial transactions and financial institutions, the broad definitions of those terms may make the businesses entered into by the Company and its strategic partners subject to the provisions of the Act. This, in turn, may increase the cost of doing business and make it unattractive to collect and transfer information regarding users of services. This, in turn, may reduce the revenues of the Company and its strategic partners, thus reducing potential revenues and profitability. Similarly, the Children On-line Privacy and Protection Act ("COPPA") imposes strict limitations on the ability of Internet ventures to collect information from minors. The impact of COPPA may be to increase the cost of doing business on the Internet and reducing potential revenue sources. The Company may also be impacted by the US Patriot Act, which requires certain companies to collect and provide information to United States governmental authorities. A number of state governments have also proposed or enacted privacy legislation that reflects or, in some cases, extends the limitations imposed by the Gramm-Leach-Bliley Act and COPPA. These laws may further impact the cost of doing business on the Internet and the attractiveness of Live Current's inventory of domain names.

Advertising Regulations.  In response to concerns regarding "spam" (unsolicited electronic messages), "pop-up" web pages and other Internet advertising, the federal government and a number of states have adopted or proposed laws and regulations which would limit the use of unsolicited Internet advertisements. While a number of factors may prevent the effectiveness of such laws and regulations, the cumulative effect may be to limit the attractiveness of effecting and promoting sales on the Internet, thus reducing the value of the Company's advertising driven revenue model.


There are currently few laws or regulations that specifically regulate communications or commerce on the Internet.  However, laws and regulations may be adopted in the future that address issues such as user privacy, pricing and the characteristics and quality of products and services.  For example, the Telecommunications Act of 1996 sought to prohibit transmitting various types of information and content over the Internet.  Several telecommunications companies have petitioned the Federal Communications Commission to regulate Internet service providers and on-line service providers in a manner similar to long distance telephone carriers and to impose access fees on those companies.  This could increase the cost of transmitting data over the Internet.  Moreover, it may take years to determine the extent to which existing laws relating to issues such as intellectual property ownership, libel and personal privacy are applicable to the Internet.  Any new laws or regulations relating to the Internet or any new interpretations of existing laws could have a negative impact on Live Current's business and add additional costs to doing business on the Internet.

Competition.  The Company competes with many companies possessing greater financial resources and technical facilities than itself in the B2C (business-to-consumer) market as well as for the recruitment and retention of qualified personnel. In addition, some of these competitors have been in business for longer than Live Current and may have established more strategic partnerships and relationships than the Company.

Dependence on One or a Few Major Customers.  The Company does not currently depend on any single customer for a significant proportion of its business. However, as the Company enters into strategic transactions, the Company may choose to grant exclusive rights to a small number of parties or otherwise limit its activities that could, in turn, create such dependence. The Company, however, has no current plans to do so.

Patents, Trademarks and Proprietary Rights.  On November 16, 2007, The Company filed a trademark application with the US Patent & Trademark Office ("USPTO") for the mark "LIVE CURRENT".  A certificate of registration was issued on October 14, 2008 and the mark was assigned registration number 3,517,876.

The Company will consider seeking further trademark protection for its online businesses, however, the Company may be unable to avail itself of trademark protection under United States laws. Consequently, the Company will seek trademark protection only where it has determined that the cost of obtaining protection, and the scope of protection provided, results in a meaningful benefit to the Company.

Market Acceptance.  Both SPRT MTRX and FEDERATION are new products in a product abundant gaming market and there is no guarantee that they will be accepted by the market.  In addition to acceptance, should they be accepted, there is no guarantee that they will maintain their popularity in a notoriously fickle gaming market.

Suspension of Live, Professional Sports.  SPRT MTRX relies on live, professional sports to provide game content.  Without live professional sports, SPRT MTRX will be forced to change its business model.  This could possibly include developing artificial intelligence induced content.  There could be significant costs associated with this change and there is no guarantee that it would meet with public acceptance.

Risks Related to the Company's Securities

Additional financing will be required. The Company anticipates that it will require significant additional financing to fund its proposed business development plans. The costs of developing the Company’s platforms is anticipated to be substantially greater than the Company’s existing financial resources, and the Company anticipates that it will require substantial financing to develop and operate its businesses over the next 12 months.

If the Company is unable to obtain additional financing when needed, the Company may not be able to complete its business development plans or its business could fail.  The Company will scale back its development plans depending upon its existing financial resources.

The Company’s ability to obtain future financing will be subject to a number of factors, including the variability of the global economy, investor interest in our planned business projects, and the performance of equity markets in general. These factors may make the timing, amount, terms or conditions of additional financing unavailable to the Company. If the Company is not able to obtain financing when needed or in an amount sufficient to enable us to complete our programs, the Company may be required to scale back its business development plans.

Additional equity financing will dilute existing stockholders. The most likely source of future financing presently available to the Company is through the sale of shares of its common stock. Issuing shares of common stock, for financing purposes or otherwise, will dilute the interests of existing stockholders.


The Company's stock price is volatile.  The stock markets in general, and the stock prices of internet companies in particular, have experienced extreme volatility that often has been unrelated to the operating performance of any specific public company.  The market price of the Company's Common Stock is likely to fluctuate in the future, especially if the Company's Common Stock is thinly traded.  Factors that may have a significant impact on the market price of the Company's Common Stock include:

(a) actual or anticipated variations in the Company's results of operations;

(b) the Company's ability or inability to generate new revenues;

(c) increased competition;

(d) government regulations, including internet regulations;

(e) conditions and trends in the internet industry;

(f) proprietary rights; or
(g) rumors or allegations regarding the Company's financial disclosures or practices.

The Company's stock price may be impacted by factors that are unrelated or disproportionate to its operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of the Company's Common Stock.

The Company does not expect to pay dividends in the foreseeable future.  The Company has never paid cash dividends on its Common Stock and has no plans to do so in the foreseeable future.  The Company intends to retain earnings, if any, to develop and expand its business.

"Penny Stock" rules may make buying or selling the Company's Common Stock difficult, and severely limit its market and liquidity.  Trading in The Company's Common Stock is subject to certain regulations adopted by the SEC commonly known as the "penny stock" rules.  The Company's Common Stock qualifies as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934, which imposes additional sales practice requirements on broker/dealers who sell the Common Stock in the aftermarket.  The "penny stock" rules govern how broker-dealers can deal with their clients and "penny stocks".  For sales of The Company's Common Stock, the broker/dealer must make a special suitability determination and receive from you a written agreement prior to making a sale to you.  The additional burdens imposed upon broker-dealers by the "penny stock" rules may discourage broker-dealers from effecting transactions in The Company's Common Stock, which could severely limit their market price and liquidity of its Common Stock.  This could prevent you from reselling your shares and may cause the price of the Common Stock to decline.

Lack of operating revenues.  The Company has limited operating revenues and is expected to continue to do so for the foreseeable future.  Management has assessed the Company's ability to continue as a going concern and the financial statements included with this registration statement includes disclosure that there is a substantial doubt as to the Company's ability to continue as a going concern.  The audit report of the Company's principal independent accountants for the years ended December 31, 2019 and December 31, 2018 includes a statement regarding the uncertainty of the Company's ability to continue as a going concern.  The Company's failure to achieve profitability and positive operating revenues could have a material adverse effect on its financial condition and results of operations, and could cause the Company's business to fail.


No assurance that forward-looking assessments will be realized.  The Company's ability to accomplish their objectives and whether or not they are financially successful is dependent upon numerous factors, each of which could have a material effect on the results obtained. Some of these factors are in the discretion and control of management and others are beyond management's control. The assumptions and hypotheses used in preparing any forward-looking assessments contained herein are considered reasonable by management. There can be no assurance, however, that any projections or assessments contained herein or otherwise made by management will be realized or achieved at any level.

Uncertainty due to Global Outbreak of COVID-19. In March of 2020, the World Health Organization declared an outbreak of COVID-19 Global pandemic. The COVID-19 has impacted vast array of businesses through the restrictions put in place by most governments internationally, including the USA federal government as well as provincial and municipal governments, regarding travel, business operations and isolation/quarantine orders. At this time, it is unknown to what extent the impact of the COVID-19 outbreak may have on the Company as this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place world-wide to fight the virus. While the extent of the impact is unknown, the COVID-19 outbreak may hinder the Company’s ability to raise financing for exploration or operating costs due to uncertain capital markets, supply chain disruptions, increased government regulations and other unanticipated factors, all of which may also negatively impact the Company’s business and financial condition.

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

The Company did not engage in any sales of its equity securities during the interim period ended March 31, 2020.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION

On January 29, 2020, the Company made the decision to exit the medical device distribution business and agreed to sell back to Cell MedX Corp. (“Cell MedX”) the exclusive worldwide distribution rights to Cell MedX’s eBalance microcurrent device, acquired in 2019 (the “Distribution Rights”).  Under the terms of the agreement, the Company sold the Distribution Rights back to Cell MedX in consideration for a royalty on future sales of the eBalance device capped at US$507,500, plus warrants to purchase up to 2,000,000 shares in the common stock of Cell MedX (the "Warrants") exercisable for a period of three (3) years.  1,000,000 of the Warrants are exercisable at a price of $US0.50 per share (the "$0.50 Warrants"), with the remaining 1,000,000 Warrants exercisable at US$1.00 per share (the "$1.00 Warrants").  The Warrants are subject to an acceleration right, with the $0.50 Warrants being subject to acceleration if Cell MedX's common stock trades at or above $1.00 per share for 30 consecutive trading days, and the $1.00 Warrants being subject to acceleration if Cell MedX's common stock trades at or above $1.75 per share for 30 consecutive trading days.  Cell MedX may buyout the royalty at any time during the first twelve months following the effective date of the agreement for 85% of the remaining amount of the royalty still payable. 


ITEM 6.  EXHIBITS.

The following exhibits are either provided with this Quarterly Report or are incorporated herein by reference:

Exhibit

Number

Description of Exhibit

3.1

Articles of Incorporation(1)

3.2

Certificate of Amendment to Articles - Name Change to Communicate com Inc. (1)

3.3

Certificate of Amendment to Articles - Name Change to Live Current Media Inc. (1)

3.4

Certificate of Amendment to Articles - Increase in Authorized Capital to 500,000,000 shares of common stock, par value of $0.001(1)

3.5

Amended and Restated Bylaws(1)

10.1

2018 Stock Option Plan(2)

10.2

Buyback Agreement between Live Current Media Inc, and Cell MedX Corp. dated January 29, 2020(3)

21.1

List of Subsidiaries(1)

31.1 Section 302 Certifications under Sarbanes-Oxley Act of 2002
32.1 Section 906 Certifications under Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document.

101.SCH

XBRL Taxonomy Extension Schema.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase.

101.DEF

XBRL Taxonomy Extension Definition Linkbase.

101.LAB

XBRL Taxonomy Extension Label Linkbase.

101.PRE XBRL Taxonomy Extension Presentation Linkbase.

Notes:

(1) Filed as an exhibit to the Company's Registration Statement on Form 10, originally filed on February 1, 2018.

(2) Filed as an exhibit to the Company's Registration Statement on S-8, filed on January 9, 2019.

(3) Filed as an exhibit to the Company’s Current report on Form 8-K, filed on January 31, 2020.

 


SIGNATURES

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.

 

 

 

LIVE CURRENT MEDIA INC.

 

 

 

 

 

 

 

 

 

 

 

 

Date:

May    , 2020

By:

 /s/ DAVID M. JEFFS

 

 

 

DAVID M. JEFFS

 

 

 

Chief Executive Officer, President, Chief Financial Officer and Secretary

 

 

 

(Principal Executive Officer and Principal Financial Officer)