UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
From ________________ to ________________
Commission File Number
(Exact name of registrant as specified in its charter)
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(I.R.S. Employer Identification No.) |
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200 - |
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(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | |||||
| N/A | N/A | N/A | |||||
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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. | ☒ | 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 prior 12 months (or for such shorter period that the registrant was required to submit such files). | ☒ | No | ☐ | |||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | Emerging growth company | |
| ☒ | Smaller reporting 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 |
The number of shares outstanding of Common Stock, $0.001 par value per share, on August 12, 2022 was
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The accompanying unaudited condensed consolidated financial statements of Live Current Media Inc. as at June 30, 2022, have been prepared by the Company's management in conformity with accounting principles generally accepted in the United States of America and 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' deficit 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- and six-month periods ended June 30, 2022, are not necessarily indicative of the results that can be expected for the year ending December 31, 2022.
| LIVE CURRENT MEDIA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2022 and December 31, 2021 - unaudited |
| June 30, | December 31, | |||||
| 2022 | 2021 | |||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash | $ | $ | ||||
| Prepaid expenses and other current assets | ||||||
| Total Current Assets | ||||||
| Fixed assets, net | ||||||
| Intangible assets, net | ||||||
| Other assets | ||||||
| Total Assets | $ | $ | ||||
| LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | $ | ||||
| Accrued expenses | ||||||
| Accrued rent payable | ||||||
| Accrued interest payable | ||||||
| Deferred subscription revenue | ||||||
| Convertible notes | ||||||
| Secured promissory note | ||||||
| Right to use lease liability | ||||||
| Total Current Liabilities | ||||||
| Convertible notes | ||||||
| Interest payable | ||||||
| Right to use lease liability | ||||||
| Total Liabilities | ||||||
| Commitments and contingencies (Note 6) | ||||||
| Stockholders' Deficit: | ||||||
| Preferred stock outstanding, respectively |
||||||
| Common stock $ |
||||||
| Stock subscription receivable | ( |
) | ||||
| Additional paid in capital | ||||||
| Accumulated deficit | ( |
) | ( |
) | ||
| Total Stockholders' Deficit | ( |
) | ||||
| Total Liabilities and Stockholders' Deficit | $ | $ |
The accompanying notes are an integral part of these financial statements.
|
LIVE CURRENT MEDIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the three and six month periods ended June 30, 2022 and 2021 - unaudited |
| Three month period ended June 30, | Six month period ended June 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| Revenues | $ | $ | |||||||||||
| Operating Expenses | |||||||||||||
| Software and platform development costs | |||||||||||||
| Professional fees | |||||||||||||
| Depreciation and amortization | |||||||||||||
| Wages and salaries | |||||||||||||
| Advertising | |||||||||||||
| General and administrative | |||||||||||||
| Total Operating Expenses | |||||||||||||
| Loss from Operations | ( |
) | ( |
) | ( |
) | ( |
) | |||||
| Other income (expense) | |||||||||||||
| Interest expense | ( |
) | ( |
) | ( |
) | ( |
) | |||||
| Forgiveness of subscription and interest receivable | ( |
) | |||||||||||
| Gain on forgiveness of CARES Act loan | |||||||||||||
| Impairment of right to use lease asset | ( |
) | ( |
) | |||||||||
| Change in fair value of warrants | ( |
) | ( |
) | |||||||||
| Gain on settlement of lease liability | |||||||||||||
| Other miscellaneous income (expense), net | ( |
) | ( |
) | |||||||||
| Total other income (expense) | ( |
) | ( |
) | |||||||||
| Income (Loss) Before Income Taxes | ( |
) | ( |
) | ( |
) | ( |
) | |||||
| Income Taxes | |||||||||||||
| Net Income (Loss) | $ | ( |
) | ( |
) | ( |
) | $ | ( |
) | |||
| Net Loss per Common Share: | |||||||||||||
| Basic & Diluted | $ | ( |
) | ( |
) | ( |
) | $ | ( |
) | |||
| Weighted Average Common Shares Outstanding: | |||||||||||||
| Basic & Diluted | |||||||||||||
The accompanying notes are an integral part of these financial statements.
| LIVE CURRENT MEDIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT For the three and six month periods ended June 30, 2022 and 2021 - unaudited |
| Additional | Stock | Total | ||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Subscription | Accumulated | Stockholders' | |||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Receivable | Deficit | Deficit | |||||||||||||||||
| Balance at January 1, 2021 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||
| Net income | - | - | - | - | - | - | ||||||||||||||||||
| Stock based compensation | - | - | - | - | - | - | ||||||||||||||||||
| Balance at March 31, 2021 | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( |
) | ( |
) | ||||||||||||||
| Stock based compensation | - | - | - | - | - | - | ||||||||||||||||||
| Balance at June 30, 2021 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||
| Balance at January 1, 2022 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||
| Net loss | - | - | - | - | - | - | ( |
) | ( |
) | ||||||||||||||
| Stock based compensation | - | - | - | - | - | - | ||||||||||||||||||
| Forgiveness of subscription receivable | - | - | - | - | - | - | ||||||||||||||||||
| Balance at March 31, 2022 | - | ( |
) | ( |
) | |||||||||||||||||||
| Conversion to shares of common stock: | ||||||||||||||||||||||||
| Preferred shares (Note 5) | ( |
) | ( |
) | - | |||||||||||||||||||
| Convertible debt and accrued interest to shares of common stock (Note 4) | ||||||||||||||||||||||||
| Common stock payable (Note 5) | ||||||||||||||||||||||||
| Options exercised on a cashless basis (Note 5) | ( |
) | - | |||||||||||||||||||||
| Recapitalization (Note 1) | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( |
) | ( |
) | ||||||||||||||
| Issuance of warrants | ||||||||||||||||||||||||
| Balance at June 30, 2022 | - | $ | - | $ | $ | $ | - | $ | ( |
) | $ | |||||||||||||
The accompanying notes are an integral part of these financial statements.
|
LIVE CURRENT MEDIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the six month periods ended June 30, 2022 and 2021 - unaudited |
| 2022 | 2021 | |||||
| Cash Flows From Operating Activities: | ||||||
| Net income (loss) | $ | ( |
) | $ | ( |
) |
| Adjustments to reconcile net income (loss) to net cash used by operating activities | ||||||
| Depreciation | ||||||
| Amortization of debt discount | ||||||
| Stock based compensation | ||||||
| Professional fees paid with convertible debt | ||||||
| Wages and salaries paid with stock payable | ||||||
| Stock subscription and interest receivables forgiven | ||||||
| Impairment of lease asset | ||||||
| Change in fair value of warrants | ||||||
| Gain on settlement of lease liability | ( |
) | ||||
| Gain on forgiveness of CARES Act note | ( |
) | ||||
| Change in: | ||||||
| Prepaid expenses | ( |
) | ( |
) | ||
| Other assets | ( |
) | ||||
| Accounts payable | ( |
) | ||||
| Accrued expenses | ( |
) | ( |
) | ||
| Accrued rent payable | ||||||
| Deferred subscription revenue | ||||||
| Accrued interest payable | ||||||
| Net cash provided (used) by operating activities | ( |
) | ||||
| Cash Flows From Investing Activities: | ||||||
| Additions to fixed assets | ( |
) | ||||
| Cash acquired upon acquisition | ||||||
| Acquisition of intangible | ( |
) | ||||
| Net cash used by investing activities | ||||||
| Cash Flows From Financing Activities: | ||||||
| Issuance of senior secured promissory notes | ||||||
| Borrowings under vendor financing | ||||||
| Payments on promissory note | ( |
) | ( |
) | ||
| Payments on vendor financing | ( |
) | ||||
| Proceeds from issuance of warrant | ||||||
| Proceeds from exercise of stock options | ||||||
| Net cash provided by financing activities | ( |
) | ||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( |
) | ||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | ||||
| NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||
| Convertible note issued for accrued expenses | $ | $ | ||||
| Convertible note issued for accounts payable | ||||||
| Stock payable issued for accrued liabilities | ||||||
| Stock payable issued for interest payable | ||||||
| Stock payable issued for promissory note |
The accompanying notes are an integral part of these financial statements.
| LIVE CURRENT MEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the three and six month periods ended June 30, 2022 and 2021 - unaudited |
Nature of Business:
Live Current Media, Inc. (the "Company") was incorporated under the laws of the State of Nevada on October 10, 1995.
On April 22, 2022, the Company completed a reverse triangular merger (the "Merger") with Evasyst, Inc. ("KAST") and the Company's wholly owned subsidiary formed for the purpose of completing the Merger, Evasyst Acquisition Inc. ("LIVC Sub"). As part of the Merger, LIVC Sub merged with and into KAST, with KAST continuing as the surviving corporation. Upon completion of the Merger, all of the previously outstanding shares of KAST common stock were automatically converted into the right to receive
Pursuant to the Agreement and Plan of Merger dated January 20, 2022 among the Company, KAST and LIVC Sub (the "Merger Agreement"), John da Costa and Amir Vahabzadeh resigned as directors of the Company and Mark Ollila, Heidi Steiger, Leslie S. Klinger, Justin Weissberg and Annamaria Rapakko were appointed to the board of directors. Pursuant to the Merger Agreement, on completion of the Merger, David Jeffs resigned as CEO and CFO of the Company and Mark Ollila was appointed as new CEO and Chairman of the board of directors and Steve Smith was appointed as CFO of the Company. Mr. Jeffs continues to act as President and as a director of the Company. Heidi Steiger was subsequently appointed Chair uananimously on June 21, 2022.
Although the Company was the legal acquirer of KAST, under generally accepted accounting principles, the Merger was accounted for as a reverse acquisition, with KAST being treated as the acquiring entity for accounting and financial reporting purposes. As used herein, "Live Current" refers to the Company as it existed prior to the completion of the Merger. The purchase price consideration and provisional allocation to net assets acquired is presented below.
| Fair value of consideration transferred | $ | ||
| Recognized amounts of identifiable assets acquired: | |||
| Cash and cash equivalents | $ | ||
| Prepaid expenses and other assets | |||
| Warrant | |||
| Intangible assets and goodwill | |||
| Liabilities assumed: | |||
| Accounts payable | ( |
) | |
| Accrued interest payable | ( |
) | |
| Convertible notes | ( |
) | |
| ( |
) | ||
| Net identifiable assets | $ |
Consideration transferred is comprised
The Company is in the process of finalizing the allocation of the consideration to individual net assets acquired. The Company is currently determining the fair value of domain names, and licensing agreements that were acquired. Excess consideration received over the fair value of net assets acquired will be assigned to goodwill.
From acquisition date through June 30, 2022, Live Current had no earnings and incurred a net loss of $
The pro forma financial information below represents the combined results of operations for the year ended December 31, 2021 as if the acquisition had occurred as of January 1, 2021. Based on preliminary assessment of net assets acquired, no intangible assets with definite lives have been identified thus no amortization of such intangibles is reflected in the pro forma information. The unaudited pro forma financial information is presented for informational purposes only and is neither indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the period presented nor indicative of future operating results.
| LIVE CURRENT MEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the three and six month periods ended June 30, 2022 and 2021 - unaudited |
| For the three month period | For the six month period | |||||||||||
| June 30, 2022 |
June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||
| Revenue | $ | $ | $ | $ | ||||||||
| Earnings | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
Basis of Presentation:
The condensed consolidated financial statements, including notes, of the Company are representations of the Company's management, which is responsible for their integrity and objectivity. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results for the interim periods reported. The balance sheet at December 31, 2021 was derived from audited annual consolidated financial statements but does not contain all of the footnote disclosures from the annual consolidated financial statements. All amounts presented are in U.S. dollars.
The results of operations for the six month period ended June 30, 2022 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. The Company estimates that for 2022 the anticipated effective annual federal income tax rate will be
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2022, the Company has not achieved profitable operations, has incurred recurring operating losses and further losses are possible. The Company has an accumulated deficit of approximately $
Net Loss per Share:
The Company calculates basic earnings (loss) per share by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding. We do not include the impact of any potentially dilutive common stock equivalents in our basic earnings (loss) per share calculations. Diluted earnings per share reflect potentially dilutive common stock equivalents, including options and warrants that could share in our earnings through the conversion of common shares, except where their inclusion would be anti-dilutive. For the six month periods ended June 30, 2022 and 2021, the Company had the following securities are excluded from the calculation of diluted income per share as their effect would have been anti-dilutive to the net loss for the periods.
| LIVE CURRENT MEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the three and six month periods ended June 30, 2022 and 2021 - unaudited |
| June 30, 2022 | June 30, 2021 | |||||
| Stock options | ||||||
| Restricted stock units | ||||||
| Warrants | ||||||
| Convertible notes | ||||||
| Preferred stock | ||||||
Consolidation
The Company’s consolidated financial statements include the accounts of its wholly-owned subsidiaries Live Current Media Inc. and Domain Holdings Inc. The Company has three wholly owned subsidiaries Perfume.com Inc. and Rabbit Asset Purchase Corp and Neverthink Asset Purchase Corp. All intercompany balances and transactions are eliminated in consolidation.
New Accounting Pronouncements:
Accounting standards that have been issued by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.
2. Convertible Notes
Upon completion of the Merger on April 22, 2022, the Company assumed the accounting acquiree, Live Current's, convertible debt obligations. The debt was incurred by Live Current during the three month period ended March 31, 2022 and is described below.
On February 15, 2022 ("February Notes") and March 28, 2022 ("March Notes" and, together with the February Notes, the "Notes"), the Live Current issued convertible promissory notes that bear interest of
Upon issuance of the Notes, the Company recognized total debt discount of $
The Company may close a second tranche of the February Notes having a face value of $
The Company may prepay the Notes
3. Secured Promissory Notes
During 2020, the Company entered into secured promissory notes with Shanon Prum and Mark Ollila, president of the Company, for $
| LIVE CURRENT MEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the three and six month periods ended June 30, 2022 and 2021 - unaudited |
The balances of the promissory notes at June 30, 2022 and December 31, 2021 are
4. Evasyst Convertible Notes
In 2022, prior to the completion of the Merger on April 22, 2022, the Company issued additional convertible notes with the same terms as existing convertible notes as follows:
| Consulting expense | $ | ||
| Accrued wages | |||
| $ |
The convertible notes issued for consulting were to satisfy payables due for expenses incurred by Leawood VC Fund LP and Fairmont Capital, Inc., entities associated with major shareholders of the Company. The related consulting services were associated with the Merger on April 22, 2022. The fair value of the consulting expenses was based upon the number of Company shares the debtholder ultimately received upon conversion of the notes multiplied by the trading price of the shares on the date of the note.
At merger date, April 22, 2022 and December 31, 2021, the balance of convertible debt was $
During the three months ended June 30, 2022, all convertible notes and accrued interest were converted into
At the Merger date, April 22, 2022 and December 31, 2021, convertible notes and accrued interest payable were due to the following related parties as follows:
| Convertible Debt | Accrued Interest Payable | ||||||||||||
| April 22, 2022 |
December 31, 2022 |
April 22, 2022 |
December 31, 2022 |
||||||||||
| Mark Ollila | CEO, Director | $ | $ | $ | $ | ||||||||
| Company associated with Michael Gibbons | Director | ||||||||||||
| Leawood VC Fund 1 LP | > 5% shareholder | ||||||||||||
| Trust associated with Stephen Petilli | Director | ||||||||||||
| $ | $ | $ | $ | ||||||||||
| LIVE CURRENT MEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the three and six month periods ended June 30, 2022 and 2021 - unaudited |
5. Equity
The Company issued no shares in 2022 of its preferred or common stock during through the merger date. Nor were any shares issued during three month periods ended March 31, 2021. At merger date, the Company has the following stock payable amounts that represent shares of common stock to be issued:
| Authorized by board during March 29, 2022 meeting: | |||
| Compensation to Mr. Ollila | $ | ||
| Compensation to Justin Weissberg, Chairman of the Company | |||
| In exchange for: | |||
| Promissory note due to Mr. Ollila | |||
| Accrued interest due to Mr. Ollila | |||
| Accrued wages due to Mr. Ollila | |||
| Accrued wages due to Mr. Weissberg | |||
| Stock options exercised during the three month period ended March 31, 2022 | |||
| Stock payable at March 31, 2022 | $ |
The shares authorized to be issued to Mr. Ollila and Mr. Weissberg for compensation on March 29, 2022 were subsequently modified on April 20, 2022 to include vesting terms over a period of eight years. Upon completion of the Merger, all vesting of Evasyst shares were accelerated as consistent with the Company’s Stock Plan.
For the three month period ended March 31, 2022, Mr. Ollila and Mr. Weissberg's compensation was calculated based upon the number of Live Current shares that each individual received upon the merger multiplied by the trading price of Live Current shares on the date of the board authorized the compensation.
During the three months ended June 30, 2022, the Company issued
Stock options
During the six month periods ended June 30, 2022 and 2021, no options were granted, expired or forfeited. During the six month period ended June 30, 2022,
Preferred stock
During the three month period ended June 30, 2022, all of the Company's outstanding preferred stock was converted into
6. Leases
The Company leases its office in San Diego. The lease, as amended in 2019 and 2020, is for a term of four years and expires in January 2024. The initial ROU asset and liability recorded in 2019 relating to this lease were calculated based on the future lease payments due under the lease discounted using an estimated incremental borrowing rate of
The Company is in discussions with the lessor to settle the amount due. As of June 30, 2022, based on discussions, management estimates that the Company will pay $
| LIVE CURRENT MEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the three and six month periods ended June 30, 2022 and 2021 - unaudited |
For the six month periods ended June 30, 2022 and 2021, rent expense of $
In February 2022, the Company entered into a short term lease for an office space with payments due of $
7. CARES Act Loan
On May 1, 2020, the Company received a loan of $
8. Equity Investment and Royalties
Upon the completion of the Merger on April 22, 2022, the Company acquired Live Current's investment in warrants of Cell MedX Corp ("CMXC"). On March 21, 2019, Live Current entered an agreement with CMXC to purchase the direct rights to distribute the eBalance device from CMXC. On January 29, 2020 Live Current and CMXC entered a buyback agreement to sell the exclusive distribution rights to the eBalance microcurrent device back to CMXC.
On June 30, 2022, the fair value of the warrants was $
| Assumptions: | |||
| Risk-free rate (%) | |||
| Expected stock price volatility (%) | |||
| Expected dividend yield (%) | |||
| Expected life of options (years) | |||
The sales price included a retained royalty on future sales of the eBalance device capped at US$
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this report. This discussion and analysis may contain forward-looking statements based on assumptions about our future business. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to those set forth under "Risk Factors" and elsewhere in this report.
Live Current Media Inc. (the "Company", "we", "us" or "our"") was incorporated under the laws of the State of Nevada on October 10, 1995.
On January 20, 2022, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Evasyst Inc. ("Evasyst") and the Company's wholly owned subsidiary formed for the purpose of completing the transactions set out in the Merger Agreement, Evasyst Acquisition Inc. ("LIVC Sub"). On April 22, 2022, the merger was completed. Under the terms of the Merger Agreement, the Company acquired all of the outstanding shares of Evasyst (the "Evasyst Acquisition") by means of a reverse triangular merger, whereby LIVC Submerged with and into LIVC Sub, with LIVC Sub continuing as the surviving corporation (the "Merger"). Upon completion of the Merger all of the outstanding shares of Evasyst's common stock were converted into the right to receive a total of 125,000,000 shares of the Company's common stock and each share of LIVC Sub's common stock outstanding were converted into one share of Evasyst common stock. Upon completion of the Merger, the board of directors of the Company now consists of Mark Ollila (Chairman), David Jeffs, Justin Weissberg, Leslie S. Klinger, Annamaria Rapakko and Heidi Steiger. Mr. Ollila was appointed the Chief Executive Officer of the Company, with Mr. Jeffs maintaining his previous roles as the President and Secretary of the Company and Steve Smith has been appointed as CFO of the Company.
Evasyst is a digital technology company operating the social video streaming application "Kast". Users of Kast can host public or private watch parties with friends on their PC, Mac, web or mobile device. Kast's technology allows for the creation of intimate private watch parties that scales with millions of users.
Prior to the Merger, the Company was a digital technology company primarily involved in the development of two game apps, SPRT MTRX and Trivia Matrix. Subsequent to the Merger, the Company intends to focus its business resources primarily on the development of its Kast business and also expects to continue the development of SPRT MTRX and Trivia Matrix.
During fiscal 2022, the Company intends to focus on increasing its consumer revenue streams through marketing designed to attract new users as well as negotiating content licensing arrangements to add value to the Kast video streaming service and encourage more subscribed users. There is no assurance that the Company will be able to achieve its revenue goals or to otherwise increase revenues during the next 12 months, if ever. As the Company's business is still developing, and it is still in the process of establishing itself in the social media and gaming app marketplaces, any revenues that the Company generates are likely to be subject to significant fluctuations and may be difficult to reliably predict.
RESULTS OF OPERATIONS
The Merger was accounted for as a reverse acquisition, with Evasyst being treated as the acquiring entity for accounting and financial reporting purposes. As such, the Company's financial statements will be presented as a continuation of the operations of Evasyst and not Live Current Media Inc. The operations of Live Current Media Inc. will be included in the consolidated financial statements for the Company from the effective date of the Merger, April 22, 2022.
The following selected financial data was derived from the Company's unaudited condensed interim consolidated financial statements. 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.
Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021
1
| Three month period ended June 30, | |||||||||
| 2022 | 2021 | Change | |||||||
| Revenues | $ | 67,428 | $ | 109,190 | $ | (41,762 | ) | ||
| Operating Expenses | |||||||||
| Software and platform development costs | 43,948 | 80,246 | (36,298 | ) | |||||
| Professional fees | 358,001 | 9,267 | 348,734 | ||||||
| Depreciation and amortization | 6,431 | 4,876 | 1,555 | ||||||
| Wages and salaries | 328,100 | 6,803 | 321,297 | ||||||
| Advertising | 92,416 | 1,285 | 91,131 | ||||||
| General and administrative | 188,085 | 36,170 | 151,915 | ||||||
| Total Operating Expenses | 1,016,981 | 138,647 | 878,334 | ||||||
| Loss from Operations | (949,553 | ) | (29,457 | ) | (920,096 | ) | |||
| Total other income (expense) | 227,496 | (384,334 | ) | 611,830 | |||||
| Net Income (Loss) | $ | (722,057 | ) | $ | (413,791 | ) | $ | (308,266 | ) |
Revenue
The Company earns revenues from subscription-based services from its users. Subscription services revenue is comprised of cloud-based subscription fees that provide the paying user the right to access the platform's preferred features as a "Premium User" for a period of time. The subscription contracts may be made on a monthly or annual option, beginning on the date that access is made available to the customer. Monthly subscription contracts are billed monthly, and annual subscription contracts are billed annually, all in advance. The contracts do not have a significant financing component and customer invoices are paid upfront.
The Company earned revenues of $67,428 during the three months ending June 30, 2022 as compared to revenue of $109,190 for the three months ending June 30, 2021, a decrease of $41,762. Revenue decreased during the three months ended June 30, 2022 as compared to the same period ended 2021 as a result of decreased spend on development and reduced content on the platform.
Operating Expenses
Operating Expenses for the second quarter were $1,016,981 compared with $138,647 prior period. The increase is due to Professional Services and Wages and Salaries increases as most of the Company's current employees and professional consultants began April 1, 2022, resulting in approximately $686,000 in expenses for the period. General and Administrative costs increased for the period with insurance and other operating expenses.
Other Income (Expense)
Other income (expense) for the three month period ended June 30, 2022 includes a gain on settlement of the Company's office lease of $439,230 which is a result of settling with the lessor of its former office space. The estimated settlement of $140,000 was less than the amount the Company had accrued as rent expense and as the related right of use lease liability. During the three month period ended June 30, 2021, the Company recorded an impairment of right to use lease asset of $354,895 as a result of the Company vacating its office space. Interest expense for the six month period ended June 30, 2022 was $187,495 compared to $29,377 in the six month period ended June 30, 2021 due to the new convertible notes entered into in February and March 2022.
Net Loss
The Company recorded a net loss of $722,057 for the period compared with $413,791 in the prior comparable period. The net loss for the three month period was offset by the $227,496 in Other Income, net as detailed above.
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
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| Six month period ended June 30, | ||||||||||
| 2022 | 2021 | Change | ||||||||
| Revenues | $ | 154,970 | $ | 233,997 | $ | (79,027 | ) | |||
| Operating Expenses | ||||||||||
| Software and platform development costs | 144,281 | 173,910 | (29,629 | ) | ||||||
| Professional fees | 1,206,420 | 36,693 | 1,169,727 | |||||||
| Depreciation and amortization | 11,468 | 9,698 | 1,770 | |||||||
| Wages and salaries | 1,328,914 | 28,011 | 1,300,903 | |||||||
| Advertising | 93,827 | 3,595 | 90,232 | |||||||
| General and administrative | 245,134 | 95,834 | 149,300 | |||||||
| Total Operating Expenses | 3,030,044 | 347,741 | 2,682,303 | |||||||
| Loss from Operations | (2,875,074 | ) | (113,744 | ) | (2,761,330 | ) | ||||
| Total other income (expense) | 96,378 | (155,459 | ) | 251,837 | ||||||
| Net Income (Loss) | $ | (2,778,696 | ) | $ | (269,203 | ) | $ | (2,509,493 | ) | |
Revenue
The Company earned revenues of $154,970 during the six months ended June 30, 2022 as compared to revenue of $233,997 for the six months ended June 30, 2021, a decrease of $79,027. Revenue decreased during the six months ended June 30, 2022 as compared to the same period ended 2021 as a result of decreased spend on development and reduced content on the platform.
Operating Expenses
Operating Expenses for the six months ended June 30, 2022 of $3,030,044 are abnormally high for the Company ($347,741 prior period). The sharp increase in operating expenses is related to the merger transaction with Live Current Media and some related consulting and officer compensations, and reigniting operations on April 1, 2022 with new team members and software engineers
Other Income (Expense)
Other income (expense) for the six month period ended June 30, 2022 includes a gain on settlement of the Company's office lease of $439,230 which is a result of settling with the lessor of its former office space. The estimated settlement of $140,000 was less than the amount the Company had accrued as rent expense and as the related right of use lease liability. During the six month period ended June 30, 2021, the Company recorded an impairment of right to use lease asset of $354,895 as a result of the Company vacating its office space. Also during the six month period ended June 30, 2021, the Company recognized a gain on forgiveness of CARES Act loan of $265,952. Interest expense for the six month period ended June 30, 2022 was $223,180 compared to $64,618 in the six month period ended June 30, 2021 due to the new convertible notes entered into in February and March 2022.
Net Loss
The Company reported a net loss of $2,778,696 compared with $269,203 in the comparable prior period. The net loss is largely attributed to the one-time expenses listed above, as well as the rehiring of employees and software engineers during the second quarter of 2022.
Liquidity and Capital Resources
At June 30, 2022, the Company had cash and cash equivalents of $1,118,207 and negative working capital of $918,627, a decrease from the Company's negative working capital of $943,679 at December 31, 2021. During the six months ended June 30, 2022 the Company had negative operating cash flow of $1,604,771. Due to the fact that the Company has incurred recurring operating losses and anticipates incurring further operating losses in the future, there is substantial doubt as to the Company's ability to continue as a going concern.
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Secured Note Transaction
On February 15, 2022, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with Mercer Street Global Opportunity Fund LLC ("Mercer") pursuant to which the Company agreed to sell to Mercer, for gross proceeds of up to $2,500,000, Original Issue Discount Senior Convertible Promissory Notes (the "Secured Notes") having an aggregate principal amount of up to $2,700,000 and warrants (the "Secured Note Warrants") to purchase up to 5,955,882 shares of the Company's common stock in two tranches (the "Secured Note Transaction").
Under the first tranche under the Purchase Agreement, which closed upon signing of the Purchase Agreement, for gross proceeds of $1,500,000, the Company issued Secured Notes (the "First Secured Notes") in the aggregate principal amount of $1,620,000 and the Secured Note Warrants (the "First Secured Note Warrants") to purchase up to 3,573,529 shares of the Company's common stock (the "Common Stock"). The Secured Notes mature 24 months after issuance, bear interest at a rate of 4% per annum and are convertible into shares of Common Stock at an initial conversion price of $0.34 per share, subject to adjustment for certain stock splits, stock combinations and dilutive share issuances.
The Company may prepay the Secured Notes (i) at any time during the first 90 days following closing at the face value of the Secured Notes, (ii) at any time during the period from 91 to 180 days following closing at a premium of 110% of the face value of the Secured Notes, and (iii) thereafter at 120% of the face value of the Secured Notes. The Secured Notes contain a number of customary events of default. Additionally, the Secured Notes are secured by all of the assets of the Company, including a lien on and security interest in all of the issued and outstanding equity interests of the wholly-owned subsidiaries of the Company, pursuant to a security agreement that was entered into in connection with the issuance of the Secured Notes (the "Security Agreement").
The Secured Note Warrants are exercisable at an initial exercise price of $0.60 per share for a term ending on the 5 year anniversary of the date of issuance. The exercise price of the Secured Note Warrants are subject to adjustment for certain stock splits, stock combinations and dilutive share issuances.
Subject to the terms and conditions set forth in the Purchase Agreement, for gross proceeds of $1,000,000 the Company and Mercer may close a second tranche for an additional Secured Note having an aggregate principal amount of $1,080,000 (the "Second Secured Note") and additional Secured Note Warrants to purchase up to 2,382,353 shares of Common Stock (the "Second Secured Note Warrants"). There is no assurance that a second tranche will be completed or that the Second Secured Note and the Second Secured Note Warrants will be sold under the Purchase Agreement.
In connection with the Secured Note Transaction, the Company paid to registered broker dealers a cash fee of $120,000 and issued an aggregate of 221,402 shares of Common Stock at a deemed price of $0.281 per share. If a second tranche is completed under the Purchase Agreement, the Company will pay a further cash fee equal to 8% of the funds raised in the second tranche, plus shares of Common Stock in an amount equal to 4% of the funds raised in the second tranche divided by the last closing price of the Common Stock prior to closing of the second tranche.
March 2022 Notes
On March 28, 2022, for gross proceeds of $886,000, the Company issued Original Issue Discount Senior Unsecured Convertible Promissory Notes (the "Unsecured Notes") having an original principal amount equal to $956,880 and warrants (the "Unsecured Note Warrants") to purchase up to 2,110,763 shares of Common Stock (the "March Private Placement").
The Unsecured Notes are unsecured, mature 24 months after issuance, bear interest at a rate of 4% per annum and are convertible into shares of Common Stock at an initial conversion price of $0.34 per share, subject to adjustment for certain stock splits, stock combinations and dilutive share issuances. The Company may prepay the Unsecured Notes (i) at any time during the first 90 days following closing at the face value of the Unsecured Notes, (ii) at any time during the period from 91 to 180 days following closing at a premium of 110% of the face value of the Unsecured Notes, and (iii) thereafter at 120% of the face value of the Unsecured Notes. The Unsecured Notes contain a number of customary events of default.
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The Unsecured Note Warrants are exercisable at an initial exercise price of $0.60 per share for a term ending on the 5 year anniversary of the date of issuance. The exercise price of the Unsecured Note Warrants are subject to adjustment for certain stock splits, stock combinations and dilutive share issuances.
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 intangible assets in the portfolio for potential impairment throughout the fiscal year in determining whether a particular intangible asset 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 it's carrying amount, impairment is recognized.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
At the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company's management, including the President and Principal Executive Officer ("PEO") and Principal Financial Officer ("PFO"), of the effectiveness of the design and operations of the Company's disclosure controls and procedures (as defined in Rule 13a - 15(e) and Rule 15d - 15(e) under the Exchange Act). Based on that evaluation, the PEO and the PFO have concluded that as of the end of the period covered by this report, the Company's disclosure controls and procedures were not effective as it was determined that there were material weaknesses affecting our disclosure controls and procedures.
Management of the Company believes that these material weaknesses are due to the small size of the Company's accounting staff. The small size of the Company's accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As the Company grows, management expects to increase the number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.
During the fiscal quarter ended June 30, 2022, 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.
ITEM 5. OTHER INFORMATION
None.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company was not involved in any material legal proceedings during the interim period ended June 30, 2022.
ITEM 1A. RISK FACTORS.
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An investment in the Company's common stock involves a high degree of risk. You should carefully consider the risks described below and in other reports filed by the Company before investing in our common stock. Before making a decision to invest in the Company's securities, you should carefully consider the following risk factors, as well as the risks described under "Risk Factors" in any applicable prospectus supplement and the risks described in the Company's most recent Annual Report on Form 10-K, or any updates to our risk factors described in the Company's Quarterly Reports on Form 10-Q.
If any of these risks occur, the Company's business, operating results and financial condition could be seriously harmed, which could in turn adversely affect your investment. The market price of our securities could decline due to any of these risks, and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties, including those of which we are currently unaware or that we deem immaterial, could also affect our business or your investment in the Company's securities.
Risks Related to the Company's Business
Our Efforts to Attract and Retain Users may not be Successful. We have experienced significant user growth over the past several years. Our ability to continue to attract users will depend in part on our ability to effectively market our service, consistently provide our users with compelling content choices, as well as a quality experience for selecting and viewing factual entertainment. Furthermore, the relative service levels, content offerings, pricing and related features of competitors to our service may adversely impact our ability to attract and retain users. Competitors include other entertainment video providers, such as Multichannel Video Programming Distributors (MVPDs) and Subscription Video on Demand (SvoD) services. If consumers do not perceive our service offering to be of value, including if we introduce new or adjust existing features, adjust pricing or service offerings or change the mix of content in a manner that is not favorably received by them, we may not be able to attract and retain users. In addition, we believe that many of our users rejoin our service or originate from word-of-mouth advertising from existing users. If our efforts to satisfy our existing users are not successful, we may not be able to attract users, and as a result, our ability to maintain and/or grow our business will be adversely affected. Users may cancel our service for many reasons, including: a perception that they do not use the service sufficiently, the need to cut household expenses, selection of content is unsatisfactory, competitive services provide a better value or experience and customer service issues are not satisfactorily resolved. Membership growth is also impacted by seasonality, with the first quarter historically representing our greatest growth, also affecting the timing of our content release schedules. We must continually add new users both to replace cancelled users and to grow our business beyond our current user base. If we do not grow as expected, we may not be able to adjust our expenditures or increase our per user revenues commensurate with the lowered growth rate, such that our margins, liquidity and results of operations may be adversely impacted, and our ability to operate may be strained. If we are unable to successfully compete with current and new competitors in both retaining our existing users and attracting new users, our business will be adversely affected. Further, if excessive numbers of users cancel our service, we may be required to incur significantly higher marketing expenditures than we currently anticipate to replace these users with new users.
Operating Results are Likely to Fluctuate Significantly. We expect our operating results to fluctuate significantly in the future based on a variety of factors, many of which are outside our control and difficult to predict. As a result, period-to-period comparisons of our operating results may not be a good indicator of our future or long-term performance. The following factors may affect us from period-to-period and may affect our long-term performance:
• our ability to maintain and develop new and existing revenue-generating relationships;
• our ability to improve or maintain gross margins in our business;
• the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations and infrastructure;
• our ability to significantly increase our subscriber base and retain customers;
• our ability to enforce our contracts and collect receivables from third parties;
• our ability to develop, acquire and maintain an adequate breadth and depth of content via original productions, co-productions, commissions and/or licenses;
• changes by our competitors to their product and service offerings;
• increased competition;
• our ability to detect and comply with data collection and privacy regulation and customer questions related thereto in every jurisdiction in which we operate;
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• changes in promotional support or other aspects of our relationships with our partners through which we make our service available, including the MVPDs and/or the vMVPDs (virtual multichannel video programming distributors), through which we offer our content;
• our ability to effectively manage the development of new business segments and markets, and determine appropriate contract and licensing terms;
• our ability to maintain and develop new and existing marketing relationships;
• our ability to maintain, upgrade and develop our website, our applications through which we offer our service on our customers' devices and our internal computer systems;
• fluctuations in the use of the Internet for the purchase of consumer goods and services such as those offered by us;
• technical difficulties, system downtime or Internet disruptions;
• our ability to attract new and qualified personnel in a timely and effective manner and retain existing personnel;
• our ability to attract and retain sponsors and prove that our sponsorship offerings are effective enough to justify a pricing structure that is profitable for us;
• the success of our program sales to other media companies;
• our ability to successfully manage the integration of operations and technology resulting from possible future acquisitions;
• governmental regulation and taxation policies; and
• general economic conditions and economic conditions specific to the Internet, online commerce and the media industry.
Managing Growth. We have expanded rapidly since we launched our subscription service in March 2020 We anticipate that further expansion of our operations will be required to achieve significant growth in our products, lines of business and user base and to take advantage of favorable market opportunities. Any future expansion will likely place significant demands on our managerial, operational, administrative and financial resources. If we are not able to respond effectively to new or increased demands that arise because of our growth, or, if in responding, our management is materially distracted from our current operations, our business may be adversely affected. In addition, if we do not have sufficient breadth and depth of content necessary to satisfy increased demand arising from growth in our user base, our user satisfaction may be adversely affected.
We are continuing to expand our operations internationally, scaling our service to effectively and reliably handle anticipated growth in both users and features related to our service and ramping up our ability to produce original content. As our offerings evolve, we are managing and adjusting our business to address varied content offerings, consumer customs and practices, different technology infrastructure, different markets for factual video content, as well as differing legal and regulatory environments. As we scale our service, we are developing technology and utilizing third-party "cloud" computing services. As we ramp up our original content production, we are building out expertise in a number of disciplines, including creative, marketing, legal, finance, licensing and other resources related to the development and physical production of content. If we are not able to manage the growing complexity of our business, including improving, refining or revising our systems and operational practices related to our operations and original content, our business may be adversely affected.
Costs and Challenges Associated with Strategic Acquisitions and Investments. From time to time, we acquire or invest in businesses, content, and technologies that support our business. The risks associated with such acquisitions or investments include the difficulty of integrating solutions, operations, and personnel; inheriting liabilities and exposure to litigation; failure to realize anticipated benefits and expected synergies; and diversion of management's time and attention, among other acquisition-related risks. We may not be successful in overcoming such risks, and such acquisitions and investments may negatively impact our business.
In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquire goodwill, which must be assessed for impairment at least annually. If our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process. Acquisitions also could result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results.
Furthermore, if we do not integrate an acquired business successfully and in a timely manner, we may not realize the benefits of the acquisition to the extent anticipated. If an acquired business fails to meet our expectations, our operating results, business and financial condition may suffer. Acquisitions and investments may contribute to fluctuations in our quarterly financial results. These fluctuations could arise from transaction-related costs and charges associated with eliminating redundant expenses or write-offs of impaired assets recorded in connection with acquisitions and investments, which could negatively impact our financial results.
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Certain of Our Growth Strategies are Untested, Unproven or not yet fully Developed. We intend to increase our revenues through expanding our subscriber base by, among other things, continuing to expand into international markets, expanding into the mobile video market. There can be no assurance that these international partnerships will be successful or result in our meeting revenue targets.
If We Experience Excessive Rates of User Churn, Our Revenues and Business will be Harmed. In order to increase our revenues, we must minimize the rate of loss of existing users while adding new users to our Kast subscription service. Our experience during our operating history indicates that there are many variables that impact churn, including the type of plan selected, user engagement with the platform and length of a user's subscription to date. As a result, in periods of rapid user growth, we believe that our average churn is likely to increase as the average length of subscription to date decreases. Similarly, in periods of slow user growth, we believe that our average churn is likely to decrease since our average user duration is longer. However, these estimates are subject to change based on a number of factors, including the percentage of users selecting monthly vs. annual plans, increased rates of subscription cancellations and decreased rates of user acquisition. We cannot assure you that these estimates will be indicative of future performance or that the risks related to these estimates will not materialize. Users may cancel their subscription to our service for many reasons, including, among others, a perception that they do not use the service sufficiently, or the belief that the service is a poor value or that customer service issues are not satisfactorily resolved. We must continually add new users both to replace users who cancel and to continue to grow our business beyond our current user base. If too many of our users cancel our service, or if we are unable to attract new users in numbers sufficient to grow our business, our operating results will be adversely affected. Further, if excessive numbers of users cancel our service, we may be required to incur significantly higher marketing expenditures than we currently anticipate in order to replace these users with new users.
Risks Connected with Content We Acquire, Produce, License and/or Distribute, such as Unforeseen Costs and Potential Liability. As a producer and distributor of content, we face potential liability for negligence, copyright and trademark infringement, or other claims based on the nature and content of materials that we acquire, produce, license and/or distribute. We also may face potential liability for content used in promoting our service, including marketing materials. We are devoting more resources toward the development, production, marketing and distribution of original programming. We believe that original programming can help differentiate our service from other offerings, enhance our brand and otherwise attract and retain users. To the extent our original programming does not meet our expectations, in particular, in terms of costs, viewing and popularity, our business, including our brand and results of operations, may be adversely impacted. As we expand our original programming, we have become responsible for production costs and other expenses. We also take on risks associated with production, such as completion risk. To the extent we create and sell physical or digital merchandise relating to our original programming, and/or license such rights to third parties, we could become subject to product liability, intellectual property or other claims related to such products. We may decide to remove content from our service, not to place licensed or produced content on our service or discontinue or alter production of original content if we believe such content might not be well received by our users or could be damaging to our brand.
To the extent we do not accurately anticipate costs or mitigate risks, including for content that we obtain but ultimately does not appear on or is removed from our service, or if we become liable for content we acquire, produce, license and/or distribute, our business may suffer. Litigation to defend these claims could be costly and the expenses and damages arising from any liability or unforeseen production risks could harm our results of operations. We may not be indemnified against claims or costs of these types and we may not have insurance coverage for these types of claims.
Payment Processing Risks. Our users pay for our service using a variety of different payment methods, including credit and debit cards, gift cards, direct debit and online wallets. We rely on third parties to process payment. Acceptance and processing of these payment methods are subject to certain rules and regulations and require payment of interchange and other fees. To the extent there are disruptions in our payment processing systems, increases in payment processing fees, material changes in the payment ecosystem, such as large re-issuances of payment cards, delays in receiving payments from payment processors and/or changes to rules or regulations concerning payment processing, our revenue, operating expenses and results of operation could be adversely impacted. In addition, the recent military invasion of Ukraine by Russian forces and the economic sanctions imposed by the U.S. and other nations on Russia, Belarus and certain Russian organizations and individuals may disrupt payments we receive for distribution of our content in Russian territories. In certain instances, we leverage third parties such as our MVPDs and other partners to bill subscribers on our behalf. If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to find alternative methods of collecting payments, which could adversely impact user acquisition and retention. In addition, from time to time, we encounter fraudulent use of payment methods, which could impact our results of operation and if not adequately controlled and managed could create negative perceptions of our service.
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If We Fail to Maintain or, in Newer Markets Establish, a Positive Reputation with Consumers Concerning Our Service, Including the Content We Offer, We may not be Able to Attract or Retain Users, and Our Operating Results may be Adversely Affected. We believe that a positive reputation with consumers concerning our service is important in attracting and retaining users who have many choices when it comes to where to obtain video entertainment. To the extent our content is perceived as low quality, offensive or otherwise not compelling to consumers, our ability to establish and maintain a positive reputation may be adversely impacted. To the extent our content is deemed controversial or offensive by government regulators, we may face direct or indirect retaliatory action or behavior, including being required to remove such content from our service, and our entire service could be banned and/or become subject to heightened regulatory scrutiny across our business and operations. In light of the recent military invasion of Ukraine by Russian forces and the economic sanctions imposed by the U.S. and other nations on Russia, Belarus and certain Russian organizations and individuals, our contracts to sell and distribute our content to Russian distributors in Russian territories may cast us in a negative light with consumers, governmental authorities, business partners or other stakeholders and injure our reputation. Furthermore, to the extent our marketing, customer service and public relations efforts are not effective or result in negative consumer reaction, our ability to establish and maintain a positive reputation may likewise be adversely impacted. Lastly, to the extent we suffer any security vulnerabilities, bugs, errors or other performance failures, our ability to establish and maintain a positive reputation may be adversely impacted. With newer markets, we also need to establish our reputation with consumers and to the extent we are not successful in creating positive impressions, our business in these newer markets may be adversely impacted.
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.
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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 us 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 Trivia Matrix 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.
10
Additional financings that are 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, 2021 and December 31, 2020 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 its objectives and whether or not we 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 to be a global pandemic. The COVID-19 has impacted a 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.
11
FOR ALL OF THE AFORESAID REASONS AND OTHERS SET FORTH AND NOT SET FORTH HEREIN, AN INVESTMENT IN OUR SECURITIES INVOLVES A CERTAIN DEGREE OF RISK. ANY PERSON CONSIDERING INVESTING IN OUR SECURITIES SHOULD BE AWARE OF THESE AND OTHER FACTORS SET FORTH IN THIS REPORT AND IN THE OTHER REPORTS AND DOCUMENTS THAT WE FILE FROM TIME TO TIME WITH THE SEC AND SHOULD CONSULT WITH HIS/HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN INVESTMENT IN OUR SECURITIES. AN INVESTMENT IN OUR SECURITIES SHOULD ONLY BE ACQUIRED BY PERSONS WHO CAN AFFORD TO LOSE THEIR TOTAL INVESTMENT.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS.
The following exhibits are either provided with this Quarterly Report or are incorporated herein by reference:
12
| 32.1 | Certification of Principal Executive Officer pursuant to Section 906 under Sarbanes-Oxley Act of 2002 |
| 32.2 | Certification of Principal Financial Officer pursuant to Section 906 under Sarbanes-Oxley Act of 2002 |
| 101.INS | Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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 Current Report on Form 8-K, filed on December 12, 2018.
(3) Filed as an exhibit to the Company's Current report on Form 8-K, filed on January 31, 2020.
(4) Filed as an exhibit to the Company's Current Report on Form 8-K, filed on January 23, 2021.
(5) Filed as an exhibit to the Company's Current Report on Form 8-K filed on February 16, 2021.
13
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: | August 15, 2022 | By: | /s/ Mark Ollila |
| MARK OLLILA | |||
| Chief Executive Officer | |||
| (Principal Executive Officer) |
| Date: | August 15, 2022 | By: | /s/ Steve Smith |
| STEVE SMITH | |||
| Chief Financial Officer | |||
| (Principal Accounting Officer) |
14
CERTIFICATIONS
I, Mark Ollila, certify that;
(1) I have reviewed this Quarterly Report on Form 10-Q of Live Current Media Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 15, 2022
/s/ Mark Ollila
___________________________________
By: Mark Ollila
Title: Chief Executive Officer
CERTIFICATIONS
I, Steve Smith, certify that;
(1) I have reviewed this Quarterly Report on Form 10-Q of Live Current Media Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 15, 2022
/s/ Steve Smith
___________________________________
By: Steve Smith
Title: Chief Financial Officer
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Mark Ollila, the Chief Executive Officer of Live Current Media Inc. (the "Company"), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(i) the Quarterly Report on Form 10-Q of the Company, for the fiscal quarter ended March 31, 2022, and to which this certification is attached as Exhibit 32.1 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| By: | /s/ Mark Ollila |
| Name: | Mark Ollila |
| Title: | Chief Executive Officer |
| Date: | August 15, 2022 |
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Steve Smith, the Chief Financial Officer of Live Current Media Inc. (the "Company"), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(i) the Quarterly Report on Form 10-Q of the Company, for the fiscal quarter ended March 31, 2022, and to which this certification is attached as Exhibit 32.1 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| By: | /s/ Steve Smith |
| Name: | Steve Smith |
| Title: | Chief Financial Officer |
| Date: | August 15, 2022 |
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred Stock, No Par Value | $ 0 | $ 0 |
| Preferred Stock, Shares Authorized | 1,189,664 | 1,189,664 |
| Preferred Stock, Shares Issued | 0 | 907,232 |
| Preferred Stock, Shares Outstanding | 0 | 907,232 |
| Common Stock, Par Value Per Share | $ 0.001 | $ 0.001 |
| Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
| Common Stock, Shares, Issued | 160,559,027 | 951,488 |
| Common Stock, Shares, Outstanding | 160,559,027 | 951,488 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Statement of Operations [Abstract] | ||||
| Revenues | $ 67,428 | $ 109,190 | $ 154,970 | $ 233,997 |
| Operating Expenses | ||||
| Software and platform development costs | 43,948 | 80,246 | 144,281 | 173,910 |
| Professional fees | 358,001 | 9,267 | 1,206,420 | 36,693 |
| Depreciation and amortization | 6,431 | 4,876 | 11,468 | 9,698 |
| Wages and salaries | 328,100 | 6,803 | 1,328,914 | 28,011 |
| Advertising | 92,416 | 1,285 | 93,827 | 3,595 |
| General and administrative | 188,085 | 36,170 | 245,134 | 95,834 |
| Total Operating Expenses | 1,016,981 | 138,647 | 3,030,044 | 347,741 |
| Loss from Operations | (949,553) | (29,457) | (2,875,074) | (113,744) |
| Other income (expense) | ||||
| Interest expense | (187,495) | (29,377) | (223,180) | (64,618) |
| Forgiveness of subscription and interest receivable | 0 | 0 | (96,432) | 0 |
| Gain on forgiveness of CARES Act loan | 0 | 0 | 0 | 265,952 |
| Impairment of right to use lease asset | 0 | (354,895) | 0 | (354,895) |
| Change in fair value of warrants | (28,165) | 0 | (28,165) | 0 |
| Gain on settlement of lease liability | 439,230 | 0 | 439,230 | 0 |
| Other miscellaneous income (expense), net | 3,926 | (62) | 4,925 | (1,898) |
| Total other income (expense) | 227,496 | (384,334) | 96,378 | (155,459) |
| Income (Loss) Before Income Taxes | (722,057) | (413,791) | (2,778,696) | (269,203) |
| Income Taxes | 0 | 0 | 0 | 0 |
| Net Income (Loss) | $ (722,057) | $ (413,791) | $ (2,778,696) | $ (269,203) |
| Net Loss per Common Share: | ||||
| Basic net loss per common share | $ (0.01) | $ (0.43) | $ (0.04) | $ (0.28) |
| Diluted net loss per common share | $ (0.01) | $ (0.43) | $ (0.04) | $ (0.28) |
| Weighted average number of basic common shares outstanding | 122,587,794 | 951,488 | 951,488 | |
| Weighted average number of diluted common shares outstanding | 122,587,794 | 951,488 | 62,134,378 | 951,488 |
Organization and Basis of Presentation |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization and Basis of Presentation [Text Block] |
1. Organization and Basis of Presentation
Nature of Business: Live Current Media, Inc. (the "Company") was incorporated under the laws of the State of Nevada on October 10, 1995. On April 22, 2022, the Company completed a reverse triangular merger (the "Merger") with Evasyst, Inc. ("KAST") and the Company's wholly owned subsidiary formed for the purpose of completing the Merger, Evasyst Acquisition Inc. ("LIVC Sub"). As part of the Merger, LIVC Sub merged with and into KAST, with KAST continuing as the surviving corporation. Upon completion of the Merger, all of the previously outstanding shares of KAST common stock were automatically converted into the right to receive 125,000,000 shares of the Company's common stock, and each share of LIVC Sub common stock was converted into one share of KAST common stock. As a result of the Merger, the former stockholders of KAST owned approximately 77% the Company's common stock. Pursuant to the Agreement and Plan of Merger dated January 20, 2022 among the Company, KAST and LIVC Sub (the "Merger Agreement"), John da Costa and Amir Vahabzadeh resigned as directors of the Company and Mark Ollila, Heidi Steiger, Leslie S. Klinger, Justin Weissberg and Annamaria Rapakko were appointed to the board of directors. Pursuant to the Merger Agreement, on completion of the Merger, David Jeffs resigned as CEO and CFO of the Company and Mark Ollila was appointed as new CEO and Chairman of the board of directors and Steve Smith was appointed as CFO of the Company. Mr. Jeffs continues to act as President and as a director of the Company. Heidi Steiger was subsequently appointed Chair uananimously on June 21, 2022. Although the Company was the legal acquirer of KAST, under generally accepted accounting principles, the Merger was accounted for as a reverse acquisition, with KAST being treated as the acquiring entity for accounting and financial reporting purposes. As used herein, "Live Current" refers to the Company as it existed prior to the completion of the Merger. The purchase price consideration and provisional allocation to net assets acquired is presented below.
Consideration transferred is comprised 35,559,027 shares of common stock with a fair value of $9,423,142 held by Live Current’s shareholders on the date of the merger plus the fair value of 1,300,000 outstanding Live Current stock options. The fair value of the stock options calculated using the Black Scholes option model with the following variables: exercise price $0.10, stock price - $0.265, weighted average volatility – 148.28%, discount rate – 0.43%, and weighted average term of 0.67 years. The Company is in the process of finalizing the allocation of the consideration to individual net assets acquired. The Company is currently determining the fair value of domain names, and licensing agreements that were acquired. Excess consideration received over the fair value of net assets acquired will be assigned to goodwill. From acquisition date through June 30, 2022, Live Current had no earnings and incurred a net loss of $291,797. The pro forma financial information below represents the combined results of operations for the year ended December 31, 2021 as if the acquisition had occurred as of January 1, 2021. Based on preliminary assessment of net assets acquired, no intangible assets with definite lives have been identified thus no amortization of such intangibles is reflected in the pro forma information. The unaudited pro forma financial information is presented for informational purposes only and is neither indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the period presented nor indicative of future operating results.
Basis of Presentation: The condensed consolidated financial statements, including notes, of the Company are representations of the Company's management, which is responsible for their integrity and objectivity. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results for the interim periods reported. The balance sheet at December 31, 2021 was derived from audited annual consolidated financial statements but does not contain all of the footnote disclosures from the annual consolidated financial statements. All amounts presented are in U.S. dollars. The results of operations for the six month period ended June 30, 2022 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. The Company estimates that for 2022 the anticipated effective annual federal income tax rate will be 0%. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2022, the Company has not achieved profitable operations, has incurred recurring operating losses and further losses are possible. The Company has an accumulated deficit of approximately $11.1 million. 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 operations through the issuance of capital stock and debt. Management plans to continue raising additional funds through equity or debt financings and loans from directors. There is no certainty that further funding will be available as needed. These factors 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 consolidated financial statements do not include any adjustments to be recorded to assets or liabilities that might be necessary should the Company be unable to continue as a going concern. Net Loss per Share: The Company calculates basic earnings (loss) per share by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding. We do not include the impact of any potentially dilutive common stock equivalents in our basic earnings (loss) per share calculations. Diluted earnings per share reflect potentially dilutive common stock equivalents, including options and warrants that could share in our earnings through the conversion of common shares, except where their inclusion would be anti-dilutive. For the six month periods ended June 30, 2022 and 2021, the Company had the following securities are excluded from the calculation of diluted income per share as their effect would have been anti-dilutive to the net loss for the periods.
Consolidation The Company’s consolidated financial statements include the accounts of its wholly-owned subsidiaries Live Current Media Inc. and Domain Holdings Inc. The Company has three wholly owned subsidiaries Perfume.com Inc. and Rabbit Asset Purchase Corp and Neverthink Asset Purchase Corp. All intercompany balances and transactions are eliminated in consolidation. New Accounting Pronouncements: Accounting standards that have been issued by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
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Convertible Notes |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Convertible Notes Payable [Abstract] | |
| Convertible Notes [Text Block] |
2. Convertible Notes Upon completion of the Merger on April 22, 2022, the Company assumed the accounting acquiree, Live Current's, convertible debt obligations. The debt was incurred by Live Current during the three month period ended March 31, 2022 and is described below. On February 15, 2022 ("February Notes") and March 28, 2022 ("March Notes" and, together with the February Notes, the "Notes"), the Live Current issued convertible promissory notes that bear interest of 4.0% and have a term of two years. Both the February Notes and the March Notes have an initial conversion price to the Company's common stock of $0.34 per share. The Notes were issued with an original issue discount. In addition, in connection with the issuance of the February Notes, the Company paid a cash fee of $120,000 and issued 221,402 shares of its common stock with a fair value of $62,213,.96 to registered broker dealers. Along with the Notes, the Company also issued warrants to purchase up to 5,684,292 shares of common stock at an exercise price of $0.60 per share for a term of five years from the date of issuance. Upon issuance of the Notes, the Company recognized total debt discount of $1,182,540 which will be amortized over the term of the debt using the interest method. During the three month period ended June 30, 2022, the Company recognized $25,708 in interest expense and $185,250 in financing costs associated with the amortization of the debt discount. The Company may close a second tranche of the February Notes having a face value of $1,080,000 and warrants to purchase up to an additional 2,382,353 shares of the Company's common stock for gross proceeds of $1,000,000. Closing of the second tranche of the February Notes is conditional upon certain conditions precedent. There is no assurance that second tranche of February Notes will be completed or sold. The Company may prepay the Notes (i) at any time during the first 90 days following closing at the face value of the, (ii) at any time during the period from 91 to 180 days following closing at a premium of 110% of the face value, and (iii) thereafter at 120% of the face value. The February Notes contain a number of customary events of default. Additionally, the February Notes are secured by all of the assets of the Company, including a lien on and security interest in all of the issued and outstanding equity interests of the wholly-owned subsidiaries of the Company. The March Notes are unsecured. |
Secured Promissory Notes |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Debt Instruments [Abstract] | |
| Secured Promissory Notes [Text Block] |
3. Secured Promissory Notes During 2020, the Company entered into secured promissory notes with Shanon Prum and Mark Ollila, president of the Company, for $50,000 and $10,000, respectively. Interest on the notes is 18% and the notes were due in October 2021. The notes are collateralized by all of the Company's cash, accounts receivable, contracts, inventory and other property. Mr. Ollila was a guarantor of Mr. Prum's note. During the six month period ended June 30, 2022, Mr. Prum's note was paid in full along with accrued interest for a total payment of $41,124. On March 29, 2022, the Company authorized the exchange of Mr. Ollila's note and accrued interest of $8,000 and $1,450, respectively, into shares of the Company's common stock for a total of $9,450.
The balances of the promissory notes at June 30, 2022 and December 31, 2021 are nil and $38,000, respectively. Interest expense on the notes to Mr. Prum and Mr. Ollila during the three and six month periods ended June 30, 2022 and 2021 was $582 and $2,024 respectively. |
Evasyst Convertible Notes |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Convertible Notes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Evasyst Convertible Notes [Text Block] |
4. Evasyst Convertible Notes In 2022, prior to the completion of the Merger on April 22, 2022, the Company issued additional convertible notes with the same terms as existing convertible notes as follows:
The convertible notes issued for consulting were to satisfy payables due for expenses incurred by Leawood VC Fund LP and Fairmont Capital, Inc., entities associated with major shareholders of the Company. The related consulting services were associated with the Merger on April 22, 2022. The fair value of the consulting expenses was based upon the number of Company shares the debtholder ultimately received upon conversion of the notes multiplied by the trading price of the shares on the date of the note. At merger date, April 22, 2022 and December 31, 2021, the balance of convertible debt was $3,346,510 and $2,715,343, respectively. Related accrued interest was nil and $210,013, respectively. During the three months ended June 30, 2022, all convertible notes and accrued interest were converted into 584,984 shares of common stock in connection with the completion of the Merger. At the Merger date, April 22, 2022 and December 31, 2021, convertible notes and accrued interest payable were due to the following related parties as follows:
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Equity |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Text Block] |
5. Equity The Company issued no shares in 2022 of its preferred or common stock during through the merger date. Nor were any shares issued during three month periods ended March 31, 2021. At merger date, the Company has the following stock payable amounts that represent shares of common stock to be issued:
The shares authorized to be issued to Mr. Ollila and Mr. Weissberg for compensation on March 29, 2022 were subsequently modified on April 20, 2022 to include vesting terms over a period of eight years. Upon completion of the Merger, all vesting of Evasyst shares were accelerated as consistent with the Company’s Stock Plan. For the three month period ended March 31, 2022, Mr. Ollila and Mr. Weissberg's compensation was calculated based upon the number of Live Current shares that each individual received upon the merger multiplied by the trading price of Live Current shares on the date of the board authorized the compensation. During the three months ended June 30, 2022, the Company issued 220,440 shares of common stock to settle the stock payable prior to its merger with Live Current. Stock options During the six month periods ended June 30, 2022 and 2021, no options were granted, expired or forfeited. During the six month period ended June 30, 2022, 56,044 options were exercised for total proceeds of $12,784. In early April 2022, the remaining 125,459 outstanding options were exercised on a cashless basis. Preferred stock During the three month period ended June 30, 2022, all of the Company's outstanding preferred stock was converted into 907,232 shares of the Company's common stock in connection with the Company's merger with Live Current. |
Leases |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Leases [Abstract] | |
| Leases [Text Block] |
6. Leases The Company leases its office in San Diego. The lease, as amended in 2019 and 2020, is for a term of four years and expires in January 2024. The initial ROU asset and liability recorded in 2019 relating to this lease were calculated based on the future lease payments due under the lease discounted using an estimated incremental borrowing rate of 12.0%. In February 2021, the Company vacated the premises and pursuant to the terms of the lease agreement, was considered in default. As a result, the remaining balances of the ROU asset and of $354,895 was recognized as an impairment expense during the six months ended June 30, 2021. Under the lease agreement, the Company was still obligated to pay the required lease payments. At December 31, 2021, the balance due under the agreement was $256,519. The Company is in discussions with the lessor to settle the amount due. As of June 30, 2022, based on discussions, management estimates that the Company will pay $140,000 to settle the liability with the lessor. The Company recognized a gain on settlement of lease of $439,230 during the three month period ended June 30, 2022 to reduce total outstanding liabilities associated with the lease of $579,230 ($305,669 in accrued rent payable and $273,561 in right to use lease liability) to $140,000. For the six month periods ended June 30, 2022 and 2021, rent expense of $17,422 and $59,878, respectively, on this lease was recognized. In February 2022, the Company entered into a short term lease for an office space with payments due of $5,039 per month. Rent expense of $30,234 was recognized during the six month period ended June 30, 2022. |
CARES Act Loan |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Debt Disclosure [Abstract] | |
| CARES Act Loan [Text Block] |
7. CARES Act Loan On May 1, 2020, the Company received a loan of $265,952 pursuant to the Paycheck Protection Program (the "PPP") under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The loan, which was in the form of a note dated May 1, 2020 had an original maturity date on April 30, 2022 and an interest rate of 1% per annum. It is anticipated that the loan will be forgiven under the provisions of the CARES Act because the Company used the funds for qualifying expenses. Qualifying expenses included payroll costs, costs used to continue group health care benefits, rent, and utilities. The amount of the PPP loan was recognized as gain on forgiveness of the CARES Act loan during the three month period ended March 31, 2021 when the Company receives formal notification of forgiveness. |
Equity Investment and Royalties |
6 Months Ended | ||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||
| Equity Investment And Royalties [Abstract] | |||||||||||||||||||||
| Equity Investment and Royalties [Text Block] |
8. Equity Investment and Royalties Upon the completion of the Merger on April 22, 2022, the Company acquired Live Current's investment in warrants of Cell MedX Corp ("CMXC"). On March 21, 2019, Live Current entered an agreement with CMXC to purchase the direct rights to distribute the eBalance device from CMXC. On January 29, 2020 Live Current and CMXC entered a buyback agreement to sell the exclusive distribution rights to the eBalance microcurrent device back to CMXC. On June 30, 2022, the fair value of the warrants was $3,948. The Company recognized a change in the fair value of the warrant of a loss of $28,165 during the three and six month period ended June 30, 2022. The fair value of the warrants at June 30, 2022 was calculated based on the following assumptions.
The sales price included a retained royalty on future sales of the eBalance device capped at US$507,500 and share purchase warrants for 2,000,000 shares of CMXC of which 1,000,000 are exercisable at $0.50 and 1,000,000 exercisable at $1.00. As at June 30, 2022, the Company's equity investment consists of 2,000,000 share purchase warrants. Each CMXC share purchase warrant is exercisable for a period of three years, expiring on January 31, 2023. CMXC has the right to accelerate the expiry date of the warrants based on the trading price of CMXC's shares. |
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Organization and Basis of Presentation (Policies) |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nature of Business: [Policy Text Block] |
Nature of Business: Live Current Media, Inc. (the "Company") was incorporated under the laws of the State of Nevada on October 10, 1995. On April 22, 2022, the Company completed a reverse triangular merger (the "Merger") with Evasyst, Inc. ("KAST") and the Company's wholly owned subsidiary formed for the purpose of completing the Merger, Evasyst Acquisition Inc. ("LIVC Sub"). As part of the Merger, LIVC Sub merged with and into KAST, with KAST continuing as the surviving corporation. Upon completion of the Merger, all of the previously outstanding shares of KAST common stock were automatically converted into the right to receive 125,000,000 shares of the Company's common stock, and each share of LIVC Sub common stock was converted into one share of KAST common stock. As a result of the Merger, the former stockholders of KAST owned approximately 77% the Company's common stock. Pursuant to the Agreement and Plan of Merger dated January 20, 2022 among the Company, KAST and LIVC Sub (the "Merger Agreement"), John da Costa and Amir Vahabzadeh resigned as directors of the Company and Mark Ollila, Heidi Steiger, Leslie S. Klinger, Justin Weissberg and Annamaria Rapakko were appointed to the board of directors. Pursuant to the Merger Agreement, on completion of the Merger, David Jeffs resigned as CEO and CFO of the Company and Mark Ollila was appointed as new CEO and Chairman of the board of directors and Steve Smith was appointed as CFO of the Company. Mr. Jeffs continues to act as President and as a director of the Company. Heidi Steiger was subsequently appointed Chair uananimously on June 21, 2022. Although the Company was the legal acquirer of KAST, under generally accepted accounting principles, the Merger was accounted for as a reverse acquisition, with KAST being treated as the acquiring entity for accounting and financial reporting purposes. As used herein, "Live Current" refers to the Company as it existed prior to the completion of the Merger. The purchase price consideration and provisional allocation to net assets acquired is presented below.
Consideration transferred is comprised 35,559,027 shares of common stock with a fair value of $9,423,142 held by Live Current’s shareholders on the date of the merger plus the fair value of 1,300,000 outstanding Live Current stock options. The fair value of the stock options calculated using the Black Scholes option model with the following variables: exercise price $0.10, stock price - $0.265, weighted average volatility – 148.28%, discount rate – 0.43%, and weighted average term of 0.67 years. The Company is in the process of finalizing the allocation of the consideration to individual net assets acquired. The Company is currently determining the fair value of domain names, and licensing agreements that were acquired. Excess consideration received over the fair value of net assets acquired will be assigned to goodwill. From acquisition date through June 30, 2022, Live Current had no earnings and incurred a net loss of $291,797. The pro forma financial information below represents the combined results of operations for the year ended December 31, 2021 as if the acquisition had occurred as of January 1, 2021. Based on preliminary assessment of net assets acquired, no intangible assets with definite lives have been identified thus no amortization of such intangibles is reflected in the pro forma information. The unaudited pro forma financial information is presented for informational purposes only and is neither indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the period presented nor indicative of future operating results.
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| Basis of Presentation: [Policy Text Block] |
Basis of Presentation: The condensed consolidated financial statements, including notes, of the Company are representations of the Company's management, which is responsible for their integrity and objectivity. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results for the interim periods reported. The balance sheet at December 31, 2021 was derived from audited annual consolidated financial statements but does not contain all of the footnote disclosures from the annual consolidated financial statements. All amounts presented are in U.S. dollars. The results of operations for the six month period ended June 30, 2022 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. The Company estimates that for 2022 the anticipated effective annual federal income tax rate will be 0%. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2022, the Company has not achieved profitable operations, has incurred recurring operating losses and further losses are possible. The Company has an accumulated deficit of approximately $11.1 million. 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 operations through the issuance of capital stock and debt. Management plans to continue raising additional funds through equity or debt financings and loans from directors. There is no certainty that further funding will be available as needed. These factors 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 consolidated financial statements do not include any adjustments to be recorded to assets or liabilities that might be necessary should the Company be unable to continue as a going concern. |
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| Net Loss per Share: [Policy Text Block] |
Net Loss per Share: The Company calculates basic earnings (loss) per share by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding. We do not include the impact of any potentially dilutive common stock equivalents in our basic earnings (loss) per share calculations. Diluted earnings per share reflect potentially dilutive common stock equivalents, including options and warrants that could share in our earnings through the conversion of common shares, except where their inclusion would be anti-dilutive. For the six month periods ended June 30, 2022 and 2021, the Company had the following securities are excluded from the calculation of diluted income per share as their effect would have been anti-dilutive to the net loss for the periods.
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| Consolidation [Policy Text Block] |
Consolidation The Company’s consolidated financial statements include the accounts of its wholly-owned subsidiaries Live Current Media Inc. and Domain Holdings Inc. The Company has three wholly owned subsidiaries Perfume.com Inc. and Rabbit Asset Purchase Corp and Neverthink Asset Purchase Corp. All intercompany balances and transactions are eliminated in consolidation. |
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| New Accounting Pronouncements: [Policy Text Block] |
New Accounting Pronouncements: Accounting standards that have been issued by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
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Organization and Basis of Presentation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of purchase price consideration and provisional allocation to net assets acquired [Table Text Block] |
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| Schedule of pro forma financial information [Table Text Block] |
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| Schedule of securities are excluded from the calculation of diluted income per share [Table Text Block] |
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Evasyst Convertible Notes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Convertible Notes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of additional convertible notes [Table Text Block] |
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| Schedule of convertible notes and accrued interest payable [Table Text Block] |
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Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of stock payable amounts [Table Text Block] |
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Equity Investment and Royalties (Tables) |
6 Months Ended | ||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||
| Equity Investment And Royalties [Abstract] | |||||||||||||||||||||
| Schedule of stock options, valuation assumptions [Table Text Block] |
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Organization and Basis of Presentation (Narrative) (Details) - USD ($) |
2 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|---|
Apr. 22, 2022 |
Jun. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
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| Business Acquisition [Line Items] | |||||||||
| Net income (loss) | $ 291,797 | $ 722,057 | $ 2,056,639 | $ 413,791 | $ (144,588) | $ 2,778,696 | $ 269,203 | ||
| Federal income tax rate | 0.00% | ||||||||
| Accumulated deficit | $ 11,070,709 | $ 11,070,709 | $ 11,070,709 | $ 8,292,013 | |||||
| KAST [Member] | |||||||||
| Business Acquisition [Line Items] | |||||||||
| Number of shares in right to receive | 125,000,000 | ||||||||
| Ownership percentage | 77.00% | ||||||||
| Number of common shares issued | 35,559,027 | ||||||||
| Fair value of common shares issued | $ 9,423,142 | ||||||||
| Options outstanding | 1,300,000 | ||||||||
| Exercise price | $ 0.1 | ||||||||
| Stock price | $ 0.265 | ||||||||
| Weighted average volatility | 148.28% | ||||||||
| Discount rate | 0.43% | ||||||||
| Weighted average term | 8 months 1 day | ||||||||
Organization and Basis of Presentation - Schedule of assets acquired and liabilities assumed (Details) - KAST [Member] |
Apr. 22, 2022
USD ($)
|
|---|---|
| Business Acquisition [Line Items] | |
| Fair value of consideration transferred | $ 9,666,250 |
| Recognized amounts of identifiable assets acquired: | |
| Cash and cash equivalents | 2,355,065 |
| Prepaid expenses and other assets | 405,819 |
| Warrant | 32,113 |
| Intangible assets and goodwill | 8,406,199 |
| Assets acquired, Total | 11,199,196 |
| Liabilities assumed: | |
| Accounts payable | (81,794) |
| Accrued interest payable | (8,127) |
| Convertible notes | (1,443,025) |
| Liabilities assumed, Total | (1,532,946) |
| Net identifiable assets | $ 9,666,250 |
Organization and Basis of Presentation - Schedule of pro-forma financial information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
| Revenue | $ 67,428 | $ 109,190 | $ 154,970 | $ 233,997 |
| Earnings | $ (767,545) | $ (546,477) | $ (3,038,995) | $ (723,884) |
Convertible Notes (Narrative) (Details) - USD ($) |
1 Months Ended | 6 Months Ended |
|---|---|---|
Feb. 15, 2022 |
Jun. 30, 2022 |
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| Debt Instrument [Line Items] | ||
| Convertible notes, payment terms | (i) at any time during the first 90 days following closing at the face value of the, (ii) at any time during the period from 91 to 180 days following closing at a premium of 110% of the face value, and (iii) thereafter at 120% of the face value. The February Notes contain a number of customary events of default. Additionally, the February Notes are secured by all of the assets of the Company, including a lien on and security interest in all of the issued and outstanding equity interests of the wholly-owned subsidiaries of the Company. | |
| Options exercised (Shares) | 56,044 | |
| Convertible Promissory February Notes [Member] | ||
| Debt Instrument [Line Items] | ||
| Original issue discount | $ 120,000 | |
| Convertible Promissory February and March Notes [Member] | ||
| Debt Instrument [Line Items] | ||
| Convertible notes, interest rate per annum | 4.00% | |
| Convertible notes, maturity period | 2 years | |
| Initial conversion price | $ 0.34 | |
| Number of shares issued as brokerage fee | 221,402 | |
| Value of shares issued as brokerage fee | $ 62,213.96 | |
| Warrants to purchase shares of common | 5,684,292 | |
| Warrant exercise price | $ 0.6 | |
| Term of warrants | 5 years | |
| Unamortized debt discount | $ 1,182,540 | |
| Interest expense | 25,708 | |
| Financing costs | $ 185,250 | |
| Second Tranche [Member] | Convertible Promissory February Notes [Member] | ||
| Debt Instrument [Line Items] | ||
| Convertible Note, face value | $ 1,080,000 | |
| Number of common shares called by warrants | 2,382,353 | |
| Proceeds from Issuance of Common Stock | $ 1,000,000 |
Secured Promissory Notes (Narrative) (Details) - Secured promissory notes [Member] - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|---|
Mar. 29, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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| Debt Instrument [Line Items] | |||||||
| Convertible Note, face value | $ 0 | $ 0 | $ 38,000 | ||||
| Shanon Prum [Member] | |||||||
| Debt Instrument [Line Items] | |||||||
| Convertible Note, face value | 41,124 | 41,124 | $ 50,000 | ||||
| Convertible notes, interest rate per annum | 18.00% | ||||||
| Mark Ollila [Member] | |||||||
| Debt Instrument [Line Items] | |||||||
| Convertible Note, face value | $ 8,000 | $ 10,000 | |||||
| Convertible notes, interest rate per annum | 18.00% | ||||||
| Accrued interest of debt | 1,450 | ||||||
| Value of shares issued on conversion of secured promissory notes | $ 9,450 | ||||||
| Mr Prum And Mr Ollila [Member] | |||||||
| Debt Instrument [Line Items] | |||||||
| Interest expense of debt | $ 582 | $ 2,024 | $ 582 | $ 2,024 | |||
Evasyst Convertible Notes (Narrative) (Details) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Jun. 30, 2022 |
Apr. 22, 2022 |
Dec. 31, 2021 |
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| Convertible Notes [Abstract] | |||
| Convertible debt | $ 0 | $ 3,346,510 | $ 2,715,343 |
| Accrued interest on convertible debt | $ 0 | $ 0 | $ 210,013 |
| Conversion of common stock related to convertible notes and accrued interest | 584,984 |
Evasyst Convertible Notes - Schedule of additional convertible notes (Details) |
Apr. 22, 2022
USD ($)
|
|---|---|
| Convertible Notes [Abstract] | |
| Consulting expense | $ 613,250 |
| Accrued wages | 17,917 |
| Additional convertible notes issued | $ 631,167 |
Evasyst Convertible Notes - Schedule of convertible notes and accrued interest payable (Details) - USD ($) |
Apr. 22, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Debt Instrument [Line Items] | ||
| Convertible Debt | $ 911,905 | $ 911,905 |
| Accrued Interest Payable | 93,044 | 74,930 |
| Mark Ollila [Member] | ||
| Debt Instrument [Line Items] | ||
| Convertible Debt | 11,905 | 11,905 |
| Accrued Interest Payable | 833 | 596 |
| Company associated with Michael Gibbons [Member] | ||
| Debt Instrument [Line Items] | ||
| Convertible Debt | 550,000 | 550,000 |
| Accrued Interest Payable | 55,681 | 44,756 |
| Leawood VC Fund 1 LP [Member] | ||
| Debt Instrument [Line Items] | ||
| Convertible Debt | 250,000 | 250,000 |
| Accrued Interest Payable | 26,911 | 21,945 |
| Trust associated with Stephen Petilli [Member] | ||
| Debt Instrument [Line Items] | ||
| Convertible Debt | 100,000 | 100,000 |
| Accrued Interest Payable | $ 9,619 | $ 7,633 |
Equity (Narrative) (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | |
|---|---|---|---|---|
Apr. 30, 2022 |
Jun. 30, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Stockholders' Equity Note [Abstract] | ||||
| Number of common stock issued to settle stock payable | 220,440 | |||
| Number of stock options exercised | 56,044 | |||
| Proceeds from options exercised | $ 12,784 | $ 0 | ||
| Options exercised on cashless basis | 125,459 | |||
| Preferred stock converted | 907,232 | |||
Equity - Schedule of stock payable amounts (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | |
|---|---|---|---|---|
Mar. 29, 2022 |
Mar. 31, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Class of Stock [Line Items] | ||||
| Compensation | $ 964,000 | $ 0 | ||
| Stock options exercised during the three month period ended March 31, 2022 | $ 12,784 | $ 0 | ||
| Equity Option [Member] | ||||
| Class of Stock [Line Items] | ||||
| Compensation | $ 964,000 | |||
| Stock options exercised during the three month period ended March 31, 2022 | $ 12,784 | |||
| Stock payable | 1,007,218 | $ 1,020,002 | ||
| Equity Option [Member] | Mr. Ollila [Member] | ||||
| Class of Stock [Line Items] | ||||
| Compensation | 750,000 | |||
| Promissory note due | 8,000 | |||
| Accrued interest due | 1,450 | |||
| Accrued wages due | 24,768 | |||
| Equity Option [Member] | Mr. Weissberg [Member] | ||||
| Class of Stock [Line Items] | ||||
| Compensation | 214,000 | |||
| Accrued wages due | $ 9,000 | |||
Leases (Narrative) (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
|---|---|---|---|---|---|---|---|---|
Feb. 28, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 29, 2022 |
Dec. 31, 2021 |
Dec. 31, 2019 |
|
| Leases [Abstract] | ||||||||
| Estimated incremental borrowing rate | 12.00% | |||||||
| Impairment expense on ROU asset | $ 0 | $ 354,895 | $ 0 | $ 354,895 | ||||
| Accrued rent payable | 140,000 | 140,000 | $ 256,519 | |||||
| Gain on settlement of lease | 439,230 | $ 0 | 439,230 | 0 | ||||
| Total outstanding liabilities, operating lease | 140,000 | 140,000 | $ 579,230 | |||||
| Accrued rent payable | 305,669 | 305,669 | ||||||
| Right to use lease liability | $ 273,561 | 273,561 | ||||||
| Rent expense | 17,422 | $ 59,878 | ||||||
| Monthly payments | $ 5,039 | |||||||
| Rent expense for short term lease | $ 30,234 | |||||||
CARES Act Loan (Narrative) (Details) - Paycheck Protection Program [Member] |
May 01, 2020
USD ($)
|
|---|---|
| Debt Instrument [Line Items] | |
| Amount of loan received | $ 265,952 |
| Loan interest rate | 1.00% |
Equity Investment and Royalties - Schedule of stock options, valuation assumptions (Details) - Cell MedX Corp. [Member] |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Risk-free rate (%) | 0.09% |
| Expected stock price volatility (%) | 161.30% |
| Expected dividend yield (%) | 0.00% |
| Expected life of options (years) | 6 months 29 days |