2. Reverse Acquisition

On April 22, 2022, Live Current completed its merger with Evasyst pursuant to the terms of a merger agreement dated January 20, 2022, by which a wholly-owned subsidiary of Live Current merged with and into Evasyst, with Evasyst continuing as a wholly-owned subsidiary of Live Current (the "Merger"), and the business conducted by Evasyst became the primary business conducted by the Live Current. Live Current and Evasyst are collectively referred to as the "Company" after the Merger.

Upon completion of the Merger, all of the outstanding shares of Evasyst's common stock were automatically converted into the right to receive an aggregate of 125,000,000 newly issued shares of Live Current's common stock. Following the Merger, Live Current's shareholders retained 35,559,027 shares of the Company's common stock, which represents 22% of the Company's common stock, and the former stockholders of Evasyst own 125,000,000 of the Company, which represents approximately 78% the Company's common stock. Following the Merger, two former directors of Live Current resigned, and five new directors were appointed by Evasyst. A third former director of Live Current who was the former CEO/CFO of Live Current resigned those positions, and continues as the President and a director of the Company.

The Merger is accounted for as a reverse acquisition. Under this method of accounting, Evasyst was determined to be the acquiring company for accounting purposes, and Live Current is treated as the acquired company. Accordingly, the assets and liabilities of Live Current were recorded at estimated fair value as of April 22, 2022, the Merger closing date. The accounting acquirer was primarily determined based on Evasyst shareholders having the larger voting interest in the post-combination company, and the ability to appoint the majority of the members of the Board of Directors as well as management in the post-combination company.

Consideration transferred by Evasyst is comprised 35,559,027 shares of common stock held by Live Current's shareholders with a fair value of $9,423,142 based on the trading price of the Company's common stock on the date of the merger. In addition, the acquisition date fair value of 1,100,000 options held by Live Current employees to purchase shares of common stock of $243,108 is included as part of the consideration transferred. The Live Current options were in substance exchanged for share-based payment awards of Evasyst. The fair value of the stock options was 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 purchase price consideration and provisional allocation to net assets acquired is presented below.

Fair value of consideration
Live Current shares of common stock	$	9,423,142
Live Current stock options		243,108
Total fair value of consideration	$	9,666,250

Allocation of the consideration to the fair value of assets acquired and liabilities assumed:
Assets
Cash and cash equivalents	$	2,355,065
Prepaid expenses and other assets		437,932
Acquisition related goodwill-provisional		8,406,199
Total assets acquired		11,199,196

Liabilities
Accounts payable accrued expenses		(89,921	)
Convertible notes payable		(1,443,025	)
Total liabilities assumed		(1,532,946	)
Fair value of net assets acquired	$	9,666,250

At December 31, 2022, management performed an impairment analysis of the acquisition related goodwill-provisional and determined that the goodwill-provisional was fully impaired. As such, for the year ended December 31, 2022, the Company recorded an impairment loss of $8,406,199 for the balance of Live Current reverse acquisition goodwill-provisional.

From acquisition date through December 31, 2022, Live Current had revenue of $321,771 and incurred a net loss of $730,822.

The pro forma financial information below represents the combined results of operations for the years ended December 31, 2022 and 2021, as if the acquisition had occurred as of January 1, 2021. 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.

		For the year ended December 31,
		2022			2021

Revenue	$	488,018		$	427,868
Earnings	$	(16,343,210	)	$	(624,328	)