Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this Quarterly Report constitute "forward-looking statements." These statements, identified by words such as "plan," "anticipate," "believe," "estimate," "should," "expect" and similar expressions include the Company's expectations and objectives regarding its future financial position, operating results and business strategy. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause its actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, general economic conditions particularly related to demand for the Company's products and services, changes in business strategy, competitive factors (including the introduction or enhancement of competitive services), pricing pressures, changes in operating expenses, fluctuation in foreign currency exchange rates, inability to attract or retain consulting, sales and/or development talent, changes in customer requirements, and/or evolving industry standards, as well as those factors discussed in the section titled "Part II, Item 1A. Risk Factors" in this Quarterly Report.
Forward looking statements are based on a number of material factors and assumptions, including the availability and final receipt of required government licenses, that sufficient working capital is available to complete the proposed activities, that contracted parties provide goods and/or services on the agreed time frames. While the Company considers these assumptions may be reasonable based on information currently available to it, they may prove to be incorrect. Actual results may vary from such forward-looking information for a variety of reasons, including but not limited to risks and uncertainties disclosed in the section titled "Risk Factors" in this Quarterly Report.
The Company intends to discuss in its Quarterly Reports and Annual Reports any events or circumstances that occurred during the period to which such documents relate that are reasonably likely to cause actual events or circumstances to differ materially from those disclosed in this registration statement. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on its business or the extent to which any factor, or combination of such factors, may cause actual results to differ materially from those contained in any forwarding looking statement. You are advised to carefully review the reports and documents that the Company files from time to time with the United States Securities Exchange Commission (the "SEC"), particularly its periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934 (the "Exchange Act").
OVERVIEW
Live Current Media, Inc. (the "Company" or "Live Current") was incorporated under the laws of the State of Nevada on October 10, 1995. The Company operates a segment of its business through its wholly owned subsidiary, Domain Holdings Inc., originally formed under the laws of British Columbia, Canada on July 4, 1994 and re-domiciled to Alberta, Canada on April 14, 1999 ("DHI"). The Company is also the majority shareholder of Perfume.com Inc. (95% ownership), formed under the laws of the State of Delaware on March 13, 2008. Perfume.com Inc. is currently dormant and does not carry on an active business. References herein to the Company include DHI and Perfume.com Inc. (collectively, the "Subsidiaries") unless otherwise stated.
The Company is a development stage, technology company involved in the entertainment industry. Currently developing two products, SPRT MTRX and Trivia Matrix, management is positioning the Company to take advantage of the exciting and rapidly growing Sports and Gaming sectors.
PLAN OF OPERATIONS
SPRT MTRX
SPRT MTRX is a gaming app, available in both iPhone and Android versions, in which players bid on the final scores of NHL, NBA and NFL games. The events are organized as "Challenges" and cover multiple games over one day. A cash prize is awarded to the player who receives the most points for correctly bidding on the final scores of the games included in the Challenge. The system for bidding on the final scores is unique in the gaming industry.
Revenue Model. The business model entails offering cash prizes to introduce and attract players to the game, developing a large contingent of users and delivering advertisements. This model, free to play (F2P), has proven popular among gamers as the lure of free money is a very attractive inducement.
Development. The Company will continue to develop and enhance the SPRT MTRX through 2021 by adding additional functionality and more sports such as MLB and EPL but does not anticipate generating any significant revenue from SPRT MTRX in fiscal 2021.
Trivia Matrix
Trivia Matrix is a mobile trivia game app. The game consists of a 4 x 4 grid of eight mixed pairs of trivia data belonging to a specific category. The categories are Geography, History, Sports, Natural World, Pop Culture and Entertainment. The goal of the game is to eliminate each pair of trivia by matching them together and clear the grid of all data. Examples of matches are; actor with movie, musician with band, painter with painting, country with capital and country with silhouette.
Revenue Model. Trivia Matrix is a F2P game. Revenue will be generated by presenting advertisements periodically to players who complete games and by in app purchases (IAP) such as pay to avoid advertisements and pay to gain access to a premium account, which includes more data and more questions.
Development. The game is currently a single player game and involves playing against a clock to achieve the fastest time for clearing the grid. Future development includes two versions of head to head competitions and an elimination tournament game format.
The game is available on the Apple App Store and Apple tablets. A Google Play Store version of Trivia Matrix is under development.
Boxing.com FEDERATION
The Company terminated developing Boxing.com Federation in March 2021.
The Company does not believe it has the necessary cash requirements for the next 12 months without having to raise additional funds.
RESULTS OF OPERATIONS
The following selected financial data was derived from the Company's unaudited condensed interim consolidated financial statements for the periods ended June 30, 2021 and June 30, 2020. 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
|
Six months ended
|
|
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
Percentage
Increase/
(Decrease)
|
|
|
June 30, 2021
|
|
|
June 30, 2020
|
|
|
Percentage
Increase/
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense (income)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domain content and registration
|
$
|
-
|
|
$
|
104
|
|
|
(100
|
)
|
$
|
3,072
|
|
|
3,140
|
|
|
(2.17
|
)
|
General and administrative
|
|
12,968
|
|
|
11,512
|
|
|
12.65
|
|
|
25,079
|
|
|
23,268
|
|
|
7.78
|
|
Interest expense
|
|
51
|
|
|
51
|
|
|
0.0
|
|
|
102
|
|
|
102
|
|
|
0.0
|
|
Management fees
|
|
31,301
|
|
|
30,859
|
|
|
1.43
|
|
|
63,616
|
|
|
63,700
|
|
|
(.13
|
)
|
Marketing
|
|
10,119
|
|
|
350
|
|
|
2,791.14
|
|
|
44,578
|
|
|
13,820
|
|
|
222.56
|
|
Professional fees
|
|
2,193
|
|
|
12,431
|
|
|
(82.36
|
)
|
|
9,597
|
|
|
34,087
|
|
|
(71.85
|
)
|
Transfer agent and regulatory
|
|
14,338
|
|
|
15,363
|
|
|
(6.67
|
)
|
|
15,898
|
|
|
17,144
|
|
|
(7.27
|
)
|
Website development
|
|
2505
|
|
|
26
|
|
|
9,534.62
|
|
|
3,464
|
|
|
1,506
|
|
|
130.01
|
|
Stock based compensation
|
|
-
|
|
|
-
|
|
|
n/a
|
|
|
95,722
|
|
|
-
|
|
|
n/a
|
|
Total operating expenses
|
$
|
73,475
|
|
$
|
70,696
|
|
|
3.93
|
|
$
|
261,128
|
|
|
156,767
|
|
|
66.57
|
|
Results of Operation
Revenue
The Company did not recognize recurring revenues during the three-month period ended June 30, 2021 or the three-month period ended June 30, 2020. The Company does not anticipate recognizing recurring revenues in 2021.
At June 30, 2021 the Company had an accumulated deficit of $17,282,959. The Company is presently in the development stage of its business and cannot provide any assurances that it will be able to generate regular or recurring revenues in the near future.
Operating Expenses
Operating expenses for the three-month period ended June 30, 2021 and the three-month period ended June 30, 2020 were $73,475 and $70,696 respectively. The operating expense for the six-months ended June 30, 2021 and the six-months ended June 30, 2020 were $261,196 and $156,767 respectively. The increased expense in the quarter ended June 30, 2021 is attributable to a one time $95,722 cost for stock-based compensation and an increase in marketing costs related to SPRT MTRX.
Net Gain
The Company recorded a net loss $132,686 for the three-month period ended June 30, 2021 compared to a net gain of $513,308 for the three-month period ended June 30, 2020. The net gain in the period ended June 30, 2020 was attributed to a net gain of $584,004 in the value of an equity investment related to warrants detailed below. On a strictly operational basis, the Company had net losses during both of the periods being compared.
On January 29, 2020, the Company made the decision to exit the medical device distribution business and agreed to sell back to Cell MedX Corp. ("Cell MedX") the exclusive worldwide distribution rights to Cell MedX's eBalance microcurrent device, acquired in 2019 (the "Distribution Rights"). Under the terms of the agreement, the Company sold the Distribution Rights back to Cell MedX in consideration for a royalty on future sales of the eBalance device capped at US$507,500, plus warrants to purchase up to 2,000,000 shares in the common stock of Cell MedX (the "Warrants") exercisable for a period of three (3) years. 1,000,000 of the Warrants are exercisable at a price of $US0.50 per share (the "$0.50 Warrants"), with the remaining 1,000,000 Warrants exercisable at US$1.00 per share (the "$1.00 Warrants"). The Warrants are subject to an acceleration right, with the $0.50 Warrants being subject to acceleration if Cell MedX's common stock trades at or above $1.00 per share for 30 consecutive trading days, and the $1.00 Warrants being subject to acceleration if Cell MedX's common stock trades at or above $1.75 per share for 30 consecutive trading days. Cell MedX may buyout the royalty at any time during the first twelve months following the effective date of the agreement for 85% of the remaining amount of the royalty still payable.
Liquidity and Capital Resources
At June 30, 2021, the Company had working capital of $830,778, an increase from the Company's working capital of $41,938 at December 31, 2020. During the six months ended June 30, 2021 the Company had negative operating cash flow. 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.
The Company does not anticipate purchasing any plant or significant equipment in the immediate future.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.
CRITICAL ACCOUNTING POLICIES
The Company reviews individual domain names in the portfolio for potential impairment throughout the fiscal year in determining whether a particular URL should be renewed. Impairment is recognized for names that are not renewed. The Company performs a qualitative assessment of the portfolio of domain names in the fourth quarter of each year, to determine whether it is more likely than not that the fair market value of a domain name is less than its carrying amount. As part of the assessment, certain qualitative factors are considered, including macro-economic conditions, industry and market conditions, non-renewal of names, as well as other factors. If there are indications of impairment following the qualitative impairment testing, further quantitative impairment testing would be necessary. When it is determined that the fair value of a domain name is less than it's carrying amount, impairment is recognized.
RECENT ACCOUNTING PRONOUNCEMENTS
There are no new accounting pronouncements that materially impact the Company's condensed consolidated interim financial statements.