LIVE CURRENT MEDIA, INC. Management's Discussion and Analysis
The following selected financial data was derived from the Company's audited
consolidated financial statements for the year ended
The acquisition of
Summary of Results
Year ended December 31,
2022 2021 % Change
Revenues $ 488,018 $ 427,868 14.06%
Operating expenses (income)
Software and platform development costs 603,833 277,238 117.80%
Gain on settlement of lease liability (399,230 ) - n/a
General and administration 2,465,577 279,700 786.77%
Depreciation and amortization 22,810 19,665 16.00%
Wages and salaries 2,639,145 29,615 8,811.51%
Gain on sale of domain name (89,903 ) - n/a
Cost of goods sold 55,800 - n/a
Impairment of goodwill and intangibles 9,592,424 - n/a
Impairment of right to use lease asset - 354,895 n/a
$ 14,905,183 $ 961,113 1450.83%
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Results of Operation
Revenue
The Company recognized revenue of
The Company's revenue primarily consists of software subscription fees that
allow customers to access the hosted software over the contract period. The
revenue arrangements do not contain general rights of refund in the event of
cancellations. In addition, service revenue represents fees for services
provided that are not covered under subscription arrangements. The Company
recognized revenue of
Acquired company
The following table disaggregates revenue by major source for the period from
the date the Company acquired
2022
Subscription fees $ 161,080
Service revenue $ 5,166
$ 166,247 During the period since acquisition, revenue to the Company's largest customers
represented approximately 28%, 23%, 14%, and 11% of total revenue. As of
The Company is in the process of integrating its platforms and expects to begin generating additional streams of revenue in the 2023 fiscal year. Anticipated revenue streams include subscription-based services and software-as-a-service, with the additions of transaction fees, advertising, and revenue share agreements across its platforms. There is no assurance that the Company will realize additional revenues from these revenue streams moving forward.
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Operating Expenses
Operating expenses for the year ended
Net Loss
The Company recorded a net loss of
Liquidity and Capital Resources
Live Current reduced its operating expenses in January of this year by furloughing employees, and maintaining its core team with the directive of completing key acquisitions within the Creator Economy. In addition to reducing the Company's monthly burn, LIVC has raised additional funds through a combination of debt and equity during Q1 2023.
The Company is currently seeking additional equity financing and has received some subscriptions for the first tranche. Proceeds from the Company's financing will be used for additional key acquisitions, including a key Creator Economy platform that has signed a non-binding LOI. Funds will also be used to finance the Company's operations. Concurrently, the Company has recently refinanced existing loans at a better rate, and providing additional cash to fund growth.
Capital Resources
December 31
2022 2021
Total Current Assets $ 373,095 $ 19,311
Total Assets 498,814 46,788
Current Liabilities 1,932,838 962,990
Total Liabilities 4,281,174 4,060,109
Working Capital (deficit)
Cash Flows
Year Ended December 31
2022 2021
Net cash provided by (used in) operating activities
Net cash used by investing activities 2,413,456 -
Net cash provided by (used in) financing activities 1,146,207 (22,000 )
Net increase (decrease) in cash$ 159,778 $ (453 ) 26
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The Companyhad a working capital deficit of (
Cash provided by investing for the year ended
Cash provided by financing activities for the year ended
Any long-term financing that we obtain in the future is expected to come from sales of our equity securities and/or convertible debt financing. There is no assurance that we will be able to obtain financing in amounts sufficient to meet our short-term or long-term capital needs. If the Company is successful in completing any equity or convertible debt financings, of which there is no assurance, or if an issuance of equity securities in payment for the goods or services provided, existing shareholders will likely experience a dilution of their interest in the company.
If the Company is not successful in raising sufficient financing, it will not be able to complete the current plan of operation and may not be able to continue as a going concern. The Company does not have any specific alternatives to the current plan of operation and has not planned for any such contingency. If the Company is not able to raise sufficient financing, the business may fail and existing shareholders may lose all or part of their investment.
Critical Accounting Policies
The preparation of financial statements in conformity with generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.
Our significant accounting policies are described in Note 1 to our consolidated
financial statements for the year ended
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