UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of
1934
LIVE CURRENT MEDIA INC.
(Exact name of registrant as specified in its charter)
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Nevada
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88-0346310
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(State or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer Identification No.)
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1130 Pender Street – Suite 820
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Vancouver, BC
Canada
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V6E 4A4
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(Address of principal executive offices)
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(Zip Code)
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(604) 648-0500
Registrant’s telephone number
Securities to be registered under Section 12(b) of the Exchange
Act:
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Title of each class to be so registered
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Name of exchange on which each class is to be
registered.
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NONE.
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N/A
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Securities to be registered under Section 12(g) of the Exchange
Act:
Common Stock, $0.001 par value
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
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Large accelerated filer
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[ ]
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Accelerated filer
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[ ]
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Non-accelerated filer
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[ ]
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Smaller reporting company
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[X]
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(Do not check if a smaller reporting company)
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LIVE CURRENT MEDIA INC.
FORM 10
TABLE OF CONTENTS
Page 2 of 22
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this registration statement
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 registration statement.
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 registration statement.
The Company intends to discuss in their 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.
As used in this registration statement,
unless the context
otherwise requires, “we,” “us,” “our,” the “Company” and “Live Current” refers
to Live Current Media Inc. All dollar amounts in this registration statement are
in U.S. dollars unless otherwise stated.
Page 3 of 22
BUSINESS
General
Live Current Media Inc. (the “Company”) was incorporated under
the laws of the State of Nevada on October 10, 1995. The Company has an
authorized capital of 500,000,000 shares of common stock with 34,837,625 shares
currently issued and outstanding.
The Company operates 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 Inc.
(95% ownership), formed under the laws of the State of Delaware on March 13,
2008. Perfume Inc. is currently dormant and does not carry on an active
business. References herein to the Company include DHI and Perfume Inc.
(collectively, the “Subsidiaries”) unless otherwise stated.
On June 4, 2014, pursuant to an arbitration award issued as
part of certain legal proceedings among the Company, former executives and
directors of the Company and certain shareholders of the Company (including
David M. Jeffs, the Company’s current Chief Executive Officer), the District
Court for Washoe County, Nevada ordered a receiver to be appointed and to take
charge of the Company’s assets. The Company operated throughout 2015 and 2016
under receivership. On January 11, 2017, the District Court in Washoe County
entered an order terminating the receiver’s possession of assets of the Company
resulting in operations of the Company being returned to the directors of the
Company. On May 4, 2017, the District Court in Washoe County discharged the
Company from receivership. A description of the legal proceedings resulting in
the appointment of the receiver is provided under “Legal Proceedings”.
Business of the Company and DHI
The Company’s sole business currently is that of managing the
business of DHI. DHI is in the business of utilizing its exclusive ownership of
domain names to develop internet-related business ventures.
Online Business Development.
The Company, through DHI,
holds title to a portfolio of approximately six hundred (600) intuitive, generic
domains, such as Rodeo.com, Electronic.com, Boxing.com and Number.com, which
inherently attract a stream of online visitors. The Company is not actively
seeking to acquire additional domain names at this time. However, the Company
will evaluate future opportunities to acquire additional domain names as they
present themselves. The Company seeks opportunities to use its domain name
rights to develop online businesses, by itself and through alliances with other
entities. The Company believes that its operating businesses can share common
platforms and infrastructure helping to create a scalable, adaptable and
efficient growth model, while also capitalizing on the generic domain names’
ability to intuitively attract customers. The Company also believes it may be
able to create economies of scale with each new business it develops. The
Company’s business model for these operating businesses includes multiple
revenue streams via revenue-sharing, leasing, web-advertising and trading of
domain names. The Company has not, to date, capitalized on this plan in any
significant manner.
Joint Ventures and Participations.
The Company believes
that its inventory of generic domain names may be attractive to established
non-Internet businesses that are leaders or near-leaders in their respective
industries. The Company’s business plan focuses on offering a long-term,
strategic partnership in exchange for commitments that could include cash,
marketing exposure, access to limited products, and business development
activities. Similarly, the Company seeks to identify end-consumers who purchase
the products and services that complement the businesses utilizing the Company’s
inventory of domain names. Since 2000, the Company has implemented its business
plan by entering into arrangements pursuant to which the Company has leased or
licensed rights to utilize generic domain names owned by the Company to existing
entities in return for cash payments and, in some cases, an equity participation
in the entity or a joint venture established to exploit the name. Currently, the
Company has two websites, Boxing.com and Number.com, that operate under a verbal
joint venture arrangement with a third party web developer (the “Web
Developer”). Under this arrangement, the Company owns the domain names and the
Web Developer develops and operates the websites at the Web Developers own cost
and expense. The terms of the arrangement call for the Company and the Web
Developer to split gross advertising revenues from the websites and the proceeds
of any sale of the websites. However, advertising revenues for Boxing.com and
Number.com have been minimal. As such, the Company has permitted the Web
Developer to retain advertising revenues to offset against the costs of operating those websites. A description of
the terms of the Company’s verbal arrangement with the Web Developer is attached
as Exhibit 10-1 to this registration statement. Boxing.com is a news and media
site offering users the opportunity to read daily news and statistics relating
to the boxing and fight industry and is focused on becoming the most used site
for boxing enthusiasts online. Number.com is a US directory of businesses.
Page 4 of 22
The Company expects to continue to seek additional
opportunities utilizing its domain names; however, there can be no assurance
that the Company will be able to locate such opportunities, or if located, it
will be able to enter into arrangements with such entities.
Sale and Lease of Domain Names.
The Company recognizes
opportunities which arise to monetize its ownership of domain names by selling
or leasing the domain names, which may be more valuable than the exploitation of
the ownership value of the names. The Company has previously sought
opportunities to sell all or a portion of the domain names it holds in one or a
series of transactions. Through these efforts, the Company has determined that
by selling the domain names individually rather than as a portfolio the Company
will maximize the revenue potential of these assets. The Company continues to
market its individual and portfolio of domain names using third party brokers.
The Company will continue to evaluate any offers received. During the fiscal
years ended December 31, 2016 and December 31, 2015, the Company’s only source
of income was from the sale of domain names.
The Company is also actively seeking opportunities to lease its
domain names to companies who want to benefit from the availability of
advertising and internet traffic that is generated by generic domain names.
Advertising Revenues.
Historically, the Company
generated revenue from advertising. However, advertising revenue has declined
significantly over the years due to changes in the advertising model. The
Company will continue to seek advertising revenue opportunities but does not
expect that advertising will ever again represent a significant revenue source
for the Company.
RISK FACTORS
An investment in the Company’s common shares involves a high
degree of risk. You should carefully consider the risks described below and the
other information in this registration statement before investing in its common
shares. If any of the following risks occur, the Company’s business, operating
results and financial condition could be seriously harmed. The trading price of
its common shares could decline due to any of these risks, and you may lose all
or part of your investment.
You should consider each of the following risk factors and the
other information in this registration statement, including the Company’s
financial statements and the related notes, in evaluating its business and
prospects. The risks and uncertainties described below are not the only ones
that impact on the Company’s business. Additional risks and uncertainties not
presently known to the Company or that the Company currently consider immaterial
may also impair its business operations. If any of the following risks do occur,
its business and financial results could be harmed. In that case, the trading
price of its common stock could decline.
Risks associated with the Company’s industry:
Effect of Existing Governmental Regulation.
The
Company’s services are subject to significant regulation at the federal, state
and local levels. Delays in receiving required regulatory approvals or the
enactment of new adverse regulation or regulatory requirements may have a
negative impact upon the Company and its 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, although the
Company applies to ICANN and its contractors to obtain and maintain its domain
name assets. 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.
Page 5 of 22
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 sales on the Internet, thus reducing the value of
the Company’s inventory of domain names.
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.
Effect of new root domain names.
The Company’s business
is subject to a number of risks. In addition to competitive risks, the Company
is engaged in businesses that are not currently profitable, and there can be no
assurance that the Company’s business strategy will ever lead to profits.
Moreover, the Company relies upon an inventory of generic domain names for
lease, sale, and other ventures, which are made up mostly of “.com” suffixes.
The Internet Corporation for Assigned Names and Numbers (“ICANN”) has introduced
the introduction of additional new domain name suffixes, which may be as or more
attractive than the “.com” domain name suffix. New root domain names may have
the effect of allowing the entrance of new competitors at limited cost, which
may further reduce the value of the Company’s domain name assets. The Company
does not presently intend to acquire domain names using newly authorized root
domain names to match its existing domain names, although the Company has
certain .cn (China) root domain names to complement its growth strategy.
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:
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(a)
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actual or anticipated variations in the Company’s results
of operations;
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(b)
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the Company’s ability or inability to generate new
revenues;
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(c)
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increased competition;
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(d)
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government regulations, including internet
regulations;
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(e)
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conditions and trends in the internet
industry;
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(f)
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proprietary rights; or
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(g)
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rumors or allegations regarding the Company’s financial
disclosures or practices.
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Page 6 of 22
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.
Competition.
The Company competes with many companies
possessing greater financial resources and technical facilities than itself in
the B2B2C (business-to-business-to-consumer) market as well as for the
recruitment and retention of qualified personnel. In addition, while the Company
holds title to a wide variety of generic names that may prove valuable, many of
the Company’s competitors have a very diverse portfolio of names and have not
confined their market to one industry, product or service, but offer a wide
array of multilayered businesses consisting of many different customer and
industry partners. Some of these competitors have been in business for longer
than the Company and may have established more strategic partnerships and
relationships than the Company. In addition, as noted above, ICANN regularly
develops new domain name suffixes that will have the result of making a number
of domain names available in different formats, many of which may be more
attractive than the formats held by the Company.
Receivership.
On June 4, 2014, as a result of numerous
lawsuits involving the Company, the Washoe County court in Nevada ordered a
receiver to take charge of the Company’s assets to determine if the Company
should be dissolved. On January 11, 2017, the court in Washoe County Nevada
entered an order terminating the receiver’s possession of assets of the Company
resulting in operations of the Company being returned to the directors of the
Company. On May 4, 2017, the court in Washoe County Nevada discharged the
Company from receivership.
New Products and Services.
The Company seeks to develop
a portfolio of operating businesses either by itself or by entering into
arrangements with businesses that operate in the product or service categories
that are described by the domain name assets owned by DHI. The Company has not,
however, identified specific business opportunities other than Boxing.com and
Number.com at this point and there can be no assurance that it will do so.
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 and the associated domain names, however, the Company
may be unable to avail itself of trademark protection under United States laws
because, among other things, the names are generic and intuitive. 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.
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.
Page 7 of 22
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, 2016 and
December 31, 2015 includes a statement regarding the uncertainty of the
Company’s ability to continue as a going concern. The Company’s failure to
achieve profitability and positive operating revenues could have a material
adverse effect on its financial condition and results of operations, and could
cause the Company’s business to fail.
No assurance that forward-looking assessments will be
realized.
The Company’s ability to accomplish their objectives and whether
or not they are financially successful is dependent upon numerous factors, each
of which could have a material effect on the results obtained. Some of these
factors are in the discretion and control of management and others are beyond
management’s control. The assumptions and hypotheses used in preparing any
forward-looking assessments contained herein are considered reasonable by
management. There can be no assurance, however, that any projections or
assessments contained herein or otherwise made by management will be realized or
achieved at any level.
FINANCIAL INFORMATION
Plan of Operation
The Company is in the business of developing and
commercializing its portfolio of domain names, some of which generate meaningful
amounts of Internet traffic, which the Company attributes to, among other
things, their generic descriptive nature of a product or services category.
Management believes that it can develop and sustain a business
based on the lease, sale and other exploitation of domain names because, in
part, of its ownership of a number of generic, intuitive domain names which
attract significant numbers of visitors to websites utilizing those names.
Moreover, because there are a limited number of potential domain names, the
Company believes that the value of these names may be significant and may allow
the Company to achieve both strategic relationships with leading participants in
key Internet businesses and businesses that desire to expand using the Internet,
as well as independent operations. Currently the Company owns two websites,
Boxing.com and Number.com, which are operated through a verbal arrangement with
an independent web developer.
The Company acquired a number of “.cn” domain names through a
lottery-allocation in 2003 which are available to be developed. In 2005, Live
Current also acquired a portfolio of second and third tier .com domain names,
all of which end in the word “Bound”, such as “shoppingbound.com,”
pharmacybound.com and vietnambound.com. Management does not believe that these
“bound” domain names will ever represent a significant part of the Company’s
business and will seek opportunities to divest itself of these assets.
The Company, for the immediate future, does not anticipate
independently developing technologies, processes, products or otherwise engaging
in research, development or similar activities. Instead, such activities will be
engaged in pursuant to arrangements with its strategic partners.
Management of the company believe that the Company currently
has enough cash on hand to manage its operations for the next 12 months.
Management’s Discussion and Analysis
The following selected financial data was derived from the
Company’s audited and unaudited 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 registration statement. From June 2014
to May 2017 the Company operated under receivership. During this time, the
Company did not engage in any efforts to develop its business as the receiver’s
primary responsibilities during this time were to make recommendations to the
court as to whether the Company should be dissolved or otherwise, and to settle
and resolve the Company’s ongoing litigation matters. As the Company is no
longer operating under receivership, results for fiscal 2016 and 2015 may not be
reflective of the Company’s financial results and capital requirements moving
forward.
Page 8 of 22
Summary of Results
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For the Year
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For the year
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ended
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ended
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December 31,
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December 31,
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2016
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2015
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(audited)
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(audited)
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Loss from operations
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$
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(195,257
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)
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$
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(358,556
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)
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Litigation settlement
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(225,000
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)
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-
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Impairment of intangible
assets
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-
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-
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Gain on debt retirement
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-
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-
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Interest income
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1,396
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1,779
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Interest expense
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(207
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)
|
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(207
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)
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Other income
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|
112
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10,438
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Foreign exchange
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(818
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)
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5,402
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Net and comprehensive income
(Loss)
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$
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(419,774
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)
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$
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(341,144
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)
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For the three
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For the three
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For the nine
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For the nine
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month period
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month period
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month period
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month period
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ended
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ended
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ended
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ended
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September 30,
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September 30,
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|
September 30,
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September 30,
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|
|
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2017
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2016
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2017
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2016
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|
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(unaudited)
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|
(unaudited)
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|
(unaudited)
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(unaudited)
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Loss from operations
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$
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(102,284
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)
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$
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(24,433
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)
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$
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(258,171
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)
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$
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(50,680
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)
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Litigation settlement
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|
-
|
|
|
-
|
|
|
-
|
|
|
(225,000
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)
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Gain on debt retirement
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|
-
|
|
|
-
|
|
|
182,236
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|
|
-
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Interest income
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|
-
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|
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-
|
|
|
-
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|
|
-
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Interest expense
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|
(104
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)
|
|
-
|
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(155
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)
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-
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Other income
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|
120
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|
|
-
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|
120
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|
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7,252
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Foreign exchange
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533
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|
|
-
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527
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|
-
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Net and comprehensive income (Loss)
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$
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(101,735
|
)
|
$
|
(24,433
|
)
|
$
|
(75,443
|
)
|
$
|
(268,428
|
)
|
Revenue
The Company recognized a gain of $206,764 from the sale of
domain names during the year ended December 31, 2016 (2015 $5,000). The Company
did not recognize recurring revenues during its 2016 or 2015 fiscal years or the
interim periods ended September 30, 2017 and 2016. The Company does not
anticipate recognizing recurring revenues in the short term. The Company
continues to market its domain names in its portfolio and considers offers
received for domain names in its portfolio. The Company believes its portfolio
of domain names will continue to maintain its value over time. Although the
Company’s arrangement with the web developer for Boxing.com and Number.com calls
for revenues to be split between the Company and the web developer, advertising
revenues for those sites has been minimal. As such, the Company has permitted
the web developer to retain the advertising revenue to offset against the
developer’s costs of operating those sites. The Company does not anticipate
earning significant advertising revenue from Boxing.com or Number.com in the
near future.
The Company has an accumulated deficit of $17,361,036. The
Company is presently in the development stage of their business and cannot
provide any assurances that they will be able to generate regular or recurring
revenues in the near future.
Page 9 of 22
Results of Operation
Three Month Period Ended September 30, 2017
The Company recorded a net loss of $101,735 for the three month
period ended September 30, 2017 as compared to a net loss of $24,433 for the
three month period ended September 30, 2016. Professional fees decreased during
the three months ended September 30, 2017 to $16,971 (2016 - $96,287) as a
result of the termination of the receivership under which the Company had
operated during 2016 and 2015. In addition, during the three months ended
September 30, 2017 we recognized an impairment of intangible assets of $37,500
(2016 - $NIL) relating to the write off of the previously mentioned “Bound”
domains.
During the three months ended September 30, 2016, the Company
recognized a gain of $86,962 on the sale of domain names.
Nine Month Period Ended September 30, 2017
The Company recorded a net loss of $75,443 for the nine month
period ended September 30, 2017 as compared to a net loss of $268,428 for the
nine month period ended September 30, 2016. An increase in general and
administrative expenses to $157,589 (2016 - $29,539) during the nine months
ended September 30, 2017 was offset against a decrease in professional fees of
$63,082 (2016 - $227,905). Management fees during fiscal 2016 and 2015 were
minimal as the Company operated under receivership during that time. The
receivership was terminated in 2017, resulting in a decrease in professional
fees.
During the nine months ended September 30, 2016, the Company
recognized a gain of $206,764 on the sale of domain names. In addition, during
the nine months ended September 30, 2016, the Company paid the sum of $225,000
to C. Geoffrey Hampson in settlement of its litigation proceedings involving Mr.
Hampson. See “Legal Proceedings”. During the nine months ended September 30,
2017, the Company recognized a gain of $182,236 on the discharge of creditor
obligations as part of the receivership proceedings. The Company also recorded
an impairment of intangible assets of $37,500 relating to the write off of the
previously mentioned “Bound” domains.
Year Ended December 31, 2016 and 2015
The Company recorded a net loss of $419,774 for the year ended
December 31, 2016 and a net loss of $341,144 for the year ended December 31,
2015. During the year ended December 31, 2016, general and administrative
expenses increased by $36,956 to $76,956 as compared to $43,024 for the year
ended December 31, 2015. This was the result of additional costs related to a
special annual meeting held in 2016. Management fees and professional fees did
not materially change between the years ended December 31, 2016 and 2015.
Also during the year ended December 31, 2016 the Company
recognized a charge of $225,000 as a result of the settlement of litigation with
C. Geoffrey Hampson. See “Legal Proceedings”.
Liquidity and Capital Resources
At September 30, 2017, the Company had working capital surplus
of $663,980, a decrease of $37,943 or 5.4% from December 31, 2016 ($701,923) and
a decrease of $427,519 or 39.1% from December 31, 2015 ($1,091,499). During the
year ended 2016 the Company’s only significant source of cashflow came from the
sale of domain names. The Company did not have any significant source of
cashflow during the nine months ended September 30, 2017 or the year ended
December 31, 2015. Due to the fact that the Company has incurred recurring
losses and anticipates incurring further losses in the future, the Company’s
auditors have expressed a substantial doubt as to the Company’s ability to
continue as a going concern.
The Company believes it has the necessary cash requirements for
the next 12 months without having to raise additional funds.
The Company does not anticipate purchasing any plant or
significant equipment in the immediate future
Page 10 of 22
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
In August 2014, the FASB issued ASU 2014-15,
Presentation of
Financial Statements – Going Concern (Subtopic 205-40): Disclosure of
Uncertainties about an Entity’s Ability to Continue as a Going Concern
,
which is intended to define management’s responsibility to evaluate whether
there is substantial doubt about an organization’s ability to continue as a
going concern within one year after the date that the financial statements are
issued (or within one year after the date that the financial statements are
available to be issued when applicable) and to provide related footnote
disclosures. The ASU provides guidance to an organization’s management, with
principles and definitions that are intended to reduce diversity in the timing
and content of disclosures that are commonly provided by organizations today in
the financial statement footnotes. The ASU is effective for annual periods
ending after December 15, 2016, and interim periods within annual periods
beginning after December 15, 2016, which for the Company is January 1, 2017. The
adoption of this standard did not have a material impact on the Company’s
financial position or results of operations.
In August 2016, the FASB issued ASU No. 2016-15,
Statement
of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash
Payments.
This ASU is effective for annual periods beginning after December
15, 2018 and interim periods within fiscal years beginning after December 15,
2019. ASU No 2016-15 addresses eight specific cash flow issues with the
objective of reducing the existing diversity in practice. The adoption of this
standard will not have a material impact on the Company’s financial position or
results of operations.
Other recent accounting pronouncements issued by the FASB
(including its Emerging Issues Task Force), the American Institute of Certified
Public Accountants, and the SEC did not, or are not believed by management to,
have a material impact on the Company’s present or future financial position,
results of operations or cash flows.
PROPERTIES
The Company does not currently have any interests in any real
property.
The Company and its Subsidiaries operate from their principal
office at 820 – 1130 Pender Street, Vancouver, British Columbia, Canada. The
Company’s telephone number is (604) 648-0500.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information concerning
the number of common shares owned beneficially as of January 31, 2018 by: (i)
each person (including any group) known to us to own more than five percent (5%)
of any class of the Company’s voting securities, (ii) each of its directors,
(iii) each of its named executive officers; and (iv) officers and directors as a
group. Unless otherwise indicated, the shareholders listed possess sole voting
and investment power with respect to the shares shown.
Title of Class
|
Name and Address of
Beneficial
Owner
|
Amount and Nature of
Beneficial Ownership
|
Percentage of
Common
Shares
(1)
|
Directors and Officers
|
|
Common Shares
|
Amir Vahabzadeh, 1825 West King
Edward
Avenue, Vancouver, BC V6J
2W3
|
3,371,053
Direct
|
9.7%
|
Page 11 of 22
Title of Class
|
Name and Address of
Beneficial
Owner
|
Amount and Nature of
Beneficial Ownership
|
Percentage of
Common
Shares
(1)
|
Common Shares
|
David Jeffs, Stollenweg 5, 79299
Wittnau, Germany
|
8,409,903
Direct
1,124,500
Indirect
(2)
|
27.4%
|
Common Shares
|
John da Costa, 820 – 1130 West Pender
Street, Vancouver, BC V6E 4A4
|
0
|
0%
|
|
|
All Officers and Directors as a Group
|
12,905,456
|
37.1%
|
5% Shareholders
|
Common Shares
|
Amir Vahabzadeh, 1825 West King
Edward Avenue, Vancouver, BC V6J
2W3
|
3,371,053
Direct
|
9.7%
|
Common Shares
|
David Jeffs, Stollenweg 5, 79299
Wittnau, Germany
|
8,409,903
Direct
1,124,500
Indirect
(2)
|
27.4%
|
Common Shares
|
Susan Jeffs, 11750 Fairtide Road,
Ladysmith,
BC V9G 1K5
|
3,797,500
(2)
Direct
|
10.5%
|
Common Shares
|
Richard Jeffs, 11750 Fairtide Road,
Ladysmith, BC V9G 1K5
|
2,524,671
Direct
|
7.3%
|
Notes:
|
(1)
|
Under Rule 13d-3, a beneficial owner of a security
includes any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares: (i)
voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or
direct the disposition of shares. Certain shares may be deemed to be
beneficially owned by more than one person (if, for example, persons share
the power to vote or the power to dispose of the shares). In addition,
shares are deemed to be beneficially owned by a person if the person has
the right to acquire the shares (for example, upon exercise of an option)
within 60 days of the date as of which the information is provided. In
computing the percentage ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned
by such person (and only such person) by reason of these acquisition
rights. As a result, the percentage of outstanding shares of any person as
shown in this table does not necessarily reflect the person’s actual
ownership or voting power with respect to the number of its shares
actually outstanding on January 31, 2018. As of January 31, 2018, there were
34,837,625 shares of common stock issued and outstanding.
|
|
(2)
|
1,124,500 shares are registered in the names of immediate
family members of Mr.
Jeffs.
|
Changes in Control
The Company is not aware of any arrangement, which may result
in a change in control in the future.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name and positions of the
Company’s executive officers and directors as of the date hereof.
|
Name
|
Age
|
Positions
|
David M Jeffs
(Appointed October 15, 2010.)
|
48
|
Director, Chief Executive
Officer, President, Treasurer and Secretary
|
John da Costa
(Appointed December 15, 2016)
|
53
|
Director
|
Amir Vahabzadeh
(Appointed December 15, 2016)
|
49
|
Director
|
Page 12 of 22
Set forth below is a brief description of the background and
business experience of the Company’s executive officers and directors:
David Jeffs
Mr. Jeffs has been the Chief
Executive Officer, President, Treasurer and Secretary of the Company since
October 2010. He was also the Chief Executive Officer of the Company from July
2002 through May 2007 and the President and a director of the Company from July
2002 through September 2007. Previously he was a consultant to the Company’s
subsidiary, Domain Holdings Inc., from November 2000 and was responsible for
revenue-generating initiatives. Prior to consulting for Domain Holdings Inc.,
Mr. Jeffs was the president and director of a private corporation trading in
consumer goods products since 1997. Mr. Jeffs graduated from the University of
British Columbia with a Bachelor of Arts where he majored in economics.
Joao (John) da Costa
Mr. da Costa has more than
twenty five years of experience providing bookkeeping and accounting services to
both private and public companies and is the founder and President of Da Costa
Management Corp., a company that has provided management and accounting services
to public and private companies since August 2003. Since 2002, Mr. da Costa has
been the CFO, and a member of the Board of Directors of Triton Emission
Solutions Inc., a company reporting under the United States Securities Exchange
Act of 1934 (the “Exchange Act”). In addition to Triton Emission Solutions Inc.,
Mr. da Costa currently serves as the CFO, Treasurer and a director of Red Metal
Resources Ltd., a company reporting under the Exchange Act and engaged in the
business of acquiring and exploring mineral claims. Mr. da Costa also currently
serves as the CFO, Secretary and a director of Kesselrun Resources Ltd., a
Canadian reporting company listed on the TSX Venture Exchange.
Amir Vahabzadeh
Mr. Vahabzadeh has been involved
in the internet industry as a private online business owner and consultant for
over 20 years. Mr. Vahabzadeh holds a Bachelor of Arts degree and is a graduate
of the University of British Columbia and has been a shareholder of the Company
since 2000.
Term Of Office
The Company’s directors are elected to hold office until the
next annual meeting of the shareholders and until their respective successors
have been elected and qualified. The Company’s executive officers are appointed
by its board of directors and hold office until removed by its board of
directors or until their successors are appointed.
Other Significant Employees
Other than the Company’s sole executive officer, the Company
does not have any significant employees.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the total compensation paid or
accrued to the Company’s named executive officers, as that term is defined in
Item 402(m)(2) of Regulation S-K, during its last two completed fiscal years.
|
SUMMARY COMPENSATION TABLE
|
Name & Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compen-
sation ($)
|
Nonqualified
Deferred
Compen-
sation
Earnings
($)
|
All Other
Compen
-sation
($)
|
Total
($)
|
David Jeffs
President, CEO,
Treasurer & Director
|
2016
2015
|
$0
$0
|
$0
$0
|
$0
$0
|
$0
$0
|
$0
$0
|
$0
$0
|
$0
$0
|
$0
$0
|
Page 13 of 22
Notes:
|
(1)
|
The Company does not have a written compensation
arrangement in place with David Jeffs, however, it has agreed to
compensate Mr. Jeffs at a rate of $120,000 per year, commencing in January
of 2017, for his commitment as Chief Executive
Officer.
|
Outstanding Equity Awards at Fiscal Year End
As of the Company’s fiscal year ended December 31, 2016 the
Company had no outstanding equity awards.
Director Compensation
During our fiscal years ended December 31, 2016 and 2015, we
did not compensate our directors for acting in that capacity. We do not
currently have any compensation arrangements with our directors.
Compensation Committee Interlocks and Insider Participation
The Company does not have a compensation committee. The Board
of Directors conducts reviews with regard to the compensation of the directors
and the Chief Executive Officer once a year. To make its recommendations on such
compensation, the Board of Directors takes into account the types of
compensation and the amounts paid to officers of comparable publicly traded
companies.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Related Transactions
None of the following parties has, during the Company’s last
two fiscal years, had any material interest, direct or indirect, in any
transaction with us or in any presently proposed transaction that has or will
materially affect us, in which the Company is a participant and the amount
involved exceeds the lesser of $120,000 or 1% of the average of the Company’s
total assets for the last two completed fiscal years:
|
|
(i)
|
Any of its directors or officers;
|
|
|
(ii)
|
Any person proposed as a nominee for election as a
director;
|
|
|
(iii)
|
Any person who beneficially owns, directly or indirectly,
shares carrying more than 10% of the voting rights attached to its
outstanding common shares;
|
|
|
(iv)
|
Any of its promoters; and
|
|
|
(v)
|
Any relative or spouse of any of the foregoing persons
who has the same house as such person.
|
Page 14 of 22
Director Independence
Quotations for the Company’s common stock are currently entered
on the OTC Pink marketplace, which does not have director independence
requirements. In determining whether any of its directors are independent, the
Company has applied the definition for “Independent Directors” set out in NASDAQ
Rule 5605(a)(2). In applying this definition, the Company has determined that
John da Costa and Amir Vahabzadeh are independent directors.
LEGAL PROCEEDINGS
Wrongful Dismissal Proceedings with Former CEO of DHI
On March 9, 2000, a former Chief Executive Officer of DHI
commenced a legal action against DHI for wrongful dismissal and breach of
contract. He is seeking, at a minimum, 18.39% of the outstanding shares of DHI,
specific performance of his contract, special damages of approximately $30,000,
aggravated and punitive damages, interest and costs. On June 1, 2000, DHI filed
a defense and counterclaim claiming damages and special damages for breach of
fiduciary duty and breach of his employment contract. The plaintiff has taken no
further action.
Legal Proceedings With Former CEO
Between May 2010 and February 2016 the Company was involved in
a number of law suits involving its former CEO, C. Geoffrey Hampson.
On May 14, 2010, David Jeffs, the Company’s current CEO, and
Richard Jeffs (plaintiffs) filed a complaint in the Circuit Court of Cook
County, Illinois, Chancery Division in which they, derivatively on behalf of the
Company, sued Mr. Hampson, James Taylor, Mark Benham and Boris Wertz
(defendants) and the Company (nominal defendant). Messrs. Taylor, Benham and
Wertz were directors of the Company at the time the lawsuit was filed. On
October 22, 2010, the Company took over as plaintiff in the complaint. The
Company alleged, among other matters, that (i) the defendant members of the
board of directors breached their fiduciary duties of loyalty, trust, good faith
and due care by failing to properly supervise Mr. Hampson, and (ii) that Mr.
Hampson breached his fiduciary duties and his employment agreement and defrauded
the Company by failing to devote the time necessary to manage the Company’s
business and failing to disclose to the board of directors his activities
relating to other businesses. The Company sought compensatory damages of no less
than $50,000,000, punitive damages, and attorney’s fees and other costs of
bringing the action. The complaint against Messrs. Hampson, Taylor, Benham and
Wertz was stayed in Illinois pending the outcome of arbitration, commenced by
Mr. Hampson against the Company on January 28, 2011 in British Columbia (see
below). The proceedings in Cook County, Illinois were stayed pending conclusion
of the arbitration proceedings.
On January 26, 2011, Mr. Hampson filed a third-party complaint
in the Circuit Court of Cook County, Illinois, against the Company. The claim
sought indemnification to cover the costs of Mr. Hampson in defending a
defamation suit filed against him during his time as CEO of the Company.
On January 28, 2011, Mr. Hampson initiated arbitration
proceedings in British Columbia under his employment agreement seeking severance
pay and expenses of $300,697.73.
On October 4, 2012, Mr. Hampson filed a complaint against the
Company in the Second Judicial District Court of the State of Nevada seeking a
court-ordered election of directors. On October 29, 2012 the court granted a
Writ of Mandate and Order Shortening Time. On November 19, 2012, the Company
held a meeting of its stockholders in Reno, Nevada. Stockholders present either
in person or on the provided conference call service did not represent a quorum
and the meeting was adjourned.
On February 19, 2013, Mr. Hampson filed another lawsuit in the
Circuit Court of Cook Country, Illinois County, Chancery Division against David
Jeffs, Susan Jeffs, John L Hayes, Ogletree Deakins Nash Smoak & Stewart
P.C., and Krasnow Saunders Kaplan & Beninato LLP as defendants, and the
Company as a nominal defendant.
Page 15 of 22
On February 21, 2013, Mr. Hampson, Christopher Hampson, and
Hampson Equities filed in the Second Judicial District Court of the State of
Nevada a supplemental petition to compel election of directors, application to
appoint temporary and permanent receiver, and application to enter ancillary
equitable relief.
On March 29, 2013, Mr. Hampson, Christopher Hampson, and
Hampson Equities Ltd. filed a motion for preliminary injunction in the Second
Judicial District Court of the State of Nevada seeking an order enjoining the
Company and its officers and directors from dealing with the Company’s assets,
engaging in self-dealing transactions and violating the October 29, 2012 writ of
mandate.
On June 18, 2013, the Company, David Jeffs, Mr. Hampson,
Christopher Hampson and Hampson Equities agreed to a global binding arbitration
to take place in Las Vegas, Nevada to resolve all of the outstanding lawsuits
and arbitration involved in the dispute. The arbitration took place in October
of 2013.
On June 4, 2014, the arbitrator delivered his findings. As a
result of the arbitration, Mr. Hampson was ordered to repay the Company $297,747
and the arbitrator ordered a receiver to be put in charge of the assets of the
Company to determine whether or not the Company should be dissolved. The Company
operated under receivership from June 4, 2014 to May 4, 2017, whereupon the
District Court for Washoe County, Nevada discharged the Company from
receivership.
On February 16, 2016, the appointed receiver of the Company
negotiated a final settlement and mutual release with Mr. Hampson. As part of
this settlement, the Company paid $225,000 to Mr. Hampson in exchange for the
surrender by Mr. Hampson of 3,022,875 shares of the Company’s common stock for
cancellation. The release absolutely and unconditionally released the Company,
from any and all claims for relief, actions, suits, damages, debts, liabilities,
judgments, executions and other claims of every kind and nature whatsoever.
Wrongful Dismissal Suit with Former Employee
On March 17, 2011, a former employee filed a civil claim in the
Supreme Court of British Columbia against the Company and the Subsidiaries
seeking special damages of $120,000 and other damages as a result of the
Company’s termination of her employment. The Company filed a counter claim. On
February 16, 2016 the former employee and the Company agreed to dismiss all
claims.
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
Holders of the Company’s Shares
As of the date of this registration statement, the Company had
72 registered shareholders.
Market Information
The Company’s common shares trade over-the-counter in the
United States on the OTC Pink marketplace under the symbol “LIVC.” The following
is the high and low close information for the Company’s common stock during each
fiscal quarter of its last two fiscal years on the OTC Pink marketplace.
|
Period ended
|
|
High
|
|
|
Low
|
|
|
30 September 2017
|
$
|
0.063
|
|
$
|
0.02
|
|
|
30 June 2017
|
$
|
0.10
|
|
$
|
0.03
|
|
|
31 March 2017
|
$
|
0.08
|
|
$
|
0.01
|
|
|
31 December 2016
|
$
|
0.025
|
|
$
|
0.009
|
|
|
30 September 2016
|
$
|
0.0121
|
|
$
|
0.008
|
|
|
30 June 2016
|
$
|
0.0125
|
|
$
|
0.005
|
|
|
31 March 2016
|
$
|
0.01
|
|
$
|
0.0038
|
|
|
31 December 2015
|
$
|
0.0275
|
|
$
|
0.005
|
|
|
30 September 2015
|
$
|
0.0365
|
|
$
|
0.0245
|
|
|
30 June 2015
|
$
|
0.037
|
|
$
|
0.036
|
|
|
31 March 2015
|
$
|
0.0435
|
|
$
|
0.035
|
|
Page 16 of 22
High and low bid information for the last two fiscal years and
the interim periods ended March 31, 2017, June 30, 2017 and September 30, 2017
was not available. The above prices reflect the high and low close price for the
periods listed.
Bid quotations entered on the OTC Pink marketplace reflect
inter-dealer prices, without retail mark-up, markdown or commission and may not
represent actual transactions.
Dividend Rights
There are no provisions in the Company’s articles of
incorporation or bylaws restricting the Company’s ability to pay dividends on
our common stock. Chapter 78 of the Nevada Revised Statutes (the “NRS”) does
provide certain limitations on the Company’s ability to declare and pay
dividends. Section 78.288 of the NRS prohibits the Company from declaring
dividends where, after giving effect to the distribution of the dividend:
|
|
(a)
|
The Company would not be able to pay its debts as they
become due in the usual course of business; or
|
|
|
|
|
|
|
(b)
|
Except as allowed in the Company’s articles of
incorporation the Company’s total assets would be less than the sum of the
Company’s total liabilities plus the amount that would be needed to
satisfy any preferential rights.
|
The Company has never declared, nor paid, any dividend since
their incorporation and they do not foresee paying any dividend in the near
future since all available funds will be used to conduct the Company’s business
development activities. Any future payment of dividends will depend on its
financing requirements and financial condition and other factors which the board
of directors, in its sole discretion, may consider appropriate.
Equity Compensation Plan Information
The Company does not currently have any outstanding equity
compensation plans. The Company’s 2007 Stock Incentive Plan expired in August
2017 in accordance with its terms.
RECENT SALES OF UNREGISTERED SECURITIES
During the past three years, the Company did not issue any
securities.
Cancellation of issued shares
On August 10, 2016, in connection with the settlement reached
with C. Geoffrey Hampson, the Company’s former CEO, as described in “Legal
Proceedings” above, 3,022,875 common shares were returned to treasury and
subsequently cancelled.
DESCRIPTION OF REGISTRANT’S SECURITIES TO BE
REGISTERED
General
The Company’s authorized capital consists of 500,000,000 shares
of common stock, with a par value of $0.001 per share. As of the date of this
registration statement, the Company had 34,837,625 common shares issued and
outstanding.
Common Stock
The following is a summary of the material rights and
restrictions associated with its common shares. This description does not
purport to be a complete description of all of the rights of the Company’s
shareholders and is subject to, and qualified in its entirety by, the
provisions of its most current Bylaws and Bylaws, which are included as exhibits
to this registration statement.
Page 17 of 22
The holders of the Company’s common stock are entitled to
receive notice of and to attend and vote at all meetings of the shareholders and
each share of common stock shall confer the right to one vote in person or by
proxy at all meetings of the shareholders. Stockholders holding not less than
twenty five percent (25%) of the voting power of the Company whether present in
person or by proxy, constitute a quorum for all meetings of the stockholders.
Except as otherwise provided by the NRS, the Company’s Articles of Incorporation
or its Bylaws, all action taken by the holders of a majority of the voting power
present at the meeting, excluding abstentions, at any meeting at which a quorum
is present shall be valid and binding. In the case of certain fundamental
changes such as liquidation, merger, or change of entity type or change of
jurisdiction of incorporation, or approval of stockholders owning a majority of
the Company’s outstanding voting power is required.
Holders of the Company’s common stock are entitled to receive
such dividends in any financial year as the board of directors may determine by
resolution, provided that dividends may not be declared or paid after giving
effect to the dividend, (i) the Company would be unable to pay or liabilities as
they become due in the usual course of business, or (ii) if the sum of its total
assets would be less than the total liabilities of the Company. In the event of
its liquidation, dissolution or winding-up, whether voluntary or involuntary,
the holders of the Company’s common stock are entitled to receive, subject to
the prior rights, if any, of the holders of any other class of shares, the
remaining property and assets of the Company. The Company’s common stock does
not carry any pre-emptive, subscription, redemption or conversion rights, nor do
they contain any sinking fund provisions.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Indemnification
Chapter 78 of the NRS, pertaining to private corporations,
provides that the Company is required to indemnify its officers and directors to
the extent that they are successful in defending any actions or claims brought
against them as a result of serving in that position, including criminal, civil,
administrative or investigative actions and actions brought by or on behalf of
the Company.
Chapter 78 of the NRS further provides that the Company is
permitted (but not required) to indemnify its officers and directors for
criminal, civil, administrative or investigative actions brought against them by
third parties and for actions brought by or on behalf of the Company, even if
they are unsuccessful in defending that action, if the officer or director:
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(a)
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is not found liable for a breach of his or her fiduciary
duties as an officer or director or to have engaged in intentional
misconduct, fraud or a knowing violation of the law; or
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(b)
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acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company,
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe that his conduct was unlawful.
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However, with respect to actions brought by or on behalf of the
Company against its officers or directors, the Company is not permitted to
indemnify its officers or directors where they are adjudged by a court, after
the exhaustion of all appeals, to be liable to the Company or for amounts paid
in settlement to the Company, unless, and only to the extent that, a court
determines that the officers or directors are entitled to be indemnified.
The Company’s Bylaws provide that the Company will indemnify
its officers and directors to the full extent permitted by law, provided that
the Company is not required to indemnify any director or officer in connection
with any proceeding initiated by that person, unless (i) indemnification is
required by law, (ii) the Company’s Board authorized the proceeding or (iii) the
Company voluntarily indemnifies the person, as permitted under the NRS.
Page 18 of 22
Advance of Expenses
Our Bylaws provide that we will advance to any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was our director or officer,
or is or was serving at our request as a director or executive officer of
another corporation, partnership, joint venture, trust or other enterprise,
prior to the final disposition of the proceeding, promptly following request
therefor, all expenses incurred by any director or officer in connection with
such proceeding upon receipt of an undertaking by or on behalf of such person to
repay said amounts if it should be determined ultimately that such person is not
entitled to be indemnified under our Bylaws or otherwise.
Our Bylaws provide that no advance shall be made by us to our
officers (except by reason of the fact that such officer is or was our director
in which event this paragraph shall not apply) in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, if a
determination is reasonably and promptly made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to the
proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to our best interests.
Insurance
To the fullest extent permitted by the NRS, the Board of
Directors, may cause the Company to purchase and maintain insurance on behalf of
any person who is or was a Director, officer, employee or agent of the Company,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the Company would have the power to indemnify such
person.
Page 19 of 22
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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1.
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Audited financial statements for the fiscal years ended
December 31, 2016, including:
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(a)
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Report of Independent Registered Accounting
Firm;
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(b)
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Consolidated Balance Sheet for the years ended December
31, 2015 and 2016;
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(c)
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Consolidated Statements of Operations for the years ended
December 31, 2015 and 2016;
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(d)
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Consolidated Statements of Cash Flows for the years ended
December 31, 2015 and 2016;
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(e)
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Consolidated Statements of Stockholders’ Equity;
and
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(f)
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Notes to the Financial
Statements.
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2.
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Unaudited financial statements for the Nine Month Period
Ended September 30, 2017, including:
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(a)
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Consolidated Balance Sheet for the Nine Month Period
Ended September 30, 2017;
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(b)
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Consolidated Statements of Operations for the Nine Month
Period Ended September 30, 2017 and 2016;
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(c)
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Consolidated Statements of Cash Flows for the Nine Month
Period Ended September 30, 2017 and 2016;
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(d)
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Consolidated Statements of Stockholders’ Equity;
and
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(e)
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Notes to the financial Statements
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Page 20 of 22
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
On January 13, 2017, the Company engaged Dale Matheson
Carr-Hilton Labonte LLP (“DMCL”) to act as the Company’s principal accountant
for the purpose of auditing the Company’s financial statements. The engagement
of DMCL as the Company’s principal accountant effectively dismissed the
Company’s prior independent registered public accounting firm, Davidson &
Company LLP (“Davidson”). The decision to engage DMCL and dismiss Davidson was
approved by the Company’s board of directors. The Company did not consult with
DMCL during the last two fiscal years or any subsequent interim period prior to
their engagement regarding any matter set out in Item 304(a)(2) of Regulation
S-K.
Davidson did not audit the Company’s financial statements for
the past two fiscal years. During the two most recent fiscal years and in the
subsequent interim periods preceding the engagement of DMCL, there were no
disagreements with Davidson on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure. The Company will
provide Davidson with a copy of this report, and will request that Davidson
provide a letter addressed to the Securities and Exchange Commission stating
whether or not they agree with such disclosure. The Company will file any letter
received from Davidson as an exhibit to an amendment to this registration
statement.
FINANCIAL STATEMENTS AND EXHIBITS
Page 21 of 22
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
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Live Current Media Inc.
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Date: January 31, 2018
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By:
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/s/
David M. Jeffs
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DAVID M. JEFFS
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Chief Executive Officer, President, Chief
Financial Officer
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and Secretary
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(Principal Executive Officer and Principal
Financial Officer)
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Page 22 of 22
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