An investment in the Companys securities 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 Companys 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 Companys
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 Companys 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 Companys Domain Name and Website
Development Business
Effect of Existing Governmental Regulation.
The
Companys 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 Companys 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 Currents inventory of domain names.
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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 Companys 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 Currents business and add additional costs to doing
business on the Internet.
Effect of new root domain names.
The Companys 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 Companys 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 Companys 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.
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 Companys 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.
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.
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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.
Risks Related to the Companys eBalance Distribution
Business
Competitive Marketplace for Medical and Wellness
Devices.
The eBalance device operates in a highly competitive market.
eBalance devices will face competition from devices manufactured and marketed by
large, well established medical and wellness device manufacturers and
pharmaceutical companies in the market for treating and managing diabetes and
related ailments. Many of these companies and their devices are very well
accepted by health practitioners and have significant resources, and the Company
may not be able to compete effectively.
The market for treatment and management of diabetes and related
ailments is intensely competitive, subject to rapid change and significantly
affected by new product introductions. The eBalance device competes indirectly
with large pharmaceutical and medical device companies, such as Bayer Corp.,
Becton Dickinson Corp., LifeScan Inc., a division of Johnson & Johnson, the
MediSense Inc. and TheraSense Inc. These competitors products are based on
traditional healthcare model and are well accepted by health practitioners and
patients. If these companies decide to penetrate the target market for the
eBalance device, they could threaten threaten the Companys ability to market
and distribute the eBalance device.
Developing Technology with Numerous Governmental
Regulations.
The eBalance device will be subject to rigorous regulation by
the FDA, Health Canada and numerous international, supranational, federal, and
state authorities. The process of obtaining regulatory approvals to market a
medical device can be costly and time-consuming, and approvals might not be
granted for future products, or additional indications or uses of existing
products, on a timely basis, if at all. Delays in the receipt of, or failure to
obtain approvals for, the eBalance products, or new indications and uses, could
result in delayed realization of product revenues, reduction in revenues, and in
substantial additional costs. In addition, no assurance can be given that the
eBalance device will remain in compliance with applicable FDA, Health Canada and
other regulatory requirements once approval or marketing authorization has been
obtained. These requirements include, among other things, regulations regarding
manufacturing practices, product labeling, and advertising and postmarketing
reporting, including adverse event reports and field alerts due to manufacturing
quality concerns.
Changes in the health care regulatory environment may
adversely affect our business.
A number of the provisions of the U.S.
Patient Protection and Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010 and its amendments changed access to health care
products and services and established new fees for the medical device industry.
Future rulemaking could increase rebates, reduce prices or the rate of price
increases for health care products and services, or require additional reporting
and disclosure. The Company cannot predict the timing or impact of any future
rulemaking.
Inability of Cell MedX to protect and enforce intellectual
property rights.
As a distributor of the eBalance device, the Company is
reliant on the intellectual property rights of Cell MedX to its technology. If
Cell MedX is unable to defend, protect and enforce its intellectual property
rights, the Companys ability to distribute eBalance devices could adversely be
affected. In addition, an adverse outcome in any litigation or interference
proceeding could subject the Company to significant liabilities to third parties
and require the Company to cease distributing eBalance devices. In addition, a
finding that any of Cell MedXs intellectual property rights are invalid could
allow competitors to more easily and cost-effectively develop and manufacture
competing devices. Thus, an unfavorable outcome in any patent litigation or
interference proceeding could have a material adverse effect on the Companys
future business prospects, financial condition or results of operations.
eBalance Device is Unproven
. The eBalance device is a
new product to the health, wellness and medical device space, and a commercial
market has not yet developed. The Companys future success will depend on its
ability to work with Cell MedX to develop a market for the eBalance device and
to gain commercial acceptance of the eBalance device and the eBalance
Technology.
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Lack of Operating History in Marketplace.
The Company
does not have any operating history or experience in the distribution of medical
or wellness devices. A lack of experience in this marketplace could make it more
difficult for the Company to compete. In addition, the Companys lack of
experience in this space makes it difficult to assess or estimate its future
potential. Success has yet to be proven and financial losses should be expected
to continue in the near future.
Risks Related to the Companys Securities
The Companys 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
Companys Common Stock is likely to fluctuate in the future, especially if the
Companys Common Stock is thinly traded. Factors that may have a significant
impact on the market price of the Companys Common Stock include:
(a)
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actual or anticipated variations in the Companys results
of operations;
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(b)
|
the Companys ability or inability to generate new
revenues;
|
(c)
|
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 Companys financial
disclosures or practices.
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The Companys 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 Companys Common Stock.
The Company does not expect to pay dividends in the
foreseeable future.
The Company has never paid cash dividends on its Common
Stock and has no plans to do so in the foreseeable future. The Company intends
to retain earnings, if any, to develop and expand its business.
"
Penny Stock" rules may make buying or selling the Companys
Common Stock difficult, and severely limit its
market and liquidity.
Trading in The Companys Common Stock is subject to certain regulations
adopted by the SEC commonly known as the "penny stock" rules. The Companys
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 Companys 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 Companys
Common Stock, which could severely limit their market price and
liquidity of its Common Stock. This could prevent you from reselling your shares
and may cause the price of the Common Stock to decline.
Lack of operating revenues.
The Company has limited
operating revenues and is expected to continue to do so for the foreseeable
future. Management has assessed the Companys 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 Companys
ability to continue as a going concern. The audit report of the Companys
principal independent accountants for the years ended December 31, 2017 and
December 31, 2016 includes a statement regarding the uncertainty of the
Companys ability to continue as a going concern. The Companys 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 Companys business to fail.
No assurance that forward-looking assessments will be
realized.
The Companys 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
managements control. The assumptions and hypotheses used in preparing any
forward-looking assessments contained herein are considered reasonable by
management.
12
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.
FOR ALL OF THE AFORESAID REASONS AND OTHERS SET-FORTH AND
NOT SET-FORTH HEREIN, AN INVESTMENT IN OUR SECURITIES INVOLVES A CERTAIN DEGREE
OF RISK. ANY PERSON CONSIDERING TO INVEST IN OUR SECURITIES SHOULD BE AWARE OF
THESE AND OTHER FACTORS SET-FORTH IN THIS REPORT AND IN THE OTHER REPORTS AND
DOCUMENTS THAT WE FILE FROM TIME TO TIME WITH THE SEC AND SHOULD CONSULT WITH
HIS/HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN INVESTMENT IN OUR
SECURITIES. AN INVESTMENT IN OUR SECURITIES SHOULD ONLY BE ACQUIRED BY PERSONS
WHO CAN AFFORD TO LOSE THEIR TOTAL INVESTMENT.