LIVE CURRENT MEDIA INC.
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
(expressed in US dollars)
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash
|
$
|
176,511
|
|
$
|
432,850
|
|
|
|
|
176,511
|
|
|
432,850
|
|
Non-current assets
|
|
|
|
|
|
|
|
Intangible assets
|
|
105,417
|
|
|
111,951
|
|
|
Development of Computer Software
|
|
128,268
|
|
|
-
|
|
|
Equity Investment
|
|
398,308
|
|
|
-
|
|
|
|
$
|
808,504
|
|
$
|
544,801
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
116,724
|
|
$
|
91,060
|
|
|
Other payable
|
|
17,849
|
|
|
17,645
|
|
|
|
|
134,573
|
|
|
108,705
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
Capital stock
|
|
|
|
|
|
|
|
Authorized:
|
|
|
|
|
|
|
|
500,000,000 common shares, par value $0.001 per share
|
|
|
|
|
|
|
Issued and outstanding as of December 31, 2020 and December 31, 2019:
|
|
|
|
|
|
|
|
34,837,625 common shares (34,837,625 at December 31, 2019)
|
34,838
|
|
|
34,838
|
|
|
Additional paid in capital
|
|
18,376,735
|
|
|
18,370,899
|
|
|
Deficit
|
|
(17,737,642
|
)
|
|
(17,969,641
|
)
|
|
|
|
673,931
|
|
|
436,096
|
|
|
|
$
|
808,504
|
|
$
|
544,801
|
|
The accompanying notes are an integral part of these consolidated financial statements
F-4
LIVE CURRENT MEDIA INC.
|
CONSOLIDATED STATEMENTS OF OPERATIONS
(expressed in US dollars)
|
|
|
|
For the years ended
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Operating expenses (income)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domain content and registration
|
$
|
3,140
|
|
$
|
13,405
|
|
|
Fair value change of equity investment
|
|
(47,174
|
)
|
|
-
|
|
|
Gain on sale of license
|
|
(351,134
|
)
|
|
-
|
|
|
General and administration
|
|
42,162
|
|
|
47,922
|
|
|
Interest expense
|
|
204
|
|
|
205
|
|
|
Gain on sale of domain names
|
|
(117,466
|
)
|
|
(359,200
|
)
|
|
Management fees
|
|
123,708
|
|
|
120,000
|
|
|
Marketing
|
|
23,376
|
|
|
47,733
|
|
|
Professional fees
|
|
60,450
|
|
|
57,248
|
|
|
Transfer agent and regulatory
|
|
29,229
|
|
|
29,211
|
|
|
Travel
|
|
-
|
|
|
9,495
|
|
|
Website Development
|
|
1,506
|
|
|
18,216
|
|
Income (Loss) from operations
|
|
231,999
|
|
|
15,765
|
|
|
|
|
|
|
|
|
|
Net income (loss) before taxes
|
|
231,999
|
|
|
15,765
|
|
Provision for taxes
|
|
|
|
|
|
|
|
Current taxes recovered
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Net income (loss) for the year
|
$
|
231,999
|
|
$
|
15,765
|
|
|
|
|
|
|
|
|
Basic and diluted income per share
|
$
|
0.01
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Weighted average number of basic common shares outstanding
|
|
34,837,625
|
|
|
34,837,625
|
|
The accompanying notes are an integral part of these consolidated financial statements
F-5
LIVE CURRENT MEDIA INC.
|
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(expressed in US dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
|
|
|
Total
|
|
|
|
|
Number
|
|
|
|
|
|
Paid In
|
|
|
Accumulated
|
|
|
Stockholders'
|
|
|
|
|
of Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Deficit
|
|
Balance, December 31, 2018
|
|
|
34,837,625
|
|
$
|
34,838
|
|
$
|
18,370,899
|
|
$
|
(17,985,406
|
)
|
$
|
420,331
|
|
Net income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
15,765
|
|
|
15,765
|
|
Balance, December 31, 2019
|
|
|
34,837,625
|
|
$
|
34,838
|
|
$
|
18,370,899
|
|
$
|
(17,969,641
|
)
|
$
|
436,096
|
|
Net income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
231,999
|
|
|
231,999
|
|
Stock based compensation
|
|
|
-
|
|
|
-
|
|
|
5,836
|
|
|
-
|
|
|
5,836
|
|
Balance, December 31, 2020
|
|
|
34,837,625
|
|
$
|
34,838
|
|
$
|
18,376,735
|
|
$
|
(17,737,642
|
)
|
$
|
673,931
|
|
The accompanying notes are an integral part of these consolidated financial statements
F-6
LIVE CURRENT MEDIA INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
(expressed in US dollars)
|
|
|
|
|
For the years ended
|
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Cash flows used in operating activities
|
|
|
|
|
|
|
|
Net income for the year
|
$
|
231,999
|
|
$
|
15,765
|
|
|
Non-cash items
|
|
|
|
|
|
|
|
|
Gain on sale of domain names
|
|
(117,466
|
)
|
|
(359,200
|
)
|
|
|
Fair value change on equity investment
|
|
(47,174
|
)
|
|
-
|
|
|
|
Gain on sale of licences
|
|
(351,134
|
)
|
|
-
|
|
|
|
Accrued interest
|
|
204
|
|
|
205
|
|
|
|
Stock based compensation
|
|
5,836
|
|
|
-
|
|
|
Changes in non-cash working capital item
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
25,684
|
|
|
5,474
|
|
|
|
Cash used in operating activities
|
|
(252,051
|
)
|
|
(337,756
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows used in investing activities
|
|
|
|
|
|
|
|
Proceeds received for sale of domain name
|
|
123,980
|
|
|
381,700
|
|
|
Website development
|
|
(128,268
|
)
|
|
-
|
|
|
|
Cash used in investing activities
|
|
(4,288
|
)
|
|
381,700
|
|
|
|
|
|
|
|
|
|
|
Change in cash
|
|
(256,339
|
)
|
|
43,944
|
|
Cash, beginning of year
|
|
432,850
|
|
|
388,906
|
|
Cash, end of year
|
$
|
176,511
|
|
$
|
432,850
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
Interest paid
|
$
|
-
|
|
$
|
-
|
|
Income taxes paid
|
$
|
-
|
|
$
|
-
|
|
The accompanying notes are an integral part of these consolidated financial statements
F-7
LIVE CURRENT MEDIA INC.
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
December 31, 2020
|
1. NATURE AND CONTINUANCE OF OPERATIONS
Live Current Media Inc. (the "Company" or "Live Current") was incorporated under the laws of the State of Nevada on October 10, 1995. The Company's wholly owned principal operating subsidiary, Domain Holdings Inc. ("DHI"), was incorporated under the laws of British Columbia on July 4, 1994 under the name "IMEDIAT Digital Creations Inc.". On April 14, 1999, IMEDIAT Creations, Inc. changed its name to "Communicate.com Inc." and was redomiciled from British Columbia to the jurisdiction of Alberta. On April 5, 2002, Communicate.com Inc. changed its name to Domain Holdings Inc.
On March 13, 2008, the Company incorporated a wholly owned subsidiary in the state of Delaware, Perfume.com Inc. (Perfume Inc.) which is a dormant and inactive company.
Live Current is a digital technology company involved in the entertainment industry. Currently developing SPRT MTRX which is positioned in the sports/gaming sector.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of December 31, 2020, the Company has not achieved profitable operations, has incurred recurring operating losses and further losses are possible. The Company has an accumulated deficit of $17,737,642. The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to further develop its business. To date, the Company has funded operations through the issuance of capital stock and debt. Management plans to continue raising additional funds through equity or debt financings and loans from directors. There is no certainty that further funding will be available as needed. These factors raise substantial doubt about the ability of the Company to continue operating as a going concern. The ability of the Company to continue its operations as a going concern is dependent upon its ability to raise sufficient new capital to fund its operating commitments and ongoing losses and ultimately on generating profitable operations. The consolidated financial statements do not include any adjustments to be recorded to assets or liabilities that might be necessary should the Company be unable to continue as a going concern.
In March of 2020, the World Health Organization declared an outbreak of COVID-19 a global pandemic. The COVID-19 has impacted a vast array of businesses through the restrictions put in place by most governments internationally, including the USA federal government as well as provincial and municipal governments, regarding travel, business operations and isolation/quarantine orders. At this time, it is unknown to what extent the impact of the COVID-19 outbreak may have on the Company as this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place world-wide to fight the virus. While the extent of the impact is unknown, the COVID-19 outbreak may hinder the Company's ability to raise financing for operating costs due to uncertain capital markets, supply chain disruptions, increased government regulations and other unanticipated factors, all of which may also negatively impact the Company's business and financial condition.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States ("US GAAP'), and pursuant to the rules and regulations of the United States Security and Exchange Commission ("SEC"), and are expressed in United States dollars.
Basis of Presentation
These consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances have been eliminated on consolidation.
Development Costs
The Company has adopted the provisions of ASC 985-20-25, Costs of Software to Be Sold, Leased or Marketed, whereby costs incurred to establish the technological feasibility of a computer software product to be sold, leased or marketed are research and development coasts. Those costs are expressed as incurred; costs of producing product masters incurred subsequent to establishing technological feasibility are capitalized; and costs incurred when the product is available for general release to the customers are expensed as incurred. Upgrades and enhancements are capitalized if they result in added functionality which enables the software to preform tasks it was previously incapable of performing.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. Examples of key estimates in these financial statements include the valuation of deferred tax assets, estimated variable consideration on the sale of license, fair value of stock-based compensation valuation of intangible assets and fair value of equity investment. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
F-8
LIVE CURRENT MEDIA INC.
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
December 31, 2020
|
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and cash equivalents
All highly liquid investments, with an original term to maturity of three months or less are classified as cash and cash equivalents. Cash and cash equivalents are stated at cost which approximates market value.
Intangible Assets not subject to amortization
Intangible assets not subject to amortization consist of direct navigation domain names. While the domain names are renewed annually, through payment of a renewal fee to the applicable registry, the Company has the exclusive right to renew these names at its option. The Company has determined that there are currently no legal, regulatory, contractual, economic or other factors that limit the useful life of these domain names on an aggregate basis and accordingly treat the portfolio of domain names as indefinite life intangible assets.
The Company reviews individual domain names in the portfolio for potential impairment throughout the fiscal year in determining whether a particular URL should be renewed. Impairment is recognized for names that are not renewed. The Company performs an annual assessment of individual domain names in its portfolio to determine whether it is more likely than not that the fair market value of a domain name is less than its carrying amount. When it is determined that the fair value of a domain name is less than its carrying amount, impairment is recognized.
Foreign Currency Translation
The Company's functional currency is the US dollar and reporting currency is the United States dollar. The Company translates assets and liabilities to US dollars using year-end exchange rates, stockholders' deficit accounts are translated at historical exchange rates, and translates revenues and expenses using average exchange rates during the period. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the Statement of Operations.
Income Recognition
The Company recognizes income from the sale of intangible assets when the control of the asset is transferred to the customer at the amount that reflects the consideration it expects to be entitled to in exchange for this performance obligation. In determining the transaction price for the sale of assets, the Company considers the effects of variable consideration. Some contracts for the sale of assets provide the Company future royalty payments based on the sales generated by the purchaser. The Company constrained its estimates to reduce the probability of a significant income reversal in future periods. The Company uses the expected value method to estimate the variable consideration because this method best predicts the amount of variable consideration to which the Company will be entitled. The Company uses historical evidence, current information and forecasts to estimate the variable consideration. The requirements in ASC 606 on constraining estimates of variable consideration are applied to determine the amount of variable consideration that can be included in the transaction price. The estimate is updated at each reporting period date.
Income taxes
The Company follows the liability method of accounting for income taxes. Under this method, current income taxes are recognized for the estimated income taxes payable for the current year. Deferred income tax assets and liabilities are recognized in the current year for temporary differences between the tax and accounting basis of assets and liabilities as well as for the benefit of losses available to be carried forward to future years for tax purposes. Deferred income tax assets and liabilities are measured using tax rates and laws expected to apply in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is "more likely-than-not" that a deferred tax asset will not be realized. Deferred tax assets and deferred tax liabilities, along with any associated valuation allowance, are offset and shown in the financial statements as a single noncurrent amount when these items arise within the same tax jurisdiction.
The Company and its subsidiaries are subject to U.S. federal income tax and Canadian income tax, as well as income tax of multiple state and local jurisdictions. Based on the Company's evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in the Company's financial statements.
F-9
LIVE CURRENT MEDIA INC.
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
December 31, 2020
|
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Stock Based Payments
The Company accounts for all stock-based payments and awards under the fair value based method. The Company accounts for the granting of stock options to employees using the fair value method whereby all awards to employees will be measured at fair value on the date of the grant. The fair value of all stock options are expensed over their vesting period with a corresponding increase to additional paid-in capital. Upon exercise of stock options, the consideration paid by the option holder, together with the amount previously recognized in additional paid-in capital is recorded as an increase to share capital. Stock options granted to employees are accounted for as liabilities when they contain conditions or other features that are indexed to other than a market, performance or service condition. Stock-based payments to non-employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of stock-based payments to non-employees is periodically re-measured until the counterparty performance is complete, and any change therein is recognized over the vesting period of the award and in the same manner as if the Company had paid cash instead of paying with or using equity based instruments. The fair value of the stock-based payments to non-employees that are fully vested and non-forfeitable as at the grant date are measured and recognized at that date.
The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected dividend yield of the common stock. Changes in these assumptions can materially affect the fair value estimate.
Fair Value of Financial Instruments
The estimated fair values for financial instruments are determined based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair value of cash, receivable, accounts payable and amounts due to shareholders of Auctomatic approximate their carrying value due to the short-term nature of those instruments.
ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
Level 3 - Unobservable inputs that are supported by little or no market activity, there for requiring an entity to develop its own assumptions about the assumption that market participants would use in pricing.
The Company had no Level 3 assets or liabilities required to be recorded at fair value on a recurring basis in accordance with US GAAP as at December 31, 2020 and 2019. Cash is measured at fair value using level 1 and equity investment are measured at fair value using level 2.
F-10
LIVE CURRENT MEDIA INC.
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
December 31, 2020
|
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basic and Diluted Income (Loss) per Share
Earnings or loss per share ("EPS") is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income (loss) by the weighted-average of all potentially dilutive shares of the common stock that were outstanding during the years presented. The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common shares at the average market price for the period.
3. SHARE CAPITAL
Authorized
The authorized capital of the Company consists of 500,000,000 shares of common stock with a par value of $0.001 per share. No other shares have been authorized
4. STOCK OPTIONS
The Company's Stock Option Plan (the "Plan") provides the grant of 5,000,000 shares of common stock of the Company, subject to increase after March 31, 2019, upon approval by the Company's directors, provided that the total number of shares that may be optioned and sold under the Plan shall at no time be greater than 15% of total number of shares of common stock outstanding, less any options still outstanding under any previous stock option plan.
The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected dividend yield of the common stock. Changes in these assumptions can materially affect the fair value estimates.
During the year ending December 31, 2020, 1,900,000 Stock Options previously issued expired.
On February 21, 2020, the board of directors granted 200,000 options to one of its contractors. These stock options vest as to one-fourth immediately and one-fourth after the first, second and third six months period of the date granted. The fair value of the options granted calculated to be $11,673. The Company recognized a total of $5,836 as share-based compensation related to stock options vested during the year ending December 31, 2020. The fair values were determined using the Black-Scholes Option Pricing model with the following assumptions:.
F-11
LIVE CURRENT MEDIA INC.
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
December 31, 2020
|
4. STOCK OPTIONS continued
|
|
At February 21, 2020
|
|
Expected Life of Options
|
|
2 years
|
|
Risk-Free Interest Rate
|
|
1.34%
|
|
Expected Dividend Yield
|
|
Nil
|
|
Expected Stock Price Volatility
|
|
208%
|
|
As at December 31, 2020, the Company had 200,000 (2019 - 1,900,000) option outstanding with a weighted average exercise price and weighted average life of $.10 and 1.14 years, respectively.
5. EQUITY INVESTMENT AND ROYALTIES
On March 21, 2019, the Company entered an agreement with Cell MedX Corp/ ("CMXC") to purchase the direct rights to distribute the eBalance device from CMXC. On January 29, 2020 the Company and CMXC entered a Buyback agreement to sell the exclusive distribution rights to the eBalance microcurrent device back to CMXC.
The sale price included a retained royalty on future sales of the eBalance device capped at US$507,000 and share purchase warrants for 2,000,000 shares of CMXC of which 1,000,000 are exercisable at $0.50 and 1,000,000 exercisable at $1.00. As of December 31, 2020. The Company's equity investment consists of 2,000,000 share purchase warrants. Each CMXC share purchase warrant is exercisable for a period of three years expiring on January 31, 2023.
As of December 31, 2020, the fair value of the equity investment was calculated to be $398,308 based on the market price of $0.27 per CMXC common share using a Black Scholes Options Pricing model with the following assumptions.
Assumptions:
|
|
Risk-free rate (%)
|
0.13
|
Expected stock price volatility (%)
|
182.61
|
Expected dividend yield (%)
|
0.00
|
Expected life of options (years)
|
2.08
|
The initial recognition of the equity investment in CMXC resulted in a $351,134 gain on sale of distribution license which is equivalent to the fair value of equity investment received. On December 31, 2020 the equity investment was revalued resulting in a cumulative gain of $398,308. The Company constrained the gain to the fair value of the equity instruments received, as at the point of sale future royalty payments were uncertain as Cell MedX had limited sales and had not obtained Health Canada Class II Medical Device License for the eBalance® Device or the 510K certification from the Food and Drug Administration. The company reviewed its estimates at December 31, 2020 and did not include an additional gain from the royalty.
The transaction is considered to be a related party transaction as the Company has a common director with Cell MedX and there are beneficial shareholders in common for both Companies.
6. INTANGIBLE ASSETS
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
Domain names
|
$
|
105,417
|
|
$
|
111,951
|
|
|
$
|
105,417
|
|
$
|
111,951
|
|
The Company's portfolio of domain names are considered by management to be indefinite life intangible assets not subject to amortization. Management performs an annual impairment assessment of its domain names; during the year ended December 31, 2020, the Company recorded an impairment charge of $Nil (2019: $Nil).
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
Computer software development
|
$
|
128,268
|
|
$
|
-
|
|
|
$
|
128,268
|
|
$
|
-
|
|
The Company is developing computer software for SPRT MTRX which is in the development stage. No amortization costs have been recorded as of December 31, 2020.
F-12
LIVE CURRENT MEDIA INC.
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
December 31, 2020
|
7. INCOME TAXES
The Company was subject to United States federal income taxes at an approximate rate of 21%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company's income tax expense as reported is as follows:
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
Net income (loss) for the year
|
$
|
231,999
|
|
$
|
15,765
|
|
Statutory rate
|
|
21%
|
|
|
21%
|
|
Expected income tax expense (recovery)
|
|
49,000
|
|
|
3,000
|
|
Impact of statutory tax rate on earnings of subsidiary
|
|
(2,000
|
)
|
|
11,000
|
|
Non-taxable earnings
|
|
(101,000
|
)
|
|
49,000
|
|
Adjustment to prior year tax provision
|
|
-
|
|
|
-
|
|
Change in valuation allowance
|
|
54,000
|
|
|
(63,000
|
)
|
|
$
|
-
|
|
$
|
-
|
|
The significant components of deferred income tax assets at December 31, 2020 and December 31, 2019 are as follows:
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
Net operating losses
|
$
|
1,762,000
|
|
$
|
1,705,000
|
|
Intangible assets
|
|
(7,000
|
)
|
|
11,000
|
|
|
|
1,755,000
|
|
|
1,716,000
|
|
Valuation allowance
|
|
(1,755,000
|
)
|
|
(1,716,000
|
)
|
|
$
|
-
|
|
$
|
-
|
|
At December 31, 2020, the Company had approximately $458,000 of non-capital losses carry-forwards in Canada which expire in 2040 and non-capital loss carry-forwards of approximately $7,802,000 that may be carried forward indefinitely, subject to limitations. The potential future tax benefits of these expenses and losses carried-forward have not been reflected in these consolidated financial statements due to the uncertainty regarding their ultimate realization. Tax attributes are subject to review, and potential adjustment by tax authorities.
8. SUBSEQUENT EVENTS
On January 8, 2021, the Company issued certain Corporation's Officers, Directors and Consultants non-qualified and incentive stock options pursuant the Corporation's 2018 Stock Option Plan to purchase an aggregate of 1,600,000 shares of the Corporation's common stock that vest immediately at an exercise price of $0.10 per share and expire in 2 years.
On March 22, 2021 the Company completed the sale of one of its domain names for $1,150,000, resulting in a gain of $913,246.
In March 2021 the Company discontinued development of Boxing.com Federation.
F-13