Form 1-K/A LiveCare, Inc. For: Dec 31

May 23, 2022 2:23 PM EDT

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.

  
    1-K/A
    
      LIVE
      
        
          0001762400
          XXXXXXXX
        
        24R-00236
      
      
        N
        N
        true
      
      12-31-2021
    
  
  
    
      Annual Report
      12-31-2021
      1830 Prospector Ave
      Park City
      UT
      84060
      941-225-6699
      Common Stock
    
    
      LiveCare
      0001762400
      DE
      83-1151012
    
    
      false
    
    
      024-10975
      05-16-2019
      05-16-2019
      5000000
      3475200
      1.0000
      1.00
      1.00
      Malone Bailey (2019, 2020) TAAD LLP (2022)
      87340.00
      BrannellyLaw, PLLC
      27000.00
      3360860.00
    
  



 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 1-K

 

PART I
NOTIFICATION

 

This Form 1-K is to provide an [X] Annual Report OR [  ] Special Financial Report

 

for the fiscal year ended 12/31/2021

 

LIVECARE, INC.
Exact name of issuer as specified in the issuer’s charter

 

Delaware 83-1151012
Jurisdiction of incorporation/organization I.R.S. Employer Identification Number

 

1500 East Venice Ave, Unit #411, Venice FL 94292

Address of principal executive offices

 

(800) 345-0491

Telephone number

 

Common Stock

Title of each class of securities issued pursuant to Regulation A

 

Common Stock, par value $0.001

 

Summary Information Regarding Prior Offerings and Proceeds

 

The following information must be provided for any Regulation A offering that has terminated or completed prior to the filing of this Form 1-K unless such information has been previously reported in a manner permissible under Rule 257. If such information has been previously reported, check this box [  ] and leave the rest of Part I blank.

 

Not applicable

 

 

 

 

BUSINESS

 

Overview

 

LiveCare Inc. (“LiveCare”, or, the “Company”) is a telemedicine service provider. This plan is intended to assist the Company by establishing the parameters and setting goals toward profitability. This goal will be accomplished through strategic growth and the implementation of a marketing plan to increase sales and revenue.

 

The Industry

 

The telemedicine industry is growing at an extremely fast rate. LiveCare Inc. intends to capture a portion of the market through superior customer service, better and faster results for clients, and cutting-edge technology. With the rapid growth projected LiveCare Inc. is in an industry that will see huge success over the next several years. It is our goal to become in industry leader while maintaining our excellent customer service.

 

Strategy

 

LiveCare is seeking to become the market leader in remote patient monitoring telemedicine by combining the necessary testing hardware with a more impactful resource: regular guidance and encouragement from competent, friendly medical professionals. We recruit doctors, certified diabetes educators (CDEs), registered nurses, nursing assistants, nutritionists, and even physical therapists. This ensures that guidance can be legally and accurately given to members in real-time. Although interactions with machines are replacing interactions between individuals, and the science behind this shift’s effects is still developing, there’s evidence that our increasing focus on technology—and away from real-life interactions—is creating an increasing market need. LiveCare is filling that need by personnel and a platform that regularly and directly communicates with the patient with both kindness and competence.

 

PROPERTY

 

The principle office of the company is located at 1500 Venice Avenue, Suite 411, Venice, Florida via commercial lease. This location has an office suite approximately 1,110 square feet and access to a conference room for meetings.

 

 

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto of the Company, as well as the financial statements and the notes theretoincluded in this Offering Circular. The following discussion contains forward-looking statements. Actual results could differ materially from the results discussed in the forward-looking statements. See “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” above.

 

Forward-looking Statements

 

Statements made in this Annual Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words "may," "would," "could," "should," "expects," "projects," "anticipates," "believes," "estimates," "plans," "intends," "targets" or similar expressions.

 

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, international gold prices, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.

 

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

 

Results of Operations

 

For The Years Ended December 31, 2021 and 2020

 

We had $484,976 in revenues during the year ended December 31, 2021, compared to $0 for 2020. Revenues are the result of the commencement of our planned principal business of remote diabetes management during 2021.

 

Operating expenses increase from $0 during the year ended December 31, 2020, to $771,613 during the year ended December 31, 2021 as a result of the commencement of our planned principal business of remote diabetes management during 2021. Operating expenses consist of direct costs of providing monitoring services such as CDE labor, monitoring expenses and testing equipment sent to members.

 

General and administrative expenses increased by $167,415, or 24%, in the year ended December 31, 2021 to $855,121, compared to $687,706 during the year ended December 31, 2020. Increases are mainly due to a $133,842 increase in consulting, professional fees and contract labor and $33,573 net increase of general operating expenses such as rent, office supplies, utilities and insurance. 

 

During 2021, we issued common stock to consultants for services valued at $2 during the year ended December 31, 2020. The issuances of common stock for services in 2021 and 2020 was done to compensate external consultants for services related to the initial costs of commencement of operations. 

 

Compensation expense was $1,003,069 during the year ended December 31, 2021, compared to $758,237 during the year ended December 31, 2020. Stock based compensation expense was $3,000,000 during the year ended December 31, 2021, compared to $2,000,000 during the year ended December 31, 2020. The $1,244,832 increase is mainly due to the grants of $1,000,000 more in common stock bonuses for operational milestones to our Chief Executive Officer and Chairman of the Board as well as the hiring of employees for commencement of operations. 

 

 

 

We incurred operating losses of $7,343,375 and $6,274,943 during the years ended December 31, 2021 and 2020, respectively. The $1,068,432 increase is mainly due the combined increase of $1,244,832 in compensation and stock based compensation expenses, a $771,613 increase in operating expenses and a $167,415 increase in general and administrative expenses, as discussed above. Increase are partially offset by a $630,452 decrease in stock based consulting expenses during the year ended December 31, 2021 compared to the year ended December 31, 2020.

 

We incurred total other expense of $1,770,682 during the year ended December 31, 2021, as compared to $1,061,629 in the year ended December 31, 2020. The $709,053 increase is due to a $208,787 increase in debt extension expense, a $182,412 increase in interest expense, a $9,919 increase in amortization of debt discount expense and a $322,762 increase in loss on debt extension during the year ended December 31, 2021. The increases are partially offset by a $14,827 gain on extinguishment of debt during the year ended December 31, 2021.

 

Net loss totaled $9,114,057, or $0.31 per share, in the year ended December 31, 2021, compared to a net loss of $7,336,572, or $0.38 per share in the year ended December 31, 2020.

 

Liquidity

 

Current assets at December 31, 2021 totaled $2,389,778 and includes $2,259,516 in cash, $103,400 in common stock subscriptions receivable, $21,088 in accounts receivable and $5,774 in prepaid expenses, as compared to total current assets of $914,348 consisting of $905,682 in cash and $8,666 in prepaid expenses at December 31, 2020.

 

During the year ended December 31, 2021, our operating activities used net cash of $2,006,403 compared to $804,295 in the comparable 2020 period. The $1,202,108 increase in cash used in operating activities is mainly due to the $1,777,485 increase in net loss, as offset by $469,911 in increases in non-cash operating activities such as common stock issued for services and compensation. The increase in net loss was also offset by $105,466 in net increases in current assets and liabilities.

 

Cash used in investing activities was $39,483 in the year ended December 31, 2021 period and $8,167 in the comparable 2020 period. Cash payments in 2021 were made for internal software development. During the year ended December 31, 2020, cash payments were for office furniture and equipment. 

 

Financing activities provided $3,399,720 in cash during the year ended December 31, 2021, compared to $1,473,200 during the year ended December 31, 2020. During the year ended December 31, 2021, we receive $1,035,000 from the issuance of revenue share agreements and $3,022,700 from the sales of common stock and we repaid $516,680 in principal on revenue share agreements and $227,000 in convertible notes payable. During the year ended December 31, 2020, we receive $1,009,500 from the issuance of convertible notes payable, $305,000 from the issuance of revenue share agreements, $113,700 from the receipt of common stock subscriptions receivable and $45,000 in cash from the sales of common stock.

 

At December 31, 2021, the Company had working capital of $1,394,017, as compared to a deficit of $506,203 at December 31, 2020.

 

 

 

MANAGEMENT

Name Position Age Start Date
James Dalton Chairman 80 07/2018
Cornelius Max Rockwell CEO 53 07/2018
John J. Brannelly Chief Legal Officer 57 07/2018

 

James Dalton, Max Rockwell and John J. Brannelly combine for over 50 years of experience in marketing and technology development. They have opened several successful businesses and know what it takes to build a new company. Mr. Dalton has extensive experience in building companies with particular expertise in sales forces and managing the entire sales process. Mr. Rockwell has worked with numerous companies and engaged in significant capital-raising as well as company development. Mr. Brannelly is an attorney with 29 years’ experiences in corporate law and has also been a founder of several successful companies.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS

The following table sets forth information as to the shares of common stock beneficially owned as of December 31, 2020 by (i) each person known to us to be the beneficial owner of more than 5% of our common stock; (ii) each Director; (iii) each Executive Officer; and (iv) all of our Directors and Executive Officers as a group. Unless otherwise indicated in the footnotes following the table, the persons as to whom the information is given had sole voting and investment power over the shares of common stock shown as beneficially owned by them.

 

Directors and Executive Officers   Amount   Percent  
Cornelius Max Rockwell   4,000,000   11.4%  
James Dalton   4,000,000   11.4%  
Jeff Greene   3,012,000   8.6%  
JJB Holdings, LLC   3,000,000   8.6%  
Feras Al-Kandari   2,630,000   7.5%  
Shaya Schwartz   2,000,000   5.7%  

 

Founder shares that were issued upon inception of the company in July of 2018. Cloverleaf Investors, LLC acquired its shares via a Reg D offering in March of 2019.

 

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

During the year ended December 31, 2021, LiveCare Inc. paid a total of $779,857 of wages to management.

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors of Live Care, Inc.

 

Opinion on the Consolidated Financial Statements

 

We have audited the accompanying consolidated balance sheets of Live Care, Inc. (the “Company”) as of December 31, 2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern Matter

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company has accumulated losses since its inception and negative cashflow from operations that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 5. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matters

 

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no critical audit matters

 

 

/s/ TAAD LLP

 

Diamond Bar, CA

May 20, 2022

 

We have served as the Company’s auditor since 2021

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors of

Live Care, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheet of Live Care, Inc. (the “Company”) as of December 31, 2020 and the related statements of operations, stockholders’ equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matters

 

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no critical audit matters

 

/s/ MaloneBailey, LLP

www.malonebailey.com

We served as the Company’s auditor from 2018 to 2021.

Houston, Texas

April 28, 2021

 

 

LIVECARE, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

 

   For the Year Ended
December 31,
 
   2021   2020 
ASSETS          
           
Current assets:          
Cash  $2,259,516   $905,682 
Common stock subscriptions receivable   103,400     
Accounts receivable   21,088     
Prepaid expenses   5,774    8,666 
    Total current assets   2,389,778    914,348 
           
Long-Term Assets:          
Software and software development, net   102,809     
Furniture and fixtures, net   5,633    7,266 
    Total long-term assets   108,442    7,266 
           
Total Assets  $2,498,220   $921,614 
           
 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          
           
Current liabilities:          
Accounts payable and accrued expenses  $286,942   $94,755 
Accounts payable, related party   50,972     
Accrued wages, related party   101,998    158,331 
Common stock shares to be issued   121,460     
Convertible notes payable, net of $0 and $10,167 of debt discount, respectively   75,000    999,333 
Notes payable, net of $157,150 and 136,868 of debt discount, respectively   480,849    168,132 
    Total current liabilities   1,117,221    1,420,551 
           
Stockholders' equity (deficit):          
Preferred stock; $0.001 par value, 50,000,000 shares authorized, 27,000,000 and 0 shares issued and outstanding, respectively   27,000     
Common stock; $0.001 par value, 100,000,000 shares authorized, 34,943,463 and 23,585,900 shares issued and outstanding, respectively   34,943    23,586 
Additional paid-in capital   18,712,598    7,746,962 
Common stock subscriptions receivable   (10,000)    
           
Accumulated deficit   (17,385,542)   (8,269,485)
    Total stockholders' equity (deficit)   1,380,999    (498,937)
           
Total Liabilities and Stockholders' Equity (Deficit)  $2,498,220   $921,614 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

LIVECARE, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

 

    For the Years Ended
December 31,
 
    2021   2020 
         
Revenues:  $484,976   $ 
           
Costs and Operating Expenses:          
Costs of revenue   771,613     
General and administrative   855,121    687,706 
Consulting expense   2,198,548    2,829,000 
Compensation expense   4,003,069    2,758,237 
Total operating expenses   7,828,351    6,274,943 
           
Operating loss   (7,343,375)   (6,274,943)
           
Other Income (Expenses):          
Interest expense, net   (38,623)   (46,664)
Accretion of debt discounts   (190,453)    
Debt discount amortization   (1,024,884)   (1,014,965)
Debt conversion and extension expense   (531,549)    
Gain on settlement of debt   14,827     
Total other income (expenses)   (1,770,682)   (1,061,629)
           
Loss before income taxes   (9,114,057)   (7,336,572)
           
Provision for income taxes        
           
Net loss  $(9,114,057)  $(7,336,572)
           
Basic loss per common share  $(0.31)  $(0.38)
           
Basic weighted average common shares outstanding   29,357,248    19,272,698 
           

 

The accompanying notes are an integral part of these consolidated financial statements.

 

LIVECARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   For the Years Ended
December 31,
 
   2021   2020 
Cash flows from operating activities:          
Net loss  $(9,114,057)  $(7,336,572)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation   20,307    901 
Amortization of debt discounts   1,024,884    1,014,965 
Accretion of debt discounts   190,453     
Gain on forgiveness of debt   (14,827)    
Common stock issued for services   2,044,380    3,354,000 
Common stock issued for officer and director bonus   3,000,000    2,000,000 
Common stock issued for debt extension   208,150     
Warrants issued for debt conversion   322,762     
Preferred stock issued for officer and director bonus   27,000     
Unsubstantiated cash revenue recorded as capital contribution   16,668     
Changes in operating assets and liabilities:          
Accounts receivable   (21,088)    
Prepaid assets   2,892    (8,666)
Accounts payable   291,434    87,206 
Accounts payable, related party   50,972     
Accrued expenses   (56,333)   83,871 
Net cash used in operating activities   (2,006,403)   (804,295)
           
Cash flows from investing activities:          
Internal developed software costs   (39,483)    
Purchase of furniture and fixtures       (8,167)
Net cash used in investing activities   (39,483)   (8,167)
           
Cash flows from financing activities:          
Proceeds from the sale of common stock, net   3,022,700    45,000 
Proceeds from common stock to be issued   85,700      
Proceeds from receipt of subscriptions receivable       113,700 
Proceeds from the issuance of notes payable   1,035,000    305,000 
Proceeds from the issuance of convertible notes payable       1,009,500 
Payment on notes payable   (516,680)    
Payment on convertible notes payable   (227,000)    
Net cash provided by financing activities   3,399,720    1,473,200 
           
Net change in cash   1,353,834    660,738 
Cash, beginning of period   905,682    244,944 
           
Cash, end of period  $2,259,516   $905,682 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Cash paid for interest  $   $ 
Cash paid for taxes  $   $ 
           
NON-CASH FINANCING ACTIVITIES:          
Common stock issued for debt inducement  $1,035,000   $ 
Common stock issued for debt conversion  $1,141,933   $ 
Common stock to be issued for debt conversion  $25,760   $ 
Common stock issued for internal developed software  $82,000   $ 
Common stock issued for common stock subscriptions receivable  $113,400   $ 
Common stock shares reversed to common stock to be issued  $10,000   $ 
Convertible debt discount related to common shares issued with debt  $   $657,250 
Convertible debt discount related to beneficial conversion feature  $   $504,750 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

LIVECARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

 

  Preferred Stock   Common Stock   Additional
Paid-in
Capital
  Stock Subscription
Receivable
  Accumulated
Deficit
  Total
Stockholders'
Equity (Deficit)
  Shares   Amount   Shares   Amount
Balance, December 31, 2019 -   $ -   15,934,900   $ 15,935   $ 1,193,613   $ (113,700)   $ (932,913)   $ 162,935
Common stock issued for services -     -   3,354,000     3,354     3,350,646     -     -     3,354,000
Common stock issued for officer bonus -     -   2,000,000     2,000     1,998,000           -          -     2,000,000
Common stock issued for convertible note inducement -     -   1,947,000     1,947     1,007,553     -     -     1,009,500
Common stock and stock to be issued for cash, net -     -           45,000     45     44,955     -     -     45,000
Common stock to be issued for note and convertible note inducement -     -   305,000     305     152,195     -     -     152,500
Cash received for subscription receivable       -   -     -     -     113,700     -     113,700
Net loss for the year ended December 31, 2020 -     -         -             -     -             -        (7,336,572)        (7,336,572)
Balance, December 31, 2020 -     -   23,585,900     23,586     7,746,962     -     (8,269,485)     (498,937)
Common stock issued for services -     -   2,044,380     2,044     2,042,336     -     -     2,044,380
Common stock issued for officer and director bonus -     -   3,000,000     3,000     2,997,000     -     -     3,000,000
Common stock issued for note payable inducement -     -   1,735,000     1,735     1,033,265     -     -     1,035,000
Common stock and stock to be issued for cash, net -     -   3,042,700     3,043     3,019,657     -     -     3,022,700
Common stock issued for common stock subscriptions receivable -     -   103,400     103     103,297     (10,000)     -     93,400
Common stock issued for notes payable,  convertible notes payable and accrued interest -     -   1,141,933     1,142     1,140,791     -     -     1,141,933
Common stock issued for note payable extension -     -   208,150     208     207,942     -     -     208,150
Common stock issued for software development -     -   82,000     82     81,918     -     -     82,000
Preferred stock issued for officer and director bonus 27,000,000     27,000   -     -     -     -     -     27,000
Unsubstantiated cash revenue recorded as capital contribution -     -   -     -     16,668     -     -     16,668
Warrants issued for debt conversion -     -   -     -     322,762     -     -     322,762
Net loss for the year ended December 31, 2020 -     -   -     -     -     -     (9,114,057)     (9,114,057)
Balance, December 31, 2020 27,000,000   $ 27,000   34,943,463   $ 34,943   $ 18,712,598   $ (10,000)   $ (17,383,542)   $ 1,380,999
                                           

 

The accompanying notes are an integral part of these consolidated financial statements. 

10 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

 

LiveCare Inc. (“LiveCare”, or, the “Company”) was incorporated on July 10, 2018, under the laws of the State of Delaware under the name Gulf Coast Chronic Care, Inc. During 2019, the Company changed its name to LiveCare, Inc.

 

LiveCare is seeking to become the pre-eminent chronic care service and technology provider of a proven solution for the diabetes epidemic through visibility into daily health status, proactive real time communication, personalized support and programs designed to better engage diabetics in their overall wellness.

 

a.                Basis of Presentation and Principals of Consolidation

 

The accompanying consolidated financial statements of LiveCare have been prepared using the accrual method in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission. LiveCare has elected a calendar year-end.

 

The accompanying consolidated financial statements reflect the accounts and operations of LiveCare and LiveCare Forida, P.A. (LiveCare FL), a Florida company in which we have a controlling financial interest.

 

b.       Variable Interest Entities

 

In accordance with the provisions of Accounting Standards Codification 810, Consolidation (“ASC 810”), we consolidate any variable interest entity (“VIE”) of which we are the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We do not consolidate a VIE in which we have a majority ownership interest when we are not considered the primary beneficiary. We had one consolidated VIE during the year ended December 31, 2021 that was established in 2020 (see Note 6).

 

b.       Cash Equivalents

 

LiveCare considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

 

c.       Reclassifications of Prior Period Balances

 

Certain amounts in prior periods have been reclassified to conform to the current year presentation with no effect on previously reported net loss or stockholder’s equity (deficit). Due to a reduction of the par value of LiveCare common stock from $0.01 to $0.001, $212,273 was reclassified from the December 31, 2020 common stock balance to additional paid-in capital. Amounts totaling $1,014,965 for interest expense as a result of the amortization of debt discounts previously reported in interest expense in the Statement of Operations for the year ended December 31, 2021 were broken out of previously netted amounts of $1,062,844 in interest expense and $1,215 in interest income. In addition, $2,000,000 for common stock issued to officers as a bonus previously netted in the adjustment to reconcile net loss to net cash used in operating activities of the Statement of Cash Flows for the year ended December 31, 2021 were separated from the previously reported Common stock issued for compensation. Lastly, 10,000 shares of common stock shown as issued at December 31, 2020 were reclassified to common stock shares to be issued during the year ended December 31, 2021

11 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

c.       Use of Estimates

 

The preparation of financial statements 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. Actual results could differ from those estimates. Significant estimates during the years ended December 31, 2021 and 2020 include fair value measurements of equity based instruments, the collectability of outstanding accounts receivables and the probability of ability to use tax loss carryforwards in future years.

 

d.       Revenue Recognition Policy

 

LiveCare follows the revenue accounting requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). ASC 606 establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to our members in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services. This principle is achieved through applying the following five-step approach:

 

Identification of the contract, or contracts, with a member.
Identification of the performance obligations in the contract.
Determination of the transaction price.
Allocation of the transaction price to the performance obligations in the contract.
Recognition of revenue when, or as, LiveCare satisfies a performance obligation.

 

LiveCare generates revenue from contracts with members who purchase access to LiveCare’s virtual diabetes healthcare management services on a monthly basis. Substantially all revenue is derived from monthly access fees, recognized as services are rendered and earned under subscription agreements with members that are based on a per participant per month model, using the number of active enrolled members each month for the minimum enrollment period. These solutions integrate devices, supplies, access to LiveCare’s blue-tooth based platform and clinical and data services to provide an overall health management solution. The promises to transfer these goods and services are not separately identifiable and is considered a single continuous service comprised of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e., distinct days of service).

 

e.       Stock-Based Compensation

 

LiveCare records stock-based compensation using the fair value method. Equity instruments issued to employees and the cost of the services received as consideration are accounted for in accordance with ASC 718, Stock Compensation, and are measured at the date of grant and recognized based on the fair value of the equity instruments issued.

 

All transactions with non-employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for in accordance with ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, whereby, based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

 

12 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

f.       Fair Value of Financial Instruments

 

ASC 820, Fair Value Measurements (“ASC 820”) and ASC 825, Financial Instruments (“ASC 825”), require an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It 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. It prioritizes the inputs into three levels that may be used to measure fair value:

 

Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

The carrying values of cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, notes and convertible notes payable approximate fair value. Pursuant to ASC 820, the fair value of cash is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

 

g.       New Accounting Pronouncements

 

LiveCare has implemented all new accounting pronouncements that are in effect and that may impact its financial statements. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

In July 2021, the FASB issued ASU 2021-05, Lessors—Certain Leases with Variable Lease Payments (“ASU 2021-05”). ASU 2021-05 was issued to address the day-one loss issue related to a lessor’s accounting for certain leases with variable lease payments, requiring a lease with variable lease payments that do not depend on an index or a rate to be classified as operating under certain conditions. ASU 2021-05 is effective for the Company for interim periods beginning after December 15, 2021. LiveCare is currently assessing the potential impact of the adoption of ASU 2021-05, but does not expect it to have a material effect on the Company’s financial statements and related disclosures. 

 

In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 codifies how an issuer should account for modifications made to equity-classified written call options. The guidance in ASU 2021-04 requires the issuer to treat a modification of an equity-classified warrant that does not cause the warrant to become liability-classified as an exchange of the original warrant for a new warrant. This guidance applies whether the modification is structured as an amendment to the terms and conditions of the warrant or as termination of the original warrant and issuance of a new warrant. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021. LiveCare is currently assessing the potential impact of the adoption of ASU 2021-04, but does not expect it to have a material effect on the Company’s financial statements and related disclosures. 

 

13 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity by removing the separation models for convertible debt with cash conversion and beneficial conversion features by requiring entities not to separately present in equity an embedded conversion feature in such debt and instead will account for a convertible debt instrument and convertible preferred stock as a single unit of account unless a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or was issued at a substantial premium. The ASU was early adopted for the fiscal year ending December 31, 2021. The adoption of ASU 2020-06 did not have a material effect on LiveCare’s consolidated financial statements and related disclosures.

 

h.       Long Lived Assets

 

Periodically LiveCare assesses potential impairment of its long-lived assets, which include property, equipment and developed software, in accordance with the provisions of ASC Topic 360, Property, Plant and Equipment. LiveCare recognizes impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying values. An impairment loss would be recognized in the amount by which the recorded value of the asset exceeds the fair value of the asset, measured by the quoted market price of an asset or an estimate based on the best information available in the circumstances. There have been no such losses recognized during the years ended December 31, 2021 and 2020.

 

i.       Fixed Assets and Internal Use Software, net

 

Fixed assets consisting of office furniture and equipment are recorded at cost and depreciated upon placement in service over the estimated useful lives of three to five years on a straight-line basis. Expenditures for normal repairs and maintenance are charged to expense as incurred.

 

LiveCare applies ASC 350-40, Intangibles—Goodwill and Other—Internal Use Software, in review of certain system projects. These system projects generally relate to software we do not intend to sell or otherwise market. In addition, we apply this guidance to our review of development projects related to software used exclusively for our patient monitoring subscription offerings. In these reviews, all costs incurred during the preliminary project stages are expensed as incurred. Once the projects have been committed to and it is probable that the projects will meet functional requirements, costs are capitalized. Capitalized software costs are amortized when the software is available for its intended use over the expected economic life on a straight-line basis, which is three years. Amounts capitalized related to development of internal use software are included in property and equipment, net, on our Consolidated Balance sheets and related depreciation is recorded as a component of amortization and depreciation in our consolidated statements of operations.

 

During the year ended December 31, 2021, LiveCare incurred $121,187 in internal developed software costs and recognized $18,674 in amortization expense. During the year ended December 31, 2020, LiveCare purchased $8,167 in new office furniture and equipment. During the years ended December 31, 2021 and 2020, LiveCare recognized $1,634 and $901 in depreciation expense, respectively. The net fixed assets and internal use software balance was $102,513 and $7,266 at December 31, 2021 and 2020, respectively.

 

14 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

j.       Basic and Diluted Loss Per Share

 

Basic net loss per share is computed on the basis of the weighted average number of common shares outstanding during each year. Diluted net loss per share is computed similar to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company uses the “if-converted” method for calculating the earnings per share impact of outstanding convertible debentures, whereby the securities are assumed converted and an earnings per incremental share is computed. Options, warrants and their equivalents are included in EPS calculations through the treasury stock method. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

 

The calculation of basic and diluted net loss per share for the years ended December 31, 2021 and 2020 are as follows:

 

   2021   2020 
Basic Net Loss Per Share:          
Numerator:          
Net loss  $(9,114,057)  $(7,336,572)
Denominator:          
Weighted-average common shares outstanding   29,357,248    19,272,698 
           
Basic net loss per share  $(0.31)  $(0.38)
           
Diluted Net Loss Per Share:          
Numerator:          
Net loss  $(9,114,057)  $(7,336,572)
Diluted net loss  $(9,114,057)  $(7,336,572)
Denominator:          
Weighted-average common shares outstanding   29,357,248    19,272,698 
Convertible debt        
Weighted average shares used in computing diluted net loss per share   29,357,248    19,272,698 
           
Diluted net loss per share  $(0.31)  $(0.38)

 

The following table summarizes the potential shares of common stock that were excluded from the computation of diluted net loss per share for the years ended December 31, 2021 and 2020 as such shares would have had an anti-dilutive effect:

 

   2021   2020 
Common stock warrants   2,774,793     
Convertible notes payable   75,000    1,009,500 
Total   2,849,793    1,009,500 

 

15 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

k.       Income Taxes

 

LiveCare files income tax returns in the U.S. federal jurisdiction, and the state of Delaware. LiveCare’s policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

 

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

NOTE 2 - RELATED PARTY TRANSACTIONS

 

Accounts Payable, Related Party

 

As of December 31, 2021, LiveCare owes $50,972 in legal fees to a law firm owned and operated by LiveCare’s Chief Legal Officer.

 

Accrued Payroll

 

As of December 31, 2021 and 2020, LiveCare owes back due wages under an employment agreement with its President and CEO in the amounts of $101,998 and $96,598, respectively. As of December 31, 2021 and 2020, LiveCare owes back due wages under an employment agreement with its Chairman in the amounts of $0 and $61,733, respectively.

 

Common Stock

 

During August 2020, as a management bonus, LiveCare issued 1,500,000 shares of its common stock to its Chairman and 500,000 shares of its common stock President and CEO, valued at $1.00 per share, or a total of $2,000,000.

 

During June 2021, as a management bonus, LiveCare issued 1,500,000 shares of its common stock to its Chairman and 1,000,000 shares of its common stock President and CEO, valued at $1.00 per share, or a total of $2,500,000.

 

During September 2021, as a management bonus, LiveCare issued 500,000 shares of its common stock to its Chairman, valued at $1.00 per share, or $500,000.

 

Preferred Stock

 

During September 2021, as a measure to prevent a change in control and ensure continuity of management, LiveCare issued 9,000,000 shares of its preferred stock to its Chairman; issued 9,000,000 shares of its preferred stock to its President and CEO; and, issued 9,000,000 shares of its preferred stock its Chief Legal Officer valued at $0.001 per share, or a total of $27,000 (see also Note 4).

 

16 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 3 - NOTES AND CONVERTIBLE NOTES PAYABLE

 

Notes Payable

 

During the years ended December 31, 2021 and 2020, LiveCare entered into eleven Notes Payable for cash totaling $735,000 and $305,000, respectively. The Notes Payable are unsecured and provide each investor a face discount of up to 22% and for repayment of the total face amount over 9 equal monthly payments beginning April 15, 2021. The Notes Payable also provide the holder one share of LiveCare common stock for each dollar invested, or a total of 1,040,000 shares with a value of $887,500, the relative fair value being recognized as a discount and amortized to interest expense over the term of the respective Notes Payable.

 

During the years ended December 31, 2021 and 2020, LiveCare recognized a total of $1,014,718 and $31,263 in interest expense from the amortization of debt discounts on the above Notes Payable, respectively. The balance of the Notes Payable was $637,999 and $305,000 as of December 31, 2021 and 2020, respectively. The balance of the debt discount on Notes Payable was $157,150 and $136,868, leaving a net balance of $480,849 and $168,132 as of December 31, 2021 and 2020, respectively.

 

Convertible Bridge Loan Agreements

 

During the year ended December 31, 2020, LiveCare issued Convertible Bridge Loan Agreements (“CBLA”) totaling $1,009,500. The CBLA are unsecured, due after 180 days, accrue interest at 12% per annum, are unsecured, and principal and interest are convertible at the option of the holder into common stock of the Company at $1.00 per share. Based on the relative fair value of the conversion feature of the CBLA, the Company recognized $504,750 in debt discount.

 

As an inducement, each CBLA holder was also granted either one or two shares of LiveCare common stock for each dollar lent to the Company. A total of 1,947,000 shares of common stock were granted, with the relative fair value of $504,750 being ascribed to debt discount.

 

During the years ended December 31, 2021 and 2020, LiveCare recognized a total of $10,167 and $999,333 in interest expense from the amortization of debt discounts on the above agreements, respectively. The balance of the CBLA’s was $75,000 and $1,009,500 as of December 31, 2021 and 2020, respectively. The balance of the debt discount on Notes Payable was $0 and $10,167, leaving a net balance of $75,000 and $999,333 as of December 31, 2021 and 2020, respectively.

 

Short-Term Loan

 

During January 2021, LiveCare entered into a consulting agreement with an individual for investor relations and marketing services, which included a short-term loan to LiveCare whereby LiveCare received $300,000 in cash. The short-term loan is unsecured and LiveCare agreed to repay the loan upon the consultant arranging for a minimum of $2,500,000 in equity funding for the Company. A total of 1,000,000 shares of common stock were granted as debt inducement, with the relative fair value of $300,000 being ascribed to debt discount and immediately expensed to interest expense.

 

17 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Outstanding notes and convertible notes payable consisted of the following as of December 31, 2021 and 2020:

 

   2021   2020 
Convertible Bridge Notes:          
Various convertible notes payable, interest at 12%, unsecured, due dates through June 2021, past due  $75,000   $1,009,500 
Less: Unamortized discount       (10,167)
Net, convertible notes   75,000    999,333 
Notes Payable:          
Various revenue share agreement notes payable, face discounts of between 20%-22%, unsecured, due in monthly payments through June 2023   337,999    305,000 
Less: Unamortized face discount   (157,150)   (136,868)
Net, convertible notes   180,849    168,132 
Short-Term Loan:          
Short term loan due upon reaching funding milestone, no interest, unsecured   300,000     
Total notes payable  $555,849   $1,167,465 

 

NOTE 4 - STOCKHOLDERS’ EQUITY

 

Common Stock

 

2021

 

During the year ended December 31, 2021, LiveCare issued a total of 2,044,380 shares of common stock for services to outside consultants valued at $2,044,380, or $1.00 per share based on the price of shares issued for cash.

 

During the year ended December 31, 2021, LiveCare issued a total of 766,160 shares of its common stock and recognized $25,760 in common stock shares to be issued to CBLA holders for conversion of $707,500 in principal and $84,420 in accrued interest. During December 2021, as a result of 10,000 shares of common stock for debt inducement previously shown as issued and outstanding in 2020 not having been issued in 2021, 10,000 shares were reversed to common stock to be issued until issued in 2022.

 

During the year ended December 31, 2021, LiveCare issued a total of 3,042,700 shares of common stock for cash of $3,022,700, or $1.00 per share and recognized $20,000 in stock issuance costs.

 

During the year ended December 31, 2021, LiveCare issued a total of 103,400 shares of common stock for common stock subscriptions receivable totaling $103,400 at December 31, 2021.

 

During the year ended December 31, 2021, LiveCare issued a total of 1,735,000 shares of its common stock as inducement to RSA holders with the relative fair value of $1,035,000 being ascribed to debt discount.

 

During the year ended December 31, 2021, LiveCare issued a total of 208,150 shares of its common stock to note payable holders in exchange for delaying scheduled cash repayments. The shares were valued at $208,150, or $1.00 per share based on the price of shares issued for cash, and recorded as debt extension expense.

 

During the year ended December 31, 2021, LiveCare issued a total of 375,773 shares of its common stock and warrants to purchase 375,773 shares of its common stock to RSA holders for conversion of $375,773 in principal.

18 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

During June 2021, LiveCare issued 82,000 shares of its common stock to a consultant for software development services valued at $1.00 per share based on the price of shares issued for cash, or a total of $82,000.

 

During June 2021, as a management bonus, LiveCare issued 1,500,000 shares of its common stock to its Chairman and 1,000,000 shares of its common stock President and CEO, valued at $1.00 per share based on the price of shares issued for cash, or a total of $2,500,000.

 

During September 2021, as a management bonus, LiveCare issued 500,000 shares of its common stock to its Chairman, valued at $1.00 per share, or $500,000.

 

2020

 

During the year ended December 31, 2020, LiveCare issued a total of 3,354,000 shares of common stock for services valued at $3,354,000, or $1.00 per share.

 

During the year ended December 31, 2020, in conjunction with the issuance of CBLA, LiveCare issued a total of 1,947,000 shares of its common stock to CBLA holders.

 

During January 2020, LiveCare received a total of $45,000 for 45,000 shares of common stock, or $1.00 per share.

 

During August 2020, as a management bonus, LiveCare issued 1,500,000 shares of its common stock to its Chairman and 500,000 shares of its common stock President and CEO, valued at $1.00 per share, or a total of $2,000,000.

 

During December 2020, LiveCare issued a total of 305,000 shares of its common stock to RSA holders as inducement with the relative fair value of $305,000 being ascribed to debt discount.

 

Preferred Stock

 

During September 2021, LiveCare amended its Articles of Incorporation to create a new class of 50,000,000 authorized shares of preferred stock (“Blank Check Preferred Stock”). The board of directors of LiveCare is authorized to determine or alter the powers, preferences and rights, and the qualifications, limitations and restrictions granted to or imposed upon any wholly unissued series of Blank Check Preferred Stock to increase or decrease (but not below the number of shares of any such series of Preferred Stock then outstanding) the number of shares of any such series of Blank Check Preferred Stock, and to fix the number of shares of any series of Blank Check Preferred Stock. The preferred stock is entitled to 100 votes for each shares held at all meetings of stockholders and for written actions in lieu of meetings, but has no liquidation rights upon dissolution of LiveCare.

 

During September 2021, as a measure to prevent a change in control and ensure continuity of management, LiveCare issued 9,000,000 shares of its preferred stock to its Chairman; issued 9,000,000 shares of its preferred stock to its President and CEO; and, issued 9,000,000 shares of its preferred stock its Chief Legal Officer valued at $0.001 per share, or a total of $27,000.

 

Common Stock Warrants

 

During October 2021, LiveCare agreed to convert $375,773 of note payable principal into 382,793 shares of common stock and issue 342,493 warrants to purchase LiveCare common stock at a price of $1.00 per share, exercisable at any time until December 31, 2024. LiveCare recognized a loss on debt conversion of $322,762 based on the fair value of the warrants on the date of grant.

 

19 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Between July and December 2021, in conjunction with the issuance of 2,774,793 shares of common stock for $2,774,793 in cash, LiveCare issued 2,774,793 warrants to purchase common stock at a price of $1.00 per share, exercisable at any time until December 31, 2024.

 

The following table presents the stock warrant activity during the year ended December 31, 2021:

 

   Warrants   Weighted
Average Exercise Price
   Weighted
Average
Remaining Term
 
Outstanding - December 31, 2020      $     
Granted   2,774,793    1.00    3.13 
Forfeited/expired            
Exercised            
Outstanding December 31, 2021   2,774,793   $1.00    3.00 
Exercisable – December 31, 2021   2,774,793   $1.00    3.00 

 

The Company analyzed the conversion options embedded in the convertible debt for derivative accounting consideration under ASC 815 and determined that the instruments embedded in the above referenced convertible promissory notes should be classified as liabilities and recorded at fair value due to their being no explicit limit to the number of shares to be delivered upon settlement of the conversion options.  Because the number of shares to be issued upon settlement of the above referenced convertible promissory notes could not be determined under these instruments, the Company could not determine whether it would have sufficient authorized shares at a given date to settle future share instruments. The fair values of the instruments were determined using a Black-Scholes option-pricing model.

 

The Company estimated the fair value of the derivative liabilities using the Black-Scholes option pricing model and the following key assumptions during the year ended December 31, 2021:

 

Expected dividends 0.0%
Expected term (years) 3.2
Volatility 211.73%
Risk-free rate 0.7%

  

The intrinsic value of the exercisable warrants as of December 31, 2021 and 2020 was $0 and $0, respectively.

 

Common Stock Shares To Be Issued

 

As of December 31, 2021, LiveCare had not yet issued 85,700 shares of common stock for $85,700 in cash, 10,000 shares of common stock for $10,000 in debt inducement and 25,760 shares of common stock for $25,760 in CBLA principal conversions. The value of the unissued shares of $121,760 is recorded as a current liability at December 31, 2021 as the shares remain unissued.

 

NOTE 5 - GOING CONCERN

 

LiveCare's financial statements are prepared using Generally Accepted Accounting Principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, LiveCare has recently accumulated losses since its inception and has negative cash flows from operations, which raise substantial doubt about its ability to continue as a going concern. Management's plans with respect to alleviating the adverse financial conditions that caused management to express substantial doubt about the LiveCare's ability to continue as a going concern are as follows:

 

LiveCare is seeking to raise up to $25,000,000 more total through private placements of its common stock to fund additional operation start-up expenses and expand operations. Funds received from the issuance of debt and equity is being used to fund the development, implementation and marketing of the platform. The continuation of LiveCare as a going concern is dependent upon its ability to implement its business plan and generate profitable operations that produce positive cash flows. If LiveCare is not successful, it may be forced to raise additional debt or equity financing.

 

20 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

There can be no assurance that LiveCare will be able to achieve its business plans, raise any more required capital or secure the financing necessary to achieve its current operating plan. The ability of LiveCare to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 6 - VARIABLE INTEREST ENTITY ARRANGEMENT

 

During 2020, LiveCare management entered into a Management Service Agreement (“MSA”) with a related party medical service provider, LiveCare FL, an affiliate entity with common management. The MSA requires LiveCare to render business development, marketing, management and administrative services management for LiveCare FL’s telemedicine and remote patient monitoring business in exchange for a 95% fixed fee of amounts collected. Under the MSA, LiveCare is to reimburse or provide all of the personnel and external firms for management of billing and collections functions for its remote diabetic monitoring business.

 

LiveCare has determined it is the primary beneficiary of LiveCare FL due to the MSA terms granting LiveCare management the power to manage and make decisions that affect LiveCare FL operations as well as LiveCare being the primary beneficiary of the LiveCare FL as a result of its requirement to cover expenses and absorb losses of LiveCare FL’s only business activity.

 

As the primary beneficiary of LiveCare FL, LiveCare consolidates LiveCare FL in the consolidated financial statements and all intercompany balances and transactions are eliminated.

 

We evaluate our relationship with LiveCare FL on an ongoing basis to ensure that we continue to be the primary beneficiary. All intercompany transactions and balances have been eliminated upon consolidation.

 

Assets of LiveCare FL included in the consolidated balance sheet as of December 31, 2021 consist of cash totaling $480,323 after elimination of intercompany transactions and balances, there are no outstanding liabilities. Revenues for LiveCare FL for the year ended December 31, 2021 was $484,976, all expenses of LiveCare FL were incurred by and paid by LiveCare as provided by the MSA.

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

Employment Agreements

 

During 2019, LiveCare entered into employment agreements with its Chairman and President, providing for annual salaries of $210,000 and $144,000, respectively, until termination.

 

Operating Leases

 

LiveCare has two operating leases for a total of approximately 2,205 square feet of executive office space in Venice, Florida. The leases are both for one year with two additional one year lease options for which management is does not intend to utilize. The leases call for total monthly lease payments of $3,675.

 

21 

 

 

LIVECARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 8 - INCOME TAXES

 

The Company had generated federal and state net operating losses of approximately $4,303,782 that begin to expire in 2029. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. LiveCare believes that its ability to fully utilize the existing net operating loss carryforwards could be restricted by its ability to generate net income and should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

 

In accordance with the statute of limitations for federal tax returns, the Company’s federal tax returns for the years 2018 through 2020 are subject to examination.

 

Net deferred tax assets consist of the following components as of December 31, 2021 and 2020:

 

   2021   2020 
Deferred tax assets:          
Net operating loss carryforward  $948,293   $308,886 
Valuation allowance   (948,293)   (308,886)
   $   $ 

 

The federal income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate of 21% to pretax income from continuing operations for the years ended December 31, 2021 and 2020 due to the following:

 

   2021   2020 
Pre-tax book loss  $(1,913,952)  $(1,543,963)
Meals       6,225 
Common stock issued for services and bonus   1,059,320    1,124,340 
Debt discount amortization   215,226    216,425 
Valuation allowance   639,406    196,973 
   $   $ 

 

NOTE 9 - SUBSEQUENT EVENTS

 

Between January and March 2022, $103,400 in cash was received for common stock subscriptions receivable.

 

Between January and May 2022, LiveCare issued 577,000 shares of common stock and granted 577,000 warrants to purchase its common stock for cash at $1.00 per share until December 31, 2024.

 

Between January and May 2022, LiveCare issued 1,007,700 shares of common stock for services.

 

During April 2022, two RSA holders elected to convert principal totaling $131,999 into 131,999 shares of common stock and granted 577,000 warrants to purchase its common stock for cash at $1.00 per share until December 31, 2024.

 

 

22 

 

 

SIGNATURES

 

Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 20, 2022.

 

LIVECARE, INC.

 

By:   /s/ Cornelius M. Rockwell

Name: Cornelius M. Rockwell

Title: President, Chief Executive Officer and Director

 

Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities on May 20, 2022.

 

LIVECARE, INC.

 

By:   /s/ Cornelius M. Rockwell

Name: Cornelius M. Rockwell

President, Chief Executive Officer and Director

(Principal Executive Officer)

 

23 

 



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings