Eva Live Inc. (GOAI) - 10-K Summary for Fiscal Year Ended December 31, 2024
Business Context and Reporting Period
Company: Eva Live Inc. (Nevada corporation, OTC Markets ticker: GOAI)
Reporting Period: Fiscal year ended December 31, 2024
Business Model: Digital marketing and media monetization utilizing the "Eva Platform" and "Eva XML Platform." The company operates primarily on a principal-based model, purchasing advertising inventory and reselling it to clients (advertising agencies and businesses) while recognizing the total ad spend as revenue. The company is classified as a "Smaller Reporting Company" and an "Emerging Growth Company."
Key Financial Metrics
| Metric | 2024 (Audited) | 2023 (Audited) |
|---|---|---|
| Total Revenue | $9,330,971 | $5,096,543 |
| Net Loss | $(3,753,268) | $(6,610,119) |
| Operating Expenses | $13,055,886 | $11,706,662 |
| Cash and Cash Equivalents | $76,356 | $472,509 |
| Working Capital | $1,560,391 (Surplus) | $(652,446) (Deficit) |
| Accumulated Deficit | $(28,469,675) | $(24,716,407) |
| Shares Outstanding | 125,364,737 | 123,052,349 |
Key Expense Drivers: Media traffic purchases accounted for $5,570,972 (59.7% of revenue) in 2024. General and Administrative (G&A) expenses were $7,484,914 (80.2% of revenue), a decrease from 2023 primarily due to reduced share-based compensation.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased by approximately 83% year-over-year, driven by increased client ad spend.
- Loss Reduction: Net loss decreased by 43% compared to 2023, largely attributed to a reduction in share-based expenses for management.
- Liquidity Improvement: The company moved from a working capital deficit of $652,446 in 2023 to a surplus of $1,560,391 in 2024, despite a significant drawdown in cash on hand (from $472,509 to $76,356).
- Customer Concentration: Customer count decreased from 7 to 6 for the full year. The top three customers represented 85% of 2024 revenue (up from 93% in 2023), indicating high dependency on a few key clients.
- Accounting Adjustments: The company reevaluated its 2021 reverse merger as a reverse capitalization, eliminating $2,010,606 of previously recorded goodwill. Additionally, the AdFlare acquisition goodwill of $1,500,000 was fully impaired in 2022.
Guidance, Outlook, Risks, and Unusual Items
Going Concern: The independent auditors have issued a "Going Concern" opinion. The company has an accumulated deficit of $28.5 million and negative cash flows from operations. Management states that cash on hand is insufficient to meet obligations for the next 12 months without raising additional capital through equity or debt financing.
Capital Requirements: Management estimates a need for approximately $250,000 in capital expenditures and an additional $1.65 million for sales, marketing, and working capital over the next 12 months.
Internal Controls: Management concluded that disclosure controls and internal controls over financial reporting were not effective as of December 31, 2024, citing inadequate segregation of duties and insufficient written policies.
Related Party Transactions:
- Media Purchases: Hottest Media LLC (a related party) was the sole entity purchasing media traffic for the company, totaling $5.57 million in 2024.
- Compensation: CEO David Boulette received significant share-based compensation ($2.73 million in 2024) and an annual salary of $360,000.
Subsequent Events:
- Reverse Stock Split: A 4-for-1 reverse stock split was announced in February 2025 to aid in uplisting to a national exchange.
- Auditor Changes: The company dismissed Michael Gillespie & Associates (May 2024), engaged Olayinka Oyebola & Co. (March 2025), and subsequently dismissed Olayinka (April 2025) due to OTC Markets Group status changes, engaging Lao Professionals (LAO) in April 2025.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $76,356 cash balance against the stated $1.9 million capital requirement for the next 12 months.
- Revenue Quality: Assess the collectability of the $4.02 million in accounts receivable, noting the $1.38 million allowance for doubtful accounts.
- Related Party Dependence: Evaluate the risks associated with Hottest Media LLC being the sole vendor for media traffic purchases ($5.57M) and the concentration of revenue in the top three customers (85%).
- Auditor Stability: Investigate the rapid succession of auditor changes (BF Borgers, Gillespie, Olayinka, LAO) and the reasons for dismissal.
- Internal Controls: Review the specific material weaknesses in internal controls and the remediation plan, given the company's status as a public entity.