Eva Live Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; filed April 10, 2024. Eva Live operates digital advertising and media-buying platforms, including the Eva Platform and Eva XML Platform. It reported all revenue under its principal-based model, recognizing client advertising spend on a gross basis.
Financial results and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $5,377,273 | $1,350,941 |
| General and administrative expense | $8,393,556 | $2,120,352 |
| Media traffic purchases | $2,834,723 | $1,105,718 |
| Amortization and depreciation | $193,498 | $217,778 |
| Net loss | $6,044,504 | $3,592,907 |
| EBITDA, non-GAAP | $(5,851,006) | $(1,875,129) |
| Cash at year-end | $472,509 | $38,506 |
| Working capital | $(61,141) | $(1,492,334) |
Revenue rose approximately 298%, while net loss widened approximately 68%. The company attributed revenue growth mainly to customer growth from 7 to 19. G&A was 156.1% of revenue, and media purchases were 52.7%. The company reported a net loss margin of approximately 112%.
Current assets were $2.07 million versus current liabilities of $2.13 million. Net accounts receivable was $1.59 million, with a $624,898 allowance for doubtful accounts. Total liabilities were $2.13 million; the $40,832 PPP loan was forgiven, leaving no PPP balance at year-end. Goodwill was $2.01 million, with no impairment recorded in 2023; the company recorded a $1.5 million AdFlare goodwill impairment in 2022.
The cash-flow statement reports 2023 operating cash flow of positive $423,803, compared with negative $593,817 in 2022. This conflicts with narrative statements that the company continued to have negative operating cash flows and had not generated significant operating cash flow. The filing text does not reconcile the discrepancy.
Material changes and notable items
- The company issued 7.2 million shares for services in 2023, valued at $7.272 million, primarily including 7 million shares issued to CEO David Boulette. Management cited share-based compensation as the main reason for increased G&A and net loss.
- The three largest customers accounted for 73% of 2023 revenue, down from 92% in 2022. One related party, Hottest Media LLC, was the company’s sole media buyer; media purchases through it were $2.83 million in 2023.
- The company restated comparative financial information after concluding EvaMedia was the accounting acquirer in the 2021 reverse acquisition. It states that the previously filed S-1 and S-1/A financial statements and auditor’s report could no longer be relied upon.
- Capitalized software was fully amortized by year-end 2023; no future amortization is estimated.
Outlook, risks, and controls
- Going concern: The auditor cited substantial doubt about the company’s ability to continue as a going concern. The company reported a $24.18 million accumulated deficit and says additional capital is needed. It has no specific funding agreements and expects to seek private or public-market financing, with no assurance funding will be available on acceptable terms.
- Management describes funding needs and timing inconsistently: it says available resources may not cover the next 12 months, also expects resources to cover operations for 6–9 months, and anticipates raising significant capital. It discusses up to $250,000 of capital expenditures and at least $500,000 for sales and marketing; a separate spending estimate contains an apparent unclear figure (“$1,500,000”) for working capital.
- Customer concentration, receivable collectability, dependence on external capital, intense competition, and the company’s small operating team are material business risks. The filing reports three employees, all executive officers.
- Management concluded disclosure controls and internal control over financial reporting were ineffective at year-end 2023, citing inadequate segregation of duties and insufficient written accounting, IT, and reporting procedures. Management described remediation plans but reported no material control changes during the year.
- The company reported no pending litigation or off-balance-sheet arrangements. It does not anticipate paying dividends in the foreseeable future.
Key facts for investors to verify
- Reconcile the positive operating cash flow in the cash-flow statement with management’s statements about negative operating cash flow and funding runway.
- Confirm financing needs, cash runway, and the intended amounts and timing of planned capital expenditures, marketing, and working-capital spending.
- Review the $7.272 million share-based compensation charge, share issuance details, and resulting dilution; outstanding common shares were 123,052,349 at December 31, 2023.
- Assess collection of receivables, the adequacy of the $624,898 bad-debt allowance, and exposure to the three largest customers and Hottest Media LLC.
- Review the restated comparative statements and the company’s progress in remediating material weaknesses in financial reporting controls.