Eva Live Inc. (GOAI) - Q2 2025 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2025. Eva Live Inc. operates at the intersection of digital marketing and media monetization, utilizing an AI-driven platform (Eva Platform) and an XML-based traffic arbitrage system. The company executes a principal-based revenue model, purchasing media inventory and reselling it to advertising agencies and businesses. As of June 30, 2025, the company had 11 customers, with the top three accounting for 88% of receivables.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Balance Sheet (June 30, 2025) |
|---|---|---|---|
| Total Revenue | $4,138,712 | $7,820,232 | - |
| Net Income (Loss) | $2,625,101 | $4,620,795 | - |
| Operating Income | $2,631,101 | $4,634,063 | - |
| Cash and Equivalents | - | - | $261,079 |
| Total Assets | - | - | $9,115,225 |
| Total Liabilities | - | - | $2,927,541 |
| Working Capital | - | - | $6,174,392 |
| Notes Payable | - | - | $589,963 |
| Accounts Receivable (Net) | - | - | $8,779,875 |
Note: Net income for the six months ended June 30, 2025, is $4,620,795. The filing text contains a discrepancy in the Cash Flow statement where "Net loss" is listed as a positive $4,620,795, which aligns with the Net Income reported in the Statement of Operations.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased significantly from $2,188,616 in Q2 2024 to $4,138,712 in Q2 2025 (approx. 89% increase). For the six-month period, revenue grew from $4,425,566 to $7,820,232.
- Profitability Turnaround: The company shifted from a net loss of $360,361 in Q2 2024 to a net income of $2,625,101 in Q2 2025. Similarly, the six-month period moved from a loss of $163,652 to income of $4,620,795.
- Expense Efficiency: Media traffic purchases as a percentage of revenue dropped from 89.28% in Q2 2024 to 30.72% in Q2 2025, indicating improved arbitrage margins or platform performance. General and administrative expenses decreased from $588,447 to $331,451.
- Balance Sheet Strength: Cash balances increased from $76,356 (Dec 31, 2024) to $261,079 (June 30, 2025). Accounts receivable grew substantially to $8.78 million, reflecting higher sales volume.
Outlook, Risks, and Contingencies
- Going Concern: Despite recent profitability, the company maintains a "Going Concern" warning due to a historical accumulated deficit of $23.8 million and a history of negative cash flows. Management states that future cash flows may not be sufficient to meet debt obligations without additional capital.
- Customer Concentration: The top three customers represent 88% of receivables. The loss of any single major client could materially impact financial health.
- Capital Requirements: The company plans to spend at least $500,000 on sales and marketing over the next 12 months and anticipates capital expenditures of up to $250,000. It intends to raise additional capital through private equity or public markets.
- Subsequent Events: On July 11, 2025, the company filed a Form S-1 registration statement to register an offering of common stock to raise capital for growth and working capital.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, citing material weaknesses including inadequate segregation of duties and insufficient written policies.
- Debt Obligations: The company has outstanding promissory notes with high interest rates (12%) and potential conversion features at a 35% discount to the lowest closing bid price in the event of default.
Investor Verification Checklist
- Cash Flow Quality: Verify the source of the $4.6M net income. The cash flow from operating activities was only $2,341 for the six months, while accounts receivable increased by $4.76M. Confirm if revenue is being recognized before cash collection.
- Related Party Transactions: Review the $2.31M in accounts payable and accrued liabilities, which are attributed to unpaid salaries of officers and related parties. Assess the risk of these liabilities being converted to equity or requiring immediate cash settlement.
- Debt Terms: Scrutinize the terms of the "Boot Note" and "Diagonal Note," specifically the 150% default penalty and the 35% discount conversion feature, which could lead to significant dilution.
- Customer Retention: Investigate the stability of the top three customers who comprise 88% of receivables to assess revenue sustainability.
- Internal Control Remediation: Monitor the company's progress in addressing the material weaknesses in internal controls, particularly regarding segregation of duties.