10Q posted today .... not noted on IHub yet but filed nonetheless.
15 pages before getting to something that isn't financials or funding related. Awful.
Then there is this ......
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NOTE 8 - DEFERRED REVENUE - PARTICIPATION AGREEMENTS
During the quarter ended June 30, 2020, the Company entered into six (6) s (“Agreements”) totaling $1,150,000 with third parties (“Participants”). The Agreements provide for payments by the Company to the Participants of an aggregate of 17.25% of fees generated by the Company from licensing or selling bioactive ingredients or molecules (including its TLR4 Inhibitor molecule) derived from the Company’s algae cultures and actually received from any licensee of the Company (the “Revenue Share”). The Agreements also call for the issuance of warrants to purchase an aggregate of 3,450,000 shares of common stock with a term of five years and at exercise prices of either $.11 or $.12 per share (See the Table below).
According to the terms of the Agreements, and pursuant to ASC 470-10-25 “Debt – Sales of Future Revenues” the Company has bifurcated the proceeds of $1,150,000 as follows: 1) the 3,450,000 warrants sold were attributed a value of $117,474 based on the Black Scholes pricing model using the following assumptions: volatilities ranging from 147.12% to 154.26%; annual rate of dividends 0%; discount rates ranging from 0.29% to 0.44%, and recorded as Additional Paid In Capital; 2) the remaining $1,032,526 was recorded as Deferred Revenue – Participation Agreements. Since the Company believes there is a rebuttable presumption pursuant to ASC 470-10-25.2, the Deferred Revenue – Participation Agreements will be amortized into income, using an estimate to be determined by Management, if and when the Company derives income from the license or sale of bioactive ingredients or molecules (including its TLR4 Inhibitor molecule) derived from the Company’s algae cultures.
Agreements #1 through #4 allow the Company the option (“Option”) to buy back the right, title and interest in the Revenue Share for an amount equal to the amount funded plus a forty percent (40%) premium. The Company may exercise its Option by delivering written notice to the Participant of its intent to exercise the Option, along with repayment terms of the amount funded, which may be paid, in the Company’s sole discretion, in one lump sum or in four (4) equal quarterly payments.
Agreements #5 and #6 allow the Company the Option to buy back the right, title and interest in the Revenue Share for an amount equal to the amount funded plus a forty percent (40%) premium, if the Option is exercised in less than 18 months, or a fifty percent (50%) premium, if the Option is exercised after 18 months. Pursuant to the terms of both Agreements, the Company may not exercise its Option until it has paid the Participant a revenue share equal to a minimum of thirty percent (30%) of the amount initially funded. Once this minimum threshold is met, the Company may exercise its Option by delivering written notice to the Participant of its intent to exercise the Option, along with repayment terms of the amount funded, which may be paid, in the Company’s sole discretion, in one lump sum or in four (4) equal quarterly payments. If the Company does not make such quarterly payments timely for any quarter, then the Company shall pay the prorate Revenue Share amount, retroactive on the entire remaining balance owed, that would have been earned during such quarter until the default payments are made and the payment schedule is no longer in default.
Agreement Date of Funding Amount Funded Warrants Revenue Share
1 April 13, 2020 $100,000 300,000 1.500%
2 April 13, 2020 $150,000 450,000 2.250%
3 April 13, 2020 $150,000 450,000 2.250%
4 May 7, 2020 $250,000 750,000 3.750%
5 June 1, 2020 $275,000 825,000 4.125%
6 June 3, 2020 $225,000 675,000 3.375%
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From July 1, 2020 through the date of this filing, the Company entered into a License Co-Development Participation Agreement (“Agreement”) for $100,000. The Agreement provides for, among other items, the partner (the “Participant”) to participate in the fees (the “Fees”) from licensing or selling bioactive ingredients or molecules derived from the Company’s algae cultures. Based upon the agreement signed to date, the Company will issue to the Participant warrants with a five-year term to purchase 300,000 shares of the Company’s common stock at an exercise price of $0.12 per share and provide to the Participant a 1.50% “Revenue Share” of all license fees generated by ZIVO from any Licensee.
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Ah ... so ... the way I read this ... these aren't "licenses" and CoDevelopment agreements .... this is giving away a percentage of any future licensing revenues in exchange for "advanced funding".
And of course continue to hand out warrants and options like candy. No mention of development of commercial scale production. No mention of business activities that occurred in the quarter outside of the alternate funding arrangements noted above. Totally worthless.
Of course there are no disclosures on who is providing the money for these participation agreements.
So the 1st 4 above were originally disclosed as subsequent events in the prior 10Q and I mistakenly took them to be LICENSES and CO DEVELOPMENT agreements with companies actually licensing the product.
Only way these are now remotely interesting is if the entities providing this money are Merck, Zoetis, Nutriquest or similar who are working towards and negotiating an actual license ..... otherwise it is probably Maggiore and HEP Investments using an alternate method of funding that doesn't appear as more convertible debt on the balance sheet. Although I would expect they'd have to disclose if Maggiore and file the Form 4s as well.
That said .... Dahl is probably negotiating some actual licenses but ..... not holding my breathe.
At this point, I don't see why ZIVO wouldn't be in a position to work with a legit IB and raise $5-7 million. These big pharmas have venture arms as well. Can't tell me they haven't accumulated enough data and with the ID of the complex that a big boy wouldn't take a shot.
What needs to happen is get this stock up to $.25 .... do a raise with legit IB or partner pharma instead of these ridiculous "Corporate advisor agreement", "financial consulting agreement", "supply chain consulting agreement" (is particularly ridiculous), "marketing/public relations agreement" .... and get 1 flipping vertical DONE and PRODUCING REVENUE. What are ZIVO VPs that have experience building supply chains doing ??? This Mickey Mouse chit is ridiculous. Obvious Dahl and Rice can't raise the money and are completely devoid of any skill in showing prospective or even existing investors what ZIVO offers is of value.
And still pissing money into the Wellmetrix wind.
Unreal.
Maybe lightning strikes and Dahl lands a license but certainly not holding my breathe. Someone picking up some stock lately for whatever reason.
Amigo Mike
AI
