• Filing Date: 2018-11-14
  • Form Type: 10-Q
  • Description: Quarterly report
v3.10.0.1
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2018
Nov. 13, 2018
Document and Entity Information    
Entity Registrant Name Triton Emission Solutions Inc.  
Document Type 10-Q  
Document Period End Date Sep. 30, 2018  
Amendment Flag false  
Entity Central Index Key 0001143238  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   88,195,005
Entity Filer Category Smaller Reporting Company  
Entity Current Reporting Status Yes  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q3  
Trading Symbol dsox  
v3.10.0.1
Consolidated Balance Sheets - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Current Assets    
Cash $ 220 $ 3,849
Prepaids 15,568 3,040
Total Current Assets 15,788 6,889
Total Assets 15,788 6,889
Current Liabilities    
Accounts payable 465,613 218,471
Accrued liabilities 38,057 39,076
Wages payable 70,750 91,795
Unearned revenue 2,075,000 2,075,000
Notes and advances payable 1,562,188 1,455,073
Due to related parties 203,392 436,584
Derivative liability - warrants 88,159 157,463
Derivative liability - conversion feature 2,318,741 1,968,174
Loans payable 9,704,085 8,718,451
Total Current Liabilities 16,525,985 15,160,087
Total Liabilities 16,525,985 15,160,087
Stockholders' Deficit    
Common stock value 88,195 88,195
Common stock obligation 46,410 46,410
Additional paid-in capital 63,343,169 63,309,928
Accumulated deficit (79,991,891) (78,596,334)
Accumulated other comprehensive income 3,920 (1,397)
Total Stockholders' Equity (Deficit) (16,510,197) (15,153,198)
Total Liabilities and Stockholders' Equity (Deficit) $ 15,788 $ 6,889
v3.10.0.1
Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2018
Dec. 31, 2017
Balance Sheet    
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 88,195,005 88,195,005
Common stock, shares outstanding 88,195,005 88,195,005
v3.10.0.1
Consolidated Statements of Operations - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Income Statement        
Consulting revenue       $ 8,753
Total revenues       8,753
Operating expenses        
General and administrative expense $ 15,714 $ 28,567 $ 23,331 353,498
Research and development   3,680   247,554
Loss before other items (15,714) (32,247) (23,331) (592,299)
Other items        
Accretion expense       1,046,271
Change in fair value of derivative liability 17,156 (18,036) (281,263) (83,942)
Financing costs       362,720
Gain on divestiture of subsidiary     11,871  
Interest expense 373,649 315,793 1,070,150 860,405
Stock-based compensation 9,115 24,130 32,684 (47,933)
Net income (loss) (381,322) (390,206) (1,395,557) (2,897,704)
Foreign exchange translation   (2,998) 5,317 (8,219)
Comprehensive income (loss) $ (381,322) $ (393,204) $ (1,390,240) $ (2,905,923)
Net income (loss) per common share - basic and diluted $ 0 $ 0 $ (0.02) $ (0.03)
Weighted common shares outstanding - basic and diluted 88,195,005 88,195,005 88,195,005 88,195,005
v3.10.0.1
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($)
Common Stock
Obligation to Issue Shares
Additional Paid-in Capital
Accumulated Deficit
Accumulated Other Comprehensive Income
Total
Beginning Balance, shares at Dec. 31, 2016 88,195,005          
Beginning Balance, amount at Dec. 31, 2016 $ 88,195 $ 46,410 $ 63,345,881 $ (75,052,646) $ 6,308 $ (11,565,852)
Stock-based compensation     (47,933)     (47,933)
Translation to reporting currency         (8,219) (8,219)
Net income (loss) for the period       (2,897,704)   (2,897,704)
Ending Balance, shares at Sep. 30, 2017 88,195,005          
Ending Balance, amount at Sep. 30, 2017 $ 88,195 46,410 63,297,948 (77,950,350) (1,911) (14,519,708)
Stock-based compensation     11,980     11,980
Translation to reporting currency         514 514
Net income (loss) for the period       (645,984)   (645,984)
Ending Balance, shares at Dec. 31, 2017 88,195,005          
Ending Balance, amount at Dec. 31, 2017 $ 88,195 46,410 63,309,928 (78,596,334) (1,397) (15,153,198)
Stock-based compensation     32,684     32,684
Divestiture of subsidiary     557     557
Translation to reporting currency         5,317 5,317
Net income (loss) for the period       (1,395,557)   (1,395,557)
Ending Balance, shares at Sep. 30, 2018 88,195,005          
Ending Balance, amount at Sep. 30, 2018 $ 88,195 $ 46,410 $ 63,343,169 $ (79,991,891) $ 3,920 $ (16,510,197)
v3.10.0.1
Consolidated Statements of Cash Flows - USD ($)
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Cash Flows from Operating Activities    
Net income (loss) $ (1,395,557) $ (2,897,704)
Non cash items    
Accretion expense   1,046,271
Accrued interest 1,070,150 860,405
Financing costs   362,720
Foreign exchange gain (loss) 5,624 (12,339)
Change in fair value of derivative liability (281,263) (83,942)
Stock-based compensation 32,684 (47,933)
Changes to operating assets and liabilities:    
Accounts receivable   12,428
Prepaids (12,528) 1,462
Accounts payable 12,348 46,482
Accrued liabilities (1,019) (4,500)
Wages payable (15,641) 36,940
Due to related parties 1,969 191,071
Net cash provided by (used in) operating activities (31,955) (296,077)
Cash Flows from Financing Activities    
Proceeds from notes and advances payable 27,839 299,816
Net cash provided by financing activities 27,839 299,816
Cash Flows from Investing Activities    
Divestiture of subsidiary 557  
Net cash used by investing activities 557  
Effects of foreign currency exchange (70) 388
Net increase (decrease) in cash (3,629) 4,127
Cash, beginning of period 3,849 3,794
Cash, end of period 220 7,921
Supplemental Disclosure of Cash Flow Information:    
Income tax
Interest
v3.10.0.1
Organization and Nature of Operations
9 Months Ended
Sep. 30, 2018
Notes  
Organization and Nature of Operations

NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

 

Triton Emission Solutions Inc. (the “Company”) was incorporated in the state of Delaware on March 2, 2000. On August 25, 2014, the Company changed its name from Poly Shield Technologies Inc. to Triton Emission Solutions Inc. On November 13, 2014, the Company established a wholly owned subsidiary in Sweden, Triton Emission Solutions International AB (the “Subsidiary”), which was dissolved on April 27, 2018. The Company’s shares are listed on the OTCPink under the symbol “DSOX”

 

The Company’s main focus is the development and marketing of its proprietary DSOX Fuel Purification (the “DSOX”) and Njord Exhaust Gas Scrubber (the “Njord”) Systems, designed to remove sulfur from marine fuel and exhaust gases. The technology is currently aimed at the maritime industry which includes vessels for cruise-line, freight shipping and tanker companies.

 

Basis of presentation

The unaudited interim consolidated financial statements included herein have been prepared by, and are the responsibility of, the Company’s management in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Due to a weak financial condition, the Company’s independent auditor has not performed a review of these unaudited interim consolidated financial statements. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the unaudited consolidated financial statements included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2017. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, these unaudited interim consolidated financial statements and the related notes should be read in conjunction with the Company’s unaudited consolidated financial statements for the year ended December 31, 2017, included in the Company’s report on Form 10-K.

 

Reclassifications

Certain prior period amounts in the accompanying unaudited consolidated interim financial statements have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the consolidated results of operations or financial position for any period presented.

 

Going concern

The accompanying unaudited, management prepared, consolidated interim financial statements have been prepared assuming the Company will continue as a going concern. Continuation as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations.

 

As of September 30, 2018, the Company has not achieved profitable operations and has a working capital deficit of $16,510,197 and accumulated a deficit of $79,991,891. In addition, as of September 30, 2018, the Company owed a total of $9,704,085 to KF Business Ventures, LP (“KFBV”), an entity controlled by the Company’s Chairman, under the terms of three separate loan agreements with KFBV (Note 4). Should KFBV serve the Company with default notice and request a payment of the amounts owed, the Company may not be able to continue as a going concern and may be required to file for bankruptcy. The likelihood and outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that the Company will be able to continue as a going concern.

 

These unaudited interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and/or a private placement of common stock.

v3.10.0.1
Related Party Transactions Disclosure
9 Months Ended
Sep. 30, 2018
Notes  
Related Party Transactions Disclosure

NOTE 2 - RELATED PARTY TRANSACTIONS

 

Amounts due to related parties, other than notes payable to related parties and KF Business Ventures loans (Notes 3 and 4), at September 30, 2018 and December 31, 2017:

 

 

September 30,

2018

 

December 31,

2017

Due to a company controlled by the Chief Financial Officer (“CFO”)

$

203,392

 

$

201,472

Due to the former Chief Executive Officer (“CEO”)(1)

 

--

 

 

73,125

Due to the former President and Chief Technical Officer (“CTO”) (1)

 

--

 

 

87,923

Due to the former Senior Vice President (“VP”) of Business Development(1)

 

--

 

 

74,064

Due to related parties

$

203,392

 

$

436,584

Amounts are unsecured, due on demand and bear no interest.

(1) Mr. Norling, the Company’s former President and CTO, and Mr. Aasen, the Company’s former CEO, resigned from their respective management positions with the Company on February 7, 2017; Mr. Miller, the Company’s former Senior VP of Business Development, resigned from his management positions with the Company on February 13, 2017. As at September 30, 2018, we owed Mr. Norling $87,923, Mr. Aasen - $73,125, and Mr. Miller - $74,064 for the past services; these amounts have been included in accounts payable.

 

The Company incurred the following expenses with related parties:

 

 

September 30,

2018

 

September 30,

2017

Administrative fees accrued to a company controlled by the CFO

 

--

 

 

105,000

Fair value of options issued to a Director and Chairman (Note 5)

 

32,684

 

 

79,118

Total transactions with related parties

$

32,684

 

$

184,118

 

v3.10.0.1
Notes and Advances Payable Disclosure
9 Months Ended
Sep. 30, 2018
Notes  
Notes and Advances Payable Disclosure

NOTE 3 - NOTES AND ADVANCES PAYABLE

 

The tables below summarize the short-term loans outstanding as at September 30, 2018 and December 31, 2017:

 

As at September 30, 2018

Principal

Outstanding

Interest Rate

per Annum

Accrued

Interest

Total

$

27,000

8%

$

19,148

$

46,148

 

49,500

7%

 

36,723

 

86,223

 

146,775*

6%

 

23,815

 

170,590

 

15,000

0%

 

--

 

15,000

 

600,000

6%

 

120,266

 

720,266

 

110,000

15%

 

31,726

 

141,726

 

333,062

10%

 

49,173

 

382,235

$

1,281,337

 

$

280,851

$

1,562,188

*The carrying value of this loan is denoted in Canadian dollars and is translated into US dollars at the end of each reporting period.

 

As at December 31, 2017

Principal

Outstanding

Interest Rate

per Annum

Accrued

Interest

Total

$

27,000

8%

$

16,477

$

43,477

 

49,500

7%

 

32,336

 

81,836

 

151,455*

6%

 

16,867

 

168,322

 

15,000

0%

 

--

 

15,000

 

600,000

6%

 

88,735

 

688,735

 

110,000

15%

 

19,385

 

129,385

 

305,223

10%

 

23,095

 

328,318

$

1,258,178

 

$

196,895

$

1,455,073

*The carrying value of this loan is denoted in Canadian dollars and is translated into US dollars at the end of each reporting period.

 

Quarry Bay Loans

 

In 2012 the Company entered into series of Loan Agreements with Quarry Bay Capital LLC (“Quarry Bay”) for a total of CAD$190,000 (the “Quarry Bay Loan”). The Quarry Bay Loan accumulates interest at 6% per annum. As at September 30, 2018, the Company owed $170,590 (December 31, 2017 - $168,322), including accrued interest of $23,815 (2017 - $16,867) under the Quarry Bay Loan.

 

Norling Bridge Loans

 

On July 28, 2015, and November 6, 2015, the Company entered into two separate bridge loan agreements (the “Norling Loans”) with its former President and CTO, Rasmus Norling.  Pursuant to the Norling Loans, Mr. Norling agreed to lend to the Company total of $400,000 in exchange for unsecured promissory notes.

 

The Norling Loans have an interest rate of 6% and were due December 31, 2016. During the nine-month period ended September 30, 2018, the Company recorded $21,002 in interest expense associated with the Norling Loans (2017 - $19,782). As at September 30, 2018, the Company owed $479,750 (2017 - $458,748) under the Norling Loans.

 

As of September 30, 2018, the Norling Loans are in default, however, the Company has not been served with a default notice by Mr. Norling.

 

KF Business Ventures Bridge Loan and Note Payable

 

On August 31, 2015, the Company entered into a bridge loan agreement with KFBV, whereby KFBV agreed to lend to the Company $200,000 in exchange for an unsecured promissory note (the “KFBV Bridge Loan”).

 

The KFBV Bridge Loan has an interest rate of 6%, and was due December 31, 2016. During the nine months ended September 30, 2018, the Company recorded $10,529 in interest expense associated with the KFBV Bridge Loan (2017 - $9,918). As at September 30, 2018, the Company owed $240,516 (2017 - $229,987) under the KFBV Bridge Loan.

 

In September 2016, the Company issued an unsecured promissory note to KFBV for gross proceeds of $110,000 (the “KFBV Note”). As part of the terms of the KFBV Note the Company agreed to grant KFBV the right to offset the cash payable by KFBV to exercise the warrants to purchase shares of the Company’s common stock against the corresponding amount the Company would have to pay for outstanding indebtedness under this KFBV Note.

 

The KFBV Note has an interest rate of 10% and was due January 15, 2017. Under the terms of the KFBV Note, in the event of default the interest rate increases to 15% per annum until such time that the default is cured. During the nine months ended September 30, 2018, the Company recorded $12,341 in interest expense associated with the KFBV Note (2017 - $15,226). As at September 30, 2018, the Company owed $141,726 (2017 - $129,385) under the KFBV Note.

 

As of September 30, 2018, the KFBV Bridge Loan and KFBV Note are in default, however, the Company has not been served with a default notice by KFBV.

 

During the nine months ended September 30, 2018, KFBV advanced the Company an additional $27,839 (2017 - $305,223) for working capital. The advances are unsecured, due on demand and accumulate interest at a rate of 10% per annum. During the nine months ended September 30, 2018, the Company recorded $26,078 in interest expense associated with these advances (2017 - $Nil). As at September 30, 2018, the Company owed $382,235 (2017 - $328,318) on account of working capital advances it borrowed from KFBV.

 

Other Loans

 

In September and October of its Fiscal 2010, the Company entered into a number of loan agreements with a third party creditor, whereby the third party creditor agreed to lend to the Company a total of $34,500 in exchange for unsecured promissory notes. On November 9, 2010, the Company entered into a loan agreement with another third party creditor, whereby the third party creditor agreed to lend to the Company $15,000 in exchange for an unsecured promissory note.

 

The loans have an interest rate of 7%, and are due on demand. During the nine months ended September 30, 2018, the Company recorded $4,387 in interest expense associated with these loans from third party creditors (2017 - $4,090). As at September 30, 2018, the Company owed $86,223 (2017 - $81,836) under these loans.

 

On December 12, 2011, the Company entered into a loan agreement with a third party creditor, whereby the third party creditor agreed to lend to the Company $15,000 in exchange for an unsecured promissory note. On February 13, 2012, the third party creditor entered into a second loan agreement with the Company, whereby the third party creditor agreed to lend to the Company an additional $12,000 in exchange for an unsecured promissory note.

 

The loans have an interest rate of 8%, and are due on demand. During the nine months ended September 30, 2018, the Company recorded $2,671 in interest expense associated with these loans (2017 - $2,467). As at September 30, 2018, the Company owed $46,148 (2017 - $43,477) under these loans.

 

On August 14, 2012, the Company entered into a loan agreement with a third party creditor, whereby the third party creditor agreed to lend to the Company $15,000 in exchange for an unsecured non-interest bearing promissory note payable on demand.

v3.10.0.1
KFBV Loans and Derivative Liability Disclosure
9 Months Ended
Sep. 30, 2018
Notes  
KFBV Loans and Derivative Liability Disclosure

NOTE 4 - KFBV LOANS AND DERIVATIVE LIABILITY

 

On January 15, 2014, the Company entered into a binding letter agreement with KFBV which was superseded by the formal definitive loan agreement signed on February 11, 2014, and further amended on March 10, 2014, September 8, 2014, and on December 17, 2015 (the “First KF Loan Agreement”). Under the First KF Loan Agreement the Lender agreed to lend to the Company up to $2,000,000 in four equal installments of $500,000 each (the “First KF Loan”). Pursuant to the First KF Loan Agreement (as amended on March 10, 2014) the principal and interest were to become payable in 18 equal monthly installments commencing on January 1, 2015, with the  Company having the right to prepay the First KF Loan at any time in increments of not less than $250,000.  The First KF Loan is unsecured and has effective interest rate of 1,130%, which was due primarily to the recording of non-cash accretion interest.

 

In consideration for the First KF Loan Agreement, as amended on March 10, 2014 (the “March Amendment”), the Company issued to the Lender non-transferrable share purchase warrants to purchase a total of 6,904,546 shares exercisable at a price of $1.00 per share (the “First KF Warrants”). Warrants for 2,450,000 shares had an original expiry date of January 15, 2015, and warrants for 4,454,546 shares had an original expiry date of January 15, 2018. At the discretion of the Lender the First KF Warrants for up to 3,452,273 shares of common stock could have been acquired by way of a cashless exercise.

 

The First KF Warrants included a down-round provision whereby the exercise price of the First KF Warrants could have been adjusted to the lowest offering price of any options, warrants or shares issued subsequent to the issuance of the First KF Warrants (the “Down-Round Provision”). The First KF Warrants were determined to be a derivative under ASC 815; therefore, at initial measurement, the proceeds were allocated to the fair value of the warrants first and any residual proceeds to the principal of the First KF Loan.

 

At issuance date, the fair value of the First KF Warrants was $5,128,110 and a value of $Nil was allocated to the principal.

 

On September 8, 2014, the Company entered into a Second Amendment Agreement (the “September Amendment”) to extend the maturity of the First KF Loan to January 15, 2016, and replace 18 equal monthly installments with a one-time payment of principal and accrued interest. Furthermore, the Company was given an option to further extend the repayment of the First KF Loan to January 15, 2017, by issuing additional share purchase warrants (the “First Extension Warrants”) equal to one-half of the outstanding principal and unpaid interest as at January 15, 2016. The Extension Warrants were to have an initial exercise price of $0.50 per share expiring on September 1, 2021.

 

As consideration for the September Amendment, the Company issued to the Lender additional warrants for the purchase of up to 2,350,000 shares (the “September Warrants”), with an initial exercise price of $0.50 per share and expiring on January 15, 2019, with cashless exercise rights for up to 1,175,000 shares. In addition, the Company agreed to decrease the exercise price for the First KF Warrants (the “Amended Warrants”) from $1.00 per share to $0.50 per share and extend the expiration date of warrants for up to 2,450,000 shares of the Company’s common stock from January 15, 2015, to January 15, 2016. The September Warrants also included the Down-Round Provision.

 

On December 17, 2015 (the “December Amendment Date”), as part of the second definitive Letter Agreement with KFBV (the “Second KF Letter Agreement”), which was superseded by a formal Loan Agreement dated January 8, 2016, the Company agreed to decrease the exercise price for Amended Warrants and September Warrants from $0.50 per share to $0.10 per share and extend the expiration date of warrants to January 15, 2021. In addition, the Company exercised its option to extend the maturity of the First KF Loan to January 15, 2017, by issuing the Lender 1,194,332 First Extension Warrants, being an equivalent to one-half of the outstanding principal and unpaid interest on the First KF Loan as at January 15, 2016. First Extension Warrants have an initial exercise price of $0.10 per share expiring on September 1, 2021.

 

The Company did not repay the First KF Loan on January 15, 2017, when due, and as such the First KF Loan is in default. The Company recorded a penalty on unpaid balance of $131,978, representing 5% of the full balance due under the First KF Loan on January 15, 2017. The penalty has been included in financing costs. The Company has not been served with a default notice by KFBV.

 

During the nine months ended September 30, 2018, the Company recorded $359,189 (2017 - $293,378) in interest expense on the First KF Loan at 15% per annum, the default rate of interest. In addition to the accrued interest, during the nine months ended September 30, 2017, the Company recognized accretion expense of $73,250. As at January 15, 2017, the First KF Loan was fully accreted and, as such, no accretion expense was recognized during the nine months ended September 30, 2018.

 

At September 30, 2018, the fair value of the derivative liability associated with the warrants issued pursuant to the First KF Loan Agreement was $31,347 (December 31, 2017 - $53,439).

 

At September 30, 2018 and December 31, 2017, the fair values of Amended Warrants, September Warrants, and First Extension Warrants were revalued using the Binomial Lattice model using the following assumptions:

 

 

At September 30,

2018

At December 31,

2017

Expected Warrant Life

2.30 - 2.92 years

3.04 - 3.67 years

Risk-Free Interest Rate

2.81% - 2.88%

1.98%

Expected Dividend Yield

Nil

Nil

Expected Stock Price Volatility

32% - 60%

32% - 60%

 

Second KF Business Ventures Loan Agreement

 

On July 28, 2014, the Company entered into a second loan agreement with the Lender (the “Second KF Loan Agreement”). Under the Second KF Loan Agreement, the Lender agreed to lend to the Company $2,400,000 (the “Second KF Loan”), to be advanced in eight equal installments of $300,000 each, commencing on September 1, 2014, and on the first day of each consecutive calendar month thereafter until fully advanced.

 

The initial maturity date under the Second KF Loan Agreement was January 15, 2016, with an option to further extend the maturity date to January 15, 2017, by issuing additional share purchase warrants (the “Second Extension Warrants”) equal to one-half of the outstanding principal and unpaid interest as at January 15, 2016. The Second KF Loan is unsecured and has an effective interest rate of 1,729%, which was due primarily to the recording of non-cash accretion interest.

 

In consideration for the Second KF Loan Agreement, the Company issued to the Lender non-transferrable share purchase warrants for a total of 9,600,000 shares of the Company’s common stock, exercisable at a price of $0.50 per share for a period expiring September 1, 2019 (the “Second KF Warrants”). At the discretion of the Lender the Second KF Warrants for up to 4,800,000 shares of common stock can be acquired by way of a cashless exercise.

 

The Second KF Warrants were determined to be a derivative under ASC 815; therefore, at initial measurement, the proceeds were allocated to the fair value of the Second KF Warrants first and any residual proceeds to the loan principal.

 

At issuance date, the fair value of the Second KF Warrants was $5,388,652 and a value of $Nil was allocated to the principal.

 

On December 17, 2015, as part of the Second KF Letter Agreement, which was superseded by a formal Loan Agreement dated January 8, 2016, the Company agreed to decrease the exercise price for the Second KF Warrants from $0.50 per share to $0.10 per share and extend the expiration date of these warrants to January 15, 2021. The Second KF Warrants included a down-round provision whereby the exercise price of the Second KF Warrants could have been adjusted to the lowest offering price of any options, warrants or shares issued subsequent to the issuance of the Second KF Warrants.  In addition, the Company exercised its option to extend the maturity of the Second KF Loan to January 15, 2017, by issuing the Lender 1,337,320 Second Extension Warrants, being an equivalent to one-half of the outstanding principal and unpaid interest as at January 15, 2016. Second Extension Warrants have an initial exercise price of $0.10 per share expiring on September 1, 2021.

 

The Company did not repay the Second KF Loan on January 15, 2017, when due, and as such the Second KF Loan is in default. The Company recorded a penalty on unpaid balance of $147,779, representing 5% of the full balance due under the Second KF Loan on January 15, 2017. The penalty has been included in financing costs. The Company has not been served with a default notice by KFBV.

 

During the nine months ended September 30, 2018, the Company recorded $402,191 (2017 - $328,501) in interest expense on the Second KF Loan at 15% per annum, the default rate of interest. In addition to the accrued interest, during the nine months ended September 30, 2017, the Company recognized accretion expense of $165,212. As at January 15, 2017, the Second KF Loan was fully accreted and, as such, no accretion expense was recognized during the nine months ended September 30, 2018.

 

At September 30, 2018, the fair value of the derivative liabilities associated with the Second KF Warrants and the Second Extension Warrants was $32,812 (December 31, 2017 - $56,024).

 

At September 30, 2018 and December 31, 2017, the fair values of the Second KF Warrants and Second Extension Warrants were revalued using the Binomial Lattice model using the following assumptions:

 

 

At September 30,

2018

At December 31,

2017

Expected Warrant Life

2.30 - 2.92 years

3.04 - 3.67 years

Risk-Free Interest Rate

2.81% - 2.88%

1.98%

Expected Dividend Yield

Nil

Nil

Expected Stock Price Volatility

15% - 60%

15% - 60%

 

Third KF Business Ventures Loan Agreement

 

On December 17, 2015, the Company entered into a Second KF Letter Agreement with the Lender, which was ratified by the formal definitive loan agreement signed on January 8, 2016 (the “Third KF Loan Agreement”). Under the Third KF Loan Agreement, the Lender agreed to lend to the Company $1,500,000 (the “Third KF Loan”), to be advanced in five equal installments of $300,000 each, commencing on execution of the Second KF Letter Agreement, and on the first day of each consecutive calendar month thereafter until fully advanced.

 

The maturity date under the Third KF Loan Agreement was January 15, 2017. The Third KF Loan is unsecured and has an effective interest rate of 2,339%, which was due primarily to the recording of non-cash accretion interest. At the discretion of the Lender the principal and accrued but unpaid interest under the Third KF Loan may be converted into shares of the Company’s common stock at a conversion price of $0.10 per share, in minimum increments of $250,000 (the “Third KF Loan Conversion Feature”). In case of default, the conversion price is calculated based on a 50% discount to the volume weighted average price of the Company’s stock over the last five days of trading immediately preceding the date of exercise. The Down-Round Provision is included in the Third KF Loan Conversion Feature.

 

In consideration for the Third KF Loan Agreement, the Company issued to the Lender non-transferrable share purchase warrants for a total of 8,000,000 shares of the Company’s common stock, exercisable at a price of $0.10 per share for a period expiring January 15, 2021 (the “Third KF Warrants”). At the discretion of the Lender the Third KF Warrants for up to 4,000,000 shares of common stock can be acquired by way of a cashless exercise. The Down-Round Provision is included in the Third KF Warrants.

 

The Third KF Warrants and the Third KF Loan Conversion Feature were determined to be derivatives under ASC 815; therefore, at initial measurement, the proceeds were allocated to the Third KF Warrants and the Third KF Loan Conversion Feature on pro-rata basis first and any residual proceeds to the principal.

 

At issuance date, the fair value of the Third KF Warrants and the Third KF Loan Conversion Feature was $509,760 and $990,239 respectively and a value of $1 was allocated to the principal.

 

The Company did not repay the Third KF Loan on January 15, 2017, when due, and as such the Third KF Loan is in default. The Company recorded a penalty on unpaid balance of $82,399, representing 5% of the full balance due under the Third KF Loan on January 15, 2017. The penalty has been included in financing costs. The Company has not been served with a default notice by KFBV.

 

During the nine months ended September 30, 2018, the Company recorded $224,255 (2017 - $183,166) in interest expense on the Third KF Loan at 15% per annum, the default rate of interest. In addition to the accrued interest, during the nine months ended September 30, 2017, the Company recognized accretion expense of $807,809. As at January 15, 2017, the Third KF Loan was fully accreted and, as such, no accretion expense was recognized during the nine months ended September 30, 2018.

 

As a consequence of the Third KF Loan being in default, the conversion price decreased to 50% of the volume weighted average price of the Company’s stock over the last five days of trading immediately preceding the date of exercise. The decrease in price may result in the Company having to issue up to 772,912,876 shares of its common stock should KFBV decide to exercise its conversion rights under the Third KF Loan Agreement.

 

At September 30, 2018, the fair value of the derivative liability associated with the Third KF Warrants and the Third KF Loan Conversion Feature were $24,000 (2017 - $48,000) and $2,318,741 (2017 - $1,968,174), respectively.

 

At September 30, 2018 and December 31, 2017, the fair value of the Third KF Warrants was revalued using the Binomial Lattice model using the following assumptions:

 

 

At September 30,

2018

At December 31,

2017

Expected Warrant Life

2.30 years

3.04 years

Risk-Free Interest Rate

2.81%

1.98%

Expected Dividend Yield

Nil

Nil

Average Expected Stock Price Volatility

60%

60%

 

At September 30, 2018 and December 31, 2017, the fair value of the Third KF Loan Conversion Feature was revalued using the Binomial Lattice model using the following assumptions:

 

 

At September 30,

2018

At December 31,

2017

Amount Eligible for Conversion

$2,125,506

$1,901,252

Share Price

$0.0055

$0.0097

Expected Life

on demand

on demand

Risk-Free Interest Rate

2.12%

0.96%

Expected Dividend Yield

Nil

Nil

Expected Stock Price Volatility

57%

57%

 

Summary of KF Loans Payable

 

A summary of the discounted carrying value, deferred financing costs, accumulated accrued interest, penalty and principal of KF loans payable is as follows:

 

As at September 30, 2018

 

 

Principal

Outstanding

Accumulated

Accrued

Interest

Penalty

Total

 

First KF Loan Payable

$

2,000,000

$

1,404,426

$

131,978

$

3,536,404

 

Second KF Loan Payable

 

2,400,000

 

1,411,997

 

147,779

 

3,959,776

 

Third KF Loan Payable

 

1,500,000

 

625,506

 

82,399

 

2,207,905

 

 

$

5,900,000

$

3,441,929

$

362,156

$

9,704,085

 

 

 

As at December 31, 2017

 

 

Principal

Outstanding

Accumulated

Accrued

Interest

Penalty

Total

First KF Loan Payable

$

2,000,000

$

1,045,238

$

131,978

$

3,177,216

Second KF Loan Payable

 

2,400,000

 

1,009,806

 

147,779

 

3,557,585

Third KF Loan Payable

 

1,500,000

 

401,251

 

82,399

 

1,983,650

 

$

5,900,000

$

2,456,295

$

362,156

$

8,718,451

 

Summary of the Derivative Liability - Conversion Feature

 

A summary of the derivative liability associated with the Conversion Feature under the Third KF Loan Agreement is as follows:

 

As at September 30, 2018

 

 

 

 

Fair Value

at December

31, 2017

Change on

Revaluation at

Reporting

Date

Fair Value

at September 30,

2018

Third KF Loan Conversion Feature

$ 1,968,174

$350,567

$ 2,318,741

 

 

 

 

As at December 31, 2017

 

 

 

 

Fair Value

at December

31, 2016

Change on

Revaluation at

Reporting

Date

Fair Value

at December

31, 2017

Third KF Loan Conversion Feature

$ 1,576,327

$391,847

$ 1,968,174

 

Summary of the Derivative Liabilities - Warrants

 

A summary of the derivative liabilities associated with the warrants under the KF Loan Agreements and their amendments is as follows:

 

As at September 30, 2018

 

Fair Value at

December 31,

2017

Change on

Revaluation at

Reporting Date

Fair Value at

September 30, 2018

9,254,546 warrants (Amended Warrants and September Warrants)

$

46,273

$

(18,509)

$

27,764

1,194,332 warrants (First Extension Warrants)

 

7,166

 

(3,583)

 

3,583

9,600,000 warrants (Second KF Warrants)

 

48,000

 

(19,200)

 

28,800

1,337,320 warrants (Second Extension Warrants)

 

8,024

 

(4,012)

 

4,012

8,000,000 warrants (Third KF Warrants)

 

48,000

 

(24,000)

 

24,000

Total

$

157,463

$

(69,304)

$

88,159

 

As at December 31, 2017

 

Fair Value at

December 31,

2016

Change on

Revaluation at

Reporting Date

Fair Value at

December

31, 2017

9,254,546 warrants (Amended Warrants and September Warrants)

$

58,303

$

(12,030)

$

46,273

1,194,332 warrants (First Extension Warrants)

 

9,077

 

(1,911)

 

7,166

9,600,000 warrants (Second KF Warrants)

 

57,600

 

(9,600)

 

48,000

1,337,320 warrants (Second Extension Warrants)

 

10,164

 

(2,140)

 

8,024

8,000,000 warrants (Third KF Warrants)

 

59,200

 

(11,200)

 

48,000

Total

$

194,344

$

(36,881)

$

157,463

 

KF Business Ventures, Deferred Financing Costs

 

During the year ended December 31, 2015, the Company recorded $50,538 in legal fees associated with securing the KFBV Loans. These fees were amortized over the remaining life of the loans. As of September 30, 2018, the legal fees were fully amortized and the Company did not have any financing costs associated with the KFBV Loans. During the nine months ended September 30, 2017 the Company recorded $564 in financing costs associated with the amortization of the legal fees associated with KFBV Loans.

v3.10.0.1
Share Capital Disclosure
9 Months Ended
Sep. 30, 2018
Notes  
Share Capital Disclosure

NOTE 5 - SHARE CAPITAL

 

During the nine months ended September 30, 2018, the Company did not have any transactions that resulted in issuance of its common stock.

 

Warrants

 

A continuity schedule of warrants is as follows:

 

September 30, 2018

December 31, 2017

Warrants, beginning

29,886,198

39,886,198

Warrants, expired

(500,000)

(10,000,000)

Warrants, outstanding

29,386,198

29,886,198

 

Details of warrants outstanding as at September 30, 2018 are as follows:

 

Exercise price

Expiry date

Number of warrants

outstanding

$0.10

January 15, 2021

26,854,546

$0.10

September 1, 2021

2,531,652

 

 

29,386,198

 

At September 30, 2018, the weighted-average exercise price and remaining contractual life of the outstanding share purchase warrants were $0.10 and 2.35 years, respectively.

 

Options

 

Effective September 8, 2014, the Company adopted the 2014 Stock Option Plan (the "2014 Plan"). The 2014 Plan allows the Company to grant awards to its officers, directors and employees.  In addition, the Company may grant awards to individuals who act as consultants to the Company, so long as those consultants do not provide services connected to the offer or sale of the Company’s securities in capital raising transactions and do not directly or indirectly promote or maintain a market for the Company’s securities.

 

The Company reserved a total of 13,200,000 shares of its common stock for issuance under the 2014 Plan. However, under the terms of the 2014 Plan, at any time after January 1, 2015, the Company can increase the number of authorized shares available under the 2014 Plan up to 15% of the total number of shares of common stock then outstanding.

 

A summary of options is as follows:

 

September 30, 2018

December 31, 2017

Options, beginning

2,500,000

6,300,000

Options, forfeited

--

(3,800,000)

Options, outstanding

2,500,000

2,500,000

Options, exercisable

2,500,000

2,000,000

 

Details of options outstanding as at September 30, 2018 are as follows:

 

Exercise price

Grant date

Number of options

Granted and exercisable

$0.10

September 8, 2014

2,500,000

 

 

2,500,000

 

At September 30, 2018, the remaining contractual life of the outstanding options to purchase the shares of the Company’s common stock was 2.94 years.

 

On September 8, 2014, the Company granted options to acquire up to 2,500,000 shares of the Company’s common stock to a Director (the “Options”). These Options were issued under the 2014 Plan.  The Options vested at a rate of 500,000 shares per year, beginning September 1, 2014, and had initial exercise price of $0.50 per share. The Options expire five years after the vesting date thereof. On December 17, 2015, the Options were repriced to $0.10 in accordance with the provisions under the Stock Option Agreement with the Director.

 

The grant date fair value of these options was $953,885. During the nine-month period ended September 30, 2018, the Company recognized $32,684 as stock-based compensation (2017 - $79,118).

 

The fair value was determined using the Black-Scholes Option pricing model at the grant date using the following assumptions:

 

 

At September 8, 2014

Expected Option Life

5 years

Average Risk-Free Interest Rate

1.98%

Expected Dividend Yield

Nil

Average Expected Stock Price Volatility

118%

 

v3.10.0.1
Organization and Nature of Operations: Basis of Presentation (Policies)
9 Months Ended
Sep. 30, 2018
Policies  
Basis of Presentation

Basis of presentation

The unaudited interim consolidated financial statements included herein have been prepared by, and are the responsibility of, the Company’s management in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Due to a weak financial condition, the Company’s independent auditor has not performed a review of these unaudited interim consolidated financial statements. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the unaudited consolidated financial statements included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2017. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, these unaudited interim consolidated financial statements and the related notes should be read in conjunction with the Company’s unaudited consolidated financial statements for the year ended December 31, 2017, included in the Company’s report on Form 10-K.

v3.10.0.1
Organization and Nature of Operations: Reclassifications Policy (Policies)
9 Months Ended
Sep. 30, 2018
Policies  
Reclassifications Policy

Reclassifications

Certain prior period amounts in the accompanying unaudited consolidated interim financial statements have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the consolidated results of operations or financial position for any period presented.

v3.10.0.1
Organization and Nature of Operations: Going Concern (Policies)
9 Months Ended
Sep. 30, 2018
Policies  
Going Concern

Going concern

The accompanying unaudited, management prepared, consolidated interim financial statements have been prepared assuming the Company will continue as a going concern. Continuation as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations.

 

As of September 30, 2018, the Company has not achieved profitable operations and has a working capital deficit of $16,510,197 and accumulated a deficit of $79,991,891. In addition, as of September 30, 2018, the Company owed a total of $9,704,085 to KF Business Ventures, LP (“KFBV”), an entity controlled by the Company’s Chairman, under the terms of three separate loan agreements with KFBV (Note 4). Should KFBV serve the Company with default notice and request a payment of the amounts owed, the Company may not be able to continue as a going concern and may be required to file for bankruptcy. The likelihood and outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that the Company will be able to continue as a going concern.

 

These unaudited interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and/or a private placement of common stock.

v3.10.0.1
Related Party Transactions Disclosure: Schedule of Related Party Transactions (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Schedule of Related Party Transactions

 

 

September 30,

2018

 

December 31,

2017

Due to a company controlled by the Chief Financial Officer (“CFO”)

$

203,392

 

$

201,472

Due to the former Chief Executive Officer (“CEO”)(1)

 

--

 

 

73,125

Due to the former President and Chief Technical Officer (“CTO”) (1)

 

--

 

 

87,923

Due to the former Senior Vice President (“VP”) of Business Development(1)

 

--

 

 

74,064

Due to related parties

$

203,392

 

$

436,584

Amounts are unsecured, due on demand and bear no interest.

(1) Mr. Norling, the Company’s former President and CTO, and Mr. Aasen, the Company’s former CEO, resigned from their respective management positions with the Company on February 7, 2017; Mr. Miller, the Company’s former Senior VP of Business Development, resigned from his management positions with the Company on February 13, 2017. As at September 30, 2018, we owed Mr. Norling $87,923, Mr. Aasen - $73,125, and Mr. Miller - $74,064 for the past services; these amounts have been included in accounts payable.

v3.10.0.1
Related Party Transactions Disclosure: Schedule of expenses with related parties (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Schedule of expenses with related parties

 

 

September 30,

2018

 

September 30,

2017

Administrative fees accrued to a company controlled by the CFO

 

--

 

 

105,000

Fair value of options issued to a Director and Chairman (Note 5)

 

32,684

 

 

79,118

Total transactions with related parties

$

32,684

 

$

184,118

v3.10.0.1
Notes and Advances Payable Disclosure: Schedule of Loans Outstanding (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Schedule of Loans Outstanding

 

As at September 30, 2018

Principal

Outstanding

Interest Rate

per Annum

Accrued

Interest

Total

$

27,000

8%

$

19,148

$

46,148

 

49,500

7%

 

36,723

 

86,223

 

146,775*

6%

 

23,815

 

170,590

 

15,000

0%

 

--

 

15,000

 

600,000

6%

 

120,266

 

720,266

 

110,000

15%

 

31,726

 

141,726

 

333,062

10%

 

49,173

 

382,235

$

1,281,337

 

$

280,851

$

1,562,188

*The carrying value of this loan is denoted in Canadian dollars and is translated into US dollars at the end of each reporting period.

 

As at December 31, 2017

Principal

Outstanding

Interest Rate

per Annum

Accrued

Interest

Total

$

27,000

8%

$

16,477

$

43,477

 

49,500

7%

 

32,336

 

81,836

 

151,455*

6%

 

16,867

 

168,322

 

15,000

0%

 

--

 

15,000

 

600,000

6%

 

88,735

 

688,735

 

110,000

15%

 

19,385

 

129,385

 

305,223

10%

 

23,095

 

328,318

$

1,258,178

 

$

196,895

$

1,455,073

*The carrying value of this loan is denoted in Canadian dollars and is translated into US dollars at the end of each reporting period.

v3.10.0.1
KFBV Loans and Derivative Liability Disclosure: Fair values assumptions of the warrants - First KF loan (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Fair values assumptions of the warrants - First KF loan

 

 

At September 30,

2018

At December 31,

2017

Expected Warrant Life

2.30 - 2.92 years

3.04 - 3.67 years

Risk-Free Interest Rate

2.81% - 2.88%

1.98%

Expected Dividend Yield

Nil

Nil

Expected Stock Price Volatility

32% - 60%

32% - 60%

v3.10.0.1
KFBV Loans and Derivative Liability Disclosure: Fair values assumptions of the warrants - Second KF loan (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Fair values assumptions of the warrants - Second KF loan

 

 

At September 30,

2018

At December 31,

2017

Expected Warrant Life

2.30 - 2.92 years

3.04 - 3.67 years

Risk-Free Interest Rate

2.81% - 2.88%

1.98%

Expected Dividend Yield

Nil

Nil

Expected Stock Price Volatility

15% - 60%

15% - 60%

v3.10.0.1
KFBV Loans and Derivative Liability Disclosure: Fair values assumptions of the warrants - Third KF loan (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Fair values assumptions of the warrants - Third KF loan

 

 

At September 30,

2018

At December 31,

2017

Expected Warrant Life

2.30 years

3.04 years

Risk-Free Interest Rate

2.81%

1.98%

Expected Dividend Yield

Nil

Nil

Average Expected Stock Price Volatility

60%

60%

 

At September 30, 2018 and December 31, 2017, the fair value of the Third KF Loan Conversion Feature was revalued using the Binomial Lattice model using the following assumptions:

 

 

At September 30,

2018

At December 31,

2017

Amount Eligible for Conversion

$2,125,506

$1,901,252

Share Price

$0.0055

$0.0097

Expected Life

on demand

on demand

Risk-Free Interest Rate

2.12%

0.96%

Expected Dividend Yield

Nil

Nil

Expected Stock Price Volatility

57%

57%

v3.10.0.1
KFBV Loans and Derivative Liability Disclosure: Summary of the Loans Payable (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Summary of the Loans Payable

 

As at September 30, 2018

 

 

Principal

Outstanding

Accumulated

Accrued

Interest

Penalty

Total

 

First KF Loan Payable

$

2,000,000

$

1,404,426

$

131,978

$

3,536,404

 

Second KF Loan Payable

 

2,400,000

 

1,411,997

 

147,779

 

3,959,776

 

Third KF Loan Payable

 

1,500,000

 

625,506

 

82,399

 

2,207,905

 

 

$

5,900,000

$

3,441,929

$

362,156

$

9,704,085

 

 

 

As at December 31, 2017

 

 

Principal

Outstanding

Accumulated

Accrued

Interest

Penalty

Total

First KF Loan Payable

$

2,000,000

$

1,045,238

$

131,978

$

3,177,216

Second KF Loan Payable

 

2,400,000

 

1,009,806

 

147,779

 

3,557,585

Third KF Loan Payable

 

1,500,000

 

401,251

 

82,399

 

1,983,650

 

$

5,900,000

$

2,456,295

$

362,156

$

8,718,451

v3.10.0.1
KFBV Loans and Derivative Liability Disclosure: Summary of the Derivative Liability - Conversion Feature (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Summary of the Derivative Liability - Conversion Feature

 

As at September 30, 2018

 

 

 

 

Fair Value

at December

31, 2017

Change on

Revaluation at

Reporting

Date

Fair Value

at September 30,

2018

Third KF Loan Conversion Feature

$ 1,968,174

$350,567

$ 2,318,741

 

 

 

 

As at December 31, 2017

 

 

 

 

Fair Value

at December

31, 2016

Change on

Revaluation at

Reporting

Date

Fair Value

at December

31, 2017

Third KF Loan Conversion Feature

$ 1,576,327

$391,847

$ 1,968,174

v3.10.0.1
KFBV Loans and Derivative Liability Disclosure: Summary of the Derivative Liabilities - Warrants (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Summary of the Derivative Liabilities - Warrants

 

As at September 30, 2018

 

Fair Value at

December 31,

2017

Change on

Revaluation at

Reporting Date

Fair Value at

September 30, 2018

9,254,546 warrants (Amended Warrants and September Warrants)

$

46,273

$

(18,509)

$

27,764

1,194,332 warrants (First Extension Warrants)

 

7,166

 

(3,583)

 

3,583

9,600,000 warrants (Second KF Warrants)

 

48,000

 

(19,200)

 

28,800

1,337,320 warrants (Second Extension Warrants)

 

8,024

 

(4,012)

 

4,012

8,000,000 warrants (Third KF Warrants)

 

48,000

 

(24,000)

 

24,000

Total

$

157,463

$

(69,304)

$

88,159

 

As at December 31, 2017

 

Fair Value at

December 31,

2016

Change on

Revaluation at

Reporting Date

Fair Value at

December

31, 2017

9,254,546 warrants (Amended Warrants and September Warrants)

$

58,303

$

(12,030)

$

46,273

1,194,332 warrants (First Extension Warrants)

 

9,077

 

(1,911)

 

7,166

9,600,000 warrants (Second KF Warrants)

 

57,600

 

(9,600)

 

48,000

1,337,320 warrants (Second Extension Warrants)

 

10,164

 

(2,140)

 

8,024

8,000,000 warrants (Third KF Warrants)

 

59,200

 

(11,200)

 

48,000

Total

$

194,344

$

(36,881)

$

157,463

v3.10.0.1
Share Capital Disclosure: Continuity schedule of warrants (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Continuity schedule of warrants

 

September 30, 2018

December 31, 2017

Warrants, beginning

29,886,198

39,886,198

Warrants, expired

(500,000)

(10,000,000)

Warrants, outstanding

29,386,198

29,886,198

v3.10.0.1
Share Capital Disclosure: Schedule of Stockholders' Equity Note, Warrants (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Schedule of Stockholders' Equity Note, Warrants

 

Exercise price

Expiry date

Number of warrants

outstanding

$0.10

January 15, 2021

26,854,546

$0.10

September 1, 2021

2,531,652

 

 

29,386,198

v3.10.0.1
Share Capital Disclosure: Schedule of Stock Option Continuity (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Schedule of Stock Option Continuity

 

September 30, 2018

December 31, 2017

Options, beginning

2,500,000

6,300,000

Options, forfeited

--

(3,800,000)

Options, outstanding

2,500,000

2,500,000

Options, exercisable

2,500,000

2,000,000

v3.10.0.1
Share Capital Disclosure: Schedule of Stock Options Outstanding (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Schedule of Stock Options Outstanding

 

Exercise price

Grant date

Number of options

Granted and exercisable

$0.10

September 8, 2014

2,500,000

 

 

2,500,000

v3.10.0.1
Share Capital Disclosure: Fair value of options granted at September 8, 2014 (Tables)
9 Months Ended
Sep. 30, 2018
Tables/Schedules  
Fair value of options granted at September 8, 2014

 

 

At September 8, 2014

Expected Option Life

5 years

Average Risk-Free Interest Rate

1.98%

Expected Dividend Yield

Nil

Average Expected Stock Price Volatility

118%

v3.10.0.1
Organization and Nature of Operations: Going Concern (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Working capital deficit $ 16,510,197  
Accumulated deficit 79,991,891 $ 78,596,334
Loans payable 9,704,085 $ 8,718,451
To an entity controlled by the Company's Chairman    
Loans payable $ 9,704,085  
v3.10.0.1
Related Party Transactions Disclosure: Schedule of Related Party Transactions (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Due to related parties $ 203,392 $ 436,584
Due to a company controlled by the CFO    
Due to related parties $ 203,392 201,472
Due to the former CEO    
Due to related parties   73,125
Due to the former President and CTO    
Due to related parties   87,923
Due to the former VP of Business Development    
Due to related parties   $ 74,064
v3.10.0.1
Related Party Transactions Disclosure: Schedule of expenses with related parties (Details) - USD ($)
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Expenses incurred with related parties $ 32,684 $ 184,118
Administrative fees incurred to a company controlled by the CFO    
Expenses incurred with related parties   105,000
Fair value of options issued to a Director and Chairman    
Expenses incurred with related parties $ 32,684 $ 79,118
v3.10.0.1
Notes and Advances Payable Disclosure: Schedule of Loans Outstanding (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Principal outstanding $ 1,281,337 $ 1,258,178
Accrued interest 280,851 196,895
Notes and advances payable 1,562,188 1,455,073
Short-term loan (1)    
Principal outstanding $ 27,000 $ 27,000
Effective interest rate 8.00% 8.00%
Accrued interest $ 19,148 $ 16,477
Notes and advances payable 46,148 43,477
Short-term loan (2)    
Principal outstanding $ 49,500 $ 49,500
Effective interest rate 7.00% 7.00%
Accrued interest $ 36,723 $ 32,336
Notes and advances payable 86,223 81,836
Short-term loan (3)    
Principal outstanding $ 146,775 $ 151,455
Effective interest rate 6.00% 6.00%
Accrued interest $ 23,815 $ 16,867
Notes and advances payable 170,590 168,322
Short-term loan (4)    
Principal outstanding $ 15,000 $ 15,000
Effective interest rate 0.00% 0.00%
Notes and advances payable $ 15,000 $ 15,000
Short-term loan (5)    
Principal outstanding $ 600,000 $ 600,000
Effective interest rate 6.00% 6.00%
Accrued interest $ 120,266 $ 88,735
Notes and advances payable 720,266 688,735
Short-term loan (6)    
Principal outstanding $ 110,000 $ 110,000
Effective interest rate 15.00% 15.00%
Accrued interest $ 31,726 $ 19,385
Notes and advances payable 141,726 129,385
Short-term loan (7)    
Principal outstanding $ 333,062 $ 305,223
Effective interest rate 10.00% 10.00%
Accrued interest $ 49,173 $ 23,095
Notes and advances payable $ 382,235 $ 328,318
v3.10.0.1
Notes and Advances Payable Disclosure (Details) - USD ($)
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2017
Proceeds from notes and advances payable $ 27,839 $ 299,816  
Quarry Bay and Tradex Loans and Advances      
Loans and advances payable 170,590   $ 168,322
Norling Bridge Loans      
Loans and advances payable 479,750   458,748
Interest expense recorded 21,002 19,782  
KF Business Ventures Bridge Loan      
Loans and advances payable 240,516   229,987
Interest expense recorded 10,529 9,918  
KF Business Ventures Promissory Note      
Loans and advances payable 141,726   129,385
Interest expense recorded 12,341 15,226  
KF Business Ventures Working Capital Advances      
Loans and advances payable 382,235   328,318
Interest expense recorded 26,078    
Proceeds from notes and advances payable 27,839 305,223  
Other Loans - Third Party Creditor      
Loans and advances payable 86,223   81,836
Interest expense recorded 4,387 4,090  
Other Loan - Third Party Creditor (2)      
Loans and advances payable 46,148   $ 43,477
Interest expense recorded $ 2,671 $ 2,467  
v3.10.0.1
KFBV Loans and Derivative Liability Disclosure (Details) - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2015
Dec. 31, 2017
Dec. 17, 2015
Sep. 08, 2014
Jul. 28, 2014
Mar. 10, 2014
Jan. 15, 2014
Accretion expense   $ 1,046,271              
Financing costs   362,720              
First KF Business Ventures Loan Agreement                  
Loan agreement                 $ 2,000,000
Common stock that may be exercised by warrants           2,350,000   6,904,546  
Exercise price per warrant share         $ 0.10 $ 0.50   $ 1.00  
Interest expense recorded $ 359,189 293,378              
Accretion expense   73,250              
Derivative liability 31,347     $ 53,439          
Second KF Business Ventures Loan Agreement                  
Loan agreement             $ 2,400,000    
Common stock that may be exercised by warrants         1,337,320   9,600,000    
Exercise price per warrant share         $ 0.10   $ 0.50    
Interest expense recorded 402,191 328,501              
Accretion expense   165,212              
Derivative liability 32,812     56,024          
Third KF Business Ventures Loan Agreement                  
Loan agreement         $ 1,500,000        
Common stock that may be exercised by warrants         8,000,000        
Exercise price per warrant share         $ 0.10        
Interest expense recorded 224,255 183,166              
Accretion expense   807,809              
Third KF Warrants                  
Derivative liability 24,000     48,000          
Third KF Loan Conversion Feature                  
Derivative liability $ 2,318,741     $ 1,968,174          
KF Business Ventures Deferred Financing Costs                  
Legal Fees     $ 50,538            
Financing costs   $ 564              
v3.10.0.1
Share Capital Disclosure: Continuity schedule of warrants (Details) - shares
9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Details      
Number of warrants outstanding 29,386,198 29,886,198 39,886,198
Warrants expired (500,000) (10,000,000)  
v3.10.0.1
Share Capital Disclosure (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Sep. 08, 2014
Details          
Weighted-average exercise price of the outstanding share purchase warrants     $ 0.10    
2014 Stock Option Plan         13,200,000
Stock-based compensation $ 9,115 $ 24,130 $ 32,684 $ (47,933)  
v3.10.0.1
Share Capital Disclosure: Schedule of Stock Option Continuity (Details) - shares
12 Months Ended
Dec. 31, 2017
Sep. 30, 2018
Dec. 31, 2016
Details      
Stock options outstanding 2,500,000 2,500,000 6,300,000
Options forfeited (3,800,000)    
Stock options exercisable 2,000,000 2,500,000