Validian (VLDI) 10-Q 19 Nov 13 2013 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 12, 2013
Document and Entity Information:	'	'
Entity Registrant Name	'Validian Corp.	'
Document Type	'10-Q	'
Document Period End Date	30-Sep-13	'
Amendment Flag	'false	'
Entity Central Index Key	'0001100644	'
Current Fiscal Year End Date	'--12-31	'
Entity Common Stock, Shares Outstanding	'	221,326,035
Entity Filer Category	'Smaller Reporting Company	'
Entity Current Reporting Status	'Yes	'
Entity Voluntary Filers	'No	'
Entity Well-known Seasoned Issuer	'No	'
Document Fiscal Year Focus	'2013	'
Document Fiscal Period Focus	'Q3	'

VALIDIAN_CORPORATION_AND_SUBSI

VALIDIAN CORPORATION AND SUBSIDIARIES A DEVELOPMENT STAGE ENTERPRISE Unaudited Interim Consolidated, Condensed Balance Sheets (USD $)	Sep. 30, 2013		Dec. 31, 2012
Current assets:	'		'
Cash and cash equivalents	$13,107		$2,110
Value added taxes recoverable	12,738		2,494
Prepaid expenses	4,306		'
Total Current assets	30,151		4,604
Property and equipment, net of accumulated depreciation of $30,436 (December 31, 2012 - $28,163)	4,154		4,737
Total assets	34,305		9,341
Current liabilities:	'		'
Accounts payable and accrued liabilities	3,954,039	[1]	3,382,408	[1]
Accrued interest on promissory notes and 10% senior convertible notes payable to related parties	228,142	[1]	189,986	[1]
Deferred revenue	320,000		320,000
Promissory notes payable	51,350	[2]	49,850	[2]
Promissory notes payable to related parties	5,989	[2]	43,158	[2]
10% Senior convertible notes	6,671,920	[3]	6,237,304	[3]
10% Senior convertible notes payable to related parties	631,945	[3]	659,445	[3]
Convertible promissory notes	79,524	[4]	10,954	[4]
Total current liabilities	11,942,909		10,893,105
Total liabilities	11,942,909		10,893,105
Stockholders' deficiency	'		'
Preferred stock ($0.001 par value. Authorized 50,000,000 shares; issued and outstanding Nil shares at September 30, 2013 and at December 31, 2012)	0		0
Common stock, ($0.001 par value. Authorized 700,000,000 shares; issued and outstanding 221,226,262 and 184,399,565 shares at September 30, 2013 and December 31, 2012, respectively.)	221,226	[5]	184,400	[5]
Additional paid in capital	29,571,909		28,291,884
Deficit accumulated during the development stage	-41,673,305		-39,331,614
Retained earnings prior to entering development stage	21,304		21,304
Treasury stock (7,000 shares at September 30, 2013 and December 31, 2012, at cost)	-49,738		-49,738
Total stockholders' deficiency	-11,908,604		-10,883,764
Total liabilities and stockholders' deficiency	$34,305	[6]	$9,341	[6]
[1]	Note 9
[2]	Notes 2 and 9
[3]	Notes 3 and 9
[4]	Note 4
[5]	Note 5
[6]	Notes 1, 10 and 14

Statement_of_Financial_Positio

Statement of Financial Position - Parenthetical (USD $)	Sep. 30, 2013	Dec. 31, 2012
Statement of financial position	'	'
Preferred Stock, Par Value	$0.00	$0.00
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par Value	$0.00	$0.00
Common Stock, Shares Authorized	700,000,000	700,000,000
Common Stock, Shares Issued	221,226,262	184,399,565
Common Stock, Shares Outstanding	221,226,262	184,399,565
Treasury Stock, Shares	7,000	7,000
Depreciation	$30,436	$28,163

VALIDIAN_CORPORATION_AND_SUBSI1

VALIDIAN CORPORATION AND SUBSIDIARIES A DEVELOPMENT STAGE ENTERPRISE Unaudited Interim Consolidated, Condensed Statements of Operations (USD $)	3 Months Ended				9 Months Ended				170 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013
Expenses:	'		'		'		'		'
Selling, general and administrative	$545,725		$93,962		$1,027,052		$484,485		$17,666,786
Research and development	75,087		18,572		105,714		80,736		10,311,839
Depreciation of property and equipment	852		1,127		2,273		4,689		455,217
Gain on sale of property and equipment	'		'		'		'		-7,442
Write-off of prepaid services	'		'		'		'		496,869
Write-off of deferred consulting services	'		'		'		'		1,048,100
Write-off of accounts receivable	'		'		'		'		16,715
Write-off of due from related party	'		'		'		'		12,575
Loss on cash pledged as collateral for operating lease	'		'		'		'		21,926
Write-down of property and equipment	'		'		'		'		14,750
Total expenses	621,664		113,661		1,135,039		569,910		30,037,355
Loss before the undernoted	-621,664		-113,661		-1,135,039		-569,910		-30,037,355
Other income (expenses):	'		'		'		'		'
Interest income	'		'		'		'		61,728
Gain (loss) on extinguishment of debt, accounts payable and accrued liabilities	-80,000	[1]	'	[1]	-79,075	[1]	31,888	[1]	280,000	[1]
Interest and financing costs	-411,504	[2]	-199,301	[2]	-1,168,002	[2]	-763,400	[2]	-11,853,626	[2]
Foreign exchange gain (loss)	-28,812		-11,356		40,425		-7,699		-124,072
Total other income	-520,316		-210,657		-1,206,652		-739,211		-11,635,970
Net loss	($1,141,980)		($324,318)		($2,341,691)		($1,309,121)		($41,673,305)
Loss per common share - basic and diluted	$0	[3]	$0	[3]	($0.01)	[3]	($0.01)	[3]	'
Weighted average number of common shares outstanding during period	216,102,283		166,736,884		202,680,106		156,701,132		'
[1]	Note 6
[2]	Notes 7 and 9
[3]	Note 8

VALIDIAN_CORPORATION_AND_SUBSI2

VALIDIAN CORPORATION AND SUBSIDIARIES A DEVELOPMENT STAGE ENTERPRISE Unaudited Interim Consolidated, Condensed, Statements of Cash Flow For the three and nine months ended September 30, 2013 and 2012 And for the Period from August 3, 1999 to September 30, 2013 (USD $)	9 Months Ended				170 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013
Cash flows from operating activities:	'		'		'
Net loss	($2,341,691)		($1,309,121)		($41,673,305)
Adjustments to reconcile net loss to net cash used in operating activities:	'		'		'
Depreciation of property and equipment	2,273		4,689		455,217
Stock-based compensation	366,400		229,680		4,307,254
Non-cash interest and financing expense	1,131,507		747,304		11,757,635
Loss (gain) on extinguishment of debt and accrued liabilities	79,075	[1]	-31,888	[1]	-280,000	[1]
Non-cash penalties	'		'		166,900
Write-off of prepaid services	'		'		496,869
Write-off of deferred consulting services	'		'		1,048,100
Currency translation adjustment on liquidation of investment in foreign subsidiary	'		'		-26,212
Gain on sale of property and equipment	'		'		-7,442
Write-off of accounts receivable	'		'		16,715
Write-off of due to related party	'		'		12,575
Loss on cash pledged as collateral for operating lease	'		'		21,926
Write-down of property and equipment	'		'		14,750
Increase (decrease) in cash resulting from changes in:	'		'		'
Value added taxes recoverable	-10,245		2,669		13,063
Prepaid expenses	-4,306		'		-65,863
Accounts payable and accrued liabilities	304,843		98,754		5,154,243
Deferred revenue	'		'		320,000
Due to a related party	'		'		-5,178
Net cash used in operating activities	-472,144		-257,913		-18,272,753
Cash flows from investing activities:	'		'		'
Additions to property and equipment	-1,690		'		-548,633
Proceeds on sale of property and equipment	'		'		176,890
Cash pledged as collateral for operating lease	'		'		-21,926
Net cash used in investing activities	-1,690		'		-393,669
Cash flows from financing activities:	'		'		'
Capital lease repayments	'		-2,009		-30,489
Issuance of promissory notes	20,156		29,601		4,923,129
Issuance of 10% senior convertible notes	458,500		242,000		4,343,500
Issuance of convertible promissory notes	181,000		65,000		469,000
Debt and equity issuance costs	-11,000		-5,000		-964,483
Repayment of promissory notes	-55,630		-46,785		-372,915
Repayment of 10% senior convertible notes	-43,000		-37,000		-80,000
Repayment of convertible promissory notes	-65,000		'		-65,000
Proceeds from exercise of stock purchase warrants	'		'		412,500
Increase in due from related party	'		'		12,575
Issuance of common shares	'		'		8,030,000
Redemption of common stock	'		'		-49,738
Issuance of 4% senior subordinated convertible debentures	'		'		2,000,000
Net cash provided by financing activities	485,026		245,807		18,628,079
Effects of exchange rates on cash and cash equivalents	-195		575		16,653
Net increase (decrease) in cash and cash equivalents	10,997		-11,531		-21,692
Cash and cash equivalents beginning of period	2,110		11,957		34,799
Cash and cash equivalents end of period	$13,107	[2]	$426	[2]	$13,107	[2]
[1]	Note 6
[2]	Supplementary information Note 11

General

General	9 Months Ended
	Sep. 30, 2013
Notes	'
General:	'
	Validian Corporation (the “Company”) was incorporated in the State of Nevada on April 12, 1989 as CCC Funding Corp.  The Company underwent several name changes before being renamed to Validian Corporation on January 28, 2003.
	Since August 3, 1999, the efforts of the Company have been devoted primarily to the development of a high speed, highly secure method of transacting business using the Internet, and to the sale and marketing of the Company’s products.

1_Basis_of_Presentation

1. Basis of Presentation	9 Months Ended
	Sep. 30, 2013
Notes	'
1. Basis of Presentation	'
	1.  Basis of presentation
	The accompanying consolidated financial statements include the accounts of Validian Corporation and its wholly owned subsidiaries (collectively, the "Company") after elimination of all significant intercompany balances and transactions. The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America which require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While management has based its assumptions and estimates on the facts and circumstances currently known, final amounts may differ from such estimates.
	The interim financial statements are unaudited but, in the opinion of management, include all adjustments (consisting only of normal recurring entries) necessary for a fair presentation of the financial position and results of operations of the Company for the periods presented. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the operating results for the full fiscal year ending December 31, 2013.  These unaudited interim financial statements have been prepared following accounting principles consistent with those used in the annual audited financial statements and should be read in conjunction with the annual audited financial statements for the year ended December 31, 2012.
	Going concern
	The consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  The Company has no revenues, has negative working capital of $11,912,758, and stockholders’ deficiency of $11,908,604 as at September 30, 2013, and has incurred a loss of $2,341,691 and negative cash flow from operations of $472,144 for the nine months then ended.  Furthermore, the Company failed to settle certain 10% senior convertible notes and promissory notes plus accrued interest when they matured on various dates between October 2008 and December 2012.  As a result of these non-payment defaults, all of the 10% senior convertible notes, as well as $36,250 of the promissory notes were in default at September 30, 2013, in accordance with the default provisions of the respective notes, and consequently are due and payable on demand.  In addition, the Company expects to continue to incur operating losses for the foreseeable future, and has no lines of credit or other financing facilities in place.
	The Company expects to incur operating expenses of approximately $1,500,000 for the year ending December 31, 2013, subject to the availability of adequate funding.  In the event the Company cannot raise the additional funds necessary to finance its research and development and sales and marketing activities, it may have to cease operations.
	All of the factors above raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plan to address these issues includes raising capital through the private placement of equity, the exercise of previously-issued equity instruments and through the issuance of additional promissory notes.   The Company’s ability to continue as a going concern is subject to management’s ability to successfully implement these plans.  Failure to do so could have a material adverse effect on the Company’s position and or results of operations and could also result in the Company ceasing operations.  The consolidated financial statements do not include adjustments that would be required if the assets are not realized and the liabilities settled in the normal course of operations.
	Even if successful in obtaining financing in the near term, the Company cannot be certain that cash generated from its future operations will be sufficient to satisfy its liquidity requirements in the longer term, and it may need to continue to raise capital by issuing additional equity or by obtaining credit facilities.  The Company’s future capital requirements will depend on many factors, including, but not limited to, the market acceptance of its products and the level of its promotional activities and advertising required to generate product sales.  No assurance can be given that any such additional funding will be available or that, if available, it can be obtained on terms favorable to the Company.

2_Promissory_Notes_Payable

2. Promissory Notes Payable	9 Months Ended
	Sep. 30, 2013
Notes	'
2. Promissory Notes Payable	'
	2.  Promissory notes payable
	The following table sets forth the financial statement presentation of the promissory note proceeds on issuance, and the changes in the financial statement presentation of the balance allocated to the notes as at and for the periods ended September 30, 2013 and December 31, 2012:
		Nine months	Year ended
		ended September 30, 2013	31-Dec-12
		(unaudited)
	Balance beginning of period	$  93,008	$  117,897
	Notes issued	20,156	32,201
	Principal repaid	-55,630	-58,571
	Adjustment for foreign currency translation	-195	1,481
		$   57,339	$  93,008
	Due on demand, interest at 12%, unsecured, repayable in Canadian dollars	$            --	$  32,158
	Due on demand, interest at 12%, unsecured, repayable in United States dollars	57,339	60,850
		57,339	93,008
	Payable to related parties (note 11)	-5,989	-43,158
		$    51,350	$   49,850
	Included in interest and financing costs for the three and nine months ended September 30, 2013 is $2,226 (2012: $3,013) and $7,507 (2012: $9,171), respectively, of interest on the promissory notes.  Interest on the promissory notes paid in cash during the three and nine months ended September 30, 2013 was $2,226 (2012: $63) and $3,531 (2012: $16,046), respectively.

3_10_Senior_Convertible_Notes

3. 10% Senior Convertible Notes	9 Months Ended
	Sep. 30, 2013
Notes	'
3. 10% Senior Convertible Notes	'
	3.  10% Senior convertible notes
	The following table sets forth the financial statement presentation of the note proceeds on issuance, and the changes in financial statement presentation of the balance allocated to the 10% senior convertible notes for the periods ended September 30, 2013 and December 31, 2012:
		Nine months	Year
		Ended	Ended
		30-Sep-13	31-Dec-12
		(unaudited)
	Balance beginning of period	$  6,896,749	$  6,466,265
	Note proceeds on issuance	1,306,832	838,536
	Allocated to common stock and additional paid-in capital for the relative fair value of stock issued to holders of the notes:
	Allocated to common stock par value	-7,095	-2,123
	Allocated to additional paid-in capital	-156,292	-55,268
		-163,387	-57,392
	Allocated to additional paid-in capital for the intrinsic value of the beneficial conversion feature	-289,454	-86,635
	Proceeds allocated to 10% senior convertible notes on issuance	853,991	694,509
	Accretion recorded as a charge to interest and financing costs	452,841	144,027
	Principal matured and repaid through the issuance of new 10% senior convertible notes	-760,049	-371,052
	Principal converted pursuant to the conversion feature of the notes	-96,667	--
	Principal repaid in cash	-43,000	-37,000
		7,303,865	6,896,749
	Payable to related parties (note 11)	-631,945	-659,445
		$6,671,920	$6,237,304
	During the nine months ended September 30, 2013, the Company issued an aggregate of $1,306,832 of its 10% senior convertible notes.  $458,500 of the notes were issued for cash; $822,332 of the notes were issued in settlement of $760,049 in previously issued 10% senior convertible notes and $62,283 in accrued interest thereon; and $26,000 of the notes were issued in settlement of accounts payable and accrued liabilities.  During this period the Company settled $45,360 in accrued interest on the 10% senior convertible notes through the issuance of 1,511,997 shares of the Company’s common stock; holders of the notes exercised the conversion feature and converted $96,667 in principal, plus $616 in accrued interest thereon, into 3,242,772 common shares of the Company’s common stock; and $43,000 in principal of the notes was repaid in cash.
	Under the terms of the notes issued during the nine months ended September 30, 2013, the holders are permitted, at any time, to convert all or a portion of the outstanding principal plus accrued interest into common stock of the company, at a rate of one common share for each $0.03 of debt converted.  The Company has the option of pre-paying all or any portion of the balance outstanding on the notes at any time, without penalty or bonus, with the permission of the holders.  Interest on the notes is accrued until the notes are either repaid by the Company or converted by the holder.  At the Company’s option, interest may be paid either in cash or in common shares of the Company.  If interest is paid in common shares, the number of shares required for settlement will be calculated at the rate of conversion in effect for the conversion of the note principal.  $277,900 of the notes issued during the period are payable on demand; $1,028,932 mature on dates ranging from December 31, 2013 to December 31, 2014.
	Holders of the notes issued during the nine months ended September 30, 2013 were granted 7,095,220 common shares of the Company upon issuance of the notes; $163,387, representing the relative fair value of the common shares at the issuance date, was allocated to the common shares par value and additional paid in capital.
	The conversion feature of $401,900 of the notes issued during the nine months ended September 30, 2013 were in-the-money at the date of issuance.  $289,454, representing the relative fair value of the beneficial conversion feature at the issuance date, was allocated to additional paid in capital.
	The Company failed to settle certain of its 10% senior convertible notes plus accrued interest thereon when they matured on various dates between October 1, 2008 and December 31, 2012.  At September 30, 2013, a significant portion of these notes remained in default for non-payment.  As a result of these non-payment defaults, all of the 10% senior convertible notes are in default at September 30, 2013, in accordance with the default provisions of the notes, and consequently are payable on demand.  Interest is accrued at the coupon rate on all notes outstanding past the maturity date.
	The following table summarizes information regarding the 10% senior convertible notes outstanding at September 30, 2013:
	Note	Conversion
	Principal	Rate
	$  6,292,358	$0.03
	511,507	0.038
	500,000	0.1
	$  7,303,865
	At September 30, 2013, $2,835,025 of the 10% senior convertible notes were secured by a first position lien on all of the assets of the Company.  The remaining $4,468,840 were unsecured.  As a result of the event of default noted above, holders of secured notes have the right to exercise their lien on all of the assets of the Company.
	Included in interest and financing costs for the three months ended September 30, 2013 is $184,710 (2012:  $173,261) in coupon rate interest accrued on the 10% senior convertible notes, and $107,400 (2012: $670) in accretion related to the relative fair value of the equity components of the 10% senior convertible notes at issuance.  Included in interest and financing costs for the nine months ended September 30, 2013 is $349,374 (2012:  $510,123) in coupon rate interest accrued on the 10% senior convertible notes, and $452,841 (2012: $144,027) in accretion related to the relative fair value of the equity components of the 10% senior convertible notes at issuance.
	At September 30, 2013, the fair value of the stock issuable to fully convert the 10% senior convertible note principal, was $19,853,921, which exceeds the principal outstanding on that date by $12,550,056.

4_Convertible_Promissory_Notes

4. Convertible Promissory Notes	9 Months Ended
	Sep. 30, 2013
Notes	'
4. Convertible Promissory Notes	'
	4.  Convertible promissory notes
	During the nine months ended September 30, 2013, the Company issued $181,000 of its convertible promissory notes for cash.  The notes bear interest at the rate of 8% until they mature, or until there is an event of default; thereafter, any portion of the principal or interest which has not been settled will be subject to interest at the rate of 22% per annum.
	$32,500 of the notes issued during the nine months ended September 30, 2013 had a maturity date of November 6, 2013, and could be prepaid during the period from issuance to August 3, 2013, in full, at various rates ranging from 130% to 145% of the principal balance plus accrued interest to the date of prepayment.  The holder had the option to convert any balance of principal and interest which was unpaid at August 3, 2013 or thereafter, into common stock of the Company.  The Company exercised the prepayment option and issued a cash payment of $49,884 in settlement of principal, accrued interest and prepayment bonus.
	$32,500 of the notes issued during the nine months ended September 30, 2013 had a maturity date of February 3, 2014, and could be prepaid during the period from issuance to October 27, 2013, in full, at various rates ranging from 130% to 145% of the principal balance plus accrued interest to the date of prepayment.  The holder had the option to convert any balance of principal and interest which was unpaid at October 27, 2013 or thereafter, into common stock of the Company.  The Company exercised the prepayment option and issued a cash payment of $48,080 in settlement of principal, accrued interest and prepayment bonus.
	$63,000 of the notes issued during the nine months ended September 30, 2013 mature on June 5, 2014, and may be prepaid during the period from issuance to January 5, 2014, in full, at various rates ranging from 125% to 145% of the principal balance plus accrued interest to the date of prepayment.  The holder has the option to convert any balance of principal and interest which is unpaid at January 5, 2014 or thereafter, into common stock of the Company.
	$53,000 of the notes issued during the nine months ended September 30, 2013 mature on April 11, 2014, and may be prepaid during the period from issuance to March 2, 2014, in full, at various rates ranging from 125% to 145% of the principal balance plus accrued interest to the date of prepayment.  The holder has the option to convert any balance of principal and interest which is unpaid at March 2, 2014 or thereafter, into common stock of the Company.
	The rate of conversion for the $65,000 in notes issued and prepaid by the Company during the nine months ended September 30, 2013 was calculated as the average of the lowest three trading prices during the thirty trading days immediately preceding such conversion, discounted by 55%.  The rate of conversion for the remaining $116,000 in notes issued during the nine months ended September 30, 2013 is calculated as the average of the lowest three trading prices during the ten trading days immediately preceding such conversion, discounted by 49%.  $103,591, representing the relative fair value of the beneficial conversion feature of the notes at date of issuance, was allocated to additional paid in capital.
	Also during the nine months ended September 30, 2013, holders of the convertible promissory notes exercised the conversion feature of the notes, and converted $70,000 of note principal, and $2,800 of accrued interest on the notes, into 13,160,041 common shares of the Company.
	$70,000 of the convertible promissory notes were issued during 2012, and were converted by the holders into common stock of the Company during the nine months ended September 30, 2013.  The notes had a maturity date of September 17, 2013, and could be prepaid until June 12, 2013, in full, at various rates ranging from 130% to 145% of the principal balance plus accrued interest to the date of prepayment; the holder had the option to convert any balance of principal and interest which was unpaid at June 12, 2013 or thereafter, into common stock of the Company.  The rate of conversion for these notes was calculated as the average of the lowest three trading prices during the thirty trading days immediately preceding such conversion, discounted by 55%.
	The convertible promissory notes bear interest at the rate of 8% until they mature, or until there is an event of default.  The notes contain penalty provisions relating to events of default, pursuant to which the Company could be required not only to pay interest at the rate of 22% following such an event, but also to pay immediately 150% of the principal outstanding plus accrued interest and penalty interest; alternatively, the Company could be required, at the discretion of the holder, to issue stock in satisfaction of the value determined under such penalty provisions, at the rate of conversion in effect at such time as the holder so elects.  In addition to non-payment of the note principal and interest at maturity or failure to transfer stock on receipt of a notice of conversion from the holder, events of default include making an assignment or appointment of a receiver or trustee, ceasing operations, liquidating assets or entering into bankruptcy proceedings; certain money judgments filed against the Company; breach of covenants, representations or warranties under the note; delisting of the Company’s stock or failure to comply with the exchange act; failure to maintain property or rights which are necessary to the Company’s business; certain restatements of the Company’s financial statements as filed with the SEC during the preceding two years; effectuating a reverse stock split without first providing the holder with 20 days’ notice of such occurrence; replacing the Company’s transfer agent without first providing to the successor transfer agent, the necessary instructions to effect a transfer of stock to the holder pursuant to the terms of the note.
	The discount to market conversion feature of the convertible promissory notes causes a theoretical possibility that the Company may be required to settle the notes by issuing more shares than are authorized.  Furthermore, this feature causes the notes to fall within the FAS 133 definition of a derivative liability.  Management has calculated that the maximum number of shares required to convert the principal plus accrued interest on the convertible notes at September 30, 2013 was 3,286,659, which represents less than 1% of the authorized, unissued shares at that date, and has also estimated that the fair value of the notes at September 30, 2013 approximates face value, therefore no adjustment for fair value restatement has been made.
	The convertible promissory notes are being accreted to their face value over the term of the notes through periodic charges to interest expense, using the effective interest rate method.  During the three and nine months ended September 30, 2013, accretion of $78,864 (2012:  $18,432) and $127,223 (2012: $86,041), respectively, was included in interest and financing costs.
	Also included in interest and financing costs for the three and nine months ended September 30, 2013 is $32,870 (2012:  $789) and $36,406 (2012: $4,302), respectively, relating to accrued coupon-rate interest and prepayment bonus on the convertible promissory notes; and $5,435 (2012:  $3,135) and $9,941 (2012:  $7,927), respectively, relating to the amortization of deferred finance fees incurred in connection with the placement of the convertible promissory notes.
	At September 30, 2013, the fair value of the stock issuable to fully convert the convertible promissory note principal was $285,939, which exceeded the principal amount outstanding on that date by $168,480.

5_Stockholders_Deficiency

5. Stockholders' Deficiency	9 Months Ended
	Sep. 30, 2013
Notes	'
5. Stockholders' Deficiency	'
	5.  Stockholders’ deficiency
	(a)  Common stock transactions
	During the nine months ended September 30, 2013, the Company issued an aggregate of 8,500,000 shares of its common stock as partial remuneration for consulting services rendered and to be rendered.  $366,400, representing the fair value of the stock at issuance, was allocated to shares and additional paid in capital, and was charged to expense.
	During the nine months ended September 30, 2013, the Company issued an aggregate of 1,511,997 shares of its common stock in settlement of $45,360 in accrued interest on the 10% senior convertible notes.
	During the nine months ended September 30, 2013, holders of the 10% senior convertible notes exercised the conversion feature of the notes, and converted $96,667 of note principal, plus $616 in accrued interest thereon, into 3,242,772 common shares of the Company.
	During the nine months ended September 30, 2013, holders of the convertible promissory notes exercised the conversion feature of the notes, and converted $70,000 of note principal, plus $2,800 of accrued interest thereon, into 13,160,041 common shares of the Company.
	During the nine months ended September 30, 2013, the Company issued an aggregate of 3,316,667 shares of its common stock in settlement of $99,500 in accounts payable and accrued liabilities; a net loss of $79,075 was recognized.
	In connection with the issuance of the Company’s 10% senior convertible notes during the three months ended September 30, 2013, the Company issued an aggregate of 7,095,220 shares of its common stock, with a relative fair value of $163,387, to the holders of the notes.
	(b)           Stock option transactions
	During the nine months ended September 30, 2013, 4,125,000 of the Company’s stock options expired.
	(c)           Stock-based compensation
	The following table presents the total of stock-based compensation included in the expenses of the Company for the three and nine months ended September 30, 2013 and 2012:
		Three Months Ended		Nine months ended
		September 30,		September 30,
		2013	2012	2013	2012
	Selling, general and administrative	$  241,000	$  20,000	$  366,400	$   229,680
	Research and development	--	--	--	--
	Total stock-based compensation included in expenses	$  241,000	$  20,000	$  366,400	$   229,680

6_Gain_On_Extinguishment_of_De

6. Gain On Extinguishment of Debt, Accounts Payable and Accrued Liabilities	9 Months Ended
	Sep. 30, 2013
Notes	'
6. Gain On Extinguishment of Debt, Accounts Payable and Accrued Liabilities	'
	6.  Gain on extinguishment of debt, accounts payable and accrued liabilities
	During the nine months ended September 30, 2013, the Company issued an aggregate of 3,316,667 shares of its common stock in settlement of $99,500 in accounts payable and accrued liabilities; a net loss of $79,075 was recognized.

7_Interest_and_Financing_Costs

7. Interest and Financing Costs	9 Months Ended
	Sep. 30, 2013
Notes	'
7. Interest and Financing Costs	'
	7.  Interest and financing costs
	Interest and financing costs include accrued and paid coupon rate interest; accretion and financing costs relating to the 10% senior convertible notes, promissory notes, and convertible promissory notes.

8_Loss_Per_Share

8. Loss Per Share	9 Months Ended
	Sep. 30, 2013
Notes	'
8. Loss Per Share	'
	8.  Loss per share
	As the Company incurred a net loss during the nine months ended September 30, 2013, and during the nine months ended September 30, 2012, the loss and diluted loss per common share are based on the weighted-average common shares outstanding during the period.  The following outstanding instruments could have a dilutive effect in the future:
		30-Sep-13	30-Sep-12
		(unaudited)	(unaudited)
	Shares issuable on conversion of 10%  senior
	convertible notes	228,205,983	214,161,456
	Shares issuable on conversion of convertible promissory notes and accrued interest thereon	3,286,659	14,305,876
	Stock options	300,000	4,725,000
		231,792,642	233,192,332

9_Related_Party_Transactions

9. Related Party Transactions	9 Months Ended
	Sep. 30, 2013
Notes	'
9. Related Party Transactions	'
	9.  Related party transactions
	Included in 10% senior convertible notes payable (note 3) is $584,387 (December 31, 2012 – $611,887) payable to a director and to a company controlled by a director, and $47,558 (December 31, 2012 – $47,558) payable to an individual related to a director and a company controlled by an individual related to a director.
	Included in promissory notes payable (note 2) is $5,989 (December 31, 2012 - $43,158) payable to the director and to a company controlled by a director.
	$228,142 (December 31, 2012 – $189,986) in accrued interest charges relating to the 10% senior convertible notes and promissory notes is included in accrued liabilities at September 30, 2013.  $16,602 (2012:  $18,770) and $50,170 (2012:  $54,488) is included in interest and financing costs for the three and nine months ended September 30, 2013, respectively.

10_Contingent_Liabilities

10. Contingent Liabilities	9 Months Ended
	Sep. 30, 2013
Notes	'
10. Contingent Liabilities	'
	10.  Contingent liabilities
	On or around August 3, 2010, an agent of the Company was served notice of the commencement of legal action against the Company by a former consultant of the Company.  The plaintiff was seeking approximately $171,900 in unpaid fees relating to a service contract entered into by the Company and the consultant in January of 2007, plus legal and other costs.  A settlement was reached in January 2013, wherein the Company agreed to pay a total of $47,500 to the former consultant through installment payments over a thirteen-month period, commencing January 2013.  In the event the Company obtains financing of $250,000 or more, the outstanding balance remaining at the time of such financing is to be repaid in full.  If there should be an event of default, which includes failure to make a scheduled payment as agreed, the Company would become liable to pay a total of $171,887 (reduced by payments made to the date of default) to the former consultant, and would also be required to reimburse all legal fees incurred by the former consultant in relation to this matter.  The settlement amount, adjusted for prior accruals totaling $24,000, was recorded as expense and accounts payable for the period ended December 31, 2012.

11_Supplementary_Cash_Flow_Inf

11. Supplementary Cash Flow Information	9 Months Ended
	Sep. 30, 2013
Notes	'
11. Supplementary Cash Flow Information	'
	11.  Supplementary cash flow information
	The Company paid no income taxes during the nine months ended September 30, 2013, nor during the nine months ended September 30, 2012.  Interest paid in cash during the nine months ended September 30, 2013 was $36,495 (2012:  $16,046).
	Non-cash financing activities are excluded from the consolidated statements of cash flows.  The following is a summary of such activities for the nine months ended September 30, 2013 and 2012:
		2013	2012
	Issuance of the Company’s 10% senior convertible notes in settlement of  previously issued 10% senior convertible notes and accrued interest thereon	$  822,332	$    321,745
	Issuance of the Company’s common stock on conversion of the 10% senior convertible notes plus accrued interest thereon	97,283	--
	Issuance of the Company’s common stock on conversion of convertible promissory notes plus accrued interest thereon	72,800	100,920
	Issuance of the Company’s common stock in settlement of accrued interest on the Company’s 10% senior convertible notes	45,360	3,020
	Issuance of the Company’s common stock as compensation to consultants	366,400	42,180
	Issuance of the Company’s common stock in settlement of accounts payable and accrued liabilities	99,500	--
	Issuance of the Company’s 10% senior convertible notes in settlement of accounts payable and accrued liabilities	26,000	--
	Issuance of the Company’s 10% senior convertible notes in settlement of  previously issued 12% convertible notes and accrued interest thereon	--	193,366
	Issuance of the Company’s common stock as incentive for entering into consulting services agreements	--	187,500
		$    1,529,675	$     848,731

12_Fair_Value_Measurements

12. Fair Value Measurements	9 Months Ended
	Sep. 30, 2013
Notes	'
12. Fair Value Measurements	'
	12.  Fair value measurements
	The carrying value of cash and cash equivalents, amounts receivable, accounts payable and accrued liabilities approximates fair value due to the short term to maturity of these instruments.  The carrying value of the 10% senior convertible notes, the convertible promissory notes, and the promissory notes approximate fair value, due to the issuance of certain of these debt instruments during the six weeks prior to the period ended September 30, 2013, under conditions substantially identical to those existing at September 30, 2013.

13_Recent_Accounting_Pronounce

13. Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2013
Notes	'
13. Recent Accounting Pronouncements	'
	13.  Recent accounting pronouncements
	Management does not believe that any recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

14_Subsequent_Events

14. Subsequent Events	9 Months Ended
	Sep. 30, 2013
Notes	'
14. Subsequent Events	'
	14.  Subsequent events
	On October 31, 2013, the company issued an aggregate of $33,258 of its 10% senior convertible notes.  $9,000 of the notes were issued for cash; $24,258 of the notes were issued in settlement of $20,500 in previously issued 10% senior convertible notes and $3,758 in accrued interest thereon.  The notes mature on December 14, 2014; holders are permitted, at any time, to convert all or a portion of the outstanding principal plus accrued interest into common stock of the company, at a rate of one common share for each $0.03 of debt converted.  The Company has the option of pre-paying all or any portion of the balance outstanding on the notes at any time, without penalty or bonus, with the permission of the holders.  Interest on the notes is accrued until the notes are either repaid by the Company or converted by the holder.  At the Company’s option, interest may be paid either in cash or in common shares of the Company.  If interest is paid in common shares, the number of shares required for settlement will be calculated at the rate of conversion in effect for the conversion of the note principal.  Holders of the notes were granted 99,773 shares of the Company’s common stock upon issuance of the notes.

2_Promissory_Notes_Payable_Sch

2. Promissory Notes Payable: Schedule of Promissory Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2013
Tables/Schedules	'
Schedule of Promissory Notes Payable	'
		Nine months	Year ended
		ended September 30, 2013	31-Dec-12
		(unaudited)
	Balance beginning of period	$  93,008	$  117,897
	Notes issued	20,156	32,201
	Principal repaid	-55,630	-58,571
	Adjustment for foreign currency translation	-195	1,481
		$   57,339	$  93,008
	Due on demand, interest at 12%, unsecured, repayable in Canadian dollars	$            --	$  32,158
	Due on demand, interest at 12%, unsecured, repayable in United States dollars	57,339	60,850
		57,339	93,008
	Payable to related parties (note 11)	-5,989	-43,158
		$    51,350	$   49,850

3_10_Senior_Convertible_Notes_

3. 10% Senior Convertible Notes: Financial Statement Presentation of Senior Convertible Notes (Tables)	9 Months Ended
	Sep. 30, 2013
Tables/Schedules	'
Financial Statement Presentation of Senior Convertible Notes	'
		Nine months	Year
		Ended	Ended
		30-Sep-13	31-Dec-12
		(unaudited)
	Balance beginning of period	$  6,896,749	$  6,466,265
	Note proceeds on issuance	1,306,832	838,536
	Allocated to common stock and additional paid-in capital for the relative fair value of stock issued to holders of the notes:
	Allocated to common stock par value	-7,095	-2,123
	Allocated to additional paid-in capital	-156,292	-55,268
		-163,387	-57,392
	Allocated to additional paid-in capital for the intrinsic value of the beneficial conversion feature	-289,454	-86,635
	Proceeds allocated to 10% senior convertible notes on issuance	853,991	694,509
	Accretion recorded as a charge to interest and financing costs	452,841	144,027
	Principal matured and repaid through the issuance of new 10% senior convertible notes	-760,049	-371,052
	Principal converted pursuant to the conversion feature of the notes	-96,667	--
	Principal repaid in cash	-43,000	-37,000
		7,303,865	6,896,749
	Payable to related parties (note 11)	-631,945	-659,445
		$6,671,920	$6,237,304

3_10_Senior_Convertible_Notes_1

3. 10% Senior Convertible Notes: Summary Senior Convertible Notes (Tables)	9 Months Ended
	Sep. 30, 2013
Tables/Schedules	'
Summary Senior Convertible Notes	'
	Note	Conversion
	Principal	Rate
	$  6,292,358	$0.03
	511,507	0.038
	500,000	0.1
	$  7,303,865

5_Stockholders_Deficiency_Sche

5. Stockholders' Deficiency: Schedule of Other Share-based Compensation, Activity (Tables)	9 Months Ended
	Sep. 30, 2013
Tables/Schedules	'
Schedule of Other Share-based Compensation, Activity	'
		Three Months Ended		Nine months ended
		September 30,		September 30,
		2013	2012	2013	2012
	Selling, general and administrative	$  241,000	$  20,000	$  366,400	$   229,680
	Research and development	--	--	--	--
	Total stock-based compensation included in expenses	$  241,000	$  20,000	$  366,400	$   229,680

8_Loss_Per_Share_Schedule_of_A

8. Loss Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2013
Tables/Schedules	'
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	'
		30-Sep-13	30-Sep-12
		(unaudited)	(unaudited)
	Shares issuable on conversion of 10%  senior
	convertible notes	228,205,983	214,161,456
	Shares issuable on conversion of convertible promissory notes and accrued interest thereon	3,286,659	14,305,876
	Stock options	300,000	4,725,000
		231,792,642	233,192,332

11_Supplementary_Cash_Flow_Inf1

11. Supplementary Cash Flow Information: Schedule of Cash Flow, Supplemental Disclosures (Tables)	9 Months Ended
	Sep. 30, 2013
Tables/Schedules	'
Schedule of Cash Flow, Supplemental Disclosures	'
		2013	2012
	Issuance of the Company’s 10% senior convertible notes in settlement of  previously issued 10% senior convertible notes and accrued interest thereon	$  822,332	$    321,745
	Issuance of the Company’s common stock on conversion of the 10% senior convertible notes plus accrued interest thereon	97,283	--
	Issuance of the Company’s common stock on conversion of convertible promissory notes plus accrued interest thereon	72,800	100,920
	Issuance of the Company’s common stock in settlement of accrued interest on the Company’s 10% senior convertible notes	45,360	3,020
	Issuance of the Company’s common stock as compensation to consultants	366,400	42,180
	Issuance of the Company’s common stock in settlement of accounts payable and accrued liabilities	99,500	--
	Issuance of the Company’s 10% senior convertible notes in settlement of accounts payable and accrued liabilities	26,000	--
	Issuance of the Company’s 10% senior convertible notes in settlement of  previously issued 12% convertible notes and accrued interest thereon	--	193,366
	Issuance of the Company’s common stock as incentive for entering into consulting services agreements	--	187,500
		$    1,529,675	$     848,731

1_Basis_of_Presentation_Detail

1. Basis of Presentation (Details) (USD $)	3 Months Ended		9 Months Ended		170 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Dec. 31, 2012
Details	'	'	'	'	'	'
Going Concern Note	'	'	'Going concern The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has no revenues, has negative working capital of $11,912,758, and stockholders’ deficiency of $11,908,604 as at September 30, 2013, and has incurred a loss of $2,341,691 and negative cash flow from operations of $472,144 for the nine months then ended. Furthermore, the Company failed to settle certain 10% senior convertible notes and promissory notes plus accrued interest when they matured on various dates between October 2008 and December 2012. As a result of these non-payment defaults, all of the 10% senior convertible notes, as well as $36,250 of the promissory notes were in default at September 30, 2013, in accordance with the default provisions of the respective notes, and consequently are due and payable on demand. In addition, the Company expects to continue to incur operating losses for the foreseeable future, and has no lines of credit or other financing facilities in place. The Company expects to incur operating expenses of approximately $1,500,000 for the year ending December 31, 2013, subject to the availability of adequate funding. In the event the Company cannot raise the additional funds necessary to finance its research and development and sales and marketing activities, it may have to cease operations. All of the factors above raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan to address these issues includes raising capital through the private placement of equity, the exercise of previously-issued equity instruments and through the issuance of additional promissory notes. The Company’s ability to continue as a going concern is subject to management’s ability to successfully implement these plans. Failure to do so could have a material adverse effect on the Company’s position and or results of operations and could also result in the Company ceasing operations. The consolidated financial statements do not include adjustments that would be required if the assets are not realized and the liabilities settled in the normal course of operations. Even if successful in obtaining financing in the near term, the Company cannot be certain that cash generated from its future operations will be sufficient to satisfy its liquidity requirements in the longer term, and it may need to continue to raise capital by issuing additional equity or by obtaining credit facilities. The Company’s future capital requirements will depend on many factors, including, but not limited to, the market acceptance of its products and the level of its promotional activities and advertising required to generate product sales. No assurance can be given that any such additional funding will be available or that, if available, it can be obtained on terms favorable to the Company.	'	'	'
Working capital	$11,912,758	'	$11,912,758	'	$11,912,758	'
Total stockholders' deficiency	11,908,604	'	11,908,604	'	11,908,604	10,883,764
Net loss	1,141,980	324,318	2,341,691	1,309,121	41,673,305	'
Net cash used in operating activities	'	'	$472,144	$257,913	$18,272,753	'

2_Promissory_Notes_Payable_Det

2. Promissory Notes Payable (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Details	'	'	'	'
Interest and Financing Costs	$2,226	$3,013	$7,507	$9,171
Interest Paid	$2,226	$63	$3,531	$16,046

5_Stockholders_Deficiency_Sche1

5. Stockholders' Deficiency: Schedule of Other Share-based Compensation, Activity (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Details	'	'	'	'
Other Selling, General and Administrative Expense	$241,000	$20,000	$366,400	$229,680
Total stock-based compensation included in expenses	$241,000	$20,000	$366,400	$229,680

8_Loss_Per_Share_Schedule_of_A1

8. Loss Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Details	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	231,792,642	233,192,332

11_Supplementary_Cash_Flow_Inf2

11. Supplementary Cash Flow Information: Schedule of Cash Flow, Supplemental Disclosures (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Details	'	'
Issuance of the Company's 10% senior convertible notes in settlement of previously issued 10% senior convertible notes and accrued interest thereon	$822,332	$321,745
Issuance of the Company's common stock on conversion of the 10% senior convertible notes plus accrued interest thereon	97,283	'
Issuance of the Company's common stock on conversion of convertible promissory notes plus accrued interest thereon	72,800	100,920
Issuance of the Company's common stock in settlement of accrued interest on the Company's 10% senior convertible notes	45,360	3,020
Issuance of the Company's common stock as compensation to consultants	366,400	42,180
Issuance of the Company's common stock in settlement of accounts payable and accrued liabilities	99,500	'
Issuance of the Company's 10% senior convertible notes in settlement of accounts payable and accrued liabilities	26,000	'
Issuance of the Company's 10% senior convertible notes in settlement of previously issued 12% convertible notes and accrued interest thereon	'	193,366
Issuance of the Company's common stock as incentive for entering into consulting services agreements	'	$187,500

14_Subsequent_Events_Details

14. Subsequent Events (Details) (USD $)	Oct. 31, 2013
Details	'
Subsequent event, convertible promissory notes issued	$33,258