Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 08, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ProtoKinetix, Inc. | ||
Entity Central Index Key | 1,128,189 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Trading Symbol | pktx | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Voluntary Filers | No | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 | $ 13,337,413 | |
Entity Common Stock, Shares Outstanding | 254,711,673 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 302,942 | $ 371,029 |
Prepaid expenses and deposits (Notes 3 and 11) | 62,127 | 70,384 |
Total current assets | 365,069 | 441,413 |
Intangible assets (Note 4) | 153,028 | 100,681 |
Total assets | 518,097 | 542,094 |
Current Liabilities | ||
Accounts payable and accrued liabilities (Note 10) | 26,906 | 45,295 |
Promissory notes payable (Note 10) | 117,656 | 0 |
Total current liabilities | 144,562 | 45,295 |
Stockholders' Equity (Deficiency) | ||
Common stock, $0.0000053 par value; 400,000,000 common shares authorized; 251,352,433 and 237,952,433 shares issued and outstanding for 2017 and 2016 respectively (Note 9) | 1,344 | 1,273 |
Additional paid-in capital | 30,506,094 | 29,115,795 |
Accumulated deficit | (30,133,903) | (28,620,269) |
Total stockholders' equity | 373,535 | 496,799 |
Total liabilities and stockholders' equity | $ 518,097 | $ 542,094 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par Value Per Share | $ 0.0000053 | $ 0.0000053 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Shares, Issued | 251,352,433 | 237,952,433 |
Common Stock, Shares, Outstanding | 251,352,433 | 237,952,433 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
EXPENSES | ||
Amortization - intangible assets (Note 4) | $ 3,000 | $ 3,000 |
General and administrative | 105,264 | 99,648 |
Interest | 1,657 | 12 |
Professional fees (Note 10) | 196,828 | 211,006 |
Research and development | 296,515 | 450,899 |
Share-based compensation (Note 10) | 910,370 | 760,073 |
Operating Income (Expenses) | (1,513,634) | (1,524,638) |
OTHER ITEMS | ||
Net loss for the year | $ (1,513,634) | $ (1,524,638) |
Loss per common share (basic and diluted) | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding (basic and diluted) | 246,598,460 | 221,613,392 |
STATEMENT OF STOCKHOLDERS' EQUI
STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2015 | 216,602,433 | |||
Beginning Balance, Amount at Dec. 31, 2015 | $ 1,159 | $ 27,498,836 | $ (27,095,631) | $ 404,364 |
Issuance of common stock for services, shares | 100,000 | |||
Issuance of common stock for services, amount | $ 1 | 6,999 | 0 | 7,000 |
Fair value of compensatory options issued | $ 0 | 760,073 | 0 | 760,073 |
Compensatory options repurchased | 0 | |||
Issuance of common stock pursuant to private placement offering, shares | 4,150,000 | |||
Issuance of common stock pursuant to private placement offering, amount | $ 22 | 165,978 | 0 | 166,000 |
Issuance of common stock pursuant to private placement offering, shares | 5,350,000 | |||
Issuance of common stock pursuant to private placement offering, amount | $ 29 | 213,971 | 0 | 214,000 |
Issuance of common stock pursuant to private placement offering, shares | 5,250,000 | |||
Issuance of common stock pursuant to private placement offering, amount | $ 28 | 209,972 | 0 | 210,000 |
Issuance of common stock pursuant to private placement offering, shares | 6,500,000 | |||
Issuance of common stock pursuant to private placement offering, amount | $ 34 | 259,966 | 0 | 260,000 |
Net loss for the year | $ 0 | 0 | (1,524,638) | (1,524,638) |
Ending Balance, Shares at Dec. 31, 2016 | 237,952,433 | |||
Ending Balance, Amount at Dec. 31, 2016 | $ 1,273 | 29,115,795 | (28,620,269) | 496,799 |
Issuance of common stock for services, shares | 0 | |||
Issuance of common stock for services, amount | $ 0 | 0 | 0 | 0 |
Fair value of compensatory options issued | 0 | 910,370 | 0 | 910,370 |
Compensatory options repurchased | $ 0 | (110,000) | 0 | 110,000 |
Issuance of common stock pursuant to private placement offering, shares | 8,000,000 | |||
Issuance of common stock pursuant to private placement offering, amount | $ 43 | 319,957 | 0 | 320,000 |
Issuance of common stock pursuant to private placement offering, shares | 4,400,000 | |||
Issuance of common stock pursuant to private placement offering, amount | $ 23 | 219,977 | 0 | 220,000 |
Issuance of common stock pursuant to private placement offering, shares | 1,000,000 | |||
Issuance of common stock pursuant to private placement offering, amount | $ 5 | 49,995 | 0 | 50,000 |
Net loss for the year | $ 0 | 0 | (1,513,634) | (1,513,634) |
Ending Balance, Shares at Dec. 31, 2017 | 251,352,433 | |||
Ending Balance, Amount at Dec. 31, 2017 | $ 1,344 | $ 30,506,094 | $ (30,133,903) | $ 373,535 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS USED IN OPERATING ACTIVITIES | ||
Net loss for the year | $ (1,513,634) | $ (1,524,638) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Amortization - intangible assets | 3,000 | 3,000 |
Issuance and amortization of common stock for services | 0 | 7,000 |
Fair value of compensatory options granted | 910,370 | 760,073 |
Accrued interest expense | 1,656 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 0 | 8,023 |
Prepaid expenses and deposits | 8,257 | (69,987) |
Accounts payable and accrued liabilities | (14,758) | (3,724) |
Net cash used in operating activities | (605,109) | (820,253) |
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | ||
Promissory notes received | 116,000 | 0 |
Purchase of intangible assets | (58,978) | (29,790) |
Net cash from (used in) investing activities | 57,022 | (29,790) |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ||
Repurchase of compensatory options | (110,000) | 0 |
Issuance of common stock for cash | 590,000 | 850,000 |
Net cash from financing activities | 480,000 | 850,000 |
Net change in cash | (68,087) | (43) |
Cash, beginning of year | 371,029 | 371,072 |
Cash, end of year | 302,942 | 371,029 |
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Supplementary information - non-cash transactions: | ||
Common stock issued for consulting services | 0 | 7,000 |
Intangible asset costs included in accounts payable and accrued liabilities | $ 0 | $ 3,631 |
1. Basis of Presentation - Goin
1. Basis of Presentation - Going Concern Uncertainties | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Basis of Presentation - Going Concern Uncertainties | ProtoKinetix, Inc. (the "Company"), a development stage company, was incorporated under the laws of the State of Nevada on December 23, 1999. The Company is a medical research company whose mission is the advancement of human health care. The Company is currently researching the benefits and feasibility of synthesized Antifreeze Glycoproteins ("AFGP") or anti-aging glycoproteins, trademarked AAGP. During the year ended December 31, 2015, the Company acquired certain patents and rights for cash consideration of $30,000 (25,000 Euros), as well as additional patent applications for cash consideration of $10,000 and 6,000,000 share purchase warrants with a fair value of $25,000 (Note 4). A Cease Trade Order ("CTO") was issued in respect of the Company's securities by the British Columbia Securities Commission ("BCSC") on May 9, 2013 based on the Company's failure to file annual financial statements for the year ended December 31, 2012 by the deadline of April 1, 2013. The Company has since completed all of the required filings for annual and interim periods and received a full Revocation Order from the BCSC during the year ended December 31, 2015. During the year ended December 31, 2016, the Company filed Form 51-105F1 – Notice – OTC Issuer Ceases to be an OTC Reporting Issuer with the BCSC. The Company's financial statements are prepared consistent with accounting principles generally accepted in the United States applicable to a going concern. The Company has not developed a commercially viable product, has not generated any significant revenue to date, and has incurred losses since inception, resulting in a net accumulated deficit at December 31, 2017. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company needs additional working capital to continue its medical research or to be successful in any future business activities and continue to pay its liabilities. Therefore, continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to accomplish its objective. Management is presently engaged in seeking additional working capital through equity financing or related party loans. The accompanying financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company fail in any of the above objectives and is unable to operate for the coming year. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Basis of Presentation The accompanying financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and are expressed in United States dollars. Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The more significant accounting estimates inherent in the preparation of the Company's financial statements include estimates as to valuation of equity related instruments issued and deferred income taxes. Cash Cash consists of funds held in checking accounts. Cash balances may exceed federally insured limits from time to time. Fair Value of Financial Instruments Financial instruments, which includes cash, accounts payable and accrued liabilities and promissory notes payable, are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities pursuant to ASC 820 "Fair Value Measurements and Disclosures" which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy describes three levels of inputs that may be used to measure fair value: Level 1 – quoted prices in active markets for identical assets or liabilities Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions) Level 1 inputs are used to measure cash. At December 31, 2017 there were no other assets or liabilities subject to additional disclosure. Income Taxes The Company accounts for income taxes following the assets and liability method in accordance with the ASC 740 "Income Taxes." Under such method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company applies the accounting guidance issued to address the accounting for uncertain tax positions. This guidance clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements as well as provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years that the asset is expected to be recovered or the liability settled. Intangible assets – patent and patent application costs The Company owns intangible assets consisting of certain patents and patent applications. Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures are recognized in profit or loss as incurred. As at December 31, 2017, the Company does not hold any intangible assets with indefinite lives. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization method and amortization period of an intangible asset with a finite life is reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of the Company's patents, whereas no amortization has been recognized on the patent application costs at December 31, 2017. Research and Development Costs Research and development costs are expensed as incurred. Loss per Share and Potentially Dilutive Securities Basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted loss per share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive securities. The effect of 44,100,000 stock options (December 31, 2016 – 28,900,000) and 6,500,000 warrants (December 31, 2016 – 6,500,000) were not included in the computation of diluted earnings per share for all periods presented because it was anti-dilutive due to the Company's losses. Share-Based Compensation The Company has granted warrants and options to purchase shares of the Company's common stock to various parties for consulting services. The fair values of the warrants and options issued have been estimated using the Black-Scholes Option Pricing Model. The Company accounts for stock compensation with persons classified as employees for accounting purposes in accordance with ASC 718 "Compensation – Stock Compensation", which recognizes awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options is determined using the Black-Scholes Option Pricing Model. The fair value of common shares issued for services is determined based on the Company's stock price on the date of issuance. The Company accounts for stock compensation arrangements with persons classified as non-employees for accounting purposes in accordance with ASC 505-50 "Stock-Based Transactions with Nonemployees", which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of share-based compensation is subject to periodic adjustment as the underlying instruments vest. The fair value of stock options is estimated using the Black-Scholes Option Pricing Model and the compensation charges are amortized over the vesting period. Common stock Common stock issued for non-monetary consideration are recorded at their fair value on the measurement date and classified as equity. The measurement date is defined as the earliest of the date at which the commitment for performance by the counterparty to earn the common shares is reached or the date at which the counterparty's performance is complete. Transaction costs directly attributable to the issuance of common stock, units and stock options are recognized as a deduction from equity, net of any tax effects. Related Party Transactions A related party is generally defined as (i) any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Recent Accounting Pronouncements In August 2014, the FASB issued Accounting Standards Update 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessment of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is substantial doubt about the entity's ability to continue as a going concern. The requirement was effective for annual periods ending after December 15, 2016 and did not have a material impact on the Company's financial statements. Accounting Standards Update 2016-09 – Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. This accounting pronouncement, which goes into effect for periods ending after December 16, 2016, addresses the simplification of several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The adoption of this guidance did not have a material impact on the Company's financial statements. Accounting Standards Update 2015-17 – Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This accounting pronouncement requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. Currently deferred tax liabilities and assets must be presented as current and noncurrent. The policy was effective for periods ending after December 16, 2016. The adoption of this guidance did not have a material impact on the Company's financial statements. Accounting Standards Update 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This accounting pronouncement, which goes into effect for periods ending after December 12, 2017, is far reaching and covers several presentation areas dealing with measurement, impairment, assumptions used in estimating fair value and several other areas. The adoption of this guidance did not have a material impact on the Company's financial statements. Accounting Standards Update 2016-02-Leases (Topic 842). This accounting pronouncement allows lessees to make an accounting policy election to not recognize a lease asset and liability for leases with a term of 12 months or less and do not have a purchase option that is expected to be exercised. This standard is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its financial statements. |
3. Prepaid Expenses and Deposit
3. Prepaid Expenses and Deposits | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Prepaid Expenses and Deposits | The following summarizes the Company's prepaid expenses and deposits outstanding as at December 31, 2017 and 2016: 2017 2016 Deposit on research agreement (Note 11(c)) $ 61,077 $ 54,770 Other prepaid expenses and deposits 1,050 15,614 $ 62,127 $ 70,384 |
4. Intangible Assets
4. Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible asset transactions are summarized as follows: Patent Rights Patent Application Rights Total Cost Balance, December 31, 2015 $ 30,000 $ 41,760 $ 71,760 Additions - 33,421 33,421 Balance, December 31, 2016 $ 30,000 $ 75,181 $ 105,181 Additions - 55,347 55,347 Balance, December 31, 2017 $ 30,000 $ 130,528 $ 160,528 Accumulated amortization Balance, December 31, 2015 $ 1,500 $ - $ 1,500 Amortization 3,000 - 3,000 Balance, December 31, 2016 $ 4,500 $ - $ 4,500 Amortization 3,000 - 3,000 Balance, December 31, 2017 $ 7,500 $ - $ 7,500 Net carrying amounts December 31, 2016 $ 25,500 $ 75,181 $ 100,681 December 31, 2017 $ 22,500 $ 130,528 $ 153,028 During the year ended December 31, 2015, the Company entered into an Assignment of Patents and Patent Application (effective January 1, 2015) (the "Patent Assignment") with the Institut National des Sciences Appliquees de Rouen ("INSA") for the assignment of certain patents and all rights associated therewith (the "Patents"). The Company and INSA had previously entered into a licensing agreement for the Patents in August 2004. The Patent Assignment transfers all of the Patents and rights associated therewith to the Company upon payment to INSA in the sum of $30,000 (25,000 Euros) (paid). During the year ended December 31, 2017, the Company recorded $3,000 (2016 - $3,000) in amortization expense associated with the Patents. During the year ended December 31, 2015, the Company entered into a Technology Transfer Agreement with Grant Young for the assignment of his 50% ownership of certain patents and all rights associated therewith (the "Patent Application Rights"). In exchange for the Patent Application Rights, the Company agreed to pay $10,000 (paid) and to issue 6,000,000 warrants (issued) to purchase shares of the Company's common stock at an exercise price of $0.10 per share for a period of five years. The Patent Application Rights had a total fair value of $35,000, which was allocated as $10,000 to the cash consideration paid, with the remaining $25,000 being allocated to the warrant component of the overall consideration. The Company incurred an additional $95,528 in direct costs relating to the Patent Application Rights, $55,347 of which were incurred during the year ended December 31, 2017. The remaining 50% ownership of the Patent Application Rights was acquired from the Governors of the University of Alberta in exchange for a future gross revenue royalty. During the year ended December 31, 2016, the Company entered into a Universal Assignment with Grant Young for the assignment of his ownership of certain new and useful improvements in an invention entitled "Use of Anti-Aging Glycoprotein for Enhancing Survival of Neurosensory Precursor Cells" (the "New Patent Application Rights"). In exchange for the New Patent Application Rights, the Company agreed to pay $1 (paid). The Company incurred $2,415 in direct costs relating to the New Patent Application Rights during the year ended December 31, 2016. No amortization was recorded on the Patent Application Rights or the New Patent Application Rights to December 31, 2017. |
5. Credit Facility
5. Credit Facility | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Credit Facility | Credit Facility On June 16, 2016, the Company executed a line of credit arrangement for an amount of up to $250,000 with Pleasants County Bank, West Virginia. Pursuant to the terms of the line of credit, interest will accrue on the amount of credit outstanding at a rate of 1.5% above the prime rate adjusted monthly. The Company's President and CEO pledged personal assets to secure the line of credit and the Company pledged its patent rights in the provisional patent application numbered 62287857, dated January 21, 2016, "Use of Anti-Aging Glycoprotein for Enhancing Survival of Neurosensory Precursor Cells". During the year ended December 31, 2017, the line of credit was canceled, and the pledged assets were released. No amounts were drawn from the line of credit during the years ended December 31, 2016 and 2017. |
6. Common Shares Issued for Ser
6. Common Shares Issued for Services | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Common Shares Issued for Services | During the year ended December 31, 2017 and 2016, the Company issued shares of common stock for services and other value rendered as follows: 2017 Number of Shares Value per Share Total January – December 2017 - $ - $ - - $ - 2016 Number of Shares Value per Share Total March 2016 100,000 $ 0.07 $ 7,000 100,000 $ 7,000 |
7. Stock Options
7. Stock Options | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Stock Options | On December 30, 2016, the Board of Directors of the Company adopted the 2017 Stock Option and Stock Bonus Plan (the "2017 Plan"). The Board of Directors adopted the 2017 Plan as it anticipates utilizing equity compensation as part of its ongoing standard corporate operations and in connection with its contemplated activities going forward. The aggregate number of shares that may be issued under the 2017 Plan is 30,000,000 shares subject to adjustment as provided therein. The 2017 Plan includes two types of options. Options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended are referred to as incentive options. Options which are not intended to qualify as incentive options are referred to as non-qualified options. As of December 31, 2017, there are 24,200,000 options and no shares of common stock granted and outstanding under the 2017 Plan. The 2017 Plan is administered by the Board of Directors, or a committee appointed by the Board of Directors. In addition to determining who will be granted options or stock bonuses, the committee has the authority and discretion to determine when options and bonuses will be granted and the number of options and bonuses to be granted. The committee also may determine a vesting and/or forfeiture schedule for bonuses and/or options granted, the time or times when each option becomes exercisable, the duration of the exercise period for options and the form or forms of the agreements, certificates or other instruments evidencing grants made under the 2017 Plan. The committee may determine the purchase price of the shares of common stock covered by each option and determine the fair market value per share. The committee also may impose additional conditions or restrictions not inconsistent with the provisions of the 2017 Plan. The committee may adopt, amend and rescind such rules and regulations as in its opinion may be advisable for the administration of the 2017 Plan. The committee also has the power to interpret the 2017 Plan, and the provisions in the instruments evidencing grants made under it and is empowered to make all other determinations deemed necessary or advisable for the administration of it. Participants in the 2017 Plan may be selected by the committee from employees, officers, consultants and advisors (including board members) of the Company. The committee may take into account the duties of persons selected, their present and potential contributions to the success of the Company and such other considerations as the committee deems relevant to the purposes of the 2017 Plan. In the event that a change, such as a stock split, is made in the Company's capitalization which results in an exchange or other adjustment of each share of common stock for or into a greater or lesser number of shares, appropriate adjustments will be made to unvested bonuses and in the exercise price and in the number of shares subject to each outstanding option. The committee also may make provisions for adjusting the number of bonuses or underlying outstanding options in the event the Company effects one or more reorganizations, recapitalizations, rights offerings, or other increases or reductions of shares of its outstanding common stock. Options and bonuses may provide that in the event of the dissolution or liquidation of the Company, a corporate separation or division or the merger or consolidation of the Company, the holder may exercise the option on such terms as it may have been exercised immediately prior to such dissolution, corporate separation or division or merger or consolidation; or in the alternative, the committee may provide that each option granted under the 2017 Plan shall terminate as of a date fixed by the committee. The exercise price of any option granted under the 2017 Plan must be no less than 100% of the "fair market value" of the Company's common stock on the date of grant. Any incentive stock option granted under the 2017 Plan to a person owning more than 10% of the total combined voting power of the common stock must be at a price of no less than 110% of the fair market value per share on the date of grant. The exercise price of an option may be paid in cash, in shares of the Company's common stock or other property having a fair market value equal to the exercise price of the option, or in a combination of cash, shares, other securities and property. The committee determines whether or not property other than cash or common stock may be used to purchase the shares underlying an option and shall determine the value of the property received. Stock option transactions are summarized as follows: Number of Stock Options Weighted Average Exercise Price Weighted Average Fair Value Weighted Average Remaining Life $ $ (Years) Outstanding, December 31, 2015 14,600,000 0.05 0.03 Options granted 15,300,000 0.08 0.05 Options expired (1,000,000 ) 0.10 0.03 Outstanding, December 31, 2016 28,900,000 0.06 0.04 Options granted 28,200,000 0.05 0.05 Options repurchased (12,000,000 ) 0.06 0.04 Options expired (1,000,000 ) 0.10 0.03 Outstanding, December 31, 2017 44,100,000 0.06 0.05 2.69 The fair values of the stock options granted during the years ended December 31, 2017 and 2016 were estimated using the Black-Scholes Option Pricing Model. The weighted average assumptions used in the pricing model for these options are as follows: December 31, 2017 December 31, 2016 Risk-free interest rate 1.12 % 0.90 % Dividend yield 0.00 % 0.00 % Expected stock price volatility 125.00 % 125.00 % Expected forfeiture rate 0.00 % 0.00 % Expected life 3.58 years 3.71 years The following non-qualified stock options were outstanding and exercisable at December 31, 2017: Exercise Price Number of Options Outstanding Number of Options Exercisable $ February 24, 2018 0.05 1,000,000 1,000,000 February 25, 2020 0.04 2,000,000 - February 28, 2020 0.04 5,000,000 5,000,000 June 30, 2018 0.10 600,000 600,000 December 31, 2019 0.08 11,000,000 11,000,000 October 5, 2018 0.08 300,000 300,000 December 31, 2020 0.05 12,200,000 12,200,000 August 31, 2021 0.06 11,000,000 2,500,000 November 14, 2021 0.07 1,000,000 - 44,100,000 32,600,000 As at December 31, 2017, the aggregate intrinsic value of the Company's stock options is $272,000 (December 31, 2016 – $110,000). The weighted average fair value of stock options granted during the year ended December 31, 2017 is $0.05 (2016 - $0.05), and the weighted average exercise price of exercisable stock options is $0.06 (2016 - $0.05). During the year ended December 31, 2017, the Company repurchased a total of 12,000,000 stock options from its former CFO for proceeds of $110,000. In accordance with ASC 718, the Company first calculated the fair value of the stock options as of the repurchase date ($604,350) in order to determine the appropriate allocation between equity and profit or loss. As the fair value of the stock options as of the repurchase date was in excess of the consideration paid, the full amount of the consideration was allocated against equity. The fair values of the stock options repurchased during the year ended December 31, 2017 were estimated using the Black-Scholes Option Pricing Model. The weighted average assumptions used in the pricing model for these options are as follows: December 31, 2017 Risk-free interest rate 1.60 % Dividend yield 0.00 % Expected stock price volatility 125.00 % Expected forfeiture rate 0.00 % Expected life 2.54 years |
8. Warrants
8. Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Warrants | Warrant transactions are summarized as follows: Number of Warrants Weighted Average Exercise Price $ Outstanding, December 31, 2015 8,700,000 0.11 Warrants expired (2,200,000 ) 0.10 Outstanding, December 31, 2016 and 2017 6,500,000 0.11 The following warrants were outstanding and exercisable as at December 31, 2017: Number of Warrants Exercise Price ($) Expiry Date 500,000 0.25 November 8, 2018 6,000,000 0.10 April 22, 2020 6,500,000 |
9. Stockholders' Equity
9. Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Stockholders' Equity | The Company is authorized to issue 400,000,000 (December 31, 2016 – 400,000,000) shares of $0.0000053 par value common stock. Each holder of common stock has the right to one vote but does not have cumulative voting rights. Shares of common stock are not subject to any redemption or sinking fund provisions, nor do they have any preemptive, subscription or conversion rights. Holders of common stock are entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No dividends have been declared or paid as of December 31, 2017 (December 31, 2016 - $nil). During the year ended December 31, 2017, the Company: a) Issued 8,000,000 shares of common stock to investors (which included both the President and CEO as well as the CFO of the Company) at $0.04 for gross proceeds of $320,000. b) Issued 4,400,000 shares of common stock to investors at $0.05 for gross proceeds of $220,000. c) Issued 1,000,000 shares of common stock to investors at $0.05 for gross proceeds of $50,000. During the year ended December 2016, the Company: a) Issued 100,000 shares of common stock with a fair value of $7,000 ($0.07 per share) pursuant to a consulting agreement. b) Issued 4,150,000 shares of common stock to investors (one of which was the President and CEO of the Company) at $0.04 per share for gross proceeds of $166,000. c) Issued 5,350,000 shares of common stock to investors (one of which was the President and CEO of the Company) at $0.04 per share for gross proceeds of $214,000. d) Issued 5,250,000 shares of common stock to investors (one of which was the President and CEO of the Company) at $0.04 per share for gross proceeds of $210,000. e) Issued 6,500,000 shares of common stock to investors (one of which was the President and CEO of the Company) at $0.04 for gross proceeds of $260,000. |
10. Related Party Transactions
10. Related Party Transactions and Balances | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions And Balances | |
Related Party Transactions and Balances | During the year ended December 31, 2017, the Company: a) Entered into a consulting agreement with an effective date of January 1, 2017 with the Company's President and CEO whereby he will be compensated at a nominal amount of $1 for services through to December 31, 2017. The agreement also stipulates a termination fee that would pay the Company's President and CEO $100,000 per year of service if terminated without cause or in the case of termination upon a change of control event, the termination fee would be equal to $100,000 per year of service plus 2.5% of the aggregate transaction value of the change of control. In addition, the agreement stipulates that he would be entitled to a bonus payment equal to 2.5% of the aggregate transaction value of a sale or license of any Patent Rights, Patent Application Rights or products effected during the term of his agreement. Pursuant to the agreement, he was also granted 5,000,000 stock options exercisable into common shares of the Company until December 31, 2020 at a price of $0.05 per share. The options vest in equal instalments on a quarterly basis beginning March 31, 2017. On September 1, 2017, the consulting agreement was amended to continue the term of the agreement until December 31, 2018 and thereafter to automatically renew. The consulting agreement was also amended to grant an additional 5,000,000 stock options exercisable into common shares of the Company until August 31, 2021 at a price of $0.06 per share (Note 7). The options vest quarterly in equal installments beginning December 31, 2017. b) Entered into a consulting agreement with an effective date of January 1, 2017 with the Company's former CFO whereby she will be compensated at a monthly fee of $6,000 for services through to December 31, 2017. The agreement also stipulates a termination fee that would pay the Company's CFO $72,000 per years of service (including the pro-rata amount for partial years of service) if terminated without cause or upon termination due to a change of control event. Pursuant to the agreement, she was also granted 4,000,000 stock options exercisable into common shares of the Company until December 31, 2020 at a price of $0.05 per share (Note 7). The options vest in equal instalments on a quarterly basis beginning March 31, 2017. A total of $72,000 was paid or accrued to the Company's CFO during the year ended December 31, 2017 and is included in professional fees. c) Entered into a directorship agreement with an effective date of January 1, 2017 with a director of the Company. Pursuant to the agreement, the director was issued 1,000,000 stock options exercisable into common shares of the Company until December 31, 2020 at a price of $0.05 per share (Note 7). The options vest in equal installments on a quarterly basis beginning March 31, 2017. On September 1, 2017, the consulting agreement was amended to continue the term of the agreement until December 31, 2018 and thereafter to automatically renew. The consulting agreement was also amended to grant an additional 1,000,000 stock options exercisable into common shares of the Company until August 31, 2021 at a price of $0.06 per share (Note 7). The options vest quarterly in equal installments beginning December 31, 2017. d) Entered into two promissory notes (the "Notes") with the Company's President and CEO whereby a total of $116,000 was loaned to the Company. The Notes bear interest at a rate of 8% per annum, are unsecured and are repayable on demand. As at December 31, 2017, accrued interest totaled $1,656. The Notes were settled through the issuance of common stock of the Company subsequent to the year ended December 31,2017 (Note 13). e) Entered into a settlement agreement with the Company's former CFO whereby she left her position as CFO effective upon the filing of the Company's quarterly report for the nine-month period ended September 30, 2017. Pursuant to the settlement agreement, the Company paid the former CFO $6,000 for December 2017 consulting services and $110,000 in exchange for the return of stock options to purchase up to 12,000,000 shares of the Company's common stock (Note 7), which were then cancelled. f) Entered into a consulting agreement with an effective date of November 14, 2017 with the Company's newly appointed CFO whereby he will be compensated at a monthly fee of $5,000 for services through to November 30, 2018. Pursuant to the agreement, he was also granted 1,000,000 stock options exercisable into common shares of the Company until November 14, 2021 at a price of $0.07 per share (Note 7). The options vest in equal instalments on a quarterly basis beginning February 14, 2018. A total of $7,500 was paid or accrued to the Company's new CFO during the year ended December 31, 2017. g) Recognized $481,644 in share-based compensation associated with stock options granted to key management personnel. During the year ended December 31, 2016, the Company: a) Entered into a consulting agreement with an effective date of January 1, 2016 with the Company's President and CEO whereby he will be compensated at a nominal amount of $1 for services through to December 31, 2016. The agreement also stipulates a termination fee that would pay the Company's President and CEO $100,000 per year of service if terminated without cause or in the case of termination upon a change of control event, the termination fee would be equal to $100,000 per year of service plus 2.5% of the aggregate transaction value of the change of control. In addition, the agreement stipulates that he would be entitled to a bonus payment equal to 2.5% of the aggregate transaction value of a sale or license of any Patent Rights, Patent Application Rights or products effected during the term of his agreement. Pursuant to the agreement, he was also granted 5,000,000 stock options exercisable into common shares of the Company until December 31, 2019 at a price of $0.08 per share (Note 7). The options vest in equal instalments on a quarterly basis beginning March 31, 2016. b) Entered into a consulting agreement with an effective date of January 1, 2016 with the Company's CFO whereby she will be compensated at a monthly fee of $6,000 for services through to December 31, 2016. The agreement also stipulates a termination fee that would pay the Company's CFO $36,000 if terminated without cause or $72,000 upon termination due to a change of control event. Pursuant to the agreement, she was also granted 4,000,000 stock options exercisable into common shares of the Company until December 31, 2019 at a price of $0.08 per share (Note 7). The options vest in equal instalments on a quarterly basis beginning March 31, 2016. A total of $72,000 was paid or accrued to the Company's CFO during the year ended December 31, 2016 and is included in professional fees. c) Entered into a directorship agreement with an effective date of January 1, 2016 with a director of the Company. Pursuant to the agreement, the director was issued 1,000,000 stock options exercisable into common shares of the Company until December 31, 2019 at a price of $0.08 per share (Note 7). The options vest in equal instalments on a quarterly basis beginning March 31, 2016. d) Recognized $543,699 in share-based compensation associated with stock options granted to key management personnel. As at December 31, 2017 and December 31, 2016, the following amounts are due to related parties: December 31, 2017 December 31, 2016 Clarence Smith (CEO) Accounts payable and accrued liabilities $ - $ 81 Clarence Smith (CEO) Promissory notes payable (and interest) $ 117,656 $ - Amounts included in accounts payable and accrued liabilities are non-interest bearing, unsecured and repayable on demand. |
11. Commitments and Contingency
11. Commitments and Contingency | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingency | As at December 31, 2016, the Company has the following commitments: a) Entered into a royalty agreement with the Governors of the University of Alberta (the “University”) whereby the University had developed certain intellectual property (the “Additional Patent Rights”) in conjunction with and by permission of the Company employing patented intellectual property of the Company. The agreement assigns the Additional Patent Rights to the Company in return for 5% of any future gross revenues (the “Royalty”) derived from products arising from the Patent Rights. The Company will have the right and option for two years from the earlier of September 1, 2015 or the first date that the University publishes its research related to the Additional Patent Rights to buy out all of the University’s Royalty for consideration of the aggregate sum of CAD $5,000,000. b) Entered into a consulting agreement effective May 1, 2015, whereby the Company would pay the consultant $4,000 per month for an initial term of 1 year for providing research and development services. c) Entered into a consulting agreement effective March 1, 2015, whereby the company would pay the consultant $2,700 per month for an initial term of 1 year for providing public relations services. The consultant was also entitled to 400,000 shares of common stock, which were issued at a rate of 25% (100,000 shares) every 3 months over the term of the agreement (100,000 shares issued during the year ended December 31, 2016 (Note 7)). d) Entered into a Collaborative Research Agreement (the “CREA”) effective May 31, 2016 with The University of British Columbia (“UBC”) for a term of 2 years. Pursuant to the CREA, the Company paid a total of CAD $169,000 ($131,448) in advance for services to be provided by UBC in the first year, and will be required to pay an additional CAD $201,500 within 12 months from the effective date of the CREA in advance of services to be provided by UBC in the second year. The CREA can be terminated by either party with 30 days’ written notice. As at December 31, 2016, a total of $54,770 is included in prepaid expenses and deposits. The Company was delinquent in filing certain income tax returns with the U.S. Internal Revenue Service and reports disclosing its interest in foreign bank accounts on form TDF 90-22.1, "Report of Foreign Bank and Financial Accounts" ("FBARs"). In September 2015, the Company filed the delinquent income tax returns and has sought waivers of any penalties under the IRS Offshore Voluntary Disclosure Program for late filing of the returns and FBARs. Under the program, the IRS has indicated that it will not impose a penalty for the failure to file delinquent income tax returns if there are no underreported tax liabilities. On November 30, 2017, the Company received a letter from the IRS concluding their review of the Company's tax returns under the program and accepting the returns as filed. No penalties have been assessed by the IRS to date, and management does not believe that the Company will incur any penalties relating to the tax years submitted under the program. |
12. Income Taxes
12. Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Income Taxes | As a Nevada corporation, the Company is liable for taxes in the United States. As of December 31, 2017, the Company did not have any income for tax purposes and therefore, no tax liability or expense has been recorded in these financial statements (December 31, 2016 – none). The Company has tax losses of approximately $27,800,000 (December 31, 2016 - $27,200,000) to reduce future taxable income. The tax losses expire in years starting from 2028. The deferred tax asset associated with the tax loss carry forward is approximately $9,500,000 (December 31, 2016 - $9,200,000). The Company has provided a full valuation allowance against the deferred tax asset since it is more likely than not that the asset will not be realized. The difference between the Company's statutory income tax rate of (34%) and its effective rate of zero is primarily attributable to the valuation allowance provided on deferred taxes arising from net operating loss carry forwards. |
13. Subsequent Events
13. Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Subsequent Events | Subsequent to the year ended December 31, 2017, the Company: a) Issued a total of 2,359,240 shares of common stock to its President and CEO as settlement of principal and interest owing on the Notes (Note 10). b) Issued 1,000,000 shares of common stock to investors at $0.05 for gross proceeds of $50,000. c) Entered into a consulting agreement with an effective date of January 1, 2018 whereby the Company would pay the consultant $1,000 per month for providing public relations and strategic media relations services for a term of one year. Pursuant to the agreement, the consultant was also granted 400,000 stock options exercisable into common shares of the Company until December 31, 2022 at a price of $0.06 per share. The options vest in equal instalments on a quarterly basis beginning March 31, 2018. d) Entered into a consulting agreement for research and investor relation services effective January 1, 2018. The consultant was granted 400,000 stock options exercisable into common shares of the Company until December 31, 2022 at a price of $0.06 per share. The options vest in equal instalments on a quarterly basis beginning March 31, 2018. |
2. Summary of Significant Acc20
2. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Basis of Presentation | The accompanying financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and are expressed in United States dollars. |
Use of Estimates | Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The more significant accounting estimates inherent in the preparation of the Company's financial statements include estimates as to valuation of equity related instruments issued and deferred income taxes. |
Cash | Cash consists of funds held in checking accounts. Cash balances may exceed federally insured limits from time to time. |
Fair Value of Financial Instruments | Financial instruments, which includes cash, accounts payable and accrued liabilities and promissory notes payable, are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities pursuant to ASC 820 "Fair Value Measurements and Disclosures" which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy describes three levels of inputs that may be used to measure fair value: Level 1 – quoted prices in active markets for identical assets or liabilities Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions) Level 1 inputs are used to measure cash. At December 31, 2017 there were no other assets or liabilities subject to additional disclosure. |
Income Taxes | The Company accounts for income taxes following the assets and liability method in accordance with the ASC 740 "Income Taxes." Under such method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company applies the accounting guidance issued to address the accounting for uncertain tax positions. This guidance clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements as well as provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years that the asset is expected to be recovered or the liability settled. |
Intangible assets - patent and patent application costs | The Company owns intangible assets consisting of certain patents and patent applications. Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures are recognized in profit or loss as incurred. As at December 31, 2017, the Company does not hold any intangible assets with indefinite lives. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization method and amortization period of an intangible asset with a finite life is reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of the Company's patents, whereas no amortization has been recognized on the patent application costs at December 31, 2017. |
Research and Development Costs | Research and development costs are expensed as incurred. |
Loss per Share and Potentially Dilutive Securities | Basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted loss per share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive securities. The effect of 44,100,000 stock options (December 31, 2016 – 28,900,000) and 6,500,000 warrants (December 31, 2016 – 6,500,000) were not included in the computation of diluted earnings per share for all periods presented because it was anti-dilutive due to the Company's losses. |
Share-Based Compensation | The Company has granted warrants and options to purchase shares of the Company's common stock to various parties for consulting services. The fair values of the warrants and options issued have been estimated using the Black-Scholes Option Pricing Model. The Company accounts for stock compensation with persons classified as employees for accounting purposes in accordance with ASC 718 "Compensation – Stock Compensation", which recognizes awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options is determined using the Black-Scholes Option Pricing Model. The fair value of common shares issued for services is determined based on the Company's stock price on the date of issuance. The Company accounts for stock compensation arrangements with persons classified as non-employees for accounting purposes in accordance with ASC 505-50 "Stock-Based Transactions with Nonemployees", which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of share-based compensation is subject to periodic adjustment as the underlying instruments vest. The fair value of stock options is estimated using the Black-Scholes Option Pricing Model and the compensation charges are amortized over the vesting period. |
Common stock | Common stock issued for non-monetary consideration are recorded at their fair value on the measurement date and classified as equity. The measurement date is defined as the earliest of the date at which the commitment for performance by the counterparty to earn the common shares is reached or the date at which the counterparty's performance is complete. Transaction costs directly attributable to the issuance of common stock, units and stock options are recognized as a deduction from equity, net of any tax effects. |
Related Party Transactions | A related party is generally defined as (i) any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. |
Recent Accounting Pronouncements | In August 2014, the FASB issued Accounting Standards Update 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessment of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is substantial doubt about the entity's ability to continue as a going concern. The requirement was effective for annual periods ending after December 15, 2016 and did not have a material impact on the Company's financial statements. Accounting Standards Update 2016-09 – Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. This accounting pronouncement, which goes into effect for periods ending after December 16, 2016, addresses the simplification of several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The adoption of this guidance did not have a material impact on the Company's financial statements. |
3. Prepaid Expenses and Depos21
3. Prepaid Expenses and Deposits (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Prepaid expenses and deposits outstanding | 2017 2016 Deposit on research agreement (Note 11(c)) $ 61,077 $ 54,770 Other prepaid expenses and deposits 1,050 15,614 $ 62,127 $ 70,384 |
4. Intangible Assets (Tables)
4. Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible asset transactions | Patent Rights Patent Application Rights Total Cost Balance, December 31, 2015 $ 30,000 $ 41,760 $ 71,760 Additions - 33,421 33,421 Balance, December 31, 2016 $ 30,000 $ 75,181 $ 105,181 Additions - 55,347 55,347 Balance, December 31, 2017 $ 30,000 $ 130,528 $ 160,528 Accumulated amortization Balance, December 31, 2015 $ 1,500 $ - $ 1,500 Amortization 3,000 - 3,000 Balance, December 31, 2016 $ 4,500 $ - $ 4,500 Amortization 3,000 - 3,000 Balance, December 31, 2017 $ 7,500 $ - $ 7,500 Net carrying amounts December 31, 2016 $ 25,500 $ 75,181 $ 100,681 December 31, 2017 $ 22,500 $ 130,528 $ 153,028 |
6. Common Shares Issued for S23
6. Common Shares Issued for Services (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Schedule of Stock Incentive Plan, Issuances | 2017 Number of Shares Value per Share Total January – December 2017 - $ - $ - - $ - 2016 Number of Shares Value per Share Total March 2016 100,000 $ 0.07 $ 7,000 100,000 $ 7,000 |
7. Stock Options (Tables)
7. Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | Number of Weighted Average Exercise Price Weighted Average Fair Value Weighted Average Remaining Life $ $ (Years) Outstanding, December 31, 2014 — — — Options granted 14,600,000 0.05 0.03 Outstanding, December 31, 2015 14,600,000 0.05 0.03 Options granted 15,300,000 0.08 0.05 Options expired (1,000,000 ) 0.10 0.03 Outstanding, December 31, 2016 28,900,000 0.06 0.04 2.66 |
Schedule of valuation assumptions for options | December 31, 2015 December 31, 2016 Risk-free interest rate 0.90 % 0.55 % Dividend yield 0.00 % 0.00 % Expected stock price volatility 125.00 % 125.00 % Expected forfeiture rate 0.00 % 0.00 % Expected life 4.50 years 3.71 years |
Schedule of options by exercise price | Expiry date Exercise Price Number of Options Number of $ February 25, 2020 0.04 2,000,000 — February 24, 2018 0.05 1,000,000 1,000,000 February 25, 2020 0.04 4,000,000 4,000,000 February 28, 2020 0.04 5,000,000 5,000,000 June 30, 2017 0.10 1,000,000 1,000,000 June 30, 2018 0.10 600,000 600,000 December 31, 2019 0.08 15,000,000 15,000,000 October 5, 2018 0.08 300,000 300,000 28,900,000 26,900,000 |
Schedule of Assumptions Used | December 31, 2017 Risk-free interest rate 1.60 % Dividend yield 0.00 % Expected stock price volatility 125.00 % Expected forfeiture rate 0.00 % Expected life 2.54 years |
8. Warrants (Tables)
8. Warrants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements [Abstract] | |
Schedule of Warrant Activity | Number of Warrants Weighted Average Exercise Price $ Outstanding, December 31, 2015 8,700,000 0.11 Warrants expired (2,200,000 ) 0.10 Outstanding, December 31, 2016 and 2017 6,500,000 0.11 |
Schedule of Stockholders' Equity Note, Warrants or Rights | Number of Warrants Exercise Price ($) Expiry Date 500,000 0.25 November 8, 2018 6,000,000 0.10 April 22, 2020 6,500,000 |
10. Related Party Transaction26
10. Related Party Transactions and Balances (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions And Balances Tables | |
Schedule of related party transactions | December 31, 2017 December 31, 2016 Clarence Smith (CEO) Accounts payable and accrued liabilities $ - $ 81 Clarence Smith (CEO) Promissory notes payable (and interest) $ 117,656 $ - |
2. Summary of Significant Acc27
2. Summary of Significant Accounting Policies (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 44,100,000 | 28,900,000 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 6,500,000 | 6,500,000 |
3. Prepaid Expenses and Depos28
3. Prepaid Expenses and Deposits (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Notes to Financial Statements [Abstract] | ||
Deposit on research agreement (Note 11(d)) | $ 61,077 | $ 54,770 |
Other prepaid expenses and deposits | 1,050 | 15,614 |
Total | $ 62,127 | $ 70,384 |
4. Intangible Assets (Details)
4. Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cost | ||
Beginning balance | $ 105,181 | $ 71,760 |
Additions | 55,347 | 33,421 |
Ending balance | 160,528 | 105,181 |
Accumulated amortization | ||
Beginning balance | 4,500 | 1,500 |
Amortization | 3,000 | 3,000 |
Ending balance | 7,500 | 4,500 |
Net carrying amounts | 153,028 | 100,681 |
Patent Rights [Member] | ||
Cost | ||
Beginning balance | 30,000 | 30,000 |
Additions | ||
Ending balance | 30,000 | 30,000 |
Accumulated amortization | ||
Beginning balance | 4,500 | 1,500 |
Amortization | 3,000 | 3,000 |
Ending balance | 7,500 | 4,500 |
Net carrying amounts | 22,500 | 25,500 |
Patent Application Rights [Member] | ||
Cost | ||
Beginning balance | 75,181 | 41,760 |
Additions | 55,347 | 33,421 |
Ending balance | 130,528 | 75,181 |
Accumulated amortization | ||
Beginning balance | ||
Amortization | ||
Ending balance | ||
Net carrying amounts | $ 130,528 | $ 75,181 |
4. Intangible Assets (Details N
4. Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible Assets Details Narrative | ||
Amortization | $ 3,000 | $ 3,000 |
5. Credit Facility (Details Nar
5. Credit Facility (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Line of credit | $ 0 | $ 0 |
6. Common Shares Issued for S32
6. Common Shares Issued for Services (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Number of Shares | 100,000 | 0 | |
Value per Share | $ 0.07 | $ 0 | |
Total | $ 7,000 | $ 0 | $ 7,000 |
7. Stock Options (Details)
7. Stock Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Notes to Financial Statements [Abstract] | ||
Outstanding, beginning | 28,900,000 | 14,600,000 |
Options granted | 28,200,000 | 15,300,000 |
Options repurchased | (12,000,000) | |
Options expired | (1,000,000) | (1,000,000) |
Outstanding, ending | 44,100,000 | 28,900,000 |
Weighted average exercise price beginning balance | $ 0.06 | $ 0.05 |
Weighted Average Exercise Price, granted | 0.05 | 0.08 |
Weighted Average Exercise Price, repurchased | 0.06 | |
Weighted Average Exercise Price, expired | 0.1 | 0.1 |
Weighed average exercise price ending balance | 0.06 | 0.06 |
Weighted Average Fair Value, beginning | 0.03 | 0.03 |
Weighted Average Fair Value, granted | 0.05 | 0.05 |
Weighted Average Fair Value, repurchased | 0.04 | 0.03 |
Weighted Average Fair Value, expired | 0.03 | 0.04 |
Weighted Average Fair Value, ending | $ 0.05 | $ 0.03 |
Weighted Average Remaining Life | 2 years 8 months 9 days |
7. Stock Options (Details 1)
7. Stock Options (Details 1) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected forfeiture rate | ||
Risk-free interest rate | 1.12% | 0.90% |
Dividend yield | 0.00% | 0.00% |
Expected stock price volatility | 125.00% | 125.00% |
Expected forfeiture rate | 0.00% | 0.00% |
Expected life | 3 years 6 months 29 days | 3 years 8 months 16 days |
7. Stock Options (Details 2)
7. Stock Options (Details 2) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Weighed average exercise price ending balance | $ 0.06 | $ 0.06 | $ 0.05 |
Outstanding, ending | 44,100,000 | 28,900,000 | 14,600,000 |
Number of options exercisable | 32,600,000 | ||
February 24, 2018 | |||
Weighed average exercise price ending balance | $ 0.05 | ||
Outstanding, ending | 1,000,000 | ||
Number of options exercisable | 1,000,000 | ||
February 25, 2020 | |||
Weighed average exercise price ending balance | $ 0.04 | ||
Outstanding, ending | 2,000,000 | ||
Number of options exercisable | 0 | ||
February 28, 2020 | |||
Weighed average exercise price ending balance | $ 0.04 | ||
Outstanding, ending | 5,000,000 | ||
Number of options exercisable | 5,000,000 | ||
June 30, 2018 | |||
Weighed average exercise price ending balance | $ 0.1 | ||
Outstanding, ending | 600,000 | ||
Number of options exercisable | 600,000 | ||
December 31, 2019 | |||
Weighed average exercise price ending balance | $ 0.08 | ||
Outstanding, ending | 11,000,000 | ||
Number of options exercisable | 11,000,000 | ||
October 5, 2018 | |||
Weighed average exercise price ending balance | $ 0.08 | ||
Outstanding, ending | 300,000 | ||
Number of options exercisable | 300,000 | ||
December 31, 2020 | |||
Weighed average exercise price ending balance | $ 0.05 | ||
Outstanding, ending | 12,200,000 | ||
Number of options exercisable | 12,200,000 | ||
August 31, 2021 | |||
Weighed average exercise price ending balance | $ 0.06 | ||
Outstanding, ending | 11,000,000 | ||
Number of options exercisable | 2,500,000 | ||
November 14, 2021 | |||
Weighed average exercise price ending balance | $ 0.07 | ||
Outstanding, ending | 1,000,000 | ||
Number of options exercisable | 0 |
7. Stock Options (Details 3)
7. Stock Options (Details 3) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected forfeiture rate | ||
Risk-free interest rate | 1.60% | |
Dividend yield | 0.00% | |
Expected stock price volatility | 125.00% | |
Expected forfeiture rate | 0.00% | 0.00% |
Expected life | 2 years 6 months 14 days |
7. Stock Options (Details Narra
7. Stock Options (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Common stock granted | 24,200,000 | 0 |
Aggregate intrinsic value | $ 272,000 | $ 110,000 |
Weighted average fair value of stock options granted per share | $ 0.05 | $ 0.05 |
Options [Member] | ||
Weighted average fair value of stock options granted per share | $ 0.05 | $ 0.05 |
8. Warrants (Details)
8. Warrants (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Outstanding, beginning | shares | 14,600,000 |
Outstanding, ending | shares | 28,900,000 |
Weighted average exercise price beginning balance | $ / shares | $ 0.05 |
Weighed average exercise price ending balance | $ / shares | $ 0.06 |
Warrant [Member] | |
Outstanding, beginning | shares | 8,700,000 |
Warrants expired | shares | (2,200,000) |
Outstanding, ending | shares | 6,500,000 |
Weighted average exercise price beginning balance | $ / shares | $ 0.11 |
Weighted average exercise price warrants expired | $ / shares | 0.10 |
Weighed average exercise price ending balance | $ / shares | $ 0.11 |
8. Warrants (Details 1)
8. Warrants (Details 1) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Number of Warrants | 6,500,000 |
Warrant One | |
Number of Warrants | 500,000 |
Warrant Exercise Price | $ / shares | $ 0.25 |
Expiry Date | November 8, 2018 |
Warrant Two | |
Number of Warrants | 6,000,000 |
Warrant Exercise Price | $ / shares | $ 0.10 |
Expiry Date | April 22, 2020 |
9. Stockholders' Equity (Detail
9. Stockholders' Equity (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' Equity Note [Abstract] | ||
Common Stock, Par Value Per Share | $ 0.0000053 | $ 0.0000053 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Dividends declared | $ 0 | $ 0 |
10. Related Party Transaction41
10. Related Party Transactions and Balances (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts payable and accrued liabilities | $ 26,906 | $ 45,295 |
Clarence Smith (CEO) | ||
Accounts payable and accrued liabilities | 0 | 81 |
Promissory notes payable (and interest) | $ 117,656 | $ 0 |
10. Related Party Transaction42
10. Related Party Transactions and Balances (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
Share based Compensation | $ 481,644 | $ 543,699 |
Payment to CFO | $ 72,000 | $ 72,000 |
11. Commitments and Contingen43
11. Commitments and Contingency (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Prepaid expenses | $ 61,077 | $ 54,770 |
12. Income Taxes (Details Narra
12. Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes Details Narrative | ||
Income tax losses | $ 27,800,000 | $ 27,200,000 |
Deferred tax asset tax loss carry forward | $ 9,500,000 | $ 9,200,000 |
Tax losses expire | Dec. 31, 2018 | |
Statutory income tax rate | (34.00%) |