Related Party Transactions and Balances | Note 8. Related Party Transactions and Balances During the year ended December 31, 2018, the Company: a) Settled two promissory notes on January 16, 2018 (the "Notes") with the Company's President and CEO for a total of $117,962. A total of $116,000 was loaned to the Company and the Notes bear interest at a rate of 8% per annum. As at the time of settlement, the Notes had accrued interest of $1,962. The Company 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. There was no gain or loss recorded on settlement. b) 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 vested 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 5). The options vested quarterly in equal installments beginning December 31, 2017. On November 9, 2018, the President and CEO was granted an additional 5,000,000 stock options for continued service. The options are exercisable until November 8, 2023 at a price of $0.09 per share (Note 5) and vest quarterly in equal installments beginning March 31, 2019. 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 5). The options vested 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 5). The options vested quarterly in equal installments beginning December 31, 2017. On November 9, 2018, the director was granted an additional 1,000,000 stock options for continued service. The options are exercisable until November 8, 2023 at a price of $0.09 per share (Note 5) and vest quarterly in equal installments beginning March 31, 2019. d) Entered into a consulting agreement with an effective date of November 14, 2017 with the Company's 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 5). The options vested in equal instalments on a quarterly basis beginning February 14, 2018. On November 9, 2018, the CFO was granted an additional 4,000,000 stock options for continued service. The options are exercisable until November 8, 2023 at a price of $0.09 per share (Note 5) and vest quarterly in equal installments beginning March 31, 2019. In 2018 the Company paid Mr. Guzzetta $60,000 in consulting fees, and reimbursed The Guzzetta Company LLC $12,600 in office rent. In 2017 he received $7,500 in consulting fees and The Guzzetta Company LLC was reimbursed $2,100 for a deposit of $1,050 on office space, and office rent of $1,050. e) Recognized $310,962 in share-based compensation associated with stock options granted to key management personnel. 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 5). 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 5). 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 former 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 5). 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 5). 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. 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 5), 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 5). 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. As at December 31, 2018 and December 31, 2017, the following amounts are due to related parties: December 31, 2018 December 31, 2017 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. |