Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2016shares | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | QWICK MEDIA INC. |
Entity Central Index Key | 1,128,790 |
Trading Symbol | qwikf |
Entity Current Reporting Status | Yes |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 71,128,456 |
Entity Well-known Seasoned Issuer | No |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2016 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current | ||
Cash | $ 56,130 | $ 60,161 |
Receivables | 34,491 | 172,030 |
Inventory (Note 4) | 146,398 | 101,009 |
Prepaid expenses | 29,802 | 39,198 |
Total Current Assets | 266,821 | 372,398 |
Equipment (Note 5) | 28,802 | 28,943 |
Intangible Assets (Note 6) | 87,698 | 100,240 |
Total Assets | 383,321 | 501,581 |
Current | ||
Accounts payable and accrued liabilities (Note 7) | 183,145 | 207,599 |
Due to related parties (Note 7) | 63,808 | 6,663,086 |
Loans payable to related parties (Note 7) | 419,050 | |
Accrued dividends payable (Note 9) | 734,228 | |
Total Liabilities | 246,953 | 8,023,963 |
Redeemable Preferred Shares (Note 9) | 2,027,945 | |
Authorized: 400,000,000 common shares, $0.001 par value; 100,000,000 preferred shares, $0.001 par value, and series as determined by directors. | ||
Common Stock - 71,128,456 common shares issued at December 31, 2016 and 2015 | 71,128 | 71,128 |
Preferred Stock - 9,891,800 and 2,027,095 preferred shares issued at December 31, 2016 and 2015, respectively | 9,892 | |
Additional Paid-in Capital | 14,975,324 | 5,029,013 |
Deficit | (14,919,976) | (14,650,468) |
Total Shareholders' Equity (Deficiency) | 136,368 | (9,550,327) |
Total Liabilities and Shareholders' Equity (Deficiency) | $ 383,321 | $ 501,581 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued | 71,128,456 | 71,128,456 |
Preferred stock, shares issued | 9,891,800 | 2,027,095 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenue | $ 654,916 | $ 459,125 | $ 89,526 |
Expenses | |||
Advertising and promotion | 19,877 | 3,511 | 8,223 |
Amortization | 24,085 | 15,074 | 14,954 |
Consulting fees (Notes 7 and 8) | 183,652 | 193,667 | 57,701 |
Filing fees | 14,694 | 25,196 | 11,239 |
Foreign exchange loss (gain) | 140,015 | (323,724) | (50,759) |
Interest and bank charges | 5,536 | 106,719 | 208,909 |
Inventory costs | 383,282 | 266,365 | 147,176 |
Management fees (Note 7) | 41,514 | 161,428 | 214,621 |
Office and administrative | 106,485 | 181,367 | 205,244 |
Professional fees | 30,899 | 97,642 | 125,705 |
Rent | 127,070 | 140,679 | 195,255 |
Salaries, wages and benefits (Note 7) | 568,310 | 777,645 | 979,960 |
Travel | 13,395 | 19,003 | 94,864 |
Total Expenses | 1,658,814 | 1,664,572 | 2,213,092 |
Operating Loss | (1,003,898) | (1,205,447) | (2,123,566) |
Other Income | |||
Interest income | 162 | 408 | 4,094 |
Reversal of accrued dividends payable (Note 9) | 734,228 | ||
Net Loss For The Year | $ (269,508) | $ (1,205,039) | $ (2,119,472) |
Basic And Diluted Loss Per Common Share (in dollars per share) | $ 0 | $ (0.02) | $ (0.03) |
Weighted Average Number Of Common Shares Outstanding (in shares) | 71,128,456 | 71,128,456 | 71,128,456 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Activities | |||
Net loss for the year | $ (269,508) | $ (1,205,039) | $ (2,119,472) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Amortization | 24,085 | 15,074 | 14,954 |
Share-based compensation | 64,403 | 147,622 | 45,840 |
Accrued interest receivable | (3,879) | ||
Inventory obsolescence | 22,453 | 26,699 | |
Changes in operating assets and liabilities: | |||
Receivables | 137,539 | 46,710 | (36,478) |
Loans receivable | 16,026 | (97,672) | |
Prepaid expenses | 9,396 | (13,356) | (23,681) |
Inventory | (67,842) | (13,014) | 115,899 |
Due to related parties | 311,233 | 322,985 | 1,810,188 |
Accrued dividends payable | (734,228) | 101,398 | 202,795 |
Accounts payable and accrued liabilities | (24,454) | 101,962 | (19,168) |
Net cash used in operating activities | (526,923) | (452,933) | (110,674) |
Investing Activities | |||
Cash paid to acquire business | (27,850) | ||
Purchase of equipment | (11,402) | (7,425) | (1,334) |
Net cash used in investing activities | (11,402) | (35,275) | (1,334) |
Financing Activity | |||
Proceeds from loans payable to related parties | 534,294 | 419,050 | |
Net cash provided by financing activity | 534,294 | 419,050 | |
Net Decrease in Cash | (4,031) | (69,158) | (112,008) |
Cash, Beginning of Year | 60,161 | 129,319 | 241,327 |
Cash, End of Year | 56,130 | $ 60,161 | $ 129,319 |
Non-cash financing activity | |||
Issuance of preferred shares to settle related party debt | $ 7,863,855 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY) - USD ($) | Common share | Preferred Stock | Additional Paid-in Capital | Deficit | Total |
Balance at Dec. 31, 2013 | $ 71,128 | $ 4,835,551 | $ (11,325,957) | $ (6,419,278) | |
Balance (in shares) at Dec. 31, 2013 | 71,128,456 | 2,027,945 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 45,840 | 45,840 | |||
Net loss for the year | (2,119,472) | (2,119,472) | |||
Balance at Dec. 31, 2014 | $ 71,128 | 4,881,391 | (13,445,429) | (8,492,910) | |
Balance (in shares) at Dec. 31, 2014 | 71,128,456 | 2,027,945 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 147,622 | 147,622 | |||
Net loss for the year | (1,205,039) | (1,205,039) | |||
Balance at Dec. 31, 2015 | $ 71,128 | 5,029,013 | (14,650,468) | (9,550,327) | |
Balance (in shares) at Dec. 31, 2015 | 71,128,456 | 2,027,945 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Reclasification Of Preferred Shares | $ 2,028 | 2,025,917 | 2,027,945 | ||
Issuance of preferred shares to settle related party debt | $ 7,864 | 7,855,991 | 7,863,855 | ||
Issuance of preferred shares to settle related party debt (Shares) | 7,863,855 | ||||
Share-based compensation | 64,403 | 64,403 | |||
Net loss for the year | (269,508) | (269,508) | |||
Balance at Dec. 31, 2016 | $ 71,128 | $ 9,892 | $ 14,975,324 | $ (14,919,976) | $ 136,368 |
Balance (in shares) at Dec. 31, 2016 | 71,128,456 | 9,891,800 |
NATURE OF OPERATIONS AND GOING
NATURE OF OPERATIONS AND GOING CONCERN | 12 Months Ended |
Dec. 31, 2016 | |
Nature Of Operations And Going Concern [Abstract] | |
NATURE OF OPERATIONS AND GOING CONCERN | 1. NATURE OF OPERATIONS AND GOING CONCERN a) Organization Qwick Media Inc. (the “Company”) is governed by the corporate laws of the Cayman Islands. It is currently a reporting issuer in the Provinces of British Columbia and Ontario, Canada. Principal executive offices are located in Vancouver, British Columbia, Canada. The registered office is in the Cayman Islands. The Company was incorporated on October 5, 2000 under the laws of the State of Nevada, and had since re-domiciled to the Cayman Islands and became a foreign private issuer with the United States Securities and Exchange Commission (the “SEC”). b) Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying consolidated financial statements, the Company has incurred accumulated losses of $14,919,976 (2015 - $14,650,468) as at December 31, 2016. The future of the Company is dependent upon its ability to obtain adequate financing and upon future profitable operations. Management has plans to seek additional capital financing through private placement and a public offering of the Company’s common shares and from the issuance of promissory notes. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), and are expressed in US dollars. These consolidated financial statements include the accounts of the Company and the accounts of the Company’s wholly owned subsidiaries, Qeyos Ad Systems Inc. (“Qeyos”), incorporated in British Columbia, Canada, and Wuxi Xun Fu Information Technology Co., Ltd. (“Wuxi”), incorporated in the People’s Republic of China. The Company’s fiscal year-end is December 31. For all periods presented, all significant inter-company accounts and transactions have been eliminated in the consolidated financial statements. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement. The consolidated financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below: a) Cash and Cash Equivalents Cash consists of cash on deposit with high quality major financial institutions. The carrying amounts approximated fair market value due to the liquidity of these deposits. For purposes of the balance sheets and statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had no cash equivalents at December 31, 2016 and 2015. b) Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. Management evaluates estimates and judgments on an ongoing basis. Actual results could differ from these estimates. The significant areas requiring management’s estimates and assumptions include the fair value of shares issued to settle debt, share-based compensation, valuation of receivables and inventory, estimated life, amortization rates and impairment of long-lived assets, valuation allowance for income tax purposes, and fair value measurement of financial instruments. c) Revenue Recognition The Company recognizes revenue when all of the following criteria are met: (1) the Company has evidence of an arrangement with a customer; (2) the Company delivers the specified products; (3) license agreement terms are fixed or determinable and free of contingencies or uncertainties that may alter the agreement such that it may not be complete and final; and (4) collection is probable. d) Software Development Costs The Company accounts for software development costs in accordance with Accounting Standards Codification (“ASC”) 985-20, Software - Cost of Software to Be Sold, Leased To December 31, 2016, software development costs, comprised of salaries, wages and benefits, and direct overhead, have been charged to operations as the research and development activities for other components of the product and processes have not been completed. e) Inventory Inventory is recorded at the lower of cost or market, with cost being determined on the weighted average method. When required, a provision is made to reduce excess and obsolete inventory to estimated net realizable value. The net realizable value of inventory is generally considered to be the selling price in the ordinary course of business, less the estimated costs of completion and estimated costs to make the sale. Inventory consists of computers, monitors, printers, parts and enclosures, and general inventory. f) Equipment and Amortization Equipment is recorded at cost and amortized using the declining-balance and straight-line method at rates determined to estimate the useful lives of the assets. The annual rates used in calculating amortization are as follows: Computer hardware 30% declining-balance Computer software 50% declining-balance Office furniture 20% declining-balance Automobile 20% declining-balance Equipment 30% declining-balance g) Intangible Assets Patents, trademarks and other rights have been capitalized in accordance with ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the excess of the carrying value over the fair value of the asset. h) Foreign Currency Translation The Company’s functional currency is the U.S. dollar. Transactions in foreign currency are translated in accordance with ASC Topic 830, Foreign Currency Matters i) monetary items at the exchange rate prevailing at the balance sheet date; ii) non-monetary items at the historical exchange rate; iii) revenue and expense at the average exchange rate in effect during the applicable accounting period. Gains and losses on foreign currency transactions are reported in the statements of operations. i) Basic and Diluted Loss Per Share The Company computes loss per share in accordance with ASC 260, Earnings Per Share j) Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures Financial Instruments These tiers are: · Level 1 – defined as observable inputs such as quoted prices in active markets; · Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and · Level 3 – defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Cash consists of cash on deposit with a high quality major financial institution. The carrying cost approximates fair value due to the liquidity of these deposits. The carrying amounts of other financial assets and liabilities, comprising receivables, loans receivable, accounts payable and accrued liabilities, and due to and loans payable to related parties, were a reasonable approximation of their fair value. k) Income Taxes The Company has adopted ASC 740, Income Taxes l) Asset Impairment Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate the carrying amount may not be recoverable, pursuant to guidance established in ASC 360-50, Impairment or Disposal of Long-lived Assets m) Comprehensive Loss ASC 220, Comprehensive Income n) Equity Instruments In situations where common shares are issued and the fair value of the goods or services received is not readily determinable, the fair value of the common shares is used to measure and record the transaction. The fair value of the common shares issued in exchange for the receipt of goods and services is based on the share price as of the earliest of: i) the date at which the counterparty’s performance is complete; ii) the date at which a commitment for performance by the counterparty to earn the common shares is reached; or iii) the date at which the common shares are issued if they are fully vested and non-forfeitable at that date. The Company has a share-based compensation plan which is described more fully in Note 8. The Company measures the compensation cost of stock options and other share-based awards to employees and directors at fair value at the grant date and recognizes compensation expense over the requisite service period for awards expected to vest. Except for transactions with employees and directors, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. Additionally, the Company has determined that the dates used to value the transaction are either: i) The date at which a commitment for performance by the counter party to earn the equity instruments is established; or ii) The date at which the counter party’s performance is complete. o) Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
ACQUISITION OF WATERFILLZ
ACQUISITION OF WATERFILLZ | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
ACQUISITION OF WATERFILLZ | 3. ACQUISITION OF WATERFILLZ On June 25, 2014, the Company advanced $47,310 (CAD$60,000) to Safestar Products Company Limited (operating under the name “Waterfillz”) pursuant to a promissory note and general security agreement. Waterfillz produces water delivery system kiosks that manage large volume water provision in high traffic areas. On October 3, 2014, the Company further advanced $42,034 (CAD$53,309) to Waterfillz. The loans bore interest at 12% per annum payable monthly, and were due on July 1, 2015. On January 12, 2015, the Company provided Notices of Intention to Enforce Security to Waterfillz, which made an assignment under the Bankruptcy and Insolvency Act (Canada) on or about February 4, 2015. On March 9, 2015, the Company appointed a receiver under the general security agreement made between the Company and Waterfillz. On April 9, 2015, the Company made an offer to purchase all of the Waterfillz assets, including certain intellectual property, tradename and design patents. On April 17, 2015, the receiver accepted the Company’s offer for a purchase price of $112,990 (CAD$142,000) by debt settlement of the principal amount plus accrued interest. On April 30, 2015, the Company completed the acquisition. The Company assessed the transaction and determined that the acquisition constituted an acquisition of Waterfillz under ASC 805, Business Combinations The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. $ Property and equipment 5,570 Intangible assets 107,420 Total purchase price 112,990 Of the $107,420 of acquired intangible assets, $78,214 was assigned to registered trademarks, $21,818 was assigned to patents and $7,388 was assigned to intellectual property that was recognized at fair value on the acquisition date. The acquired intangible assets are subject to a useful life of approximately 10 years. The amounts of revenue and losses of Waterfillz included in the Company’s consolidated statement of operations from the acquisition date to the period ending December 31, 2015 are as follows: $ Revenue − Losses 71,206 The Company has not included pro forma consolidated disclosures as the acquisition of Waterfillz did not represent a material business acquisition. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 4. INVENTORY 2016 2015 Computers $ 14,478 $ 18,154 Monitors 38,013 44,131 Printers 2,860 979 Charging stations 17,040 – Parts and enclosures 31,433 2,594 General 42,574 35,151 $ 146,398 $ 101,009 During the year, the Company recorded inventory obsolescence in the amount of $22,453 (2015 - $26,699; 2014 - $Nil). |
EQUIPMENT
EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
EQUIPMENT | 5. EQUIPMENT 2016 Cost Accumulated Amortization Net Book Value Computer hardware $ 38,713 $ 36,391 $ 2,322 Computer software 1,950 1,883 67 Office furniture 11,828 5,648 6,180 Automobile 8,669 1,736 6,933 Equipment 52,395 39,095 13,300 $ 113,555 $ 84,753 $ 28,802 2015 Cost Accumulated Amortization Net Book Value Computer hardware $ 38,713 $ 35,361 $ 3,352 Computer software 1,950 1,723 227 Office furniture 11,828 4,288 7,540 Equipment 49,662 31,838 17,824 $ 102,153 $ 73,210 $ 28,943 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 6. INTANGIBLE ASSETS 2016 Cost Accumulated Amortization Net Book Value Trademarks $ 78,214 $ 14,371 $ 63,843 Patents 21,818 3,998 17,820 Intellectual property 7,388 1,353 6,035 $ 107,420 $ 19,722 $ 87,698 2015 Cost Accumulated Amortization Net Book Value Trademarks $ 78,214 $ 5,232 $ 72,982 Patents 21,818 1,455 20,363 Intellectual property 7,388 493 6,895 $ 107,420 $ 7,180 $ 100,240 |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND AMOUNTS OWING | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND AMOUNTS OWING | 7. RELATED PARTY TRANSACTIONS AND AMOUNTS OWING The following are related party transactions and amounts owing at December 31, 2016 that are not otherwise disclosed elsewhere: a) For the year ended December 31, 2016, the Company paid management fees of $41,514 (2015 – $161,428; 2014 – $214,621) to companies controlled by officers and directors; and salaries of $135,864 (2015 – $51,682; 2014 – $54,324) to an officer of the Company and spouse. b) The Company recorded share-based compensation of $64,403 (2015 – $147,622; 2014 – $45,832) as consulting fees paid to directors and officers for the year ended December 31, 2016. c) As of December 31, 2016, $63,808 (2015 – $6,663,085) were owed to a director and companies controlled by that director. The amounts owed are unsecured, non-interest bearing and due on demand. d) As of December 31, 2016, the Company recorded in accounts payable and accrued liabilities: (i) $7,038 (2015 – $6,828) owed to a company controlled by a director; (ii) $3,910 (2015 – $7,586) owed to a company controlled by an officer; (iii) $3,693 (2015 – $3,583) owed to a director of the Company; and (iv) $Nil (2015 – $1,798) owed to an officer of the Company. The amounts owed are unsecured, non-interest bearing and due on demand. e) As of December 31, 2016, $Nil (2015 – $180,625 (CAD $250,000)) had been advanced by the President of the Company; and $Nil (2015 – $238,425 (CAD $330,000)) had been advanced by several directors of the Company. The advances were unsecured, non-interest bearing and due on demand. During the year ended December 31, 2016, advances of $975,872 (CAD $1,280,000) were converted into preferred shares of the Company. f) On December 30, 2016, the Company converted $7,863,855 of amounts owed to related parties into 7,863,855 Class A Preferred Shares at a price of $1.00 per Class A Preferred Share. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTIONS | 8. STOCK OPTIONS The Company adopted a Stock Option Plan under which the Company can grant up to 6,620,230 common shares to its officers, directors, employees and consultants. On August 5, 2015, the Company granted 300,000 stock options to a director of the Company, each of which is exercisable into one common share of the Company at a price of $0.20 per share until July 31, 2020. These options will vest as follows: 100,000 on July 31, 2015, 100,000 on July 31, 2016 and 100,000 on July 31, 2017. On September 4, 2015, the Company granted 1,000,000 stock options to an officer of the Company, each of which is exercisable into one common share of the Company at a price of $0.20 per share until September 4, 2020. These options will vest as follows: 500,000 on September 4, 2015, 250,000 on September 4, 2016 and 250,000 on September 4, 2017. On April 29, 2014, the Company granted options to purchase an aggregate of 600,000 common shares to two directors. The stock options will vest over a two year period, with one-third vesting on the date of grant, one-third on the first anniversary date and one-third on the second anniversary date. The stock options have a five year term and each allows the holder to purchase one common share of the Company at a price of $0.20 per share until April 30, 2019. The Company did not grant any stock options during the year ended December 31, 2016. The fair values of stock options granted were estimated at the date of grant using the Black-Scholes option-pricing model, and the weighted average grant date fair value of stock options granted during the year ended December 31, 2015 was $0.158 (2014 - $0.114). During the year ended December 31, 2016, the Company recorded share-based compensation of $64,403 (2015 - 147,622, 2014 - $45,840) as consulting expenses related to the vesting of stock options. The fair value assumptions used were as follows: 2016 2015 2014 Expected dividend yield N/A 0 % 0 % Risk-free interest rate N/A 1.51 % 1.74 % Expected volatility N/A 111 % 68 % Expected option life (in years) N/A 4.94 5.00 The following table summarizes the continuity of the Company’s stock options: Number of Weighted Average Exercise Price Weighted-Average Remaining Contractual Term (years) Outstanding, December 31, 2014 2,550,000 $ 0.22 1.75 Granted 1,300,000 $ 0.20 Expired (1,950,000 ) $ 0.23 Outstanding, December 31, 2015 1,900,000 $ 0.20 4.20 Granted – – Expired – – Outstanding, December 31, 2016 1,900,000 $ 0.20 3.20 Exercisable, December 31, 2016 1,550,000 $ 0.20 3.10 A summary of the status of the Company’s non-vested options and changes are presented below: Number of Weighted Average Grant Date Fair Value Non-vested at December 31, 2014 400,000 $ 0.11 Granted 1,300,000 $ 0.16 Vested (800,000 ) $ 0.15 Non-vested at December 31, 2015 900,000 $ 0.15 Vested (550,000 ) $ 0.14 Non-vested at December 31, 2016 350,000 $ 0.16 As at December 31, 2016, there was $16,424 (2015 – $80,823) in total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of 0.66 years. As at December 31, 2016, the following stock options were outstanding: Number of Options Exercise Price Expiry Date 600,000 $0.20 April 30, 2019 300,000 $0.20 July 31, 2020 1,000,000 $0.20 September 4, 2020 1,900,000 |
REDEEMABLE PREFERRED SHARES
REDEEMABLE PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2016 | |
Redeemable Preferred Shares [Abstract] | |
REDEEMABLE PREFERRED SHARES | 9. REDEEMABLE PREFERRED SHARES On November 15, 2011, the Company created one series of the 100,000,000 preferred shares it is authorized to issue, consisting of 25,000,000 shares, to be designated as Class A Preferred Shares. During the year ended December 31, 2011, the Company completed a private placement with a company owned by the Company's President and Chief Executive Officer, consisting of the issuance of 1,000,000 Class A Preferred Shares at a price of $1.00 per Class A Preferred Share for gross proceeds of $1,000,000, and converted the principal amount of a debenture and accrued interest thereon to the related party, into an aggregate of 1,027,945 Class A Preferred Shares, at a conversion price of $1.00 per Class A Preferred Share. As at December 31, 2015, the holder of the Class A Preferred Shares agreed to not exercise the retractable rights to have the Company redeem the Class A Preferred Shares, for the next two years. On December 30, 2016, the Company amended the rights and restrictions of the Class A Preferred Shares to remove the redemption rights of the holder and revise the conversion rights. The principal terms of the Class A Preferred Shares are as follows: Voting rights Dividend rights Conversion rights Redemption rights The Company had originally classified the Class A Preferred Shares as a liability because they are redeemable beyond the control of the Company. As the modification of the Class A Preferred Shares added a substantive conversion option and removed the retractability feature, the Company has accounted for the modification as an extinguishment of the previous preferred stock and the issuance of new preferred stock. The Company assessed the revised Class A Preferred Shares and concluded that they represented an equity host contract. The Company also concluded that conversion feature was clearly and closely related to the host contract and that the conversion feature was not beneficial. The Company also assessed the redemption option and concluded that it did not meet the definition of a derivative. Finally, the Company concluded that as the Class A Preferred Shares were no longer redeemable at the option of the holder that they should be classified as permanent equity. The Company has determined that there was no difference between the fair value of the outstanding preferred shares and the modified preferred shares. Upon the modification, the Company has reclassified the outstanding preferred shares from debt to permanent equity. On December 30, 2016, the Company converted $7,863,855 of amounts owed to related parties into 7,863,855 Class A Preferred Shares at a price of $1.00 per Class A Preferred Share. Effective December 30, 2016, accrued dividends payable to a director and his related holding company were waived. The waiver was accepted by the Company’s Board of Directors as of December 30, 2016 such that the accrued dividends in the amount of $734,228 are discharged from the Company’s debt obligations. As such dividends were expensed, the Company has recaptured an equivalent amount of other income income in the amount of $734,228 effective December 30, 2016. |
COMMITMENTS AND CONTRACTUAL OBL
COMMITMENTS AND CONTRACTUAL OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTRACTUAL OBLIGATIONS | 10. COMMITMENTS AND CONTRACTUAL OBLIGATIONS The Company had no significant commitments or contractual obligations with any parties respecting executive compensation, consulting arrangements, or other matters other than disclosed below. Management services provided are on a month-to-month basis. The Company has entered into leases for the provision of facility space until August 31, 2017 and May 31, 2018, and continued on a month-to-month basis. The Company’s future minimum lease payments for the leases on premises are as follows: Fiscal year ending December 31, 2017 $ 66,056 (CDN$88,691) Fiscal year ending December 31, 2018 12,784 (CDN$17,165) Total $ 78,840 (CDN$105,856) |
FINANCIAL INSTRUMENTS AND RISK
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT | 11. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT The following table presents information about the Company’s financial instruments that have been measured at fair value as of December 31, 2016, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair values: DECEMBER 31, 2016 FAIR VALUE INPUT LEVEL HELD-FOR- TRADING TOTAL CARRYING VALUE FAIR VALUE Financial assets Cash 1 $ 56,130 $ 56,130 $ 56,130 DECEMBER 31, 2015 FAIR VALUE INPUT LEVEL HELD-FOR- TRADING TOTAL CARRYING VALUE FAIR VALUE Financial assets Cash 1 $ 60,161 $ 60,161 $ 60,161 Due to the nature of cash, accounts payable and redeemable preferred shares, the fair value of these instruments approximated their carrying value. |
SEGMENTED INFORMATION
SEGMENTED INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENTED INFORMATION | 12. SEGMENTED INFORMATION The Company’s business is considered as operating in one segment, being the development of software and hardware for use in digital media kiosks. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 13. INCOME TAXES The provision for income taxes differs from the result which would be obtained by applying the statutory income tax rate of 26% (2015 - 26%; 2014 – 26%) to income before income taxes. The difference results from the following items: 2016 2015 2014 Computed expected (benefit) income taxes $ (238,000 ) $ (271,000 ) $ (535,000 ) Increase in valuation allowance 238,000 271,000 535,000 $ - $ - $ - Significant components of the Company’s deferred income tax assets are as follows: 2016 2015 Deferred income tax asset $ 3,835,000 $ 3,597,000 Valuation allowance (3,835,000 ) (3,597,000 ) $ - $ - The Company has net operating losses of approximately $14,750,000 (2015 - $13,835,000), which, if unutilized, will expire through to 2036. Future tax benefits, which may arise as a result of these losses, have not been recognized in these consolidated financial statements and have been offset by a valuation allowance. The Company and its subsidiaries file income tax returns in Canada and China. These tax returns are subject to examination by local taxation authorities provided the tax years remain open to audit under the relevant statutes of limitations. |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | a) Cash and Cash Equivalents Cash consists of cash on deposit with high quality major financial institutions. The carrying amounts approximated fair market value due to the liquidity of these deposits. For purposes of the balance sheets and statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had no cash equivalents at December 31, 2016 and 2015. |
Use of Estimates and Assumptions | b) Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. Management evaluates estimates and judgments on an ongoing basis. Actual results could differ from these estimates. The significant areas requiring management’s estimates and assumptions include the fair value of shares issued to settle debt, share-based compensation, valuation of receivables and inventory, estimated life, amortization rates and impairment of long-lived assets, valuation allowance for income tax purposes, and fair value measurement of financial instruments. |
Revenue Recognition | c) Revenue Recognition The Company recognizes revenue when all of the following criteria are met: (1) the Company has evidence of an arrangement with a customer; (2) the Company delivers the specified products; (3) license agreement terms are fixed or determinable and free of contingencies or uncertainties that may alter the agreement such that it may not be complete and final; and (4) collection is probable. |
Software Development Costs | d) Software Development Costs The Company accounts for software development costs in accordance with Accounting Standards Codification (“ASC”) 985-20, Software - Cost of Software to Be Sold, Leased To December 31, 2016, software development costs, comprised of salaries, wages and benefits, and direct overhead, have been charged to operations as the research and development activities for other components of the product and processes have not been completed. |
Inventory | e) Inventory Inventory is recorded at the lower of cost or market, with cost being determined on the weighted average method. When required, a provision is made to reduce excess and obsolete inventory to estimated net realizable value. The net realizable value of inventory is generally considered to be the selling price in the ordinary course of business, less the estimated costs of completion and estimated costs to make the sale. Inventory consists of computers, monitors, printers, parts and enclosures, and general inventory. |
Equipment and Amortization | f) Equipment and Amortization Equipment is recorded at cost and amortized using the declining-balance and straight-line method at rates determined to estimate the useful lives of the assets. The annual rates used in calculating amortization are as follows: Computer hardware 30% declining-balance Computer software 50% declining-balance Office furniture 20% declining-balance Automobile 20% declining-balance Equipment 30% declining-balance |
Intangible Assets | g) Intangible Assets Patents, trademarks and other rights have been capitalized in accordance with ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the excess of the carrying value over the fair value of the asset. |
Foreign Currency Translation | h) Foreign Currency Translation The Company’s functional currency is the U.S. dollar. Transactions in foreign currency are translated in accordance with ASC Topic 830, Foreign Currency Matters i) monetary items at the exchange rate prevailing at the balance sheet date; ii) non-monetary items at the historical exchange rate; iii) revenue and expense at the average exchange rate in effect during the applicable accounting period. Gains and losses on foreign currency transactions are reported in the statements of operations. |
Basic and Diluted Loss Per Share | i) Basic and Diluted Loss Per Share The Company computes loss per share in accordance with ASC 260, Earnings Per Share |
Fair Value of Financial Instruments | j) Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures Financial Instruments These tiers are: · Level 1 – defined as observable inputs such as quoted prices in active markets; · Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and · Level 3 – defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Cash consists of cash on deposit with a high quality major financial institution. The carrying cost approximates fair value due to the liquidity of these deposits. The carrying amounts of other financial assets and liabilities, comprising receivables, loans receivable, accounts payable and accrued liabilities, and due to and loans payable to related parties, were a reasonable approximation of their fair value. |
Income Taxes | k) Income Taxes The Company has adopted ASC 740, Income Taxes |
Asset Impairment | l) Asset Impairment Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate the carrying amount may not be recoverable, pursuant to guidance established in ASC 360-50, Impairment or Disposal of Long-lived Assets |
Comprehensive Loss | m) Comprehensive Loss ASC 220, Comprehensive Income |
Equity Instruments | n) Equity Instruments In situations where common shares are issued and the fair value of the goods or services received is not readily determinable, the fair value of the common shares is used to measure and record the transaction. The fair value of the common shares issued in exchange for the receipt of goods and services is based on the share price as of the earliest of: i) the date at which the counterparty’s performance is complete; ii) the date at which a commitment for performance by the counterparty to earn the common shares is reached; or iii) the date at which the common shares are issued if they are fully vested and non-forfeitable at that date. The Company has a share-based compensation plan which is described more fully in Note 8. The Company measures the compensation cost of stock options and other share-based awards to employees and directors at fair value at the grant date and recognizes compensation expense over the requisite service period for awards expected to vest. Except for transactions with employees and directors, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. Additionally, the Company has determined that the dates used to value the transaction are either: i) The date at which a commitment for performance by the counter party to earn the equity instruments is established; or ii) The date at which the counter party’s performance is complete. |
Recent Accounting Pronouncements | o) Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of annual rates used in calculating amortization | Computer hardware 30% declining-balance Computer software 50% declining-balance Office furniture 20% declining-balance Automobile 20% declining-balance Equipment 30% declining-balance |
ACQUISITION OF WATERFILLZ (Tabl
ACQUISITION OF WATERFILLZ (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of estimated fair values of the assets acquired and liabilities assumed | $ Property and equipment 5,570 Intangible assets 107,420 Total purchase price 112,990 |
Schedule of acquired entity's statement of operations | $ Revenue − Losses 71,206 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | 2016 2015 Computers $ 14,478 $ 18,154 Monitors 38,013 44,131 Printers 2,860 979 Charging stations 17,040 – Parts and enclosures 31,433 2,594 General 42,574 35,151 $ 146,398 $ 101,009 |
EQUIPMENT (Tables)
EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | 2016 Cost Accumulated Amortization Net Book Value Computer hardware $ 38,713 $ 36,391 $ 2,322 Computer software 1,950 1,883 67 Office furniture 11,828 5,648 6,180 Automobile 8,669 1,736 6,933 Equipment 52,395 39,095 13,300 $ 113,555 $ 84,753 $ 28,802 2015 Cost Accumulated Amortization Net Book Value Computer hardware $ 38,713 $ 35,361 $ 3,352 Computer software 1,950 1,723 227 Office furniture 11,828 4,288 7,540 Equipment 49,662 31,838 17,824 $ 102,153 $ 73,210 $ 28,943 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangibles assets | 2016 Cost Accumulated Amortization Net Book Value Trademarks $ 78,214 $ 14,371 $ 63,843 Patents 21,818 3,998 17,820 Intellectual property 7,388 1,353 6,035 $ 107,420 $ 19,722 $ 87,698 2015 Cost Accumulated Amortization Net Book Value Trademarks $ 78,214 $ 5,232 $ 72,982 Patents 21,818 1,455 20,363 Intellectual property 7,388 493 6,895 $ 107,420 $ 7,180 $ 100,240 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value assumptions | 2016 2015 2014 Expected dividend yield N/A 0 % 0 % Risk-free interest rate N/A 1.51 % 1.74 % Expected volatility N/A 111 % 68 % Expected option life (in years) N/A 4.94 5.00 |
Schedule of continuity of the company's stock options | Number of Weighted Average Exercise Price Weighted-Average Remaining Contractual Term (years) Outstanding, December 31, 2014 2,550,000 $ 0.22 1.75 Granted 1,300,000 $ 0.20 Expired (1,950,000 ) $ 0.23 Outstanding, December 31, 2015 1,900,000 $ 0.20 4.20 Granted – – Expired – – Outstanding, December 31, 2016 1,900,000 $ 0.20 3.20 Exercisable, December 31, 2016 1,550,000 $ 0.20 3.10 |
Schedule of non-vested options and changes | Number of Weighted Average Grant Date Fair Value Non-vested at December 31, 2014 400,000 $ 0.11 Granted 1,300,000 $ 0.16 Vested (800,000 ) $ 0.15 Non-vested at December 31, 2015 900,000 $ 0.15 Vested (550,000 ) $ 0.14 Non-vested at December 31, 2016 350,000 $ 0.16 |
Schedule of stock options | Number of Options Exercise Price Expiry Date 600,000 $0.20 April 30, 2019 300,000 $0.20 July 31, 2020 1,000,000 $0.20 September 4, 2020 1,900,000 |
COMMITMENTS AND CONTRACTUAL O27
COMMITMENTS AND CONTRACTUAL OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments for the premise leases | Fiscal year ending December 31, 2017 $ 66,056 (CDN$88,691) Fiscal year ending December 31, 2018 12,784 (CDN$17,165) Total $ 78,840 (CDN$105,856) |
FINANCIAL INSTRUMENTS AND RIS28
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Schedule of financial instruments measured at fair value | DECEMBER 31, 2016 FAIR VALUE INPUT LEVEL HELD-FOR- TRADING TOTAL CARRYING VALUE FAIR VALUE Financial assets Cash 1 $ 56,130 $ 56,130 $ 56,130 DECEMBER 31, 2015 FAIR VALUE INPUT LEVEL HELD-FOR- TRADING TOTAL CARRYING VALUE FAIR VALUE Financial assets Cash 1 $ 60,161 $ 60,161 $ 60,161 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | 2016 2015 2014 Computed expected (benefit) income taxes $ (238,000 ) $ (271,000 ) $ (535,000 ) Increase in valuation allowance 238,000 271,000 535,000 $ - $ - $ - |
Schedule of deferred income tax assets | 2016 2015 Deferred income tax asset $ 3,835,000 $ 3,597,000 Valuation allowance (3,835,000 ) (3,597,000 ) $ - $ - |
NATURE OF OPERATIONS AND GOIN30
NATURE OF OPERATIONS AND GOING CONCERN (Detail Textuals) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Nature Of Operations And Going Concern [Abstract] | ||
Accumulated losses | $ (14,919,976) | $ (14,650,468) |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |
Amortization methods | Declining-balance and straight-line method |
Computer hardware | |
Property, Plant and Equipment [Line Items] | |
Amortization rate | (30.00%) |
Computer software | |
Property, Plant and Equipment [Line Items] | |
Amortization rate | (50.00%) |
Office furniture | |
Property, Plant and Equipment [Line Items] | |
Amortization rate | (20.00%) |
Automobile | |
Property, Plant and Equipment [Line Items] | |
Amortization rate | (20.00%) |
Equipment | |
Property, Plant and Equipment [Line Items] | |
Amortization rate | (30.00%) |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Amortization period of patents, trademarks and other rights | 10 years |
ACQUISITION OF WATERFILLZ (Deta
ACQUISITION OF WATERFILLZ (Details) - Apr. 30, 2015 - WATERFILLZ | USD ($) | CAD |
Business Acquisition [Line Items] | ||
Property and equipment | $ 5,570 | |
Intangible assets | 107,420 | |
Total purchase price | $ 112,990 | CAD 142,000 |
ACQUISITION OF WATERFILLZ (De34
ACQUISITION OF WATERFILLZ (Details 1) - WATERFILLZ | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Business Acquisition [Line Items] | |
Revenue | |
Losses | $ 71,206 |
ACQUISITION OF WATERFILLZ (De35
ACQUISITION OF WATERFILLZ (Detail Textuals) - WATERFILLZ | Oct. 03, 2014USD ($) | Oct. 03, 2014CAD | Apr. 30, 2015USD ($) | Jun. 25, 2014USD ($) | Jun. 25, 2014CAD | Apr. 30, 2015CAD |
Business Acquisition [Line Items] | ||||||
Payments for Advance to Affiliate | $ 42,034 | CAD 53,309 | $ 47,310 | CAD 60,000 | ||
Rate of interest on loans advances | 12.00% | 12.00% | 12.00% | 12.00% | ||
Purchase price | $ 112,990 | CAD 142,000 | ||||
Acquired intangible assets | $ 107,420 | |||||
Acquired intangible assets useful life | 10 years | |||||
Registered trademarks | ||||||
Business Acquisition [Line Items] | ||||||
Acquired intangible assets | $ 78,214 | |||||
Patents | ||||||
Business Acquisition [Line Items] | ||||||
Acquired intangible assets | 21,818 | |||||
Intellectual property | ||||||
Business Acquisition [Line Items] | ||||||
Acquired intangible assets | $ 7,388 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory [Line Items] | ||
Inventory | $ 146,398 | $ 101,009 |
Computers | ||
Inventory [Line Items] | ||
Inventory | 14,478 | 18,154 |
Monitors | ||
Inventory [Line Items] | ||
Inventory | 38,013 | 44,131 |
Printers | ||
Inventory [Line Items] | ||
Inventory | 2,860 | 979 |
Charging stations | ||
Inventory [Line Items] | ||
Inventory | 17,040 | |
Parts and enclosures | ||
Inventory [Line Items] | ||
Inventory | 31,433 | 2,594 |
General | ||
Inventory [Line Items] | ||
Inventory | $ 42,574 | $ 35,151 |
INVENTORY (Detail Textuals)
INVENTORY (Detail Textuals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Inventory Disclosure [Abstract] | |||
Inventory obsolescence | $ 22,453 | $ 26,699 |
EQUIPMENT (Details)
EQUIPMENT (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 113,555 | $ 102,153 |
Accumulated Amortization | 84,753 | 73,210 |
Net Book Value | 28,802 | 28,943 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 38,713 | 38,713 |
Accumulated Amortization | 36,391 | 35,361 |
Net Book Value | 2,322 | 3,352 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,950 | 1,950 |
Accumulated Amortization | 1,883 | 1,723 |
Net Book Value | 67 | 227 |
Office furniture | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 11,828 | 11,828 |
Accumulated Amortization | 5,648 | 4,288 |
Net Book Value | 6,180 | 7,540 |
Automobile | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 8,669 | |
Accumulated Amortization | 1,736 | |
Net Book Value | 6,933 | |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 52,395 | 49,662 |
Accumulated Amortization | 39,095 | 31,838 |
Net Book Value | $ 13,300 | $ 17,824 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 107,420 | $ 107,420 |
Accumulated Amortization | 19,722 | 7,180 |
Net Book Value | 87,698 | 100,240 |
Trademarks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | 78,214 | 78,214 |
Accumulated Amortization | 14,371 | 5,232 |
Net Book Value | 63,843 | 72,982 |
Patents | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | 21,818 | 21,818 |
Accumulated Amortization | 3,998 | 1,455 |
Net Book Value | 17,820 | 20,363 |
Intellectual property | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | 7,388 | 7,388 |
Accumulated Amortization | 1,353 | 493 |
Net Book Value | $ 6,035 | $ 6,895 |
RELATED PARTY TRANSACTIONS AN40
RELATED PARTY TRANSACTIONS AND AMOUNTS OWING (Detail Textuals) | 1 Months Ended | 12 Months Ended | ||||
Dec. 30, 2016USD ($)$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016CAD | Dec. 31, 2015CAD | |
Related Party Transaction [Line Items] | ||||||
Management fees to companies controlled by officers and directors | $ 41,514 | $ 161,428 | $ 214,621 | |||
Salaries to officer of Company and spouse | 135,864 | 51,682 | 54,324 | |||
Share-based compensation to directors and officers | 64,403 | 147,622 | $ 45,840 | |||
Amounts owing to related parties | 63,808 | 6,663,086 | ||||
Related party advances converted into preferred shares | 975,872 | CAD 1,280,000 | ||||
Due to Related Parties | $ 7,863,855 | |||||
Class A Preferred Shares | ||||||
Related Party Transaction [Line Items] | ||||||
Number of shares issued | shares | 7,863,855 | |||||
Per share price of shares issued | $ / shares | $ 1 | |||||
Company controlled by a director | Accounts payable and accrued liabilities | ||||||
Related Party Transaction [Line Items] | ||||||
Amounts owing to related parties | 7,038 | 6,828 | ||||
Company controlled by an officer | Accounts payable and accrued liabilities | ||||||
Related Party Transaction [Line Items] | ||||||
Amounts owing to related parties | 3,910 | 7,586 | ||||
Director | Accounts payable and accrued liabilities | ||||||
Related Party Transaction [Line Items] | ||||||
Amounts owing to related parties | 3,693 | 3,583 | ||||
Officer | Accounts payable and accrued liabilities | ||||||
Related Party Transaction [Line Items] | ||||||
Amounts owing to related parties | 1,798 | |||||
President | ||||||
Related Party Transaction [Line Items] | ||||||
Amounts owing to related parties | 180,625 | CAD 250,000 | ||||
Several directors | ||||||
Related Party Transaction [Line Items] | ||||||
Amounts owing to related parties | $ 238,425 | CAD 330,000 |
STOCK OPTIONS (Details)
STOCK OPTIONS (Details) - Stock Option | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 1.51% | 1.74% |
Expected volatility | 111.00% | 68.00% |
Expected option life (in years) | 4 years 11 months 9 days | 5 years |
STOCK OPTIONS (Details 1)
STOCK OPTIONS (Details 1) - Stock Option - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Options | |||
Outstanding, Beginning Balance | 1,900,000 | 2,550,000 | |
Granted | 1,300,000 | ||
Expired | (1,950,000) | ||
Outstanding, Ending Balance | 1,900,000 | 1,900,000 | 2,550,000 |
Exercisable, Ending Balance | 1,550,000 | ||
Weighted Average Exercise Price | |||
Outstanding, Beginning Balance | $ 0.20 | $ 0.22 | |
Granted | 0.20 | ||
Expired | 0.23 | ||
Outstanding, Ending Balance | 0.20 | $ 0.20 | $ 0.22 |
Exercisable, Ending Balance | $ 0.20 | ||
Weighted-Average Remaining Contractual Term (years) | |||
Outstanding, Ending Balance | 3 years 2 months 12 days | 4 years 2 months 12 days | 1 year 9 months |
Exercisable, Ending Balance | 3 years 1 month 6 days |
STOCK OPTIONS (Details 2)
STOCK OPTIONS (Details 2) - Stock Option - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Options | ||
Non-vested, Beginning Balance | 900,000 | 400,000 |
Granted | 1,300,000 | |
Vested | (550,000) | (800,000) |
Non-vested, Ending Balance | 350,000 | 900,000 |
Weighted Average Grant Date Fair Value | ||
Non-vested, Beginning Balance | $ 0.15 | $ 0.11 |
Granted | 0.16 | |
Vested | 0.14 | 0.15 |
Non-vested, Ending Balance | $ 0.16 | $ 0.15 |
STOCK OPTIONS (Details 3)
STOCK OPTIONS (Details 3) - Stock Option - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Options | 1,900,000 | 1,900,000 | 2,550,000 |
Exercise Price | $ 0.20 | $ 0.20 | $ 0.22 |
April 30, 2019 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Options | 600,000 | ||
Exercise Price | $ 0.20 | ||
Expiry Date | Apr. 30, 2019 | ||
July 31, 2020 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Options | 300,000 | ||
Exercise Price | $ 0.20 | ||
Expiry Date | Jul. 31, 2020 | ||
September 4, 2020 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Options | 1,000,000 | ||
Exercise Price | $ 0.20 | ||
Expiry Date | Sep. 4, 2020 |
STOCK OPTIONS (Detail Textuals)
STOCK OPTIONS (Detail Textuals) | Sep. 04, 2015$ / sharesshares | Aug. 05, 2015$ / sharesshares | Apr. 29, 2014Director$ / sharesshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation | $ | $ 64,403 | $ 147,622 | $ 45,840 | |||
Total unrecognized compensation cost related to non-vested stock options | $ | $ 16,424 | $ 80,823 | ||||
Weighted average period of compensation cost expected to be recognized | 7 months 28 days | |||||
Officer | September 4, 2015 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options granted | 1,000,000 | |||||
Exercise price of stock options granted | $ / shares | $ 0.20 | |||||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized to grant | 6,620,230 | |||||
Method used for calculation of fair value | Black-Scholes option-pricing model | |||||
Weighted average grant date fair value of stock options granted | $ / shares | $ 0.158 | $ 0.114 | ||||
Share-based Compensation | $ | $ 64,403 | $ 147,622 | $ 45,840 | |||
Stock options | July 31, 2015 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | 100,000 | |||||
Stock options | July 31, 2016 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | 100,000 | |||||
Stock options | July 31, 2017 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | 100,000 | |||||
Stock options | Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options granted | 300,000 | 600,000 | ||||
Number of directors | Director | 2 | |||||
Vesting period | 2 years | |||||
Term of options | 5 years | |||||
Exercise price of stock options granted | $ / shares | $ 0.20 | $ 0.20 | ||||
Stock options | Officer | September 4, 2015 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | 500,000 | |||||
Stock options | Officer | September 4, 2016 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | 250,000 | |||||
Stock options | Officer | September 4, 2017 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | 250,000 |
REDEEMABLE PREFERRED SHARES (De
REDEEMABLE PREFERRED SHARES (Detail Textuals) - $ / shares | 1 Months Ended | ||
Nov. 15, 2011 | Dec. 31, 2016 | Dec. 31, 2015 | |
Redeemable Preferred Shares [Line Items] | |||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | |
Preferred stock, shares issued | 9,891,800 | 2,027,095 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Class A Preferred Shares | |||
Redeemable Preferred Shares [Line Items] | |||
Preferred stock, shares authorized | 100,000,000 | ||
Preferred stock, shares issued | 25,000,000 | ||
Preferred stock, voting rights | The Class A Preferred Shares have voting rights (one vote per share) equal to those of the Company's common shares. | ||
Cumulative cash dividend, percentage | 10.00% | ||
Preferred stock, redemption rights | At any time, the Company may redeem the Class A Preferred Shares for an amount equal to $1.00 per share plus the amount of any accrued and unpaid dividends thereon. | ||
Preferred stock, redemption price (in dollars per share) | $ 1 |
REDEEMABLE PREFERRED SHARES (47
REDEEMABLE PREFERRED SHARES (Detail Textuals 1) - USD ($) | 1 Months Ended | |
Dec. 30, 2016 | Dec. 31, 2011 | |
Redeemable Preferred Shares [Line Items] | ||
Amount owed to related party | $ 7,863,855 | |
Dividend discharged from companys debt obligations | $ 734,228 | |
Class A Preferred Shares | ||
Redeemable Preferred Shares [Line Items] | ||
Number of shares issued | 7,863,855 | |
Per share price of shares issued | $ 1 | |
Private placement | President and Chief Executive Officer | Class A Preferred Shares | ||
Redeemable Preferred Shares [Line Items] | ||
Number of shares issued | 1,000,000 | |
Per share price of shares issued | $ 1 | |
Proceeds from issuance of private placement | $ 1,000,000 | |
Principal amount of a debenture and accrued interest converted into shares | 1,027,945 | |
Preferred stock, conversion price (in dollars per share) | $ 1 |
COMMITMENTS AND CONTRACTUAL O48
COMMITMENTS AND CONTRACTUAL OBLIGATIONS (Details) - Dec. 31, 2016 | USD ($) | CAD |
Commitments and Contingencies Disclosure [Abstract] | ||
Fiscal year ending December 31, 2017 | $ 66,056 | CAD 88,691 |
Fiscal year ending December 31, 2018 | 12,784 | 17,165 |
Total | $ 78,840 | CAD 105,856 |
FINANCIAL INSTRUMENTS AND RIS49
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Financial assets | ||||
Cash - TOTAL CARRYING VALUE | $ 56,130 | $ 60,161 | $ 129,319 | $ 241,327 |
FAIR VALUE INPUT LEVEL 1 | ||||
Financial assets | ||||
Cash - HELD-FOR-TRADING | 56,130 | 60,161 | ||
Cash - TOTAL CARRYING VALUE | 56,130 | 60,161 | ||
Cash - FAIR VALUE | $ 56,130 | $ 60,161 |
SEGMENTED INFORMATION (Detail T
SEGMENTED INFORMATION (Detail Textuals) | 12 Months Ended |
Dec. 31, 2016Segment | |
Segment Reporting [Abstract] | |
Number of Operating Segment | 1 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Computed expected (benefit) income taxes | $ (238,000) | $ (271,000) | $ (535,000) |
Increase in valuation allowance | 238,000 | 271,000 | 535,000 |
Income Tax Expense (Benefit) |
INCOME TAXES (Details1)
INCOME TAXES (Details1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Deferred income tax asset | $ 3,835,000 | $ 3,597,000 |
Valuation allowance | (3,835,000) | (3,597,000) |
Deferred income tax assets, Total |
INCOME TAXES (Detail Textuals)
INCOME TAXES (Detail Textuals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Statutory income tax rate | 26.00% | 26.00% | 26.00% |
Operating loss carryforwards | $ 14,750,000 | $ 13,835,000 |