Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 20, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | VISCOUNT SYSTEMS INC | |
Entity Central Index Key | 1,158,387 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 130,297,236 | |
Trading Symbol | VSYS | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - CAD | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash | CAD 51,796 | CAD 250,270 |
Short term investments | 55,000 | 55,000 |
Trade accounts receivable, net | 542,443 | 506,264 |
Prepaid expenses | 40,724 | 31,791 |
Inventory | 461,689 | 569,796 |
Current assets held for sale | 37,135 | 59,317 |
Total Current Assets | 1,188,787 | 1,472,438 |
Equipment - net | 162,256 | 162,332 |
Deposits | 8,391 | 8,391 |
Long-term assets held for sale | 17,243 | 18,151 |
Total Assets | 1,376,677 | 1,661,312 |
Current Liabilities | ||
Accounts payable | 974,431 | 900,211 |
Accrued liabilities | 592,947 | 532,003 |
Capital lease obligation - current portion | 16,687 | 16,348 |
Deferred revenue | 28,978 | 47,780 |
Due to related parties | 134,583 | 91,683 |
Loans payable | 114,536 | 114,536 |
Interest payable - Convertible Debt | 982,039 | 373,841 |
Notes liability - Convertible Debt | 3,279,871 | 3,491,802 |
Derivative liabilities | 3,635,121 | 4,383,668 |
Convertible redeemable preferred stock | 269,880 | 269,880 |
Total Current Liabilities | 10,029,073 | 10,221,752 |
Capital lease obligation - non-current | 5,346 | 9,647 |
Total Liabilities | CAD 10,034,419 | CAD 10,231,399 |
Commitments and contingencies | ||
Convertible redeemable preferred stock - US$0.001 par value; 20,000,000 shares authorized: Series A convertible redeemable preferred stock, stated value $1,000; 132 and 130 shares outstanding at March 31, 2016 and December 31, 2015, respectively; aggregate liquidation preference of $132,436 and $130,000 as of March 31, 2016 and December 31, 2015, respectively | ||
Stockholders’ Deficit | ||
Series B Preferred Stock, par value $0.001 per share. 50 shares issued and outstanding at March 31, 2016 and December 31, 2015. | CAD 1 | CAD 1 |
Common stock, par value US$0.001 per share, 300,000,000 shares authorized, 130,297,236 shares issued, 126,047,236 shares outstanding at March 31, 2016 and December 31, 2015 | 130,297 | 130,297 |
Additional paid-in capital | 7,610,096 | 7,558,416 |
Accumulated deficit | (16,398,136) | (16,258,801) |
Total Stockholders’ Deficit | (8,657,742) | (8,570,087) |
Total Liabilities and Stockholders’ Deficit | CAD 1,376,677 | CAD 1,661,312 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - CAD | Mar. 31, 2016 | Dec. 31, 2015 |
Preferred Stock, Par Value Per Share | CAD 0.001 | CAD 0.001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Common Stock, Par Value Per Share | CAD 0.001 | CAD 0.001 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares, Issued | 130,297,236 | 130,297,236 |
Common Stock, Shares, Outstanding | 126,047,236 | 126,047,236 |
Series A Convertible Redeemable Preferred Stock [Member] | ||
Preferred Stock, Stated Value | CAD 1,000 | CAD 1,000 |
Preferred Stock, Shares Outstanding | 132 | 130 |
Preferred Stock, Liquidation Preference, Value | CAD 132,436 | CAD 130,000 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Par Value Per Share | CAD 0.001 | CAD 0.001 |
Preferred Stock, Shares Issued | 50 | 50 |
Preferred Stock, Shares Outstanding | 50 | 50 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - CAD | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Sales | CAD 981,878 | CAD 1,054,480 |
Cost of sales | 451,799 | 563,663 |
Gross profit | 530,079 | 490,817 |
Operating expenses: | ||
Selling, general and administrative | 849,554 | 879,860 |
Research and development | 236,502 | 189,215 |
Total operating expenses | 1,086,056 | 1,069,075 |
Operating loss | (555,977) | (578,258) |
Other income (expense): | ||
Interest income | 3 | CAD 10 |
Interest expense | (635,460) | |
Foreign exchange gain on revaluation of notes liability | 211,930 | |
Change in fair value of derivative liabilities | 757,176 | CAD 621,373 |
Total Other income (expense) | 333,649 | 621,383 |
(Loss) income from continuing operations | (222,328) | 43,125 |
Income from discontinued operations of servicing business, net of tax | 82,993 | 96,728 |
Net (loss) income | (139,335) | 139,853 |
Preferred stock: | ||
Series A convertible - contractual dividends | (3,131) | (18,696) |
Net (loss) income attributable to common stockholders | CAD (142,466) | CAD 121,157 |
Per share data: | ||
Continuing operations | CAD 0 | CAD 0 |
Discontinued operations | 0 | 0 |
Net (loss) income attributable to common stockholders - basic and diluted | CAD 0 | CAD 0 |
Weighted average number of shares of common stock outstanding: | ||
Basic and diluted | 126,047,236 | 126,026,928 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - CAD | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows from Operating Activities | ||
Net (loss) income | CAD (139,335) | CAD 139,853 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Income from discontinued operations | (82,993) | (96,728) |
Depreciation and amortization | 9,678 | 10,685 |
Recovery of uncollectible receivables | (3,782) | CAD (66,607) |
Recovery of inventory obsolescence | (51,488) | |
Change in fair value of derivative liabilities | (757,176) | CAD (621,373) |
Stock based compensation | 54,811 | CAD 908 |
Foreign exchange gain on revaluation of notes liability | (211,930) | |
Fair value of warrants issued | 5,498 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (32,397) | CAD (80,092) |
Inventory | 159,595 | CAD (21,866) |
Prepaid expenses | (8,933) | |
Accounts payable & accrued liabilities | 135,164 | CAD 361,296 |
Notes interest payable | 608,198 | |
Deferred revenue | (18,802) | CAD (7,723) |
Due to related parties | 42,900 | 12,640 |
Net Cash used in operating activities from continuing operations | (290,993) | (369,007) |
Net Cash provided by operating activities from discontinued operations | 106,083 | 124,310 |
Net Cash used in Operating Activities | (184,910) | (244,697) |
Cash Flows from Investing Activities | ||
Purchases of property and equipment | (9,602) | (1,371) |
Net cash used in investing activities | (9,602) | (1,371) |
Cash Flows from Financing Activities | ||
Capital lease payments | CAD (3,962) | (2,490) |
Proceeds from sale of common stock and warrants | 3,050 | |
Proceeds from sale of preferred stock | 234,000 | |
Net cash (used in) provided by financing activities | CAD (3,962) | 234,560 |
Decrease in cash | (198,474) | (11,508) |
Cash, beginning of period | 250,270 | 135,308 |
Cash, end of period | 51,796 | CAD 123,800 |
Supplementary Information: | ||
Interest paid | 4,572 | |
Non-cash investing and financing activities: | ||
Fair value of preferred shares issued as dividends | 3,131 | CAD 18,696 |
Fair value of warrants issued | CAD 5,498 | |
Fair value of embedded conversion option from Series A shares | CAD 184,835 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation These unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions for Form 10-Q and from Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for a complete set of annual financial statements. These financial statements should be read in conjunction with the audited annual consolidated financial statements of the Company filed on Form 10-K for the year ended December 31, 2015. The operating results for the periods presented are not necessarily indicative of the results that will occur for the year ending December 31, 2016 or for any other period. The financial information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 is unaudited; however, such financial information includes all adjustments, consisting solely of normal recurring adjustments, which, are necessary for the fair presentation of the financial information in conformity with U.S. GAAP. |
Nature of Operations and Going
Nature of Operations and Going Concern | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Going Concern | 2. Nature of operations and going concern Viscount Systems, Inc. (the Company) was incorporated on May 24, 2001 in the State of Nevada. The Company manufactures, distributes, and provides services for electronic premises access and security equipment primarily through its wholly owned Canadian subsidiary, Viscount Communication and Control Systems Inc. The Companys legacy business consists of products and services for high rise residential and office buildings, generally described as telephone access. These products allow visitors to contact tenants or offices via a lobby device to gain entry. The Company has various brands in this marketplace, with high end products called MESH, and lower cost products called Enterphone, selling through dealers in Canada and the United States. The Companys Freedom Access Control software solution (Freedom) controls entry doors throughout a business, hospital, school, or other buildings, and prevents entry by persons unknown or staff attempting to enter at the wrong time of day. As of March 31, 2016, the Company has an accumulated deficit of $16,398,136, a working capital deficit of $8,840,286 and reported a loss of $139,335 for the three months ended March 31, 2016. These factors raise substantial doubt about the ability of the Company to continue operations as a going concern. Based on its current financial position, the Company could be required to fund its operations on a month-to-month basis. The Company recognizes it will need to raise additional capital in order to fund operations, meet its payment obligations and execute its business plan. Although management is confident that the Company can access sufficient working capital to maintain operations and ultimately generate positive cash flows from operations, the ability to sustain the current level of operations is dependent upon growing sales and achieving sustainable profits. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company and whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. If the Company is unable to obtain financing on a timely basis, the Company could be forced to sell its assets and discontinue its operations. Accordingly, the accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily represent realizable or settlement values. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 3. Significant accounting policies The significant accounting policies adopted by the Company are as follows: (a) Principles of consolidation The condensed consolidated financial statements include accounts and results of the Company and its wholly-owned subsidiary, Viscount Communication and Control Systems Inc. (VCCS). Intercompany transactions and balances have been eliminated on consolidation. (b) Use of estimates Management has made a number of estimates and judgments relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in order to prepare these consolidated financial statements in conformity with U.S. GAAP. Significant areas involving estimates include the allowance for doubtful accounts, inventory obsolescence, the provision for future warranty costs, the estimated useful lives of equipment and intangible assets, the deferred tax valuation allowance, and assumptions used to determine the fair value of equity instruments, stock-based compensation and derivative liabilities. Actual results could differ materially from those estimates. (c) Reportable segment Prior to January 1, 2016, the Company organized its business into two reportable segments: manufacturing and servicing. The manufacturing segment designs, produces and sells intercom and door access control systems that utilize telecommunications to control access to buildings and other facilities for security purposes. The servicing segment provides maintenance to these intercom and door access control systems. As a result of the Companys decision to sell its servicing business, the Company will discontinue its servicing business and operate in one segment, the manufacturing business. During the three months ended March 31, 2016, the Company has reclassified its servicing business as a discontinued operation on the accompanying condensed consolidated financial statements (see Note 13). (d) Discontinued operations The Company accounted for its decision to sell its servicing business as discontinued operations in accordance with the guidance provided in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360, Accounting for Impairment or Disposal of Long-Lived Assets, and ASC 205, Presentation of Financial Statements, which requires that only a component of an entity or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entitys operations that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations. In the period a component of an entity has been disposed of or classified as held for sale, the results of operations for the periods presented are reclassified into separate line items in the statements of operations. Assets and liabilities are also reclassified into separate line items on the related balance sheets for the periods presented. The statements of cash flows for the periods presented are also reclassified to reflect the results of discontinued operations as separate line items. (e) Foreign currency translation The functional and reporting currency of the Company and its wholly-owned subsidiary is the Canadian dollar. Accordingly, the financial statements are presented in Canadian dollars unless otherwise specified. Monetary assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect at the balance sheet date while non-monetary assets and liabilities denominated in a foreign currency are translated at historical rates. Revenue and expense items denominated in a foreign currency are translated at exchange rates prevailing when such items are recognized in the statement of operations and comprehensive loss. Exchange gains or losses arising on translation of foreign currency items are included in the statement of operations and comprehensive loss. (f) Allowance for doubtful accounts Accounts receivable are shown net of an allowance for doubtful accounts of $93,467 and $97,249 as of March 31, 2016 and December 31, 2015, respectively. The Companys management has established an allowance for doubtful accounts sufficient to cover probable and reasonably estimable losses. The nature of the business is that the majority of the payments are made net 30 days after the product is delivered. If the financial conditions of customers were to materially deteriorate, an increase in the allowance amount could be required. The allowance for doubtful accounts considers a number of factors, including collection experience, current economic trends, estimates of forecasted write-offs, aging of the accounts receivable, and other factors. (g) Net loss per share of common stock Basic net earnings (loss) per share is computed by dividing net earnings (loss) attributable to holders of the Company Common Stock, par value $0.001(Common Stock) by the weighted average number of common shares outstanding during the period. Diluted net earnings per share reflects the potential dilution that could occur if securities or other instruments to issue Common Stock were exercised or converted into Common Stock. Potentially dilutive securities are excluded from the computation of diluted net earnings per share if their inclusion would be anti-dilutive and consist of the following: March 31 2016 2015 Warrants 53,752,128 82,372,128 Options 12,991,450 11,692,075 Series A preferred stock 3,130,695 27,156,802 Series A Demand Notes and Series B Demand Notes and accrued interest 546,398,752 - Total potentially dilutive shares 616,273,025 121,221,005 (h) Sequencing Policy The Company has adopted a sequencing policy that reclassifies contracts from equity to assets or liabilities for those with the earliest inception date first. Future issuances of securities will be evaluated as to reclassification as a liability under the sequencing policy which will take the earliest date first until either all of the Common Stock underlying the Companys Series A Convertible Redeemable Preferred Stock, (Series A Shares), are settled or expired. (i) Recently issued accounting pronouncements In March 2016, the FASB issued ASU, No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 was issued as part of the FASBs simplification initiative and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (ASU 2016-10). ASU 2016-10 clarifies two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The update is effective for annual periods beginning after December 15, 2017 including interim reporting periods therein. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our consolidated financial position, results of operations or cash flows. |
Accounts Receivable Factoring
Accounts Receivable Factoring | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements [Abstract] | |
Accounts Receivable Factoring | 4. Accounts Receivable Factoring As of March 31, 2016, invoices totaling an aggregate of $244,874 had been factored. The Companys accounts receivable are purchased by the financing company on a recourse basis. Accordingly, the accounts receivable are retained on the Companys balance sheet while advances from the financing company are recorded as accrued liabilities. Discounts provided and interest charged related to factoring of the accounts receivable totaled $3,494 and have been expensed on the accompanying condensed consolidated statements of operations as interest expense. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | 5. Inventory Inventory consists of the following: March 31, 2016 December 31, 2015 Raw materials $ 654,941 $ 806,659 Work in process 59,587 88,682 Finished goods 282,237 261,018 Sub total 996,765 1,156,359 Reserve for obsolescence and shrinkage (535,076 ) (586,563 ) Total $ 461,689 $ 569,796 |
Due to Related Parties
Due to Related Parties | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Due to Related Parties | 6. Due to Related Parties Amounts due to directors for consulting fees and travel expenses totaled $134,583 and $91,683 as of March 31, 2016 and December 31, 2015, respectively. |
Series A Convertible Redeemable
Series A Convertible Redeemable Preferred Stock | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Series A Convertible Redeemable Preferred Stock | 7. Series A convertible redeemable preferred stock As the Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 was not timely filed with the SEC (a Redemption Event), the Company is required to redeem its Series A convertible redeemable preferred stock (the Series A Shares) for 150% of their value if holders of 10% of the Stated Value (as defined in the Companys Certificate of Designation, Preferences and Rights of the Series A Shares, as amended (the Certificate)) of the Series A Shares provide the Company with a written notice of redemption within sixty days after the Redemption Event becomes known to such holders (a Redemption Request). Accordingly, the Company has recorded the Series A Shares at its redemption value as of March 31, 2016 and December 31, 2015. During the three months ended March 31, 2016, the Company issued 2 Series A Shares representing Series A quarterly dividends. The embedded conversion options associated with the Series A Shares were valued using the Binomial Lattice model as they were denominated in USD currency and not in the Companys reporting currency. The embedded conversion options associated with the Series A Shares were valued at $3,131 and $18,696 as of March 31, 2016 and December 31, 2015, respectively, and recorded as a derivative liability in the accompanying condensed consolidated financial statement. As of March 31, 2016 and December 31, 2015, there were 132 and 130 Series A Shares outstanding. The convertible redeemable preferred stock balance total of $269,880 is recorded in the condensed consolidated balance sheet as a liability at March 31, 2016 and December 31, 2015, as they are subject to mandatory redemption. |
Notes Liability - Convertible
Notes Liability - Convertible Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Notes Liability - Convertible Debt | 8. Notes Liability Convertible Debt The Companys notes liability consists of Senior Secured Convertible Demand Promissory A Notes and Senior Secured Convertible Demand Promissory B Notes for which the conversion features were bifurcated and are being classified as a derivative liability, which is marked-to-market each reporting period. (Series A and B Demand Notes). Notes liability balance Convertible Debt At March 31, 2016, the Company revalued the US currency denominated notes liability of the Series A and B Demand Notes at the March 31, 2016 exchange rate and recorded a foreign currency exchange gain of $211,930 on the accompanying condensed consolidated statement of operations. As of December 31 2015 and March 31, 2016, the Series A and B Demand Notes liability balance is $3,491,802 and $3,279,871, respectively. Interest payable Convertible Debt The Companys Interest payable Convertible Debt includes Payment in Kind (PIK) interests accrued to the Series A and B Demand Notes holders in the amount of US $384,539 (CAD $499,901) and US $100,759 (CAD $130,987), respectively, as of March 31, 2016. These amounts have been recorded as interest expense in the accompanying condensed consolidated statement of operations during the three months ended March 31, 2016. At March 31, 2016, the Company revalued the US currency denominated interest payable balance at the March 31, 2016 exchange rate. Interest payable amounted to $982,039 and $373,841 at March 31, 2016 and December 31, 2015, respectively. |
Reservation of Authorized Share
Reservation of Authorized Shares | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Reservation of Authorized Shares | 9. Reservation of Authorized Shares The Series A Demand Note and Series B Demand Note also require the Company to reserve from its authorized shares of Common Stock a number of shares of Common Stock sufficient to convert all of the Series A Demand Note and Demand B Note into shares of Common Stock. In order to do so, the Company has covenanted to increase its authorized shares of Common Stock to 3,000,000,000 shares as soon as possible. If the Company is unable to satisfy this covenant, the Company will owe to the note holders an amount equal to 2% of the aggregate principal amount of the Series A Demand Note and Series B Demand Note plus all accrued but unpaid interest. The Company has not reserved such shares as of March 31, 2016. On March 30, 2016, the note holders agreed to waive any rights that they may have to declare a default, and to pursue any remedies or impose any penalties as applicable to Series A Demand Note and Series B Demand Note, effective December 3, 2015 and thereon, including the Companys three months ended March 31, 2016. In consideration of this waiver, the Company agreed to file an Information Statement on Form 14A or Form 14C, as applicable, with the U.S. Securities and Exchange Commission and take all and any such action to cure the Subsequent Reserve Deficiency and the Subsequent Authorized Deficiency for the Notes (i) on or prior to the close of business on May 31, 2016 in the case of an Information Statement Schedule 14C filing or (ii) on or prior to the close of business on July 29, 2016 in the case of an Information Statement Schedule 14A filing. The penalties would be retroactive to the initial default date contained in the Notes if the increase of authorized shares cannot be completed by June 15, 2016, if no SEC comments to the Schedule 14C are received and July 31, 2016, if SEC comments are received. There can be no assurance that the Company will be able to increase its authorized shares. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 10. Fair Value of Financial Instruments The Companys financial instruments consist of cash, short-term investments, trade accounts receivable, accounts payable, accrued liabilities, capital lease obligations, due to related parties and loans payable. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These fair value measurements apply to all financial instruments that are measured and reported on a fair value basis. Based on the observability of the inputs used in the valuation techniques, financial instruments are categorized according to the fair value hierarchy, which ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 Observable inputs such as quoted prices in active markets. Level 2 Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3 Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The assessed level that a financial asset or liability will carry is determined by the Companys Principal Financial Officer under management of the Chief Executive Officer. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the assignment of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liabilities at every reporting period and recognizes gains or losses in the condensed consolidated statements of operations that are attributable to the change in the fair value of the derivative liabilities. A summary of the Companys Level 3 derivative liabilities for the three months ended March 31, 2016 is as follows: Balance, December 31, 2015 $ 4,383,668 Fair value change of derivative liabilities (757,176 ) Fair value of embedded conversion options in preferred shares issued as dividends 3,131 Fair value of Warrants issued 5,498 Balance, March 31, 2016 $ 3,635,121 Fair value change of derivative liabilities The derivative liabilities consist of fair value of certain share purchase warrants that were issued in unit private placements that have an exercise price in a currency other than the functional currency of the Company, as well as embedded conversion options in the Series A and B Demand Notes and Series A Share dividends. The fair value of the warrants and embedded conversion options were determined using the Black-Scholes option pricing model and the Binomial Lattice model depending on their characteristics, using the following current market assumptions for the three months ended March 31, 2016 and 2015: March 31 2016 2015 Volatility 111.63% - 125.84% 81% - 104% Risk-free interest rate 0.73% - 1.21% 0.26% - 1.37% Contractual term 1.18 - 5.00 yrs 0.69 - 5.00 yrs |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Capital Stock | 11. Capital Stock Stock Options On January 18, 2016, the Company granted its Principal Financial Officer 200,000 stock options at an exercise price of US$0.01, fully vested at the issuance date and are exercisable for two years unless extended in writing. The options had an aggregate grant date fair value of $1,823, which was recorded as stock based compensation expense on the accompanying condensed consolidated statement of operations during the three months ended March 31, 2016. A summary of stock option activity for the three months ended March 31, 2016, is as follows: Weighted Weighted Average Aggregate Number of Average Remaining Life Intrinsic Options Exercise Price In Years Value Outstanding at January 1, 2016 12,791,450 US$0.08 Employee Options Granted 200,000 US$0.01 Outstanding at March 31, 2016 12,991,450 US$0.08 3.45 $ - Exercisable at March 31, 2016 12,241,450 US$0.08 2.90 $ - The Company has computed the fair value of warrants and options granted using the Black-Scholes option pricing model. Option forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate will be adjusted periodically based on the extent to which actual option forfeitures differ, or are expected to differ, from the previous estimate, when it is material. The Company estimated forfeitures related to option grants at annual rates ranging from 0% to 5% for options granted during the three months ended March 31, 2016. The expected term used for warrants and options issued to non-employees is the contractual life and the expected term used for options issued to employees is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the simplified method to develop an estimate of the expected term of plain vanilla employee option grants. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. The fair value of the options granted during the three months ended March 31, 2016 were determined using the Black-Scholes option pricing model using the following current market assumptions: Volatility 111.63% - 125.84% Risk-free interest rate 0.73% - 1.21% Contractual term 1.30 - 5.00 yrs The significant assumptions used during the year to estimate the fair value included an expected term (based on the history of exercises and forfeitures) and volatility (based on the historical volatility with a look-back period equivalent to the expected term). The weighted average grant date fair value of the options granted during the three months ended March 31, 2016 and 2015 was US$0.01 and $0.00 per option, respectively. A summary of the stock options outstanding and exercisable at March 31, 2016 is as follows: Outstanding Exercisable Remaining Number of Number of Contractual Life Exercise Price Options Options in years US$ 0.01 200,000 200,000 1.8 US$ 0.02 1,150,000 400,000 9.5 US$ 0.04 250,000 250,000 5.1 US$ 0.08 1,350,000 1,350,000 0.0 US$ 0.09 10,016,450 10,016,450 3.1 US$ 0.10 25,000 25,000 1.3 12,991,450 12,241,450 3.45 During the three months ended March 31, 2016 and 2015, the Company recorded stock based compensation expense related to the stock options granted to employees of $14,998, and $908, respectively. Warrants A summary of warrant activity during the three months ended March 31, 2016 is as follows: [1] Weighted Weighted Average Aggregate Number of Average Remaining Life Intrinsic Warrants Exercise Price In Years Value Outstanding at January 1, 2016 64,702,128 CAD$ 0.15 Expired (10,950,000 ) CAD$ 0.10 Outstanding at March 31, 2016 53,752,128 CAD$ 0.15 1.73 $ - Exercisable at March 31, 2016 53,752,128 CAD$ 0.15 1.73 $ - [1] US$ denominated warrants are reflected in their CAD$ equivalents. A summary of the warrants outstanding and exercisable at March 31, 2016 is as follows: Weighted Average Remaining Weighted Average Contractual Life Exercise Price Warrants in years CAD$ 0.065 2,500,000 0.23 CAD$ 0.090 975,000 1.04 CAD$ 0.160 1,481,327 3.76 US$ 0.050 17,272,014 1.29 US$ 0.090 4,937,650 1.30 US$ 0.095 500,000 3.49 US$ 0.100 7,690,000 2.13 US$ 0.180 3,749,996 0.13 US$ 0.200 14,646,141 2.63 CAD$ 0.147 53,752,128 1.73 The warrants outstanding have no aggregate intrinsic value as of March 31, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Litigation In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such matters that are deemed material to the condensed consolidated financial statements as of March 31, 2016 and 2015. Legal Case Viscount filed a Notice of Civil Claim in the Supreme Court of British Columbia against Stephen Pineau, its former President, CEO and director on November 19, 2014 alleging that during the term of his employment, Mr. Pineau had misappropriated certain company funds. The Company sought damages for breach of contract and fiduciary duty, equitable relief, including restitution and recovery of Company funds owed, special, aggravated and punitive damages, as well as interest and costs, including special costs. Mr. Pineau denied these allegations, and on January 2, 2015, filed a counterclaim alleging that the Company owed him compensation for wrongful termination, bad faith damages, compensation he claimed he is owed by the Company, unpaid directors fees and expenses. Viscount denied these allegations and asserted that Mr. Pineaus termination, while initially without cause, was changed for cause post-termination once the Company discovered evidence of Mr. Pineaus alleged misappropriation. As of March 31, 2016, the Company and its former CEO, Stephen Pineau came to general terms of an agreement to resolve their outstanding claim. The parties fully and finally settle all issues between them, including but not limited to Mr. Pineaus employment and its termination, directorship and its termination, options and shareholdings, as well as the facts and matters plead in the action referenced above, on a mutual and without-costs basis. Both parties executed the consent order dismissing the claim and counterclaim as if there had been a trial on the issues with no costs payable to either party and agreed to take all actions and steps necessary to have it filed with the Vancouver Registry. The Company agreed to re-issue 3,000,000 stock options to Mr. Pineau on the same terms and at the same exercise price as those that expired in December 2013, being $0.04 CAD, except with the expiry date extended by five years (expiring in December, 2018). Accordingly, the Company valued the 3,000,000 stock options at $24,627, using the Black-Scholes Model. As of March 31, 2016, the stock options related litigation liability was $24,627. The Company agreed to extend Mr. Pineaus 3,000,000 warrants exercisable at $0.08 CAD per share, which expired December 23, 2015 until December 23, 2018. Accordingly, the Company valued the 3,000,000 extended warrants at $18,476, using the Black-Scholes Model. As of March 31, 2016, the warrants related to litigation liability was $18,476. As of March 31, 2016, such options and warrants have not been issued. Subsequent to the first quarter of 2016, the Company and its former CEO, Stephen Pineau have executed the consent order and the law case has been dismissed. The Company issued Mr. Pineau 3,000,000 stock options and 3,000,000 warrants as disclosed above. Operating Leases Rent expense, including the insurance charge, included in the condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015 was $36,390 and $35,789, respectively. The Company has renewed the lease agreement from June 1, 2016 to May 31, 2017. |
Results of Discontinued Operati
Results of Discontinued Operations | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Results of Discontinued Operations | 13. Results of Discontinued Operations Discontinued operations represent the Companys servicing business, as a result of the Companys decision to sell this line of business. A summary of the Companys results of discontinued operations of its servicing business for the three months ended March 31, 2016 and 2015 and the Companys assets and liabilities from discontinued operations of its servicing business as of March 31, 2016 and December 31, 2015 is as follows: Results of discontinued servicing business operations: Three Months Ended March 31, 2016 2015 Sales $ 222,965 $ 270,416 Cost of sales 89,061 96,715 Operating expenses 50,911 76,973 Income from discontinued operations, net of tax $ 82,993 $ 96,728 Income per share from discontinued operations, basic and diluted $ 0.00 $ 0.00 Weighted average shares outstanding, basic and diluted 126,047,236 126,026,928 Assets and liabilities of discontinued operations: March 31, 2016 December 31, 2015 Accounts receivable $ 37,135 $ 59,317 Equipment, net $ 17,243 $ 18,151 |
Sales Concentration
Sales Concentration | 3 Months Ended |
Mar. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Sales Concentration | 14. Sales Concentration (a) Of the total sales for the three months ended March 31, 2016 and 2015, $368,632 and $487,979, respectively, were derived from U.S.-based customers. Total sales of $613,246 and $566,501, respectively, were derived from Canadian-based customers. Substantially all of the Companys operations, assets and employees are located in Canada. (b) Products: Enterphone/MESH sales represented 66% and 58% of total revenue during the three months ended March 31, 2016 and 2015, respectively. Freedom sales represented 34% and 42% of total revenue during the three months ended March 31, 2016 and 2015, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Management has evaluated subsequent events or transactions occurring through the date on which the financial statements were issued. Based upon that evaluation, the Company did not identify any recognized or non- recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed. |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | (a) Principles of consolidation The condensed consolidated financial statements include accounts and results of the Company and its wholly-owned subsidiary, Viscount Communication and Control Systems Inc. (VCCS). Intercompany transactions and balances have been eliminated on consolidation. |
Use of Estimates | (b) Use of estimates Management has made a number of estimates and judgments relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in order to prepare these consolidated financial statements in conformity with U.S. GAAP. Significant areas involving estimates include the allowance for doubtful accounts, inventory obsolescence, the provision for future warranty costs, the estimated useful lives of equipment and intangible assets, the deferred tax valuation allowance, and assumptions used to determine the fair value of equity instruments, stock-based compensation and derivative liabilities. Actual results could differ materially from those estimates. |
Reportable Segment | (c) Reportable segment Prior to January 1, 2016, the Company organized its business into two reportable segments: manufacturing and servicing. The manufacturing segment designs, produces and sells intercom and door access control systems that utilize telecommunications to control access to buildings and other facilities for security purposes. The servicing segment provides maintenance to these intercom and door access control systems. As a result of the Companys decision to sell its servicing business, the Company will discontinue its servicing business and operate in one segment, the manufacturing business. During the three months ended March 31, 2016, the Company has reclassified its servicing business as a discontinued operation on the accompanying condensed consolidated financial statements (see Note 13). |
Discontinued Operations | (d) Discontinued operations The Company accounted for its decision to sell its servicing business as discontinued operations in accordance with the guidance provided in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360, Accounting for Impairment or Disposal of Long-Lived Assets, and ASC 205, Presentation of Financial Statements, which requires that only a component of an entity or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entitys operations that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations. In the period a component of an entity has been disposed of or classified as held for sale, the results of operations for the periods presented are reclassified into separate line items in the statements of operations. Assets and liabilities are also reclassified into separate line items on the related balance sheets for the periods presented. The statements of cash flows for the periods presented are also reclassified to reflect the results of discontinued operations as separate line items. |
Foreign Currency Translation | (e) Foreign currency translation The functional and reporting currency of the Company and its wholly-owned subsidiary is the Canadian dollar. Accordingly, the financial statements are presented in Canadian dollars unless otherwise specified. Monetary assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect at the balance sheet date while non-monetary assets and liabilities denominated in a foreign currency are translated at historical rates. Revenue and expense items denominated in a foreign currency are translated at exchange rates prevailing when such items are recognized in the statement of operations and comprehensive loss. Exchange gains or losses arising on translation of foreign currency items are included in the statement of operations and comprehensive loss. |
Allowance for Doubtful Accounts | (f) Allowance for doubtful accounts Accounts receivable are shown net of an allowance for doubtful accounts of $93,467 and $97,249 as of March 31, 2016 and December 31, 2015, respectively. The Companys management has established an allowance for doubtful accounts sufficient to cover probable and reasonably estimable losses. The nature of the business is that the majority of the payments are made net 30 days after the product is delivered. If the financial conditions of customers were to materially deteriorate, an increase in the allowance amount could be required. The allowance for doubtful accounts considers a number of factors, including collection experience, current economic trends, estimates of forecasted write-offs, aging of the accounts receivable, and other factors. |
Net Loss Per Share of Common Stock | (g) Net loss per share of common stock Basic net earnings (loss) per share is computed by dividing net earnings (loss) attributable to holders of the Company Common Stock, par value $0.001(Common Stock) by the weighted average number of common shares outstanding during the period. Diluted net earnings per share reflects the potential dilution that could occur if securities or other instruments to issue Common Stock were exercised or converted into Common Stock. Potentially dilutive securities are excluded from the computation of diluted net earnings per share if their inclusion would be anti-dilutive and consist of the following: March 31 2016 2015 Warrants 53,752,128 82,372,128 Options 12,991,450 11,692,075 Series A preferred stock 3,130,695 27,156,802 Series A Demand Notes and Series B Demand Notes and accrued interest 546,398,752 - Total potentially dilutive shares 616,273,025 121,221,005 |
Sequencing Policy | (h) Sequencing Policy The Company has adopted a sequencing policy that reclassifies contracts from equity to assets or liabilities for those with the earliest inception date first. Future issuances of securities will be evaluated as to reclassification as a liability under the sequencing policy which will take the earliest date first until either all of the Common Stock underlying the Companys Series A Convertible Redeemable Preferred Stock, (Series A Shares), are settled or expired. |
Recently Issued Accounting Pronouncements | (i) Recently issued accounting pronouncements In March 2016, the FASB issued ASU, No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 was issued as part of the FASBs simplification initiative and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (ASU 2016-10). ASU 2016-10 clarifies two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The update is effective for annual periods beginning after December 15, 2017 including interim reporting periods therein. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our consolidated financial position, results of operations or cash flows. |
Significant Accounting Polici22
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | March 31 2016 2015 Warrants 53,752,128 82,372,128 Options 12,991,450 11,692,075 Series A preferred stock 3,130,695 27,156,802 Series A Demand Notes and Series B Demand Notes and accrued interest 546,398,752 - Total potentially dilutive shares 616,273,025 121,221,005 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventory consists of the following: March 31, 2016 December 31, 2015 Raw materials $ 654,941 $ 806,659 Work in process 59,587 88,682 Finished goods 282,237 261,018 Sub total 996,765 1,156,359 Reserve for obsolescence and shrinkage (535,076 ) (586,563 ) Total $ 461,689 $ 569,796 |
Fair Value of Financial Instr24
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Derivative Liabilities | A summary of the Companys Level 3 derivative liabilities for the three months ended March 31, 2016 is as follows: Balance, December 31, 2015 $ 4,383,668 Fair value change of derivative liabilities (757,176 ) Fair value of embedded conversion options in preferred shares issued as dividends 3,131 Fair value of Warrants issued 5,498 Balance, March 31, 2016 $ 3,635,121 |
Schedule of Fair Value of Warrants Valuation Assumptions | following current market assumptions for the three months ended March 31, 2016 and 2015: March 31 2016 2015 Volatility 111.63% - 125.84% 81% - 104% Risk-free interest rate 0.73% - 1.21% 0.26% - 1.37% Contractual term 1.18 - 5.00 yrs 0.69 - 5.00 yrs |
Capital Stock (Tables)
Capital Stock (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of stock option activity for the three months ended March 31, 2016, is as follows: Weighted Weighted Average Aggregate Number of Average Remaining Life Intrinsic Options Exercise Price In Years Value Outstanding at January 1, 2016 12,791,450 US$0.08 Employee Options Granted 200,000 US$0.01 Outstanding at March 31, 2016 12,991,450 US$0.08 3.45 $ - Exercisable at March 31, 2016 12,241,450 US$0.08 2.90 $ - |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of the options granted during the three months ended March 31, 2016 were determined using the Black-Scholes option pricing model using the following current market assumptions: Volatility 111.63% - 125.84% Risk-free interest rate 0.73% - 1.21% Contractual term 1.30 - 5.00 yrs |
Schedule of Share-based Compensation Arrangements by Share-based Payment Award | A summary of the stock options outstanding and exercisable at March 31, 2016 is as follows: Outstanding Exercisable Remaining Number of Number of Contractual Life Exercise Price Options Options in years US$ 0.01 200,000 200,000 1.8 US$ 0.02 1,150,000 400,000 9.5 US$ 0.04 250,000 250,000 5.1 US$ 0.08 1,350,000 1,350,000 0.0 US$ 0.09 10,016,450 10,016,450 3.1 US$ 0.10 25,000 25,000 1.3 12,991,450 12,241,450 3.45 |
Schedule of Stockholders' Equity Note, Warrants or Rights, Activity | A summary of warrant activity during the three months ended March 31, 2016 is as follows: [1] Weighted Weighted Average Aggregate Number of Average Remaining Life Intrinsic Warrants Exercise Price In Years Value Outstanding at January 1, 2016 64,702,128 CAD$ 0.15 Expired (10,950,000 ) CAD$ 0.10 Outstanding at March 31, 2016 53,752,128 CAD$ 0.15 1.73 $ - Exercisable at March 31, 2016 53,752,128 CAD$ 0.15 1.73 $ - |
Schedule of Share-based Compensation Arrangements By Share-based Payment Award And Warrants or Rights | A summary of the warrants outstanding and exercisable at March 31, 2016 is as follows: Weighted Average Remaining Weighted Average Contractual Life Exercise Price Warrants in years CAD$ 0.065 2,500,000 0.23 CAD$ 0.090 975,000 1.04 CAD$ 0.160 1,481,327 3.76 US$ 0.050 17,272,014 1.29 US$ 0.090 4,937,650 1.30 US$ 0.095 500,000 3.49 US$ 0.100 7,690,000 2.13 US$ 0.180 3,749,996 0.13 US$ 0.200 14,646,141 2.63 CAD$ 0.147 53,752,128 1.73 |
Results of Discontinued Opera26
Results of Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Results Of Discontinued Operations Tables | |
Schedule of Discontinued Servicing Business Operations | Results of discontinued servicing business operations: Three Months Ended March 31, 2016 2015 Sales $ 222,965 $ 270,416 Cost of sales 89,061 96,715 Operating expenses 50,911 76,973 Income from discontinued operations, net of tax $ 82,993 $ 96,728 Income per share from discontinued operations, basic and diluted $ 0.00 $ 0.00 Weighted average shares outstanding, basic and diluted 126,047,236 126,026,928 |
Schedule of Assets and Liability of Discontinued Operations | Assets and liabilities of discontinued operations: March 31, 2016 December 31, 2015 Accounts receivable $ 37,135 $ 59,317 Equipment, net $ 17,243 $ 18,151 |
Nature of Operations and Goin27
Nature of Operations and Going Concern (Details Narrative) - CAD | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Accumulated deficit | CAD 16,398,136 | CAD 16,258,801 | |
Working capital deficit | 8,840,286 | ||
Net loss | CAD 139,335 | CAD (139,853) |
Significant Accounting Polici28
Significant Accounting Policies (Details Narrative) - CAD | Mar. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | CAD 93,467 | CAD 97,249 |
Common stock, par value per share | CAD 0.001 | CAD 0.001 |
Significant Accounting Polici29
Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Total potentially dilutive shares | 616,273,025 | 121,221,005 |
Warrants [Member] | ||
Total potentially dilutive shares | 53,752,128 | 82,372,128 |
Stock Option [Member] | ||
Total potentially dilutive shares | 12,991,450 | 11,692,075 |
Series A Preferred Stock [Member] | ||
Total potentially dilutive shares | 3,130,695 | 27,156,802 |
Series A Demand Notes and Series B Demand Notes and Accrued Interest [Member] | ||
Total potentially dilutive shares | 546,398,752 |
Accounts Receivable Factoring (
Accounts Receivable Factoring (Details Narrative) | 3 Months Ended |
Mar. 31, 2016CAD | |
Notes to Financial Statements [Abstract] | |
Aggregate accounts receivable factoring | CAD 244,874 |
Accounts receivable, expenses | CAD 3,494 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory, Current (Details) - CAD | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | CAD 654,941 | CAD 806,659 |
Work in process | 59,587 | 88,682 |
Finished goods | 282,237 | 261,018 |
Sub total | 996,765 | 1,156,359 |
Reserve for obsolescence and shrinkage | (535,076) | (586,563) |
Total | CAD 461,689 | CAD 569,796 |
Due to Related Parties (Details
Due to Related Parties (Details Narrative) - CAD | Mar. 31, 2016 | Dec. 31, 2015 |
Notes to Financial Statements [Abstract] | ||
Due to related parties | CAD 134,583 | CAD 91,683 |
Series A Convertible Redeemab33
Series A Convertible Redeemable Preferred Stock (Details Narrative) - CAD | 3 Months Ended | |||
Mar. 31, 2016 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | |
Convertible redeemable preferred stock balance | CAD 269,880 | |||
Series B Preferred Stock [Member] | ||||
Embedded conversion options | 3,131 | |||
Preferred stock shares outstanding | CAD 132 | |||
Series A Preferred Stock [Member] | ||||
Preferred stock redeemable percentage | 150.00% | |||
Percentage of amount paid to preferred stock | 10.00% | |||
Number of shares issued for dividends | 2 | |||
Embedded conversion options | CAD 18,696 | |||
Preferred stock shares outstanding | CAD 130 |
Notes Liability Convertible Deb
Notes Liability Convertible Debt (Details Narrative) | 3 Months Ended | ||
Mar. 31, 2016CAD | Mar. 31, 2016USD ($) | Dec. 31, 2015CAD | |
Foreign currency exchange gain | CAD 211,930 | ||
Interests accrued | 982,039 | CAD 373,841 | |
Series A and B Demand Notes Holders [Member] | |||
Series A and B Demand Notes liability | 3,279,871 | CAD 3,491,802 | |
Series A Demand Notes Holder [Member] | |||
Interests accrued | 499,901 | ||
Series A Demand Notes Holder [Member] | USD [Member] | |||
Interests accrued | $ | $ 384,539 | ||
Series B Demand Notes Holder [Member] | |||
Interests accrued | CAD 130,987 | ||
Series B Demand Notes Holder [Member] | USD [Member] | |||
Interests accrued | $ | $ 100,759 |
Reservation of Authorized Sha35
Reservation of Authorized Shares (Details Narrative) | 3 Months Ended |
Mar. 31, 2016shares | |
Equity [Abstract] | |
Covenanted to authorized shares of common stock | 3,000,000,000 |
Aggregate principal percentage | 2.00% |
Fair Value of Financial Instr36
Fair Value of Financial Instruments - Summary of Fair Value of Derivative Liabilities (Details) | 3 Months Ended |
Mar. 31, 2015CAD | |
Fair Value Disclosures [Abstract] | |
Balance, Beginning | CAD 4,383,668 |
Fair value change of derivative liabilities | (757,176) |
Fair value of embedded conversion options in preferred shares issued as dividends | 3,131 |
Fair value of Warrants issued | 5,498 |
Balance, Ending | CAD 3,635,121 |
Fair Value of Financial Instr37
Fair Value of Financial Instruments - Schedule of Fair Value of Warrants Valuation Assumptions (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Minimum [Member] | ||
Volatility | 111.63% | 81.00% |
Risk-free interest rate | 0.73% | 0.26% |
Contractual term | 1 year 2 months 5 days | 8 months 9 days |
Maximum [Member] | ||
Volatility | 125.84% | 104.00% |
Risk-free interest rate | 1.21% | 1.37% |
Contractual term | 5 years | 5 years |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) | Jan. 18, 2016CADshares | Jan. 18, 2016$ / shares | Mar. 31, 2016CADCAD / sharesshares | Mar. 31, 2015CADCAD / shares |
Stock options granted number of shares | shares | 200,000 | |||
Weighted average grant date fair value of options granted | CAD / shares | CAD 0 | CAD 0 | ||
Compensation expense | CAD | CAD 14,998 | CAD 908 | ||
Minimum [Member] | ||||
Estimated forfeitures related to option grants at annual rates | 0.00% | |||
Maximum [Member] | ||||
Estimated forfeitures related to option grants at annual rates | 5.00% | |||
USD [Member] | ||||
Weighted average grant date fair value of options granted | CAD / shares | CAD 0.01 | |||
Financial Officer [Member] | ||||
Stock options granted number of shares | shares | 200,000 | |||
Fair value of granted option | CAD | CAD 1,823 | |||
Financial Officer [Member] | USD [Member] | ||||
Options to purchase aggregate common stock, exercise price | $ / shares | $ 0.01 |
Capital Stock - Schedule of Sha
Capital Stock - Schedule of Share-based Compensation, Stock Options, Activity (Details) - 3 months ended Mar. 31, 2016 | CADshares | $ / shares |
Number of Options, Outstanding beginning | shares | 12,791,450 | |
Number of Options, Granted | shares | 200,000 | |
Number of Options, Outstanding ending | shares | 12,991,450 | |
Number of Options, Exercisable | shares | 12,241,450 | |
Weighted Average Remaining Life In Years, outstanding | 3 years 5 months 12 days | |
Weighted Average Remaining Life In Years, Exercisable | 2 years 10 months 24 days | |
Aggregate Intrinsic Value, Outstanding | CAD | ||
Aggregate Intrinsic Value, Exercisable | CAD | ||
USD [Member] | ||
Weighted Average Exercise Price, Outstanding beginning | $ / shares | $ 0.08 | |
Weighted Average Exercise Price, Granted | $ / shares | 0.01 | |
Weighted Average Exercise Price, Outstanding ending | $ / shares | 0.08 | |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.08 |
Capital Stock - Schedule of S40
Capital Stock - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Minimum [Member] | ||
Volatility | 111.63% | 81.00% |
Risk free interest rate | 0.73% | 0.26% |
Contractual term | 1 year 2 months 5 days | 8 months 9 days |
Maximum [Member] | ||
Volatility | 125.84% | 104.00% |
Risk free interest rate | 1.21% | 1.37% |
Contractual term | 5 years | 5 years |
Stock Option [Member] | Minimum [Member] | ||
Volatility | 111.63% | |
Risk free interest rate | 0.73% | |
Contractual term | 1 year 3 months 18 days | |
Stock Option [Member] | Maximum [Member] | ||
Volatility | 125.84% | |
Risk free interest rate | 1.21% | |
Contractual term | 5 years |
Capital Stock - Schedule of S41
Capital Stock - Schedule of Share-based Compensation Arrangements by Share-based Payment Award (Details) - 3 months ended Mar. 31, 2016 | $ / sharesshares | CAD / sharesshares |
Outstanding Number of Options | 12,991,450 | 12,991,450 |
Exercisable Number of Options | 12,241,450 | 12,241,450 |
Exercisable Options, Remaining Contractual Life in years | 3 years 5 months 12 days | 3 years 5 months 12 days |
Exercise Price Range One [Member] | ||
Outstanding Number of Options | 200,000 | 200,000 |
Exercisable Number of Options | 200,000 | 200,000 |
Exercise Price Range One [Member] | USD [Member] | ||
Exercise Price | $ / shares | $ 0.01 | |
Exercisable Options, Remaining Contractual Life in years | 1 year 9 months 18 days | 1 year 9 months 18 days |
Exercise Price Range Two [Member] | ||
Outstanding Number of Options | 1,150,000 | 1,150,000 |
Exercisable Number of Options | 400,000 | 400,000 |
Exercise Price Range Two [Member] | USD [Member] | ||
Exercise Price | $ / shares | $ 0.02 | |
Exercisable Options, Remaining Contractual Life in years | 9 years 6 months | 9 years 6 months |
Exercise Price Range Three [Member] | ||
Outstanding Number of Options | 250,000 | 250,000 |
Exercisable Number of Options | 250,000 | 250,000 |
Exercise Price Range Three [Member] | USD [Member] | ||
Exercise Price | $ / shares | $ 0.04 | |
Exercisable Options, Remaining Contractual Life in years | 5 years 1 month 6 days | 5 years 1 month 6 days |
Exercise Price Range Four [Member] | ||
Outstanding Number of Options | 1,350,000 | 1,350,000 |
Exercisable Number of Options | 1,350,000 | 1,350,000 |
Exercise Price Range Four [Member] | USD [Member] | ||
Exercise Price | $ / shares | $ 0.08 | |
Exercisable Options, Remaining Contractual Life in years | 0 years | 0 years |
Exercise Price Range Five [Member] | ||
Outstanding Number of Options | 10,016,450 | 10,016,450 |
Exercisable Number of Options | 10,016,450 | 10,016,450 |
Exercise Price Range Five [Member] | USD [Member] | ||
Exercise Price | $ / shares | $ 0.09 | |
Exercisable Options, Remaining Contractual Life in years | 3 years 1 month 6 days | 3 years 1 month 6 days |
Exercise Price Range Six [Member] | ||
Outstanding Number of Options | 25,000 | 25,000 |
Exercisable Number of Options | 25,000 | 25,000 |
Exercise Price Range Six [Member] | USD [Member] | ||
Exercise Price | CAD / shares | CAD 0.10 | |
Exercisable Options, Remaining Contractual Life in years | 1 year 3 months 18 days | 1 year 3 months 18 days |
Capital Stock - Schedule of Sto
Capital Stock - Schedule of Stockholders' Equity Note, Warrants or Rights, Activity (Details) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2016CADCAD / sharesshares | |
Number of Warrants, Outstanding beginning | shares | 64,702,128 |
Number of Warrants, Expired | shares | (10,950,000) |
Number of Warrants, Outstanding ending | shares | 53,752,128 |
Number of Warrants, Exercisable | shares | 53,752,128 |
Weighted Average Exercise Price, Outstanding beginning | CAD / shares | CAD 0.15 |
Weighted Average Exercise Price, Expired | CAD / shares | 0.10 |
Weighted Average Exercise Price, Outstanding ending | CAD / shares | 0.15 |
Weighted Average Exercise Price, Exercisable | CAD / shares | CAD 0.15 |
Weighted Average Remaining Life In Years, Outstanding | 1 year 8 months 23 days |
Weighted Average Remaining Life In Years, Exercisable | 1 year 8 months 23 days |
Aggregate Intrinsic Value, Outstanding | CAD | |
Aggregate Intrinsic Value, Exercisable | CAD |
Capital Stock - Schedule of S43
Capital Stock - Schedule of Share-based Compensation Arrangements By Share-based Payment Award And Warrants or Rights (Details) - 3 months ended Mar. 31, 2016 | $ / sharesshares | CAD / sharesshares |
Outstanding Number of Warrants | 12,991,450 | 12,991,450 |
Weighted Average Remaining Contractual Life in years | 3 years 5 months 12 days | 3 years 5 months 12 days |
Warrants [Member] | ||
Outstanding Number of Warrants | 53,752,128 | 53,752,128 |
Warrants [Member] | ||
Weighted Average Exercise Price | CAD / shares | CAD 0.147 | |
Weighted Average Remaining Contractual Life in years | 1 year 8 months 23 days | 1 year 8 months 23 days |
Exercise Price Range One [Member] | ||
Outstanding Number of Warrants | 200,000 | 200,000 |
Exercise Price Range One [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.01 | |
Weighted Average Remaining Contractual Life in years | 1 year 9 months 18 days | 1 year 9 months 18 days |
Exercise Price Range Two [Member] | ||
Outstanding Number of Warrants | 1,150,000 | 1,150,000 |
Exercise Price Range Two [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.02 | |
Weighted Average Remaining Contractual Life in years | 9 years 6 months | 9 years 6 months |
Exercise Price Range Three [Member] | ||
Outstanding Number of Warrants | 250,000 | 250,000 |
Exercise Price Range Three [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.04 | |
Weighted Average Remaining Contractual Life in years | 5 years 1 month 6 days | 5 years 1 month 6 days |
Exercise Price Range Four [Member] | ||
Outstanding Number of Warrants | 1,350,000 | 1,350,000 |
Exercise Price Range Four [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.08 | |
Weighted Average Remaining Contractual Life in years | 0 years | 0 years |
Exercise Price Range Five [Member] | ||
Outstanding Number of Warrants | 10,016,450 | 10,016,450 |
Exercise Price Range Five [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.09 | |
Weighted Average Remaining Contractual Life in years | 3 years 1 month 6 days | 3 years 1 month 6 days |
Exercise Price Range Six [Member] | ||
Outstanding Number of Warrants | 25,000 | 25,000 |
Exercise Price Range Six [Member] | USD [Member] | ||
Weighted Average Exercise Price | CAD / shares | CAD 0.10 | |
Weighted Average Remaining Contractual Life in years | 1 year 3 months 18 days | 1 year 3 months 18 days |
Warrants [Member] | Exercise Price Range One [Member] | ||
Weighted Average Exercise Price | CAD / shares | CAD 0.065 | |
Outstanding Number of Warrants | 2,500,000 | 2,500,000 |
Weighted Average Remaining Contractual Life in years | 2 months 23 days | 2 months 23 days |
Warrants [Member] | Exercise Price Range Two [Member] | ||
Weighted Average Exercise Price | CAD / shares | CAD 0.090 | |
Outstanding Number of Warrants | 975,000 | 975,000 |
Weighted Average Remaining Contractual Life in years | 1 year 15 days | 1 year 15 days |
Warrants [Member] | Exercise Price Range Three [Member] | ||
Weighted Average Exercise Price | CAD / shares | CAD 0.160 | |
Outstanding Number of Warrants | 1,481,327 | 1,481,327 |
Weighted Average Remaining Contractual Life in years | 3 years 9 months 4 days | 3 years 9 months 4 days |
Warrants [Member] | Exercise Price Range Four [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.050 | |
Outstanding Number of Warrants | 17,272,014 | 17,272,014 |
Weighted Average Remaining Contractual Life in years | 1 year 3 months 15 days | 1 year 3 months 15 days |
Warrants [Member] | Exercise Price Range Five [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.090 | |
Outstanding Number of Warrants | 4,937,650 | 4,937,650 |
Weighted Average Remaining Contractual Life in years | 1 year 3 months 18 days | 1 year 3 months 18 days |
Warrants [Member] | Exercise Price Range Six [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.095 | |
Outstanding Number of Warrants | 500,000 | 500,000 |
Weighted Average Remaining Contractual Life in years | 3 years 5 months 27 days | 3 years 5 months 27 days |
Warrants [Member] | Exercise Price Range Seven [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.100 | |
Outstanding Number of Warrants | 7,690,000 | 7,690,000 |
Weighted Average Remaining Contractual Life in years | 2 years 1 month 17 days | 2 years 1 month 17 days |
Warrants [Member] | Exercise Price Range Eight [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.180 | |
Outstanding Number of Warrants | 3,749,996 | 3,749,996 |
Weighted Average Remaining Contractual Life in years | 1 month 17 days | 1 month 17 days |
Warrants [Member] | Exercise Price Range Nine [Member] | USD [Member] | ||
Weighted Average Exercise Price | $ / shares | $ 0.200 | |
Outstanding Number of Warrants | 14,646,141 | 14,646,141 |
Weighted Average Remaining Contractual Life in years | 2 years 7 months 17 days | 2 years 7 months 17 days |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - CAD | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Option extended period | 3 years 5 months 12 days | |
Stock-based compensation expense, related to the litigation liabilities | CAD 14,998 | CAD 908 |
Number of Options, Granted | 200,000 | |
Operating leases rent | CAD 36,390 | CAD 35,789 |
Lease agreement description | June 1, 2016 to May 31, 2017 | |
Mr.Pineau [Member] | ||
Number of option re-issued | 3,000,000 | |
Option exercise price | CAD 0.04 | |
Option extended period | 5 years | |
Option expiration date | expiring in December, 2018 | |
Stock-based compensation expense, related to the litigation liabilities | CAD 24,627 | |
Mr.Pineau [Member] | Warrants [Member] | ||
Stock-based compensation expense, related to the litigation liabilities | CAD 18,476 | |
Number of warrants exercisable | 3,000,000 | |
Warrants exercisable price per share | CAD 0.08 | |
Number of Options, Granted | 3,000,000 | |
Number of warrants issued | 3,000,000 |
Results of Discontinued Opera45
Results of Discontinued Operations - Schedule of Discontinued Servicing Business Operations (Details) - CAD | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Results Of Discontinued Operations - Schedule Of Discontinued Servicing Business Operations Details | ||
Sales | CAD 222,965 | CAD 270,416 |
Cost of sales | 89,061 | 96,715 |
Operating expenses | 50,911 | 76,973 |
Income from discontinued operations, net of tax | CAD 82,993 | CAD 96,728 |
Income per share from discontinued operations, basic and diluted | CAD 0 | CAD 0 |
Weighted average shares outstanding, basic and diluted | 126,047,236 | 126,026,928 |
Results of Discontinued Opera46
Results of Discontinued Operations - Schedule of Assets and Liability of Discontinued Operations (Details) - CAD | Mar. 31, 2016 | Dec. 31, 2015 |
Results Of Discontinued Operations - Schedule Of Assets And Liability Of Discontinued Operations Details | ||
Accounts receivable | CAD 37,135 | CAD 59,317 |
Equipment, net | CAD 17,243 | CAD 18,151 |
Sales Concentration (Details Na
Sales Concentration (Details Narrative) - CAD | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
U.S Based Customers [Member] | ||
Sales revenue | CAD 368,632 | CAD 487,979 |
Canadian Based Customers [Member] | ||
Sales revenue | CAD 613,246 | CAD 566,501 |
Enterphone/MESH [Member] | Sales Revenue, Net [Member] | ||
Percentage of credit risk | 66.00% | 58.00% |
Freedom [Member] | Sales Revenue, Net [Member] | ||
Percentage of credit risk | 34.00% | 42.00% |