Trident Brands (TDNT) 10-Q 14 Jul 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	May 31, 2016	Jul. 14, 2016
Document And Entity Information
Entity Registrant Name	Trident Brands Inc
Entity Central Index Key	1,421,907
Trading Symbol	tdnt
Current Fiscal Year End Date	--11-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		31,000,000
Document Type	10-Q
Document Period End Date	May 31, 2016
Amendment Flag	false
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	May 31, 2016	Nov. 30, 2015
Current Assets
Cash	$ 18,600	$ 187,886
Accounts Receivable	148,183
Inventory	330,182	145,480
Prepaid	23,882	55,887
Total Current Assets	520,847	389,253
Intangible Assets - Licenses, net	2,575,000
TOTAL ASSETS	3,095,847	389,253
Current Liabilities
Accounts Payable	624,547	184,680
Accrued Liability	433,042	181,024
Loan Payable - Related Party, net of discount $26,438 and $0, respectively	353,562	180,000
Loan Payable - Third Party, net of discount $29,017 and $0, respectively	520,983	300,000
Convertible Debt, net of discount $0 and $147,230, respectively	2,300,000	2,152,770
Total Current Liabilities	4,232,134	2,998,474
Total Liabilities	4,232,134	2,998,474
Stockholders' Equity (Deficit)
Common stock, ($0.001 par value, 300,000,000 shares authorized; 31,000,000 shares issued and outstanding as of May 31 2016 and 28,000,000 as of November 30, 2015	31,000	28,000
Additional paid-in capital	4,074,624	1,177,540
Non-Controlling Interest in Subsidiary	(17,568)	(14,643)
Accumulated Deficit	(5,224,343)	(3,800,118)
Total Stockholders' Equity (Deficit)	(1,136,287)	(2,609,221)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)	$ 3,095,847	$ 389,253

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	May 31, 2016	Nov. 30, 2015
Consolidated Balance Sheets Parenthetical
Loan Payable - Related Party, net of discount	$ 26,438	$ 0
Loan Payable - Third Party, net of discount	29,017	0
Convertible Debt, net of discount	$ 0	$ 147,230
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	31,000,000	28,000,000
Common stock, shares outstanding	31,000,000	28,000,000

Consolidated Statement of Opera

Consolidated Statement of Operations (unaudited) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2016	May 31, 2015	May 31, 2016	May 31, 2015
Consolidated Statement Of Operations
Revenues	$ 204,831	$ 670	$ 224,026	$ 1,640
Cost of Sales	112,157	456	125,977	539
Gross Profit	92,674	214	98,049	1,101
General & Administrative Expenses	(556,644)	(566,977)	(1,099,988)	(820,535)
Other Income (Expenses)
Royalty Fees	(80,187)	(58,750)	(153,127)	(107,921)
Interest Expense	(103,906)	(167,344)	(272,084)	(256,340)
Total Other Income (Expenses)	(184,093)	(226,094)	(425,211)	(364,261)
Net Loss	(648,063)	(792,857)	(1,427,150)	(1,183,695)
Net loss attributable to Trident	(647,862)	(792,857)	(1,424,225)	(1,183,695)
Net loss attributable to Non-Controlling Interests	$ (201)		$ (2,925)
Basic earning (loss) per share	$ (0.02)	$ (0.03)	$ (0.05)	$ (0.04)
Weighted average number of common shares outstanding	31,000,000	28,000,000	30,393,443	28,000,000

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (unaudited) - USD ($)	6 Months Ended
	May 31, 2016	May 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (1,427,150)	$ (1,183,695)
Adjustments to reconcile net loss to net cash used in operating activities:
Debt issuance cost		34,250
Amortization of debt discount	170,551	176,019
Amortization of license	125,000
Compensation-Options	121,308
Changes in operating assets and liabilities:
Accounts Receivable	(148,183)
Prepaid expenses	32,005	(80,509)
Inventory	(184,702)	(201,834)
Accounts payable and accrued liabilities	691,885	(1,348)
Cash used in operating activities	(619,286)	(1,257,117)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on loan payable - related party		(140,070)
Proceeds on loan payable - related party	200,000	75,000
Principal payments on loan payable - third party		(123,000)
Proceeds on loan payable - third party	250,000	100,000
Proceeds on convertible debt		2,300,000
Cash provided by financing activities	450,000	2,211,930
Net change in cash	(169,286)	954,813
Cash at beginning of period	187,886	352
Cash at end of period	18,600	955,165
NON-CASH TRANSACTIONS
Beneficial conversion features		647,887
Common stock issued for asset acquisition	2,700,000
Relative fair value of warrant recorded as debt discount	78,776
Cash paid for:
Income taxes
Interest		$ 34,250

ORGANIZATION AND DESCRIPTION OF

ORGANIZATION AND DESCRIPTION OF BUSINESS	6 Months Ended
	May 31, 2016
Notes to Financial Statements
1. ORGANIZATION AND DESCRIPTION OF BUSINESS	Trident Brands Incorporated (f/k/a Sandfield Ventures Corp.) ("the Company") was incorporated under the laws of the State of Nevada on November 5, 2007. The Company was formed to engage in the acquisition, exploration and development of natural resource properties. The Company is now focused on consumer products. The objective is investment in and development of high growth consumer brands and ingredients businesses. The Company is in its early growth stage and has transitioned out of it's shell status with the Super-8 filing at the end of August, 2014. Activities to date have been limited to capital formation, organization, development of its business plan, and development of an array of products for sale and initial commercialization efforts.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	May 31, 2016
Notes to Financial Statements
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Basis of Presentation The accompanying unaudited interim financial statements of Trident Brands Incorporated have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Trident's Form 10-K filed with SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2015 as reported on Form 10-K have been omitted.

GOING CONCERN

GOING CONCERN	6 Months Ended
	May 31, 2016
Notes to Financial Statements
3. GOING CONCERN	The accompanying financial statements are presented on a going concern basis. The Company has had minimal revenues during the period from November 5, 2007 (date of inception) to May 31, 2016 and has a working capital deficit as of May 31, 2016. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company is currently in the early growth stage at product introduction phase and expenses are increasing. The company has secured financing to cover these expenses. The current cash of $18,600, is insufficient to cover the expenses the Company will incur during the next twelve months. The Company is currently pursuing various financing alternatives in order to address this issue.

WARRANTS AND OPTIONS

WARRANTS AND OPTIONS	6 Months Ended
	May 31, 2016
Notes to Financial Statements
4. WARRANTS AND OPTIONS	On May 1, 2016, 100,000 stock options were granted to Steve Bromley, a Special Advisor to the Company and Chair of our Advisory Committee, with 50,000 of the options exercisable at a price of $1.25 per share, vesting May 1, 2017 and the remaining 50,000 options exercisable at a price of $1.50 per share, vesting May 1, 2018. All 100,000 options expire on May 1, 2021. The total outstanding stock options as of May 31, 2016 are 2,475,000. The company uses the Black-Scholes model to value the stock options. Following are the assumptions used for the shares vested 12 and 24 months from the date of issuance: Discount rate .9% and 1.29%; Volatility 80.54% and 75.85%; and Term 3.0 and 3.5. During the six months ended May 31, 2016, $121,308 was recognized as options expense. The following table represents stock option activity for the period ended May 31, 2016: Number of Options Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding - Nov. 30, 2015 2,375,000 $ 1.15 3.5 Exercisable - Nov. 30, 2015 958,334 $ 2.00 3.4 $ 354,583 Granted -100,000- $ 1.38 4.92 Exercised or Vested -0- Cancelled or Expired -0- Outstanding - May 31, 2016 2,475,000 $ 0.89 3.01 Exercisable - 31, 2016 1,541,667 $ 0.59 2.93 $ 316,667 On January 29, 2016, the Company issued 125,000 warrants to purchase common shares of the Company along with the $250,000 secured third party promissory note. The relative fair value is $43,526 which is recognized as debt discount. As of May 31, 2016, $14,509 of the debt discount is amortized and the unamortized discount is $29,017. On March 4, 2016, the Company issued 100,000 warrants to purchase common shares of the Company along with the $200,000 secured related party promissory note. The relative fair value is $35,250 which is recognized as debt discount. As of May 31, 2016, $8,812 of the debt discount is amortized and the unamortized discount is $26,438. The exercise price of both warrants are $1.35 with a term of 3 years and are vested immediately. The company uses the Black-Scholes model to value the warrants. Following are the assumptions used: Discount rate .9%; Volatility 76.25% and 77.30% respectively. The following table represents warrant activity for the period ended May 31, 2016: Number of Warrants Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding - Nov. 30, 2015 -0- Exercisable - Nov. 30, 2015 -0- Granted 225,000 $ 1.35 2.70 Exercised or Vested -0- Cancelled or Expired -0- Outstanding – May 31, 2016 225,000 $ 1.35 2.70

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	May 31, 2016
Notes to Financial Statements
5. RELATED PARTY TRANSACTIONS	The Company neither owns nor leases any real or personal property. The company is paying a director $500 per month rent for use of office space and services. During the quarter ended November 30, 2015, Continental Ingredients Canada, Inc. of which the Company's CEO owns significant interest, loaned the Company $180,000 bearing interest at the rate of 8% per annum, payable on maturity, calculated on the principal amount of the loan outstanding. The $180,000 note was advanced during the year ended November 30, 2015. Unless paid earlier, the loan and accrued and unpaid interest shall be payable in full on November 2, 2016. As of May 31, 2016, the full amount of the loan is outstanding. On February 29, 2016, we entered into a Securities Purchase Agreement with Continental Ingredients Canada, Inc. whereby we received proceeds of $200,000 on March 4, 2016 in return for a $200,000 secured promissory note due 12 months from the issuance date, bearing interest at the rate of 10% per annum, and 100,000 warrants to purchase common shares of our Company at an exercise price of $1.35 per share for three years from the date of issue. As of May 31, 2016, the full amount of the loan is outstanding. See note 4 for valuation of warrants. During the year, the Company purchased inventory from Continental Ingredients Canada, Inc. The total amount of inventory purchased was $316,086.

LOAN PAYABLE - THIRD PARTY

LOAN PAYABLE - THIRD PARTY	6 Months Ended
	May 31, 2016
Notes to Financial Statements
6. LOAN PAYABLE - THIRD PARTY	We have three short term loans. One for $200,000, one for $100,000 and the other for $250,000 bearing interest at the rate of 8.0%, 8.0% and 10.0% per annum respectively, payable on maturity, calculated on the principle amount of the loan outstanding. Unless paid earlier, the loan and accrued and unpaid interest shall be payable in full on April 30, 2015 (payment maturity date extended to October 31, 2015 and while now technically in default, the parties to the obligation are negotiating a deal for repayment), July 21, 2015 (payment maturity date extended to April 30, 2016 and while now technically in default, the parties to the obligation are negotiating a deal for repayment) and January 29, 2017 respectively. As of May 31, 2016, the full amount of the loans are outstanding and the accrued interest expense is $56,548 ($33,333, $14,882 and $8,333 respectively).

CONVERTIBLE DEBT

CONVERTIBLE DEBT	6 Months Ended
	May 31, 2016
Notes to Financial Statements
7. CONVERTIBLE DEBT	On January 29, 2015, Trident Brands Incorporated entered into a securities purchase agreement with a non-US institutional investor whereby it agreed to sell an aggregate principal amount of $2,300,000 of senior secured convertible debentures, convertible into shares of the company's common stock. The Company received $1,800,000 of the funds from the transaction on February 5, 2015. The balance of $500,000 was received on May 14, 2015. The convertible debentures are convertible into shares of the Company's common stock at an initial conversion price of $.71 per share, for an aggregate of up to 3,239,437 shares. The debentures bear interest at 6% per annum. The applicable portion of the Principal Amount and the Interest outstanding shall be due and payable on the date that is 12 months from the applicable Issuance Date. While the $2,300,000 is now technically in default, the parties to the obligation are negotiating a deal for repayment. Due to the note being convertible to the company common shares, beneficial conversion features analysis was performed. The intrinsic value of the conversion feature was $647,887 which was recognized as debt discount. During the six months ended May 31, 2016, $147,230 of debt discount was amortized and the unamortized discount is $0. As of May 31, 2016 and November 30, 2015, the outstanding balance of the convertible debt is 2,300,000 and $2,152,770, net of discount of $0 and $147,230, respectively. The Company analyzed the embedded conversion option for derivative accounting consideration under ASC 815-15 "Derivatives and Hedging" and determined that the conversion option should be classified as equity.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	6 Months Ended
	May 31, 2016
Notes to Financial Statements
8. INTANGIBLE ASSETS	On January 22, 2015, pursuant to a Deed of Assignment dated effective January 20, 2015, the Company entered into an Emulsion Supply Agreement with Oceans Omega LLC which represents the rights acquired pursuant to the Deed of Assignment. The Emulsion Supply Agreement provides the Company with the non-exclusive right and license (without the right to sublicense) to purchase, market, promote, sell and distribute Oceans Omega LLC's omega-3 emulsions for use in the development, production, processing, manufacture and sale of food and beverages (exclusive meats) for human or animal consumption. On January 6, 2016 the Company issued 3,000,000 shares to mark the closing of the Deed of Assignment and the Emulsion Supply Agreement, which did not specify the amount of consideration payable by the Company when they were executed on January 20, 2015. The consideration payable was subsequently established by the parties at a market value of $2,700,000 based on the closing price of the common shares as quoted on the OTC Markets quotation systems on January 6, 2016. The value of the license is being amortized over the remaining contractual life which is 9 years. As of May 31, 2016, the net value of the license was $2,575,000 after amortizing $125,000.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	May 31, 2016
Notes to Financial Statements
9. SUBSEQUENT EVENTS	Effective June 1, 2016 the Company issued to Mr. Bromley an additional 200,000 stock options under the 2013 Stock Option Plan, with 100,000 of the options exercisable at a price of $1.25 per share, vesting June 1, 2017 and the remaining 100,000 options exercisable at a price of $1.50 per share, vesting June 1, 2018. All 200,000 options expire on June 1, 2021.

SUMMARY OF SIGNIFICANT ACCOUN15

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	May 31, 2016
Summary Of Significant Accounting Policies Policies
Basis of Presentation	The accompanying unaudited interim financial statements of Trident Brands Incorporated have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Trident's Form 10-K filed with SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2015 as reported on Form 10-K have been omitted.

WARRANTS AND OPTIONS (Tables)

WARRANTS AND OPTIONS (Tables)	6 Months Ended
	May 31, 2016
Warrants And Options Tables
Schedule of stock option activity	The following table represents stock option activity for the period ended May 31, 2016: Number of Options Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding - Nov. 30, 2015 2,375,000 $ 1.15 3.5 Exercisable - Nov. 30, 2015 958,334 $ 2.00 3.4 $ 354,583 Granted -100,000- $ 1.38 4.92 Exercised or Vested -0- Cancelled or Expired -0- Outstanding - May 31, 2016 2,475,000 $ 0.89 3.01 Exercisable - 31, 2016 1,541,667 $ 0.59 2.93 $ 316,667
Schedule of warrant activity	The following table represents warrant activity for the period ended May 31, 2016: Number of Warrants Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding - Nov. 30, 2015 -0- Exercisable - Nov. 30, 2015 -0- Granted 225,000 $ 1.35 2.70 Exercised or Vested -0- Cancelled or Expired -0- Outstanding – May 31, 2016 225,000 $ 1.35 2.70

GOING CONCERN (Details Narrativ

GOING CONCERN (Details Narrative) - USD ($)	May 31, 2016	Nov. 30, 2015	May 31, 2015	Nov. 30, 2014
Going Concern Details Narrative
Cash	$ 18,600	$ 187,886	$ 955,165	$ 352

WARRANTS AND OPTIONS (Details)

WARRANTS AND OPTIONS (Details) - USD ($)	6 Months Ended	12 Months Ended
	May 31, 2016	Nov. 30, 2015
Number of Options
Outstanding - Nov. 30, 2015	2,375,000
Exercisable - Nov. 30, 2015	958,334
Granted	100,000
Exercised or Vested	0
Cancelled or Expired	0
Outstanding - May 31, 2016	2,475,000	2,375,000
Exercisable - May 31, 2016	1,541,667	958,334
Weighted Average Exercise Price
Outstanding - Nov. 30, 2015	$ 1.15
Exercisable - Nov. 30, 2015	2
Granted	1.38
Outstanding - May 31, 2016	0.89	$ 1.15
Exercisable - May 31, 2016	$ 0.59	$ 2
Outstanding Contractual Life in Years	3 years 4 days	3 years 6 months
Exercisable Contractual Life in Years	2 years 11 months 5 days	3 years 4 months 24 days
Granted Contractual Life in Years		4 years 11 months 1 day
Exercisable Intrinsic Value	$ 316,667	$ 354,583

WARRANTS AND OPTIONS (Details 1

WARRANTS AND OPTIONS (Details 1)	6 Months Ended
	May 31, 2016$ / sharesshares
Number Of Warrants
Outstanding - Nov. 30, 2015	0
Exercisable - Nov. 30, 2015	0
Granted	225,000
Exercised or Vested	0
Cancelled or Expired	0
Outstanding - May 31, 2016	225,000
Class Of Warrant Or Right, Additional Information
Granted Weighted Average Exercise Price | $ / shares	$ 1.35
Weighted Average Exercise Price | $ / shares	$ 1.35
Granted Contractual Life in Years	2 years 8 months 12 days
Contractual Life in Years	2 years 8 months 12 days

WARRANTS AND OPTIONS (Details N

WARRANTS AND OPTIONS (Details Narrative) - USD ($)	6 Months Ended
	May 31, 2016	May 31, 2015	Nov. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock options granted	100,000
Total outstanding stock options	2,475,000		2,375,000
Share-based Compensation	$ 121,308
Amortization of debt discount	170,551	$ 176,019
Unamortized debt discount	0
On January 29, 2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amortization of debt discount	14,509
Unamortized debt discount	29,017
On March 4, 2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amortization of debt discount	8,812
Unamortized debt discount	$ 26,438

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	May 31, 2016	Nov. 30, 2015
Related Party Transaction [Line Items]
Loan Payable - Related Party	$ 353,562	$ 180,000
Continental Ingredients Canada Inc [Member]
Related Party Transaction [Line Items]
Loan Payable - Related Party		$ 180,000
Interest rate		8.00%

LOAN PAYABLE - THIRD PARTY (Det

LOAN PAYABLE - THIRD PARTY (Details Narrative)	6 Months Ended
	May 31, 2016USD ($)Loan	May 31, 2015USD ($)
Short-term Debt [Line Items]
Short term loan	$ 250,000	$ 100,000
Accrued interest expense	$ 8,333
Number of promissory notes issued | Loan	3
Short Term Loan One [Member]
Short-term Debt [Line Items]
Short term loan	$ 200,000
Loan interest rate	8.00%
Accrued interest expense	$ 33,333
Short Term Loan Two [Member]
Short-term Debt [Line Items]
Short term loan	$ 100,000
Loan interest rate	8.00%
Accrued interest expense	$ 14,882
Short Term Loan Three [Member]
Short-term Debt [Line Items]
Short term loan	$ 250,000
Loan interest rate	10.00%
Accrued interest expense	$ 2,083

CONVERTIBLE DEBT (Details Narra

CONVERTIBLE DEBT (Details Narrative) - USD ($)	6 Months Ended
	May 31, 2016	May 31, 2015	Nov. 30, 2015
Debt Instrument [Line Items]
Outstanding balance of convertible debt	$ 2,300,000		$ 2,152,770
Convertible Debt, net of discount	0		$ 147,230
Amount of intrinsic value recognized as debt discount		$ 647,887
Amortization of debt discount	170,551	$ 176,019
Unamortized debt discount	0
Convertible Debt [Member] | Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Amortization of debt discount	$ 147,230

INTANGIBLE ASSETS (Details Narr

INTANGIBLE ASSETS (Details Narrative) - USD ($)	May 31, 2016	Nov. 30, 2015
Intangible Assets Details Narrative
Net value of the license	$ 2,575,000
Accumulated amortization of license	$ 125,000