Trident Brands (TDNT) 10-Q 14 Apr 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Feb. 28, 2017	Apr. 14, 2017
Document And Entity Information [Abstract]
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	Feb. 28, 2017
Amendment Flag	false
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($)	Feb. 28, 2017	Nov. 30, 2016
Current Assets
Cash	$ 823,593	$ 1,527,624
Accounts Receivable	51,219	53,053
Inventory	207,938	231,221
Prepaid	168,212	67,332
Total Current Assets	1,250,963	1,879,230
Intangible Assets - Licenses, net	2,350,000	2,425,000
TOTAL ASSETS	3,600,963	4,304,230
Current Liabilities
Accounts Payable	21,498	106,612
Accrued Liability	648,907	431,178
Loan Payable - Third Party, net of discount $0 and $8,812, respectively	200,000	191,188
Total Current Liabilities	870,405	728,978
Convertible Debt, net of discount $1,173,916 and $1,285,836, respectively	5,226,084	5,114,164
Total Liabilities	6,096,489	5,843,142
Stockholders' Deficit
Common stock, $0.001 par value, 300,000,000 shares authorized; 31,000,000 shares issued and outstanding as of February 28, 2017 and November 30, 2016	31,000	31,000
Additional paid-in capital	5,447,811	5,431,976
Non-Controlling Interest in Subsidiary	(75,078)	(65,786)
Accumulated Deficit	(7,899,259)	(6,936,102)
Total Stockholders' Deficit	(2,495,526)	(1,538,912)
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT	$ 3,600,963	$ 4,304,230

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($)	Feb. 28, 2017	Nov. 30, 2016
Statement of Financial Position [Abstract]
Discount on Loan Payable - Third Party	$ 0	$ 8,812
Discount on Convertible Debt	$ 1,173,916	$ 1,285,836
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	31,000,000	31,000,000
Common stock, shares outstanding	31,000,000	31,000,000

Consolidated Statements of Oper

Consolidated Statements of Operations (unaudited) - USD ($)	3 Months Ended
	Feb. 28, 2017	Feb. 29, 2016
Income Statement [Abstract]
Revenues	$ 16,686	$ 19,195
Cost of Sales	9,204	13,820
Gross Profit	7,482	5,375
General & Administrative Expenses	(726,200)	(616,284)
Loss from Operations	(718,718)	(610,909)
Other Income (Expenses)
Interest Expense	(253,732)	(168,178)
Total Other Income (Expenses)	(253,732)	(168,178)
Net Loss	(972,450)	(779,087)
Net loss attributable to Trident	(963,158)	(776,363)
Net loss attributable to Non-Controlling Interests	$ (9,292)	$ (2,724)
Loss per share - Basic and diluted (in dollars per share)	$ (0.03)	$ (0.03)
Weighted average number of common shares outstanding - Basic and diluted (in shares)	31,000,000	29,780,220

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (unaudited) - USD ($)	3 Months Ended
	Feb. 28, 2017	Feb. 29, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (972,450)	$ (779,087)
Adjustments to reconcile net loss to net cash used in operating activities:
Debt issuance cost
Amortization of debt discount	120,732	121,995
Amortization of license	75,000	45,000
Stock options expenses	15,835	81,303
Changes in operating assets and liabilities:
Accounts Receivable	1,833
Prepaid expenses	(100,879)	40,024
Inventory	23,283	13,172
Accounts payable and accrued liabilities	132,615	59,146
Cash used in operating activities	(704,031)	(418,447)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on loan payable - related party
Proceeds on loan payable - related party
Principal payments on loan payable - third party
Proceeds on loan payable - third party		250,000
Proceeds on convertible debt
Cash provided by financing activities		250,000
Net change in cash	(704,031)	(168,447)
Cash at beginning of period	1,527,624	187,886
Cash at end of period	823,593	19,439
NON-CASH TRANSACTIONS
Beneficial conversion features
Common stock issued for asset acquisition		2,700,000
Relative fair value of warrants recorded as debt discount		$ 43,526
Cash paid for:
Income taxes
Interest

ORGANIZATION AND DESCRIPTION OF

ORGANIZATION AND DESCRIPTION OF BUSINESS	3 Months Ended
	Feb. 28, 2017
Organization And Description Of Business [Abstract]
ORGANIZATION AND DESCRIPTION OF BUSINESS	NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Trident Brands Incorporated (f/k/a Sandfield Ventures Corp.) (“we”, “our”, “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 the development of high growth branded and private label consumer products and ingredients within the nutritional supplement, life sciences and food and beverage categories. The Company is in its early growth stage and has transitioned out of its shell status with the Super-8 filing at the end of August, 2014. Activities to date have focused on capital formation, organizational development and execution of its branded and private label consumer products and ingredients business plan.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Feb. 28, 2017
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 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 2016 as reported in the Form 10-K have been omitted.

LIQUIDITY

LIQUIDITY	3 Months Ended
	Feb. 28, 2017
Liquidity [Abstract]
LIQUIDITY	NOTE 3. LIQUIDITY On September 26, 2016, the Company completed a long term financing with a non-US institutional investor, receiving proceeds of $4,100,000 through the issuance of a secured convertible promissory note. The investor has agreed to make additional investments at the Company’s request of up to $5,900,000 ($10,000,000 in the aggregate). On February 28, 2017, the Company had $823,593 in cash and has access to $5,900,000 available from the investor. The Company feels this represents substantial liquid resources (cash & available financing), sufficient to meet the Company’s obligations for the next twelve months.

WARRANTS AND OPTIONS

WARRANTS AND OPTIONS	3 Months Ended
	Feb. 28, 2017
Warrants And Options [Abstract]
WARRANTS AND OPTIONS	NOTE 4. WARRANTS AND OPTIONS The total outstanding stock options as of February 28, 2017 are 2,125,000. The Company uses the Black-Scholes model to value the stock options at $571,624. For the period ended February 28, 2017, the Company expensed $15,835 as compensation expense compared to $81,303 in the previous year. Following are the assumptions used for the shares vested 12, 24 and 36 months from the date of issuance: Discount rate .9%, 1.29%, 1.29%; Volatility 68.35%, 67.35%, 65.50%; and Term 3.0, 3.5, 4.0. Number of Options Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding - November 30, 2016 2,358,333 $ 0.96 2.51 Exercisable - November 30, 2016 1,666,667 $ 1.17 2.43 Granted -0- 0.0 Exercised or Vested -0- Cancelled or Expired 233,334 Outstanding - February 28, 2017 2,125,000 $ 0.95 2.27 Exercisable - February 28, 2017 1,433,333 $ 1.17 2.18 $67,333 The total outstanding warrants as of February 28, 2017 are 225,000. The exercise price of the warrants are $1.35 with a term of 3 years and 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 February 28, 2017: Number of Warrants Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding – November 30, 2016 225,000 $ 1.35 2.21 Exercisable - November 30, 2016 -0- Granted -0- Exercised or Vested -0- Cancelled or Expired -0- Outstanding – February 28, 2017 225,000 $ 1.35 1.96

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Feb. 28, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 5. RELATED PARTY TRANSACTIONS The Company neither owns nor leases any real or personal property. The company is paying a director $750 per month rent for use of office space and services.

LOAN PAYABLE - THIRD PARTY

LOAN PAYABLE - THIRD PARTY	3 Months Ended
	Feb. 28, 2017
Debt Disclosure [Abstract]
LOAN PAYABLE - THIRD PARTY	NOTE 6. LOAN PAYABLE – THIRD PARTY On February 29, 2016, the Company entered into a Securities Purchase Agreement with CIC whereby the Company 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, plus 100,000 warrants to purchase common shares of the Company at an exercise price of $1.35 per share for three years from the date of issue. As of February 28, 2017, the full amount of the loan is outstanding. See note 4 for valuation of warrants. The loan was subsequently paid back on March 3, 2017.

CONVERTIBLE NOTE

CONVERTIBLE NOTE	3 Months Ended
	Feb. 28, 2017
Convertible Note [Abstract]
CONVERTIBLE NOTE	NOTE 7. CONVERTIBLE NOTE On January 29, 2015, the Company 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 originally accrued interest at 6% per annum. On September 26, 2016 the Company entered into an amendment agreement related to these convertible debentures whereby the applicable interest rate was increased from 6% to 8% and provisions added to allow the investor to transfer, sell or hypothecate the convertible notes subject to applicable securities laws. The maturity date of the notes was also extended through September 30, 2019. Due to the note being convertible to common shares of the Company, a beneficial conversion feature analysis was performed. The intrinsic value of the conversion feature was $647,888 which was recognized as debt discount. As of February 28, 2017, the full amount of the debt discount has been amortized. On September 26, 2016, the Company entered into a securities purchase agreement with a non-US institutional investor, pursuant to which, in consideration for proceeds of $4,100,000, the Company issued a secured convertible promissory note in the amount of $4,100,000. Pursuant to the securities purchase agreement, the investor has agreed, from time to time after January 1, 2017, to make additional investments at the Company’s request of up to $5,900,000 ($10,000,000 in the aggregate) in one or more tranches of not less than one tranche during any 60 day period. The funding of any tranche under the agreement (other than the first $4,100,000 which has been funded) is subject to the mutual agreement of the parties as to the use of funds. The parties have agreed to negotiate in good faith to pre-approve use of funds with 120 days following September 26, 2016. The Company intends to use the proceeds of the secured convertible note for general working capital purposes including, without limitation, settlement of accounts payable and repayment of mature loans. In consideration of each advance made by the investor pursuant to the securities purchase agreement, the Company will issue to the investor a convertible promissory note of equal value, maturing three years after issuance, and bearing interest at the rate of 8% per annum. Each note will be secured in first priority against the present and after acquired assets of the Company, and will be convertible in whole or in part at the option of the holder into common shares of the Company at a conversion price of $.60 per share. Due to the note being convertible to common shares of the Company, a beneficial conversion feature analysis was performed. The intrinsic value of the conversion feature was $1,366,667 which was recognized as debt discount. As of February 28, 2017, $192,751 of debt discount was amortized of which $111,920 was amortized during the current 3 month period and $80,831 in the prior year. The unamortized discount is $1,173,916. 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	3 Months Ended
	Feb. 28, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	NOTE 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 and exclusive rights to purchase, market, promote, sell and distribute Oceans Omega emulsions for 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 and common shares issued as compensation 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 February 28, 2017, the net value of the license was $2,350,000 after amortizing $350,000.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Feb. 28, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 9. SUBSEQUENT EVENTS On March 3, 2017 the loan of $200,000 payable to a third party and bearing interest at 8% per annum was paid back.

SUMMARY OF SIGNIFICANT ACCOUN15

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Feb. 28, 2017
Accounting Policies [Abstract]
Basis of Presentation	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 2016 as reported in the Form 10-K have been omitted.

WARRANTS AND OPTIONS (Tables)

WARRANTS AND OPTIONS (Tables)	3 Months Ended
	Feb. 28, 2017
Warrants And Options [Abstract]
Schedule of stock option activity	Number of Options Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding - November 30, 2016 2,358,333 $ 0.96 2.51 Exercisable - November 30, 2016 1,666,667 $ 1.17 2.43 Granted -0- 0.0 Exercised or Vested -0- Cancelled or Expired 233,334 Outstanding - February 28, 2017 2,125,000 $ 0.95 2.27 Exercisable - February 28, 2017 1,433,333 $ 1.17 2.18 $67,333
Schedule of warrant activity	Number of Warrants Weighted Average Exercise Price Contractual Life in Years Intrinsic Value Outstanding – November 30, 2016 225,000 $ 1.35 2.21 Exercisable - November 30, 2016 -0- Granted -0- Exercised or Vested -0- Cancelled or Expired -0- Outstanding – February 28, 2017 225,000 $ 1.35 1.96

LIQUIDITY (Detail Textuals)

LIQUIDITY (Detail Textuals) - USD ($)	1 Months Ended	3 Months Ended
	Sep. 26, 2016	Feb. 28, 2017	Nov. 30, 2016	Feb. 29, 2016	Nov. 30, 2015
Liquidity [Line Items]
Proceeds from promissory note
Cash		823,593	$ 1,527,624	$ 19,439	$ 187,886
Secured convertible promissory note | Securities purchase agreement
Liquidity [Line Items]
Proceeds from promissory note	$ 4,100,000
Additional funding amount	5,900,000
Aggregate amount of promissory note	$ 10,000,000
Available financing from investor		$ 5,900,000

WARRANTS AND OPTIONS (Details)

WARRANTS AND OPTIONS (Details) - USD ($)	3 Months Ended	12 Months Ended
	Feb. 28, 2017	Nov. 30, 2016
Number of Options
Outstanding	2,358,333
Exercisable	1,666,667
Granted	0
Exercised or Vested	0
Cancelled or Expired	233,334
Outstanding	2,125,000	2,358,333
Exercisable	1,433,333	1,666,667
Weighted Average Exercise Price
Outstanding	$ 0.96
Exercisable	1.17
Outstanding	0.95	$ 0.96
Exercisable	$ 1.17	$ 1.17
Outstanding Contractual Life in Years	2 years 3 months 7 days	2 years 6 months 4 days
Granted		0 years
Exercisable Contractual Life in Years	2 years 2 months 5 days	2 years 5 months 5 days
Exercisable Intrinsic Value	$ 67,333

WARRANTS AND OPTIONS (Details 1

WARRANTS AND OPTIONS (Details 1) - $ / shares	3 Months Ended	12 Months Ended
	Feb. 28, 2017	Nov. 30, 2016
Number Of Warrants
Outstanding	225,000
Exercisable	0
Granted	0
Exercised or Vested	0
Cancelled or Expired	0
Outstanding	225,000	225,000
Weighted Average Exercise Price
Outstanding	$ 1.35
Outstanding	$ 1.35	$ 1.35
Outstanding contractual life	1 year 11 months 16 days	2 years 2 months 16 days

WARRANTS AND OPTIONS (Detail Te

WARRANTS AND OPTIONS (Detail Textuals) - USD ($)	3 Months Ended		12 Months Ended
	Feb. 28, 2017	Feb. 29, 2016	Nov. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total outstanding stock options	2,125,000		2,358,333
Value of stock option using Black-Scholes model	$ 571,624
Share-based Compensation	$ 15,835	$ 81,303	$ 81,303
Number of outstanding warrants	225,000		225,000
Warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price (in dollars per share)	$ 1.35
Fair value assumption model used	Black-Scholes model
Number of outstanding warrants	225,000
Discount rate	0.90%
Volatility	76.25%	77.30%
Term	3 years
Trident's 2013 Stock Plan | Stock options | Shares vesting 12 months
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value assumption model used	Black-Scholes model
Discount rate	0.90%
Volatility	68.35%
Term	3 years
Trident's 2013 Stock Plan | Stock options | Shares vesting 24 months
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value assumption model used	Black-Scholes model
Discount rate	1.29%
Volatility	67.35%
Term	3 years 6 months
Trident's 2013 Stock Plan | Stock options | Shares vesting 36 months
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value assumption model used	Black-Scholes model
Discount rate	1.29%
Volatility	65.50%
Term	4 years

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Detail Textuals)	3 Months Ended
	Feb. 28, 2017USD ($)
Director
Related Party Transaction [Line Items]
Rent paid per month	$ 750

LOAN PAYABLE - THIRD PARTY (Det

LOAN PAYABLE - THIRD PARTY (Detail Textuals) - USD ($)	3 Months Ended
	Feb. 29, 2016	Feb. 28, 2017	Nov. 30, 2016
Short-term Debt [Line Items]
Proceeds on loan payable - third party	$ 250,000
Warrant exercise price		$ 1.35	$ 1.35
CIC
Short-term Debt [Line Items]
Proceeds on loan payable - third party	$ 200,000
Percentage of interest rate	10.00%
Number of warrants to purchase common shares	100,000
Warrant exercise price	$ 1.35

CONVERTIBLE NOTE (Detail Textua

CONVERTIBLE NOTE (Detail Textuals) - USD ($)	May 14, 2015	Feb. 05, 2015	Sep. 26, 2016	Jan. 29, 2015	Feb. 28, 2017	Feb. 29, 2016	Nov. 30, 2016
Debt Instrument [Line Items]
Funds received
Amount of intrinsic value recognized as debt discount
Amortization of debt discount					120,732	$ 121,995
Proceeds from promissory note
Securities purchase agreement | Senior secured convertible debentures
Debt Instrument [Line Items]
Principal amount of debt			$ 4,100,000	$ 2,300,000
Funds received	$ 500,000	$ 1,800,000
Common stock conversion, shares				3,239,437
Percentage of interest rate			8.00%	6.00%
Amount of intrinsic value recognized as debt discount			$ 1,366,667	$ 647,888
Amortization of convertible debt					192,751
Amortization of debt discount					111,920		$ 80,831
Unamortized debt discount					$ 1,173,916
Maturity date of notes			Sep. 30, 2019
Proceeds from promissory note			$ 4,100,000
Additional funding amount			5,900,000
Aggregate amount of promissory note			$ 10,000,000
Promissory note maturity period			3 years
Conversion price			$ 0.60	$ 0.71

INTANGIBLE ASSETS (Detail Textu

INTANGIBLE ASSETS (Detail Textuals) - USD ($)	Jan. 06, 2016	Feb. 28, 2017	Nov. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Useful life of intangible asset		9 years
Net value of the license		$ 2,350,000	$ 2,425,000
Accumulated amortization of license		$ 350,000
Licensing Agreements | Emulsion Supply Agreement | Oceans Omega LLC
Finite-Lived Intangible Assets [Line Items]
Shares issued to mark closing of agreement	3,000,000
Market value of consideration payable	$ 2,700,000

SUBSEQUENT EVENTS (Detail Textu

SUBSEQUENT EVENTS (Detail Textuals) - USD ($)	Mar. 03, 2017	Feb. 28, 2017	Nov. 30, 2016
Subsequent Event [Line Items]
Loan payable to third party		$ 200,000	$ 191,188
Subsequent event
Subsequent Event [Line Items]
Loan payable to third party	$ 200,000
Percentage of interest rate	8.00%