Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 05, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Axiom Corp. | |
Entity Central Index Key | 1,566,265 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 69,232,748 |
Unaudited Interim Condensed Con
Unaudited Interim Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash | $ 14,270 | $ 48,116 |
Accounts receivable (net of allowance of $nil (2014 - $nil) | 12,990 | 9,727 |
Inventory | 6,329 | 13,528 |
Prepaid expenses and other receivables | 10,369 | 23,759 |
Total current assets | 43,958 | 95,130 |
Non-current assets | ||
Equipment | 18,401 | 21,646 |
Total non-current assets | 18,401 | 21,646 |
Total assets | 62,359 | 116,776 |
Current liabilities | ||
Accounts payable and accrued liabilities | 312,357 | 251,433 |
Other taxes payable | 693 | 3,450 |
Current portion of deferred revenue | 8,470 | 7,948 |
Due to related parties | 219,111 | 169,526 |
Loans payable and conversion features | 551,581 | 462,142 |
Total current liabilities | 1,092,212 | 894,499 |
Non-current liabilities | ||
Deferred revenue | 9,176 | 10,597 |
Total non-current liabilities | 9,176 | 10,597 |
Total liabilities | 1,101,388 | 905,096 |
Capital Stock: | ||
Common stock, (authorized 200,000,000, issued 67,397,975, par value $0.00001 per share) | 674 | 674 |
Additional paid-in capital | 1,211,240 | 1,211,240 |
Accumulated other comprehensive income | 36,633 | 36,633 |
Deficit | (2,242,924) | (1,998,650) |
Axiom Corporation Ltd. Stockholders' deficit | (994,340) | (750,066) |
Non-controlling interest | (44,689) | (38,254) |
Total stockholders' deficit | (1,039,029) | (788,320) |
Total liabilities and deficit | 62,359 | 116,776 |
Series A Preferred Stock | ||
Capital Stock: | ||
Preferred stock, Value | 27 | 27 |
Series B Preferred Stock | ||
Capital Stock: | ||
Preferred stock, Value | $ 10 | $ 10 |
Unaudited Interim Condensed Co3
Unaudited Interim Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts receivable - net allowance | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 67,397,975 | 67,397,975 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Series A Preferred Stock | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 2,666,668 | 2,666,668 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Series B Preferred Stock | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 1,000,002 | 1,000,002 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Unaudited Interim Condensed Co4
Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Revenue | $ 24,983 | $ 11,301 |
Cost of revenue | 11,237 | 7,297 |
Gross profit | 13,746 | 4,004 |
Expenses | ||
Advertising and promotion | 124 | 1,333 |
Interest and financing costs | 13,521 | 3,591 |
Office and general | 13,801 | 8,127 |
Rent | 2,960 | 3,273 |
Salaries and fees | 86,110 | 156,263 |
Travel | 1,070 | 5,160 |
Depreciation and amortization | 3,245 | 5,087 |
Research and development | $ 14,685 | 683 |
Stock-based compensation | 148,125 | |
Professional fees | $ 24,116 | 55,353 |
Total operating expenses | 159,631 | 386,995 |
Operating income (Loss) | (145,885) | (382,991) |
Valuation adjustment of convertible loans payable | (78,505) | |
Gain (loss) on foreign exchange | (26,319) | (1,400) |
Net loss and comprehensive loss for the period | (250,709) | $ (384,391) |
Net loss and comprehensive loss attributed to non-controlling interest | (6,435) | |
Net loss and comprehensive loss attributed to Axiom Corporation | $ (244,274) | $ (384,391) |
Net loss per share - basic and diluted | $ 0 | $ (0.01) |
Weighted average number of shares outstanding - basic and diluted | 67,397,975 | 69,328,702 |
Unaudited Interim Condensed Co5
Unaudited Interim Condensed Consolidated Statements of Stockholders' Deficit - USD ($) | Total | Common Stock | Shares to be Issued | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Deficit | Non-controlling interest | Series A Preferred Stock | Series B Preferred Stock |
Beginning Balance at Dec. 31, 2014 | $ (140,475) | $ 798,586 | $ 17,807 | $ (956,868) | |||||
Issuance of warrants | 148,125 | $ 148,125 | |||||||
Reverse acquisition by Papernuts Canada | (72,277) | $ (797,888) | $ 706,785 | $ 18,826 | |||||
Proceeds of share subscriptions collected | 270,000 | $ 270,000 | |||||||
Net (loss) for the year | (384,391) | $ (384,391) | |||||||
Ending Balance at Mar. 31, 2015 | (179,018) | $ 698 | $ 270,000 | $ 854,910 | $ 36,633 | (1,341,259) | |||
Beginning Balance at Dec. 31, 2015 | (788,320) | $ 674 | $ 1,211,240 | $ 36,633 | (1,998,650) | $ (38,254) | |||
Reverse acquisition by Papernuts Canada | 124,287 | ||||||||
Net (loss) for the year | (250,709) | (244,274) | (6,435) | ||||||
Ending Balance at Mar. 31, 2016 | $ (1,039,029) | $ 674 | $ 1,211,240 | $ 36,633 | $ (2,242,924) | $ (44,689) |
Unaudited Interim Condensed Co6
Unaudited Interim Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities | ||
Net loss for the period | $ (250,709) | $ (384,391) |
Depreciation and amortization | 3,245 | 5,087 |
Valuation adjustment of convertible loans | $ 78,505 | |
Stock-based compensation | 148,125 | |
Accrued interest on loans | $ 13,521 | $ 2,498 |
Related party loans and advances | 49,585 | |
Net changes in non-cash working capital: | ||
Changes in accounts receivable | (3,263) | $ (667) |
Change in inventory | 7,199 | 5,983 |
Changes in prepaid expenses | 13,390 | 5,020 |
Changes in accounts payable and accrued liabilities and other taxes payable | 55,579 | 26,623 |
Changes in deferred revenue | (899) | (4,829) |
Net cash flows (used in) operating activities | $ (33,847) | (196,551) |
Investing activities | ||
Purchase of equipment | (5,000) | |
Net cash flows from investing activities | (5,000) | |
Financing activities | ||
Proceeds from shares to be issued | 270,000 | |
Related party loans and advances | 60,367 | |
Net cash flows generated by financing activities | 330,367 | |
Net (decrease) increase in cash | $ (33,846) | 128,816 |
Cash, beginning of period | 48,116 | 8,602 |
Cash, end of period | $ 14,270 | $ 137,418 |
Nature of Business, Economic De
Nature of Business, Economic Dependence and Going Concern | 3 Months Ended |
Mar. 31, 2016 | |
Nature of Business, Economic Dependence and Going Concern [Abstract] | |
Nature of Business, Economic Dependence and Going Concern | 1. Nature of Business, Economic Dependence and Going Concern Axiom Corp. (“Axiom” or the “Company”) was incorporated in the State of Colorado on April 2, 2012. On February 23, 2015, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with shareholders of Papernuts Corporation (the “Papernuts Shareholders”) and Kranti Kumar Kotni, the controlling stockholder of Axiom (the “Controlling Stockholder”). Pursuant to the Share Exchange Agreement, the Papernuts Shareholders agreed to exchange up to 1,220,165 shares, which represents 100% of the common stock of Papernuts Corporation (“Papernuts”), for up to Fifty Two Million (52,000,000) shares of Axiom’s common stock (the “Company Shares”). On February 26, 2015, the Company closed on the Share Exchange Agreement, with 95.6% of the Papernuts Shareholders exchanging a total of 1,166,540 common shares (the “Papernuts Exchanged Shares”) for a total of 49,714,642 Axiom Shares (the “Company Exchanged Shares”). Each Papernuts Exchanged Share was converted into the number of Company Exchanged Shares at an exchange ratio of 42.617187019 (the “Exchange Ratio”), rounded, if necessary, up to the nearest whole share (the “Share Exchange”). Pursuant to the Share Exchange Agreement, the Company also issued warrants to purchase a total of 5,650,000 shares of the Company’s Common Stock at exercise prices ranging from $0.056 to $0.075 per share. These warrants have terms which are the same as and replace warrants previously held by Papernuts warrant holders. (see also note 12). Additionally, on February 23, 2015, Mr. Scott MacRae, the former Chief Executive Officer of Papernuts, entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the Controlling Shareholder, whereby Mr. MacRae purchased 30,000,000 shares (the “Shares”) of the Company’s common stock beneficially owned by Mr. Kotni. The Shares were purchased by Mr. MacRae for an aggregate purchase price of $75,000. As a result of the Share Exchange transaction and the transaction between Mr. MacRae and Mr. Kotni, Papernuts Canada has become a majority owned subsidiary of the Company and the Company now carries on the business of Papernuts Canada as its primary business. Additionally, as required by the Share Exchange Agreement, the Company and Mr. Kotni entered into a Share Transfer & Assignment Agreement dated February 26, 2015, pursuant to which the Company, following the Closing of the Share Exchange Agreement, transferred to Mr. Kotni all of the issued and outstanding shares of the Company’s formerly wholly-owned subsidiary, Acton Holdings Limited, a Kenyan company. Mr. Kotni assumes all the liabilities of Acton Holdings Limited. Papernuts was incorporated in Ontario, Canada on April 8, 2010 as 2239794 Ontario Inc. On January 19, 2015 Papernuts changed its name to Papernuts Corporation. The Company’s primary focus is the sale of paper and equipment. The Company’s registered office is as follows: 380 Vansickle Road, Unit 600, St. Catharines, Ontario, Canada, L2S 0B5. At March 31, 2016, the Company had not yet achieved profitable operations, had an accumulated deficit of $2,242,924 and expects to incur further losses in the development of its business, all of which casts significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funding to further develop operations and a sales and marketing program so as to grow revenue and attain profitability. Although the Company has been successful in the past in obtaining financing, there remains significant doubt that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. During the period approximately 43% of revenues were derived from one customer (2015 – 48%). |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Principles of Consolidation and Basis of Presentation These unaudited interim condensed consolidated financial statements include the accounts of the Company and its 95.6% owned subsidiary, Papernuts. All inter-company balances and transactions have been eliminated on consolidation. The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant estimates include the use of the going concern assumption, the useful life of equipment, the valuation of equipment and the valuation of convertible debt. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. At March 31, 2016 and December 31, 2015, the Company had a cash balance of $14,270 and $48,116 respectively. Revenue Recognition and Deferred Revenue Revenue from product sales is recognized when the customer takes title, assumes the risks and rewards of ownership and collectability is reasonably assured. Revenue is recorded at the time of shipment for terms designated f.o.b. (free on board) shipping point. For sales transactions designated f.o.b. destination, revenue is recorded when the product is delivered to the customer’s delivery site, when title and risk of loss are transferred. Revenue from the sale of licences and distribution agreements is recognized over the related term of the agreement. Proceeds received prior to the Company meeting its revenue recognition criteria is recorded as deferred revenue and shown as either a current or non-current liability depending on the expected timing of recognition. Shipping and Handling Costs Shipping and handling costs, such as freight to our customers’ destinations, are included in cost of revenue in the statement of operations and comprehensive loss. When shipping and handling costs are included in the sales price charged for our products, they are recognized in revenue. Inventories Inventories are valued at the lower of cost or market using the average cost method. Inventory is periodically reviewed for use and obsolescence, and adjusted as necessary. Inventory consists of raw material and finished goods. Equipment Equipment is stated at cost, less accumulated depreciation. Expenditures for betterments are capitalized, whereas normal repairs and maintenance are expensed as incurred. The straight-line method is used to depreciate equipment over its estimated useful life, ranging from 3-5 years. Intangible Assets Intangible assets are stated at cost, less accumulated amortization. The straight-line method is used to amortize intangible assets over their estimated useful life, for a period of 10 years. Impairment of Long-lived Assets The Company periodically evaluates the carrying value of long-lived assets in accordance with GAAP, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal. Fair Value of Convertible Loans The Company has issued convertible loans that are convertible into common stock, at the option of the holder, at conversion prices based on the trading price per share over a period of time. As a result of the variability in the amount of common stock to be issued, the conversion features are reflected at fair value. The instrument is bifurcated into a debt instrument and derivative liability instrument. The debt is accreted to face value over the life of debt. The derivative liability is measured using a binomial lattice valuation methodology and is included in the consolidated balance sheets under the caption “loans payable and conversion features”. Any unrealized and realized gains and losses related to the convertible loans are measured based on the changes in the fair values of the derivative liability. Such gains and losses and accretion costs are recorded as a valuation adjustment of convertible loans payable on the consolidated statements of operations and comprehensive loss. Loss per Share Basic loss per share is calculated by dividing the Company’s net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing the Company’s net loss available to common stockholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity instruments, if dilutive. Income Taxes Income taxes are computed in accordance with the provisions of ASC Topic 740, which requires, among other things, a liability approach to calculating deferred income taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company is required to make certain estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters. In the event that uncertain tax positions are resolved for amounts different than the Company’s estimates, or the related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of related assets and liabilities in the period in which such events occur. Such adjustment may have a material impact on the Company’s income tax provision and results of operations. Fair value of stock-based compensation Stock-based compensation is valued using the Black-Scholes option pricing model, which requires the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options have characteristics significantly different than those of traded options and because changes in the subjective input assumptions can materially affect the calculated fair value, such value is subject to measurement uncertainty. Research and development costs Development expenditures are capitalized if they meet the criteria for recognition as an asset, and are amortized over their expected useful lives once they are available for use. Research costs are expensed as incurred. Fair Value of Financial Instruments The standard, “Disclosures about Fair Value of Financial Instruments”, defines financial instruments and requires fair value disclosures for those instruments. The standard, “Fair Value Measurements”, defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. The carrying amounts reported on the balance sheets for cash, accounts receivable, due to related parties, accounts payable and accrued liabilities and loan payable qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. For the due to related parties, the Company believes the carrying value of the loans approximates fair value as the interest rates are market rates. The standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the standard are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and U.S. government treasury securities; Level 2 Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as the conversion features of the loans payable; and Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value from the perspective of a market participant. Level 3 instruments include those that may be more structured or otherwise tailored to customers' needs. At each balance sheet date, the Company performs an analysis of all instruments subject to the standard and includes in Level 3 all of those whose fair value is based on significant unobservable inputs. Other than the conversion features, there were no assets or liabilities measured at fair value on a recurring basis as of March 31, 2016 or December 31, 2015. Foreign Currency Translation As further described in Note 4, the Canadian dollar had been the functional and reporting currency of the Company’s business and the consolidated financial statements for periods up to December 31, 2014 were expressed in Canadian dollars. On February 26, 2015, to reflect the changed circumstances of the Company, the functional currency of the Company and its subsidiaries changed to the United States dollar and the Company decided to change its reporting currency to the United States dollar as well. Accordingly, these consolidated financial statements are expressed in United States dollars. Monetary assets and liabilities denominated in currencies other than United States dollars are translated into United States dollars at the rate of exchange in effect at the end of the reporting period. Revenues and expenses are translated at the transaction exchange rate. Foreign currency gains and losses resulting from translation are reflected in net income of the period. An exchange rate of 0.77 was used to translate the monetary assets and liabilities from Canadian to US dollars at March 31, 2016 (December 31, 2015 – 0.7225). An exchange rate of 0.7287 was used to translate revenue and expenses from Canadian to US dollars for the three months ended March 31, 2016 (2015 - 0.8057). Accounting Principles for Future Adoption In May 2014, FASB issued ASU 2014-09 with the intent of significantly enhancing comparability of revenue recognition practices across entities and industries. The new standard provides a single principles-based, five-step model to be applied to all contracts with customers and introduces new, increased disclosure requirements. The new standard is effective for annual and interim periods beginning on or after December 15, 2017 and may be applied on either a full or modified retrospective basis. The Company is currently assessing the impact of the new standard to the Company’s consolidated financial statements. In August 2014, FASB issued ASU 2014-15 providing guidance on how to account for and disclose going concern risks. The new standard is effective for annual and interim periods beginning on or after December 15, 2016. The Company is currently assessing the impact of the new standard to the Company’s consolidated financial statements. |
Papernuts Reverse Merger
Papernuts Reverse Merger | 3 Months Ended |
Mar. 31, 2016 | |
Papernuts Reverse Merger [Abstract] | |
Papernuts Reverse Merger | 3. Papernuts Reverse Merger A reverse acquisition transaction involving a non-public operating entity and a non-operating public company is in substance a share-based payment transaction, rather than a business combination. The Transaction is equivalent to the issuance of shares by the non-public operating entity, Papernuts, for the net assets and the listing status of the non-operating public company, Axiom. The fair value of the shares issued was determined based on the fair value of the common shares issued by Axiom. A summary of the transaction is as follows: Deemed issuance of 49,714,642 post-Transaction common shares to the former shareholders of Papernuts Canada $ 124,287 Cash and funds held in trust $ 74,967 Accounts payable and accrued liabilities (17,974 ) Due to related parties (61 ) Loans payable (148,035 ) Listing costs reallocated to additional paid-in capital 215,390 Value attributed to Papernuts shares issued $ 124,287 |
Change of Functional and Report
Change of Functional and Reporting Currency | 3 Months Ended |
Mar. 31, 2016 | |
Change of Functional and Reporting Currency [Abstract] | |
Change of Functional and Reporting Currency | 4. Change of Functional and Reporting Currency Effective February 26, 2015, Papernut’s functional currency changed to the United States dollar, and accordingly, Papernuts decided to change its reporting currency to the United States dollar. Prior to February 26, 2015, Papernut’s functional currency was the Canadian dollar and the Company used the Canadian dollar as its reporting currency. With the completion of the Share Exchange Agreement, the Company’s assets, liabilities, revenues and expenses are expected to be predominantly denominated in United States dollars and, accordingly, the use of the Canadian dollar to measure and report the Company’s financial performance and financial position became inappropriate. The impact of the currency translation up to February 26, 2015 is recorded in accumulated other comprehensive income. Under the current rate method for the comparative period presented, all assets and liabilities of the Company’s operations were translated from their Canadian dollar functional currency into United States dollars using the exchange rates in effect on the balance sheet date, shareholders’ equity were translated at the historical rates and revenues, expenses and cash flows were translated at the average rates during the reporting period presented. The resulting translation adjustments are reported under comprehensive income as a separate component of shareholders’ equity. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2016 | |
Inventory [Abstract] | |
Inventory | 5. Inventory March 31, December 31, Raw materials $ 5,306 $ 11,306 Finished goods 1,023 2,222 Total inventory $ 6,329 $ 13,528 |
Equipment
Equipment | 3 Months Ended |
Mar. 31, 2016 | |
Equipment [Abstract] | |
Equipment | 6. Equipment Accumulated March 31, 2016 Cost Depreciation and Impairment Net Book Value Furniture $ 3,723 $ (3,263 ) $ 460 Machinery 53,848 (35,906 ) 17,941 $ 57,571 $ (39,169 ) $ 18,401 Accumulated December 31, 2015 Cost Depreciation and Impairment Net Book Value Furniture $ 3,723 $ (3,038 ) $ 685 Machinery 53,848 (32,887 ) 20,961 $ 57,571 $ (35,925 ) $ 21,646 Depreciation expense during the three months ended March 31, 2016 was $3,245 (2015 - $3,243). |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Intangible Assets [Abstract] | |
Intangible Assets | 7. Intangible Assets In June 2014, Papernuts acquired the rights to the Papernuts trademark for $75,000. Terms of the agreement are as follows: ● Upon signing the agreement and paying $20,000 (paid in July 2014), the Company received the temporary right to use the Papernuts name and trademark, provided Papernuts comply with certain insurance and other requirements as stipulated by the vendor. ● Upon payment of an additional $55,000, required to be paid by September 15, 2014 (and paid on that date), Papernuts received permanent use and ownership of the Papernuts name, web domain and any trademarks, patents and rights to sell Papernuts products in the US and Canada. ● Papernuts is required to pay a royalty of 2% of sales of Papernuts products, to a maximum of $100,000. ● As part of this agreement, should Papernuts and the vendor not be able to negotiate a distribution contract in the future, Papernuts would be required to acquire certain of the vendor’s inventory and equipment valued at $40,000 (paid in March, 2015). Papernuts has recorded an impairment charge of $35,000 in December, 2014 with respect to this inventory. Papernuts recorded amortization of $7,377 relating to this asset during the year ended December 31, 2015. The remaining balance of $62,697 was fully written off in 2015 due to the uncertainty of the future benefit that the Company will be able to realize. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts payable and accrued liabilities | 8. Accounts payable and accrued liabilities Accounts payable and accrued liabilities consisted of the following as at March 31, 2016 and December 31, 2015. March 31, December 31, Accounts payable $ 198,392 $ 159,568 Accrued liabilities 113,965 91,865 $ 312,357 $ 251,433 |
Related Party Transactions and
Related Party Transactions and Balances | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions and Balances [Abstract] | |
Related Party Transactions and Balances | 9. Related Party Transactions and Balances March 31, December 31, 8% Demand loans inclusive of interest $ 160,294 $ 147,850 Due to related party 58,817 21,676 Payable to related parties $ 219,111 $ 169,526 On August 1, 2012, PaperNuts Canada received loans of $32,445 (CDN$32,500) from shareholders Jim Vanderzalm and Rob Moes. The loans were unsecured, and were due and payable on demand as they were contracted to meet PaperNuts Canada’s 2012 general fiscal obligations. In April, 2014 and January, 2015 Mr. Moes made additional advances of $6,818 (CDN$7,500) and $30,184 (CDN$37,500) respectively to PaperNuts Canada. As at March 31, 2016 there is principal and interest of $70,671 ($65,199 as at December 31, 2015) outstanding in relation to those loans. The largest outstanding balance during the period ended March 31, 2016 was $70,671, including principal of $59,675. On March 28, 2013, PaperNuts Canada received loans of $18,345 (CDN$18,629) from Jerry Moes, a shareholder and director of PaperNuts Canada. The loans were unsecured, and were due and payable on demand as they were contracted to meet PaperNuts Canada’s 2013 general fiscal obligations. Mr. Moes made further advances of $30,180 (CDN$32,098) on December 31, 2013 and $11,190 (CDN$12,310) from January 1, 2014 to April 1, 2014. In January, 2015 Mr. Moes advanced an additional $15,625 (CDN$18,750). As at March 31, 2016, there is principal and interest of $73,822 ($68,094 as at December 31, 2015) outstanding in relation to those loans. The largest outstanding balance during the period ended March 31, 2016 was $73,822 including principal of $62,975. In January, 2015, PaperNuts Canada received a loan of $15,625 (CDN$18,750) from Ron Vanderzalm, a shareholder of PaperNuts Canada. As at March 31, 2016, there is a principal and interest of $15,801 (December 31, 2015 - $14,557) outstanding in relation to this loan. The largest outstanding balance during the period ended March 31, 2016 was $15,801 including principal of $14,438. During the periods ended March 31, 2016 and 2015 the shareholders above charged interest of $2,588 (CDN$3,551) and $2,500 (CDN$3,101), respectively on these demand loans. No payments of interest have been made and the unpaid interest is included in the loan balances noted above. As at March 31, 2016, due to related party included $58,817 (December 31, 2015 - $21,676) in unpaid fees and salaries due to officers and directors of the Company, including Tyler Pearson, CEO, Scott MacRae, Director and Andrew Hilton, CFO. |
Loans Payable and Conversion Fe
Loans Payable and Conversion Features | 3 Months Ended |
Mar. 31, 2016 | |
Loans Payable and Conversion Features [Abstract] | |
Loans Payable and Conversion Features | 10. Loans Payable and Conversion Features Demand loan (a) Debt (b) Conversion features (b) Total Loans payable, December 31, 2015 $ 83,151 $ 74,298 $ 304,693 $ 462,142 Accrued interest 1,457 9,476 - 10,933 Accretion - 92,165 - 92,165 Change in fair value of conversion features - - (13,659 ) (13,659 ) Loans payable, March 31, 2016 $ 84,608 $ 175,939 $ 291,034 $ 551,581 $10,933 is included in interest expense and $92,165 and $(13,659) are included in valuation adjustment of convertible loan payable. Key inputs to determine the fair value at March 31, 2016: Stock Price $ 0.0130 Exercise Price $ 0.0087 Time to expiration – days 188 Risk-free interest rate 0.54 % Estimated volatility 150 % Dividend - (a) On August 1, 2013, Axiom Corp. entered into a line of credit agreement with a third party, enabling the Company to borrow up to $50,000, at 8% per annum, with related amounts being due on demand (“Demand loan”). During 2014, the third party agreed to increase the maximum principal amount to $85,000, however no amount was borrowed as of December 31, 2014. As at March 31, 2016, the amount outstanding under this line of credit was $73,068 with accrued interest of $11,541. In addition to the line of credit the third party advanced $74,967 to the Company’s trust account in connection with the Share Exchange Agreement described in Note 1. This latter amount was repaid in April, 2015. (b) On October 16, 2015, the Company closed a financing transaction pursuant to Securities Purchase Agreements dated October 5, 2015 (the “Securities Purchase Agreements”) and Convertible Promissory Notes dated October 5, 2015 (the “Notes”), each entered into by the Company and two investors (the “Purchasers”). Pursuant to the Securities Purchase Agreements, as described below, the principal amount of the Notes is $612,250, and the purchase price of the Notes is $581,000. The terms of the Notes are as follows: The Notes, dated October 5, 2015, (the “Issue Date”), earn interest at an annual rate equal to 10% and provide for a maturity date of October 5, 2016. The funding calls for $256,000 at the time of closing of the Securities Purchase Agreements and Notes, $50,000 upon the filing of a registration statement with the Securities and Exchange Commission (the “SEC”), $50,000 upon receipt of the first round of comments from the SEC regarding the registrations statement, $125,000 upon the effectiveness of the registration statement, and at the Company’s option, $100,000 thirty (30) days after the registration statement becomes effective. As part of the Securities Purchase Agreements, the Company entered into a Registration Rights Agreement (‘RRA”) with the Purchasers. Pursuant to the RRA, the Company shall use its best efforts to file a registration statement on Form S-1 (the “Registration Statement) with the SEC, registering the shares of common stock which may be issued to the Purchasers pursuant to the Securities Purchase Agreements. The Company must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC. As at May 10, 2016 the registration was not yet effective. Any amount of principal or interest not paid when due on the Notes will bear interest at an annual rate of 24% applied from the due date until the date of payment. The Notes carry an original issue discount (“OID”) of $28,750. The Company agrees to pay the Purchasers $8,500 to cover certain fees incurred in connection with the Securities Purchase Agreements and Notes. The amount for fees is included in the initial principal amount of the Notes and the original issue discount is applied pro rata in accordance with the funded tranches. The notes are convertible at a conversion price equal to the lower of: 1) 60% multiplied by the lowest average trading price for the Company’s common stock during the twenty (20) day trading period ending on the latest complete trading day prior to the date of conversion; or 2) the closing price at October 5, 2015. While the Purchasers’ conversion rights exist, the Company will reserve a sufficient number of shares from its authorized and unissued shares of common stock to provide for the issuance of common stock upon the full conversion of the Notes. The Company does not currently have enough shares authorized to meet this requirement. In the event the Company redeems the Notes prior to maturity, the Company is required to pay off all principal balance, interest and any other amounts owing multiplied by 125%. In the event of default, the amount of principal and accrued interest will be due immediately, multiplied by 130%. The Securities Purchase Agreements restricts the ability of the Purchasers to convert the Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. As a result of the variability in the amount of shares of common stock to be issued in accordance with variable pricing terms or conversion price protection clauses, the Company has recorded the conversion features as liabilities at fair value. The Company has determined that the convertible notes are valued at amortized cost, the conversion features are Level 2 fair value measurement and the binominal lattice pricing model was used to calculate the fair value as of December 31, 2015, March 31 2016, and the commitment dates. The following is a summary of the convertible promissory notes at commitment dates: Convertible Loans Gross notes $ 374,893 Less: original issue discount (16,393 ) Less: fees (36,500 ) Net proceeds 322,000 Conversion features (313,632 ) Debt $ 8,368 Key inputs to determine the fair value at commitment dates: Stock Price $ 0.015-0.0249 Exercise Price $ 0.0115-0.0173 Time to expiration – days 280-356 Risk-free interest rate 0.48% - 0.53 % Estimated volatility 150 % Dividend - |
Deferred Revenue
Deferred Revenue | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Revenue [Abstract] | |
Deferred Revenue | 11. Deferred Revenue In April 2013, Papernuts entered into an exclusive distribution agreement providing the rights to commercialize and distribute Papernuts’ converter machines in the Ottawa and Hull-Gatineau regions of Canada. Of the $44,035 (CDN$55,000) up-front licensing fee received, $2,004 (CDN $2,750) has been recognized as revenue during the period ended March 31, 2016 (2015 - $2,216 or CDN $2,750) and $17,646 (CDN $22,917) has been recorded as deferred revenue as at March 31, 2016 (December 31, 2015 - $18,545 or CDN $25,667). The balance of deferred revenue will be amortized into contract revenue over the remaining period of Papernuts obligations under the agreement of approximately 2 years. |
Stockholder's Equity
Stockholder's Equity | 3 Months Ended |
Mar. 31, 2016 | |
Stockholder's Equity [Abstract] | |
Stockholder's Equity | 12. Stockholder’s Equity The Company’s authorized capital consists of 200,000,000 shares of common stock with a par value of $0.00001 per share, 5,000,000 shares of Series A Preferred stock with a par value of $0.00001 per share and 5,000,000 shares of Preferred B stock with a par value of $0.00001 per share. Number of Par Capital stock Shares Value Common Shares: Common Shares as at March 31, 2016 and December 31, 2015 67,397,975 $ 674 Series A Preferred Shares Series A Preferred shares as at March 31, 2016 and December 31, 2015 2,666,668 $ 27 Series B Preferred Shares Series B Preferred shares as at March 31, 2016 and December 31, 2015 1,000,002 $ 10 a) In March, 2015 the Company completed agreements with three directors of Papernuts for the cancellation of 40,000,000 Common Shares of the Company in exchange for a combination of newly issued multi-voting Series A Preferred Shares and multiple-voting Series B Preferred Shares. As per the agreements, the 40,000,000 common shares were converted into 2,666,668 multiple-voting Series A Preferred Shares and 1,000,002 multiple-voting Series B Preferred Shares. Series A Preferred Shares are convertible into Common Shares at the option of the holder at a ratio of 1:10, meaning each Preferred A Share can convert into ten (10) Common Shares of the Company. In addition, holders of each Series A Preferred Share shall have the right to one (1) vote for each Common Share into which such Series A Preferred Share could be converted. Assuming the exercise of all convertible securities including warrants, the Series A Preferred Shares represent 7.7% of the total voting power of the Company’s shareholders. Series B Preferred Shares are convertible into Common Shares at the option of the holder at a ratio of 1:10, meaning each Preferred B Share can convert into ten (10) Common Shares of the Company. In addition, holders of each Series B Preferred Share shall have the right to twenty-five (25) votes for each Common Share into which such Series B Preferred Share could be converted. Assuming the exercise of all convertible securities including warrants, the Series B Preferred Shares represent 71.7% of the total voting power of the Company’s shareholders. The Series A and Series B Preferred Shares are non-redeemable and have a par value of $0.00001 per share. b) Pursuant to the Share Exchange Agreement, the Company also issued warrants to purchase an aggregate of 5,650,000 shares of the Company’s common stock at exercise prices ranging from $0.056 to $0.075 per share to replace warrants previously held by Papernuts warrant holders (the “Warrants”). The Warrants are currently exercisable and may be exercised for a period of 24 months from the date of issuance, February 26, 2015. The Warrants were initially valued at $148,125 using the Black-Scholes pricing model assuming no expected dividends, a volatility of 100%, expected life of two years and a risk-free rate of 0.43%, the value of which is included in additional paid in capital. As at March 31, 2016 there were 5,650,000 warrants outstanding. c) In March, 2015 the Company received $270,000 from a private investor in a private sale in exchange for 900,000 shares of the Company’s common stock. |
Contingency
Contingency | 3 Months Ended |
Mar. 31, 2016 | |
Contingency [Abstract] | |
Contingency | 13. Contingency In the first quarter of 2015 the Company became aware of a potential claim from an individual stating that he was owed $118,427 (CDN$150,000) worth of Papernuts common shares. No action has been commenced as of the date of this report. Management is of the opinion that this potential claim is without merit. Accordingly, no provision has been made in these interim condensed consolidated financial statements. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events On May 2, 2016 the Company cancelled 2,000,000 Series A Preferred Shares, previously issued to directors of the Company and issued 2,000,000 Series A Preferred Shares to directors, officers, staff and vendors. Of the total Series A Preferred Shares issued, 1,125,000 were issued to officers and directors. |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation These unaudited interim condensed consolidated financial statements include the accounts of the Company and its 95.6% owned subsidiary, Papernuts. All inter-company balances and transactions have been eliminated on consolidation. The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant estimates include the use of the going concern assumption, the useful life of equipment, the valuation of equipment and the valuation of convertible debt. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. At March 31, 2016 and December 31, 2015, the Company had a cash balance of $14,270 and $48,116 respectively. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue Revenue from product sales is recognized when the customer takes title, assumes the risks and rewards of ownership and collectability is reasonably assured. Revenue is recorded at the time of shipment for terms designated f.o.b. (free on board) shipping point. For sales transactions designated f.o.b. destination, revenue is recorded when the product is delivered to the customer’s delivery site, when title and risk of loss are transferred. Revenue from the sale of licences and distribution agreements is recognized over the related term of the agreement. Proceeds received prior to the Company meeting its revenue recognition criteria is recorded as deferred revenue and shown as either a current or non-current liability depending on the expected timing of recognition. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs, such as freight to our customers’ destinations, are included in cost of revenue in the statement of operations and comprehensive loss. When shipping and handling costs are included in the sales price charged for our products, they are recognized in revenue. |
Inventories | Inventories Inventories are valued at the lower of cost or market using the average cost method. Inventory is periodically reviewed for use and obsolescence, and adjusted as necessary. Inventory consists of raw material and finished goods. |
Equipment | Equipment Equipment is stated at cost, less accumulated depreciation. Expenditures for betterments are capitalized, whereas normal repairs and maintenance are expensed as incurred. The straight-line method is used to depreciate equipment over its estimated useful life, ranging from 3-5 years. |
Intangible Assets | Intangible Assets Intangible assets are stated at cost, less accumulated amortization. The straight-line method is used to amortize intangible assets over their estimated useful life, for a period of 10 years. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company periodically evaluates the carrying value of long-lived assets in accordance with GAAP, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal. |
Fair Value of Convertible Loans | Fair Value of Convertible Loans The Company has issued convertible loans that are convertible into common stock, at the option of the holder, at conversion prices based on the trading price per share over a period of time. As a result of the variability in the amount of common stock to be issued, the conversion features are reflected at fair value. The instrument is bifurcated into a debt instrument and derivative liability instrument. The debt is accreted to face value over the life of debt. The derivative liability is measured using a binomial lattice valuation methodology and is included in the consolidated balance sheets under the caption “loans payable and conversion features”. Any unrealized and realized gains and losses related to the convertible loans are measured based on the changes in the fair values of the derivative liability. Such gains and losses and accretion costs are recorded as a valuation adjustment of convertible loans payable on the consolidated statements of operations and comprehensive loss. |
Loss per Share | Loss per Share Basic loss per share is calculated by dividing the Company’s net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing the Company’s net loss available to common stockholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity instruments, if dilutive. |
Income Taxes | Income Taxes Income taxes are computed in accordance with the provisions of ASC Topic 740, which requires, among other things, a liability approach to calculating deferred income taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company is required to make certain estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters. In the event that uncertain tax positions are resolved for amounts different than the Company’s estimates, or the related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of related assets and liabilities in the period in which such events occur. Such adjustment may have a material impact on the Company’s income tax provision and results of operations. |
Fair value of stock-based compensation | Fair value of stock-based compensation Stock-based compensation is valued using the Black-Scholes option pricing model, which requires the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options have characteristics significantly different than those of traded options and because changes in the subjective input assumptions can materially affect the calculated fair value, such value is subject to measurement uncertainty. |
Research and development costs | Research and development costs Development expenditures are capitalized if they meet the criteria for recognition as an asset, and are amortized over their expected useful lives once they are available for use. Research costs are expensed as incurred. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The standard, “Disclosures about Fair Value of Financial Instruments”, defines financial instruments and requires fair value disclosures for those instruments. The standard, “Fair Value Measurements”, defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. The carrying amounts reported on the balance sheets for cash, accounts receivable, due to related parties, accounts payable and accrued liabilities and loan payable qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. For the due to related parties, the Company believes the carrying value of the loans approximates fair value as the interest rates are market rates. The standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the standard are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and U.S. government treasury securities; Level 2 Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as the conversion features of the loans payable; and Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value from the perspective of a market participant. Level 3 instruments include those that may be more structured or otherwise tailored to customers' needs. At each balance sheet date, the Company performs an analysis of all instruments subject to the standard and includes in Level 3 all of those whose fair value is based on significant unobservable inputs. Other than the conversion features, there were no assets or liabilities measured at fair value on a recurring basis as of March 31, 2016 or December 31, 2015. |
Foreign Currency Translation | Foreign Currency Translation As further described in Note 4, the Canadian dollar had been the functional and reporting currency of the Company’s business and the consolidated financial statements for periods up to December 31, 2014 were expressed in Canadian dollars. On February 26, 2015, to reflect the changed circumstances of the Company, the functional currency of the Company and its subsidiaries changed to the United States dollar and the Company decided to change its reporting currency to the United States dollar as well. Accordingly, these consolidated financial statements are expressed in United States dollars. Monetary assets and liabilities denominated in currencies other than United States dollars are translated into United States dollars at the rate of exchange in effect at the end of the reporting period. Revenues and expenses are translated at the transaction exchange rate. Foreign currency gains and losses resulting from translation are reflected in net income of the period. An exchange rate of 0.77 was used to translate the monetary assets and liabilities from Canadian to US dollars at March 31, 2016 (December 31, 2015 – 0.7225). An exchange rate of 0.7287 was used to translate revenue and expenses from Canadian to US dollars for the three months ended March 31, 2016 (2015 - 0.8057). |
ASU 2014-09 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Accounting Principles for Future Adoption | In May 2014, FASB issued ASU 2014-09 with the intent of significantly enhancing comparability of revenue recognition practices across entities and industries. The new standard provides a single principles-based, five-step model to be applied to all contracts with customers and introduces new, increased disclosure requirements. The new standard is effective for annual and interim periods beginning on or after December 15, 2017 and may be applied on either a full or modified retrospective basis. The Company is currently assessing the impact of the new standard to the Company’s consolidated financial statements. |
ASU 2014-15 Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Accounting Principles for Future Adoption | In August 2014, FASB issued ASU 2014-15 providing guidance on how to account for and disclose going concern risks. The new standard is effective for annual and interim periods beginning on or after December 15, 2016. The Company is currently assessing the impact of the new standard to the Company’s consolidated financial statements. |
Papernuts Reverse Merger (Table
Papernuts Reverse Merger (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Papernuts Reverse Merger [Abstract] | |
Summary of reverse acquisition transaction | Deemed issuance of 49,714,642 post-Transaction common shares to the former shareholders of Papernuts Canada $ 124,287 Cash and funds held in trust $ 74,967 Accounts payable and accrued liabilities (17,974 ) Due to related parties (61 ) Loans payable (148,035 ) Listing costs reallocated to additional paid-in capital 215,390 Value attributed to Papernuts shares issued $ 124,287 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory [Abstract] | |
Schedule of inventory | March 31, December 31, Raw materials $ 5,306 $ 11,306 Finished goods 1,023 2,222 Total inventory $ 6,329 $ 13,528 |
Equipment (Tables)
Equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equipment [Abstract] | |
Schedule of Equipment | Accumulated March 31, 2016 Cost Depreciation and Impairment Net Book Value Furniture $ 3,723 $ (3,263 ) $ 460 Machinery 53,848 (35,906 ) 17,941 $ 57,571 $ (39,169 ) $ 18,401 Accumulated December 31, 2015 Cost Depreciation and Impairment Net Book Value Furniture $ 3,723 $ (3,038 ) $ 685 Machinery 53,848 (32,887 ) 20,961 $ 57,571 $ (35,925 ) $ 21,646 |
Accounts Payable and Accrued 25
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of accounts payable | March 31, December 31, Accounts payable $ 198,392 $ 159,568 Accrued liabilities 113,965 91,865 $ 312,357 $ 251,433 |
Related Party Transactions an26
Related Party Transactions and Balances (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions and Balances [Abstract] | |
Schedule of related party transactions and balances | March 31, December 31, 8% Demand loans inclusive of interest $ 160,294 $ 147,850 Due to related party 58,817 21,676 Payable to related parties $ 219,111 $ 169,526 |
Loans Payable and Conversion 27
Loans Payable and Conversion Features (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Short-term Debt [Line Items] | |
Schedule of loans payable | Demand loan (a) Debt (b) Conversion features (b) Total Loans payable, December 31, 2015 $ 83,151 $ 74,298 $ 304,693 $ 462,142 Accrued interest 1,457 9,476 - 10,933 Accretion - 92,165 - 92,165 Change in fair value of conversion features - - (13,659 ) (13,659 ) Loans payable, March 31, 2016 $ 84,608 $ 175,939 $ 291,034 $ 551,581 |
Fair value at commitment dates [Member] | |
Short-term Debt [Line Items] | |
Schedule of the convertible promissory notes | Key inputs to determine the fair value at March 31, 2016: Stock Price $ 0.0130 Exercise Price $ 0.0087 Time to expiration – days 188 Risk-free interest rate 0.54 % Estimated volatility 150 % Dividend - |
Convertible promissory notes [Member] | Fair value at commitment dates [Member] | |
Short-term Debt [Line Items] | |
Schedule of loans payable | Convertible Loans Gross notes $ 374,893 Less: original issue discount (16,393 ) Less: fees (36,500 ) Net proceeds 322,000 Conversion features (313,632 ) Debt $ 8,368 Key inputs to determine the fair value at commitment dates: Stock Price $ 0.015-0.0249 Exercise Price $ 0.0115-0.0173 Time to expiration – days 280-356 Risk-free interest rate 0.48% - 0.53 % Estimated volatility 150 % Dividend - |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of capital stock number of shares | Number of Par Capital stock Shares Value Common Shares: Common Shares as at March 31, 2016 and December 31, 2015 67,397,975 $ 674 Series A Preferred Shares Series A Preferred shares as at March 31, 2016 and December 31, 2015 2,666,668 $ 27 Series B Preferred Shares Series B Preferred shares as at March 31, 2016 and December 31, 2015 1,000,002 $ 10 |
Nature of Business, Economic 29
Nature of Business, Economic Dependence and Going Concern (Details) | Feb. 26, 2015$ / sharesshares | Feb. 23, 2015USD ($)shares | Mar. 31, 2016USD ($)Customershares | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) |
Nature of Business, Economic Dependence and Going Concern (Textual) | |||||
Entity Incorporation, Date of Incorporation | Apr. 2, 2012 | ||||
Retained earnings (Accumulated Deficit) | $ | $ (2,242,924) | $ (1,998,650) | |||
Percentage of revenue | 43.00% | 48.00% | |||
Purchase price | $ | $ 124,287 | $ (72,277) | |||
Number of shares purchased | 49,714,642 | ||||
Number of customer | Customer | 1 | ||||
Share Exchange Agreement [Member] | |||||
Nature of Business, Economic Dependence and Going Concern (Textual) | |||||
Warrants issued to purchase of common stock | 5,650,000 | ||||
Share Exchange Agreement [Member] | Papernuts Corporation [Member] | |||||
Nature of Business, Economic Dependence and Going Concern (Textual) | |||||
Shares exchange under agreement | 1,166,450 | 1,220,165 | |||
Exchange agreement of common stock percentage | 95.60% | 100.00% | |||
Common stock shares exchange under agreement | 49,714,642 | (52,000,000) | |||
Share exchange ratio | 42.617187019 | ||||
Stock Purchase Agreement [Member] | Mr. Scott MacRae [Member] | |||||
Nature of Business, Economic Dependence and Going Concern (Textual) | |||||
Purchase price | $ | $ 75,000 | ||||
Number of shares purchased | 30,000,000 | ||||
Minimum [Member] | Share Exchange Agreement [Member] | |||||
Nature of Business, Economic Dependence and Going Concern (Textual) | |||||
Exercise price of warrants | $ / shares | $ 0.056 | ||||
Maximum [Member] | Share Exchange Agreement [Member] | |||||
Nature of Business, Economic Dependence and Going Concern (Textual) | |||||
Exercise price of warrants | $ / shares | $ 0.075 |
Significant Accounting Polici30
Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Significant Accounting Policies (Textual) | ||||
Cash | $ 14,270 | $ 48,116 | $ 137,418 | $ 8,602 |
Estimated useful life of intangible assets | 10 years | |||
Subsidiary or equity method investee, Percentage | 95.60% | |||
Foreign currency transactions, Description | An exchange rate of 0.77 was used to translate the monetary assets and liabilities from Canadian to US dollars at March 31, 2016 (December 31, 2015 0.7225). An exchange rate of 0.7287 was used to translate revenue and expenses from Canadian to US dollars for the three months ended March 31, 2016 (2015 - 0.8057). | |||
Maximum [Member] | ||||
Significant Accounting Policies (Textual) | ||||
Equipment estimated useful life | 5 years | |||
Minimum [Member] | ||||
Significant Accounting Policies (Textual) | ||||
Equipment estimated useful life | 3 years |
Papernuts Reverse Merger (Detai
Papernuts Reverse Merger (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Papernuts Reverse Merger [Abstract] | ||
Cash and funds held in trust | $ 74,967 | |
Accounts payable and accrued liabilities | (17,974) | |
Due to related parties | (61) | |
Loans payable | (148,035) | |
Listing costs reallocated to additional paid-in capital | 215,390 | |
Value attributed to Papernuts shares issued | $ 124,287 | $ (72,277) |
Papernuts Reverse Merger (Det32
Papernuts Reverse Merger (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Papernuts Reverse Merger (Textual) | ||
Deemed issuance of common shares | 49,714,642 | |
Deemed issuance common shares, value | $ 124,287 | $ (72,277) |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory [Abstract] | ||
Raw materials | $ 5,306 | $ 11,306 |
Finished goods | 1,023 | 2,222 |
Total inventory | $ 6,329 | $ 13,528 |
Equipment (Details)
Equipment (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 57,571 | $ 57,571 |
Accumulated Depreciation and Impairment | (39,169) | (35,925) |
Net Book Value | 18,401 | 21,646 |
Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 3,723 | 3,723 |
Accumulated Depreciation and Impairment | (3,263) | (3,038) |
Net Book Value | 460 | 685 |
Machinery [member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 53,848 | 53,848 |
Accumulated Depreciation and Impairment | (35,906) | (32,887) |
Net Book Value | $ 17,941 | $ 20,961 |
Equipment (Details Textual)
Equipment (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Equipment (Textual) | ||
Depreciation expense | $ 3,245 | $ 3,243 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Sep. 15, 2014 | Jul. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible Assets (Textual) | |||||||
Impairment of intangible assets | $ 35,000 | ||||||
Inventory and equipment | $ 40,000 | ||||||
Amortization of intangible assets | $ 7,377 | ||||||
Impairment of assets | $ 62,697 | ||||||
Trademarks [Member] | |||||||
Intangible Assets (Textual) | |||||||
Payments to acquire intangible assets | $ 55,000 | $ 20,000 | $ 75,000 | ||||
Royalty percentage | 2.00% | ||||||
Royalty expense | $ 100,000 |
Accounts Payable and Accrued 37
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable | $ 198,392 | $ 159,568 |
Accrued liabilities | 113,965 | 91,865 |
Accounts payable and accrued liabilities | $ 312,357 | $ 251,433 |
Related Party Transactions an38
Related Party Transactions and Balances (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Related Party Transactions and Balances [Abstract] | ||
8% Demand loans inclusive of interest | $ 160,294 | $ 147,850 |
Due to related party | 58,817 | 21,676 |
Payable to related parties | $ 219,111 | $ 169,526 |
Related Party Transactions an39
Related Party Transactions and Balances (Details Textual) | Jan. 25, 2015USD ($) | Jan. 25, 2015CAD | Jan. 31, 2015USD ($) | Jan. 31, 2015CAD | Apr. 30, 2014USD ($) | Apr. 30, 2014CAD | Dec. 31, 2013USD ($) | Dec. 31, 2013CAD | Mar. 31, 2016USD ($) | Mar. 31, 2016CAD | Apr. 01, 2014USD ($) | Apr. 01, 2014CAD | Dec. 31, 2015USD ($) | Dec. 31, 2015CAD | Jan. 31, 2015CAD | Mar. 28, 2013USD ($) | Mar. 28, 2013CAD | Aug. 01, 2012USD ($) | Aug. 01, 2012CAD |
Related Party Transactions and Balances (Textual) | |||||||||||||||||||
Interest charge | $ 2,588 | CAD 3,551 | $ 2,500 | CAD 3,101 | |||||||||||||||
Additional fees | 58,817 | 21,676 | |||||||||||||||||
Jim Vanderzalm and Rob Moes [Member] | |||||||||||||||||||
Related Party Transactions and Balances (Textual) | |||||||||||||||||||
Loans receivable from Related parties | $ 32,445 | CAD 32,500 | |||||||||||||||||
Outstanding principal and interest in relation to loans | 70,671 | 65,199 | |||||||||||||||||
Principal amount | 70,671 | 59,675 | |||||||||||||||||
Jerry Moes [Member] | |||||||||||||||||||
Related Party Transactions and Balances (Textual) | |||||||||||||||||||
Loans receivable from Related parties | $ 18,345 | CAD 18,629 | |||||||||||||||||
Additions advances to related party | $ 30,184 | CAD 37,500 | $ 15,625 | CAD 18,750 | $ 6,818 | CAD 7,500 | $ 30,180 | CAD 32,098 | $ 11,190 | CAD 12,310 | |||||||||
Outstanding principal and interest in relation to loans | 73,822 | 68,094 | |||||||||||||||||
Principal amount | 73,822 | 62,975 | |||||||||||||||||
Ron Vanderzalm [Member] | |||||||||||||||||||
Related Party Transactions and Balances (Textual) | |||||||||||||||||||
Loans receivable from Related parties | $ 15,625 | CAD 18,750 | |||||||||||||||||
Outstanding principal and interest in relation to loans | 15,801 | 14,557 | |||||||||||||||||
Principal amount | $ 15,801 | $ 14,438 |
Loans Payable and Conversion 40
Loans Payable and Conversion Features (Details ) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Schedule of loans payable | ||
Loans payable - original | $ 462,142 | |
Accrued interest | 10,933 | |
Accretion | 92,165 | |
Change in fair value of conversion features | 78,505 | |
Loans payable, March 31, 2016 | 551,581 | $ 462,142 |
Demand loan [Member] | ||
Schedule of loans payable | ||
Loans payable - original | 83,151 | |
Accrued interest | $ 1,457 | |
Accretion | ||
Change in fair value of conversion features | ||
Loans payable, March 31, 2016 | $ 84,608 | |
Debt [Member] | ||
Schedule of loans payable | ||
Loans payable - original | 74,298 | |
Accrued interest | 9,476 | |
Accretion | $ 92,165 | |
Change in fair value of conversion features | ||
Loans payable, March 31, 2016 | $ 175,939 | |
Conversion features [Member] | ||
Schedule of loans payable | ||
Loans payable - original | $ 304,693 | |
Accrued interest | ||
Accretion | ||
Change in fair value of conversion features | $ (13,659) | |
Loans payable, March 31, 2016 | $ 291,034 |
Loans Payable and Conversion 41
Loans Payable and Conversion Features (Details 1) - Fair value at commitment dates [Member] | 3 Months Ended |
Mar. 31, 2016$ / shares | |
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract] | |
Stock Price | $ 0.0130 |
Exercise Price | $ 0.0087 |
Time to expiration - days | 188 days |
Risk free interest rate | 0.54% |
Estimated volatility | 150.00% |
Dividend |
Loans Payable and Conversion 42
Loans Payable and Conversion Features (Details 2) - Fair value at commitment dates [Member] | 3 Months Ended |
Mar. 31, 2016USD ($)$ / shares | |
Schedule of the convertible promissory notes | |
Stock Price | $ / shares | $ 0.0130 |
Exercise Price | $ / shares | $ 0.0087 |
Time to expiration - days | 188 days |
Risk-free interest rate | 0.54% |
Estimated volatility | 150.00% |
Dividend | |
Convertible Loans [Member] | |
Schedule of the convertible promissory notes | |
Gross notes | $ | $ 374,893 |
Less: original issue discount | $ | (16,393) |
Less: fees | $ | (36,500) |
Net proceeds | $ | 322,000 |
Conversion features | $ | (313,632) |
Debt | $ | $ 8,368 |
Estimated volatility | 150.00% |
Dividend | |
Convertible Loans [Member] | Minimum [Member] | |
Schedule of the convertible promissory notes | |
Stock Price | $ / shares | $ 0.015 |
Exercise Price | $ / shares | $ 0.0115 |
Time to expiration - days | 280 days |
Risk-free interest rate | 0.48% |
Convertible Loans [Member] | Maximum [Member] | |
Schedule of the convertible promissory notes | |
Stock Price | $ / shares | $ 0.0249 |
Exercise Price | $ / shares | $ 0.0173 |
Time to expiration - days | 356 days |
Risk-free interest rate | 0.53% |
Loans Payable and Conversion 43
Loans Payable and Conversion Features (Details Textual) | Oct. 05, 2015USD ($)Investor | Aug. 01, 2013USD ($) | Mar. 31, 2016USD ($) | Aug. 31, 2014USD ($) |
Loans Payable and Conversion Features (Textual) | ||||
Company to borrow amount | $ 50,000 | |||
Interest rate | 8.00% | 24.00% | ||
Maximum principal amount | $ 85,000 | |||
Accrued interest | $ 11,541 | |||
Addition line of credit advanced | 74,967 | |||
Line of credit | 73,068 | |||
Annual interest rate | 24.00% | |||
Original debt discount | 28,750 | |||
Payments to purchase of securities purchase agreement and notes | $ 8,500 | |||
Securities Purchase Agreements [Member] | Convertible Debt [Member] | ||||
Loans Payable and Conversion Features (Textual) | ||||
Principal amount of notes | $ 612,250 | |||
Purchase price of notes | $ 581,000 | |||
Number of investors | Investor | 2 | |||
Issuance date | Oct. 5, 2015 | |||
Annual interest rate | 10.00% | |||
Maturity date | Oct. 5, 2016 | |||
Repayment of funding calls | $ 256,000 | |||
Registration statement, description | $50,000 upon the filing of a registration statement with the Securities and Exchange Commission (the "SEC"), $50,000 upon receipt of the first round of comments from the SEC regarding the registrations statement, $125,000 upon the effectiveness of the registration statement, and at the Company's option, $100,000 thirty (30) days after the registration statement becomes effective. | |||
Percentage of conversion price | 60.00% | |||
Number of trading days | 20 days | |||
Percentage of redeemption principal balance | 125.00% | |||
Percentage of event of default | 130.00% | |||
Debt conversion, description | The Securities Purchase Agreements restricts the ability of the Purchasers to convert the Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. |
Deferred Revenue (Details)
Deferred Revenue (Details) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016USD ($) | Mar. 31, 2016CAD | Dec. 31, 2015USD ($) | Dec. 31, 2015CAD | Mar. 31, 2016CAD | Dec. 31, 2015CAD | |
Deferred Revenue (Textual) | ||||||
Licensing fee | $ 44,035 | CAD 55,000 | ||||
Recognition of deferred revenue | 2,004 | CAD 2,750 | $ 2,216 | CAD 2,750 | ||
Deferred revenue | $ 17,646 | $ 18,545 | CAD 22,917 | CAD 25,667 | ||
Amortization of deferred revenue period | 2 years | 2 years |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Common Shares: | ||
Common Shares as at March 31, 2016 and December 31, 2015 | 67,397,975 | 67,397,975 |
Common stock value | $ 674 | $ 674 |
Series A Preferred Stock [Member] | ||
Common Shares: | ||
Conversion of common stock, Shares | 2,666,668 | |
Conversion of common shares, Value | $ 27 | 27 |
Series B Preferred Stock [Member] | ||
Common Shares: | ||
Conversion of common stock, Shares | 1,000,002 | |
Conversion of common shares, Value | $ 10 | $ 10 |
Common Stock [Member] | ||
Common Shares: | ||
Common Shares as at March 31, 2016 and December 31, 2015 | 67,397,975 | 67,397,975 |
Common stock value | $ 674 | $ 674 |
Stockholder's Equity (Details T
Stockholder's Equity (Details Textual) - USD ($) | Feb. 26, 2015 | Mar. 31, 2015 | Mar. 31, 2016 | Dec. 31, 2015 |
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||
Common stock, par value | $ 0.00001 | $ 0.00001 | ||
Common shares cancellation | 40,000,000 | |||
Date of warrant exercisable | Feb. 26, 2015 | |||
Warrants outstanding | 5,650,000 | |||
Warrants valued | $ 148,125 | |||
Received from exchanges of shrae of common stock in private sale | $ 270,000 | |||
Number of shares of common stock exchanged in private sale | 900,000 | |||
Share exchange agreement member [Member] | ||||
Class of Stock [Line Items] | ||||
Warrants issued to purchase of common stock | 5,650,000 | |||
Share exchange agreement member [Member] | Minimum [Member] | ||||
Class of Stock [Line Items] | ||||
Exercise price of warrants | $ 0.056 | |||
Share exchange agreement member [Member] | Maximum [Member] | ||||
Class of Stock [Line Items] | ||||
Exercise price of warrants | $ 0.075 | |||
Warrant [Member] | ||||
Class of Stock [Line Items] | ||||
Volatility rate | 100.00% | |||
Expected dividend rate | ||||
Risk free interest rate | 0.43% | |||
Expected life term | 2 years | |||
Series A Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | ||
Conversion of common stock, Shares | 2,666,668 | |||
Conversion of stock, description | Series A Preferred Shares are convertible into Common Shares at the option of the holder at a ratio of 1:10, meaning each Preferred A Share can convert into ten (10) Common Shares of the Company. | |||
Common stock voting rights description | In addition, holders of each Series A Preferred Share shall have the right to one (1) vote for each Common Share into which such Series A Preferred Share could be converted. Assuming the exercise of all convertible securities including warrants, the Series A Preferred Shares represent 7.7% of the total voting power of the Company's shareholders. | |||
Series B Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | ||
Conversion of common stock, Shares | 1,000,002 | |||
Conversion of stock, description | Series B Preferred Shares are convertible into Common Shares at the option of the holder at a ratio of 1:10, meaning each Preferred B Share can convert into ten (10) Common Shares of the Company. | |||
Common stock voting rights description | In addition, holders of each Series B Preferred Share shall have the right to twenty-five (25) votes for each Common Share into which such Series B Preferred Share could be converted. Assuming the exercise of all convertible securities including warrants, the Series B Preferred Shares represent 71.7% of the total voting power of the Company's shareholders. |
Contingency (Details)
Contingency (Details) - Mar. 31, 2015 ¥ in Thousands | USD ($) | CNY (¥) |
Contingency [Abstract] | ||
Owe worth from related parties | $ 118,427 | ¥ 150,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - Series A Preferred Share [Member] | May. 02, 2016shares |
Subsequent Event [Line Items] | |
Cancellation of shares | 2,000,000 |
Management [Member] | |
Subsequent Event [Line Items] | |
Shares issued | 2,000,000 |
Officers and Directors [Member] | |
Subsequent Event [Line Items] | |
Shares issued | 1,125,000 |