Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 02, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40578 | |
Entity Registrant Name | AGRIFORCE GROWING SYSTEMS LTD. | |
Entity Central Index Key | 0001826397 | |
Entity Incorporation, State or Country Code | A1 | |
Entity Address, Address Line One | 800 – 525 West 8th Avenue | |
Entity Address, City or Town | Vancouver | |
Entity Address, State or Province | BC | |
Entity Address, Country | CA | |
Entity Address, Postal Zip Code | V5Z 1C6 | |
City Area Code | (604) | |
Local Phone Number | 757-0952 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,413,511 | |
Common Shares [Member] | ||
Title of 12(b) Security | Common Shares | |
Trading Symbol | AGRI | |
Security Exchange Name | NASDAQ | |
Series A Warrants [Member] | ||
Title of 12(b) Security | Series A Warrants | |
Trading Symbol | AGRIW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Interim
Condensed Consolidated Interim Balance Sheets | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Current | |||
Cash and cash equivalents | $ 586,565 | $ 2,269,320 | |
Other receivable | 74,735 | 48,941 | |
Prepaid expenses and other current assets (Note 3) | 242,033 | 598,342 | |
Inventories (Note 4) | 38,167 | ||
Advance (Note 5) | 218,934 | ||
Total current assets | 1,160,434 | 2,916,603 | |
Non-current | |||
Property and equipment, net | 92,482 | 121,672 | |
Intangible asset (Note 6) | 12,620,896 | 13,089,377 | |
Operating lease right-of-use asset | 1,406,060 | 1,540,748 | |
Construction in progress | 2,056,459 | 2,092,533 | |
Land deposit (Note 3) | 2,085,960 | ||
Total assets | 17,336,331 | 21,846,893 | |
Current | |||
Accounts payable and accrued liabilities (Note 7) | 1,891,589 | 1,147,739 | |
Debentures (Note 8 and 14) | 4,669,944 | 3,941,916 | |
Contract liabilities (Note 9) | 23,262 | ||
Lease liability – current (Note 13) | 275,584 | 271,110 | |
Total current liabilities | 6,860,379 | 5,360,765 | |
Non-current | |||
Lease liability – non-current (Note 13) | 1,122,692 | 1,250,060 | |
Derivative liabilities (Note 11) | 1,958,568 | 4,649,115 | |
Long term loan (Note 10) | 44,379 | 44,300 | |
Total liabilities | 9,986,018 | 11,304,240 | |
Commitments and contingencies (Note 14) | |||
Shareholders’ equity | |||
Common shares, no par value per share – unlimited shares authorized; 1,071,516 and 315,916 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | [1] | 41,891,730 | 27,142,762 |
Obligation to issue shares | 44,214 | ||
Additional paid-in-capital | 6,486,532 | 16,816,695 | |
Accumulated deficit | (40,514,172) | (32,774,094) | |
Accumulated other comprehensive income | (557,991) | (642,710) | |
Total shareholders’ equity | 7,350,313 | 10,542,653 | |
Total liabilities and shareholders’ equity | $ 17,336,331 | $ 21,846,893 | |
[1]reflects the 1:50 reverse stock split |
Condensed Consolidated Interi_2
Condensed Consolidated Interim Balance Sheets (Parenthetical) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | Unlimited | Unlimited |
Common stock, shares issued | 1,071,516 | 315,916 |
Common stock, shares outstanding | 1,071,516 | 315,916 |
Condensed Consolidated Interi_3
Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
OPERATING EXPENSES | |||||
Wages and salaries | $ 603,242 | $ 695,510 | $ 2,319,026 | $ 2,521,164 | |
Consulting | 147,190 | 522,576 | 1,032,210 | 2,030,994 | |
Professional fees | 277,694 | 1,177,236 | 1,026,044 | 2,058,636 | |
Office and administrative | 191,829 | 356,408 | 821,358 | 987,298 | |
Share based compensation | 80,537 | 169,020 | 565,861 | 705,882 | |
Depreciation and amortization | 172,096 | 6,714 | 512,695 | 15,706 | |
Investor and public relations | 61,319 | 111,499 | 451,184 | 718,423 | |
Lease expense | 73,261 | 79,293 | 222,535 | 238,728 | |
Sales and marketing | 11,242 | 95,750 | 173,568 | 186,132 | |
Shareholder and regulatory | 35,857 | 28,431 | 114,674 | 175,094 | |
Travel and entertainment | 3,813 | 55,904 | 104,938 | 214,725 | |
Research and development | (27,046) | 110,916 | 22,312 | 537,772 | |
Operating loss | (1,631,034) | (3,409,257) | (7,366,405) | (10,390,554) | |
OTHER EXPENSES | |||||
Accretion of interest on debentures (Note 8) | 2,064,936 | 1,688,672 | 6,045,214 | 1,688,672 | |
Loss (gain) on conversion of convertible debt (Note 8) | 108,125 | (93,973) | 541,730 | (93,973) | |
Change in fair value of derivative liabilities (Note 11) | (326,042) | (1,465,027) | (6,159,067) | (1,683,489) | |
Foreign exchange loss (gain) | 25,472 | (104,468) | (1,317) | (143,432) | |
Write-off of deposit (Note 3) | 12,000 | ||||
Other income | (10,472) | (37,831) | (64,887) | (37,831) | |
Net loss | (3,493,053) | (3,396,630) | (7,740,078) | (10,120,501) | |
Other comprehensive income (loss) | |||||
Foreign currency translation | (226,286) | (566,414) | 84,719 | (599,507) | |
Comprehensive loss attributable to common shareholders | $ (3,719,339) | $ (3,963,044) | $ (7,655,359) | $ (10,720,008) | |
Basic net loss attributed to common share | [1] | $ (4.03) | $ (8.31) | $ (12.58) | $ (29.07) |
Diluted net loss attributed to common share | [1] | $ (4.03) | $ (8.31) | $ (12.58) | $ (29.07) |
Weighted average number of common shares outstanding - basic | [1] | 867,110 | 408,702 | 615,152 | 348,133 |
Weighted average number of common shares outstanding - diluted | [1] | 867,110 | 408,702 | 615,152 | 348,133 |
[1]reflects the 1:50 reverse stock split |
Condensed Consolidated Interi_4
Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited) (Parenthetical) | Oct. 11, 2023 |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Reverse stock split | 1:50 reverse stock split |
Condensed Consolidated Interi_5
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Obligation to Issue Shares [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total | ||
Balance at Dec. 31, 2021 | $ 25,637,543 | [1] | $ 2,203,343 | $ 93,295 | $ (19,900,992) | $ (33,086) | $ 8,000,103 | |
Balance, shares at Dec. 31, 2021 | [1] | 303,534 | ||||||
Shares issued for conversion of convertible debt | $ 131,532 | [1] | 131,532 | |||||
Shares issued for conversion of convertible debt, shares | [1] | 1,351 | ||||||
Shares issued for compensation | $ 432,054 | [1] | 432,054 | |||||
Shares issued for compensation, shares | [1] | 3,692 | ||||||
Shares issued for consulting services | $ 801,457 | [1] | (93,295) | 708,162 | ||||
Shares issued for consulting services, shares | [1] | 5,195 | ||||||
Share based compensation | [1] | 282,828 | 282,828 | |||||
Net loss | [1] | (10,120,501) | (10,120,501) | |||||
Foreign currency translation | [1] | (599,507) | (599,507) | |||||
Prefunded warrants issued | [1] | 11,082,546 | 11,082,546 | |||||
Balance at Sep. 30, 2022 | $ 27,002,586 | [1] | 13,568,717 | (30,021,493) | (632,593) | 9,917,217 | ||
Balance, shares at Sep. 30, 2022 | [1] | 313,772 | ||||||
Balance at Dec. 31, 2021 | $ 25,637,543 | [1] | 2,203,343 | 93,295 | (19,900,992) | (33,086) | 8,000,103 | |
Balance, shares at Dec. 31, 2021 | [1] | 303,534 | ||||||
Balance at Dec. 31, 2022 | $ 27,142,762 | [1] | 16,816,695 | (32,774,094) | (642,710) | 10,542,653 | ||
Balance, shares at Dec. 31, 2022 | [1] | 315,916 | ||||||
Balance at Jun. 30, 2022 | $ 26,710,990 | [1] | 10,123,315 | (26,624,863) | (66,179) | 10,143,263 | ||
Balance, shares at Jun. 30, 2022 | [1] | 310,293 | ||||||
Shares issued for conversion of convertible debt | $ 131,532 | [1] | 131,532 | |||||
Shares issued for conversion of convertible debt, shares | [1] | 1,351 | ||||||
Shares issued for compensation | $ 100,564 | [1] | 100,564 | |||||
Shares issued for compensation, shares | [1] | 1,528 | ||||||
Shares issued for consulting services | $ 59,500 | [1] | 59,500 | |||||
Shares issued for consulting services, shares | [1] | 600 | ||||||
Share based compensation | [1] | 68,456 | 68,456 | |||||
Net loss | [1] | (3,396,630) | (3,396,630) | |||||
Foreign currency translation | [1] | (566,414) | (566,414) | |||||
Prefunded warrants issued | [1] | 3,376,946 | 3,376,946 | |||||
Balance at Sep. 30, 2022 | $ 27,002,586 | [1] | 13,568,717 | (30,021,493) | (632,593) | 9,917,217 | ||
Balance, shares at Sep. 30, 2022 | [1] | 313,772 | ||||||
Balance at Dec. 31, 2022 | $ 27,142,762 | [1] | 16,816,695 | (32,774,094) | (642,710) | 10,542,653 | ||
Balance, shares at Dec. 31, 2022 | [1] | 315,916 | ||||||
Shares issued for conversion of convertible debt | $ 4,756,872 | [1] | 4,756,872 | |||||
Shares issued for conversion of convertible debt, shares | [1] | 472,431 | ||||||
Shares issued for compensation | $ 311,190 | [1] | 44,214 | 355,404 | ||||
Shares issued for compensation, shares | [1] | 35,007 | ||||||
Shares issued for cash, net of issuance costs | $ 939,695 | [1] | $ 939,695 | |||||
Shares issued for cash, net of issuance costs, shares | 124,652 | [1] | 102,610 | |||||
Shares issued for consulting services | $ 80,885 | [1] | $ 80,885 | |||||
Shares issued for consulting services, shares | [1] | 900 | ||||||
Shares issued on conversion of vested prefunded warrants | $ 8,455,446 | [1] | (8,455,446) | |||||
Shares issued on conversion of vested prefunded warrants, shares | [1] | 102,610 | ||||||
Share based compensation | [1] | 211,243 | 211,243 | |||||
Net loss | [1] | (7,740,078) | (7,740,078) | |||||
Foreign currency translation | [1] | 84,719 | 84,719 | |||||
Shares issued in private placement | $ 204,880 | [1] | 204,880 | |||||
Shares issued in private placement, shares | [1] | 20,000 | ||||||
Cancelled prefunded warrants | [1] | (2,085,960) | (2,085,960) | |||||
Balance at Sep. 30, 2023 | $ 41,891,730 | [1] | 6,486,532 | 44,214 | (40,514,172) | (557,991) | 7,350,313 | |
Balance, shares at Sep. 30, 2023 | [1] | 1,071,516 | ||||||
Balance at Jun. 30, 2023 | $ 33,086,067 | [1] | 11,478,156 | 97,837 | (37,021,119) | (331,705) | 7,309,236 | |
Balance, shares at Jun. 30, 2023 | [1] | 454,335 | ||||||
Shares issued for conversion of convertible debt | $ 3,013,171 | [1] | 3,013,171 | |||||
Shares issued for conversion of convertible debt, shares | [1] | 422,104 | ||||||
Shares issued for compensation | $ 205,678 | [1] | (53,623) | 152,055 | ||||
Shares issued for compensation, shares | [1] | 31,890 | ||||||
Shares issued for cash, net of issuance costs | $ 640,096 | [1] | 640,096 | |||||
Shares issued for cash, net of issuance costs, shares | [1] | 103,177 | ||||||
Shares issued for consulting services | $ 27,150 | [1] | 27,150 | |||||
Shares issued for consulting services, shares | [1] | 350 | ||||||
Shares issued on conversion of vested prefunded warrants | $ 4,919,568 | [1] | (4,919,568) | |||||
Shares issued on conversion of vested prefunded warrants, shares | [1] | 59,660 | ||||||
Share based compensation | [1] | (72,056) | (72,056) | |||||
Net loss | [1] | (3,493,053) | (3,493,053) | |||||
Foreign currency translation | [1] | (226,286) | (226,286) | |||||
Balance at Sep. 30, 2023 | $ 41,891,730 | [1] | $ 6,486,532 | $ 44,214 | $ (40,514,172) | $ (557,991) | $ 7,350,313 | |
Balance, shares at Sep. 30, 2023 | [1] | 1,071,516 | ||||||
[1]reflects the 1:50 reverse stock split |
Condensed Consolidated Interi_6
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) | Oct. 11, 2023 |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Reverse stock split | 1:50 reverse stock split |
Condensed Consolidated Interi_7
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss for the period | $ (7,740,078) | $ (10,120,501) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 512,695 | 15,706 |
Share based compensation | 211,243 | 282,828 |
Shares issued for consulting services | 80,885 | 708,162 |
Shares issued for compensation | 355,404 | 432,054 |
Loss (gain) on debt conversion | 541,730 | (93,973) |
Amortization of debt issuance costs | 5,873,396 | 1,515,296 |
Change in fair value of derivative liabilities | (6,159,067) | (1,683,489) |
Write-off of deposit | 12,000 | |
Changes in operating assets and liabilities: | ||
Other receivables | (25,794) | (14,411) |
Prepaid expenses and other current assets | 344,309 | (60,914) |
Inventories | (38,167) | |
Advance | (225,000) | |
Accounts payable and accrued liabilities | 783,725 | (35,791) |
Right-of-use asset | 134,688 | 249,038 |
Lease liabilities | (122,894) | (255,731) |
Contract liabilities | 23,333 | |
Net cash used in operating activities | (5,437,592) | (9,061,726) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Payment towards acquisition of intangibles | (500,000) | |
Acquisition of equipment and leasehold improvements | (93,259) | |
Deposit for purchase of land | 20,000 | |
Construction in progress | (50,000) | |
Net cash used in investing activities | (623,259) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from common shares issued for cash | 1,342,915 | |
Share issuance costs paid | (153,220) | |
Proceeds from debentures – net of discount | 4,615,385 | 12,750,000 |
Repayment of convertible debentures | (1,741,950) | (1,122,000) |
Financing costs of debentures | (325,962) | (1,634,894) |
Net cash provided by financing activities | 3,737,168 | 9,993,106 |
Effect of exchange rate changes on cash and cash equivalent | 17,669 | (214,383) |
Change in cash | (1,682,755) | 93,738 |
Cash, beginning of period | 2,269,320 | 7,775,290 |
Cash, end of period | 586,565 | 7,869,028 |
Supplemental cash flow information: | ||
Cash paid during the period for interest | 171,818 | 173,376 |
Supplemental disclosure of non-cash investing and financing transactions | ||
Shares issued for conversion of convertible debt | 4,756,872 | 131,532 |
Reclassified accrued construction in progress fees | 39,875 | |
Initial fair value of debenture warrants (“Second Tranche Warrants”) | 2,378,000 | |
Initial fair value of conversion feature of debentures (“Second Tranche Debentures”) | 1,599,000 | |
Fair value of debenture warrants (“First Tranche Warrants”) | 4,342,877 | |
Fair value of conversion feature of debentures (“First Tranche Debentures”) | 2,249,000 | |
Prefunded warrants issued related to intangible assets | 8,996,586 | |
Prefunded warrants issued related to land deposit | 2,085,960 | |
Initial operating lease liability recognized under Topic 842 | 1,776,599 | |
Initial lease right-of-use asset recognized under Topic 842 | $ 1,837,782 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PREPARATION | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PREPARATION | 1. NATURE OF OPERATIONS AND BASIS OF PREPARATION Business Overview AgriFORCE Growing Systems Ltd. (“AgriFORCE” or the “Company”) was incorporated as a private company by Articles of Incorporation issued pursuant to the provisions of the Business Corporations Act (British Columbia) th The Company is an innovative agriculture-focused technology company that delivers reliable, financially robust solutions for high value crops through our proprietary facility design and automation Intellectual Property to businesses and enterprises globally through our AgriFORCE™ Solutions division (“Solutions”) and delivers nutritious food products through our AgriFORCE™ Brands division (“Brands”). Solutions intends to operate in the plant based pharmaceutical, nutraceutical, and other high value crop markets using its unique proprietary facility design and hydroponics based automated growing system that enable cultivators to effectively grow crops in a controlled environment (“FORCEGH+™”). The Company has designed FORCEGH+™ facilities to produce in virtually any environmental condition and to optimize crop yields to as near their full genetic potential possible whilst substantially eliminating the need for the use of pesticides and/or irradiation. Brands is focused on the development and commercialization of plant-based ingredients and products that deliver healthier and more nutritious solutions. We will market and commercialize both branded consumer product offerings and ingredient supply. Basis of Presentation The accompanying Unaudited Condensed Consolidated Interim Financial Statements and related financial information of AgriFORCE Growing Systems Ltd. should be read in conjunction with the audited financial statements and the related notes thereto for the years ended December 31, 2022 and 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 13, 2023. These unaudited interim financial statements have been prepared in accordance with the rules and regulations of the United States Securities and SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. In the opinion of management, the accompanying interim financial statements contain all adjustments which are necessary to state fairly the Company’s financial position as of September 30, 2023 and December 31, 2022, and the results of its operations and cash flows during the three and nine months ended September 30, 2023 and 2022. Such adjustments are of a normal and recurring nature. The results for the nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2023, or for any future period. Liquidity and Management’s Plan The Company has incurred substantial operating losses since its inception and expects to continue to incur significant operating losses for the foreseeable future. As reflected in the interim financial statements for the nine months ended September 30, 2023, the Company had a net loss of $ 7.7 5.4 5.7 The accompanying interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The interim financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. The Company is at the development stage of its business plan. As such it is likely that additional financing will be needed by the Company to fund its operations and to develop and commercialize its technology. These factors raise substantial doubt about the Company’s ability to continue as a going concern. For the next twelve months from issuance of these interim financial statements, the Company will seek to obtain additional capital through the sale of debt or equity financings or other arrangements to fund operations; however, there can be no assurance that the Company will be able to raise needed capital under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to our currently outstanding common shares. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Due to the uncertainty in the Company’s ability to raise capital, management believes that there is substantial doubt in the Company’s ability to continue as a going concern for twelve months from the issuance of these interim financial statements. Reverse Stock Split On October 11, 2023, the Company executed a one-for-fifty reverse stock split of the Company’s common shares (the “Reverse Split”). As a result of the Reverse Split, every 50 shares of the Company’s old common shares were converted into one share of the Company’s new common shares. Fractional shares resulting from the reverse split were rounded up to the nearest whole number. The Reverse Split automatically and proportionately adjusted all issued and outstanding shares of the Company’s common shares, as well as convertible debentures, convertible features, prefunded warrants, stock options and warrants outstanding at the time of the date of the Reverse Split. The exercise price on outstanding equity based-grants was proportionately increased, while the number of shares available under the Company’s equity-based plans was proportionately reduced. Share and per share data (except par value) for the periods presented reflect the effects of the Reverse Split. References to numbers of common shares and per share data in the accompanying financial statements and notes thereto for periods ended prior to October 11, 2023 have been adjusted to reflect the Reverse Split on a retroactive basis. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses.” The standard, including subsequently issued amendments, requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, and requires the modified retrospective approach. ASU 2016-13 was adopted by the Company on January 1, 2023. Based on the composition of the Company’s affected financial assets, current market conditions, and historical credit loss activity, the adoption did not have a material impact to these interim financial statements. In August 2020, the FASB issued ASU 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASU 2020-06”). The intention of ASU 2020-06 is to address the complexities in accounting for certain financial instruments with a debt and equity component. Under ASU 2020-06, the number of accounting models for convertible notes will be reduced and entities that issue convertible debt will be required to use the if-converted method for the computation of diluted “Earnings per share” under ASC 260. ASC 2020-06 is effective for fiscal years beginning after December 15, 2023 and may be adopted through either a modified retrospective method of transition or a fully retrospective method of transition. ASU 2020-06 was adopted by the Company on January 1, 2023. Since the Company had a net loss for the nine months ended September 30, 2023 and its convertible debentures were determined to be anti-dilutive, there was no material impact to its basic and diluted net loss per share for the period as a result of adopting ASU 2020-06. In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under ASU 2021-08, an acquirer must recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. ASU 2021-08 was adopted on January 1, 2023 and did not have a material impact to these interim financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. Inventories Inventories consist of finished goods of milled flour and related packaging material recorded at the lower of cost or net realizable value with the cost measured using the average cost method. Inventories includes all costs that relate to bringing the inventory to its present condition and location under normal operating conditions. Revenue Recognition Product revenue includes sales from hydroxyl generators. We recognize product revenue when we satisfy performance obligations by transferring control of the promised products or services to customers. Product revenue is recognized at a point in time when a good is shipped or delivered to the customer. Contract Balances We recognize a receivable when the Company has a right to consideration for which the Company has completed the performance obligations and only the passage of time is required before payment of that consideration is due. We recognize a contract asset when revenue is recognized prior to invoicing. We recognize a contract liability when a customer provides payment to the Company for a performance obligation not yet satisfied. Payment terms generally require payments within 30 days. Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which provides that if three criteria are met, the Company is required to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which; (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract; (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur; and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.” The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability. Definite Lived Intangible Asset Definite lived intangible asset consists of a granted patent. Amortization is computed using the straight-line method over the estimated useful life of the asset. The estimated useful life of the granted patent is 20 Fair Value of Financial Instruments The fair value of the Company’s other receivable, accounts payable and other current liabilities approximate their carrying amounts due to the relative short maturities of these items. The Company issued warrants having a strike price denominated in U.S. dollars, which creates an obligation to issue shares for a price that is not denominated in the Company’s functional currency, Canadian dollars, and renders the warrants not indexed to the Company’s stock. The Series A warrants, representative warrants issued as part of the IPO, and convertible debt warrants are thus classified as derivative liabilities and are measured at fair value. The convertible debentures also have a conversion feature whereby the debt holders can convert their outstanding debentures into common shares of the Company. The conversion price has a strike price denominated in U.S. dollars and accordingly, the conversion feature is classified as a derivative liability and measured at fair value. The fair value of the Company’s warrants are determined in accordance with FASB ASC 820, “Fair Value Measurement,” which establishes a fair value hierarchy that prioritizes the assumptions (inputs) to valuation techniques used to price assets or liabilities that are measured at fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The guidance for fair value measurements requires that assets and liabilities measured at fair value be classified and disclosed in one of the following categories: ● Level 1: Defined as observable inputs, such as quoted (unadjusted) prices in active markets for identical assets or liabilities. ● Level 2: Defined as observable inputs other than quoted prices included in Level 1. This includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Defined as unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation. Reclassifications The Company has reclassified certain amounts in the 2022 consolidated financial statements to comply with the 2023 presentation. |
PREPAID EXPENSES, OTHER CURRENT
PREPAID EXPENSES, OTHER CURRENT ASSETS AND LAND DEPOSIT | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES, OTHER CURRENT ASSETS AND LAND DEPOSIT | 3. PREPAID EXPENSES, OTHER CURRENT ASSETS AND LAND DEPOSIT SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS September 30, 2023 December 31, 2022 Prepaid expenses $ 169,448 $ 436,496 Legal retainer 30,811 24,457 Inventory advances 36,107 - Deferred offering costs - 100,337 Deposits - 12,000 Others 5,667 25,052 Prepaid expenses, other current assets $ 242,033 $ 598,342 The Company wrote off a non-refundable deposit amounting to $ 12,000 Inventory advances represent payments made to manufacturers for goods not received. On August 31, 2022, the Company signed a purchase and sale agreement with Stronghold Power Systems, Inc. (“Stronghold”), to purchase approximately seventy acres of land located in the City of Coachella as well as to have Stronghold complete certain permitting, zoning, and infrastructure work for a total purchase price of $ 4,300,000 (i) $ 1,500,000 (ii) A first stock deposit of $ 1,700,000 13,917 (iii) A second stock deposit $ 1,100,000 9,005 As at December 31, 2022 the $ 2,085,960 On March 31, 2023 the prefunded warrants issued were rescinded and the warrants were rendered null and void as the Company presented a termination notice to Stronghold and the value under land deposit was also reversed. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 4. INVENTORIES As at September 30, 2023, the Company had $ 38,167 (December 31, 2022 - nil) in finished goods. At the end of each reporting period, inventories are reviewed to ensure that they are recorded at the lower of cost and net realizable value. |
ADVANCE
ADVANCE | 9 Months Ended |
Sep. 30, 2023 | |
Advance | |
ADVANCE | 5. ADVANCE On June 18, 2023, the Company signed a memorandum of understanding (“MOU”) with Radical Clean Solutions Ltd. (“RCS”) to advance $ 225,000 to RCS to be used exclusively for the advance purchase of hydroxyl generating devices. On June 26, 2023, the Company advanced $ 225,000 to RCS. The Company has an option to convert the advance into an investment for 14 % of the issued and outstanding common shares of RCS. Upon conversion of the advance into an investment, the Company will receive one of five board of director seats of RCS and will have a right of first refusal to maintain an ownership percentage in RCS of not less than 10 % of the total issued and outstanding common shares. On October 1, 2023 the Company and RCS signed a definitive agreement to convert the advance into a 14% ownership investment in RCS. |
INTANGIBLE ASSET
INTANGIBLE ASSET | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSET | 6. INTANGIBLE ASSET Intangible asset represents $ 12,620,896 13,089,377 1,475,000 147,600 12,106,677 469,058 492,300 9.99 On January 3, 2023, Manna satisfied all of its contractual obligations when the patent was approved by the US Patents Office and the title was transferred to the Company. During the nine months ended September 30, 2023, the Company issued 102,610 44,990 Based on the terms above and in conformity with US GAAP, the Company accounted for purchase as an asset acquisition and has deemed the asset purchased as an in-process research and development. The asset was completed and will be amortized over its useful life of 20 492,220 The estimated annual amortization expense for the next five years are as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE Period ending: Amount Remaining 2023 $ 163,908 2024 655,631 2025 655,631 2026 655,631 2027 655,631 Subsequent years 9,834,464 Total $ 12,620,896 |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES September 30, 2023 December 31, 2022 Accounts payable $ 623,887 $ 498,188 Accrued expenses 665,696 365,521 Other 602,006 284,030 Accounts payable and accrued liabilities $ 1,891,589 $ 1,147,739 |
DEBENTURES
DEBENTURES | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBENTURES | 8. DEBENTURES On June 30, 2022, the Company executed the definitive agreement with arm’s length accredited institutional investors (the “Investors”) for $ 14,025,000 10 12,750,000 111.00 82,129 122.10 December 31, 2025 1,634,894 The Investors have the right to purchase additional tranches of $ 5,000,000 33,000,000 On January 17, 2023, the Investors purchased additional debentures totaling $ 5,076,923 10 4,615,385 62.00 53,226 62.00 December 31, 2025 62.00 325,962 The First Tranche and Second Tranche Debentures (the “Debentures”) have an interest rate of 5 6 8 th 8 On August 9, 2023, the Company entered into another waiver and amendment agreement (“Agreement”) with the Investors with respect to a certain Senior Convertible Debenture (the “Debentures”) due July 17, 2025 issued by the Company to that Investor. The Agreement provides as follows: 1. The Company wishes to make Monthly Redemptions in shares of the Company’s Common Stock in lieu of cash payments, until further written notice from the Company to the Purchaser. 2 The Purchaser is willing to accept such shares as payment of the Monthly Redemption Amount provided that the Equity Conditions are met; and will consider on a case-by-case basis accepting payments in shares of Common Stock if the Equity Conditions are not met, at its sole discretion. Company may inquire of the Purchaser at least 5 3 The Purchaser will accept the August 1, 2023 Monthly Redemption Amount in shares of Common Stock valued at the August 1 Repayment Price for such date. On August 30, 2023, the Company issued common shares for cash under an ATM agreement (the “ATM”) triggering the down round provision, adjusting the exercise prices of the First and Second Tranche Debentures as well as the First and Second Tranche Warrants to $ 5.50 Due to the currency of the above noted features being different from the Company’s functional currency, the First Tranche Warrants and Second Tranche Warrants (the “Debenture Warrants), as well as the Debentures’ convertible features were classified as derivative liabilities and are further discussed in Note 11. The following table summarizes the outstanding debentures as of the dates indicated: SCHEDULE OF OUTSTANDING DEBENTURES Maturity Cash September 30, December 31, Principal (First Tranche Debentures) 12/31/2024 5.00 8.00 % $ 14,025,000 $ 14,025,000 Principal (Second Tranche Debentures) 17/07/2025 5.00 8.00 % 5,076,923 - Repayments and conversions (8,431,581 ) (2,955,000 ) Debt issuance costs and discounts (Note 8 & 11) (6,000,398 ) (7,128,084 ) Total Debentures (current) $ 4,669,944 $ 3,941,916 During the nine months ended September 30, 2023, the Investors converted $ 3,734,631 305,175 541,730 6,045,214 |
CONTRACT BALANCES
CONTRACT BALANCES | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT BALANCES | 9. CONTRACT BALANCES For the nine months ended September 30, 2023 , 23,262 nil |
LONG TERM LOAN
LONG TERM LOAN | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG TERM LOAN | 10. LONG TERM LOAN During the year ended December 31, 2020, the Company entered into a loan agreement with Alterna Bank for a principal amount of $ 29,586 29,533 40,000 The Program, as set out by the Government of Canada, requires that the funds from this loan shall only be used by the Company to pay non-deferrable operating expenses including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation. In April 2021, the Company applied for an additional loan with Alterna Bank under the Program and received $ 14,793 20,000 14,767 The loan is interest free for an initial term that ends on January 18, 2024 20,000 5 January 19, 2024 to December 31, 2025 The balance as at September 30, 2023 was $ 44,379 60,000 44,300 60,000 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | 11. DERIVATIVE LIABILITIES Warrant Liabilities As of September 30, 2023, the Warrant Liabilities represent aggregate fair value of publicly traded 61,765 2,721 82,129 53,226 20,000 The fair value of the Private Placement Warrants amount to $ 2,407 45,120 5.50 12.50 nil nil 59 65.0 4.91 4.58 1.75 2 The fair value of the IPO Warrants and Rep Warrants amount to $ 64,161 275,115 The fair value of the First Tranche Warrants amounted to $ 234,000 2,917,000 5.60 56.50 nil nil 80.0 95.0 4.97 4.22 2.25 3 On January 17, 2023 the Company issued Second Tranche Warrants. As at September 30, 2023 the Second Tranche Warrants had a fair value that amounted to $ 75,000 2,378,000 5.60 60.50 nil nil 80 95.0 4.85 3.80 2.80 3.5 Debenture Convertible Feature On June 30, 2022, the Company issued First Tranche Debentures with an equity conversion feature, see Note 8. As at September 30, 2023 the fair value of the First Tranche Debentures’ convertible feature amounted to $ 887,000 1,457,000 5.60 56.50 nil nil 80.0 95.0 5.35 4.41 16.23 13.65 1.25 2 On January 17, 2023, the Company issued Second Tranche Debentures with an equity conversion feature, see Note 8. As at September 30, 2023 the fair value of the Second Tranche Debentures’ convertible feature amounted to $ 696,000 1,599,000 5.60 60.50 nil nil 80.0 95.0 5.12 4.02 16.01 11.65 1.80 2.50 The IPO Warrants, Rep Warrants, and Private Placement Warrants (the “Equity Warrants”) are classified as Level 1 financial instruments, while the Debenture Warrants and Debenture Convertible Feature are classified as Level 3 financial instruments. Changes in the fair value of the Company’s financial instruments for the nine months ended September 30, 2023 and 2022 were as follows: SCHEDULE OF CHANGES IN THE FAIR VALUE OF COMPANY'S LEVEL 3 FINANCIAL INSTRUMENTS Level 1 Level 3 Level 3 Equity Warrants Debenture Warrants Debenture Convertible Feature Total Balance at January 1, 2023 $ 275,115 2,917,000 1,457,000 4,649,115 Additions 45,120 2,378,000 1,599,000 4,022,120 Conversions - - (529,340 ) (529,340 ) Change in fair value (259,123 ) (4,960,112 ) (939,832 ) (6,159,067 ) Effect of exchange rate changes 5,456 (25,888 ) (3,828 ) (24,260 ) Balance at September 30, 2023 $ 66,568 $ 309,000 $ 1,583,000 $ 1,958,568 Level 1 Level 3 Level 3 Equity Warrants Debenture Warrants Debenture Convertible Feature Total Balance at January 1, 2022 $ 1,418,964 $ - $ - $ 1,418,964 Additions - 4,080,958 3,336,535 7,417,493 Conversions - - (63,723 ) (63,723 ) Change in fair value (640,540 ) (191,957 ) (850,992 ) (1,683,489 ) Effect of exchange rate changes (85,547 ) (239,001 ) (172,820 ) (497,368 ) Balance at September 30, 2022 $ 692,877 $ 3,650,000 $ 2,249,000 $ 6,591,877 Due to the expiry date of the warrants and conversion feature being greater than one year, the liabilities have been classified as non-current. |
SHARE CAPITAL
SHARE CAPITAL | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
SHARE CAPITAL | 12. SHARE CAPITAL During the nine months ended September 30, 2023, the Company issued shares for cash under its at-the market agreement (the “ATM”). In total 124,652 1,092,915 153,220 On June 20, 2023 the Company entered in to a private placement agreement issuing 20,000 25.00 250,000 45,120 On September 30, 2023, the Company owed $ 44,214 Obligation to issue shares Basic and diluted net loss per share represents the loss attributable to shareholders divided by the weighted average number of shares and prefunded warrants outstanding during the period on an as converted basis. Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares): SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE September 30, 2023 September 30, 2022 Warrants 270,762 197,536 Options 76,185 12,711 Convertible debentures 2,020,390 114,892 Total anti-dilutive weighted average shares 2,367,337 325,139 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
LEASES | 13. LEASES The Company entered an operating lease for office space. As at September 30, 2023, the remaining lease term is six years 7.0 no The components of lease expenses were as follows: SCHEDULE OF LEASE EXPENSES Nine months ended September 30, 2023 Nine months ended September 30, 2022 Operating lease cost $ 219,018 $ 226,098 Short-term lease cost 3,517 12,630 Total lease expenses $ 222,535 $ 238,728 The minimum future annual payments under the lease for our continuing operations as at September 30 is as follows: SCHEDULE OF FUTURE PAYMENTS UNDER LEASE Remaining 2023 $ 68,896 2024 280,907 2025 296,876 2026 296,876 2027 296,876 Subsequent years 519,533 Total minimum lease payments 1,759,964 Less: imputed interest (361,688 ) Total lease liability 1,398,276 Current portion of lease liability (275,584 ) Non-current portion of lease liability $ 1,122,692 On November 1, 2023, the Company terminated its operating lease of its office space and entered in to a short-term lease. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES Debenture principal repayments The following table summarizes the future principal payments related to our outstanding debt as of September 30, 2023: SUMMARY OF FUTURE PRINCIPAL PAYMENTS OUTSTANDING Remaining 2023 $ 3,056,307 2024 6,395,573 2025 1,218,462 Long Term Debt $ 10,670,342 Contingencies Litigation On August 11, 2023, Mr. Ingo Mueller, the former Chief Executive Officer and former director of the Company, filed a claim for wrongful dismissal in the BC Supreme Court. On September 8, 2023, the Company filed a reply to this civil claim. The Company’s reply states that the Company’s position is that Mr. Mueller was terminated for just cause as a result of certain actions taken b y Mr. Mueller which are alleged to constitute breaches of his employment agreement with the Company and violations of the Company’s corporate governance policies. The Company denies any liability to Mr. Mueller in connection with termination of Mr. Mueller’s employment agreement and will vigorously defend the claims made against the Company. The Company has not recorded a liability related to this claim as we do not believe Mr. Mueller has any legal or other grounds to pursue this claim nor that he will have any success whatsoever in pursuing it. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS The Company evaluated subsequent events through November 2, 2023, the date on which these interim financial statements were available to be issued, to ensure that this filing includes appropriate disclosure of events both recognized in the interim financial statements as of and subsequent to September 30, 2023, but were not recognized in the interim financial statements. Except as disclosed below, there were no events that required recognition, adjustment or disclosure in the financial statements. On October 1, 2023, the Company issued 111,419 On October 1, 2023, the Company issued 13,644 The Company intends to vigorously defend itself in this matter; however, we cannot predict the outcome. nil 452,000 On October 18, 2023 one of the Investors purchased an additional tranche totaling $ 2,750,000 in convertible debentures and received 620,230 warrants. The convertible debentures and warrants were issued with an exercise price of $ 2.62 . The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First and Second Tranche Debentures as well as the First and Second Tranche Debenture Warrants to $ 2.62 (Note 8 & 11). On October 23, 2023, the Company issued 37,251 fractional shares due to the round up from the reverse stock split. On October 30, 2023, one of the Investors converted $ 50,000 19,084 On November 1, 2023, the Company issued 160,500 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses.” The standard, including subsequently issued amendments, requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, and requires the modified retrospective approach. ASU 2016-13 was adopted by the Company on January 1, 2023. Based on the composition of the Company’s affected financial assets, current market conditions, and historical credit loss activity, the adoption did not have a material impact to these interim financial statements. In August 2020, the FASB issued ASU 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASU 2020-06”). The intention of ASU 2020-06 is to address the complexities in accounting for certain financial instruments with a debt and equity component. Under ASU 2020-06, the number of accounting models for convertible notes will be reduced and entities that issue convertible debt will be required to use the if-converted method for the computation of diluted “Earnings per share” under ASC 260. ASC 2020-06 is effective for fiscal years beginning after December 15, 2023 and may be adopted through either a modified retrospective method of transition or a fully retrospective method of transition. ASU 2020-06 was adopted by the Company on January 1, 2023. Since the Company had a net loss for the nine months ended September 30, 2023 and its convertible debentures were determined to be anti-dilutive, there was no material impact to its basic and diluted net loss per share for the period as a result of adopting ASU 2020-06. In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under ASU 2021-08, an acquirer must recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. ASU 2021-08 was adopted on January 1, 2023 and did not have a material impact to these interim financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Inventories | Inventories Inventories consist of finished goods of milled flour and related packaging material recorded at the lower of cost or net realizable value with the cost measured using the average cost method. Inventories includes all costs that relate to bringing the inventory to its present condition and location under normal operating conditions. |
Revenue Recognition | Revenue Recognition Product revenue includes sales from hydroxyl generators. We recognize product revenue when we satisfy performance obligations by transferring control of the promised products or services to customers. Product revenue is recognized at a point in time when a good is shipped or delivered to the customer. Contract Balances We recognize a receivable when the Company has a right to consideration for which the Company has completed the performance obligations and only the passage of time is required before payment of that consideration is due. We recognize a contract asset when revenue is recognized prior to invoicing. We recognize a contract liability when a customer provides payment to the Company for a performance obligation not yet satisfied. Payment terms generally require payments within 30 days. |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which provides that if three criteria are met, the Company is required to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which; (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract; (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur; and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.” The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability. |
Definite Lived Intangible Asset | Definite Lived Intangible Asset Definite lived intangible asset consists of a granted patent. Amortization is computed using the straight-line method over the estimated useful life of the asset. The estimated useful life of the granted patent is 20 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s other receivable, accounts payable and other current liabilities approximate their carrying amounts due to the relative short maturities of these items. The Company issued warrants having a strike price denominated in U.S. dollars, which creates an obligation to issue shares for a price that is not denominated in the Company’s functional currency, Canadian dollars, and renders the warrants not indexed to the Company’s stock. The Series A warrants, representative warrants issued as part of the IPO, and convertible debt warrants are thus classified as derivative liabilities and are measured at fair value. The convertible debentures also have a conversion feature whereby the debt holders can convert their outstanding debentures into common shares of the Company. The conversion price has a strike price denominated in U.S. dollars and accordingly, the conversion feature is classified as a derivative liability and measured at fair value. The fair value of the Company’s warrants are determined in accordance with FASB ASC 820, “Fair Value Measurement,” which establishes a fair value hierarchy that prioritizes the assumptions (inputs) to valuation techniques used to price assets or liabilities that are measured at fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The guidance for fair value measurements requires that assets and liabilities measured at fair value be classified and disclosed in one of the following categories: ● Level 1: Defined as observable inputs, such as quoted (unadjusted) prices in active markets for identical assets or liabilities. ● Level 2: Defined as observable inputs other than quoted prices included in Level 1. This includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Defined as unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation. |
Reclassifications | Reclassifications The Company has reclassified certain amounts in the 2022 consolidated financial statements to comply with the 2023 presentation. |
PREPAID EXPENSES, OTHER CURRE_2
PREPAID EXPENSES, OTHER CURRENT ASSETS AND LAND DEPOSIT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS September 30, 2023 December 31, 2022 Prepaid expenses $ 169,448 $ 436,496 Legal retainer 30,811 24,457 Inventory advances 36,107 - Deferred offering costs - 100,337 Deposits - 12,000 Others 5,667 25,052 Prepaid expenses, other current assets $ 242,033 $ 598,342 |
INTANGIBLE ASSET (Tables)
INTANGIBLE ASSET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | The estimated annual amortization expense for the next five years are as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE Period ending: Amount Remaining 2023 $ 163,908 2024 655,631 2025 655,631 2026 655,631 2027 655,631 Subsequent years 9,834,464 Total $ 12,620,896 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES September 30, 2023 December 31, 2022 Accounts payable $ 623,887 $ 498,188 Accrued expenses 665,696 365,521 Other 602,006 284,030 Accounts payable and accrued liabilities $ 1,891,589 $ 1,147,739 |
DEBENTURES (Tables)
DEBENTURES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF OUTSTANDING DEBENTURES | The following table summarizes the outstanding debentures as of the dates indicated: SCHEDULE OF OUTSTANDING DEBENTURES Maturity Cash September 30, December 31, Principal (First Tranche Debentures) 12/31/2024 5.00 8.00 % $ 14,025,000 $ 14,025,000 Principal (Second Tranche Debentures) 17/07/2025 5.00 8.00 % 5,076,923 - Repayments and conversions (8,431,581 ) (2,955,000 ) Debt issuance costs and discounts (Note 8 & 11) (6,000,398 ) (7,128,084 ) Total Debentures (current) $ 4,669,944 $ 3,941,916 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN THE FAIR VALUE OF COMPANY'S LEVEL 3 FINANCIAL INSTRUMENTS | Changes in the fair value of the Company’s financial instruments for the nine months ended September 30, 2023 and 2022 were as follows: SCHEDULE OF CHANGES IN THE FAIR VALUE OF COMPANY'S LEVEL 3 FINANCIAL INSTRUMENTS Level 1 Level 3 Level 3 Equity Warrants Debenture Warrants Debenture Convertible Feature Total Balance at January 1, 2023 $ 275,115 2,917,000 1,457,000 4,649,115 Additions 45,120 2,378,000 1,599,000 4,022,120 Conversions - - (529,340 ) (529,340 ) Change in fair value (259,123 ) (4,960,112 ) (939,832 ) (6,159,067 ) Effect of exchange rate changes 5,456 (25,888 ) (3,828 ) (24,260 ) Balance at September 30, 2023 $ 66,568 $ 309,000 $ 1,583,000 $ 1,958,568 Level 1 Level 3 Level 3 Equity Warrants Debenture Warrants Debenture Convertible Feature Total Balance at January 1, 2022 $ 1,418,964 $ - $ - $ 1,418,964 Additions - 4,080,958 3,336,535 7,417,493 Conversions - - (63,723 ) (63,723 ) Change in fair value (640,540 ) (191,957 ) (850,992 ) (1,683,489 ) Effect of exchange rate changes (85,547 ) (239,001 ) (172,820 ) (497,368 ) Balance at September 30, 2022 $ 692,877 $ 3,650,000 $ 2,249,000 $ 6,591,877 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE | Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares): SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE September 30, 2023 September 30, 2022 Warrants 270,762 197,536 Options 76,185 12,711 Convertible debentures 2,020,390 114,892 Total anti-dilutive weighted average shares 2,367,337 325,139 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
SCHEDULE OF LEASE EXPENSES | The components of lease expenses were as follows: SCHEDULE OF LEASE EXPENSES Nine months ended September 30, 2023 Nine months ended September 30, 2022 Operating lease cost $ 219,018 $ 226,098 Short-term lease cost 3,517 12,630 Total lease expenses $ 222,535 $ 238,728 |
SCHEDULE OF FUTURE PAYMENTS UNDER LEASE | The minimum future annual payments under the lease for our continuing operations as at September 30 is as follows: SCHEDULE OF FUTURE PAYMENTS UNDER LEASE Remaining 2023 $ 68,896 2024 280,907 2025 296,876 2026 296,876 2027 296,876 Subsequent years 519,533 Total minimum lease payments 1,759,964 Less: imputed interest (361,688 ) Total lease liability 1,398,276 Current portion of lease liability (275,584 ) Non-current portion of lease liability $ 1,122,692 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
SUMMARY OF FUTURE PRINCIPAL PAYMENTS OUTSTANDING | The following table summarizes the future principal payments related to our outstanding debt as of September 30, 2023: SUMMARY OF FUTURE PRINCIPAL PAYMENTS OUTSTANDING Remaining 2023 $ 3,056,307 2024 6,395,573 2025 1,218,462 Long Term Debt $ 10,670,342 |
NATURE OF OPERATIONS AND BASI_2
NATURE OF OPERATIONS AND BASIS OF PREPARATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Net loss | $ 3,493,053 | $ 3,396,630 | $ 7,740,078 | $ 10,120,501 |
Net cash used in operating activities | 5,437,592 | $ 9,061,726 | ||
Working captial deficit | $ 5,700,000 | $ 5,700,000 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Sep. 30, 2023 |
Accounting Policies [Abstract] | |
Estimated useful lives | 20 years |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 169,448 | $ 436,496 |
Legal retainer | 30,811 | 24,457 |
Inventory advances | 36,107 | |
Deferred offering costs | 100,337 | |
Deposits | 12,000 | |
Others | 5,667 | 25,052 |
Prepaid expenses, other current assets | $ 242,033 | $ 598,342 |
PREPAID EXPENSES, OTHER CURRE_3
PREPAID EXPENSES, OTHER CURRENT ASSETS AND LAND DEPOSIT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Aug. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 09, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Wrote off non-refundable deposit | $ 12,000 | |||||||
Deposits | $ 12,000 | |||||||
Land deposits | $ 2,085,960 | |||||||
Purchase and Sale Agreement [Member] | Stronghold Power System, Inc. [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Payments to acquire land | $ 4,300,000 | |||||||
Cash | $ 1,500,000 | |||||||
Purchase and Sale Agreement [Member] | Stronghold Power System, Inc. [Member] | First Stock Deposits [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Deposits | $ 1,700,000 | |||||||
Warrants issued | 13,917 | |||||||
Purchase and Sale Agreement [Member] | Stronghold Power System, Inc. [Member] | Second Stock Deposits [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Deposits | $ 1,100,000 | |||||||
Warrants issued | 9,005 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) | Sep. 30, 2023 USD ($) |
Inventory Disclosure [Abstract] | |
Inventory, Finished Goods, Gross | $ 38,167 |
ADVANCE (Details Narrative)
ADVANCE (Details Narrative) - USD ($) | Jun. 26, 2023 | Jun. 18, 2023 |
Payable, Investment, Purchase | $ 225,000 | $ 225,000 |
Radical Clean Solutions Ltd [Member] | Maximum [Member] | ||
Equity Method Investment, Ownership Percentage | 14% | |
Radical Clean Solutions Ltd [Member] | Minimum [Member] | ||
Equity Method Investment, Ownership Percentage | 10% |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) | Sep. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2023 | $ 163,908 |
2024 | 655,631 |
2025 | 655,631 |
2026 | 655,631 |
2027 | 655,631 |
Subsequent years | 9,834,464 |
Total | $ 12,620,896 |
INTANGIBLE ASSET (Details Narra
INTANGIBLE ASSET (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset | $ 12,620,896 | $ 12,620,896 | $ 13,089,377 | ||
Number of shares issued | shares | 102,610 | ||||
Stock issued during period value new issues | 640,096 | $ 939,695 | |||
Adjusted for foreign exchange adjustments | $ (226,286) | $ (566,414) | $ 84,719 | $ (599,507) | |
Unconverted prefunded warrants outstanding | shares | 44,990 | 44,990 | |||
Useful life | 20 years | 20 years | |||
Prefunded Warrants [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cash | $ 1,475,000 | $ 1,475,000 | |||
Number of shares issued | shares | 147,600 | ||||
Stock issued during period value new issues | $ 12,106,677 | ||||
Adjusted for foreign exchange adjustments | $ 469,058 | 492,300 | |||
Foreign currency exchange rate | 0.0999 | 0.0999 | |||
Manna Nutritional Group LLC [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 492,220 | ||||
Asset Purchase Agreement [Member] | Manna Nutritional Group LLC [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset | $ 12,620,896 | $ 12,620,896 | $ 13,089,377 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 623,887 | $ 498,188 |
Accrued expenses | 665,696 | 365,521 |
Other | 602,006 | 284,030 |
Accounts payable and accrued liabilities | $ 1,891,589 | $ 1,147,739 |
SCHEDULE OF OUTSTANDING DEBENTU
SCHEDULE OF OUTSTANDING DEBENTURES (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Repayments and conversions | $ (8,431,581) | $ (2,955,000) |
Debt issuance costs and discounts | (6,000,398) | (7,128,084) |
Total Debentures (current) | $ 4,669,944 | 3,941,916 |
Share-Based Payment Arrangement, Tranche One [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Date | Dec. 31, 2024 | |
Debentures (gross) | $ 14,025,000 | 14,025,000 |
Share-Based Payment Arrangement, Tranche One [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Cash Interest Rate | 5% | |
Share-Based Payment Arrangement, Tranche One [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Cash Interest Rate | 8% | |
Share-Based Payment Arrangement, Tranche Two [Member] | ||
Debt Instrument [Line Items] | ||
Debentures (gross) | $ 5,076,923 | |
Maturity Date | 17/07/2025 | |
Share-Based Payment Arrangement, Tranche Two [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Cash Interest Rate | 5% | |
Share-Based Payment Arrangement, Tranche Two [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Cash Interest Rate | 8% |
DEBENTURES (Details Narrative)
DEBENTURES (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||||
Jan. 17, 2023 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) Integer | Sep. 30, 2022 USD ($) | Aug. 30, 2023 $ / shares | Dec. 31, 2022 USD ($) | |
Short-Term Debt [Line Items] | ||||||||
Debentures transaction costs incurred | $ 4,669,944 | $ 4,669,944 | $ 3,941,916 | |||||
Purchaser trading days | Integer | 5 | |||||||
Loss on conversion of convertible debentures | (108,125) | $ 93,973 | $ (541,730) | $ 93,973 | ||||
Accretion in interest | $ 2,064,936 | $ 1,688,672 | 6,045,214 | $ 1,688,672 | ||||
Investors [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Exercise price of warrants | $ / shares | $ 62 | |||||||
Debt instrument converted value | 3,734,631 | |||||||
Debt instrument converted shares | 305,175 | |||||||
Loss on conversion of convertible debentures | $ 541,730 | |||||||
Definitive Agreement [Member] | Investors [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt principal amount | $ 14,025,000 | |||||||
Original issue discount percentage | 10% | 10% | ||||||
Gross proceeds of debt | $ 4,615,385 | $ 12,750,000 | ||||||
Convertible into common shares per share | $ / shares | $ 62 | $ 111 | ||||||
Investors received warrants | shares | 53,226 | 82,129 | ||||||
Exercise price of warrants | $ / shares | $ 62 | $ 122.10 | ||||||
Warrants expire date | Dec. 31, 2025 | Dec. 31, 2025 | ||||||
Debentures transaction costs incurred | $ 1,634,894 | |||||||
Purchase of additional tranches | $ 5,076,923 | 5,000,000 | ||||||
Debt instrument interest rate percentage | 8% | |||||||
Definitive Agreement [Member] | Investors [Member] | First 12 Months [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt instrument interest rate percentage | 5% | |||||||
Definitive Agreement [Member] | Investors [Member] | Subsequent 12 Months [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt instrument interest rate percentage | 6% | |||||||
Definitive Agreement [Member] | Investors [Member] | Thereafter [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt instrument interest rate percentage | 8% | |||||||
Definitive Agreement [Member] | Investors [Member] | Additional Tranches [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Debt principal amount | $ 33,000,000 | |||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Transaction costs | $ 325,962 | |||||||
Waiver and Amendment Agreements [Member] | First And Second Tranche Warrants [Member} | ||||||||
Short-Term Debt [Line Items] | ||||||||
Exercise price of warrants | $ / shares | $ 5.50 |
CONTRACT BALANCES (Details Narr
CONTRACT BALANCES (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contact balances | $ 23,262 |
LONG TERM LOAN (Details Narrati
LONG TERM LOAN (Details Narrative) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Apr. 30, 2021 USD ($) | Apr. 30, 2021 CAD ($) | Sep. 30, 2023 CAD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 CAD ($) | Dec. 31, 2022 CAD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 CAD ($) | |
Long term loans payable | $ 44,300 | $ 44,379 | $ 60,000 | $ 60,000 | |||||
Alterna Bank [Member] | Loan Agreement [Member] | |||||||||
Debt principal amount | 29,533 | $ 29,586 | $ 40,000 | ||||||
Proceeds from loan | $ 14,793 | $ 20,000 | $ 14,767 | ||||||
Debt, maturity date | Jan. 18, 2024 | ||||||||
Debt instrument, forgiveness | $ 20,000 | ||||||||
Debt instrument, interest rate | 5% | 5% | |||||||
Debt, maturity date description | January 19, 2024 to December 31, 2025 |
SCHEDULE OF CHANGES IN THE FAIR
SCHEDULE OF CHANGES IN THE FAIR VALUE OF COMPANY'S LEVEL 3 FINANCIAL INSTRUMENTS (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at January 1, 2022 | $ 4,649,115 | $ 1,418,964 |
Additions | 4,022,120 | 7,417,493 |
Conversions | (529,340) | (63,723) |
Change in fair value | (6,159,067) | (1,683,489) |
Effect of exchange rate changes | (24,260) | (497,368) |
Balance at September 30, 2022 | 1,958,568 | 6,591,877 |
Equity Warrants [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at January 1, 2022 | 275,115 | 1,418,964 |
Additions | 45,120 | |
Conversions | ||
Change in fair value | (259,123) | (640,540) |
Effect of exchange rate changes | 5,456 | (85,547) |
Balance at September 30, 2022 | 66,568 | 692,877 |
Debenture Warrants [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at January 1, 2022 | 2,917,000 | |
Additions | 2,378,000 | 4,080,958 |
Conversions | ||
Change in fair value | (4,960,112) | (191,957) |
Effect of exchange rate changes | (25,888) | (239,001) |
Balance at September 30, 2022 | 309,000 | 3,650,000 |
Debenture Convertible Feature [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at January 1, 2022 | 1,457,000 | |
Additions | 1,599,000 | 3,336,535 |
Conversions | (529,340) | (63,723) |
Change in fair value | (939,832) | (850,992) |
Effect of exchange rate changes | (3,828) | (172,820) |
Balance at September 30, 2022 | $ 1,583,000 | $ 2,249,000 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details Narrative) | 9 Months Ended | 12 Months Ended | ||
Jun. 20, 2023 USD ($) $ / shares shares | Jan. 17, 2023 USD ($) $ / shares | Sep. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares | |
First Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Warrant stock price | $ / shares | $ 5.60 | $ 56.50 | ||
Second Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Warrant stock price | $ / shares | $ 60.50 | $ 5.60 | ||
Fair Value, Inputs, Level 3 [Member] | First Tranche Warrants [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Fair value of warrants | $ 234,000 | $ 2,917,000 | ||
Fair Value, Inputs, Level 3 [Member] | Second Tranche Warrants [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Fair value of warrants | $ 2,378,000 | 75,000 | ||
Fair Value, Inputs, Level 3 [Member] | First Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Fair value of debentures | 887,000 | $ 1,457,000 | ||
Fair Value, Inputs, Level 3 [Member] | Second Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Fair value of debentures | $ 1,599,000 | $ 696,000 | ||
Measurement Input, Price Volatility [Member] | First Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Discount rate | 80 | 95 | ||
Measurement Input, Price Volatility [Member] | Second Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Discount rate | 95 | 80 | ||
Measurement Input, Risk Free Interest Rate [Member] | First Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Discount rate | 5.35 | 4.41 | ||
Measurement Input, Risk Free Interest Rate [Member] | Second Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Discount rate | 4.02 | 5.12 | ||
Measurement Input, Expected Term [Member] | First Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Expected warrant term | 1 year 3 months | 2 years | ||
Measurement Input, Expected Term [Member] | Second Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Expected warrant term | 2 years 6 months | 1 year 9 months 18 days | ||
Measurement Input, Discount Rate [Member] | First Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Discount rate | 16.23 | 13.65 | ||
Measurement Input, Discount Rate [Member] | Second Tranche Debenture Convertible [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Discount rate | 11.65 | 16.01 | ||
Private Placement [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Class of warrant or right number of securities called by warrants or rights | shares | 20,000 | |||
Fair value of warrants | $ 45,120 | $ 2,407 | ||
Private Placement [Member] | Measurement Input, Share Price [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Warrant stock price | $ / shares | $ 12.50 | $ 5.50 | ||
Private Placement [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Risk free rate of return | ||||
Private Placement [Member] | Measurement Input, Price Volatility [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Risk free rate of return | 65 | 59 | ||
Private Placement [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Risk free rate of return | 4.58 | 4.91 | ||
Private Placement [Member] | Measurement Input, Expected Term [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Expected warrant term | 2 years | 1 year 9 months | ||
IPO [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Fair value of warrants | $ 275,115 | |||
IPO [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Fair value of warrants | $ 64,161 | |||
Series A Warrants [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Class of warrant or right number of securities called by warrants or rights | shares | 61,765 | |||
Warrant [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Class of warrant or right number of securities called by warrants or rights | shares | 2,721 | |||
First Tranche Warrants [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Class of warrant or right number of securities called by warrants or rights | shares | 82,129 | |||
First Tranche Warrants [Member] | Measurement Input, Share Price [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Warrant stock price | $ / shares | $ 5.60 | $ 56.50 | ||
First Tranche Warrants [Member] | Measurement Input, Price Volatility [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Risk free rate of return | 80 | 95 | ||
First Tranche Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Risk free rate of return | 4.97 | 4.22 | ||
First Tranche Warrants [Member] | Measurement Input, Expected Term [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Expected warrant term | 2 years 3 months | 3 years | ||
Second Tranche Warrants [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Class of warrant or right number of securities called by warrants or rights | shares | 53,226 | |||
Second Tranche Warrants [Member] | Measurement Input, Share Price [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Warrant stock price | $ / shares | $ 60.50 | $ 5.60 | ||
Second Tranche Warrants [Member] | Measurement Input, Price Volatility [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Risk free rate of return | 95 | 80 | ||
Second Tranche Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Risk free rate of return | 3.80 | 4.85 | ||
Second Tranche Warrants [Member] | Measurement Input, Expected Term [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Expected warrant term | 3 years 6 months | 2 years 9 months 18 days |
SCHEDULE OF ANTI-DILUTIVE SECUR
SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE (Details) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 2,367,337 | 325,139 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 270,762 | 197,536 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 76,185 | 12,711 |
Convertible Debt Securities [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 2,020,390 | 114,892 |
SHARE CAPITAL (Details Narrativ
SHARE CAPITAL (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Jun. 20, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Number of shares issued | 102,610 | |||||
Stock issued, value | $ 27,150 | $ 59,500 | $ 80,885 | $ 708,162 | ||
Payments of stock issuance costs | 153,220 | |||||
Stock based compensation | $ 211,243 | $ 282,828 | ||||
Officer [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Stock based compensation | $ 44,214 | |||||
Private Placement [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Sale of stock issued | 20,000 | |||||
Total consideration | $ 250,000 | |||||
Fair value of warrant amount | $ 45,120 | |||||
Private Placement [Member] | Measurement Input, Share Price [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Warrant strike price | $ 25 | |||||
ATM [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Number of shares issued | 124,652 | |||||
Stock issued, value | $ 1,092,915 | |||||
Payments of stock issuance costs | $ 153,220 |
SCHEDULE OF LEASE EXPENSES (Det
SCHEDULE OF LEASE EXPENSES (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | ||
Operating lease cost | $ 219,018 | $ 226,098 |
Short-term lease cost | 3,517 | 12,630 |
Total lease expenses | $ 222,535 | $ 238,728 |
SCHEDULE OF FUTURE PAYMENTS UND
SCHEDULE OF FUTURE PAYMENTS UNDER LEASE (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases | ||
Remaining 2023 | $ 68,896 | |
2024 | 280,907 | |
2025 | 296,876 | |
2026 | 296,876 | |
2027 | 296,876 | |
Subsequent years | 519,533 | |
Total minimum lease payments | 1,759,964 | |
Less: imputed interest | (361,688) | |
Total lease liability | 1,398,276 | |
Current portion of lease liability | (275,584) | $ (271,110) |
Non-current portion of lease liability | $ 1,122,692 | $ 1,250,060 |
LEASES (Details Narrative)
LEASES (Details Narrative) | Sep. 30, 2023 USD ($) |
Leases | |
Operating lease for office remaining lease term | 6 years |
Operating lease discount rate | 7% |
Finance leases | $ 0 |
SUMMARY OF FUTURE PRINCIPAL PAY
SUMMARY OF FUTURE PRINCIPAL PAYMENTS OUTSTANDING (Details) | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remaining 2023 | $ 3,056,307 |
2024 | 6,395,573 |
2025 | 1,218,462 |
Long Term Debt | $ 10,670,342 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Nov. 01, 2023 | Oct. 29, 2023 | Oct. 23, 2023 | Oct. 18, 2023 | Oct. 08, 2023 | Oct. 01, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | |
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Value, New Issues | $ 640,096 | $ 939,695 | ||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Conversion of convertible debt | 111,419 | |||||||
Conversion of shares | 13,644 | |||||||
Stock Issued During Period, Shares, Reverse Stock Splits | 37,251 | |||||||
Conversion of shares, value | $ 160,500 | |||||||
Subsequent Event [Member] | Investor [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Conversion of shares | 19,084 | |||||||
Conversion of shares, value | $ 50,000 | |||||||
Subsequent Event [Member] | Investor [Member] | Convertible Debenture [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Value, New Issues | $ 2,750,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.62 | |||||||
Subsequent Event [Member] | Investor [Member] | Warrant [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock Issued During Period, Value, New Issues | $ 620,230 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.62 | |||||||
Subsequent Event [Member] | Purchase and Sale Agreement [Member] | Stronghold Power System, Inc. [Member] | Maximum [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Estimate loss | $ 452,000 |