Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 20, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | ETHEMA HEALTH Corp | |
Entity Central Index Key | 792,935 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 121,339,230 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash | $ 12,623 | $ 4,779 |
Accounts receivable | 974,849 | |
Prepaid expenses | 14,724 | 2,710 |
Discontinued operations | 183,219 | |
Related party Receivables | 15,756 | 84,867 |
Total current assets | 1,017,952 | 275,575 |
Non-current assets | ||
Investment | 110,000 | |
Due on sale of subsidiary | 1,371,512 | |
Property, plant and equipment | 12,189,984 | |
Intangibles | 1,438,525 | |
Cash - Restricted | 74,480 | |
Total non-current assets | 15,000,021 | 184,480 |
Total assets | 16,017,973 | 460,055 |
Current liabilities | ||
Bank overdraft | 11 | 56,116 |
Accounts payable and accrued liabilities | 379,972 | 374,317 |
Taxes payable | 404,795 | 2,798,824 |
Convertible loans | 46,510 | 250,258 |
Loans payable | 158,534 | |
Derivative liability | 148,297 | |
Related party payables | 1,756,873 | 157,596 |
Total current liabilities | 2,894,992 | 3,637,111 |
Non-current liabilities | ||
Loan payable | 7,232,870 | |
Total liabilities | 10,127,862 | 3,637,111 |
Stockholders' deficit | ||
Preferred stock - Series A; $0.01 par value, 3,000,000 authorized, nil outstanding as of September 30, 2017 and December 31, 2016. | ||
Preferred Stock - Series B; $0.01 par value, 10,000,000 authorized, nil outstanding as of September 30, 2017 and December 31, 2016. | ||
Common stock; $0.01 par value, 500,000,000 shares authorized; 121,339,230 and 48,738,855 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively. | 1,213,393 | 487,389 |
Additional paid-in capital | 18,417,913 | 16,509,906 |
Accumulated other comprehensive income | 1,048,794 | 807,563 |
Accumulated deficit | (14,789,989) | (20,981,914) |
Total stockholders' equity (deficit) | 5,890,111 | (3,177,056) |
Total liabilities and stockholders' equity (deficit) | $ 16,017,973 | $ 460,055 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common Stock Par Value | $ 0.01 | $ 0.01 |
Common Stock Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock Shares Issued | 121,339,230 | 48,738,855 |
Common Stock Shares Outstanding | 121,339,230 | 48,738,855 |
Preferred Stock, Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, Series A Shares Authorized | 3,000,000 | 3,000,000 |
Preferred Stock, Series A Shares Issued | 0 | 0 |
Preferred Stock, Series A Shares Outstanding | 0 | 0 |
Preferred Stock, Series B Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, Series B Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Series B Shares Issued | 0 | 0 |
Preferred Stock, Series B Shares Outstanding | 0 | 0 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 648,298 | $ 1,373,028 | ||
Operating expenses | ||||
General and administrative | 170,491 | 55,124 | 578,931 | 165,319 |
Professional fees | 53,830 | 47,135 | 453,034 | 122,180 |
Salaries and wages | 200,863 | 89,934 | 583,559 | 110,934 |
Depreciation and amortization | 131,784 | 314,190 | ||
Total operating expenses | 556,968 | 192,193 | 1,929,714 | 398,433 |
Operating income (loss) | 91,330 | (192,193) | (556,686) | (398,433) |
Other Income (expense) | ||||
Other income | 67,596 | 60,000 | 635,904 | 72,507 |
Other expense | (12,250) | (392,538) | (12,250) | |
Interest income | 32,074 | |||
Interest expense | (86,371) | (8,598) | (242,992) | (15,701) |
Debt discount | (13,052) | (39,988) | (442,377) | (73,250) |
Derivative liability movement | (19,329) | 75,203 | ||
Foreign exchange movements | 53,294 | 11,099 | (111,052) | 13,833 |
Net loss before taxation from continuing operations | 93,468 | (181,930) | (1,002,464) | (413,294) |
Taxation | ||||
Net income (loss) from continuing operations | 93,468 | (181,930) | (1,002,464) | (413,294) |
Gain on disposal of business | 7,494,828 | |||
Operating (loss) income from discontinued operations, net of tax | (218,253) | 318,901 | (300,439) | 762,680 |
Net income per share from discontinued operations, amount | (218,253) | 318,901 | 7,194,389 | 762,680 |
Net loss | (124,785) | 136,971 | 6,191,925 | 349,386 |
Accumulated other comprehensive income (loss) | ||||
Foreign currency translation adjustment | 277,923 | 24,805 | 241,231 | (190,471) |
Total comprehensive income | $ 153,138 | $ 161,776 | $ 6,433,156 | $ 158,915 |
Basic loss per common share from continuing operations | $ (0.01) | $ (0.01) | ||
Basic income per share from discontinued operations | 0.07 | 0.02 | ||
Basic income per common share | 0.06 | 0.01 | ||
Diluted loss per common share from continuing operations | (0.01) | (0.01) | ||
Diluted income per share from discontinued operations | 0.06 | 0.02 | ||
Diluted income per common share | $ 0.05 | $ 0.01 | ||
Weighted average common shares outstanding - Basic | 119,407,668 | 48,738,855 | 102,455,451 | 48,158,563 |
Weighted average common shares outstanding - Diluted | 119,407,668 | 49,005,555 | 117,312,150 | 48,425,263 |
Shareholders Equity
Shareholders Equity - 9 months ended Sep. 30, 2017 - USD ($) | Common Stock | Additional Paid-In Capital | Comprehensive Income | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2016 | 48,738,855 | ||||
Beginning Balance, Value at Dec. 31, 2016 | $ 487,389 | $ 16,509,906 | $ 807,563 | $ (20,981,914) | $ (3,177,056) |
Shares issued to acquire subsidiary, Shares | 60,000,000 | ||||
Shares issued to acquire subsidiary, Amount | $ 600,000 | 1,584,000 | 2,184,000 | ||
Conversion of debt to equity, Shares | 12,500,375 | ||||
Conversion of debt to equity, Amount | $ 125,004 | 250,007 | 375,011 | ||
Fair value of warrants issued | 71,000 | 71,000 | |||
Shares issued for services, Shares | 100,000 | ||||
Shares issued for services, Amount | $ 1,000 | 3,000 | 4,000 | ||
Foreign currency translation | 241,231 | 241,231 | |||
Net loss | 6,191,925 | 6,191,925 | |||
Ending Balance, Shares at Sep. 30, 2017 | 121,339,230 | ||||
Ending Balance, Value at Sep. 30, 2017 | $ 1,213,393 | $ 18,417,913 | $ 1,048,794 | $ (14,789,989) | $ 5,890,111 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net income | $ 6,191,925 | $ 349,386 |
Net income from discontinued operations | (7,194,389) | (762,680) |
Net loss from continuing operations | (1,002,464) | (413,294) |
Adjustment to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation | 314,190 | |
Non cash compensation expense on acquisition of subsidiary | 373,274 | |
Loss on mortgage sold | 19,265 | |
Non cash compensation for services | 4,000 | 50,000 |
Other foreign currency movements | 63,962 | 6,951 |
Amortization of beneficial conversion feature | 442,377 | 73,250 |
Derivative liability movements | (75,203) | |
Provision against receivable on sale of subsidiary | (446,476) | |
Non cash earnout accrual | (162,536) | |
Changes in operating assets and liabilities | ||
Accounts receivable | (833,374) | |
Prepaid expenses | (12,013) | (118,140) |
Accounts payable and accrued liabilities | (162,834) | (254,195) |
Taxes payable | (2,393,899) | 240,440 |
Net cash used in operating activities - continuing operations | (3,871,731) | (414,988) |
Net cash provided by operating activities - discontinued operations | (117,221) | 738,967 |
Net cash (used in) provided by operating activities | (3,988,952) | 323,979 |
Investing activities | ||
Investments in Seastone | (2,960,000) | |
Proceeds from restricted cash | 74,480 | |
Purchase of fixed assets | (8,878) | |
Net cash used in investing activities - continuing operations | (2,894,398) | |
Net cash used in investing activities - discontinued operations | 6,285,852 | (11,836) |
Net cash used in Investing activities | 3,391,454 | (11,836) |
Financing activities | ||
Decrease in bank overdraft | (56,105) | (8,657) |
Repayment of loan payable | (4,406) | |
Proceeds from short-term notes | 283,386 | |
Repayment of short-term notes | (107,639) | |
Proceeds from mortgage sold | 111,554 | |
Proceeds from mortgage | 4,367,000 | |
Repayment of mortgage | (3,482,144) | |
Proceeds from convertible notes | 294,500 | |
Repayment of convertible notes | (274,958) | |
Proceeds from related party notes | (595,736) | (253,389) |
Net cash provided by (used in) financing activities | 364,111 | (90,705) |
Effect of exchange rate on cash | 241,231 | (190,471) |
Net change in cash | 7,844 | 30,967 |
Beginning cash balance | 4,779 | 174 |
Ending cash balance | 12,623 | 31,141 |
Supplemental cash flow information | ||
Cash paid for interest | 253,256 | 9,632 |
Cash paid for income taxes | ||
Non-cash Investing and Financing activities | ||
Common shares issued to acquire subsidiary | 2,184,000 | |
Conversion of debt to equity | 375,011 | |
Fair value of warrants issued | 71,000 | |
Assumption of mortgage liabilities on acquisition of subsidiary | $ 3,145,549 |
1. Nature of Business
1. Nature of Business | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
1. Nature of Business | 1. Nature of Business Ethema Health Corporation (the “Company”) was incorporated under the laws of the state of Colorado, USA, on April 1, 1993. Effective April 4, 2017, the Company changed its name to Ethema Health Corporation and prior to that, on May 2012, the Company had changed its name to GreeneStone Healthcare Corporation from Nova Natural Resources Corporation. As of September 30, 2017, the Company owned 100% of the outstanding shares of GreeneStone Clinic Muskoka Inc., incorporated in 2010 under the laws of the Province of Ontario, Canada; Cranberry Cove Holdings Ltd., incorporated on January 9, 2004 under the laws of the Province of Ontario, Canada. and Seastone Delray Healthcare, LLC, incorporated on May 17, 2016 under the laws of Florida, USA; and Delray Andrews RE, LLC, incorporated on May 17, 2016 under the laws of Florida, USA. During December 2016, the Company obtained a license to operate and provide addiction treatment healthcare services in Florida, USA. The company commenced operations under this license with effect from January 2017. On February 14, 2017, the Company completed a series of transactions (referred to collectively as the “Restructuring Transactions”), including a Share Purchase Agreement (the “SPA”) whereby the Company acquired 100% of the stock of Cranberry Cove Holdings Ltd., which holds the real estate on which the Company’s Rehabilitation Clinic (“the Canadian Rehab Clinic”) operates, an asset purchase agreement (the “APA”) and lease (the “Lease”) whereby the Company sold all of the Canadian Rehab Clinic business assets and leased the real estate to the buyer, and a real estate purchase agreement and asset purchase agreement whereby the Company purchased the real estate and business assets of Seastone Delray (the “Florida Purchase”). The Share Purchase Agreement Under the SPA, the Company acquired 100% of the stock of Cranberry Cove Holdings Ltd. (“CCH”) from Leon Developments Ltd. (“Leon Developments”), a company wholly owned by Shawn E. Leon, who is the President, CEO, and CFO of the Company (“Mr. Leon”). CCH owns the real estate on which the Canadian Rehab Clinic is located. The total consideration paid by the Company was CDN$3,517,062, including the assumption of certain liabilities of CCH, which was funded by the assignment to Leon Developments of certain indebtedness owing to the Company in the amount of CDN$659,918, and the issuance of 60,000,000 shares of the Company’s common stock to Leon Developments, valued at US$0.0364 per share. The Asset Purchase Agreement and Lease Under the APA, the assets of the Canadian Rehab Clinic were sold by the Company, through its subsidiary, GreeneStone Clinic Muskoka Inc. (“Muskoka”), to Canadian Addiction Residential Treatment LP (the “Purchaser”), for a total consideration of CDN$10,000,000, plus an additional performance payment of up to CDN$3,000,000 as a performance payment to be received in 2019 if certain clinic performance metrics are met. The Purchaser completed the sale with cash proceeds to the Company of CDN$10,000,000, of which CDN$1,500,000 will remain in escrow for up to two years to cover indemnities given by the Company. The proceeds of the Muskoka clinic asset sale were used to pay down certain tax debts and operational costs of the Company and to fund the Florida Purchase, mentioned below. Through the APA, substantially all of the assets of the Canadian Rehab Clinic were sold, leaving Ethema with only the underlying clinic real estate, which the Company, through its newly acquired subsidiary, CCH concurrently leased to the Purchaser. The Lease is a triple net lease and provides for a five (5) year primary term with three (3) five-year renewal options, annual base rent for the first year at CDN$420,000 with annual increases, an option to tenant to purchase the leased premises and certain first refusal rights. The Florida Purchase Immediately after closing on the sale of the assets of the Canadian Rehab Clinic, the Company closed on the acquisition of the business and real estate assets of Seastone Delray pursuant to certain real estate and asset purchase agreements This business is operated through its wholly owned subsidiary Seastone. The purchase price for the Seastone assets was US$6,070,000 financed with a purchase money mortgage of US$3,000,000, and US$3,070,000 in cash. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim consolidated financial information and Rule 8-03 of Regulation SX. Accordingly, these unaudited condensed consolidated financial statements do not include all the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included in these unaudited condensed consolidated financial statements. Operating results for the three and nine month period presented are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The balance sheet at December 31, 2016 has been derived from audited consolidated financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto for the year ended December 31, 2016. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
2. Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies a) Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 reporting periods. Actual results could differ from those estimates. b) Principals of consolidation and foreign currency translation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its subsidiary. All intercompany transactions and balances have been eliminated on consolidation. The Company previously owned an operational subsidiary whose functional currency was the Canadian dollar, while the Company’s reporting currency is the U.S. dollar. The Company recently acquired a property-owning subsidiary, CCH, whose functional currency is the Canadian dollar. All transactions initiated in Canadian dollars are translated into US dollars in accordance with ASC 830, “Foreign Currency Translation” as follows: ● Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. ● Equity at historical rates. ● Revenue and expense items at the average rate of exchange prevailing during the period. Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of accumulated other comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income (loss). For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period. The relevant translation rates are as follows: For the nine months ended September 30, 2017; a closing rate of CAD$1.0000 equals US$0.8013 and an average exchange rate of CAD$1.0000 equals US$0.7984. c) Cash and cash equivalents The Company's policy is to disclose bank balances under cash, including bank overdrafts with balances that fluctuate frequently from being positive to overdrawn and term deposits with a maturity period of three months or less from the date of acquisition. d) Revenue Recognition The Company has two operating segments from which it derives revenues, i) rental income from leasing of a rehabilitation facility to third parties and ii) in-patient revenues for rehabilitation services provided to customers. Revenue is recognized as follows: i. Rental Income In terms of the lease agreement, on a monthly basis as long as the facility is utilized by the tenant ii. In-patient revenue The customers have been treated and provided with services by the Company; there is clear evidence that an arrangement exists; the amount of revenue and related costs can be measured reliably; and it is probable that the economic benefits associated with the transaction will flow to the Company. In particular, the Company recognizes fees for inpatient addiction treatments proportionately over the term of the patient’s treatment. Deferred revenue represents monies deposited by the patients for future services to be provided by the Company. Such monies will be recognized into revenue as the patient progresses through their treatment term. e) Recent accounting pronouncements In July 2017, the FASB issued Accounting Standards Update No. (“ASU’’) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815). The amendments in this Update provide guidance about: 1. Accounting for certain financial instruments with down round features 2. Replacement of the indefinite deferral for mandatorily redeemable financial instruments of certain non-public entities and certain non-controlling interests The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. The amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging, an amendment to Topic 815. The amendments in this Update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components 2 and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this Update require an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted in any interim period after issuance of the Update. All transition requirements and elections should be applied to hedging relationships existing (that is, hedging relationships in which the hedging instrument has not expired, been sold, terminated, or exercised or the entity has not removed the designation of the hedging relationship) on the date of adoption. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). The amendments in this ASU deals with the transition and effective dates of implementing to ASU 2014-09, Revenue from contracts with customers, ASU 2016-08, Revenue from contracts with customers, principal versus agent considerations, ASU 2016-10, revenues from contacts with customers; identifying performance obligations and licensing, ASU 2016-12, revenues from contacts with customers, narrow scope improvements and practical expedients, 2016-20, technical corrections and improvements and ASU 2017-05, other income, gains and losses from the derecognition of non-financial assets. The transition provisions require adoption of Topic 606 for annual reporting periods commencing after December 15, 2017 and the adoption of Topic 842 for annual reporting periods beginning after December 15, 2018 for public business entities, if the requirements of a public business entity as defined in ASU 2017-122 are not met, may adopt Topic 606 for annual reporting periods commencing after December 15, 2018 and for Topic 842 for annual reporting periods commencing after December 15, 2019. Early adoption is permitted of both Topics. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. Any new accounting standards, not disclosed above, 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 financial statements upon adoption. f) Financial instruments The Company is exposed to various risks through its financial instruments. The following analysis provides a measure of the Company’s risk exposure and concentrations at the balance sheet date, September 30, 2017 and December 31, 2016. i. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments that subject the Company to credit risk consist primarily of accounts receivable. Credit risk associated with accounts receivable of Seastone of Delray is mitigated as only a percentage of the revenue billed to health insurance companies is recognized as income until such time as the actual funds are collected. The revenue is concentrated amongst several health insurance companies located in the US. In the opinion of management, credit risk with respect to accounts receivable is assessed as low. ii. Liquidity risk Liquidity risk is the risk the Company will not be able to meet its financial obligations as they fall due. The Company is exposed to liquidity risk through its working capital deficiency of $1,877,040 accumulated deficit $(14,789,989). As disclosed in note 6, the Company will be dependent upon the raising of additional capital in order to implement its business plan. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. In the opinion of management, liquidity risk is assessed as high, material and remains unchanged from the prior year. iii. Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risk: interest rate risk, currency risk, and other price risk. The Company is exposed to interest rate risk and currency risk. a. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to minimal interest rate risk on its bank indebtedness as there is a balance owing of $11 as of September 30, 2017. This liability is based on floating rates of interest that have been stable during the current reporting period. In the opinion of management, interest rate risk is assessed as low, not material and remains unchanged from the prior year. b. Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is subject to currency risk as it has subsidiaries that operate in Canada and are subject to fluctuations in the Canadian dollar. A substantial portion of the Company’s financial assets and liabilities are denominated in Canadian dollars. Based on the net exposures at September 30, 2017, a 5% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in an approximate $13,217 increase or decrease in the Company’s after tax net income from operations. The Company has not entered into any hedging agreements to mediate this risk. In the opinion of management, currency risk is assessed as low, material and remains unchanged from the prior year. c. Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. In the opinion of management, the Company is not exposed to this risk and remains unchanged from the prior year. g) Derivative instrument liability The Company accounts for derivative instruments in accordance with ASC815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged. At September 30, 2017, the Company had a derivative liability amounting to $148,297. h) Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities.” Professional standards generally provide three criteria that, if met, require companies 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. Professional standards also provide 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. |
3. Disposal of Business
3. Disposal of Business | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
3. Disposal of Business | 3. Disposal of Business On February 14, 2017, in terms of the details outlined in note 1 above, the Company disposed of the business and certain assets of its Canadian Rehab Clinic for gross proceeds of CDN$10,000,000, a total of CDN$1,500,000 of the gross proceeds is being held in escrow for up to two years, in addition there is an earnout payment of up to CDN$3,000,000 to be received in 2019, if certain clinic performance metrics are met, see note 8 below. The proceeds realized from the sale of the Canadian Rehab Clinic were used to settle outstanding tax liabilities, refer note 11 below, and to acquire the business of Seastone of Delray, refer note 5 below. The proceeds realized on disposal have been allocated as follows: Amount Proceeds on disposal $ 7,644,000 Assets sold: Accounts receivable 113,896 Plant and equipment 109,075 222,971 Liabilities assumed by purchaser Deferred revenue (73,799) Net assets and liabilities sold 149,172 Net profit realized on disposal $ 7,494,828 |
4. Acquisition of subsidiary
4. Acquisition of subsidiary | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
4. Acquisition of subsidiary | 4. Acquisition of subsidiary On February 14, 2017, the Company acquired 100% of the equity of CCH, from Leon Developments, a company wholly owned by our CEO. The total consideration paid by the Company was CDN$3,517,062, including the assumption of certain liabilities of CCH, which was funded by the assignment to Leon Developments of certain indebtedness owing to the Company in the amount of CDN$659,918 (US$504,442) on the disposal of a subsidiary, 1816191 Ontario, which principal amount had previously been fully provided for during 2015; and the issuance of 60,000,000 shares of the Company’s common stock at US$0.0364 per share for proceeds of $2,184,000. On June 1, 2017, the Company had the property owned by CCH appraised by an independent valuer, the appraisal obtained was for CDN$10,000,000, which resulted an increase in the value of the assets acquired by $1,146,000 and a corresponding reduction in the excess purchased consideration allocated to the shareholder. The allocation of the purchase price is as follows: Amount Purchase price paid: Common shares issued to Seller $ 2,184,000 Receivable assumed by the Seller 504,442 2,688,442 Allocated as follows: Assets acquired: Property 7,644,000 Receivable from Ethema Health Corporation 299,743 7,943,743 Liabilities assumed: Accounts payable and other accruals 158,093 Related party payable to Leon Developments 2,057,392 Mortgage liability owing to Ethema Health Corporation 267,550 Mortgage liability 3,145,550 5,628,575 Net assets acquired 2,315,168 Excess purchase consideration allocated to shareholders compensation $ 373,274 |
5. Acquisition of the business
5. Acquisition of the business of Seastone of Delray | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
5. Acquisition of the business of Seastone of Delray | 5. Acquisition of the business of Seastone of Delray The Company, utilized a portion of the proceeds realized on the sale of the Canadian Rehab Clinic to acquire certain assets of Seastone of Delray. The Company obtained its own license to run a rehabilitation Clinic in Florida in December 2016 and began operations, through its wholly owned subsidiary, Seastone of Delray, LLC, effective January 2017. The assets acquired were as follows: Amount Purchase price paid: Cash paid to seller $ 2,960,000 Deposits previously paid to seller 110,000 Mortgage liability funds 3,000,000 6,070,000 Assets acquired: Property 4,410,000 Furniture and fixtures 80,000 Intangibles - to be classified 1,438,525 Receivables 141,475 $ 6,070,000 |
6. Going concern
6. Going concern | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
6. Going concern | 6. Going concern The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with US GAAP applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations in the normal course of business. As of September 30, 2017, the Company has a working capital deficiency of $1,877,040 and accumulated deficit of $(14,789,989). Management believes that current available resources will not be sufficient to fund the Company’s planned expenditures over the next 12 months. Accordingly, the Company will be dependent upon the raising of additional capital through placement of common shares, and/or debt financing in order to implement its business plan, and, or generating sufficient revenue in excess of costs. If the Company raises additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of common stock or convertible senior notes. If the Company raises additional funds by issuing debt, the Company may be subject to limitations on its operations, through debt covenants or other restrictions. If the Company obtains additional funds through arrangements with collaborators or strategic partners, the Company may be required to relinquish its rights to certain geographical areas, or techniques that it might otherwise seek to retain. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. These unaudited condensed consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations. The ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common stock or obtaining debt financing and attaining future profitable operations. Management's plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts. |
7. Discontinued Operations
7. Discontinued Operations | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
7. Discontinued Operations | 7. Discontinued Operations On February 14, 2017, the Company completed a series of transactions, including an APA whereby the Company sold certain of the Canadian Rehab Clinic assets. The assets disposed of business represented substantially all of the operating assets of the Canadian Rehab Clinic and has been disclosed as a discontinued operation for comparative purposes as of December 31, 2016 and for the three and nine month period ended June 30, 2017 and 2016. Refer note 2 above. The assets and liabilities of discontinued operations as of December 31, 2016 is as follows: December 31, 2016 Current assets Accounts receivable, net $ 123,358 Prepaid expenses and other current assets 11,253 Total current assets 134,611 Non-current assets Plant and equipment, net 129,127 Deposits - Total assets 263,738 Current liabilities Deferred revenues 80,519 Discontinued operation 183,219 The Statement of operations for discontinued operations is as follows: Three months ended September 30, 2017 Three months ended September 30, 2016 Nine months ended September 30, 2017 Nine months ended September 30, 2016 Revenues $ - $ 1,076,303 $ 232,040 $ 2,923,524 Operating expenses Depreciation and amortization - 16,586 4,196 47,332 General and administrative 353 197,854 119,058 547,477 Professional fees - - 32,818 - Rent - 104,881 47,493 284,993 Salaries and wages - 366,986 201,723 1,178,968 Total operating expenses 353 686,307 405,288 2,058,770 Operating (loss) income (353) 389,996 (173,248) 864,754 Other (Expense) Income Other income - - - 21,042 Other expense - (28,298) - (28,298) Interest expense (1,904) (40,031) (2,898) (116,774) Foreign exchange movements (215,996) (2,766) (124,293) 21,956 Net (loss) income before taxation (218,253) 318,901 (300,439) 762,680 Taxation - - - - Net (loss) income from discontinued operations $ (218,253) $ 318,901 $ (300,439) $ 762,680 Gain on disposal of business - - 7,494,828 - $ (218,253) $ 318,901 $ 7,194,389 $ 762,680 |
8. Due from sale of subsidiary
8. Due from sale of subsidiary | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
8. Due from sale of subsidiary | 8. Due from sale of subsidiary A net amount of CDN$617,960 was due to the Company on the sale of the Endoscopy Clinic as of December 31, 2016. This amount was past due and had fully provided for as of December 31, 2016. On February 14, 2017, the Company acquired CCH from Leon Developments and settled a portion of the purchase consideration by assigning the proceeds due to the Company on the sale of the Endoscopy Clinic to Leon Developments. The note together with accrued interest thereon of CDN$41,959 amounted to CDN$659,919 (US$504,442). The provision raised against the note was reversed and the unrecorded interest thereon was recognized during the current period. On February 14, 2017, the Company sold its Canadian Rehab Clinic for gross proceeds of CDN$10,000,000, of which CDN$1,500,000 (US$1,155,900) has been retained in an escrow account for a period of up to two years in order to guarantee the warranties provided by the Company in terms of the APA. In addition, the Company may earn up to an additional CDN$3,000,000 as a performance payment based on the attainment of certain clinic performance metrics. The Company estimates that the earnout will approximate $663,000 and is accruing this additional amount over a period of twenty-three and a half months. The accrual is recorded as other income, as of September 30, 2017, the company had accrued $169,593 (at closing exchange rates) as additional income. |
9. Property plant and equipment
9. Property plant and equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
9. Property plant and equipment | 9. Property, plant and equipment Property, plant and equipment consists of the following: September 30, 2017 December 31, 2016 Cost Amortization and Impairment Net book value Net book value Property $ 12,432,237 $ (307,253 ) $ 12,124,984 $ — Furniture and fixtures 80,000 (15,000 ) 65,000 — $ 12,512,237 $ (322,253 ) $ 12,189,984 $ — Depreciation expense for the three months ended September 30, 2017 and 2016 was $131,784 and $0, respectively, and for the nine months ended September 30, 2017 and 2016 was $314,190 and $0, respectively. |
10. Intangibles
10. Intangibles | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
10. Intangibles | 10. Intangibles In terms of the acquisition of Seastone of Delray, the Company paid an amount of $1,438,525 (Note 1 above) in excess of the fair market value of the assets acquired. This amount will be allocated to different classes of intangible assets when an independent valuation of the intangibles is performed. |
11. Taxes Payable
11. Taxes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
11. Taxes Payable | 11. Taxes Payable The Company settled the tax liabilities owing to the Canadian Revenue Authorities out of the proceeds of the disposal of the Canadian Rehab Clinic on February 14, 2017. The Company paid CDN$2,929,886 to settle outstanding payroll liabilities, CDN$441,598 to settle outstanding GST/HST liabilities and a further CDN$ 57,621 to settle other Canadian tax liabilities. The remaining taxes payable consist of: ● A payroll tax liability of $154,795 (CDN$193,184) in Greenestone Muskoka which has not been settled as yet. ● The Company has assets and operates businesses in Canada and is required to disclose these operations to the US taxation authorities, the requisite disclosure has not been made. Management has reserved the maximum penalty due to the IRS in terms of non-disclosure. This noncompliance with US disclosure requirements is currently being addressed. An amount of $250,000 has been accrued for any potential exposure the Company may have. |
12. Short-term convertible loan
12. Short-term convertible loan | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
12. Short-term convertible loan | 12. Short-term Convertible Notes The short-term convertible notes consist of the following: Interest rate Maturity date Principal Outstanding Accrued interest Unamortized Discount September 30, 2017 December 31, 2016 Labrys Fund, LP 8.0% August 2, 2017 $ - $ - $ - $ - $ - Power Up Lending Group LTD. 12.0% March 20, 2018 $ 113,500 $ 3,844 $ (70,834) $ 46,510 $ - Series L Convertible notes 0.0% June 30, 2017 to July 17, 2017 - - - - 250,258 $ 113,500 $ 3,844 $ (70,834) $ 46,510 $ 250,258 Disclosed as follows: Short-term portion $ 46,510 $ 250,258 Long-term portion - - $ 46,510 $ 250,258 Labrys Fund, LP On February 2, 2017, the Company entered into a Securities Purchase Agreement with LABRYS FUND LP, in terms of the agreement the Company borrowed $110,000 in terms of an unsecured convertible promissory note with a maturity date of August 2, 2017. The note bears interest at a rate of 8% per annum. The note is only convertible upon a repayment default, at the lower of 60% of the lowest traded price over the preceding 30 day trading period prior to the issuance of this note or 60% of the lowest traded price 30 days prior to the conversion date. The Company issued 1,200,000 common shares to the note holder as a commitment fee which returnable shares will be returned to the company if fully repaid prior to August 2, 2017. On May 26, 2017, the Company repaid the note for gross proceeds of $112,744, including interest thereon of $2,744. The 1,200,000 commitment fee shares were returned to the Company. Power Up Lending Group LTD On June 19, 2017, the Company, entered into a Securities Purchase Agreement with Power Up Lending Group Ltd., pursuant to which the Company issued to the Purchaser a Convertible Promissory Note in the aggregate principal amount of $113,500. The Note has a maturity date of March 20, 2018 and bears interest at the at the rate of eight percent per annum from the date on which the Note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of the Purchaser during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to 61% of the average lowest closing bid prices of the Company’s common stock for the ten trading days prior to conversion. The balance of the Note plus accrued interest at September 30, 2017 was $46,510, net of unamortized discount of $70,834. Series L convertible notes The Company entered into Series L Convertible Securities Purchase Agreements with 8 individuals on December 30, 2016. In terms of these agreements, the Company borrowed an aggregate principal amount of $468,969 in terms of a senior ranking convertible promissory note with a maturity date six months from the issue date and bearing interest at 0% per annum. The notes are convertible at the option of the holder into shares of common stock of the Company at a conversion price of $0.03 per share, subject to certain recapitalization adjustments. On December 30, 2016, it was determined that the beneficial conversion feature related to the discounted note and warrant issuances amounting to $218,711 would be amortized over the life of the loans. During January 2017, the Company borrowed a further aggregate principal amount of $71,000 in terms of three senior ranking convertible promissory notes with a maturity date six months from the issue date and bearing interest at 0% per annum. The notes are convertible at the option of the holder into shares of common stock of the Company at a conversion price of $0.03 per share, subject to certain recapitalization adjustments. In January 2017, it was determined that the beneficial conversion feature related to the discounted note and warrant issuances amounting to $71,000 would be amortized over the life of the loans. On May 4, 2017, the Company repaid $20,000 of the principal outstanding to one investor. During July and August 2017, the Company repaid a further $144,958 of the principal outstanding to five investors. During July 2017, five investors converted an aggregate principal amount of $375,011 of convertible notes into 12,500,375 shares of common stock at a conversion price of $0.03 per share. The amortization charge of the debt discount for the three months and nine months ended September 30, 2017 was $5,917 and $289,711, respectively. In terms of the Series L Convertible notes issued above, during January 2017, the Company granted three-year warrants to the Series L Convertible noteholders, exercisable for 2,366,667 shares of common stock at an exercise price of $0.03, subject to certain recapitalization adjustments, per share, expiring between January 16 and January 17, 2020. (Refer note 16 (b) below). |
13. Derivative liability
13. Derivative liability | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
13. Derivative liability | 13. Derivative liability The short-term convertible notes issued to Labrys Fund LP and Power Up Lending Group, LTD, disclosed in note 12 above, have variable priced conversion rights with no fixed floor price and will reprice dependent on the share price performance over varying periods of time. This gives rise to a derivative financial liability, which was initially valued at inception of the convertible notes at $223,500, the maximum amount permissible, using a Black-Scholes valuation model. The Labrys Fund note was repaid in May 2017; therefore, the derivative liability was no longer required, the total derivative liability relating to this note of $183,048 was released to the statement of operations. The value of the Power Up convertible note was re-assessed as of September 30, 2017 and a further charge of $19,329 was made to the statement of operations. The value of the derivative liability will be re assessed at each financial reporting period, with any movement thereon recorded in the statement of operations in the period in which it is incurred. The following assumptions were used in the Black-Scholes valuation model: Nine months ended September 30, 2017 Calculated stock price $0.03 to $0.06 Risk free interest rate 0.64% to 1.31% Expected life of convertible notes 3 to 9 months expected volatility of underlying stock 134.9% to 198.48% Expected dividend rate 0% The movement in derivative liability is as follows: Nine months ended September 30, 2017 Opening balance $ - Derivative liability arising from convertible notes 223,500 Fair value adjustment to derivative liability (75,203) $ 148,297 |
14. Related Party Transactions
14. Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
14. Related Party Transactions | 14. Related Party Transactions Greenstone Clinic Inc. As of September 30, 2017 and December 31, 2016, the Company had a payable of $0 and $79,592, respectively. Greenstone Clinic Inc., is controlled by one of the Company’s directors. The balance payable is noninterest bearing, not secured and has no specific repayment terms. 1816191 Ontario As of September 30, 2017, and December 31, 2016, the Company had a payable of $16,855 and $70,763, respectively, to 1816191 Ontario, the Endoscopy Clinic, which was sold at the end of the prior year. The payable is noninterest bearing, and has no specific repayment terms. Shawn E. Leon As of September 30, 2017, and December 31, 2016 the Company had a receivable of $15,756 and a payable of $8,492, respectively to Shawn E. Leon, a director and CEO of the Company. The balances receivable and payable are noninterest bearing and have no fixed repayment terms. Mr. Leon was paid management fees of $193,156 during the nine months ended September 30, 2017. In addition to this the Company recorded a once off compensation expense in other expenses, relating to the excess of the fair value of the assets acquired in Cranberry Cove Holdings, Ltd. Mr. Leon is the owner of Leon Developments, the counterparty in the acquisition of the Cranberry Cove subsidiary referred to in note 1 and 3 above. Leon Developments, Ltd. The Company acquired CCH from Leon Developments, Ltd., on February 14, 2017, refer note 1 and 3 above. CCH owns the facility utilized by the Canadian Rehab Clinic which was sold to a third party on February 14, 2017. CCH owed CDN $2,692,512 to Leon Developments. The amount owing to Leon Developments Ltd., as of September 30, 2017 was $1,740,018. Cranberry Cove Holdings Ltd. The Company acquired CCH on February 14, 2017. CCH owns the real estate previously utilized by the Canadian Rehab Clinic and now utilized by the purchaser of the business. As of December 31, 2016, the Company had a receivable of $84,867 from CCH. Prior to the acquisition of CCH, the Company paid rental expense to CCH of $47,493 for the period ended September 30 ,2017 and $100,203 and $271,364 for the three and nine months ended September 30, 2017, respectively. |
15. Loans payable
15. Loans payable | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
15. Loans payable | 15. Loans payable On February 14, 2017, the Company acquired 100% of the equity of CCH, from Leon Developments. The subsidiary has certain mortgage indebtedness amounting to CDN$4,115,057 (US$3,145,549) at the date of acquisition, which was assumed by the Company. On February 14, 2017, the Company acquired certain assets of Seastone of Delray, including fixed property. A portion of the purchase consideration was funded by a purchase money mortgage secured over the properties acquired, amounting to $3,000,000. The loans payable is as follows: Interest rate Maturity date Principal Outstanding Accrued interest September 30, 2017 December 31, 2016 Cranberry Cove Holdings First Mortgage 8.0% August 14, 2017 $ - $ - $ - $ - Second Mortgage 12.0% November 4, 2018 - - - - Pace Mortgage 4.2% July 19,2022 4,391,140 5,558 4,396,698 - Seastone of Delray Mortgage 5.0% February 13, 2020 2,982,280 $ 12,426 2,994,706 - $ 7,373,420 $ 17,984 $ 7,391,404 $ - Disclosed as follows: Short-term portion $ 158,534 $ - Long-term portion 7,232,870 - $ 7,391,404 $ - The aggregate amount outstanding is payable as follows: Amount 2017 $ 38,438 2018 134,673 2019 140,707 2020 3,032,025 2021 116,262 Thereafter 3,929,299 Total $ 7,391,404 Cranberry Cove Holdings First Mortgage The first mortgage with an aggregate principal amount outstanding of CDN$3,500,000, including late charges, interest and penalties of CDN$165,057 for a gross aggregate amount outstanding of CDN$3,663,380, over the Cranberry Cove Holdings properties is secured by the property located at 3571 Muskoka Road, #169, Bala, described as PT LT 15 CON F Medora PT1 35R5958, PT 2 &3 35R11290, Muskoka Lakes. The mortgage bears interest at the rate of 8% per annum on the aggregate principal outstanding of $3,500,000 and matures on August 14, 2017, with monthly interest payments of $23,118 (CDN 30,000). During March 2017, the Company made a principal payment of CDN$100,000 on the first mortgage. This mortgage was repaid in full on July 21, 2017 out of the proceeds derived from a new mortgage agreement entered into on July 19, 2017, see below. Second Mortgage The second mortgage had an initial principal amount outstanding of CDN$350,000, on May 23, 2017, the Company sold CDN$175,000 of the mortgage it owned to the second mortgage holder for gross proceeds of CDN$150,000, the balance outstanding on the second mortgage is now CDN$525,000, the mortgage is secured by the Cranberry Cove Holdings properties located at 3571 Muskoka Road, #169, Bala, described as PT LT 15 CON F Medora PT1 35R5958, PT 2 &3 35R11290, Muskoka Lakes. The mortgage bears interest at the rate of 12% per annum on the aggregate principal outstanding of CDN$525,000, and matures on November 4, 2018, with monthly interest payments of CDN$3,500. This mortgage was repaid in full on July 21, 2017 out of the proceeds derived from a new mortgage agreement entered into on July 19, 2017, see below. Pace Mortgage On July 19, 2017, Cranberry Cove Holdings, LTD. (“CCH”), a wholly owned subsidiary closed on a loan agreement in the principal amount of CDN$5,500,000. The loan is secured by a first mortgage on the premises owned by CCH located at 3571 Muskoka Road 169, Bala, Ontario (the “Property”). The Loan bears interest at the fixed rate of 4.2% with a 5-year primary term and a 25-year amortization. The Company has guaranteed the Loan and the Company’s chief executive officer and controlling shareholder also has personally guaranteed the Loan. CCH and the Company have granted the Lender a general security interest in its assets to secure repayment of the Loan. The loan is amortized with monthly installments of CDN $29,531. Seastone of Delray The Company entered into a Mortgage and Security Agreement with Seastone Delray Healthcare, LLC on February 13, 2017 for the aggregate principal sum of $3,000,000, bearing interest at the rate of 5% per annum, maturing on February 13, 2020, with monthly repayments of interest and principal of $15,000. The proceeds of the mortgage of $3,000,000 was used to fund the acquisition of the Seastone Delray properties, described as follows: Parcel 1, Moore’s Landing according to the Plat thereof, as recorded in Plat Book 42, page 72, Public Records of Palm Beach County, Florida Unit numbers 1 to 10, inclusive of Seastone Condominium Apartments, a Condominium, according to The Declaration of Condominium recorded on O.RT. Book 3313, Page 122 and all exhibits thereof, Public Records of Palm Beach County, Florida. |
16. Stockholders' equity (defic
16. Stockholders' equity (deficit) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
16. Stockholders' deficit | 16. Stockholders’ equity (deficit) a) Common shares On February 2, 2017, the Company issued 1,200,000 common shares to a convertible note holder in terms of a returnable commitment fee. The shares are returnable to the Company if the convertible note is repaid prior to maturity, failing which the commitment fee will be earned. These shares were not accounted for as issued as the probability of the commitment fee being assessed was not probable or certain. The convertible loan was repaid and the 1,200,000 common shares were returned to the Company, refer note 12 above. On February 14, 2017, in terms of the acquisition of 100% of the capital stock of Cranberry Cove Holdings Ltd. (“CCH”) from Leon Developments, the Company funded a portion of the acquisition by the issuance of 60,000,000 shares of the Company’s common stock at a market value of US$0.0364 per share, totaling $2,184,000, refer note 1 and 3 above. On May 30, 2017, the Company issued 100,000 common shares to a vendor in lieu of services rendered at a market value of US$0.04 per share. During July 2017, five Series L Convertible note holders exercised their conversion rights and converted an aggregate principal amount of $375,011 into 12,500,375 shares of common stock at a conversion price or $0.03 per share. b) Warrants In terms of the short-term Series L Convertible notes entered into with 3 parties, as disclosed in note 12 above, the Company awarded three year warrants exercisable over 2,366,666 shares of common stock, at an exercise price of $0.03 per share. The fair value of Warrants awarded during the nine months ended September 30, 2017 were valued at $94,620 using the Black Scholes pricing model utilizing the following weighted average assumptions: Nine months ended September 30, 2017 Calculated stock price $0.04 Risk free interest rate 1.48% Expected life of warrants (years) 3 years expected volatility of underlying stock 398% Expected dividend rate 0% The movements in warrants is summarized as follows: No. of shares Exercise price per share Weighted average exercise price Outstanding January 1, 2016 6,300,000 $0.0033 to $0.03 $ 0.14 Granted 19,337,409 0.03 0.0300 Forfeited/cancelled (6,000,000) 0.15 0.1500 Exercised - - - Outstanding December 31, 2016 19,637,409 $0.0033 to $0.03 0.0300 Granted 2,366,666 0.03 0.0300 Forfeited/cancelled - - - Exercised - - - Outstanding September 30, 2017 22,004,075 $0.033 to $0.03 $0.0300 The following table summarizes information about warrants outstanding at September 30, 2017: Warrants outstanding Warrants exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.0033 300,000 * 300,000 $0.03 21,704,075 2.44 21,704,075 22,004,075 2.44 $ 0.03 22,004,075 $ 0.03 * In terms of an agreement entered into with an investor relations company, 300,000 warrants were to be issued as part of the Investor Relations Agreement. These warrants have not been issued as yet, therefore the warrant terms are uncertain. All of the warrants outstanding as of September 30, 2017 are vested. The warrants outstanding as of September 30, 2017 have an intrinsic value of $668,123. c) Stock options Our board of directors adopted the GreeneStone Healthcare Corporation 2013 Stock Option Plan (the “Plan”) to promote our long- term growth and profitability by (i) providing our key directors, officers and employees with incentives to improve stockholder value and contribute to our growth and financial success and (ii) enable us to attract, retain and reward the best available persons for positions of substantial responsibility. A total of 10,000,000 shares of our common stock have been reserved for issuance upon exercise of options granted pursuant to the Plan. The Plan allows us to grant options to our employees, officers and directors and those of our subsidiaries; provided that only our employees and those of our subsidiaries may receive incentive stock options under the Plan. We have granted a total of 480,000 options as of September 30, 2017 under the Plan. No options were issued, exercised or cancelled for the period under review. The following table summarizes information about options outstanding as of September 30, 2017. Options outstanding Options exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.12 480,000 2.08 480,000 480,000 2.08 $ 0.12 480,000 $ 0.12 As of September 30, 2017, there was no unrecognized compensation costs related to these options and the intrinsic value of the options is $0. |
17. Segment Information
17. Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
17. Segment Information | 17. Segment information Due to the recent acquisition of the Cranberry Cove subsidiary on February 14, 2017, the Company has two reportable operating segments; a. Rental income from the property owned by Cranberry Cove subsidiary located at 3571 Muskoka Road, #169, Bala, on which the operations of the Canadian Rehab Clinic were located prior to disposal on February 14, 2017 and subsequently leased to the purchasers of the business of the Canadian Rehab Clinic, for a period of 5 years renewable for a further three five-year periods and with an option to acquire the property at a fixed price. b. Rehabilitation Services provided to customers, during the nine months ended September 30, 2017, these services were provided to customers at our Seastone of Delray business acquired on February 14, 2017. The Rehabilitation services provided by our Canadian Rehab Center for the nine months ended September 30, 2017 and 2016 are reported under discontinued operations and have not been reported as part of the Segment Information. The segment operating results of the reportable segments are disclosed as follows: Three months ended September 30, 2017 Rental Operations In-Patient services Total Revenue $ 83,837 $ 564,461 $ 648,298 Operating expenditure 158,808 398,160 556,968 Operating (loss) income (74,971) 166,301 91,330 Other (expense) income Other income - 67,596 67,596 Interest expense (38,714) (47,657) (86,371) Amortization of debt discount - (13,052) (13,052) Loss on change in fair value of derivative liability - (19,329) (19,329) Foreign exchange movements (18,320) 71,614 53,294 Net loss before taxation from continuing operations (132,005) 225,473 93,468 Taxation - - - Net loss from continuing operations $ (132,005) $ 225,473 $ 93,468 The segment operating results of the reportable segments are disclosed as follows: Nine months ended September 30, 2017 Rental Operations In-Patient services Total Revenue $ 203,962 $ 1,169,066 $ 1,373,028 Operating expenditure 294,673 1,635,041 1,929,714 Operating loss (90,711) (465,975) (556,686) Other (expense) income Other income - 635,904 635,904 Other expense (373,274) (19,264) (392,538) Interest income - 32,074 32,074 Interest expense (136,902) (106,090) (242,992) Amortization of debt discount - (442,377) (442,377) Loss on change in fair value of derivative liability - 75,203 75,203 Foreign exchange movements (18,320) (92,732) (111,052) Net loss before taxation from continuing operations (619,207) (383,257) (1,002,464) Taxation - - - Net loss from continuing operations $ (619,207) $ (383,257) $ (1,002,464) The operating assets and liabilities of the reportable segments are as follows: Rental Operations In-Patient services Total Purchase of fixed assets $ — $ 8,878 $ 8,878 Assets Current assets 6,391 1,011,561 1,017,952 Non-current assets 7,825,234 7,174,787 15,000,021 Liabilities Current liabilities (2,333,270 ) (561,722 ) (2,894,992 ) Non-current liabilities (4,311,464 ) (2,921,406 ) (7,232,870 ) Intercompany balances (1,813,184 ) 1,813,184 — Net (liability) asset position $ (626,293 ) $ 6,516,404 $ 5,890,111 |
18. Net income (loss) per commo
18. Net income (loss) per common share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
18. Net income (loss) per common share | 18. Net loss (income) per common share For the three months ended September 30, 2017, 480,000 options to purchase shares of common stock; 22,004,075 warrants to purchase shares of common stock and convertible notes convertible into 3,721,311 shares of common stock at the Company’s share price on September 30, 2017, were excluded from the calculation of earnings per share as the result would have been anti-dilutive. For the three months ended September 30, 2016 the computation of basic and diluted earnings per share is as follows: Amount Number of shares Per share amount Basic earnings per share Net loss per share from continuing operations $ (181,930) 48,738,855 $ - Net income per share from discontinued operations 318,901 48,738,855 $ - Basic income per share 136,971 48,738,855 - Effect of dilutive securities Warrants - 266,700 Options - - Diluted earnings per share Net loss per share from continuing operations (181,930) 49,005,555 - Net income per share from discontinued operations 318,901 49,005,555 - $ 136,971 49,005,555 $ - For the nine months ended September 30, 2017 the computation of basic and diluted earnings per share is as follows: Amount Number of shares Per share amount Basic earnings per share Net loss per share from continuing operations $ (1,002,464) 102,455,451 $ (0.01) Net income per share from discontinued operations 7,194,389 102,455,451 $ 0.07 Basic income per share 6,191,925 102,455,451 0.06 Effect of dilutive securities Warrants - 14,856,699 Options - - Diluted earnings per share Net loss per share from continuing operations (1,002,464) 117,312,150 (0.01) Net income per share from discontinued operations 7,194,389 117,312,150 0.06 $ 6,191,925 117,312,150 $ 0.05 For the nine months ended September 30, 2016 the computation of basic and diluted earnings per share is as follows: Amount Number of shares Per share amount Basic earnings per share Net loss per share from continuing operations $ (413,294) 48,158,563 $ - Net income per share from discontinued operations 762,680 48,158,563 $ - Basic income per share 349,386 48,158,563 - Effect of dilutive securities Warrants - 266,700 Options - - Diluted earnings per share Net loss per share from continuing operations (413,294) 48,425,263 - Net income per share from discontinued operations 762,680 48,425,263 - |
19. Commitments and contingenci
19. Commitments and contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
19. Commitments and contingencies | 19. Commitments and contingencies a. Contingency related to outstanding penalties The Company has provided for potential US penalties of $250,000 due to noncompliance with the filing of certain required returns. The actual liability may be higher due to interest and penalties assessed by these taxing authorities. b. Other From time to time, the Company and its subsidiaries enter into legal disputes in the ordinary course of business. The Company believes there are no material legal or administrative matters pending that are likely to have, individually or in the aggregate, a material adverse effect on its business or results of operations. |
20. Income taxes
20. Income taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
20. Income taxes | 20. Income taxes The Company is not current in its tax filings as of September 30, 2017. The Company has accrued $250,000 for not filing certain required returns in the United States. The Company is also currently evaluating potential tax liabilities due to the gain on disposal of our Canadian Rehab Clinic. The total tax liabilities, including penalties and interest could be significant and adversely impact stockholder value. |
21. Subsequent events
21. Subsequent events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
21. Subsequent events | 21. Subsequent events On August 3, 2017, the Company entered into an agreement to acquire a property at 45 West 17th Street, Riviera Beach, Florida, including the completion of the construction of a 20 bed in-patient detoxification facility and the licensing approvals to operate a detoxification facility for a total purchase consideration of $3,000,000, of which $1,000,000 of the financing is to be provided by the seller, bearing interest at 7% per annum for a 22-month period. This agreement is subject to a successful closing on or before November 17, 2017, after which date it may be cancelled by either party. This agreement was subsequently cancelled and all deposits paid were returned. On October 31, 2017 and November 6, 2017, Eileen Greene, the spouse of the CEO, advanced the company CDN $575,000 and CDN $327,000, respectively. The terms of the advance are undecided to date. The proceeds of these advances were used to make the initial down payments, as discussed below. On November 6, 2017, the Company, entered into a Securities Purchase Agreement with Power Up Lending Group Ltd., pursuant to which the Company issued to the Purchaser a Convertible Promissory Note in the aggregate principal amount of $103,000. The Note has a maturity date of August 15, 2018 and bears interest at the at the rate of twelve percent per annum from the date on which the Note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the Note in terms of agreement at a prepayment penalty ranging from 112% to 130% of the balance outstanding. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of the Purchaser during the period beginning on the date that is 180 days following the issue date into shares of the Company's common stock at a conversion price equal to 61% of the lowest closing bid price of the Company's common stock for the ten trading days prior to conversion. The proceeds of this note was also used to fund the initial down payment, as discussed below. On November 2, 2017, the Company entered into an agreement to purchase certain buildings in West Palm Beach, Florida, totalling approximately 80,000 square feet on which the current tenant operates a substance abuse center for a consideration of $20,080,000. The Company is obligated to make certain non-refundable down payments of $2,210,000. The closing of this transaction is expected to take place on February 28, 2018 or at an earlier date agreed to by the parties. Other than disclosed above, the Company has evaluated subsequent events through the date of the unaudited condensed consolidated financial statements were available to be issued and has concluded that no such events or transactions took place that would require disclosure herein. |
2. Summary of Significant Acc28
2. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | a) Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 reporting periods. Actual results could differ from those estimates. |
Principals of consolidation and foreign currency translation | b) Principals of consolidation and foreign currency translation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its subsidiary. All intercompany transactions and balances have been eliminated on consolidation. The Company previously owned an operational subsidiary whose functional currency was the Canadian dollar, while the Company’s reporting currency is the U.S. dollar. The Company recently acquired a property-owning subsidiary, CCH, whose functional currency is the Canadian dollar. All transactions initiated in Canadian dollars are translated into US dollars in accordance with ASC 830, “Foreign Currency Translation” as follows: ● Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. ● Equity at historical rates. ● Revenue and expense items at the average rate of exchange prevailing during the period. Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of accumulated other comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income (loss). For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period. The relevant translation rates are as follows: For the nine months ended September 30, 2017; a closing rate of CAD$1.0000 equals US$0.8013 and an average exchange rate of CAD$1.0000 equals US$0.7984. |
Cash and cash equivalents | c) Cash and cash equivalents The Company's policy is to disclose bank balances under cash, including bank overdrafts with balances that fluctuate frequently from being positive to overdrawn and term deposits with a maturity period of three months or less from the date of acquisition. |
Revenue Recognition | d) Revenue Recognition The Company has two operating segments from which it derives revenues, i) rental income from leasing of a rehabilitation facility to third parties and ii) in-patient revenues for rehabilitation services provided to customers. Revenue is recognized as follows: i. Rental Income In terms of the lease agreement, on a monthly basis as long as the facility is utilized by the tenant ii. In-patient revenue The customers have been treated and provided with services by the Company; there is clear evidence that an arrangement exists; the amount of revenue and related costs can be measured reliably; and it is probable that the economic benefits associated with the transaction will flow to the Company. In particular, the Company recognizes fees for inpatient addiction treatments proportionately over the term of the patient’s treatment. Deferred revenue represents monies deposited by the patients for future services to be provided by the Company. Such monies will be recognized into revenue as the patient progresses through their treatment term. |
Recent accounting pronouncements | e) Recent accounting pronouncements In July 2017, the FASB issued Accounting Standards Update No. (“ASU’’) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815). The amendments in this Update provide guidance about: 1. Accounting for certain financial instruments with down round features 2. Replacement of the indefinite deferral for mandatorily redeemable financial instruments of certain non-public entities and certain non-controlling interests The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. The amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging, an amendment to Topic 815. The amendments in this Update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components 2 and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this Update require an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted in any interim period after issuance of the Update. All transition requirements and elections should be applied to hedging relationships existing (that is, hedging relationships in which the hedging instrument has not expired, been sold, terminated, or exercised or the entity has not removed the designation of the hedging relationship) on the date of adoption. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). The amendments in this ASU deals with the transition and effective dates of implementing to ASU 2014-09, Revenue from contracts with customers, ASU 2016-08, Revenue from contracts with customers, principal versus agent considerations, ASU 2016-10, revenues from contacts with customers; identifying performance obligations and licensing, ASU 2016-12, revenues from contacts with customers, narrow scope improvements and practical expedients, 2016-20, technical corrections and improvements and ASU 2017-05, other income, gains and losses from the derecognition of non-financial assets. The transition provisions require adoption of Topic 606 for annual reporting periods commencing after December 15, 2017 and the adoption of Topic 842 for annual reporting periods beginning after December 15, 2018 for public business entities, if the requirements of a public business entity as defined in ASU 2017-122 are not met, may adopt Topic 606 for annual reporting periods commencing after December 15, 2018 and for Topic 842 for annual reporting periods commencing after December 15, 2019. Early adoption is permitted of both Topics. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. Any new accounting standards, not disclosed above, 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 financial statements upon adoption. |
Financial instruments | f) Financial instruments The Company is exposed to various risks through its financial instruments. The following analysis provides a measure of the Company’s risk exposure and concentrations at the balance sheet date, September 30, 2017 and December 31, 2016. i. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments that subject the Company to credit risk consist primarily of accounts receivable. Credit risk associated with accounts receivable of Seastone of Delray is mitigated as only a percentage of the revenue billed to health insurance companies is recognized as income until such time as the actual funds are collected. The revenue is concentrated amongst several health insurance companies located in the US. In the opinion of management, credit risk with respect to accounts receivable is assessed as low. ii. Liquidity risk Liquidity risk is the risk the Company will not be able to meet its financial obligations as they fall due. The Company is exposed to liquidity risk through its working capital deficiency of $1,877,040 accumulated deficit $(14,789,989). As disclosed in note 6, the Company will be dependent upon the raising of additional capital in order to implement its business plan. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. In the opinion of management, liquidity risk is assessed as high, material and remains unchanged from the prior year. iii. Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risk: interest rate risk, currency risk, and other price risk. The Company is exposed to interest rate risk and currency risk. a. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to minimal interest rate risk on its bank indebtedness as there is a balance owing of $11 as of September 30, 2017. This liability is based on floating rates of interest that have been stable during the current reporting period. In the opinion of management, interest rate risk is assessed as low, not material and remains unchanged from the prior year. b. Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is subject to currency risk as it has subsidiaries that operate in Canada and are subject to fluctuations in the Canadian dollar. A substantial portion of the Company’s financial assets and liabilities are denominated in Canadian dollars. Based on the net exposures at September 30, 2017, a 5% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in an approximate $13,217 increase or decrease in the Company’s after tax net income from operations. The Company has not entered into any hedging agreements to mediate this risk. In the opinion of management, currency risk is assessed as low, material and remains unchanged from the prior year. c. Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. In the opinion of management, the Company is not exposed to this risk and remains unchanged from the prior year. |
Derivative instrument liability | g) Derivative instrument liability The Company accounts for derivative instruments in accordance with ASC815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged. At September 30, 2017, the Company had a derivative liability amounting to $148,297. |
Convertible instruments | h) Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities.” Professional standards generally provide three criteria that, if met, require companies 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. Professional standards also provide 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. |
3. Disposal of Business (Tables
3. Disposal of Business (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disposal Of Business Tables | |
Schedule of business disposal | Amount Proceeds on disposal $ 7,644,000 Assets sold: Accounts receivable 113,896 Plant and equipment 109,075 222,971 Liabilities assumed by purchaser Deferred revenue (73,799) Net assets and liabilities sold 149,172 Net profit realized on disposal $ 7,494,828 |
4. Acquisition of subsidiary (T
4. Acquisition of subsidiary (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Acquisition Of Subsidiary Tables | |
Schedule of acquisiton of subsidiary | The allocation of the purchase price is as follows: Amount Purchase price paid: Common shares issued to Seller $ 2,184,000 Receivable assumed by the Seller 504,442 2,688,442 Allocated as follows: Assets acquired: Property 7,644,000 Receivable from Ethema Health Corporation 299,743 7,943,743 Liabilities assumed: Accounts payable and other accruals 158,093 Related party payable to Leon Developments 2,057,392 Mortgage liability owing to Ethema Health Corporation 267,550 Mortgage liability 3,145,550 5,628,575 Net assets acquired 2,315,168 Excess purchase consideration allocated to shareholders compensation $ 373,274 |
5. Acquisition of the busines31
5. Acquisition of the business of Seastone of Delray (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Acquisition Of Business Of Seastone Of Delray Tables | |
Schedule of acquisition of the business of Seastone of Delray | Amount Purchase price paid: Cash paid to seller $ 2,960,000 Deposits previously paid to seller 110,000 Mortgage liability funds 3,000,000 6,070,000 Assets acquired: Property 4,410,000 Furniture and fixtures 80,000 Intangibles - to be classified 1,438,525 Receivables 141,475 $ 6,070,000 |
7. Discontinued Operations (Tab
7. Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
7. Discontinued Operations (Tables) | December 31, 2016 Current assets Accounts receivable, net $ 123,358 Prepaid expenses and other current assets 11,253 Total current assets 134,611 Non-current assets Plant and equipment, net 129,127 Deposits - Total assets 263,738 Current liabilities Deferred revenues 80,519 Discontinued operation 183,219 The Statement of operations for discontinued operations is as follows: Three months ended September 30, 2017 Three months ended September 30, 2016 Nine months ended September 30, 2017 Nine months ended September 30, 2016 Revenues $ - $ 1,076,303 $ 232,040 $ 2,923,524 Operating expenses Depreciation and amortization - 16,586 4,196 47,332 General and administrative 353 197,854 119,058 547,477 Professional fees - - 32,818 - Rent - 104,881 47,493 284,993 Salaries and wages - 366,986 201,723 1,178,968 Total operating expenses 353 686,307 405,288 2,058,770 Operating (loss) income (353) 389,996 (173,248) 864,754 Other (Expense) Income Other income - - - 21,042 Other expense - (28,298) - (28,298) Interest expense (1,904) (40,031) (2,898) (116,774) Foreign exchange movements (215,996) (2,766) (124,293) 21,956 Net (loss) income before taxation (218,253) 318,901 (300,439) 762,680 Taxation - - - - Net (loss) income from discontinued operations $ (218,253) $ 318,901 $ (300,439) $ 762,680 Gain on disposal of business - - 7,494,828 - $ (218,253) $ 318,901 $ 7,194,389 $ 762,680 |
9. Property plant and equipme33
9. Property plant and equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property Plant And Equipment Tables | |
Schedule of property and equipment | September 30, 2017 December 31, 2016 Cost Amortization and Impairment Net book value Net book value Property $ 12,432,237 $ (307,253 ) $ 12,124,984 $ — Furniture and fixtures 80,000 (15,000 ) 65,000 — $ 12,512,237 $ (322,253 ) $ 12,189,984 $ — |
12. Short-term convertible lo34
12. Short-term convertible loan (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Short-term Convertible Loan Tables | |
Short term notes | Interest rate Maturity date Principal Outstanding Accrued interest Unamortized Discount September 30, 2017 December 31, 2016 Labrys Fund, LP 8.0% August 2, 2017 $ - $ - $ - $ - $ - Power Up Lending Group LTD. 12.0% March 20, 2018 $ 113,500 $ 3,844 $ (70,834) $ 46,510 $ - Series L Convertible notes 0.0% June 30, 2017 to July 17, 2017 - - - - 250,258 $ 113,500 $ 3,844 $ (70,834) $ 46,510 $ 250,258 Disclosed as follows: Short-term portion $ 46,510 $ 250,258 Long-term portion - - $ 46,510 $ 250,258 |
13. Derivative liability (Table
13. Derivative liability (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Liability Tables | |
Schedule of assumption used in Black Scholes | Nine months ended September 30, 2017 Calculated stock price $0.03 to $0.06 Risk free interest rate 0.64% to 1.31% Expected life of convertible notes 3 to 9 months expected volatility of underlying stock 134.9% to 198.48% Expected dividend rate 0% |
Schedule of derivative liability | Nine months ended September 30, 2017 Opening balance $ - Derivative liability arising from convertible notes $ 223,500 Fair value adjustment to derivative liability (75,203) $ 148,297 |
15. Loans payable (Tables)
15. Loans payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Loans Payable | The loans payable is as follows: Interest rate Maturity date Principal Outstanding Accrued interest September 30, 2017 December 31, 2016 Cranberry Cove Holdings First Mortgage 8.0% August 14, 2017 $ - $ - $ - $ - Second Mortgage 12.0% November 4, 2018 - - - - Pace Mortgage 4.2% July 19,2022 4,391,140 5,558 4,396,698 - Seastone of Delray Mortgage 5.0% February 13, 2020 2,982,280 $ 12,426 2,994,706 - $ 7,373,420 $ 17,984 $ 7,391,404 $ - Disclosed as follows: Short-term portion $ 158,534 $ - Long-term portion 7,232,870 - $ 7,391,404 $ - |
Estimated Principal Repayments | The aggregate amount outstanding is payable as follows: Amount 2017 $ 38,438 2018 134,673 2019 140,707 2020 3,032,025 2021 116,262 Thereafter 3,929,299 Total $ 7,391,404 |
16. Stockholders' deficit (Tabl
16. Stockholders' deficit (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Warrants outstanding | Nine months ended September 30, 2017 Calculated stock price $0.04 Risk free interest rate 1.48% Expected life of warrants (years) 3 years expected volatility of underlying stock 398% Expected dividend rate 0% The movements in warrants is summarized as follows: No. of shares Exercise price per share Weighted average exercise price Outstanding January 1, 2016 6,300,000 $0.0033 to $0.03 $ 0.14 Granted 19,337,409 0.03 0.0300 Forfeited/cancelled (6,000,000) 0.15 0.1500 Exercised - - - Outstanding December 31, 2016 19,637,409 $0.0033 to $0.03 0.0300 Granted 2,366,666 0.03 0.0300 Forfeited/cancelled - - - Exercised - - - Outstanding September 30, 2017 22,004,075 $0.033 to $0.03 $0.0300 The following table summarizes information about warrants outstanding at September 30, 2017: Warrants outstanding Warrants exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.0033 300,000 * 300,000 $0.03 21,704,075 2.44 21,704,075 22,004,075 2.44 $ 0.03 22,004,075 $ 0.03 |
Options Outstanding | Options outstanding Options exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.12 480,000 2.08 480,000 480,000 2.08 $ 0.12 480,000 $ 0.12 |
17. Segment information (Tables
17. Segment information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
17. Segment information | Three months ended September 30, 2017 Rental Operations In-Patient services Total Revenue $ 83,837 $ 564,461 $ 648,298 Operating expenditure 158,808 398,160 556,968 Operating (loss) income (74,971) 166,301 91,330 Other (expense) income Other income - 67,596 67,596 Interest expense (38,714) (47,657) (86,371) Amortization of debt discount - (13,052) (13,052) Loss on change in fair value of derivative liability - (19,329) (19,329) Foreign exchange movements (18,320) 71,614 53,294 Net loss before taxation from continuing operations (132,005) 225,473 93,468 Taxation - - - Net loss from continuing operations $ (132,005) $ 225,473 $ 93,468 The segment operating results of the reportable segments are disclosed as follows: Nine months ended September 30, 2017 Rental Operations In-Patient services Total Revenue $ 203,962 $ 1,169,066 $ 1,373,028 Operating expenditure 294,673 1,635,041 1,929,714 Operating loss (90,711) (465,975) (556,686) Other (expense) income Other income - 635,904 635,904 Other expense (373,274) (19,264) (392,538) Interest income - 32,074 32,074 Interest expense (136,902) (106,090) (242,992) Amortization of debt discount - (442,377) (442,377) Loss on change in fair value of derivative liability - 75,203 75,203 Foreign exchange movements (18,320) (92,732) (111,052) Net loss before taxation from continuing operations (619,207) (383,257) (1,002,464) Taxation - - - Net loss from continuing operations $ (619,207) $ (383,257) $ (1,002,464) The operating assets and liabilities of the reportable segments are as follows: Rental Operations In-Patient services Total Purchase of fixed assets $ — $ 8,878 $ 8,878 Assets Current assets 6,391 1,011,561 1,017,952 Non-current assets 7,825,234 7,174,787 15,000,021 Liabilities Current liabilities (2,333,270 ) (561,722 ) (2,894,992 ) Non-current liabilities (4,311,464 ) (2,921,406 ) (7,232,870 ) Intercompany balances (1,813,184 ) 1,813,184 — Net (liability) asset position $ (626,293 ) $ 6,516,404 $ 5,890,111 |
18. Net income (loss) per com39
18. Net income (loss) per common share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Basic and dilutive earnings per share | For the three months ended September 30, 2016 the computation of basic and diluted earnings per share is as follows: Amount Number of shares Per share amount Basic earnings per share Net loss per share from continuing operations $ (181,930) 48,738,855 $ - Net income per share from discontinued operations 318,901 48,738,855 $ - Basic income per share 136,971 48,738,855 - Effect of dilutive securities Warrants - 266,700 Options - - Diluted earnings per share Net loss per share from continuing operations (181,930) 49,005,555 - Net income per share from discontinued operations 318,901 49,005,555 - $ 136,971 49,005,555 $ - For the nine months ended September 30, 2017 the computation of basic and diluted earnings per share is as follows: Amount Number of shares Per share amount Basic earnings per share Net loss per share from continuing operations $ (1,002,464) 102,455,451 $ (0.01) Net income per share from discontinued operations 7,194,389 102,455,451 $ 0.07 Basic income per share 6,191,925 102,455,451 0.06 Effect of dilutive securities Warrants - 14,856,699 Options - - Diluted earnings per share Net loss per share from continuing operations (1,002,464) 117,312,150 (0.01) Net income per share from discontinued operations 7,194,389 117,312,150 0.06 $ 6,191,925 117,312,150 $ 0.05 For the nine months ended September 30, 2016 the computation of basic and diluted earnings per share is as follows: Amount Number of shares Per share amount Basic earnings per share Net loss per share from continuing operations $ (413,294) 48,158,563 $ - Net income per share from discontinued operations 762,680 48,158,563 $ - Basic income per share 349,386 48,158,563 - Effect of dilutive securities Warrants - 266,700 Options - - Diluted earnings per share Net loss per share from continuing operations (413,294) 48,425,263 - Net income per share from discontinued operations 762,680 48,425,263 - |
3. Disposal of Business (Detail
3. Disposal of Business (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Assets sold: | ||
Plant and equipment | $ 12,189,984 | |
Total | 16,017,973 | $ 460,055 |
Disposal of Business | ||
Proceeds on disposal | 7,644,000 | |
Assets sold: | ||
Accounts receivable | 113,896 | |
Plant and equipment | 109,075 | |
Total | 222,971 | |
Deferred revenue | (73,799) | |
Net assets and liabilities sold | 149,172 | |
Net profit realized on disposal | $ 7,494,828 |
4. Acquisition of subsidiary (D
4. Acquisition of subsidiary (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property | $ 12,189,984 | |
Accounts payable and other accruals | 379,972 | 374,317 |
Liabilities, net | 10,127,862 | $ 3,637,111 |
Acquisition Of business of Seastone of Delray | ||
Common shares issued to Seller | 2,184,000 | |
Receivable assumed by the Seller | 504,442 | |
Total | 2,688,442 | |
Property | 7,644,000 | |
Receivable from Ethema Health Corporation | 299,743 | |
Total | 7,943,743 | |
Accounts payable and other accruals | 158,093 | |
Related party payable to Leon Developments | 2,057,392 | |
Mortgage liability owing to Ethema Health Corporation | 267,550 | |
Mortgage liability | 3,145,550 | |
Liabilities, net | 5,628,575 | |
Net assets acquired | 2,315,168 | |
Excess purchase consideration allocated to shareholders compensation | $ 373,274 |
5. Acquisition of the busines42
5. Acquisition of the business of Seastone of Delray (Details) - Acquisition Of business of Seastone of Delray | Sep. 30, 2017USD ($) |
Cash paid to seller | $ 2,960,000 |
Deposits previously paid to seller | 110,000 |
Mortgage liability funds | 3,000,000 |
Total Purchase Price Paid | 6,070,000 |
Property | 4,410,000 |
Furniture and fixtures | 80,000 |
Intangibles - to be classified | 1,438,525 |
Receivables | 141,475 |
Total Assets Acquired | $ 6,070,000 |
7. Discontinued Operations (Det
7. Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Current assets | |||||
Prepaid expenses and other current assets | $ 14,724 | $ 14,724 | $ 2,710 | ||
Total current assets | 1,017,952 | 1,017,952 | 275,575 | ||
Non-current assets | |||||
Total assets | 16,017,973 | 16,017,973 | 460,055 | ||
Current liabilities | |||||
Revenues | 648,298 | 1,373,028 | |||
Operating expenses | |||||
Depreciation and amortization | 131,784 | 314,190 | |||
General and administrative | 170,491 | 55,124 | 578,931 | 165,319 | |
Professional fees | 53,830 | 47,135 | 453,034 | 122,180 | |
Salaries and wages | 200,863 | 89,934 | 583,559 | 110,934 | |
Total operating expenses | 556,968 | 192,193 | 1,929,714 | 398,433 | |
Operating (loss) income | 91,330 | (192,193) | (556,686) | (398,433) | |
Other income | |||||
Other expense | 12,250 | 392,538 | 12,250 | ||
Interest expense | 32,074 | ||||
Foreign exchange movements | (53,294) | (11,099) | 111,052 | (13,833) | |
Taxation | |||||
Net income per share from discontinued operations, amount | (218,253) | 318,901 | 7,194,389 | 762,680 | |
DiscontinuedOperations | |||||
Current assets | |||||
Accounts receivable, net | 123,358 | ||||
Prepaid expenses and other current assets | 11,253 | ||||
Total current assets | 134,611 | ||||
Non-current assets | |||||
Plant and equipment, net | 129,127 | ||||
Deposits | |||||
Total assets | 263,738 | ||||
Current liabilities | |||||
Deferred revenues | 80,519 | ||||
Discontinued operation | $ 183,219 | ||||
Revenues | 1,076,303 | 232,040 | 2,923,524 | ||
Operating expenses | |||||
Depreciation and amortization | 16,586 | 4,196 | 47,332 | ||
General and administrative | 353 | 197,854 | 119,058 | 547,477 | |
Professional fees | 32,818 | ||||
Rent | 104,881 | 47,493 | 284,993 | ||
Salaries and wages | 366,986 | 201,723 | 1,178,968 | ||
Total operating expenses | 353 | 686,307 | 405,288 | 2,058,770 | |
Operating (loss) income | (353) | 389,996 | (173,248) | 864,754 | |
Other income | |||||
Other income | 21,042 | ||||
Other expense | (28,298) | (28,298) | |||
Interest expense | (1,904) | (40,031) | (2,898) | (116,774) | |
Foreign exchange movements | (215,996) | (2,766) | (124,293) | 21,956 | |
Net income (loss) before taxation | (218,253) | 318,901 | (300,439) | 762,680 | |
Taxation | $ (218,253) | $ 318,901 | |||
Net income per share from discontinued operations, amount | $ (300,439) | $ 762,680 |
9. Property plant and equipme44
9. Property plant and equipment (Details) | Sep. 30, 2017USD ($) |
Cost | $ 12,512,237 |
Amortization and impairment | (322,253) |
Net book value | 12,189,984 |
Property | |
Cost | 12,432,237 |
Amortization and impairment | (307,253) |
Net book value | 12,124,984 |
Furniture and Equipment | |
Cost | 80,000 |
Amortization and impairment | (15,000) |
Net book value | $ 65,000 |
12. Short term convertible note
12. Short term convertible note (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Short-term poriton | $ 46,510 | $ 250,258 |
Long-term portion | ||
Total | $ 46,510 | $ 250,258 |
Labrys Fund LP | ||
Interest Rate | 8.00% | 8.00% |
Maturity | August 2, 2017 | August 2, 2017 |
Power Up Lending Group LTD | ||
Interest Rate | 12.00% | |
Maturity | March 20, 2018 | |
Principal | $ 113,500 | |
Accrued interest | 3,844 | |
Unamortized Discount | $ (70,834) | |
Series L Convertible Notes | ||
Interest Rate | 0.00% | 0.00% |
Maturity | June 30, 2017 to July 17, 2017 | June 30, 2017 to July 17, 2017 |
Principal | $ 511,234 | $ 250,258 |
13. Derivative liability (Detai
13. Derivative liability (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Liability Details | |
Risk free interest rate, min | 0.64% |
Risk free interest rate, max | 1.31% |
Expected life of convertible notes | 9 months |
Expected volatility of underlying stock, min | 134.90% |
Expected volatility of underlying stock, max | 198.48% |
Expected dividend rate | 0.00% |
13. Derivative liability (Det47
13. Derivative liability (Details 1) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Derivative Liability Details 1 | |
Derivative liability arising from convertible notes | $ 223,500 |
Fair value adjustment to derivative liability | (75,203) |
Total Derivative Liability | $ 148,297 |
15. Loans payable - Loans Payab
15. Loans payable - Loans Payable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Short term portion | $ 158,534 | |
Long term portion | 7,232,870 | |
Loan Payable | $ 7,391,404 |
15. Loans payable - Loans Pay49
15. Loans payable - Loans Payable (Details 1) - Vehicles | Sep. 30, 2017USD ($) |
2,017 | $ 38,438 |
2,018 | 134,673 |
2,019 | 140,707 |
2,020 | 3,032,025 |
2,021 | 116,262 |
Thereafter | 3,929,299 |
Total | $ 7,391,404 |
16. Stockholders' deficit - War
16. Stockholders' deficit - Warrants Outstanding (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Options | ||
Beginning balance, warrants | 19,637,409 | |
Beginning balance, warrants exercise price | $ 0.03 | |
Warrants Granted, shares | 2,366,666 | |
Warrants granted, price | $ 0.03 | |
Warrant Exercised, shares | 0 | |
Ending Balance, warrants | 22,004,075 | 19,637,409 |
Ending Balance, warrants exercise price | $ 0.03 | $ 0.03 |
Warrants | ||
Beginning balance, warrants | 19,637,409 | 6,300,000 |
Beginning balance, warrants exercise price | $ 0.03 | $ 0.03 |
Warrants Granted, shares | 19,337,409 | |
Warrants granted, price | $ 0.03 | |
Warrant Exercised, shares | (6,000,000) | |
Warrants Exercised, price | $ 0.15 | |
Ending Balance, warrants | 19,637,409 | |
Ending Balance, warrants exercise price | $ 0.03 |
16. Stockholders' deficit - Opt
16. Stockholders' deficit - Options Outstanding (Details) - Options | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Beginning balance, options | 480,000 |
Beginning balance, options exercise price | $ / shares | $ 0.12 |
Options Exercisable, shares | 0 |
Ending Balance, options | 480,000 |
Ending Balance, options exercise price | $ / shares | $ 0.12 |
Weighted Average Contractual Life, options | 2 years 29 days |
17. Segment information (Detail
17. Segment information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Revenues | $ 648,298 | $ 1,373,028 | |||
Operating expenditure | 556,968 | 192,193 | 1,929,714 | 398,433 | |
Operating (loss) income | 91,330 | (192,193) | (556,686) | (398,433) | |
Other Income (expense) | |||||
Other income | 67,596 | 60,000 | 635,904 | 72,507 | |
Other expense | (12,250) | (392,538) | (12,250) | ||
Interest income | 32,074 | ||||
Interest expense | (86,371) | (8,598) | (242,992) | (15,701) | |
Foreign exchange movements | 53,294 | 11,099 | (111,052) | 13,833 | |
Net loss before taxation from continuing operations | 93,468 | (181,930) | (1,002,464) | (413,294) | |
Taxation | |||||
Net loss from continuing operations | 93,468 | $ (181,930) | (1,002,464) | $ (413,294) | |
Assets | |||||
Current assets | 1,017,952 | 1,017,952 | $ 275,575 | ||
Non-current assets | 15,000,021 | 15,000,021 | 184,480 | ||
Liabilities | |||||
Current liabilities | 2,894,992 | 2,894,992 | $ 3,637,111 | ||
Rental Operations | |||||
Revenues | 83,837 | 203,962 | |||
Operating expenditure | 158,808 | 294,673 | |||
Operating (loss) income | (74,971) | (90,711) | |||
Other Income (expense) | |||||
Other income | |||||
Other expense | 38,714 | 373,274 | |||
Interest income | |||||
Interest expense | (136,902) | ||||
Amortization of debt discount | |||||
Loss on change in fair value of derivative liability | |||||
Foreign exchange movements | 18,320 | 18,320 | |||
Net loss before taxation from continuing operations | (132,005) | (619,207) | |||
Taxation | |||||
Net loss from continuing operations | (113,685) | (619,207) | |||
Purchase of fixed assets | |||||
Assets | |||||
Current assets | 6,391 | 6,391 | |||
Non-current assets | 7,825,234 | 7,825,234 | |||
Liabilities | |||||
Current liabilities | (2,333,270) | (2,333,270) | |||
Non-current liabilities | (4,311,464) | (4,311,464) | |||
Intercompany balances | (1,813,184) | (1,813,184) | |||
Net (liability) asset position | (626,293) | (626,293) | |||
In-Patient services | |||||
Revenues | 564,461 | 1,169,066 | |||
Operating expenditure | 398,160 | 1,635,041 | |||
Operating (loss) income | 166,301 | (465,975) | |||
Other Income (expense) | |||||
Other income | 67,596 | 635,904 | |||
Other expense | (47,657) | (19,264) | |||
Interest income | 32,074 | ||||
Interest expense | (106,090) | ||||
Amortization of debt discount | (13,052) | (442,377) | |||
Loss on change in fair value of derivative liability | (19,329) | 75,203 | |||
Foreign exchange movements | (71,614) | (92,732) | |||
Net loss before taxation from continuing operations | 225,473 | (383,257) | |||
Taxation | |||||
Net loss from continuing operations | 225,473 | (383,257) | |||
Purchase of fixed assets | 8,878 | 8,878 | |||
Assets | |||||
Current assets | 1,011,561 | 1,011,561 | |||
Non-current assets | 7,174,787 | 7,174,787 | |||
Liabilities | |||||
Current liabilities | (561,722) | (561,722) | |||
Non-current liabilities | (2,921,406) | (2,921,406) | |||
Intercompany balances | 1,813,184 | 1,813,184 | |||
Net (liability) asset position | 6,516,404 | 6,516,404 | |||
Total | |||||
Revenues | 648,298 | 1,373,028 | |||
Operating expenditure | 556,968 | 1,929,714 | |||
Operating (loss) income | 91,330 | (556,686) | |||
Other Income (expense) | |||||
Other income | 67,596 | 635,904 | |||
Other expense | (86,371) | 392,538 | |||
Interest income | 32,074 | ||||
Interest expense | (242,992) | ||||
Amortization of debt discount | (13,052) | (442,377) | |||
Loss on change in fair value of derivative liability | (19,329) | 75,203 | |||
Foreign exchange movements | (53,294) | 111,052 | |||
Net loss before taxation from continuing operations | 93,468 | (1,002,464) | |||
Taxation | |||||
Net loss from continuing operations | 93,468 | (1,002,464) | |||
Purchase of fixed assets | 8,878 | 8,878 | |||
Assets | |||||
Current assets | 1,017,952 | 1,017,952 | |||
Non-current assets | 15,000,021 | 15,000,021 | |||
Liabilities | |||||
Current liabilities | (2,894,992) | (2,894,992) | |||
Non-current liabilities | (7,232,870) | (7,232,870) | |||
Intercompany balances | |||||
Net (liability) asset position | $ 5,890,111 | $ 5,890,111 |
18. Net loss per common share (
18. Net loss per common share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic earnings per share | ||||
Net loss per share from continuing operations, amount | $ 93,468 | $ (181,930) | $ (1,002,464) | $ (413,294) |
Net loss per share from continuing operations, number of shares | 119,407,668 | 48,738,855 | 102,455,451 | 48,158,563 |
Net loss per share from continuing operations, per share | $ (0.01) | $ (0.01) | ||
Net income per share from discontinued operations, amount | $ (218,253) | $ 318,901 | $ 7,194,389 | $ 762,680 |
Net income per share from discontinued operations, number of shares | 119,407,668 | 48,738,855 | 102,455,451 | 48,158,563 |
Net income per share from discontinued operations, per share | $ 0.07 | $ 0.02 | ||
Net loss | $ (124,785) | $ 136,971 | $ 6,191,925 | $ 349,386 |
Diluted earnings per share | ||||
Net loss per share from continuing operations, amount | $ 93,468 | $ (181,930) | $ (1,002,464) | $ (413,294) |
Net loss per share from continuing operations, number of shares | 119,407,668 | 49,005,555 | 117,312,150 | 48,425,263 |
Net loss per share from continuing operations, per share | $ (0.01) | $ (0.01) | ||
Net income per share from discontinued operations, amount | $ (218,253) | $ 318,901 | $ 7,194,389 | $ 762,680 |
Net income per share from discontinued operations, number of shares | 119,407,668 | 49,005,555 | 117,312,150 | 48,425,263 |
Net income per share from discontinued operations, per share | $ 0.05 | $ 0.01 |