Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 24, 2001 | |
Document And Entity Information | ||
Entity Registrant Name | ETHEMA HEALTH Corp | |
Entity Central Index Key | 0000792935 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | true | |
Is Entity's Reporting Status Current? | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 0 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Balance Sheets
Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 35,230 | $ 90,500 |
Accounts receivable, net | 3,113 | 3,075 |
Prepaid expenses | 1,040 | 19,190 |
Other current assets | 135,467 | 131,938 |
Other investments | 1,026,669 | 690,449 |
Total current assets | 1,201,519 | 935,152 |
Non-current assets | ||
Due on sale of business | 5,157 | 5,094 |
Property nd equipment | 2,885,861 | 2,882,220 |
Total non-current assets | 2,891,018 | 2,887,314 |
Total assets | 4,092,537 | 3,822,466 |
Current liabilities | ||
Accounts payable and accrued liabilities | 798,948 | 833,615 |
Taxes payable | 870,843 | 850,277 |
Convertible loans, net of discounts | 4,579,133 | 4,200,217 |
Short term loans | 118,382 | 115,375 |
Mortgage loans | 118,538 | 115,704 |
Government assistance loans | 156,782 | 156,782 |
Derivative liability | 4,379,372 | 4,765,387 |
Accrued dividends | 36,377 | 15,594 |
Related party payables | 2,815,450 | 2,811,849 |
Total current liabilities | 13,873,825 | 13,864,800 |
Non-current liabilities | ||
Third party loan | 47,714 | 31,417 |
Government assistance loans | 731,629 | 704,271 |
Mortgage loans, net of current portion | 3,865,866 | 3,848,077 |
Total non-current liabilities | 4,645,209 | 4,583,765 |
Total liabilities | 18,519,034 | 18,448,565 |
Preferred stock - Series B; $0.0001 par value, 10,000,000 authorized, 400,000 outstanding as of March 31, 2021 and December 31, 2020, respectively. | 400,000 | 400,000 |
Stockholders' deficit | ||
Preferred stock - Series A; $0.01 par value, 10,000,000 authorized, 4,000,000 outstanding at March 31, 2021 and December 31, 2020, respectively | 40,000 | 40,000 |
Common stock; $0.01 par value,10,000,000,000 shares authorized; 2,262,849,130 and 2,207,085,665 shares issued and outstanding as of March 31, 2021 and December 31, 2020. | 22,628,492 | 20,270,857 |
Additional paid-in capital | 24,649,099 | 23,344,885 |
Discount for shares issued below par value | (18,821,629) | (17,728,779) |
Accumulated other comprehensive income | 836,325 | 806,719 |
Accumulated deficit | (44,858,784) | (42,459,781) |
Total stockholders’ deficit | (15,526,497) | (15,726,099) |
Non-controlling interest | 700,000 | 700,000 |
Total stockholders' deficit | (14,826,497) | (15,026,099) |
Total liabilities and stockholders' deficit | $ 4,092,537 | $ 3,822,466 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common Stock Par Value | $ 0.01 | $ 0.01 |
Common Stock Shares Authorized | 10,000,000,000 | 10,000,000,000 |
Common Stock Shares Issued | 2,262,849,130 | 2,207,085,665 |
Common Stock Shares Outstanding | 2,262,849,130 | 2,207,085,665 |
Preferred Stock, Seriea A Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, Series A Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Series A Shares Issued | 4,000,000 | 4,000,000 |
Preferred Stock, Series A Shares Outstanding | 4,000,000 | 4,000,000 |
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 | 400,000 | 400,000 |
Preferred Stock, Series B Shares Outstanding | 400,000 | 400,000 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 90,793 | $ 83,542 |
Operating expenses | ||
General and administrative | 5,503 | 22,536 |
Rental expense | 1,500 | 1,000 |
Professional fees | 36 | 108,021 |
Salaries and wages | 12,852 | 12,351 |
Depreciation | 32,125 | 30,241 |
Total operating expenses | 52,016 | 174,149 |
Operating income (loss) | 38,777 | (90,607) |
Other Income (expense) | ||
Loss on conversion of convertible debentures | 1,106,648 | 286,343 |
Penalty on convertible notes | (9,240) | |
Fair value of warrants granted to convertible debt holders | (976,788) | |
Exercise of warrants | (90,000) | (92,952) |
Interest income | 60 | |
Interest expense | (137,677) | (193,922) |
Debt discount | (502,677) | (403,677) |
Derivative liability movement | 495,589 | (9,754,896) |
Foreign exchange movements | (79,492) | 484,051 |
Net loss before taxation | (2,368,156) | (10,338,286) |
Taxation | ||
Net loss | (2,368,156) | (10,338,286) |
Preferred stock dividend | (30,847) | |
Net loss available to ordinary shareholders | (2,399,003) | (10,338,286) |
Foreign currency translation adjustment | 29,606 | (185,813) |
Total comprehensive loss | $ (2,369,397) | $ (14,865,276) |
Basic and diluted loss per common share | $ 0 | $ (0.01) |
Weighted average common shares outstanding – Basic and diluted | 2,143,692,378 | 956,540,071 |
Shareholders Equity
Shareholders Equity - USD ($) | Series A Preferred Stock | Common Stock | Additional Paid-In Capital | Discount To Par Value | Comprehensive Income | Accumulated Deficit | Minority Shareholders Interest | Total |
Beginning Balance, Shares at Dec. 31, 2019 | 4,000,000 | 2,027,085,665 | ||||||
Beginning Balance, Value at Dec. 31, 2019 | $ 40,000 | $ 20,270,857 | $ 23,344,885 | $ (17,728,779) | $ 806,719 | $ (42,459,781) | $ 700,000 | $ (15,026,099) |
Warrants Exercised, Shares | 59,999,999 | |||||||
Warrants Exercised, Value | $ 600,000 | (510,000) | 90,000 | |||||
Fair value of warrants issued to convertible debt holders | 1,207,214 | 1,207,214 | ||||||
Conversion of convertible notes, Shares | 175,763,466 | |||||||
Conversion of convertible notes, Amount | $ 1,757,635 | 97,000 | (582,850) | 1,271,785 | ||||
Foreign currency translation | 29,606 | 29,606 | ||||||
Net loss | (2,368,156) | (2,368,156) | ||||||
Dividends accrued | (30,847) | (30,847) | ||||||
Ending Balance, Shares at Mar. 31, 2020 | 4,000,000 | 2,262,849,130 | ||||||
Ending Balance, Value at Mar. 31, 2020 | $ 40,000 | $ 22,628,492 | 24,649,099 | (18,821,629) | 836,325 | (44,858,784) | $ 700,000 | (14,826,497) |
Beginning Balance, Shares at Dec. 31, 2020 | 155,483,897 | |||||||
Beginning Balance, Value at Dec. 31, 2020 | $ 1,554,838 | 23,188,527 | 727,976 | (45,491,885) | (20,020,544) | |||
Warrants Exercised, Shares | 103,000,000 | |||||||
Warrants Exercised, Value | $ 1,030,000 | (937,048) | 92,952 | |||||
Shares issued for commitment fees, Shares | 2,700,000 | |||||||
Shares issued for commitment fees, Value | $ 27,000 | 138,780 | 165,780 | |||||
Conversion of convertible notes, Shares | 1,316,679,078 | |||||||
Conversion of convertible notes, Amount | $ 13,166,792 | (12,635,787) | 531,005 | |||||
Foreign currency translation | (185,813) | (185,813) | ||||||
Net loss | (10,338,286) | (10,338,286) | ||||||
Ending Balance, Shares at Mar. 31, 2021 | 1,577,862,975 | |||||||
Ending Balance, Value at Mar. 31, 2021 | $ 15,778,630 | $ 23,327,307 | $ 13,572,835 | $ 542,163 | $ 55,830,171 | $ (29,754,906) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities | ||
Net loss | $ (2,368,156) | $ (10,338,286) |
Adjustment to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation | 32,125 | 30,241 |
Exercise of warrants | 90,000 | 92,952 |
Fair value of warrants granted to convertible debt holders | 976,788 | |
Loss on conversion of convertible debentures | 1,106,648 | 286,343 |
Stock based compensation for services | 165,780 | |
Amortization of debt discount | 502,677 | 403,677 |
Derivative liability movements | (495,589) | 9,754,896 |
Non-cash interest accrual on escrow deposit | (23) | |
Changes in operating assets and liabilities | ||
Accounts receivable | 49,007 | |
Prepaid expenses and other current assets | 14,638 | 3,000 |
Accrued purchase consideration | 50,330 | 75,296 |
Taxes payable | 12,983 | 10,861 |
Net cash used in operating activities | (77,556) | 533,744 |
Investing activities | ||
Investment in promissory note | (15,537) | |
Deposit refunded | 5,995 | |
Other investments | (336,220) | |
Net cash used in Investing activities | (336,220) | (9,542) |
Financing activities | ||
Decrease in bank overdraft | (11,079) | |
Repayment of mortgage loans | (28,631) | (25,855) |
Proceeds from convertible notes | 340,000 | |
Repayment of convertible notes | (35,000) | |
Proceeds from government assistance loans | 15,797 | |
Repayment of related party notes | (12,985) | |
Proceeds from related party notes | 19,362 | |
Net cash provided by (used in) financing activities | 279,181 | (17,572) |
Effect of exchange rate on cash | 79,325 | (507,665) |
Net change in cash | (55,270) | (1,035) |
Beginning cash balance | 90,500 | 2,975 |
Ending cash balance | 35,230 | 1,940 |
Supplemental cash flow information | ||
Cash paid for interest | 41,344 | 41,504 |
Cash paid for income taxes | ||
Non cash investing and financing activities | ||
Conversion of debt to equity | 165,137 | 531,005 |
Fair value of warrants issued | $ 230,426 |
Nature of Business
Nature of Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 Greenstone Healthcare Corporation from Nova Natural Resources Corporation. As of December 31, 2017, the Company owned 100% of the outstanding shares of Greenstone 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; Addiction Recovery Institute of America (“ARIA”) (formerly 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 CCH, which holds the real estate on which the Company previously operated a rehabilitation clinic (“the Canadian Rehab Clinic”). The Company entered into 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. Simultaneously with this transaction, the Company entered into 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 Asset Purchase Agreement and Lease Under the APA, the assets of the Canadian Rehab Clinic were sold by the Company, through its subsidiary, Greenstone Clinic Muskoka Inc. (“Muskoka”), to Canadian Addiction Residential Treatment LP (the “Purchaser”), for a total consideration of CDN$10,000,000. 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 real estate assets of Seastone Delray pursuant to certain real estate and asset purchase agreements 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. On April 2, 2019, the Company disposed of the real property located at 801 Andrews Avenue, Delray Beach for gross proceeds of $3,500,000. Since June 30, 2020, the Company has been actively involved in the operation of the treatment center operated by Evernia Health Center LLC (“Evernia”) at 950 Evernia Street, West Palm Beach Florida. The Company is under contract to purchase a majority interest in this company and has been financing the startup operations of this facility. This operation will be the Company’s only treatment center operating and expects the purchase of the majority interest to close in the second quarter of 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies Financial Reporting The (a) unaudited condensed consolidated balance sheets as of March 31, 2021, which have been derived from the unaudited condensed consolidated financial statements, and as of December 31, 2020, which have been derived from audited consolidated financial statements, and (b) the unaudited condensed consolidated statements of operations and cash flows of the Company, have All amounts referred to in the notes to the unaudited condensed consolidated financial statements are in United States Dollars ($) unless stated otherwise. a) Use of Estimates The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated 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 condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions and balances have been eliminated on consolidation. Certain of the Company’s subsidiaries functional currency is the Canadian dollar, while the Company’s reporting currency is the U.S. 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. ● Non-monetary, non-current and equity at historical rates. ● Revenue and expense items and cash flows 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’ deficit 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 three months ended March 31, 2021, a closing rate of CDN$1.0000 equals US$0.7952 and an average exchange rate of CDN$1.0000 equals US$0.7899. For the three months ended March 31, 2020, a closing rate of CAD$1.0000 equals US$0.7049 and an average exchange rate of CAD$1.0000 equals US$0.7435. c) Revenue Recognition ASC 606 requires companies to exercise more judgment and recognize revenue using a five-step process. The Company’s provision for doubtful accounts are recorded as a direct reduction to revenue instead of being presented as a separate line item on the consolidated statements of operations and comprehensive loss. As our performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as our patients typically are under no obligation to remain admitted in our facilities. The Company receives payments from the following sources for services rendered in our U.S. Facility: (i) commercial insurers; and (ii) individual patients and clients. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and does not adjust for the effects of a significant financing component. The Company derives a significant portion of its revenue from other payors that receive discounts from established billing rates. The various managed care contracts under which these discounts must be calculated are complex, subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided in the Company’s inpatient facilities and cost settlement provisions. Management estimates the transaction price on a payor-specific basis given its interpretation of the applicable regulations or contract terms. The services authorized and provided and related reimbursement are often subject to interpretation that could result in payments that differ from the Company’s estimates. Additionally, updated regulations and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management. Settlements with third-party payors are estimated and recorded in the period in which the related services are rendered and are adjusted in future periods as final settlements are determined. In the opinion of management, adequate provision has been made for any adjustments and final settlements. However, there can be no assurance that any such adjustments and final settlements will not have a material effect on the Company’s financial condition or results of operations. The Company’s receivables were $3,113 and $3,075 for the three months ended March 31, 2021 and for the year ended December 31, 2020, respectively. Management believes that these receivables are properly stated and are not likely to be settled for a significantly different amount. The Company’s revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions: i. identify the contract with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to performance obligations in the contract; and v. recognize revenue as the performance obligation is satisfied. d) Cash and cash equivalents For purposes of the statements of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. The Company maintains cash and cash equivalents with several financial institutions in the USA and Canada. The Company primarily places cash balances in the USA with high-credit quality financial institutions located in the United States which are insured by the Federal Deposit Insurance Corporation up to a limit of $250,000 per institution, in Canada which are insured by the Canadian Deposit Insurance Corporation up to a limit of CDN$100,000 per institution. e) Accounts receivable Accounts receivable primarily consists of amounts due from third-party payors (non-governmental) and private pay patients and is recorded net of allowances for doubtful accounts and contractual discounts. The Company’s ability to collect outstanding receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s consolidated financial statements is recorded at the net amount expected to be received. The Company’s primary collection risks are (i) the risk of overestimating net revenues at the time of billing that may result in the Company receiving less than the recorded receivable, (ii) the risk of non-payment as a result of commercial insurance companies denying claims, (iii) the risk that patients will fail to remit insurance payments to the Company when the commercial insurance company pays out-of-network claims directly to the patient, (iv) resource and capacity constraints that may prevent the Company from handling the volume of billing and collection issues in a timely manner, (v) the risk that patients do not pay the Company for their self-pay balances (including co-pays, deductibles and any portion of the claim not covered by insurance) and (vi) the risk of non-payment from uninsured patients. f) Allowance for Doubtful Accounts, Contractual and Other Discounts The Company derives the majority of its revenues from commercial payors at out-of-network rates. Management estimates the allowance for contractual and other discounts based on its historical collection experience. The services authorized and provided and related reimbursement are often subject to interpretation and negotiation that could result in payments that differ from the Company’s estimates. The Company’s allowance for doubtful accounts is based on historical experience, but management also takes into consideration the age of accounts, creditworthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. An account is written off only after the Company has pursued collection efforts or otherwise determines an account to be uncollectible. Uncollectible balances are written-off against the allowance. Recoveries of previously written-off balances are credited to income when the recoveries are made. g) Financial instruments The Company initially measures its financial assets and liabilities at fair value, except for certain non-arm’s length transactions. The Company subsequently measures all its financial assets and financial liabilities at amortized cost. Financial assets measured at amortized cost include cash and accounts receivable. Financial liabilities measured at amortized cost include bank indebtedness, accounts payable and accrued liabilities, harmonized sales tax payable, withholding taxes payable, convertible notes payable, loans payable and related party notes. Financial assets measured at cost are tested for impairment when there are indicators of impairment. The amount of the write-down is recognized in net income. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in net income. The Company recognizes its transaction costs in net income in the period incurred. However, financial instruments that will not be subsequently measured at fair value are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption. FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: ● Level 1. Observable inputs such as quoted prices in active markets; ● Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. The Company measures its convertible debt and derivative liabilities associated therewith at fair value. These liabilities are revalued periodically and the resultant gain or loss is realized through the Statement of Operations and Comprehensive Loss. h) Property and equipment Property and equipment is recorded at cost. Depreciation is calculated on the straight line basis over the estimated life of the asset: i) Leases The Company accounts for leases in terms of AC 842 whereby leases are classified as either capital or operating leases. Leases that transfer substantially all of the benefits and inherent risks of ownership of property to the Company are accounted for as capital leases. At the time a capital lease is entered into, an asset is recorded together with its related long-term obligation to reflect the acquisition and financing. Equipment recorded under capital leases is amortized on the same basis as described above. Operating leases are recognized on the balance sheet as a lease liability with a corresponding right of use asset for all leases with a term that is more than twelve months. Payments under operating leases are expensed as incurred. j) Income taxes The Company accounts for income taxes under the provisions of ASC Topic 740, “Income Taxes”. ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties accrued on unrecognized tax benefits within general and administrative expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in general and administrative expenses in the period that such determination is made. k) Net income (loss) per Share Basic net income (loss) per share is computed on the basis of the weighted average number of common stock outstanding during the period. Diluted net income (loss) per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation. Dilution is computed by applying the treasury stock method for options and warrants. Under this method, “in-the money” options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Dilution is computed by applying the if-converted method for convertible preferred stocks. Under this method, convertible preferred stock is assumed to be converted at the beginning of the period (or at the time of issuance, if later), and preferred dividends (if any) will be added back to determine income applicable to common stock. The shares issuable upon conversion will be added to weighted average number of common stock outstanding. Conversion will be assumed only if it reduces earnings per share (or increases loss per share). l) Stock based compensation Stock based compensation cost is measured at the grant date, based on the estimated fair value of the award and is recognized as expense over the employee’s requisite service period or vesting period on a straight-line basis. Share-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest and has been reduced for estimated forfeitures. This estimate will be revised in subsequent periods if actual forfeitures differ from those estimates. We have minimal awards with performance conditions and no awards dependent on market conditions. m) Derivatives The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. The Company uses a Black Scholes Option Pricing model to estimate the fair value of convertible debt conversion features at the end of each applicable reporting period. Changes in the fair value of these derivatives during each reporting period are included in the statements of operations. Inputs into the Black Scholes Option Pricing model require estimates, including such items as estimated volatility of the Company’s stock, risk free interest rate and the estimated life of the financial instruments being fair valued. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature. n) Recent accounting pronouncements The FASB issued several additional updates during the period, none of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the consolidated financial statements upon adoption. o) Financial instruments Risks 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, March 31, 2021 and December 31, 2020. 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 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 $12,672,306, which includes derivative liabilities of $4,379,372, and an accumulated deficit of $44,858,784. The Company is 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 that of 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 interest rate risk on its convertible debt, mortgage loans, short term loans, third party loans and government assistance loans as of March 31, 2021. In the opinion of management, interest rate risk is assessed as moderate. 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 March 31, 2021, a 5% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in an approximate $4,526 increase or decrease in the Company’s after tax net income from operations. The Company has not entered into any hedging agreements to mitigate this risk. In the opinion of management, currency risk is assessed as low, material and remains unchanged from that of 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. |
Going concern
Going concern | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 3. Going concern The Company’s 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 at March 31, 2021 the Company has a working capital deficiency of $12,672,306, including derivative liabilities of $4,379,372 and accumulated deficit of $44,858,784. 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 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 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 requirements and ongoing operations; however, there can be no assurance the Company will be successful in these efforts. These factors create substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities or other adjustments that may be necessary should the Company not be able to continue as a going concern. |
Other current assets
Other current assets | 3 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other current assets | 4. Other current assets Other current assets includes the following: On February 25, 2019, the Company entered into a Letter of Intent whereby it would purchase a 33.33% interest in Local Link Wellness, LLC (“LLW”) for gross proceeds of $400,000. LLW proposes to provide a comprehensive addiction treatment program to large employee groups. The company has advanced LLW a total of $120,000 at March 31, 2021. These funds were advanced as short-term promissory notes that are immediately due and payable and are classified as other current assets on our consolidated balance sheet. The Company has no intention to close on the purchase of LLW and is currently negotiating with the vendors to provide advertising services in lieu of the return of the $120,000 invested by the Company. |
Due on sale of business
Due on sale of business | 3 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Due on sale of business | 6. Due on sale of business 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 had 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. As of March 31, 2021, CDN$1,055,042 of the escrow had been refunded to the Company and CDN$461,318 had been used to affect building improvements to the premises owned by CCH, for a total reduction of CDN$1,516,360. The remaining escrow balance was CDN$6,485 (approximately US$ 5,157). |
Property plant and equipment
Property plant and equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property plant and equipment | 7. Property and equipment Property and equipment consists of the following: March 31, December 31, 2020 Cost Accumulated depreciation Net book value Net book value Land $ 170,974 $ — $ 170,974 $ 168,866 Property 3,234,310 (519,423 ) 2,714,887 2,713,354 $ 3,405,284 $ (519,423 ) $ 2,885,861 $ 2,882,220 Depreciation expense for the three months ended March 31, 2021 and 2020 was $32,125 and $30,241, respectively. |
Other Investments
Other Investments | 3 Months Ended |
Mar. 31, 2021 | |
Other Investments [Abstract] | |
Other Investments | 5. Other investments On June 30, 2020, the Company entered into an agreement whereby the Company will acquire 51% of American Treatment Holdings, Inc. (“ATHI”) from The Q Global Trust (“Seller”) and Lawrence B Hawkins (“Hawkins”), which in turn owns 100% of Evernia Health Services LLC. (“Evernia”), which operates drug rehabilitation facilities. The consideration for the acquisition is a loan to be provided by the purchaser to Evernia in the amount of $500,000. As of March 31, 2021, the Company had advanced Evernia approximately $1,026,669 including accrued interest thereon. The Company originally had a 180 day option, from the advancement of the first tranche to Evernia, to purchase an additional 9% of ETHI for a purchase consideration of $50,000. The option has been extended and the Company had made a down payment of $10,000 towards exercising this option. On June 30, 2020, the Company entered into an agreement whereby the Company will acquire 51% of Behavioral Health Holdings, Inc. (“BHHI”) from The Q Global Trust (“Seller”) and Lawrence B Hawkins, which in turn owns 100% of Peace of Mind Counseling Services, Inc. (“PMCS”), which operates drug rehabilitation facilities. The consideration for the acquisition is still to be determined. The Company is currently considering its options to acquire a stake in BHHI and may renegotiate the deal terms. On July 12, 2020, the Company entered into a five year option agreement with Leonite Capital LLC (“Leonite”) and other investors (collectively the “Transferees”), the Company agreed to sell to Leonite a portion of the total outstanding shares of ATHI from the shares of ATHI held by the company. The Company provided Leonite an option to purchase a 33% of ATHI from the Company for a purchase consideration of $0.0001 per share, based on the advances that Leonite made to the Company totaling $655,000. Leonite shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Leonite to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option. On September 14, 2020, the Company entered into a five year option agreement with Ed Blasiak (“Blasiak”) whereby the Company agreed to sell to Blasiak a portion of the total outstanding shares of ATHI. The Company provided Blasiak an option to purchase 2.5% of ATHI from the Company for a purchase consideration of $0.0001 per share, based on the advances that Blasiak made to the Company totaling $50,000. Blasiak shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Blasiak to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option. On October 29, 2020, the Company entered into a five year option agreement with First Fire whereby the Company agreed to sell to First Fire a portion of the total outstanding shares of ATHI. The Company provided First Fire an option to purchase 6.25% of ATHI from the Company for a purchase consideration of $0.0001 per share, based on the advances that First Fire made to the Company totaling $125,000. First Fire shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by First Fire to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option. On October 29, 2020, the Company entered into a five year option agreement entered into with Bauman, so that the Company agreed to sell to Bauman a portion of the total outstanding shares of ATHI. The Company provided Bauman an option to purchase 6.25% of ATHI from the Company for a purchase consideration of $0.0001 per share, based on the advances that Bauman made to the Company totaling $125,000. Bauman shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Bauman to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option. |
Taxes Payable
Taxes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Taxes Payable | 8 . Taxes Payable The taxes payable consist of: ● A payroll tax liability of $145,200 (CDN$182,589) in Greenstone Muskoka which has not been settled as yet. ● A GST/HST tax payable of $87,492 (CDN$110,022). ● 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. March 31, December 31, Payroll taxes $ 145,200 $ 143,410 HST/GST payable 87,493 73,503 US penalties due 250,000 250,000 Income tax payable 388,150 383,364 $ 870,843 $ 850,277 |
Short term convetible notes
Short term convetible notes | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Short term convertible notes | 9. Short-term Convertible Notes The short-term convertible notes consist of the following: Interest rate Maturity Date Principal Interest Debt Discount March 31, 2021 December 31, 2020 Leonite Capital, LLC 8.5 % — $ — $ — $ — $ — $ 70,583 6.5 % June 12, 2021 677,874 6,763 (340,016 ) 344,621 147,058 First Fire Global Opportunities Fund 6.5 % October 29,2021 138,889 3,821 (80,841 ) 61,869 25,297 Auctus Fund, LLC 10.0 % May 7, 2020 115,000 — — 115,000 150,000 10.0 % August 13, 2021 95,000 6,139 (35,137 ) 66,002 40,202 Labrys Fund, LP 12.0 % November 30, 2021 275,000 11,053 (183,836 ) 102,217 26,159 Ed Blasiak 6.5 % September 14, 2021 55,000 1,966 (25,164 ) 31,802 17,347 Joshua Bauman 6.5 % September 14, 2021 138,889 4,819 (63,817 ) 79,891 43,247 Geneva Roth Remark Holdings, Inc. 9.0 % August 29, 2021 88,000 2,431 (43,711 ) 46,720 19,238 9.0 % October 15, 2021 53,000 1,670 (31,033 ) 23,637 6,753 9.0 % January 3, 2022 53,500 374 (48,605 ) 5,269 — Series N convertible notes 6.0 % On Demand 3,229,000 473,105 — 3,702,105 3,654,333 $ 4,579,133 $ 4,200,217 Leonite Capital, LLC On December 1, 2017, the Company closed on a private offering to raise US $1,500,000 in capital. The Company issued one senior secured convertible promissory note with a principal amount of $1,650,000 to Leonite Capital, LLC (“Leonite”). The note is convertible into shares of common stock at a conversion price of $0.06 per share, subject to anti-dilution and price protection. The Note bears interest at the rate of 8.5% per annum. The Note’s amended maturity date was December 1, 2018. During the term of the Note the Company and the Subsidiaries was obligated to make monthly payment of accrued and unpaid interest. The Note contains Company and Subsidiary representations and warranties, covenants, events of default, and registration rights. The Company paid a commitment fee of $132,000 settled through the issue of 1,650,000 shares of common stock and paid $20,000 towards the lenders legal fees. In conjunction with this note, the Company issued a five year warrant to purchase 27,500,000 shares of common stock at an exercise price or $0.10 per share, subject to anti-dilution and price protection. The Note provided that the parties use reasonable best efforts to close on the remaining $1,200,000 of availability under the Note by January 1, 2018. As a condition to the closing of the Balance Tranche, the parties must finalize and enter into additional agreements related to the Private Offering, including, but not limited to, (i) a Securities Purchase Agreement; (ii) a Warrant Agreement under which the Investor will have the right to purchase up to 27,500,000 shares of the Company’ common stock for $0.10 per share, subject to adjustment, for a period of five years; (iii) a Securities Pledge Agreement under which the Company and the Subsidiaries will grant the lender a blanket lien on their assets, and the Company will pledge its equity ownership in the Subsidiaries. Upon the closing of the Balance Tranche the maturity date of the Note was to become December 1, 2018. On December 29, 2017, effective as of December 1, 2017, the Company and the Subsidiaries entered into an Amended and Restated Senior Secured Convertible Promissory Note, which note amended and restated the Note to (a) extend the maturity date to December 1, 2018; (b) remove CCH, as an obligor; (c) increase the interest rate by 2.00% per annum, to 8.5% per annum; and (d) issue an additional 250,000 shares of the Company’s common stock to the Investor. In connection with the execution of the amendment, the parties entered into (i) a Securities Purchase Agreement; (ii) a Warrant Agreement under which the Investor will have the right to purchase up to 27,500,000 shares of the Company’ common stock for $0.10 per share, subject to adjustment, for a period of five years; (iii) a Security and Pledge Agreement and a General Security Agreement under which the Company and the Subsidiaries will grant the Investor a blanket lien on their assets, and the Company will pledge its equity ownership in the Subsidiaries; effective January 2, 2018. At the execution of the Note, the Investor funded an initial tranche of $300,000. Thereafter the Investor funded a second tranche of $156,136. Upon the execution of the A&R Note the Investor funded a third tranche of $100,000. Upon the execution of the First Amendment the Investor funded a final tranche of $850,000, with the remaining $93,764 of availability under the A&R Note, as amended, serving as a holdback pursuant to the terms of the First Amendment. On March 29, 2018, the Company, entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $165,000, including an Original Issue Discount of $15,000, for net proceeds of $150,000. The note had a maturity date of December 1, 2018 and bears interest at a rate of 8.5% per annum. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser following the issue date into shares of the Company’s common stock at a conversion price equal to $0.06 per share subject to anti-dilution and price protection. The Company paid a commitment fee of $11,550 settled through the issue of 165,000 shares of common stock. In conjunction with this note the Company issued a five year warrant to purchase 5,500,000 shares of common stock at an exercise price of $0.10 per share, subject to anti-dilution and price protection. On April 17, 2018, the Company, entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $605,000, including an Original Issue Discount of $55,000, for net proceeds of $550,000. The note had a maturity date of December 1, 2018 and bears interest at 8.5% per annum. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser following the issue date into shares of the Company’s common stock at a conversion price equal to $0.06 per share subject to price protection and anti-dilution protection. The Company paid a commitment fee of $42,350 settled through the issue of 10,083,333 shares of common stock. In conjunction with this note the Company issued a five year warrant to purchase 10,083,333 shares of common stock at an exercise price of $0.10 per share, subject to anti-dilution and price protection. On January 17, 2019, the Company, entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $71,111, including an Original Issue Discount of $7,111, for net proceeds of $64,000. The note had a maturity date of July 25, 2019 and bears interest at 11.0% per annum. The outstanding principal amount of the note was convertible at any time and from time to time at the election of the purchaser following the issue date into shares of the Company’s common stock at a conversion price equal to $0.06 per share subject to price protection and anti-dilution protection. The Company paid a commitment fee of $4,978 settled through the issue of 71,111 shares of common stock. In conjunction with this note the Company issued a five year warrant to purchase 1,185,183 shares of common stock at an exercise price of $0.10 per share, subject to anti-dilution and price protection. Effective March 19, 2019, the Company entered into a note extension agreement with Leonite, whereby the convertible notes outstanding to Leonite, amounting to $2,420,000, for consideration of $75,000 added to the principal outstanding on the note on January 1, 2019, a further $75,000 added to the principal outstanding on the note on February 1, 2019 and a further $100,000 added to the principal of the note on March 15, 2019, the maturity date of all of the convertible notes above were extended to December 31, 2019 and has subsequently been partially settled by the transfer of the property located at 810 Andrews Avenue, Delray Beach, Florida, valued at $1,500,000. On August 26, 2019, the Company, entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $60,000, including an Original Issue Discount of $10,000, for net proceeds of $47,000. The note had a maturity date of September 10, 2019 and bears interest at 1.0% per annum. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser following the issue date into shares of the Company’s common stock at a conversion price equal to $0.06 per share subject to price protection and anti-dilution protection. In conjunction with this note the Company issued a five year warrant to purchase 1,000,000 shares of common stock at an exercise price of $0.10 per share, subject to anti-dilution and price protection. On October 10, 2019, the Company transferred a warranty deed to the real property located at 810 Andrews Avenue, Delray Beach, Florida to Leonite Capital LLC, in settlement of indebtedness of $1,398,514 and additional expenses related to the disposal of the property of $36,470. These expenses of $36,470 were provided for resulting in net proceeds recognized on the transfer of the property of $1,362,044. On July 12, 2020, the company entered into a debt extinguishment agreement with Leonite whereby the following occurred: 1. The total amount outstanding under the note, including principal and interest was reduced to $150,000 2. $700,000 of the note was converted into Series A Redeemable Preferred shares in the Company’s subsidiary, Cranberry Cove Holdings, accruing dividends at 10% per annum. 3. $400,000 of the note was converted into series B Preferred stock in the Company for a 12 month period, mandatorily redeemable by the Company accruing dividends at 6% per annum payable in cash or stock, subject to certain conditions. 4. The remaining balance of $150,000 will accrue interest at 8.5% per annum and is convertible into common stock and repayable in 6 monthly installments of $25,000 commencing after December 12, 2020. 5. The existing warrants were cancelled and a new five year warrant, with a cashless exercise options, exercisable for a minimum of 326,286,847 shares of common stock and a maximum of 20% of the outstanding equity of the Company at an initial exercise price of $0.10 per share subject to adjustment based on new stock issuances or the lowest volume weighted exercise price of the stock for 30 days immediately preceding the exercise was issued to Leonite. On December 28, 2020, Leonite converted $80,000 plus accrued interest of $5,949 of the Leonite loan amended on July 12, 2020, into 96,331,811 shares of common stock at a conversion price of $0.0009, thereby realizing a loss on conversion of $240,616. On January 8, 2021, Leonite converted the remaining principal amount of $70,000, plus accrued interest thereon of $137, into 78,763,466 shares of common stock at a conversion price of $0.0009 per share. On July 12, 2020, the Company entered into a Senior Secured Convertible Note agreement with Leonite for $440,000 with an original issue discount of $40,000 for gross proceeds of $400,000, the initial tranche advanced will be for cash of $200,000 plus the OID of $20,000, the remaining advances will be at the discretion of the Leonite. The loan bears interest at 6.5% per annum and matures on June 12, 2021. The Company is required to make monthly payments of the accrued interest on the advances made. The note is convertible into common shares at the option of the holder at $0.10 per share, or 80% multiplied by the price per share paid in subsequent financings or after a six month period from the effective date at 60% of the lowest trading price during the preceding 21 consecutive trading days. The note has both conversion price protection and anti-dilution protection provisions. On July 12, 2020, the Company entered into a five year option agreement with Leonite Capital LLC (“Leonite”) and other investors (collectively the “Transferees”), the Company agreed to sell to Leonite a portion of the total outstanding shares of ATHI from the shares of ATHI held by the company. The Company has provided Leonite an option to purchase 33% of ATHI from the Company for a purchase consideration of $0.0001 per share, based on the advances that Leonite made to the Company totaling $655,000. Leonite shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Leonite to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option. On January 8, 2021, in terms of a conversion notice, Leonite converted the principal sum of $70,000 and interest thereon of $137 of the Leonite loan into 78,763,466 shares of common stock at a conversion price of $0.009 per share. In terms of clause 3.12 of the Senior secured convertible Promissory Note Agreement (“Leonite Note”) entered into with Leonite and the amendments thereto, the terms of the convertible promissory note issued to Labrys Fund LP on November 30, 2020, as described below, contained terms more favorable than those contained in the Leonite Note, resulting in an adjustment made to the Original issue discount of $4,000 and the issuance of five year warrants exercisable for 145,454,547 shares of common at an exercise price of $0.00205 per share, for all advances made to the Company by Leonite in terms of the Leonite Note, up to and including December 31, 2020. On January 8, January 22, February 4, and February 19, 2021, Leonite advanced the company an aggregate cash amount of $290,000, including a revised original issue discount of $74,556 for an aggregate principal sum added to the Leonite Note of $364,556. On March 3, 2021, in terms of a conversion notice, Leonite converted the principal sum of $82,681 and interest thereon of $12,319 of the Leonite Note into 97,000,000 shares of common stock at a conversion price of $0.009 per share. Power Up Lending Group LTD On July 8, 2019, the Company entered into a Securities Purchase Agreement with Power Up, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $53,000. The Note had a maturity date of April 30, 2020 and bore interest at the rate of nine percent per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has 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 Power Up 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. Between January 10, 2020 and January 24, 2020, in terms of conversion notices received, Power Up converted the aggregate principal amount of $53,000 and interest thereon of $1,085 into 75,618,509 shares of common stock at an average conversion price of $0.000715 per share. On July 15 2019, the Company, entered into a Securities Purchase Agreement with Power Up, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $83,000. The Note has a maturity date of April 30, 2020 and bears interest at the rate of nine percent per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has 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 Power Up 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. Between January 24, 2020 and February 27, 2020, in terms of conversion notices received, Power Up converted the aggregate principal amount of $41,400 into 453,800,493 shares of common stock at an average conversion price of 0.0000912 per share. On June 1, 2020, The Company repaid the Power Up Lending Group $41,600 in full settlement of the convertible note entered into on July 15, 2019. First Fire Global Opportunities Fund On March 5, 2019, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $200,000, for net proceeds of $192,000 after the payment of legal fees and origination fees amounting to $8,000. The note has a maturity date of December 9, 2019. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser. 180 days after the issued date into shares of the Company’s common stock at the lower of $0.08 per share or 65% of the lowest trade price during the ten consecutive trading days immediately prior to conversion. The note has certain buyback terms if the Company consummates a registered or unregistered primary offering of securities for capital raising purposes, or an option to convert at a 20% discount to the offering price to investors. Between September 11, 2019 and December 30, 2019, in terms of a conversion notices received, the Company issued 11,887,445 shares of Common stock in settlement of $36,592 of principal outstanding. Between January 6, 2020 and February 26, 2020, in terms of conversion notices received, First Fire converted an aggregate principal amount of $83,902 into 308,100,000 shares of common stock at an average conversion price of $0.000272 per share. On June 3, 2020, the Company entered into an agreement with First Fire whereby the remaining balance of the convertible note of $73,006 would be settled by two payments of $25,000 each. Between July 2, 2020 and August 17, 2020, the Company repaid the remaining principal outstanding of $50,000 plus additional interest charges of $1,500. On October 29, 2020, the Company entered into a Securities Purchase Agreement, pursuant to which the Company issued a senior secured convertible promissory note in the aggregate principal amount of $137,500, including an OID of $12,500. The note bears interest at 6.5% per annum and matures on October 29, 2021. The note is senior to any future borrowings and commencing on November 29, 2020 the Company will make monthly payments of the accrued interest under the note. The note may be prepaid at certain prepayment penalties and is convertible into shares of common stock at a conversion price at the option of the holder at $0.001 per share, adjusted for anti-dilution provisions; or 80% of the price per share of subsequent equity financings or; after six months 60% of the lowest trading price during the preceding six month period. On October 29, 2020, the Company entered into a five year option agreement with First Fire whereby the Company agreed to sell to First Fire a portion of the total outstanding shares of ATHI. The Company provided First Fire an option to purchase 6.25% of ATHI from the Company for a purchase consideration of $0.0001 per share, based on the advances that First Fire made to the Company totaling $125,000. First Fire shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by First Fire to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option. In terms of clause 3.12 of the Senior secured convertible Promissory Note Agreement (“First Fire Note”) entered into with First Fire, the terms of the convertible promissory note issued to Labrys Fund LP on November 30, 2020, as described below, contained terms more favorable than those contained in the First Fire Note, resulting in an adjustment made to the Original issue discount of $1,389 and the issuance of five year warrants exercisable for 50,505,051shares of common at an exercise price of $0.00205 per share, for the advance made to the Company by First Fire in terms of the First Fire Note. Auctus Fund, LLC On August 7 2019, the Company, entered into a Securities Purchase Agreement with Auctus Fund, LLC, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $225,000. The Note had a maturity date of May 7, 2020 and bore interest at the rate of ten percent per annum from the date on which the Note was issued until the same became due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company had 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 Auctus Fund, LLC 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 60% of the lowest closing bid price of the Company’s common stock for the thirty trading days prior to conversion. On June 15, 2020, The Company entered into an amended agreement with Auctus whereby Auctus agreed to discharge the principal amount of the note by nine equal monthly installments of $25,000 commencing in October 2020. During the three months ended March 31, 2021, the Company repaid Auctus the principal sum of $35,000. On August 13, 2020, the Company entered into a Securities Purchase Agreement with Auctus Fund LLC, pursuant to which the Company issued a convertible promissory note in the aggregate principal amount of $100,000 for net proceeds of $85,000 after certain fees and expenses of $15,000. The note has a maturity date of August 13, 2021 and bears interest at 10% per annum. The interest due on the note for the full twelve month period is due immediately upon issuance of the note, regardless of acceleration or prepayment. The principal amount of the note is payable in six monthly instalments of $16,666.66 commencing 180 days after the issuance date, the balance outstanding under the note due at maturity date. In the event a default occurs under the Note, the Note is convertible into shares of common stock at a conversion price equal to the lowest trading price over the prior 5 days prior to the date of the note or the five day volume weighted market price prior to the date of conversion. The Company is required to adhere to certain covenants including covenants concerning distributions of capital stock; restrictions on stock repurchases, additional borrowings sales of assets and loans and advances made by the Company. In conjunction with the issuance of the promissory note, the Company issued a five year warrant exercisable for 66,666,666 shares of common stock at an exercisable price of $0.0015 per share subject to anti-dilution and price protection adjustments. The Company also issued a second five year warrant exercisable for 66,666,666 shares of common stock at an exercisable price of $0.0015 per share subject to anti-dilution and price protection adjustments, which warrants will only be exercisable upon an event of default on the convertible note. On March 9, 2021, Auctus exercised its warrant for 66,666,666 shares of common stock on a cashless exercise basis, resulting in the issue of 59,999,999 shares of common stock. Labrys Fund, LP On July 8, 2019, the Company, entered into a Securities Purchase Agreement with Labrys Fund, LP (“Labrys”), pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $282,000 for net proceeds of $253,800 after an original issue discount of $28,200. The Note had a maturity date of January 8, 2020 and bore interest at the rate of twelve percent per annum from the date on which the Note was issued until the same became due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company had the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note was convertible at any time and from time to time at the election of Labrys 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 60% of the lowest closing bid price of the Company's common stock for the thirty trading days prior to conversion. In connection with the issuance of the convertible promissory note to Labrys, the Company issued 2,700,000 returnable shares. These shares were returnable if the note was paid prior to maturity date on January 8, 2020. The company had not repaid the note on the maturity date, January 8, 2020, therefore the 2,700,000 shares were expensed as an additional fee amounting to $165,780, the value of the shares on the date of grant. Between January 15, 2020 and February 25, 2020, in terms of conversion notices received, Labrys converted the aggregate principal sum of $8,936 and interest of $19,867 into 479,160,076 shares of common stock at an average conversion price of 0.00006 per share. On May 15, 2020 the Company entered into an amended agreement with Labrys Fund LP whereby default interest and penalties were waived, no further conversions will be effectuated and the Company committed to make eight equal payments of $25,000 commencing on October 15, 2020, in full settlement of the balance outstanding. No event of default will occur as long as the Company makes all scheduled payments. Between October 21, 2020 and November 30, 2020, the Company repaid principal of $37,500. The Company was unable to adhere to the amended repayment schedule and default penalty and penalty interest was reinstated. On November 30, 2020, Labrys converted principal of $235,564 and interest thereon of $20,416 into 91,421,457 shares of common stock, realizing a gain on conversion of $4,571, thereby extinguishing the note. On November 30, 2020, the Company, entered into a Securities Purchase Agreement with Labrys, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $275,000 for net proceeds of $239,050 after an original issue discount of $27,500 and certain legal expenses. The Note has a maturity date of November 30, 2021 and bears interest at the rate of twelve percent per annum from the date on which the Note was issued until the same became due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note was convertible at any time and from time to time at the election of Labrys 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 60% of the lowest closing bid price of the Company's common stock for the thirty trading days prior to conversion. In connection with the issuance of the convertible promissory note to Labrys, the Company granted Labrys a five-year warrant to purchase 100,000,000 shares of common stock at an exercise price of $0.00205 per share. The value of the warrant was accounted for as a debt discount. Ed Blasiak On September 14, 2020, the Company entered into a Securities Purchase Agreement with Ed Blasiak (“Blasiak”), pursuant to which the Company issued a senior secured convertible promissory note in the aggregate principal amount of $55,000, including an original issue discount of $5,000. The note bears interest at 6.5% per annum and matures on September 14, 2021. The note is senior to any future borrowings and commencing on October 1, 2020 the Company will make monthly payments of the accrued interest under the note. The note may be prepaid at certain prepayment penalties and is convertible into shares of common stock at a conversion price at the option of the holder at $0.001 per share, adjusted for anti-dilution provisions; or 80% of the price per share of subsequent equity financings or; after six months 60% of the lowest trading price during the preceding six month period. On September 14, 2020, the Company entered into a five year option agreement with Ed Blasiak (“Blasiak”) whereby the Company agreed to sell to Blasiak a portion of the total outstanding shares of ATHI. The Company provided Blasiak an option to purchase 2.5% of ATHI from the Company for a purchase consideration of $0.0001 per share, based on the advances that Blasiak made to the Company totaling $50,000. Blasiak shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Blasiak to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option. Joshua Bauman On September 14, 2020, the Company entered into a Securities Purchase Agreement with Joshua Bauman (“Bauman”), pursuant to which the Company issued a senior secured convertible promissory note in the aggregate principal amount of $110,000, including an original issue discount of $10,000. The note bears interest at 6.5% per annum and matures on September 14, 2021. The note is senior to any future borrowings and commencing on October 1, 2020 the Company will make monthly payments of the accrued interest under the note. The note may be prepaid at certain prepayment penalties and is convertible into shares of common stock at a conversion price at the option of the holder at $0.001 per share, adjusted for anti-dilution provisions; or 80% of the price per share of subsequent equity financings or; after six months 60% of the lowest trading price during the preceding six month period. On October 29, 2020, the Company entered into a five year option agreement entered into with Bauman, so that the Company agreed to sell to Bauman a portion of the total outstanding shares of ATHI. The Company provided Bauman an option to purchase 6.25% of ATHI from the Company for a purchase consideration of $0.0001 per share, based on the advances that Bauman made to the Company totaling $125,000. Bauman shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Bauman to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option. In terms of clause 3.12 of the Senior secured convertible Promissory Note Agreement (“Bauman Note”) entered into with Joshua Bauman, the terms of the convertible promissory note issued to Labrys Fund LP on November 30, 2020, as described above, contained terms more favorable than those contained in the Bauman Note, resulting in an adjustment made to the Original issue discount of $1,389 and the issuance of five year warrants exercisable for 50,505,051 shares of common at an exercise price of $0.00205 per share, for the advance made to the Company by Bauman in terms of the Bauman Note. Geneva Roth Remark Holdings, Inc On October 29, 2020, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $88,000, for net proceeds of $85,000 after the payment of legal fees and origination fees amounting to $3,000. The note has a maturity date of August 29, 2021 and bears interest at the rate of 9.0% per annum. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser. 180 days after the issued date into shares of the Company’s common stock at 61% of the lowest trade price during the ten consecutive trading days immediately prior to conversion. The principal plus the accrued interest of the Note may be prepaid by the Company prior to the expiry of 180 days from issuance date at a prepayment penalty ranging from 112% to 130%. On November 24, 2020, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $53,000, for net proceeds of $50,000 after the payment of legal fees and origination fees amounting to $3,000. The note has a maturity date of October 15, 2021 and bears interest at the rate of 9.0% per annum. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser. 180 days after the issued date into shares of the Company’s common stock at 61% of the lowest |
Mortgage Loans
Mortgage Loans | 3 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Mortgage Loans | 10. Mortgage loans Mortgage loans is disclosed as follows: Interest rate Maturity date Principal Outstanding Accrued interest March 31, 2021 December 31, 2020 Cranberry Cove Holdings, Ltd. Pace Mortgage 4.2 % July 19, 2022 $ 3,978,909 $ 5,495 $ 3,984,404 $ 3,963,781 Disclosed as follows: Short-term portion $ 118,538 $ 115,704 Long-term portion 3,865,866 3,848,077 $ 3,984,404 $ 3,963,781 The aggregate amount outstanding is payable as follows: Amount Within the next twelve months 118,538 Thereafter 3,865,866 Total $ 3,984,404 Cranberry Cove Holdings, Ltd. On July 19, 2017, 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 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. |
Short term loans
Short term loans | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Short term loans | 11. Short term loans On April 12, 2019, Eileen Greene, a related party assigned CDN1,000,000 of the amount owed by the Company to her, to a third party. The loan bears interest at 12% per annum which the Company agreed to pay. |
Government assistance loans
Government assistance loans | 3 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Government assistance loans | 12. Government assistance loans On May 10, 2020, the Company was granted a government assistance loan in the aggregate principal amount of $156,782. The loan is forgivable if the Company demonstrates that the proceeds were used for expenses such as employee costs during the pandemic. Should the loan not be forgiven, interest is payable on the loan at the rate of 1% per annum and the principal is repayable and interest is payable over an 18 month period. No payments have been made to date and the Company expects the loan to be forgiven, therefore no interest has been accrued. On December 1, 2020, CCH was granted a Covid-19 related government assistance loan in the aggregate principal amount of CDN$ 40,000 (Approximately $31,000). the grant is interest free and CDN$ 10,000 is forgivable if the loan is repaid in full by December 31, 2022. On January 12, 2021, CCH received a further CDN$ 20,000 Covid-19 related government assistance loan. The loan is interest free and if repaid by December 31, 2022, CDN$ 10,000 is forgivable. |
Derivative Liabilities
Derivative Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Derivative Liabilities | 13. Derivative liability The short-term convertible notes issued to convertible note holders disclosed in note 9 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 $109,574 using a Black-Scholes valuation model, after taking into account the value of warrants issued to the convertible note holders. The derivative liability is marked-to-market on a quarterly basis. As of March 31, 2021, the derivative liability was valued at $4,379,372. The following assumptions were used in the Black-Scholes valuation model: Three months ended Calculated stock price $0.001 to $0.0055 Risk free interest rate 0.03% to 0.64 % Expected life of convertible notes and warrants 3 to 60 months expected volatility of underlying stock 157.4% to 299.1 % Expected dividend rate 0 % The movement in derivative liability is as follows: March 31, December 31, Opening balance $ 4,765,387 $ 8,694,272 Derivative liability mark-to-market on convertible debt extinguishment — 126,444,276 Derivative liability on revised convertible notes and warrants arising from convertible debt extinguishment — 6,349,265 Derivative liability cancelled on debt extinguishment — (144,893,444 Derivative liability on issued convertible notes 109,574 1,129,050 Fair value adjustments to derivative liability (495,589 ) 7,041,968 Closing balance $ 4,379,372 $ 4,765,387 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related party transactions Shawn E. Leon As of March 31, 2021 and December 31, 2020 the Company had a payable to Shawn Leon of $322,744. Mr. Leon is a director and CEO of the Company. The balances payable are non-interest bearing and has no fixed repayment terms. Due to the current financial position of the Group, Mr. Leon forfeited the management fees due to him for the three months ended March 31, 2021 and for the year ended December 31, 2020. Leon Developments, Ltd. As of March 31, 2021 and December 31, 2020, the Company owed Leon Developments, Ltd. $946,894 and $930,307, respectively, for funds advanced to the Company. Eileen Greene As of March 31, 2021 and December 31, 2020, the Company owed Eileen Greene, the spouse of our CEO, Shawn Leon, $1,545,812 and $1,558,798, respectively. The amount owing to Ms. Greene is non-interest bearing and has no fixed repayment terms. All related party transactions occur in the normal course of operations and in terms of agreements entered into between the parties. |
Stockholders' deficit
Stockholders' deficit | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders' deficit | 15. Stockholder’s deficit a) Common shares Authorized and outstanding The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding 2,262,849,130 and 2,027,085,665 shares of common stock at March 31, 2021 and December 31, 2020, respectively. On January 8, 2021, the Company issued 78,763,466 shares of common stock to Leonite in connection with a conversion notice received, converting principal and interest of $70,137. On March 3, 2021, the Company issued 97,000,000 shares of common stock to Leonite in connection with a conversion notice received, converting principal and interest of $95,000. On March 9, 2021, the Company received notification of exercise of warrants for 66,666,666 shares on a cashless basis, resulting in the issuance of 59,999,999 shares of common stock valued on the date of issuance at $90,000. b) Series A Preferred shares Authorized, issued and outstanding The Company has authorized 10,000,000 Series A preferred shares with a par value of $0.01 per share. The company has issued and outstanding 4,000,000 Series A Preferred shares at March 31, 2021 and December 31, 2020, respectively. c) Series B Preferred shares Authorized and outstanding The Company has authorized 400,000 Series B preferred shares with a par value of $1.00 per share. The company has issued and outstanding 400,000 Series B Preferred shares at March 31, 2021 and December 31, 2020, respectively. d) Warrants The Secured Promissory Note Agreements entered into with Leonite, First Fire and Bauman contain certain conversion price protection and anti-dilution protection provisions, which were triggered as a result of the terms contained in the promissory note issued to Labrys Fund LP on November 30, 2020. As a result, the Company issued five year warrants exercisable for 246,464,649 shares of common at an exercise price of $0.00205 per share, for all advances made to the Company by the lenders in terms of the secured Promissory Note Agreements. Between January 8, 2021 and February 19, 2021, Leonite advanced the Company an additional $290,000 and in terms of clause 3.12 of the Secured Promissory Note Agreement entered into with Leonite, the Company granted Leonite five year warrants exercisable for 131,111,112 shares of common stock at an exercise price of $0.00205 per share. On March 9, 2021, the Company received a cashless warrant exercise, exercising warrants for 66,666,666 shares for net shares of 59,999,999 shares of common stock. A summary of all of the Company’s warrant activity during the period January 1, 2020 to March 31, 2021 is as follows: No. of shares Exercise price per Weighted average exercise price Outstanding as of January 1, 2020 2,566,101,248 $0.00204 to $0.12 $ 0.0044700 Granted 233,333,332 0.0017357 0.0017357 Adjustment due to price protection 152,017,272,726 0.0000324 0.0000324 Forfeited/cancelled (2,366,666 ) 0.0300000 0.0300000 Granted in terms of debt extinguishment 326,286,847 0.000675 0.0006750 Cancelled as part of debt extinguishment (154,300,675,861 ) 0.0000324 0.0000324 Exercised (224,390,247 ) 0.0004 0.0004000 Outstanding as of December 31, 2020 615,561,379 $0.000675 to $0.12 0.0113796 Granted 377,575,761 $0.0020500 0.0020500 Forfeited/cancelled — — — Exercised (66,666,666 ) $0.0015000 $0.001500 Outstanding as of March 31, 2021 926,470,474 $0.000675 to $0.12 $ $0.0082883 The warrants were valued using a Black Scholes pricing model on the date of grant at $1,565,487 using the following weighted average assumptions: Three months ended March 31, 2021 Calculated stock price $0.00205 Risk free interest rate 0.36 to 0.59 % Expected life of warrants 60 months expected volatility of underlying stock 226.2 to 231.3 % Expected dividend rate 0 % The volatility of the common stock is estimated using historical data of the Company’s common stock. The risk-free interest rate used in the Black Scholes pricing model is determined by reference to historical U.S. Treasury constant maturity rates with maturities approximate to the life of the warrants granted. An expected dividend yield of zero is used in the valuation model, because the Company does not expect to pay any cash dividends in the foreseeable future. The following table summarizes information about warrants outstanding at March 31, 2021: Warrants outstanding Warrants exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.000675 326,286,847 4.28 326,286,847 $0.03000 3,703,700 0.04 3,703,700 $0.00150 66,666,666 437 66,666,666 $0.00205 477,575,761 4.73 477,575,761 $0.12 52,237,500 0.64 52,237,500 926,470,474 4.30 $ 0.0082883 926,470,474 $ 0.0082883 All of the warrants outstanding as of March 31, 2021 are vested. The warrants outstanding as of March 31, 2021 have an intrinsic value of $3,227,478. e) Stock options Our board of directors adopted the Greenstone 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 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Segment Information | 16. Segment information The Company has two reportable operating segments: a. Rental income from the property owned by CCH 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, these services were provided to customers at our Addiction Recovery Institute of America and Seastone of Delray operations. The segment operating results of the reportable segments for the three months ended March 31, 2021 is disclosed as follows: Three months ended March 31, 2021 Rental Operations In-Patient services Total Revenue $ 90,793 $ — $ 90,793 Operating expenditure (32,849 ) (19,167 ) (52,016 ) Operating income (loss) 57,944 (19,167 ) 38,777 Other (expense) income Loss on debt conversion — (1,106,648 ) (1,106,648 ) Penalty on convertible notes — (9,240 ) (9,240 ) Fair value of warrants granted (976,788 ) (976,788 ) Fair value of warrants exercised (90,000 ) (90,000 ) Interest expense (59,745 ) (77,932 ) (137,677 ) Amortization of debt discount — (502,677 ) (502,677 ) Change in fair value of derivative liability — 495,589 495,589 Foreign exchange movements (18,695 ) (60,797 ) (79,492 ) Net loss before taxation (20,496 ) (2,347,660 ) (2,368,156 ) Taxation — — — Net loss $ (20,496 ) $ (2,347,660 ) $ (2,368,156 ) The operating assets and liabilities of the reportable segments as of March 31, 2021 is as follows: March 31, 2021 Rental Operations In-Patient services Total Purchase of fixed assets $ — $ — $ — Assets Current assets 4,580 1,196,939 1,201,519 Non-current assets 2,885,861 5,157 2,891,018 Liabilities Current liabilities (1,484,968 ) (12,388,857 ) (13,873,825 ) Non-current liabilities (4,645,209 ) — (4,645,209 ) Mandatory redeemable preferred shares — (400,000 ) (400,000 ) Intercompany balances 1,330,423 (1,330,423 ) — Net liability position $ (1,909,313 ) $ (12,917,184 ) $ (14,826,497 ) The segment operating results of the reportable segments for the three months ended March 31, 2020 is disclosed as follows: Three months ended March 31, 2020 Rental Operations In-Patient services Total Revenue $ 83,542 $ - $ 83,542 Operating expenditure 30,300 143,849 174,149 Operating income (loss) 53,242 (143,849 ) (90,607 ) Other (expense) income Other income Loss on conversion of convertible notes - (286,343 ) (286,343 ) Exercise of warrants - (92,952 ) (92,952 ) Interest income - 60 60 Interest expense (61,398 ) (132,524 ) (193,922 ) Amortization of debt discount - (403,677 ) (403,677 ) Change in fair value of derivative liability - (9,754,896 ) (9,754,896 ) Foreign exchange movements 71,619 412,432 484,051 Net income (loss) before taxation 63,463 (10,401,749 ) (10,338,286 ) Taxation - - - Net income (loss) $ 63,463 $ (10,401,749 ) $ (10,338,286 ) The operating assets and liabilities of the reportable segments as of March 31, 2020 is as follows: March 31, 2020 Rental Operations In-Patient services Total Purchase of fixed assets — — — Assets Current assets 2,883 208,793 211,676 Non-current assets 2,677,198 — 2,677,198 Liabilities Current liabilities (1,149,279 ) (27,237,487 ) (28,386,766 ) Non-current liabilities (3,526,779 ) (730,235 ) (4,257,014 ) Intercompany balances (704,122 ) 704,122 — Net liability position (2,700,099 ) (27,054,807 ) (29,754,906 ) |
Net loss per common share
Net loss per common share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net loss per common share | 17. Net (loss) income per common share For the three months ended March 31, 2021 and 2020, the following options, warrants and convertible securities were excluded from the computation of diluted net loss per share as the results would have been anti-dilutive. Three months ended Three months ended Warrants to purchase shares of common stock 926,470,474 154,455,397,549 Convertible notes 662,500,729 48,756,889,839 1,588,971,203 203,212,287,388 |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 18. Commitments and contingencies a. Contingency related to outstanding penalties The Company has provided for potential US penalties of $250,000 due to non-compliance with the filing of certain required returns. The actual liability may be higher due to interest and penalties assessed by these taxing authorities. b. Mortgage loans The company has a mortgage loans as disclosed in note 10 above. The future commitment under this loan is as follows: Amount Within the next twelve months 118,538 Thereafter 3,865,866 Total $ 3,984,404 The Company has principal and interest payment commitments under the Convertible notes disclosed under Note 9 above. Conversion of these notes are at the option of the investor, if not converted these notes may need to be repaid. 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. |
Subsequent events
Subsequent events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent events | 19. Subsequent events On April 30, 2021 the Company was given a conversion notice of three payments of $30,800 due on April 30, 2021 under the Labrys note entered into on November 30, 2020 in the aggregate principal amount of $275,000 and 100,000,000 restricted shares were issued. The Company still has seven more payments of 30,800 due under the note. On May 10, 2021, the Company closed on a new financing with Labrys for a $550,000 convertible note including a 10% OID for net proceeds of $500,000. The note bears interest at 10% per annum and has a fixed conversion price of $0.005 per share subject to adjustments should other new financings be done at more favorable terms. The note is due 12 months from the issuance date. The funding included a five year warrant for 91,666,666 shares at a conversion price of $0.006 per share. On May 10, 2021, the Company prepaid the note entered into on October 29, 2020 with First Fire Global Opportunities Fund, LLC in the aggregate principal amount of $137,500. The note was repaid in its entirety. On May 12, warrants issued under the note in the amount 50,505,051 shares were exercised on a cashless basis, resulting in the issuance of 42,353,038 common shares. On April 30, 2021 the Company prepaid the note issued on October 29, 2020, to Geneva Roth Remark Holdings, Inc., in the aggregate principal amount of $88,000. The note has been repaid in its entirety. On May 10, 2021 the Company prepaid the note issued August 13, 2020, to Auctus Fund LLC, in the aggregate principal amount of $100,000. The note has been repaid and retired. On May 3, 2021, a Company subsidiary Addiction Recovery Institute of America LLC closed on a second PPP loan through Lendistry for net proceeds of $157,367. The Company intends to continue its operations at a new location in west Palm Beach. A Letter of Intent ("LOI") was signed on February 7, 2020, with a third party that has a property lease and a pending license at its new location. The Company originally anticipated recommencing operations in February 2020, however it has been adversely affected by the COVID-19 pandemic. The LOI requires the Company to provide a working capital loan of up to $500,000, the Company has loaned $1,026,669 as of March 31, 2021. The Company is expected to close on the acquisition during the second quarter. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | a) Use of Estimates The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Principles of consolidation and foreign currency translation | b) Principals of consolidation and foreign currency translation The accompanying condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions and balances have been eliminated on consolidation. Certain of the Company’s subsidiaries functional currency is the Canadian dollar, while the Company’s reporting currency is the U.S. 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. ● Non-monetary, non-current and equity at historical rates. ● Revenue and expense items and cash flows 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’ deficit 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 three months ended March 31, 2021, a closing rate of CDN$1.0000 equals US$0.7952 and an average exchange rate of CDN$1.0000 equals US$0.7899. For the three months ended March 31, 2020, a closing rate of CAD$1.0000 equals US$0.7049 and an average exchange rate of CAD$1.0000 equals US$0.7435. |
Revenue Recognition | c) Revenue Recognition ASC 606 requires companies to exercise more judgment and recognize revenue using a five-step process. The Company’s provision for doubtful accounts are recorded as a direct reduction to revenue instead of being presented as a separate line item on the consolidated statements of operations and comprehensive loss. As our performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as our patients typically are under no obligation to remain admitted in our facilities. The Company receives payments from the following sources for services rendered in our U.S. Facility: (i) commercial insurers; and (ii) individual patients and clients. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and does not adjust for the effects of a significant financing component. The Company derives a significant portion of its revenue from other payors that receive discounts from established billing rates. The various managed care contracts under which these discounts must be calculated are complex, subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided in the Company’s inpatient facilities and cost settlement provisions. Management estimates the transaction price on a payor-specific basis given its interpretation of the applicable regulations or contract terms. The services authorized and provided and related reimbursement are often subject to interpretation that could result in payments that differ from the Company’s estimates. Additionally, updated regulations and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management. Settlements with third-party payors are estimated and recorded in the period in which the related services are rendered and are adjusted in future periods as final settlements are determined. In the opinion of management, adequate provision has been made for any adjustments and final settlements. However, there can be no assurance that any such adjustments and final settlements will not have a material effect on the Company’s financial condition or results of operations. The Company’s receivables were $3,113 and $3,075 for the three months ended March 31, 2021 and for the year ended December 31, 2020, respectively. Management believes that these receivables are properly stated and are not likely to be settled for a significantly different amount. The Company’s revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions: i. identify the contract with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to performance obligations in the contract; and v. recognize revenue as the performance obligation is satisfied. |
Cash and cash equivalents | d) Cash and cash equivalents For purposes of the statements of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. The Company maintains cash and cash equivalents with several financial institutions in the USA and Canada. The Company primarily places cash balances in the USA with high-credit quality financial institutions located in the United States which are insured by the Federal Deposit Insurance Corporation up to a limit of $250,000 per institution, in Canada which are insured by the Canadian Deposit Insurance Corporation up to a limit of CDN$100,000 per institution. |
Accounts receivable | e) Accounts receivable Accounts receivable primarily consists of amounts due from third-party payors (non-governmental) and private pay patients and is recorded net of allowances for doubtful accounts and contractual discounts. The Company’s ability to collect outstanding receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s consolidated financial statements is recorded at the net amount expected to be received. The Company’s primary collection risks are (i) the risk of overestimating net revenues at the time of billing that may result in the Company receiving less than the recorded receivable, (ii) the risk of non-payment as a result of commercial insurance companies denying claims, (iii) the risk that patients will fail to remit insurance payments to the Company when the commercial insurance company pays out-of-network claims directly to the patient, (iv) resource and capacity constraints that may prevent the Company from handling the volume of billing and collection issues in a timely manner, (v) the risk that patients do not pay the Company for their self-pay balances (including co-pays, deductibles and any portion of the claim not covered by insurance) and (vi) the risk of non-payment from uninsured patients. |
Allowance for Doubtful Accounts, Contractual and Other Discounts | f) Allowance for Doubtful Accounts, Contractual and Other Discounts The Company derives the majority of its revenues from commercial payors at out-of-network rates. Management estimates the allowance for contractual and other discounts based on its historical collection experience. The services authorized and provided and related reimbursement are often subject to interpretation and negotiation that could result in payments that differ from the Company’s estimates. The Company’s allowance for doubtful accounts is based on historical experience, but management also takes into consideration the age of accounts, creditworthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. An account is written off only after the Company has pursued collection efforts or otherwise determines an account to be uncollectible. Uncollectible balances are written-off against the allowance. Recoveries of previously written-off balances are credited to income when the recoveries are made. |
Financial instruments | g) Financial instruments The Company initially measures its financial assets and liabilities at fair value, except for certain non-arm’s length transactions. The Company subsequently measures all its financial assets and financial liabilities at amortized cost. Financial assets measured at amortized cost include cash and accounts receivable. Financial liabilities measured at amortized cost include bank indebtedness, accounts payable and accrued liabilities, harmonized sales tax payable, withholding taxes payable, convertible notes payable, loans payable and related party notes. Financial assets measured at cost are tested for impairment when there are indicators of impairment. The amount of the write-down is recognized in net income. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in net income. The Company recognizes its transaction costs in net income in the period incurred. However, financial instruments that will not be subsequently measured at fair value are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption. FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: ● Level 1. Observable inputs such as quoted prices in active markets; ● Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. The Company measures its convertible debt and derivative liabilities associated therewith at fair value. These liabilities are revalued periodically and the resultant gain or loss is realized through the Statement of Operations and Comprehensive Loss. |
Property, plant and equipment | h) Property and equipment Property and equipment is recorded at cost. Depreciation is calculated on the straight line basis over the estimated life of the asset: |
Leases | i) Leases The Company accounts for leases in terms of AC 842 whereby leases are classified as either capital or operating leases. Leases that transfer substantially all of the benefits and inherent risks of ownership of property to the Company are accounted for as capital leases. At the time a capital lease is entered into, an asset is recorded together with its related long-term obligation to reflect the acquisition and financing. Equipment recorded under capital leases is amortized on the same basis as described above. Operating leases are recognized on the balance sheet as a lease liability with a corresponding right of use asset for all leases with a term that is more than twelve months. Payments under operating leases are expensed as incurred. |
Income taxes | j) Income taxes The Company accounts for income taxes under the provisions of ASC Topic 740, “Income Taxes”. ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties accrued on unrecognized tax benefits within general and administrative expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in general and administrative expenses in the period that such determination is made. |
Net income (loss) per share information | k) Net income (loss) per Share Basic net income (loss) per share is computed on the basis of the weighted average number of common stock outstanding during the period. Diluted net income (loss) per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation. Dilution is computed by applying the treasury stock method for options and warrants. Under this method, “in-the money” options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Dilution is computed by applying the if-converted method for convertible preferred stocks. Under this method, convertible preferred stock is assumed to be converted at the beginning of the period (or at the time of issuance, if later), and preferred dividends (if any) will be added back to determine income applicable to common stock. The shares issuable upon conversion will be added to weighted average number of common stock outstanding. Conversion will be assumed only if it reduces earnings per share (or increases loss per share). |
Stock based compensation | l) Stock based compensation Stock based compensation cost is measured at the grant date, based on the estimated fair value of the award and is recognized as expense over the employee’s requisite service period or vesting period on a straight-line basis. Share-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest and has been reduced for estimated forfeitures. This estimate will be revised in subsequent periods if actual forfeitures differ from those estimates. We have minimal awards with performance conditions and no awards dependent on market conditions. |
Derivatives | m) Derivatives The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. The Company uses a Black Scholes Option Pricing model to estimate the fair value of convertible debt conversion features at the end of each applicable reporting period. Changes in the fair value of these derivatives during each reporting period are included in the statements of operations. Inputs into the Black Scholes Option Pricing model require estimates, including such items as estimated volatility of the Company’s stock, risk free interest rate and the estimated life of the financial instruments being fair valued. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature. |
Recent accounting pronouncements | n) Recent accounting pronouncements The FASB issued several additional updates during the period, none of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the consolidated financial statements upon adoption. |
Financial instrument Risks | o) Financial instruments Risks 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, March 31, 2021 and December 31, 2020. 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 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 $12,672,306, which includes derivative liabilities of $4,379,372, and an accumulated deficit of $44,858,784. The Company is 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 that of 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 interest rate risk on its convertible debt, mortgage loans, short term loans, third party loans and government assistance loans as of March 31, 2021. In the opinion of management, interest rate risk is assessed as moderate. 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 March 31, 2021, a 5% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in an approximate $4,526 increase or decrease in the Company’s after tax net income from operations. The Company has not entered into any hedging agreements to mitigate this risk. In the opinion of management, currency risk is assessed as low, material and remains unchanged from that of 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. |
Property plant and equipment (T
Property plant and equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property Plant And Equipment Tables | |
Schedule of property and equipment | Property and equipment consists of the following: March 31, December 31, 2020 Cost Accumulated depreciation Net book value Net book value Land $ 170,974 $ — $ 170,974 $ 168,866 Property 3,234,310 (519,423 ) 2,714,887 2,713,354 $ 3,405,284 $ (519,423 ) $ 2,885,861 $ 2,882,220 |
Taxes Payable (Tables)
Taxes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Taxation Payable | March 31, December 31, Payroll taxes $ 145,200 $ 143,410 HST/GST payable 87,493 73,503 US penalties due 250,000 250,000 Income tax payable 388,150 383,364 $ 870,843 $ 850,277 |
Short term convertible notes (T
Short term convertible notes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Short-term Convertible Loan Tables | |
Short term convertible notes | The short-term convertible notes consist of the following: Interest rate Maturity Date Principal Interest Debt Discount March 31, 2021 December 31, 2020 Leonite Capital, LLC 8.5 % — $ — $ — $ — $ — $ 70,583 6.5 % June 12, 2021 677,874 6,763 (340,016 ) 344,621 147,058 First Fire Global Opportunities Fund 6.5 % October 29,2021 138,889 3,821 (80,841 ) 61,869 25,297 Auctus Fund, LLC 10.0 % May 7, 2020 115,000 — — 115,000 150,000 10.0 % August 13, 2021 95,000 6,139 (35,137 ) 66,002 40,202 Labrys Fund, LP 12.0 % November 30, 2021 275,000 11,053 (183,836 ) 102,217 26,159 Ed Blasiak 6.5 % September 14, 2021 55,000 1,966 (25,164 ) 31,802 17,347 Joshua Bauman 6.5 % September 14, 2021 138,889 4,819 (63,817 ) 79,891 43,247 Geneva Roth Remark Holdings, Inc. 9.0 % August 29, 2021 88,000 2,431 (43,711 ) 46,720 19,238 9.0 % October 15, 2021 53,000 1,670 (31,033 ) 23,637 6,753 9.0 % January 3, 2022 53,500 374 (48,605 ) 5,269 — Series N convertible notes 6.0 % On Demand 3,229,000 473,105 — 3,702,105 3,654,333 $ 4,579,133 $ 4,200,217 |
Mortgage loans (Tables)
Mortgage loans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Mortgage loans | Mortgage loans is disclosed as follows: Interest rate Maturity date Principal Outstanding Accrued interest March 31, 2021 December 31, 2020 Cranberry Cove Holdings, Ltd. Pace Mortgage 4.2 % July 19, 2022 $ 3,978,909 $ 5,495 $ 3,984,404 $ 3,963,781 Disclosed as follows: Short-term portion $ 118,538 $ 115,704 Long-term portion 3,865,866 3,848,077 $ 3,984,404 $ 3,963,781 The aggregate amount outstanding is payable as follows: Amount Within the next twelve months 118,538 Thereafter 3,865,866 Total $ 3,984,404 |
Derivative Liablility (Tables)
Derivative Liablility (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Liablility | |
Schedule of assumption used in Black Scholes | The following assumptions were used in the Black-Scholes valuation model: Three months ended Calculated stock price $0.001 to $0.0055 Risk free interest rate 0.03% to 0.64 % Expected life of convertible notes and warrants 3 to 60 months expected volatility of underlying stock 157.4% to 299.1 % Expected dividend rate 0 % |
Schedule of derivative liability | The movement in derivative liability is as follows: March 31, December 31, Opening balance $ 4,765,387 $ 8,694,272 Derivative liability mark-to-market on convertible debt extinguishment — 126,444,276 Derivative liability on revised convertible notes and warrants arising from convertible debt extinguishment — 6,349,265 Derivative liability cancelled on debt extinguishment — (144,893,444 Derivative liability on issued convertible notes 109,574 1,129,050 Fair value adjustments to derivative liability (495,589 ) 7,041,968 Closing balance $ 4,379,372 $ 4,765,387 |
Stockholders' deficit (Tables)
Stockholders' deficit (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Warrants outstanding | A summary of all of the Company’s warrant activity during the period January 1, 2020 to March 31, 2021 is as follows: No. of shares Exercise price per Weighted average exercise price Outstanding as of January 1, 2020 2,566,101,248 $0.00204 to $0.12 $ 0.0044700 Granted 233,333,332 0.0017357 0.0017357 Adjustment due to price protection 152,017,272,726 0.0000324 0.0000324 Forfeited/cancelled (2,366,666 ) 0.0300000 0.0300000 Granted in terms of debt extinguishment 326,286,847 0.000675 0.0006750 Cancelled as part of debt extinguishment (154,300,675,861 ) 0.0000324 0.0000324 Exercised (224,390,247 ) 0.0004 0.0004000 Outstanding as of December 31, 2020 615,561,379 $0.000675 to $0.12 0.0113796 Granted 377,575,761 $0.0020500 0.0020500 Forfeited/cancelled — — — Exercised (66,666,666 ) $0.0015000 $0.001500 Outstanding as of March 31, 2021 926,470,474 $0.000675 to $0.12 $ $0.0082883 The warrants were valued using a Black Scholes pricing model on the date of grant at $1,565,487 using the following weighted average assumptions: Three months ended March 31, 2021 Calculated stock price $0.00205 Risk free interest rate 0.36 to 0.59 % Expected life of warrants 60 months expected volatility of underlying stock 226.2 to 231.3 % Expected dividend rate 0 % The following table summarizes information about warrants outstanding at March 31, 2021: Warrants outstanding Warrants exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.000675 326,286,847 4.28 326,286,847 $0.03000 3,703,700 0.04 3,703,700 $0.00150 66,666,666 437 66,666,666 $0.00205 477,575,761 4.73 477,575,761 $0.12 52,237,500 0.64 52,237,500 926,470,474 4.30 $ 0.0082883 926,470,474 $ 0.0082883 |
Segment information (Tables)
Segment information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Segment information | The segment operating results of the reportable segments for the three months ended March 31, 2021 is disclosed as follows: Three months ended March 31, 2021 Rental Operations In-Patient services Total Revenue $ 90,793 $ — $ 90,793 Operating expenditure (32,849 ) (19,167 ) (52,016 ) Operating income (loss) 57,944 (19,167 ) 38,777 Other (expense) income Loss on debt conversion — (1,106,648 ) (1,106,648 ) Penalty on convertible notes — (9,240 ) (9,240 ) Fair value of warrants granted (976,788 ) (976,788 ) Fair value of warrants exercised (90,000 ) (90,000 ) Interest expense (59,745 ) (77,932 ) (137,677 ) Amortization of debt discount — (502,677 ) (502,677 ) Change in fair value of derivative liability — 495,589 495,589 Foreign exchange movements (18,695 ) (60,797 ) (79,492 ) Net loss before taxation (20,496 ) (2,347,660 ) (2,368,156 ) Taxation — — — Net loss $ (20,496 ) $ (2,347,660 ) $ (2,368,156 ) The operating assets and liabilities of the reportable segments as of March 31, 2021 is as follows: March 31, 2021 Rental Operations In-Patient services Total Purchase of fixed assets $ — $ — $ — Assets Current assets 4,580 1,196,939 1,201,519 Non-current assets 2,885,861 5,157 2,891,018 Liabilities Current liabilities (1,484,968 ) (12,388,857 ) (13,873,825 ) Non-current liabilities (4,645,209 ) — (4,645,209 ) Mandatory redeemable preferred shares — (400,000 ) (400,000 ) Intercompany balances 1,330,423 (1,330,423 ) — Net liability position $ (1,909,313 ) $ (12,917,184 ) $ (14,826,497 ) ETHEMA HEALTH CORPORATION NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 16. Segment information (continued) The segment operating results of the reportable segments for the three months ended March 31, 2020 is disclosed as follows: Three months ended March 31, 2020 Rental Operations In-Patient services Total Revenue $ 83,542 $ - $ 83,542 Operating expenditure 30,300 143,849 174,149 Operating income (loss) 53,242 (143,849 ) (90,607 ) Other (expense) income Other income Loss on conversion of convertible notes - (286,343 ) (286,343 ) Exercise of warrants - (92,952 ) (92,952 ) Interest income - 60 60 Interest expense (61,398 ) (132,524 ) (193,922 ) Amortization of debt discount - (403,677 ) (403,677 ) Change in fair value of derivative liability - (9,754,896 ) (9,754,896 ) Foreign exchange movements 71,619 412,432 484,051 Net income (loss) before taxation 63,463 (10,401,749 ) (10,338,286 ) Taxation - - - Net income (loss) $ 63,463 $ (10,401,749 ) $ (10,338,286 ) The operating assets and liabilities of the reportable segments as of March 31, 2020 is as follows: March 31, 2020 Rental Operations In-Patient services Total Purchase of fixed assets — — — Assets Current assets 2,883 208,793 211,676 Non-current assets 2,677,198 — 2,677,198 Liabilities Current liabilities (1,149,279 ) (27,237,487 ) (28,386,766 ) Non-current liabilities (3,526,779 ) (730,235 ) (4,257,014 ) Intercompany balances (704,122 ) 704,122 — Net liability position (2,700,099 ) (27,054,807 ) (29,754,906 ) |
Net loss per common share (Tabl
Net loss per common share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net loss per common share (Tables) | For the three months ended March 31, 2021 and 2020, the following options, warrants and convertible securities were excluded from the computation of diluted net loss per share as the results would have been anti-dilutive. Three months ended Three months ended Warrants to purchase shares of common stock 926,470,474 154,455,397,549 Convertible notes 662,500,729 48,756,889,839 1,588,971,203 203,212,287,388 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments And Contingencies | |
Schedule of commitment and contingencies | The company has a mortgage loans as disclosed in note 10 above. The future commitment under this loan is as follows: Amount Within the next twelve months 118,538 Thereafter 3,865,866 Total $ 3,984,404 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) | Mar. 31, 2021USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Working Capital Deficiency | $ 12,672,306 |
Accumulated Deficit | $ 44,858,784 |
Property plant and equipment (D
Property plant and equipment (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Cost | $ 3,405,284 | |
Accumulated Depreciation | (519,423) | |
Net book value | 2,885,861 | $ 2,882,220 |
Land [Member] | ||
Cost | 170,974 | |
Accumulated Depreciation | ||
Net book value | 170,974 | 168,866 |
Property | ||
Cost | 3,234,310 | |
Accumulated Depreciation | (519,423) | |
Net book value | $ 2,714,887 | $ 2,713,354 |
Taxes payable - Taxes Payable (
Taxes payable - Taxes Payable (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Notes to Financial Statements | ||
Payroll taxes | $ 145,200 | $ 143,410 |
HST/GST payable | 87,493 | 73,503 |
US tax penalties | 250,000 | 250,000 |
Income tax payable | 388,150 | 383,364 |
Taxes Payable | $ 870,843 | $ 850,277 |
Short-term Convertible Notes (D
Short-term Convertible Notes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Total | $ 4,579,133 | $ 4,200,217 |
Leonite Investment LLC [Member] | ||
Interest rate | 8.50% | |
Maturity date | ||
Principal | ||
Interest | ||
Debt Discount | ||
Total | 70,583 | |
Leonite Investment LLC 2 | ||
Total | 147,058 | |
First Fire Global Opportunities Fund [Member] | ||
Interest rate | 6.50% | |
Maturity date | October 29, 2021 | |
Principal | $ 138,889 | |
Interest | 3,821 | |
Debt Discount | (80,841) | |
Total | $ 61,869 | 25,297 |
Actus Fund, LLC [Member] | ||
Interest rate | 10.00% | |
Maturity date | May 7, 2020 | |
Principal | $ 115,000 | |
Interest | ||
Debt Discount | ||
Total | $ 115,000 | 150,000 |
Actus Fund, LLC 2 | ||
Interest rate | 10.00% | |
Maturity date | August 13, 2021 | |
Principal | $ 95,000 | |
Interest | 6,139 | |
Debt Discount | (35,137) | |
Total | $ 66,002 | 40,202 |
Labrys Fund, LP [Member] | ||
Interest rate | 12.00% | |
Maturity date | November 30, 2021 | |
Principal | $ 275,000 | |
Interest | 11,053 | |
Debt Discount | (183,836) | |
Total | $ 102,217 | 26,159 |
Ed Blasiak | ||
Interest rate | 6.50% | |
Maturity date | September 14, 2021 | |
Principal | $ 55,000 | |
Interest | 1,966 | |
Debt Discount | (25,164) | |
Total | $ 31,802 | 17,347 |
Joshua Bauman | ||
Interest rate | 6.50% | |
Maturity date | September 14, 2021 | |
Principal | $ 138,889 | |
Interest | 4,819 | |
Debt Discount | (63,817) | |
Total | $ 79,891 | 43,247 |
Geneva Roth Remark Holdings, Inc. | ||
Interest rate | 9.00% | |
Maturity date | August 29, 2021 | |
Principal | $ 88,000 | |
Interest | 2,431 | |
Debt Discount | (43,711) | |
Total | $ 46,720 | 19,238 |
Geneva Roth Remark Holdings, Inc. 2 | ||
Interest rate | 9.00% | |
Maturity date | October 15, 2021 | |
Principal | $ 53,000 | |
Interest | 1,670 | |
Debt Discount | (31,033) | |
Total | $ 23,637 | 6,753 |
Geneva Roth Remark Holdings, Inc. 3 | ||
Interest rate | 9.00% | |
Maturity date | January 3, 2022 | |
Principal | $ 53,000 | |
Interest | 374 | |
Debt Discount | (48,605) | |
Total | $ 5,269 | |
Series N Convertible Notes [Member] | ||
Interest rate | 6.00% | |
Maturity date | On Demand | |
Principal | $ 3,229,000 | |
Interest | 473,105 | |
Debt Discount | ||
Total | $ 3,702,105 | $ 3,654,333 |
Power Up Lending Group LTD 2 [Member] | ||
Interest rate | 6.50% | |
Maturity date | June 12, 2021 | |
Principal | $ 677,874 | |
Interest | 6,763 | |
Debt Discount | (258,002) | |
Total | $ 344,621 |
Mortgage loans - Aggregate Amou
Mortgage loans - Aggregate Amount Outstanding (Details) | Mar. 31, 2021USD ($) |
Mortgage Loans - Aggregate Amount Outstanding | |
Within one year | $ 118,538 |
One to two years | 3,865,866 |
Total | $ 3,984,404 |
Derivative liability - Black Sc
Derivative liability - Black Scholes Valuations (Details) | 3 Months Ended |
Mar. 31, 2021$ / shares | |
Derivative Liability Details | |
Calculated stock price, min | $ 0.001 |
Calculated stock price, max | $ 0.0055 |
Risk free interest rate, min | 0.03% |
Risk free interest rate, max | 0.64% |
Expected life of convertible notes, minimum | 3 months |
Expected life of convertible notes, maximum | 5 years |
Expected volatility of underlying stock, min | 157.40% |
Expected volatility of underlying stock, max | 299.10% |
Expected dividend rate | 0.00% |
Derivative liability - Movement
Derivative liability - Movement (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Derivative Liability Details 1 | ||
Opening Balance | $ 4,765,387 | $ 8,694,272 |
Derivative liability mark-to-market on convertible debt extinguishment | 126,444,276 | |
Derivative liability on revised convertible notes and warrants arising from convertible debt extinguishment | 6,349,265 | |
Derivative liability cancelled on debt extinguishment | (144,893,444) | |
Derivative liability arising from convertible notes | 109,574 | 1,129,050 |
Fair value adjustment to derivative liability | (495,589) | 7,041,968 |
Closing Balance | $ 4,379,372 | $ 4,765,387 |
Stockholders' deficit - Warrant
Stockholders' deficit - Warrants Outstanding (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Stock options | ||
Beginning balance, warrants | 615,561,379 | 2,566,101,248 |
Beginning balance, warrants exercise price | $ 0.12 | $ 0.12 |
Adjustment due to price protection, shares | 233,333,332 | |
Adjustment due to price protection, price | $ 0.0017357 | |
Warrants Forfeited, shares | 152,017,272,726 | |
Warrants Forfeited, price | $ 0.0000324 | |
Warrants Granted, shares | 377,575,761 | 326,286,847 |
Warrants Granted, price | $ 0.0020500 | $ 0.000675 |
Warrants Cancelled, shares | (154,300,675,861) | |
Warrants Cancelled, price | $ 0.0000324 | |
Warrant Exercised, shares | (66,666,666) | (224,390,247) |
Warrants Exercised, price | $ 0.0015000 | $ 0.0004 |
Ending Balance, warrants | 926,470,474 | 615,561,379 |
Ending Balance, warrants exercise price | $ 0.12 | $ 0.12 |
Segment information (Details)
Segment information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Revenues | $ 90,793 | $ 83,542 | |
Operating expenditure | 52,016 | 174,149 | |
Operating income (loss) | 38,777 | (90,607) | |
Other (expense) income | |||
Loss on debt conversion | 1,106,648 | 286,343 | |
Interest Income | 60 | ||
Interest expense | (137,677) | (193,922) | |
Foreign exchange movements | (79,492) | 484,051 | |
Net loss before taxation | (2,368,156) | (10,338,286) | |
Taxation | |||
Assets | |||
Current assets | 1,201,519 | $ 935,152 | |
Non-current assets | 2,891,018 | 2,887,314 | |
Liabilities | |||
Current liabilities | 13,873,825 | $ 13,864,800 | |
Rental Operations | |||
Revenues | 83,542 | ||
Operating expenditure | 30,300 | ||
Operating income (loss) | 53,242 | ||
Other (expense) income | |||
Loss on debt conversion | |||
Exercise of warrants | |||
Interest Income | |||
Interest expense | (61,398) | ||
Amortization of debt discount | |||
Change in fair value of derivative liability | |||
Foreign exchange movements | 71,619 | ||
Net loss before taxation | 63,463 | ||
Taxation | |||
Net loss from operations | 63,463 | ||
Purchase of fixed assets | |||
Assets | |||
Current assets | 2,883 | ||
Non-current assets | 2,677,198 | ||
Liabilities | |||
Current liabilities | (1,149,279) | ||
Non-current liabilities | (3,526,779) | ||
Intercompany balances | (704,122) | ||
Net (liability) asset position | (2,700,099) | ||
In-Patient services | |||
Revenues | |||
Operating expenditure | 143,849 | ||
Operating income (loss) | (143,849) | ||
Other (expense) income | |||
Loss on debt conversion | (286,343) | ||
Exercise of warrants | (92,952) | ||
Interest Income | 60 | ||
Interest expense | (132,524) | ||
Amortization of debt discount | (403,677) | ||
Change in fair value of derivative liability | (9,754,896) | ||
Foreign exchange movements | 412,432 | ||
Net loss before taxation | (10,401,749) | ||
Taxation | |||
Net loss from operations | (10,401,749) | ||
Purchase of fixed assets | |||
Assets | |||
Current assets | 208,793 | ||
Non-current assets | |||
Liabilities | |||
Current liabilities | (27,237,487) | ||
Non-current liabilities | (730,235) | ||
Intercompany balances | 704,122 | ||
Net (liability) asset position | (27,054,807) | ||
Total | |||
Revenues | 83,542 | ||
Operating expenditure | 174,149 | ||
Operating income (loss) | (90,607) | ||
Other (expense) income | |||
Loss on debt conversion | (286,343) | ||
Exercise of warrants | (92,952) | ||
Interest Income | 60 | ||
Interest expense | (193,922) | ||
Amortization of debt discount | (403,677) | ||
Change in fair value of derivative liability | (9,754,896) | ||
Foreign exchange movements | 484,051 | ||
Net loss before taxation | (10,338,286) | ||
Taxation | |||
Net loss from operations | (10,338,286) | ||
Purchase of fixed assets | |||
Assets | |||
Current assets | 211,676 | ||
Non-current assets | 2,677,198 | ||
Liabilities | |||
Current liabilities | (28,386,766) | ||
Non-current liabilities | (4,257,014) | ||
Intercompany balances | |||
Net (liability) asset position | $ (29,754,906) |
Net loss per common share (Deta
Net loss per common share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net Loss Per Common Share Details | ||
Warrants to purchase shares of common stock | $ 926,470,474 | $ 154,455,397,549 |
Convertible notes | 662,500,729 | 48,756,889,839 |
Total | $ 1,588,971,203 | $ 203,212,287,388 |
Commitments and contingencies_2
Commitments and contingencies (Details) | Mar. 31, 2021USD ($) |
Commitments And Contingencies Details Abstract | |
Within the next twelve months | $ 118,538 |
Thereafter | 3,865,866 |
Total | $ 3,984,404 |