Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | Digatrade Financial Corp |
Entity Central Index Key | 0001369128 |
Document Type | 6-K |
Document Period End Date | Sep. 30, 2020 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Period Focus | Q3 |
Document Fiscal Year Focus | 2020 |
Interim Consolidated Balance Sh
Interim Consolidated Balance Sheets - CAD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current | ||
Cash | $ 122 | $ 113,156 |
GST recoverable | 11,032 | 13,655 |
Deferred loss on derivatives | 331,569 | 150,851 |
Total current assets | 342,723 | 277,662 |
Investment | 258,594 | 0 |
Intangible assets | 0 | 26,761 |
Total assets | 601,317 | 304,423 |
Current | ||
Trade and other payables | 191,220 | 122,276 |
Loan payable | 0 | 26,565 |
Convertible promissory notes - liability component | 46,293 | 50,593 |
Derivative liability | 495,383 | 370,194 |
Promissory notes | 175,606 | 165,698 |
Total liabilities | 908,502 | 735,326 |
SHAREHOLDERS' (DEFICIENCY) EQUITY | ||
Share capital | 8,338,793 | 7,460,158 |
Reserves | 60,000 | 60,000 |
Accumulated deficit | (8,705,978) | (7,793,332) |
Total equity (deficiency) attributable to shareholders | (307,185) | (273,174) |
Non-controlling interest | 0 | (157,729) |
Total liabilities and shareholders' equity (deficiency) | $ 601,317 | $ 304,423 |
Interim Consolidated Statement
Interim Consolidated Statement of Changes in Shareholders' Equity - CAD ($) | Common Shares | Class "B" Common Shares | Share Capital | Contributed Surplus | Deficit | Total | Non-Controlling Interest |
Beginning balance, shares at Dec. 31, 2018 | 226,411,904 | 100,000 | |||||
Beginning balance, amount at Dec. 31, 2018 | $ 6,047,999 | $ 0 | $ (6,298,936) | $ (250,937) | $ 0 | ||
Class B common shares issued, shares | 1,000,000 | ||||||
Class B common shares issued, amount | 100 | 100 | |||||
Shares issued pursuant to conversion of convertible promissory notes, shares | 126,433,617 | ||||||
Shares issued pursuant to conversion of convertible promissory notes, amount | 613,568 | 613,568 | |||||
Incorporation of controlled subsidiary | 342 | ||||||
Stock-based compensation | 60,000 | 60,000 | |||||
Net loss for the period | (832,209) | (832,209) | (12,139) | ||||
Ending balance, shares at Sep. 30, 2019 | 302,251,877 | 1,100,000 | |||||
Ending balance, amount at Sep. 30, 2019 | 6,506,856 | 60,000 | (6,911,394) | (344,538) | (11,797) | ||
Beginning balance, shares at Dec. 31, 2019 | 582,564,926 | 1,100,000 | |||||
Beginning balance, amount at Dec. 31, 2019 | 7,460,158 | 60,000 | (7,793,332) | (273,174) | (157,729) | ||
Class B common shares issued, shares | 1,000,000 | ||||||
Class B common shares issued, amount | 100 | 100 | |||||
Shares issued pursuant to conversion of convertible promissory notes, shares | 690,210,266 | ||||||
Shares issued pursuant to conversion of convertible promissory notes, amount | 878,535 | 878,535 | |||||
Shares issued to non-controlling interest, amount | 100,158 | ||||||
Incorporation of controlled subsidiary | 3,079 | ||||||
Adjustment pursuant to loss of control | 203,329 | ||||||
Stock-based compensation | 0 | ||||||
Net loss for the period | (912,646) | (912,646) | (148,837) | ||||
Ending balance, shares at Sep. 30, 2020 | 1,272,775,192 | 2,100,000 | |||||
Ending balance, amount at Sep. 30, 2020 | $ 8,338,793 | $ 60,000 | $ (8,705,978) | $ (307,185) | $ 0 |
Interim Consolidated Statements
Interim Consolidated Statements of Operations, Comprehensive Loss and Deficit - CAD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
EXPENSES | ||||
Accounting, audit, and legal | $ 12,469 | $ 24,842 | $ 84,393 | $ 123,206 |
Consulting expense | 43,026 | 91,470 | 165,812 | 296,512 |
Finders fees | 0 | 0 | 0 | 54,746 |
Filing and transfer agent fees | 3,673 | 4,898 | 16,245 | 19,558 |
Management fees | 44,656 | 62,968 | 150,222 | 164,478 |
Stock-based compensation | 0 | 0 | 0 | 60,000 |
Travel and administration expenses | 699 | 1,600 | 1,620 | 25,872 |
Marketing | 0 | 32,228 | 4,039 | 63,161 |
Bank charges and interest | 19 | 190 | 478 | 429 |
Investor relations expense | 0 | 0 | 0 | 20,096 |
Project development costs | (22,567) | 0 | 13,788 | 0 |
Total expenses | 81,975 | 218,196 | 436,597 | 828,058 |
Profit (loss) before other items | (81,975) | (218,196) | (436,597) | (828,058) |
Foreign exchange (loss) gain | (10,778) | (14,043) | (20,500) | 5,638 |
Accretion expense | (5,957) | 0 | (101,900) | 0 |
Interest expense | 3,199 | (18,115) | (10,699) | (52,531) |
Change in fair value on derivative instruments | 328,183 | 0 | (356,128) | 0 |
Gain on reorganization and disposal of subsidiary | 13,148 | 0 | 13,148 | 0 |
Net profit (loss) for the period | 245,820 | (250,354) | (912,646) | (874,951) |
Other comprehensive income | 0 | 0 | 0 | 0 |
Net comprehensive loss for the period | 245,820 | (250,354) | (912,646) | (874,951) |
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO: | ||||
Shareholders of the Company | 245,820 | (195,418) | (912,646) | (832,209) |
Non-controlling interest | $ 0 | $ (54,936) | $ 0 | $ (42,742) |
Weighted average number of shares outstanding | 1,012,902,113 | 273,574,609 | 1,012,902,113 | 273,574,609 |
Basic and diluted (loss) profit per share | $ 0.0002 | $ (0.001) | $ (0.001) | $ (0.01) |
Interim Consolidated Statemen_2
Interim Consolidated Statements of Cash Flows - CAD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CASH PROVIDED BY (USED IN): OPERATING ACTIVITIES | ||||
Net profit (loss) for the period | $ 245,820 | $ (250,354) | $ (912,646) | $ (874,951) |
Non-Cash Items | ||||
Unrealized foreign exchange (gains) losses | (1,795) | (10,150) | 9,908 | (27,588) |
Realized foreign exchange (gains) losses on conversion of convertible promissory notes | 0 | (640) | 0 | 9,764 |
Amortization of prepaid expenses | 0 | 0 | 0 | 19,927 |
Common stock issued on conversion of promissory notes | 149,039 | 0 | (878,535) | 0 |
Accretion expense | 5,957 | 0 | 101,900 | 0 |
Change in valuation of derivative instruments | (466,622) | 0 | (511,758) | 0 |
Stock-based compensation | 0 | 0 | 0 | 60,000 |
Interest accrued on convertible promissory notes | 5,726 | 36,014 | 10,669 | 52,433 |
Gain/loss on loss of control of subsidiary | (100,704) | 0 | (100,669) | 0 |
Changes in non-cash working capital accounts | ||||
GST payable (recoverable) | 14,057 | (3,492) | 2,623 | (9,201) |
Accounts payable and accrued liabilities | 11,913 | 10,164 | 68,944 | (11,634) |
Cash flows provided by (used for) operating activities | (145,534) | (218,458) | (452,494) | (781,250) |
CASH PROVIDED BY (USED IN): FINANCING ACTIVITIES | ||||
Net proceeds received on issuance of promissory notes | 81,137 | 100,851 | 339,360 | 610,699 |
Advances from minority interest | 0 | 56 | 0 | 86 |
Promissory notes repaid | 0 | 0 | 0 | (33,596) |
Proceeds on issuance of Class B common shares | 0 | 0 | 100 | 100 |
Cash flows provided by (used for) financing activities | 81,137 | 100,907 | 339,460 | 577,289 |
Net (decrease) increase in cash | (64,397) | (117,551) | (113,034) | (203,961) |
Cash (bank indebtedness), beginning of the period | 64,519 | 407,400 | 113,156 | 493,810 |
Cash, end of the period | $ 122 | $ 289,849 | $ 122 | $ 289,849 |
NATURE AND CONTINUANCE OF OPERA
NATURE AND CONTINUANCE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2020 | |
Nature And Continuance Of Operations | |
NATURE AND CONTINUANCE OF OPERATIONS | Digatrade Financial Corp. (the “Company”) is governed by the Business Corporations Act (British Columbia). The head office, principal address, and records office of the Company are located at 1500 West Georgia Street, Suite 1300, Vancouver, British Columbia, Canada, V6C 2Z6. The Company's common shares are listed on the NASDAQ Over-the-Counter Board (“OTCB”) exchange under the symbol "DIGAF". In March 2015, the Company entered into an agreement with Mega Ideas Holdings Limited, dba ANX (“ANX”), a company incorporated and existing under the laws of Hong Kong. ANX owns a proprietary trading platform and provides operational support specializing in blockchain development services and exchange and transaction services for crypto-currencies. Effective October 17, 2018 the Company closed the online retail trading platform and shared liquidity order book with ANX International owing to low transaction volumes. The Company will continue to offer OTC trading for institutional customers and accredited traders while continuing to seek new opportunities within the blockchain and the financial technology sector. In February 2019, the Company entered into a Definitive Agreement with Securter Inc. (“Securter”), a private Canadian corporation that is developing a proprietary, patent-pending credit card payment platform to significantly increase the security of online credit card payment processing (Note 5). These unaudited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards on the basis that the Company is a going concern and will be able to meet its obligations and continue its operations for its next fiscal year. Several conditions as set out below cast uncertainties on the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the financial support from its creditors, shareholders, and related parties, its ability to obtain financing for its development projects, and upon the attainment of future profitable operations. The Company has not yet achieved profitable operations and has accumulated losses of $8,705,978 since inception and working capital deficiency of $565,779 as at September 30, 2020. Accordingly, the Company will need to raise additional funds through future issuance of securities or debt financing. Although the Company has raised funds in the past, there can be no assurance the Company will be able to raise sufficient funds in the future, in which case the Company may be unable to meet its obligations as they come due in the normal course of business. It is not possible to predict whether financing efforts will be successful or if the Company will attain a profitable level of operations. The current cash resources are not adequate to pay the Company’s accounts payable and to meet its minimum commitments at the date of these consolidated financial statements, including planned corporate and administrative expenses, and other project implementation costs, accordingly, there is significant doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not give effect to adjustments that would be necessary to the carrying amounts and classifications of assets and liabilities should the Company be unable to continue as a going concern. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies | |
SIGNIFICANT ACCOUNTING POLICIES | a) Basis of Presentation These consolidated financial statements have been prepared on a historical cost basis except for financial instruments classified as available-for-sale that have been measured at fair value. Cost is the fair value of the consideration given in exchange for net assets. b) Statement of Compliance These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements were approved and authorized for issue by the Board of Directors on November 18, 2020. c) Basis of Consolidation These consolidated financial statements include the accounts of the Company and its subsidiaries (collectively, the “Company”). Intercompany balances and transactions are eliminated in preparing the consolidated financial statements. The following companies have been consolidated within these consolidated financial statements: Entity Country of Incorporation Voting Control Functional Currency Digatrade Financial Corp. Canada Parent Company Canadian Dollar Digatrade Limited Canada 100% Canadian Dollar Digatrade (UK) Limited United Kingdom 100% Pounds Sterling Digatrade Limited USA 100% US Dollar Securter Systems Inc Canada 79% (Note 4) Canadian Dollar d) Foreign Currency These consolidated financial statements are presented in Canadian dollars, which is also the functional currency of the parent company. Each subsidiary determines its own functional currency (Note 2(c)) and items included in the financial statements of each subsidiary are measured using that functional currency. i. Transactions and Balances in Foreign Currencies Foreign currency transactions are translated into the functional currency of the respective entity using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year-end exchange rates are recognized in profit or loss. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and are not retranslated. Non-monetary items measured at fair value are translated using the exchange rate at the date when fair value was determined. ii. Foreign Operations On consolidation, the assets and liabilities of foreign operations are translated into Canadian dollars at the exchange rate prevailing at the reporting date and their revenues and expenses are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on the translation are recognized in other comprehensive income and accumulated in the currency translation reserve in equity. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in earnings and recognized as part of the gain or loss on disposal. e) Financing and Finder’s Fees Financing and finder’s fees relating to financial instruments with a term of one year or less are expensed in the period incurred. For financial instruments with a term of over one year, the fees are netted against the financial instruments and amortized over the term of the financial instruments. f) Share Capital The Company records proceeds from share issuances, net of commissions and issuance costs. Shares issued for other than cash consideration are valued at either: (i) the fair value of the asset acquired or the fair value of the liability extinguished at the measurement date under current market conditions, or (ii) the quoted price on the Over-the-Counter Bulletin Board in the United States based on the earliest of: the date the shares are issued, or the date the agreement to issue the shares is reached. g) Loss per Share Basic loss per share is calculated by dividing net loss by the weighted average number of common shares issued and outstanding during the reporting period. Diluted loss per share is the same as basic loss per share, as the issuance of shares on the exercise of stock options and share purchase warrants is anti-dilutive. h) Share-Based Payments The fair value method of accounting is used for share-based payment transactions. Under this method, the cost of stock options and other share-based payments is recorded based on the estimated fair value using the Black-Scholes option-pricing model at the grant date and charged to profit over the vesting period. The amount recognized as an expense is adjusted to reflect the number of equity instruments expected to vest. Upon the exercise of stock options and other share-based payments, consideration received on the exercise of these equity instruments is recorded as share capital and the related share-based payment reserve is transferred to share capital. The fair value of unexercised equity instruments are transferred from reserve to retained earnings upon expiry. i) Income Taxes Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity. i. Current Income Tax Current income tax assets and liabilities comprise those claims from, or obligations to, fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the consolidated financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. ii. Deferred Income Tax Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are always provided for in full. Deferred tax assets are recognized to the extent that it is probable that they will be able to be utilized against future taxable income. Deferred tax assets and liabilities are offset only when the Company has a right and intention to offset current tax assets and liabilities from the same taxation authority. Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively. j) Revenue Recognition Revenue is comprised of consulting fees and commissions earned on trades executed on the digital currency trading platform. Consulting fee income is recognized as the consulting services are provided. Commission is considered earned when a trade is completed by the Company’s customers. As the platform is not yet fully live, commissions and consulting fees earned have been accounted for as a recovery of development costs incurred. k) Financial Instruments Commencing January 1, 2018, the Company adopted IFRS 9. The adoption of this new accounting standard did not have material impact to the Company’s consolidated financial statements. IFRS 9 covers classification and measurement of financial assets. It replaces the multiple category and measurement models in IAS 39 Financial Instruments. The new standard contains three classifications for financial assets: measured at amortized cost, fair value through other comprehensive income (“ FVTOCI FVTPL Recognition and Measurement for debt instruments with a new mixed measurement model having only two categories: amortized cost and fair value through profit or loss. Requirements for financial liabilities are largely carried forward from the existing requirements in IAS 39 except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss are generally recorded in other comprehensive income. Following is the new accounting policy for financial instruments under IFRS 9: (i) Classification The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by- instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL. The following table shows the original classification under IAS 39 and the new classification under IFRS 9: Financial assets Classification under IAS 39 Classification under IFRS 9 Cash FVTPL Amortized cost Accounts receivable Notes and receivable Amortized cost Derivative assets FVTPL FVTPL Financial liabilities Classification under IAS 39 Classification under IFRS 9 Accounts payable and accrued liabilities Other financial liabilities Other financial liabilities Short-term loan Other financial liabilities Other financial liabilities Due to related parties Other financial liabilities Other financial liabilities Derivative liabilities FVTPL FVTPL There were no adjustments to the carrying amounts of financial instruments as a result of the change in classification from IAS39 to IFRS 9. (ii) Measurement Financial assets and liabilities at amortized cost Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment. Financial assets and liabilities at FVTPL Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the Consolidated Statements of Comprehensive Income. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the Consolidated Statements of Comprehensive Income in the period in which they arise. (ii) Impairment of financial assets The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to twelve month expected credit losses. The Company shall recognize in the Consolidated Statements of Comprehensive Income, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized. l) Non-Controlling Interest Non-controlling interest in the Company’s less than wholly owned subsidiary is classified as a separate component of equity. On initial recognition, non-controlling interest is measured at the fair value of the non-controlling entity’s contribution into the related subsidiary. Subsequent to the original transaction date, adjustments are made to the carrying amount of non-controlling interest for the non-controlling interest’s share of changes to the subsidiary’s equity. m) Accounting Standards Effective January 1, 2019 IFRS 16 – Leases IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease term is 12 months or less or the underlying asset has a low value. Lessor accounting remains largely unchanged from IAS 17 “Leases”, and the distinction between operating and finance leases is retained. The standard is effective for annual periods beginning on or after January 1, 2019. The Company has determined that this standard did not have any impact on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING JUDGEMEN
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Judgements Estimates And Assumptions | |
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS | In the application of the Company’s accounting policies which are described in Note 2, management is required to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. Significant judgments, estimates, and assumptions that have the most significant effect on the amounts recognized in the consolidated financial statements are described below. Deferred Tax Assets Deferred tax assets, including those arising from unutilized tax losses, require management to assess the likelihood that the Company will generate sufficient taxable earnings in future periods in order to utilize recognized deferred tax assets. Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realize the net deferred tax assets recorded at the reporting date could be impacted. Share-based Compensation The fair value of share-based compensation is subject to the limitations of the Black-Scholes option pricing model that incorporates market data and involves uncertainty in estimates used by management in the assumptions. Because the Black-Scholes option pricing model requires the input of highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect the fair value estimate. Impairment of Intangible Assets An impairment loss is recognized for the amount by which the asset’s or cash generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each asset or cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management makes assumptions about future operating results. In addition, when determining the applicable discount rate, estimation is involved in determining the appropriate adjustments to market risk and asset-specific risk factors. These assumptions relate to future events and circumstances. Actual results may vary and may cause significant adjustments to the Company’s assets within the next financial year. |
SECURTER SYSTEMS INC.
SECURTER SYSTEMS INC. | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure of detailed information about business combination [abstract] | |
SECURTER SYSTEMS INC. | On February 26, 2019, the Company entered into an agreement with Securter Inc., in terms of which a newly formed corporation, Securter Systems Inc. (“SSI”) would acquire all the assets and liabilities of Securter Inc. Upon incorporation, SSI issued 25,937,594 Class A common shares to the shareholders of Securter Inc. and 100,000 Class B common shares to the Company. Each Class B common share is non-participating and carries 1,000 votes. The Company shall have the right to purchase up to 30.3% Class A common shares of SSI at a price of US$0.23 per share for a total purchase consideration of up to US$3,000,000. During the nine months ended September 30, 2020, certain adjustments to the value of the assets transferred to SSI upon incorporation totalling $3,078 were recognized. During the period ended September 8, 2020, a further 173,913 class A common shares of Securter Systems Inc. were issued to the Company. As at September 8, 2020, SSI had 27,382,515 Class A Common Shares issued and outstanding whereby the Company held 773,563 of Class A Shares of SSI. On September 8, 2020, SSI completed a reorganization of its share capital. All the Class A Common Shares and Class B Common shares were canceled, and 19,767,000 Class A Common Shares were issued from Treasury, of which 3,817,000 were issued to the Company at a price of $0.07. As the Company ceased to hold voting control of SSI as a result of the reorganization, the results of SSI are consolidated with those of the Company up to the date of loss of voting control. The Company recognized a gain of $ 13,148 resulting from the reorganization and will account for its investment in SSI on the cost basis from the date of the reorganization. The Company held a voting and participating economic interest in SSI of 19.3% as at September 30, 2020. The following is the summarized statement of financial position of Securter Systems Inc. as at September 7, 2020 and December 31, 2019: September 7, 2020 December 31, 2019 $ $ Current Assets 26,413 79 Liabilities (2,183 ) - Total Current Net Assets 24,230 79 Non-Current Assets 29,840 26,761 Liabilities (26,600 ) (26,565 ) Total Non-Current Net Assets 3,240 196 Total Net Equity by Shareholders 27,470 275 The following is the summarized comprehensive loss of Securter Systems Inc. for the period from inception to the year ended December 31, 2019 and for the period ended September 7, 2020: $ Net Loss for the period from inception to the year ended December 31, 2019 158,844 Net Loss for the period ended September 8, 2020 185,455 343,299 |
TRADE AND OTHER PAYABLES
TRADE AND OTHER PAYABLES | 9 Months Ended |
Sep. 30, 2020 | |
Trade and other payables [abstract] | |
TRADE AND OTHER PAYABLES | As at September 30, 2020 and December 31, 2019, the Company had the following amounts due to creditors: September 30, 2020 December 31, 2019 $ $ Trade Payables 71,001 32,276 Accrued Liabilities 120,219 90,000 191,220 122,276 |
CONVERTIBLE PROMISSORY NOTES
CONVERTIBLE PROMISSORY NOTES | 9 Months Ended |
Sep. 30, 2020 | |
Convertible Promissory Notes | |
CONVERTIBLE PROMISSORY NOTES | Promissory Note Convertible Promissory Note - Liability Component Derivative Liability Deferred Derivative Loss (Increase) Total $ $ $ $ $ Balance December 31, 2017 241,517 1,340,978 - - 1,582,495 Proceeds net of transaction costs - 440,587 1,576,119 (1,221,660 ) 795,046 Repayments (31,762 ) - - - (31,762 ) Conversions - (1,718,320 ) (38,794 ) - (1757,114 ) Fair value change - - (803,986 ) 269,868 (534,118 ) Interest expense - 19,649 - - 19,649 Accretion expense - 7,039 - - 7,039 Foreign exchange (gain) loss - (64,392 ) - - (64,392 ) Balance December 31, 2018 209,755 25,541 733,339 (951,792 ) 16,843 Proceeds net of transaction costs - 13,328 1,517,944 (958,883 ) 572,389 Repayments (33,596 ) - - - (33,596 ) Conversions - (191,566 ) (1,545,331 ) 356,990 (1,379,907 ) Fair value change - - (335,758 ) 1,402,834 1,067,076 Interest expense - 58,470 - - 58,470 Accretion expense - 146,624 - - 146,624 Foreign exchange (gain) loss (10,461 ) (1,804 ) - - (12,265 ) Balance December 31, 2019 165,698 50,593 370,194 (150,851 ) 435,634 Proceeds net of transaction costs - 9,469 1,011,674 (682,119 ) 339,024 Conversions - (13,769 ) (886,485 ) (38,489 ) (861,765 ) Fair value change - (123,552 ) - 462,912 339,360 Interest expense - 19,485 - - 19,485 Accretion expense - 101,900 - - 101,900 Foreign exchange (gain) loss 3,418 2,167 - - 5,585 Balance September 30, 2020 169,116 46,293 495,383 (331,569 ) 210,107 The convertible bonds consisted of a liability component (“financial liability”) and an embedded derivative conversion feature (“derivative liability”) and contra asset account of deferred derivative loss due to significant amount of fair value of the derivative liability at inception in excess of the net proceeds. The net proceeds of these convertible bonds were first allocated to the fair value of the derivative liability. As the fair value of the derivative liability at inception exceeds the net proceeds, the indication of significant loss at inception exists. As a result, nominal values of US$1,000 per newly issued convertible bonds were allocated to the financial liability. The remaining balance was set up as deferred derivative loss as a contra asset account. The deferred derivative losses were then amortized to profit and loss over the life of the convertible bonds. Subsequent changes in fair value of the conversion feature were recognized at FVTPL (Note 2(k)). a) During the nine months ended September 30, 2020, the Company issued certain convertible promissory notes. At inception, the net proceeds of $339,024 (US$215,910 or gross proceeds of US$255,500 net of US$14,090 cash discount and transaction costs) were allocated to the derivative liability at $682,119 related to the conversion feature which was determined using the Black-Scholes option pricing model. The remaining balance of the net proceeds were then allocated to nominal values of $9,469 (U$1,000 per each convertible bond issued in 2020) and deferred derivative loss, a contra asset account of $1,011,674. b) During the nine months ended September 30, 2020, the Company recognized through profit and loss the fair value change on the derivative liability and the amortization of the deferred derivative loss of $339,360 (December 31, 2019 - $1,067,076). As at September 30, 2020, the fair value of the derivative liability related to the conversion feature of $331,569 (December 31, 2019 - $370,194) was determined using the Black-Scholes option pricing model based on the following assumptions: share price ranging from US$0.0007 to US$0.0008; an annual risk-free rate of return of 0.23%; stock price volatility ranging from 164.7% to 252.8%; dividend yield of 0%; and expected life of conversion features ranging from 0.07 to 0.73 years. c) During the nine months ended September 30, 2020, promissory notes with a face value of US$254,203 were converted into 690,210,266 common shares of the Company with a fair value of $878,535. (2019 - promissory notes with a face value of US$591,316 were converted into 356,153,022 common shares of the Company with a fair value of $1,379,907). |
SHARE CAPITAL
SHARE CAPITAL | 9 Months Ended |
Sep. 30, 2020 | |
Share Capital Abstract | |
SHARE CAPITAL | a) Authorized Capital Unlimited number of common shares, participating, voting (voting right of 1 vote per share), with no par value. 2,100,000 Class “B” common shares, non-participating, voting (voting right of 1,000 votes per share), with no par value. b) Issued and Outstanding Common Shares i. On October 10, 2018, the Company passed a resolution authorizing the creation of a new 100,000 Class “B” common shares with the following characteristics: non-participating, no par value, and with the voting right of 1,000 votes per share. On the same day, the Company issued 100,000 Class “B” common shares at $0.001 per share for total proceeds of $100 to a shareholder who is also a Director and Officer of the Company On January 2, 2019, the Company passed a resolution to increase the authorized number of Class “B” common shares from 100,000 to 1,100,000. On the same day, the Company issued 1,000,000 Class “B” common shares at $0.0001 per share for total proceeds of $100 to a shareholder who is also a Director and Officer of the Company. On April 14, 2020, the Company passed a resolution to increase the authorized number of Class “B” common shares from 1,100,000 to 2,100,000. On the same day, the Company issued 1,000,000 Class “B” common shares at $0.0001 per share for total proceeds of $100 to a shareholder who is also a Director and Officer of the Company. ii. During the nine months ended September 30, 2019, the Company converted promissory notes with a face value of US$414,009 into 75,839,973 common shares of the Company. $458,757 were allocated to the share capital related to these promissory note conversions iii. During the nine months ended September 30, 2020, the Company converted promissory notes with a face value of US$254,203 into 690,210,266 common shares of the Company. $878,535 were allocated to the share capital related to these promissory note conversions c) Share-Based Payments During the nine months ended September 30, 2019, the Company granted 10 million share purchase options at an exercise price of U$0.006 without any specified expiration date. The Company estimated the share-based compensation at $60,000 using Black-Scholes with the assumptions of risk-free rate of 1.68%, volatility of 268% and option life of 7 years. d) Share Purchase Warrants The Company had no share purchase warrants outstanding for the years ended December 31, 2019, 2018, and 2017. e) Share Options On February 14, 2019, the Company granted 5,750,000 stock options to directors of the Company and 4,250,000 stock options to consultants. The options have an exercise price of US$0.006 and expire on February 14, 2027. The continuity of share options for the nine months ended September 30, 2020 is summarized below: Expiry Date Exercise Price January 1, 2020 Granted Exercised Cancelled September 30, 2020 February 14, 2027 $ US0.006 10,000,000 - - - 10,000,000 The Company did not have any share options in issue prior to January 1, 2019. f) Escrow Shares On September 19, 2014, the Company entered into an escrow agreement with a creditor. The Company agreed to pay the creditor $2,500 upon signing of the agreement and to issue 1,500 shares to be held in escrow. The Company was obligated to pay the creditor a further $7,334 (US$6,687) forty-five days after the Company’s stock becomes DWAC- eligible. On December 22, 2016, the Company paid $5,374 (US$4,000) and the creditor agreed to release these shares from escrow. As of September 30, 2020, the 1,500 shares were held in trust by the corporate lawyer and have not been returned to the Company’s Treasury. |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Commitments | |
COMMITMENTS | a) Crypto Currency Deposit and Exchange Services On June 30, 2015, the Company entered into an agreement with Mega Idea Holdings Limited, dba ANX (“ANX”), to provide Crypto-currency deposit and exchange services. Pursuant to the terms of the agreement, the Company is required to pay monthly maintenance fees of US$10,000 for maintenance and support of the exchange platform. The agreement with ANX was for a term of three years. On April 7, 2017 (the “effective date”), the Company entered into a revised agreement with ANX. Pursuant to the terms of the revised agreement, the Company was required to pay monthly maintenance fees of US$1,500 for the first nine months commencing the first month after the effective date, and US$5,000 thereafter. The revised agreement with ANX was for a term of two years. On October 15, 2018, the Company and ANX agreed to terminate the Crypto Currency Deposit and Exchange Services Agreement. The Company paid ANX $32,770 (US$25,000) in full settlement of all outstanding liabilities and realized a gain of $7,158 on the termination of the agreement b) Consulting Contracts i. On June 1, 2018 the Company entered into a consulting agreement for the provision of strategic business advisory services for a period of one year. The Company agreed to issue a convertible promissory note in the amount of US$50,000 and pay the consultant US$10,000 per month. ii. On October 22, 2018, the Company entered into a consulting contract with a Director for the provision of strategic business advisory services for a period of four months. The Company agreed to pay the Director $2,500 per month. c) Finder Fee Agreement On June 24, 2020, the Company entered into a Finder’s Fee Agreement with an unrelated third party. The Company agreed to pay a finder’s fee in the amount of 2% of the gross amount of any debt or equity investment from a party introduced by the third party. |
RELATED PARTIES TRANSACTIONS
RELATED PARTIES TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
Related party transactions [abstract] | |
RELATED PARTIES TRANSACTIONS | Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed. Details of transactions between the Company and other related parties, in addition to those transactions disclosed elsewhere in these consolidated financial statements, are described below. All related party transactions were in the ordinary course of business and were measured at their exchange amounts. b) Compensation of Key Management Personnel The Company incurred management fees for services provided by key management personnel for the three and nine months ended September 30, 2020 and 2019 as described below. Three Months ended September 30, Nine months Ended September 30, 2020 2019 2020 2019 $ $ $ $ Management Fees 44,656 62,968 150,222 164,478 Stock-based Compensation - - - 30,000 44,656 62,968 150,222 194,478 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure of non-adjusting events after reporting period [abstract] | |
SUBSEQUENT EVENTS | 2020 COVID-19 Pandemic The outbreak of the COVID-19 virus and the worldwide pandemic has impacted the Company’s plans and activities. The Company may face disruption to operations, supply chain delays, travel and trade restrictions, and impacts on economic activity in affected countries or regions can be expected and are difficult to quantify. Regional disease outbreaks and pandemics represent a serious threat to hiring and maintaining a skilled workforce and could be a major health-care challenge for the Company. There can be no assurance that the Company’s personnel will not be impacted by these regional disease outbreaks and pandemics and ultimately that the Company would see its workforce productivity reduced or incur increased medical costs and insurance premiums as a result of these health risks. In addition, the pandemic has created a dramatic slowdown in the global economy. The duration of the outbreak and the resulting travel restrictions, social distancing recommendations, government response actions, business disruptions and business closures may have an impact on the Company’s operations and access to capital. There can be no assurance that the Company will not be impacted by adverse consequences that may be brought about by the pandemic’s impact on global industrial and financial markets which may reduce prices in general, share prices and financial liquidity thereby severely limiting access to essential capital. |
FINANCIAL RISK MANAGEMENT OBJEC
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Financial Risk Management Objectives And Policies | |
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES | The Company is exposed to various risks in relation to financial instruments. The Company’s financial assets and liabilities by category are summarized in Note 2(k). The Company’s risk management is coordinated in close co-operation with the board of directors and focuses on actively securing the Company’s short to medium-term cash flows and raising financing for the Company’s capital expenditure program. The Company does not actively engage in the trading of financial assets for speculative purposes. The most significant financial risks to which the Company is exposed are as follows: a) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company is dependent upon the availability of credit from its suppliers and its ability to generate sufficient funds from equity and debt financing to meet current and future obligations. The Company has a working capital deficiency of $565,779 as at September 30, 2020. There can be no assurance that such debt or equity financing will be available to the Company. b) 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 not exposed to significant interest rate risk as the interest rates associated with the convertible promissory notes are fixed. c) Credit Risk Credit risk is the risk of loss associated with a counter party’s inability to fulfill its payment obligations. As the Company is in the development stage and has not yet commenced commercial production or sales, it is not exposed to significant credit risk. d) Foreign Exchange Risk Foreign exchange 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 exposed to foreign exchange risk to the extent it incurs currency exchange platform service and development expenditures and operating costs in foreign currencies including the U.S. Dollar. The Company does not hedge its exposure to fluctuations in the related foreign exchange rates. e) Fair Values The Company uses the following hierarchy for determining fair value measurements: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data. The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement. The Company’s financial instruments were measured at fair value using Level 1 valuation technique during the nine months ended September 30, 2020 and during the year ended December 31, 2019. The carrying values of the Company’s financial assets and liabilities approximate their fair values. |
CAPITAL MANAGEMENT
CAPITAL MANAGEMENT | 9 Months Ended |
Sep. 30, 2020 | |
Capital Management | |
CAPITAL MANAGEMENT | The Company’s objective for managing its capital structure is to safeguard the Company’s ability to continue as a going concern and to ensure it has the financial capacity, liquidity and flexibility to fund its ongoing operations and capital expenditures. The Company manages its share capital as capital, which as of September 30, 2020, amounted to $8,338,793. At this time, the Company’s access to the debt market is limited and it relies on equity issuances and the support of shareholders to fund the development of its trading platform. The Company monitors capital to maintain a sufficient working capital position to fund annualized administrative expenses and capital investments. As at September 30, 2020, the Company had a working capital deficiency of $565,779. The Company will issue shares and may from time to time adjust its capital spending to maintain or adjust the capital structure. There can be no assurance that the Company will be able to obtain debt or equity capital in the case of operating cash deficits. The Company’s share capital is not subject to external restrictions. The Company has not paid or declared any dividends since the date of incorporation, nor are any contemplated in the foreseeable future. There were no changes in the Company’s approach to capital management during the three months ended September 30, 2020. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies | |
Basis of Presentation | These consolidated financial statements have been prepared on a historical cost basis except for financial instruments classified as available-for-sale that have been measured at fair value. Cost is the fair value of the consideration given in exchange for net assets. |
Statement of Compliance | These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements were approved and authorized for issue by the Board of Directors on November 18, 2020. |
Basis of Consolidation | These consolidated financial statements include the accounts of the Company and its subsidiaries (collectively, the “Company”). Intercompany balances and transactions are eliminated in preparing the consolidated financial statements. The following companies have been consolidated within these consolidated financial statements: Entity Country of Incorporation Voting Control Functional Currency Digatrade Financial Corp. Canada Parent Company Canadian Dollar Digatrade Limited Canada 100% Canadian Dollar Digatrade (UK) Limited United Kingdom 100% Pounds Sterling Digatrade Limited USA 100% US Dollar Securter Systems Inc Canada 79% (Note 4) Canadian Dollar |
Foreign Currency | These consolidated financial statements are presented in Canadian dollars, which is also the functional currency of the parent company. Each subsidiary determines its own functional currency (Note 2(c)) and items included in the financial statements of each subsidiary are measured using that functional currency. i. Transactions and Balances in Foreign Currencies Foreign currency transactions are translated into the functional currency of the respective entity using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year-end exchange rates are recognized in profit or loss. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and are not retranslated. Non-monetary items measured at fair value are translated using the exchange rate at the date when fair value was determined. ii. Foreign Operations On consolidation, the assets and liabilities of foreign operations are translated into Canadian dollars at the exchange rate prevailing at the reporting date and their revenues and expenses are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on the translation are recognized in other comprehensive income and accumulated in the currency translation reserve in equity. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in earnings and recognized as part of the gain or loss on disposal. |
Financing and Finder's Fees | Financing and finder’s fees relating to financial instruments with a term of one year or less are expensed in the period incurred. For financial instruments with a term of over one year, the fees are netted against the financial instruments and amortized over the term of the financial instruments. |
Share Capital | The Company records proceeds from share issuances, net of commissions and issuance costs. Shares issued for other than cash consideration are valued at either: (i) the fair value of the asset acquired or the fair value of the liability extinguished at the measurement date under current market conditions, or (ii) the quoted price on the Over-the-Counter Bulletin Board in the United States based on the earliest of: the date the shares are issued, or the date the agreement to issue the shares is reached. |
Loss per Share | Basic loss per share is calculated by dividing net loss by the weighted average number of common shares issued and outstanding during the reporting period. Diluted loss per share is the same as basic loss per share, as the issuance of shares on the exercise of stock options and share purchase warrants is anti-dilutive. |
Share-Based Payments | The fair value method of accounting is used for share-based payment transactions. Under this method, the cost of stock options and other share-based payments is recorded based on the estimated fair value using the Black-Scholes option-pricing model at the grant date and charged to profit over the vesting period. The amount recognized as an expense is adjusted to reflect the number of equity instruments expected to vest. Upon the exercise of stock options and other share-based payments, consideration received on the exercise of these equity instruments is recorded as share capital and the related share-based payment reserve is transferred to share capital. The fair value of unexercised equity instruments are transferred from reserve to retained earnings upon expiry. |
Income Taxes | Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity. i. Current Income Tax Current income tax assets and liabilities comprise those claims from, or obligations to, fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the consolidated financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. ii. Deferred Income Tax Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are always provided for in full. Deferred tax assets are recognized to the extent that it is probable that they will be able to be utilized against future taxable income. Deferred tax assets and liabilities are offset only when the Company has a right and intention to offset current tax assets and liabilities from the same taxation authority. Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively. |
Revenue Recognition | Revenue is comprised of consulting fees and commissions earned on trades executed on the digital currency trading platform. Consulting fee income is recognized as the consulting services are provided. Commission is considered earned when a trade is completed by the Company’s customers. As the platform is not yet fully live, commissions and consulting fees earned have been accounted for as a recovery of development costs incurred. |
Financial Instruments | Commencing January 1, 2018, the Company adopted IFRS 9. The adoption of this new accounting standard did not have material impact to the Company’s consolidated financial statements. IFRS 9 covers classification and measurement of financial assets. It replaces the multiple category and measurement models in IAS 39 Financial Instruments. The new standard contains three classifications for financial assets: measured at amortized cost, fair value through other comprehensive income (“ FVTOCI FVTPL Recognition and Measurement for debt instruments with a new mixed measurement model having only two categories: amortized cost and fair value through profit or loss. Requirements for financial liabilities are largely carried forward from the existing requirements in IAS 39 except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss are generally recorded in other comprehensive income. Following is the new accounting policy for financial instruments under IFRS 9: (i) Classification The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by- instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL. The following table shows the original classification under IAS 39 and the new classification under IFRS 9: Financial assets Classification under IAS 39 Classification under IFRS 9 Cash FVTPL Amortized cost Accounts receivable Notes and receivable Amortized cost Derivative assets FVTPL FVTPL Financial liabilities Classification under IAS 39 Classification under IFRS 9 Accounts payable and accrued liabilities Other financial liabilities Other financial liabilities Short-term loan Other financial liabilities Other financial liabilities Due to related parties Other financial liabilities Other financial liabilities Derivative liabilities FVTPL FVTPL There were no adjustments to the carrying amounts of financial instruments as a result of the change in classification from IAS39 to IFRS 9. (ii) Measurement Financial assets and liabilities at amortized cost Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment. Financial assets and liabilities at FVTPL Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the Consolidated Statements of Comprehensive Income. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the Consolidated Statements of Comprehensive Income in the period in which they arise. (ii) Impairment of financial assets The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to twelve month expected credit losses. The Company shall recognize in the Consolidated Statements of Comprehensive Income, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized. |
Non-Controlling Interest | Non-controlling interest in the Company’s less than wholly owned subsidiary is classified as a separate component of equity. On initial recognition, non-controlling interest is measured at the fair value of the non-controlling entity’s contribution into the related subsidiary. Subsequent to the original transaction date, adjustments are made to the carrying amount of non-controlling interest for the non-controlling interest’s share of changes to the subsidiary’s equity. |
Accounting Standards Effective January 1, 2019 | IFRS 16 – Leases IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease term is 12 months or less or the underlying asset has a low value. Lessor accounting remains largely unchanged from IAS 17 “Leases”, and the distinction between operating and finance leases is retained. The standard is effective for annual periods beginning on or after January 1, 2019. The Company has determined that this standard did not have any impact on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies | |
Subsidiaries | Entity Country of Incorporation Voting Control Functional Currency Digatrade Financial Corp. Canada Parent Company Canadian Dollar Digatrade Limited Canada 100% Canadian Dollar Digatrade (UK) Limited United Kingdom 100% Pounds Sterling Digatrade Limited USA 100% US Dollar Securter Systems Inc Canada 79% (Note 4) Canadian Dollar |
New classifications under IFRS 9 | Financial assets Classification under IAS 39 Classification under IFRS 9 Cash FVTPL Amortized cost Accounts receivable Notes and receivable Amortized cost Derivative assets FVTPL FVTPL Financial liabilities Classification under IAS 39 Classification under IFRS 9 Accounts payable and accrued liabilities Other financial liabilities Other financial liabilities Short-term loan Other financial liabilities Other financial liabilities Due to related parties Other financial liabilities Other financial liabilities Derivative liabilities FVTPL FVTPL |
SECURTER SYSTEMS INC. (Tables)
SECURTER SYSTEMS INC. (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure of detailed information about business combination [abstract] | |
Summarized financial statements of Securter Systems Inc. | The following is the summarized statement of financial position of Securter Systems Inc. as at September 7, 2020 and December 31, 2019: September 7, 2020 December 31, 2019 $ $ Current Assets 26,413 79 Liabilities (2,183 ) - Total Current Net Assets 24,230 79 Non-Current Assets 29,840 26,761 Liabilities (26,600 ) (26,565 ) Total Non-Current Net Assets 3,240 196 Total Net Equity by Shareholders 27,470 275 The following is the summarized comprehensive loss of Securter Systems Inc. for the period from inception to the year ended December 31, 2019 and for the period ended September 7, 2020: $ Net Loss for the period from inception to the year ended December 31, 2019 158,844 Net Loss for the period ended September 8, 2020 185,455 343,299 |
TRADE AND OTHER PAYABLES (Table
TRADE AND OTHER PAYABLES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Trade and other payables [abstract] | |
Trade and other paybles | September 30, 2020 December 31, 2019 $ $ Trade Payables 71,001 32,276 Accrued Liabilities 120,219 90,000 191,220 122,276 |
CONVERTIBLE PROMISSORY NOTES (T
CONVERTIBLE PROMISSORY NOTES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Convertible Promissory Notes | |
Convertible promissory notes | Promissory Note Convertible Promissory Note - Liability Component Derivative Liability Deferred Derivative Loss (Increase) Total $ $ $ $ $ Balance December 31, 2017 241,517 1,340,978 - - 1,582,495 Proceeds net of transaction costs - 440,587 1,576,119 (1,221,660 ) 795,046 Repayments (31,762 ) - - - (31,762 ) Conversions - (1,718,320 ) (38,794 ) - (1757,114 ) Fair value change - - (803,986 ) 269,868 (534,118 ) Interest expense - 19,649 - - 19,649 Accretion expense - 7,039 - - 7,039 Foreign exchange (gain) loss - (64,392 ) - - (64,392 ) Balance December 31, 2018 209,755 25,541 733,339 (951,792 ) 16,843 Proceeds net of transaction costs - 13,328 1,517,944 (958,883 ) 572,389 Repayments (33,596 ) - - - (33,596 ) Conversions - (191,566 ) (1,545,331 ) 356,990 (1,379,907 ) Fair value change - - (335,758 ) 1,402,834 1,067,076 Interest expense - 58,470 - - 58,470 Accretion expense - 146,624 - - 146,624 Foreign exchange (gain) loss (10,461 ) (1,804 ) - - (12,265 ) Balance December 31, 2019 165,698 50,593 370,194 (150,851 ) 435,634 Proceeds net of transaction costs - 9,469 1,011,674 (682,119 ) 339,024 Conversions - (13,769 ) (886,485 ) (38,489 ) (861,765 ) Fair value change - (123,552 ) - 462,912 339,360 Interest expense - 19,485 - - 19,485 Accretion expense - 101,900 - - 101,900 Foreign exchange (gain) loss 3,418 2,167 - - 5,585 Balance September 30, 2020 169,116 46,293 495,383 (331,569 ) 210,107 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share Capital Abstract | |
Stock option activity | Expiry Date Exercise Price January 1, 2020 Granted Exercised Cancelled September 30, 2020 February 14, 2027 $ US0.006 10,000,000 - - - 10,000,000 |
RELATED PARTIES TRANSACTIONS (T
RELATED PARTIES TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related party transactions [abstract] | |
Management fees and share-based payments | Three Months ended September 30, Nine months Ended September 30, 2020 2019 2020 2019 $ $ $ $ Management Fees 44,656 62,968 150,222 164,478 Stock-based Compensation - - - 30,000 44,656 62,968 150,222 194,478 |
NATURE AND CONTINUANCE OF OPE_2
NATURE AND CONTINUANCE OF OPERATIONS (Details Narrative) - CAD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Nature And Continuance Of Operations | ||
Accumulated losses | $ (8,705,978) | $ (7,793,332) |
Working capital deficit | $ (565,779) |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Parent Company | |
Disclosure of subsidiaries [line items] | |
Entity | Digatrade Financial Corp. |
Country of incorporation | Canada |
Holding interest | 100.00% |
Functional currency | Canadian Dollar |
Subsidiary 1 | |
Disclosure of subsidiaries [line items] | |
Entity | Digatrade Limited |
Country of incorporation | Canada |
Holding interest | 100.00% |
Functional currency | Canadian Dollar |
Subsidiary 2 | |
Disclosure of subsidiaries [line items] | |
Entity | Digatrade (UK) Limited |
Country of incorporation | United Kingdom |
Holding interest | 100.00% |
Functional currency | Pounds Sterling |
Subsidiary 3 | |
Disclosure of subsidiaries [line items] | |
Entity | Digatrade Limited |
Country of incorporation | USA |
Holding interest | 100.00% |
Functional currency | US Dollar |
Subsidiary 4 | |
Disclosure of subsidiaries [line items] | |
Entity | Securter Systems Inc. |
Country of incorporation | Canada |
Holding interest | 79.00% |
Functional currency | Canadian Dollar |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 9 Months Ended |
Sep. 30, 2020 | |
Accounts Payable and Accrued Liabilities | |
DisclosureOfChangesInClassificationsLineItems [Line Items] | |
Classification under IAS 39 | Other financial liabilities |
Classification under IFRS 9 | Other financial liabilities |
Short-Term Loan | |
DisclosureOfChangesInClassificationsLineItems [Line Items] | |
Classification under IAS 39 | Other financial liabilities |
Classification under IFRS 9 | Other financial liabilities |
Due to Related Parties | |
DisclosureOfChangesInClassificationsLineItems [Line Items] | |
Classification under IAS 39 | Other financial liabilities |
Classification under IFRS 9 | Other financial liabilities |
Derivative Liabilities | |
DisclosureOfChangesInClassificationsLineItems [Line Items] | |
Classification under IAS 39 | FVTPL |
Classification under IFRS 9 | FVTPL |
Cash | |
DisclosureOfChangesInClassificationsLineItems [Line Items] | |
Classification under IAS 39 | FVTPL |
Classification under IFRS 9 | Amortized cost |
Accounts Receivable | |
DisclosureOfChangesInClassificationsLineItems [Line Items] | |
Classification under IAS 39 | Notes and receivable |
Classification under IFRS 9 | Amortized cost |
Derivative Assets | |
DisclosureOfChangesInClassificationsLineItems [Line Items] | |
Classification under IAS 39 | FVTPL |
Classification under IFRS 9 | FVTPL |
SECURTER SYSTEMS INC. (Details)
SECURTER SYSTEMS INC. (Details) - CAD ($) | Sep. 07, 2020 | Dec. 31, 2019 |
Disclosure of detailed information about business combination [abstract] | ||
Current assets | $ 26,413 | $ 79 |
Current liabilities | (2,183) | 0 |
Total current net assets | 24,230 | 79 |
Non-current assets | 29,840 | 26,761 |
Non-current liabilities | (26,600) | (26,565) |
Total non-current net assets | 3,240 | 196 |
Total net equity by shareholders | $ 27,470 | $ 275 |
SECURTER SYSTEMS INC. (Details
SECURTER SYSTEMS INC. (Details 1) - CAD ($) | 8 Months Ended | 12 Months Ended |
Sep. 07, 2020 | Dec. 31, 2019 | |
Disclosure of detailed information about business combination [abstract] | ||
Net loss | $ 185,455 | $ 158,844 |
TRADE AND OTHER PAYABLES (Detai
TRADE AND OTHER PAYABLES (Details) - CAD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Trade and other payables [abstract] | ||
Trade payables | $ 71,001 | $ 32,276 |
Accrued liabilities | 120,219 | 90,000 |
Trade and other payables | $ 191,220 | $ 122,276 |
CONVERTIBLE PROMISSORY NOTES (D
CONVERTIBLE PROMISSORY NOTES (Details) - CAD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
DisclosureOfConvertiblePromissoryNotesLineItems [Line Items] | ||||||
Convertible promissory notes, beginning | $ 435,634 | $ 16,843 | $ 16,843 | $ 1,582,495 | ||
Proceeds net of transaction costs | 339,024 | 572,389 | 795,046 | |||
Repayments | 0 | (33,596) | (31,762) | |||
Conversions | (861,765) | (1,379,907) | (1,757,114) | |||
Fair value change | $ (328,183) | $ 0 | 356,128 | 0 | 1,067,076 | (534,118) |
Interest expense | 19,485 | 58,470 | 19,649 | |||
Accretion expense | 5,957 | $ 0 | 101,900 | 0 | 146,624 | 7,039 |
Foreign exchange (gain) loss | 5,585 | (12,265) | (64,392) | |||
Convertible promissory notes, ending | 210,107 | 210,107 | 435,634 | 16,843 | ||
Promissory Note | ||||||
DisclosureOfConvertiblePromissoryNotesLineItems [Line Items] | ||||||
Convertible promissory notes, beginning | 165,698 | 209,755 | 209,755 | 241,517 | ||
Proceeds net of transaction costs | 0 | 0 | 0 | |||
Repayments | 0 | (33,596) | (31,762) | |||
Conversions | 0 | 0 | 0 | |||
Fair value change | 0 | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | |||
Accretion expense | 0 | 0 | 0 | |||
Foreign exchange (gain) loss | 3,418 | (10,461) | 0 | |||
Convertible promissory notes, ending | 169,116 | 169,116 | 165,698 | 209,755 | ||
Convertible Promissory Note - Liability Component | ||||||
DisclosureOfConvertiblePromissoryNotesLineItems [Line Items] | ||||||
Convertible promissory notes, beginning | 50,593 | 25,541 | 25,541 | 1,340,978 | ||
Proceeds net of transaction costs | 9,469 | 13,328 | 440,587 | |||
Repayments | 0 | 0 | 0 | |||
Conversions | (13,769) | (191,566) | (1,718,320) | |||
Fair value change | (123,552) | 0 | 0 | |||
Interest expense | 19,485 | 58,470 | 19,649 | |||
Accretion expense | 101,900 | 146,624 | 7,039 | |||
Foreign exchange (gain) loss | 2,167 | (1,804) | (64,392) | |||
Convertible promissory notes, ending | 46,293 | 46,293 | 50,593 | 25,541 | ||
Derivative Liability | ||||||
DisclosureOfConvertiblePromissoryNotesLineItems [Line Items] | ||||||
Convertible promissory notes, beginning | 370,194 | 733,339 | 733,339 | 0 | ||
Proceeds net of transaction costs | 1,011,674 | 1,517,944 | 1,576,119 | |||
Repayments | 0 | 0 | 0 | |||
Conversions | (886,485) | (1,545,331) | (38,794) | |||
Fair value change | 0 | (335,758) | (803,986) | |||
Interest expense | 0 | 0 | 0 | |||
Accretion expense | 0 | 0 | 0 | |||
Foreign exchange (gain) loss | 0 | 0 | 0 | |||
Convertible promissory notes, ending | 495,383 | 495,383 | 370,194 | 733,339 | ||
Deferred Derivative Loss (Increase) | ||||||
DisclosureOfConvertiblePromissoryNotesLineItems [Line Items] | ||||||
Convertible promissory notes, beginning | (150,851) | $ (951,792) | (951,792) | 0 | ||
Proceeds net of transaction costs | (682,119) | (958,883) | (1,221,660) | |||
Repayments | 0 | 0 | 0 | |||
Conversions | (38,489) | 356,990 | 0 | |||
Fair value change | 462,912 | 1,402,834 | 269,868 | |||
Interest expense | 0 | 0 | 0 | |||
Accretion expense | 0 | 0 | 0 | |||
Foreign exchange (gain) loss | 0 | 0 | 0 | |||
Convertible promissory notes, ending | $ (331,569) | $ (331,569) | $ (150,851) | $ (951,792) |
SHARE CAPITAL (Details)
SHARE CAPITAL (Details) | 9 Months Ended |
Sep. 30, 2020shares$ / shares | |
Share Capital Abstract | |
Exercise price | $ / shares | $ .006 |
Stock options outstanding, beginning | 10,000,000 |
Granted | 0 |
Exercised | 0 |
Cancelled | 0 |
Stock options outstanding, ending | 10,000,000 |
RELATED PARTIES TRANSACTIONS (D
RELATED PARTIES TRANSACTIONS (Details) - CAD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Related party transactions [abstract] | ||||
Management fees | $ 44,656 | $ 62,968 | $ 150,222 | $ 164,478 |
Stock-based compensation | 0 | 0 | 0 | 30,000 |
Total | $ 44,656 | $ 62,968 | $ 150,222 | $ 194,478 |
CAPITAL MANAGEMENT (Details Nar
CAPITAL MANAGEMENT (Details Narrative) - CAD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Capital Management | ||
Share capital | $ 8,338,793 | $ 7,460,158 |
Working capital deficit | $ (565,779) |