Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2020 | |
Document And Entity Information | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Quarterly Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --09-30 | |
Entity File Number | 000-56090 | |
Entity Registrant Name | Pharmagreen Biotech Inc. | |
Entity Central Index Key | 0001435181 | |
Entity Tax Identification Number | 98-0491567 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 2987 Blackbear Court | |
Entity Address, Address Line Two | Coquitlam | |
Entity Address, State or Province | BC | |
Entity Address, Postal Zip Code | V3E 3A2 | |
City Area Code | 702 | |
Local Phone Number | 803-9404 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Public Float | $ 0 | |
Entity Common Stock, Shares Outstanding | 245,611,669 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Current assets | ||
Cash | $ 12,196 | $ 62,682 |
Amounts receivable | 295 | 10,639 |
Prepaid expenses and deposits | 253,754 | 115,856 |
Total current assets | 266,245 | 189,177 |
Property, plant, and equipment | 441,095 | |
Total assets | 266,245 | 630,272 |
Current liabilities | ||
Accounts payable and accrued liabilities | 539,663 | 855,766 |
Advance from Alliance Growers Corp. | 56,303 | 56,634 |
Due to related parties | 508,874 | 475,666 |
Loans payable | 40,000 | |
Convertible notes - current portion, net of unamortized discount of $182,012 and $2,895, respectively | 641,077 | 75,105 |
Derivative liability | 1,380,957 | |
Total current liabilities | 3,166,874 | 1,463,171 |
Loans payable | 30,028 | |
Convertible notes, net of unamortized discount of $23,619 and $27,321, respectively | 3,448 | 1,599 |
Total liabilities | 3,200,350 | 1,464,770 |
Stockholders' deficit | ||
Common Authorized: 500,000,000 shares, $0.001 par value; 95,806,289 and 75,646,835 shares issued and outstanding, respectively | 95,806 | 75,647 |
Common stock issuable | 180,000 | |
Additional paid-in capital | 3,967,261 | 3,772,781 |
Accumulated other comprehensive income (loss) | 36,679 | 47,824 |
Deficit | (7,167,346) | (4,729,476) |
Total Pharmagreen Biotech Inc. stockholders' deficit | (2,887,600) | (833,224) |
Non-controlling interest | (46,505) | (1,274) |
Total stockholders' deficit | (2,934,105) | (834,498) |
Total liabilities and stockholders' deficit | $ 266,245 | $ 630,272 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Convertible Notes, Unamortized Discount, Current | $ 182,012 | $ 2,895 |
Convertible Notes, Unamortized Discount, Noncurrent | $ 23,619 | $ 27,321 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares Issued | 95,806,289 | 75,646,835 |
Common Stock, Shares Outstanding | 95,806,289 | 75,646,835 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Expenses | ||
Consulting fees | $ 224,691 | $ 442,529 |
Foreign exchange loss | 8 | (6,144) |
General and administrative | 63,711 | 99,081 |
License application fees | 893 | 3,758 |
Professional fees | 179,015 | 81,090 |
Research and development (recovery) | 3,956 | |
Salaries and wages | 17,438 | 17,908 |
Total expenses | 485,756 | 642,178 |
Net loss before other income (expense) | (485,756) | (642,178) |
Other income (expense) | ||
Accretion of discount on convertible notes | (328,333) | (1,296) |
Interest expense | (298,942) | (3,783) |
Finance costs | (45,000) | (121,554) |
Impairment of property and equipment | (434,601) | |
Loss on change in fair value of derivative liabilities | (1,149,450) | |
Loss on settlement on convertible notes | (33,087) | |
Write-off of accounts payable | 292,557 | |
Total other income (expense) | (1,996,856) | (126,633) |
Net loss before income taxes | (2,482,612) | (768,811) |
Income tax recovery | ||
Net loss | (2,482,612) | (768,811) |
Less: net loss attributable to non-controlling interest | 44,742 | 1,274 |
Net loss attributable to Pharmagreen Biotech Inc. | (2,437,870) | (767,537) |
Comprehensive income (loss) | ||
Foreign currency translation gain (loss) | (11,634) | 9,102 |
Comprehensive loss | $ (2,449,504) | $ (758,435) |
Basic and diluted loss per share | $ (0.03) | $ (0.01) |
Weighted average number of shares outstanding | 82,072,080 | 74,061,724 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock | Common Stock Issuable | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Deficit | Noncontrolling Interest | Total |
Beginning Balance at Sep. 30, 2018 | $ 71,620 | $ 2,464,136 | $ 38,722 | $ (3,961,939) | $ (1,387,461) | ||
Beginning Balance (in Shares) at Sep. 30, 2018 | 71,620,100 | ||||||
Issuance of units for cash | |||||||
Issuance of common stock pursuant to the conversion of convertible notes | $ 3,900 | (3,510) | 390 | ||||
Issuance of common stock pursuant to the conversion of convertible notes (in Shares) | 3,900,000 | ||||||
Issuance of common stock for services | $ 127 | 293,927 | 294,054 | ||||
Issuance of common stock for services (in Shares) | 126,735 | ||||||
Issuance of common stock of 1155097 BC Ltd. | 1,018,228 | 1,018,228 | |||||
Foreign currency translation gain | 9,102 | 9,102 | |||||
Net loss for the period | (767,537) | (1,274) | (768,811) | ||||
Ending Balance at Sep. 30, 2019 | $ 75,647 | 3,772,781 | 47,824 | (4,729,476) | (1,274) | (834,498) | |
Ending Balance (in Shares) at Sep. 30, 2019 | 75,646,835 | ||||||
Issuance of units for cash | $ 114 | 39,886 | 40,000 | ||||
Issuance of units for cash, (in Shares) | 114,286 | ||||||
Issuance of common stock pursuant to the conversion of convertible notes | $ 20,023 | 180,000 | 143,836 | 343,859 | |||
Issuance of common stock pursuant to the conversion of convertible notes (in Shares) | 20,023,168 | ||||||
Issuance of common stock for services | $ 22 | 10,758 | 10,780 | ||||
Issuance of common stock for services (in Shares) | 22,000 | ||||||
Issuance of common stock of 1155097 BC Ltd. | |||||||
Foreign currency translation gain | (11,145) | (489) | (11,634) | ||||
Net loss for the period | (2,437,870) | (44,742) | (2,482,612) | ||||
Ending Balance at Sep. 30, 2020 | $ 95,806 | $ 180,000 | $ 3,967,261 | $ 36,679 | $ (7,167,346) | $ (46,505) | $ (2,934,105) |
Ending Balance (in Shares) at Sep. 30, 2020 | 95,806,289 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING ACTIVITIES | ||
Net loss | $ (2,482,612) | $ (768,811) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Accretion of discount on convertible notes | 328,333 | 1,296 |
Default penalties on convertible notes | 229,364 | |
Financing fees | 45,000 | 105 |
Impairment of property and equipment | 434,601 | |
Loss on change in fair value of derivative liability | 1,149,450 | |
Loss on settlement of convertible note | 33,087 | |
Shares issued for services | 10,780 | 294,054 |
Write-off of accounts payable | (292,557) | |
Changes in non-cash operating working capital | ||
Accounts receivable and other receivables | 10,344 | 21,126 |
Prepaid expenses and deposits | (137,898) | (101,380) |
Accounts payable and accrued liabilities | (16,220) | 231,082 |
Due to related parties | 80,694 | 4,696 |
Net cash used in operating activities | (607,634) | (317,832) |
INVESTING ACTIVITIES | ||
Acquisition of property and equipment | (196,127) | |
Net cash used in investing activities | (196,127) | |
FINANCING ACTIVITIES | ||
Proceeds from issuance of units for cash | 40,000 | |
Proceeds from the issuance of convertible notes | 570,078 | 75,000 |
Proceeds from advances from Alliance Growers Corp. | 169,713 | |
Proceeds from loans from related parties | 96,059 | 247,467 |
Repayment of convertible notes | (25,000) | |
Repayment of loans from related parties | (143,545) | (59,352) |
Proceeds from loans payable | 30,028 | |
Financing costs paid | (5,000) | |
Net cash provided by financing activities | 562,620 | 432,828 |
Effect of foreign exchange rate changes on cash | 5,472 | (8,056) |
Increase in cash | (50,486) | (89,187) |
Cash, beginning of year | 62,682 | 151,869 |
Cash, end of year | 12,196 | 62,682 |
Non-cash investing and financing activities: | ||
Original issue discount on convertible notes | 532,594 | |
Issuance of common stock pursuant to the conversion of convertible notes | 343,859 | 390 |
Issuance of equity in 1155097 B.C. Ltd in exchange for advances payable | 1,018,228 | |
Issuance of promissory note as a financing fee | 40,000 | |
Common stock issuable pursuant to conversion of convertible notes | 180,000 | |
Supplemental disclosures: | ||
Interest paid | 4,601 | |
Income taxes paid |
Nature of Business and Continua
Nature of Business and Continuance of Operations | 12 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Continuance of Operations | 1. Nature of Business and Continuance of Operations Pharmagreen Biotech Inc. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on November 26, 2007, under the name Azure International, Inc. On October 30, 2008, and effective as of the same date, the Company filed Articles of Merger (“Articles”) with the Secretary of State of the State of Nevada, to effect a merger by and between Air Transport Group Holdings, Inc., a Nevada corporation and Azure International, Inc. As a result of the merger, the Company changed its name to Air Transport Group Holdings, Inc. The Company was previously in the business of providing technical advisory and appraisals to the aircraft and aviation business as well as providing sourcing for aircraft leases and parts. Pursuant to a Share Exchange Agreement with WFS Pharmagreen Inc. (“WFS”) on May 2, 2018, the Company changed its name to Pharmagreen Biotech Inc. and changed its principal business to the construction of a biotech complex in Deroche, British Columbia, Canada, for the purpose of producing a variety of starter plantlets for the Canadian and international high CBD hemp and medical cannabis industries through the application of the proprietary plant tissue culture in vitro process called “Chibafreen”. This proprietary process will produce plantlets that will be genetically identical and free of pests and disease free with consistent and certifiable constituent properties. Going Concern These consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at September 30, 2020, the Company has not earned any revenues from operations, has a working capital deficit of $2,900,629, and has an accumulated deficit of $7,167,346. During the year ended September 30, 2020, the Company incurred a net loss of $2,482,612 and used cash flows for operations of $607,634. In addition, the Company filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Nevada on August 7, 2020. As a result of the voluntary petition, various convertible note holders triggered default provisions on the Company’s outstanding convertible notes. On October 9, 2020, a stay order was lifted by a United States District Judge of the United States District Court for the Southern District of New York, on an action filed by a lender. This effectively removed the Company from its Chapter 11 bankruptcy proceedings and protection. These factors raise substantial doubt upon the Company’s ability to continue as a going concern. These consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern. The recent outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies, disruptions of financial markets, and created uncertainty regarding potential impacts to the Company’s supply chain, operations, and customer demand. The COVID-19 pandemic has impacted and could further impact the Company’s operations and the operations of the Company’s suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company’s customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. The management team is closely following the progression of COVID-19 and its potential impact on the Company. Even after the COVID-19 pandemic has subsided, the Company may experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time our business, liquidity, capital resources and financial results. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Significant Accounting Policies (a) Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, WFS Pharmagreen Inc. (“WFS”), and its 89.7% owned subsidiary 1155097 BC Ltd. (“115BC”), companies incorporated in British Columbia, Canada. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year-end is September 30. (b) Use of Estimates and Judgments The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the allowance for doubtful accounts, the recoverability of property and equipment, the equity component of convertible notes, fair value of derivative liabilities, fair value of stock-based payments, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The Company applies judgment in the application of the going concern assumption which requires management to take into account all available information about the future, which is at least, but not limited to, 12 months from the end of the reporting period and in the factors regarding the impairment of the property and equipment. (c) Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of issuance to be cash equivalents. (d) Property, Plant, and Equipment Property, plant, and equipment is measured at cost less accumulated depreciation, residual values, and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for the intended use and borrowing costs on qualifying assets. During their construction, items of property, plant, and equipment are classified as construction in progress. When the asset is available for use, it is transferred from construction in progress to the appropriate category of property, plant, and equipment and depreciation on the item commences. The Company capitalizes borrowing costs on capital invested in projects under construction. Upon the asset becoming available for use, capitalized borrowing costs, as a portion of the total cost of the asset, are depreciated over the estimated useful life of the related asset. (e) Long-lived Assets In accordance with ASC 360, “ Property, Plant and Equipment (f) Fair Value Measurements The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by U.S. generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows: Level 1 – quoted prices for identical instruments in active markets. Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and. Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial instruments consist principally of cash, amounts receivable, accounts payable and accrued liabilities, advances from Alliance Growers Corp., loans payable, amounts due to related parties, and convertible notes. The fair value of cash is determined based on Level 1 inputs and the fair value of derivative liabilities is determined based on Level 3 inputs. There were no transfers into or out of “Level 3” during the years ended September 30, 2020, and 2019. The recorded values of all other financial instruments, with the exception of non-current convertible notes, approximate their current fair values because of their nature and respective relatively short maturity dates or durations. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The following table presents assets and liabilities that are measured and recognized at fair value as of September 30, 2020 on a recurring basis: September 30, 2020 Level 1 $ Level 2 $ Level 3 $ Total Gains (Losses) $ Derivative liability – – 1,380,957 (1,149,450) (g) Foreign Currency Translation The Company’s functional and reporting currency is the U.S. dollar. Transactions may occur in foreign currencies and management has adopted ASC 830, “ Foreign Currency Translation Matters (h) Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, “ Compensation – Stock Compensation , (i) Loss Per Share The Company computes loss per share in accordance with ASC 260, " Earnings per Share (j) Comprehensive Loss ASC 220, “ Comprehensive Income (k) Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “ Income Taxes The Company files federal and provincial income tax returns in Canada and federal, state and local income tax returns in the U.S., as applicable. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. For Canadian and U.S. income tax returns, the open taxation years range from 2014 to 2020. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of Canada and U.S. have not examined any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years noted above. (l) Recently Adopted Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The standard became effective for the Company in the first quarter of fiscal year 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2016, Topic 842, Leases Leases The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Construction in progress $ Cost Balance, September 30, 2018 251,310 Additions 196,127 Change due to foreign exchange (6,342) Balance, September 30, 2019 441,095 Impairment (434,601) Change due to foreign exchange (6,494) Balance, September 30, 2020 – Accumulated depreciation Balance, September 30, 2018, 2019 and 2020 – Balance, September 30, 2019 441,095 Balance, September 30, 2020 – During the year ended September 30, 2020, the Company recognized an impairment of $434,601 of the capitalized construction in progress costs due to economic uncertainty of sufficient financing available to complete the proposed construction. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | 4. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consists of the following: September 30, 2020 $ September 30, 2019 $ Accounts payable (Note 8) 455,310 829,942 Accrued interest payable (Notes 5 and 6) 84,353 25,824 539,663 855,766 During the year ended September 30, 2020, the Company recognized a write-off of accounts payable of $292,557 (2019 - $nil) related to professional fees that are no longer owing. |
Loans Payable
Loans Payable | 12 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Loans Payable | 5. Loans Payable (a) On November 22, 2019, the Company entered into a promissory note with an unrelated party for $40,000 in connection with an equity purchase agreement (Refer to Note 11(b)). The promissory note is unsecured, due on November 30, 2020, and bears interest on the unpaid principal balance at a rate of 10% per annum. During the year ended September 30, 2020, the Company recorded accrued interest payable of $3,421 (2019 - $nil). (b) On April 22, 2020, the Company received a loan for $30,028 (Cdn$40,000) from the Government of Canada under the Canada Emergency Business Account program (“CEBA”). These funds are interest free until December 31, 2022, at which time the remaining balance will convert to a 3-year term loan at an interest rate of 5% per annum. If the Company repays the loan prior to December 31, 2022, there will be loan forgiveness of 25% of the principal balance repaid, up to a maximum of Cdn$10,000. |
Convertible Notes
Convertible Notes | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 6. Convertible Notes (a) On April 4, 2018, the amount of $32,485 owed to related parties was converted to Series A convertible notes, which are unsecured, non-interest bearing, and due on April 4, 2023. These notes are convertible in whole or in part, at any time until maturity, to common shares of the Company at $0.0001 per share. The outstanding balance remaining at maturity shall bear interest at 12% per annum until fully paid. The Company evaluated the convertible notes for a beneficial conversion feature in accordance with ASC 470-20 Debt with Conversion and Other Options During the year ended September 30, 2018, the Company issued 31,745,000 shares of common stock upon the conversion of $3,175 of Series A convertible notes, which included 18,000,000 common shares to the President of the Company and 5,320,000 common shares to family members of the President of the Company. Upon conversion, the Company immediately recognized the related remaining debt discount of $3,112 as accretion expense. During the year ended September 30, 2019, the Company issued 3,900,000 shares of common stock upon the conversion of $390 of Series A convertible notes. Upon conversion, the Company immediately recognized the related remaining debt discount of $375 as accretion expense. During the year ended September 30, 2020, the Company issued 18,525,000 shares of common stock upon the conversion of $1,853 of Series A convertible notes. Upon conversion, the Company immediately recognized the related remaining debt discount of $1,670 as accretion expense. As at September 30, 2020, the carrying value of the convertible notes was $3,448 (2019 – $1,599) and had an unamortized discount of $23,619 (2019 - $27,321). During the year ended September 30, 2020, the Company recorded accretion expense of $3,702 (2019 - $1,296). (b) On September 17, 2019, the Company entered into a convertible note with an unrelated party for $78,000, of which $3,000 was paid directly to third parties for financing costs, resulting in cash proceeds to the Company of $75,000. The note is due on September 20, 2020, and bears interest on the unpaid principal balance at a rate of 10% per annum, which increases to 22% per annum upon default of the note. The note may be converted at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the average 2 lowest trading prices during the 10-trading day period prior to the conversion date. Due to this provision, the Company considered whether the embedded conversion option qualifies for derivative accounting under ASC 815-15 Derivatives and Hedging The convertible note became convertible on March 15, 2020. The Company evaluated the convertible note for a beneficial conversion feature in accordance with ASC 470-20 Debt with Conversion and Other Options During the year ended September 30, 2020, the Company issued 1,498,168 shares of common stock upon the conversion of $68,000 of the convertible note. On June 17, 2020, the Company paid the remaining principal of $10,000 and interest of $4,601 pursuant to a settlement agreement with the lender. Upon entering into the settlement agreement, the Company immediately recognized the remaining debt discount of $4,427. The financing costs were netted against the convertible note and were being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $10,382 (2019 - $105). As at September 30, 2020, the carrying value of the convertible note was $nil (2019 - $75,105), net of an unamortized discount of $nil (2019 - $2,895). (c) On October 1, 2019, the Company entered into a convertible note with an unrelated party for $78,000, of which $3,255 was paid directly to third parties for financing costs, resulting in proceeds to the Company of $74,745. The note is due on October 1, 2020, and bears interest on the unpaid principal balance at a rate of 10% per annum, which increases to 24% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to lower of: (i) the lowest trading price during the 10-trading day period prior to the issuance date; or (ii) 61% of the average 2 lowest trading prices during the 10-trading day period prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging On July 22, 2020, the Company received a preliminary statement of claim from the note holder for failure of the Company to deliver shares of common stock upon receipt of notices of conversion. Pursuant to the claim, the note holder requested receipt of all shares of common stock requested in the notices of conversion, and also damages in an amount to be determined at trial but in any event in excess of principal in the sum of $180,000, including without limitation the balance of any portion of the convertible note that ultimately is not converted into shares of common stock, along with default interest, liquidated damages, and damages as provided for in the convertible note. Upon default, the Company recognized the remaining debt discount of $46,904 as accretion expense. The financing costs were netted against the convertible note and were being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $77,500 and a default penalty of $85,864. As at September 30, 2020, the carrying value of the convertible note was $163,864 (2019 - $nil) and the fair value of the derivative liability was $485,863 (2019 - $nil). (d) On October 17, 2019, the Company entered into a convertible note with an unrelated party for $63,000, of which $3,000 was paid directly to third parties for financing costs, resulting in cash proceeds to the Company of $60,000. The note is due on October 17, 2020, and bears interest on the unpaid principal balance at a rate of 10% per annum, which increases to 22% per annum upon default of the note. The note may be converted at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the average 2 lowest trading prices during the 10-trading day period prior to the conversion date. On June 17, 2020, the Company entered into a settlement agreement with the lender, whereby the Company and the lender agreed on repayment terms for the remaining principal balance of $63,000, and accrued interest owing on the note of $5,775 which was due on September 30, 2020. Upon entering into the settlement agreement, the Company immediately recognized the remaining debt discount of $1,657. On September 30, 2020, the Company failed to meet the repayment terms within the settlement agreement which resulted in a default penalty of $63,000 and the resumption of the convertibility feature at a conversion price equal to 61% of the average 2 lowest trading prices during the 10-trading day period prior to the conversion date. On September 30, 2020, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging The financing costs were netted against the convertible note and were being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $3,000 and a default penalty of $63,000. As at September 30, 2020, the carrying value of the convertible note was $126,000 (2019 - $nil) and the fair value of the derivative liability was $112,822 (2019 - $nil). (e) On January 2, 2020, the Company entered into a convertible note with an unrelated party for $53,000, of which $3,000 was paid directly to third parties for financing costs, resulting in cash proceeds to the Company of $50,000. The note is due on January 2, 2021, and bears interest on the unpaid principal balance at a rate of 10% per annum, which increases to 22% per annum upon default of the note. The note may be converted at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the average 2 lowest trading prices during the 10-trading day period prior to the conversion date. On June 17, 2020, the Company entered into a settlement agreement with the lender, whereby the Company and the lender agreed on repayment terms for the remaining principal of $53,000 and accrued interest of $5,300 owing on the note. Upon entering into the settlement agreement, the Company immediately recognized the remaining debt discount of $2,286. Effective September 30, 2020, the Company failed to meet the repayment terms of the settlement agreement and defaulted on the convertible note. On September 30, 2020, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging The financing costs were netted against the convertible note and were being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $3,000 and a default penalty of $53,000. As at September 30, 2020, the carrying value of the convertible note was $106,000 (2019 - $nil) and the fair value of the derivative liability was $139,702 (2019 - $nil). (f) On January 14, 2020, the Company entered into a convertible note with an unrelated party for $78,000, of which $3,000 was paid for financing costs, resulting in net proceeds to the Company of $75,000. The note is due on January 14, 2021, and bears interest on the unpaid principal balance at a rate of 12% per annum, which increases to 15% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to lower of: (i) 65% of the lowest trading price during the 20-trading day period prior to the issuance date; or (ii) 65% of the lowest trading price during the 20-trading day period prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging The financing costs were netted against the convertible note and are being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $16,447. As at September 30, 2020, the carrying value of the convertible note was $16,947 (2019 - $nil), net of an unamortized discount of $61,053 (2019 - $nil), and the fair value of the derivative liability was $110,604 (2019 - $nil). (g) Derivatives and Hedging The Company recognized the maximum intrinsic value of the embedded beneficial conversion feature of $50,100, resulting in a loss on change in fair value of derivative liabilities of $17,746, and reduced the carrying value of the convertible note to $500. The carrying value will be accreted over the term of the convertible note up to its face value of $61,000. On July 23, 2020, the Company entered into a settlement agreement with the note holder, wherein the Company and the lender agreed to settle a convertible note and accrued interest for a total of $63,440 on a non-convertible basis, of which $15,000 was payable on or before July 24, 2020 (paid), followed by 6 monthly instalment payments of $8,073. Upon entering into the settlement agreement, the Company immediately recognized the remaining debt discount of $56,566. Effective August 24, 2020, the Company failed to meet the repayment terms and defaulted on the settlement agreement. The financing costs were netted against the convertible note and were being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $60,500. As at September 30, 2020, the carrying value of the convertible note was $46,000 (2019 -$ nil) and the fair value of the derivative liability was $69,320 (2019 - $nil). (h) On January 15, 2020, the Company entered into a convertible note with an unrelated party for $55,000, of which $2,500 was paid directly to third parties for financing costs, resulting in proceeds to the Company of $52,500. The note is due on January 15, 2021, and bears interest on the unpaid principal balance at a rate of 10% per annum, which increases to 24% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to lower of: (i) the lowest trading price during the 20-trading day period ending on the latest complete trading day prior to the issuance date; or (ii) 65% of the lowest trading price during the 20 consecutive trading day period on which at least 100 shares of common stock were traded prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging During the year ended September 30, 2020, the Company defaulted on the convertible note which resulted in a default penalty of $27,500 and the amendment of the conversion rate from 65% to 50% of the lowest trading price during the 20 consecutive trading days prior to conversion. The Company recognized the remaining debt discount of $50,767 as accretion expense. The financing costs were netted against the convertible note and were being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $54,500 and a default penalty of $27,500. As at September 30, 2020, the carrying value of the convertible note was $82,500 (2019 - $nil) and the fair value of the derivative liability was $146,272 (2019 - $nil). (i) On January 21, 2020, the Company entered into a convertible note with an unrelated party for $66,150, of which $7,800 was paid directly to third parties for financing costs and an original issue discount of $3,150, resulting in proceeds to the Company of $55,200. The note is due on January 21, 2021, and bears interest on the unpaid principal balance at a rate of 8% per annum, payable in common stock, which increases to 24% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal 60% of the lowest trading price during the 20-trading day period prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging The Company recognized the maximum intrinsic value of the embedded beneficial conversion feature of $54,700, resulting in a loss on change in fair value of derivative liabilities of $16,578, and reduced the carrying value of the convertible note to $500. The carrying value will be accreted over the term of the convertible note up to its face value of $66,150. The financing costs were netted against the convertible note and are being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $13,202. As at September 30, 2020, the carrying value of the convertible note was $13,702 (2019 - $nil), net of an unamortized discount of $52,448 (2019 - $nil), and the fair value of the derivative liability was $98,579 (2019 - $nil). (j) On January 22, 2020, the Company entered into a convertible note with an unrelated party for $78,750, of which $9,750 was paid directly to third parties for financing costs, resulting in proceeds to the Company of $69,000. The note is due on January 22, 2021, and bears interest on the unpaid principal balance at a rate of 10% per annum, payable in common stock, which increases to 24% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to 65% of the lowest trading price during the 20-trading day period ending on the latest complete trading day prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging The financing costs were netted against the convertible note and are being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company defaulted on the convertible note and recognized accretion expense of $78,250. As at September 30, 2020, the carrying value of the convertible note was $78,750 and the fair value of the derivative liability was $107,660 (2019 - $nil). (k) On February 4, 2020, the Company entered into a convertible note with an unrelated party for $100,000, of which $16,970 was paid directly to third parties for financing costs, resulting in proceeds to the Company of $83,030. The note is due on February 4, 2021, and bears interest on the unpaid principal balance at a rate of 12% per annum, which increases to 24% per annum upon default of the note. The note may be converted at any time after the date of issuance into shares of Company’s common stock at a conversion price equal to lower of: (i) the lowest trading price during the 10-trading day period ending on the latest complete trading day prior to the issuance date; or (ii) 60% of the average of the two lowest trading prices during the 10-trading day period prior to the conversion date. In connection with the issuance of the above convertible note, the Company evaluated the conversion option for derivative treatment under ASC 815-15, Derivatives and Hedging During the year ended September 30, 2020, the Company lender converted $24,175 of the convertible note for common stock issuable with a fair value of $180,000. Upon conversion, the Company immediately recognized the related remaining debt discount of $23,136 as accretion expense. The financing costs were netted against the convertible note and are being amortized over the term using the effective interest rate method. During the year ended September 30, 2020, the Company recognized accretion expense of $7,854. As at September 30, 2020, the carrying value of the convertible note was $7,314 (2019 - $nil), net of an unamortized discount of $68,511 (2019 - $nil), and the fair value of the derivative liability was $110,135 (2019 - $nil). |
Derivative Liability
Derivative Liability | 12 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | 7. Derivative Liabilities The embedded conversion option of certain of the Company’s convertible notes described in Note 6 contain a conversion feature that qualifies for embedded derivative classification. The fair value of this liability will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on change in fair value of derivative liabilities. The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities: $ Balance, September 30, 2018 and 2019 – Addition 1,020,071 Conversion of convertible notes (301,087) Change in fair value 661,973 Balance, September 30, 2020 1,380,957 The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using a binomial model based on various assumptions. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the weighted-average assumptions used in the calculations: Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) As at date of issuance 161.13% 1.19% 0% 0.87 As at September 30, 2020 295.81% 0.09% 0% 0.20 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. Related Party Transactions (a) As at September 30, 2020, the Company owed $453,697 (Cdn$604,366) (2019 - $372,799 (Cdn$493,694)) to the President of the Company, which is non-interest bearing, unsecured, and due on demand. During the year ended September 30, 2020, the Company incurred consulting fees of $93,000 (2019 - $90,423) to the President of the Company. (b) As at September 30, 2020, the Company owed $nil (2019 - $47,367 (Cdn$62,730)) to a company controlled by the President of the Company, which is non-interest bearing, unsecured, and due on demand. (c) As at September 30, 2020, the Company owed $55,177 (Cdn$73,500) (2019 - $55,500 (Cdn$73,500)) to the father of the President of the Company, which is non-interest bearing, unsecured, and due on demand. (d) As at September 30, 2020, the Company owed $nil (2019 - $25,825 (Cdn$34,200)) to a Company owned by the father of the President of the Company, which is included in accounts payable and accrued liabilities. The amount due is non-interest bearing, unsecured, and due on demand. (e) As at September 30, 2020, the Company owed $347,229 (Cdn$462,540) (2019 – $291,504 (Cdn$386,039)) to a company controlled by the Chief Financial Officer of WFS, which is included in accounts payable and accrued liabilities. The amount due is non-interest bearing, unsecured, and due on demand. During the year ended September 30, 2020, the Company incurred consulting fees of $93,000 (2019 - $90,423) to the company controlled by the Chief Financial Officer of WFS. (f) During the year ended September 30, 2020, the Company incurred research and development fees of $nil (2019 - $3,956), license application fees of $nil (2019 - $3,758) and expenses related to the construction of the cannabis construction complex of $nil (2019 - $8,308) (Cdn$11,025) to the Chief Financial Officer of WFS. |
Common Stock
Common Stock | 12 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Common Stock | 9. Common Stock Year ended September 30, 2020 (a) On March 24, 2020, the Company issued 78,064 shares of common stock with a fair value of $21,077 pursuant to the conversion of $10,000 of a convertible note (Note 6(b)). (b) On April 1, 2020, the Company issued 6,000,000 shares of common stock pursuant to the conversion of $600 of a convertible note (Note 6(a)). (c) On April 2, 2020, the Company issued 136,612 shares of common stock with a fair value of $20,492 pursuant to the conversion of $10,000 of a convertible note (Note 6(b)). (d) On April 16, 2020, the Company issued 351,288 shares of common stock with a fair value of $38,642 pursuant to the conversion of $15,000 of a convertible note (Note 6(b)). (e) On April 30, 2020, the Company issued 423,729 shares of common stock with a fair value of $47,881 pursuant to the conversion of $15,000 of a convertible note (Note 6(b)). (f) On May 4, 2020, the Company issued 508,475 shares of common stock with a fair value of $33,915 pursuant to the conversion of $18,000 of a convertible note (Note 6(b)). (g) On June 30, 2020, the Company issued 8,000,000 shares of common stock pursuant to the conversion of $800 of a convertible note (Note 6(a)). (h) On July 9, 2020, the Company issued 22,000 shares of common stock with a fair value of $10,780 for management consulting and strategic business advisory services. (i) On July 31, 2020, the Company issued 4,525,000 shares of common stock pursuant to the conversions of an aggregate of $453 of a convertible note. (j) On July 31, 2020, the Company issued 114,286 units at $0.35 per unit for proceeds of $40,000. Each unit consisted of one share of common stock and one common share purchase warrant exercisable at $0.55 per share until July 16, 2022. (k) As at September 30, 2020, the Company received a conversion notice for 2,000,000 shares of common stock with a fair value of $180,000 pursuant to the conversion of $30,750 of a convertible note. Year ended September 30, 2019 (l) On December 6, 2018, the Company issued 2,000,000 shares of common stock upon the conversion of $200 of Series A convertible notes at $0.0001 per share (Note 6 (a)). (m) On December 6, 2018, the Company issued 51,735 shares of common stock with a fair value of $121,554 for financing costs. The fair value of common stock was determined based on the end of day trading price of the Company’s common stock on the date of issuance. (n) On February 1, 2019, the Company issued 1,000,000 shares of common stock upon the conversion of $100 of Series A convertible notes at $0.0001 per share (Note 6 (a)). (o) On August 19, 2019, the Company issued 900,000 shares of common stock upon the conversion of $90 of Series A convertible notes at $0.0001 per share (Note 6 (a)). (p) On September 17, 2019, the Company issued 75,000 shares of common stock with a fair value of $172,500 for consulting fees. The fair value of common stock was determined based on the end of day trading price of the Company’s common stock on the date of issuance. |
Share Purchase Warrants
Share Purchase Warrants | 12 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Share Purchase Warrants | 10. Share Purchase Warrants The following table summarizes the continuity of the Company’s share purchase warrants: Number of warrants Weighted average exercise price $ Balance, September 30, 2018 and 2019 – – Issued 114,286 0.55 Balance, September 30, 2020 114,286 0.55 The share purchase warrants have an expiry date of July 16, 2022. |
Commitment
Commitment | 12 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment | 11. Commitments (a) Effective December 11, 2017, the Company entered into a binding Letter of Intent (“LOI”) with Alliance Growers Corp. (“Alliance”), whereby the Company will build a new cannabis biotech complex located in Deroche, British Columbia, through their subsidiary, 115BC. On January 25, 2019, the Company’s subsidiaries WFS and 115BC entered into an option agreement with Alliance, which superseded the LOI entered into on December 11, 2017. The option agreement grants an option to Alliance to purchase 10% equity interest in 115BC for Cdn$1,350,000 and previously granted a second option to purchase an additional 20% equity interest in 115BC for funding of 30% of the total construction and equipment costs for the biotech complex less Cdn$1,350,000. On January 25, 2019, 115BC issued 8 shares of common stock to Alliance upon exercise of the first option for consideration of $1,018,182 (Cdn$1,350,008), which was recognized as additional paid-in capital. The second option expired unexercised. As at September 30, 2020, the Company received advances of $56,303 (Cdn$75,000) (2019 - $56,634 (Cdn$75,000)) from Alliance, which is unsecured, non-interest bearing, and due on demand. (b) On November 22, 2019, the Company entered into an equity purchase agreement with an unrelated party, whereby the third party is to purchase up to $10,000,000 of the Company’s common stock. The equity purchase agreement is effective for a term of 2 years from the effective date of the registration statement. The purchase price would be 85% of the market price. In return, the Company issued a promissory note of $40,000 (Refer to Note 5(a)). In addition, the third party is required to pay an additional commitment fee of $10,000, of which $5,000 was paid upon signing the term sheet and the remaining $5,000 is due upon completion of the first tranche of the financing. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The Company is subject to Canadian federal and provincial taxes at an approximate rate of 27% (2019 – 27%) and United States federal and state income taxes at an approximate rate of 21% (2019 – 21%). The reconciliation of the provision for income taxes at the federal statutory rate compared to the Company’s income tax expense as reported is as follows: 2020 $ 2019 $ Income tax recovery at statutory rate (531,798) (177,541) Permanent differences and other 288,722 (5,970) Change in enacted tax rate – (401,110) Change in valuation allowance 243,076 584,621 Income tax provision – – The significant components of deferred income tax assets and liabilities are as follows: 2020 $ 2019 $ Net operating losses carried forward 1,691,669 1,567,688 Property and equipment 52,954 (66,141) Valuation allowance (1,744,623) (1,501,547) Net deferred income tax asset – – The 2017 Act reduces the corporate tax rate from 34% to 21% for tax years beginning after December 31, 2017. For net operating losses arising after December 31, 2017, the 2017 Act limits a taxpayer’s ability to utilize net operating losses carryforwards to 80% of taxable income. In addition, net operating losses arising after 2017 can be carried forward indefinitely, but carryback is generally prohibited. Net operating losses generated in tax years beginning before January 1, 2018 will not be subject to the taxable income limitation. The 2017 Act would generally eliminate the carryback of all net operating losses arising in a tax year ending after 2017 and instead would permit all such net operating losses to be carried forward indefinitely. The Company has net operating losses carried forward of $6,509,481 which may be carried forward to apply against future years’ taxable income, subject to the final determination by taxation authorities, expiring in the following years: Canada $ USA $ 2029 – 54,040 2030 – 101,259 2034 401,530 – 2035 740,776 1,003 2036 1,008,613 1,000 2037 1,229,859 – 2038 1,575,665 91,177 2039 272,632 493,609 2040 182,216 356,102 5,411,291 1,098,190 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events (a) On October 13, 2020. The Company filed a certificate of amendment to its articles of incorporation, whereby it increased the authorized capital to 2,000,000,000 shares of common stock with a par value of $0.001 per share and 1,000,000 preferred shares with a par value of $0.001. (b) Subsequent to the year ended September 30, 2020, the Company issued a total of 144,315,380 shares of common stock pursuant to conversions of convertible notes of an aggregate of $645,629 of principal, $31,716 of accrued interest, and $32,500 in conversion fees and penalties. (c) Subsequent to the year ended September 30, 2020, the Company closed a private placement for units of the company consisting of one common share and one share purchase unit at $0.005 per unit. The share purchase warrants have an exercise price of $0.05 exercisable for 24 months for the purchase of an additional share. The Company issued 5,400,000 units to various subscribers for proceeds of $27,000. (d) Subsequent to year end the Company issued 90,000 shares for fair value of $1,215 for a consulting agreement entered into with an arms-length party. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (a) Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, WFS Pharmagreen Inc. (“WFS”), and its 89.7% owned subsidiary 1155097 BC Ltd. (“115BC”), companies incorporated in British Columbia, Canada. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year-end is September 30. |
Use of Estimates and Judgments | (b) Use of Estimates and Judgments The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the allowance for doubtful accounts, the recoverability of property and equipment, the equity component of convertible notes, fair value of derivative liabilities, fair value of stock-based payments, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The Company applies judgment in the application of the going concern assumption which requires management to take into account all available information about the future, which is at least, but not limited to, 12 months from the end of the reporting period and in the factors regarding the impairment of the property and equipment. |
Cash and Cash Equivalents | (c) Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of issuance to be cash equivalents. |
Property, Plant, and Equipment | (d) Property, Plant, and Equipment Property, plant, and equipment is measured at cost less accumulated depreciation, residual values, and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for the intended use and borrowing costs on qualifying assets. During their construction, items of property, plant, and equipment are classified as construction in progress. When the asset is available for use, it is transferred from construction in progress to the appropriate category of property, plant, and equipment and depreciation on the item commences. The Company capitalizes borrowing costs on capital invested in projects under construction. Upon the asset becoming available for use, capitalized borrowing costs, as a portion of the total cost of the asset, are depreciated over the estimated useful life of the related asset. |
Long-lived Assets | (e) Long-lived Assets In accordance with ASC 360, “ Property, Plant and Equipment |
Fair Value Measurements | (f) Fair Value Measurements The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by U.S. generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows: Level 1 – quoted prices for identical instruments in active markets. Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and. Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial instruments consist principally of cash, amounts receivable, accounts payable and accrued liabilities, advances from Alliance Growers Corp., loans payable, amounts due to related parties, and convertible notes. The fair value of cash is determined based on Level 1 inputs and the fair value of derivative liabilities is determined based on Level 3 inputs. There were no transfers into or out of “Level 3” during the years ended September 30, 2020, and 2019. The recorded values of all other financial instruments, with the exception of non-current convertible notes, approximate their current fair values because of their nature and respective relatively short maturity dates or durations. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The following table presents assets and liabilities that are measured and recognized at fair value as of September 30, 2020 on a recurring basis: September 30, 2020 Level 1 $ Level 2 $ Level 3 $ Total Gains (Losses) $ Derivative liability – – 1,380,957 (1,149,450) |
Foreign Currency Translation | (g) Foreign Currency Translation The Company’s functional and reporting currency is the U.S. dollar. Transactions may occur in foreign currencies and management has adopted ASC 830, “ Foreign Currency Translation Matters |
Stock-based Compensation | (h) Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, “ Compensation – Stock Compensation , |
Loss per share | (i) Loss Per Share The Company computes loss per share in accordance with ASC 260, " Earnings per Share |
Comprehensive Loss | (j) Comprehensive Loss ASC 220, “ Comprehensive Income |
Income Taxes | (k) Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “ Income Taxes The Company files federal and provincial income tax returns in Canada and federal, state and local income tax returns in the U.S., as applicable. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. For Canadian and U.S. income tax returns, the open taxation years range from 2014 to 2020. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of Canada and U.S. have not examined any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years noted above. |
Recently Adopted Accounting Pronouncements | (l) Recently Adopted Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The standard became effective for the Company in the first quarter of fiscal year 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2016, Topic 842, Leases Leases The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Construction in progress $ Cost Balance, September 30, 2018 251,310 Additions 196,127 Change due to foreign exchange (6,342) Balance, September 30, 2019 441,095 Impairment (434,601) Change due to foreign exchange (6,494) Balance, September 30, 2020 – Accumulated depreciation Balance, September 30, 2018, 2019 and 2020 – Balance, September 30, 2019 441,095 Balance, September 30, 2020 – |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Accounts Payable And Accrued Liabilities | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consists of the following: September 30, 2020 $ September 30, 2019 $ Accounts payable (Note 8) 455,310 829,942 Accrued interest payable (Notes 5 and 6) 84,353 25,824 539,663 855,766 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liability | The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities: $ Balance, September 30, 2018 and 2019 – Addition 1,020,071 Conversion of convertible notes (301,087) Change in fair value 661,973 Balance, September 30, 2020 1,380,957 The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using a binomial model based on various assumptions. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the weighted-average assumptions used in the calculations: Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) As at date of issuance 161.13% 1.19% 0% 0.87 As at September 30, 2020 295.81% 0.09% 0% 0.20 |
Nature of Business and Contin_2
Nature of Business and Continuance of Operations (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working Capital Deficit | $ 2,900,629 | |
Accumulated Deficit | 7,167,346 | $ 4,729,476 |
Net loss | 2,482,612 | 768,811 |
Net cash used in operating activities | $ 607,634 | $ 317,832 |
Significant Accounting Policies
Significant Accounting Policies (Details) - Derivative [Member] | Sep. 30, 2020USD ($) |
Derivative liability | $ (1,149,450) |
Fair Value, Inputs, Level 3 [Member] | |
Derivative liability | $ 1,380,957 |
Significant Accounting Polici_2
Significant Accounting Policies (Details Narrative) - shares | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Significant Accounting Policies | ||
Potentially Dilutive Shares Outstanding | 388,372,556 | 364,850,535 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Additions | $ 196,127 | |
Impairment | (434,601) | |
Construction in Progress [Member] | ||
Beginning Balance | 441,095 | 251,310 |
Additions | 196,127 | |
Impairment | (434,601) | |
Change due to foreign exchange | (6,494) | (6,342) |
Ending Balance | $ 441,095 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Disclosure Accounts Payable And Accrued Liabilities Details Abstract | ||
Accounts payable | $ 455,310 | $ 829,942 |
Accrued interest payable | 84,353 | 25,824 |
Accounts Payable and Accrued Liabilities | $ 539,663 | $ 855,766 |
Loans Payable (Details Narrativ
Loans Payable (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Nov. 22, 2019 | |
Disclosure Promissory Note Details Narrative Abstract | ||
Promissory Note with unrelated party | $ 40,000 | |
Accured Interest | $ 3,421 |
Convertible Notes (Details Narr
Convertible Notes (Details Narrative) | 12 Months Ended | ||||
Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018shares | Apr. 04, 2018USD ($) | Apr. 04, 2018$ / shares | |
Common Stock, Par Value | $ / shares | $ 0.001 | $ 0.001 | |||
Accretion Expense | $ | $ 3,702 | $ 1,296 | |||
NotesIssued April 04, 2018 | |||||
Common Stock Share Issued | shares | 18,525,000 | ||||
Accretion Expense | $ | $ 1,853 | ||||
Convertible Note [Member] | NotesIssued April 04, 2018 | |||||
Amount Owed to Related Party | $ | $ 32,485 | ||||
Common Stock, Par Value | $ / shares | $ 0.0001 | ||||
Common Stock Share Issued | shares | 3,900,000 | ||||
Accretion Expense | $ | $ 375 | ||||
Convertible Note [Member] | NotesIssued April 04, 2018 | President [Member] | |||||
Common Stock Share Issued | shares | 31,745,000 | ||||
Convertible Note [Member] | NotesIssued April 04, 2018 | Family of President [Member] | |||||
Common Stock Share Issued | shares | 5,320,000 |
Derivative Liability (Details)
Derivative Liability (Details) | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Disclosure Derivative Liability Details Abstract | |
Derivative Liability | |
Addition of new derivative liabilities | 1,020,071 |
Conversion of convertible notes | (301,087) |
Change in fair value of embedded conversion option | 661,973 |
Derivative Liability | $ 1,380,957 |
Derivative Liability (Details 2
Derivative Liability (Details 2) - Derivative Liability [Member] | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Expected volatility | 295.81% | 161.13% |
Risk-free interest rate | 0.09% | 1.19% |
Expected dividend yield | 0.00% | 0.00% |
Expected life | 2 months 12 days | 10 months 13 days |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 12 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020CAD ($) | Sep. 30, 2019CAD ($) | |
Due to Related Parties | $ 508,874 | $ 475,666 | ||
Consulting Fees | 224,691 | 442,529 | ||
President [Member] | ||||
Due to Related Parties | 453,697 | 372,799 | ||
Consulting Fees | 93,000 | 90,423 | ||
President [Member] | CANADA | ||||
Due to Related Parties | $ 604,366 | $ 493,694 | ||
Company Controller By President [Member] | ||||
Due to Related Parties | 47,367 | |||
Company Controller By President [Member] | CANADA | ||||
Due to Related Parties | 62,730 | |||
Mother of President [Member] | ||||
Due to Related Parties | 55,177 | 55,500 | ||
Mother of President [Member] | CANADA | ||||
Due to Related Parties | 73,500 | 73,500 | ||
Company Controller By Chief Financial Officer [Member] | ||||
Due to Related Parties | 347,229 | 291,504 | ||
Consulting Fees | 93,000 | 90,423 | ||
Company Controller By Chief Financial Officer [Member] | CANADA | ||||
Due to Related Parties | 462,540 | 386,039 | ||
Father of President [Member] | ||||
Due to Related Parties | $ 25,825 | |||
Father of President [Member] | CANADA | ||||
Due to Related Parties | $ 34,200 |
Share Purchase Warrants (Detail
Share Purchase Warrants (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Number of warrants | ||
Beginning Balance | ||
Issued | 114,286 | |
Ending Balance | 114,286 | |
Weighted average exercise price | ||
Beginning Balance | ||
Issued | 0.55 | |
Ending Balance | $ 0.55 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | Jan. 25, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Common Stock Issued upon exercise of the option | $ 343,859 | $ 390 | |
Alliance Growers Corp. [Member] | |||
Common Stock Issued upon exercise of the option | $ 1,018,182 | ||
Common Stock Issued upon exercise of the option (in Shares) | 8 | ||
Alliance Growers Corp. [Member] | CANADA | |||
Common Stock Issued upon exercise of the option | $ 1,350,008 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Disclosure Income Taxes Details Abstract | ||
Income tax recovery at statutory rate | $ (531,798) | $ (177,541) |
Permanent differences and other | 288,722 | (5,970) |
Change in enacted tax rate | (401,110) | |
Change in valuation allowance | 243,076 | 584,621 |
Income tax provision |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Disclosure Income Taxes Details Abstract | ||
Net operating losses carried forward | $ 1,691,669 | $ 1,567,688 |
Property and equipment | 52,954 | (66,141) |
Valuation allowance | (1,744,623) | (1,501,547) |
Net deferred income tax asset |
Income Taxes (Details 3)
Income Taxes (Details 3) | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Net Operating Loss Carryforward | $ 6,509,481 |
US [Member] | |
Net Operating Loss Carryforward | 1,098,190 |
US [Member] | Tax Year 2029 [Member] | |
Net Operating Loss Carryforward | $ 54,040 |
Expiration Date | Dec. 31, 2029 |
US [Member] | Tax Year 2030 [Member] | |
Net Operating Loss Carryforward | $ 101,259 |
Expiration Date | Dec. 31, 2030 |
US [Member] | Tax Year 2035 [Member] | |
Net Operating Loss Carryforward | $ 1,003 |
Expiration Date | Dec. 31, 2035 |
US [Member] | Tax Year 2036 [Member] | |
Net Operating Loss Carryforward | $ 1,000 |
Expiration Date | Dec. 31, 2036 |
US [Member] | Tax Year 2038 [Member] | |
Net Operating Loss Carryforward | $ 91,177 |
Expiration Date | Dec. 31, 2038 |
US [Member] | Tax Year 2039 [Member] | |
Net Operating Loss Carryforward | $ 493,609 |
Expiration Date | Dec. 31, 2039 |
US [Member] | Tax Year 2040 [Member] | |
Net Operating Loss Carryforward | $ 356,102 |
Expiration Date | Dec. 31, 2040 |
Canada [Member] | |
Net Operating Loss Carryforward | $ 5,411,291 |
Canada [Member] | Tax Year 2035 [Member] | |
Net Operating Loss Carryforward | $ 740,776 |
Expiration Date | Dec. 31, 2035 |
Canada [Member] | Tax Year 2036 [Member] | |
Net Operating Loss Carryforward | $ 1,008,613 |
Expiration Date | Dec. 31, 2036 |
Canada [Member] | Tax Year 2038 [Member] | |
Net Operating Loss Carryforward | $ 1,575,665 |
Expiration Date | Dec. 31, 2038 |
Canada [Member] | Tax Year 2039 [Member] | |
Net Operating Loss Carryforward | $ 272,632 |
Expiration Date | Dec. 31, 2039 |
Canada [Member] | Tax Year 2040 [Member] | |
Net Operating Loss Carryforward | $ 182,216 |
Expiration Date | Dec. 31, 2040 |
Canada [Member] | Tax Year 2034 [Member] | |
Net Operating Loss Carryforward | $ 401,530 |
Expiration Date | Dec. 31, 2034 |
Canada [Member] | Tax Year 2037 [Member] | |
Net Operating Loss Carryforward | $ 1,229,859 |
Expiration Date | Dec. 31, 2037 |