Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 19, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | ETHEMA HEALTH Corp | |
Entity Central Index Key | 0000792935 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 146,296,452 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 24,961 | $ 24,674 |
Accounts receivable | 240,656 | 202,654 |
Prepaid expenses and other current assets | 242,930 | 147,870 |
Related party Receivables | 59,763 | 32,650 |
Total current assets | 568,310 | 407,848 |
Non-current assets | ||
Deposit on real Estate | 2,924,955 | 2,940,546 |
Due on sale of subsidiary | 76,412 | 372,366 |
Property, plant and equipment | 4,948,275 | 8,948,349 |
Right of use assets | 15,476,645 | |
Total non-current assets | 23,426,287 | 12,261,261 |
Total assets | 23,994,597 | 12,669,109 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,784,915 | 1,092,882 |
Taxes payable | 767,155 | 775,392 |
Convertible loans | 4,572,920 | 4,403,473 |
Promissory notes | 161,751 | |
Mortgage loans, current portion | 110,815 | 172,276 |
Operating lease liability, current portion | 835,898 | |
Derivative liability | 3,924,231 | 4,618,080 |
Related party payables | 2,823,504 | 2,615,613 |
Total current liabilities | 14,981,189 | 13,677,716 |
Non-current liabilities | ||
Mortgage loans, net of current portion | 3,906,127 | 6,707,346 |
Operating lease liability, net of current portion | 14,824,699 | |
Total non-current liabilities | 18,730,826 | 6,707,346 |
Total liabilities | 33,712,015 | 20,385,062 |
Stockholders' deficit | ||
Preferred stock - Series A; $0.01 par value, 3,000,000 authorized, nil outstanding as of June 30, 2019 and December 31, 2018. | ||
Preferred Stock - Series B; $0.01 par value, 10,000,000 authorized, nil outstanding as of June 30, 2019 and December 31, 2018. | ||
Common stock; $0.01 par value, 500,000,000 shares authorized; 143,596,452 and 124,300,341 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. | 1,435,965 | 1,243,004 |
Additional paid-in capital | 23,422,968 | 20,939,676 |
Accumulated other comprehensive income | 712,525 | 630,411 |
Accumulated deficit | (35,288,876) | (30,529,044) |
Total stockholders' deficit | (9,717,418) | (7,715,953) |
Total liabilities and stockholders' deficit | $ 23,994,597 | $ 12,669,109 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common Stock Par Value | $ 0.01 | $ 0.01 |
Common Stock Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock Shares Issued | 143,596,452 | 124,300,341 |
Common Stock Shares Outstanding | 143,596,452 | 124,300,341 |
Preferred Stock, Seriea A Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, Series A Shares Authorized | 3,000,000 | 3,000,000 |
Preferred Stock, Series A Shares Issued | 0 | 0 |
Preferred Stock, Series A Shares Outstanding | 0 | 0 |
Preferred Stock, Series B Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, Series B Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Series B Shares Issued | 0 | 0 |
Preferred Stock, Series B Shares Outstanding | 0 | 0 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 98,186 | $ 66,694 | $ 180,201 | $ 179,996 |
Operating expenses | ||||
General and administrative | 499,423 | 171,915 | 881,576 | 365,647 |
Rental expense | 209,359 | 156,580 | 779,425 | 156,580 |
Management fees | 45,565 | 92,098 | ||
Professional fees | 399,673 | 145,088 | 443,827 | 183,098 |
Salaries and wages | 328,449 | 208,280 | 732,713 | 393,436 |
Depreciation and amortization | 56,419 | 68,041 | 132,295 | 136,456 |
Total operating expenses | 1,493,323 | 795,469 | 2,969,836 | 1,327,315 |
Operating loss | (1,395,137) | (728,775) | (2,789,635) | (1,147,319) |
Other Income (expense) | ||||
Interest income | (49) | 15,262 | ||
Loss on disposal of property | (692,488) | (692,488) | ||
Bonus shares issued to investors | (143,500) | (143,500) | ||
Interest expense | (197,054) | (176,587) | (542,137) | (347,038) |
Debt discount | (828,313) | (1,339,885) | (1,590,255) | (2,092,834) |
Derivative liability movement | 1,728,172 | (796,795) | 1,254,871 | (808,951) |
Foreign exchange movements | (142,832) | 110,628 | (271,950) | 248,524 |
Net loss before taxation from continuing operations | (1,671,152) | (2,931,463) | (4,759,832) | (4,147,618) |
Taxation | ||||
Net loss | (1,671,152) | (2,931,463) | (4,759,832) | (4,147,618) |
Foreign currency translation adjustment | 39,017 | (53,186) | 82,114 | (95,645) |
Total comprehensive loss | $ (1,632,368) | $ (2,984,649) | $ (4,677,718) | $ (4,243,263) |
Basic and diluted loss per common share | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.03) |
Weighted average common shares outstanding - Basic and diluted | 131,159,364 | 123,976,208 | 127,713,048 | 123,571,357 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Additional Paid-In Capital | Comprehensive Income | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2017 | 123,239,230 | ||||
Beginning Balance, Value at Dec. 31, 2017 | $ 1,232,393 | $ 18,545,913 | $ 796,453 | $ (22,350,401) | $ (1,775,642) |
Shares issued for commitment fee, Shares | 165,000 | ||||
Shares issued for commitment fee, Amount | $ 1,650 | 9,900 | 11,550 | ||
Foreign currency translation | (53,186) | (53,186) | |||
Net loss | (1,216,155) | (1,216,155) | |||
Ending Balance, Shares at Mar. 31, 2018 | 123,404,230 | ||||
Ending Balance, Value at Mar. 31, 2018 | $ 1,234,043 | 18,555,813 | 743,267 | (23,566,556) | (3,033,433) |
Beginning Balance, Shares at Dec. 31, 2017 | 123,239,230 | ||||
Beginning Balance, Value at Dec. 31, 2017 | $ 1,232,393 | 18,545,913 | 796,453 | (22,350,401) | (1,775,642) |
Net loss | (4,147,618) | ||||
Ending Balance, Shares at Jun. 30, 2018 | 124,009,230 | ||||
Ending Balance, Value at Jun. 30, 2018 | $ 1,240,093 | 19,799,660 | 700,808 | (26,498,019) | (4,757,458) |
Beginning Balance, Shares at Mar. 31, 2018 | 123,404,230 | ||||
Beginning Balance, Value at Mar. 31, 2018 | $ 1,234,043 | 18,555,813 | 743,267 | (23,566,556) | (3,033,433) |
Shares issued for commitment fee, Shares | 605,000 | ||||
Shares issued for commitment fee, Amount | $ 6,050 | 41,100 | 47,150 | ||
Fair value of series N warrants issued | 1,202,747 | 1,202,747 | |||
Foreign currency translation | (42,459) | (42,459) | |||
Net loss | (2,931,463) | (2,931,463) | |||
Ending Balance, Shares at Jun. 30, 2018 | 124,009,230 | ||||
Ending Balance, Value at Jun. 30, 2018 | $ 1,240,093 | 19,799,660 | 700,808 | (26,498,019) | (4,757,458) |
Beginning Balance, Shares at Dec. 31, 2018 | 124,300,341 | ||||
Beginning Balance, Value at Dec. 31, 2018 | $ 1,243,004 | 20,939,676 | 630,411 | (30,529,044) | (7,715,953) |
Fair value of warrants issued | 874,566 | 874,566 | |||
Shares issued for commitment fee, Shares | 71,111 | ||||
Shares issued for commitment fee, Amount | $ 711 | 4,267 | 4,978 | ||
Foreign currency translation | 43,097 | 43,097 | |||
Net loss | (3,088,680) | (3,088,680) | |||
Ending Balance, Shares at Mar. 31, 2019 | 124,371,452 | ||||
Ending Balance, Value at Mar. 31, 2019 | $ 1,243,715 | 21,818,509 | 673,508 | (33,617,724) | (9,881,992) |
Beginning Balance, Shares at Dec. 31, 2018 | 124,300,341 | ||||
Beginning Balance, Value at Dec. 31, 2018 | $ 1,243,004 | 20,939,676 | 630,411 | (30,529,044) | (7,715,953) |
Net loss | (4,759,832) | ||||
Ending Balance, Shares at Jun. 30, 2019 | 143,596,452 | ||||
Ending Balance, Value at Jun. 30, 2019 | $ 1,435,965 | 23,422,968 | 712,525 | (35,288,876) | (9,717,418) |
Beginning Balance, Shares at Mar. 31, 2019 | 124,371,452 | ||||
Beginning Balance, Value at Mar. 31, 2019 | $ 1,243,715 | 21,818,509 | 673,508 | (33,617,724) | (9,881,992) |
Fair value of warrants issued | 332,209 | 332,209 | |||
Share based compensation, Shares | 5,300,000 | ||||
Share based compensation, Value | $ 53,000 | 318,000 | 371,000 | ||
Conversion of convertible notes, Shares | 11,875,000 | ||||
Conversion of convertible notes, Amount | $ 118,750 | 831,250 | 950,000 | ||
Bonus shares issued to investors, Shares | 2,050,000 | ||||
Bonus shares issued to investors, Value | $ 20,500 | 123,000 | 143,500 | ||
Foreign currency translation | 39,017 | 39,017 | |||
Net loss | (1,671,152) | (1,671,152) | |||
Ending Balance, Shares at Jun. 30, 2019 | 143,596,452 | ||||
Ending Balance, Value at Jun. 30, 2019 | $ 1,435,965 | $ 23,422,968 | $ 712,525 | $ (35,288,876) | $ (9,717,418) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities | ||
Net loss | $ (4,759,832) | $ (4,147,618) |
Adjustment to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation | 132,295 | 136,456 |
Non cash interest accrual on escrow deposit | (15,229) | |
Loss on disposal of property | 692,488 | |
Bonus shares issued to investors | 143,500 | |
Non cash compensation for services | 371,000 | 58,700 |
Amortization of debt discount | 1,590,255 | 2,092,834 |
Non-cash discount on convertible debt | 103,000 | |
Derivative liability movements | (1,254,871) | 808,951 |
Movement on receivables reserve | (38,826) | |
Non-cash deferral of operating lease liability expense | 183,952 | |
Changes in operating assets and liabilities | ||
Accounts receivable | (38,002) | 196,982 |
Prepaid expenses and other current assets | (95,055) | 51,678 |
Accrued purchase consideration | 321,147 | 517,239 |
Accounts payable and accrued liabilities | 700,015 | 6,525 |
Taxes payable | (3,896) | |
Net cash (used in) provided by operating activities | (2,028,337) | (217,777) |
Investing activities | ||
Proceeds on disposal of property, net of closing costs of $183,344 | 3,318,141 | |
Deposits paid | (1,133,657) | |
Deposit refunded | 15,592 | |
Purchase of fixed assets | (22,868) | (41,610) |
Net cash used in Investing activities | 3,310,865 | (1,175,267) |
Financing activities | ||
Decrease in bank overdraft | (28,056) | |
Repayment of mortgage loans | (3,001,101) | (66,080) |
Proceeds from convertible notes | 2,010,000 | 2,550,000 |
Repayment of convertible notes | (775,377) | (433,000) |
Proceeds from promissory notes | 153,541 | |
Proceeds from related party notes | 97,633 | (31,329) |
Net cash (used by) provided by financing activities | (1,515,304) | 1,991,535 |
Effect of exchange rate on cash | 233,063 | (253,690) |
Net change in cash | 287 | 344,802 |
Beginning cash balance | 24,674 | 339 |
Ending cash balance | 24,961 | 345,141 |
Supplemental cash flow information | ||
Cash paid for interest | 498,757 | 308,077 |
Cash paid for income taxes | ||
Non cash investing and financing activities | ||
Fair value of warrants issued | $ 1,206,775 |
Nature of Business
Nature of Business | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | 1. Nature of business Ethema Health Corporation (the “Company”) was incorporated under the laws of the state of Colorado, USA, on April 1, 1993. Effective April 4, 2017, the Company changed its name to Ethema Health Corporation and prior to that, on May 2012, the Company had changed its name to GreeneStone Healthcare Corporation from Nova Natural Resources Corporation. As of December 31, 2017, the Company owned 100% of the outstanding shares of GreeneStone Clinic Muskoka Inc., incorporated in 2010 under the laws of the Province of Ontario, Canada; Cranberry Cove Holdings Ltd., incorporated on January 9, 2004 under the laws of the Province of Ontario, Canada; Addiction Recovery Institute of America (“ARIA”) (formerly Seastone Delray Healthcare, LLC), incorporated on May 17, 2016 under the laws of Florida, USA; and Delray Andrews RE, LLC, incorporated on May 17, 2016 under the laws of Florida, USA. During December 2016, the Company obtained a license to operate and provide addiction treatment healthcare services in Florida, USA. The company commenced operations under this license with effect from January 2017. On February 14, 2017, the Company completed a series of transactions (referred to collectively as the “Restructuring Transactions”), including a Share Purchase Agreement (the “SPA”) whereby the Company acquired 100% of the stock of CCH, which holds the real estate on which the Company previously operated a rehabilitation clinic (“the Canadian Rehab Clinic”). The Company entered into an Asset Purchase Agreement (the “APA”) and lease (the “Lease”) whereby the Company sold all of the Canadian Rehab Clinic business assets and leased the real estate to the buyer. Simultaneously with this transaction, the Company entered into a Real Estate Purchase agreement and Asset Purchase Agreement whereby the Company purchased the real estate and business assets of Seastone Delray (the “Florida Purchase”). The Share Purchase Agreement Under the SPA, The Asset Purchase Agreement and Lease Under the APA, the assets of the Canadian Rehab Clinic were sold by the Company, through its subsidiary, GreeneStone Clinic Muskoka Inc. (“Muskoka”), to Canadian Addiction Residential Treatment LP (the “Purchaser”), for a total consideration of CDN$10,000,000, plus an additional payment of up to CDN$3,000,000 as a performance payment to be received in 2019 if certain clinic performance metrics are met. The Purchaser completed the sale with cash proceeds to the Company of CDN$10,000,000, of which CDN$1,500,000 was to remain in escrow for up to two years to cover indemnities given by the Company. The proceeds of the Muskoka clinic asset sale were used to pay down certain tax debts and operational costs of the Company and to fund the Florida Purchase, mentioned below. Through the APA, substantially all of the assets of the Canadian Rehab Clinic were sold, leaving Ethema with only the underlying clinic real estate, which the Company, through its newly acquired subsidiary, CCH, concurrently leased to the Purchaser. The Lease is a triple net lease and provides for a five (5) year primary term with three (3) five-year renewal options, annual base rent for the first year at CDN$420,000 with annual increases, an option to tenant to purchase the leased premises and certain first refusal rights. The Florida Purchase Immediately after closing on the sale of the assets of the Canadian Rehab Clinic, the Company closed on the acquisition of the real estate assets of Seastone Delray pursuant to certain real estate and asset purchase agreements The purchase price for the Seastone assets was US$6,070,000 financed with a purchase money mortgage of US$3,000,000, and US$3,070,000 in cash. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies Basis of presentation The (a) unaudited condensed consolidated balance sheets as of June 30, 2019, which have been derived from the unaudited condensed consolidated financial statements, and as of December 31, 2018, which have been derived from audited consolidated financial statements, and (b) the unaudited condensed consolidated statements of operations and cash flows of the Company, have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2019 are not necessarily indicative of results that may be expected for the year ending December 31, 2019. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K/A for the year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”) on April 22, 2019. All amounts referred to in the notes to the unaudited condensed consolidated financial statements are in United States Dollars ($) unless stated otherwise. a) Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. b) Principles of consolidation and foreign currency translation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions and balances have been eliminated on consolidation. Certain of the Company’s subsidiaries functional currency is the Canadian dollar, while the Company’s reporting currency is the U.S. dollar. All transactions initiated in Canadian dollars are translated into US dollars in accordance with ASC 830, “Foreign Currency Translation” as follows: ● Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. ● Equity at historical rates. ● Revenue and expense items and cash flows at the average rate of exchange prevailing during the period. Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ deficit as a component of accumulated other comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income (loss). For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period. The relevant translation rates are as follows: For the six months ended June 30, 2019, a closing rate of CDN$1.00 equals US$0.7641 and an average exchange rate of CDN$1.00 equals US$0.7498. For the six months ended June 30, 2018, a closing rate of CAD$1.00 equals US$0.7594 and an average exchange rate of CAD$1.0000 equals US$0.7715. c) Revenue Recognition ASU 2014-09 requires companies to exercise more judgment and recognize revenue using a five-step process. The Company adopted ASU 2014-09 using the modified retrospective method for all contracts effective January 1, 2018. Modified retrospective adoption requires entities to apply the standard retrospectively to the most current period presented in the financial statements, requiring the cumulative effect of the retrospective application as an adjustment to the opening balance of retained earnings at the date of initial application. Prior periods have not been adjusted. No cumulative effect adjustment in retained earnings was recorded as the adoption of ASU 2014-09 did not significantly impact the Company’s reported historical revenue. As a result of certain changes required by ASU 2014-09, the majority of the Company’s provision for doubtful accounts are recorded as a direct reduction to revenue instead of being presented as a separate line item on the consolidated statements of operations. The adoption of ASU 2014-09 has no impact on the Company’s accounts receivable as it was historically recorded net of allowance for doubtful accounts and contractual adjustments, and the Company has eliminated the presentation of allowance for doubtful accounts on the consolidated balance sheets. As our performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as our patients typically are under no obligation to remain admitted in our facilities. The Company receives payments from the following sources for services rendered in our U.S. Facility: (i) commercial insurers; and (ii) individual patients and clients. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and did not adjust for the effects of a significant financing component. The Company derives a significant portion of its revenue from other payors that receive discounts from established billing rates. The various managed care contracts under which these discounts must be calculated are complex, subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided in the Company’s in-patient facilities and cost settlement provisions. Management estimates the transaction price on a pay or specific basis given its interpretation of the applicable regulations or contract terms. The services authorized and provided and related reimbursement are often subject to interpretation that could result in payments that differ from the Company’s estimates. Additionally, updated regulations and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management. Settlements under cost reimbursement agreements with third-party payors are estimated and recorded in the period in which the related services are rendered and are adjusted in future periods as final settlements are determined. In the opinion of management, adequate provision has been made for any adjustments and final settlements. However, there can be no assurance that any such adjustments and final settlements will not have a material effect on the Company’s financial condition or results of operations. The Company’s accounts receivables were $240,656 and $202,654 for the six months ended June 30, 2019 and year ended December 31, 2018, respectively, and were included in other current assets in the consolidated balance sheets. Management believes that these receivables are properly stated and are not likely to be settled for a significantly different amount. The net adjustments to estimated accounts receivable settlements resulted in a decrease in revenues of $0 and $262,353 for the six months ended June 30, 2019 and the year ended December 31, 2018, respectively. The Company’s revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services, as defined below. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions: i. identify the contract with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to performance obligations in the contract; and v. recognize revenue as the performance obligation is satisfied. The Company has two operating segments from which it derives revenues which is recognized on the basis described below. i. Rental Income In terms of the lease agreement, on a monthly basis as long as the facility is utilized by the tenant ii. In-patient revenue The patients have been treated and provided with services by the Company; there is clear evidence that an arrangement exists; the amount of revenue and related costs can be measured reliably; and it is probable that the economic benefits associated with the transaction will flow to the Company. d) Non-monetary transactions The Company’s policy is to measure an asset exchanged or transferred in a non-monetary transaction at the more reliable measurement of the fair value of the asset given up and the fair value of the asset received, unless: ● The transaction lacks commercial substance; ● The transaction is a transfer between entities under common control; ● The transaction is an exchange of a product or property held for sale in the ordinary course of business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties to the exchange; ● Neither the fair value of the asset received nor the fair value of the asset given up is reliably measurable; or ● The transaction is a non-monetary, non-reciprocal transfer to owners that represents a spinoff or other form of restructuring or liquidation. e) Cash and cash equivalents The Company’s policy is to disclose bank balances under cash, including bank overdrafts with balances that fluctuate frequently from being positive to overdrawn and term deposits with a maturity period of three months or less from the date of acquisition. The Company had no cash equivalents at June 30, 2019 and December 31, 2018. f) Accounts receivable Accounts receivable primarily consists of amounts due from third-party payors (non-governmental) and private pay patients and is recorded net of allowances for doubtful accounts and contractual discounts. The Company’s ability to collect outstanding receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s unaudited condensed consolidated financial statements is recorded at the net amount expected to be received. The Company’s primary collection risks are (i) the risk of overestimating net revenues at the time of billing that may result in the Company receiving less than the recorded receivable, (ii) the risk of non-payment as a result of commercial insurance companies denying claims, (iii) the risk that patients will fail to remit insurance payments to the Company when the commercial insurance company pays out-of-network claims directly to the patient, (iv) resource and capacity constraints that may prevent the Company from handling the volume of billing and collection issues in a timely manner, (v) the risk that patients do not pay the Company for their self-pay balances (including co-pays, deductibles and any portion of the claim not covered by insurance) and (vi) the risk of non-payment from uninsured patients. g) Allowance for Doubtful Accounts, Contractual and Other Discounts The Company derives the majority of its revenues from commercial payors at out-of-network rates. Management estimates the allowance for contractual and other discounts based on its historical collection experience. The services authorized and provided and related reimbursement are often subject to interpretation and negotiation that could result in payments that differ from the Company’s estimates. The Company’s allowance for doubtful accounts is based on historical experience, but management also takes into consideration the age of accounts, creditworthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. An account is written off only after the Company has pursued collection efforts or otherwise determines an account to be uncollectible. Uncollectible balances are written-off against the allowance. Recoveries of previously written-off balances are credited to income when the recoveries are made. h) Financial instruments The Company initially measures its financial assets and liabilities at fair value, except for certain non-arm’s length transactions. The Company subsequently measures all its financial assets and financial liabilities at amortized cost. Financial assets measured at amortized cost include cash and accounts receivable. Financial liabilities measured at amortized cost include bank indebtedness, accounts payable and accrued liabilities, harmonized sales tax payable, withholding taxes payable, convertible notes payable, loans payable and related party notes. Financial assets measured at cost are tested for impairment when there are indicators of impairment. The amount of the write-down is recognized in net income. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in net income. The Company recognizes its transaction costs in net income in the period incurred. However, financial instruments that will not be subsequently measured at fair value are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption. FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: · Level 1. Observable inputs such as quoted prices in active markets; · Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and · Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. The Company measures its convertible debt and derivative liabilities associated therewith at fair value. These liabilities are revalued periodically and the resultant gain or loss is realized through the Statement of Operations. i) Plant and equipment Fixed assets are recorded at cost. Depreciation is calculated on the straight line basis over the estimated life of the asset: Leasehold improvements are depreciated using the straight-line method over the term of the lease. j) Leases Leases are classified as either capital or operating leases. Leases that transfer substantially all of the benefits and inherent risks of ownership of property to the Company are accounted for as capital leases. At the time a capital lease is entered into, an asset is recorded together with its related long-term obligation to reflect the acquisition and financing. Equipment recorded under capital leases is amortized on the same basis as described above. Payments under operating leases are expensed as incurred. k) Income taxes The Company accounts for income taxes under the provisions of ASC Topic 740, “Income Taxes”. ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties accrued on unrecognized tax benefits within general and administrative expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in general and administrative expenses in the period that such determination is made. The tax returns for fiscal 2001, through 2017 are subject to audit or review by the US tax authorities, whereas fiscal 2010 through 2017 are subject to audit or review by the Canadian tax authority. l) Net income (loss) per Share Basic net income (loss) per share is computed on the basis of the weighted average number of common stock outstanding during the period. Diluted net income (loss) per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation. Dilution is computed by applying the treasury stock method for options and warrants. Under this method, “in-the money” options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Dilution is computed by applying the if-converted method for convertible preferred stocks. Under this method, convertible preferred stock is assumed to be converted at the beginning of the period (or at the time of issuance, if later), and preferred dividends (if any) will be added back to determine income applicable to common stock. The shares issuable upon conversion will be added to weighted average number of common stock outstanding. Conversion will be assumed only if it reduces earnings per share (or increases loss per share). m) Stock based compensation Stock based compensation cost is measured at the grant date, based on the estimated fair value of the award and is recognized as expense over the employee’s requisite service period or vesting period on a straight-line basis. Share-based compensation expense recognized in the unaudited condensed consolidated statements of operations for the three months and six months ended June 30, 2019 and 2018 is based on awards ultimately expected to vest and has been reduced for estimated forfeitures. This estimate will be revised in subsequent periods if actual forfeitures differ from those estimates. We have minimal awards with performance conditions and no awards dependent on market conditions. n) Derivatives The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. The Company uses a Black Scholes Option Pricing model to estimate the fair value of convertible debt conversion features at the end of each applicable reporting period. Changes in the fair value of these derivatives during each reporting period are included in the statements of operations. Inputs into the Black Scholes Option Pricing model require estimates, including such items as estimated volatility of the Company’s stock, risk free interest rate and the estimated life of the financial instruments being fair valued. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature. o) Recent accounting pronouncements Adoption of Accounting Standards In February 2016, the Financial Accounting Standards Board (“FSAB”) issued Accounting Standards Update (“ASU”), No. 2016-02, Leases (Topic 842) (ASC 842) The amendments in this update establishes a comprehensive new lease accounting model. The new standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, including a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, an update which provides another transition method, the prospective transition method, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard on January 1, 2019 using the prospective transition method. The Company has identified all leases and reviewed the leases to determine the impact of ASC 842 on its unaudited condensed consolidated financial statements. The Company has elected to apply the practical expedient to certain classes of leases, whereby the separation of components of leases into lease and non-lease components is not required and all of the practical expedients to all leases, which include not reassessing (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. The adoption of the new standard resulted in the recording of a right-of-use asset and a lease liability on the unaudited condensed consolidated balance sheet on January 1, 2019 of $15,986,074. The adoption of ASU 2016-02, as amended, has had no impact on the unaudited condensed consolidated statements of operations or unaudited condensed consolidated statements of cash flows. Recent accounting pronouncements The FASB issued several updated during the period, none of these standards are either applicable to the Company or require adoption at a future date and are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption. p) Financial instruments Risks The Company is exposed to various risks through its financial instruments. The following analysis provides a measure of the Company’s risk exposure and concentrations at the balance sheet date, June 30, 2019 and December 31, 2018. i. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments that subject the Company to credit risk consist primarily of accounts receivable. Credit risk associated with accounts receivable of ARIA is mitigated as only a percentage of the revenue billed to health insurance companies is recognized as income until such time as the actual funds are collected. The revenue is concentrated amongst several health insurance companies located in the US. In the opinion of management, credit risk with respect to accounts receivable is assessed as low. ii. Liquidity risk Liquidity risk is the risk the Company will not be able to meet its financial obligations as they fall due. The Company is exposed to liquidity risk through its working capital deficiency of $14,412,879 accumulated deficit of $35,288,876. The Company will be dependent upon the raising of additional capital in order to implement its business plan. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. In the opinion of management, liquidity risk is assessed as high, material and remains unchanged from the prior year. iii. Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risk: interest rate risk, currency risk, and other price risk. The Company is exposed to interest rate risk and currency risk. a. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to minimal interest rate risk as there is no overdraft indebtedness as of June 30, 2019. In the opinion of management, interest rate risk is assessed as low, not material and remains unchanged from the prior year. b. Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is subject to currency risk as it has subsidiaries that operate in Canada and are subject to fluctuations in the Canadian dollar. A substantial portion of the Company’s financial assets and liabilities are denominated in Canadian dollars. Based on the net exposures at June 30, 2019, a 5% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in an approximate $83,570 increase or decrease in the Company’s after tax net income from operations. The Company has not entered into any hedging agreements to mitigate this risk. In the opinion of management, currency risk is assessed as low, material and remains unchanged from the prior year. c. Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. In the opinion of management, the Company is not exposed to this risk and remains unchanged from the prior year. q) Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Going concern
Going concern | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 3. Going concern The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with US GAAP applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations in the normal course of business. As at June 30, 2019 the Company has a working capital deficiency of $14,412,879 and accumulated deficit of $35,288,876. Management believes that current available resources will not be sufficient to fund the Company’s planned expenditures over the next 12 months. Accordingly, the Company will be dependent upon the raising of additional capital through placement of common shares, and/or debt financing in order to implement its business plan, and generating sufficient revenue in excess of costs. If the Company raises additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of common stock or convertible senior notes. If the Company raises additional funds by issuing debt, the Company may be subject to limitations on its operations, through debt covenants or other restrictions. If the Company obtains additional funds through arrangements with collaborators or strategic partners, the Company may be required to relinquish its rights to certain geographical areas, or techniques that it might otherwise seek to retain. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. These factors create substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities or other adjustments that may be necessary should the Company not be able to continue as a going concern. |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses and other current assets | 4. Prepaid expenses and other current assets Prepaid expenses and other current assets includes the following: On February 25, 2019, the Company entered into a Letter of Intent whereby it would purchase a 33.33% interest in Local Link Wellness, LLC (“LLW”) for gross proceeds of $400,000. LLW proposes to provide a comprehensive addiction treatment program to large employee groups. The company has advanced LLW a total of $120,000 as at June 30, 2019. These funds were advanced as short-term promissory notes that are immediately due and payable. |
Assets held for resale
Assets held for resale | 6 Months Ended |
Jun. 30, 2019 | |
Increase in bank overdraft | |
Assets held for resale | 5. Assets held for resale On April 2, 2019, the Company entered into a Commercial Contract whereby the real property at 801 Andrews Avenue, Delray Beach, Florida, consisting of land and condominiums thereon, was sold to JAGGM, LLC for $3,500,000. This transaction closed on April 26, 2019. The loss realized on the disposal was calculated as follows: Amount Proceeds received $ 3,500,485 Less: closing costs (182,344 ) Net proceeds received 3,318,141 Assets sold: Land 1,877,618 Buildings thereon 2,060,219 Furniture and fixtures 72,792 4,010,629 Loss on disposal $ 692,488 |
Deposit on Real Estate
Deposit on Real Estate | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Deposit on Real Estate | 6. Deposit on real estate On November 2, 2017, the Company entered into an Agreement to purchase from AREP 5400 East Avenue LLC certain buildings in West Palm Beach, Florida, totaling approximately 80,000 square feet, on which the present tenant operates a substance abuse treatment center. The purchase price of the Property is $20,530,000. The Company made a series of nonrefundable down payments totaling $2,924,955 and $1,825,000 as of June 30, 2019 and $2,940,546 as of December 31, 2018. On May 23, 2018, the Company converted the agreement to purchase AREP 5400 East Avenue LLC. (“the landlord”) into a lease agreement with a purchase option of $17,250,000, increasing by $750,000 per month, commencing on August 31, 2018, until the purchase option is exercised. The premises is located at 5400, 5402 and 5410 East Avenue, West Palm Beach, Florida (the “Property”). The lease is for an initial 10 years and provides for two additional 10 year extensions. The Company was previously under agreement to purchase the property from the landlord. The property is presently used as a rehabilitation treatment center. The current tenant at the property, Alternatives in Treatment, LLC, a Florida limited liability company, consented to the Lease and concurrent with the execution of the Lease entered into a Sublease Agreement with the Company. |
Due from sale of business
Due from sale of business | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Due from sale of business | 7. Due on sale of business On February 14, 2017, the Company sold its Canadian Rehab Clinic for gross proceeds of CDN$10,000,000, of which CDN$1,500,000 had been retained in an escrow account for a period of up to two years in order to guarantee the warranties provided by the Company in terms of the APA. As of June 30, 2019, CDN$1,055,042 of the escrow had been refunded to the Company and CDN$365,268 had been used to affect building improvements to the premises owned by CCH, for a total reduction of CDN$1,420,310. The remaining escrow balance was CDN$100,000 consisting of principal of CDN$76,690 and accrued interest thereon of CDN$20,310. |
Property plant and equipment
Property plant and equipment | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property plant and equipment | 8. Property, plant and equipment Property, plant and equipment consists of the following: June 30, December 31, 2018 Cost Accumulated Depreciation Net book value Net book value Land $ 1,040,596 $ — $ 1,040,596 $ 2,911,530 Property 4,059,658 (408,047 ) 3,651,611 5,750,045 Leasehold improvements 271,074 (15,006 ) 256,068 251,774 Furniture and fixtures — — — 35,000 $ 5,371,328 $ (423,053 ) $ 4,948,275 $ 8,948,349 Depreciation expense for the three months ended June 30, 2019 and 2018 was $56,419 and $68,041, respectively, and for the six months ended June 30, 2019 and 2018 was $132,295 and $136,456, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Leases | 9. Leases Adoption of ASC Topic 842, Leases On January 1, 2019, the Company adopted Topic 842 using the modified retrospective method applied to leases that were in place as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 840. The Company's leases consists of operating leases that relate to real estate rental agreements. All of the value of the Company's lease portfolio relates to a real estate lease agreement that was entered into in May 2018. Practical Expedients and Elections The Company elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We also elected the short-term lease recognition exemption for all leases that qualify. Discount Rate applied to property operating lease To determine the present value of minimum future lease payments for operating leases at January 1, 2019, the Company was required to estimate a rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment (the "incremental borrowing rate" or "IBR"). The Company determined the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the average of (i) the risk free interest rate adjusted for a premium for Company and liquidity risk; (ii) the weighted average mortgage interest rate currently availed to the Company; and (iii) the fifteen year mortgage interest rate. The weighted average rate the Company determined was 4.76% as an appropriate incremental borrowing rate to apply to its real-estate operating lease. Right of use assets Right of use assets are included in the unaudited condensed consolidated Balance Sheet are as follows: June 30, Non-current assets Right of use assets, operating leases, net of amortization $ 15,467,645 Total operating lease cost Individual components of the total lease cost incurred by the Company is as follows: Six months Operating lease expense $ 1,068,624 Minimum rental payments under operating leases are recognized on a straight-line basis over the term of the lease. Maturity of operating leases The amount of future minimum lease payments under operating leases are as follows: Amount Remainder of 2019 $ 917.930 2020 1,882,422 2021 1,962,242 2022 2,042,062 2023 and thereafter 12,436,420 Total undiscounted minimum future lease payments 19,241,076 Deferred rental liability on straight line amortization 183,952 Imputed interest (3,764,431 ) Total operating lease liability $ 15,660,597 Disclosed as: Current portion $ 835,898 Non-current portion 14,824,699 $ 15,660,597 |
Taxes Payable
Taxes Payable | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Taxes Payable | 10. Taxes payable The taxes payable consist of: ● A payroll tax liability of $139,520 (CDN$182,589) in Greenestone Muskoka which has not been settled as yet. ● The Company has assets and operates businesses in Canada and is required to disclose these operations to the US taxation authorities, the requisite disclosure has not been made. Management has reserved the maximum penalty due to the IRS in terms of non-disclosure. This non-compliance with US disclosure requirements is currently being addressed. An amount of $250,000 has been accrued for any potential exposure the Company may have. ● Estimated income taxes payable in certain of the Canadian operations. June 30, December 31, Payroll taxes $ 139,520 $ 133,843 HST/GST payable 4,670 33,757 US penalties due 250,000 250,000 Income tax payable 372,965 357,792 $ 767,155 $ 775,392 |
Convetible notes
Convetible notes | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible notes | 11. Convertible notes The convertible notes consist of the following: Interest rate Maturity date Principal Interest Debt Discount June 30, 2019 December 31, 2018 Leonite Investments LLC 11.0 % July 25, 2019 $ 2,243,179 $ 63,793 $ (32,391 ) $ 2,274,581 $ 2,494,180 Power Up Lending Group Ltd 9.0 % May 15,2019 - - - - 94,595 9.0 % September 10, 2019 - - - - 44,484 9.0 % October 30, 2019 53,000 2,247 (21,993 ) 33,254 - 9.0 % November 15, 2019 138,000 5,206 (65,443 ) 77,763 - 9.0 % January 30, 2020 128,000 3,661 (69,543 ) 62,118 - First Fire Global Opportunities Fund 12.0 % December 9, 2019 200,000 3,205 (114,909 ) 88,296 - Series N convertible notes 6.0 % May 17, 2019 to June 11,2020 2,999,000 135,741 (1,097,833 ) 2,036,908 1,770,214 $ 4,572,920 $ 4,403,4 73 Leonite Investments, LLC On December 1, 2017, the Company closed on a private offering to raise US $1,500,000 in capital. The Company issued one senior secured convertible promissory note with a principal amount of $1,650,000 to Leonite Capital, LLC (“Leonite”). The note is convertible into shares of common stock at a conversion price of $0.06 per share, subject to anti-dilution and price protection. The Note bears interest at the rate of 8.5% per annum. The Note’s amended maturity date was December 1, 2018. During the term of the Note the Company and the Subsidiaries will be obligated to make monthly payment of accrued and unpaid interest. The Note contains Company and Subsidiary representations and warranties, covenants, events of default, and registration rights. The Company paid a commitment fee of $132,000 settled through the issue of 1,650,000 shares of common stock and paid $20,000 towards the lenders legal fees. In conjunction with this note, the Company issued a five year warrant to purchase 27,500,000 shares of common stock at an exercise price or $0.10 per share, subject to antidilution and price protection. The Note provided that the parties use reasonable best efforts to close on the remaining $1,200,000 of availability under the Note by January 1, 2018. As a condition to the closing of the Balance Tranche, the parties must finalize and enter into additional agreements related to the Private Offering, including, but not limited to, (i) a Securities Purchase Agreement; (ii) a Warrant Agreement under which the Investor will have the right to purchase up to 27,500,000 shares of the Company’ common stock for $0.10 per share, subject to adjustment, for a period of five years; (iii) a Securities Pledge Agreement under which the Company and the Subsidiaries will grant the lender a blanket lien on their assets, and the Company will pledge its equity ownership in the Subsidiaries. Upon the closing of the Balance Tranche the maturity date of the Note was to become December 1, 2018. On December 29, 2017, effective as of December 1, 2017, the Company and the Subsidiaries entered into an Amended and Restated Senior Secured Convertible Promissory Note, which note amended and restated the Note to (a) extend the maturity date to December 1, 2018; (b) remove CCH, as an obligor; (c) increase the interest rate by 2.00% per annum, to 8.5% per annum; and (d) issue an additional 250,000 shares of the Company’s common stock to the Investor. In connection with the execution of the amendment, the parties entered into (i) a Securities Purchase Agreement; (ii) a Warrant Agreement under which the Investor will have the right to purchase up to 27,500,000 shares of the Company’ common stock for $0.10 per share, subject to adjustment, for a period of five years; (iii) a Security and Pledge Agreement and a General Security Agreement under which the Company and the Subsidiaries will grant the Investor a blanket lien on their assets, and the Company will pledge its equity ownership in the Subsidiaries; effective January 2, 2018. At the execution of the Note, the Investor funded an initial tranche of $300,000. Thereafter the Investor funded a second tranche of $156,136. Upon the execution of the A&R Note the Investor funded a third tranche of $100,000. Upon the execution of the First Amendment the Investor funded a final tranche of $850,000, with the remaining $93,764 of availability under the A&R Note, as amended, serving as a holdback pursuant to the terms of the First Amendment. On March 12, 2018, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $330,000, including an Original Issue Discount of $30,000, for net proceeds of $300,000. The note had a maturity date of March 19, 2018. The outstanding principal amount of the note was convertible at any time and from time to time at the election of the purchaser following the issue date into shares of the Company’s common stock at a conversion price equal to $0.06 per share subject to anti-dilution and price protection. The Company paid a commitment fee of $19,800 settled through the issue of 330,000 shares of common stock. This note was repaid on the maturity date for gross proceeds of $330,000. On March 29, 2018, the Company, entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $165,000, including an Original Issue Discount of $15,000, for net proceeds of $150,000. The note had a maturity date of December 1, 2018 and bears interest at a rate of 8.5% per annum. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser following the issue date into shares of the Company’s common stock at a conversion price equal to $0.06 per share subject to anti-dilution and price protection. The Company paid a commitment fee of $11,550 settled through the issue of 165,000 shares of common stock. In conjunction with this note the Company issued a five year warrant to purchase 5,500,000 shares of common stock at an exercise price of $0.10 per share, subject to anti-dilution and price protection. On April 17, 2018, the Company, entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $605,000, including an Original Issue Discount of $55,000, for net proceeds of $550,000. The note had a maturity date of December 1, 2018 and bears interest at 8.5% per annum. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser following the issue date into shares of the Company’s common stock at a conversion price equal to $0.06 per share subject to price protection and anti-dilution protection. The Company paid a commitment fee of $42,350 settled through the issue of 10,083,333 shares of common stock. In conjunction with this note the Company issued a five year warrant to purchase 10,083,333 shares of common stock at an exercise price of $0.10 per share, subject to anti-dilution and price protection. On November 5, 2018, the Company, entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $111,111, including an Original Issue Discount of $11,111, for net proceeds of $100,000. The note had a maturity date of November 30, 2018 and bore interest at 1.0% per annum. The outstanding principal amount of the note was convertible at any time and from time to time at the election of the purchaser following the issue date into shares of the Company’s common stock at a conversion price equal to $0.06 per share subject to price protection and anti-dilution protection. The Company paid a commitment fee of $8,889 settled through the issue of 111,111 shares of common stock. In conjunction with this note the Company issued a five year warrant to purchase 1,400,000 shares of common stock at an exercise price of $0.10 per share, subject to anti-dilution and price protection. This note was repaid on the maturity date for gross proceeds of $111,184. On January 17, 2019, the Company, entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $71,111, including an Original Issue Discount of $7,111, for net proceeds of $64,000. The note had a maturity date of July 25, 2019 and bears interest at 11.0% per annum. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser following the issue date into shares of the Company’s common stock at a conversion price equal to $0.06 per share subject to price protection and anti-dilution protection. The Company paid a commitment fee of $4,978 settled through the issue of 71,111 shares of common stock. In conjunction with this note the Company issued a five year warrant to purchase 1,185,183 shares of common stock at an exercise price of $0.10 per share, subject to anti-dilution and price protection. Effective March 19, 2019, the Company entered into a note extension agreement with Leonite, whereby the convertible notes outstanding to Leonite, amounting to $2,420,000, for consideration of $75,000 added to the principal outstanding on the note on January 1, 2019, a further $75,000 added to the principal outstanding on the note on February 1, 2019 and a further $100,000 added to the principal of the note on March 15, 2019, the maturity date of all of the convertible notes above were extended to July 25, 2019. Power Up Lending Group LTD On July 31, 2018, the Company, entered into a Securities Purchase Agreement with Power Up, pursuant to which the Company issued to the Purchaser a Convertible Promissory Note in the aggregate principal amount of $153,000. The Note has a maturity date of May 15, 2019 and bears interest at the rate of nine percent per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of the Purchaser during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to 61% of the lowest closing bid price of the Company’s common stock for the ten trading days prior to conversion. On January 28, 2019, the Company repaid the Power Up convertible note entered into on July 31, 2018 of $153,000 together with interest and early settlement penalty thereon for a payout of $207,679. On September 10, 2018, the Company, entered into a Securities Purchase Agreement with Power Up, pursuant to which the Company issued to the Purchaser a Convertible Promissory Note in the aggregate principal amount of $133,000. The Note has a maturity date of September 10, 2019 and bears interest at the rate of nine percent per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of the Purchaser during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to 61% of the lowest closing bid price of the Company’s common stock for the ten trading days prior to conversion. On March 11, 2019, the Company repaid the Power Up convertible note entered into on September 10, 2018, of $133,000 together with interest and early settlement penalty thereon for gross proceeds of $180,062. On January 9, 2019, the Company, entered into a Securities Purchase Agreement with Power Up, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $53,000 for net proceeds of $50,000 after expenses. The Note has a maturity date of October 30, 2019 and bears interest at the rate of nine percent per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of Power Up during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to 61% of the lowest closing bid price of the Company’s common stock for the ten trading days prior to conversion. On January 28, 2019, the Company, entered into a Securities Purchase Agreement with Power Up, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $138,000 for net proceeds of $135,000 after expenses. The Note has a maturity date of November 15, 2019 and bears interest at the rate of nine percent per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of Power Up during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to 61% of the lowest closing bid price of the Company’s common stock for the ten trading days prior to conversion. On March 6, 2019, the Company, entered into a Securities Purchase Agreement with Power Up, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $128,000. The Note has a maturity date of January 30, 2020 and bears interest at the rate of nine percent per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of Power Up during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to 61% of the lowest closing bid price of the Company’s common stock for the ten trading days prior to conversion. First Fire Global Opportunities Fund On March 5, 2019, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $200,000, for net proceeds of $192,000 after the payment of legal fees and origination fees amounting to $8,000. The note has a maturity date of December 9, 2019. The outstanding principal amount of the note is convertible at any time and from time to time at the election of the purchaser 180 days after the issued date into shares of the Company’s common stock at the lower of $0.08 per share or 65% of the lowest trade price during the ten consecutive trading days immediately prior to conversion. The note has certain buyback terms if the Company consummates a registered or unregistered primary offering of securities for capital raising purposes, or an option to convert at a 20% discount to the offering price to investors. Series N convertible notes During the period from May 17, 2018 to December 4, 2018, The Company closed several tranches of a private offering in which it raised $2,505,000 in principal from 12 accredited investors through the issuance to the investors of the Company’s Series N convertible notes, in the total original principal amount of $2,505,000, which Notes are convertible into the Company’s common stock at a conversion price of $0.08 per share together with three year warrants to purchase up to a total of 31,312,500 shares of the Company’s common stock at an exercise price of $0.12 per share. Both the conversion price under the Notes and the exercise price under the warrants are subject to standard price and anti-dilution adjustment mechanisms. The notes mature between May 16, 2019 to December 3, 2019. Between January 28, 2019 and June 12, 2019, the Company closed several tranches of Series N Convertible notes in which it raised $1,444,000 in principal from accredited investors through the issuance to the investors of the Company’s Series N convertible notes, in the total original principal amount of $1,444,000, which Notes are convertible into the Company’s common stock at a conversion price of $0.08 per share together with three year warrants to purchase up to a total of 18,050,000 shares of the Company’s common stock at an exercise price of $0.12 per share. Both the conversion price under the Notes and the exercise price under the warrants are subject to standard adjustment mechanisms. The notes mature one year from the date of issuance. On May 15, 2019, one investor converted the aggregate principal amount of $950,000 of Series N convertible notes into 11,875,000 shares of common stock at a conversion price of $0.08 per share. |
Mortgage Loans
Mortgage Loans | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Mortgage Loans | 12. Mortgage loans Mortgage loans payable is disclosed as follows: Interest Maturity date Principal Accrued June 30, December 31, Cranberry Cove Holdings, Ltd. Pace Mortgage 4.2 % July 19, 2022 $ 4,011,864 $ 5,078 $ 4,016,942 $ 3,924,836 ARIA Mortgage 5.0 % February 13, 2020 - - - 2,954,786 $ 4,011,864 $ 5,078 $ 4,016,942 $ 6,879,622 Disclosed as follows: Short-term portion $ 110,815 $ 172,276 Long-term portion 3,906,127 6,707,346 $ 4,016,942 $ 6,879,622 The aggregate amount outstanding is payable as follows: Amount Within one year 110,815 One to two years 110,225 Two to three years 114,903 Three to four years 3,680,999 Total $ 4,016,942 Cranberry Cove Holdings, Ltd – Pace mortgage On July 19, 2017, CCH, a wholly owned subsidiary, closed on a loan agreement in the principal amount of CDN$5,500,000. The loan is secured by a first mortgage on the premises owned by CCH located at 3571 Muskoka Road 169, Bala, Ontario (the “Property”). The loan bears interest at the fixed rate of 4.2% with a 5-year primary term and a 25-year amortization. The Company has guaranteed the loan and the Company’s chief executive officer and controlling shareholder also has personally guaranteed the Loan. CCH and the Company have granted the Lender a general security interest in its assets to secure repayment of the Loan. The loan is amortized with monthly installments of CDN $29,531. ARIA On February 13, 2017, the Company, through its subsidiary, ARIA, entered into a Mortgage and Security Agreement to purchase the properties located at 801 and 810 Andrews Avenue, Delray Beach, Florida, for an aggregate principal sum of $3,000,000, bearing interest at the rate of 5% per annum, maturing on February 13, 2020, with monthly installments of $15,000. On April 2, 2019, the Company entered into a Commercial Contract whereby the real property at 801 Andrews Avenue, Delray Beach, Florida, consisting of land and condominiums thereon, was sold to JAGGM, LLC for $3,500,000. This transaction closed during April 2019 and the principal mortgage liability of $2,942,526, including interest thereon was settled. |
Derivative Liabilities
Derivative Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Derivative Liabilities | 13. Derivative liabilities The short-term convertible notes, together with certain warrants issued to Leonite and the short term convertible notes disclosed in note 11 above and note 15 below, have variable priced conversion rights with no fixed floor price and will reprice dependent on the share price performance over varying periods of time. This gives rise to a derivative financial liability, which was initially valued at inception of the convertible notes at $1,335,709 using a Black-Scholes valuation model. The derivative liability is marked-to-market on a quarterly basis. As of June 30, 2019, the derivative liability was valued at $3,924,231. The following assumptions were used in the Black-Scholes valuation model: Six months ended Calculated stock price $0.07 to $0.09 Risk free interest rate 1.71% to 2.56% Expected life of convertible notes and warrants 3 to 60 months expected volatility of underlying stock 124.7% to 206.8% Expected dividend rate 0 % The movement in derivative liability is as follows: June 30, 2019 December 31, 2018 Opening balance (January 1) $ 4,618,080 $ 2,859,832 Derivative liability on issued convertible notes and variable priced warrants 561,022 1,335,709 Fair value adjustments to derivative liability (1,254,871 ) 422,539 Closing balance $ 3,924,231 $ 4,618,080 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related party transactions Shawn E. Leon As of June 30, 2019 and December 31, 2018 the Company had a receivable of $59,763 and $32,650, respectively from Shawn E. Leon. Mr. Leon is a director and CEO of the Company. The balances receivable is non-interest bearing and has no fixed repayment terms. Mr. Leon was paid management fees of $0 and $92,098 for the six months ended June 30, 2019 and 2018 respectively. Leon Developments, Ltd. As of June 30, 2019 and December 31, 2018, the Company owed Leon Developments, Ltd., $1,658,386 and $1,581,499, respectively. The balance owing to Leon Developments, Ltd. Is non-interest bearing and has no fixed terms of repayment. Eileen Greene As of June 30, 2019 and December 31, 2018, the Company owed Eileen Greene, the spouse of Mr. Leon, $1,165,119 and $1,034,114, respectively. The amount owing to Ms. Greene is non-interest bearing and has no fixed repayment terms. All related party transactions occur in the normal course of operations and in terms of agreements entered into between the parties. |
Stockholders' deficit
Stockholders' deficit | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' deficit | 15. Stockholders' deficit a) Common shares Authorized, issued and outstanding The Company has authorized 500,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding 143,596,452 and 124,300,341as of June 30, 2019 and December 31, 2018, respectively. On January 17, 2019, the Company issued 71,111 shares of common stock to Leonite in connection with the closing of a financing of a Senior Secured Convertible Note. The shares were valued at $4,978 on the issue date and recorded as a debt discount. On May 15, 2019, a Series N convertible note holder converted an aggregate principal amount of $950,000 of principal debt into 11,875,000 at a conversion price of $0.08 per share. During June 2019, the Company issued a total of 5,300,000 shares of common stock to certain consultants, directors and employees for services rendered during the course of the current fiscal year. These shares of common stock were valued at $371,000 at the date of grant. During June 2019, the Company issued a total of 2,050,000 shares of common stock to certain investors as bonus shares. These shares were valued at $0.07 per share on the date of issuance. b) Preferred shares Authorized, issued and outstanding The Company has authorized 13,000,000 preferred shares with a par value of $0.01 per share, designated as 3,000,000 series A convertible preferred shares and 10,000,000 series B convertible preferred shares. The Company has no preferred shares issued and outstanding. c) Warrants In terms of the convertible note agreements entered into with Leonite disclosed in note 11 above, the Company granted warrants exercisable over a total of 1,185,183 shares of common stock at an initial exercise price of $0.10 per share, which was recorded as a debt discount. In terms of the Series N Convertible debt issued to various accredited investors, disclosed in note 11 above, the Company granted warrants exercisable over a total of 18,050,000 shares of common stock at an initial exercise price of $0.12 per share, which was recorded as a debt discount. The warrants were valued using a Black Scholes pricing model and the relative fair value method, on the date of grant at $1,231,258 using the following weighted average assumptions: Six months ended Calculated stock price $0.07 to $0.09 Risk free interest rate 1.81% to 2.58% Expected life of warrants 36 to 60 months expected volatility of underlying stock 169.8% to 186.7% Expected dividend rate 0 % The volatility of the common stock is estimated using historical data of the Company’s common stock. The risk-free interest rate used in the Black Scholes pricing model is determined by reference to historical U.S. Treasury constant maturity rates with maturities approximate to the life of the warrants granted. An expected dividend yield of zero is used in the valuation model, because the Company does not expect to pay any cash dividends in the foreseeable future. As of June 30, 2019, the Company does not anticipate any awards will be forfeited in the valuation of the warrants. A summary of all of the Company’s warrant activity during the period January 1, 2018 to June 30, 2019 is as follows: No. of shares Exercise price per Weighted average exercise price Outstanding January 1, 2018 49,504,075 0.0033 to $.0.10 $ 0.0690 Granted 48,295,833 0.10 to $0.12 0.1130 Forfeited/cancelled — — — Exercised — — — Outstanding December 31, 2018 97,799,908 $0.03 to $0.12 $ 0.0910 Granted 19,235,183 $0.10 to $0.12 0.1188 Forfeited/cancelled (300,000 ) $0.0033 (0.0033 ) Exercised — — — Outstanding June 30, 2019 116,735,091 $0.03 to $0.12 $ 0.0954 The following table summarizes information about warrants outstanding at June 30, 2019: Warrants outstanding Warrants exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.03 21,704,075 0.73 21,704,075 $0.10 45,668,516 3.60 45,668,516 $0.12 49,362,500 2.35 49,362,500 116,735,091 2.54 $ 0.0954 116,735,091 $ 0.0954 All of the warrants outstanding as of June 30, 2019 and December 31, 2018 are vested. The warrants outstanding as of June 30, 2019 have an intrinsic value of $868,163. d) Stock options Our board of directors adopted the Greenestone Healthcare Corporation 2013 Stock Option Plan (the “Plan”) to promote our long-term growth and profitability by (i) providing our key directors, officers and employees with incentives to improve stockholder value and contribute to our growth and financial success and (ii) enable us to attract, retain and reward the best available persons for positions of substantial responsibility. A total of 10,000,000 shares of our common stock have been reserved for issuance upon exercise of options granted pursuant to the Plan. The Plan allows us to grant options to our employees, officers and directors and those of our subsidiaries; provided that only our employees and those of our subsidiaries may receive incentive stock options under the Plan. We have granted a total of 480,000 options as of June 30, 2019 under the Plan. No options were issued, exercised or cancelled during the six months ended June 30, 2019 and the year ended December 31, 2018, respectively. The following table summarizes information about options outstanding as of June 30, 2019: Options outstanding Options exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.12 480,000 0.34 480,000 480,000 0.34 $ 0.12 480,000 $ 0.12 The Company issued Stock options to a former officer vesting over a 24-month period commencing on November 1, 2014 expiring on October 31, 2019, a formal option agreement has not been issued as yet, as such the terms of these options are uncertain. As of June 30, 2019 there was no unrecognized compensation costs related to these options and the fair value of the options as of June 30, 2019 was $0. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Segment Information | 16. Segment information The Company has two reportable operating segments: a. Rental income from the property owned by CCH subsidiary located at 3571 Muskoka Road, #169, Bala, on which the operations of the Canadian Rehab Clinic were located prior to disposal on February 14, 2017 and subsequently leased to the purchasers of the business of the Canadian Rehab Clinic, for a period of 5 years renewable for a further three five-year periods and with an option to acquire the property at a fixed price. b. Rehabilitation Services provided to customers, these services were provided to customers at the Company’s Addiction Recovery Institute of America and Seastone of Delray operations. The segment operating results of the reportable segments are disclosed as follows: Three months ended June 30, 2019 Rental Operations In-Patient services Total Revenue $ 82,461 $ 15,725 $ 98,186 Operating expenses 36,989 1,456,334 1,493,323 Operating income (loss) 45,472 (1,440,609 ) (1,395,137 ) Other (expense) income Loss on disposal of property — (692,488 ) (692,488 ) Bonus shares issued to investors — (143,500 ) (143,500 ) Interest expense (40,666 ) (156,388 ) (197,054 ) Amortization of debt discount — (828,313 ) (828,313 ) Loss on change in fair value of derivative liability — 1,728,172 1,728,172 Foreign exchange movements (26,066 ) (116,766 ) (142,832 ) Net loss before taxation (21,260 ) (1,649,892 ) (1,671,152 ) Taxation — — — Net loss from operations $ (21,260 ) $ (1,649,892 ) $ (1,671,152 ) Three months ended June 30, 2018 Rental Operations In-Patient services Total Revenue $ 83,031 $ (16,337 ) $ 66,694 Operating expenses 45,102 750,366 795,468 Operating income (loss) 37,929 (766,703 ) (728,774 ) Other (expense) income Interest income — (49 ) (49 ) Interest expense (42,845 ) (133,742 ) (176,587 ) Amortization of debt discount — (1,339,885 ) (1,339,885 ) Loss on change in fair value of derivative liability — (796,795 ) (796,795 ) Foreign exchange movements 18,345 92,283 110,628 Net income (loss) before taxation 13,429 (2,944,891 ) (2,931,462 ) Taxation — — — Net income (loss) from operations $ 13,429 $ (2,944,891 ) $ (2,931,462 ) The segment operating results of the reportable segments are disclosed as follows: Six months ended June 30, 2019 Rental Operations In-Patient services Total Revenue $ 164,476 $ 15,725 $ 180,201 Operating expenses 74,229 2,895,607 2,969,836 Operating income (loss) 90,247 (2,879,882 ) (2,789,635 ) Other (expense) income Interest income — 15,262 15,262 Loss on disposal of property — (692,488 ) (692,488 ) Bonus shares issued to investors — (143,500 ) (143,500 ) Interest expense (82,046 ) (460,091 ) (542,137 ) Amortization of debt discount — (1,590,255 ) (1,590,255 ) Loss on change in fair value of derivative liability — 1,254,871 1,254,871 Foreign exchange movements (45,296 ) (226,654 ) (271,950 ) Net loss before taxation (37,095 ) (4,722,737 ) (4,759,832 ) Taxation — — — Net loss from operations $ (37,095 ) $ (4,722,737 ) $ (4,759,832 ) Six months ended June 30, 2018 Rental Operations In-Patient services Total Revenue $ 167,143 $ 12,853 $ 179,996 Operating expenses 76,504 1,250,811 1,327,315 Operating income (loss) 90,639 (1,237,958 ) (1,147,319 ) Other (expense) income Interest expense (92,895 ) (254,143 ) (347,038 ) Amortization of debt discount — (2,092,834 ) (2,092,834 ) Loss on change in fair value of derivative liability — (808,951 ) (808,951 ) Foreign exchange movements 47,555 200,969 248,524 Net income (loss) before taxation 45,299 (4,192,917 ) (4,147,618 ) Taxation — — — Net income (loss) from operations $ 45,299 $ (4,192,917 ) $ (4,147,618 ) The segment operating results of the reportable segments are disclosed as follows: The operating assets and liabilities of the reportable segments are as follows: June 30, 2019 Rental Operations In-Patient services Total Purchase of fixed assets — 22,868 22,868 Assets Current assets 9,630 558,680 568,310 Non-current assets 2,916,346 20,509,941 23,426,287 Liabilities Current liabilities (2,075,136 ) (12,906,053 ) (14,981,189 ) Non-current liabilities (4,016,852 ) (14,713,974 ) (18,730,826 ) Intercompany balances 719,954 (719,954 ) — Net liability position (2,446,058 ) (7,271,360 ) (9,717,418 ) |
Net loss per common share
Net loss per common share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net loss per common share | 17. Net loss per common share For the three and six months ended June 30, 2019 and 2018, the following options and warrants were excluded from the computation of diluted net loss per share as the results would have been anti-dilutive. June 30, June 30, Stock options 480,000 480,000 Warrants 116,735,091 82,587,408 Convertible notes 78,944,078 43,916,472 196,159,169 126,983,880 |
Commitments and contingencies
Commitments and contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 18. Commitment and contingencies a) Contingency related to outstanding penalties The Company has provided for potential US penalties of $250,000 due to non-compliance with the filing of certain required returns. The actual liability may be higher due to interest and penalties assessed by these taxing authorities. b) Option to purchase lease property On May 23, 2018, the Company entered into a Lease Agreement pursuant to which it leased from the AREP 5400 East Avenue LLP (the “Landlord”), the premises located at 5400, 5402, and 5410 East Avenue, West Palm Beach, Florida (the “Property”). The Lease has an initial term of 10 years and provides for 2 additional 10 year extensions. The Company has the option to purchase the property initially for $17,250,000, which amount has increased to $25,500,000 as of July 31, 2019, plus any landlord funded improvements. The option to purchase increases by $750,000 per calendar month. The initial base rental is $146,337 per month, plus any taxes imposed on the premises or the base rental. c) Future minimum operating lease payments In terms of the lease agreement mentioned above the Company is obligated to make the following minimum undiscounted lease payments: Amount Remainder of 2019 $ 917,930 2020 1,882,422 2021 1,962,242 2022 2,042,062 2023 and thereafter 12,436,420 Total undiscounted minimum future lease payments $ 19,241,076 d) Mortgage payments The Company is obligated to make the following mortgage loans payments: Amount Within one year $ 110,815 One to two years 110,225 Two to three years 114,903 Three to four years 3,680,999 Total $ 4,016,942 e) Other The Company has principal and interest payment commitments under the Convertible notes disclosed under Note 11 above. Conversion of these notes are at the option of the investor, if not converted these notes may need to be repaid. From time to time, the Company and its subsidiaries enter into legal disputes in the ordinary course of business. The Company believes there are no material legal or administrative matters pending that are likely to have, individually or in the aggregate, a material adverse effect on its business or results of operations. |
Subsequent events
Subsequent events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent events | 19. Subsequent events On July 8, 2019, 2019, the Company, entered into a Securities Purchase Agreement with Labrys Fund, LP, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $282,000 for net proceeds of $253,800 after an original issue discount of $28,200. The Note has a maturity date of January 8, 2020 and bears interest at the rate of twelve percent per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of Power Up during the period beginning on the date that is 180 days following the issue date into shares of the Company's common stock at a conversion price equal to 60% of the lowest closing bid price of the Company's common stock for the thirty trading days prior to conversion. The Company was also required to issue 2,764,706 shares of common stock, which shares will be returned to the Company if the note is repaid prior to the expiry of 180 days from the date of issuance. On August 7, 2019, the Company, entered into a Securities Purchase Agreement with Auctus Fund, LLC, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $225,000 for net proceeds of $197,250 after expenses and original issue discount of $25,000. The Note has a maturity date of May 7, 2020 and bears interest at the rate of ten percent per annum from the date on which the Note was issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of Auctus Fund, LLC during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to 60% of the lowest closing bid price of the Company’s common stock for the thirty trading days prior to conversion. The Company has reached an agreement with Leonite Capital, LLC whereby it has agreed to transfer ownership of the land and buildings at 810 Andrews Avenue, Delray Beach, valued at $1,500,000, in partial settlement of the principal and interest outstanding of $2,306,972 as at June 30, 2019. Leonite has agreed to further negotiate extend the maturity date of the remaining balance outstanding to December 31, 2019. Other than disclosed above, the Company has evaluated subsequent events through the date the unaudited condensed consolidated financial statements were available to be issued and has concluded that no such events or transactions took place that would require disclosure herein. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | a) Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Principles of consolidation and foreign currency translation | b) Principles of consolidation and foreign currency translation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions and balances have been eliminated on consolidation. Certain of the Company’s subsidiaries functional currency is the Canadian dollar, while the Company’s reporting currency is the U.S. dollar. All transactions initiated in Canadian dollars are translated into US dollars in accordance with ASC 830, “Foreign Currency Translation” as follows: ● Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. ● Equity at historical rates. ● Revenue and expense items and cash flows at the average rate of exchange prevailing during the period. Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ deficit as a component of accumulated other comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income (loss). For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period. The relevant translation rates are as follows: For the six months ended June 30, 2019, a closing rate of CDN$1.00 equals US$0.7641 and an average exchange rate of CDN$1.00 equals US$0.7498. For the six months ended June 30, 2018, a closing rate of CAD$1.00 equals US$0.7594 and an average exchange rate of CAD$1.0000 equals US$0.7715. |
Revenue Recognition | c) Revenue Recognition ASU 2014-09 requires companies to exercise more judgment and recognize revenue using a five-step process. The Company adopted ASU 2014-09 using the modified retrospective method for all contracts effective January 1, 2018. Modified retrospective adoption requires entities to apply the standard retrospectively to the most current period presented in the financial statements, requiring the cumulative effect of the retrospective application as an adjustment to the opening balance of retained earnings at the date of initial application. Prior periods have not been adjusted. No cumulative effect adjustment in retained earnings was recorded as the adoption of ASU 2014-09 did not significantly impact the Company’s reported historical revenue. As a result of certain changes required by ASU 2014-09, the majority of the Company’s provision for doubtful accounts are recorded as a direct reduction to revenue instead of being presented as a separate line item on the consolidated statements of operations. The adoption of ASU 2014-09 has no impact on the Company’s accounts receivable as it was historically recorded net of allowance for doubtful accounts and contractual adjustments, and the Company has eliminated the presentation of allowance for doubtful accounts on the consolidated balance sheets. As our performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as our patients typically are under no obligation to remain admitted in our facilities. The Company receives payments from the following sources for services rendered in our U.S. Facility: (i) commercial insurers; and (ii) individual patients and clients. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and did not adjust for the effects of a significant financing component. The Company derives a significant portion of its revenue from other payors that receive discounts from established billing rates. The various managed care contracts under which these discounts must be calculated are complex, subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided in the Company’s in-patient facilities and cost settlement provisions. Management estimates the transaction price on a pay or specific basis given its interpretation of the applicable regulations or contract terms. The services authorized and provided and related reimbursement are often subject to interpretation that could result in payments that differ from the Company’s estimates. Additionally, updated regulations and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management. Settlements under cost reimbursement agreements with third-party payors are estimated and recorded in the period in which the related services are rendered and are adjusted in future periods as final settlements are determined. In the opinion of management, adequate provision has been made for any adjustments and final settlements. However, there can be no assurance that any such adjustments and final settlements will not have a material effect on the Company’s financial condition or results of operations. The Company’s accounts receivables were $240,656 and $202,654 for the six months ended June 30, 2019 and year ended December 31, 2018, respectively, and were included in other current assets in the consolidated balance sheets. Management believes that these receivables are properly stated and are not likely to be settled for a significantly different amount. The net adjustments to estimated accounts receivable settlements resulted in a decrease in revenues of $0 and $262,353 for the six months ended June 30, 2019 and the year ended December 31, 2018, respectively. The Company’s revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services, as defined below. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions: i. identify the contract with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to performance obligations in the contract; and v. recognize revenue as the performance obligation is satisfied. The Company has two operating segments from which it derives revenues which is recognized on the basis described below. i. Rental Income In terms of the lease agreement, on a monthly basis as long as the facility is utilized by the tenant ii. In-patient revenue The patients have been treated and provided with services by the Company; there is clear evidence that an arrangement exists; the amount of revenue and related costs can be measured reliably; and it is probable that the economic benefits associated with the transaction will flow to the Company. |
Non-monetary transactions | d) Non-monetary transactions The Company’s policy is to measure an asset exchanged or transferred in a non-monetary transaction at the more reliable measurement of the fair value of the asset given up and the fair value of the asset received, unless: ● The transaction lacks commercial substance; ● The transaction is a transfer between entities under common control; ● The transaction is an exchange of a product or property held for sale in the ordinary course of business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties to the exchange; ● Neither the fair value of the asset received nor the fair value of the asset given up is reliably measurable; or ● The transaction is a non-monetary, non-reciprocal transfer to owners that represents a spinoff or other form of restructuring or liquidation. |
Cash and cash equivalents | e) Cash and cash equivalents The Company’s policy is to disclose bank balances under cash, including bank overdrafts with balances that fluctuate frequently from being positive to overdrawn and term deposits with a maturity period of three months or less from the date of acquisition. The Company had no cash equivalents at June 30, 2019 and December, 2018. |
Accounts receivable | f) Accounts receivable Accounts receivable primarily consists of amounts due from third-party payors (non-governmental) and private pay patients and is recorded net of allowances for doubtful accounts and contractual discounts. The Company’s ability to collect outstanding receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s unaudited condensed consolidated financial statements is recorded at the net amount expected to be received. The Company’s primary collection risks are (i) the risk of overestimating net revenues at the time of billing that may result in the Company receiving less than the recorded receivable, (ii) the risk of non-payment as a result of commercial insurance companies denying claims, (iii) the risk that patients will fail to remit insurance payments to the Company when the commercial insurance company pays out-of-network claims directly to the patient, (iv) resource and capacity constraints that may prevent the Company from handling the volume of billing and collection issues in a timely manner, (v) the risk that patients do not pay the Company for their self-pay balances (including co-pays, deductibles and any portion of the claim not covered by insurance) and (vi) the risk of non-payment from uninsured patients. |
Allowance for Doubtful Accounts, Contractual and Other Discounts | g) Allowance for Doubtful Accounts, Contractual and Other Discounts The Company derives the majority of its revenues from commercial payors at out-of-network rates. Management estimates the allowance for contractual and other discounts based on its historical collection experience. The services authorized and provided and related reimbursement are often subject to interpretation and negotiation that could result in payments that differ from the Company’s estimates. The Company’s allowance for doubtful accounts is based on historical experience, but management also takes into consideration the age of accounts, creditworthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. An account is written off only after the Company has pursued collection efforts or otherwise determines an account to be uncollectible. Uncollectible balances are written-off against the allowance. Recoveries of previously written-off balances are credited to income when the recoveries are made. |
Financial instruments | h) Financial instruments The Company initially measures its financial assets and liabilities at fair value, except for certain non-arm’s length transactions. The Company subsequently measures all its financial assets and financial liabilities at amortized cost. Financial assets measured at amortized cost include cash and accounts receivable. Financial liabilities measured at amortized cost include bank indebtedness, accounts payable and accrued liabilities, harmonized sales tax payable, withholding taxes payable, convertible notes payable, loans payable and related party notes. Financial assets measured at cost are tested for impairment when there are indicators of impairment. The amount of the write-down is recognized in net income. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in net income. The Company recognizes its transaction costs in net income in the period incurred. However, financial instruments that will not be subsequently measured at fair value are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption. FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: · Level 1. Observable inputs such as quoted prices in active markets; · Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and · Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. The Company measures its convertible debt and derivative liabilities associated therewith at fair value. These liabilities are revalued periodically and the resultant gain or loss is realized through the Statement of Operations. |
Plant and equipment | i) Plant and equipment Fixed assets are recorded at cost. Depreciation is calculated on the straight line basis over the estimated life of the asset: Leasehold improvements are depreciated using the straight-line method over the term of the lease. |
Leases | j) Leases Leases are classified as either capital or operating leases. Leases that transfer substantially all of the benefits and inherent risks of ownership of property to the Company are accounted for as capital leases. At the time a capital lease is entered into, an asset is recorded together with its related long-term obligation to reflect the acquisition and financing. Equipment recorded under capital leases is amortized on the same basis as described above. Payments under operating leases are expensed as incurred. |
Income taxes | k) Income taxes The Company accounts for income taxes under the provisions of ASC Topic 740, “Income Taxes”. ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties accrued on unrecognized tax benefits within general and administrative expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in general and administrative expenses in the period that such determination is made. The tax returns for fiscal 2001, through 2017 are subject to audit or review by the US tax authorities, whereas fiscal 2010 through 2017 are subject to audit or review by the Canadian tax authority. |
Net income (loss) per share information | l) Net income (loss) per Share Basic net income (loss) per share is computed on the basis of the weighted average number of common stock outstanding during the period. Diluted net income (loss) per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation. Dilution is computed by applying the treasury stock method for options and warrants. Under this method, “in-the money” options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Dilution is computed by applying the if-converted method for convertible preferred stocks. Under this method, convertible preferred stock is assumed to be converted at the beginning of the period (or at the time of issuance, if later), and preferred dividends (if any) will be added back to determine income applicable to common stock. The shares issuable upon conversion will be added to weighted average number of common stock outstanding. Conversion will be assumed only if it reduces earnings per share (or increases loss per share). |
Stock based compensation | m) Stock based compensation Stock based compensation cost is measured at the grant date, based on the estimated fair value of the award and is recognized as expense over the employee’s requisite service period or vesting period on a straight-line basis. Share-based compensation expense recognized in the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2019 and 2018 is based on awards ultimately expected to vest and has been reduced for estimated forfeitures. This estimate will be revised in subsequent periods if actual forfeitures differ from those estimates. We have minimal awards with performance conditions and no awards dependent on market conditions. |
Derivatives | n) Derivatives The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. The Company uses a Black Scholes Option Pricing model to estimate the fair value of convertible debt conversion features at the end of each applicable reporting period. Changes in the fair value of these derivatives during each reporting period are included in the statements of operations. Inputs into the Black Scholes Option Pricing model require estimates, including such items as estimated volatility of the Company’s stock, risk free interest rate and the estimated life of the financial instruments being fair valued. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature. |
Recent accounting pronouncements | o) Recent accounting pronouncements Adoption of Accounting Standards In February 2016, the Financial Accounting Standards Board (“FSAB”) issued Accounting Standards Update (“ASU”), No. 2016-02, Leases (Topic 842) (ASC 842) The amendments in this update establishes a comprehensive new lease accounting model. The new standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, including a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, an update which provides another transition method, the prospective transition method, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard on January 1, 2019 using the prospective transition method. The Company has identified all leases and reviewed the leases to determine the impact of ASC 842 on its unaudited condensed consolidated financial statements. The Company has elected to apply the practical expedient to certain classes of leases, whereby the separation of components of leases into lease and non-lease components is not required and all of the practical expedients to all leases, which include not reassessing (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. The adoption of the new standard resulted in the recording of a right-of-use asset and a lease liability on the unaudited condensed consolidated balance sheet on January 1, 2019 of $15,986,074. The adoption of ASU 2016-02, as amended, has had no impact on the unaudited condensed consolidated statements of operations or unaudited condensed consolidated statements of cash flows. Recent accounting pronouncements The FASB issued several updated during the period, none of these standards are either applicable to the Company or require adoption at a future date and are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption. |
Financial instrument Risks | p) Financial instruments Risks The Company is exposed to various risks through its financial instruments. The following analysis provides a measure of the Company’s risk exposure and concentrations at the balance sheet date, June 30, 2019 and December 31, 2018. i. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments that subject the Company to credit risk consist primarily of accounts receivable. Credit risk associated with accounts receivable of ARIA is mitigated as only a percentage of the revenue billed to health insurance companies is recognized as income until such time as the actual funds are collected. The revenue is concentrated amongst several health insurance companies located in the US. In the opinion of management, credit risk with respect to accounts receivable is assessed as low. ii. Liquidity risk Liquidity risk is the risk the Company will not be able to meet its financial obligations as they fall due. The Company is exposed to liquidity risk through its working capital deficiency of $14,412,879 accumulated deficit of $35,288,876. The Company will be dependent upon the raising of additional capital in order to implement its business plan. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. In the opinion of management, liquidity risk is assessed as high, material and remains unchanged from the prior year. iii. Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risk: interest rate risk, currency risk, and other price risk. The Company is exposed to interest rate risk and currency risk. a. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to minimal interest rate risk as there is no overdraft indebtedness as of June 30, 2019. In the opinion of management, interest rate risk is assessed as low, not material and remains unchanged from the prior year. b. Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is subject to currency risk as it has subsidiaries that operate in Canada and are subject to fluctuations in the Canadian dollar. A substantial portion of the Company’s financial assets and liabilities are denominated in Canadian dollars. Based on the net exposures at June 30, 2019, a 5% depreciation or appreciation of the Canadian dollar against the U.S. dollar would result in an approximate $83,570 increase or decrease in the Company’s after tax net income from operations. The Company has not entered into any hedging agreements to mitigate this risk. In the opinion of management, currency risk is assessed as low, material and remains unchanged from the prior year. c. Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. In the opinion of management, the Company is not exposed to this risk and remains unchanged from the prior year. |
Reclassification of Prior Year Presentation | q) Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Assets held for resale (Tables)
Assets held for resale (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Maturity | |
Schedule of assets held for resale | Amount Proceeds received $ 3,500,485 Less: closing costs (182,344 ) Net proceeds received 3,318,141 Assets sold: Land 1,877,618 Buildings thereon 2,060,219 Furniture and fixtures 72,792 4,010,629 Loss on disposal $ 692,488 |
Property plant and equipment (T
Property plant and equipment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property Plant And Equipment Tables | |
Schedule of property and equipment | June 30, December 31, 2018 Cost Accumulated Depreciation Net book value Net book value Land $ 1,040,596 $ — $ 1,040,596 $ 2,911,530 Property 4,059,658 (408,047 ) 3,651,611 5,750,045 Leasehold improvements 271,074 (15,006 ) 256,068 251,774 Furniture and fixtures — — — 35,000 $ 5,371,328 $ (423,053 ) $ 4,948,275 $ 8,948,349 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases Tables Abstract | |
Schedule of operating leases | June 30, Non-current assets Right of use assets, operating leases, net of amortization $ 15,467,645 Individual components of the total lease cost incurred by the Company is as follows: Six months Operating lease expense $ 1,068,624 The amount of future minimum lease payments under operating leases are as follows: Amount Remainder of 2019 $ 917.930 2020 1,882,422 2021 1,962,242 2022 2,042,062 2023 and thereafter 12,436,420 Total undiscounted minimum future lease payments 19,241,076 Deferred rental liability on straight line amortization 183,952 Imputed interest (3,764,431 ) Total operating lease liability $ 15,660,597 Disclosed as: Current portion $ 835,898 Non-current portion 14,824,699 $ 15,660,597 |
Taxes Payable (Tables)
Taxes Payable (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Taxation Payable | June 30, December 31, Payroll taxes $ 139,520 $ 133,843 HST/GST payable 4,670 33,757 US penalties due 250,000 250,000 Income tax payable 372,965 357,792 $ 767,155 $ 775,392 |
Convertible notes (Tables)
Convertible notes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Short-term Convertible Loan Tables | |
Convertible notes | Interest rate Maturity date Principal Interest Debt Discount June 30, 2019 December 31, 2018 Leonite Investments LLC 11.0 % July 25, 2019 $ 2,243,179 $ 63,793 $ (32,391 ) $ 2,274,581 $ 2,494,180 Power Up Lending Group Ltd 9.0 % May 15,2019 - - - - 94,595 9.0 % September 10, 2019 - - - - 44,484 9.0 % October 30, 2019 53,000 2,247 (21,993 ) 33,254 - 9.0 % November 15, 2019 138,000 5,206 (65,443 ) 77,763 - 9.0 % January 30, 2020 128,000 3,661 (69,543 ) 62,118 - First Fire Global Opportunities Fund 12.0 % December 9, 2019 200,000 3,205 (114,909 ) 88,296 - Series N convertible notes 6.0 % May 17, 2019 to June 11,2020 2,999,000 135,741 (1,097,833 ) 2,036,908 1,770,214 $ 4,572,920 $ 4,403,4 73 |
Mortgage loans (Tables)
Mortgage loans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Mortgage loans | Mortgage loans payable is disclosed as follows: Interest Maturity date Principal Accrued June 30, December 31, Cranberry Cove Holdings, Ltd. Pace Mortgage 4.2 % July 19, 2022 $ 4,011,864 $ 5,078 $ 4,016,942 $ 3,924,836 ARIA Mortgage 5.0 % February 13, 2020 - - - 2,954,786 $ 4,011,864 $ 5,078 $ 4,016,942 $ 6,879,622 Disclosed as follows: Short-term portion $ 110,815 $ 172,276 Long-term portion 3,906,127 6,707,346 $ 4,016,942 $ 6,879,622 The aggregate amount outstanding is payable as follows: Amount Within one year 110,815 One to two years 110,225 Two to three years 114,903 Three to four years 3,680,999 Total $ 4,016,942 |
Derivative Liablility (Tables)
Derivative Liablility (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Liablility | |
Schedule of assumption used in Black Scholes | Six months ended Calculated stock price $0.07 to $0.09 Risk free interest rate 1.71% to 2.56% Expected life of convertible notes and warrants 3 to 60 months expected volatility of underlying stock 124.7% to 206.8% Expected dividend rate 0 % |
Schedule of derivative liability | June 30, 2019 December 31, 2018 Opening balance (January 1) $ 4,618,080 $ 2,859,832 Derivative liability on issued convertible notes and variable priced warrants 561,022 1,335,709 Fair value adjustments to derivative liability (1,254,871 ) 422,539 Closing balance $ 3,924,231 $ 4,618,080 |
Stockholders' deficit (Tables)
Stockholders' deficit (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Warrants outstanding | Six months ended Calculated stock price $0.07 to $0.09 Risk free interest rate 1.81% to 2.58% Expected life of warrants 36 to 60 months expected volatility of underlying stock 169.8% to 186.7% Expected dividend rate 0 % A summary of all of the Company’s warrant activity during the period January 1, 2018 to June 30, 2019 is as follows: No. of shares Exercise price per Weighted average exercise price Outstanding January 1, 2018 49,504,075 0.0033 to $.0.10 $ 0.0690 Granted 48,295,833 0.10 to $0.12 0.1130 Forfeited/cancelled — — — Exercised — — — Outstanding December 31, 2018 97,799,908 $0.03 to $0.12 $ 0.0910 Granted 19,235,183 $0.10 to $0.12 0.1188 Forfeited/cancelled (300,000 ) $0.0033 (0.0033 ) Exercised — — — Outstanding June 30, 2019 116,735,091 $0.03 to $0.12 $ 0.0954 The following table summarizes information about warrants outstanding at June 30, 2019: Warrants outstanding Warrants exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.03 21,704,075 0.73 21,704,075 $0.10 45,668,516 3.60 45,668,516 $0.12 49,362,500 2.35 49,362,500 116,735,091 2.54 $ 0.0954 116,735,091 $ 0.0954 |
Options Outstanding | The following table summarizes information about options outstanding as of June 30, 2019: Options outstanding Options exercisable Exercise price No. of shares Weighted average remaining years Weighted average exercise price No. of shares Weighted average exercise price $0.12 480,000 0.34 480,000 480,000 0.34 $ 0.12 480,000 $ 0.12 |
Segment information (Tables)
Segment information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Segment information | The segment operating results of the reportable segments are disclosed as follows: Three months ended June 30, 2019 Rental Operations In-Patient services Total Revenue $ 82,461 $ 15,725 $ 98,186 Operating expenses 36,989 1,456,334 1,493,323 Operating income (loss) 45,472 (1,440,609 ) (1,395,137 ) Other (expense) income Loss on disposal of property — (692,488 ) (692,488 ) Bonus shares issued to investors — (143,500 ) (143,500 ) Interest expense (40,666 ) (156,388 ) (197,054 ) Amortization of debt discount — (828,313 ) (828,313 ) Loss on change in fair value of derivative liability — 1,728,172 1,728,172 Foreign exchange movements (26,066 ) (116,766 ) (142,832 ) Net loss before taxation (21,260 ) (1,649,892 ) (1,671,152 ) Taxation — — — Net loss from operations $ (21,260 ) $ (1,649,892 ) $ (1,671,152 ) Three months ended June 30, 2018 Rental Operations In-Patient services Total Revenue $ 83,031 $ (16,337 ) $ 66,694 Operating expenses 45,102 750,366 795,468 Operating income (loss) 37,929 (766,703 ) (728,774 ) Other (expense) income Interest income — (49 ) (49 ) Interest expense (42,845 ) (133,742 ) (176,587 ) Amortization of debt discount — (1,339,885 ) (1,339,885 ) Loss on change in fair value of derivative liability — (796,795 ) (796,795 ) Foreign exchange movements 18,345 92,283 110,628 Net income (loss) before taxation 13,429 (2,944,891 ) (2,931,462 ) Taxation — — — Net income (loss) from operations $ 13,429 $ (2,944,891 ) $ (2,931,462 ) The segment operating results of the reportable segments are disclosed as follows: Six months ended June 30, 2019 Rental Operations In-Patient services Total Revenue $ 164,476 $ 15,725 $ 180,201 Operating expenses 74,229 2,895,607 2,969,836 Operating income (loss) 90,247 (2,879,882 ) (2,789,635 ) Other (expense) income Interest income — 15,262 15,262 Loss on disposal of property — (692,488 ) (692,488 ) Bonus shares issued to investors — (143,500 ) (143,500 ) Interest expense (82,046 ) (460,091 ) (542,137 ) Amortization of debt discount — (1,590,255 ) (1,590,255 ) Loss on change in fair value of derivative liability — 1,254,871 1,254,871 Foreign exchange movements (45,296 ) (226,654 ) (271,950 ) Net loss before taxation (37,095 ) (4,722,737 ) (4,759,832 ) Taxation — — — Net loss from operations $ (37,095 ) $ (4,722,737 ) $ (4,759,832 ) Six months ended June 30, 2018 Rental Operations In-Patient services Total Revenue $ 167,143 $ 12,853 $ 179,996 Operating expenses 76,504 1,250,811 1,327,315 Operating income (loss) 90,639 (1,237,958 ) (1,147,319 ) Other (expense) income Interest expense (92,895 ) (254,143 ) (347,038 ) Amortization of debt discount — (2,092,834 ) (2,092,834 ) Loss on change in fair value of derivative liability — (808,951 ) (808,951 ) Foreign exchange movements 47,555 200,969 248,524 Net income (loss) before taxation 45,299 (4,192,917 ) (4,147,618 ) Taxation — — — Net income (loss) from operations $ 45,299 $ (4,192,917 ) $ (4,147,618 ) The operating assets and liabilities of the reportable segments are as follows: June 30, 2019 Rental Operations In-Patient services Total Purchase of fixed assets — 22,868 22,868 Assets Current assets 9,630 558,680 568,310 Non-current assets 2,916,346 20,509,941 23,426,287 Liabilities Current liabilities (2,075,136 ) (12,906,053 ) (14,981,189 ) Non-current liabilities (4,016,852 ) (14,713,974 ) (18,730,826 ) Intercompany balances 719,954 (719,954 ) — Net liability position (2,446,058 ) (7,271,360 ) (9,717,418 ) |
Net loss per common share (Tabl
Net loss per common share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net loss per common share (Tables) | June 30, June 30, Stock options 480,000 480,000 Warrants 116,735,091 82,587,408 Convertible notes 78,944,078 43,916,472 196,159,169 126,983,880 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies | |
Schedule of operating leases | In terms of the lease agreement mentioned above the Company is obligated to make the following minimum undiscounted lease payments: Amount Remainder of 2019 $ 917,930 2020 1,882,422 2021 1,962,242 2022 2,042,062 2023 and thereafter 12,436,420 Total undiscounted minimum future lease payments $ 19,241,076 |
Schedule of mortgage loans | The Company is obligated to make the following mortgage loans payments: Amount Within one year $ 110,815 One to two years 110,225 Two to three years 114,903 Three to four years 3,680,999 Total $ 4,016,942 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) | Jun. 30, 2019USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Working Capital Deficiency | $ 14,412,879 |
Accumulated Deficit | $ 35,288,876 |
Assets held for resale (Details
Assets held for resale (Details) | Jun. 30, 2019USD ($) |
Long-term portion | |
Proceeds received | $ 3,500,485 |
Less: closing costs | (182,344) |
Net proceeds received | 3,318,141 |
Assets sold: | |
Land | 1,877,618 |
Buildings thereon | 2,060,219 |
Furniture and fixtures | 72,792 |
Total | 4,010,629 |
Loss on disposal | $ 692,488 |
Property plant and equipment (D
Property plant and equipment (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Cost | $ 5,371,328 | |
Accumulated Depreciation | (423,053) | |
Net book value | 4,948,275 | $ 8,948,349 |
Land [Member] | ||
Cost | 1,040,596 | |
Accumulated Depreciation | ||
Net book value | 1,040,596 | 2,911,530 |
Property | ||
Cost | 4,059,658 | |
Accumulated Depreciation | (408,047) | |
Net book value | 3,651,611 | 5,750,045 |
Leasehold Improvements | ||
Cost | 271,074 | |
Accumulated Depreciation | (15,006) | |
Net book value | 256,068 | 251,774 |
Furniture and Equipment | ||
Cost | ||
Accumulated Depreciation | ||
Net book value | $ 35,000 |
Leases - Right of use assets (D
Leases - Right of use assets (Details) | Jun. 30, 2019USD ($) |
Intercompany balances | |
Right of use assets, net of amortization | $ 15,467,645 |
Leases - Operating leases (Deta
Leases - Operating leases (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Leases - Operating Leases | |
Operating lease expense | $ 1,068,624 |
Leases - Maturity of operating
Leases - Maturity of operating leases (Details) | Jun. 30, 2019USD ($) |
Net (liability) asset  position | |
Remainder of 2019 | $ 917,930 |
2020 | 1,882,422 |
2021 | 1,962,242 |
2022 | 12,436,420 |
2023 and thereafter | 12,436,420 |
Total undiscounted minimum future lease payments | 19,241,076 |
Deferred rental liability on straight line amortization | 183,952 |
Imputed interest | (3,764,431) |
Total operating lease liability | 15,660,597 |
Disclosed as: | |
Current portion | 835,898 |
Non-current portion | 14,824,699 |
Total | $ 15,660,597 |
Taxes payable - Taxes Payable (
Taxes payable - Taxes Payable (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Notes to Financial Statements | ||
Payroll taxes | $ 139,520 | $ 133,843 |
HST/GST payable | 4,670 | 33,757 |
US tax penalties | 250,000 | 250,000 |
Income tax payable | 372,965 | 357,792 |
Taxes Payable | $ 767,155 | $ 775,392 |
Convertible notes (Details)
Convertible notes (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Total | $ 4,572,920 | $ 1,770,214 |
Leonite Investment LLC | ||
Interest Rate | 11.00% | |
Maturity | July 25, 2019 | |
Principal | $ 2,243,179 | |
Interest | 63,793 | |
Debt Discount | (32,391) | |
Total | $ 2,274,581 | 2,494,180 |
Power Up Lending Group LTD | ||
Interest Rate | 9.00% | |
Maturity | May 15,2019 | |
Principal | ||
Interest | ||
Debt Discount | ||
Total | 94,595 | |
Power Up Lending Group LTD 2 | ||
Interest Rate | 9.00% | |
Maturity | September 10, 2019 | |
Principal | ||
Interest | ||
Debt Discount | ||
Total | 44,484 | |
Power Up Lending Group LTD 3 | ||
Interest Rate | 9.00% | |
Maturity | October 30, 2019 | |
Principal | $ 53,000 | |
Interest | 2,247 | |
Debt Discount | (21,993) | |
Total | $ 33,254 | |
Power Up Lending Group LTD 4 | ||
Interest Rate | 9.00% | |
Maturity | November 15, 2019 | |
Principal | $ 138,000 | |
Interest | 5,206 | |
Debt Discount | (65,443) | |
Total | $ 77,763 | |
Power Up Lending Group LTD 5 | ||
Interest Rate | 9.00% | |
Maturity | January 30, 2020 | |
Principal | $ 128,000 | |
Interest | 3,661 | |
Debt Discount | (69,543) | |
Total | $ 62,118 | |
First Fire Global Opportunities Fund | ||
Interest Rate | 12.00% | |
Maturity | December 9, 2019 | |
Principal | $ 200,000 | |
Interest | 3,205 | |
Debt Discount | (114,909) | |
Total | $ 88,296 | |
Series N Convertible Notes | ||
Interest Rate | 6.00% | |
Maturity | May 17, 2019 to March 13, 2020 | |
Principal | $ 2,999,000 | |
Interest | 135,741 | |
Debt Discount | (1,097,833) | |
Total | $ 2,036,908 | $ 1,770,214 |
Mortgage loans - Loans Payable
Mortgage loans - Loans Payable (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Short term portion | $ 110,815 | $ 172,276 |
Long term portion | 3,906,127 | 6,707,346 |
Automobile Loan Payable | $ 4,016,942 | $ 6,879,622 |
Mortgage loans - Aggregate Amou
Mortgage loans - Aggregate Amount Outstanding (Details) | Jun. 30, 2019USD ($) |
Mortgage Loans - Aggregate Amount Outstanding | |
Within one year | $ 110,815 |
One to two years | 110,225 |
Two to three years | 114,903 |
Three to four years | 3,680,999 |
Total | $ 4,016,942 |
Derivative liability - Black Sc
Derivative liability - Black Scholes Valuations (Details) | 6 Months Ended |
Jun. 30, 2019$ / shares | |
Derivative Liability Details | |
Calculated stock price, min | $ 0.07 |
Calculated stock price, max | $ 0.09 |
Risk free interest rate, min | 1.71% |
Risk free interest rate, max | 2.56% |
Expected life of convertible notes, minimum | 3 months |
Expected life of convertible notes, maximum | 5 years |
Expected volatility of underlying stock, min | 124.70% |
Expected volatility of underlying stock, max | 206.80% |
Expected dividend rate | 0.00% |
Derivative liability - Movement
Derivative liability - Movement (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Derivative Liability Details 1 | ||
Opening Balance | $ 4,618,080 | $ 2,859,832 |
Derivative liability arising from convertible notes | 561,022 | 1,335,709 |
Fair value adjustment to derivative liability | (1,254,871) | 422,539 |
Closing Balance | $ 3,924,231 | $ 4,618,080 |
Stockholders' deficit - Warrant
Stockholders' deficit - Warrants Outstanding (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Beginning balance, warrants | 97,799,908 | 49,504,075 |
Beginning balance, warrants exercise price | $ 0.0910 | $ 0.0690 |
Warrants Granted, shares | 19,235,183 | 48,295,833 |
Warrants granted, price | $ 0.1188 | $ 0.1130 |
Warrants Forfeited, shares | (300,000) | |
Warrants Forfeited, price | $ (0.0033) | |
Ending Balance, warrants | 116,735,091 | 97,799,908 |
Ending Balance, warrants exercise price | $ 0.0954 | $ 0.0910 |
Weighted Average Contractual Life, warrants | 2 years 11 months 19 days |
Stockholders' deficit - Options
Stockholders' deficit - Options Outstanding (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Beginning balance, options | shares | 480,000 |
Beginning balance, options exercise price | $ / shares | $ 0.12 |
Ending Balance, options | shares | 480,000 |
Ending Balance, options exercise price | $ / shares | $ 0.12 |
Weighted Average Contractual Life, options | 4 months 2 days |
Segment information (Details)
Segment information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenues | $ 98,186 | $ 66,694 | $ 180,201 | $ 179,996 | |
Operating expenses | 1,493,323 | 795,469 | 2,969,836 | 1,327,315 | |
Operating income (loss) | (1,395,137) | (728,775) | (2,789,635) | (1,147,319) | |
Other (expense) income | |||||
Loss on disposal of property | 692,488 | ||||
Bonus shares issued to investors | (143,500) | (143,500) | |||
Interest Income | (49) | 15,262 | |||
Interest expense | (197,054) | (176,587) | (542,137) | (347,038) | |
Foreign exchange movements | (142,832) | 110,628 | (271,950) | 248,524 | |
Net loss before taxation | (1,671,152) | (2,931,463) | (4,759,832) | (4,147,618) | |
Taxation | |||||
Assets | |||||
Current assets | 568,310 | 568,310 | $ 407,848 | ||
Non-current assets | 23,426,287 | 23,426,287 | 12,261,261 | ||
Liabilities | |||||
Current liabilities | 14,981,189 | 14,981,189 | $ 13,677,716 | ||
Rental Operations | |||||
Revenues | 82,461 | 83,031 | 164,476 | 167,143 | |
Operating expenses | 36,989 | 45,102 | 74,229 | 76,504 | |
Operating income (loss) | 45,472 | 37,929 | 90,247 | 90,639 | |
Other (expense) income | |||||
Loss on disposal of property | |||||
Bonus shares issued to investors | |||||
Interest Income | (92,895) | ||||
Interest expense | (40,666) | (42,845) | (82,046) | ||
Amortization of debt discount | |||||
Loss on change in fair value of derivative liability | |||||
Foreign exchange movements | (26,066) | 18,345 | (45,296) | 47,555 | |
Net loss before taxation | (21,260) | 13,429 | (37,095) | 45,299 | |
Taxation | |||||
Net loss from operations | (21,260) | 13,429 | (37,095) | 45,299 | |
Purchase of fixed assets | |||||
Assets | |||||
Current assets | 9,630 | 9,630 | |||
Non-current assets | 2,916,346 | 2,916,346 | |||
Liabilities | |||||
Current liabilities | (2,075,136) | (2,075,136) | |||
Non-current liabilities | (4,016,852) | (4,016,852) | |||
Intercompany balances | 719,954 | 719,954 | |||
Net (liability) asset position | (2,446,058) | (2,446,058) | |||
In-Patient services | |||||
Revenues | 15,725 | (16,337) | 15,725 | 12,853 | |
Operating expenses | 1,456,334 | 750,366 | 2,895,607 | 1,250,811 | |
Operating income (loss) | (1,440,609) | (766,703) | (2,879,882) | (1,237,958) | |
Other (expense) income | |||||
Loss on disposal of property | (692,488) | (692,488) | |||
Bonus shares issued to investors | (143,500) | (143,500) | |||
Interest Income | (49) | 15,262 | (254,143) | ||
Interest expense | (156,388) | (133,742) | (460,091) | ||
Amortization of debt discount | (828,313) | (1,339,885) | (1,590,255) | (2,092,834) | |
Loss on change in fair value of derivative liability | 1,728,172 | (796,795) | 1,254,871 | (808,951) | |
Foreign exchange movements | (116,766) | 92,283 | (226,654) | 200,969 | |
Net loss before taxation | (1,649,892) | (2,944,891) | (4,722,737) | (4,192,917) | |
Taxation | |||||
Net loss from operations | (1,649,892) | (2,944,891) | (4,722,737) | (4,192,917) | |
Purchase of fixed assets | 22,868 | 22,868 | |||
Assets | |||||
Current assets | 558,680 | 558,680 | |||
Non-current assets | 20,509,941 | 20,509,941 | |||
Liabilities | |||||
Current liabilities | (12,906,053) | (12,906,053) | |||
Non-current liabilities | (14,713,974) | (14,713,974) | |||
Intercompany balances | (719,954) | (719,954) | |||
Net (liability) asset position | (7,271,360) | (7,271,360) | |||
Total | |||||
Revenues | 98,186 | 66,694 | 180,201 | 179,996 | |
Operating expenses | 1,493,323 | 795,468 | 2,969,836 | 1,327,315 | |
Operating income (loss) | (1,395,137) | (728,774) | (2,789,635) | (1,147,319) | |
Other (expense) income | |||||
Loss on disposal of property | (692,488) | (692,488) | |||
Bonus shares issued to investors | (143,500) | (143,500) | |||
Interest Income | (49) | 15,262 | (347,038) | ||
Interest expense | (197,054) | (176,587) | (542,137) | ||
Amortization of debt discount | (828,313) | (1,339,885) | (1,590,255) | (2,092,834) | |
Loss on change in fair value of derivative liability | 1,728,172 | (796,795) | 1,254,871 | (808,951) | |
Foreign exchange movements | (142,832) | 110,628 | (271,950) | 248,524 | |
Net loss before taxation | (1,671,152) | (2,931,462) | (4,759,832) | (4,147,618) | |
Taxation | |||||
Net loss from operations | (1,671,152) | $ (2,931,462) | (4,759,832) | $ (4,147,618) | |
Purchase of fixed assets | 22,868 | 22,868 | |||
Assets | |||||
Current assets | 568,310 | 568,310 | |||
Non-current assets | 23,426,287 | 23,426,287 | |||
Liabilities | |||||
Current liabilities | (14,981,189) | (14,981,189) | |||
Non-current liabilities | (18,730,826) | (18,730,826) | |||
Intercompany balances | |||||
Net (liability) asset position | $ (9,717,418) | $ (9,717,418) |
Net loss per common share (Deta
Net loss per common share (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Net Loss Per Common Share Details | ||
Stock options | $ 480,000 | $ 480,000 |
Warrants | 116,735,091 | 82,587,408 |
Convertible notes | 78,944,078 | 43,916,472 |
Total | $ 196,159,169 | $ 126,983,880 |
Commitments and contingencies -
Commitments and contingencies - Operating Leases (Details) | Jun. 30, 2019USD ($) |
Commitments And Contingencies - Operating Leases | |
Remainder of 2019 | $ 917,930 |
2020 | 1,882,422 |
2021 | 1,962,242 |
2022 | 2,042,062 |
2023 and thereafter | 12,436,420 |
Total undiscounted minimum future lease payments | 19,241,076 |
Total | $ 19,241,076 |
Commitments and contingencies_2
Commitments and contingencies - Mortgage Loans (Details) | Jun. 30, 2019USD ($) |
Commitments And Contingencies - Mortgage Loans | |
Within one year | $ 110,815 |
One to two years | 110,225 |
Two to three years | 114,903 |
Three to four years | 3,680,999 |
Total | $ 4,016,942 |