Restatement Correction for Fair Value Option Election

3 Months Ended

Mar. 31, 2022

Accounting Changes and Error Corrections [Abstract]

Restatement Correction for Fair Value Option Election [Text Block]

5. Correction for Fair Value Option Election

Subsequent to the issuance of our Quarterly Report on Form 10-Q for the period ended March 31, 2021, we identified an error in our historical financial statements related to the measurement of convertible promissory notes. The Company elected the fair value option to account for certain of its convertible promissory notes and should have recorded the convertible promissory notes subsequently at fair value instead of amortized cost.

In accordance with FASB Accounting Standards Codification 250, Accounting Changes and Error Corrections, we evaluated the materiality of the error from both a quantitative and qualitative perspective, and concluded that the error was immaterial to our prior period interim condensed consolidated financial statements. Since the error was not material, no amendments to previously filed interim reports are required. Consequently, we have adjusted for these errors by revising our historical Interim Condensed Consolidated Financial Statements presented herein.

The effects of the corrections to each of the individual affected line items were as follows:

Interim Condensed Consolidated Balance Sheets
	March 31,		Adjustments		March 31,		Notes
	2021				2021
	As Previously				As
	Reported				Adjusted
	$		$		$
Convertible promissory notes	479,000		152,197		631,197		(a)
Total Current Liabilities	9,432,847		152,197		9,585,044		(a)
Total Liabilities	9,772,324		152,197		9,924,521		(a)
Shares to be issued	66,000		(66,000	)	-		(b)
Accumulated deficit	(13,775,129	)	(86,197	)	(13,861,326	)	(c)
Stockholders' deficiency	(3,664,243	)	(152,197	)	(3,816,440	)	(a)
Total Liabilities and Stockholders' Deficiency	6,108,081		-		6,108,081

Interim Condensed Statements of Operations and Comprehensive Loss

	March 31,		Adjustments		March 31,		Notes
	2021				2021
	As Previously				As
	Reported				Adjusted
	$		$		$
Professional fees	64,402		5,000		69,402		(c)
Total operating expenses	593,212		5,000		598,212		(c)
Net Loss From Operating Activities	(711,144	)	(5,000	)	(716,144	)	(c)
Other income	404,809		(81,197	)	323,612		(c)
Net Loss	(306,335	)	(86,197	)	(392,532	)	(c)
The adjustments did not have an impact on loss per share, basic and diluted, due to rounding.

Interim Condensed Consolidated Statements of Cash Flows

	March 31,		Adjustments		March 31,		Notes
	2021				2021
	As Previously				As
	Reported				Adjusted
	$		$		$
Cash flows from operating activities
Net Loss	(306,335	)	(86,197	)	(392,532	)	(c)
Adjustments for:
Loss on revaluation	-		81,197		81,197		(c)
Net cash used in operating activities	(429,617	)	(5,000	)	(434,617	)	(c)

(a) The Company elected fair the fair value option to account for its convertible promissory notes issued in 2021. In accordance with ASC 825, the convertible promissory notes are mark-to-market at each reporting date with changes in fair value recorded as a component of other (expense) income. As a result, there was a mark-to-market adjustment of $152,197 in the interim condensed consolidated statements of operations and comprehensive loss as of March 31, 2021.

(b) The Company used the with-and-without method to allocate the proceeds between the convertible promissory note and the common shares. As a result, all the proceeds were allocated to the convertible promissory note and $nil to the common shares. The previously recognized amount of $66,000 in shares to be issued was adjusted to $nil.

(c)  The transaction costs of $5,000 were previously capitalized against the convertible promissory note. The transaction costs were expensed, and a day one revaluation loss of $81,197 was recognized.