5. Correction for Fair Value Option Election

Subsequent to the issuance of our Quarterly Report on Form 10-Q for the period ended June 30, 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
	June 30,		Adjustments		June 30,		Notes
	2021				2021
	As Previously				As
	Reported				Adjusted
	$		$		$

Convertible promissory notes	848,022		545,931		1,393,953		(a)
Total Current Liabilities	9,462,953		545,931		10,008,884		(a)
Total Liabilities	9,914,442		545,931		10,460,373		(a)
Additional paid-in capital	11,171,385		(435,000	)	10,736,385
Accumulated deficit	(14,573,090	)	(110,931	)	(14,684,301	)	(c)
Stockholders' deficiency	(3,854,878	)	(545,931	)	(4,400,809	)	(a)
Total Liabilities and Stockholders' Deficiency	6,059,564		-		6,059,564

Interim Condensed Statements of Operations and Comprehensive Loss

	Three months ended June 30, 2021		Adjustments		Three months ended June 30, 2021		Notes
	As Previously				As
	Reported				Adjusted
	$		$		$

Professional fees	70,844		27,500		98,344		(c)
Interest expense and default amounts	168,718		268		168,986
Amortization of financing costs	122,543		(110,790	)	11,753
Total operating expenses	719,917		(83,022	)	636,895		(c)
Net Loss From Operating Activities	(797,961	)	83,022		(714,939	)	(c)
Other income (loss)	-		(107,756	)	(107,756	)	(c)
Net Loss	(797,961	)	(24,734	)	(822,695	)	(c)
The adjustments did not have an impact on loss per share, basic and diluted, due to rounding.

	Six months ended June 30, 2021		Adjustments		Six months ended June 30, 2021		Notes
	As Previously				As
	Reported				Adjusted
	$		$		$

Professional fees	135,246		32,500		167,746		(c)
Interest expense and default amounts	332,592		268		332,860		(c)
Amortization of financing costs	136,121		(110,790	)	25,331		(c)
Total operating expenses	1,313,129		(78,022	)	1,235,107		(c)
Net Loss From Operating Activities	(1,509,105	)	78,022		(1,431,083	)	(c)
Other income	404,809		(188,953	)	215,856		(c)
Net Loss	(1,104,296	)	(110,931	)	(1,215,227	)	(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

	Six months ended June 30, 2021		Adjustments		Six months ended June 30, 2021		Notes
	As Previously				As
	Reported				Adjusted
	$		$		$

Cash flows from operating activities
Net Loss	(1,104,296	)	(110,931	)	(1,215,227	)	(c)
Adjustments for:
Amortization of financing fees	136,121		110,790		25,331		(d)
Loss on revaluation	-		188,953		188,953		(c)
Net cash used in operating activities	(1,259,009	)	(32,768	)	(1,291,777	)	(c)

(a) The Company elected 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 $545,931 in the interim condensed consolidated statements of operations and comprehensive loss as of June 30, 2021.

(b) The Company used the with-and-without method to allocate the proceeds between the convertible promissory notes 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 $434,860 in additional paid-in capital was adjusted by $435,000 to $(140).

(c) For the three and six-month periods ended June 30, 2021, the transaction costs of $27,500 and $32,500 respectively, were previously capitalized against the convertible promissory note. The transaction costs were expensed, and a day one revaluation for the three and six-month periods ended June 30, 2022 of loss of $107,756 and $188,953 respectively, was recognized. In addition, for the three and six-month periods ended June 30, 2021, an additional amount of interest expense in the amount of $268 and $268 respectively, was expensed.

(d) For the three and six-month periods ended June 30, 2021, amortization of financing fees in the amount of $110, 790 and $110,790 respectively, were previously capitalized against the convertible promissory and now included in the day one revaluation.