UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| (Mark One) |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For
the quarterly period ended |
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from [___] to [___] |
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
N/A
(Former name or former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of the registrant’s Common Stock, $0.001 par value, outstanding as of May 22, 2023 was .
TABLE OF CONTENTS
| Page No. | ||
| PART I | FINANCIAL INFORMATION | 4 |
| Item 1. | Financial Statements (2023 unaudited, 2022 audited) | 4 |
| Consolidated Balance Sheets | 4 | |
| Consolidated Statements of Operations and Comprehensive Loss | 5 | |
| Consolidated Statements of Stockholders’ Equity (deficit) | 6 | |
| Consolidated Statements of Cash Flows | 7 | |
| Notes to the Consolidated Financial Statements | 8-19 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 24 |
| Item 4. | Controls and Procedures | 24 |
| PART II | OTHER INFORMATION | 25 |
| Item 1. | Legal Proceedings | 25 |
| Item 1A. | Risk Factors | 25 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 25 |
| Item 3. | Defaults Upon Senior Securities | 26 |
| Item 4. | Mine Safety Disclosures | 26 |
| Item 5. | Other Information | 26 |
| Item 6. | Exhibits | 26 |
| SIGNATURES | 27 | |
| 2 |
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS
This quarterly report on Form 10-Q (“Form 10-Q”) of Rainmaker Worldwide Inc. (the “Company”) includes statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, these forward-looking statements can be identified by the use of such terms as “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately” or the negative or other variations thereon or comparable terminology, although not all forward-looking statements contain these words. They appear in a number of places throughout this Form 10-Q and include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, our results of operations, financial condition, our available cash, liquidity, prospects, growth and strategies, impacts of the ongoing coronavirus (COVID-19) pandemic, the length of time that we will be able to continue to fund our operating expenses and capital expenditures, our expected financing needs and sources of financing, the industry in which we operate and the trends that may affect our industry or us.
By their nature, forward-looking statements involve risks and uncertainties because they relate to the occurrence and timing of events or circumstances, many of which are beyond the control of the Company. As a result of these, we cannot assure you that the forward-looking statements in this Form 10-Q will prove to be accurate. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Form 10-Q, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this Form 10-Q, they may not be predictive of results or developments in future periods.
Some of the material factors that we believe could cause actual results to differ from those anticipated or predicted include:
| ● | the successful development and implementation of our sales and marketing campaigns; |
| ● | the size and growth of the potential markets for our product and our ability to serve those markets; |
| ● | regulatory developments in the United States and other countries; |
| ● | our available cash; |
| ● | the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; |
| ● | our ability to obtain additional funding; |
| ● | our ability to manufacture and the performance of third-party manufacturers; |
| ● | our ability to identify license and collaboration partners and to maintain existing relationships; and |
| ● | our ability to successfully implement our strategy. |
You should also read carefully the factors described in the “Risk Factors” section of the on Form 10-12GA. Any forward-looking statements that we make in this Form 10-Q speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this Form 10-Q except as required by the federal securities laws.
This Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data.
| 3 |
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
RAINMAKER WORLDWIDE INC.
(Formerly Gold and Silver Mining of Nevada Inc.)
Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Other receivables | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity (Deficit) | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Customer deposits | ||||||||
| Contingent liability | ||||||||
| Convertible notes payable
net of discount of $ | ||||||||
| Notes payable - related parties | ||||||||
| Other loans payable | ||||||||
| Derivative liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | $ | $ | ||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Common stock - $ par value; authorized shares; and outstanding at March 31, 2023 and December 31, 2022 | $ | $ | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total Stockholders’ Equity (Deficit) | $ | ( | ) | $ | ( | ) | ||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 4 |
RAINMAKER WORLDWIDE INC.
(Formerly Gold and Silver Mining of Nevada Inc.)
Consolidated Statements of Operations and Comprehensive Loss
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue | $ | $ | ||||||
| Expenses | ||||||||
| General and administrative expense | ||||||||
| Total Expenses | ||||||||
| Loss from Operations | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Other income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Amortization of debt discount | ( | ) | ||||||
| Change in derivative liabilities expense | ( | ) | ||||||
| Total other income (expense) | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive income (loss) | ||||||||
| Foreign exchange translation gain (loss) | ( | ) | ( | ) | ||||
| Net income (loss) and comprehensive income (loss) | $ | ( | ) | $ | ( | ) | ||
| Net loss per share: | ||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding: | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 5 |
RAINMAKER WORLDWIDE INC.
(Formerly Gold and Silver Mining of Nevada Inc.)
Consolidated Statements of Stockholders’ Equity (deficit) (Unaudited)
| Accumulated | ||||||||||||||||||||||||||||
| Additional | other | |||||||||||||||||||||||||||
Number of stock | Amount ($) | paid-in capital ($) | Stock Payable | Deficit ($) | comprehensive income ($) | Total | ||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||
| Conversion of convertible promissory notes | ||||||||||||||||||||||||||||
| Shares cancelled | ( | ) | ( | ) | ||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||||
| Net gain (loss) for the quarter | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||
| Additional | other | |||||||||||||||||||||||||||
Number of stock | Amount ($) | paid-in capital ($) | Stock Payable | Deficit ($) | comprehensive income ($) | Total | ||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||
| Conversion of convertible promissory notes | ||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net gain (loss) for the quarter | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 6 |
RAINMAKER WORLDWIDE INC.
(Formerly Gold and Silver Mining of Nevada Inc.)
Consolidated Statements of Cash Flows (Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used for) operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Change in fair value of derivative liabilities | ||||||||
| Discount amortization | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable, related party payables and accrued liabilities | ||||||||
| CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Restructuring/discontinued operations | ||||||||
| CASH USED FOR INVESTING ACTIVITIES | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Borrowed on convertible debt | ||||||||
| Borrowed on debt | ||||||||
| Borrowed on debt-related party | ( | ) | ||||||
| CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| Effect on Foreign Currency Exchange | ( | ) | ( | ) | ||||
| NET INCREASE (DECREASE) IN CASH | ( | ) | ||||||
| CASH AT BEGINNING OF YEAR | ||||||||
| CASH AT PERIOD END | $ | $ | ||||||
| NON-CASH TRANSACTIONS | ||||||||
| Shares issued for conversion | ||||||||
| Initial derivative discount | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 7 |
Note 1: Nature of Operations, Reverse Merger and Going Concern
Nature of Operations
Rainmaker Worldwide Inc. (“Rainmaker” or the “Company” or “RAKR”) is a Nevada company which operates Rainmaker Worldwide Inc. (Ontario) (“RWI”) with its head office in Peterborough, Ontario, Canada. The Company distributes two main types of energy-efficient, fresh water-producing technologies: (1) Air-to-Water (“AW”), which harvests fresh water from humidity in the atmosphere, and (2) Water-to-Water (“WW”), which transforms seawater or polluted water into drinking water. The technology can be wind, solar, or use conventional power sources (grid or generator), is deployable anywhere, and leaves no carbon trace if renewable resources are deployed.
Rainmaker
holds a
Reverse Merger
RWI
was incorporated on
| 8 |
Joint Development Agreement
On July 28, 2022, the Company signed a Joint Development Agreement (“JDA”) with Miranda Environmental and Water Treatment Technologies, Energy, Natural Resources, Engineering, Consulting, Construction and Commerce Inc. (“Miranda”) whose primary operations reside in Ankara, Turkey. This JDA allows for reciprocal distribution rights for all of RAKR’s and Miranda’s combined technologies and fosters a long-term technological integration strategy between the two companies. The first result of this JDA was achieved in May of 2023 with a purchase order from Turks and Caicos.
Subsequent to the quarter end, on October 5, 2022, the Company entered into a Memorandum of Understanding (the “MOU”) with Miranda to formalize the mutual intention to integrate the two firms at both strategic and operating levels. This is a non-binding agreement allowing for standard due diligence to take place before the creation of, and, agreement to definitive agreements. The MOU has now been converted to a Term Sheet with a pathway to closing in the coming weeks. There can be no assurance that the parties will reach a definitive agreement.
Going Concern
The
Company has incurred continuing losses from its operations and has an accumulated deficit of $
The Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financings to enable it to meet its operating needs including current and future sales orders. In addition, revenues are being forecasted at the operational level.
Note 2: Significant Accounting Policies
Basis of Preparation
The consolidated financial statements presented are for the entity Rainmaker and its wholly owned subsidiary, Rainmaker Worldwide Inc. (Ontario) as a consolidated entity. The consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles.
The preparation of the consolidated financial statements in conformity with United States Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
All accounting policies are chosen to ensure the resulting financial information satisfies the concepts of relevance and reliability.
Foreign Currency Translation
The reporting currency of the Company is the United States dollar. The financial statements of the subsidiary located outside of the United States is measured in its functional currency: Rainmaker Worldwide Inc. (Ontario) reports in Canadian dollars. Monetary assets and liabilities of this subsidiary are translated at the exchange rate at the balance sheet date. Income and expense items are translated using average annual exchange rates. Non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive income in the consolidated balance sheets.
| 9 |
Intangible Assets
No Intangible Assets.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is provided at rates estimated to write off the cost of the relevant assets less their estimated residual values by equal annual amounts over their expected useful lives. Residual values and expected useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Depreciation periods for the Company’s property and equipment are as follows:
| Leasehold Improvements – | Manufacturing
Equipment – |
| Office
Furniture & Equipment – |
Demonstration
Equipment – |
| Intellectual
Property – |
Computer
Software – |
Embedded Conversion Features
Until December 31, 2021, the Company evaluated embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature did not require derivative treatment under ASC 815, the instrument was evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features. On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective method and reviewed and calculated the impact on the outstanding financial instruments as of this adoption date concluding there was no impact.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses a Monte Carlo simulation model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
Debt Issue Costs and Debt Discount
The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Demonstration Equipment
Demonstration equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.
Depreciation for the demonstration equipment is at a rate estimated to write off the cost of the equipment less its estimated residual value by an equal annual amount over its expected useful life. The residual value and expected useful life of the demonstration equipment is reviewed and adjusted, if appropriate, at the end of each reporting period.
Revenue Recognition
In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services. On January 1, 2018, the Company adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers using the modified retrospective method, and the Company determined the new guidance does not change the Company’s policy of revenue recognition.
| 10 |
The Company has multiple sources of revenue. The first is through the direct sales of water production and purification systems. A contract with a customer is established once an agreement is signed and the initial down payment is received. Each transaction price is established in the signed contract. Unearned revenue is recognized upon receipt of the down payment for the system. The revenue is recognized once title of the system transfers to the customer. The nature of the business of equipment sales implies there is only one performance obligation which is delivery of the end product to the customer. Our contracts outline each party’s rights and obligations including the terms and timing of payments. Another source of revenue is in exchange for operating, maintenance and professional services to these joint ventures. That revenue is recognized in the period it is earned.
In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements, ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. Accordingly, the Company recognizes revenue from grants and contracts in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.
Related Party Transactions
Parties are considered to be related if one party has the ability to directly or indirectly control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.
Share-based Payment Expense
The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers, and consultants. Share-based awards to employees are measured at the fair value of the related share-based awards. Share-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of shares are valued using the fair value of the shares at the time of grant; issuances of options are valued using the Black-Scholes model with assumptions based on historical experience and future expectations.
Financial Liabilities and Equity Instruments
Financial liabilities and equity instruments are classified and accounted for as debt or equity according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Marketing, Advertising and Promotional Costs
As required by Generally Accepted Accounting Principles of the United States, the Company records marketing costs as an expense in the year to which such costs relate. The Company does not defer amounts on its year-end consolidated balance sheets with respect to marketing costs. Advertising costs are expensed as incurred.
Segment Reporting
ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for the way that public business enterprises report information about operating segments in the Company’s consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and assess performance. The Company has reportable segments in the United States and Canada.
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| Gross Profit | ||||||||
| United States | ||||||||
| Canada | ||||||||
| $ | $ | |||||||
| Net Income (Loss) | ||||||||
| United States | ( | ) | ( | ) | ||||
| Canada | ||||||||
| $ | ( | ) | $ | ( | ) | |||
| Assets | ||||||||
| United States | ||||||||
| Canada | ||||||||
| $ | $ | |||||||
| 11 |
Use of Estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles of the United States 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 expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.
The Company reports loss per share in accordance with ASC 260, “Earnings per Share”. Basic loss per share is computed by dividing net loss by the weighted average number of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock and other potentially dilutive securities outstanding during the year. .
Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
Income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted by the date of the statement of financial position.
Equity-Settled Transactions
The costs of equity-settled transactions with employees are measured by reference to the fair value at the date on which they are granted.
The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“the vesting date”). The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and the corresponding amount is represented in share-based compensation reserve.
| 12 |
No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the share-based payment arrangement or is beneficial to the employee as measured at the date of modification.
Inventory
Inventory and work in progress are valued at the lower of cost and net realizable value. The production cost of inventory includes an appropriate proportion of depreciation and production overheads based the ratio of indirect vs. direct costs. Cost is determined on the following bases: Raw materials and consumables are valued at cost on a first in, first out (FIFO) basis; finished products are valued at raw material cost, labor cost and a proportion of manufacturing overhead expenses.
Financial Instruments
ASC 820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a fair value hierarchy prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).
Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants.
Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
Level 3 - Significant unobservable inputs that cannot be corroborated by market data.
The Company’s policy is to recognize transfers into and out of Level 3 as of the date of the event or change in the circumstances that caused the transfer. There were no such transfers during the periods being reported.
Customer Concentration
Due to the infancy of the Company’s market penetration, current sales are concentrated on a limited number of customers.
Cash and Cash Equivalents
The
Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company maintains
the majority of its cash accounts at a commercial bank. Cash balances are insured by the Canada Deposit Insurance Corporation (“CDIC”)
up to CAD
Customer Deposits
The
typical arrangement for customer deposits for purchases of Company products is
| 13 |
Note 3: Convertible Notes Payable
The Convertible Notes Payable are defined below.
An
$
On
September 14, 2020, the Company issued a Senior Secured Convertible Promissory Note in the amount of $
On
February 7, 2022, the Company issued a convertible promissory note in the amount of $
On
March 11, 2022, the Company issued a second convertible promissory note in the amount of $
On
June 28, 2022, the Company issued a convertible promissory note in the amount of $
On
July 26, 2022, the Company issued a convertible promissory note in the amount of $
On
September 12, 2022, the Company issued a convertible promissory note in the amount of $
| 14 |
On
October 25, 2022, the Company issued a convertible promissory note in the amount of $
On
February 21, 2023, the Company issued a convertible promissory note in the amount of $
Note 4: Derivative Liabilities
Derivative liabilities – Convertible Notes
In
Q3, 2022, the convertible debt issued February 7, 2022, March 11, 2022, and July 26, 2022 became eligible for conversion on August
6, 2022, September 7, 2022 and December 25, 2022 respectively. The Company engaged a third-party consultant to determine the fair
value of the convertible notes at the end of each quarter. The subsequent evaluation determined that the notes should be accounted
for as derivative liabilities upon the date they became convertible due to the variable conversion price included in each note based
on Financial Accounting Standards Board (“FASB”) guidance. The derivative component of the obligation is initially
valued and classified as a derivative liability with an offset to discounts on convertible debt. Discounts have been amortized to
interest expense over the respective terms of the related notes. Since the issuances of the convertible notes mentioned above, three
more convertible notes were issued (as discussed in Note 3) for a total of seven of which four are fully converted and debt discount
fully amortized. The total derivative liabilities associated with these notes eligible for conversion at March 31, 2023 was $
On
July 26, 2022, due to the tainted equity environment, existing convertible notes required derivative treatment. The convertible note
in the amount of $
Derivative liabilities – Warrants
Due
to the tainted equity environment at July 26, 2022, the Company recognized derivative liability for existing warrants in the amount of
$
| Derivative liabilities (fair value) | ||||
| Beginning Balance | $ | |||
| Change due to Issuances | ||||
| Change due to Conversions | ( | ) | ||
| Mark-to-market | ||||
| Ending Balance | $ | |||
Note 5: Notes Payable, Related Parties
Promissory
notes dated November 6, 2016 with a principal amount of $
In
2017 compensation was due to members of the executive management team in the amount of $
| 15 |
During 2021, a related party loaned the Company, on a short-term basis, $. This amount was fully repaid in Q1, 2022. This related party will, from time to time, as necessary, lend the Company money on a short-term basis without charging interest. As of March 31, 2023, the Company owes this party $.
Note 6: Other Loans Payable
On
February 2, 2021, the company entered into a short-term loan agreement in the amount of $
Note 7: Intellectual Property
As of the filing, the Company holds no intellectual property.
Note 8: Property and Equipment
Demonstration Equipment
The Company may have demonstration equipment to allow it to show a working version of its technology and equipment to customers and organizations in the future. Demonstration equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost would include the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended useful life. Depreciation for the demonstration equipment would be at a rate estimated to write off the cost of the equipment less its estimated residual value by an equal annual amount over its expected useful life. The residual value and expected useful life of the demonstration equipment is reviewed and adjusted, if appropriate, at the end of each reporting period. The Company does not currently have any demonstration equipment but could have in the future.
Note 9: Common Stock
Common Stock
As at December 31, 2021, the Company had authorized common stock with $ par value with shares issued and outstanding. Effective June 29, 2022, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada to increase the aggregate number of authorized shares to , of which shares are to be common stock with a par value of $ per share and shares are to be preferred stock with a par value of $ per share.
At March 31, 2023, common stock is issued and outstanding. The following table details the number of common stock issued:
| Number of Stock | ||||
| Balance, December 31, 2021 | ||||
| Conversion of convertible promissory notes | ||||
| Shares cancelled | ( | ) | ||
| Balance, December 31, 2022 | ||||
| Conversion of convertible promissory notes | ||||
| Balance, March 31, 2023 | ||||
On August 9, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On August 16, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On September 1, 2022 (effective June 13, 2022), shares were rescinded by a shareholder.
On September 6, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On
September 12, 2022, the Company issued shares completing the full conversion of a convertible promissory note including accrued
interest of $
| 16 |
On September 20, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On October 6, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On October 24, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On January 9, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On January 26, 2023, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On February 2, 2023, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On February 3, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 7, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 8, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 13, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 14, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 21, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On March 15, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On March 20, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On March 27, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
Note 10: Related Party Transactions
Outstanding compensation and expense reimbursements due to consultants engaged by the Company $ (2022: $).
Refer to other related party payables in Notes 5 and 6.
The
Company (the lender) signed a loan agreement with RHBV (the borrower) on June 21, 2022. RAKR agreed to a two-year loan facility with
an interest rate of
Note 11: Commitments and Contingencies
In the ordinary course of operating the Company’s business, it may, from time to time, be subject to various claims or possible claims. Management’s view that there are no claims or possible claims that if resolved would either individually or collectively result in a material adverse impact on the Company’s financial position, results of operations, or cash flows. These matters are inherently uncertain, and management’s view of these matters may change in the future.
| 17 |
On
April 27, 2018, the Company located a judgement dated August 8, 2016 against six Defendants including a former subsidiary of the Company
as well as a predecessor of the Company as currently named and constituted. The amount of the judgement including costs is $
Note 12: Inventory
Inventory is stated at the lower of cost or market. Cost is recorded at standard cost, which approximates actual cost, on the first-in first-out basis. The Company, at this time, holds no inventory but may in the future.
Note 13: Leases
The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.
There are no lease related assets and liabilities recorded on the Company’s consolidated balance sheet and the Company has no lease expenses.
Note 14: Stock Options
In order to compensate members of the board and executives, the following stock options have been granted, vesting as described.
| ● | Effective July 1, 2022, the Company granted options as compensation to the newly filled position, VP Sales and to the newly filled position, Executive VP Finance. and options respectively vested immediately and the remaining options vest over one year, with a term of years and exercisable at $ per Share. | |
| ● | For
the period ended December 31, 2022, the Company recorded a stock option expense of $ |
| Warrants and Options | |||||||||||||||||
| Vested | Expired | Granted | Vested | Non-Vested | |||||||||||||
| Dec 31, 2022 | To Mar 31, 2023 | To Mar 31, 2023 | To Mar 31, 2023 | To Mar 31, 2023 | |||||||||||||
| ● | The assumptions used in the Company’s Black Scholes option pricing is as follows: |
| Stock Price | $ | -$ | ||
| Exercise Price | $ | -$ | ||
| Number of Options Granted | ||||
| Dividend Yield | % | |||
| Expected Volatility | - | % | ||
| Weighted Average Risk-Free Interest Rate | - | % | ||
| Term (in years) |
| 18 |
Note 15: Income Taxes
The
Company recognizes deferred tax assets and liabilities using the asset and liability method. Deferred tax assets and liabilities are
recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect
when these differences are expected to reverse. This method requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
As of December 31, 2022, the Company’s deferred tax assets relate to net operating loss (“NOL”) carry-forwards that
were derived from operating losses and stock-based compensation from prior years. A full valuation allowance has been applied to the
Company’s deferred tax assets. The valuation allowance will be reduced when and if the Company determines it is more likely than
not that the related deferred income tax assets will be realized. At March 31, 2023, the Company had federal net operating loss carry-forwards,
which are available to offset future taxable income, of $
Quarter ended March 31, | Year ended December 31, | |||||||
| 2023 | 2022 | |||||||
| Net Loss | ( | ) | ( | ) | ||||
| Add back: | ||||||||
| Stock Compensation | ||||||||
| Amortization of Debt Discount | ||||||||
| Taxable Income | ( | ) | ( | ) | ||||
| Tax Rate | % | % | ||||||
| Deferred Tax Asset: | ||||||||
| Net Operating (Gain) Loss | ||||||||
| Valuation Allowance | ( | ) | ( | ) | ||||
| Net Deferred Asset | ||||||||
Note 16: Investments
None.
Note 17: Subsequent Events
On
April 24, 2023, the convertible promissory note dated September 12, 2022, originally in the amount of $
On
May 8, 2023 the Company issued a convertible promissory note in the amount of $
On
April 1, 2023, the Company’s wholly owned subsidiary, RWI (Rainmaker Worldwide Inc. (Ontario), completed the issuance of
shares to an investor representing % of the outstanding shares of RWI. As a result, the investor will take over management of RWI,
and the Company will retain a
| 19 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis contain forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our results could differ materially from the results indicated by our forward-looking statements as a result of many known or unknown factors, including, but not limited to, those factors discussed in Item 1A. “Risk Factors” in our on Form 10-12GA below in Part II Item 1A. “Risk Factors” of this Form 10-Q and in the “Cautionary Note Regarding Forward-Looking Statements” set forth at the beginning of this report.
You should read the following discussion and analysis in conjunction with the audited financial statements, and the related footnotes thereto, appearing elsewhere in this Form 10-Q. In addition, we intend to use our media and investor section on our website (www.rainmakerww.com/category/investor-updates/), SEC filings and press releases to communicate with the public about Rainmaker, its services and other issues.
Overview
Rainmaker Worldwide Inc. (“RAKR”, the “Company”, “we”, “us” or “our”) is a Nevada corporation originally formed on February 27, 1998. The corporation became RAKR on July 3, 2017 in a reverse merger. We are currently developing projects in various locations around the globe. We are implementing these projects using proprietary technology of our former subsidiary based in the Netherlands, Rainmaker Holland B.V. (“RHBV”). The Company retains a 12% ownership stake in RHBV. RAKR retains access to the technology based on a cost-plus formula.
Rainmaker Worldwide Inc. (Ontario) (“RWI”), an Ontario Corporation, was formed in Peterborough, Ontario, Canada on July 21, 2014, under the Ontario Business Corporations Act to finance and commercialize patented technology and to consolidate the assets, intellectual property, and executive management expertise of Dutch Rainmaker B.V. (“DRM”). RWI is a wholly owned subsidiary of the Company. DRM was originally started by Piet Oosterling as a technology company focused on delivering decentralized water solutions to water scarce regions in the world. In his lifetime, Mr. Oosterling wrote and commercialized over 400 patents. His wealth of knowledge and expertise continues to inspire and guide the Company’s executive management team and policy, our distribution partners, and RHBV.
On July 3, 2017, RWI shareholders completed a share exchange with the Company (the “Merger”) pursuant to a share exchange agreement dated June 28, 2017 (the “Share Exchange Agreement”) among the Company, RWI and RWI’s 45 shareholders at the time. Upon completion of the Merger, and in accordance with the terms and provisions of the Share Exchange Agreement, the Company acquired an aggregate of 9,029,562 common shares of stock in the capital of RWI from the RWI Shareholders (being all the issued and outstanding shares of RWI) in exchange for an aggregate of 66,818,759 restricted shares of the Company’s common stock, or 7.4 shares for each share of RWI. Therefore, RWI became a wholly owned subsidiary of the Company effective July 3, 2017. The Company’s former name, Gold and Silver Mining of Nevada, Inc. (“CJT”) was changed on April 24, 2017, in expectation of and conditional upon completion of the Merger. The Merger was accounted for as a reverse acquisition with RWI considered the accounting acquirer since the former RWI shareholders remained in control of the combined entity after the consummation of the transaction. As part of the Merger, net liabilities of $235,495 were recognized on the Company’s balance sheet.
On July 15, 2020, Sphere 3D Corp. (NASDAQ: ANY) announced that it entered into a definitive merger agreement pursuant to which it would have acquired all the outstanding securities of Rainmaker Worldwide Inc. Upon closing, Sphere 3D’s name would have changed to Rainmaker Worldwide Inc. Rainmaker management would have assumed operational leadership of the combined entity. The transaction was subject to completion of an equity financing, or series of financings, for a minimum of US$15 million at a share price to be mutually agreed prior to closing and such other customary regulatory and shareholder approvals, including the approval of NASDAQ. Closing was originally expected to occur prior to December 31, 2020, but was subject to extension to February 28, 2021, under certain circumstances if mutually agreed by the parties. As part of this process, Sphere 3D agreed to advance US$1.85 million to Rainmaker by way of a secured convertible note for Rainmaker to sustain multiple growth initiatives. The funds were used to fulfil recent contracts and expand its equipment production capacity. This note remains payable and is presented in RAKR’s financial statements. Due to various transactional and regulatory complications the agreement was ultimately terminated on February 12, 2021 and was subsequently announced publicly.
As a result of the incomplete Sphere 3D transaction, on March 31, 2021, the Company, including RWI, entered a business agreement with RHBV, DRM and Wind en Water Technologie Holding B.V. (“WWT”). These companies were considered related parties on that date by virtue of stock ownership exceeding 10%. The parties agreed to an exchange of contractual obligations, debt owed, and shares of common stock in full settlement of all obligations among the parties. The resultant Financial Statements, in accordance with ASC 205-20-45-1E, reflect the impact of these exchanges to the Company. The Company and RHBV decided to restructure in order to optimize business operations and broaden access to the capital markets. The Company and RHBV, as mutual shareholders in each other’s company, continue to pursue the mission and objective of providing low-cost water to communities and commercial entities in need of water solutions.
| 20 |
The Company has its head office based in Peterborough, Ontario, Canada. The Company utilizes two main types of products that it produces: energy-efficient, fresh water-producing/purification technologies: (1) Air-to-Water (“AW”), which harvests fresh water from humidity and heat in the atmosphere, and (2) Water-to-Water (“WW”), which transforms seawater or polluted water into drinking water. The technologies can be wind driven, solar based, or can use conventional power sources, such as grid or generator. It is deployable anywhere and leaves no carbon trace if renewable resources are deployed. The Company also distributes complementary technology through Joint Development Agreements.
The Company is pursuing projects in Turks and Caicos and other Caribbean countries. In the Caribbean and Central America, locations have been identified and operating plans defined.
The Company has generated limited revenue up until the present time, and its operations for the past four years have been typically focused on business development, market research, technology research and development activities. The Company, on a consolidated basis, had total assets of $43,038, as of December 31, 2022. As of March 31, 2023, net assets were $39,567.
At present, the Company executes consulting agreements with experienced executive personnel and senior advisors. Sales are heavily driven by independent distributors and project developers. The Company had no revenue for the quarter ended March 31, 2023 and no revenue the year ended December 31, 2022 and had net losses of $441,875 and $209,724 for the quarters ended March 31, 2023 and 2022, respectively. The losses incurred to March 31, 2023, consist of general and administrative expenses (41%) and interest expense, amortization of debt discount and change in derivative liabilities net of other income (59%). The Company has suffered recurring losses from operations, negative cash flows from operating activities and has limited resources or revenues to cover its operating costs. The Company’s auditor’s report for 2022 stated that there was substantial doubt about the Company’s ability to continue as a going concern.
Products and Services
Overview
Across the world, fresh water is unevenly distributed. Many regions are desperately under-served, including North Africa, the Middle East, India, Mexico, large portions of South America, and various island geographies.
Fundamentally, the solutions are based on deploying technology with the following attributes to ensure low-cost delivery and Company profitability:
| ● | Versatile | |
| ● | Scalable & Cost-effective | |
| ● | Environmentally & Socially Sustainable | |
| ● | Applying Proprietary Technology through partners and affiliates |
Air-to-Water (AW) – Harvests fresh water from airborne humidity by using advanced heating and cooling technologies.
Water-to-Water (WW) – Transforms contaminated water (saltwater, sewage, polluted) into safe, clean water by using an environmentally sustainable process called Multi-Effect Membrane Distillation.
The operating efficiency of these technologies allows us to provide customers with clean water at a price that is highly competitive relative to traditional alternatives. We substantially out-perform peer competitors because we can deploy remotely where the water is consumed where the water is consumed and using up to 50% less power than those same competitors. The compact and scalable systems for AW and WW enable decentralized deployment, in which water is distributed directly to the consumption site with no expensive piping or truck transport. AW and WW are both cost-effective technology solutions and can be powered by solar, wind, or grid electricity, or a combination of power sources. They can produce roughly 5,000 to 150,000 liters of water per unit, per day, depending on the local conditions and the type of unit deployed.
Cost Information
The relevant Cost Information is the cost per liter of alternative suppliers. Currently in remote locations, the principal source of supply is bottled water. Accordingly, our solutions are optimally profitable when we compete head-to-head with bottled water that is transported or bulk water that is transported by truck to local communities. In most remote communities where this water is imported, the minimum cost per liter is US$0.30 reaching as high as US$2.00, according to our market research. The Company’s fully amortized cost of water per liter allows us to compete profitably to generate corporate value beneficial to our shareholders.
| 21 |
Market Opportunity
In the past ten years, there has been a growing awareness of the shortage of fresh water—and the associated economic and social effects the problem magnifies in impoverished and underdeveloped communities. Entities ranging from Water.Org to the United Nations (access to safe drinking water represents #6 of the 17 Sustainable Development Goals articulated by the United Nations) are at the forefront of driving international policy momentum and prospects for multilateral cooperation in the realms of global governance and public-private co-regulation. Common to these efforts is the search for scalable and practical solutions that possess applications uniquely suited to the problem of shortage.
The metrics that underpin the international need for ingenuity and action are the same as those that animate and sustain the market opportunity for our Company:
| (1) | Less than 3% of the world’s water is fresh – the rest is seawater and undrinkable in its current state. | |
| (2) | Of this 3%, over 2.5% is frozen and locked up in Antarctica, the Arctic and glaciers. | |
| (3) | People and animals rely on 0.5% of the world’s water. (Source: Unwater.org - Facts and Trends: Water) |
Moreover, at any moment, the atmosphere contains approximately 37.5 million billion gallons of water. This potential is not currently harvested by the means of private organizations or government institutions and thus presents a significant opportunity for AW technology to satisfy worldwide demand for water.
The World Health Organization estimates that 50 liters of water per day is required per individual to meet basic needs. It is estimated by the OECD that by 2030 nearly half of humanity will be living in a condition of severe water stress. Currently, according to UNICEF, 2.2 billion people around the globe lack safe drinking water. While high-income countries only treat 70% of wastewater, low-income countries treat 8%. With the world’s population expected to reach 9 billion by 2038, the global need is indisputably high. Much of the population expansion is or will be in the very areas that are already suffering from the problem of water scarcity.
The above analysis points to a global market for water that is extraordinarily immense. Today, the annual global water market for all purposes and uses is $650 billion and is expected to expand to $1 trillion by 2025. (Source: RobecoSAM Study (2015, June). Water: the market of the future). Applying RAKR’s approach against the purposes and uses defined above, our solutions are tailored to meet roughly 70% of that global level of demand.
Suppliers
As stated previously, our principal supplier for the core technologies to be deployed is RHBV. RHBV in turn has built a global supply chain for its components. Should RHBV not supply the appropriate scale of technology required by a project, RAKR has identified multiple technologies of different sizes and types.
Supplemental technology (i.e., bottling, pre-post wastewater treatment, mineralization solutions, and renewable energy) – suppliers are global, abundant, and highly competitive so as to ensure the lowest cost per liter for any given project planned implemented by the Company. The Company is pursuing projects as a distributor of supplementary products based on Joint Development Agreements.
Competition
The Rainmaker business model that will deliver potable water at the source of demand is uniquely positioned to address alternative competitive models. We believe that competitive models, while relevant and plausible alternatives, will not ultimately fully support the global level of demand for water at a reasonable price per liter. By virtue of our current affiliations, we believe we have a cost per liter competitive advantage. Accordingly, on a global basis, we do not believe competitive conditions will thwart our ability to produce long-term, corporate value or significantly diminish our financial results in the near term. However, other companies with sufficiently greater resources may develop competing products and have an advantage over us based on the relative size.
Results of Operations for the Three Months ended March 31, 2023 and 2022
Revenue
Revenue was $0 and $0 for the three months ended March 31, 2023, and March 31, 2022.
| 22 |
General and Administrative Expenses
General and administrative expenses primarily include consultant expenses and benefit costs and stock-based compensation expense for executive consultants, outside legal and professional services, marketing and advertising, and facilities costs. General and administrative expenses for the three months ended March 31, 2023 and March 31, 2022 were as follows:
| Three
Months Ended March 31, | Increase
(Decrease) | |||||||||||||||
| 2023 | 2022 | $ | % | |||||||||||||
| General and administrative expense | $ | 181,769 | $ | 146,997 | $ | 34,772 | 23.7 | % | ||||||||
| Stock-based compensation expense included in general and administrative expense | $ | 34,737 | $ | 22,335 | $ | 12,402 | 55.5 | % | ||||||||
General and administrative expenses, including stock-based compensation, for the three months ended March 31, 2023, increased $34,772, or 23.7%, compared to the same period in 2022. This increase primarily relates to (1) an increase of $59,250 in consulting fees, (2) marketing, advertising and promotion expense increased by approximately $484, (3) stock option expense increased by approximately $12,402 and (5) general and administrative expenses increased approximately $34,772. Excluding stock-based compensation, general and administrative expenses increased $22,370.
Liquidity and Capital Resources
Management’s Plans
Similar to other development stage companies, our products have yet to generate significant revenue. As a result, we have historically suffered recurring losses and we do not have required cash resources to fully execute our business plans.
Historically, the Company’s major sources of cash have comprised proceeds from various private offerings of its securities (including common stock) and debt financings. From 2015 through to the date of this filing, the Company raised approximately $8.05 million in gross proceeds from various private offerings of our common stock and convertible debt. These funds were raised during various stages of the company and allowed us first to develop a commercial ready product and as soon as logistics and supply chains allow, deliver these products into identified projects and begin to generate revenue. The Company has sustained losses from operations in each fiscal year since our inception, and we expect losses to continue for the indefinite future. As of March 31, 2023 and March 31, 2022, the Company had an accumulated deficit of approximately $73 million and $71 million, respectively, and stockholders’ equity of approximately $(10.5) million and $(9.1) million, respectively. As of March 31, 2023, the Company had approximately $1,400 in cash.
The Company recognizes and is addressing the need to raise additional capital in order to continue to execute its business plan in the future. There is no assurance that additional financing will be available when needed or that the Company will be able to obtain financing on terms acceptable to it or whether the Company will become profitable and generate positive operating cash flow.
Off-Balance Sheet Arrangements
As of March 31, 2023, the Company had no off-balance sheet arrangements.
Critical Accounting Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:
| ● | it requires assumptions to be made that were uncertain at the time the estimate was made, and | |
| ● | changes in the estimate or different estimates that could have been selected could have material impact in our results of operations or financial condition. |
While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those estimates and the differences could be material. The most significant estimates impact the following transactions or account balances: stock compensation.
See Note 2 to our consolidated financial statements for a discussion of our significant accounting policies.
| 23 |
Recently Issued Accounting Standards Not Yet Effective or Adopted
Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, as of December 31, 2022, our Chief Executive Officer and Acting Chief Financial Officer has concluded that our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Our Chief Executive Officer and Acting Chief Financial Officer also concluded that, as of March 31, 2023, our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Acting Chief Financial Officer, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting in accordance with Exchange Act Rule 13a-15. With the participation of our Chief Executive Officer and Acting Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2023 based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of March 31, 2023, based on those criteria. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:
| 1. | As of March 31, 2023, due to the inherent issue of segregation of duties in a small company, we have relied heavily on entity or management review controls. Accordingly, management has determined that this control deficiency constitutes a material weakness. | |
| 2. | As of March 31, 2023, we did not establish a formal written policy for the approval, identification, and authorization of related party transactions. | |
| 3. | During the 2022 audit, it was necessary to record adjusting journal entries. Management has determined that the effects of the corrected misstatements are material, both individually and in the aggregate, to the financial statements as a whole. The corrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in the judgment of our auditor previously, such corrected misstatements are material to the financial statements under audit.
Professional standards define an audit adjustment as a proposed correction of the financial statements that, in the judgment of our auditor previously, may not have been detected except through the auditing procedures. An audit adjustment may or may not indicate matters that could have a significant effect on the Company’s financial reporting process (that is, cause future financial statements to be materially misstated). In the judgment of our auditor previously, the adjustments proposed indicate matters that could have a significant effect on the Company’s financial reporting process. |
Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2023, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.
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Changes in Internal Control over Financial Reporting
During the quarter ended March 31, 2023, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls
Our management, including our CEO and EVP Finance, do not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not currently in any legal proceedings.
Item 1A. Risk Factors
Investing in our common stock involves risks. Each of these risks as well as other risks and uncertainties not presently known to us or that we currently deem immaterial could adversely affect our business, results of operations, cash flows and financial condition and cause the value of our common shares to decline, which may result in the loss of part or all of your investment.
There has been no change since filing the 2022 fourth quarter 10-Q.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On January 9, 2023, a convertible promissory note dated June 28, 2022 in the amount of $64,250 was partially converted. $15,000 principal was converted into 5,769,231 shares leaving a principal balance owing of $49,250.
On January 26, 2023, a convertible promissory note dated July 26, 2022 in the amount of $35,00 was partially converted. $12,000 principal and $595.07 accrued interest was converted into 3,229,505 shares leaving a principal balance owing of $23,000.
On February 2, 2023, the Company issued shares upon a partial conversion of the June 28, 2023 convertible promissory note. $15,000 principal was converted into 7,500,000 shares leaving a principal balance owing of $34,250.
On February 3, 2023, the Company issued shares upon partial conversion of the July 26, 2022 convertible promissory note. $8,000 principal plus accrued interest of $416.44 was converted into 4,316,123 shares leaving a principal balance of $15,000.
On February 7, 2023, the Company issued shares upon partial conversion of the June 28, 2022 convertible promissory note. $16,250 principal was converted into 9,027,778 shares leaving a principal balance of $18,000.
On February 8, 2023, the Company issued shares upon a partial conversion of the July 26, 2023 convertible promissory note. $8,000 principal and $427.40 accrued interest was converted into 4,986,627 shares leaving a principal balance of $7,000.
On February 13, 2023, the Company issued shares upon partial conversion of the June 28, 2022 convertible promissory note. $15,600 principal was converted into 9,750,000 shares leaving a principal balance of $2,400.
On February 14, 2023, the Company issued shares upon a partial conversion of the July 26, 2022 convertible promissory note. This final partial conversion was in the amount of $7,000 principal plus $383.56 accrued interest and was converted into 5,384,615 shares. This note is now fully converted.
On February 21, 2023, the Company issued shares upon a partial conversion of the June 28, 2022 convertible promissory note. This final partial conversion was in the amount of $2,400 principal plus $3212.50 accrued interest and was converted into 3,507,813 shares. This note is now fully converted.
| 25 |
On March 15, 2023, the Company issued shares upon partial conversion of a convertible promissory note dated September 12, 2022 in the amount of $49,250. $15,000 principal was converted into 9,375,000 shares leaving a principal balance of $34,250.
On March 20, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $12,200 principal was converted into 11,090,909 shares leaving a principal balance of $22,050.
On March 27, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $10,600 principal was converted into 11,648,352 shares leaving a principal balance of $11,450.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable to smaller companies.
Item 5. Other Information
None
Item 6. Exhibits
| Exhibit No. | Description | |
| 10.1 | Issuance of Convertible Promissory Note | |
| 10.2 | Term Sheet | |
| 31.1* | Certification of Principal Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Principal Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Principal Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2* | Certification of Principal Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
| 26 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Rainmaker Worldwide Inc. | ||
| Date: May 22, 2023 | By: | /s/ Michael O’Connor |
| Michael O’Connor | ||
| President, Chief Executive Officer and Interim | ||
| Chief Financial Officer | ||
| 27 |
Exhibit 10.1
TERM SHEET
| Issue: | VIVA INDUSTRIES INC. (“VIVA”) and RAINMAKER WORLDWIDE INC. (“RAKR”), herein after referred to as the “BUYERS”. The BUYERS offer the following in exchange for 100% of the common stock of MIRANDA ENVIRONMENTAL AND WATER TREATMENT TECHNOLOGIES, ENERGY, NATURAL RESOURCES, ENGINEERING, CONSULTING, CONSTRUCTION AND COMMERCE INC. (“MIRANDA”). |
| Shareholders of MIRANDA (the “SELLER”) hereby confirm unanimous support of the following terms. | |
| The Aggregate Purchase Price for one hundred percent (100%) of the common stock equates to a valuation of Five Million USD, ($5 Million USD). The form and terms of payment shall be as follows: |
| ● | $1 Million USO payable simultaneously with the execution of the Definitive Purchase and Shareholders Agreement (“Close Date”) preferably on June 30, 2023 but no later than July 31st, 2023, |
| ● | $1 Million USD of Preferred A Shares in MIRANDA that have a fixed dividend of 12% paid annually in Preferential A stock to be authorized upon execution of the Definitive Agreement. MIRANDA has the option to purchase these shares at the par value for cancellation up until the 18- month anniversary of the Close Date. |
| ● | $1 Million USD of Preferred B Shares in MIRANDA stock to be authorized upon execution of the Definitive Agreement. After 18-months from the anniversary of the close date up until the 24-month of the Close Date this stock has the option to be converted to 20% of the common stock at that time. MIRANDA has the option to purchase these shares at the par value for cancellation up until the 18-month anniversary of the Close Date. |
| ● | $2 Million USD of RAKR common stock represented by 40 million shares. Also completed upon execution of the Definitive Purchase Agreement. |
| Voting Rights: | The holders of the Preferred A & B Shares shall have the right to vote with the Common Stock shareholders. |
| Automatic Buyback: | The Preferred A Shares shall be automatically purchased by the BUYERS if still owned by the SELLER on the 18-month anniversary of the Close Date for $1 Million USD. |
| The Preferred B Shares shall be automatically purchased by the BUYERS if still owned by the SELLER on the 24-month anniversary of the Close Date for $1 Million USD plus 12% Annual Interest. |
| Information Rights: | All PARTIES signatory to this Agreement shall have rights to receive monthly Actual vs Planned Financials of MIRANDA. The PARTIES have agreed to establish a non-authoritative Joint Advisory Committee that will oversee the operations of MIRANDA prior to the Close Date. This Committee will consist of Bulent Hatay, Michael Skinner and Michael O’Connor. Mete Ozsoy, Ben Kaczmarek, John Gillis and Ryan Moore will have the option to attend as alternatives or guests. |
| Assignability: | The BUYERs have the right to transfer the rights and responsibilities contained within this agreement collectively from Viva and RAKR to a joint Company of their desire prior to Close Date. |
| Board of Directors: | The Board will consist of [5] members following the execution of Definitive Purchase Agreement. Three members will be appointed by the BUYERS, one member by the SELLER, and sn independent Turkish citizen to be approved by all PARTIES. |
| Expenses: | All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the PARTY incurring such expenses. |
| Definitive Purchase & Due Diligence: | The purchase of the common stock will be made pursuant to negotiation of a Definitive Purchase Agreement. The Definitive Purchase Agreement will contain customary Representations and Warranties related to the transaction. Any further Due Diligence activities will be conducted simultaneously with the development of the Definitive Purchase Agreement. |
| Closing: | The BUYERS and SELLER commit to use their best efforts to close the transaction as quickly as reasonably possible. |
This Term Sheet merely constitutes a statement of the present material intentions of the PARTIES, by which the PARTIES intend to be legally bound. No oral modifications to this principle shall be valid. This Term Sheet is governed by the Laws of Ontario.
This proposal remains open until 28 April, 2023, at which point it will be deemed to have been withdrawn.
RAINMAKER WORLDWIDE INC.
MIRANDA ENVIRONMENTAL AND WATER
TREATMENT TECHNOLOGIES, ENERGY,
NATURAL RESOURCES, ENGINEERING,
CONSULTING, CONSTRUCTION AND COMMERCE INC.
VIVA INDUSTRIES INC.
Date: April 24, 2023
Exhibit 10.2
EXTENSION AGREEMENT
This Extension Agreement (“EA”) is made and effective the Feb 2, 2023,
| BETWEEN: | KAWARTHA ENTERTAINMENT GROUP INC., a corporation organized and existing under the laws of the Province of ONTARIO, with its head office located at: 1562 CHAMPLAIN DR., PETERBOROUGH, ON K9L 1N6 (“KEGI”) |
| AND: | RAINMAKER
WORLDWIDE INC., a corporation organized and existing under the laws of the State of NEVADA,
with its head office located at: 271 BROCK STREET, PETERBOROUGH, ON K9H 2P8 (“RAKR”) |
| Each referred to as “Party” or collectively as “Parties”. |
In consideration of the mutual covenants contained in this EA, the Parties agree as follows:
WHEREAS the existing loan agreement including any assignments (“Agreement”) or amendments that took place following the signature of the original agreement, and
WHEREAS the Agreement, attached as Schedule A, is set to expire on February 2, 2023 and the Parties wish to extend the terms and the due date of the loan.
Wherein said Agreement expires on February 2, 2023, and the Parties desire to extend and continue said Agreement; it is provided that said Agreement shall be extended for an additional term of 6 months, commencing upon the expiration of the original term, and expiring on August 2, 2023.
This extension shall be on the same terms and conditions as contained in the original Agreement and as if set forth herein excepting that:
The interest rate is hereby changed to 12% from 5% in the Agreement.
This EA supersedes all previous agreements and amendments.
IN WITNESS WHEREOF, the Parties have executed this agreement on April 20, 2023 effective February 2, 2023.
| KAWARTHA ENTERTAINMENT GROUP INC. | RAINMAKER WORLDWIDE INC. | |
| Michael Skinner, CEO | Michael O’Connor, CEO |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a) OR RULE 15d-14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
I, Michael O’Connor, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Rainmaker Worldwide Inc. for the quarter ended March 31, 2023; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | As the registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of this annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | As the registrant’s certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 22, 2023 | |
| /s/ Michael O’Connor | |
| Michael O’Connor | |
| Chief Executive Officer and | |
Acting Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18. U.S.C. 7350
(SECTION 302 OF THE SARBANES OXLEY ACT OF 2002)
I, Michael O’Connor, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2023 of Rainmaker Worldwide Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant has disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| May 22, 2023 | ||
| By: | /s/ Michael O’Connor | |
| Name: | Michael O’Connor | |
| Title: | President, Chief Executive Officer and Interim Chief Financial Officer |
|
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Rainmaker Worldwide Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael O’Connor, Chief Executive Officer and Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| Date: May 22, 2023 | |
| /s/ Michael O’Connor | |
| Michael O’Connor | |
| Chief Executive Officer and | |
Acting Chief Financial Officer (Principal Executive Officer and Acting Principal Financial and Accounting Officer) |
EXHIBIT 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Rainmaker Worldwide Inc., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chief Financial Officer, hereby certifies pursuant to 18 U.S.C. Sec. 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 that, to the undersigned’s knowledge:
(1) the Report of the Company filed today fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
| May 22, 2023 | By: | /s/ Michael O’Connor |
| Name: | Michael O’Connor | |
| Title: | President, Chief Executive Officer and Interim Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Convertible notes payable discount | $ 263,589 | $ 328,501 |
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 500,000,000 | 500,000,000 |
| Common stock, shares outstanding | 246,383,669 | 160,797,716 |
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Statement [Abstract] | ||
| Revenue | ||
| Expenses | ||
| General and administrative expense | 181,769 | 146,997 |
| Total Expenses | 181,769 | 146,997 |
| Loss from Operations | (181,769) | (146,997) |
| Other income (expense) | ||
| Other income | 20,000 | |
| Interest expense | (88,156) | (82,727) |
| Amortization of debt discount | (107,947) | |
| Change in derivative liabilities expense | (64,003) | |
| Total other income (expense) | (260,106) | (62,727) |
| Loss from operations | (441,875) | (209,724) |
| Net income (loss) | (441,875) | (209,724) |
| Other comprehensive income (loss) | ||
| Foreign exchange translation gain (loss) | (13,155) | (16,953) |
| Net income (loss) and comprehensive income (loss) | $ (455,030) | $ (226,677) |
| Net loss per share: | ||
| Basic and diluted | $ (0.002) | $ (0.001) |
| Weighted average number of common shares outstanding: | ||
| Basic and diluted | 196,460,597 | 144,354,957 |
Consolidated Statements of Stockholders' Equity (deficit) (Unaudited) - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Stock Payable [Member] |
Retained Earnings [Member] |
AOCI Attributable to Parent [Member] |
Total |
|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2021 | $ 144,355 | $ 61,686,839 | $ (70,997,053) | $ 295,018 | $ (8,870,841) | |
| Balance, shares at Dec. 31, 2021 | 144,354,957 | |||||
| Conversion of convertible promissory notes | $ 16,640 | 177,314 | 193,954 | |||
| Conversion of convertible promissory notes, shares | 16,639,942 | |||||
| Shares cancelled | $ (197) | 197 | ||||
| Shares cancelled, shares | (197,183) | |||||
| Stock-based compensation | 136,492 | 136,492 | ||||
| Foreign currency translation | 77,631 | 77,631 | ||||
| Net gain (loss) for the quarter | (1,837,611) | (1,837,611) | ||||
| Balance at Dec. 31, 2022 | $ 160,798 | 62,000,842 | (72,834,664) | 372,649 | (10,300,375) | |
| Balance, shares at Dec. 31, 2022 | 160,797,716 | |||||
| Conversion of convertible promissory notes | $ 85,586 | 168,203 | 253,789 | |||
| Conversion of convertible promissory notes, shares | 85,585,953 | |||||
| Stock-based compensation | 34,737 | 34,737 | ||||
| Foreign currency translation | (13,155) | (13,155) | ||||
| Net gain (loss) for the quarter | (441,875) | (441,875) | ||||
| Balance at Mar. 31, 2023 | $ 246,384 | $ 62,203,782 | $ (73,276,539) | $ 359,494 | $ (10,466,879) | |
| Balance, shares at Mar. 31, 2023 | 246,383,669 |
Nature of Operations, Reverse Merger and Going Concern |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Nature of Operations, Reverse Merger and Going Concern | Note 1: Nature of Operations, Reverse Merger and Going Concern
Nature of Operations
Rainmaker Worldwide Inc. (“Rainmaker” or the “Company” or “RAKR”) is a Nevada company which operates Rainmaker Worldwide Inc. (Ontario) (“RWI”) with its head office in Peterborough, Ontario, Canada. The Company distributes two main types of energy-efficient, fresh water-producing technologies: (1) Air-to-Water (“AW”), which harvests fresh water from humidity in the atmosphere, and (2) Water-to-Water (“WW”), which transforms seawater or polluted water into drinking water. The technology can be wind, solar, or use conventional power sources (grid or generator), is deployable anywhere, and leaves no carbon trace if renewable resources are deployed.
Rainmaker holds a 12% interest in Rainmaker Holland B.V. (“RHBV”) which consists of the innovation and manufacturing center located in Rotterdam, Netherlands. RAKR will purchase equipment on a favorable cost-plus formula.
Reverse Merger
RWI was incorporated on July 21, 2014 under the Ontario Business Corporations Act. On July 3, 2017, RWI shareholders completed a share exchange with the Company (the “Merger”) pursuant to a share exchange agreement dated June 28, 2017 (the “Share Exchange Agreement”) among the Company, RWI and RWI’s 45 shareholders. Upon completion of the Merger, and in accordance with the terms and provisions of the Share Exchange Agreement, the Company acquired an aggregate of common shares in the capital of RWI from the RWI Shareholders (being all of the issued and outstanding shares in the capital of RWI) in exchange for an aggregate of restricted shares of the Company’s common stock, or shares for each share of RWI. Therefore, RWI became a wholly owned subsidiary of the Company effective July 3, 2017. The Company’s former name, Gold and Silver Mining of Nevada, Inc. (“CJT”) was changed on April 24, 2017 in expectation of and conditional upon completion of the Merger. The Merger was accounted for as a reverse acquisition with RWI considered the accounting acquirer since the former RWI shareholders remained in control of the combined entity after the transaction. As part of the merger, net liabilities of $235,495 were recognized on the Company’s balance sheet. As a result of the Merger the Company originally traded on the OTC Pink Sheet under the trading symbol RAKR but since then become an SEC filing company and was up-listed to the OTCQB in 2022. The Company has temporarily been relegated to the OCT Pink due to share price. The Company is working on mechanisms to cure that issue. In the meantime, shareholders remain able to trade the stock.
Joint Development Agreement
On July 28, 2022, the Company signed a Joint Development Agreement (“JDA”) with Miranda Environmental and Water Treatment Technologies, Energy, Natural Resources, Engineering, Consulting, Construction and Commerce Inc. (“Miranda”) whose primary operations reside in Ankara, Turkey. This JDA allows for reciprocal distribution rights for all of RAKR’s and Miranda’s combined technologies and fosters a long-term technological integration strategy between the two companies. The first result of this JDA was achieved in May of 2023 with a purchase order from Turks and Caicos.
Subsequent to the quarter end, on October 5, 2022, the Company entered into a Memorandum of Understanding (the “MOU”) with Miranda to formalize the mutual intention to integrate the two firms at both strategic and operating levels. This is a non-binding agreement allowing for standard due diligence to take place before the creation of, and, agreement to definitive agreements. The MOU has now been converted to a Term Sheet with a pathway to closing in the coming weeks. There can be no assurance that the parties will reach a definitive agreement.
Going Concern
The Company has incurred continuing losses from its operations and has an accumulated deficit of $73,276,539. There are no assurances the Company will be able to raise capital on acceptable terms or that cash flows generated from its operations will be sufficient to meet its current operating costs and required debt service. If the Company is unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its business, which could harm its financial condition and operating results. These conditions raise substantial doubt about the Company’s ability to continue ongoing operations. These consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
The Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financings to enable it to meet its operating needs including current and future sales orders. In addition, revenues are being forecasted at the operational level.
|
Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Significant Accounting Policies | Note 2: Significant Accounting Policies
Basis of Preparation
The consolidated financial statements presented are for the entity Rainmaker and its wholly owned subsidiary, Rainmaker Worldwide Inc. (Ontario) as a consolidated entity. The consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles.
The preparation of the consolidated financial statements in conformity with United States Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
All accounting policies are chosen to ensure the resulting financial information satisfies the concepts of relevance and reliability.
Foreign Currency Translation
The reporting currency of the Company is the United States dollar. The financial statements of the subsidiary located outside of the United States is measured in its functional currency: Rainmaker Worldwide Inc. (Ontario) reports in Canadian dollars. Monetary assets and liabilities of this subsidiary are translated at the exchange rate at the balance sheet date. Income and expense items are translated using average annual exchange rates. Non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive income in the consolidated balance sheets.
Intangible Assets
No Intangible Assets.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is provided at rates estimated to write off the cost of the relevant assets less their estimated residual values by equal annual amounts over their expected useful lives. Residual values and expected useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Depreciation periods for the Company’s property and equipment are as follows:
Embedded Conversion Features
Until December 31, 2021, the Company evaluated embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature did not require derivative treatment under ASC 815, the instrument was evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features. On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective method and reviewed and calculated the impact on the outstanding financial instruments as of this adoption date concluding there was no impact.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses a Monte Carlo simulation model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
Debt Issue Costs and Debt Discount
The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Demonstration Equipment
Demonstration equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.
Depreciation for the demonstration equipment is at a rate estimated to write off the cost of the equipment less its estimated residual value by an equal annual amount over its expected useful life. The residual value and expected useful life of the demonstration equipment is reviewed and adjusted, if appropriate, at the end of each reporting period.
Revenue Recognition
In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services. On January 1, 2018, the Company adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers using the modified retrospective method, and the Company determined the new guidance does not change the Company’s policy of revenue recognition.
The Company has multiple sources of revenue. The first is through the direct sales of water production and purification systems. A contract with a customer is established once an agreement is signed and the initial down payment is received. Each transaction price is established in the signed contract. Unearned revenue is recognized upon receipt of the down payment for the system. The revenue is recognized once title of the system transfers to the customer. The nature of the business of equipment sales implies there is only one performance obligation which is delivery of the end product to the customer. Our contracts outline each party’s rights and obligations including the terms and timing of payments. Another source of revenue is in exchange for operating, maintenance and professional services to these joint ventures. That revenue is recognized in the period it is earned.
In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements, ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. Accordingly, the Company recognizes revenue from grants and contracts in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.
Related Party Transactions
Parties are considered to be related if one party has the ability to directly or indirectly control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.
Share-based Payment Expense
The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers, and consultants. Share-based awards to employees are measured at the fair value of the related share-based awards. Share-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of shares are valued using the fair value of the shares at the time of grant; issuances of options are valued using the Black-Scholes model with assumptions based on historical experience and future expectations.
Financial Liabilities and Equity Instruments
Financial liabilities and equity instruments are classified and accounted for as debt or equity according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Marketing, Advertising and Promotional Costs
As required by Generally Accepted Accounting Principles of the United States, the Company records marketing costs as an expense in the year to which such costs relate. The Company does not defer amounts on its year-end consolidated balance sheets with respect to marketing costs. Advertising costs are expensed as incurred.
Segment Reporting
ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for the way that public business enterprises report information about operating segments in the Company’s consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and assess performance. The Company has reportable segments in the United States and Canada.
Use of Estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles of the United States 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 expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.
The Company reports loss per share in accordance with ASC 260, “Earnings per Share”. Basic loss per share is computed by dividing net loss by the weighted average number of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock and other potentially dilutive securities outstanding during the year. .
Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
Income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted by the date of the statement of financial position.
Equity-Settled Transactions
The costs of equity-settled transactions with employees are measured by reference to the fair value at the date on which they are granted.
The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“the vesting date”). The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and the corresponding amount is represented in share-based compensation reserve.
No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the share-based payment arrangement or is beneficial to the employee as measured at the date of modification.
Inventory
Inventory and work in progress are valued at the lower of cost and net realizable value. The production cost of inventory includes an appropriate proportion of depreciation and production overheads based the ratio of indirect vs. direct costs. Cost is determined on the following bases: Raw materials and consumables are valued at cost on a first in, first out (FIFO) basis; finished products are valued at raw material cost, labor cost and a proportion of manufacturing overhead expenses.
Financial Instruments
ASC 820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a fair value hierarchy prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).
Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants.
Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
Level 3 - Significant unobservable inputs that cannot be corroborated by market data.
The Company’s policy is to recognize transfers into and out of Level 3 as of the date of the event or change in the circumstances that caused the transfer. There were no such transfers during the periods being reported.
Customer Concentration
Due to the infancy of the Company’s market penetration, current sales are concentrated on a limited number of customers.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company maintains the majority of its cash accounts at a commercial bank. Cash balances are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to CAD100,000 per commercial bank. From time to time, cash in deposit accounts may exceed the insurance limits thus the excess would be at risk of loss. For purposes of the statement of cash flows we consider all cash and highly liquid investments with maturities of 90 days or less to be cash equivalents. As of March 31, 2023, the Company had no cash equivalents.
Customer Deposits
The typical arrangement for customer deposits for purchases of Company products is 50% down at the time of ordering. The Company records the deposit as a current liability reflecting the obligation to provide the goods or services to the customer or to return the money. When the Company earns the deposit amount, the current liability will be debited, and sales revenues will be credited.
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Convertible Notes Payable |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Debt Disclosure [Abstract] | |
| Convertible Notes Payable | Note 3: Convertible Notes Payable
The Convertible Notes Payable are defined below.
An $8,200 convertible note that came into the Company through the July 3, 2017 merger. On July 26, 2022, this note required derivative treatment. On March 31, 2023, the value of this note was $3,694.
On September 14, 2020, the Company issued a Senior Secured Convertible Promissory Note in the amount of $3,105,896.72 bearing interest of 10% per annum with a maturity date of 3 years from the anniversary date of the funding advance and is convertible into shares of Common Stock equal to 85% multiplied by the average of the 5 closing prices of the Common Stock immediately preceding the Trading Day that the Company receives a Notice of Conversion with a floor price of $0.15. On October 1, 2020, the amount of $1,850,000 was advanced to the Company. The balance of the principal of this note is made up of the principal and interest on the existing promissory notes totaling $1,100,000 (1), and the principal and interest on the existing note issued August 4, 2020, in the amount of $150,000 (2). Each of the existing notes, (1) and (2), are deemed to be cancelled and are replaced by the note in the amount of $3,105,896.72 described above. The company evaluated the note for a beneficial conversion feature at the date of issuance noting that there was no BCF related. The security interest of this loan is junior and subordinate to all existing security. On July 26, 2022, this note required derivative treatment. On March 31, 2023, the value of this note was $477,678.
On February 7, 2022, the Company issued a convertible promissory note in the amount of $55,000 bearing interest of 10% per annum with a maturity date of one year (February 7, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before maturity. During Q3, 2022, the investor fully converted this note including accrued interest of $2750 into common shares. The conversions were within the terms of the agreement and no gain or loss were recognized on the conversions.
On March 11, 2022, the Company issued a second convertible promissory note in the amount of $53,750 bearing interest of 10% per annum with a maturity date of one year (March 11, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before maturity. During Q3, 2022, the investor partially converted this note ($15,000) into common shares leaving the balance of the note available for conversion of $38,750. During Q4, 2022 the lender converted the balance of the note ($38,750) and accrued interest ($2687.50) into common shares and is now fully converted. The conversions were within the terms of the agreement and no gain or loss were recognized on the conversions.
On June 28, 2022, the Company issued a convertible promissory note in the amount of $64,250 bearing interest of 10% per annum with a maturity date of one year (June 28, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10 trading day period). The Company has the right to prepay any time before maturity. Agreement was signed on June 28th and ultimately funded on July 6, 2022. During Q1, 2023, the principal amount of this note ($64,250) plus all accrued interest ($3212.50) was fully converted into common shares. This note had an Original Issue Discount of $4,250 and as of March 31, 2023, it was fully amortized. The conversions were within the terms of the agreement and no gain or loss were recognized on the conversions.
On July 26, 2022, the Company issued a convertible promissory note in the amount of $35,000 bearing interest of 10% per annum with a maturity date of one year (July 26, 2023) and has the option to convert into shares of Common Stock any time following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10 trading day period). The Company has the right to prepay any time before the 180th day. During Q1, 2023, the principal amount of this note ($35,000) plus all accrued interest ($1,822.47) was fully converted into common shares. This note had an Original Issue Discount of $2,500 and as of March 31, 2023, it was fully amortized. The conversions were within the terms of the agreement and no gain or loss were recognized on the conversions.
On September 12, 2022, the Company issued a convertible promissory note in the amount of $49,250 bearing interest of 10% per annum with a maturity date of one year (September 12, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before the 180th day. During Q1, 2023, there were conversions totaling $37,800 leaving a principal balance of $11,450. These conversions converted into common shares. This note had an Original Issue Discount of $4,250 and as of March 31, 2023, $2,329 amortized. The conversions were within the terms of the agreement and no gain or loss were recognized on the conversions.
On October 25, 2022, the Company issued a convertible promissory note in the amount of $44,250 bearing interest of 10% per annum with a maturity date of one year (October 25, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before the 180th day. This note had an Original Issue Discount of $4,250 and as of March 31, 2023, $2,119 amortized.
On February 21, 2023, the Company issued a convertible promissory note in the amount of $44,250 bearing interest of 10% per annum with a maturity date of one year (February 21, 2024) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before the 180th day. This note had an Original Issue Discount of $4,250 and as of March 31, 2023, $442 amortized.
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Derivative Liabilities |
3 Months Ended | |||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||
| Derivative Liabilities | ||||||||||||||||||||||||||||||||||||
| Derivative Liabilities | Note 4: Derivative Liabilities
Derivative liabilities – Convertible Notes
In Q3, 2022, the convertible debt issued February 7, 2022, March 11, 2022, and July 26, 2022 became eligible for conversion on August 6, 2022, September 7, 2022 and December 25, 2022 respectively. The Company engaged a third-party consultant to determine the fair value of the convertible notes at the end of each quarter. The subsequent evaluation determined that the notes should be accounted for as derivative liabilities upon the date they became convertible due to the variable conversion price included in each note based on Financial Accounting Standards Board (“FASB”) guidance. The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to discounts on convertible debt. Discounts have been amortized to interest expense over the respective terms of the related notes. Since the issuances of the convertible notes mentioned above, three more convertible notes were issued (as discussed in Note 3) for a total of seven of which four are fully converted and debt discount fully amortized. The total derivative liabilities associated with these notes eligible for conversion at March 31, 2023 was $490,351 and $0 at March 31, 2022. The Company’s debt discount relating to these convertible notes amounted to $255,729 at March 31, 2023 and the Company recorded interest expense for the amortization of the discount in the amount of $95,488 at March 31, 2023. The Company recorded a change in the value of embedded derivative liabilities expense of $5,273 for the three months ended March 31, 2023.
On July 26, 2022, due to the tainted equity environment, existing convertible notes required derivative treatment. The convertible note in the amount of $8,200 and the convertible note in the amount of $3,105,896.72 (discussed in Note 3) had an initial debt discount of $397,542, loss on initial derivative of $126,888 and a derivative liability of $524,330. At March 31, 2023, the derivative liability value of these notes was $481,372, of which is included in the $490,351 total discussed in the previous paragraph, and which represents an increase in fair value of $99,708 since December 31, 2022. On March 31, 2022, this situation did not exist.
Derivative liabilities – Warrants
Due to the tainted equity environment at July 26, 2022, the Company recognized derivative liability for existing warrants in the amount of $273,679. On December 31, 2022, a gain on derivative liabilities was recognized in the amount of $229,355 leaving a fair value at December 31, 2022 of $44,324 for warrants. On March 31, 2023, a gain on derivative liabilities was recognized in the amount of $40,978 leaving a fair value of $3,346 for warrants at March 31, 2023.
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Notes Payable, Related Parties |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Debt Disclosure [Abstract] | |
| Notes Payable, Related Parties | Note 5: Notes Payable, Related Parties
Promissory notes dated November 6, 2016 with a principal amount of $13,516 are due and bear interest of 5% and are payable on demand. Accrued interest to March 31, 2023 on these notes is $4,959.
In 2017 compensation was due to members of the executive management team in the amount of $312,000. In support of the growth of the Company, those executive team members agreed to defer receipt of payment by converting into loans that bear interest of 4%. $60,000 principal and accrued interest remains.
During 2021, a related party loaned the Company, on a short-term basis, $. This amount was fully repaid in Q1, 2022. This related party will, from time to time, as necessary, lend the Company money on a short-term basis without charging interest. As of March 31, 2023, the Company owes this party $.
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Other Loans Payable |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Other Loans Payable | |
| Other Loans Payable | Note 6: Other Loans Payable
On February 2, 2021, the company entered into a short-term loan agreement in the amount of $50,000 at an annual interest rate of 5% and due February 1, 2022. It was agreed to extend the due date to February 2, 2023. By mutual agreement, the note was extended for an additional term of six months and therefore now expiring August 2, 2023. The terms and conditions remained the same with the exception of a change in the interest rate from 5% to 12%.
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Intellectual Property |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| Intellectual Property | Note 7: Intellectual Property
As of the filing, the Company holds no intellectual property.
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Property and Equipment |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Property, Plant and Equipment [Abstract] | |
| Property and Equipment | Note 8: Property and Equipment
Demonstration Equipment
The Company may have demonstration equipment to allow it to show a working version of its technology and equipment to customers and organizations in the future. Demonstration equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost would include the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended useful life. Depreciation for the demonstration equipment would be at a rate estimated to write off the cost of the equipment less its estimated residual value by an equal annual amount over its expected useful life. The residual value and expected useful life of the demonstration equipment is reviewed and adjusted, if appropriate, at the end of each reporting period. The Company does not currently have any demonstration equipment but could have in the future.
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Common Stock |
3 Months Ended | |||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||||||||||||||
| Common Stock | Note 9: Common Stock
Common Stock
As at December 31, 2021, the Company had authorized common stock with $ par value with shares issued and outstanding. Effective June 29, 2022, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada to increase the aggregate number of authorized shares to , of which shares are to be common stock with a par value of $ per share and shares are to be preferred stock with a par value of $ per share.
At March 31, 2023, common stock is issued and outstanding. The following table details the number of common stock issued:
On August 9, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On August 16, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On September 1, 2022 (effective June 13, 2022), shares were rescinded by a shareholder.
On September 6, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On September 12, 2022, the Company issued shares completing the full conversion of a convertible promissory note including accrued interest of $2750. (See Note 3 for details).
On September 20, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On October 6, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On October 24, 2022, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On January 9, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On January 26, 2023, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On February 2, 2023, the Company issued shares upon a partial conversion of a convertible promissory note. (See Note 3 for details).
On February 3, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 7, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 8, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 13, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 14, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On February 21, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On March 15, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On March 20, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
On March 27, 2023, the Company issued shares upon partial conversion of a convertible promissory note (see Note 3 for details).
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Related Party Transactions |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 10: Related Party Transactions
Outstanding compensation and expense reimbursements due to consultants engaged by the Company $ (2022: $).
Refer to other related party payables in Notes 5 and 6.
The Company (the lender) signed a loan agreement with RHBV (the borrower) on June 21, 2022. RAKR agreed to a two-year loan facility with an interest rate of 8% with interest only payments until a bullet payment is made for the principal on the due date. Provisions in the agreement allow for prepayment. First tranche of the loan to RHBV in the amount of $ was issued to RHBV on July 7, 2022. No changes to March 31, 2023.
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Commitments and Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| Commitments and Contingencies | Note 11: Commitments and Contingencies
In the ordinary course of operating the Company’s business, it may, from time to time, be subject to various claims or possible claims. Management’s view that there are no claims or possible claims that if resolved would either individually or collectively result in a material adverse impact on the Company’s financial position, results of operations, or cash flows. These matters are inherently uncertain, and management’s view of these matters may change in the future.
On April 27, 2018, the Company located a judgement dated August 8, 2016 against six Defendants including a former subsidiary of the Company as well as a predecessor of the Company as currently named and constituted. The amount of the judgement including costs is $4,423,910. An appeal was filed on November 9, 2016 by the previous management. A decision on the appeal was rendered on June 22, 2018 and the original judgement was upheld. As a result, the Company has recorded a contingent liability of $4,423,910 as of March 31, 2023 (2022: $4,423,910). The Company, since its last report, has not been contacted by the Plaintiff.
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Inventory |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Inventory Disclosure [Abstract] | |
| Inventory | Note 12: Inventory
Inventory is stated at the lower of cost or market. Cost is recorded at standard cost, which approximates actual cost, on the first-in first-out basis. The Company, at this time, holds no inventory but may in the future.
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Leases |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Leases | |
| Leases | Note 13: Leases
The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.
There are no lease related assets and liabilities recorded on the Company’s consolidated balance sheet and the Company has no lease expenses.
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Stock Options |
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| Stock Options | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Options | Note 14: Stock Options
In order to compensate members of the board and executives, the following stock options have been granted, vesting as described.
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Income Taxes |
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | Note 15: Income Taxes
The Company recognizes deferred tax assets and liabilities using the asset and liability method. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. This method requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2022, the Company’s deferred tax assets relate to net operating loss (“NOL”) carry-forwards that were derived from operating losses and stock-based compensation from prior years. A full valuation allowance has been applied to the Company’s deferred tax assets. The valuation allowance will be reduced when and if the Company determines it is more likely than not that the related deferred income tax assets will be realized. At March 31, 2023, the Company had federal net operating loss carry-forwards, which are available to offset future taxable income, of $5,693,491. The Company’s NOL carry-forwards can be carried forward to offset future taxable income for a period of 20 years for each tax year’s loss. These NOL carry-forwards begin to expire in 2037. No provision was made for federal income taxes as the Company has significant NOLs in the United States and Canada. All of the Company’s income tax years remained open for examination by taxing authorities.
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Investments |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Investments, All Other Investments [Abstract] | |
| Investments | Note 16: Investments
None.
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Subsequent Events |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Note 17: Subsequent Events
On April 24, 2023, the convertible promissory note dated September 12, 2022, originally in the amount of $49,250, went through a fourth conversion in the amount of $10,400 principal converting into shares leaving $1,050 principal remaining.
On May 8, 2023 the Company issued a convertible promissory note in the amount of $21,000 bearing interest of 12% per annum with a maturity date of one year (May 8, 2024) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 61% of the Market Price (lowest trading price during the 20-trading day period). The Company has the right to prepay any time before maturity.
On April 1, 2023, the Company’s wholly owned subsidiary, RWI (Rainmaker Worldwide Inc. (Ontario), completed the issuance of shares to an investor representing % of the outstanding shares of RWI. As a result, the investor will take over management of RWI, and the Company will retain a 40% ownership interest in RWI. This transaction was completed in accordance with applicable laws and regulations. |
Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Preparation | Basis of Preparation
The consolidated financial statements presented are for the entity Rainmaker and its wholly owned subsidiary, Rainmaker Worldwide Inc. (Ontario) as a consolidated entity. The consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles.
The preparation of the consolidated financial statements in conformity with United States Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
All accounting policies are chosen to ensure the resulting financial information satisfies the concepts of relevance and reliability.
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| Foreign Currency Translation | Foreign Currency Translation
The reporting currency of the Company is the United States dollar. The financial statements of the subsidiary located outside of the United States is measured in its functional currency: Rainmaker Worldwide Inc. (Ontario) reports in Canadian dollars. Monetary assets and liabilities of this subsidiary are translated at the exchange rate at the balance sheet date. Income and expense items are translated using average annual exchange rates. Non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive income in the consolidated balance sheets.
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| Intangible Assets | Intangible Assets
No Intangible Assets.
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| Property and Equipment | Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is provided at rates estimated to write off the cost of the relevant assets less their estimated residual values by equal annual amounts over their expected useful lives. Residual values and expected useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Depreciation periods for the Company’s property and equipment are as follows:
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| Embedded Conversion Features | Embedded Conversion Features
Until December 31, 2021, the Company evaluated embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature did not require derivative treatment under ASC 815, the instrument was evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features. On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective method and reviewed and calculated the impact on the outstanding financial instruments as of this adoption date concluding there was no impact.
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| Derivative Financial Instruments | Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses a Monte Carlo simulation model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
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| Debt Issue Costs and Debt Discount | Debt Issue Costs and Debt Discount
The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
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| Demonstration Equipment | Demonstration Equipment
Demonstration equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.
Depreciation for the demonstration equipment is at a rate estimated to write off the cost of the equipment less its estimated residual value by an equal annual amount over its expected useful life. The residual value and expected useful life of the demonstration equipment is reviewed and adjusted, if appropriate, at the end of each reporting period.
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| Revenue Recognition | Revenue Recognition
In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services. On January 1, 2018, the Company adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers using the modified retrospective method, and the Company determined the new guidance does not change the Company’s policy of revenue recognition.
The Company has multiple sources of revenue. The first is through the direct sales of water production and purification systems. A contract with a customer is established once an agreement is signed and the initial down payment is received. Each transaction price is established in the signed contract. Unearned revenue is recognized upon receipt of the down payment for the system. The revenue is recognized once title of the system transfers to the customer. The nature of the business of equipment sales implies there is only one performance obligation which is delivery of the end product to the customer. Our contracts outline each party’s rights and obligations including the terms and timing of payments. Another source of revenue is in exchange for operating, maintenance and professional services to these joint ventures. That revenue is recognized in the period it is earned.
In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements, ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. Accordingly, the Company recognizes revenue from grants and contracts in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.
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| Related Party Transactions | Related Party Transactions
Parties are considered to be related if one party has the ability to directly or indirectly control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.
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| Share-based Payment Expense | Share-based Payment Expense
The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers, and consultants. Share-based awards to employees are measured at the fair value of the related share-based awards. Share-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of shares are valued using the fair value of the shares at the time of grant; issuances of options are valued using the Black-Scholes model with assumptions based on historical experience and future expectations.
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| Financial Liabilities and Equity Instruments | Financial Liabilities and Equity Instruments
Financial liabilities and equity instruments are classified and accounted for as debt or equity according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
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| Marketing, Advertising and Promotional Costs | Marketing, Advertising and Promotional Costs
As required by Generally Accepted Accounting Principles of the United States, the Company records marketing costs as an expense in the year to which such costs relate. The Company does not defer amounts on its year-end consolidated balance sheets with respect to marketing costs. Advertising costs are expensed as incurred.
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| Segment Reporting | Segment Reporting
ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for the way that public business enterprises report information about operating segments in the Company’s consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and assess performance. The Company has reportable segments in the United States and Canada.
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| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles of the United States 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 expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.
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| Loss per Share |
The Company reports loss per share in accordance with ASC 260, “Earnings per Share”. Basic loss per share is computed by dividing net loss by the weighted average number of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock and other potentially dilutive securities outstanding during the year. .
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| Income Taxes | Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
Income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted by the date of the statement of financial position.
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| Equity-Settled Transactions | Equity-Settled Transactions
The costs of equity-settled transactions with employees are measured by reference to the fair value at the date on which they are granted.
The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“the vesting date”). The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and the corresponding amount is represented in share-based compensation reserve.
No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the share-based payment arrangement or is beneficial to the employee as measured at the date of modification.
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| Inventory | Inventory
Inventory and work in progress are valued at the lower of cost and net realizable value. The production cost of inventory includes an appropriate proportion of depreciation and production overheads based the ratio of indirect vs. direct costs. Cost is determined on the following bases: Raw materials and consumables are valued at cost on a first in, first out (FIFO) basis; finished products are valued at raw material cost, labor cost and a proportion of manufacturing overhead expenses.
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| Financial Instruments | Financial Instruments
ASC 820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a fair value hierarchy prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).
Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants.
Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
Level 3 - Significant unobservable inputs that cannot be corroborated by market data.
The Company’s policy is to recognize transfers into and out of Level 3 as of the date of the event or change in the circumstances that caused the transfer. There were no such transfers during the periods being reported.
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| Customer Concentration | Customer Concentration
Due to the infancy of the Company’s market penetration, current sales are concentrated on a limited number of customers.
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| Cash and Cash Equivalents | Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company maintains the majority of its cash accounts at a commercial bank. Cash balances are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to CAD100,000 per commercial bank. From time to time, cash in deposit accounts may exceed the insurance limits thus the excess would be at risk of loss. For purposes of the statement of cash flows we consider all cash and highly liquid investments with maturities of 90 days or less to be cash equivalents. As of March 31, 2023, the Company had no cash equivalents.
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| Customer Deposits | Customer Deposits
The typical arrangement for customer deposits for purchases of Company products is 50% down at the time of ordering. The Company records the deposit as a current liability reflecting the obligation to provide the goods or services to the customer or to return the money. When the Company earns the deposit amount, the current liability will be debited, and sales revenues will be credited. |
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Significant Accounting Policies (Tables) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Estimated Useful Lives of Property and Equipment | Depreciation is provided at rates estimated to write off the cost of the relevant assets less their estimated residual values by equal annual amounts over their expected useful lives. Residual values and expected useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Depreciation periods for the Company’s property and equipment are as follows:
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| Schedule of Segment Reporting |
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Derivative Liabilities (Tables) |
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| Derivative Liabilities | ||||||||||||||||||||||||||||||||||||
| Schedule of Derivative Liabilities and Fair Value |
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Common Stock (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||||||||||||||
| Schedule of Common Stock |
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Stock Options (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Options | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Warrants and Options |
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| Schedule of Share-based Payment Award Stock Options Valuation Assumptions |
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Income Taxes (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Effective Income Tax Rate Reconciliation |
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Nature of Operations, Reverse Merger and Going Concern (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
| Net liabilities | $ 10,506,446 | $ 10,343,413 |
| Accumulated deficit | $ 73,276,539 | $ 72,834,664 |
| Parent Company [Member] | ||
| Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
| Date of incorporation | Jul. 21, 2014 | |
| Shares acquired | 9,029,562 | |
| Restricted shares exchanged | 66,818,759 | |
| Number of shares issued | 7.4 | |
| Net liabilities | $ 235,495 | |
| Rainmaker Holland B V [Member] | ||
| Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
| Ownership interest after disposal | 12.00% |
Schedule of Segment Reporting (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
| Gross Profit | |||
| Net Loss | (441,875) | (209,724) | $ (1,837,611) |
| Assets | 39,567 | 341,784 | $ 43,038 |
| UNITED STATES | |||
| Gross Profit | |||
| Net Loss | (441,875) | (209,724) | |
| Assets | 39,152 | 341,661 | |
| CANADA | |||
| Gross Profit | |||
| Net Loss | |||
| Assets | $ 415 | $ 123 | |
Significant Accounting Policies (Details Narrative) |
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2023
USD ($)
|
Mar. 31, 2023
CAD ($)
|
|
| Accounting Policies [Abstract] | ||
| Earnings per share, description | The Company has options, debentures and other potentially dilutive instruments extending to the latest date of July 1, 2027 | |
| Cash balance FDIC insured amount | $ 100,000 | |
| Cash equivalents | $ 0 | |
| Customer deposits percentage | 50.00% | 50.00% |
Convertible Notes Payable (Details Narrative) - USD ($) |
3 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 21, 2023 |
Oct. 25, 2022 |
Sep. 12, 2022 |
Jul. 26, 2022 |
Jul. 07, 2022 |
Jun. 28, 2022 |
Mar. 11, 2022 |
Feb. 07, 2022 |
Oct. 02, 2020 |
Sep. 14, 2020 |
Aug. 04, 2020 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Mar. 31, 2022 |
Jul. 03, 2017 |
|
| Short-Term Debt [Line Items] | ||||||||||||||||
| Debt instrument, carrying amount | $ 3,694 | $ 8,200 | ||||||||||||||
| Debt interest rate | 8.00% | |||||||||||||||
| Proceeds from debt | $ 108,750 | |||||||||||||||
| Accrued interest | $ 2,750 | |||||||||||||||
| Amortization of debt discount premium | 107,947 | |||||||||||||||
| Senior Secured Convertible Promissory Note [Member] | ||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||
| Debt principal amount | $ 1,100,000 | $ 3,105,896.72 | ||||||||||||||
| Debt interest rate | 10.00% | |||||||||||||||
| Debt instrument description | maturity date of 3 years from the anniversary date of the funding advance and is convertible into shares of Common Stock equal to 85% multiplied by the average of the 5 closing prices of the Common Stock immediately preceding the Trading Day that the Company receives a Notice of Conversion with a floor price of $0.15 | |||||||||||||||
| Conversion price | 0.85 | |||||||||||||||
| Proceeds from debt | $ 1,850,000 | $ 150,000 | ||||||||||||||
| Convertible notes payable | 477,678 | |||||||||||||||
| Convertible Promissory Note [Member] | ||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||
| Debt principal amount | $ 55,000 | |||||||||||||||
| Debt interest rate | 10.00% | |||||||||||||||
| Debt instrument description | maturity date of one year (February 7, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before maturity | |||||||||||||||
| Conversion price | 0.65 | |||||||||||||||
| Debt instrument maturity date | Feb. 07, 2023 | |||||||||||||||
| Debt conversion of stock, amount converted | $ 2,750 | |||||||||||||||
| Debt conversion of stock, shares converted | 6,109,361 | |||||||||||||||
| Second Convertible Promissory Note [Member] | ||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||
| Debt principal amount | $ 53,750 | |||||||||||||||
| Debt interest rate | 10.00% | |||||||||||||||
| Debt instrument description | maturity date of one year (March 11, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date. Conversion price is calculated at 65% of the Market Price (lowest trading price during the 10-trading day period). The Company has the right to prepay any time before maturity | |||||||||||||||
| Conversion price | 0.65 | |||||||||||||||
| Debt instrument maturity date | Mar. 11, 2023 | |||||||||||||||
| Debt conversion of stock, amount converted | $ 38,750 | $ 15,000 | ||||||||||||||
| Debt conversion of stock, shares converted | 7,988,208 | 2,542,373 | ||||||||||||||
| Conversion of stock amount issued | $ 38,750 | |||||||||||||||
| Accrued interest | $ 2,687.50 | |||||||||||||||
| Convertible Promissory Note One [Member] | ||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||
| Debt principal amount | $ 64,250 | $ 64,250 | ||||||||||||||
| Debt interest rate | 10.00% | |||||||||||||||
| Debt instrument description | maturity date of one year (June 28, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date | |||||||||||||||
| Conversion price | 0.65 | |||||||||||||||
| Debt instrument maturity date | Jun. 28, 2023 | |||||||||||||||
| Debt conversion of stock, shares converted | 35,554,822 | |||||||||||||||
| Accrued interest | $ 3,212.50 | |||||||||||||||
| Original issue discount | 4,250 | |||||||||||||||
| Convertible Promissory Note Two [Member] | ||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||
| Debt principal amount | $ 35,000 | 35,000 | ||||||||||||||
| Debt interest rate | 10.00% | |||||||||||||||
| Debt instrument description | maturity date of one year (July 26, 2023) and has the option to convert into shares of Common Stock any time following the date of the Note and ending on the maturity date | |||||||||||||||
| Conversion price | 0.65 | |||||||||||||||
| Debt instrument maturity date | Jul. 26, 2023 | |||||||||||||||
| Accrued interest | 1,822.47 | |||||||||||||||
| Original issue discount | $ 2,500 | |||||||||||||||
| Conversion of Stock, Shares Converted | 17,916,870 | |||||||||||||||
| Convertible Promissory Note Three [Member] | ||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||
| Debt principal amount | $ 49,250 | $ 11,450 | ||||||||||||||
| Debt interest rate | 10.00% | |||||||||||||||
| Debt instrument description | maturity date of one year (September 12, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date | |||||||||||||||
| Conversion price | 0.65 | |||||||||||||||
| Debt instrument maturity date | Sep. 12, 2023 | |||||||||||||||
| Debt conversion of stock, amount converted | 37,800 | |||||||||||||||
| Original issue discount | $ 4,250 | |||||||||||||||
| Conversion of Stock, Shares Converted | 32,114,261 | |||||||||||||||
| Amortization of debt discount premium | $ 2,329 | |||||||||||||||
| Convertible Promissory Note Four [Member] | ||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||
| Debt principal amount | $ 44,250 | |||||||||||||||
| Debt interest rate | 10.00% | |||||||||||||||
| Debt instrument description | maturity date of one year (October 25, 2023) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date | |||||||||||||||
| Conversion price | 0.65 | |||||||||||||||
| Debt instrument maturity date | Oct. 25, 2023 | |||||||||||||||
| Original issue discount | 4,250 | |||||||||||||||
| Amortization of debt discount premium | 2,119 | |||||||||||||||
| Convertible Promissory Note Five [Member] | ||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||
| Debt principal amount | $ 44,250 | |||||||||||||||
| Debt interest rate | 10.00% | |||||||||||||||
| Debt instrument description | maturity date of one year (February 21, 2024) and has the option to convert into shares of Common Stock any time beginning 180 days following the date of the Note and ending on the maturity date | |||||||||||||||
| Conversion price | 0.65 | |||||||||||||||
| Debt instrument maturity date | Feb. 21, 2024 | |||||||||||||||
| Original issue discount | 4,250 | |||||||||||||||
| Amortization of debt discount premium | $ 442 | |||||||||||||||
Schedule of Derivative Liabilities and Fair Value (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
USD ($)
| |
| Derivative Liabilities | |
| Derivative liabilities, beginning balance | $ 502,611 |
| Change due to Issuances | 38,787 |
| Change due to Conversions | (111,704) |
| Market-to-market | 64,003 |
| Derivative liabilities, ending balance | $ 493,697 |
Notes Payable, Related Parties (Details Narrative) - USD ($) |
12 Months Ended | ||||
|---|---|---|---|---|---|
Jul. 07, 2022 |
Nov. 06, 2016 |
Dec. 31, 2017 |
Mar. 31, 2023 |
Dec. 31, 2021 |
|
| Short-Term Debt [Line Items] | |||||
| Debt Instrument, interest rate | 8.00% | ||||
| Executive Management Team [Member] | |||||
| Short-Term Debt [Line Items] | |||||
| Debt principal amount | $ 312,000 | $ 60,000 | |||
| Debt Instrument, interest rate | 4.00% | ||||
| Notes Payable Related Parties [Member] | |||||
| Short-Term Debt [Line Items] | |||||
| Debt principal amount | $ 13,516 | ||||
| Debt Instrument, interest rate | 5.00% | ||||
| Accrued interest | 4,959 | ||||
| Notes Payable Related Parties [Member] | Related Party [Member] | |||||
| Short-Term Debt [Line Items] | |||||
| Due to related parties | $ 10,081 | $ 21,903 |
Other Loans Payable (Details Narrative) - USD ($) |
3 Months Ended | |||
|---|---|---|---|---|
Jul. 07, 2022 |
Feb. 02, 2021 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
| Proceeds from debt | $ 108,750 | |||
| Debt instrument, interest rate | 8.00% | |||
| Short-term Loan Agreement [Member] | ||||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
| Proceeds from debt | $ 50,000 | |||
| Debt instrument, interest rate | 5.00% | |||
| Debt instrument, maturity date | Feb. 01, 2022 | |||
| Debt instrument maturity date, description | By mutual agreement, the note was extended for an additional term of six months and therefore now expiring August 2, 2023 | |||
| Short-term Loan Agreement [Member] | Minimum [Member] | ||||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
| Debt instrument, interest rate | 5.00% | |||
| Short-term Loan Agreement [Member] | Maximum [Member] | ||||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
| Debt instrument, interest rate | 12.00% | |||
Schedule of Common Stock (Details) - shares |
3 Months Ended | 12 Months Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 27, 2023 |
Mar. 20, 2023 |
Mar. 15, 2023 |
Feb. 21, 2023 |
Feb. 14, 2023 |
Feb. 13, 2023 |
Feb. 08, 2023 |
Feb. 07, 2023 |
Feb. 03, 2023 |
Feb. 02, 2023 |
Jan. 26, 2023 |
Jan. 09, 2023 |
Oct. 24, 2022 |
Oct. 06, 2022 |
Sep. 20, 2022 |
Sep. 12, 2022 |
Sep. 06, 2022 |
Aug. 09, 2022 |
Aug. 16, 2021 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Conversion of convertible promissory notes | 11,648,352 | 11,090,909 | 9,375,000 | 3,507,813 | 5,384,615 | 9,750,000 | 4,986,627 | 9,027,778 | 4,316,123 | 7,500,000 | 3,229,505 | 5,769,231 | 4,988,208 | 3,000,000 | 2,542,373 | 1,250,000 | 1,648,352 | 1,376,147 | 1,834,862 | ||
| Common Stock [Member] | |||||||||||||||||||||
| Balance, shares | 160,797,716 | 144,354,957 | |||||||||||||||||||
| Conversion of convertible promissory notes | 85,585,953 | 16,639,942 | |||||||||||||||||||
| Shares cancelled | (197,183) | ||||||||||||||||||||
| Balance, shares | 246,383,669 | 160,797,716 |
Common Stock (Details Narrative) - USD ($) |
Mar. 27, 2023 |
Mar. 20, 2023 |
Mar. 15, 2023 |
Feb. 21, 2023 |
Feb. 14, 2023 |
Feb. 13, 2023 |
Feb. 08, 2023 |
Feb. 07, 2023 |
Feb. 03, 2023 |
Feb. 02, 2023 |
Jan. 26, 2023 |
Jan. 09, 2023 |
Oct. 24, 2022 |
Oct. 06, 2022 |
Sep. 20, 2022 |
Sep. 12, 2022 |
Sep. 06, 2022 |
Sep. 01, 2022 |
Aug. 09, 2022 |
Aug. 16, 2021 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Jun. 29, 2022 |
Jun. 28, 2022 |
Dec. 31, 2021 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Stock | |||||||||||||||||||||||||
| Common stock shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 501,000,000 | 200,000,000 | ||||||||||||||||||||
| Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||
| Common stock, shares issued | 246,383,669 | 144,354,957 | |||||||||||||||||||||||
| Common stock, shares outstanding | 246,383,669 | 160,797,716 | 144,354,957 | ||||||||||||||||||||||
| Preferred stock shares authorized | 1,000,000 | ||||||||||||||||||||||||
| Preferred stock par value | $ 0.001 | ||||||||||||||||||||||||
| Conversion of convertible promissory note | 11,648,352 | 11,090,909 | 9,375,000 | 3,507,813 | 5,384,615 | 9,750,000 | 4,986,627 | 9,027,778 | 4,316,123 | 7,500,000 | 3,229,505 | 5,769,231 | 4,988,208 | 3,000,000 | 2,542,373 | 1,250,000 | 1,648,352 | 1,376,147 | 1,834,862 | ||||||
| Stock repurchased by shareholders | 197,183 | ||||||||||||||||||||||||
| Accrued interest | $ 2,750 |
Related Party Transactions (Details Narrative) - USD ($) |
Jul. 07, 2022 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
|---|---|---|---|---|
| Related Party Transaction [Line Items] | ||||
| Due to related party | $ 1,388,103 | $ 1,261,984 | ||
| Debt instrument, interest rate | 8.00% | |||
| Share-Based Payment Arrangement, Tranche One [Member] | ||||
| Related Party Transaction [Line Items] | ||||
| Loans to related parties | $ 5,000 | |||
| Related Party [Member] | Consultants [Member] | ||||
| Related Party Transaction [Line Items] | ||||
| Due to related party | $ 1,388,103 | $ 964,179 |
Commitments and Contingencies (Details Narrative) - USD ($) |
Apr. 27, 2018 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|---|---|---|---|
| Accounting Policies [Abstract] | |||
| Contingencies awarded value | $ 4,423,910 | ||
| Contingent liability | $ 4,423,910 | $ 4,423,910 |
Schedule of Warrants and Options (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
shares
| |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Warrants and Options, Granted | 66,700,000 |
| Warrants and Options [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Warrants and Options, Vested | 63,611,667 |
| Warrants and Options, Expired | 25,000,000 |
| Warrants and Options, Granted | 41,700,000 |
| Warrants and Options, Vested | 39,751,667 |
| Warrants and Options, Non-vested | 1,948,333 |
Schedule of Share-based Payment Award Stock Options Valuation Assumptions (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
$ / shares
shares
| |
| Number of Options Granted | shares | 66,700,000 |
| Dividend Yield | 0.00% |
| Expected Volatility, Minimum | 116.00% |
| Expected Volatility, Maximum | 156.00% |
| Term | 5 years |
| Minimum [Member] | |
| Stock price | $ 0.0172 |
| Exercise Price | $ 0.10 |
| Weighted Average Risk-Free Interest Rate, Minimum | 0.06% |
| Maximum [Member] | |
| Stock price | $ 0.0646 |
| Exercise Price | $ 0.30 |
| Weighted Average Risk-Free Interest Rate, Maximum | 2.88% |
Stock Options (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Jul. 02, 2022 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
| Option granted | 66,700,000 | ||
| Stock option expense | $ 34,737 | $ 136,492 | |
| VP Sales [Member] | |||
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
| Option granted | 1,500,000 | ||
| Option vested | 640,000 | ||
| Executive VP Finance [Member] | |||
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
| Option granted | 2,500,000 | ||
| Option vested | 500,000 | ||
| VP Sales and Executive VP Finance [Member] | |||
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
| Option term | 5 years | ||
| Options exercisable exercise price | $ 0.10 |
Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
| Income Tax Disclosure [Abstract] | |||
| Net gain (loss) for the quarter | $ (441,875) | $ (209,724) | $ (1,837,611) |
| Stock Compensation | 34,737 | 410,171 | |
| Amortization of Debt Discount | 107,949 | 252,373 | |
| Taxable Income | $ (299,189) | $ (1,175,067) | |
| Tax Rate | 21.00% | 21.00% | |
| Net Operating (Gain) Loss | $ 62,830 | $ 246,764 | |
| Deferred Tax Assets, Valuation Allowance | (62,830) | (246,764) | |
| Deferred Tax Assets, Net of Valuation Allowance | |||
Income Taxes (Details Narrative) |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
USD ($)
| |
| Income Tax Disclosure [Abstract] | |
| Federal net operating loss carryforwards | $ 5,693,491 |
| Tax credit carryforward, limitations on use | These NOL carry-forwards begin to expire in 2037. No provision was made for federal income taxes as the Company has significant NOLs in the United States and Canada. All of the Company’s income tax years remained open for examination by taxing authorities |