1. Restatement of Previously Issued Financial Statements

12 Months Ended

Dec. 31, 2014

Accounting Changes and Error Corrections [Abstract]

1. Restatement of Previously Issued Financial Statements

1. Restatement of Previously Issued Financial Statements

The Company has restated its consolidated financial statements as of and for the fiscal years ended December 31, 2013 and December 31, 2012. In addition, the Company has restated its quarterly Consolidated Statements of Operations and Balance Sheets for each of the quarterly periods in fiscal 2013 and for the first three quarters of fiscal 2014, as presented in an unaudited schedule to these financial statements entitled Unaudited Quarterly Financial Data.

The restatements reflect adjustments to correct errors identified by management during the Company’s normal closing process, in the course of the Company’s regularly scheduled audit by its newly appointed Independent Accounting Firm, and during the course of an internal investigation initiated by the board of directors of the Company (in performance of its function as the audit committee). The Company’s board of directors has completed its investigation. The effect of the restatements on the Company’s Balance Sheets is not material and the restatements have no effect on reported cash flow from operations.

In addition, the Company has restated its consolidated financial statements, to retroactively reflect the Company’s Board of Directors decision to dispose of its Endoscopy Division, as of and for the fiscal years ended December 31, 2013 and December 31, 2012. 

Beneficial Conversion Feature

During the fourth quarter of fiscal 2014, the Company identified an error as a result of not recognizing the beneficial conversion feature inherent in seventy five (75) mandatorily convertible notes issued between 2010 and 2012 to accredited investors; the beneficial conversion feature inherent in two (2) convertible notes issued to Asher Enterprises, Inc., during the second and third quarter of 2013; and the beneficial conversion feature inherent in five (5) convertible notes issued to JMJ Financial Group, during the five quarters beginning with the period ended June 30, 2013 and ending in the period ended September 30, 2014. The cumulative effect of the errors over the restated periods resulted in an increase to pre-tax and after tax expense of approximately $1,627,789 of which $511,073 was attributable to discontinued operations.

Shares Issued for Services

Management discovered an error in the recording of legal fees satisfied by the issuance of shares during the third quarter of 2013. The effect of this error during the third quarter of 2013 resulted in an increase to pre-tax and after tax expense of approximately $365,850 none of which was attributable to discontinued operations.

Employee Option Incentive Grants

During the fourth quarter of fiscal 2014, the Company identified an error as a result of not recognizing the costs of employee option incentive granted during the second quarter of 2012 and which terminated during the second quarter of 2014. The cumulative effect of the errors over the restated periods resulted in an increase to pre-tax and after tax expense of approximately $2,810,683 of which none was attributable to discontinued operations.

Certain of the adjustments described above, or portions thereof, relate to periods prior to fiscal 2013. The cumulative effect of those restatement adjustments on years prior to fiscal 2013 has been reflected as a $2,219,238 increase in accumulated deficit as of January 1, 2013 (the beginning of the Company’s 2013 fiscal year).

The restated Consolidated Balance Sheet as of December 31, 2013 and the restated Consolidated Statements of Operations and Cash Flows for the year ended December 31, 2013 are presented below:

GREENESTONE HEALTHCARE CORPORATION
Consolidated Balance Sheet
December 31, 2013
	As Previously Reported on Form 10-K		Opening Deficit			BCF			Legal Fees		Compensation		As Restated		Reclassify Discontinued Operations			As Restated and Reclassified
ASSETS
CURRENT ASSETS
Cash	$	—											$	—	$	—		$	—
Accounts receivable		440,918												440,918		(246,415	)		194,503
Prepaid expenses		109,854												109,854		(25,331	)		84,523
Inventory		12,548												12,548		(12,548	)		—
Current assets - held for sale		—												—		284,294			284,294
Total current assets		563,320		—			—			—		—		563,320		—			563,320
NON CURRENT ASSETS:
Fixed assets		536,124												536,124		(252,878	)		283,246
Cash – Restricted		94,020												94,020		—			94,020
Long term assets - held for resale																252,878			252,878
Total assets	$	1,193,464	$	—		$	—		$	—	$	—	$	1,193,464	$	—		$	1,193,464
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Bank overdraft	$	126,073.00											$	126,073.00	$	—		$	126,073.00
Accounts payable and accrued liabilities		703,918												703,918		(263,311	)		440,607
Harmonized sales tax payable		594,120												594,120		—			594,120
Withholding taxes payable		1,796,655												1,796,655		(18,856	)		1,777,799
Deferred revenue		107,477												107,477					107,477
Convertible notes payable		246,612		(225,380	)		211,121							232,353		—			232,353
Short term loan		64,541					(20,098	)						44,443		—			44,443
Current portion of loan payable		7,953												7,953		—			7,953
Related party notes		622,356												622,356		(416,361	)		205,995
Current liabilities - held for resale		—												—		698,528			698,528
Total current liabilities		4,269,705		(225,380	)		191,023			—		—		4,235,348		—			4,235,348
COMMITMENTS

NON CURRENT LIABILITIES:
Loan payable		28,452															28,452			—		28,452
Total Liabilities		4,298,157			(225,380	)		191,023			—			—			4,263,800			—		4,263,800
STOCKHOLDERS' DEFICIT
Preferred Stock - Series A; $0.01 par value,
3,000,000 shares authorized; -0- issued and outstanding		—																		—
Preferred Stock - Series B; $0.01 par value,
10,000,000 shares authorized; -0- issued and outstanding		—																		—
Common stock; $0.01 par value, 500,000,000
shares authorized; 41,065,564 shares issued and outstanding as of December 31, 2013		410,656															410,656			—		410,656
Additional paid-in capital		8,155,474			2,444,618			1,705,495			365,850			1,249,192			13,920,629			—		13,920,629
Accumulated other comprehensive loss		264,135															264,135			—		264,135
Accumulated deficit		(11,934,958	)		(2,219,238	)		(1,896,518	)		(365,850	)		(1,249,192	)		(17,665,756	)		—		(17,665,756	)
Total Stockholders' Deficit		(3,104,693	)		225,380			(191,023	)		—			—			(3,070,336	)		—		(3,070,336	)
Total Liabilities and Stockholders' Deficit	$	1,193,464		$	—		$	—		$	—		$	—		$	1,193,464		$	—	$	1,193,464

GREENESTONE HEALTHCARE CORPORATION
INCOME STATEMENT
For the Year Ended December 31, 2013 ( Expressed in $ US )
		As Previously Reported on Form 10-K			BCF			Legal Fees			Stock Based Compensation			As Restated			Reclassify Discontinued Operations			As Restated and Reclassified
Revenues	$	5,962,304		$	—		$	—		$	—		$	5,962,304		$	(2,276,577	)	$	3,685,727
Cost of services provided		1,256,483												1,256,483			(1,256,483	)		—
Gross margin		4,705,821			—			—			—			4,705,821			(1,020,094	)		3,685,727
Operating expenses
Depreciation		183,260												183,260			-68,793			114,467
General and administrative		601,863												601,863			-144,225			457,638
Management fees		233,016												233,016			-38,836			194,180
Meals and entertainment		1,830												1,830			-87			1,743
Professional fees		402,995						365,850						768,845			-21,260			747,585
Rent		1,016,387												1,016,387			-285,849			730,538
Salaries and wages		3,118,718									1,249,192			4,367,910			-461,105			3,906,805
Supplies		339,029												339,029			-146,636			192,393
Travel		42,481												42,481			-9			42,472
Total operating expenses		5,939,579			—			365,850			1,249,192			7,554,621			(1,166,800	)		6,387,821
Operating loss	$	(1,233,758	)	$	—		$	(365,850	)	$	(1,249,192	)	$	(2,848,800	)	$	146,706		$	(2,702,094	)
Other income (loss)
Interest expense		(397,298	)		(281,475	)								(678,773	)		103,425			(575,348	)
Net loss from continuing operations	$	(1,631,056	)	$	(281,475	)	$	(365,850	)	$	(1,249,192	)	$	(3,527,573	)	$	250,131		$	(3,277,442	)
Loss from discontinued operations, net of tax		—															(250,131	)
Net loss applicable to common shareholders	$	(1,631,056	)	$	(281,475	)	$	(365,850	)	$	(1,249,192	)	$	(3,527,573	)	$	—		$	(3,277,442	)
Accumulated other comprehensive loss
Foreign currency translation adjustment		311,861												311,861						250,131
Total comprehensive loss	$	(1,319,195	)	$	(281,475	)	$	(365,850	)	$	(1,249,192	)	$	(3,215,712	)	$	—		$	(3,215,712	)
Basic and diluted income (loss) per common share- continuing operations	$	(0.05	)	$	(0.01	)	$	(0.01	)	$	(0.04	)	$	(0.11	)	$	0.01		$	.10

Basic and diluted loss per common share- discontinued operations		$ ( -)			$ ( -)			$ ( -)			$ ( -)			$ ( -)		$	(0.01	)	$	0.01
Basic and diluted loss per common share	$	(0.04	)	$	(0.01	)	$	(0.01	)	$	(0.04	)	$	(0.10	)		$ ( -)		$	0.11
Weighted average outstanding		33,588,851			33,588,851			33,588,851			33,588,851			33,588,851			33,588,851			33,588,851

GREENESTONE HEALTHCARE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2013
( Expressed in $US )
	As Previously Reported on Form 10-K				BCF				Legal Fees				Stock Based Compensation				As Restated				Reclassify Discontinued Operations			Conform to 2014 Presentation			As Restated and Reclassified
Cash flows from operating activities:
Net loss		$	(1,631,056	)		$	(281,475	)		$	(365,850	)		$	(1,249,192	)		$	(3,527,573	)		$250,131.						$	(3,277,442	)
Net loss from discontinued operations, net of tax																			—			(250,131	)						(250,131	)
Net loss from continuing operations			(1,631,056	)			(281,475	)			(365,850	)			(1,249,192	)			(3,527,573	)		—			—				(3,527,573	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation			183,260																183,260										183,260
Provision for bad debts																			—						29,511				29,511
Stock compensation															1,249,192				1,249,192										1,249,192
Stock issued for services											365,850								365,850										365,850
Amortization of beneficial conversion feature							281,475												281,475										281,475
Changes in operating assets and liabilities
Inc/dec in accounts receivable			(60,875	)															(60,875	)		65,286			(29,511	)			(25,100	)
Inc/dec in inventory			3,621																3,621			(3,621	)						—
Inc/dec in prepaids			1,360																1,360			(42,245	)						(40,885	)
Inc/dec in due to related parties																			—			—							—

Inc/dec in accounts payable and accrued liabilities	(159,940	)	(159,940	)	(74,892	)	(234,832	)
Inc/dec in taxes payable	1,037,724		1,037,724		(2,799	)	1,034,925
Inc/dec in deferred revenue	(108,318	)	(108,318	)			(108,318	)

Net cash provided by (used in) operating activities- continuing operations	(734,224	)	—	—	—	(734,224	)	(58,271	)	—		(792,495	)
Net cash provided by (used in) operating activities- discontinued operations								58,271				58,271
Net cash provided (used in) operating activities	(734,224	)	—	—	—	(734,224	)	—		—		(734,224	)
Cash flows from investing activities:
Cash paid for purchase of fixed assets	(101,818	)				(101,818	)	(13,910	)			(115,728	)
Net cash used by investing activities	(101,818	)	—	—	—	(101,818	)	(13,910	)	—		(115,728	)
Cash flows from financing activities:
Repayment of notes payable
Changes in restricted cash	(94,020	)				(94,020	)					(94,020	)
Proceeds from issuance of short term notes	53,902					53,902		(107,080	)			(53,178	)
Proceeds from bank indebtedness	55,270					55,270		—		70,803		126,073
Repayment of short term notes						—		(416,361	)			(416,361	)
Proceeds from issuance of related party notes	531,708					531,708		202,027				733,735
Repayment of related party notes	(99,834	)				(99,834	)	—				(99,834	)
Net proceeds from additional paid in capital	68,111					68,111				(68,111	)	—
Proceeds from issuance of common stock	9,044					9,044				68,111		77,155
Net cash provided by (Used in) financing activities- continuing operations	524,181		—	—	—	524,181		(321,414	)	70,803		273,570

Net cash provided by (Used in) financing activities- discontinued operations										—		335,324					335,324
Net cash provided by financing activities		524,181		—		—		—		524,181		13,910		70,803			482,821
Effect of exchange rate on cash		311,861								311,861							311,861
Net increase in cash		—		—		—		—		—		—		70,803			(55,270	)
Cash, beginning of period	$	—	$	—	$	—	$	—	$	—	$	—	$	(70,803	)		(70,803	)
Cash, end of period	$	—	$	—	$	—	$	—	$	—	$	—	$	(126,073	)	$	(126,073	)
Supplemental cash flow information:
Cash paid for interest	$	397,298							$	397,298						$	397,298
Cash paid for income taxes	$	—	$	—	$	—	$	—	$	—	$	—	$	—		$	—

GREENESTONE HEALTHCARE CORPORATION
Consolidated Balance Sheet
December 31, 2012
	As Previously Reported on Form 10-K		Opening Deficit			BCF		Legal Fees		Compensation		As Restated		Reclassify Discontinued Operations			As Restated and Reclassified
ASSETS
CURRENT ASSETS
Cash	$	—										$	—	$	—		$	—
Accounts receivable		380,043											380,043		(181,129	)		198,914
Prepaid expenses		111,214											111,214		(67,576	)		43,638
Inventory		16,169											16,169		(16,169	)		—
Current assets - held for sale		—											—		264,874			264,874
Total current assets		507,426		—			—		—		—		507,426		—			507,426
NON CURRENT ASSETS:
Fixed assets		617,567											617,567		(266,788	)		350,779
Cash – Restricted													—		—			—
Long term assets - held for resale															266,788			266,788
Total assets	$	1,124,993	$	—		$	—	$	—	$	—	$	1,124,993	$	—		$	1,124,993
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Bank overdraft	$	70,803										$	70,803	$	—		$	70,803
Accounts payable and accrued liabilities		863,858											863,858		(188,419	)		675,439
Harmonized sales tax payable		313,295											313,295		—			313,295
Withholding taxes payable		1,039,756											1,039,756		(16,057	)		1,023,699
Deferred revenue		215,793											215,793					215,793
Convertible notes payable		1,820,713		(732,321	)		506,941						1,595,333		(202,027	)		1,393,306
Short term loan													—		—			—
Current portion of loan payable		8,129											8,129		—			8,129
Related party notes		190,484											190,484		107,080			297,564

Current liabilities - held for resale	—						—	299,423	299,423
Total current liabilities	4,522,831	(732,321	)	506,941	—	—	4,297,451	—	4,297,451

NON CURRENT LIABILITIES:
Loan payable (note 9)		38,917															38,917			—		38,917
Total Liabilities		4,561,748			(732,321	)		506,941			—			—			4,336,368			—		4,336,368
STOCKHOLDERS' DEFICIT
Preferred Stock - Series A; $0.01 par value,
3,000,000 shares authorized; -0- issued and
Outstanding		—																		—
Preferred Stock - Series B; $0.01 par value,
10,000,000 shares authorized; -0- issued and
Outstanding		—																		—
Common stock; $0.01 par value, 100,000,000
shares authorized; 27,234,279
shares issued and outstanding as of		272,343															272,343			—		272,343
Additional paid-in capital		6,642,530			1,356,436			1,088,182			365,850			936,894			10,389,892			—		10,389,892
Accumulated other comprehensive loss		(47,726	)														(47,726	)		—		(47,726	)
Accumulated deficit		(10,303,902	)		(624,115	)		(1,595,123	)		(365,850	)		(936,894	)		(13,825,884	)		—		(13,825,884	)
Total Stockholders' Deficit		(3,436,755	)		732,321			(506,941	)		—			—			(3,211,375	)		—		(3,211,375	)
Total Liabilities and Stockholders' Deficit	$	1,124,993		$	—		$	—		$	—		$	—		$	1,124,993		$	—	$	1,124,993

GREENESTONE HEALTHCARE CORPORATION
INCOME STATEMENT
For the Year Ended December 31, 2012
		As Previously Reported on Form 10-K			BCF			Legal Fees		Compensation			As Restated			Reclassify Discontinued Operations			As Restated and Reclassified
Revenues	$	5,540,909		$	—		$	—	$	—		$	5,540,909		$	(1,874,105	)	$	3,666,804
Cost of services provided		1,050,002											1,050,002			(1,050,002	)		—
Gross margin		4,490,907			—			—		—			4,490,907			(824,103	)		3,666,804
Operating expenses
Continuing education		25,739											25,739						25,739
Depreciation		223,984											223,984			(87,224	)		136,760
General and administrative		546,563											546,563			(135,026	)		411,537
Management fees		179,924											179,924			(37,484	)		142,440
Meals and entertainment		3,385											3,385			(472	)		2,913
Medical supplies		132,253											132,253			(132,253	)		0
Professional fees		128,578											128,578			(15,993	)		112,585
Rent		847,558											847,558			(196,417	)		651,141
Salaries and wages		3,410,659								936,894			4,347,553			(657,777	)		3,689,776
Subcontract fees		42,890											42,890						42,890
Supplies		181,590											181,590						181,590
Travel		37,930											37,930			(61	)		37,869
Total operating expenses		5,761,053			—			—		936,894			6,697,947			(1,262,707	)		5,435,240
Operating loss	$	(1,270,146	)	$	—		$	—	$	(936,894	)	$	(3,079,476	)	$	438,604		$	(1,768,436	)
Other income (loss)
Interest expense		(214,207	)		(658,229	)							(872,436	)		220,431			(652,005	)
Net loss from continuing operations	$	(1,484,353	)	$	(658,229	)	$	—	$	(936,894	)	$	(3,079,476	)	$	659,035		$	(2,240,441	)
Loss from discontinued operations, net of tax		—														(659,035	)		(659,035	)
Net loss applicable to common shareholders	$	(1,484,353	)	$	(658,229	)	$	—	$	(936,894	)	$	(3,079,476	)	$	—		$	(3,079,476	)
Accumulated other comprehensive loss
Foreign currency translation adjustment		(69,444	)										(69,444	)					(69,444	)
Total comprehensive loss	$	(1,553,797	)	$	(658,229	)	$	—	$	(936,894	)	$	(3,148,920	)	$	—		$	(3,148,920	)

Basic and diluted income (loss) per common share- continuing operations	$	(0.10	)	$	(0.05	)	($-	$	(0.07	)	$	(0.21	)	$	0.05		$	(0.16	)
Basic and diluted loss per common share- discontinued operations		$ ( -)			$ ( -)		$ ( -)		$ ( -)			$ ( -)		$	(0.05	)	$	(0.05	)
Basic and diluted loss per common share	$	(0.10	)	$	(0.05	)	($-	$	(0.07	)	$	(0.21	)		($-		$	(0.21	)
Weighted average outstanding		14,392,555			14,392,555		14,392,555		14,392,555			14,392,555			14,392,555			14,392,555

GREENESTONE HEALTHCARE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2012
( Expressed in $US )
	As Previously Reported on Form 10-K				BCF				Legal Fees			Compensation				As Restated				Reclassify Discontinued Operations			Conform to 2014 Prresenttion		As Restated and Reclassified
Cash flows from operating activities:
Net loss		$	(2,496,861	)		$	(658,229	)		$	—		$	(936,894	)		$	(4,091,984	)		$250,131.					$	(3,841,853	)
Net loss from discontinued operations, net of tax																		—			(250,131	)					(250,131	)
Net loss from continuing operations			(2,496,861	)			(658,229	)			—			(936,894	)			(4,091,984	)		—			—			(4,091,984	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation			129,766															129,766									129,766
Provision for bad debts																		—									—
Stock compenstion														936,894				936,894									936,894
Stock issued for services																		—									—
Amortization of beneficial conversion feature							658,229											658,229									658,229
Changes in operating assets and liabilities
Inc/dec in accounts receivable			(147,516	)														(147,516	)		7,887			—			(139,629	)
Inc/dec in inventory			(818	)														(818	)		4,386						3,568
Inc/dec in prepaids			(31,288	)														(31,288	)		(2,786	)					(34,074	)

Inc/dec in due to related parties						—		—				—
Inc/dec in accounts payable and accrued liabilities	333,966					333,966		(386,607	)	(15	)	(52,656	)
Inc/dec in taxes payble	264,185					264,185		—				264,185
Inc/dec in deferred revenue	116,692					116,692						116,692
Net cash provided by (used in) operating activities- continuing operations	(1,831,874	)	—	—	—	(1,831,874	)	(377,120	)	(15	)	(2,209,009	)

Net cash provided by (used in) operating activities- discontinued operations								377,120				377,120
Net cash provided (used in) operating activities	(1,831,874	)	—	—	—	(1,831,874	)	—		(15	)	(1,831,889	)
Cash flows from investing activities:
Cash paid for purchase of fixed assets	(428,122	)				(428,122	)	(39,370	)			(467,492	)
Net cash used by investing activities	(428,122	)	—	—	—	(428,122	)	(39,370	)	—		(467,492	)
Cash flows from financing activities:
Repayment of notes payable
Changes in restricted cash						—						—
Proceeds from issuance of short term notes	2,053,374					2,053,374		819,341				2,872,715
Proceeds from bank indebtedness	28,266					28,266		—		(28,266	)	—
Repayment of short term notes						—		—				—
Proceeds from issuance of related party notes	(74,593	)				(74,593	)	(202,027	)			(276,620	)
Repayment of related party notes						—		349,544				349,544
Net proceeds from additional paid in capital	85,002					85,002				(85,002	)	—
Proceeds from issuance of common stock	84,998					84,998				85,002		170,000

Net cash provided by (Used in) financing activities- continuing operations		2,177,047			—		—		—		2,177,047			966,858			(28,266	)		3,115,639
Net cash provided by (Used in) financing activities- discontinued operations											—			(927,488	)					(927,488	)
Net cash provided by financing activities		2,177,047			—		—		—		2,177,047			39,370			(28,266	)		2,188,151
Effect of exchange rate on cash		34,573									34,573									34,573
Net increase in cash		(48,376	)		—		—		—		(48,376	)		—			(28,281	)		(76,657	)
Cash, beginning of period	$	48,376		$	—	$	—	$	—	$	48,376		$	—						48,376
Cash, end of period	$	—		$	—	$	—	$	—	$	—		$	—		$	(28,281	)	$	(28,281	)
Supplemental cash flow information:
Cash paid for interest	$	26,918
Cash paid for income taxes	$	—		$	—	$	—	$	—	$	—		$	—		$	—		$	—
Noncash Transaction:
Common stock issued as a result of conversion of convertible notes payable