Stockholder's deficit

12 Months Ended

Dec. 31, 2018

Equity [Abstract]

Stockholder's deficit

16. Stockholder’s deficit

a) Common shares

Authorized, issued and outstanding 

The Company has authorized 500,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding 124,300,341 and 123,239,230 as of December 31, 2018 and 2017, respectively.  

On January 1, 2018, the Company recorded the issuance of a further 80,000 shares of common stock to Leonite in connection with a senior secured convertible promissory note issued in March 2018. The shares were valued at $4,800 on the issue date and recorded as a debt discount.

On March 29, 2018, the Company issued 165,000 shares of common stock to Leonite in connection with the closing of a financing of a Senior Secured Convertible Note. The shares were valued at $11,550 on the issue date and recorded as a debt discount.

On April 17, 2018, the Company issued 605,000 shares of common stock to Leonite in connection with the closing of a financing of a Senior Secured Convertible Note. The shares were valued at $39,450 on the issue date and recorded as a debt discount.

On November 6, 2018, the Company issued 111,111 shares of common stock to Leonite in connection with the closing of a financing of a Senior Secured Convertible Note. The shares were valued at $8,889 on the issue date and recorded as a debt discount. 

On December 13, 2018, the Company entered into a Separation Agreement and Mutual General Release with a previous employee. In terms of the agreement, the Company issued the employee 100,000 shares of common stock valued at $8,000 on the issue date. 

On February 14, 2017, the Company issued 60,000,000 common shares valued at $2,184,000 to Leon Development Ltd, a Company controlled by our CEO, Shawn Leon, in connection with the purchase of the entire shareholding of CCH, the owner of the premises located in Bala, Ontario at 3571 Highway 169. 

On May 30, 2017, the Company issued 100,000 common shares to a vendor in lieu of services rendered at a market value of $4,000 or US$0.04 per share. 

During July 2017, five Series L Convertible note holders exercised their conversion rights and converted an aggregate principal amount of 

$375,011 into 12,500,375 shares of common stock at a conversion price or $0.03 per share. 

On December 1, 2017, the Company issued 1,650,000 shares of common stock in connection with the closing of a financing of a Senior Secured Convertible Note. The shares were valued at $132,000, or $0.08 per share on December 1, 2017. 

On December 29, 2017, the Company issued an additional 250,000 shares of common stock upon the amendment of the Senior Secured Convertible note, disclosed in 4 above. The shares were valued at $15,000 or $0.06 per share on December 29, 2017. 

b) Preferred shares

Authorized, issued and outstanding 

The Company has authorized 13,000,000 preferred shares with a par value of $0.01 per share, designated as 3,000,000 series A convertible preferred shares and 10,000,000 series B convertible preferred shares. The Company has no preferred shares issued and outstanding.

c) Warrants

In terms of the convertible note agreements entered into with Leonite disclosed in note 12 above, the Company granted warrants exercisable over a total of 16,983,333 shares of common stock at an exercise price of $0.10 per share, which was recorded as a debt discount.

In terms of the Series N Convertible debt issued to various accredited investors, disclosed in note 12 above, the Company granted warrants exercisable over a total of 31,312,500 shares of common stock at an exercise price of $0.12 per share, which was recorded as a debt discount.

The warrants were valued using a Black Scholes pricing model on the date of grant at $2,974,675 using the following weighted average assumptions:  

	Year ended December 31, 2018
Calculated stock price	$0.02 to $0.08
Risk free interest rate	2.6% to 2.9%
Expected life of warrants (years)		3 to 5 years
expected volatility of underlying stock		195% to 204%
Expected dividend rate		0	%

The volatility of the common stock is estimated using historical data of the Company’s common stock. The risk-free interest rate used in the Black Scholes pricing model is determined by reference to historical U.S. Treasury constant maturity rates with maturities approximate to the life of the warrants granted. An expected dividend yield of zero is used in the valuation model, because the Company does not expect to pay any cash dividends in the foreseeable future. As of December 31, 2018, the Company does not anticipate any awards will be forfeited in the valuation of the warrants.

A summary of all of the Company’s warrant activity during the period January 1, 2017 to December 31, 2018 is as follows: 

	No. of shares			Exercise price per  share		Weighted average exercise price
Outstanding January 1, 2017		19,637,409			$0.0033 to $0.03	$	0.030
Granted		29,866,666			$0.03 to $0.10		0.095
Forfeited/cancelled		—			—		—
Exercised		—			—		—
Outstanding December 31, 2017		49,504,075			$0.0033 to $0.10	$	0.069
Granted		48,295,833			$0.10 to $0.12		0.113
Forfeited/cancelled		(300,000	)		$0.0033		0.003
Exercised		—			—		—
Outstanding December 31, 2018		97,499,908			$0.03 to $0.12	$	0.091

The following table summarizes information about warrants outstanding at December 31, 2018: 

	Warrants outstanding						Warrants exercisable
Exercise price	No. of shares		Weighted average  remaining years		Weighted average  exercise price		No. of shares		Weighted average  exercise price
$0.03		21,704,075		1.20				21,704,075
$0.10		44,483,333		4.10				44,483,333
$0.12		31,312,500		2.60				31,312,500
		97,499,908		2.97	$	0.091		97,499,908	$	0.091

All of the warrants outstanding as of December 31, 2018 are vested. The warrants outstanding as of December 31, 2018 have an intrinsic value of $1,085,204.  

d) Stock options

Our board of directors adopted the Greenestone Healthcare Corporation 2013 Stock Option Plan (the “Plan”) to promote our long-term growth and profitability by (i) providing our key directors, officers and employees with incentives to improve stockholder value and contribute to our growth and financial success and (ii) enable us to attract, retain and reward the best available persons for positions of substantial responsibility. A total of 10,000,000 shares of our common stock have been reserved for issuance upon exercise of options granted pursuant to the Plan. The Plan allows us to grant options to our employees, officers and directors and those of our subsidiaries; provided that only our employees and those of our subsidiaries may receive incentive stock options under the Plan. We have granted a total of 480,000 options as of December 31, 2018 under the Plan.

No options were issued, exercised or cancelled during the year ended December 31, 2018 and 2017, respectively. 

The following table summarizes information about options outstanding as of December 31, 2018: 

	Options outstanding						Options exercisable
Exercise price	No. of shares		Weighted average  remaining years		Weighted average  exercise price		No. of shares		Weighted average  exercise price
$0.12		480,000		0.83				480,000
		480,000		0.83	$	0.12		480,000	$	0.12

The Company issued Stock options to a former officer vesting over a 24-month period commencing on November 1, 2014 expiring on October 31, 2019, a formal option agreement has not been issued as yet, as such the terms of these options are uncertain. 

As of December 31, 2018 there was no unrecognized compensation costs related to these options and the intrinsic value of the options as of December 31, 2018 is $0.