Stockholders' deficit

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Stockholders' deficit

15. Stockholders' 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 143,596,452 and 124,300,341as of June 30, 2019 and December 31, 2018, respectively.

On January 17, 2019, the Company issued 71,111 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 $4,978 on the issue date and recorded as a debt discount.

On May 15, 2019, a Series N convertible note holder converted an aggregate principal amount of $950,000 of principal debt into 11,875,000 at a conversion price of $0.08 per share.

During June 2019, the Company issued a total of 5,300,000 shares of common stock to certain consultants, directors and employees for services rendered during the course of the current fiscal year. These shares of common stock were valued at $371,000 at the date of grant.

During June 2019, the Company issued a total of 2,050,000 shares of common stock to certain investors as bonus shares. These shares were valued at $0.07 per share on the date of issuance.

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 11 above, the Company granted warrants exercisable over a total of 1,185,183 shares of common stock at an initial 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 11 above, the Company granted warrants exercisable over a total of 18,050,000 shares of common stock at an initial exercise price of $0.12 per share, which was recorded as a debt discount.

The warrants were valued using a Black Scholes pricing model and the relative fair value method, on the date of grant at $1,231,258 using the following weighted average assumptions:

	Six months ended June 30, 2019
Calculated stock price		$0.07 to $0.09
Risk free interest rate		1.81% to 2.58%
Expected life of warrants		36 to 60 months
expected volatility of underlying stock		169.8% to 186.7%
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 June 30, 2019, 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, 2018 to June 30, 2019 is as follows:

	No. of shares			Exercise price per  share		Weighted average exercise price
Outstanding January 1, 2018		49,504,075			0.0033 to $.0.10	$	0.0690
Granted		48,295,833			0.10 to $0.12		0.1130
Forfeited/cancelled		—			—		—
Exercised		—			—		—
Outstanding December 31, 2018		97,799,908			$0.03 to $0.12	$	0.0910
Granted		19,235,183			$0.10 to $0.12		0.1188
Forfeited/cancelled		(300,000	)		$0.0033		(0.0033	)
Exercised		—			—		—
Outstanding June 30, 2019		116,735,091			$0.03 to $0.12	$	0.0954

The following table summarizes information about warrants outstanding at June 30, 2019:

	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		0.73				21,704,075
$0.10		45,668,516		3.60				45,668,516
$0.12		49,362,500		2.35				49,362,500
		116,735,091		2.54	$	0.0954		116,735,091	$	0.0954

All of the warrants outstanding as of June 30, 2019 and December 31, 2018 are vested. The warrants outstanding as of June 30, 2019 have an intrinsic value of $868,163.

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 June 30, 2019 under the Plan.

No options were issued, exercised or cancelled during the six months ended June 30, 2019 and the year ended December 31, 2018, respectively.

The following table summarizes information about options outstanding as of June 30, 2019:

	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		0.34				480,000
		480,000		0.34	$	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 June 30, 2019 there was no unrecognized compensation costs related to these options and the fair value of the options as of June 30, 2019 was $0.