Stockholders' deficit

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Stockholders' deficit

16. Stockholder’s deficit

a) Common shares

Authorized, issued and outstanding

On September 20, 2019, in terms of a shareholders resolution and Article of Amendment filed with the Colorado Secretary of State, the Company increased its authorized common share capital to 900,000,000 shares with a par value of $0.01 per share. 

On January 6, 2020, the majority of the shareholders of the Company approved an increase in the authorized number of common shares from 900,000,000 to 10,000,000,000 with a par value of $0.01 per share.

The company has issued and outstanding 155,483,897 and 124,300,341 at December 31, 2019 and 2018, 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 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.

On July 15, 2019, the Company transferred 2,700,000 unissued shares to Labrys Fund, LP in connection with a convertible note issued on July 8, 2019. These shares are only earned and to be issued upon an event of a repayment default. The Company intends repaying the note prior to maturity, therefore the shares are not recorded as issued for financial statement purposes.

Between September 11, 2019 and December 30, 2019 in terms of conversion notices received from First Fire Global Opportunities Fund, the Company issued 11,887,445 shares of common stock to settle $43,092 of convertible debt.

b) Preferred shares

Authorized, issued and outstanding

The Company has authorized 13,000,000 preferred shares, designated as 3,000,000 series A convertible preferred shares with a par value of $1.00 each and 10,000,000 series B convertible preferred shares with a par value of $0.01 per share. 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 10 above, the Company granted warrants exercisable over a total of 2,185,183 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 10 above, the Company granted warrants exercisable over a total of 20,925,000 shares of common stock at an initial exercise price of $0.12 per share, which was recorded as a debt discount.

In terms of the price protection provided in the Leonite Capital, LLC warrants which were issued at an initial exercise price of $0.10 per share. These warrants provided for a reduction in the issue price should the Company issue any stock at a price below the exercise price. The Company subsequently issued common stock at a price of $0.00204 per share thereby triggering the price protection clause in the warrant agreement. The warrants issued to Leonite were originally exercisable over 51,258,985 shares and were increased to be exercisable over 2,456,534,397 shares of common, amounting to a total exercisable over 2,507,793,382 shares of common stock, at an exercise price of $0.00204 per share.

c) Warrants

The warrants were valued using a Black Scholes pricing model on the date of grant at $1,477,163 using the following weighted average assumptions: 

	Year ended December 31, 2019
Calculated stock price		$0.05 to $0.09
Risk free interest rate		1.43% to 2.58%
Expected life of warrants		36 to 60 months
expected volatility of underlying stock		164.5% 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 December 31, 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 December 31, 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		(300,000	)		$0.0033		0.0033
Exercised		—			—		—
Outstanding December 31, 2018		97,499,908			$0.003 to $0.12	$	0.0910
Granted		27,700,652			$0.10 to $0.12		0.11773
Adjustment due to price protection		2,456,534,397			$0.00204		0.00204
Forfeited/cancelled		(15,633,709	)		0.03		0.030
Exercised		—			—		—
Outstanding December 31, 2019		2,566,101,248			$0.00204 to $0.12	$	0.00451

c) Warrants

The following table summarizes information about warrants outstanding at December 31, 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
$0.00204		2,507,793,382		3.18				2,507,793,382
$0.03		6,070,366		0.80				6,070,366
$0.12		52,237,500		1.89				52,237,500
		2,566,101,248		3.15	$	0.00451		2,566,101,248	$	0.00451

All of the warrants outstanding as of December 31, 2019 are vested. The warrants outstanding as of December 31, 2019 have an intrinsic value of $2,188,320. 

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 no issued options at December 31, 2019 under the Plan.

No options were issued, exercised during the year ended December 31, 2019 and 2018, respectively.

On October 31, 2019, options exercisable for 480,000 shares expired. There are no other stock options outstanding.

As of December 31, 2019 there was no unrecognized compensation costs related to these options and the intrinsic value of the options as of December 31, 2019 is $0.