Stockholders' deficit

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stockholders' deficit

13. Stockholders' deficit

Effective August 10, 2020, the Company amended its Articles of Incorporation whereby the authorized share capital was amended to the following:

· Ten billion shares of common stock, par value $0.01 per share;

· Ten million shares of Series A Preferred stock, par value $0.01 per share; and

· Four hundred thousand Series B Preferred stock, par value $1.00 per share.

Series A Preferred stock

The salient terms of the Series A Preferred stock is summarized as follows:

· Convertible into ten shares of common stock six months after the date of issue

· No participation in the profits and losses of the corporation

· No dividend entitlement

· Upon redemption, repurchase or conversion, the Series A Preferred shares shall be cancelled and will not be eligible for reissue.

Series B Preferred stock

The salient terms of the Series B Preferred stock is summarized as follows:

· Series B Preferred stock will rank senior to all other classes of stock

· Entitled to cumulative dividends at 6% per annum payable in cash or in kind, monthly on the last day of each month, calculated on 360 day year consisting of 12, 30-day periods.

· No voting rights other than on (i) amendment to the articles of incorporation; (ii) mergers, consolidations or reorganizations; (iii) a sale of substantially all of the assets of the Company; (iv) change of the rights and preferences of the Series B preferred stock; (v) fundamental transactions entered into or liquidation of the Company;

· Redeemable at the option of the Company, one year from date of issue;

· Mandatorily redeemable one year after the date of issuance;

· Entitled to participate in any future debt or equity offerings as longs as 10% of the Series B Preferred stock is outstanding.

a) Common shares

Authorized, issued and outstanding

The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding common shares of 1,841,090,247 and 155,483,897 as of September 30, 2020 and December 31, 2019, respectively.

Between January 6, 2020 and June 9, 2020, the Company issued 1,398,906,350 shares of common stock in terms of conversion notices received from convertible note holders. The shares issued were issued below par based on the market price of the stock on the date of conversion and were valued at $559,285.

On January 8, 2020, the Company recorded the issuance of 2,700,000 shares to Labrys Fund. These shares were originally issued to Labrys fund as shares returnable to the Company dependent on settlement of the convertible note at maturity. The Company did not settle the convertible note or interest thereon at maturity.

Between January 6, 2020 and May 2, 2020, the Company issued 184,000,000 shares of common stock to Leonite Capital LLC in terms of the exercise of 224,390,247 warrants valued at $95,868 at an average exercise price of 0.00043 per share, based on the price protection afforded to the warrant holder.

b) Series A Preferred shares

Authorized, issued and outstanding

The Company has authorized 10,000,000 Series A preferred shares with a par value of $0.01 per share, with 0 shares issued and outstanding.

c) Series B Preferred shares

With effect from June 12, the Company designated $400,000 of the Leonite Capital LLC convertible loan as Series B Preferred Stock issuable at a par value of $1.00 per share.

d) Warrants

The Company issued warrants to Leonite Capital LLC with an initial exercise price of $0.10 per share. The terms of these warrants included a price protection in the form of a reduction in the exercise price should the Company issue any stock at a price below the exercise price. The Company subsequently issued common stock at a price of $0.0000324 per share thereby triggering the price protection clause in the warrant agreement, resulting in an additional 152,017,272,726 warrants exercisable over shares of common stock. Leonite exercised warrants over 224,338,247 shares of common stock resulting in the issue of 184,000,000 shares of common stock. The remaining Leonite warrants exercisable for 154,300,675,861 shares of common stock were cancelled in terms of the debt extinguishment agreement entered into with Leonite and a further five year warrant exercisable for 326,286,847 shares of common stock, exercisable at $0.10 per share or the lowest volume weighted average price over a 30 day period preceding the date of issuance, exercise or twenty four month anniversary of issuance.

A summary of all of the Company’s warrant activity during the period January 1, 2019 to September 30, 2020 is as follows:

	No. of shares			Exercise price per  share		Weighted average exercise price
Outstanding as of January 1, 2019		97,499,908			$0.003 to $0.12	$	0.0910000
Granted		27,700,652			$0.10 to $0.12		0.1177300
Adjustment due to price protection		2,456,534,397		$	0.00204		0.0020400
Forfeited/cancelled		(15,633,709	)		0.03		0.0300000
Exercised		—			—		—
Outstanding as of December 31, 2019		2,566,101,248			$0.00204 to $0.12	$	0.0044700
Granted		-			-		-
Adjustment due to price protection		152,017,272,726			0.0000324		0.0000324
Forfeited/cancelled		(2,366,666	)		0.03		0.0300000
Granted in terms of debt extinguishment		326,286,847			0.000675		0.0006750
Cancelled as part of debt extinguishment		(154,300,675,861	)		0.0000324		0.0000324
Granted		133,333,332			0.0015000		0.0015000
Exercised		(224,388,247	)		0.0004		0.0004000
Outstanding as of September 30, 2020		515,561,379			$0.000675 to $0.12	$	0.0131892

The following table summarizes information about warrants outstanding at September 30, 2020:

			Warrants outstanding							Warrants exercisable
Exercise price	No. of shares			Weighted average remaining years		Weighted average exercise price		No. of shares			Weighted average exercise price
$0.000675		326,286,847			4.78				326,286,847
$0.001500		133,333,332			4.87				133,333,332
$0.030000		3,703,700			0.53				3,703,700
$0.120000		52,237,500			1.14				52,237,500
		515,561,379			4.41	$	0.0131892		515,561,379		$	0.0131892

All of the warrants outstanding as of September 30, 2020 and December 31, 2019 are vested. The warrants outstanding as of September 30, 2020 have an intrinsic value of $1,280,351.

e) 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.

No options were issued, exercised or cancelled during the nine months ended September 30, 2020 and the year ended December 31, 2019, respectively.