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For the fiscal year ended June 30, 2013
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For the transition period from: ______________ to ______________
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Commission file number: 0-28353
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INTEGRAL TECHNOLOGIES, INC.
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(Name of small business issuer as specified in its charter)
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Nevada
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98-0163519
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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805 W. Orchard Drive, Suite 7, Bellingham, Washington
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98225
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(Address of principal executive offices)
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(Zip Code)
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Page
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PART I
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||
Item 1.
|
2
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Item 1A.
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7
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Item 1B.
|
11
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Item 2.
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11
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Item 3.
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11
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Item 4.
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11
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PART II
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||
Item 5.
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12
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Item 6.
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13
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Item 7.
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13
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Item 7A.
|
15
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Item 8.
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15
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Item 9.
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15
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Item 9A.
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16
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Item 9B.
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17
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|
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|
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PART III
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||
Item 10.
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19
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Item 11.
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22
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Item 12.
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27
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Item 13.
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29
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Item 14.
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31
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Item 15.
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32
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35
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· | has a stated value and liquidation preference of $1.00; |
· | has a 5% annual dividend, payable in cash or shares of common stock at the discretion of the Board of Directors; |
· | may be converted into shares of common stock (determined by dividing the number of shares of Series A being converted by the average of the high and low bid prices of our common stock reported by the OTC Bulletin Board over the ten trading days preceding the date of conversion); |
· | may be redeemed by us within one year after issuance at $1.50, after one year but less than two years at $2.00, after two years but less than three years at $2.50, after three years but less than four years at $3.00, and after four years but less than five years at $3.50; |
· | during the year ended June 30, 2010, an amendment was made to the Series A convertible preferred shares in which they may be redeemed after five years but less than six years after the date of issue at a redemption price of $4.00 and increasing $0.50 per year for each share of Series A Convertible Preferred Stock so redeemed; |
· | may be voted on all matters on an as-converted basis; and |
· | may be voted as a class on any merger, share exchange, recapitalization, dissolution, liquidation or change in control of our company. |
· | announcements of new products or sales offered by us or our competitors; |
· | actual or anticipated variations in quarterly operating results; |
· | changes in financial estimates by securities analysts, if any; |
· | changes in the market’s perception of us or the nature of our business; and |
· | sales of our common stock. |
Quarter Ended
|
Low Bid
|
High Bid
|
||||||
|
||||||||
September 30, 2011
|
$
|
0.31
|
$
|
0.51
|
||||
December 31, 2011
|
$
|
0.25
|
$
|
0.51
|
||||
March 31, 2012
|
$
|
0.24
|
$
|
0.65
|
||||
June 30, 2012
|
$
|
0.30
|
$
|
0.45
|
||||
|
||||||||
September 30, 2012
|
$
|
0.29
|
$
|
0.39
|
||||
December 31, 2012
|
$
|
0.20
|
$
|
0.38
|
||||
March 31, 2013
|
$
|
0.20
|
$
|
0.37
|
||||
June 30, 2013
|
$
|
0.28
|
$
|
0.83
|
· | Inadequate segregation of duties consistent with control objectives; and |
· | Ineffective controls over periodic financial disclosures and reporting processes. |
· | We have engaged an independent public accounting firm to perform a qualified, independent review over all significant transactions included in our financial reports as well as our period end financial disclosures included in our periodic filings. |
1) | The Company entered into a Consulting and Confidentiality Agreement with Stephen Neu, dated June 1, 2011, engaging Mr. Neu to provide certain consulting services to the Company. The term of the agreement expires on June 1, 2014. Mr. Neu shall receive a monthly consulting fee of $14,000. Mr. Neu was issued 150,000 shares of common stock in the Company upon the execution of this agreement (not yet issued), and will receive an additional 100,000 shares of common stock in the Company upon the 6-month anniversary of the execution date of the agreement. Mr. Neu was granted 600,000 stock options, which vest pursuant to the terms therein, and rights to receive an additional 1,250,000 stock options (not yet issued) on the first anniversary of the execution date of the agreement. In the event Mr. Neu is terminated without cause, he will receive the full amount of compensation due through the expiration of this agreement. The agreement also contains customary provisions regarding confidentiality of the Company’s proprietary information, indemnification and non-competition; |
Name
|
Age
|
Position with Company
|
Director of Company Since
|
|
|
|
|
Doug Bathauer
|
48
|
Director, CEO and Treasurer
|
November 2012
|
|
|
|
|
William A. Ince
|
62
|
Director, Secretary and Chief
Financial Officer
|
February 1996
|
|
|
|
|
James Eagan
|
50
|
Director, Chairman
|
January 2011
|
|
|
|
|
Herbert C. Reedman
|
60
|
President, Director
|
November 2012
|
|
|
|
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Richard Blumberg
|
64
|
Independent Director
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November 2012
|
Name and Principal Position
|
Fiscal Year Ended June 30
|
Salary ($)
|
Bonus ($)
|
Stock Awards (n1)
|
Options Awards ($) (n2)
|
Non-Equity Incentive Plan Compensation ($)
|
Nonqualified Deferred Compensation Earnings ($)
|
All Other Compensation ($) (n3)
|
Total ($)
|
||||||||||||||||||||||||
William S. Robinson
|
2013
|
$
|
55,000
|
-0-
|
$
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
$
|
11,570
|
$
|
66,570
|
|||||||||||||||||||
Former Chief Executive Officer, Treasurer, Chairman, Director
|
2012
|
$
|
220,000
|
-0-
|
$
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
$
|
28, 271
|
$
|
248,271
|
|||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
Doug Bathauer
|
2013
|
$
|
168,000
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
-0-
|
$
|
-0_
|
$
|
168,000
|
||||||||||||||||||||
Chief Executive Officer, Treasurer, Director
|
2012
|
$
|
150,000
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
-0-
|
$
|
-0_
|
$
|
150,000
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
William A. Ince
|
2013
|
$
|
220,000
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
-0-
|
$
|
23,189
|
$
|
243,189
|
||||||||||||||||||||
Chief Financial and Accounting Officer, Secretary, Director
|
2012
|
$
|
220,000
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
-0-
|
$
|
23,189
|
$
|
243,189
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
Herbert Reedman
|
2013
|
$
|
168,000
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
$
|
168,000
|
|||||||||||||||||||||
President, Director
|
2012
|
$
|
168,000
|
-0-
|
$
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
$
|
168,000
|
(n1) | Reflects dollar amount expensed by the company during applicable fiscal year for financial statement reporting purposes pursuant to ASC 718. ASC 718 requires the company to determine the overall value of the options as of the date of grant based upon the Black-Scholes method of valuation, and to then expense that value over the service period over which the options become exercisable (vest). As a general rule, for time-in-service-based options, the company will immediately expense any option or portion thereof which is vested upon grant, while expensing the balance on a pro rata basis over the remaining vesting term of the option. For a description ASC 718 and the assumptions used in determining the value of the options under the Black-Scholes model of valuation, see the notes to the consolidated financial statements included with this report. |
(n2) | On July 1, 2002, Mr. Ince was granted an option to acquire 415,000 shares of common stock at an exercise price of $1.00 per share. In December 2005, the expiration date of these options was extended until December 31, 2007. Then in June 2007, the expiration date of these options was extended until December 31, 2010. On April 10, 2010 the expiration date of these options was extended until July 31, 2014. |
(n3) | William S. Robinson and William A. Ince each own shares of Series A Preferred Stock. A 5% dividend on the Series A Preferred Stock is payable in cash or shares of common stock at the election of Integral. For the year ended June 30, 2013, $10,271 was paid or accrued for Mr. Robinson and $5,189 was paid or accrued for Mr. Ince. For the year ended June 30, 2012, $10,271 was paid or accrued for Mr. Robinson and $5,189 was paid or accrued for Mr. Ince. |
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||||||||||
|
Equity Incentive Plan Awards:
|
|
Equity Incentive Plan Awards:
|
Equity Incentive Plan Awards:
|
|||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
Name
|
Number of Securities Underlying Unexercised Options(#) Exercisable
|
Number of Securities Underlying Unexercised Options(#) Unexercisable
|
Number of Securities Underlying Unexercised Unearned Options (#)
|
Option Exercise Price ($)
|
Option Expiration Date
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
Market Value of Shares or Units of Stock That Have Not Vested
|
Number of Unearned Shares, Units or Other Rights That Have Not Vested
|
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
|
||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
William A. Ince (n1)
|
415,000
|
0
|
0
|
$
|
1.00
|
7/31/2014
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||
|
500,000
|
0
|
0
|
$
|
0.25
|
12/31/2014
|
|||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
Doug Bathauer
|
250,000
|
0
|
0
|
$
|
0.25
|
12/31/2013
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||
|
125,000
|
0
|
0
|
$
|
0.25
|
12/31/2014
|
|||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
Herbert Reedman (n2)
|
100,000
|
0
|
$
|
0.50
|
10/15/2014
|
0
|
0
|
0
|
0
|
||||||||||||||||||||||||
|
100,000
|
$
|
0.50
|
04/15/2015
|
|||||||||||||||||||||||||||||
|
100,000
|
$
|
0.50
|
10/15/2015
|
|||||||||||||||||||||||||||||
|
100,000
|
$
|
0.50
|
04/15/2016
|
|||||||||||||||||||||||||||||
|
100,000
|
$
|
0.50
|
10/15/2016
|
|||||||||||||||||||||||||||||
|
100,000
|
$
|
0.50
|
04/15/2013
|
(n1) | Mr. Ince holds the following options: On July 1, 2002, Mr. Ince was granted an option to acquire 415,000 shares of common stock at an exercise price of $1.00 per share. In June 2007, the expiration date of these options was extended until December 31, 2010 and on April 10, 2010 the expiration date of these options was extended to July 31, 2014. On July 14, 2009 Mr. Ince was granted an option to acquire 500,000 shares of common stock at an exercise price of $0.25 per share. These options are exercisable after January 1, 2010 and expire on December 31, 2014. |
(n2) | The Company entered into a Consulting and Confidentiality Agreement with Herb Reedman, dated April 15, 2011. In addition to the above mentioned options, an additional 1,250,000 options were granted to Mr. Reedman on the first anniversary of execution date of the agreement. These options have not been issued yet. |
Name
|
Fees Earned or Paid in Cash ($)
|
Stock Awards ($)
|
Options Awards ($)
|
Non-Equity Incentive Plan Compensation ($)
|
Nonqualified Deferred Compensation Earnings ($)
|
All Other Compensation ($)
|
Total ($)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
James Eagan
|
168,000
|
|
|
|
|
|
168,000
|
Name and Address of Beneficial Owner (n1)
|
Amount and Nature of Beneficial Ownership(n1)
|
Percent of Class (n3)
|
Executive Officers and Directors:
|
|
|
Doug Bathauer (n6)
805 West Orchard Dr. Suite #7
Bellingham WA 98225
|
325,000
|
.004
|
William A. Ince (n4)
805 W. Orchard Dr., Suite #7 Bellingham, WA 98225
|
2,648,816 (n2)
|
3.4%
|
Herb Reedman (n7)
220 Commerce Drive Suite 205
Fort Washington PA 19034
|
650,000
|
.008%
|
James Eagan (n8)
805 West Orchard Dr. Suite 7
Bellingham WA 98225
|
750,000
|
.009%
|
Richard P. Blumberg
|
7,731,142 (n5)
|
9.8%
|
All executive officers and directors as a group
|
12,104,958
|
13.2%
|
(n1) | Unless otherwise indicated, all shares are directly beneficially owned and investing power is held by the persons named. |
(n2) | Includes vested options beneficially owned but not yet exercised and outstanding, if any. The table does not include the effects of conversion by Mr. Ince of his shares of Series A Convertible Preferred Stock (“Series A”), which are convertible into shares of common stock at a conversion rate that varies with the market price of the common stock at the time of conversion. The conversion rate is determined by dividing the number of shares of Series A being converted by the average of the high and low bid prices of Integral’s common stock reported by the OTC Bulletin Board over the ten trading days preceding the date of conversion. Mr. Ince owns 103,563 shares of Series A. As of September 10, 2013, the conversion rate was $0.475 per share, so Mr. Ince’s 103,563 shares of Series A were convertible into 215,756 shares of common stock. The actual number of shares of common stock receivable by Mr. Ince upon conversion of the Series A would depend on the actual conversion rate in effect at the time of conversion. |
(n3) | Based upon 78,939,484 shares issued and outstanding, plus the amount of shares each person or group has the right to acquire within 60 days pursuant to options, warrants, conversion privileges or other rights. |
(n4) | Mr. Ince is an executive officer and director of Integral and each of its subsidiaries. Beneficial ownership figure includes 915,000 shares underlying options. |
(n5) | Based on information contained in Schedule 13G filed with the SEC on February 5, 2012, filed by Richard P. Blumberg whose address is 2357 Hobart Ave. S.W., Seattle, WA 98116. Richard P. Blumberg has sole voting power with respect to 4,940,667 and has shared voting power over 2,790,475 shares. |
(n6) | Mr. Bathauer is an executive officer and director of Integral and each of its subsidiaries. Beneficial figure ownership includes 325,000 shares underlying options. |
(n7) | Mr. Reedman is an executive officer and director of Integral and each of its subsidiaries. Beneficial figure ownership includes 650,000 shares underlying options. The Company entered into a Consulting and Confidentiality Agreement with Mr. Reedman, dated April 15, 2011. In addition to the above mentioned options, an additional 1,250,000 options were granted to Mr. Reedman on the first anniversary of execution date of the agreement. These options have not been issued yet. |
(n8) | Mr. Eagan is a director of Integral and each of its subsidiaries. Beneficial figure ownership includes 750,000 shares underlying options. The Company entered into a Consulting and Confidentiality Agreement with Mr. Eagan, dated December 1, 2010. In addition to the above mentioned options, an additional 1,250,000 options were granted to Mr. Eagan on the first anniversary of execution date of the agreement. These options have not been issued yet. |
Name and Address of Beneficial Owner (n1)
|
Amount and Nature of Beneficial Ownership(n1)
|
Percent of Class (n2)
|
William S. Robinson (n3) –
#3 1070 West Pender St.
Vancouver, B.C. V6E 2N7
|
204,975
|
66.4%
|
William A. Ince (n4) –
805 W. Orchard Dr., Suite #7
Bellingham, WA 98225
|
103,563
|
33.6%
|
All officers and directors of Integral as a group (2 persons)
|
308,538
|
100%
|
(n1) | Unless otherwise indicated, all shares are directly beneficially owned and investing power is held by the persons named. |
(n3) | Mr. Robinson is a former executive officer and director of Integral and each of its subsidiaries. |
(n4) | Mr. Ince is an executive officer and director of Integral and each of its subsidiaries. |
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of options, warrants and rights
|
Number of securities available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|
|
|
|
Plan category
|
(a)
|
(b)
|
(c)
|
Equity compensation plans approved by security holders
|
N/A
|
N/A
|
N/A
|
Equity compensation plans not approved by security holders
|
5,450,000
|
$0.43
|
3,100,000
|
Total
|
5,450,000
|
$0.43
|
3,100,000
|
Exhibit No. | Description |
3.03 | Articles of Incorporation, as amended and currently in effect. (Incorporated by reference to Exhibit 3.03 of Integral’s quarterly report on Form 10-QSB for the period ended March 31, 2006.) |
3.04 | Bylaws, as amended and restated on December 31, 1997. (Incorporated by reference to Exhibit 3.04 of Integral’s quarterly report on Form 10-QSB for the period ended March 31, 2006.) |
10.12 | Integral Technologies, Inc. 2001 Stock Plan dated January 2, 2001, as amended December 17, 2001. (Incorporated by reference to Exhibit 10.12 of Integral’s registration statement on Form S-8 (file no. 333-76058).) |
10.15 | Integral Technologies, Inc. 2003 Stock Plan dated April 4, 2003 (Incorporated by reference to Exhibit 10.15 of Integral’s registration statement on Form S-8 (file no. 333-104522).) |
10.18 | Grant of Option dated June 17, 2005 between Integral and Thomas Aisenbrey. (Incorporated by reference to Exhibit 10.18 of Integral’s Current Report Form 8-K dated June 17, 2005 (filed June 23, 2005).) |
10.19 | Agreement between the Company and The QuanStar Group, LLC dated June 20, 2005. (Incorporated by reference to Exhibit 10.18 of Integral’s Current Report Form 8-K dated June 17, 2005 (filed June 23, 2005).) |
10.20 | Patent License Agreement between the Company and Heatron, Inc. dated March 17, 2006. (Incorporated by reference to Exhibit 10.20 of Integral’s Current Report Form 8-K dated March 17, 2006 (filed April 11, 2006).) |
10.21 | Patent License Agreement between the Company and Jasper Rubber Products, Inc. dated August 25, 2006. (Incorporated by reference to Exhibit 10.21 of Integral’s Current Report Form 8-K dated August 25, 2006 (filed September 19, 2006).) |
10.22 | Grant of Option dated November 6, 2006 between Integral and Thomas Aisenbrey. (Incorporated by reference to Exhibit 10.22 of Integral’s Quarterly Report on Form 10-QSB for the period ended September 30, 2006.) |
10.23 | Manufacturing Agreement between Integral and Jasper Rubber Products, Inc. dated November 22, 2006. (Incorporated by reference to Exhibit 10.23 of Integral’s Current Report on Form 8-K dated November 27, 2006 (filed December 4, 2006).) |
10.24 | Patent License Agreement between Integral and ADAC Plastics, Inc. d/b/a ADAC Automotive, dated November 28, 2006. (Incorporated by reference to Exhibit 10.24 of Integral’s Current Report on Form 8-K dated December 18, 2006 (filed December 20, 2006).) |
10.25 | Patent License Agreement between Integral and Esprit Solutions Limited, dated December 18, 2006. (Incorporated by reference to Exhibit 10.25 of Integral’s Current Report on Form 8-K dated January 9, 2007 (filed January 19, 2007).) |
10.26 | Patent License Agreement between Integral and Knowles Electronics, LLC, dated January 18, 2007. (Incorporated by reference to Exhibit 10.26 of Integral’s Quarterly Report on Form 10-QSB for the period ended December 31, 2006.) |
10.27 | Agreement between Integral and Visionary Innovations, Inc., dated February 16, 2007. (Incorporated by reference to Exhibit 10.27 of Integral’s Quarterly Report on Form 10-QSB for the period ended March 31, 2007.) |
10.28 | Amendment One to Manufacturing Agreement between Integral and Jasper Rubber Products, Inc. dated July 19, 2007. (Incorporated by reference to Exhibit 10.28 of Integral’s Current Report on Form 8-K dated July 19, 2007 (filed July 30, 2007).) |
10.29 | Integral Technologies, Inc. 2009 Stock Option Plan dated July 14, 2009. (Incorporated by reference to Exhibit 10.29 of Integral’s Current Report on Form 10-KSB dated September 29, 2009 (filed September 29, 2009)) . |
10.30 | Employment Agreement between Integral and William Robinson dated July 14, 2009. (Incorporated by reference to Exhibit 10.30 of Integral’s Current Report on Form 10-KSB dated September 29, 2009 (filed September 29, 2009)). |
10.31 | Employment Agreement between Integral and William Ince dated July 14, 2009. (Incorporated by reference to Exhibit 10.31 of Integral’s Current Report on Form 10-KSB dated September 29, 2009 (filed September 29, 2009)). |
10.32 | Consulting Agreement between Integral and Mohamed Zeidan dated August 10, 2009. (Incorporated by reference to Exhibit 10.32 of Integral’s Current Report on Form 10-KSB dated September 29, 2009 (filed September 29, 2009)). |
10.33 | Consulting Agreement between Integral and James Eagan dated December 1, 2010. (Incorporated by reference to Exhibit 10.33 of Integral’s Current report on Form 10-k dated September 28, 2011 (filed September 28,2011)). |
10.34 | Consulting Agreement between Integral and Herbert C. Reedman dated April 15, 2011. . (Incorporated by reference to Exhibit 10.34 of Integral’s Current report on Form 10-k dated September 28, 2011 (filed September 28,2011)). |
10.35 | Consulting Agreement between Integral and Stephen Neu dated June 1, 2011. (Incorporated by reference to Exhibit 10.35 of Integral’s Current report on Form 10-k dated September 28, 2011 (filed September 28,2011)). |
10.36 | Consulting Agreement between Integral and Paul MacKenzie dated June 1, 2011. (Incorporated by reference to Exhibit 10.36 of Integral’s Current report on Form 10-k dated September 28, 2011 (filed September 28,2011)). |
10.37 | Separation Agreement between Integral and William Robinson dated November 8, 2012. (filed herewith) |
10.38 | Separation Agreement between Integral and Steven Neu dated June 13, 2013. (Filed herewith). |
10.39 | Consulting Agreement Extension between Integral and Mo Zeidan dated June 20,2013. (filed herewith) |
10.40 | Redacted License Agreement between Integral and Hanwha L&C Corp. dated June 19, 2013. (Filed herewith). |
14.1 | Code of Ethics adopted September 20, 2004. (Incorporated by reference to Exhibit 14.1 of Integral’s annual report on Form 10-KSB for the period ended June 30, 2004.) |
21.4 | List of Subsidiaries. (Incorporated by reference to Exhibit 21.4 of Integral’s annual report on Form 10-KSB for the period ended June 30, 2004.) |
31.1 | Section 302 Certification by the Corporation’s Chief Executive Officer. (Filed herewith). |
31.2 | Section 302 Certification by the Corporation’s Chief Financial Officer. (Filed herewith). |
32.1 | Section 906 Certification by the Corporation’s Chief Executive Officer. (Filed herewith). |
32.2 | Section 906 Certification by the Corporation’s Chief Financial Officer. (Filed herewith). |
|
INTEGRAL TECHNOLOGIES, INC
|
|
|
|
|
Dated: September 30, 2013
|
/s/ Douglas Bathauer
|
|
|
Douglas Bathauer, Chief Executive Officer
|
|
|
|
|
|
/s/ William A. Ince
|
|
|
William A. Ince, Chief Financial Officer and Principal Accounting Officer
|
Name
|
|
Title
|
Date
|
|
|
|
|
/s/ Douglas Bathauer
|
|
Director
|
September 30, 2013
|
Douglas Bathauer
|
|
|
|
|
|
|
|
/s/ William A. Ince
|
|
Director
|
September 30, 2013
|
William A. Ince
|
|
|
|
|
|
|
|
/s/ James Eagan
|
|
Director
|
September 30, 2013
|
James Eagan
|
|
|
|
Index
|
Page
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
|
|
Consolidated Financial Statements
|
|
|
|
Consolidated Balance Sheets
|
F-2
|
|
|
Consolidated Statements of Operations
|
F-3
|
|
|
Consolidated Statements of Stockholders' Equity (Deficit)
|
F-4 – F-11
|
|
|
Consolidated Statements of Cash Flows
|
F-12
|
|
|
Notes to Consolidated Financial Statements
|
F-13 – F-45
|
|
2013
|
2012
|
||||||
|
||||||||
Assets
|
||||||||
|
||||||||
Current
|
||||||||
Cash
|
$
|
532,308
|
$
|
172,173
|
||||
Prepaid expense
|
20,232
|
19,723
|
||||||
Account receivable (note 8)
|
250,000
|
0
|
||||||
|
||||||||
Total Assets
|
$
|
802,540
|
$
|
191,896
|
||||
|
||||||||
Liabilities
|
||||||||
|
||||||||
Current
|
||||||||
Accounts payable and accruals (notes 6, 13 and 15)
|
$
|
2,270,727
|
$
|
2,032,309
|
||||
Promissory note payable (note 7)
|
0
|
123,696
|
||||||
Deferred liability (note 8)
|
25,000
|
0
|
||||||
Convertible debentures (note 5)
|
174,827
|
93,356
|
||||||
Derivative financial liabilities (note 5)
|
414,102
|
84,718
|
||||||
Redeemable preferred stock (note 15)
|
180,000
|
0
|
||||||
|
3,064,656
|
2,334,079
|
||||||
Deferred Liability (note 8)
|
225,000
|
0
|
||||||
Redeemable Preferred Stock (note 15)
|
120,000
|
0
|
||||||
|
||||||||
Total Liabilities
|
3,409,656
|
2,334,079
|
||||||
Commitments (note 17)
|
||||||||
Subsequent events (note 18)
|
||||||||
|
||||||||
Stockholders’ Deficit (note 4)
|
||||||||
|
||||||||
Preferred Stock and Paid-in Capital in Excess of $0.001 Par Value
|
||||||||
20,000,000 shares authorized
|
||||||||
308,538 issued and outstanding (note 15)
|
237,950
|
308,538
|
||||||
Common Stock and Paid-in Capital in Excess of $0.001 Par Value
|
||||||||
150,000,000 shares authorized
|
||||||||
76,748,839 (2012 – 62,368,653) issued and outstanding
|
41,204,935
|
37,655,315
|
||||||
Promissory Notes Receivable
|
(29,737
|
)
|
(29,737
|
)
|
||||
Subscriptions Received
|
13,400
|
191,600
|
||||||
Accumulated Other Comprehensive Income
|
46,267
|
46,267
|
||||||
Deficit Accumulated During the Development Stage
|
(44,079,931
|
)
|
(40,314,166
|
)
|
||||
|
||||||||
Total Stockholders’ Deficit
|
(2,607,116
|
)
|
(2,142,183
|
)
|
||||
|
||||||||
Total Liabilities and Stockholders’ Deficit
|
$
|
802,540
|
$
|
191,896
|
|
Years Ended June 30,
|
Period From February 12, 1996 (Inception)
|
||||||||||||||
|
Through
|
|||||||||||||||
|
2013
|
2012
|
2011
|
June 30, 2013
|
||||||||||||
|
||||||||||||||||
Revenue
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
249,308
|
||||||||
Cost of Sales
|
0
|
0
|
0
|
216,016
|
||||||||||||
|
||||||||||||||||
|
0
|
0
|
0
|
33,292
|
||||||||||||
Other Income
|
246
|
103
|
797
|
869,652
|
||||||||||||
|
||||||||||||||||
|
246
|
103
|
797
|
902,944
|
||||||||||||
|
||||||||||||||||
Expenses
|
||||||||||||||||
Consulting (note 4(c))
|
2,260,810
|
1,759,230
|
1,682,959
|
13,628,665
|
||||||||||||
Salaries
|
275,000
|
440,000
|
440,000
|
5,416,297
|
||||||||||||
Legal and accounting
|
472,833
|
345,980
|
192,295
|
11,912,149
|
||||||||||||
Research and development (note 16)
|
89,198
|
238,955
|
245,593
|
2,295,535
|
||||||||||||
General and administrative
|
235,835
|
203,788
|
89,805
|
1,807,806
|
||||||||||||
Travel and entertainment
|
139,344
|
137,798
|
105,546
|
1,802,002
|
||||||||||||
Rent
|
61,523
|
75,720
|
50,454
|
721,998
|
||||||||||||
Bank charges and interest, net
|
130,397
|
73,488
|
910
|
412,076
|
||||||||||||
Telephone
|
23,800
|
25,000
|
27,908
|
560,385
|
||||||||||||
Advertising
|
12,970
|
11,252
|
6,612
|
369,561
|
||||||||||||
Fair value loss on derivative financial liabilities (note 5)
|
320,537
|
89,326
|
0
|
409,863
|
||||||||||||
Net gain on settlement of convertible debentures (note 5)
|
(26,189
|
)
|
0
|
0
|
(26,189
|
)
|
||||||||||
Gain on extinguishment of debt (note 15)
|
(355,022
|
)
|
0
|
0
|
(355,022
|
)
|
||||||||||
Loss on extinguishment of debt (note 15)
|
109,000
|
0
|
0
|
109,000
|
||||||||||||
Write-down of license and operating assets
|
0
|
0
|
0
|
1,855,619
|
||||||||||||
Write-off of investments
|
0
|
0
|
0
|
1,250,000
|
||||||||||||
Non-competition agreement
|
0
|
0
|
0
|
711,000
|
||||||||||||
Interest on beneficial conversion feature
|
0
|
0
|
0
|
566,455
|
||||||||||||
Financing fees, net
|
0
|
0
|
0
|
129,043
|
||||||||||||
Bad debts
|
0
|
0
|
0
|
46,604
|
||||||||||||
Settlement of lawsuit
|
0
|
0
|
0
|
45,250
|
||||||||||||
Depreciation and amortization
|
0
|
0
|
0
|
324,386
|
||||||||||||
|
||||||||||||||||
|
3,750,036
|
3,400,537
|
2,842,082
|
43,992,483
|
||||||||||||
|
||||||||||||||||
Net Loss and Comprehensive Loss for Period
|
$
|
(3,749,790
|
)
|
$
|
(3,400,434
|
)
|
$
|
(2,841,285
|
)
|
$
|
(43,089,539
|
)
|
||||
|
||||||||||||||||
Basic and Diluted Loss Per Share (note 12)
|
$
|
(0.06
|
)
|
$
|
(0.06
|
)
|
$
|
(0.05
|
)
|
|||||||
|
||||||||||||||||
Weighted Average Number of Common Shares Outstanding
|
68,354,944
|
59,780,612
|
56,487,578
|
|
Shares of Common Stock Issued
|
Common Stock and Paid-in Capital in Excess of Par
|
Shares of Preferred Stock Issued
|
Preferred Stock and Paid-in Capital in Excess of Par
|
Promissory Notes Receivable
|
Share Subscriptions
|
Accumulated Other Comprehensive Income
|
Deficit Accumulated During the Development Stage
|
Total Stockholders' Equity (Deficit)
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
|
1,000,000
|
$
|
10,000
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
10,000
|
||||||||||||||||||||
Property and equipment (to officers and directors)
|
1,500,000
|
15,000
|
0
|
0
|
0
|
0
|
0
|
0
|
15,000
|
|||||||||||||||||||||||||||
Services (provided by officers and directors)
|
2,000,000
|
20,000
|
0
|
0
|
0
|
0
|
0
|
0
|
20,000
|
|||||||||||||||||||||||||||
Services (other)
|
1,500,000
|
15,000
|
0
|
0
|
0
|
0
|
0
|
0
|
15,000
|
|||||||||||||||||||||||||||
Foreign currency translation
|
0
|
0
|
0
|
0
|
0
|
0
|
(1,226
|
)
|
0
|
(1,226
|
)
|
|||||||||||||||||||||||||
Net loss for period
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(344,843
|
)
|
(344,843
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 1996
|
6,000,000
|
60,000
|
0
|
0
|
0
|
0
|
(1,226
|
)
|
(344,843
|
)
|
(286,069
|
)
|
||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
|
5,086,000
|
865,514
|
0
|
0
|
0
|
0
|
0
|
0
|
865,514
|
|||||||||||||||||||||||||||
Share issue costs
|
0
|
(48,920
|
)
|
0
|
0
|
0
|
0
|
0
|
0
|
(48,920
|
)
|
|||||||||||||||||||||||||
Services
|
564,000
|
63,036
|
0
|
0
|
0
|
0
|
0
|
0
|
63,036
|
|||||||||||||||||||||||||||
Acquisition of subsidiary
|
100,000
|
275,000
|
0
|
0
|
0
|
0
|
0
|
0
|
275,000
|
|||||||||||||||||||||||||||
Foreign currency translation
|
0
|
0
|
0
|
0
|
0
|
0
|
12,601
|
0
|
12,601
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(822,217
|
)
|
(822,217
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 1997
|
11,750,000
|
1,214,630
|
0
|
0
|
0
|
0
|
11,375
|
(1,167,060
|
)
|
58,945
|
||||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
|
825,396
|
650,000
|
0
|
0
|
0
|
0
|
0
|
0
|
650,000
|
|||||||||||||||||||||||||||
Share issue costs
|
0
|
(78,000
|
)
|
0
|
0
|
0
|
0
|
0
|
0
|
(78,000
|
)
|
|||||||||||||||||||||||||
Foreign currency translation
|
0
|
0
|
0
|
0
|
0
|
0
|
24,860
|
0
|
24,860
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(937,373
|
)
|
(937,373
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 1998
|
12,575,396
|
$
|
1,786,630
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
36,235
|
$
|
(2,104,433
|
)
|
$
|
(281,568
|
)
|
|
Shares of Common Stock Issued
|
Common Stock and Paid-in Capital in Excess of Par
|
Shares of Preferred Stock Issued
|
Preferred Stock and Paid-in Capital in Excess of Par
|
Promissory Notes Receivable
|
Share Subscriptions
|
Accumulated Other Comprehensive Income
|
Deficit Accumulated During the Development Stage
|
Total Stockholders' Equity (Deficit)
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 1998
|
12,575,396
|
$
|
1,786,630
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
36,235
|
$
|
(2,104,433
|
)
|
$
|
(281,568
|
)
|
||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Cash
|
200,000
|
50,000
|
0
|
0
|
0
|
0
|
0
|
0
|
50,000
|
|||||||||||||||||||||||||||
Exercise of stock options
|
445,000
|
80,500
|
0
|
0
|
0
|
0
|
0
|
0
|
80,500
|
|||||||||||||||||||||||||||
Promissory note
|
1,683,789
|
252,568
|
0
|
0
|
(284,068
|
)
|
0
|
0
|
0
|
(31,500
|
)
|
|||||||||||||||||||||||||
Settlement of lawsuit
|
150,000
|
15,000
|
0
|
0
|
0
|
0
|
0
|
0
|
15,000
|
|||||||||||||||||||||||||||
Services (provided by officers and directors)
|
666,666
|
100,000
|
0
|
0
|
0
|
0
|
0
|
0
|
100,000
|
|||||||||||||||||||||||||||
Share issue costs
|
0
|
(100,500
|
)
|
0
|
0
|
0
|
0
|
0
|
0
|
(100,500
|
)
|
|||||||||||||||||||||||||
Services
|
250,000
|
50,000
|
0
|
0
|
0
|
0
|
0
|
0
|
50,000
|
|||||||||||||||||||||||||||
Conversion of convertible debentures
|
3,869,120
|
525,813
|
0
|
0
|
0
|
0
|
0
|
0
|
525,813
|
|||||||||||||||||||||||||||
Acquisition of subsidiary
|
1,800,000
|
619,200
|
0
|
0
|
0
|
0
|
0
|
0
|
619,200
|
|||||||||||||||||||||||||||
Held in escrow
|
447,091
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Stock-based compensation
|
0
|
70,600
|
0
|
0
|
0
|
0
|
0
|
0
|
70,600
|
|||||||||||||||||||||||||||
Beneficial conversion feature
|
0
|
566,456
|
0
|
0
|
0
|
0
|
0
|
0
|
566,456
|
|||||||||||||||||||||||||||
Foreign currency translation
|
0
|
0
|
0
|
0
|
0
|
0
|
8,444
|
0
|
8,444
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1,404,021
|
)
|
(1,404,021
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance June 30, 1999
|
22,087,062
|
4,016,267
|
0
|
0
|
(284,068
|
)
|
0
|
44,679
|
(3,508,454
|
)
|
268,424
|
|||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Cash on private placement
|
2,650,000
|
3,975,000
|
0
|
0
|
0
|
0
|
0
|
0
|
3,975,000
|
|||||||||||||||||||||||||||
Exercise of options
|
1,245,000
|
256,700
|
0
|
0
|
0
|
0
|
0
|
0
|
256,700
|
|||||||||||||||||||||||||||
Services
|
50,000
|
13,000
|
0
|
0
|
0
|
0
|
0
|
0
|
13,000
|
|||||||||||||||||||||||||||
Settlement of debt
|
0
|
0
|
664,410
|
664,410
|
0
|
0
|
0
|
0
|
664,410
|
|||||||||||||||||||||||||||
Shares released from escrow
|
0
|
75,558
|
0
|
0
|
0
|
0
|
0
|
0
|
75,558
|
|||||||||||||||||||||||||||
Stock-based compensation
|
0
|
48,256
|
0
|
0
|
0
|
0
|
0
|
0
|
48,256
|
|||||||||||||||||||||||||||
Promissory note repayment
|
0
|
0
|
0
|
0
|
225,568
|
0
|
0
|
0
|
225,568
|
|||||||||||||||||||||||||||
Foreign currency translation
|
0
|
0
|
0
|
0
|
0
|
0
|
1,614
|
0
|
1,614
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1,537,402
|
)
|
(1,537,402
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2000
|
26,032,062
|
$
|
8,384,781
|
664,410
|
$
|
664,410
|
$
|
(58,500
|
)
|
$
|
0
|
$
|
46,293
|
$
|
(5,045,856
|
)
|
$
|
3,991,128
|
|
Shares of Common Stock Issued
|
Common Stock and Paid-in Capital in Excess of Par
|
Shares of Preferred Stock Issued
|
Preferred Stock and Paid-in Capital in Excess of Par
|
Promissory Notes Receivable
|
Share Subscriptions
|
Accumulated Other Comprehensive Income
|
Deficit Accumulated During the Development Stage
|
Total Stockholders' Equity (Deficit)
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2000
|
26,032,062
|
$
|
8,384,781
|
664,410
|
$
|
664,410
|
$
|
(58,500
|
)
|
$
|
0
|
$
|
46,293
|
$
|
(5,045,856
|
)
|
$
|
3,991,128
|
||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Cash on private placement
|
81,885
|
112,480
|
0
|
0
|
0
|
0
|
0
|
0
|
112,480
|
|||||||||||||||||||||||||||
Exercise of options
|
517,000
|
91,515
|
0
|
0
|
0
|
0
|
0
|
0
|
91,515
|
|||||||||||||||||||||||||||
Services
|
100,000
|
40,000
|
0
|
0
|
0
|
0
|
0
|
0
|
40,000
|
|||||||||||||||||||||||||||
Held in escrow
|
218,115
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Stock-based compensation
|
0
|
272,207
|
0
|
0
|
0
|
0
|
0
|
0
|
272,207
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(30,720
|
)
|
(30,720
|
)
|
|||||||||||||||||||||||||
Share subscriptions
|
0
|
0
|
0
|
0
|
0
|
50,000
|
0
|
0
|
50,000
|
|||||||||||||||||||||||||||
Redemption of preferred stock
|
0
|
0
|
(100,000
|
)
|
(100,000
|
)
|
0
|
0
|
0
|
(100,000
|
)
|
(200,000
|
)
|
|||||||||||||||||||||||
Foreign currency translation
|
0
|
0
|
0
|
0
|
0
|
0
|
(26
|
)
|
0
|
(26
|
)
|
|||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(4,000,169
|
)
|
(4,000,169
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2001
|
26,949,062
|
8,900,983
|
564,410
|
564,410
|
(58,500
|
)
|
50,000
|
46,267
|
(9,176,745
|
)
|
326,415
|
|||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Proprietary non-competition agreement
|
450,000
|
711,000
|
0
|
0
|
0
|
0
|
0
|
0
|
711,000
|
|||||||||||||||||||||||||||
Held in escrow
|
700,000
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Exercise of options
|
2,263,500
|
971,200
|
0
|
0
|
(15,000
|
)
|
(10,000
|
)
|
0
|
0
|
946,200
|
|||||||||||||||||||||||||
Exercise of warrants
|
325,000
|
130,000
|
0
|
0
|
0
|
0
|
0
|
0
|
130,000
|
|||||||||||||||||||||||||||
Subscriptions
|
100,000
|
40,000
|
0
|
0
|
0
|
(40,000
|
)
|
0
|
0
|
0
|
||||||||||||||||||||||||||
Stock-based compensation
|
0
|
415,685
|
0
|
0
|
0
|
0
|
0
|
0
|
415,685
|
|||||||||||||||||||||||||||
Shares released from escrow
|
0
|
954,582
|
0
|
0
|
0
|
0
|
0
|
0
|
954,582
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(26,087
|
)
|
(26,087
|
)
|
|||||||||||||||||||||||||
Redemption of preferred stock
|
0
|
0
|
(124,800
|
)
|
(124,800
|
)
|
0
|
0
|
0
|
(187,200
|
)
|
(312,000
|
)
|
|||||||||||||||||||||||
Write-off of promissory note receivable
|
0
|
(7,000
|
)
|
0
|
0
|
7,000
|
0
|
0
|
0
|
0
|
||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(3,836,191
|
)
|
(3,836,191
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2002
|
30,787,562
|
$
|
12,116,450
|
439,610
|
$
|
439,610
|
$
|
(66,500
|
)
|
$
|
0
|
$
|
46,267
|
$
|
(13,226,223
|
)
|
$
|
(690,396
|
)
|
|
Shares of Common Stock Issued
|
Common Stock and Paid-in Capital in Excess of Par
|
Shares of Preferred Stock Issued
|
Preferred Stock and Paid-in Capital in Excess of Par
|
Promissory Notes Receivable
|
Share Subscriptions
|
Accumulated Other Comprehensive Income
|
Deficit Accumulated During the Development Stage
|
Total Stockholders' Equity (Deficit)
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2002
|
30,787,562
|
$
|
12,116,450
|
439,610
|
$
|
439,610
|
$
|
(66,500
|
)
|
$
|
0
|
$
|
46,267
|
$
|
(13,226,223
|
)
|
$
|
(690,396
|
)
|
|||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Cash on private placement
|
1,684,000
|
842,050
|
0
|
0
|
0
|
0
|
0
|
0
|
842,050
|
|||||||||||||||||||||||||||
Settlement of debt
|
144,793
|
104,542
|
0
|
0
|
0
|
0
|
0
|
0
|
104,542
|
|||||||||||||||||||||||||||
Services
|
200,000
|
196,000
|
0
|
0
|
0
|
0
|
0
|
0
|
196,000
|
|||||||||||||||||||||||||||
Exercise of options
|
52,500
|
43,750
|
0
|
0
|
0
|
0
|
0
|
0
|
43,750
|
|||||||||||||||||||||||||||
Exercise of warrants
|
55,000
|
27,500
|
0
|
0
|
0
|
0
|
0
|
0
|
27,500
|
|||||||||||||||||||||||||||
Subscription received
|
0
|
0
|
0
|
0
|
0
|
176,665
|
0
|
0
|
176,665
|
|||||||||||||||||||||||||||
Stock-based compensation
|
0
|
5,460
|
0
|
0
|
0
|
0
|
0
|
0
|
5,460
|
|||||||||||||||||||||||||||
Settlement of lawsuit
|
0
|
0
|
0
|
0
|
0
|
35,250
|
0
|
0
|
35,250
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(22,060
|
)
|
(22,060
|
)
|
|||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1,346,833
|
)
|
(1,346,833
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2003
|
32,923,855
|
13,335,752
|
439,610
|
439,610
|
(66,500
|
)
|
211,915
|
46,267
|
(14,595,116
|
)
|
(628,072
|
)
|
||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Cash on private placement
|
6,609,336
|
6,042,935
|
0
|
0
|
0
|
(211,915
|
)
|
0
|
0
|
5,831,020
|
||||||||||||||||||||||||||
Cash on exercise of options
|
25,000
|
25,000
|
0
|
0
|
0
|
0
|
0
|
0
|
25,000
|
|||||||||||||||||||||||||||
Settlement of lawsuit
|
37,500
|
35,250
|
0
|
0
|
0
|
0
|
0
|
0
|
35,250
|
|||||||||||||||||||||||||||
Services
|
25,000
|
21,873
|
0
|
0
|
0
|
0
|
0
|
0
|
21,873
|
|||||||||||||||||||||||||||
Redemption of preferred stock
|
415,000
|
415,000
|
(118,572
|
)
|
(118,572
|
)
|
0
|
0
|
0
|
(296,428
|
)
|
0
|
||||||||||||||||||||||||
Exercise of warrants
|
288,298
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Shares returned to treasury for cancellation
|
(142,140
|
)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||||||||||||
Stock-based compensation
|
0
|
321,275
|
0
|
0
|
0
|
0
|
0
|
0
|
321,275
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(19,016
|
)
|
(19,016
|
)
|
|||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(2,543,848
|
)
|
(2,543,848
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2004
|
40,181,849
|
$
|
20,197,085
|
321,038
|
$
|
321,038
|
$
|
(66,500
|
)
|
$
|
0
|
$
|
46,267
|
$
|
(17,454,408
|
)
|
$
|
3,043,482
|
|
Shares of Common Stock Issued
|
Common Stock and Paid-in Capital in Excess of Par
|
Shares of Preferred Stock Issued
|
Preferred Stock and Paid-in Capital in Excess of Par
|
Promissory Notes Receivable
|
Share Subscriptions
|
Accumulated Other Comprehensive Income
|
Deficit Accumulated During the Development Stage
|
Total Stockholders' Equity (Deficit)
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2004
|
40,181,849
|
$
|
20,197,085
|
321,038
|
$
|
321,038
|
$
|
(66,500
|
)
|
$
|
0
|
$
|
46,267
|
$
|
(17,454,408
|
)
|
$
|
3,043,482
|
||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Settlement of debt
|
44,000
|
55,000
|
0
|
0
|
0
|
0
|
0
|
0
|
55,000
|
|||||||||||||||||||||||||||
Cashless exercise of warrants
|
1,713,300
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Services
|
500,000
|
270,000
|
0
|
0
|
0
|
0
|
0
|
0
|
270,000
|
|||||||||||||||||||||||||||
Redemption of preferred stock
|
0
|
0
|
(12,500
|
)
|
(12,500
|
)
|
0
|
0
|
0
|
(37,500
|
)
|
(50,000
|
)
|
|||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,739
|
)
|
(15,739
|
)
|
|||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1,812,265
|
)
|
(1,812,265
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2005
|
42,439,149
|
20,522,085
|
308,538
|
308,538
|
(66,500
|
)
|
0
|
46,267
|
(19,319,912
|
)
|
1,490,478
|
|||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Exercise of options
|
200,000
|
134,000
|
0
|
0
|
0
|
0
|
0
|
0
|
134,000
|
|||||||||||||||||||||||||||
Cashless exercise of warrants
|
35,115
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||||
Services
|
269,000
|
191,510
|
0
|
0
|
0
|
0
|
0
|
0
|
191,510
|
|||||||||||||||||||||||||||
Exercise of warrants
|
1,291,168
|
1,080,669
|
0
|
0
|
0
|
0
|
0
|
0
|
1,080,669
|
|||||||||||||||||||||||||||
Repayment of promissory note
|
0
|
0
|
0
|
0
|
34,000
|
0
|
0
|
0
|
34,000
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,427
|
)
|
(15,427
|
)
|
|||||||||||||||||||||||||
Stock-based compensation
|
0
|
107,219
|
0
|
0
|
0
|
0
|
0
|
0
|
107,219
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(2,104,189
|
)
|
(2,104,189
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2006
|
44,234,432
|
22,035,483
|
308,538
|
308,538
|
(32,500
|
)
|
0
|
46,267
|
(21,439,528
|
)
|
918,260
|
|||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Exercise of options
|
50,000
|
35,000
|
0
|
0
|
0
|
0
|
0
|
0
|
35,000
|
|||||||||||||||||||||||||||
Services
|
50,000
|
105,000
|
0
|
0
|
0
|
0
|
0
|
0
|
105,000
|
|||||||||||||||||||||||||||
Private placement
|
1,180,537
|
2,361,641
|
0
|
0
|
0
|
0
|
0
|
0
|
2,361,641
|
|||||||||||||||||||||||||||
Repayment of promissory note
|
0
|
0
|
0
|
0
|
2,763
|
0
|
0
|
0
|
2,763
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,427
|
)
|
(15,427
|
)
|
|||||||||||||||||||||||||
Stock-based compensation
|
0
|
4,225,648
|
0
|
0
|
0
|
0
|
0
|
0
|
4,225,648
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(5,985,850
|
)
|
(5,985,850
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2007
|
45,514,969
|
$
|
28,762,772
|
308,538
|
$
|
308,538
|
$
|
(29,737
|
)
|
$
|
0
|
$
|
46,267
|
$
|
(27,440,805
|
)
|
$
|
1,647,035
|
|
Shares of Common Stock Issued
|
Common Stock and Paid-in Capital in Excess of Par
|
Shares of Preferred Stock Issued
|
Preferred Stock and Paid-in Capital in Excess of Par
|
Promissory Notes Receivable
|
Share Subscriptions
|
Accumulated Other Comprehensive Income
|
Deficit Accumulated During the Development Stage
|
Total Stockholders' Equity (Deficit)
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2007
|
45,514,969
|
$
|
28,762,772
|
308,538
|
$
|
308,538
|
$
|
(29,737
|
)
|
$
|
0
|
$
|
46,267
|
$
|
(27,440,805
|
)
|
$
|
1,647,035
|
||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Exercise of warrants
|
190,000
|
208,995
|
0
|
0
|
0
|
0
|
0
|
0
|
208,995
|
|||||||||||||||||||||||||||
Subscriptions received
|
0
|
0
|
0
|
0
|
0
|
276,500
|
0
|
0
|
276,500
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,427
|
)
|
(15,427
|
)
|
|||||||||||||||||||||||||
Stock-based compensation
|
0
|
247,944
|
0
|
0
|
0
|
0
|
0
|
0
|
247,944
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1,938,216
|
)
|
(1,938,216
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2008
|
45,704,969
|
29,219,711
|
308,538
|
308,538
|
(29,737
|
)
|
276,500
|
46,267
|
(29,394,448
|
)
|
426,831
|
|||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Services
|
100,000
|
60,500
|
0
|
0
|
0
|
(46,500
|
)
|
0
|
0
|
14,000
|
||||||||||||||||||||||||||
Private placement
|
4,500,800
|
1,125,200
|
0
|
0
|
0
|
(230,000
|
)
|
0
|
0
|
895,200
|
||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,427
|
)
|
(15,427
|
)
|
|||||||||||||||||||||||||
Stock-based compensation
|
0
|
119,064
|
0
|
0
|
0
|
0
|
0
|
0
|
119,064
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1,554,876
|
)
|
(1,554,876
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2009
|
50,305,769
|
30,524,475
|
308,538
|
308,538
|
(29,737
|
)
|
0
|
46,267
|
(30,964,751
|
)
|
(115,208
|
)
|
||||||||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Services
|
270,000
|
81,000
|
0
|
0
|
0
|
0
|
0
|
0
|
81,000
|
|||||||||||||||||||||||||||
Cash
|
4,263,152
|
1,393,637
|
0
|
0
|
0
|
0
|
0
|
0
|
1,393,637
|
|||||||||||||||||||||||||||
Subscriptions received
|
0
|
0
|
0
|
0
|
0
|
11,250
|
0
|
0
|
11,250
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,462
|
)
|
(15,462
|
)
|
|||||||||||||||||||||||||
Stock-based compensation
|
0
|
1,225,151
|
0
|
0
|
0
|
0
|
0
|
0
|
1,225,151
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(2,929,737
|
)
|
(2,929,737
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2010
|
54,838,921
|
$
|
33,224,263
|
308,538
|
$
|
308,538
|
$
|
(29,737
|
)
|
$
|
11,250
|
$
|
46,267
|
$
|
(33,909,950
|
)
|
$
|
(349,369
|
)
|
|
Shares of Common Stock Issued
|
Common Stock and Paid-in Capital in Excess of Par
|
Shares of Preferred Stock Issued
|
Preferred Stock and Paid-in Capital in Excess of Par
|
Promissory Notes Receivable
|
Share Subscriptions
|
Accumulated Other Comprehensive Income
|
Deficit Accumulated During the Development Stage
|
Total Stockholders' Equity (Deficit)
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2010
|
54,838,921
|
$
|
33,224,263
|
308,538
|
$
|
308,538
|
(29,737
|
)
|
$
|
11,250
|
$
|
46,267
|
$
|
(33,909,950
|
)
|
$
|
(349,369
|
)
|
||||||||||||||||||
Shares Issued for
|
||||||||||||||||||||||||||||||||||||
Services
|
446,118
|
619,284
|
0
|
0
|
0
|
0
|
0
|
0
|
619,284
|
|||||||||||||||||||||||||||
Cash
|
1,820,042
|
1,101,720
|
0
|
0
|
0
|
(11,250
|
)
|
0
|
0
|
1,090,470
|
||||||||||||||||||||||||||
Share issue costs
|
330,879
|
(122,497
|
)
|
0
|
0
|
0
|
0
|
0
|
0
|
(122,497
|
)
|
|||||||||||||||||||||||||
Warrants exercised
|
860,800
|
430,400
|
0
|
0
|
0
|
0
|
0
|
0
|
430,400
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,460
|
)
|
(15,460
|
)
|
|||||||||||||||||||||||||
Warrant extension
|
||||||||||||||||||||||||||||||||||||
Deemed dividend
|
0
|
131,577
|
0
|
0
|
0
|
0
|
0
|
(131,577
|
)
|
0
|
||||||||||||||||||||||||||
Stock-based compensation
|
0
|
474,075
|
0
|
0
|
0
|
0
|
0
|
0
|
474,075
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(2,841,285
|
)
|
(2,841,285
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2011
|
58,296,760
|
35,858,822
|
308,538
|
308,538
|
(29,737
|
)
|
0
|
46,267
|
(36,898,272
|
)
|
(714,382
|
)
|
||||||||||||||||||||||||
Shares issued for
|
||||||||||||||||||||||||||||||||||||
Services
|
77,755
|
34,954
|
0
|
0
|
0
|
0
|
0
|
0
|
34,954
|
|||||||||||||||||||||||||||
Cash
|
3,364,980
|
1,147,915
|
0
|
0
|
0
|
0
|
0
|
0
|
1,147,915
|
|||||||||||||||||||||||||||
Settlement of convertible debenture
|
629,158
|
236,926
|
0
|
0
|
0
|
0
|
0
|
0
|
236,926
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,460
|
)
|
(15,460
|
)
|
|||||||||||||||||||||||||
Subscriptions received
|
0
|
0
|
0
|
0
|
0
|
191,600
|
0
|
0
|
191,600
|
|||||||||||||||||||||||||||
Stock-based compensation
|
0
|
376,698
|
0
|
0
|
0
|
0
|
0
|
0
|
376,698
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(3,400,434
|
)
|
(3,400,434
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2012
|
62,368,653
|
$
|
37,655,315
|
308,538
|
$
|
308,538
|
$
|
(29,737
|
)
|
$
|
191,600
|
$
|
46,267
|
$
|
(40,314,166
|
)
|
$
|
(2,142,183
|
)
|
|
Shares of Common Stock Issued
|
Common Stock and Paid-in Capital in Excess of Par
|
Shares of Preferred Stock Issued
|
Preferred Stock and Paid-in Capital in Excess of Par
|
Promissory Notes Receivable
|
Share Subscriptions
|
Accumulated Other Comprehensive Income
|
Deficit Accumulated During the Development Stage
|
Total Stockholders' Equity (Deficit)
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2012
|
62,368,653
|
$
|
37,655,315
|
308,538
|
$
|
308,538
|
$
|
(29,737
|
)
|
$
|
191,600
|
$
|
46,267
|
$
|
(40,314,166
|
)
|
$
|
(2,142,183
|
)
|
|||||||||||||||||
Shares issued for (note 4(a))
|
||||||||||||||||||||||||||||||||||||
Services
|
2,247,500
|
974,125
|
0
|
0
|
0
|
0
|
0
|
0
|
974,125
|
|||||||||||||||||||||||||||
Cash, net
|
11,202,304
|
2,191,360
|
0
|
0
|
0
|
(191,600
|
)
|
0
|
0
|
1,999,760
|
||||||||||||||||||||||||||
Settlement of convertible debenture
|
930,382
|
252,456
|
0
|
0
|
0
|
0
|
0
|
0
|
252,456
|
|||||||||||||||||||||||||||
Dividends on preferred stock
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(15,460
|
)
|
(15,460
|
)
|
|||||||||||||||||||||||||
Redeemable preferred stock (note 15)
|
0
|
0
|
0
|
(70,588
|
)
|
0
|
0
|
0
|
(229,412
|
)
|
(300,000
|
)
|
||||||||||||||||||||||||
Gain on extinguishment of debt (note 15)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
228,897
|
228,897
|
|||||||||||||||||||||||||||
Subscriptions received
|
0
|
0
|
0
|
0
|
0
|
13,400
|
0
|
0
|
13,400
|
|||||||||||||||||||||||||||
Stock-based compensation (note 4(c))
|
0
|
131,679
|
0
|
0
|
0
|
0
|
0
|
0
|
131,679
|
|||||||||||||||||||||||||||
Net loss for year
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(3,749,790
|
)
|
(3,749,790
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, June 30, 2013
|
76,748,839
|
$
|
41,204,935
|
308,538
|
$
|
237,950
|
$
|
(29,737
|
)
|
$
|
13,400
|
$
|
46,267
|
$
|
(44,079,931
|
)
|
$
|
(2,607,116
|
)
|
|
Period from February 12, 1996 (Inception)
|
|||||||||||||||
|
Years Ended June 30,
|
Through
|
||||||||||||||
|
2013
|
2012
|
2011
|
June 30, 2013
|
||||||||||||
Operating Activities
|
||||||||||||||||
Net loss
|
$
|
(3,749,790
|
)
|
$
|
(3,400,434
|
)
|
$
|
(2,841,285
|
)
|
$
|
(43,089,539
|
)
|
||||
Adjustments to reconcile net loss to net cash used in operating activities
|
||||||||||||||||
Write-down of investment
|
0
|
0
|
0
|
1,250,000
|
||||||||||||
Other income
|
0
|
0
|
0
|
(658,305
|
)
|
|||||||||||
Proprietary, non-competition agreement
|
0
|
0
|
0
|
711,000
|
||||||||||||
Consulting services and financing fees
|
974,125
|
34,954
|
481,803
|
3,109,665
|
||||||||||||
Depreciation and amortization
|
0
|
0
|
0
|
349,941
|
||||||||||||
Stock-based compensation
|
131,679
|
376,698
|
474,075
|
8,040,961
|
||||||||||||
Interest on derivative financial liability
|
112,328
|
55,174
|
0
|
167,502
|
||||||||||||
Fair value loss on derivative financial liabilities
|
320,537
|
89,326
|
0
|
409,863
|
||||||||||||
Net gain on settlement of convertible debenture
|
(26,189
|
)
|
0
|
0
|
(26,189
|
)
|
||||||||||
Gain on extinguishment of debt
|
(355,022
|
)
|
0
|
0
|
(355,022
|
)
|
||||||||||
Loss on extinguishment of debt
|
109,000
|
0
|
0
|
109,000
|
||||||||||||
Interest on beneficial conversion feature
|
0
|
0
|
0
|
566,456
|
||||||||||||
Settlement of lawsuit
|
0
|
0
|
0
|
60,250
|
||||||||||||
Write-down of license and operating assets
|
0
|
0
|
0
|
1,853,542
|
||||||||||||
Bad debt
|
0
|
0
|
0
|
77,712
|
||||||||||||
Changes in non-cash working capital (note 9)
|
697,368
|
1,345,075
|
113,402
|
2,822,896
|
||||||||||||
Net Cash Used in Operating Activities
|
(1,785,964
|
)
|
(1,499,207
|
)
|
(1,772,005
|
)
|
(24,600,267
|
)
|
||||||||
Investing Activities
|
||||||||||||||||
Purchase of property, equipment and intangible assets
|
0
|
0
|
0
|
(200,935
|
)
|
|||||||||||
Assets acquired and liabilities assumed on purchase of subsidiary
|
0
|
0
|
0
|
(129,474
|
)
|
|||||||||||
Investment in and advances to affiliated companies
|
0
|
0
|
0
|
(2,000,000
|
)
|
|||||||||||
License agreements
|
0
|
0
|
0
|
(124,835
|
)
|
|||||||||||
Net Cash Used in Investing Activities
|
0
|
0
|
0
|
(2,455,244
|
)
|
|||||||||||
Financing Activities
|
||||||||||||||||
Redemption of preferred stock
|
0
|
0
|
0
|
(50,000
|
)
|
|||||||||||
Repayment of loan
|
0
|
0
|
0
|
(11,000
|
)
|
|||||||||||
Repayment of promissory note
|
(123,696
|
)
|
(123,696
|
)
|
||||||||||||
Advances from stockholders
|
0
|
0
|
0
|
1,078,284
|
||||||||||||
Repayments to stockholders
|
0
|
0
|
0
|
(91,283
|
)
|
|||||||||||
Subscriptions received
|
13,400
|
191,600
|
0
|
719,415
|
||||||||||||
Proceeds from issuance of common stock
|
2,199,670
|
1,163,590
|
1,520,870
|
25,522,688
|
||||||||||||
Proceeds from convertible debentures
|
377,500
|
270,500
|
0
|
1,248,000
|
||||||||||||
Repayment of convertible debentures
|
(120,865
|
)
|
0
|
0
|
(120,865
|
)
|
||||||||||
Share issue costs
|
(199,910
|
)
|
(15,675
|
)
|
(37,735
|
)
|
(629,991
|
)
|
||||||||
Net Cash Provided by Financing Activities
|
2,146,099
|
1,610,015
|
1,483,135
|
27,541,552
|
||||||||||||
Effect of Foreign Currency Translation on Cash
|
0
|
0
|
0
|
46,267
|
||||||||||||
Inflow (Outflow) of Cash
|
360,135
|
110,808
|
(288,870
|
)
|
532,308
|
|||||||||||
Cash, Beginning of Period
|
172,173
|
61,365
|
350,235
|
0
|
||||||||||||
Cash, End of Period
|
$
|
532,308
|
$
|
172,173
|
$
|
61,365
|
$
|
532,308
|
1. | INCORPORATION AND NATURE OF OPERATIONS |
2. | GOING CONCERN |
3. | SIGNIFICANT ACCOUNTING POLICIES |
(a) | Principles of consolidation |
(b) | Loss per share |
(c) | Stock issued in exchange for services |
(d) | Revenue recognition |
(e) | Foreign currency translation |
(f) | Research and development |
3. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
(g) | Use of estimates |
(h) | Financial instruments |
(i) | Compound financial instruments |
(j) | Fair value measurements |
3. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
(j) | Fair value measurements (Continued) |
· | Level 1 – Quoted prices in active markets for identical securities; |
· | Level 2 – Other significant observable inputs that are observable through corroboration with market data (including quoted prices in active markets for similar securities); and |
· | Level 3 – Significant unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability. |
(k) | Income taxes |
(l) | Stock-based compensation |
3. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
(m) | Recently adopted accounting pronouncements |
(i) | The Financial Accounting Standards Board (“FASB”) has issued ASU No. 2011-12 Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU No. 2011-05. The amendments to the Codification in ASU No. 2011-12 are effective at the same time as the amendments in ASU No. 2011-05 Comprehensive Income (Topic 220): Presentation of Comprehensive Income so that entities will not be required to comply with the presentation requirements in ASU No. 2011-05 that ASU No. 2011-12 is deferring. |
(ii) | The FASB has issued ASU No. 2011-05 Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This ASU amends the FASB Codification to allow an entity the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity (deficit). The amendments to the Codification in the ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. |
3. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
(m) | Recently adopted accounting pronouncements (Continued) |
(iii) | The FASB has issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRS. This ASU represents the converged guidance of the Boards on fair value measurement. The collective efforts of the Boards and their staff, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value”. The Boards have concluded the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with US GAAP and IFRS. |
(n) | Recent accounting pronouncements not yet adopted |
(i) | The FASB has issued ASU No. 2013-01 Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. ASU 2013-01 clarifies that ordinary trade receivables and receivables are not in the scope of ASU No. 2011-11 Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. Specifically, ASU 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the FASB Codification or subject to a master netting arrangement or similar agreement. |
3. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
(n) | Recent accounting pronouncements not yet adopted (Continued) |
(ii) | The FASB has issued ASU No. 2011-11 Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The eligibility criteria for offsetting are different in International Financial Reporting Standards (“IFRS”) and US GAAP. Offsetting, otherwise known as netting, is the presentation of assets and liabilities as a single net amount in the balance sheet. Unlike IFRS, US GAAP allows companies the option to present net in their balance sheet derivatives that are subject to a legally enforceable netting arrangement with the same party where rights of set-off are only available in the event of default or bankruptcy. |
(iii) | The FASB has issued ASU No. 2012-04 Technical Corrections and Improvements. In November 2010, the FASB Chairman added a standing project to the FASB’s agenda to address feedback received from stakeholders on the Codification and to make other incremental improvements to US GAAP. This perpetual project will facilitate Codification updates for technical corrections, clarifications, and improvements, and should eliminate the need for periodic agenda requests for narrow and incremental items. These amendments are referred to as Technical Corrections and Improvements. |
3. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
(n) | Recent accounting pronouncements not yet adopted (Continued) |
(iii) | (Continued) |
4. | STOCKHOLDERS' EQUITY (DEFICIT) |
(a) | Common stock |
(i) | During the year ended June 30, 2011, the Company: |
(a) | Closed a private placement of 1,006,979 units consisting of one share of common stock at $0.65 and one-half warrant at $0.001. Each whole warrant entitles the holder to purchase one share of common stock on or before December 31, 2012 at an exercise price of $1.00. Exercise of all the investment warrants may be required in the event that the market price for the common stock exceeds $1.50 per share. |
(b) | Closed a private placement of 813,063 units consisting of one share of common stock at $0.55 and one warrant at $0.001. Each warrant entitles the holder to purchase one share of common stock on or before February 28, 2013, at an exercise price of $1.00. Exercise of all the investment warrants may be required in the event that the market price for the common stock exceeds $1.50 per share. |
(c) | Issued 330,879 shares of restricted common stock and paid cash of $37,735, as consideration for share issue costs. The shares have been recorded at an aggregate fair value of $137,481. |
(d) | Issued 860,800 shares of common stock upon exercise of 860,800 share purchase warrants at $0.50 per warrant, recording gross proceeds of $430,400. |
(ii) | During the year ended June 30, 2011, the Company entered into contracts for consulting services, which call for stock and option awards over the terms of the contracts (note 17). |
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(a) | Common stock (Continued) |
(ii) | (Continued) |
(a) | The Company issued 50,000 shares of restricted common stock on execution of the agreement dated November 19, 2010, 75,000 shares of restricted common stock thirty days from the execution date and 125,000 shares of restricted common stock ninety days from the execution date. On the six- and nine-month anniversaries, 125,000 shares of restricted common stock are to be issued for a total of 500,000 shares of restricted common stock. Restrictions will be removed upon contract completion. |
(b) | The Company issued 150,000 shares of common stock on execution of the agreement dated December 1, 2010. On the six-month anniversary, 100,000 shares of common stock are to be issued. |
(c) | The Company issued 46,118 shares of common stock and a fair value of $82,500 has been recorded and included as consulting fees. |
(iii) | During the year ended June 30, 2012, the Company completed five private placements. |
(a) | The first private placement amounted to $23,000 for the issuance of 41,819 units consisting of common stock at $0.55 per share and warrants at $0.001 per warrant to purchase 41,819 shares of common stock on or before December 31, 2013 at an exercise price of $1.00 per share. |
(b) | The second private placement amounted to $179,000 for the issuance of 511,428 units consisting of common stock at $0.35 per share and warrants at $0.001 per warrant to purchase 511,428 shares of common stock on or before November 29, 2016 at an exercise price of $0.70 per share. |
(c) | The third private placement amounted to $200,000 for the issuance of 571,128 units consisting of common stock at $0.35 per share and warrants at $0.001 per warrant to purchase 856,692 shares of common stock on or before January 3, 2014 at an exercise price of $0.70 per share. |
(d) | The fourth private placement amounted to $200,000 for the issuance of 666,666 units consisting of common stock at $0.30 per share and warrants at $0.001 per warrant to purchase 1,000,000 shares of common stock on or before March 31, 2014 at an exercise price of $0.57 per share. |
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(a) | Common stock (Continued) |
(iii) | (Continued) |
(e) | The fifth private placement amounted to $550,774 for the issuance of 1,573,939 units consisting of common stock at $0.35 per share and warrants at $0.001 per warrant to purchase 2,360,459 shares of common stock on or before January 31, 2014 at an exercise price of $0.70 per share. Share issue costs of $12,875 were incurred. |
(iv) | During the year ended June 30, 2013, the Company completed nine private placements. |
(a) | The first private placement amounted to $186,600, for the issuance of 533,140 units consisting of common stock at $0.35 per share and warrants at $0.001 per warrant to purchase 799,708 shares of common stock on or before August 31, 2014 at an exercise price of $0.70 per share. |
(b) | The second private placement amounted to $422,297, for the issuance of 1,398,333 units consisting of common stock at $0.30 per share and warrants at $0.001 per warrant to purchase 2,796,666 shares of common stock on or before August 31, 2014 at an exercise price of $0.60 per share. |
(c) | The third private placement amounted to $143,769, for the issuance of 363,296 units consisting of common stock at $0.30 per share and 100,000 units consisting of common stock at $0.35 and warrants at $0.001 per warrant to purchase 926,604 shares of common stock on or before September 30, 2014 at an exercise price of $0.50 per share. |
(d) | The fourth private placement amounted to $5,000, for the issuance of 14,285 units consisting of common stock at $0.35 per share and warrants at $0.001 per warrant to purchase 21,421 shares of common stock on or before February 28, 2014 at an exercise price of $0.70 per share. |
(e) | The fifth private placement amounted to $414,954, for the issuance of 2,075,000 units consisting of common stock at $0.20 per share and warrants at $0.001 per warrant to purchase 4,150,000 shares of common stock on or before January 31, 2015 at an exercise price of $0.50 per share. |
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(a) | Common stock (Continued) |
(iv) | (Continued) |
(f) | The sixth private placement amounted to $598,650, for the issuance of 2,368,250 units consisting of common stock at $0.20 per share and 1,250,000 units consisting of common stock at $0.10 and warrants at $0.001 per warrant to purchase 4,736,500 shares of common stock on or before February 28, 2015 at an exercise price of $0.50 per share. |
(g) | The seventh private placement amounted to $20,000, for the issuance of 100,000 units consisting of common stock at $0.20 per share and warrants at $0.001 per warrant to purchase 200,000 shares of common stock on or before February 28, 2015 at an exercise price of $0.50 per share. |
(h) | The eighth private placement amounted to $115,000, for the issuance of 575,000 units consisting of common stock at $0.20 per share and warrants at $0.001 per warrant to purchase 1,150,000 shares of common stock on or before May 25, 2015 at an exercise price of $0.50 per share. |
(i) | The ninth private placement amounted to $485,000, for the issuance of 2,425,000 units consisting of common stock at $0.20 per share and warrants at $0.001 per warrant to purchase 4,850,000 shares of common stock on or before May 25, 2015 at an exercise price of $0.50 per share. |
(b) | Preferred stock |
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(b) | Preferred stock (Continued) |
(c) | Stock options and stock-based compensation |
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(c) | Stock options and stock-based compensation (Continued) |
|
2013
|
2012
|
2011
|
|||||||||
|
||||||||||||
Expected life (years)
|
3.17
|
3.48
|
4.33
|
|||||||||
Interest rate
|
1.09
|
%
|
1.03
|
%
|
1.27
|
%
|
||||||
Volatility
|
78.50
|
%
|
102.31
|
%
|
96.27
|
%
|
||||||
Dividend yield
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
||||||
Estimated forfeitures
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(c) | Stock options and stock-based compensation (Continued) |
|
Number of Options
|
Price Per Option
|
Weighted Average Exercise Price
|
|||||||||
|
||||||||||||
Outstanding, June 30, 2010
|
4,125,000
|
$
|
0.25 to $ 1.00
|
$
|
0.36
|
|||||||
Granted
|
2,375,000
|
$
|
0.25 to $ 0.85
|
$
|
0.58
|
|||||||
|
||||||||||||
Outstanding, June 30, 2011 and 2012
|
6,500,000
|
$
|
0.25 to $ 1.00
|
$
|
0.44
|
|||||||
Cancelled
|
(600,000
|
)
|
$
|
0.50
|
$
|
0.50
|
||||||
|
||||||||||||
Outstanding, June 30, 2013
|
5,900,000
|
$
|
0.25 to $ 1.00
|
$
|
0.43
|
|||||||
Exercisable, June 30, 2013
|
5,450,000
|
$
|
0.25 to $ 1.00
|
$
|
0.42
|
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(c) | Stock options and stock-based compensation (Continued) |
|
Exercise
|
Number of Options
|
||||||||||
Expiry Date
|
Price
|
2013
|
2012
|
|||||||||
|
||||||||||||
December 31, 2013(1)
|
$
|
0.25
|
2,500,000
|
2,500,000
|
||||||||
December 31, 2013
|
$
|
1.00
|
210,000
|
210,000
|
||||||||
March 9, 2014
|
$
|
0.25
|
125,000
|
125,000
|
||||||||
June 1, 2014
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
October 15, 2014
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
July 31, 2014
|
$
|
1.00
|
415,000
|
415,000
|
||||||||
December 1, 2014
|
$
|
0.50
|
75,000
|
175,000
|
||||||||
December 1, 2014
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
December 31, 2014
|
$
|
0.25
|
1,000,000
|
1,000,000
|
||||||||
April 15, 2015
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
June 1, 2015
|
$
|
0.50
|
75,000
|
175,000
|
||||||||
June 1, 2015
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
October 15, 2015
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
December 1, 2015
|
$
|
0.50
|
75,000
|
175,000
|
||||||||
December 1, 2015
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
April 15, 2016
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
June 1, 2016
|
$
|
0.50
|
75,000
|
175,000
|
||||||||
June 1, 2016
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
October 15, 2016
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
December 1, 2016
|
$
|
0.50
|
75,000
|
175,000
|
||||||||
December 1, 2016
|
$
|
0.85
|
100,000
|
100,000
|
||||||||
April 15, 2017
|
$
|
0.50
|
100,000
|
100,000
|
||||||||
June 1, 2017
|
$
|
0.50
|
75,000
|
175,000
|
||||||||
|
||||||||||||
Total outstanding
|
5,900,000
|
6,500,000
|
||||||||||
Total exercisable
|
5,450,000
|
3,950,000
|
(1) | During the year June 30, 2013, the expiry date of these options was extended from December 31, 2012 to December 31, 2013. |
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(c) | Stock options and stock-based compensation (Continued) |
(d) | Stock purchase warrants |
|
Number of Warrants
|
Exercise Price Per Warrant
|
Weighted Average Exercise Price
|
|||||||||
|
||||||||||||
Balance, June 30, 2010
|
8,763,952
|
$
|
0.60
|
|||||||||
Issued
|
1,316,553
|
$
|
1.00
|
$
|
1.00
|
|||||||
Exercised
|
(860,800
|
)
|
$
|
0.50
|
$
|
0.50
|
||||||
Expired
|
(2,970,000
|
)
|
$
|
0.50
|
$
|
0.50
|
||||||
Balance, June 30, 2011
|
6,249,705
|
$
|
0.74
|
|||||||||
Issued
|
4,770,398
|
$
|
0.57 to $1.00
|
$
|
0.68
|
|||||||
Reinstated
|
3,040,000
|
$
|
0.50
|
$
|
0.50
|
|||||||
|
||||||||||||
Balance, June 30, 2012
|
14,060,103
|
$
|
0.67
|
|||||||||
Issued
|
19,930,899
|
$
|
0.31 to $0.70
|
$
|
0.59
|
|||||||
|
||||||||||||
Balance, June 30, 2013
|
33,991,002
|
$
|
0.31 to $1.00
|
$
|
0.58
|
|||||||
Exercisable, June 30, 2013
|
33,916,002
|
$
|
0.31 to $1.00
|
$
|
0.58
|
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(d) | Stock purchase warrants (Continued) |
|
|
Number of Warrants
|
||||||||||
|
Exercise
|
June 30,
|
June 30,
|
|||||||||
Expiry Date
|
Price
|
2013
|
2012
|
|||||||||
|
||||||||||||
December 31, 2013(1)
|
$
|
0.50
|
3,710,000
|
3,710,000
|
||||||||
December 31, 2013(1)
|
$
|
0.70
|
3,963,152
|
3,963,152
|
||||||||
December 31, 2013(1)
|
$
|
1.00
|
1,358,372
|
1,358,372
|
||||||||
January 3, 2014
|
$
|
0.70
|
856,692
|
856,692
|
||||||||
January 31, 2014
|
$
|
0.70
|
2,360,459
|
2,360,459
|
||||||||
February 14, 2014(2)
|
$
|
0.70
|
300,000
|
300,000
|
||||||||
March 31, 2014
|
$
|
0.57
|
1,000,000
|
1,000,000
|
||||||||
November 29, 2016
|
$
|
0.70
|
511,428
|
511,428
|
||||||||
August 31, 2014
|
$
|
0.60
|
2,796,666
|
0
|
||||||||
August 31, 2014
|
$
|
0.70
|
799,708
|
0
|
||||||||
July 17, 2014
|
$
|
0.31
|
300,000
|
0
|
||||||||
February 28, 2014
|
$
|
0.70
|
21,421
|
0
|
||||||||
September 30, 2014
|
$
|
0.50
|
926,604
|
0
|
||||||||
January 31, 2015
|
$
|
0.50
|
4,150,000
|
0
|
||||||||
February 28, 2015
|
$
|
0.50
|
4,936,500
|
0
|
||||||||
May 25, 2015
|
$
|
0.50
|
6,000,000
|
0
|
||||||||
|
||||||||||||
Total outstanding
|
33,991,002
|
14,060,103
|
||||||||||
|
||||||||||||
Total exercisable
|
33,916,002
|
14,060,103
|
(1) | During the year ended June 30, 2012, these warrants were extended to December 31, 2013. |
(2) | During the year ended June 30, 2012, 300,000 warrants with expiry dates of February 28, 2012, were extended to February 14, 2014. |
(e) | Promissory notes receivable at June 30, 2012 includes: |
(i) | $17,500 (2010 - $17,500) due on exercise of 210,000 stock options, interest at 10% per annum, due November 1, 2002, subsequently extended to June 30, 2003; and |
(ii) | $12,237 (2010 - $12,237) due on exercise of 23,000 stock options, interest at 10% per annum, due June 30, 2003. |
4. | STOCKHOLDERS' EQUITY (DEFICIT) (Continued) |
(e) | Subscriptions received |
(i) | During the year ended June 30, 2012, $191,600 was received for subscriptions of 540,640 units consisting of common stock at $0.35 per share and warrants at $0.001 per warrant to purchase 810,960 shares of common stock on or before two years after the closing date at an exercise price of $0.70 per share. |
(ii) | During the year ended June 30, 2013, $13,400 was received for subscriptions of 44,000 units consisting of common stock at $0.25 per share and warrants at $0.001 per warrant to purchase 88,000 shares of common stock on or before two years after the closing date at an exercise price of $0.50 per share. |
5. | CONVERTIBLE DEBENTURES |
(a) | Asher Enterprises Inc. |
(i) | August 9, 2011 received $53,000 (settled); |
(ii) | September 15, 2011 received $50,000 (settled); |
(iii) | October 15, 2011 received $35,500 (settled); |
(iv) | April 18, 2012 received $53,500 (settled); |
(v) | May 23, 2012 received $78,500 (settled); |
(vi) | July 5, 2012 received $30,000, net of $2,500 in legal fees (settled); |
(vii) | November 20, 2012 received $50,000, net of $3,000 in legal fees (settled); |
(viii) | January 4, 2013 received $25,000, net of $2,500 in legal fees; |
(ix) | January 31, 2013 received $37,500; |
(x) | April 5, 2013 received $50,000, net of $3,000 in legal fees; and |
(xi) | June 12, 2013 received $35,000, net of $2,500 in legal fees. |
· | Outstanding principal multiplied by 135% together with accrued interest and unpaid interest thereon if prepaid within a period of 90 days beginning on the date of issuance of the note; |
5. | CONVERTIBLE DEBENTURES (Continued) |
(a) | Asher Enterprises Inc. (Continued) |
· | Outstanding principal multiplied by 145% together with accrued interest and unpaid interest thereon if prepaid at any time during the period beginning 91 days from the date of issuance of the note and ending on the date that is 150 days following the date of the note; and |
· | Outstanding principal multiplied by 150% together with accrued interest and unpaid interest thereon if prepaid at any time during the period beginning 151 days from the date of issuance of the note and ending on the date that is 180 days following the date of the note. |
(b) | JMJ Financial |
· | February 27, 2013 received $100,000, net of an upfront fee of $11,111; and |
· | June 2, 2013 received $50,000, net of an upfront fee of $5,555. |
5. | CONVERTIBLE DEBENTURES (Continued) |
|
2013
|
2012
|
||||||
|
||||||||
Expected life (years)
|
0.87
|
0.76
|
||||||
Interest rate
|
1.08
|
%
|
0.71
|
%
|
||||
Volatility
|
73.62
|
%
|
62.80
|
%
|
||||
Dividend yield
|
N/A
|
|
N/A
|
|
||||
Estimated forfeitures
|
N/A
|
|
N/A
|
|
|
2013
|
2012
|
||||||
|
||||||||
Expected life (years)
|
0.20
|
0.20
|
||||||
Interest rate
|
0.96
|
%
|
0.66
|
%
|
||||
Volatility
|
56.15
|
%
|
72.76
|
%
|
||||
Dividend yield
|
N/A
|
|
N/A
|
|
||||
Estimated forfeitures
|
N/A
|
|
N/A
|
|
5. | CONVERTIBLE DEBENTURES (Continued) |
|
2013
|
2012
|
||||||
|
||||||||
Expected life (years)
|
0.64
|
0.62
|
||||||
Interest rate
|
1.07
|
%
|
0.94
|
%
|
||||
Volatility
|
86.99
|
%
|
70.20
|
%
|
||||
Dividend yield
|
N/
|
A
|
N/
|
A
|
||||
Estimated forfeitures
|
N/
|
A
|
N/
|
A
|
|
2013
|
2012
|
||||||
|
||||||||
Fair value of convertible debenture, opening
|
$
|
93,356
|
$
|
0
|
||||
Fair value at inception of new tranches
|
166,922
|
158,500
|
||||||
Interest accrued
|
112,330
|
55,174
|
||||||
Loss on early repayment
|
44,489
|
0
|
||||||
Repayment on November 28, 2012 (cash)
|
(120,865
|
)
|
0
|
|||||
Settlement (issuance of common shares)
|
(121,405
|
)
|
(120,318
|
)
|
||||
|
||||||||
Carrying amount of convertible debenture
|
$
|
174,827
|
$
|
93,356
|
|
2013
|
2012
|
||||||
|
||||||||
Fair value of derivative liability, opening
|
$
|
84,718
|
$
|
0
|
||||
Fair value at inception of new tranches
|
210,576
|
111,501
|
||||||
Loss on fair value of derivative liability
|
320,537
|
89,326
|
||||||
Gain on early repayment
|
(70,678
|
)
|
0
|
|||||
Settlement (issuance of common shares)
|
(131,051
|
)
|
(116,109
|
)
|
||||
|
||||||||
Carrying amount of derivative liability
|
$
|
414,102
|
$
|
84,718
|
6. | ACCOUNTS PAYABLE AND ACCRUALS |
|
2013
|
2012
|
||||||
|
||||||||
Trade accounts payable
|
$
|
137,064
|
$
|
161,838
|
||||
Related party payables (note 13)
|
578,634
|
664,086
|
||||||
Modified consulting fees (note 15)
|
352,000
|
0
|
||||||
Consulting fees payable
|
516,220
|
418,720
|
||||||
Legal and accounting fees payable
|
676,489
|
772,205
|
||||||
Dividends payable
|
10,320
|
15,460
|
||||||
|
||||||||
|
$
|
2,270,727
|
$
|
2,032,309
|
7. | PROMISSORY NOTE PAYABLE |
8. | DEFERRED LIABILITY |
· | $250,000 to be paid to the Company within 15 business days; and |
· | A second payment is due to the Company no later than one year after signing the agreement. |
9. | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
Period from
|
|||||||||||||
|
February 12,
|
|||||||||||||||
|
1996
|
|||||||||||||||
|
(Inception)
|
|||||||||||||||
|
Years Ended June 30,
|
Through
|
||||||||||||||
|
2013
|
2012
|
2011
|
June 30, 2013
|
||||||||||||
|
||||||||||||||||
Changes in Non-Cash Working Capital
|
||||||||||||||||
Due from affiliated company
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
(116,000
|
)
|
|||||||
Accounts receivable
|
0
|
0
|
0
|
(109,213
|
)
|
|||||||||||
Inventory
|
0
|
0
|
0
|
(46,842
|
)
|
|||||||||||
Prepaid expenses
|
(509
|
)
|
(19,723
|
)
|
7,544
|
(20,231
|
)
|
|||||||||
Deferred revenue and other
|
0
|
0
|
0
|
(2,609
|
)
|
|||||||||||
Accounts payable and accruals
|
697,877
|
1,364,798
|
105,858
|
3,117,791
|
||||||||||||
|
||||||||||||||||
|
$
|
697,368
|
$
|
1,345,075
|
$
|
113,402
|
$
|
2,822,896
|
||||||||
|
||||||||||||||||
Supplemental Disclosure of Non-Cash Transactions
|
||||||||||||||||
Shares Issued for
|
||||||||||||||||
Redemption of preferred shares
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
415,000
|
||||||||
Property and equipment
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
23,000
|
||||||||
Proprietary agreement
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
711,000
|
||||||||
Settlement of accounts payable
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
228,742
|
||||||||
Settlement of convertible debentures
|
$
|
252,456
|
$
|
236,926
|
$
|
0
|
$
|
489,382
|
||||||||
Services (provided by officers and directors)
|
$
|
122,500
|
$
|
0
|
$
|
0
|
$
|
242,500
|
||||||||
Settlement of lawsuit
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
60,250
|
||||||||
Services
|
$
|
851,625
|
$
|
34,954
|
$
|
619,284
|
$
|
2,402,647
|
||||||||
Subscriptions received
|
$
|
13,400
|
$
|
191,600
|
$
|
11,250
|
$
|
13,400
|
||||||||
Acquisition of subsidiary
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
894,200
|
||||||||
Supplemental Cash Flow Information
|
||||||||||||||||
Interest paid
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
81,111
|
||||||||
Income tax paid
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||||
Accrual of liability for mandatory redeemable preferred shares
|
$
|
300,000
|
$
|
0
|
$
|
0
|
$
|
300,000
|
||||||||
Accrual of dividends
|
$
|
15,460
|
$
|
15,460
|
$
|
15,460
|
$
|
15,460
|
10. | RISK MANAGEMENT AND FINANCIAL INSTRUMENTS |
(a) | Fair value |
10. | RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued) |
(b) | Credit risk |
|
2013
|
2012
|
||||||
|
||||||||
Cash (US institution) – non-FDIC insured
|
$
|
532,004
|
$
|
160,188
|
||||
Cash (CDN institution)
|
304
|
11,985
|
||||||
|
||||||||
|
$
|
532,308
|
$
|
172,173
|
(c) | Interest rate risk |
(d) | Currency risk |
(e) | Liquidity risk |
10. | RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Continued) |
(e) | Liquidity risk (Continued) |
(f) | Classification of financial instruments |
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
||||||||||||||||
Modified consulting fees(1)
|
$
|
352,000
|
$
|
0
|
$
|
0
|
$
|
352,000
|
||||||||
Derivative financial liability
|
0
|
0
|
414,102
|
414,102
|
||||||||||||
|
||||||||||||||||
Total instruments at fair value
|
$
|
352,000
|
$
|
0
|
$
|
414,102
|
$
|
766,102
|
(1) | Included in accounts payable and accruals in the Company’s consolidated balance sheets. |
11. | INCOME TAXES |
|
2013
|
2012
|
2011
|
|||||||||
|
||||||||||||
Current expense
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||
Deferred benefit
|
(1,280,000
|
)
|
(522,000
|
)
|
(846,000
|
)
|
||||||
Increase (decrease) in valuation allowance
|
1,280,000
|
522,000
|
846,000
|
|||||||||
|
||||||||||||
Total provision for income tax
|
$
|
0
|
$
|
0
|
$
|
0
|
11. | INCOME TAXES (Continued) |
|
2013
|
2012
|
2011
|
|||||||||
|
||||||||||||
Provision for income tax at the statutory rate of 34%
|
$
|
(1,275,000
|
)
|
$
|
(1,001,000
|
)
|
$
|
(966,000
|
)
|
|||
|
||||||||||||
Increase (decrease) in taxes due to
|
||||||||||||
Change in valuation allowance
|
1,280,000
|
522,000
|
846,000
|
|||||||||
Disallowed expense
|
112,000
|
2,000
|
2,000
|
|||||||||
Federal tax return true ups
|
(117,000
|
)
|
0
|
0
|
||||||||
Expiration of net operating loss
|
0
|
477,000
|
118,000
|
|||||||||
Expiration of capital loss
|
0
|
0
|
0
|
|||||||||
Change in deferred stock-based compensation
|
0
|
0
|
0
|
|||||||||
|
||||||||||||
Total provision for income tax
|
$
|
0
|
$
|
0
|
$
|
0
|
11. | INCOME TAXES (Continued) |
|
2013
|
2012
|
2011
|
|||||||||
|
||||||||||||
Deferred income tax assets
|
||||||||||||
Current deferred tax assets
|
||||||||||||
Accrued liabilities
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||
Valuation allowance
|
0
|
0
|
0
|
|||||||||
|
||||||||||||
Total current deferred tax assets
|
0
|
0
|
0
|
|||||||||
|
||||||||||||
Non-current deferred tax assets
|
||||||||||||
Net operating loss carry-forwards
|
$
|
10,774,000
|
$
|
9,455,000
|
$
|
9,048,000
|
||||||
Non-qualified stock options
|
1,083,000
|
1,038,000
|
923,000
|
|||||||||
Capital loss carry-forwards
|
0
|
0
|
0
|
|||||||||
Unrealized loss on stock compensation
|
37,000
|
0
|
0
|
|||||||||
Legal dispute reserve
|
61,000
|
182,000
|
182,000
|
|||||||||
Basis difference of fixed assets
|
1,000
|
1,000
|
1,000
|
|||||||||
Valuation allowance
|
(11,956,000
|
)
|
(10,676,000
|
)
|
(10,154,000
|
)
|
||||||
|
||||||||||||
Total non-current deferred tax assets
|
0
|
0
|
0
|
|||||||||
|
||||||||||||
Non-current deferred tax liabilities
|
0
|
0
|
0
|
|||||||||
|
||||||||||||
Net deferred tax asset
|
$
|
0
|
$
|
0
|
$
|
0
|
11. | INCOME TAXES (Continued) |
Year Ended
|
Expires
|
Amount
|
|||
June 30, 1998
|
June 30, 2018
|
$
|
999,000
|
||
June 30, 1999
|
June 30, 2019
|
1,361,000
|
|||
June 30, 2000
|
June 30, 2020
|
1,091,000
|
|||
June 30, 2001
|
June 30, 2021
|
2,002,000
|
|||
June 30, 2002
|
June 30, 2022
|
2,527,000
|
|||
June 30, 2003
|
June 30, 2023
|
1,364,000
|
|||
June 30, 2004
|
June 30, 2024
|
2,162,000
|
|||
June 30, 2005
|
June 30, 2025
|
2,208,000
|
|||
June 30, 2006
|
June 30, 2026
|
2,373,000
|
|||
June 30, 2007
|
June 30, 2027
|
1,177,000
|
|||
June 30, 2008
|
June 30, 2028
|
1,676,000
|
|||
June 30, 2009
|
June 30, 2029
|
1,439,000
|
|||
June 30, 2010
|
June 30, 2030
|
1,699,000
|
|||
June 30, 2011
|
June 30, 2031
|
3,129,000
|
|||
June 30, 2012
|
June 30, 2032
|
2,968,000
|
|||
June 30, 2013
|
June 30, 2033
|
3,512,000
|
|||
|
|
||||
Total
|
|
$
|
31,687,000
|
12. | LOSS PER SHARE |
|
Income (Numerator)
|
Weighted Average Number of Shares (Denominator)
|
Loss Per Share
|
|||||||||
|
||||||||||||
2013
|
||||||||||||
Loss for the year
|
$
|
(3,749,790
|
)
|
|||||||||
Preferred stock dividends
|
(15,460
|
)
|
|
|
||||||||
|
||||||||||||
Loss attributable to common shareholders
|
$
|
(3,765,250
|
)
|
68,354,944
|
$
|
(0.06
|
)
|
|||||
|
||||||||||||
2012
|
||||||||||||
Loss for the year
|
$
|
(3,400,434
|
)
|
|||||||||
Preferred stock dividends
|
(15,460
|
)
|
||||||||||
|
||||||||||||
Loss attributable to common shareholders
|
$
|
(3,415,894
|
)
|
59,780,612
|
$
|
(0.06
|
)
|
|||||
|
||||||||||||
2011
|
||||||||||||
Loss for the year
|
$
|
(2,841,285
|
)
|
|||||||||
Preferred stock dividends
|
(15,460
|
)
|
||||||||||
|
||||||||||||
Loss attributable to common shareholders
|
$
|
(2,856,745
|
)
|
56,487,578
|
$
|
(0.05
|
)
|
13. | RELATED PARTY TRANSACTIONS |
14. | SEGMENTED INFORMATION |
15. | EXTINGUISHMENT OF DEBT |
(a) | On November 8, 2012, a director of the Company resigned from his position as director and CEO of the Company. An agreement was signed indicating that all amounts owing at the agreement date would be waived resulting in payables of $228,897 recognized as a gain on extinguishment of debt charged to accumulated deficit. Further, the agreement indicated that the Company would redeem 70,588 shares of preferred stock held by the director at $4.25 per share for a total of $300,000 as follows: |
(i) | Monthly installments of $7,500 would be paid on the 15th of each month starting November 15, 2012 until June 15, 2013; |
(ii) | Monthly installments of $10,000 would be paid on the 15th of each month starting July 15, 2013 until December 15, 2014; and |
(iii) | A lump sum payment of $60,000 on January 15, 2015. |
(b) | During the year ended June 30, 2013, legal fees included in accounts payable were derecognized as a result of becoming time barred due to the statute of limitations. A total of $355,022 has been recognized as a gain on extinguishment of liabilities in the consolidated statements of operations. |
(c) | On June 13, 2013, the Company signed a separation agreement with a consultant resulting in a termination of consulting services effective December 31, 2012. As a result of the termination, the Company is required to issue 541,666 common shares pursuant to a restricted stock award agreement for options vesting prior to the agreement date and issue an additional 628,571 common shares in consideration for unpaid fees of $243,000 (note 18(a)). The modified consulting fees have been recorded at the fair value of shares to be issued of $352,000 included in accounts payable and accruals. The increase in value of modified debt of $109,000 has been recognized as a loss on extinguishment of liabilities in the consolidated statements of operations. |
16. | RESEARCH AND DEVELOPMENT |
17. | COMMITMENTS |
(a) | A consulting and confidentiality agreement with a director, dated December 1, 2010, engaging the individual to provide certain consulting services to the Company. The term of the agreement expires on November 30, 2013 and the Company shall pay monthly consulting fees of $14,000 and issue 150,000 shares of common stock upon the execution of the agreement and an additional 100,000 shares of common stock upon the six-month anniversary of the execution date (not yet issued). The Company granted 600,000 stock options (note 4(c)) and an additional 1,250,000 stock options on the first anniversary of the execution date of the agreement (not yet issued). |
(b) | A consulting and confidentiality agreement with a director, dated April 15, 2011, engaging the individual to provide certain consulting services to the Company. The term of the agreement expires on April 15, 2014 and the Company shall pay monthly consulting fees of $14,000 and issue 150,000 shares of common stock upon the execution of the agreement (not yet issued) and an additional 100,000 shares of common stock upon the six-month anniversary of the execution date. The Company granted 600,000 stock options (note 4(c)) and an additional 1,250,000 stock options on the first anniversary of the execution date of the agreement (not yet issued). |
(c) | A consulting and confidentiality agreement with a consultant, dated June 1, 2011, engaging the individual to provide certain consulting services to the Company. The original term of the agreement expired on June 1, 2014 and the Company was to pay monthly consulting fees of $14,000 and issue 150,000 shares of common stock upon the execution of the agreement (not yet issued) and an additional 100,000 shares of common stock upon the six-month anniversary of the execution date. The Company granted 600,000 stock options (note 4(c)) and an additional 1,250,000 stock options on the first anniversary of the execution date of the agreement (not issued). |
(d) | A consulting and confidentiality agreement with a consultant, dated June 1, 2011, engaging the individual to provide certain consulting services to the Company. The term of the agreement expires on June 1, 2014 and the Company shall pay monthly consulting fees of $12,000 and issue 112,500 shares of common stock upon the execution of the agreement (not yet issued) and an additional 75,000 shares of common stock upon the six-month anniversary of the execution date. The Company granted 450,000 stock options (note 4(c)) and an additional 1,000,000 stock options on the first anniversary of the execution date of the agreement (not yet issued). |
18. | SUBSEQUENT EVENTS |
(a) | 628,571 common shares were issued to settle modified consulting fees recorded at a fair value of $352,000 as at June 30, 2013. An additional 541,666 common shares were issued pursuant to the separation agreement (note 15(c)). |
(b) | The Company issued 44,000 units, each unit consisting of one share of common stock at $0.20 and one warrant at $0.001 to purchase 88,000 shares of common stock on or before two years after the closing date at an exercise price of $0.50. |