Stockholders' Deficit

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Stockholders' Deficit

NOTE 13 – STOCKHOLDERS’ DEFICIT

PREFERRED STOCK

Series A

As of June 30, 2017, there were 1,000,000 Series A preferred shares designated and 0 Series A preferred shares outstanding. The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 250 common shares.

Series B

As of June 30, 2017 there was 1 preferred share designated and 0 preferred shares outstanding. Effective on September 30, 2016, with the divestiture of Quest Solution Canada Inc., the one share was redeemed by the Company and retired.

Series C

As of June 30, 2017, there were 15,000,000 Series C preferred shares authorized and 3,143,530 Series C preferred share outstanding. It has preferential rights above common shares and the Series B preferred shares and is entitled to receive a quarterly dividend at a rate of $0.06 per share per annum. Each Series C preferred share outstanding is convertible into one (1) share of common stock of Quest Solution, Inc.

COMMON STOCK

For the six month period ended June 30, 2017, the Company issued 87,500 shares to board members in relation to the vesting schedule agreed to during 4^th quarter 2015, which is based on an annual grant of 100,000 restricted shares every October and vesting over 8 quarters per independent board member as compensation. The shares were valued at $9,501.

In addition, pursuant to the Employee Stock Purchase Program (“ESPP”) for which the Company filed an S-8 registration statement, 196,440 shares of Common Stock were issued for proceeds of $14,390.

In April 2017, the Company issued 640,000 shares to the Chief Executive Officer as a signing bonus under his Employment Agreement. The shares were valued at $48,000. In addition, the Company issued 70,000 shares to the Chief Financial Officer as additional fees pursuant to his Contractor Agreement. The shares were valued at $8,400

As of June 30, 2017 the Company had 36,089,703 common shares outstanding.

Warrants and Stock Options

Warrants - The following table summarizes information about warrants granted during the six month periods ended June 30, 2017 and 2016:

	June 30, 2017				June 30, 2016
	Number of warrants		Weighted Average Exercise Price		Number of warrants		Weighted Average Exercise Price
Balance, beginning of period		1,405,000		0.52		1,410,000		0.52
Warrants granted		-		-		-		-
Warrants expired		-		-		-		-
Warrants cancelled, forfeited		-		-		-		-
Warrants exercised		-		-		-		-
Balance, end of period		1,405,000		0.52		1,410,000		0.52
Exercisable warrants		1,405,000		0.52		1,410,000		0.52

Outstanding warrants as of June 30, 2017 are as follows:

Range of Exercise Prices		Weighted Average residual life span (in years)		Outstanding Warrants		Weighted Average Exercise Price		Exercisable Warrants		Weighted Average Exercise Price
	0.25		0.75		900,000		0.25		900,000		0.25
	1.00		0.84		505,000		1.00		505,000		1.00
	0.25 to 1.00		0.78		1,405,000		0.52		1,405,000		0.52

Warrants outstanding at June 30, 2017 and 2016 have the following expiry date and exercise prices:

Expiry Date	Exercise Prices		June 30, 2017		June 30, 2016
July 10, 2016		1.00		-		5,000
March 22, 2018		1.00		300,000		300,000
April 1, 2018		0.25		900,000		900,000
April 30, 2018		1.00		5,000		5,000
July 10, 2018		1.00		200,000		200,000
				1,405,000		1,410,000

Share Purchase Option Plan

The Company has a stock option plan whereby the Board of Directors, may grant to directors, officers, employees, or consultants of the Company options to acquire common shares. The Board of Directors of the Company has the authority to determine the terms, limits, restrictions and conditions of the grant of options, to interpret the plan and make all decisions relating thereto. The plan was adopted by the Company’s Board of Directors on November 17, 2014 in order to provide an inducement and serve as a long term incentive program. The maximum number of common shares that may be reserved for issuance was set at 10,000,000.

The option exercise price is established by the Board of Directors and may not be lower than the market price of the common shares at the time of grant. The options may be exercised during the option period determined by the Board of Directors, which may vary, but will not exceed ten years from the date of the grant. There are 10,000,000 of the Company’s common shares which may be issued pursuant to the exercise of share options granted under the Plan. As at June 30, 2017, the Company had issued options, allowing for the subscription of 5,625,000 common shares of its share capital.

Stock Options - The following table summarizes information about stock options granted during the three months ended June 30, 2017 and 2016:

	June 30, 2017				June 30, 2016
	Number of stock options		Weighted Average Exercise Price		Number of stock options		Weighted Average Exercise Price
Balance, beginning of period		2,644,000		0.49		6,044,000		0.50
Stock options granted		2,981,000		0.09		-		-
Stock options expired		-		-		-		-
Stock options cancelled, forfeited		-		-		-		-
Stock options exercised		-		-		-		-
Balance, end of period		5,625,000		0.28		6,044,000		0.50
Exercisable stock options		3,339,750		0.34		2,237,750		0.49

For the six months ended June 30, 2017, the Company granted a total of 2,981,000 stock options, 700,000 stock options were granted to two Board members and 2,281,000 stock options were granted to the Chief Executive Officer pursuant to his Employment Contract.

Outstanding stock options as of June 30, 2017 are as follows:

Range of Exercise Prices		Weighted Average residual life span (in years)		Outstanding Stock Options		Weighted Average Exercise Price		Exercisable Stock Options		Weighted Average Exercise Price
	0.075 to 0.09		4.66		2,981,000		0.09		1,227,000		0.08
	0.33 to 0.38		0.79		144,000		0.36		144,000		0.36
	0.50		7.45		2,500,000		0.50		1,968,750		0.50
	0.075 to 0.50		5.78		5,625,000		0.28		3,339,750		0.34

Stock options outstanding at June 30, 2017 and 2016 have the following expiry date and exercise prices:

Expiry Date	Exercise Prices		June 30, 2017		June 30, 2016
February 26, 2018		0.37		72,000		72,000
April 27, 2018		0.38		36,000		36,000
July 9, 2018		0.33		36,000		36,000
February 17, 2022		0.075		760,333		-
February 17, 2022		0.09		1,520,667		-
March 30, 2022		0.09		700,000		-
November 20, 2024		0.50		2,500,000		2,500,000
				5,625,000		2,644,000

For the period ending June 30, 2017 and 2016, the Company recorded stock compensation expense relating to the vesting of stock options as follows;

	For the six months ended June 30,
	2017		2016
Board compensation expense	$	9,501		19,500
Stock compensation		56,400		7,800
Stock Option vesting		83,144		177,142
Total	$	149,045		204,442