Stockholders' Deficit

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Stockholders' Deficit

NOTE 17 – STOCKHOLDERS’ DEFICIT

PREFERRED STOCK

Series A

As of December 31, 2017 and 2016, 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 December 31, 2017 and 2016, there was 1 preferred share designated and 0 preferred shares outstanding.

Series C

As of December 31, 2017, there was 15,000,000 Series C preferred share authorized and 4,828,530 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. As part of a debt settlement agreement effective December 30, 2017, 1,685,000 shares were issued with the quarterly dividend at a rate of $.06 per share per annum were waived for a period of 24 months, with no dividends being accrued or paid. Each Series C preferred share outstanding is convertible into one (1) share of common stock of Quest Solution, Inc.

COMMON STOCK

For the year ended December 31, 2016, the Company issued 150,000 shares to the board members in relation to the vesting schedule agreed to in the 4^th quarter of 2015, which provides 12,500 common shares per independent board member as compensation. The shares were valued at $28,800.

In the first quarter of 2016, 39,000 shares were issued to certain employees that had a value of $7,800.

On June 17, 2016, the Company entered into a Stock Redemption Agreement whereby it redeemed 1,000,000 restricted common stock in exchange for 357,000 shares of Series C preferred stock.

On July 31, 2016 as part of the Separation Agreement with Mr. Ross, the Company issued a promissory note in the amount of $59,500 in connection with the redemption by the Company of 350,000 shares of restricted common stock. In addition, the Company issued 100,000 shares of Series C preferred stock pursuant to the same Separation Agreement in exchange for the redemption of 42,500 restricted common shares.

In January 2016, the Company entered into a Stock Redemption Agreement whereby the Company would repurchase 1,650,000 shares of common stock for $750,000 on an installment basis which was recorded as a note on the transaction date carrying interest at 9%. On September 30, 2016, the Company completed the redemption of 1,650,000 shares of common stock.

In January 2016, the Company entered into a Stock Redemption Agreement whereby the Company would repurchase 507,079 shares of common stock for $230,490 on an installment basis which was recorded as a note on the transaction date carrying interest at 9%. As at December 31, 2016, the Company did not complete the redemption of 507,079 shares of common stock and the remaining balance of the note and accrued interest is $241,159.

In November 2016, the Company issued 131,000 shares to an employee as a signing bonus and performance bonus, respectively, under his Employment Agreement. The shares were valued at $8,449.

In December 2016, the Company issued 708,000 shares to the Chief Financial Officer as a signing bonus and performance bonus, respectively, under his Employment Agreement. The shares were valued at $48,498.

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,

For the year ended December 31, 2016, pursuant to the Employee Stock Purchase Program (“ESPP”) for which the Company filed an S-8 registration statement, 238,785 shares of Common Stock were issued for proceeds of $20,058.

In total, for the year ended December 31, 2016, the Company has redeemed a total of 3,042,500 shares of common stock.

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.

On 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 100,000 restricted shares every October and vesting over 8 quarters per independent board member as compensation.

On August 2, 2017, the Company authorized the issuance 600,000 shares of common stock as part of a consulting agreement with Carlos Jaime Nissensohn. The shares were valued at $66,000.

On December 30, 2017 the Company issued 600,000 shares of common stock valued at $59,400 as part of a debt reduction agreement with two parties.

For the year ended December 31, 2017, pursuant to the Employee Stock Purchase Program (“ESPP”) for which the Company filed an S-8 registration statement, 335,380 shares of Common Stock.

As of December 31, 2017, the Company had 36,828,371 common shares outstanding.

Warrants and Stock Options

Warrants - The following table summarizes information about warrants granted during the years ended December 31, 2017 and 2016:

	December 31, 2017				December 31, 2016
	Number of warrants		Weighted Average Exercise Price		Number of warrants			Weighted Average Exercise Price
Balance, beginning of year		1,405,000		0.52		1,410,000			0.52
Warrants granted		4,500,000		0.17		-			-
Warrants expired		-		-		(5,000	)		(1.00	)
Warrants cancelled, forfeited		-		-		-			-
Warrants exercised		-		-		-			-
Balance, end of year		5,905,000		0.25		1,405,000			0.52
Exercisable warrants		4,780,000		0.29		1,405,000			0.52

Outstanding warrants as at December 31, 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
	0.11		3.59		1,500,000		0.11		375,000		0.11
	0.20		3.0		3,000,000		0.20		3,000,000		0.20
	0.25		0.25		900,000		.25		900,000		0.25
	1.00		0.33		505,000		1.00		505,000		1.00
	0.11 to 1.00		2.50		5,905,000		0.25		4,780,000		0.29

Warrants outstanding at the end of the year have the following expiry date and exercise prices:

Expiry Date	Exercise Prices		December 31, 2017		December 31, 2016
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
December 30, 2020		0.20		3,000,000		-
August 2,2021		0.11		1,500,000		-
				5,905,000		1,405,000

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 December 31, 2017, the Company had issued options, allowing for the subscription of 9,625,000 common shares of its share capital.

Stock Options - The following table summarizes information about stock options granted during the years ended December 31, 2017 and 2016:

	December 31, 2017					December 31, 2016
	Number of stock options		Weighted Average Exercise Price			Number of stock options			Weighted Average Exercise Price
Balance, beginning of year		2,644,000		0.50			6,044,000			0.50
Stock options granted		6,981,000		0.10			-			-
Stock options expired		-		-			-			-
Stock options cancelled, forfeited		-		(0.50	)		(3,400,000	)		(0.50	)
Stock options exercised		-		-			-			-
Balance, end of year		9,625,000		0.21			2,644,000			0.49
Exercisable stock options		6,010,583		0.25			1,925,250			0.49

During 2016, the Company canceled a total of 3,400,000 stock options in connection with the redemption and cancellation of the Series A preferred stock from the former CEO.

During 2017, the Company canceled a total of 3,400,000 stock options in connection with the Separation Agreement signed with the former CFO.

Outstanding stock options as at December 31, 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		4.16		2,981,000		0.08		1,460,333		0.08
	0.11		3.59		3,500,000		0.11		1,750,000		0.11
	0.145		9.76		500,000		0.145		500,000		0.145
	0.33 to 0.38		0.29		144,000		0.36		144,000		0.36
	0.50		6.89		2,500,000		0.50		2,156,250		0.50
	0.075 to 0.50		4.9		9,625,000		0.21		6,010,583		0.25

Stock options outstanding at the end of the year have the following expiry date and exercise prices:

Expiry Date	Exercise Prices		December 31, 2017		December 31, 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
August 2, 2021		0.11		3,500,000		-
February 17, 2022		0.09		2,281,000		-
March 30, 2022		0.09		700,000		-
November 20, 2024		1.00		2,500,000		2,500,000
October 2, 2027		0.145		500,000		-
				9,625,000		2,644,000

For the year ending December 31, 2017 and December 31, 2016, the Company recorded stock compensation expense relating to the vesting of stock options as follows;

	December 31,
	2017		2016
Board compensation expense	$	8,181	$	28,880
Stock compensation		56,400		273,443
Stock Option vesting		686,164		73,128
Total	$	750,745	$	375,451