Stockholders' Deficit

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

Stockholders' Deficit

NOTE 11 – STOCKHOLDERS’ DEFICIT

PREFERRED STOCK

Series A

As of March 31, 2018, 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 March 31, 2018 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 March 31, 2018, there were 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

In April 2017, the Company issued 640,000 shares to the Chief Executive Officer as a signing bonus under his Employment Agreement. In addition, the Company issued 70,000 shares to the Chief Financial Officer as additional fees pursuant to his Contractor Agreement.

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 of 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 of 600,000 shares of common stock as part of a consulting agreement with Carlos Jaime Nissensohn. The shares were issued in November, 2017

On December 30, 2017, the Company authorized the issuance of 600,000 shares of common stock valued at $59,400, as part of a debt extinguishment agreement with two related parties. The common shares were issued on March 9, 2018.

On March 08, 2018 and pursuant to the Plan, the Company granted a grand total of 1,700,000 Shares, as well as options to purchase up to 7,000,000 Shares (the “Options”) with an exercise price equal to the closing price of the Company’s common stock on Wednesday, March 07, 2018, $0.12 per share. A total of 1,000,000 Shares and 3,200,000 Options were issued to the Company’s Board of Directors as follows:

● Shai Lustgarten (Chairman of the Board) received 1,000,000 Shares and 2,000,000 Options;

● Andrew J. Macmillan received 400,000 Options;

● Yaron Shalem received 400,000 Options; and

● Niv Nissenson received 400,000 Options.

On March 08, 2018 and pursuant to the Plan, the Company granted 500,000 Shares to its Chief Financial Officer Benjamin Kemper.

On March 08, 2018, the Company issued 500,000 shares of the Company’s common stock, par value $0.001, to Mr. Carlos J Nissensohn, who is the father of Niv Nissensohn, a director of the Company, pursuant to a consulting agreement (the “Consulting Agreement”) dated August 02, 2017 which was previously filed with the SEC on the Company’s Form 8-K dated August, 04, 2017.

On March 08,2018, the Company issued 200,000 shares of the Company’s common stock to the JSM SOC-DIG LP.

As of March 31, 2018, the Company had 39,673,631 common shares outstanding.

Warrants and Stock Options

On March 08, 2018, the Company adopted an Equity Incentive Plan (the “Plan”), as an incentive, to retain in the employ of and as directors, officers, consultants, advisors and employees to the Company. Ten million (10,000,000) shares of the Corporation’s common stock, par value $0.001 (the “Shares”), was set aside and reserved for issuance pursuant to the Plan.

Warrants - The following table summarizes information about warrants granted during the three month periods ended March 31, 2018 and 2017:

	March 31, 2018					March 31, 2017
	Number of warrants			Weighted Average Exercise Price		Number of warrants		Weighted Average Exercise Price
Balance, beginning of period		5,905,000		$	0.21		1,405,000	$	0.52
Warrants granted		-			-		-		-
Warrants expired		(300,000	)		1.00		-		-
Warrants cancelled, forfeited		-			-		-		-
Warrants exercised		-			-		-		-
Balance, end of period		5,605,000		$	0.21		1,405,000	$	0.52
Exercisable warrants		4,885,000		$	0.23		1,405,000	$	0.52

Outstanding warrants as of March 31, 2018 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
$	0.20		2.75		3,000,000	$	0.20		3,000,000	$	0.20
$	0.25		0.01		205,000	$	0.25		205,00	$	0.25
$	0.11		3.34		1,500,000	$	0.11		750,000	$	0.11
$	1.00		0.25		900,000	$	1.00		900,000	$	1.00
$	0.11 to 1.00		2.38		5,605,000	$	0.21		4,855,000	$	0.23

Warrants outstanding at March 31, 2018 and 2017 have the following expiry date and exercise prices:

Expiry Date	Exercise Prices		March 31, 2018		March 31, 2017
March 22,2018	$	1.00		-		300,000
April 1, 2018	$	0.25		900,000		900,000
April 30, 2018	$	0.25		5,000		5,000
July 1, 2018	$	1.00		200,000		200,000
December 30, 2020	$	0.20		3,000,000		-
August 2, 2021	$	0.11		1,500,000		-
				5,605,000		1,405,000

Share Purchase Option Plan

The Company has a stock option plan adopted in on November 17, 2014 and an equity incentive plan adopted March 8, 2018 whereby the Board of Directors, may grant to directors, officers, employees, or consultants of the Company shares of common stock as well as 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 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 under the Plan was set at 20,000,000.

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 20,000,000 of the Company’s common shares which may be issued pursuant to the exercise of share options granted under the Plan. As at March 31, 2018, the Company had issued options, allowing for the subscription of 16,353,000 common shares of its share capital.

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

	March 31, 2018				March 31, 2017
	Number of stock options		Weighted Average Exercise Price		Number of stock options		Weighted Average Exercise Price
Balance, beginning of period		9,625,000	$	0.21		2,644,000	$	0.49
Stock options granted		6,800,000	$	0.12		700,000	$	0.09
Stock options expired		72,000	$	0.37		-		-
Stock options cancelled, forfeited		-		-		-		-
Stock options exercised		-		-		-		-
Balance, end of period		16,353,000	$	0.17		3,344,000	$	0.41
Exercisable stock options		10,167,666	$	0.20		2,252,334	$	0.45

For the three months ended March 31, 2018, the Company granted a total of 6,800,000 stock options, 1,200,000 stock options were granted to three Board members and 2,000,000 stock options were granted to the Chief Executive Officer, 200,000 to Company’s legal counsel.

Outstanding stock options as of March 31, 2018 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		3.91		2,981,000	$	0.08		2,220,666	$	0.08
$	0.11		3.34		3,500,000	$	0.11		2,625,000	$	0.11
$	0.12		4.93		6,800,000	$	0.12		2,500,000	$	0.12
$	0.145		9.51		500,000	$	0.145		500,000	$	0.145
$	0.33 to 0.38		0.17		72,000	$	0.36		72,000	$	0.36
$	0.50		6.65		2,500,000	$	0.50		2,250,000	$	0.50
$	0.075 to 0.50		4.79		16,353,000	$	0.17		10,167,666	$	0.20

Stock options outstanding at March 31, 2018, and 2017 have the following expiry date and exercise prices:

Expiry Date	Exercise Prices		March 31, 2018		March 31, 2017
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	$	0.075		760,333		760,333
February 17, 2022	$	0.09		1,520,667		1,520,667
March 30, 2022	$	0.09		700,000		700,000
March 5, 2023	$	0.12		6,800,000		-
November 20, 2024	$	0.50		2,500,000		2,500,000
October 2, 2027	$	0.145		500,000		-
				16,353,000		5,553,000

Stock compensation expense is $681,475 for the three months ended March 31, 2018 and $26,756 for the three months ended March 31, 2017.