NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended |
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Jun. 30, 2026 | |
| Accounting Policies [Abstract] | |
| Basis of presentation | Basis of presentation
The accompanying unaudited condensed interim consolidated financial statements (the “financial statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2025.
All figures are in United States (“US”) dollars (“USD”) unless indicated otherwise. All references to “CAD” are to Canadian dollars.
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| Foreign currency translation | Foreign currency translation
As at June 30, 2026, the official closing exchange rate for the translation of CAD to USD was 0.7037 (December 31, 2025 - 0.7296). During the three and six months ended June 30, 2026, the official average exchange rate for translation of CAD to USD was 0.7224 and 0.7257, respectively (2025 - 0.7225 and 0.7095, respectively).
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| Loss per share |
Loss per share is presented in accordance with Accounting Standards Codification, Earnings per Share (Topic 260), which requires the presentation of both basic and diluted earnings per share (“EPS”) on the income statements.
Basic EPS excludes any dilutive effects of share
options, share purchase warrants, and convertible securities, but includes restricted common shares issued. Basic EPS is calculated by
dividing net loss by the weighted average number of common shares outstanding during the period.
Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common shares were exercised using the treasury stock method or converted to common shares using the if-converted method. Diluted EPS calculations are determined by dividing net loss by the weighted average number of shares of common shares and dilutive common shares equivalents outstanding. Diluted EPS excludes all potential dilutive common shares if their effect is anti-dilutive. As at June 30, 2026, convertible preferred shares outstanding totaled shares (December 31, 2025 - shares) and share purchase warrants outstanding totaled (December 31, 2025 - ). The Company’s convertible notes were all excluded from the calculation of diluted EPS on the basis that they were anti-dilutive.
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| Fair values of assets and liabilities | Fair values of assets and liabilities
The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value.
Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
Level 2: Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments.
Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The Company’s financial assets and liabilities comprise cash, accounts receivable, accounts payable and accrued liabilities, accrued interest, notes payable, convertible notes, derivative conversion feature, loans payable to related parties, royalty payable and obligation to issue shares.
The Company measures the fair value of its convertible notes’ derivative conversion feature and obligation to issue shares based on Level 3 hierarchy.
There are no other financial assets or liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet.
As at June 30, 2026, the carrying values of the Company’s financial instruments approximate their fair values.
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| Use of estimates | Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The most significant estimates relate to the impairment of long-lived assets, the valuation of financial instruments, the valuation of inventory, the provision of income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as at the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
In preparing these financial statements, the Company is exposed to the same sources of estimation uncertainty as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
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| Significant Accounting Policies | Significant Accounting Policies
There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the year ended December 31, 2025.
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| Recently issued accounting pronouncements | Recently issued accounting pronouncements
New accounting standards not yet adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires an entity to disclose the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. It also requires an entity to include certain amounts that are already required to be disclosed under current GAAP in the same disclosure. Additionally, it requires an entity to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and to disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. Management is currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.
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