Form 1-A Issuer Information


FORM 1-A

UNITED STATE
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 1-A
REGULATION A OFFERING STATEMENT
UNDER THE SECURITIES ACT OF 1933

OMB APPROVAL

OMB Number: ####-####

Estimated average burden hours per response: ##.#

1-A: Filer Information

Issuer CIK
0001369128
Issuer CCC
XXXXXXXX
DOS File Number
Offering File Number
Is this a LIVE or TEST Filing?
x LIVE o TEST
Would you like a Return Copy?
o
Notify via Filing Website only?
o
Since Last Filing?
o

Submission Contact Information

Name
Phone
E-Mail Address

1-A: Item 1. Issuer Information

Issuer Infomation

Exact name of issuer as specified in the issuer's charter
Digatrade Financial Corp
Jurisdiction of Incorporation / Organization
BRITISH COLUMBIA, CANADA
Year of Incorporation
2000
CIK
0001369128
Primary Standard Industrial Classification Code
WHOLESALE-BEER, WINE & DISTILLED ALCOHOLIC BEVERAGES
I.R.S. Employer Identification Number
00-0000000
Total number of full-time employees
4
Total number of part-time employees
0

Contact Infomation

Address of Principal Executive Offices

Address 1
1500 West Georgia St., Suite 1300
Address 2
City
Vancouver
State/Country
BRITISH COLUMBIA, CANADA
Mailing Zip/ Postal Code
V6G-2Z4
Phone
604-200-0071

Provide the following information for the person the Securities and Exchange Commission's staff should call in connection with any pre-qualification review of the offering statement.

Name
Brad J. Moynes, CEO
Address 1
Address 2
City
State/Country
Mailing Zip/ Postal Code
Phone

Provide up to two e-mail addresses to which the Securities and Exchange Commission's staff may send any comment letters relating to the offering statement. After qualification of the offering statement, such e-mail addresses are not required to remain active.

Financial Statements

Industry Group (select one)
o Banking o Insurance x Other

Use the financial statements for the most recent period contained in this offering statement to provide the following information about the issuer. The following table does not include all of the line items from the financial statements. Long Term Debt would include notes payable, bonds, mortgages, and similar obligations. To determine "Total Revenues" for all companies selecting "Other" for their industry group, refer to Article 5-03(b)(1) of Regulation S-X. For companies selecting "Insurance", refer to Article 7-04 of Regulation S-X for calculation of "Total Revenues" and paragraphs 5 and 7 of Article 7-04 for "Costs and Expenses Applicable to Revenues".

Balance Sheet Information

Cash and Cash Equivalents
$ 480725.00
Investment Securities
$ 0.00
Total Investments
$
Accounts and Notes Receivable
$ 292410.00
Loans
$
Property, Plant and Equipment (PP&E):
$ 0.00
Property and Equipment
$
Total Assets
$ 773135.00
Accounts Payable and Accrued Liabilities
$ 344102.00
Policy Liabilities and Accruals
$
Deposits
$
Long Term Debt
$ 6343.00
Total Liabilities
$ 931237.00
Total Stockholders' Equity
$ -158102.00
Total Liabilities and Equity
$ 773135.00

Income Statement Information

Total Revenues
$ 0.00
Total Interest Income
$
Costs and Expenses Applicable to Revenues
$ 580581.00
Total Interest Expenses
$
Depreciation and Amortization
$ 0.00
Net Income
$ -650672.00
Earnings Per Share - Basic
$ -0.01
Earnings Per Share - Diluted
$ -0.01
Name of Auditor (if any)
WDM Chartered Professional Accountants

Outstanding Securities

Common Equity

Name of Class (if any) Common Equity
Class A Common
Common Equity Units Outstanding
230667223
Common Equity CUSIP (if any):
25381C109
Common Equity Units Name of Trading Center or Quotation Medium (if any)
OTC.PK

Common Equity

Name of Class (if any) Common Equity
Class B Voting/Now Particip
Common Equity Units Outstanding
1100000
Common Equity CUSIP (if any):
000000000
Common Equity Units Name of Trading Center or Quotation Medium (if any)
N/A

Preferred Equity

Preferred Equity Name of Class (if any)
None
Preferred Equity Units Outstanding
0
Preferred Equity CUSIP (if any)
000000000
Preferred Equity Name of Trading Center or Quotation Medium (if any)
N/A

Debt Securities

Debt Securities Name of Class (if any)
None
Debt Securities Units Outstanding
0
Debt Securities CUSIP (if any):
000000000
Debt Securities Name of Trading Center or Quotation Medium (if any)
N/A

1-A: Item 2. Issuer Eligibility

Issuer Eligibility

Check this box to certify that all of the following statements are true for the issuer(s)

x

1-A: Item 3. Application of Rule 262

Application Rule 262

Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either not disqualified under that rule or is disqualified but has received a waiver of such disqualification.

x

Check this box if "bad actor" disclosure under Rule 262(d) is provided in Part II of the offering statement.

o

1-A: Item 4. Summary Information Regarding the Offering and Other Current or Proposed Offerings

Summary Infomation

Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering
x Tier1 o Tier2
Check the appropriate box to indicate whether the financial statements have been audited
o Unaudited x Audited
Types of Securities Offered in this Offering Statement (select all that apply)
xEquity (common or preferred stock)
Does the issuer intend to offer the securities on a delayed or continuous basis pursuant to Rule 251(d)(3)?
o Yes x No
Does the issuer intend this offering to last more than one year?
o Yes x No
Does the issuer intend to price this offering after qualification pursuant to Rule 253(b)?
o Yes x No
Will the issuer be conducting a best efforts offering?
x Yes o No
Has the issuer used solicitation of interest communications in connection with the proposed offering?
o Yes x No
Does the proposed offering involve the resale of securities by affiliates of the issuer?
o Yes x No
Number of securities offered
100000000
Number of securities of that class outstanding
230667223

The information called for by this item below may be omitted if undetermined at the time of filing or submission, except that if a price range has been included in the offering statement, the midpoint of that range must be used to respond. Please refer to Rule 251(a) for the definition of "aggregate offering price" or "aggregate sales" as used in this item. Please leave the field blank if undetermined at this time and include a zero if a particular item is not applicable to the offering.

Price per security
$ 0.0100
The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer
$ 1000000.00
The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders
$ 0.00
The portion of the aggregate offering price attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement
$ 0.00
The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering statement concurrently with securities being sold under this offering statement
$ 0.00
Total (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs)
$ 1000000.00

Anticipated fees in connection with this offering and names of service providers

Underwriters - Name of Service Provider
Underwriters - Fees
$
Sales Commissions - Name of Service Provider
Sales Commissions - Fee
$
Finders' Fees - Name of Service Provider
Sloan Holdings Ltd.
Finders' Fees - Fees
$ 30000.00
Audit - Name of Service Provider
WDM Chartered Professional Accountants
Audit - Fees
$ 10000.00
Legal - Name of Service Provider
Procopio, Cory Hargreaves & Saviitch LLP
Legal - Fees
$ 10000.00
Promoters - Name of Service Provider
Promoters - Fees
$
Blue Sky Compliance - Name of Service Provider
Blue Sky Compliance - Fees
$
CRD Number of any broker or dealer listed:
Estimated net proceeds to the issuer
$
Clarification of responses (if necessary)

1-A: Item 5. Jurisdictions in Which Securities are to be Offered

Jurisdictions in Which Securities are to be Offered

Using the list below, select the jurisdictions in which the issuer intends to offer the securities

Selected States and Jurisdictions

COLORADO

Using the list below, select the jurisdictions in which the securities are to be offered by underwriters, dealers or sales persons or check the appropriate box

None
x
Same as the jurisdictions in which the issuer intends to offer the securities
o
Selected States and Jurisdictions

1-A: Item 6. Unregistered Securities Issued or Sold Within One Year

Unregistered Securities Issued or Sold Within One Year

None o

Unregistered Securities Act

(e) Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption
Section 4(a)(2), Regulation D - See attached Exhibit 6.5 with all the securities issued since March 25, 2018 to current.
 
 

 
An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation, or sale would be unlawful before registration or qualification under the laws of any such state.
 
PRELIMINARY OFFERING CIRCULAR
SUBJECT TO COMPLETION, DATED APRIL 2, 2019
 
 
DIGATRADE FINANCIAL CORP.
Up to 100,000,000 Shares
of Common Stock
US $1,000,000
 
Digatrade Financial Corp., a British Columbia corporation (the “Company,” “we,” “us,” and “our”), is offering up to 100,000,000 shares of common stock for $0.01 per share, for gross proceeds to the Company of up to $1,000,000, before deduction of offering expenses, assuming all shares are sold. There is no minimum aggregate offering amount, but we will impose a minimum purchase requirement of $10,000 per investor to participate in the offering, unless such minimum is waived by the Company in its sole discretion, which may be done on a case-by-case basis. We may sell significantly fewer shares of common stock than the maximum amount offered hereby. At a closing, the proceeds will be distributed to the Company and the associated shares will be issued to investors. If there are no closings, the investments for this offering will be promptly returned to investors, without deduction and without interest.
 
All shares will be offered on a “best efforts” basis. As there is no minimum offering, upon the approval of any subscription to this offering, the Company may immediately conduct a closing, deposit said proceeds into the bank account of the Company, as applicable, and use the proceeds of such closing in accordance with the “Use of Proceeds” on page 15 and “Securities Being Offered” on page 27.
 
Shares offered by the Company will be sold by our directors and executive officers on behalf of the Company. We may also elect to engage licensed broker-dealers to act as sales agents in this offering. No sales agents have yet been engaged to sell shares. All shares will be offered on a “best-efforts” basis.
 
We expect to commence the offering on the date on which the offering statement of which this offering circular is a part is qualified by the Securities and Exchange Commission (“SEC”) and will terminate one year thereafter or once all offered securities are sold, whichever occurs first. Notwithstanding the foregoing, the Company may extend the offering by an additional 90 days or terminate the offering at any time.
 
Our common stock is not now listed on any U.S. national securities exchange; however, our stock is quoted on the OTC Markets Group Inc.’s OTC marketplace under the trading symbol “DIGAF”. There is currently only a limited market for our securities. There is no guarantee that our securities will ever trade on any listed exchange.
 
This offering is being made pursuant to Tier 1 of Regulation A following the “Offering Circular” disclosure format.
 

 

 
 
Title of each class of
securities to be registered
 
Amount
maximum to
be registered
 
 
Price to
public
 
 
Proposed
maximum
aggregate
offering price
 
 
Commissions
and
discounts (1)
 
 
Proceeds to
issuer (2)
 
Common Stock
 $100,000,000 
  0.01 
 $1,000,000 
 $0 
 $1,000,000 
 
(1)We may offer shares through registered broker dealers, although at this time, we have not determined if we will require these services, and therefore have not selected such a selling agent.
 
(2)We estimate that our total expenses for this offering will be $50,000.  See “Plan of Distribution.”
 
Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.
 
This offering is highly speculative and these securities involve a high degree of risk and should be considered only by persons who can afford the loss of their entire investment. See “Risk Factors” on page 5.
 
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.
 
 
1500 West Georgia Street, Suite 1300
Vancouver, British Columbia, Canada, V6C 2Z6
+1(604) 200-0071
www.digatradefinancial.com
 
 
Offering Circular Date: April 2, 2019
 
 


 
 
          TABLE OF CONTENTS
 
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69
SIGNATURES
70
  
 

3
 
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
Some of the statements under “Summary Information,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in this offering circular constitute forward-looking statements.  Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements  by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will” and “would” or the negatives of these terms or other comparable terminology. You should not place undue reliance on forward looking statements.  The cautionary statements set forth in this offering circular, including in “Risk Factors and elsewhere, identify important factors which you should consider in evaluating our forward-looking statements.  
 
Although the forward-looking statements in this offering circular are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as may be required by law, to re-issue this offering circular or otherwise make public statements updating our forward-looking statements.
  
 
 
 
 
 
 
 
 
 
 
 
 
4
 
 
SUMMARY INFORMATION
 
This summary highlights some of the information in this offering circular. It is not complete and may not contain all of the information that you may want to consider. To understand this offering fully, you should carefully read the entire offering circular, including the section entitled “Risk Factors,” before making a decision to invest in our securities. Unless otherwise noted or unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company,” refer to Digatrade Financial Corp.
 
The Company
 
The Company is a British Columbia corporation, incorporated on December 28, 2000.
 
The Company was incorporated under the name Black Diamond Holdings Corporation. On June 26, 2007, the Company changed its name from Black Diamond Holdings Corporation to Black Diamond Brands Corporation. On November 21, 2008 the Company changed its name to Rainchief Energy Inc. and on February 19, 2015 to Bit-X Financial Corporation. On October 27, 2015 the Company changed its name to Digatrade Financial Corporation.
 
The Company is listed as a fully reporting issuer on the FINRA OTC bulletin board and trades under the symbol “DIGAF”. The Company is focused on developing blockchain technology services and building a profitable digital OTC trade desk for accredited traders and institutions seeking buyside exposure to cryptocurrency. The Company is exploring new opportunities within the sector including Initial Coin Offerings “ICO’s”, Digital Corporate Finance “DCF” and blockchain security protocol services.
 
In March 2015, the Company entered into an agreement with Mega Ideas Holdings Limited, dba ANX (“ANXPRO and ANX International”), a company incorporated and existing under the laws of Hong Kong. ANX owns a proprietary trading platform and provides operational support specializing in blockchain development services and exchange and transaction services for crypto-currencies e.g. Bitcoin and other digital assets. Effective October 17, 2018 the Company closed the online retail trading platform and shared liquidity order book with ANX International owing to low transaction volumes. The Company will continue to offer OTC trading for institutional customers and accredited traders while continuing to seek new opportunities within the blockchain and the financial technology sector.
 
On February 28, 2019 the Company executed its anticipated Definitive Agreement (“DA”) with Securter Inc., a private Canadian Corporation that is developing a proprietary, patent-pending credit card payment platform to significantly increase the security of online credit card payment processing. Securter technology reduces immense losses by financial institutions and merchants that arise from fraudulent credit card use and protects cardholder privacy by eliminating the distribution of personal information to third parties. With the current worldwide surge in online commerce expected to continue for years to come, the problem of credit card security is large and growing. The Definitive Agreement with Securter sets out that Securter’s technology will be launched and commercialized as a Digatrade subsidiary.
  
Organization Structure
 
As of the date of this report the Company has three wholly-owned subsidiaries, Digatrade Limited (a British Columbia corporation), Digatrade Limited (a Nevada corporation) and Digatrade (UK) Limited (a United Kingdom corporation).
 
 
Corporate Information
 
Our principal executive offices are located at 1500 West Georgia Street, Suite 1300, Vancouver, British Columbia, Canada, V6C 2Z6. Our telephone is +1(604) 200-0071. The address of our website is www.digatradefinancial.com. Information contained on or accessible through our website is not a part of this offering circular and should not be relied upon in determining whether to make an investment decision.
 
 

5
 
 
The Company is currently authorized to issue an unlimited number of shares of common stock without par value and 1,100,000 Class “B” Common Shares which are non-participating, voting (voting right of 1,000 votes per share) without par value. As of March 25, 2019, the Company had 230,667,223 shares of common stock and 1,100,000 shares of Class “B” Common Shares issued and outstanding.
 
The Company’s securities are currently quoted on the OTC Markets Group Inc.’s OTC marketplace under the symbol “DIGAF.” The Company is a reporting issuer under Form 20-F (Foreign Private Issuer).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

6
 
 
The Offering
 
 
 
Issuer in this Offering:
Digatrade Financial Corp.
 
 
Securities offered:
Common stock
 
 
Common Stock to be outstanding before this Offering:
230,667,223 shares
 
 
Common Stock to be outstanding after this Offering:
330,667,223 shares, assuming the maximum amount of shares are sold.
 
 
Price per share:
$0.01
 
 
Maximum Offering amount:
$1,000,000, assuming the maximum amount of shares are sold by the Company. The minimum investment established for each investor is $10,000, unless such minimum is waived by the Company in its sole discretion, which may be done on a case-by-case basis. There is no minimum aggregate offering amount, and we may sell significantly fewer shares than the maximum amount offered hereby.
 
 
Use of proceeds:
We estimate that the net proceeds to us from this offering, after deducting fees and estimated offering expenses, will be approximately $950,000, assuming the maximum amount of shares offered by us are sold.
 
We intend to use substantially all of such net proceeds from this offering for general working capital purposes, as described in this offering circular. Our management will have broad discretion over how these proceeds are used. For additional information, see “Use of Proceeds.”
 
 
Dividend policy:
Holders of our common stock are only entitled to receive dividends when, as and if declared by our board of directors out of funds legally available for dividends. We do not intend to pay dividends for the foreseeable future. Our ability to pay dividends to our stockholders in the future will depend on regulatory restrictions, liquidity and capital requirements, our earnings and financial condition, the general economic climate, contractual restrictions, our ability to service any equity or debt obligations senior to our common stock and other factors deemed relevant by our board of directors. For additional information, see “Dividend Policy.”
 
 
Risk factors:
Investing in our common stock involves risks. See “Risk Factors” for a discussion of certain factors that you should carefully consider before making an investment decision.
 
 

7
 
 
RISK FACTORS
 
In addition to the other information provided in this offering circular, we are subject to a number of risks, including risks that may prevent us from achieving our business objectives or that may adversely affect our business, financial condition, results of operations, cash flows and prospects.  You should carefully consider the risks discussed in this section in evaluating our business and before purchasing any of our common stock.
 
Risks Related to the Business
 
We have a history of operating losses and need additional capital to implement our business plan.
 
For the nine months ended September 30, 2018, we recorded a net loss from operations of $650,672, as compared with a net loss from operations of $346,873 for the nine months ended September 30, 2017. The financial statements have been prepared using IFRS applicable to a going concern. However, as disclosed in Note 1 to the interim condensed financial statements, our ability to continue operations is uncertain.
 
We continue to incur operating losses and have a consolidated deficit of $5,826,788 as at September 30, 2018. Operations for the nine months ended September 30, 2018 have been funded by the issuance of convertible promissory notes and the continued support of creditors.
 
We estimate that we will require at least $1,000,000 to continue developing the OTC Trade Desk for institutions and accredited traders and cover research & development costs with the Securter technology application. Further due diligence on new prospective business opportunities within the blockchain and financial technology sector will be in process and as a result the full implementation of our business plan will be delayed until the necessary capital is raised.
 
We cannot predict when or if we will produce revenues.
 
We have not generated any revenue to date from operations. In order for us to continue with our plans and open our business, we must raise capital. The timing of the completion of the milestones needed to commence operations and generate revenues is contingent on the success of this raise. There can be no assurance that we will generate revenues or that revenues will be sufficient to maintain our business.
 
Our entry into the OTC Trade Desk for institutions and accredited traders may not be successful and there are risks attendant on these activities.
 
The crypto-currency, blockchain and coin exchange platform business is extremely volatile. There are many companies, large and small entering the market with the capital to develop and create new innovative applications resulting in a highly competitive and fast-moving environment. Even with capital and technical expertise, industry, political and compliance risks are significant. Regulatory compliance and the overall ecosystem of crypto-currencies is extremely complex and not yet fully defined by governments and financial institutions worldwide. We may not be able to finance our business plan and marketing plan, there is no assurance that our entry into this business will be successful.
 
Our entry into the development of a secure mobile application for card not present “CNP” transaction business may not be successful and there are risks attendant on these activities.
 
 The Financial Technology “Fintech” business is extremely competitive. There are many companies, large and small entering the market with the capital to develop and create new innovative applications resulting in a highly competitive and fast-moving environment. Even with capital and technical expertise, industry, political and compliance risks are significant. Regulatory compliance and the overall ecosystem for secure online payments is extremely complex and not yet fully defined by governments and financial institutions worldwide. We may not be able to finance our business plan and marketing plan, there is no assurance that our entry into this business will be successful.
  
 

8
 
 
The loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect our business.
 
We depend on the leadership and experience of our key executive and chairman, Brad Moynes. Mr. Moynes functions as our chairman and executive officer, and as such, we are heavily dependent upon him to conduct our operations. In 2018, the Company added two additional directors which now brings the board to four directors. We do not have key man insurance. If Mr. Moynes resigns or dies, there could be a substantial negative impact upon our operations. If that should occur, until we find other qualified candidates to become officers and/or directors to conduct our operations, we may have to suspend our operations or cease operating entirely. In that event, it is possible you could lose your entire investment.
 
Risks Related to this Offering and Our Stock
 
The market price of our shares may fluctuate significantly.
 
The market price and liquidity of the market for shares may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. Some of the factors that could negatively affect the market price of our shares include:
 
our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects;
 
equity issuances by us, or share resales by our stockholders, or the perception that such issuances or resales may occur;
 
loss of a major funding source;
 
actual or anticipated accounting problems;
 
changes in market valuations of similar companies;
 
adverse market reaction to any indebtedness we incur in the future;
 
speculation in the press or investment community;
 
price and volume fluctuations in the overall stock market from time to time;
 
general market and economic conditions, and trends including inflationary concerns, the current state of the credit and capital markets;
 
significant volatility in the market price and trading volume of securities of companies in our sector, which are not necessarily related to the operating performance of these companies;
 
changes in law, regulatory policies or tax guidelines, or interpretations thereof;
 
operating performance of companies comparable to us; and
 
short-selling pressure with respect to shares of our shares generally.
 
As noted above, market factors unrelated to our performance could also negatively impact the market price of our shares. One of the factors that investors may consider in deciding whether to buy or sell our shares is our distribution rate as a percentage of our share price relative to market interest rates. If market interest rates increase, prospective investors may demand a higher distribution rate or seek alternative investments paying higher dividends or interest. As a result, interest rate fluctuations and conditions in the capital markets can affect the market value of our shares. For instance, if interest rates rise, it is likely that the market price of our shares will decrease as market rates on interest-bearing securities increase.
 
 

9
 
 
We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
 
Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common stock to decline and delay the development of our products and services.
 
If we have to raise capital by selling securities in the future, your rights and the value of your investment in the Company could be reduced.
 
If we issue debt securities, the lenders would have a claim to our assets that would be superior to the stockholder rights. Interest on the debt would increase costs and negatively impact operating results. If we issue more common stock or any preferred stock, your percentage ownership will decrease and your stock may experience additional dilution, and the holders of preferred stock (called preference securities in Canada) may have rights, preferences and privileges which are superior to (more favorable) the rights of holders of the common stock. It is likely the Company will sell securities in the future. The terms of such future transactions presently are not determinable.
 
If the market for our common stock is illiquid in the future, you could encounter difficulty if you try to sell your stock.
 
Our stock trades on the OTC Marketplace but it is not actively traded. If there is no active trading market, you may not be able to resell your shares at any price, if at all. It is possible that the trading market in the future will continue to be "thin" or "illiquid," which could result in increased price volatility. Prices may be influenced by investors' perceptions of us and general economic conditions, as well as the market for energy generally. Until our financial performance indicates substantial success in executing our business plan, it is unlikely that there will be coverage by stock market analysts will be extended. Without such coverage, institutional investors are not likely to buy the stock. Until such time, if ever, as such coverage by analysts and wider market interest develops, the market may have a limited capacity to absorb significant amounts of trading. As the stock is a “penny stock,” there are additional constraints on the development of an active trading market – see the next risk factor.
 
The penny stock rule operates to limit the range of customers to whom broker-dealers may sell our stock in the market.
 
In general, "penny stock" (as defined in the SEC’s rule 3a51-1 under the Securities Exchange Act of 1934) includes securities of companies which are not listed on the principal stock exchanges, or the Nasdaq National Market or the Nasdaq Capital Market, and which have a bid price in the market of less than $5.00; and companies with net tangible assets of less than $2 million ($5 million if the issuer has been in continuous operation for less than three years), or which has recorded revenues of less than $6 million in the last three years.
 
As a "penny stock" our stock therefore is subject to the SEC’s rule 15g-9, which imposes additional sales practice requirements on broker-dealers which sell such securities to persons other than established customers and "accredited investors" (generally, individuals with net worth in excess of $1 million or annual incomes exceeding $200,000, or $300,000 together with their spouses, or individuals who are the officers or directors of the issuer of the securities). For transactions covered by rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to sale. This rule may adversely affect the ability of broker-dealers to sell our stock, and therefore may adversely affect our stockholders' ability to sell the stock in the public market.
 
Your legal recourse as a United States investor could be limited.
 
The Company is incorporated under the laws of British Columbia. Most of the assets now are located in Canada. Our directors and officers and the audit firm are residents of Canada. As a result, if any of our shareholders were to bring a lawsuit in the United States against the officers, directors or experts in the United States, it may be difficult to effect service of legal process on those people who reside in Canada, based on civil liability under the Securities Act of 1933 or the Securities Exchange Act of 1934. In addition, we have been advised that a judgment of a United States court based solely upon civil liability under these laws would probably be enforceable in Canada, but only if the U.S. court in which the judgment were obtained had a basis for jurisdiction in the matter. We also have been advised that there is substantial doubt whether an action could be brought successfully in Canada in the first instance on the basis of liability predicated solely upon the United States' securities laws.
 
 

10
 
 
Because the risk factors referred to above, as well as other risks not mentioned above, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which ones will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
 
DILUTION
 
The Company, for business purposes, may from time to time issue additional shares, which may result in dilution of existing shareholders. Dilution is a reduction in the percentage of a stock caused by the issuance of new stock. Dilution can also occur when holders of stock options (such as company employees) or holders of other optionable securities exercise their options. When the number of shares outstanding increases, each existing stockholder will own a smaller, or diluted, percentage of the Company, making each share less valuable. Dilution may also reduce the value of existing shares by reducing the stock’s earnings per share. There is no guarantee that dilution of the Common Stock will not occur in the future.
 
PLAN OF DISTRIBUTION
 
We are offering up to 100,000,000 shares of our common stock for $0.01 per share, for a total of up to $1,000,000 in gross offering proceeds, assuming all shares of common stock are sold. The minimum investment for any investor is $10,000, unless such minimum is waived by the Company, which may be done in its sole discretion on a case-by-case basis. There is no minimum offering amount, and we may sell significantly fewer shares of common stock than those offered hereby. In fact, there can be no assurances that the Company will sell any or all of the offered shares. At a closing, the proceeds will be distributed to the Company and the associated shares will be issued to investors. All proceeds we receive from the offering will be available to us for uses set forth in the “Use of Proceeds” section of this offering circular. If there are no closings, the investments for this offering will be promptly returned to investors, without deduction and without interest.
 
We believe that the total expenses of this offering will be $50,000, regardless of the number of shares of common stock that are sold.
 
Our common stock is not now listed on any U.S. national securities exchange; however, our stock is quoted on the OTC Markets Group Inc.’s OTC marketplace under the trading symbol “DIGAF”. There is currently only a limited market for our securities and there is no guarantee that a more substantial or active trading market will develop in the future. There is also no guarantee that our securities will ever trade on any listed exchange. Accordingly, our shares should be considered highly illiquid, which inhibits investors’ ability to resell their shares.
 
Upon this offering circular being qualified by the SEC, the Company may offer and sell shares from time to time until all of the shares registered are sold; however, this offering will terminate one year from the initial qualification date of this offering circular, unless extended or terminated by the Company. The Company may terminate this offering at any time and may also extend the offering term by 90 days.
 
Currently, we plan to have our director and executive officers sell the shares offered hereby on behalf of the Company on a “best-efforts” basis. They will receive no discounts or commissions. Our director and executive officers will deliver this offering circular to those persons who they believe might have interest in purchasing all or a part of this offering. The Company may generally solicit investors; however, it must abide by the “blue sky” regulations relating to investor solicitation in the states where it will solicit investors.
 
Our directors and officers will not register as broker-dealers under Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) in reliance upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer’s securities and not be deemed to be a broker-dealer. The conditions are that:
 
 

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the person is not statutorily disqualified, as that term is defined in Section 3(a)(39) of the Securities Act, at the time of his participation;
 
the person is not at the time of their participation an associated person of a broker-dealer; and
 
the person meets the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that he (i) primarily performs, or is intended primarily to perform at the end of the offering, substantial duties for or on behalf of the issuer otherwise than in connection with transactions in securities; and (ii) is not a broker or dealer, or an associated person of a broker or dealer, within the preceding 12 months; and (iii) does not participate in selling and offering of securities for any issuer more than once every 12 months other than in reliance on paragraphs (a)(4)(i) or (a)(4)(iii) of Rule 3a4-1 of the Exchange Act.
 
Our officers and directors are not statutorily disqualified, are not being compensated, and are not associated with a broker-dealer. They are and will continue to hold their positions as officers or directors following the completion of the offering and have not been during the past 12 months and are currently not brokers or dealers or associated with brokers or dealers. They have not nor will they participate in the sale of securities of any issuer more than once every 12 months.
 
As of the date of this offering circular, we have not entered into any arrangements with any selling agents for the sale of the securities; however, we may engage one or more selling agents to sell the securities in the future. If we elect to do so, we will supplement this offering circular as appropriate.
 
All subscription agreements and wire transfers received by the Company for the purchase of shares are irrevocable until accepted or rejected by the Company and should be delivered to the Company as provided in the subscription agreement. A subscription agreement executed by a subscriber is not binding on the Company until it is accepted on our behalf by the Company’s Chief Executive Officer or by specific resolution of our board of directors. Any subscription not accepted within 30 days will be automatically deemed rejected. Once accepted, the Company will arrange the delivery of the shares electronically via DWAC to the purchaser within five days upon receipt of the funds from the purchaser; otherwise purchasers’ shares will be issued and held in book-entry format at the Company’s Transfer Agent until further instruction are provided by the purchaser.
 
Investment Limitations
 
Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth (please see below on how to calculate your net worth). Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.
 
Because this is a Tier 1, Regulation A Offering, most investors must comply with the 10% limitation on investment in the offering. The only investor in this offering exempt from this limitation is an “accredited investor” as defined under Rule 501 of Regulation D under the Securities Act (an “Accredited Investor”). If you meet one of the following tests you should qualify as an Accredited Investor:
 
You are a natural person who has had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of these years, and have a reasonable expectation of reaching the same income level in the current year;
 
You are a natural person and your individual net worth, or joint net worth with your spouse, exceeds $1,000,000 at the time you purchase shares in this offering (please see below on how to calculate your net worth);
 
You are an executive officer or general partner of the issuer or a manager or executive officer of the general partner of the issuer;
 
 

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You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or the Code, a corporation, a Massachusetts or similar business trust or a partnership, not formed for the specific purpose of acquiring the shares in this offering, with total assets in excess of $5,000,000;
 
You are a bank or a savings and loan association or other institution as defined in the Securities Act, a broker or dealer registered pursuant to Section 15 of the Exchange Act, an insurance company as defined by the Securities Act, an investment company registered under the Investment Company Act of 1940, or a business development company as defined in that act, any Small Business Investment Company licensed by the Small Business Investment Act of 1958 or a private business development company as defined in the Investment Advisers Act of 1940;
 
You are an entity (including an Individual Retirement Account trust) in which each equity owner is an accredited investor;
 
You are a trust with total assets in excess of $5,000,000, your purchase of shares in this offering is directed by a person who either alone or with his purchaser representative(s) (as defined in Regulation D promulgated under the Securities Act) has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment, and you were not formed for the specific purpose of investing in the shares in this offering; or
 
You are a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has assets in excess of $5,000,000.
 
In various states, the securities may not be sold unless these securities have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.  We have not yet applied for “blue sky” registration in any state, and there can be no assurance that we will be able to apply, or that our application will be approved and our securities will be registered, in any state in the U.S. We intend to sell the shares only in the states in which this offering has been qualified or an exemption from the registration requirements is available, and purchases of shares may be made only in those states.
 
Should any fundamental change occur regarding the status of this offering or other matters concerning the Company, we will file an amendment to this offering circular disclosing such matters.
 
OTC Markets Considerations
 
The OTC Markets Group Inc. is separate and distinct from the New York Stock Exchange and Nasdaq stock market or other national exchange. Neither the New York Stock Exchange or Nasdaq has a business relationship with issuers of securities quoted on the OTC Markets. The SEC’s order handling rules, which apply to New York Stock Exchange and Nasdaq-listed securities, do not apply to securities quoted on the OTC Markets.
 
Although other national stock markets have rigorous listing standards to ensure the high quality of their issuers, and can delist issuers for not meeting those standards; the OTC Markets Group Inc. has limited listing standards. Rather, it is the market maker who chooses to quote a security on the system, files the application, and is obligated to comply with keeping information about the issuer in its files.
 
Investors may have greater difficulty in getting orders filled than if we were on Nasdaq or other exchanges. Trading activity in general is not conducted as efficiently and effectively on OTC Markets as with exchange-listed securities. Also, because OTC Markets stocks are usually not followed by analysts, there may be lower trading volume than New York Stock Exchange and Nasdaq-listed securities.
 
How to Subscribe
 
US investors who participate in this offering will be required to transmit their funds as instructed by the Company, and then used to complete securities purchases, or returned if this offering fails to close.
 
 

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Non-US investors who participate in this offering will be required to transmit their funds as instructed by the Company, and then used to complete securities purchases, or returned if this offering fails to close.
 
After we receive your complete, executed subscription agreement and the funds required under the subscription agreement have been transferred to our account, we have the right to review and accept or reject your subscription in whole or in part, for any reason or for no reason. We will return all monies from rejected subscriptions immediately to you, without interest or deduction.
 
Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and issue the shares subscribed at closing. Once you submit the subscription agreement and it is accepted, you may not revoke or change your subscription or request your subscription funds. All accepted subscription agreements are irrevocable.
 
USE OF PROCEEDS
 
The Company seeks to raise gross proceeds of $1,000,000 from the sale of Securities in this Offering. The Company intends to apply these proceeds substantially as set forth herein, subject only to reallocation by Company Management in the best interests of the Company. All proceeds from this offering will become immediately available to us and may be used as they are accepted.
 
 
Percentage of Offering Sold
 
 100%
 
 
75%
 
 
50%
 
 
25%
 
Gross Offering Proceeds
 $1,000,000 
 $750,000 
 $500,000 
 $250,000 
Use of Proceeds:
    
    
    
    
General Working Capital (1)
 $880,000 
 $655,000 
 $430,000 
 $230,000 
Legal Fees
 $15,000 
 $15,000 
 $15,000 
 $15,000 
Accounting Fees
 $5,000 
 $5,000 
 $5,000 
 $5,000 
Reserve/contingency
 $100,000 
 $75,000 
 $50,000 
 $0 
TOTAL
 $1,000,000 
 $750,000 
 $500,000 
 $250,000 
 
(1)As it relates to general working capital, use of proceeds will be for research and development of the Securter patent pending application that will enable fintech to be more secure with online payments for Card not Present “CNP” transactions. The Securter Agreement is attached to this Offering Statement as Exhibit 6.4.
 
 

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DESCRIPTION OF BUSINESS
 
Overview
 
The Company is a British Columbia corporation, incorporated on December 28, 2000.
 
The Company was incorporated under the name Black Diamond Holdings Corporation. On June 26, 2007, the Company changed its name from Black Diamond Holdings Corporation to Black Diamond Brands Corporation. On November 21, 2008 the Company changed its name to Rainchief Energy Inc. and on February 19, 2015 to Bit-X Financial Corporation. On October 27, 2015 the Company changed its name to Digatrade Financial Corporation.
 
The Company is listed as a fully reporting issuer on the FINRA OTC.PK and trades under the symbol “DIGAF”. The Company is focused on developing blockchain technology services and building a profitable digital OTC trade desk for accredited traders and institutions seeking buyside exposure to cryptocurrency. The Company is exploring new opportunities within the sector including Initial Coin Offerings “ICO’s”, Digital Corporate Finance “DCF” and blockchain security protocol services.
 
In March 2015, the Company entered into an agreement with Mega Ideas Holdings Limited, dba ANX (“ANXPRO and ANX International”), a company incorporated and existing under the laws of Hong Kong. ANX owns a proprietary trading platform and provides operational support specializing in blockchain development services and exchange and transaction services for crypto-currencies e.g. Bitcoin and other digital assets. Effective October 17, 2018 the Company closed the online retail trading platform and shared liquidity order book with ANX International owing to low transaction volumes. The Company will continue to offer OTC trading for institutional customers and accredited traders while continuing to seek new opportunities within the blockchain and the financial technology sector.
  
On February 28, 2019 the Company executed its anticipated Definitive Agreement (“DA”) with Securter Inc., a private Canadian Corporation that is developing a proprietary, patent-pending credit card payment platform to significantly increase the security of online credit card payment processing. Securter technology reduces immense losses by financial institutions and merchants that arise from fraudulent credit card use and protects cardholder privacy by eliminating the distribution of personal information to third parties. With the current worldwide surge in online commerce expected to continue for years to come, the problem of credit card security is large and growing. The Definitive Agreement with Securter sets out that Securter’s technology will be launched and commercialized as a Digatrade subsidiary.
  
Organization Structure
 
As of the date of this report the Company has three wholly-owned subsidiaries, Digatrade Limited (a British Columbia corporation), Digatrade Limited (a Nevada corporation) and Digatrade (UK) Limited (a United Kingdom corporation).
 
Corporate Information
 
Our principal executive offices are located at 1500 West Georgia Street, Suite 1300, Vancouver, British Columbia, Canada, V6C 2Z6. Our telephone is +1(604) 200-0071. The address of our website is www.digatradefinancial.com. Information contained on or accessible through our website is not a part of this offering circular and should not be relied upon in determining whether to make an investment decision.
 
 

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The Company is currently authorized to issue an unlimited number of shares of common stock without par value and 1,100,000 Class “B” Common Shares which are non-participating, voting (voting right of 1,000 votes per share) without par value. As of March 25, 2019, the Company had 230,667,223 shares of common stock and 1,100,000 shares of Class “B” Common Shares issued and outstanding.
 
The Company’s securities are currently quoted on the OTC Markets Group Inc.’s OTC.PK marketplace under the symbol “DIGAF.” The Company is a reporting issuer under Form 20-F (Foreign Private Issuer).
 
Employees
 
The Company currently has two officers and no employees. Employees will be added as required.
 
Legal Proceedings
 
We are not currently a party to any material legal proceedings. Although we are not currently a party any material legal proceedings, from time to time, we may be subject to various other legal proceedings and claims that are routine and incidental to our business. Although some of these proceedings may result in adverse decisions or settlements, management believes that the final disposition of such matters will not have a material adverse effect on our business, financial position, results of operations or cash flows.
 
DESCRIPTION OF PROPERTY
 
The Company does not own any real estate. The Company’s address is 1500 West Georgia Street, Suite 1300, Vancouver, British Columbia, Canada, V6C 2Z6. The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.
 
 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Overview
 
The Company is a British Columbia corporation, incorporated on December 28, 2000. The registered and corporate office is at 1500 West Georgia Street, Suite 1300, Vancouver, British Columbia, Canada, V6C 2Z6. The Company does not have an agent in the United States.
 
The Company was incorporated under the name Black Diamond Holdings Corporation. On June 26, 2007, the Company changed its name from Black Diamond Holdings Corporation to Black Diamond Brands Corporation. On November 21, 2008 the Company changed its name to Rainchief Energy Inc. and on February 19, 2015 to Bit-X Financial Corporation. On October 27, 2015 the Company changed its name to Digatrade Financial Corporation.
 
The Company is listed as a fully reporting issuer on the FINRA OTC bulletin board and trades under the symbol “DIGAF”.
 
The Company is focused on developing blockchain technology services and building a profitable digital asset exchange platform that allows customers to trade digital assets and crypto-currencies. The Company is exploring new opportunities within the sector including Initial Coin Offerings “ICO’s”, Digital Corporate Finance “DCF” and blockchain consulting services.
 
In March 2015, the Company entered into an agreement with Mega Ideas Holdings Limited, dba ANX (“ANXPRO and ANX International”), a company incorporated and existing under the laws of Hong Kong. ANX owns a proprietary trading platform and provides operational support specializing in blockchain development services and exchange and transaction services for crypto-currencies e.g. Bitcoin and other digital assets. This services agreement has been implemented and is aligned with the Company’s business model to focus on licensing, developing and branding the digital exchange trading platform along with Blockchain development services and other new developments within the sector.
 
Prior to the change of name on February 19, 2015, the Company was an energy exploration company focused on the identification and evaluation for acquisition of energy assets.
 
For the years ended December 31, 2017 and 2016 (Audited)
 
Results of Operations
 
For the years ended December 31, 2016, 2015, and 2014, the Company had net losses of $674,520, $172,969 and $557,433, respectively.
 
Accounting, Audit and Legal expenses increased by $59,129 from $46,523 for the year ended December 31, 2016 to $105,652 for the year ended December 31, 2017. The increase is comprised of $786 in respect of increased accounting and audit fees and $58,344 in respect of legal expenses incurred in connection with the issuance of convertible promissory notes during the year ended December 31, 2017.
 
Accounting, Audit and Legal expenses increased by $5,329 from $36,086 for the year ended December 31, 2015 to $41,414 for the year ended December 31, 2016. Legal fees incurred in connection with regular corporate transactions amounted to $5,108 for the year ended December 31, 2016. The Company did not incur any legal expenses during the year ended December 31, 2015.
 
Consulting expense for the year ended December 31, 2017 increased by $61,696 to $147,845 as compared with $86,149 for the year ended December 31, 2016, as a result of increased corporate activity. Consulting expense for the year ended December 31, 2017 increased by $10,414 to $86,149 as compared with $75,735 for the year ended December 31, 2015, also as a result of increased corporate activity.
 
 

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During the year ended December 31, 2017 the Company incurred Filing and Transfer Agents Expenses in the amount of $7,866 as compared with $12,816 incurred during the year ended December 31, 2016, a decrease of $4,950, as a result of reduced filing activity during the period. Filing and Transfer Agents Fees for the year ended December 31, 2016 increased by $1,096 from $11,720 to $12,816 for the year ended December 31, 2015 as a result of increased corporate activity during that year.
 
During the year ended December 31, 2016 the company incurred $29,559 in Interest and Bank Charges expense as compared with $906 and $4,672 for the years ended December 31, 2015 and 2014, respectively. Of the amount incurred during the year ended December 31, 2016, $27,612 was incurred in connection with interest on a Convertible Promissory Note which was subsequently included in the debt settlement agreement concluded on December 20, 2016.
 
The Company did not incur any Investor Relations expenses during the years ended December 31, 2016 and 2014. During the year end December 31, 2015, the Company entered into three investor relations contracts for a total cost of $94,072. Management fees for the year ended December 31, 2017 amount to $105,000 as compared with $60,000 for the year ended December 31, 2016.
 
Management Fees for the year ended December 31, 2016 amounted to $60,000, unchanged from the amounts incurred during the years ended December 31, 2015.
 
The Company incurred Exchange Platform Development Costs in the amount of $104,591 during the year ending December 31, 2016, as compared with $111,734 incurred during the year ended December 31, 2016 and $216,315 incurred during the year ended December 31, 2015. The reduction in these costs resulted from the renegotiation of the agreement with the platform provider during 2017 and costs related to certain development projects in 2015 which were not continued in 2016 and 2017.
 
The Company incurred $7,137 in Administrative expenses during the year ended December 31, 2017. This amount is comprised of a bad debt written off and minor travel expenses. The Company did not incur Administrative expenses for the years ended December 31, 2016. Administrative expenses for the year ended December 31, 2015 amounted to $6,892 as the Company utilized rented office accommodation during that year and incurred $3,202 on Advertising, Promotion and Website Development.
 
The Company incurred a gain on foreign exchange of $40,723 for the year ended December 31, 2017, as compared with a gain on foreign exchange of $13,238 and a loss of $55,536 for the years ended December 31, 2016 and 2015, respectively. The losses and gain resulted from changes in the foreign currency exchange rates between the Canadian and US Dollars.
 
During the year ended December 31, 2016 the Company earned $119,600 in Coin Development Fees in connection with the joint venture agreement to develop a diamond-backed digital currency.
 
During the years ended December 31, 2016, the Company realized net gains on the settlement of certain debts in the amounts of $41,406. The Company did not realize net gains or incur net losses on settlement of debts in the years ending December 31, 2017 and 2015, respectively.
 
Financial position
 
As at December 31, 2017 the Company had a working capital deficiency of $782,207 as compared with a working capital deficiency of $350,388 as at December 31, 2015, a decrease of $431,819. The increase in working capital deficiency during the year ended December 31, 2017 is due to increases in Liabilities to Customers of $286,990 and current portion of Convertible Promissory Notes of $1,070,096, offset by Increases of $379,955 in Cash at Bank, $281,445 in Accounts Receivable, $6,672 in GST Receivable and $153,311 in Prepaid Expenses.
 
 

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Liquidity and Capital Resources
 
During the year ended December 31, 2017 the Company raised $1,462,122 by the issuance of Convertible Promissory Notes (year ended December 31, 2016 -$57,098) and re-paid a convertible Promissory Notes in the amount of $130,498 (year ended December 31, 2016 - $Nil).
 
The Company raised $103,779 by the issuance of Common Shares during the year ended December 31, 2017. The Company did not complete any private placements during the year ended December 31, 2016.
 
Changes in working capital accounts during the year ended December 31, 2017 provided $258,322 (year ended December 31, 2015 provided $75,969).
 
During the year ended December 31, 2017, the Company used cash in the amount of $693,347 to fund the Company's continuing operations (year ended December 31, 2016 – $196,218).
 
Significant Accounting Policies
 
The Company’s critical accounting estimates are described in the Company’s 2017 Consolidated Annual Financial Statements.
 
For the three and nine months ending September 30, 2018 (unaudited)
 
Results of Operations
 
For the three and nine months ended September 30, 2018 the Company had net losses of $85,572 and $650,672; as compared with net losses of $246,472 and $346,873 for the three and nine months ended September 30, 2017.
 
Accounting, Audit and Legal expenses for the three and nine months ended September 30, 2018 amounted to $21,703 and $59,914, respectively; as compared with $23,593 and $43,193 for the three and nine months ended September 30, 2017. Legal expenses incurred during the three and nine months ended September 30, 2018 amounted to $3,904 and $29,562, respectively, as compared with $13,793 incurred during the three and nine months ended September 30, 2017. The Legal Expenses were incurred in connection with the issuance of Convertible Promissory Notes. Accounting and Audit expenses for the three and nine months ended September 30, 2018 were essentially unchanged as compared with the same periods in the previous year.
 
Finders Fees incurred in connection with the issuance of certain Convertible Promissory Notes amounted to $26,881 and $86,697 for the three and nine months ended September 30, 2018. The Company did not incur any Finders Fees during the corresponding periods in 2017.
 
Consulting Expense decreased by $21,256 from $63,094 for the nine months ended September 2017 to $41,838 for the three months ended September 30, 2018, but increased by $107,016 from $108,094 for the nine months ended September 30, 2017 to $215,110 for the nine months ended September 30, 2018 as compared with $45,000 incurred during the nine months ended September 30, 2017. The increase resulted from additional consulting services procured by the Company during the three and nine months ended September 30, 2018.
 
Filing and Transfer Agents Fees for the three and nine months ended September 30, 2018 amounted to $4,341 and $16,168 respectively; as compared with $1,592 and $9,458 incurred during three and nine months ended September 30, 2017. The increases of $2,749 and $6,710 for the three and nine months ended September 30, 2018, respectively, as compared with the three and nine months ended September 30, 2017, respectively, resulted from relative levels of corporate filing activity during the periods under review.
 
 

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Management fees for the three and nine months ended September 30, 2018 amounted to $30,000 and $90,000, respectively, an increase of $15,000 as compared with three and nine months ended September 30, 2017. The increase resulted from additional fees paid to a company controlled by a Director and Officer of the Company.
 
The Company incurred Interest and Bank charges during the three and nine months ending September 30, 2018 of $17,737 and $70,091 respectively. These amounts are comprised of interest charged on Convertible Promissory Notes. The Company did not incur any interest on Convertible Promissory Notes during the three and nine months ending September 30, 2017.
 
The Company incurred Project Development Costs in the amount $102,683 during the nine months ended September 30, 2018, respectively, as compared with $56,708 incurred during the three months ended September 30, 2017 and $60782 incurred during the nine months ended September 30, 2017. The increase resulted from additional expenditures relating to the development of a mobile application.
 
The Company realized a gain on foreign exchange of $56,171 for the three months ended September 30, 2018 but recorded a loss of $2,766 for the nine months ended September 30, 2018, as compared to losses on foreign exchange of $15,528 and $37,326 for the three and nine months ended September 30, 2017, respectively. The losses resulted from changes in the foreign currency exchange rate between the Canadian and US Dollars.
 
Financial position
 
The Company had a working capital deficiency of $151,759 as at September 30, 2018, as compared with a working capital deficiency of $782,107 as at December 31, 2017; a decrease of $630,348.
 
The increase in working capital deficiency of $105,416 during the nine months ended September 30, 2018 was due to decreases in Cash at Bank of $13,718 Accounts Receivable of $153,377, Prepaid Expenses of $58,069 and increases in Accounts payable of $55,165; offset by increases in Current Portion of Convertible Promissory Notes Payable of $713,901, GST Recoverable of $6,214 and Liabilities to customers of $190,562
 
Liquidity and Capital Resources
 
Sources of Cash
 
During the nine months ended September 30, 2018, the Company raised $443,597 through the issuance of Convertible Promissory Notes.
 
Uses of Cash
 
The use of cash during the nine months ended September 30, 2018 were $425,600 to fund operations and changes in the Company's net working capital and $31,715 to repay a portion of a Convertible Promissory Note.
 
New Accounting Standards Not Yet Adopted
 
The accounting standard, amendment, and interpretation listed below is issued but not yet effective up to the date of issuance of the Company’s consolidated financial statements. The Company intends to adopt the following standard and interpretation, if applicable, when it becomes effective. The Company has not yet determined the impact of this standard on its consolidated financial statements.
 
 

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IFRS 16 – Leases
 
IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the least term is 12 months or less or the underlying asset has a low value. Lessor accounting remains largely unchanged from IAS 17 and the distinction between operating and finance leases is retained. The standard is effective for annual periods beginning on or after January 1, 2019.
 
Off Balance Sheet Arrangements
 
The Company has not entered into any material off-balance sheet arrangements such as guarantee contracts, contingent interests in assets transferred to unconsolidated entities, derivative financial obligations, or with respect to any obligations under a variable interest equity arrangement.
 
 
 
 
 
 
 
 
 

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DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
 
Our directors and executive officers are as follows:
 
Name
Position
Age
Term of Office
Brad J. Moynes
President, Chief Executive Officer and Chairman of the Board
48
December 2000-Present
James Romano
Director 
62
October 24, 2018 - Present
Tyrone Docherty
Director
58
July 10, 2016-Present
Timothy Delaney
Director
65
November 20, 2018 - Present
 
Brad J. Moynes: Mr.  Moynes has worked in the public markets and business management since 2000 offering services to private and public companies in sectors including Financial Technology, Internet Commerce, Online Security, Payment Processing, Software Development, Mining & Energy.  Mr. Moynes has held titles including CEO, President & Director.  Currently the President & CEO of Digatrade Financial Corp (a company developing more secure fintech for online payments including card not present "CNP" transactions).  Areas of expertise include corporate finance with funding mechanisms successfully raising over $25.0m.
 
Tyrone Docherty: Current CEO of Deer Horn Capital “DHC” and former President & CEO of Quinto Mining Inc., where with limited resources in a difficult market he raised more than $30 million and advanced a Quebec iron ore property to a viable project. Sold Quinto to Consolidated Thompson Iron Mines in June 2008 for a share value equal to $175M. Consolidated Thompson eventually sold to Cliffs Resources for $4.9B. From 2012 to 2018, Tyrone was Director and Chairman of Mason Graphite Inc. Mr. Docherty has worked in the financial and minerals markets for over 30 years.
 
James Romano: James Romano’s career spans over three decades of successful management of small to medium sized businesses in Canadian and US markets, providing corporate strategy, branding, and structuring, and successfully raising of capital in venture markets.  From 2006 to 2009, Mr. Romano served as Officer and Director of Exterra Energy Inc., an oil and gas company based in Houston, Texas, where he successfully led the Company to trade in the US public markets.  Exterra completed a leveraged buyout of the 11th largest operator in the Barnett Shale.  Previous to this, he founded Horizon Industries Ltd., a junior exploration and production oil and gas company.  As President and Director, he led Horizon through formation to production, listing on the TSX Venture Exchange, securing capital for acquisitions, and establishing operations in Canada and the US.
 
Timothy G. Delaney: Mr. Delaney graduated with a B. Comm (1979) from the University of British Columbia. He has been active in commercial real estate in both sales and development. He also has extensive experience in corporate filings and due diligence of public companies. From 2003 to 2014 he was the founder, principal, and managing partner for the day to day operations of a retail company with sales in excess of $6,000,000.
 
Family Relationships
 
There are no family relationships among and between the issuer’s directors, officers, persons nominated or chosen by the issuer to become directors or officers, or beneficial owners of more than ten percent of any class of the issuer’s equity securities.
 
Legal Proceedings
 
No officer, director, or persons nominated for such positions, promoter, control person or significant employee has been involved in the last five years in any of the following:
 
Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time,
 
 

22
 
  
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses),
 
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities,
 
Being found by a court of competent jurisdiction (in a civil action), the Securities Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated,
 
Having any government agency, administrative agency, or administrative court impose an administrative finding, order, decree, or sanction against them as a result of their involvement in any type of business, securities, or banking activity,
 
Being the subject of a pending administrative proceeding related to their involvement in any type of business, securities, or banking activity, or
 
Administrative proceedings related to their involvement in any type of business, securities, or banking activity.
 
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
 
The following table sets forth the compensation paid to the executive officers of the Company in each of the years ended December 31, 2017, 2016 and 2015.  The table includes compensation paid for service by such persons to subsidiaries. All amounts are stated in US dollars.
 
 
 
 
 
 
 
Annual Compensation
 
 
Long Term Compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Awards
 
 
Payouts
 
(a)
 
 
(b)
 
 
(c)
 
 
(d)
 
 
(e)
 
 
(f)
 
 
(g)
 
 
(h)
 
 
(i)
 
Name and Current Principal Position
 
 
Year
 
 
Management Fees
 
 
Bonus
 
 
Other
 
 
Restricted Stock Awards
 
 
Options or SAR's
 
 
LPIT Payouts
 
 
All Other Compensation
 
 
 
 
 
 
 
  (US$)
 
 
(US$)  
 
 
  (US$)
 
 
  (US$)
 
 
  #
 
 
  (US$)
 
 
(US$)  
 
Brad J. Moynes,
 
 $2017 
 $80,987 
 $- 
 $- 
 $- 
  - 
 $- 
 $- 
President
 
  2016 
 $45,298 
 $- 
 $- 
 $- 
  - 
 $- 
 $- 
 
 
  2015 
 $46,986 
 $- 
 $- 
 $- 
  - 
 $- 
 $- 
 
Executive Compensation Plans and Employment Agreements
 
Management Agreements
 
No management agreements were entered into for the period commencing January 1, 2017 to December 31, 2017.
 
Equity Compensation Plans; Outstanding Equity Awards
 
Effective December 31, 2010, our Board of Directors adopted the 2010 Stock Option Incentive Plan (“the Stock Option Plan”). The purpose of the Stock Option Plan is to enhance the long-term stockholder value of the Company by offering opportunities to directors, officers, key employees and eligible consultants of the Company to acquire and maintain stock ownership in the Company, in order to give these persons the opportunity to participate in the Company's growth and success, and to encourage them to remain in the service of the Company. A maximum of 10% of the issued and outstanding shares of common stock are available for issuance under the Stock Option Plan. As of March 25, 2019, 10,000,000 stock options were outstanding with an exercise price of US$0.006.
 
 

23
 
 
Director Compensation
 
During the most recently completed fiscal year, there are no arrangements (standard or otherwise) under which directors of the Company were compensated by the Company or its subsidiaries for services rendered in their capacity as directors, nor were any amounts paid to the directors for committee participation or special assignments.  There were no arrangements under which the directors would receive compensation or benefits in the event of the termination of that office.
 
 
 
 
 
 
 
 
 
 
 
 
 

24
 
 
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
 
The following tables set forth the ownership, as of March 25, 2019, of our shares of stock by each person known by us to be the beneficial owner of more than 10% of our outstanding voting stock, our executive officers and director as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.
 
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the SEC and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities.
 
Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.
 
Name
 
No. of Shares of Common Stock
 
 
Percentage of outstanding (1)
 
Brad J. Moynes
  22,504,000 
 9.76%
Tyrone Docherty
  250,000 
  0.001%
James Romano
  0 
  0%
Timothy Delaney
  0 
  0%
All Officers and Directors as a Group (4 persons)
  22,754,000 
 9.8%
 
 
Name
 
No. of Shares of Class B Common Stock
 
 
Percentage of outstanding(1)
 
Brad Moynes
  1,100,000 
  100%
 
(1) Based on 230,667,223 shares of common stock and 1,100,000 shares of Class B common stock as at March 25, 2019.
 
 

25
 
 
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
 
Except as described within the section entitled “Executive Compensation of Directors and Officers” in this offering circular, the Company had the following transactions with “Related Persons,” as that term is defined in item 404 of Regulation SK, which includes, but is not limited to:
 
● 
any of our directors or officers;
 
● 
any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; or
 
● 
any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the above persons.
 
Management fees paid in advance to a Company Controlled by Director and Officer
 
As at September 30, 2018, the Company had $96,902 (December 31, 2017 - $55,573) in prepaid management fees to a company controlled by a Director and Officer of the Company.
 
Trade and Other Payables
 
As at December 31, 2017, the Company had $Nil (2016 - $36,177) in trade and other payables owed to key management personnel. The amounts owed to key management personnel arose from outstanding management fees and are non-interest bearing, unsecured, and have no specified terms of repayment.
 
Promissory Notes
 
During the year ended December 31, 2017, the Company repaid Promissory Notes in the amount of $90,529, (including US$31,200) to a company controlled by a Director (also an officer) of the Company Included in Convertible Promissory Notes as at December 31, 2017, was $Nil (2016 – $89,364 including US$31,200) owed to a company controlled by a Director (also an officer) of the Company.
 
During the year ended December 31, 2017, the Company settled a Promissory Note owed to a company controlled by a former officer of the Company in the amount $69,205 (US$50,000) by the issuance of 1,000,000 shares of Common Stock.
 
Included in Convertible Promissory Notes as at December 31, 2017, was $Nil (2016 – $67,135 including
US$50,000) owed to a company controlled by a former officer of the Company.
Compensation of Key Management Personnel
 
The Company incurred management fees for services provided by key management personnel for the years ended December 31, 2017, 2016 and 2015, as described below.
 
Management Fees
 
 
2017
 
 
2016
 
 
2015
 
 
 $ 
 
$
 
 
$
 
Management Fees
  105,000 
  60,000 
  60,000 
Share-Based Payments
  - 
  - 
  - 
 
    
    
    
 
  105,000 
  60,000 
  60,000 
 
The Company incurred management fees for services provided by key management personnel for the three and nine months ended September 30, 2018 and 2017 as described below.
 
 
 
  Three Months Ended
September 30,  
 
 
  Nine Months Ended
September 30,  
 
 
 
 2018
 
 
 2017
 
 
 2018
 
 
 2017
 
Management Fees 
 $30,000 
 $15,000 
 $90,000 
 $45,000 
 
During the year ended December 31, 2017, the Company incurred consulting fees for services provided by a director of the Company. The fees were settled by a cash payment of $6,296 (US$5,000).
 
 

26
 
 
SECURITIES BEING OFFERED
 
This offering circular relates to the sale of up to 100,000,000 shares of our common stock by the Company at a price of $0.01 per share, for total offering proceeds to the Company of up to $1,000,000 if all offered shares are sold. There is no minimum offering amount. The minimum amount established for investors is $10,000, unless such minimum is waived by the Company, in its sole discretion. All funds raised by the Company from this offering will be immediately available for the Company’s use.
 
The Company is currently authorized to issue an unlimited number of shares of common stock without par value and 1,100,000 Class “B” Common Shares which are non-participating, voting (voting right of 1,000 votes per share) without par value. As of March 25, 2019, the Company had 230,667,223 shares of common stock and 1,100,000 shares of Class “B” Common Shares issued and outstanding.
 
Except as it relates to Class “B” Common Shares, all holders of common stock have equal voting rights, equal rights to dividends when and if declared, and equal rights to share in assets upon liquidation of the corporation.  The common shares are not subject to any redemption or sinking fund provisions.  Directors serve from year to year, there being no provision for a staggered board; cumulative voting for directors is not allowed.  Between annual general meetings, the existing board can appoint one or more additional directors to serve until the next annual general meeting, but the number of additional directors shall not at any time exceed one-third of the number of directors who held office at the expiration of the last annual meeting.  All issued and outstanding shares are fully paid and non-assessable securities.
 
In order to change the rights of the holders of common stock, the passing of a special resolution by such shareholders is required, being the affirmative vote of not less than 2/3 of the votes cast in person or by proxy at a duly called meeting of shareholders.
 
An annual meeting of shareholders must be called by the board of directors not later than 15 months after the last annual meeting.  The board at any time may call a special meeting of shareholders.  Notice of any meeting must be sent not less than 21 and not more than 50 days before the meeting, to every shareholder entitled to vote at the meeting.  All shareholders entitled to vote are entitled to be present at a shareholders meeting.  A quorum is the presence in person or by proxy of the holders of at least 5% of the issued and outstanding shares of common stock.
 
Except under the Investment Canada Act, there are no limitations specific to the rights of non-Canadians to hold or vote our shares under the laws of Canada or our charter documents.  The Investment Canada Act ("ICA") requires a non-Canadian making an investment which would result in the acquisition of control of a Canadian business, the gross value of the assets of which exceed certain threshold levels or the business activity of which is related to Canada's cultural heritage or national identity, to either notify, or file an application for review with, Investment Canada, the federal agency created by the ICA.  The notification procedure involves a brief statement of information about the investment on a prescribed form which is required to be filed with Investment Canada by the investor at any time up to 30 days after implementation of the investment.  It is intended that investments requiring only notification will proceed without intervention by government unless the investment is in a specific type of business related to the scope of the ICA.  If an investment is reviewable under the ICA, an application for review in the prescribed form normally is required to be filed with Investment Canada before the investment is made and it cannot be implemented until completion of review and Investment Canada has determined that the investment is likely to be of net benefit to Canada.  If the agency is not so satisfied, the investment cannot be implemented if not made, or if made, it must be unwound.
 
Market Price, Dividends, and Related Stockholder Matters
 
Our securities are not traded on a national exchange, but are quoted on the OTC Markets Group, Inc.’s OTC.PK marketplace. There is only a limited market for our securities.
 
The last sale price of the Company’s common stock on March 25, 2019 was $0.0104 per share.
 
The Company has approximately 109 beneficial shareholders of record at March 25, 2019.  The number of shareholders holding securities beneficially through street name nominees, as reflected in the record position of Cede & Co. and other intermediaries, is approximately 86.48%
 
 

27
 
 
On February 14, 2019, we entered into an agreement with Pikeminnow Funding LLC, a Colorado limited liability company, which allows Pikeminnow Funding, LLC to purchase up to $1.0 million of our common stock, subject to the qualification of this offering.  As such, none of our securities have been sold under such agreement to date.
 
Effective December 31, 2010, our Board of Directors adopted the 2010 Stock Option Incentive Plan (“the Stock Option Plan”). The purpose of the Stock Option Plan is to enhance the long-term stockholder value of the Company by offering opportunities to directors, officers, key employees and eligible consultants of the Company to acquire and maintain stock ownership in the Company, in order to give these persons the opportunity to participate in the Company's growth and success, and to encourage them to remain in the service of the Company. A maximum of 10% of the issued and outstanding shares of common stock are available for issuance under the Stock Option Plan. As of March 25, 2019, 10,000,000 stock options were outstanding with an exercise price of US$0.006.
 
The Company has not paid any dividends on its common shares. The Company has no present intention of paying dividends on its common shares as it anticipates that all available funds will be invested to finance the growth of its business.
 
 
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES LIABILITIES
 
Our charter documents contain provisions which allow the Company to indemnify any person against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with service to us if it is determined that person acted in good faith and in a manner which he reasonably believed was in the best interest of the Company. Insofar as indemnification for liabilities arising under the Securities Act, may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
 
 

28
 
 
FINANCIAL STATEMENTS
 
 
Annual Report for years ended December 31, 2017 and 2016
 
 
Page
 
 
Management’s Responsibility for Financial Reporting
30
 
 
Independent Auditors’ Report
31
 
 
Consolidated Statements of Financial Position
32
 
 
Consolidated Statements of Changes in Shareholders’ Deficiency
33
 
 
Consolidated Statements of Comprehensive Loss
34
 
 
Consolidated Statements of Cash Flows
35
 
 
Notes to the Consolidated Financial Statements
36
 
 
Unaudited Interim Consolidated Financial Statements as of September 30, 2018
 
Notice of No Auditor Review of Interim Consolidated Financial Statements
  52
 
    
Unaudited Interim Consolidated Balance Sheets
  53
 
    
Unaudited Interim Consolidated Statement of Equity
  54
 
    
Unaudited Interim Consolidated Statements of Operations and Deficit
  55
 
    
Unaudited Interim Consolidated Statements of Cash Flows
  56
 
    
Notes to the Unaudited Interim Consolidated Financial Statements
  57
 
 
 

29
 
 
Management’s Responsibility for Financial Reporting
 
 
These consolidated financial statements have been prepared by and are the responsibility of the management of the Company. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, using management’s best estimates and judgments based on currently available information. When alternative accounting methods exist, management has chosen those it considers most appropriate in the circumstances.
 
The Company maintains an appropriate system of internal controls to provide reasonable assurance that financial information is accurate and reliable and that the Company’s assets are appropriately accounted for and adequately safeguarded.
 
The Company’s independent auditors, WDM Chartered Professional Accountants, were appointed by the shareholders to conduct an audit in accordance with generally accepted auditing standards in Canada and the Public Company Accounting Oversight Board (United States) and their report follows.
 
 
 
“Bradley J. Moynes”
President, CEO and Director
 
 
 
“Tyrone Docherty”
Director

 30
 
 
 
 

31
 
 
DIGATRADE FINANCIAL CORP.
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
 
 
 
Note
 
 
December 31,
2017
 
 
December 31,
2016
 
 
 
 
 
 
$
 
 
$
 
ASSETS
 
 
 
    
    
 
 
 
    
    
CURRENT
 
 
 
    
    
Cash
 
 
 
  494,443 
  114,488 
Accounts Receivable
  5 
  297,309 
  15,864 
GST Recoverable
    
  9,044 
  2,372 
Prepaid Expenses
  6 
  159,312 
  6,001 
 
    
    
    
 
    
  960,108 
  138,725 
 
    
    
    
LIABILITIES
    
    
    
 
    
    
    
CURRENT
    
    
    
Trade and Other Payables
  7 
  150,213 
  254,197 
Liabilities to Customers
  8 
  297,309 
  10,319 
Convertible Promissory Notes – Current Portion
  9 
  1,294,693 
  224,597 
 
    
    
    
 
    
  1,742,215 
  489,113 
 
    
    
    
Convertible Promissory Notes
  9 
  287,802 
  170,776 
 
    
    
    
Total Liabilities
    
  2,030,017 
  659,889 
 
    
    
    
SHAREHOLDERS' DEFICIENCY
    
    
    
 
    
    
    
Share Capital
  10 
  4,106,207 
  3,645,457 
Share Subscriptions Received
  10(b)(v)
 - 
  334,975 
Deficit
    
  (5,176,116)
  (4,501,596)
 
    
    
    
 
    
  (1,069,909)
  (521,164)
 
    
    
    
 
    
  960,108 
  138,725 
 
Nature and Continuance of Operations (Note 1)
Subsequent Events (Note 17)
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
Approved on behalf of the Board:
 
Bradley J. Moynes
 
Tyrone Docherty
President, Chief Executive Officer and Director
 
Director
 
 
 

32
 
 
DIGATRADE FINANCIAL CORP.
Consolidated Statements of Changes in Shareholders’ Deficiency
For the Years Ended December 31, 2017, 2016, and 2015
(Expressed in Canadian Dollars)
 
 
 
Note
 
 
Number of Common Shares
 
 
Number of Class “B” Common Shares
 
 
Share
Capital
 
 
Share Subscriptions
Received
 
 
Share Purchase Warrant
Reserve
 
 
Deficit
 
 
Total Shareholders’ Deficiency
 
 
 
 
 
$
 
 
 $
 
 
 $
 
 
 $
 
 
 $
 
Balance, December 31, 2014
 
 
 
  1,622,150 
  - 
  3,241,848 
  - 
  18,600 
  (3,789,794)
  (529,346)
 
 
 
    
    
    
    
    
    
    
Share Issued for Cash
 
10(b)(ii),(iii)
 
  5,000 
  - 
  32,000 
  25,998 
  - 
  - 
  57,998 
Shares Issued for Services
    10(c)(i)
  34,000 
  - 
  85,000 
  - 
  - 
  - 
  85,000 
Fair Value of Share Purchase Warrants Expired
       
  - 
  - 
  - 
  - 
  (18,600)
  18,600 
  - 
Net Comprehensive Loss
       
  - 
  - 
  - 
  - 
  - 
  (557,433)
  (557,433)
 
       
    
    
    
    
    
    
    
Balance, December 31, 2015
       
  1,661,150 
  - 
  3,358,848 
  25,998 
  - 
  (4,328,627)
  (943,781)
 
       
    
    
    
    
    
    
    
Shares Issued in Settlement of Debts
 
10(b)(iv)
 
  41,000,000 
  - 
  276,983 
  - 
  - 
  - 
  276,983 
Shares Issued for Services
 
10(c)(ii)
 
  250,000 
  - 
  15,000 
  - 
  - 
  - 
  15,000 
Shares Held in Escrow and Returned to Treasury
    10(e)
  (1,500)
  - 
  (5,374)
  - 
  - 
  - 
  (5,374)
Shares Subscriptions Received, Net of Issuance Costs
    10(b)(v)
  - 
  - 
  - 
  308,977 
  - 
  - 
  308,977 
Net Comprehensive Loss
       
  - 
  - 
  - 
  - 
  - 
  (172,969)
  (172,969)
 
       
    
    
    
    
    
    
    
Balance, December 31, 2016
       
  42,909,650 
  - 
  3,645,457 
  334,975 
  - 
  (4,501,596)
  (521,164)
 
       
    
    
    
    
    
    
    
Shares Issued
    10(b)(v)
  2,500,000 
  - 
  334,975 
  (334,975)
  - 
  - 
  - 
Shares Issued in Settlement of Debts
 
10(b)(iii),(vi)
 
  4,000,000 
  - 
  103,779 
  - 
  - 
  - 
  103,779 
Shares Issued for Cash
 
10(b)(vii)
 
  - 
  100,000 
  100 
  - 
  - 
  - 
  100 
Shares Issued for Services
 
10(c)(iii)
 
  250,000 
  - 
  21,896 
  - 
  - 
  - 
  21,896 
Shares Held in Trust
    10(e)
  1,500 
  - 
  - 
  - 
  - 
  - 
  - 
Net Comprehensive Loss
       
  - 
  - 
  - 
  - 
  - 
  (674,520)
  (674,520)
 
       
    
    
    
    
    
    
    
Balance, December 31, 2017
       
  49,661,150 
  100,000 
  4,106,207 
  - 
  - 
  (5,176,116)
  (1,069,909)
 
Authorized Share Capital (Note 10(a))
Share Consolidation (Note 10(b)(i))
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 

33
 
 
DIGATRADE FINANCIAL CORP.
Consolidated Statements of Comprehensive Loss
For the Years Ended December 31, 2017, 2016, and 2015
(Expressed in Canadian Dollars)

 
 
 
Note
 
 
2017
 
 
2016
 
 
2015
 
 
 
 
 
 
$
 
 
$
 
 
$
 
EXPENSES
 
 
 
    
    
    
Accounting, Audit, and Legal
 
 
 
  105,652 
  46,523 
  36,084 
Consulting
  13(b)(ii) 
  138,192 
  86,149 
  75,735 
Depreciation
    
  - 
  432 
  173 
Exchange Platform Development Costs
  11(a) 
  104,591 
  111,734 
  216,315 
Filing and Transfer Agent Fees
    
  7,866 
  12,816 
  11,720 
Financing Finders’ Fees
  11(b) 
  109,033 
  - 
  - 
Interest and Bank Charges
    
  30,669 
  29,559 
  906 
Investor Relations
  10(c)(i) 
  107,103 
  - 
  94,072 
Management Fees
  13(b)(i) 
  105,000 
  60,000 
  60,000 
Office
    
  7,137 
  - 
  6,892 
 
    
    
    
    
 
    
  715,243 
  347,213 
  501,897 
 
    
    
    
    
LOSS BEFORE OTHER ITEMS
    
  (715,243)
  (347,213)
  (501,897)
 
    
    
    
    
Foreign Exchange Gain (Loss)
    
  40,723 
  13,238 
  (55,536)
Coin Development Fee Income
    
  - 
  119,600 
  - 
Gain on Settlement of Debts
  9(b) 
  - 
  41,406 
  - 
 
    
    
    
    
NET LOSS FOR THE YEAR
    
  (674,520)
  (172,969)
  (557,433)
 
    
    
    
    
Other Comprehensive Income
    
  - 
  - 
  - 
 
    
    
    
    
NET COMPREHENSIVE LOSS FOR THE YEAR
    
  (674,520)
  (172,969)
  (557,433)
 
    
    
    
    
 
    
    
    
    
POST-SHARE CONSOLIDATION
  10(b)(i) 
    
    
    
 
    
    
    
    
Basic and Diluted Loss per Share
    
  (0.01)
  (0.01)
  (0.34)
 
    
    
    
    
Weighted Average Number of Shares Outstanding
    
  45,281,568 
  13,620,813 
  1,636,518 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 

34
 
 
DIGATRADE FINANCIAL CORP.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2017, 2016, and 2015
(Expressed in Canadian Dollars)
 
 
 
Note
 
 
2017
 
 
2016
 
 
2015
 
 
 
 
 
 
$
 
 
$
 
 
$
 
CASH PROVIDED BY (USED IN):
 
 
 
    
    
    
 
 
 
    
    
    
OPERATING ACTIVITIES
 
 
 
    
    
    
 
 
 
    
    
    
Net Loss for the Year
 
 
 
  (674,520)
  (172,969)
  (557,433)
 
 
 
    
    
    
Non-Cash Items
 
 
 
    
    
    
Depreciation
 
 
 
  - 
  432 
  173 
Expenses Paid by An Arm’s Length Party
 
 
 
  - 
  8,569 
  - 
Shares Issued for Services
 
 
 
  21,896 
  15,000 
  85,000 
Unrealized Foreign Exchange (Gain) Loss
 
 
 
  (40,723)
  (15,873)
  56,822 
Amortization of Prepaid Expenses
 
 
 
  - 
  10,029 
  - 
Gain on Settlement of Debts
 
 
 
  - 
  (41,406)
  - 
 
 
 
    
    
    
 
 
 
  (693,347)
  (196,218)
  (415,438)
 
 
 
    
    
    
Change in Non-Cash Working Capital Accounts
  12 
  (258,322)
  (75,969)
  75,918 
 
    
    
    
    
 
    
  (951,669)
  (272,187)
  (339,520)
 
    
    
    
    
FINANCING ACTIVITIES
    
    
    
    
 
    
    
    
    
Shares Issued for Cash
    
  - 
  - 
  32,000 
Shares Subscriptions Received
    
  - 
  334,975 
  25,998 
Shares Returned to Treasury
    
  - 
  (5,374)
  - 
Net Proceeds on Issuance of Promissory Notes
    
  1,462,122 
  57,098 
  281,638 
Promissory Notes Repaid
    
  (130,498)
  - 
  - 
 
    
    
    
    
 
    
  1,331,624 
  386,699 
  339,636 
 
    
    
    
    
INCREASE IN CASH
    
  379,955 
  114,512 
  116 
 
    
    
    
    
Cash (Bank Indebtedness), Beginning of the Year
    
  114,488 
  (24)
  (140)
 
    
    
    
    
CASH (BANK INDEBTEDNESS), END OF THE YEAR
    
  494,443 
  114,488 
  (24)
 
Supplemental Cash Flow Information (Note 12)
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 

35
 
 
DIGATRADE FINANCIAL CORP.
Notes to the Consolidated Financial Statements
December 31, 2017 and 2016
(Expressed in Canadian Dollars)
 

 
NOTE 1 – NATURE AND CONTINUANCE OF OPERATIONS
 
The Company was incorporated on December 28, 2000, under the Company Act of the Province of British Columbia, Canada. On February 19, 2015, the Company changed its name from Rainchief Energy Inc. to Bit-X Financial Corporation. On October 27, 2015, the Company changed its name from Bit-X Financial Corporation to Digatrade Financial Corp. The Company is focused on increasing scale, further development and branding a digital asset (decentralized blockchain based crypto-currency) exchange platform.
 
In March 2015, the Company entered into an agreement with Mega Ideas Holdings Limited, dba ANX (“ANX”), a company incorporated and existing under the laws of Hong Kong. ANX owns and operates a technology platform and provides operational and technology support specializing in blockchain applications and crypto-currency exchange services. In addition, they provide transaction and settlement services, debit card solutions along with blockchain development services.
 
This services agreement is in line with the Company’s business model restructuring which is to focus on licensing, developing, and branding a digital exchange trading platform and peer-to-peer electronic payment processing network.
 
The head office, principal address, and records office of the Company are located at 1500 West Georgia Street, Suite 1300, Vancouver, British Columbia, Canada, V6C 2Z6.
 
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards on the basis that the Company is a going concern and will be able to meet its obligations and continue its operations for its next fiscal year. Several conditions as set out below cast uncertainties on the Company’s ability to continue as a going concern.
 
The Company’s ability to continue as a going concern is dependent upon the financial support from its creditors, shareholders, and related parties, its ability to obtain financing for its development projects, and upon the attainment of future profitable operations.
 
The Company has not yet achieved profitable operations and has accumulated losses of $5,176,116 since inception and working capital deficiency of $782,107 as at December 31, 2017; accordingly, the Company will need to raise additional funds through future issuance of securities or debt financing. Although the Company has raised funds in the past, there can be no assurance the Company will be able to raise sufficient funds in the future, in which case the Company may be unable to meet its obligations as they come due in the normal course of business. It is not possible to predict whether financing efforts will be successful or if the Company will attain a profitable level of operations.
 
The current cash resources are not adequate to pay the Company’s accounts payable and to meet its minimum commitments at the date of these consolidated financial statements, including planned corporate and administrative expenses, and other project implementation costs, accordingly, there is significant doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not give effect to adjustments that would be necessary to the carrying amounts and classifications of assets and liabilities should the Company be unable to continue as a going concern.
 
 
36
 
 
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

a)
Basis of Presentation
 
These consolidated financial statements have been prepared on a historical cost basis except for financial instruments classified as available-for-sale that have been measured at fair value. Cost is the fair value of the consideration given in exchange for net assets.
 
b)
Statement of Compliance
 
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
 
These consolidated financial statements were approved and authorized for issue by the Board of Directors on April 27, 2018.
 
c)
Basis of Consolidation
 
These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (collectively, the “Company”). Intercompany balances and transactions are eliminated in preparing the consolidated financial statements. The following companies have been consolidated within these consolidated financial statements:
 
Entity
Country of Incorporation
Holding
Functional Currency
 
 
 
 
Digatrade Financial Corp.
Canada
Parent Company
Canadian Dollar
Digatrade Limited
Canada
100%
Canadian Dollar
Digatrade (UK) Limited
United Kingdom
100%
Pounds Sterling
Digatrade Limited
USA
100%
US Dollar
 
The Company’s former subsidiaries, Jaydoc Capital Corp. and Rainchief Renewable-1 S.R.L., were de-registered during the year ended December 31, 2015.
 
d)
Foreign Currency
 
These consolidated financial statements are presented in Canadian dollars, which is also the functional currency of the parent company. Each subsidiary determines its own functional currency (Note 2(c)) and items included in the financial statements of each subsidiary are measured using that functional currency.
 
i)
Transactions and Balances in Foreign Currencies
 
Foreign currency transactions are translated into the functional currency of the respective entity using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year-end exchange rates are recognized in profit or loss.
 
Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and are not retranslated. Non-monetary items measured at fair value are translated using the exchange rate at the date when fair value was determined.
 
ii)
Foreign Operations
 
On consolidation, the assets and liabilities of foreign operations are translated into Canadian dollars at the exchange rate prevailing at the reporting date and their revenues and expenses are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on the translation are recognized in other comprehensive income and accumulated in the currency translation reserve in equity. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in earnings and recognized as part of the gain or loss on disposal.
 
 

37
 
 
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
e)
Financing and Finder’s Fees
 
Financing and finder’s fees relating to financial instruments with a term of one year or less are expensed in the period incurred. For financial instruments with a term of over one year, the fees are netted against the financial instruments and amortized over the term of the financial instruments.
 
f)
Share Capital
 
The Company records proceeds from share issuances, net of commissions and issuance costs.  Shares issued for other than cash consideration are valued at the quoted price on the Over-the-Counter Bulletin Board in the United States based on the earliest of: (i) the date the shares are issued, and (ii) the date the agreement to issue the shares is reached.
 
g)
Share-Based Payments
 
The fair value method of accounting is used for share-based payment transactions. Under this method, the cost of stock options and other share-based payments is recorded based on the estimated fair value using the Black-Scholes option-pricing model at the grant date and charged to profit over the vesting period. The amount recognized as an expense is adjusted to reflect the number of equity instruments expected to vest.
 
Upon the exercise of stock options and other share-based payments, consideration received on the exercise of these equity instruments is recorded as share capital and the related share-based payment reserve is transferred to share capital. The fair value of unexercised equity instruments are transferred from reserve to retained earnings upon expiry.
 
h)
Revenue Recognition
 
Revenue is comprised of consulting fees and commissions earned on trades executed on the digital currency trading platform. Consulting fee income is recognized as the consulting services are provided. Commission is considered earned when a trade is completed by the Company’s customers. As the platform is not yet fully live, commissions and consulting fees earned have been accounted for as a recovery of development costs incurred.
 
i)
Loss per Share
 
Basic loss per share is calculated by dividing net loss by the weighted average number of common shares issued and outstanding during the reporting period. Diluted loss per share is the same as basic loss per share, as the issuance of shares on the exercise of stock options and share purchase warrants is anti-dilutive. The loss per share in prior periods has been adjusted to take into account the consolidation of the Company’s common stock on June 8, 2016 (Note 10(b)(i)).
 
j)
Income Taxes
 
Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity.
 
i)
Current Income Tax
 
Current income tax assets and liabilities comprise those claims from, or obligations to, fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the consolidated financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
 
 

38
 
 
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
ii)
Deferred Income Tax
 
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are always provided for in full.
 
Deferred tax assets are recognized to the extent that it is probable that they will be able to be utilized against future taxable income. Deferred tax assets and liabilities are offset only when the Company has a right and intention to offset current tax assets and liabilities from the same taxation authority.
 
Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.
 
k)
Financial Instruments
 
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument.
 
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities classified at fair value through profit or loss) are added to, or deducted from, the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities classified at fair value through profit or loss are recognized immediately in profit or loss.
 
Financial assets and financial liabilities are measured subsequently as described below. The Company does not have any derivative financial instruments.
 
i)
Financial Assets
 
For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:
 
Financial assets at fair value through profit or loss;
 
Loans and receivables;
 
Held-to-maturity investments; and
 
Available-for-sale financial assets.
 
  39
 
 
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
k)
Financial Instruments (Continued)
 
i)
Financial Assets (Continued)
 
The category determines subsequent measurement and whether any resulting income and expense is recognized in profit or loss or in other comprehensive income.
 
All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below.
 
Financial assets at fair value through profit or loss – Financial assets at fair value through profit or loss include financial assets that are either classified as held for trading or that meet certain conditions and are designated at fair value through profit or loss upon initial recognition. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments. Assets in this category are measured at fair value with gains or losses recognized in profit or loss. The Company’s cash falls into this category of financial instruments.
 
Loans and receivables – Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortized cost using the effective interest method less any provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Company’s accounts receivable falls into this category of financial instruments.
 
Held-to-maturity investments – Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity, other than loans and receivables. Investments are classified as held-to-maturity if the Company has the intention and ability to hold them until maturity. The Company currently does not hold financial assets in this category.
 
Held-to-maturity investments are measured subsequently at amortized cost using the effective interest method. If there is objective evidence that the investment is impaired as determined by reference to external credit ratings, then the financial asset is measured at the present value of estimated future cash flows. Any changes to the carrying amount of the investment, including impairment losses, are recognized in profit or loss.
 
Available-for-sale financial assets – Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets. The Company currently does not hold financial assets in this category. Available-for-sale financial assets are measured at fair value. Gains and losses are recognized in other comprehensive income and reported within the available-for-sale reserve within equity, except for impairment losses and foreign exchange differences on monetary assets, which are recognized in profit or loss. When the asset is disposed of or is determined to be impaired, the cumulative gain or loss recognized in other comprehensive income is reclassified from the equity reserve to profit or loss, and presented as a reclassification adjustment within other comprehensive income.
 
For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.
 
In respect of available-for-sale financial assets, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income and accumulated in the revaluation reserve.
 
Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred.
 
 

40
 
 
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
ii)
Financial Liabilities
 
For the purpose of subsequent measurement, financial liabilities are classified as either financial liabilities at fair value through profit or loss, or other financial liabilities upon initial recognition.