Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 30, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Franchise Holdings International, Inc. | |
Entity Central Index Key | 1,096,275 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 66,785,082 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 91,704 | $ 155,735 |
Accounts receivable | 86,970 | 19,002 |
Inventory (note 4) | 249,960 | 88,766 |
Related party receivable (note 9) | 7,990 | $ 8,278 |
Other receivables | 28,140 | |
Prepaid expenses and deposits (note 11) | 2,011,006 | $ 6,102 |
Total Current Assets | 2,475,770 | $ 277,883 |
Capital Assets (note 5) | 29,062 | |
Intangible Assets (note 6) | 10,870 | $ 7,589 |
Total Assets | 2,515,702 | 285,472 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 303,914 | 287,353 |
Income taxes payable | $ 5,155 | $ 5,551 |
Shareholder loan (note 7) | ||
Total Current Liabilities | $ 309,069 | $ 292,904 |
Shareholder's Equity | ||
Share Capital (note 8) | 6,440 | 284 |
Capital Surplus | 3,622,228 | 140,850 |
Cumulative Translation Adjustment | $ 5,503 | 28,842 |
Share Subscriptions Payable | $ 386,770 | |
Share Subscriptions Receivable | $ (15,500) | |
Deficit | (1,412,038) | $ (564,178) |
Total Shareholder's Equity | 2,206,633 | (7,432) |
Total Liabilities and Shareholder's Equity | $ 2,515,702 | $ 285,472 |
Statements of Operations and Ot
Statements of Operations and Other Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statements Of Operations | ||||
Sales | $ 192,096 | $ 164,908 | $ 270,272 | $ 330,164 |
Cost of Goods Sold | 155,721 | 118,978 | 218,007 | 226,846 |
Gross Profit | 36,375 | 45,930 | 52,265 | 103,318 |
Expenses | ||||
Amortization | 264 | 52 | 417 | 104 |
Bank charges and interest | 3,905 | 440 | 4,615 | 1,890 |
Loss (gain) on foreign exchange | (2,051) | 2,282 | (1,601) | 2,966 |
Office and general | 22,775 | 12,753 | 33,527 | 24,627 |
Professional fees (note 11) | 632,836 | 10,373 | 646,820 | 10,373 |
Product development | 212 | 4,738 | 212 | 4,738 |
Rent and utilities | 12,881 | $ 4,023 | 15,095 | $ 7,982 |
Repairs and maintenance | 18 | 3,724 | ||
Shipping and freight | 48,287 | $ 20,049 | 49,529 | $ 38,733 |
Sales and marketing | 101,142 | $ 28,746 | 109,507 | $ 33,911 |
Transaction costs | 38,280 | 38,280 | ||
Total expense | 858,549 | $ 83,456 | 900,125 | $ 125,324 |
Loss before Income Taxes | $ (822,174) | $ (37,526) | $ (847,860) | $ (22,006) |
Provision for Income Taxes | ||||
Loss for the period | $ (822,174) | $ (37,526) | $ (847,860) | $ (22,006) |
Other Comprehensive Income (Loss) | ||||
Currency translation adjustment | (17,802) | (3,673) | (23,339) | 1,131 |
Comprehensive Loss for the period | $ (839,976) | $ (41,199) | $ (871,199) | $ (20,875) |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Activities | ||
Net Income (Loss) for the period | $ (847,860) | $ (22,006) |
Items not involving cash flow from operations: | ||
Transaction costs | 38,280 | |
Amortization of capital assets | 198 | $ 104 |
Amortization of intangible assets | 219 | |
Professional fees paid in shares | 517,664 | |
Sales and marketing fees paid in shares | $ 73,500 | |
Fair value of services rendered by shareholder | $ 25,000 | |
Total Items not involving cash flows from operating activities | $ (217,999) | 3,098 |
Net changes in non cash working capital: | ||
Decrease (increase) in accounts receivable | (67,968) | (18,922) |
Decrease (increase) in inventory | (161,194) | 93,381 |
Decrease (increase) in prepaid expenses and deposits | 1,116 | $ 166 |
Decrease (increase) in related party receivables | 288 | |
Decrease (increase) in other receivables | (28,140) | |
Increase (decrease) in income taxes payable | (396) | $ (219) |
Increase (decrease) in accounts payable and accrued liabilities | 96,431 | (41,305) |
Net changes in non cash working capital | (159,863) | 33,101 |
Cash provided by (used in) operating activities | (377,862) | 36,199 |
Investing Activities | ||
Capital assets | (29,260) | $ (220) |
Transaction costs | (69,870) | |
Intangible assets | (3,500) | |
Cash used in investing activities | (102,630) | $ (220) |
Financing Activities | ||
Share subscriptions payable | $ 439,800 | |
Payments to related parties | $ (11,849) | |
Cash provided by (used in) financing activities | $ 439,800 | (11,849) |
Effects of Foreign Currency Translation | (23,339) | 879 |
Change in cash | (64,031) | 25,009 |
Cash and cash equivalents - beginning of period | 155,735 | 17,517 |
Cash and cash equivalents - end of period | 91,704 | $ 42,526 |
Significant Non-Cash Transactions Not Disclosed Above | ||
Common Shares issued to service providers | $ 2,660,964 |
Nature of Operations
Nature of Operations | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 1 - Nature of Operations | Franchise Holdings International, Inc. (the "Company") was incorporated in the State of Nevada on April 2, 2003. FSGI Corporation was incorporated in the State of Florida on May 15, 1997, and in a reorganization on December 21, 1998 with another corporation named The Martial Arts Network On Line, Inc. (originally incorporated in Florida on May 23, 1996) changed its name to TMAN Global.Com, Inc. Franchise Holdings International, Inc. and TMAN Global.Com, Inc. consummated a merger on April 30, 2003 whereby Franchise Holdings International, Inc. exchanged 1 common share for all the 90,861 outstanding common shares of TMAN Global.Com, Inc. The purpose of the transaction was a change of domicile. Pursuant to the merger terms, Franchise Holdings International, Inc. was the surviving corporation and TMAN Global.Com, Inc. ceased to exist. During the year ended December 31, 2014, the Company completed a reverse acquisition transaction (the "Reverse Acquisition") with TruXmart Ltd. ("TruXmart") a company located at 1895 Clements Road, Unit 155, Pickering, Ontario, Canada. TruXmart designs and distributes truck tonneau covers in Canada and the United States. Prior to the completion of the Reverse Acquisition, TruXmart owned 2,300,000 shares of the Company, representing an 80.96% ownership stake in the Company. Pursuant to the Reverse Acquisition, the sole shareholder of TruXmart acquired the 2,300,000 shares from TruXmart and an additional 37,700,000 shares of the Company from the Company in exchange for all 4,791 Class A common shares of TruXmart. Following completion of the Reverse Acquisition, the former sole shareholder of TruXmart will own 40,000,000 of the 40,540,864 issued and outstanding shares of the Company, representing a 98.67% ownership stake in the Company. During the six months ended June 30, 2015, the Company issued the 37,700,000 shares of its common stock. During the year ended December 31, 2014, the Company incurred transaction costs of $299,839 which were included in the net loss and comprehensive loss for the year. As at December 31, 2014, $215,000 of the expenses had been paid in cash and the remaining $84,839 were included in accounts payable and accrued liabilities as they were to be paid subsequent to December 31, 2014. During the six months ended June 30, 2015, the Company paid $53,150 of the amounts included in accounts payable and accrued liabilites as at December 31, 2014. As at June 30, 2015, $31,689 of the transaction costs were included in accounts payable and accrued liabilities. The transaction has been accounted for as a reverse acquisition, as owners and management of TruXmart have voting and operating control of the Company following completion of the Reverse Acquisition The accompanying financial statements include the activities of Franchise Holdings International, Inc., its predecessor corporations and TruXmart. |
Basis of Presentation and Going
Basis of Presentation and Going Concern | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 2 - Basis of Presentation and Going Concern | a) Statement of Compliance The Company's interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") as issued by the Financial Accounting Standards Board ("FASB"). The Company's fiscal year end is December 31. The interim consolidated financial statements have been prepared without audit in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (SEC) Form 10 Q. They do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Companys audited financial statements and notes thereto for the year ended December 31, 2014. The interim consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Companys consolidated financial position as of June 30, 2015, the results of its operations for the three and six months ended June 30, 2015 and 2014, and its consolidated cash flows for the six months ended June 30, 2015 and 2014. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for future quarters or the full year ending December 31, 2015. b) Basis of Measurement The Company's interim financial statements have been prepared on the historical cost basis. c) Functional and Presentation Currency These interim financial statements are presented in United States Dollars. The functional currency of the Company is the Canadian Dollar. d) Use of Estimates The preparation of interim financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. e) Going Concern These interim unaudited financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. During the six month period ended June 30, 2015, the Company incurred a net loss of $847860 (2014 $22,006), and as of that date, the Companys deficit was $1,412,038 (2014 $106,843). While the Company has demonstrated the ability to generate revenue, there are no assurances that it will be able to achieve level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available we may be forced to discontinue operations, which would cause investors to lose their entire investment. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 3 - Significant Accounting Policies | The accounting polices used in the preparation of these interim financial statements are consistent with those of the Company's audited financial statements for the year ended December 31, 2014. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 4 - Inventory | Inventory is comprised of : June 30, 2015 December 31, 2014 Finished goods $ 234,944 $ 79,527 Promotional items 11,876 6,023 Raw materials 3,140 3,216 $ 249,960 $ 88,766 |
Capital Assets
Capital Assets | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 5 - Capital Assets | June 30, 2015 Cost Accumulated Amortization Net December 31, 2014 Net Equipment $ 2,102 $ 93 $ 2,009 $ - Product molds 26,547 - 26,547 - Computers 610 104 506 - $ 29,259 $ 197 $ 29,062 $ - |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 6 - Intangible Assets | Intangible assets consist of costs incurred to establish the TruXmart Tri Fold and Smart Fold patent technology as well as costs incurred to develop the Company's website. The patent was issued August 26, 2014. The patent will be amortized on a straight line basis over its useful life of 25 years. As the website was not yet complete as at June 30, 2015, the Company has not amortized the website during the period ended June 30, 2015. June 30, 2015 Cost Accumulated Amortization Net December 31, 2014 Net Patent $ 7,718 $ 348 $ 7,370 $ 7,589 Website 3,500 - 3,500 - $ 11,218 $ 348 $ 10,870 $ 7,589 |
Shareholder Loan
Shareholder Loan | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 7 - Shareholder Loan | During the period ended June 30, 2015, the Company received aggregate advances of $Nil (2014 $278) and made aggregate payments of $6,954 (2014 $7,293) with a shareholder. The advances are non interest bearing and payable on demand. |
Share Capital
Share Capital | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 8 - Share Capital | The Company is authorized to issue 100,000,000 shares of its common stock with a par value of $0.0001. All shares are ranked equally with regards to the Company's residual assets. During the year ended December 31, 2014, the Company received subscriptions for 2,775,360 shares of its common stock at a price of $0.138 per share for proceeds of $383,000. As at December 31, 2014, the shares had yet to be issued and the full amount of the proceeds was included in share subscriptions payable. During the six months ended June 30, 2015, the Company issued the common shares. During the six months ended June 30, 2015, the Company issued 2,849,992 shares of its common stock at an average price of $0.155 per share for proceeds of $439,800. During the six months ended June 30, 2015, the Company issued 60,000 shares of its common stock at a price of $0.138 per share to Ryan Goulding Services, LLC, for services performed, pursuant to a settlement agreement, dated February 12, 2015, by and among the Company, Securities Counselors, Inc. and Belair Capital Partners, Inc. The fair value of the common shares of $8,280 has been expensed as transaction costs during the six months ended June 30, 2015. During the six months ended June 30, 2015, the Company issued 2,178,866 shares of its common stock at a price of $0.138 per share as settlement for amounts payable pursuant to an advisory agreement disclosed in note 11(b). Of the total fair value of the common shares of $300,684, $40,000 was included in professional fees expense during the year ended December 31, 2014 and was included in accounts payable and accrued liabilities as at that date. The remaining $260,684 has been expensed as professional fees during the six months ended June 30, 2015. During the six months ended June 30, 2015, the Company issued 500,000 shares of its common stock to a key sales consultant with respect to services rendered to the Company at a deemed price of $0.147 per share. The fair value of $73,500 is included in sales and marketing expense for the six months ended June 30, 2015. During the six months ended June 30, 2015, the Company issued 15,500,000 to various consultants and advisors pursuant to agreements disclosed in notes 11(c) through (g) at a deemed price of $0.147 per share. The deemed price of $0.147 used to value the common shares issued to the sales and other consultants was calculated as the weighted average price per share for all subscriptions for common shares of the Company's stock that were paid in cash during the six months ended June 30, 2015. During the six months ended June 30, 2015, the Company issued 37,000,000 shares of its common stock to the former sole shareholder of TruXmart in connection with the Reverse Acquisition described in note 1. The Company's net loss per weighted average number of shares outstanding for the six month periods ended June 30, 2015 and 2014 are as follows: 2015 2014 Net income (loss) for the period $ (847,860) $ (22,006) Weighted average number of shares (basic and diluted) 13,556,886 100 Income (Loss) per weighted average share (basic and diluted) $ 0 $ (220) The Company's net loss per weighted average number of shares outstanding for the three month periods ended June 30, 2015 and 2014 are as follows: 2015 2014 Net income (loss) for the period $ (822,174 ) $ (37,526 ) Weighted average number of shares (basic and diluted) 23,662,690 100 Income (Loss) per weighted average share (basic and diluted) $ 0 $ (375) As at June 30, 2015 and December 31, 2014, the Company's authorized, issued and outstanding share capital is as follows: June 30, 2015 December 31, 2014 64,405,082 common shares (December 31, 2014 2,840,864) $ 6,440 $ 284 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 9 - Related Party Transactions | During the period ended June 30, 2015, the Company recorded office and general expenses of $30,673 (2014 $22,800) related to services rendered to the Company by its shareholder. The full amount was charged to the shareholder loan account. During the period ended June 30, 2015, the Company incurred repairs and maintenance expenses of $3,706 related to its prior office space which is owned by an officer of the Company. As at June 30, 2015, the Company had $7,990 (December 31, 2014 $8,278) receivable from a related party that is a company controlled by an officer of the Company. The amounts are non interest bearing and are repayable on demand. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 10 - Financial Instruments | Credit Risk The Company is exposed to credit risk on the accounts receivable from its customers. In order to reduce its credit risk, the Company has adopted credit policies which include the analysis of the financial position of its customers and the regular review of their credit balances. The Company incurred bad debt expense of $Nil during the period ended June 30, 2015 (2014 $Nil). Currency Risk The Company is exposed to currency risk on its sales and purchases denominated in Canadian Dollars. The Company actively manages these risks by adjusting its pricing to reflect currency fluctuations and purchasing foreign currency at advantageous rates. As at June 30, 2015, cash includes 19,202 Canadian Dollars (2014 26,935 Canadian Dollars), accounts receivable includes 61,627 Canadian Dollars (2014 33,531 Canadian Dollars), accounts payable and accrued expenses include 71,346 Canadian Dollars (2014 42,979 Canadian Dollars) and income taxes payable includes 6,439 Canadian Dollars (2014 Nil Canadian Dollars). Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its obligations associated with financial liabilities. The Company relies on cash flows generated from operations, as well as injections of capital through the issuance of the Company's capital stock to settle its liabilities when they become due. Interest Rate Risk The Company is not exposed to significant interest rate risk due to the short term maturity of its monetary current assets and current liabilities. Concentration of Supplier Risk The Company purchases all of its inventory from one supplier source in Asia. The Company carries significant strategic inventories of these materials to reduce the risk associated with this concentration of suppliers. Strategic inventories are managed based on demand. To date, the Company has been able to obtain adequate supplies of the materials used in the production of its products in a timely manner from existing sources. The loss of this key supplier or a delay in shipments could have an adverse effect on its business. Concentration of Customer Risk The following table includes the percentage of the Company's sales to significant customers for the six months ended June 30, 2015 and 2014. A customer is considered to be significant if they account for greater than 10% of the Company's annual sales. 2015 2014 Customer A 34.4 54.0 Customer B 30.6 19.3 65.0 73.3 The loss of any of these key customers could have an adverse effect on the Company's business. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 11 - Commitments | a) During the year ended December 31, 2014, the Company entered into a License Agreement whereby the Company was granted an exclusive license under Patent Rights to make, use, offer for sale, import or sell a proprietary latching system developed and patented by the Company's shareholder (the "Licensor"). The License Agreement allows the Company to manufacture or sub license the patented latching system and provide services utilizing the patented latching system within the United States and its territories and possessions and any foreign countries where Patent Rights exist. The License Agreement does not require the payment of license issue fees or royalties, however, the Company will be required to maintain any fees or costs associated to keep the patent active. The License Agreement will be in effect for the life of the last to expire patent or last to be abandoned patent application licensed under this Agreement, whichever is later. The Company will have the right to terminate the Agreement in whole or as to any portion of Patent Rights at any time by giving such notice to the Licensor. Should the Company violate or fail to perform any term of this Agreement, the Licensor may give written notice of such default ("Notice of Default") to the Company. Should the Company fail to repair such default within sixty days, of the effective date of such notice, the Licensor will have the right to terminate the License Agreement and the licenses therein by a second written notice ("Notice of Termination") to the Company. If a Notice of Termination is sent to the Company, the License Agreement will automatically terminate on the effective date of such notice. b) During the year ended December 31, 2014, the Company entered into an agreement (the "Advisory Agreement") for the provision of corporate advisory services including, but not limited to, the completion of a Going Public Transaction. Pursuant to the Advisory Agreement, the Company will pay a monthly fee of 5,000 Canadian Dollars (the "Advisory Fee") until May 1, 2016 unless the Advisory Agreement is extended by mutual agreement of the parties. Payment of the Advisory Fee will be deferred until such time as a Going Public Transaction is completed and the Company raises not less than 400,000 Canadian Dollars in its sales of stock and/ or other securities. The Advisory Agreement can be terminated for any reason by either party with ninety days written notice submitted by the party requesting the cancellation. In the event that the cancellation is for cause, the notification period can be reduced to thirty days subject to certain procedural requirements as defined in the Advisory Agreement. During the period ended June 30, 2015, the Advisory Agreement was amended by the parties such that the Company was to issue a number of shares of its common stock representing 4.99% of the issued and outstanding shares at the time of the amendment as full and final settlement of the accrued fees owing per the Advisory Agreement. During the period ended June 30, 2015, the Company issued 2,178,866 shares of its common stock with a fair value of $300,684 as settlement of the outstanding fees owed pursuant to the Advisory Agreement. c) During the period ended June 30, 2015, the Company entered into an agreement (the "Business Advisory Agreement") for the provision of various business advisory services including, but not limited to, marketing, business and product development, and supplier and customer relationship management for a period of 365 days. In exchange for these services, the Company was to issue 3,200,000 shares of its capital stock with a fair value of $470,400. The fair value, less cash subscription proceeds of $3,200, will be recognized as an expense over the term of the Business Advisory Agreement starting in the six months ended June 30, 2015. Included in professional fees for the six months ended June 30, 2015, is $10,240 related to this Business Advisory Agreement. Included in prepaid expenses as at June 30, 2015 is $456,960 related to this Business Advisory Agreement which will be expensed as professional fees on a straight line basis over the 365 day term of the Business Advisory Agreement. The Business Advisory Agreement can be terminated for any reason by either party with thirty days written notice submitted by the party requesting the cancellation. d) During the period ended June 30, 2015, the Company entered into an agreement (the "Service Agreement") for the provision of various services including, but not limited to, corporate branding, communications strategies and corporate strategy for a period of 180 days. In exchange for these services, the Company was to issue 2,900,000 shares of its capital stock with a fair value of $426,300. The fair value, less cash subscription proceeds of $2,900, will be recognized as an expense over the term of the Service Agreement. Included in professional fees for the six months ended June 30, 2015, is $37,636 related to this Service Agreement. Included in prepaid expenses as at June 30, 2015 is $385,764 related to this Service Agreement which will be expensed as professional fees on a straight line basis over the 180 day term of the Service Agreement. The Service Agreement can be terminated for any reason by either party with ten days written notice submitted by the party requesting the cancellation. e) During the period ended June 30, 2015, the Company entered into an agreement (the "Service Agreement") for the provision of various services including, but not limited to, business, product, and relationship development and corporate strategy for a period of 180 days. In exchange for these services, the Company was to issue 3,000,000 shares of its capital stock with a fair value of $441,000. The fair value, less cash subscription proceeds of $3,000, will be recognized as an expense over the term of the Service Agreement. Included in professional fees for the six months ended June 30, 2015, is $58,400 related to this Service Agreement. Included in prepaid expenses as at June 30, 2015 is $379,600 related to this Service Agreement which will be expensed as professional fees on a straight line basis over the 180 day term of the Service Agreement. The Service Agreement can be terminated for any reason by either party with ten days written notice submitted by the party requesting the cancellation. f) During the period ended June 30, 2015, the Company entered into an agreement (the "Business Advisory Agreement") for the provision of various business advisory services including, but not limited to, funding and financing strategies and capital structure planning and management for a period of 180 days. In exchange for these services, the Company was to issue 3,300,000 shares of its capital stock with a fair value of $485,100. The fair value, less cash subscription proceeds of $3,300, will be recognized as an expense over the term of the Business Advisory Agreement. Included in professional fees for the six months ended June 30, 2015, is $80,300 related to this Business Advisory Agreement. Included in prepaid expenses as at June 30, 2015 is $401,500 related to this Business Advisory Agreement which will be expensed as professional fees on a straight line basis over the 180 day term of the Business Advisory Agreement. The Business Advisory Agreement can be terminated for any reason by either party with thirty days written notice submitted by the party requesting the cancellation. g) During the period ended June 30, 2015, the Company entered into an agreement (the "Marketing Services Agreement") for the provision of various business advisory services including, but not limited to, strategic marketing and brand development and communications and branding research for a period of 180 days. In exchange for these services, the Company was to issue 3,100,000 shares of its capital stock with a fair value of $455,700. The fair value, less cash subscription proceeds of $3,100, will be recognized as an expense over the term of the Marketing Services Agreement. Included in professional fees for the six months ended June 30, 2015, is $70,404 related to this Marketing Service Agreement. Included in prepaid expenses as at June 30, 2015 is $382,196 related to this Marketing Services Agreement which will be expensed as professional fees on a straight line basis over the 180 day term of the Marketing Services Agreement. The Marketing Services Agreement can be terminated for any reason by either party with thirty days written notice submitted by the party requesting the cancellation. |
Comparative Figures
Comparative Figures | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 12 - Comparative Figures | Certain comparative figures have been re classified to conform to the current period's presentation. |
Evaluation of Subsequent Events
Evaluation of Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Note 13 - Evaluation of Subsequent Events | The Company has evaluated subsequent events through August 18, 2015, which is the date the financial statements were available to be issued. Subsequent to June 30, 2015 the Company issued 2,380,000 common shares at a deemed price of $0.147 per share in exchange for cash of $2,380 and services in the amount of $347,480 that are expected to be rendered in the future. The deemed price of $0.147 used to value the common shares was calculated as the weighted average price per share for all subscriptions for common shares of the Company's stock that were paid in cash during the six months ended June 30, 2015. |
Basis of Presentation and Goi18
Basis of Presentation and Going Concern (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Basis Of Presentation And Going Concern Policies | |
Statement of Compliance | The Company's interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") as issued by the Financial Accounting Standards Board ("FASB"). The Company's fiscal year end is December 31. The interim consolidated financial statements have been prepared without audit in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (SEC) Form 10 Q. They do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Companys audited financial statements and notes thereto for the year ended December 31, 2014. The interim consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Companys consolidated financial position as of June 30, 2015, the results of its operations for the three and six months ended June 30, 2015 and 2014, and its consolidated cash flows for the six months ended June 30, 2015 and 2014. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for future quarters or the full year ending December 31, 2015. |
Basis of Measurement | The Company's interim financial statements have been prepared on the historical cost basis. |
Functional and Presentation Currency | These interim financial statements are presented in United States Dollars. The functional currency of the Company is the Canadian Dollar. |
Use of Estimates | The preparation of interim financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Going Concern | These interim unaudited financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. During the six month period ended June 30, 2015, the Company incurred a net loss of $847860 (2014 $22,006), and as of that date, the Companys deficit was $1,412,038 (2014 $106,843). While the Company has demonstrated the ability to generate revenue, there are no assurances that it will be able to achieve level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available we may be forced to discontinue operations, which would cause investors to lose their entire investment. |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Tables | |
Summary of Inventory | Inventory is comprised of : June 30, 2015 December 31, 2014 Finished goods $ 234,944 $ 79,527 Promotional items 11,876 6,023 Raw materials 3,140 3,216 $ 249,960 $ 88,766 |
Capital Assets (Tables)
Capital Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Capital Assets Tables | |
Capital Assets | June 30, 2015 Cost Accumulated Amortization Net December 31, 2014 Net Equipment $ 2,102 $ 93 $ 2,009 $ - Product molds 26,547 - 26,547 - Computers 610 104 506 - $ 29,259 $ 197 $ 29,062 $ - |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Intangible Assets Tables | |
Intangible Assets | June 30, 2015 Cost Accumulated Amortization Net December 31, 2014 Net Patent $ 7,718 $ 348 $ 7,370 $ 7,589 Website 3,500 - 3,500 - $ 11,218 $ 348 $ 10,870 $ 7,589 |
Share Capital (Tables)
Share Capital (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Share Capital Tables | |
Weighted average number of shares | The Company's net loss per weighted average number of shares outstanding for the six month periods ended June 30, 2015 and 2014 are as follows: 2015 2014 Net income (loss) for the period $ (847,860) $ (22,006) Weighted average number of shares (basic and diluted) 13,556,886 100 Income (Loss) per weighted average share (basic and diluted) $ 0 $ (220) The Company's net loss per weighted average number of shares outstanding for the three month periods ended June 30, 2015 and 2014 are as follows: 2015 2014 Net income (loss) for the period $ (822,174) $ (37,526) Weighted average number of shares (basic and diluted) 23,662,690 100 Income (Loss) per weighted average share (basic and diluted) $ 0 $ (375) |
Company's authorized, issued and outstanding | As at June 30, 2015 and December 31, 2014, the Company's authorized, issued and outstanding share capital is as follows: June 30, 2015 December 31, 2014 64,405,082 common shares (December 31, 2014 2,840,864) $ 6,440 $ 284 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Financial Instruments Tables | |
Concentration of sales | The following table includes the percentage of the Company's sales to significant customers for the six months ended June 30, 2015 and 2014. A customer is considered to be significant if they account for greater than 10% of the Company's annual sales. 2015 2014 Customer A 34.4 54.0 Customer B 30.6 19.3 65.0 73.3 |
Nature of Operations (Details N
Nature of Operations (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Nature Of Operations Details Narrative | ||
Common stock issued | 37,700,000 | |
Transaction costs | $ 38,280 | $ 299,839 |
Expenses paid in cash | 69,870 | 215,000 |
Included in accounts payable and accrued liabilities | 84,839 | |
Transaction costs included in accounts payable and accrued liabilities | $ 31,689 | $ 53,150 |
Inventory (Details)
Inventory (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Details | ||
Finished goods | $ 234,944 | $ 79,527 |
Promotional items | 11,876 | 6,023 |
Raw materials | 3,140 | 3,216 |
Inventory | $ 249,960 | $ 88,766 |
Capital Assets (Details)
Capital Assets (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Equipment Cost | $ 29,259 | |
Accumulated Amortization | 197 | |
Equipment Net | 29,062 | |
Equipment [Member] | ||
Equipment Cost | 2,102 | |
Accumulated Amortization | 93 | |
Equipment Net | 2,009 | |
Product molds [Member] | ||
Equipment Cost | $ 26,547 | |
Accumulated Amortization | ||
Equipment Net | $ 26,547 | |
Computers [Member] | ||
Equipment Cost | 610 | |
Accumulated Amortization | 104 | |
Equipment Net | $ 506 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Cost | $ 11,218 | $ 7,589 |
Accumulated Amortization | 348 | |
Intangible Assets, Net | 10,870 | $ 7,589 |
Patents [Member] | ||
Cost | 7,718 | |
Accumulated Amortization | 348 | |
Intangible Assets, Net | 7,370 | $ 7,589 |
Website [Member] | ||
Cost | $ 3,500 | |
Accumulated Amortization | ||
Intangible Assets, Net | $ 3,500 |
Shareholder Loan (Details Narra
Shareholder Loan (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Shareholder Loan Details Narrative | ||
Shareholder loan advance | $ 0 | $ 278 |
Shareholder loan payment | $ 6,954 | $ 7,293 |
Share Capital (Details)
Share Capital (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share Capital Details | ||||
Net income (loss) for the period | $ (822,174) | $ (37,526) | $ (847,860) | $ (22,006) |
Weighted average number of shares (basic and diluted) | 23,662,690 | 100 | 13,556,886 | 100 |
Income (Loss) per weighted average share (basic and diluted) | $ 0 | $ (375) | $ 0 | $ (220) |
Share Capital (Details 1)
Share Capital (Details 1) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Share Capital Details 1 | ||
64,405,082 common shares (December 31, 2014 2,840,864) | $ 6,440 | $ 284 |
Share Capital (Details Narrativ
Share Capital (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Common stock subscriptions receivable, Shares | 2,775,360 | ||||
Common stock subscriptions receivable, Amount | $ 383,000 | ||||
Stock Issued During Period, Shares | 1,718,842 | 2,849,992 | |||
Stock Issued During Period, Value | $ 237,201 | $ 439,800 | |||
Professional fees | $ 632,836 | $ 10,373 | $ 646,820 | $ 10,373 | |
Ryan Goulding Services [Member] | |||||
Stock Issued During Period, Shares | 60,000 | 60,000 | |||
Stock Issued During Period, Value | $ 8,080 | $ 8,280 | |||
Advisory Agreement [Member] | |||||
Stock Issued During Period, Shares | 2,178,866 | 2,178,866 | |||
Professional fees | $ 260,684 | $ 260,684 | |||
Key Sales Consultant [Member] | |||||
Stock Issued During Period, Shares | 500,000 | 500,000 | |||
Stock Issued During Period, Value | $ 73,500 | $ 73,500 | |||
Consultants [Member] | |||||
Stock Issued During Period, Shares | 15,500,000 | 15,500,000 | |||
TruXmart [Member] | |||||
Stock Issued During Period, Shares | 37,700,000 | 37,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Related Party Transactions Details Narrative | |||||
Office and general expenses | $ 20,601 | $ 30,673 | $ 22,800 | ||
Repairs and maintenance expenses | 18 | 3,724 | |||
Receivable from related party | $ 7,990 | $ 7,990 | $ 8,278 |
Financial Instruments (Details)
Financial Instruments (Details) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Concentration of Revenues | 65.00% | 73.30% |
Customer A [Member] | ||
Concentration of Revenues | 34.40% | 54.00% |
Customer B [Member] | ||
Concentration of Revenues | 30.60% | 19.30% |
Financial Instruments (Details
Financial Instruments (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Bad debt expense | $ 0 | $ 0 | |
Canadian Dollars Includes In :- | |||
Accounts payable and accrued expenses | 303,914 | $ 287,353 | |
Income taxes payable | 5,155 | 5,551 | |
Canadian Dollars [Member] | |||
Canadian Dollars Includes In :- | |||
Cash | 19,202 | 26,935 | |
Accounts receivable | 61,627 | 33,531 | |
Accounts payable and accrued expenses | 71,346 | 42,979 | |
Income taxes payable | $ 6,439 | $ 0 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Professional fees related to services agreement | $ 632,836 | $ 10,373 | $ 646,820 | $ 10,373 |
Advisory Agreement [Member] | ||||
Common stock issued as accrued fees owing | 4.99% | 4.99% | ||
Company issued shares | 2,178,866 | 2,178,866 | ||
Outstanding fees owed | $ 300,684 | $ 300,684 | ||
Professional fees related to services agreement | 260,684 | 260,684 | ||
Business Advisory Agreement [Member] | ||||
Professional fees related to services agreement | 10,240 | 10,240 | ||
Prepaid expenses related to services agreement | $ 456,960 | $ 456,960 | ||
Services Agreement Term | 365 Day | 365 Day | ||
Service Agreements [Member] | ||||
Professional fees related to services agreement | $ 37,636 | $ 37,636 | ||
Prepaid expenses related to services agreement | $ 385,764 | $ 385,764 | ||
Services Agreement Term | 180 Day | 180 Day | ||
Service Agreements One [Member] | ||||
Professional fees related to services agreement | $ 58,400 | $ 58,400 | ||
Prepaid expenses related to services agreement | $ 379,600 | $ 379,600 | ||
Services Agreement Term | 180 Day | 180 Day | ||
Business Advisory Agreement One [Member] | ||||
Professional fees related to services agreement | $ 80,300 | $ 80,300 | ||
Prepaid expenses related to services agreement | $ 401,500 | $ 401,500 | ||
Services Agreement Term | 180 Day | 180 Day | ||
Marketing Services Agreement [Member] | ||||
Professional fees related to services agreement | $ 70,404 | $ 70,404 | ||
Prepaid expenses related to services agreement | $ 382,196 | $ 382,196 | ||
Services Agreement Term | 180 Day | 180 Day |