Worksport (WKSP) 10-Q 2 Jun 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 20, 2016
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	Mar. 31, 2016
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		67,288,142
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current Assets
Cash and cash equivalents		$ 14,466
Accounts receivable	$ 60,634	95,563
Inventory	101,358	129,006
Related party receivable	10,631	8,950
Prepaid expenses and deposits	8,107	4,606
Total Current Assets	180,730	252,591
Property and Equipment, Net	39,245	39,401
Intangible Assets, Net	10,703	10,780
Total Assets	230,678	$ 302,772
Current Liabilities
Bank overdraft	1,316
Accounts payable and accrued liabilities	270,540	$ 248,300
Income taxes payable	4,958	4,653
Current portion of promissory notes payable, net of discount (note 3)	46,105	41,456
Total Current Liabilities	$ 322,919	294,409
Promissory Note Payable, Net of Current Portion (note 3)		4,644
Total Liabilities	$ 322,919	$ 299,053
Comittments and Contingencies
Shareholders' Equity (Deficit)
Common stock, $0.0001 par value, 100,000,000 shares authorized, 67,288,142 and 66,885,082 shares issued and outstanding as of March 31, 2016 and December 31, 2015 respectively	$ 6,729	$ 6,689
Additional paid in capital	4,072,637	3,984,662
Cumulative translation adjustment	$ (14,818)	(6,212)
Share subscriptions payable		88,015
Share subscriptions receivable	$ (17,500)	(17,500)
Accumulated deficit	(4,139,289)	(4,051,935)
Total Shareholders' Equity (Deficit)	(92,241)	3,719
Total Liabilities and Shareholders' Equity (Deficit)	$ 230,678	$ 302,772

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Condensed Consolidated Balance Sheets
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	100,000,000	100,000,000
Common stock, issued	67,288,142	66,885,082
Common stock, outstanding	67,288,142	66,885,082

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Other Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statements Of Operations
Net Sales	$ 93,508	$ 78,176
Cost of Goods Sold	87,217	62,286
Gross Profit	6,291	15,890
Operating Expenses
General and administrative	29,830	18,067
Sales and marketing	21,381	8,365
Professional fees	34,371	13,984
Loss (gain) on foreign exchange	(1,368)	450
Total operating expenses	84,214	40,866
Loss from operations	(77,923)	(24,976)
Other Income (Expense)
Interest expense	(9,431)	(710)
Total other income (expense)	(9,431)	(710)
Net Loss for the period	(87,354)	(25,686)
Other Comprehensive Income (Loss)
Foreign currency translation adjustment	(8,606)	(5,537)
Comprehensive Loss for the period	$ (95,960)	$ (31,223)
Weighted Average Number of Shares (basic and diluted)	67,265,996	3,403,907
Loss per Weighted Average Share (basic and diluted)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows from Operating Activities
Net Loss	$ (87,354)	$ (25,686)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	233	$ 153
Accretion of debt discount	4,081
Fair value of services rendered by shareholder	0	$ 10,072
Total Items not involving cash flows from operating activities	(83,040)	(15,461)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable	34,929	1,938
Decrease (increase) in inventory	27,648	(83,777)
Decrease (increase) in prepaid expenses and deposits	(3,501)	(1,316)
Decrease (increase) in related party receivables	(1,681)	485
Increase (decrease) in income taxes payable	305	(467)
Increase (decrease) in accounts payable and accrued liabilities	22,240	83,684
Net changes in non cash working capital	79,940	547
Net cash used in operating activities	$ (3,100)	(14,914)
Cash Flows from Investing Activities
Purchase of property and equipment		(2,061)
Transaction costs		(53,150)
Purchase of intangible assets		(3,110)
Net cash used in investing activities		$ (58,321)
Cash Flows from Financing Activities
Overdraft proceeds	$ 1,316
Share subscription proceeds		$ 279,800
Payments to related parties		$ (6,954)
Repayments of promissory notes payable	$ (4,076)
Net cash (used in) provided by financing activities	(2,760)	$ 272,846
Effects of Foreign Currency Translation	(8,606)	(5,537)
Change in cash	(14,466)	194,074
Cash and cash equivalents beginning of period	$ 14,466	155,735
Cash and cash equivalents end of period		$ 349,809

Basis of Presentation and Going

Basis of Presentation and Going Concern	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE 1 - Basis of Presentation and Going Concern	a) Interim Financial Information The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments and reclassifications considered necessary in order to make the financial statements not misleading and for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the three month period ended March 31, 2016 are not necessarily indicated of the results that may be expected for the year ending December 31, 2016. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10 K for the year ended December 31, 2015 filed with the SEC on May 9, 2016. b) Functional and Presentation Currency These interim financial statements are presented in United States Dollars. The functional currency of the Company is the Canadian Dollar. For purposes of preparing these interim financial statements, balances denominated in Canadian Dollars outstanding at March 31, 2016 were converted into United States Dollars at a rate of 1.2987 Canadian Dollars to one United States Dollar. Transactions denominated in Canadian Dollars for the period ended March 31, 2016 were converted into United States Dollars at a rate of 1.3748 Canadian Dollars to one United States Dollar. c) Use of Estimates The preparation of condensed unaudited 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 condensed 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 three month period ended March 31, 2016, the Company incurred a net loss of $87,354, and as of that date, the Company's accumulated deficit was $4,139,289. 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	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE 2 - Significant Accounting Policies	The accounting polices used in the preparation of these interim unaudited consolidated financial statements are consistent with those of the Company's audited financial statements for the year ended December 31, 2015.

Promissory Notes Payable

Promissory Notes Payable	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE 3 - Promissory Notes Payable	In October, 2015, the Company entered into a secured promissory note with an investor in the principal amount of 102,000 Canadian Dollars ($79,768). The Company received proceeds of 75,000 Canadian Dollars ($58,653) and 27,000 Canadian Dollars ($21,115) was recorded as an original issue discount which will be accreted over the life of the note to interest expense. The promissory note requires a daily payment of 324 Canadian Dollars ($249) until January 26, 2017 and carries a 40.0% interest rate. The promissory note is secured by all assets of the Company. The outstanding principal balance on the note at March 31, 2016 was 77,943 Canadian Dollars ($60,016) and the carrying amount of the original issue discount was 18,067 Canadian Dollars ($13,911). The outstanding principal balance on the note at December 31, 2015 was 87,480 Canadian Dollars ($63,208) and the carrying amount of the original issue discount was 23,677 Canadian Dollars ($17,108). The amounts repayable under the secured promissory note as at March 31, 2016 were as follows: Balance owing, March 31, 2016 $ 46,105 Less amounts due within one year (46,105 ) $ - The amounts repayable under the secured promissory note as at December 31, 2015 were as follows: Balance owing, December 31, 2015 $ 46,100 Less amounts due within one year (41,456 ) $ 4,644

Common Stock

Common Stock	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE 4 - Common Stock	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 three months ended March 31, 2016, the Company issued 403,060 common shares, the proceeds of which were received during the year ended December 31, 2015.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE 5 - Related Party Transactions	During the period ended March 31, 2016, the Company recorded salaries expense of $5,808 (2015 $0) office and general expenses of $0 (2015 $10,072) related to services rendered to the Company by its major shareholder.

Financial Instruments

Financial Instruments	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE 6 - 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 $0 during the period ended March 31, 2016 (2015 $0). 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. 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. 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 three months ended March 31, 2016 and 2015. A customer is considered to be significant if they account for greater than 10% of the Company's annual sales. 2016 2015 Customer A 47.4 27.3 Customer B 13.5 - Customer C 11.0 - Customer D 10.2 3.9 Customer E 0.2 48.5 82.3 79.7 The loss of any of these key customers could have an adverse effect on the Company's business.

Reclassification

Reclassification	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE 7 - Reclassification	Certain comparative figures have been re classified to conform to the current period's presentation.

Evaluation of Subsequent Events

Evaluation of Subsequent Events	3 Months Ended
	Mar. 31, 2016
Notes to Financial Statements
NOTE 8 - Evaluation of Subsequent Events	Subsequent to March 31, 2016, the Company entered into a Equity Purchase Agreement (the "Agreement") pursuant to which the Company will issue up to $1,000,000 of the Company's common stock. All sales of the Company's stock pursuant to the Agreement are subject to the Company fulfilling certain conditions contained therein, including the filing and effectiveness of a registration document with the SEC to register the shares of the common stock to be sold. The Company evaluated all subsequent events after the balance sheet date through June 1, 2016, the date the financial statements were available to be issued, and concluded there were no events or transactions occurring during this period that required recognition or disclosure in the financial statements other than that mentioned above.

Basis of Presentation and Goi14

Basis of Presentation and Going Concern (Policies)	3 Months Ended
	Mar. 31, 2016
Basis Of Presentation And Going Concern Policies
Interim Financial Information	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments and reclassifications considered necessary in order to make the financial statements not misleading and for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the three month period ended March 31, 2016 are not necessarily indicated of the results that may be expected for the year ending December 31, 2016. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10 K for the year ended December 31, 2015 filed with the SEC on May 9, 2016.
Functional and Presentation Currency	These interim financial statements are presented in United States Dollars. The functional currency of the Company is the Canadian Dollar. For purposes of preparing these interim financial statements, balances denominated in Canadian Dollars outstanding at March 31, 2016 were converted into United States Dollars at a rate of 1.2987 Canadian Dollars to one United States Dollar. Transactions denominated in Canadian Dollars for the period ended March 31, 2016 were converted into United States Dollars at a rate of 1.3748 Canadian Dollars to one United States Dollar.
Use of Estimates	The preparation of condensed unaudited 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 condensed 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 three month period ended March 31, 2016, the Company incurred a net loss of $87,354, and as of that date, the Company's accumulated deficit was $4,139,289. 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.

Promissory Notes Payable (Table

Promissory Notes Payable (Tables)	3 Months Ended
	Mar. 31, 2016
Promissory Notes Payable Tables
Summary of promissory note	The amounts repayable under the secured promissory note as at March 31, 2016 were as follows: Balance owing, March 31, 2016 $ 46,105 Less amounts due within one year (46,105 ) $ - The amounts repayable under the secured promissory note as at December 31, 2015 were as follows: Balance owing, December 31, 2015 $ 46,100 Less amounts due within one year (41,456 ) $ 4,644

Financial Instruments (Tables)

Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2016
Financial Instruments Tables
Concentration of sales	2016 2015 Customer A 47.4 27.3 Customer B 13.5 - Customer C 11.0 - Customer D 10.2 3.9 Customer E 0.2 48.5 82.3 79.7

Basis of Presentation and Goi17

Basis of Presentation and Going Concern (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Basis Of Presentation And Going Concern Details Narrative
Net Loss for the year	$ (87,354)	$ (25,686)
Accumulated deficit	$ (4,139,289)		$ (4,051,935)

Promissory Notes Payable (Detai

Promissory Notes Payable (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Promissory Notes Payable Details
Balance owing	$ 46,105	$ 46,100
Less amounts due within one year	$ (46,105)	(41,456)
Promissory Note Payable		$ 4,644

Promissory Notes Payable (Det19

Promissory Notes Payable (Details Narrative) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Promissory Notes Payable Details Narrative
Outstanding principal balance	$ 60,016	$ 63,208
Carrying amount of the original issue discount	$ 13,911	$ 17,108

Common Stock (Details Narrative

Common Stock (Details Narrative) - $ / shares	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Common Stock Details Narrative
Common stock issued during period	403,060
Common stock, authorized	100,000,000	100,000,000
Common stock, par value	$ 0.0001	$ 0.0001

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Related Party Transactions Details Narrative
Office and general expenses	$ 0	$ 10,072
Salaries expense	$ 5,808	$ 0

Financial Instruments (Details)

Financial Instruments (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Concentration of Revenues	82.30%	79.70%
Customer A [Member]
Concentration of Revenues	47.40%	27.30%
Customer B [Member]
Concentration of Revenues	13.50%
Customer C [Member]
Concentration of Revenues	11.00%
Customer D [Member]
Concentration of Revenues	10.20%	3.90%
Customer E [Member]
Concentration of Revenues	0.20%	48.50%

Financial Instruments (Details

Financial Instruments (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Financial Instruments Details Narrative
Bad debt expense	$ 0	$ 0