Business context and reporting period
The supplied filing is a Form 10-Q for Franchise Holdings International, Inc., not Worksport Ltd. It covers the quarter ended June 30, 2013 and the nine months then ended; the company had a September 30 fiscal year-end. The unaudited statements describe a development-stage company evaluating franchise opportunities. The period mismatch and registrant identity should be verified before relying on this summary.
Financial results and position
- Revenue: $0 for the three and nine months ended June 30, 2013, unchanged from the comparable 2012 periods.
- Expenses and net loss: Third-quarter general and administrative expense and net loss were $4,775, versus $3,841 in 2012. Nine-month expense and net loss were $14,032, versus $18,942 in 2012.
- Margins: Not meaningful because the company reported no revenue.
- Cash flow: Nine-month operating cash use was $15,562, compared with $18,944 in 2012. Investing cash flow was $0. Financing provided $16,154, including contributions from the president and two shareholders; cash increased from $318 at September 30, 2012 to $910 at June 30, 2013.
- Liquidity and debt: Cash and reported working capital were each $910 at June 30, 2013, compared with cash of $318 and a working-capital deficit of $1,212 at September 30, 2012. The balance sheet reported no liabilities at June 30, 2013, including no accounts payable; it reported no outstanding debt balance.
- Equity and shares: Stockholders’ equity was $910. There were 2,840,864 common shares outstanding.
Material changes versus the prior comparable period
- Nine-month operating expenses and net loss declined by $4,910 from 2012; quarterly expenses and net loss increased by $934.
- Cash rose by $592 from September 30, 2012, primarily alongside $16,154 of related-party and shareholder capital contributions during the nine-month period.
- The balance sheet moved from a $1,212 deficit in shareholders’ equity at September 30, 2012 to $910 of equity at June 30, 2013, reflecting contributions and the current-period loss.
Outlook, risks, and other notable items
- Management expected overhead to remain fairly constant and said it did not anticipate raising additional capital in the next 12 months. It also said continued funding from the officer or shareholders was not assured and that no funding arrangements were in place.
- The filing identifies substantial doubt about the company’s ability to continue as a going concern, citing operating losses, limited operating history, and reliance on insider contributions. Management’s ability to generate sales and become profitable was uncertain.
- The filing reports no material legal proceedings, off-balance-sheet arrangements, or required subsequent-event disclosures through July 25, 2013. Management stated disclosure controls were effective and there had been no material change in internal control over financial reporting during the quarter.
- No specific revenue or earnings guidance was provided. Management’s expectation that overhead would stay fairly constant is not a quantified forecast.
Important facts for investors to verify
- Confirm the filing belongs to the intended issuer and period: the supplied document names Franchise Holdings International, Inc., not Worksport Ltd.
- Verify the company’s near-term cash needs and the availability of future insider or shareholder funding, given its $910 cash balance and going-concern warning.
- Assess whether the company has a concrete operating plan or credible path to revenue; the filing reports no revenue in either comparable period.
- Confirm the reported zero liabilities and 2,840,864 shares outstanding against subsequent filings and current corporate records.