SEC Filing Summary
Filing identity warning: The supplied filing is a Form 10-Q for Franchise Holdings International, Inc., not Worksport Ltd. The filing covers the quarter ended June 30, 2014 (the company’s fiscal third quarter) and the nine months ended June 30, 2014. Verify the issuer and filing before relying on this summary.
Business context
The company describes itself as a development-stage business evaluating franchise opportunities and seeking franchise, license, and distribution rights. It reported no revenue in the periods presented. The filing also checked the box identifying the company as a shell company.
Financial results and liquidity
| Metric | Three months ended June 30 | Nine months ended June 30 |
|---|---|---|
| Revenue, 2014 / 2013 | $0 / $0 | $0 / $0 |
| General and administrative expenses, 2014 / 2013 | $3,734 / $4,775 | $14,405 / $14,032 |
| Net loss, 2014 / 2013 | $3,734 / $4,775 | $14,405 / $14,032 |
| Basic and diluted loss per share | $(0.00) / $(0.00) | $(0.01) / $(0.00) |
- At June 30, 2014, cash was $1,040, total assets were $1,040, accounts payable and total liabilities were $1,922, and shareholders’ deficit was $882. The filing reports negative working capital of $882.
- For the nine months, operating cash use was $13,455 versus $15,562 in 2013; financing cash inflow was $13,513 versus $16,154. The 2014 financing inflow came from capital contributions by the president and two shareholders. Cash increased by $58 from $982 at September 30, 2013.
- No current interest expense or income-tax provision was reported. No meaningful revenue-based margin can be calculated because revenue was zero. The filing presents no current borrowings on the balance sheet; it describes older notes as settled in 2009.
Changes versus prior comparable periods
Quarterly expenses and net loss decreased by $1,041 from 2013. Nine-month expenses and net loss increased by $373. Operating cash use improved by $2,107, while financing contributions declined by $2,641. Revenue remained zero in both comparison periods. Accounts payable increased from $972 at September 30, 2013 to $1,922 at June 30, 2014, and working capital moved from positive $10 to negative $882.
Outlook, risks, and unusual items
- Management expected operating expenses to remain fairly constant and said it did not anticipate raising additional capital in the next 12 months. It cited anticipated sales and services as a route to profitability, but reported no revenue and gave no quantified forecast.
- The company warned that it has sustained losses since inception and may be unable to continue as a going concern. Continued operations depend on meeting obligations and ultimately achieving profitability; shareholder or officer funding is not assured, and no funding arrangement was in place.
- Management said short-term capital should be sufficient for current operations, but also stated that additional financing could be needed if expenses cannot be adjusted. These statements should be considered alongside the $1,040 cash balance and negative working capital.
- The company reported no material legal proceedings, off-balance-sheet arrangements, or disclosable subsequent events through August 7, 2014. It said disclosure controls were effective and there were no material quarterly changes in internal control over financial reporting.
Most important facts to verify
- Confirm that the intended filing is this Franchise Holdings International, Inc. 10-Q rather than a Worksport Ltd. filing.
- Verify the company’s business status, shell-company designation, and lack of revenue against the correct issuer’s filings.
- Assess the going-concern risk, working-capital deficit, cash needs, and whether shareholder funding remains available.
- Check the filing’s financial statements and notes for the reported balances, capital contributions, and historical debt-settlement disclosures.