fnhi_10q.htm

0001477932-18-000837.txt : 20180214 0001477932-18-000837.hdr.sgml : 20180214 20180214131519 ACCESSION NUMBER: 0001477932-18-000837 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 47 CONFORMED PERIOD OF REPORT: 20170331 FILED AS OF DATE: 20180214 DATE AS OF CHANGE: 20180214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Franchise Holdings International, Inc. CENTRAL INDEX KEY: 0001096275 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 650782227 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-27631 FILM NUMBER: 18610289 BUSINESS ADDRESS: STREET 1: 3120 RUTHERFORD RD STREET 2: SUITE 414 CITY: VAUGHAN STATE: A6 ZIP: L4K OB2 BUSINESS PHONE: 1-888-554-8789 MAIL ADDRESS: STREET 1: 3120 RUTHERFORD RD STREET 2: SUITE 414 CITY: VAUGHAN STATE: A6 ZIP: L4K OB2 FORMER COMPANY: FORMER CONFORMED NAME: TMANGLOBAL COM INC DATE OF NAME CHANGE: 19991005 10-Q 1 fnhi_10q.htm FORM 10-Q fnhi_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended March 31, 2017

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from _______________ to _______________

Commission File Number: 000-27631

FRANCHISE HOLDINGS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

NEVADA		65-0782227
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3120 Rutherford Road

Suite 414

Vaughan, Ontario, Canada L4K 0B2

(Address of principal executive offices) (Zip Code)

(888) 554-8789

Registrant's telephone number, including area code

_____________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the proceeding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check One).

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.

As of February 14, 2018, the number of shares outstanding of the registrant's class of common stock was 119,127,240.

TABLE OF CONTENTS

		Pages

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements		3

	Condensed Consolidated Balance Sheets at March 31, 2017 (Unaudited) and December 31, 2016		3

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2017 and 2016 (Unaudited)		4

	Condensed Consolidated Statements of Cash Flows for the three months Ended March 31, 2017 and 2016 (Unaudited)		5

	Notes to the Condensed Consolidated Financial Statements (Unaudited)		6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		18

Item 4.	Controls and Procedures		18

PART II OTHER INFORMATION

Item 1.	Legal Proceedings		19

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		19

Item 3.	Defaults Upon Senior Securities		19

Item 4.	Submission of Matters to a Vote of Security Holders		19

Item 5.	Other Information		19

Item 6.	Exhibits		20

SIGNATURES			21

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Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Franchise Holdings International, Inc.

Condensed Consolidated Balance Sheets

March 31,

2017

December 31,

2016

(Unaudited)

Assets

Current Assets

Cash and cash equivalents

$ 29,282

$ -

Accounts receivable

13,591

81,146

Inventory

68,093

78,975

Related party receivable

7,591

7,770

Prepaid expenses and deposits

116,267

116,267

Total Current Assets

234,824

284,158

Property and Equipment, Net of Accumulated Depreciation of $1,447 (December 31, 2016 - $1,244)

39,041

39,263

Intangible Assets, Net of Accumulated Amortization of $823 (December 31, 2016 - $746)

13,251

13,328

Total Assets (Substantially Pledged as Collateral)

$ 287,116

$ 336,749

Liabilities and Shareholders' Equity (Deficit)

Current Liabilities

Bank overdraft

$ -

$ 2,635

Accounts payable and accrued liabilities

286,246

340,270

Income taxes payable

4,830

4,796

Current portion secrued notes payable (note 3)

100,982

105,985

Convertible promissory notes payable, net of discount (note 3)

-

78,978

Derivative liability (note 5)

-

704,868

Total Current Liabilities

392,058

1,237,532

Secured Notes Payable, Net of Current Portion (note 3)

151,892

104,084

Total Liabilities

543,950

1,341,616

Comittments and Contingencies

Shareholders' Equity (Deficit)

Series A Preferred Stock, $0.0001 par value, 1,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2017 and December 31, 2016 (note 11)

-

-

Common stock, $0.0001 par value, 299,000,000 shares authorized, 202,232,666 and 68,088,142 shares issued and outstanding as of March 31, 2017 and December 31, 2016 respectively (note 6)

20,224

6,809

Additional paid-in capital

6,851,096

4,189,607

Cumulative translation adjustment

21,020

(3,778 )

Share subscriptions receivable

(7,600 )

(9,350 )

Accumulated deficit

(7,141,574 )

(5,188,155 )

Total Shareholders' Equity (Deficit)

(256,834 )

(1,004,867 )

Total Liabilities and Shareholders' Equity (Deficit)

$ 287,116

$ 336,749

See accompanying notes to the unaudited condensed consolidated financial statements.

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Table of Contents

Franchise Holdings International, Inc.

Condensed Consolidated Statements of Operations and Other Comprehensive Loss

For the three month periods ended March 31, 2017 and 2016

March 31,

2017

March 31,

2016

(Unaudited)

(Unaudited)

Net Sales

$ 101,263

$ 93,508

Cost of Goods Sold

70,991

87,217

Gross Profit

30,272

6,291

Operating Expenses

General and administrative

1,395,531

29,830

Sales and marketing

1,103

21,381

Professional fees

26,053

34,371

Loss (gain) on foreign exchange

27,773

(1,368 )

Total operating expenses

1,450,460

84,214

Loss from operations

(1,420,188 )

(77,923 )

Other Income (Expense)

Interest expense

(8,310 )

(9,431 )

Debt issuance costs

(2,971 )

-

Loss on derivative (note 5)

(484,720 )

-

Finance charges

(25,464 )

-

Loss on settlement of debt

(11,765 )

-

Total other income (expense)

(533,230 )

(9,431 )

Net Loss for the period

(1,953,418 )

(87,354 )

Other Comprehensive Income (Loss)

Foreign currency translation adjustment

24,798

(8,606 )

Net Comprehensive Loss for the period

$ (1,928,620 )

$ (95,960 )

Loss per Weighted Average Share (basic and diluted)

$ (0.01 )

$ -

Weighted Average Number of Shares (basic and diluted)

136,849,459

67,455,040

See accompanying notes to the unaudited condensed consolidated financial statements.

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Table of Contents

Franchise Holdings International, Inc.

Condensed Consolidated Statements of Cash Flows

For the three month periods ended March 31, 2017 and 2016

March 31,

2017

March 31,

2016

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities

Net Loss

$ (1,953,418 )

$ (87,354 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

299

233

Loss on settlement of debt

11,765

-

Loss on derivative

484,720

-

Accretion of debt discount

2,971

4,081

Financing fees paid in shares

21,000

-

Interest paid in shares

3,823

-

Stock based compensation

1,360,000

-

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable

67,555

34,929

Decrease (increase) in inventory

10,882

27,648

Decrease (increase) in prepaid expenses and deposits

-

(3,501 )

Decrease (increase) in related party receivables

179

(1,681 )

Increase (decrease) in income taxes payable

34

305

Increase (decrease) in accounts payable and accrued liabilities

(47,246 )

22,240

Net cash used in operating activities

(37,436 )

(3,100 )

Cash Flows from Investing Activities

Net cash used in investing activities

-

-

Cash Flows from Financing Activities

Overdraft proceeds (repayment of overdraft)

(2,635 )

1,316

Share subscription proceeds

1,750

-

Repayments of secured promissory notes payable

(4,950 )

(4,076 )

Proceeds from secured promissory notes payable

47,755

-

Net cash (used in) provided by financing activities

41,920

(2,760 )

Effects of Foreign Currency Translation

24,798

(8,606 )

Change in cash

29,282

(14,466 )

Cash and cash equivalents - beginning of period

-

14,466

Cash and cash equivalents - end of period

$ 29,282

$ -

Non-Cash Investing and Financing Activities

Common Shares issued to the Company's CEO

$ 1,360,000

$ -

Common Shares issued for conversions of promissory notes

$ 1,314,904

$ -

See accompanying notes to the unaudited condensed consolidated financial statements.

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Table of Contents

Franchise Holdings International, Inc.

Notes to the Condensed Consolidated Financial Statements

Unaudited

1. Basis of Presentation and Going Concern

a) Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("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, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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, 2016 filed with the SEC on September 18, 2017.

b) Functional and Reporting 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, 2017 were converted into United States Dollars at a rate of 1.33 Canadian Dollars to one United States Dollar. Balances denominated in Canadian Dollars outstanding at December 31, 2017 were converted into United States Dollars at a rate of 1.34 Canadian Dollars to one United States Dollar. Transactions denominated in Canadian Dollars for the period ended March 31, 2017 were converted into United States Dollars at a rate of 1.32 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 1.37 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.

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Table of Contents

Franchise Holdings International, Inc.

Notes to the Condensed Consolidated Financial Statements

Unaudited

1. Basis of Presentation and Going Concern (continued)

d) Going Concern

These unaudited condensed consolidated 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, 2017, the Company incurred a net loss of $1,953,418, and as of that date, the Company’s accumulated deficit was $7,141,574. 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.

2. 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, 2016.

3. Secured Notes Payable

During the year ended December 31, 2016, the Company issued a secured promissory note in the amount of $39,000. The secured promissory note is due September 2, 2018 and bears interest at a rate of 18% per annum, accrued daily, and calculated and payable monthly in arrears on the last day of each and every month. The secured promissory note is secured by a first charge and security interest in all of the present and after-acquired property and assets of the Company pursuant to a general security agreement and a charge against the inventory of the Company. The Company has classified this note payable as long-term on the Balance Sheet.

In connection with the issuance of the secured promissory note, the Company issued 100,000 shares of its common stock with an aggregate fair value of $15,000 as a commitment fee. The commitment fee was expensed during the year ended December 31, 2016.

During the year ended December 31, 2016, the Company issued a secured promissory note in the amount of $25,000. The secured promissory note is due October 1, 2018 and bears interest at a rate of 18% per annum, accrued daily, and calculated and payable monthly in arrears on the last day of each and every month. The secured promissory note is secured by a first charge and security interest in all of the present and after-acquired property and assets of the Company pursuant to a general security agreement and a charge against the inventory of the Company. The Company has classified this note payable as long-term on the Balance Sheet.

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Table of Contents

Franchise Holdings International, Inc.

Notes to the Condensed Consolidated Financial Statements

Unaudited

3. Secured Notes Payable (continued)

During the year ended December 31, 2016, the Company issued a secured promissory note in the amount of $15,000. The secured promissory note is due July 13, 2018 and bears interest at a rate of 18% per annum, accrued daily, and calculated and payable monthly in arrears on the last day of each and every month. The secured promissory note is secured by a first charge and security interest in all of the present and after-acquired property and assets of the Company pursuant to a general security agreement and a charge against the inventory of the Company. The Company has classified this note payable as long-term on the Balance Sheet.

During the year ended December 31, 2016, the Company issued a secured promissory note in the amount of $20,608 (27,670 Canadian Dollars). The secured promissory note is due July 13, 2018 and bears interest at a rate of 18% per annum, accrued daily, and calculated and payable monthly in arrears on the last day of each and every month. The secured promissory note is secured by a first charge and security interest in all of the present and after-acquired property and assets of the Company pursuant to a general security agreement and a charge against the inventory of the Company. During the period ended March 31, 2017, the Company borrowed an additional $42,406 (56,443 Canadian Dollars) with the same terms as the original advance of $20,608. The Company has classified this note payable as long-term on the Balance Sheet.

As of March 31, 2017, the Company has accrued interest of $9,697 (December 31, 2016 - $4,476) related to the above secured promissory notes.

During the year ended December 31, 2016, the Company issued a promissory note in the amount of $65,000 to a consultant for the purposes of generating subscriptions of shares of the Company's common stock. Of the principal balance of $65,000, $12,200 has been allocated against additional paid-in capital, with the remaining $52,800 expensed as financing charges. The promissory note was due February 18, 2017 and was non-interest bearing. During the period ended March 31, 2017, this promissory note was assigned to another lender. At the time of assignment the terms of this note were renegotiated with the new holder. The promissory note is now due March 1, 2018 and bears interest at the rate of 8%.

In October, 2015, the Company entered into a secured promissory note with an investor in the principal amount of $79,768 (102,000 Canadian Dollars). The Company received proceeds of $58,653 (75,000 Canadian Dollars) and $21,115 (27,000 Canadian Dollars) 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 $249 (324 Canadian Dollars) 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, 2017 was $35,982 (47,892 Canadian Dollars) and the carrying amount of the original issue discount was $0 (0 Canadian Dollars). As of March 31, 2017 and December 31, 2016, this note was in default, however, there have been no actions taken by the investor pursuant to the default, as they continue to withdraw the daily payment as funds permit.

The amounts repayable under the secured promissory notes are as follows:

March 31,

2017

December 31,

2016

Balance owing

$ 252,874

$ 210,069

Less amounts due within one year

(100,982 )

(105,985 )

$ 151,892

$ 104,084

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Table of Contents

Franchise Holdings International, Inc.

Notes to the Condensed Consolidated Financial Statements

Unaudited

4. Convertible Promissory Notes Payable

a) During the year ended December 31, 2016, the Company entered into a convertible promissory note in the principal amount of $77,750 with a maturity date of March 22, 2017. The convertible promissory note bears interest at a rate of 10.0% per annum from the date of issue until the principal becomes due and payable whether at maturity or upon acceleration or by prepayment or otherwise. Any amount of principal or interest that is not paid when it becomes due shall bear interest at a rate of 24.0% per annum from the due date thereof until the outstanding amounts are paid. No amounts under the convertible promissory note can be prepaid in whole or in part except as otherwise explicitly set out in the terms of the convertible promissory note with the written consent of the Holder. The Holder has the right to convert any unpaid principal amount into shares of the Company's common stock at any time from the date of the issuance of the convertible promissory note to the later of (i) maturity or (ii) the date the outstanding principal and interest is paid. The price at which the conversion is to occur is the lesser of (i) 45% multiplied by the Trading Price (representing a discount rate of 55%) during the previous trading day period ending on the latest complete trading day prior to the date of the convertible promissory note and (ii) the Variable Conversion Price, which shall mean 45% multiplied by the Market Price which shall be the lowest Trading Price for the Company's Stock during the 25 day Trading Period ending on the last complete Trading Day prior to the Conversion Date. In connection with the issuance of the convertible promissory note, the Company incurred debt issuance costs of $7,500 which are being amortized over the maturity period of the convertible promissory note. Included in interest expense for the period ended March 31, 2017, is $2,217 related to the amortization of the debt issuance costs. During the period ended March 31, 2017, and prior to the maturity date, the promissory note and accrued interest was converted in full into 37,640,800 shares of the Company's common stock.

b) During the year ended December 31, 2016, the Company entered into a convertible promissory note in the principal amount of $55,000 with a maturity date of June 28, 2017. The convertible promissory note bears interest at a rate of 10.0% per annum from the date of issue until the principal becomes due and payable whether at maturity or upon acceleration or by prepayment or otherwise. Any amount of principal or interest that is not paid when it becomes due shall bear interest at a rate of 24.0% per annum from the due date thereof until the outstanding amounts are paid. The Holder has the right to convert any unpaid principal amount into shares of the Company's common stock at any time from the date of the issuance of the convertible promissory note to the later of (i) maturity or (ii) the date the outstanding principal and interest is paid. The price at which the conversion is to occur is the lesser of (i) the closing sale price of the Company's common stock on the Principal Market on the Trading Date immediately preceding the Closing Date and ii) 55% of the lowest sale price for the Company's common stock on the Principal Market during the twenty (20) consecutive Trading Days immediately preceding the Conversion Date provided, however, if the Company’s share price at any time loses the bid (ex: 0.0001 on the ask with zero market makers on the bid on level 2), then the Conversion Price may, in the Holder’s sole and absolute discretion, be reduced to a fixed conversion price of 0.00001 (if lower than the conversion price otherwise), and provided, that if on the date of delivery of the Conversion Shares to the Holder, or any date thereafter while Conversion Shares are held by the Holder, the closing bid price per share of the Company's common stock on the Principal Market on the Trading Day on which shares of the Company's common stock are traded is less than the sale price per share of the Company's common stock on the Principal Market on the Trading Day used to calculate the Conversion Price hereunder, then such Conversion Price shall be automatically reduced such that the Conversion Price shall be recalculated using the new low closing bid price (“Adjusted Conversion Price”) and shall replace the Conversion Price above, and Holder shall be issued a number of additional shares such that the aggregate number of shares Holder receives is based upon an Adjusted Conversion Price. For the purpose of clarity, any shares required to be issued as a result of an Adjusted Conversion Price shall be deemed to be “Conversion Shares” under this convertible promissory note.

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Table of Contents

Franchise Holdings International, Inc.

Notes to the Condensed Consolidated Financial Statements

Unaudited

4. Convertible Promissory Notes Payable (continued)

In connection with the issuance of the convertible promissory note, the Company incurred debt issuance costs of $1,500 which are being amortized over the maturity period of the convertible promissory note. Included in interest expense for the period ended March 31, 2017, is $754 related to the amortization of the debt issuance costs. During the period ended March 31, 2017, and prior to the maturity date, the promissory note and accrued interest was converted in full into 24,503,724 shares of the Company's common stock.

As a result of the derivative liabilities associated with the conversion feature of the convertible promissory notes, exceeding the principal amounts of the convertible promissory notes, the Company had recognized aggregate discounts on the convertible promissory notes of $132,750. Upon conversion of the convertible promissory notes, the unamortized balances of the discounts were recorded as a reduction to additional paid-in capital.

5. Derivative Liability

The Company adopted ASC 815 which defines the determination of whether an instrument (or embedded feature) is solely indexed to an entity's own stock. During the period ended December 31, 2016, the Company issued two convertible promissory notes payable, as described in note 4, which contain features that entitles the holder to convert any outstanding amounts payable under the convertible promissory note into a shares of the common stock of the Company, the number of which is dependent on several factors. As such, ASC 815 determines the convertible promissory note to be a hybrid financial instrument that includes an embedded derivative that requires separation from the main financial instrument and recognition at fair value.

During the period ended March 31, 2017, the convertible promissory notes to which the derivative liabilities relate, were converted to shares of the Company's common stock. During the period ended March 31, 2017, the Company recognized an aggregate loss on the value of the derivative liability of $484,720 related to the changes in value from January 1, 2017 to the dates upon which the convertible promissory notes were converted.

6. Common Stock

The Company is authorized to issue 1,000,000 shares of its Series A Preferred Stock with a par value of $0.0001. These shares have voting rights equal to 299 shares of common stock, per share of preferred.

The Company is authorized to issue 299,000,000 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 period ended March 31, 2017, the Company issued 62,144,524 common shares pursuant to the conversion of the convertible promissory notes discussed in note 4.

During the period ended March 31, 2017, the Company issued 72,000,000 common shares of the Company to its CEO pursuant to the Company's employee stock incentive plan at a deemed cost of $0.001 per share. The fair value of the common shares of $1,360,000 has been included as general and administrative expense during the period ended March 31, 2017.

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Table of Contents

Franchise Holdings International, Inc.

Notes to the Condensed Consolidated Financial Statements

Unaudited

7. Related Party Transactions

During the period ended March 31, 2017, the Company recorded salaries expense of $14,865 (2016 - $5,808) related to services rendered to the Company by its major shareholder and CEO. During the period ended March 31, 2017, the Company recognized revenue of $3,749 (2016 - $3,382) for goods sold to a company with a director, officer and shareholder in common.

8. Financial Instruments

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, 2017 and 2016, as well as the balance included in accounts receivable for each significant customer as at March 31, 2017 and 2016. A customer is considered to be significant if they account for greater than 10% of the Company's annual sales.

2017

2016

$

%

$

%

Customer A

4,415

66.0

49,020

47.4

Customer B

298

10.6

552

10.2

Customer C

3,882

9.3

2,092

13.5

Customer D

-

-

3

11.0

8,595

85.9

51,667

82.1

The loss of any of these key customers could have an adverse effect on the Company's business.

9. Prior Period Misstatement

Subsequent to filing the Form 10-Q for the three months ended March 31, 2016, it was discovered that the issuance of 200,000 shares of the Company's common stock with a fair value of $102,000 were not included in the Form 10-Q. The effect of this omission was that, as at March 31, 2016, prepaid expenses were understated by $102,000, common stock was understated by $20 and additional paid-in capital was understated by $101,980. As at March 31, 2016, the restated balance of prepaid expenses is $110,107, the restated balance of common stock is $6,749 and the restated balance of additional paid-in capital is $4,174,617. In addition, the correct weighted average shares outstanding for the three months ended March 31, 2016 was 67,455,040.

The effects of the prior period misstatement are as follows:

As Originally Reported

Restated

Prepaid expenses

$ 8,107

$ 128,107

Common stock

$ 6,729

$ 6,749

Additional paid-in capital

$ 4,072,637

$ 4,174,617

Weighted average shares outstanding

67,265,996

67,455,040

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Table of Contents

Franchise Holdings International, Inc.

Notes to the Condensed Consolidated Financial Statements

Unaudited

10. Evaluation of Subsequent Events

Subsequent to March 31, 2017, the Company:

a) Is out of compliance with certain debt covenants.

b) Designated 1,000,000 of the authorized shares of its common stock as Series A Preferred Stock. The Preferred Stock will have voting rights equal to 299 shares of common stock, per share of Preferred. Subsequent to March 31, 2017, 100,000,000 shares of common stock were exchanged for 1,000,000 shares of Series A Preferred Stock.

d) Entered into a Services Agreement with a consultant to provide management consulting services for a period of 180 days in exchange for a fee of $50,000 payable in 1,577,287 common shares of the Company. Pursuant to the Services Agreement, the consultant will subscribe for the shares for gross proceeds of $1,577. Subsequent to March 31, 2017, the Company received the proceeds and issued the common shares.

d) Entered into a Services Agreement with a second consultant to provide management consulting services for a period of 180 days in exchange for a fee of $50,000 payable in 1,577,287 common shares of the Company. Pursuant to the Services Agreement, the consultant will subscribe for the shares for gross proceeds of $1,577. Subsequent to March 31, 2017, the Company received the proceeds and hissed the common shares.

e) Entered into an agreement with another company pursuant to which to other company assumed accounts payable of the Company in the aggregate amount of $183,443 in exchange for 35,000,000 common shares of the Company. As at the filing date, the Company has issued 10,400,000 common shares.

f) Completed a corporate reorganization ( the "Reorganization") in accordance with Section 251(g) of the Delaware General Corporation Law, pursuant to which the Company became a wholly-owned subsidiary of a newly formed entity which became the successor of the public company (the "Successor Issuer"). In connection with the Reorganization, the Company redomiciled into Delaware and changed its name to Franchise Transition Inc., and the Successor Issuer took the name Franchise Holdings International, Inc. As one result, the assets and liabilities of the Company, remain the assets and liabilities of such entity. Pursuant to the Reorganization, the outstanding shares of the Company were exchanged for shares of the Successor Issuer on a one-for-one basis. This corporate reorganization was subsequently unwound.

g) Issued 3,000,000 shares of its common stock for gross proceeds of $38,010.

h) Issued 340,000 shares of its common stock in exchange for services rendered of $10,000.

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Franchise Holdings International, Inc.

Notes to the Condensed Consolidated Financial Statements

Unaudited

10. Evaluation of Subsequent Events (continued)

i) Entered into a Term Sheet with respect to loans to the Company of up to $500,000 to fund the purchases of inventory. Any advances made pursuant to the Term Sheet will be secured by the wholesale inventory of the Company, all of the shares of the Company held by its majority shareholder and CEO and another asset of the Company's majority shareholder. Pursuant to the Term Sheet, the Company agrees to pay 1.5% per month on all drawn amounts, an initial due diligence fee of $20,000 upon receipt of the first $220,000 loan amount (the "first tranche") and a monthly monitoring fee of $5,000 for the first tranche and up to a loan amount of $500,000. The lender can choose to waive payment of the monthly fee in exchange for conversion of the amount into shares of the Company's common stock at a price of $0.035 per share. Should the price of the Company's stock increase beyond $0.05 per share, the conversion price will be struck at a 30% discount to the closing price of the volume weighted average price on the OTC market of the previous five trading days. Pursuant to the Term Sheet, the term of the advances made will be for a minimum of two years and the Company shall have the right to increase the credit facility to $1,000,000 provided the minimum term extends to three years. Upon the full and final advance of $500,000, the Company agrees to issue to the lender, 1,000,000 shares of its common stock and 2,000,000 warrants entitling the holder to acquire one share of the Company's common stock at a price of $0.04 per share.

j) Entered into two Share Issuance/ Claim Extinguishment Agreements pursuant to which the Company agreed to issue, in aggregate, 50,000,000 shares of its common stock in exchange for the assumption of aggregate indebtedness of $154,056.

k) Entered into a Share Purchase Agreement pursuant to which the Company has agreed to issue share of its common stock for aggregate proceeds of $100,000 at a fixed issue price of $0.02 per share (the "Fixed Price"), provided, however, that if the Company's volume weighted average price (the "VWAP") on the date the buyer provides a Stock Issuance Notice to the Company or on the date on which the buyer received such Issuance Shares, the Company's stock bid price is less than $0.035 (the "Minimum Price"), then the number of Issuance Shares shall increase as a result of a decrease in the Issuance Price below the Minimum Price. In such event, the Issuance Price shall decrease below the Fixed Price by an equal percentage of the difference between the VWAP and the Minimum Price.

l) Entered into a Share Purchase Agreement pursuant to which the Company has agreed to issue share of its common stock for aggregate proceeds of $400,000 at a fixed issue price of $0.02 per share (the "Fixed Price"), provided, however, that if the Company's volume weighted average price (the "VWAP") on the date the buyer provides a Stock Issuance Notice to the Company or on the date on which the buyer received such Issuance Shares, the Company's stock bid price is less than $0.035 (the "Minimum Price"), then the number of Issuance Shares shall increase as a result of a decrease in the Issuance Price below the Minimum Price. In such event, the Issuance Price shall decrease below the Fixed Price by an equal percentage of the difference between the VWAP and the Minimum Price.

m) Borrowed $37,770 pursuant to a loan agreement. The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of October 18, 2018.

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Franchise Holdings International, Inc.

Notes to the Condensed Consolidated Financial Statements

Unaudited

10. Evaluation of Subsequent Events (continued)

n) Borrowed $30,000 pursuant to a loan agreement. The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.

o) Borrowed $50,000 pursuant to a loan agreement. The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.

p) Entered into a consulting agreement, pursuant to which the Company will issue 12,500,000 common shares of the Company, upon written demand by the consultant, in exchange for consulting services for a period of 18 months.

The Company has evaluated subsequent events through February 14, 2018 which is the date the financial statements were available to be issued.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following management's discussion and analysis ("MD&A") should be read in conjunction with financial statements of FNHI, and its wholly-owned subsidiary, Truxmart, Ltd. for the three months ended March 31, 2017 and 2016, and the notes thereto. Additional information relating to FNHI is available at Truxmart.ca

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis (“MD&A”) should be read in conjunction with financial statements of Franchise Holdings International, Inc. (“FNHI”) for the three months ended March 31, 2017 and 2016, and the notes thereto. Additional information relating to FNHI is available at www.fnhi.net

Safe Harbor for Forward-Looking Statements

Certain statements included in this MD&A constitute forward-looking statements, including those identified by the expressions anticipate, believe, plan, estimate, expect, intend, and similar expressions to the extent they relate to FNHI or its management. These forward-looking statements are not facts, promises, or guarantees; rather, they reflect current expectations regarding future results or events. These forward-looking statements are subject to risks and uncertainties that could cause actual results, activities, performance, or events to differ materially from current expectations. These include risks related to revenue growth, operating results, industry, products, and litigation, as well as the matters discussed in FNHI's MD&A under Risk Factors. Readers should not place undue reliance on any such forward-looking statements. FNHI disclaims any obligation to publicly update or to revise any such statements to reflect any change in the Company's expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this report.

Revenue

For the three months ended March 31, 2017, revenue generated from the entire line of Truxmart products was $101,263, compared to $93,508 for the three months ended March 31, 2016. The year over year increase of approximately 8% was mainly attributable to the availability of inventory to partially satisfy customer orders. During the three months ended March 31, 2016 the Company incurred a shortage of inventory that resulted in a reduced amount of sales for the quarter.

For the three months ended March 31, 2017, revenue generated in Canada was $82,082 compared to $65,204 for the same period in 2016, an increase of 26%. The increase was primarily due to partial orders being filled with one Canadian distributor. The rate of exchange between the Canadian Dollar and the United States Dollar during the first three months of fiscal 2017 was fairly consistent, which limited the historically negative effect on reported revenues as a result of translating the sales denominated in Canadian Dollars to United States Dollars for financial statement reporting purposes. Canadian Dollar Sales increased to CAD$108,586 from CAD$89,641, an increase of 21% during three months ended March 31, 2017. For the three months ended March 31, 2017, revenue generated in the United States was $19,182 compared to $28,304 for the same period in 2016. This represents a year-over-year decrease in US- source revenue of approximately 32%, and is primarily attributable to limited inventory in stock, and the Company switching its revenue focus to aging purchase orders with the Company’s key Canadian distributor

Sales from online retailers of the Truxmart products decreased from $28,697 in the three months ended March 31, 2016 to $19,397 in the three months ended March 31, 2017, a decrease of 32%. The online retailers accounted for over 17% of total revenue for the three months ended March 31, 2017, compared to 30% for the three months ended March 31, 2016. Distributor sales increased from $61,448 in 2016, to $72,180 in 2017. The remaining revenues consist of sales from key area dealers.

Currently, Truxmart has one major distributor in Canada, one in the United States, along with its own contracted distribution and inventory facility in Breinigsville, PA. This does not include multiple independent online retailers.

Although Truxmart currently supports a total of 16 dealers and distributors, Truxmart believes the trend of increasing sales through online retailers will continue to outpace the traditional distribution business model. Moreover, reputable online retailer's customers tend to provide larger sales volumes, greater margin of profit as well as greater protection against price erosion.

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Cost of Sales

Cost of sales decreased for the first three months of fiscal 2017, when compared to the first three months of fiscal 2016, by 19% from $87,217 to $70,991. Our cost of sales, as a percentage of sales, was approximately 40% and 80% for three months ended March 31, 2017 and 2016, respectively.

Within cost of sales, freight costs accounted for 7% of cost of sales during the three months ended March 31, 2017, whereas in 2016, it accounted for 14% of cost of sales. The decrease in the percentage of cost of sales is due to the majority of the sales for the quarter ended March 31, 2017 being to Canadian customers that generally have lower shipping costs than sales to U.S. customers. Freight costs were $5,180 and $12,475 for the three month periods ended March 31, 2017 and 2016 respectively.

Truxmart provides its distributors and online retailers an "all-in" wholesale price. This includes any import duty charges, taxes and shipping charges. Discounts are applied if the distributor or retailer chooses to use their own shipping process. Certain exceptions apply on rare occasions where product is shipped outside the contiguous United States or from the United States to Canada. Volume discounts are also offered to certain higher volume customers.

Gross Margin

Gross margin percentage for the three month periods ended March 31, 2017 and 2016 were 30% and 7% respectively. The increase in gross margin reflects a return towards historical norms – the gross margin percentage for the three months ended March 31, 2016 were abnormally low as a result of the fluctuation in foreign exchange rates used to translate Canadian Dollar sales into United States Dollars for purposes of financial reporting. During the three months ended March 31, 2016, while sales denominated in Canadian Dollars increased by 152% and United States Dollars decreased by 43%, the increase in aggregate sales reported in United States Dollars was only 20% as a result of the weakened Canadian Dollar. There was less fluctuation in the foreign exchange rates during the three months ended March 31, 2017, such that there was not a significant disparity between the increases on a percentage basis in revenue denominated in Canadian Dollars when presented in Canadian or United States Dollars.

Operating Expenses

Operating expenses for the three months ended March 31, 2017 were $1,450,460 compared to $84,214 for the three months ended March 31, 2016. Our general and administrative expense increased by $1,365,701, from $29,830 to $1,395,531, during the three months ended March 31, 2017. The main reason for the increase is the fair value of $1,360,000 of 72,000,000 common shares issued to the Company’s CEO during the quarter ended March 31, 2017. The Company also realized a loss on foreign exchange in the amount of $27,773 during the three months ended March 31, 2017, an increase of $29,141 when compared to a gain on foreign exchange of $1,368 during the three months ended March 31, 2016. This loss was the result of the Company converting Canadian cash generated by sales to Canadian customers into United States Dollars in order to purchase inventory and pay operating expenses denominated in United States Dollars. These expense increases were partially offset by a reduction in sales and marketing expenses of $20,278 year-over-year. During the quarter ended March 31, 2016, the Company spent $21,381 on sales and marketing, while it only spent $1,103 during the quarter ended March 31, 2017, which was mainly a function of no longer paying a sales consultant as it had during the three months ended March 31, 2016. Professional fees which include accounting, legal and consulting fees, decreased from $34,371 for the three months ended March 31, 2016 to $26,053 for the three months ended March 31, 2017. The decrease is related to decreased accounting and legal services between the two periods.

Other Income and Expenses

Late in the 2015 fiscal year, the Company borrowed funds for working capital requirements in exchange for a promissory note. During the three month period ended March 31, 2017, the Company incurred interest of $7,836 related to this note, an increase of $1,519 when compared to interest expense of $6,317 incurred during the three months ended March 31, 2016.

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During the year ended December 31, 2016, the Company issued two convertible promissory notes in the amount of $132,750 which were determined to be hybrid financial instruments that include embedded derivatives that require separation from the main financial instrument and recognition at fair value. At the time of origination, the fair value of the derivative liabilities were $212,555 and this amount was expensed as a loss on derivative. Between December 31, 2016 and March 31, 2017, the fair value of the derivative liabilities increased such that a loss on derivative of $484,720 was incurred during the three months ended March 31, 2017. As a result of the fair value of the derivative exceeding the face value of the promissory notes at the time of issuance, the Company also recognized a discount on the issuance of the promissory notes which was amortized over the period in which the promissory notes are outstanding. During the quarter ended March 31, 2017, the Company incurred expense related to the amortization of the discount of $17,974. In connection with the issuance of the convertible promissory note payable, the Company incurred debt issuance costs which are being amortized to debt issuance expense over the maturity period of the convertible promissory note. As a result, the Company expensed debt issuance costs of $2,971 during the three months ended March 31, 2017. As the two convertible promissory notes were issued subsequent to March 31, 2016, no such expenses were incurred during the three months ended March 31, 2016. During the three months ended March 31, 2017, both notes were converted into common shares of the Company which resulted in the Company issuing 62,144,524 common shares in full satisfaction of the outstanding principal and interest. In connection with the conversion, the Company incurred a loss on settlement in the amount of $11,765 and additional finance charges of $21,000.

The balance of the other expenses consists of bank charges and other interest charges.

Net Loss

Net loss for the three months ended March 31, 2017 was $1,953,418 compared to a net loss of $87,354 for the three months ended March 31, 2016. The increase in the net loss was mainly due to the fair value of $1,360,000 of 72,000,000 common shares issued to the Company’s CEO during the quarter ended March 31, 2017, as well as the other expenses related to the debt issued by the Company as discussed above.

Liquidity and Capital Resources

Cash Flow Activities

Cash increased from $0 at December 31, 2016 to $29,282 at March 31, 2017. The increase was primarily the result of the timing of inbound payments from customers, and outbound payments to vendors. Accounts receivable decreased by $67,555 from $81,146 at December 31, 2016 to $13,591 at March 31, 2017. Inventory decreased by $10,882 from $78,975 at December 31, 2016 to $68,093 at March 31, 2017 largely as a result of the timing of the receipt of inventory shipments. Accounts payable and accrued liabilities decreased by $54,024 from $340,270 at December 31, 2016 to $286,246 at March 31, 2017. The decrease in payables is related to payments to vendors during the three months ended March 31, 2017.

Financing Activities

During the first three months of fiscal 2017, Truxmart funded working capital requirements principally through the issuance of promissory notes in the amount of $47,755. During the three month period ended March 31, 2017, the Company raised $1,750 through private placements of shares of the Company's common stock. During the three months ended March 31, 2017, the Company repaid $4,950 of the promissory note payable.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements with any party.

Critical Accounting Policies

Our discussion and analysis of results of operations and financial condition are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related to provisions for uncollectible accounts receivable, inventories, valuation of intangible assets and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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The accounting policies that we follow are set forth in Note 2 to our financial statements as included in this quarterly report. These accounting policies conform to accounting principles generally accepted in the United States, and have been consistently applied in the preparation of the financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a "smaller reporting company," as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information in this Item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. The framework used by management in making that assessment was the criteria set forth in the document entitled “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective as of March 31, 2017 to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure for the reason described below.

Because of our limited operations, we have limited number of employees which prohibits a segregation of duties. In addition, we lack a formal audit committee with a financial expert. As we grow and expand our operations we will engage additional employees and experts as needed. However, there can be no assurance that our operations will expand.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations over Internal Controls

FNHI’s management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within FNHI have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Our disclosure controls and procedures are designed to provide reasonable assurance of that our reports will be accurate. Our Chief Executive Officer and Principal Accounting Officer concludes that our disclosure controls and procedures were effective at that reasonable assurance level, as of the end of the period covered by this Form 10-Q. Our future reports shall also indicate that our disclosure controls and procedures are designed for this reason and shall indicate the related conclusion by the Chief Executive Officer and Principal Accounting Officer as to their effectiveness.

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PART II OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any material or legal proceeding and, to our knowledge, none is contemplated or threatened.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended March 31, 2017, the Company did not complete any unregistered sale of equity securities.

Item 3. Defaults Upon Senior Securities

There have been no defaults upon senior securities.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

As a "smaller reporting company," as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information in this Item.

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Item 6. Exhibits

(a) Exhibits

EXHIBIT NO.		DESCRIPTION

3.1*		Articles of Incorporation
3.2*		By-Laws
31.1		Section 302 Certification of Chief Executive Officer
31.2		Section 302 Certification of Chief Financial Officer
32.1		Section 906 Certification of Chief Executive Officer
32.2		Section 906 Certification of Chief Financial Officer

101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

_________________

*	Filed as an exhibit to the registrant's Form 10-QSB, filed October 13, 1999 and incorporated by reference herein.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FRANCHISE HOLDINGS INTERNATIONAL, INC.

Dated: February 14, 2018	By:	/s/ Steven Rossi
		Steven Rossi
		Chairman of the Board, Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Dated: February 14, 2018	By:	/s/ Michael Johnston
		Michael Johnston
		Interim Chief Financial Officer

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EX-31.1 2 fnhi_ex311.htm CERTIFICATION fnhi_ex311.htm

EXHIBIT 31.1

CERTIFICATION

I, Steven Rossi, certify that:

1.	I have reviewed this report on Form 10-Q of Franchise Holdings International, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (of persons performing the equivalent functions):

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: February 14, 2018	By:	/s/ Steven Rossi
		Steven Rossi
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2 3 fnhi_ex312.htm CERTIFICATION fnhi_ex312.htm

EXHIBIT 31.2

CERTIFICATION

I, Michael Johnston, certify that:

1.	I have reviewed this report on Form 10-Q of Franchise Holdings International, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (of persons performing the equivalent functions):

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: February 14, 2018	By:	/s/ Michael Johnston
		Michael Johnston
		Interim Chief Financial Officer

EX-32.1 4 fnhi_ex321.htm CERTIFICATION fnhi_ex321.htm

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Franchise Holdings International, Inc. (the "Company") on Form 10-Q for the period ending March 31, 2017 (the "Report") I, Steven Rossi, Chief Executive Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 14, 2018	By:	/s/ Steven Rossi
		Steven Rossi
		Chief Executive Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2 5 fnhi_ex322.htm CERTIFICATION fnhi_ex322.htm

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Franchise Holdings International, Inc. (the "Company") on Form 10-Q for the period ending March 31, 2017 (the "Report") I, Michael Johnston, Interim Chief Financial Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 14, 2018

By:

/s/ Michael Johnston

Michael Johnston

Interim Chief Financial Officer

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a) Interim Financial Information   The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("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, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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, 2016 filed with the SEC on September 18, 2017.   b) Functional and Reporting 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, 2017 were converted into United States Dollars at a rate of 1.33 Canadian Dollars to one United States Dollar. Balances denominated in Canadian Dollars outstanding at December 31, 2017 were converted into United States Dollars at a rate of 1.34 Canadian Dollars to one United States Dollar. Transactions denominated in Canadian Dollars for the period ended March 31, 2017 were converted into United States Dollars at a rate of 1.32 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 1.37 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.   d) Going Concern   These unaudited condensed consolidated 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, 2017, the Company incurred a net loss of $1,953,418, and as of that date, the Companys accumulated deficit was $7,141,574. 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.

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The amounts repayable under the secured promissory notes are as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt"> March 31, 2017</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt"> December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance owing</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">252,874</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">210,069</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less amounts due within one year</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(100,982</td> <td style="vertical-align: bottom; padding-bottom: 0.75pt; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(105,985</td> <td style="vertical-align: bottom; padding-bottom: 0.75pt; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">151,892</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">104,084</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" id="hdcell" style="border-bottom: black 1pt solid; text-align: center">2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center">2016</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">$</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">%</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">$</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">%</td> <td style="text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Customer A</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td id="ffcell" style="vertical-align: bottom; width: 9%; text-align: right">4,415</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">66.0</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">49,020</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">47.4</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Customer B</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">298</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">10.6</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">552</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">10.2</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Customer C</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">3,882</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">9.3</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">2,092</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">13.5</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Customer D</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">3</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">11.0</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">8,595</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">85.9</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">51,667</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">82.1</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

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The price at which the conversion is to occur is the lesser of (i) 45% multiplied by the Trading Price (representing a discount rate of 55%) during the previous trading day period ending on the latest complete trading day prior to the date of the convertible promissory note and (ii) the Variable Conversion Price, which shall mean 45% multiplied by the Market Price which shall be the lowest Trading Price for the Company's Stock during the 25 day Trading Period ending on the last complete Trading Day prior to the Conversion Date.

The price at which the conversion is to occur is the lesser of (i) the closing sale price of the Company's common stock on the Principal Market on the Trading Date immediately preceding the Closing Date and ii) 55% of the lowest sale price for the Company's common stock on the Principal Market during the twenty (20) consecutive Trading Days immediately preceding the Conversion Date provided, however, if the Companys share price at any time loses the bid (ex: 0.0001 on the ask with zero market makers on the bid on level 2), then the Conversion Price may, in the Holders sole and absolute discretion, be reduced to a fixed conversion price of 0.00001 (if lower than the conversion price otherwise), and provided

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The Preferred Stock will have voting rights equal to 299 shares of common stock, per share of Preferred

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During the year ended December 31, 2016, the Company issued a secured promissory note in the amount of $39,000. The secured promissory note is due September 2, 2018 and bears interest at a rate of 18% per annum, accrued daily, and calculated and payable monthly in arrears on the last day of each and every month. The secured promissory note is secured by a first charge and security interest in all of the present and after-acquired property and assets of the Company pursuant to a general security agreement and a charge against the inventory of the Company. The Company has classified this note payable as long-term on the Balance Sheet.   In connection with the issuance of the secured promissory note, the Company issued 100,000 shares of its common stock with an aggregate fair value of $15,000 as a commitment fee. The commitment fee was expensed during the year ended December 31, 2016.   During the year ended December 31, 2016, the Company issued a secured promissory note in the amount of $25,000. The secured promissory note is due October 1, 2018 and bears interest at a rate of 18% per annum, accrued daily, and calculated and payable monthly in arrears on the last day of each and every month. The secured promissory note is secured by a first charge and security interest in all of the present and after-acquired property and assets of the Company pursuant to a general security agreement and a charge against the inventory of the Company. The Company has classified this note payable as long-term on the Balance Sheet.   During the year ended December 31, 2016, the Company issued a secured promissory note in the amount of $15,000. The secured promissory note is due July 13, 2018 and bears interest at a rate of 18% per annum, accrued daily, and calculated and payable monthly in arrears on the last day of each and every month. The secured promissory note is secured by a first charge and security interest in all of the present and after-acquired property and assets of the Company pursuant to a general security agreement and a charge against the inventory of the Company. The Company has classified this note payable as long-term on the Balance Sheet.   During the year ended December 31, 2016, the Company issued a secured promissory note in the amount of $20,608 (27,670 Canadian Dollars). The secured promissory note is due July 13, 2018 and bears interest at a rate of 18% per annum, accrued daily, and calculated and payable monthly in arrears on the last day of each and every month. The secured promissory note is secured by a first charge and security interest in all of the present and after-acquired property and assets of the Company pursuant to a general security agreement and a charge against the inventory of the Company. During the period ended March 31, 2017, the Company borrowed an additional $42,406 (56,443 Canadian Dollars) with the same terms as the original advance of $20,608. The Company has classified this note payable as long-term on the Balance Sheet.   As of March 31, 2017, the Company has accrued interest of $9,697 (December 31, 2016 - $4,476) related to the above secured promissory notes.   During the year ended December 31, 2016, the Company issued a promissory note in the amount of $65,000 to a consultant for the purposes of generating subscriptions of shares of the Company's common stock. Of the principal balance of $65,000, $12,200 has been allocated against additional paid-in capital, with the remaining $52,800 expensed as financing charges. The promissory note was due February 18, 2017 and was non-interest bearing. During the period ended March 31, 2017, this promissory note was assigned to another lender. At the time of assignment the terms of this note were renegotiated with the new holder. The promissory note is now due March 1, 2018 and bears interest at the rate of 8%.   In October, 2015, the Company entered into a secured promissory note with an investor in the principal amount of $79,768 (102,000 Canadian Dollars). The Company received proceeds of $58,653 (75,000 Canadian Dollars) and $21,115 (27,000 Canadian Dollars) 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 $249 (324 Canadian Dollars) 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, 2017 was $35,982 (47,892 Canadian Dollars) and the carrying amount of the original issue discount was $0 (0 Canadian Dollars). As of March 31, 2017 and December 31, 2016, this note was in default, however, there have been no actions taken by the investor pursuant to the default, as they continue to withdraw the daily payment as funds permit.   The amounts repayable under the secured promissory notes are as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt"> March 31, 2017</td> <td style="text-align: center"> </td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt"> December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance owing</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">252,874</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">210,069</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less amounts due within one year</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(100,982</td> <td style="vertical-align: bottom; padding-bottom: 0.75pt; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(105,985</td> <td style="vertical-align: bottom; padding-bottom: 0.75pt; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">151,892</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">104,084</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

a) During the year ended December 31, 2016, the Company entered into a convertible promissory note in the principal amount of $77,750 with a maturity date of March 22, 2017. The convertible promissory note bears interest at a rate of 10.0% per annum from the date of issue until the principal becomes due and payable whether at maturity or upon acceleration or by prepayment or otherwise. Any amount of principal or interest that is not paid when it becomes due shall bear interest at a rate of 24.0% per annum from the due date thereof until the outstanding amounts are paid. No amounts under the convertible promissory note can be prepaid in whole or in part except as otherwise explicitly set out in the terms of the convertible promissory note with the written consent of the Holder. The Holder has the right to convert any unpaid principal amount into shares of the Company's common stock at any time from the date of the issuance of the convertible promissory note to the later of (i) maturity or (ii) the date the outstanding principal and interest is paid. The price at which the conversion is to occur is the lesser of (i) 45% multiplied by the Trading Price (representing a discount rate of 55%) during the previous trading day period ending on the latest complete trading day prior to the date of the convertible promissory note and (ii) the Variable Conversion Price, which shall mean 45% multiplied by the Market Price which shall be the lowest Trading Price for the Company's Stock during the 25 day Trading Period ending on the last complete Trading Day prior to the Conversion Date. In connection with the issuance of the convertible promissory note, the Company incurred debt issuance costs of $7,500 which are being amortized over the maturity period of the convertible promissory note. Included in interest expense for the period ended March 31, 2017, is $2,217 related to the amortization of the debt issuance costs. During the period ended March 31, 2017, and prior to the maturity date, the promissory note and accrued interest was converted in full into 37,640,800 shares of the Company's common stock.   b) During the year ended December 31, 2016, the Company entered into a convertible promissory note in the principal amount of $55,000 with a maturity date of June 28, 2017. The convertible promissory note bears interest at a rate of 10.0% per annum from the date of issue until the principal becomes due and payable whether at maturity or upon acceleration or by prepayment or otherwise. Any amount of principal or interest that is not paid when it becomes due shall bear interest at a rate of 24.0% per annum from the due date thereof until the outstanding amounts are paid. The Holder has the right to convert any unpaid principal amount into shares of the Company's common stock at any time from the date of the issuance of the convertible promissory note to the later of (i) maturity or (ii) the date the outstanding principal and interest is paid. The price at which the conversion is to occur is the lesser of (i) the closing sale price of the Company's common stock on the Principal Market on the Trading Date immediately preceding the Closing Date and ii) 55% of the lowest sale price for the Company's common stock on the Principal Market during the twenty (20) consecutive Trading Days immediately preceding the Conversion Date provided, however, if the Companys share price at any time loses the bid (ex: 0.0001 on the ask with zero market makers on the bid on level 2), then the Conversion Price may, in the Holders sole and absolute discretion, be reduced to a fixed conversion price of 0.00001 (if lower than the conversion price otherwise), and provided, that if on the date of delivery of the Conversion Shares to the Holder, or any date thereafter while Conversion Shares are held by the Holder, the closing bid price per share of the Company's common stock on the Principal Market on the Trading Day on which shares of the Company's common stock are traded is less than the sale price per share of the Company's common stock on the Principal Market on the Trading Day used to calculate the Conversion Price hereunder, then such Conversion Price shall be automatically reduced such that the Conversion Price shall be recalculated using the new low closing bid price (Adjusted Conversion Price) and shall replace the Conversion Price above, and Holder shall be issued a number of additional shares such that the aggregate number of shares Holder receives is based upon an Adjusted Conversion Price. For the purpose of clarity, any shares required to be issued as a result of an Adjusted Conversion Price shall be deemed to be Conversion Shares under this convertible promissory note.   In connection with the issuance of the convertible promissory note, the Company incurred debt issuance costs of $1,500 which are being amortized over the maturity period of the convertible promissory note. Included in interest expense for the period ended March 31, 2017, is $754 related to the amortization of the debt issuance costs. During the period ended March 31, 2017, and prior to the maturity date, the promissory note and accrued interest was converted in full into 24,503,724 shares of the Company's common stock.   As a result of the derivative liabilities associated with the conversion feature of the convertible promissory notes, exceeding the principal amounts of the convertible promissory notes, the Company had recognized aggregate discounts on the convertible promissory notes of $132,750. Upon conversion of the convertible promissory notes, the unamortized balances of the discounts were recorded as a reduction to additional paid-in capital.

The Company adopted ASC 815 which defines the determination of whether an instrument (or embedded feature) is solely indexed to an entity's own stock. During the period ended December 31, 2016, the Company issued two convertible promissory notes payable, as described in note 4, which contain features that entitles the holder to convert any outstanding amounts payable under the convertible promissory note into a shares of the common stock of the Company, the number of which is dependent on several factors. As such, ASC 815 determines the convertible promissory note to be a hybrid financial instrument that includes an embedded derivative that requires separation from the main financial instrument and recognition at fair value.   During the period ended March 31, 2017, the convertible promissory notes to which the derivative liabilities relate, were converted to shares of the Company's common stock. During the period ended March 31, 2017, the Company recognized an aggregate loss on the value of the derivative liability of $484,720 related to the changes in value from January 1, 2017 to the dates upon which the convertible promissory notes were converted.

During the period ended March 31, 2017, the Company recorded salaries expense of $14,865 (2016 - $5,808) related to services rendered to the Company by its major shareholder and CEO. During the period ended March 31, 2017, the Company recognized revenue of $3,749 (2016 - $3,382) for goods sold to a company with a director, officer and shareholder in common.

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, 2017 and 2016, as well as the balance included in accounts receivable for each significant customer as at March 31, 2017 and 2016. A customer is considered to be significant if they account for greater than 10% of the Company's annual sales.   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" id="hdcell" style="border-bottom: black 1pt solid; text-align: center">2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center">2016</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">$</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">%</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">$</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">%</td> <td style="text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Customer A</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td id="ffcell" style="vertical-align: bottom; width: 9%; text-align: right">4,415</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">66.0</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">49,020</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">47.4</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Customer B</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">298</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">10.6</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">552</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">10.2</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Customer C</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">3,882</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">9.3</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">2,092</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">13.5</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Customer D</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">3</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">11.0</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">8,595</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">85.9</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">51,667</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">82.1</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   The loss of any of these key customers could have an adverse effect on the Company's business.

Subsequent to March 31, 2017, the Company:   a) Is out of compliance with certain debt covenants.   b) Designated 1,000,000 of the authorized shares of its common stock as Series A Preferred Stock. The Preferred Stock will have voting rights equal to 299 shares of common stock, per share of Preferred. Subsequent to March 31, 2017, 100,000,000 shares of common stock were exchanged for 1,000,000 shares of Series A Preferred Stock.   d) Entered into a Services Agreement with a consultant to provide management consulting services for a period of 180 days in exchange for a fee of $50,000 payable in 1,577,287 common shares of the Company. Pursuant to the Services Agreement, the consultant will subscribe for the shares for gross proceeds of $1,577. Subsequent to March 31, 2017, the Company received the proceeds and issued the common shares.   d) Entered into a Services Agreement with a second consultant to provide management consulting services for a period of 180 days in exchange for a fee of $50,000 payable in 1,577,287 common shares of the Company. Pursuant to the Services Agreement, the consultant will subscribe for the shares for gross proceeds of $1,577. Subsequent to March 31, 2017, the Company received the proceeds and hissed the common shares.   e) Entered into an agreement with another company pursuant to which to other company assumed accounts payable of the Company in the aggregate amount of $183,443 in exchange for 35,000,000 common shares of the Company. As at the filing date, the Company has issued 10,400,000 common shares.   f) Completed a corporate reorganization ( the "Reorganization") in accordance with Section 251(g) of the Delaware General Corporation Law, pursuant to which the Company became a wholly-owned subsidiary of a newly formed entity which became the successor of the public company (the "Successor Issuer"). In connection with the Reorganization, the Company redomiciled into Delaware and changed its name to Franchise Transition Inc., and the Successor Issuer took the name Franchise Holdings International, Inc. As one result, the assets and liabilities of the Company, remain the assets and liabilities of such entity. Pursuant to the Reorganization, the outstanding shares of the Company were exchanged for shares of the Successor Issuer on a one-for-one basis. This corporate reorganization was subsequently unwound.   g) Issued 3,000,000 shares of its common stock for gross proceeds of $38,010.   h) Issued 340,000 shares of its common stock in exchange for services rendered of $10,000.   i) Entered into a Term Sheet with respect to loans to the Company of up to $500,000 to fund the purchases of inventory. Any advances made pursuant to the Term Sheet will be secured by the wholesale inventory of the Company, all of the shares of the Company held by its majority shareholder and CEO and another asset of the Company's majority shareholder. Pursuant to the Term Sheet, the Company agrees to pay 1.5% per month on all drawn amounts, an initial due diligence fee of $20,000 upon receipt of the first $220,000 loan amount (the "first tranche") and a monthly monitoring fee of $5,000 for the first tranche and up to a loan amount of $500,000. The lender can choose to waive payment of the monthly fee in exchange for conversion of the amount into shares of the Company's common stock at a price of $0.035 per share. Should the price of the Company's stock increase beyond $0.05 per share, the conversion price will be struck at a 30% discount to the closing price of the volume weighted average price on the OTC market of the previous five trading days. Pursuant to the Term Sheet, the term of the advances made will be for a minimum of two years and the Company shall have the right to increase the credit facility to $1,000,000 provided the minimum term extends to three years. Upon the full and final advance of $500,000, the Company agrees to issue to the lender, 1,000,000 shares of its common stock and 2,000,000 warrants entitling the holder to acquire one share of the Company's common stock at a price of $0.04 per share.   j) Entered into two Share Issuance/ Claim Extinguishment Agreements pursuant to which the Company agreed to issue, in aggregate, 50,000,000 shares of its common stock in exchange for the assumption of aggregate indebtedness of $154,056.   k) Entered into a Share Purchase Agreement pursuant to which the Company has agreed to issue share of its common stock for aggregate proceeds of $100,000 at a fixed issue price of $0.02 per share (the "Fixed Price"), provided, however, that if the Company's volume weighted average price (the "VWAP") on the date the buyer provides a Stock Issuance Notice to the Company or on the date on which the buyer received such Issuance Shares, the Company's stock bid price is less than $0.035 (the "Minimum Price"), then the number of Issuance Shares shall increase as a result of a decrease in the Issuance Price below the Minimum Price. In such event, the Issuance Price shall decrease below the Fixed Price by an equal percentage of the difference between the VWAP and the Minimum Price.   l) Entered into a Share Purchase Agreement pursuant to which the Company has agreed to issue share of its common stock for aggregate proceeds of $400,000 at a fixed issue price of $0.02 per share (the "Fixed Price"), provided, however, that if the Company's volume weighted average price (the "VWAP") on the date the buyer provides a Stock Issuance Notice to the Company or on the date on which the buyer received such Issuance Shares, the Company's stock bid price is less than $0.035 (the "Minimum Price"), then the number of Issuance Shares shall increase as a result of a decrease in the Issuance Price below the Minimum Price. In such event, the Issuance Price shall decrease below the Fixed Price by an equal percentage of the difference between the VWAP and the Minimum Price.   m) Borrowed $37,770 pursuant to a loan agreement. The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of October 18, 2018.   n) Borrowed $30,000 pursuant to a loan agreement. The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.   o) Borrowed $50,000 pursuant to a loan agreement. The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.   p) Entered into a consulting agreement, pursuant to which the Company will issue 12,500,000 common shares of the Company, upon written demand by the consultant, in exchange for consulting services for a period of 18 months.   The Company has evaluated subsequent events through February 14, 2018 which is the date the financial statements were available to be issued.

The Company is authorized to issue 1,000,000 shares of its Series A Preferred Stock with a par value of $0.0001. These shares have voting rights equal to 299 shares of common stock, per share of preferred.   The Company is authorized to issue 299,000,000 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 period ended March 31, 2017, the Company issued 62,144,524 common shares pursuant to the conversion of the convertible promissory notes discussed in note 4.   During the period ended March 31, 2017, the Company issued 72,000,000 common shares of the Company to its CEO pursuant to the Company's employee stock incentive plan at a deemed cost of $0.001 per share. The fair value of the common shares of $1,360,000 has been included as general and administrative expense during the period ended March 31, 2017.

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, 2016.

Subsequent to filing the Form 10-Q for the three months ended March 31, 2016, it was discovered that the issuance of 200,000 shares of the Company's common stock with a fair value of $102,000 were not included in the Form 10-Q. The effect of this omission was that, as at March 31, 2016, prepaid expenses were understated by $102,000, common stock was understated by $20 and additional paid-in capital was understated by $101,980. As at March 31, 2016, the restated balance of prepaid expenses is $110,107, the restated balance of common stock is $6,749 and the restated balance of additional paid-in capital is $4,174,617. In addition, the correct weighted average shares outstanding for the three months ended March 31, 2016 was 67,455,040.   The effects of the prior period misstatement are as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">As Originally Reported</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">Restated</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Prepaid expenses</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right">8,107</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right">128,107</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Common stock</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">6,729</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">6,749</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Additional paid-in capital</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">4,072,637</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">4,174,617</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Weighted average shares outstanding</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">67,265,996</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">67,455,040</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

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.

These unaudited condensed consolidated 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, 2017, the Company incurred a net loss of $1,953,418, and as of that date, the Companys accumulated deficit was $7,141,574. 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.

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, 2017 were converted into United States Dollars at a rate of 1.33 Canadian Dollars to one United States Dollar. Balances denominated in Canadian Dollars outstanding at December 31, 2017 were converted into United States Dollars at a rate of 1.34 Canadian Dollars to one United States Dollar. Transactions denominated in Canadian Dollars for the period ended March 31, 2017 were converted into United States Dollars at a rate of 1.32 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 1.37 Canadian Dollars to one United States Dollar.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("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, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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, 2016 filed with the SEC on September 18, 2017.

The effects of the prior period misstatement are as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">As Originally Reported</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">Restated</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Prepaid expenses</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right">8,107</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; width: 9%; text-align: right">128,107</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Common stock</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">6,729</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">6,749</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Additional paid-in capital</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">4,072,637</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">4,174,617</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Weighted average shares outstanding</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">67,265,996</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">67,455,040</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

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payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.

payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.

in exchange for consulting services for a period of 18 months.

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102000 200000 Balances denominated in Canadian Dollars outstanding at March 31, 2017 were converted into United States Dollars at a rate of 1.33 Canadian Dollars to one United States Dollar. Balances denominated in Canadian Dollars outstanding at December 31, 2017 were converted into United States Dollars at a rate of 1.34 Canadian Dollars to one United States Dollar. Transactions denominated in Canadian Dollars for the period ended March 31, 2017 were converted into United States Dollars at a rate of 1.32 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 1.37 Canadian Dollars to one United States Dollar.

100000

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A customer is considered to be significant if they account for greater than 10% of the Company's annual sales 100000000

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10000

5000 220000 The lender can choose to waive payment of the monthly fee in exchange for conversion of the amount into shares of the Company's common stock at a price of $0.035 per share Should the price of the Company's stock increase beyond $0.05 per share, the conversion price will be struck at a 30% discount to the closing price of the volume weighted average price on the OTC market of the previous five trading days Pursuant to the Term Sheet, the term of the advances made will be for a minimum of two years and the Company shall have the right to increase the credit facility to $1,000,000 provided the minimum term extends to three years

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Is Entity a Voluntary Filer? Is Entity's Reporting Status Current? Entity Filer Category Public Float Entity Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Condensed Consolidated Balance Sheets Assets Current Assets Cash and cash equivalents Accounts receivable Inventory Related party receivable Prepaid expenses and deposits Total Current Assets Property and Equipment, Net of Accumulated Depreciation of $1,447 (December 31, 2016 - $1,244) Intangible Assets, Net of Accumulated Amortization of $823 (December 31, 2016 - $746) Total Assets (Substantially Pledged as Collateral) Liabilities and Shareholders' Equity (Deficit) Current Liabilities Bank overdraft Accounts payable and accrued liabilities Income taxes payable Current portion secrued notes payable (note 3) Convertible promissory notes payable, net of discount (note 3) Derivative liability (note 5) Total Current Liabilities Secured Notes Payable, Net of Current Portion (note 3) Total Liabilities Comittments and Contingencies Shareholders' Equity (Deficit) Series A Preferred Stock, $0.0001 par value, 1,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2017 and December 31, 2016 (note 11) Common stock, $0.0001 par value, 299,000,000 shares authorized, 202,232,666 and 68,088,142 shares issued and outstanding as of March 31, 2017 and December 31, 2016 respectively (note 6) Additional paid-in capital Cumulative translation adjustment Share subscriptions receivable Accumulated deficit Total Shareholders' Equity (Deficit) Total Liabilities and Shareholders' Equity (Deficit) Condensed Consolidated Balance Sheets Parenthetical Property and Equipment, net of accumulated depreciation Intangible Assets, net of accumulated amortization Shareholders' Equity (Deficit) Series A preferred stock, par value Series A preferred stock, authorized Series A preferred stock, issued Series A preferred stock, outstanding Common stock, par value Common stock, authorized Common stock, issued Common stock, outstanding Statements Of Operations Net Sales Cost of Goods Sold Gross Profit Operating Expenses General and administrative Sales and marketing Professional fees Loss (gain) on foreign exchange Total operating expenses Loss from operations Other Income (Expense) Interest expense Debt issuance costs Loss on derivative (note 5) Finance charges Loss on settlement of debt Total other income (expense) Net Loss for the period Other Comprehensive Income (Loss) Foreign currency translation adjustment Net Comprehensive Loss for the period Loss per Weighted Average Share (basic and diluted) Weighted Average Number of Shares (basic and diluted) Condensed Consolidated Statements Of Cash Flows Cash Flows from Operating Activities Net Loss Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization Loss on settlement of debt Loss on derivative Accretion of debt discount Financing fees paid in shares Interest paid in shares Stock based compensation Changes in operating assets and liabilities: Decrease (increase) in accounts receivable Decrease (increase) in inventory Decrease (increase) in prepaid expenses and deposits Decrease (increase) in related party receivables Increase (decrease) in income taxes payable Increase (decrease) in accounts payable and accrued liabilities Net cash used in operating activities Cash Flows from Investing Activities Net cash used in investing activities Cash Flows from Financing Activities Overdraft proceeds (repayment of overdraft) Share subscription proceeds Repayments of secured promissory notes payable Proceeds from secured promissory notes payable Net cash (used in) provided by financing activities Effects of Foreign Currency Translation Change in cash Cash and cash equivalents - beginning of period Cash and cash equivalents - end of period Non-Cash Investing and Financing Activities Common Shares issued to the Company's CEO Common Shares issued for conversions of promissory notes Notes to Financial Statements NOTE 1 - Basis of Presentation and Going Concern NOTE 2 - Significant Accounting Policies NOTE 3 - Secured Notes Payable NOTE 4 - Convertible Promissory Notes Payable NOTE 5 - Derivative Liability NOTE 6 - Common Stock NOTE 7 - Related Party Transactions NOTE 8 - Financial Instruments NOTE 9 - Prior Period Misstatement NOTE 10 - Evaluation of Subsequent Events Basis Of Presentation And Going Concern Policies Interim Financial Information Functional and Reporting Currency Use of Estimates Going Concern Secured Notes Payable Tables Summary of secured promissory note Financial Instruments Tables Concentration of sales Prior Period Misstatement Tables Effects of prior period misstatement Basis Of Presentation And Going Concern Details Narrative Description of conversion rate for reporting currency Description of conversion rate for transactions done in CAD Secured Notes Payable Details Balance owing Less amounts due within one year Notes Payable, Net of Current Portion Statement [Table] EX-101.PRE 11 fnhi-20170331_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE XML 12 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2017	Feb. 14, 2018
Document And Entity Information
Entity Registrant Name	Franchise Holdings International, Inc.
Entity Central Index Key	0001096275
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
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?	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		119,127,240
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2017

XML 13 R2.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 29,282
Accounts receivable	13,591	81,146
Inventory	68,093	78,975
Related party receivable	7,591	7,770
Prepaid expenses and deposits	116,267	116,267
Total Current Assets	234,824	284,158
Property and Equipment, Net of Accumulated Depreciation of $1,447 (December 31, 2016 - $1,244)	39,041	39,263
Intangible Assets, Net of Accumulated Amortization of $823 (December 31, 2016 - $746)	13,251	13,328
Total Assets (Substantially Pledged as Collateral)	287,116	336,749
Current Liabilities
Bank overdraft		2,635
Accounts payable and accrued liabilities	286,246	340,270
Income taxes payable	4,830	4,796
Current portion secrued notes payable (note 3)	100,982	105,985
Convertible promissory notes payable, net of discount (note 3)		78,978
Derivative liability (note 5)		704,868
Total Current Liabilities	392,058	1,237,532
Secured Notes Payable, Net of Current Portion (note 3)	151,892	104,084
Total Liabilities	543,950	1,341,616
Comittments and Contingencies
Shareholders' Equity (Deficit)
Series A Preferred Stock, $0.0001 par value, 1,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2017 and December 31, 2016 (note 11)
Common stock, $0.0001 par value, 299,000,000 shares authorized, 202,232,666 and 68,088,142 shares issued and outstanding as of March 31, 2017 and December 31, 2016 respectively (note 6)	20,224	6,809
Additional paid-in capital	6,851,096	4,189,607
Cumulative translation adjustment	21,020	(3,778)
Share subscriptions receivable	(7,600)	(9,350)
Accumulated deficit	(7,141,574)	(5,188,155)
Total Shareholders' Equity (Deficit)	(256,834)	(1,004,867)
Total Liabilities and Shareholders' Equity (Deficit)	$ 287,116	$ 336,749

XML 14 R3.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Current Assets
Property and Equipment, net of accumulated depreciation	$ 1,447	$ 1,244
Intangible Assets, net of accumulated amortization	$ 823	$ 746
Shareholders' Equity (Deficit)
Series A preferred stock, par value	$ 0.0001	$ 0.0001
Series A preferred stock, authorized	1,000,000	1,000,000
Series A preferred stock, issued	0	0
Series A preferred stock, outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	299,000,000	299,000,000
Common stock, issued	202,232,666	68,088,142
Common stock, outstanding	202,232,666	68,088,142

XML 15 R4.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Statements of Operations and Other Comprehensive Loss - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statements Of Operations
Net Sales	$ 101,263	$ 93,508
Cost of Goods Sold	70,991	87,217
Gross Profit	30,272	6,291
Operating Expenses
General and administrative	1,395,531	29,830
Sales and marketing	1,103	21,381
Professional fees	26,053	34,371
Loss (gain) on foreign exchange	27,773	(1,368)
Total operating expenses	1,450,460	84,214
Loss from operations	(1,420,188)	(77,923)
Other Income (Expense)
Interest expense	(8,310)	(9,431)
Debt issuance costs	(2,971)
Loss on derivative (note 5)	(484,720)
Finance charges	(25,464)
Loss on settlement of debt	(11,765)
Total other income (expense)	(533,230)	(9,431)
Net Loss for the period	(1,953,418)	(87,354)
Other Comprehensive Income (Loss)
Foreign currency translation adjustment	24,798	(8,606)
Net Comprehensive Loss for the period	$ (1,928,620)	$ (95,960)
Loss per Weighted Average Share (basic and diluted)	$ (0.01)
Weighted Average Number of Shares (basic and diluted)	136,849,459	67,455,040

XML 16 R5.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities
Net Loss	$ (1,953,418)	$ (87,354)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	299	233
Loss on settlement of debt	11,765
Loss on derivative	484,720
Accretion of debt discount	2,971	4,081
Financing fees paid in shares	21,000
Interest paid in shares	3,823
Stock based compensation	1,360,000
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable	67,555	34,929
Decrease (increase) in inventory	10,882	27,648
Decrease (increase) in prepaid expenses and deposits		(3,501)
Decrease (increase) in related party receivables	179	(1,681)
Increase (decrease) in income taxes payable	34	305
Increase (decrease) in accounts payable and accrued liabilities	(47,246)	22,240
Net cash used in operating activities	(37,436)	(3,100)
Cash Flows from Investing Activities
Net cash used in investing activities
Cash Flows from Financing Activities
Overdraft proceeds (repayment of overdraft)	(2,635)	1,316
Share subscription proceeds	1,750
Repayments of secured promissory notes payable	(4,950)	(4,076)
Proceeds from secured promissory notes payable	47,755
Net cash (used in) provided by financing activities	41,920	(2,760)
Effects of Foreign Currency Translation	24,798	(8,606)
Change in cash	29,282	(14,466)
Cash and cash equivalents - beginning of period		14,466
Cash and cash equivalents - end of period	29,282
Non-Cash Investing and Financing Activities
Common Shares issued to the Company's CEO	1,360,000
Common Shares issued for conversions of promissory notes	$ 1,314,904

XML 17 R6.htm IDEA: XBRL DOCUMENT

Basis of Presentation and Going Concern

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

NOTE 1 - Basis of Presentation and Going Concern

a) Interim Financial Information

b) Functional and Reporting Currency

c) Use of Estimates

d) Going Concern

XML 18 R7.htm IDEA: XBRL DOCUMENT

Significant Accounting Policies	3 Months Ended
Significant Accounting Policies	Mar. 31, 2017
Notes to Financial Statements
NOTE 2 - 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, 2016.

XML 19 R8.htm IDEA: XBRL DOCUMENT

Secured Notes Payable

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

NOTE 3 - Secured Notes Payable

As of March 31, 2017, the Company has accrued interest of $9,697 (December 31, 2016 - $4,476) related to the above secured promissory notes.

The amounts repayable under the secured promissory notes are as follows:

	March 31, 2017			December 31, 2016

Balance owing	$	252,874		$	210,069
Less amounts due within one year		(100,982	)		(105,985	)
	$	151,892		$	104,084

XML 20 R9.htm IDEA: XBRL DOCUMENT

Convertible Promissory Notes Payable

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

NOTE 4 - Convertible Promissory Notes Payable

XML 21 R10.htm IDEA: XBRL DOCUMENT

Derivative Liability

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

NOTE 5 - Derivative Liability

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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+ Details

XML 22 R11.htm IDEA: XBRL DOCUMENT

Common Stock

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

NOTE 6 - Common Stock

The Company is authorized to issue 299,000,000 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 period ended March 31, 2017, the Company issued 62,144,524 common shares pursuant to the conversion of the convertible promissory notes discussed in note 4.

XML 23 R12.htm IDEA: XBRL DOCUMENT

Related Party Transactions	3 Months Ended
Related Party Transactions	Mar. 31, 2017
Notes to Financial Statements
NOTE 7 - Related Party Transactions	During the period ended March 31, 2017, the Company recorded salaries expense of $14,865 (2016 - $5,808) related to services rendered to the Company by its major shareholder and CEO. During the period ended March 31, 2017, the Company recognized revenue of $3,749 (2016 - $3,382) for goods sold to a company with a director, officer and shareholder in common.

XML 24 R13.htm IDEA: XBRL DOCUMENT

Financial Instruments

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

NOTE 8 - Financial Instruments

Concentration of Customer Risk

	2017				2016
	$		%		$		%
Customer A		4,415		66.0		49,020		47.4
Customer B		298		10.6		552		10.2
Customer C		3,882		9.3		2,092		13.5
Customer D		-		-		3		11.0

		8,595		85.9		51,667		82.1

The loss of any of these key customers could have an adverse effect on the Company's business.

XML 25 R14.htm IDEA: XBRL DOCUMENT

Prior Period Misstatement

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

NOTE 9 - Prior Period Misstatement

The effects of the prior period misstatement are as follows:

	As Originally Reported		Restated

Prepaid expenses	$	8,107	$	128,107
Common stock	$	6,729	$	6,749
Additional paid-in capital	$	4,072,637	$	4,174,617
Weighted average shares outstanding		67,265,996		67,455,040

XML 26 R15.htm IDEA: XBRL DOCUMENT

Evaluation of Subsequent Events

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

NOTE 10 - Evaluation of Subsequent Events

Subsequent to March 31, 2017, the Company:

a) Is out of compliance with certain debt covenants.

g) Issued 3,000,000 shares of its common stock for gross proceeds of $38,010.

h) Issued 340,000 shares of its common stock in exchange for services rendered of $10,000.

m) Borrowed $37,770 pursuant to a loan agreement. The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of October 18, 2018.

n) Borrowed $30,000 pursuant to a loan agreement. The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.

o) Borrowed $50,000 pursuant to a loan agreement. The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.

The Company has evaluated subsequent events through February 14, 2018 which is the date the financial statements were available to be issued.

XML 27 R16.htm IDEA: XBRL DOCUMENT

Basis of Presentation and Going Concern (Policies)	3 Months Ended
Basis of Presentation and Going Concern (Policies)	Mar. 31, 2017
Basis Of Presentation And Going Concern Policies
Interim Financial Information	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("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, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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, 2016 filed with the SEC on September 18, 2017.
Functional and Reporting 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, 2017 were converted into United States Dollars at a rate of 1.33 Canadian Dollars to one United States Dollar. Balances denominated in Canadian Dollars outstanding at December 31, 2017 were converted into United States Dollars at a rate of 1.34 Canadian Dollars to one United States Dollar. Transactions denominated in Canadian Dollars for the period ended March 31, 2017 were converted into United States Dollars at a rate of 1.32 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 1.37 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 unaudited condensed consolidated 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, 2017, the Company incurred a net loss of $1,953,418, and as of that date, the Company’s accumulated deficit was $7,141,574. 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.

XML 28 R17.htm IDEA: XBRL DOCUMENT

Secured Notes Payable (Tables)

3 Months Ended

Mar. 31, 2017

Secured Notes Payable Tables

Summary of secured promissory note

The amounts repayable under the secured promissory notes are as follows:

	March 31, 2017			December 31, 2016

Balance owing	$	252,874		$	210,069
Less amounts due within one year		(100,982	)		(105,985	)
	$	151,892		$	104,084

XML 29 R18.htm IDEA: XBRL DOCUMENT

Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Financial Instruments Tables

Concentration of sales

	2017				2016
	$		%		$		%
Customer A		4,415		66.0		49,020		47.4
Customer B		298		10.6		552		10.2
Customer C		3,882		9.3		2,092		13.5
Customer D		-		-		3		11.0

		8,595		85.9		51,667		82.1

XML 30 R19.htm IDEA: XBRL DOCUMENT

Prior Period Misstatement (Tables)

3 Months Ended

Mar. 31, 2017

Prior Period Misstatement Tables

Effects of prior period misstatement

The effects of the prior period misstatement are as follows:

	As Originally Reported		Restated

Prepaid expenses	$	8,107	$	128,107
Common stock	$	6,729	$	6,749
Additional paid-in capital	$	4,072,637	$	4,174,617
Weighted average shares outstanding		67,265,996		67,455,040

XML 31 R20.htm IDEA: XBRL DOCUMENT

Basis of Presentation and Going Concern (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Basis Of Presentation And Going Concern Details Narrative
Net Loss	$ (1,953,418)	$ (87,354)
Accumulated deficit	$ (7,141,574)			$ (5,188,155)
Description of conversion rate for reporting currency	Balances denominated in Canadian Dollars outstanding at March 31, 2017 were converted into United States Dollars at a rate of 1.33 Canadian Dollars to one United States Dollar.		Balances denominated in Canadian Dollars outstanding at December 31, 2017 were converted into United States Dollars at a rate of 1.34 Canadian Dollars to one United States Dollar.
Description of conversion rate for transactions done in CAD	Transactions denominated in Canadian Dollars for the period ended March 31, 2017 were converted into United States Dollars at a rate of 1.32 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 1.37 Canadian Dollars to one United States Dollar.

XML 32 R21.htm IDEA: XBRL DOCUMENT

Secured Notes Payable (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Secured Notes Payable Details
Balance owing	$ 252,874	$ 210,069
Less amounts due within one year	(100,982)	(105,985)
Notes Payable, Net of Current Portion	$ 151,892	$ 104,084

XML 33 R22.htm IDEA: XBRL DOCUMENT

Secured Notes Payable (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
Secured Notes Payable (Details Narrative) - USD ($)	Oct. 31, 2015	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Proceeds of secured promissory note		$ 47,755
Accrued interest related to secured promissory notes		9,697		$ 4,476
Consultant [Member]
Outstanding principal balance				65,000
Proceeds of secured promissory note				$ 65,000
Secured promissory note due date				Feb. 18, 2017
Additional paid-in capital				$ 12,200
Finance charges expensed				52,800
Secured Promissory Note [Member]
Proceeds of secured promissory note				$ 39,000
Interest rate				18.00%
Secured promissory note due date				Sep. 02, 2018
Common stock issued during period, shares				100,000
Common stock issued during period, amount				$ 15,000
Secured Promissory Note [Member] \| Investor [Member]
Outstanding principal balance	$ 79,768	35,982
Carrying amount of the original issue discount		0
Proceeds of secured promissory note	$ 58,653
Interest rate	40.00%
Original issue discount	$ 21,115
Periodic payment of debt	$ 249
Frequency of periodic payment	Daily
Secured Promissory Note One [Member]
Proceeds of secured promissory note				$ 25,000
Interest rate				18.00%
Secured promissory note due date				Oct. 01, 2018
Secured Promissory Note Two [Member]
Proceeds of secured promissory note				$ 15,000
Interest rate				18.00%
Secured promissory note due date				Jul. 13, 2018
Secured Promissory Note Three [Member]
Proceeds of secured promissory note		$ 42,406		$ 20,608
Interest rate		18.00%		18.00%
Secured promissory note due date		Jul. 13, 2018		Jul. 13, 2018
Secured Promissory Note Four [Member]
Interest rate				8.00%
Secured promissory note due date				Mar. 01, 2018

XML 34 R23.htm IDEA: XBRL DOCUMENT

Convertible Promissory Notes Payable (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Principal amount	$ 132,750
Convertible Promissory Notes Payable [Member]
Debt issuance costs		$ 7,500
Interest expense related to the amortization of the debt issuance costs	$ 2,217
Principal amount		$ 77,750
Maturity date		Mar. 22, 2017
Interest on promissory note		10.00%
Interest rate		24.00%
Issuance convertible promissory note description		The price at which the conversion is to occur is the lesser of (i) 45% multiplied by the Trading Price (representing a discount rate of 55%) during the previous trading day period ending on the latest complete trading day prior to the date of the convertible promissory note and (ii) the Variable Conversion Price, which shall mean 45% multiplied by the Market Price which shall be the lowest Trading Price for the Company's Stock during the 25 day Trading Period ending on the last complete Trading Day prior to the Conversion Date.
Common stock converted shares	37,640,800
Convertible Promissory Notes Payable One [Member]
Debt issuance costs		$ 1,500
Interest expense related to the amortization of the debt issuance costs	$ 754
Principal amount		$ 55,000
Maturity date		Jun. 28, 2017
Interest on promissory note		10.00%
Interest rate		24.00%
Issuance convertible promissory note description		The price at which the conversion is to occur is the lesser of (i) the closing sale price of the Company's common stock on the Principal Market on the Trading Date immediately preceding the Closing Date and ii) 55% of the lowest sale price for the Company's common stock on the Principal Market during the twenty (20) consecutive Trading Days immediately preceding the Conversion Date provided, however, if the Company’s share price at any time loses the bid (ex: 0.0001 on the ask with zero market makers on the bid on level 2), then the Conversion Price may, in the Holder’s sole and absolute discretion, be reduced to a fixed conversion price of 0.00001 (if lower than the conversion price otherwise), and provided
Common stock converted shares	24,503,724

XML 35 R24.htm IDEA: XBRL DOCUMENT

Derivative Liability (Details Narrative) - USD ($)	3 Months Ended
Derivative Liability (Details Narrative) - USD ($)	Mar. 31, 2017	Mar. 31, 2016
Derivative Liability Details Narrative
Loss on derivative liability	$ (484,720)

XML 36 R25.htm IDEA: XBRL DOCUMENT

Common Stock (Details Narrative) - USD ($)	3 Months Ended
Common Stock (Details Narrative) - USD ($)	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Series A preferred stock, par value	$ 0.0001		$ 0.0001
Series A preferred stock, authorized	1,000,000		1,000,000
Series A preferred stock, voting rights	voting rights equal to 299 shares of common stock, per share of preferred.
Common stock, par value	$ 0.0001		$ 0.0001
Common stock, authorized	299,000,000		299,000,000
Common Shares issued to the Company's CEO	$ 1,360,000
Common stock, issued	202,232,666		68,088,142
Chief Executive Officer [Member]
Common stock, par value	$ 0.001
Common Shares issued to the Company's CEO	$ 1,360,000
Common stock, issued	72,000,000
Convertible Promissory Notes [Member]
Debt conversion converted instrument, shares issued	62,144,524

XML 37 R26.htm IDEA: XBRL DOCUMENT

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Major Shareholder and CEO [Member]
Salaries	$ 14,865	$ 5,808
Director, Officer and Shareholder [Member]
Revenues for goods sold	$ 3,749	$ 3,382

XML 38 R27.htm IDEA: XBRL DOCUMENT

Financial Instruments (Details) - USD ($)	3 Months Ended
Financial Instruments (Details) - USD ($)	Mar. 31, 2017	Mar. 31, 2016
Concentration of Revenues	85.90%	82.10%
Concentration of accounts receivable	$ 8,595	$ 51,667
Customer A [Member]
Concentration of Revenues	66.00%	47.40%
Concentration of accounts receivable	$ 4,415	$ 49,020
Customer B [Member]
Concentration of Revenues	10.60%	10.20%
Concentration of accounts receivable	$ 298	$ 552
Customer C [Member]
Concentration of Revenues	9.30%	13.50%
Concentration of accounts receivable	$ 3,882	$ 2,092
Customer D [Member]
Concentration of Revenues		11.00%
Concentration of accounts receivable		$ 3

XML 39 R28.htm IDEA: XBRL DOCUMENT

Financial Instruments (Details Narrative)	3 Months Ended
Financial Instruments (Details Narrative)	Mar. 31, 2017
Financial Instruments Details Narrative
Significant customer, description	A customer is considered to be significant if they account for greater than 10% of the Company's annual sales

XML 40 R29.htm IDEA: XBRL DOCUMENT

Prior Period Misstatement (Details) - USD ($)	3 Months Ended
Prior Period Misstatement (Details) - USD ($)	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Common stock	$ 20,224		$ 6,809
Additional paid-in capital	6,851,096		$ 4,189,607
Originally Reported [Member]
Prepaid expenses	8,107
Common stock	6,729
Additional paid-in capital	$ 4,072,637
Weighted average shares outstanding	67,265,996
Restated [Member]
Prepaid expenses	$ 128,107	$ 110,107
Common stock	6,749	6,749
Additional paid-in capital	$ 4,174,617	$ 4,174,617
Weighted average shares outstanding	67,455,040	67,455,040

XML 41 R30.htm IDEA: XBRL DOCUMENT

Disclosure - Prior Period Misstatement (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Common stock	$ 20,224		$ 6,809
Additional paid-in capital	6,851,096		$ 4,189,607
Common stock value issued ommited to be recorded		$ 102,000
Common stock shares issued ommitted to be recorded		200,000
Understated [Member]
Prepaid expenses		$ 102,000
Common stock		20
Additional paid-in capital		101,980
Restated [Member]
Prepaid expenses	128,107	110,107
Common stock	6,749	6,749
Additional paid-in capital	$ 4,174,617	$ 4,174,617
Weighted average shares outstanding	67,455,040	67,455,040

XML 42 R31.htm IDEA: XBRL DOCUMENT

Evaluation of Subsequent Events (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Common stock, authorized	299,000,000	299,000,000
Voting rights, description	voting rights equal to 299 shares of common stock, per share of preferred.
Common stock, issued	202,232,666	68,088,142
Share price	$ 0.0001	$ 0.0001
Proceeds for common stock	$ 20,224	$ 6,809
Subsequent Event [Member]
Common stock, issued	3,000,000
Proceeds for common stock	$ 38,010
Common stock shares issued for services, shares	340,000
Common stock shares issued for services, value	$ 10,000
Subsequent Event [Member] \| Term Sheet [Member]
Credit facility maximum borrowing capacity to fund purchases of inventory	$ 500,000
Interest payable on borrowed amounts per month, percentage	1.50%
Due diligence fee payable upon first tranche	$ 20,000
Monthly monitoring fee payable upon first tranche	$ 5,000
Subsequent Event [Member] \| First Tranche [Member]
Commons stock shares issuable upon settlement of debt	1,000,000
Credit facilty, amount receivable upon first tranche	$ 220,000
Description of conditions to waive monthly fee	The lender can choose to waive payment of the monthly fee in exchange for conversion of the amount into shares of the Company's common stock at a price of $0.035 per share
Description for conversion price	Should the price of the Company's stock increase beyond $0.05 per share, the conversion price will be struck at a 30% discount to the closing price of the volume weighted average price on the OTC market of the previous five trading days
Description for the extension of credit facility amount	Pursuant to the Term Sheet, the term of the advances made will be for a minimum of two years and the Company shall have the right to increase the credit facility to $1,000,000 provided the minimum term extends to three years
Shares issuable upon full and final advance of credit facility amount	1,000,000
Warrants issuable upon full and final advance of credit facility amount	2,000,000
Description for the exercise of warrants	2,000,000 warrants entitling the holder to acquire one share of the Company's common stock at a price of $0.04 per share
Subsequent Event [Member] \| Consulting agreement [Member]
Common stock, issued	12,500,000
Subsequent event description	in exchange for consulting services for a period of 18 months.
Subsequent Event [Member] \| Services Agreement [Member] \| Consulting Services [Member]
Common stock, issued	1,577,287
Consulting services period	180 days
Exchange fee	$ 50,000
Proceeds for common stock	$ 1,577
Subsequent Event [Member] \| Services Agreement [Member] \| Second Consulting Services [Member]
Common stock, issued	1,577,287
Consulting services period	180 days
Exchange fee	$ 50,000
Proceeds for common stock	$ 1,577
Subsequent Event [Member] \| Agreement [Member]
Common stock, issued	10,400,000
Proceeds for common stock	$ 183,443
Exchange for common shares	35,000,000
Subsequent Event [Member] \| Share Issuance/ Claim Extinguishment Agreements [Member]
Common stock shares issuable under agreement	50,000,000
Aggregate indebtedness	$ 154,056
Subsequent Event [Member] \| Share Purchase Agreement [Member]
Share price	$ 0.02
Common stock shares issuable under agreement	100,000
Description for share price	Fixed issue price of $0.02 per share (the "Fixed Price"), provided, however, that if the Company's volume weighted average price (the "VWAP") on the date the buyer provides a Stock Issuance Notice to the Company or on the date on which the buyer received such Issuance Shares, the Company's stock bid price is less than $0.035 (the "Minimum Price"), then the number of Issuance Shares shall increase as a result of a decrease in the Issuance Price below the Minimum Price
Subsequent Event [Member] \| Second Share Purchase Agreement [Member]
Share price	$ 0.02
Common stock shares issuable under agreement	400,000
Description for share price	Fixed issue price of $0.02 per share (the "Fixed Price"), provided, however, that if the Company's volume weighted average price (the "VWAP") on the date the buyer provides a Stock Issuance Notice to the Company or on the date on which the buyer received such Issuance Shares, the Company's stock bid price is less than $0.035 (the "Minimum Price"), then the number of Issuance Shares shall increase as a result of a decrease in the Issuance Price below the Minimum Price
Subsequent Event [Member] \| Loan agreement [Member]
Borrowed amount	$ 37,770
Interest rate	12.00%
Description for the payment of interest	The loan bears interest at 12% per annum, payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of October 18, 2018
Subsequent Event [Member] \| Second Loan agreement [Member]
Subsequent event description	payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.
Borrowed amount	$ 30,000
Interest rate	12.00%
Subsequent Event [Member] \| Third Loan agreement [Member]
Subsequent event description	payable at a rate of 6% on the semi-annual anniversary and 6% on the repayment date of November 3, 2018.
Borrowed amount	$ 50,000
Interest rate	12.00%
Subsequent Event [Member] \| Series A Preferred Stock [Member]
Common stock, authorized	1,000,000
Voting rights, description	The Preferred Stock will have voting rights equal to 299 shares of common stock, per share of Preferred
Common stock shares exchanged for preferred stock	100,000,000

	March 31, 2017			December 31, 2016
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	29,282		$	-
Accounts receivable		13,591			81,146
Inventory		68,093			78,975
Related party receivable		7,591			7,770
Prepaid expenses and deposits		116,267			116,267
Total Current Assets		234,824			284,158
Property and Equipment, Net of Accumulated Depreciation of $1,447 (December 31, 2016 - $1,244)		39,041			39,263
Intangible Assets, Net of Accumulated Amortization of $823 (December 31, 2016 - $746)		13,251			13,328
Total Assets (Substantially Pledged as Collateral)	$	287,116		$	336,749

Liabilities and Shareholders' Equity (Deficit)
Current Liabilities
Bank overdraft	$	-		$	2,635
Accounts payable and accrued liabilities		286,246			340,270
Income taxes payable		4,830			4,796
Current portion secrued notes payable (note 3)		100,982			105,985
Convertible promissory notes payable, net of discount (note 3)		-			78,978
Derivative liability (note 5)		-			704,868
Total Current Liabilities		392,058			1,237,532
Secured Notes Payable, Net of Current Portion (note 3)		151,892			104,084
Total Liabilities		543,950			1,341,616
Comittments and Contingencies
Shareholders' Equity (Deficit)
Series A Preferred Stock, $0.0001 par value, 1,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2017 and December 31, 2016 (note 11)		-			-
Common stock, $0.0001 par value, 299,000,000 shares authorized, 202,232,666 and 68,088,142 shares issued and outstanding as of March 31, 2017 and December 31, 2016 respectively (note 6)		20,224			6,809
Additional paid-in capital		6,851,096			4,189,607
Cumulative translation adjustment		21,020			(3,778	)
Share subscriptions receivable		(7,600	)		(9,350	)
Accumulated deficit		(7,141,574	)		(5,188,155	)
Total Shareholders' Equity (Deficit)		(256,834	)		(1,004,867	)
Total Liabilities and Shareholders' Equity (Deficit)	$	287,116		$	336,749

	March 31, 2017			March 31, 2016
	(Unaudited)			(Unaudited)

Net Sales	$	101,263		$	93,508

Cost of Goods Sold		70,991			87,217

Gross Profit		30,272			6,291

Operating Expenses
General and administrative		1,395,531			29,830
Sales and marketing		1,103			21,381
Professional fees		26,053			34,371
Loss (gain) on foreign exchange		27,773			(1,368	)
Total operating expenses		1,450,460			84,214
Loss from operations		(1,420,188	)		(77,923	)

Other Income (Expense)
Interest expense		(8,310	)		(9,431	)
Debt issuance costs		(2,971	)		-
Loss on derivative (note 5)		(484,720	)		-
Finance charges		(25,464	)		-
Loss on settlement of debt		(11,765	)		-
Total other income (expense)		(533,230	)		(9,431	)

Net Loss for the period		(1,953,418	)		(87,354	)

Other Comprehensive Income (Loss)
Foreign currency translation adjustment		24,798			(8,606	)

Net Comprehensive Loss for the period	$	(1,928,620	)	$	(95,960	)

Loss per Weighted Average Share (basic and diluted)	$	(0.01	)	$	-

Weighted Average Number of Shares (basic and diluted)		136,849,459			67,455,040