Evaluation of Subsequent Events

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

NOTE 11 - Evaluation of Subsequent Events

Subsequent to June 30, 2017, the Company:

a)	Is out of compliance with certain debt covenants.
b)	Increased the number of shares of its common stock authorized for issuance to 300,000,000. Following this increase, the Company 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 June 30, 2017, 100,000,000 shares of common stock were exchanged for 1,000,000 shares of Series A Preferred Stock.
c)	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.
d)	Issued 3,000,000 shares of its common stock for gross proceeds of $38,010.
e)	Issued 340,000 shares of its common stock in exchange for services rendered of $10,000.
f)	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. Subsequent to June 30, 2017, the Company borrowed $19,262 pursuant to two loan agreements entered into under the Term Sheet.
	The issuance of shares of the Company's common stock and warrants to purchase shares of the Company's common stock, as well as the converion of debt into shares of the Company's would have an anti-dilutive effect on the Company's net loss per weighted average share outstanding.
g)	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.
h)	Entered into a Share Purchase Agreement pursuant to which the Company has agreed to issue shares 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.
i)	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.
j)	Borrowed 37,770 Canadian Dollars 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.
k)	Borrowed 30,000 Canadian Dollars 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.
l)	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.
m)	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 15, 2018 which is the date the financial statements were available to be issued, and concluded there were no events or transactions occurring during this period that required recognition or disclosure in the financial statements other than that mentioned above.