UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c)
of
the Securities Exchange Act of 1934
Check
the appropriate box:
[X]
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Preliminary
Information Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
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Definitive
Information Statement
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FRANCHISE
HOLDINGS INTERNATIONAL, INC.
(Name
of Registrant as Specified In Its Charter)
Payment
of Filing Fee (Check the appropriate box):
[X]
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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1)
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Title
of each class of securities to which transaction applies:
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2)
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Aggregate
number of securities to which transaction applies:
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3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4)
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Proposed
maximum aggregate value of transaction:
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5)
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Total
fee paid:
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[ ]
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement No.:
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3)
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Filing
Party:
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4)
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Date
Filed:
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FRANCHISE
HOLDINGS INTERNATIONAL, INC.
3120
Rutherford Road, Suite 414
Vaughan,
ONT L4K 0B2, Canada
To:
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The
Holders of the Common Stock of Franchise Holdings International, Inc.
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Re:
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Action
by Written Consent In lieu of Annual Meeting of Stockholders
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This
Information Statement is furnished by the Board of Directors of Franchise Holdings International, Inc., a Nevada corporation (the
“Company”, or “FNHI”), to holders of record of the Company’s common stock, $0.001 par value per
share, at the close of business on March 5, 2019. The purpose of this Information Statement is to inform the Company’s stockholders
of certain actions taken by the written consent of the holders of a majority of the Company’s voting stock, dated as of
March 5, 2019, in lieu of an Annual Meeting of stockholders.
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1.
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To
grant the Board of Directors the authority to amend the Company’s articles of incorporation to affect a reverse stock
split (the “Reverse Split Proposal”) of the Company’s common stock (“Common Stock”).
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2.
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To
grant the Board of Directors the authority to amend the Company’s Certificate of Designation for Series A Preferred
Stock.
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The
foregoing actions were approved on March 5, 2019 by our Board of Directors. In addition, on March 5, 2019, Steven Rossi, the majority
holder of the Company’s outstanding voting securities, as of the record date, approved the foregoing actions. The number
of shares voting for the proposals was sufficient for approval because Steven Rossi owns 1,000,000 shares of Series A Preferred
Stock. Each one share of Series A Preferred Stock has voting rights equal to 299 shares of Common Stock, thus giving Mr. Rossi
the voting power equivalent to 299,000,000 shares of Common Stock, in addition to the 11,500,000 shares of the Company’s
Common Stock which Mr. Rossi owns.
Section
78.320 of the Nevada Revised Statutes (the “NRS”) provides in part that any action required or permitted to be taken
at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent thereto is signed
by stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required
for such an action at a meeting, then that proportion of written consents is required.
In
order to eliminate the costs and management time involved in obtaining proxies and in order to affect the above actions as early
as possible in order to accomplish the purposes of the Company as herein described, the Board consented to the utilization of,
and did in fact obtain, the written consent of the Consenting Stockholders who collectively own shares representing a majority
of our Common Stock.
The
above actions taken by the Company’s stockholders will become effective on or about March 31, 2019 and are more fully described
in the Information Statement accompanying this Notice. Under the rules of the Securities and Exchange Commission, the above actions
cannot become effective until at least 20 days after the accompanying Information Statement has been distributed to the stockholders
of the Company. FINRA must also approve the Reverse Stock Split in order for it to be declared effective.
The
entire cost of furnishing this Information Statement will be borne by the Company. The Company may request brokerage houses, nominees,
custodians, fiduciaries and other like parties to forward this Information Statement to the beneficial owners of the Common Stock
held of record by them and will reimburse such persons for their reasonable charges and expenses in connection therewith.
WE
ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
No
action is required by you. The accompanying Information Statement is furnished only to inform our stockholders of the actions
described above before they take place in accordance with Rule 14c-2 of the Securities Exchange Act of 1934. This Information
Statement will be first distributed to you on or about March 11, 2019.
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By
Order of the Board of Directors
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/s/
Steven Rossi
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Steven
Rossi, Chief Executive Officer
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March
8, 2019
Vaughan,
Ontario
FRANCHISE
HOLDINGS INTERNATIONAL, INC.
WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
INFORMATION
STATEMENT
INFORMATION
STATEMENT PURSUANT TO SECTION 14C OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
THIS
IS NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED
HEREIN. THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT HAVE BEEN APPROVED BY HOLDERS OF A MAJORITY OF OUR COMMON STOCK. WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THERE ARE NO DISSENTERS’ RIGHTS WITH RESPECT
TO THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT.
INTRODUCTION
This
Information Statement is being mailed or otherwise furnished to the holders of common stock, $0.001 par value per share (the “Common
Stock”) of Franchise Holdings International, Inc., a Nevada corporation (“We” or the “Company”)
by the Board of Directors to notify them about a certain action that the holders of a majority of the Company’s outstanding
voting stock have taken by written consent, in lieu of an Annual Meeting of the stockholders. The action was taken on March 5,
2019. Copies of this Information Statement are first being sent on or about March 11, 2019 to the holders of record on March 5,
2019 of the outstanding shares of the Company’s Common Stock.
General
Information
Stockholders
of the Company owning a majority of the Company’s outstanding voting securities have approved the following actions (the
“Actions”) by written consent dated March 5, 2019, in lieu of a meeting of the stockholders:
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1.
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To
grant the Board of Directors the authority to amend the Company’s articles of incorporation to affect a reverse stock
split (the “Reverse Split Proposal”) of the Company’s common stock (“Common Stock”).
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2.
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To
grant the Board of Directors the authority to amend the Company’s Certificate of Designation for Series A Preferred
Stock.
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The
Company may ask brokers and other custodians, nominees, and fiduciaries to forward this Information Statement to the beneficial
owners of the common stock held of record by such persons and will reimburse such persons for out-of-pocket expenses incurred
in forwarding such material.
Dissenters’
Right of Appraisal
No
dissenters’ or appraisal rights under the Nevada Revised Statutes are afforded to the Company’s stockholders as a
result of the approval of the actions set forth above.
Vote
Required
The
vote, which was required to approve the above actions, was the affirmative vote of the holders of a majority of the Company’s
voting stock. Each holder of Common Stock is entitled to one (1) vote for each share of Common Stock held. The date used for purposes
of determining the number of outstanding shares of voting stock of the Company entitled to vote is March 5, 2019. The record date
for determining those shareholders of the Company entitled to receive this Information Statement is the close of business on March
5, 2019 (the “Record Date”). As of the Record Date, the Company had outstanding 153,804,298 shares of Common Stock.
Holders of the Common Stock have no preemptive rights. All outstanding shares are fully paid and nonassessable. The transfer agent
for the Common Stock is Corporate Stock Transfer, Inc., 3200 Cherry Creek Drive South, Suite 430, Denver, CO 80209. Telephone:
303-282-4800.
Vote
Obtained - Section 78.320 of the Nevada Revised Statutes
Section
78.320 of the Nevada Revised Statutes Law provides that any action required to be taken at any annual or special meeting of stockholders
of a corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without
a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall
be signed by the holders of outstanding stock, having not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
To
eliminate the costs and management time involved in soliciting and obtaining proxies to approve the actions and to effectuate
the Actions as early as possible to accomplish the purposes of the Company as hereafter described, the Board of Directors of the
Company voted to utilize, and did in fact obtain, the written consent of the holders of a majority of the voting power of the
Company. The consenting shareholder and his respective approximate ownership percentage of the voting stock of the Company is
as follows: Steven Rossi, CEO, President and a Director of the Company: Steven Rossi owns 1,000,000 shares of Series A Preferred
Stock. Each one share of Series A Preferred Stock has voting rights equal to 299 shares of Common Stock, thus giving Mr. Rossi
the voting power equivalent to 299,000,000 shares of Common Stock, in addition to the 11,500,000 shares of Common Stock Mr. Rossi
owns.
This
Information Statement is being distributed pursuant to the requirements of Section 14(c) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) to the Company’s stockholders on the Record Date. The corporate action described
herein will be effective approximately 20 days (the “20-day Period”) after the distributing of this Information Statement.
The 20-day Period is expected to conclude on or about March 31, 2019.
The
entire cost of furnishing this Information Statement will be borne by the Company.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth information as of the Record Date with respect to the beneficial ownership of Common Stock by (i) each
person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock as of the Record Date (ii) our current
directors, (iii) each person who will become a director on or after the tenth day following our mailing of this Information Statement,
(iv) each of newly named executive officers and (v) all of our newly named executive officers and directors as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC. Except as indicated by footnote and subject to community property
laws, where applicable, to our knowledge the persons named in the table below have sole voting and investment power with respect
to all shares of Common Stock that are shown as beneficially owned by them. In computing the number of shares of Common Stock
owned by a person and the percentage ownership of that person, any such shares subject to options and warrants held by that person
that are exercisable as of the Record Date or that will become exercisable within 60 days thereafter are deemed outstanding for
purposes of that person’s percentage ownership but not deemed outstanding for purposes of computing the percentage ownership
of any other person. The percent of class is based on 153,804,298 shares of common stock issued and outstanding as of the date
of this report. Unless otherwise indicated, the mailing address of each individual is c/o Franchise Holdings International, Inc.,
3120 Rutherford Road, Suite 414, Vaughan, ONT L4K 0B2, Canada
Name
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Number
of
Shares of
Common
stock
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Percentage
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Number
of Shares of Preferred
Stock
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Percentage
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Steven Rossi [1][2]
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11,500,000
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7.5
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%
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1,000,000
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100
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%
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[1]
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11,500,000
restricted common shares are owned by Steven Rossi in his own name.
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[2]
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Steven
Rossi also owns 1,000,000 shares of Series A Preferred Stock. Each one share of Series A Preferred Stock has voting rights
equal to 299 shares of Common Stock, thus giving Mr. Rossi the additional voting power equivalent to 299,000,000 shares of
Common Stock.
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PROPOSAL
1
APPROVAL
TO AFFECT A REVERSE STOCK SPLIT
TO
THE COMPANY’S COMMON STOCK
We
are seeking shareholder approval to affect a reverse stock split of the issued and outstanding shares of our Common Stock, par
value $0.0001 per share, such split to combine six (6) outstanding shares of our Common Stock into one (1) share of Common Stock
(the “Reverse Split Proposal”).
The
amendment will not change the number of authorized shares of Common Stock, or the relative voting power of our shareholders. Because
the number of authorized shares will not be reduced, the number of authorized but unissued shares of our Common Stock will materially
increase and will be available for reissuance by the Company. The reverse stock split, if affected, would affect all of our holders
of Common Stock uniformly.
The
Board unanimously approved and recommended seeking shareholder approval of this Reverse Split Proposal, on March 5, 2019.
The
Board’s decision to affect the reverse stock split is based on a number of factors, including prevailing market conditions,
existing and expected trading prices for our Common Stock, actual or forecasted results of operations, and the likely effect of
such results on the market price of our Common Stock.
Following
a reverse stock split, the number of our outstanding shares of Common Stock will be significantly reduced. The reverse stock split
is not being proposed in response to any effort of which we are aware to accumulate our shares of Common Stock or obtain control
of the Company, nor is it a plan by management to recommend a series of similar actions to our Board or our shareholders.
There
are certain risks associated with a reverse stock split, and we cannot accurately predict or assure the reverse stock split will
produce or maintain the desired results (for more information on the risks see the section below entitled “Certain Risks
Associated with a Reverse Stock Split”). However, our Board believes that the benefits to the Company and our shareholders
outweigh the risks and recommends that you vote in favor of granting the Board the discretionary authority to affect a reverse
stock split.
Reasons
for the Reverse Stock Split
The
primary purpose for effecting the reverse stock split would be to increase the per share price of our Common Stock. The Board
of Directors believes that affecting the reverse stock split would, among other things, help us to:
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Meet
certain initial listing requirements of the Canadian Stock Exchange (“CSE”);
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Appeal
to a broader range of investors to generate greater investor interest in the Company; and
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Improve
the perception of our Common Stock as an investment security.
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Meet
the Canadian Stock Exchange (“CSE”) Listing Requirements -
Our Common Stock is currently listed on the OTC:QB
(“FNHI”) and we plan to dual list on the CSE. CSE requires a minimum trading price per share in order to list. The
CSE Rules and Regulations, require among other things, that in order to list on the exchange, the minimum IPO price conducted
concurrent to listing is C$0.05.
Appeal
to a Broader Range of Investors to Generate Greater Investor Interest in the Company -
An increase in our stock price may
make our Common Stock more attractive to investors. Brokerage firms may be reluctant to recommend lower-priced securities to their
clients. Many institutional investors have policies prohibiting them from holding lower-priced stocks in their portfolios, which
reduces the number of potential purchasers of our Common Stock. Investment funds may also be reluctant to invest in lower-priced
stocks. Investors may also be dissuaded from purchasing lower-priced stocks because the brokerage commissions, as a percentage
of the total transaction, tend to be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the
trading activity or otherwise provide coverage of lower-priced stocks. Giving the Board of Directors the ability to affect a reverse
stock split, and thereby increase the price of our Common Stock, would give the Board the ability to address these issues if it
is deemed necessary.
Improve
the Perception of Our Common Stock as an Investment Security -
We believe that the overall economic environment in the industry
in which we are currently operating has been a significant contributing factor in the decline in the price of our Common Stock.
Our Board of Directors unanimously approved the discretionary authority to affect a reverse stock split as one potential means
of increasing the share price of our Common Stock to improve the perception of our Common Stock as a viable investment security.
Lower-priced stocks have a perception in the investment community as being risky and speculative, which may negatively impact
not only the price of our Common Stock, but also our market liquidity.
Certain
Risks Associated with a Reverse Stock Split
Even
if a reverse stock split is affected, some or all of the expected benefits discussed above may not be realized or maintained.
The market price of our Common Stock will continue to be based, in part, on our performance and other factors unrelated to the
number of shares outstanding.
The
reverse stock split will reduce the number of outstanding shares of our Common Stock without reducing the number of shares of
available but unissued Common Stock, which will also have the effect of increasing the number of authorized but unissued shares.
The issuance of additional shares of our Common Stock may have a dilutive effect on the ownership of existing shareholders.
The
current economic environment, in which we operate, the substantial debt we carry and other risks which affect our ability to operate
as a going concern, along with otherwise volatile equity market conditions, could limit our ability to raise new equity capital
in the future.
Principal
Effects of a Reverse Stock Split
If
our shareholders approve this Reverse Split Proposal and the Board of Directors elects to affect a reverse stock split, our issued
and outstanding shares of Common Stock would decrease at a rate of one share of Common Stock for every six (6) shares of Common
Stock currently outstanding, with adjustment for any fractional shares. The reverse stock split would be affected simultaneously
for all of our Common Stock, and the exchange ratio would be the same for all shares of Common Stock. The reverse stock split
would affect all of our shareholders uniformly and would not affect any shareholder’s percentage ownership interests in
the Company, except to the extent that it results in a shareholder receiving whole shares in lieu of fractional shares. Shareholders
holding fractional shares as a result of the Reverse Stock Split will be rounded up to the next whole share. The reverse stock
split would not affect the relative voting or other rights that accompany the shares of our Common Stock, except to the extent
that it results in a shareholder receiving a whole share in lieu of fractional shares. Common Stock issued pursuant to the reverse
stock split would remain fully paid and non-assessable. The reverse stock split would not affect our securities law reporting
and disclosure obligations, and we would continue to be subject to the periodic reporting requirements of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). We have no current plans to take the Company private. Accordingly, a
reverse stock split is not related to a strategy to do so.
In
addition to the change in the number of shares of Common Stock outstanding, a reverse stock split would have the following effects:
Increase
the Per Share Price of our Common Stock
- By effectively condensing a number of pre-split shares into one share of Common
Stock, the per share price of a post-split share is generally greater than the per share price of a pre-split share. The amount
of the initial increase in per share price and the duration of such increase, however, are uncertain. The Board intends to utilize
the reverse stock split as part of its plan to obtain listing on the Canadian Securities Exchange (“CSE”) to meet
their listing standards noted above.
Increase
in the Number of Shares of Common Stock Available for Future Issuance
- By reducing the number of shares outstanding without
reducing the number of shares of available but unissued Common Stock, a reverse stock split will increase the number of authorized
but unissued shares. The Board believes the increase is appropriate for use to fund the future operations of the Company.
The
following table contains approximate information relating to our common stock, based on share information as of March 5, 2019:
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Current
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After
Reverse Split at 1:6
Ratio
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Authorized Common Stock
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299,000,000
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299,000,000
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Common Stock issued and outstanding
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153,804,298
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25,634,050
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Authorized but unissued
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145,195,702
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273,365,950
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Although
a reverse stock split would not have any dilutive effect on our shareholders, a reverse stock split without a reduction in the
number of shares authorized for issuance would reduce the proportion of shares owned by our shareholders relative to the number
of shares authorized for issuance, giving our Board an effective increase in the authorized shares available for issuance, in
its discretion. Our Board from time to time may deem it to be in the best interests of the Company and our shareholders to enter
into transactions and other ventures that may include the issuance of shares of our Common Stock. If our Board authorizes the
issuance of additional shares subsequent to the reverse stock split described above, the dilution to the ownership interest of
our existing shareholders may be greater than would occur had the reverse stock split not been affected. Many stock issuances
not involving equity compensation do not require shareholder approval, and our Board generally seeks approval of our shareholders
in connection with a proposed issuance only if required at that time.
In
addition, a reverse stock split may result in some shareholders owning “odd lots” of less than 100 shares of Common
Stock, which may be more difficult to sell and may cause those holders to incur greater brokerage commissions and other costs
upon sale.
Authorized
Shares of Common Stock
The
Reverse Stock Split Proposal will not change the number of authorized shares of Common Stock but will increase the number of authorized
shares available for future issuance for corporate needs such as equity financing, retirement of outstanding indebtedness, stock
splits and stock dividends, employee benefit plans, or other corporate purposes as may be deemed by the Board to be in the best
interests of the Company and its shareholders. The Board believes the increase in available shares for future issuance is appropriate
to fund the future operations of the Company. It will also provide the Company with greater flexibility to respond quickly to
advantageous business opportunities. However, we may from time to time explore opportunities to make acquisitions through the
use of stock. As a result, the Company’s current number of authorized shares of Common Stock may enable the Company to better
meet its future business needs.
Procedure
for Effecting Reverse Stock Split and Exchange of Stock Certificates
The
Reverse Split Proposal was approved the majority shareholder, and our Board has determined that such an action is in the best
interests of the Company and our shareholders, taking into consideration the factors discussed above.
We
would then file a Certificate of Change to our Articles of Incorporation with the Secretary of the State of Nevada at such time
as our Board of Directors had determined as the appropriate effective time for the reverse stock split to affect the reverse split.
The certificate of amendment would add a new provision providing that holders of our Common Stock immediately prior to the filing
of the amendment will receive one share of Common Stock for each number of shares selected by the Board. Upon the filing of the
certificate of amendment, and without any further action on the part of the Company or our shareholders, the issued shares of
Common Stock held by shareholders of record as of the effective date of the reverse stock split would be converted into a lesser
number of shares of Common Stock calculated in accordance with the reverse stock split ratio of one-for-six (1:6), as selected
by our Board and set forth in the certificate of amendment.
For
example, if a shareholder presently holds 1,000 shares of our Common Stock, he or she would hold 167 shares of Common Stock following
a one-for-six reverse stock split with an adjustment for any fractional shares. Beginning on the effective date of the split,
each certificate representing pre-split shares would be deemed for all corporate purposes to evidence ownership of post-split
shares.
As
soon as practicable after the effective date of the reverse stock split, shareholders would be notified that the reverse stock
split had been affected.
Effect
on Beneficial Holders (i.e., Shareholders Who Hold in “Street Name”)
Upon
the reverse stock split, we intend to treat Common Stock held by shareholders in “street name,” through a bank, broker
or other nominee, in the same manner as shareholders whose shares are registered in their own names. Banks, brokers or other nominees
will be instructed to affect the reverse stock split for their customers holding Common Stock in “street name.” However,
these banks, brokers or other nominees may have different procedures than registered shareholders for processing the reverse stock
split. If you hold shares of Common Stock with a bank, broker or other nominee and have any questions in this regard, you are
encouraged to contact your bank, broker or other nominee.
Effect
on Registered “Book-Entry” Holders (i.e., Shareholders that are Registered on the Transfer Agent’s Books and
Records but do not Hold Certificates)
Some
of our registered holders of Common Stock may hold some or all of their shares electronically in book-entry form with our transfer
agent, Corporate Stock Transfer, Inc. These shareholders do not have stock certificates evidencing their ownership of Common Stock.
They are, however, provided with a statement reflecting the number of shares registered in their accounts. If a shareholder holds
registered shares in book-entry form with our transfer agent, no action needs to be taken to receive post-reverse stock split
shares. If a shareholder is entitled to post-reverse stock split shares, a transaction statement will be available to be sent
to the shareholder’s address of record indicating the number of shares (adjusted for any fractional shares) of Common Stock
held following the reverse stock split, if required by the shareholder.
Effect
on Certificated Shares
Upon
the reverse stock split our transfer agent will act as our exchange agent and assist holders of Common Stock in implementing the
exchange of their certificates.
Commencing
on the effective date of a reverse stock split, shareholders holding shares in certificated form will be sent a transmittal letter
by our transfer agent. The letter of transmittal will contain instructions on how a shareholder should surrender his or her certificates
representing Common Stock (“Old Certificates”) to the transfer agent in exchange for certificates representing the
appropriate number of whole post-reverse stock split Common Stock, as applicable (“New Certificates”). No New Certificates
will be issued to a shareholder until that shareholder has surrendered all Old Certificates, together with a properly completed
and executed letter of transmittal, to the transfer agent. The letter of transmittal will also contain instructions on how you
may obtain New Certificates if your Old Certificates have been lost. If you have lost your certificates, you will have to pay
any surety premium and the service fee required by our transfer agent.
Until
surrendered, we will deem outstanding Old Certificates held by shareholders to be canceled and only to represent the number of
whole shares to which these shareholders are entitled.
Any
Old Certificates submitted for exchange, whether because of a sale, transfer or other disposition of shares, will automatically
be exchanged for New Certificates.
Shareholders
should not destroy any stock certificates and should not submit any certificates until requested to do so by the transfer agent.
Shortly after the reverse stock split the transfer agent will provide registered shareholders with instructions and a letter of
transmittal for converting Old Certificates into New Certificates. Shareholders are encouraged to promptly surrender Old Certificates
to the transfer agent (acting as exchange agent in connection with the reverse stock split) in order to avoid having shares become
subject to escheat laws.
Fractional
Shares
The
effect of the Reverse Split upon existing shareholders of the common stock will be that the total number of shares of the Company’s
common stock held by each shareholder will automatically convert into the number of whole shares of common stock equal to the
number of shares of common stock owned immediately prior to the Reverse Split divided by the reverse stock split ratio chosen
by the Board, with an adjustment for any fractional shares. (Fractional shares will be rounded up to the next whole share).
Upon
effectuation of the Reverse Split, each common shareholder’s percentage ownership interest in the Company’s common
stock will remain virtually unchanged, except for minor changes and adjustments that will result from rounding fractional shares
into whole shares. The rights and privileges of the holders of shares of common stock of the Company will be substantially unaffected
by the Reverse Split. All issued and outstanding options, warrants, and convertible securities would be appropriately adjusted
for the Reverse Split automatically on the effective date of the Reverse Split. Shareholders holding a fractional as a result
of the Reverse Split will be rounded up to the next whole share.
No
Appraisal Rights
Our
shareholders are not entitled to appraisal rights with respect to a reverse stock split, and we will not independently provide
shareholders with any such right.
Interests
of Directors and Executive Officers
Our
directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this Reverse
Split Proposal except to the extent of their ownership of shares of our Common Stock.
Vote
Required
Steven
Rossi, the Majority Shareholder executed and delivered to the Company a written consent approving the action set forth herein.
Since the action has been approved by the Majority Stockholder, no proxies are being solicited with this Information Statement.
PROPOSAL
2
APPROVAL
TO AFFECT AN AMENDMENT TO THE
SERIES
A PREFERRED STOCK CERTIFICATE
OF
DESIGNATION
We
are seeking shareholder approval to file Amended and Restated Certificate of Designation for the Company’s Series A Preferred
Stock, attached hereto as Appendix B.
The
amendment will not change the number of authorized shares of Common Stock, or the relative voting power of our shareholders.
The
Board unanimously approved and recommended seeking shareholder approval of this proposal to file Amended and Restated Certificate
of Designation for the Company’s Series A Preferred Stock, on March 5, 2019.
Conversion Rights
The
Board’s decision to file Amended and Restated Certificate of Designation for the Company’s Series A Preferred Stock
is based on a number of factors, including certain requirements of the Canadian Securities Exchange (“CSE”) which
may in the future require the Company to have only one class of voting securities issued and outstanding, which would require
Mr. Rossi to convert his Series A Preferred Stock into shares of the Company’s Common Stock in order to facilitate the dual
listing of the Company on the CSE.
Because
of this CSE requirement, the proposed Amended and Restated Certificate of Designation for the Company’s Series A Preferred
Stock includes the right of the holder to convert all of the 1,000,000 shares of Series A Preferred Stock into such number of
shares of the Company’s Common Stock that shall equal 51% of the issued and outstanding shares of Common Stock on the date
of conversion. In that way, Mr. Rossi could choose to convert all of his 1,000,000 shares of Series A Preferred Stock into a control
block of Common Stock.
Majority
Voting Control Remains with Steven Rossi
Our
CEO, Steven Rossi, holds all 1,000,000 shares of our Series A Preferred Stock, and as such he holds majority voting power. Because
the existing Certificate of Designation of the Company’s Series A Preferred Stock, which was filed on August 9, 2017, already
provides the holder with 299 votes for each share of Series A Preferred Stock, Mr. Rossi already votes the equivalent of 299,000,000
shares of Common Stock on any matter put to a shareholder vote. This number exceeds the current issued and outstanding shares
of our Common Stock.
Once
the Company files the proposed Amended and Restated Certificate of Designation for the Company’s Series A Preferred Stock,
Mr. Rossi will still maintain voting control, except that he will be entitled to vote the equivalent of 51% of the issued and
outstanding shares of Common Stock, whereas all of the remaining holders of Common Stock shall vote their proportionate shares
of the remaining 49%. In that way, Mr. Rossi maintains voting control, albeit by a smaller majority.
No
Appraisal Rights
Our
shareholders are not entitled to appraisal rights with respect to an amendment of our Series A Preferred Stock, and we will not
independently provide shareholders with any such right.
Interests
of Directors and Executive Officers
Our
directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this proposal
file Amended and Restated Certificate of Designation for the Company’s Series A Preferred Stock except to the extent of
their ownership of shares of our Common Stock and the Series A Preferred Stock.
Vote
Required
Steven
Rossi, the Majority Shareholder executed and delivered to the Company a written consent approving the action set forth herein.
Since the action has been approved by the Majority Stockholder, no proxies are being solicited with this Information Statement.
WHERE
YOU CAN FIND MORE INFORMATION
The
Company is subject to the informational requirements of the Exchange Act and files reports and other information with the SEC.
Such reports and other information filed by the Company may be inspected and copied at the SEC’s Public Reference Room at
100 F Street, N.E., Washington, DC 20549-2736.
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By
order of the Board of Directors
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/s/
Steven Rossi
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Steven
Rossi, Chief Executive Officer
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March
8, 2019
Vaughan,
Ontario
Appendix
A
Appendix
B
AMENDED
AND RESTATED CERTIFICATE OF DESIGNATION
OF
RIGHTS, PRIVILEGES, PREFERENCES AND RESTRICTIONS
OF
SERIES
A PREFERRED STOCK
OF
FRANCHISE
HOLDINGS INTERNATIONAL, INC.
The
undersigned, President and Secretary of FRANCHISE HOLDINGS INTERNATIONAL, INC., a Nevada corporation (the “Corporation”),
hereby certifies the following:
The
Amended and Restated Articles of Incorporation of the Company authorize 300,000,000 shares of $.0001 par value capital stock,
of which are designated 1,000,000 shares of $.0001 par value preferred stock (the “Preferred Stock”) and 299,000,000
shares are designated $.0001 common stock (the “Common Stock”).
There
are presently approximately 154,000,000 shares of the Corporation’s Common Stock issued and outstanding and 1,000,000 shares
of Series A Preferred Stock are presently issued and outstanding.
The
Corporation is organized and existing under the laws of the State of Nevada and, that pursuant to the authority conferred upon
the Board of Directors of the Corporation by the Articles of Incorporation of the Corporation, as amended, and pursuant to Nevada
Revised Statutes, the shares of Preferred Stock of the Corporation must be created and issued from time to time in one or more
series, each of such series to have such voting powers, designation, preferences, and other special rights, qualifications, limitations
or restrictions, as expressed in resolutions providing for the creation and issuance of such series, as adopted by the Board of
Directors of the Corporation.
Pursuant
to the resolutions adopted by the Unanimous Written Consent of the Board of Directors Without a Meeting effective March 5, 2019
(the “March 5, 2019 Consent”) the Board of Directors adopted resolutions amending certain provision of its Series
A Preferred Stock, with those certain rights, privileges, preferences and restrictions as set forth in this Certificate of Designation
of Rights, Privileges, Preferences and Restrictions of Series A Preferred Stock of FRANCHISE HOLDINGS INTERNATIONAL, INC. as follows:
1.0
Designation and Rank.
Series
A Preferred Stock, consisting of 1,000,000 shares (the “Series A Preferred Stock”) was created by filing a Certificate
of Designation with the State of Nevada on August 9, 2017, and is hereby amended and restated, with certain rights, privileges,
preferences and restrictions as set forth below. No other shares of Preferred Stock shall be designated Series A Preferred Stock.
2.0
Dividend Rate and Rights.
The
holders of the shares of the Series A Preferred Stock shall not be entitled to receive dividends.
3.0
Conversion into Common Stock.
The
holders of the shares of the Series A Preferred Stock shall be entitled to convert all such shares of Series A Preferred Stock
into the Company’s Common Stock at any time, into that number of shares of Common Stock which shall equal 51% of the total
number of issued and outstanding shares of Common Stock on the date of conversion.
4.0
Liquidation Preference.
The
holders of Series A Preferred Stock shall not be entitled to receive any distributions in the event of any liquidation, dissolution
or winding up of the Corporation, either voluntary or involuntary.
5.0
Voting Rights.
Except
as otherwise provided herein or by law and in addition to any right to vote as a separate SERIES As provided by law, the holder
of the Series A Preferred Stock shall have full voting rights and powers equal to the voting rights and powers of holders of Common
Stock and shall be entitled to notice of any Shareholders meeting in accordance with the Bylaws of the Corporation, and shall
be entitled to vote, with respect to any question upon which holders of Common Stock have the right to vote, including, without
limitation, the right to vote for the election of directors, voting together with the holders of Common Stock as one class. For
so long as Series A Preferred Stock is issued and outstanding, the holders of Series A Preferred Stock shall vote together as
a single class with the holders of the Corporation’s Common Stock and the holders of any other class or series of shares
entitled to vote with the Common Stock, with the holders of Series A Preferred Stock being entitled to 51% of the total votes
on all such matters regardless of the actual number of shares of Series A Preferred Stock then outstanding, and the holders of
Common Stock and any other shares entitled to vote being entitled to their proportional share of the remaining 49% of the total
votes based on their respective voting power.
6.0
Other Preferences.
The
shares of the Series A Preferred Stock shall have no other preferences, rights, restrictions, or qualifications, except as otherwise
provided by law or the Articles of Incorporation of the Corporation.
7.0
No Impairment.
The
Corporation will not, either by amendment of its Articles of Incorporation or by amendment to the Certificate of Designation of
the Rights, Privileges, Preferences and Restrictions of Series A Preferred Stock, or by resolutions adopted subsequent to the
date hereof, or through any reorganization, transfer of assets, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Paragraph 7, and in the taking of all such actions as may be necessary
or appropriate in order to protect against the impairment of the rights of holders of the Series A Preferred Stock.
8.0
Notices.
Unless
otherwise specified in the Corporation’s Articles of Incorporation or Bylaws, all notices or communications given hereunder
shall be in writing and, if to the Corporation, shall be delivered to its principal executive offices, and if to the holder of
any shares of Series A Stock, shall be delivered to it at its address as it appears on the stock records of the Corporation.
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Designation of Rights, Privileges, Preferences and Restrictions
of Series Preferred Stock of FRANCHISE HOLDINGS INTERNATIONAL, INC. to be signed by the Corporation’s President and Secretary
effective this ___ day of March, 2019.
FRANCHISE
HOLDINGS INTERNATIONAL, INC.
By:
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Steven
Rossi, President and Secretary
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