What was the amortization of deferred financing costs for 1 800 Packouts in 2022?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
terest expense | | (3,821,499) | | (647,029) | | Earnings from unconsolidated subsidiary | | - | | 77,537 | | Gain on sale of unconsolidated subsidiary | | 1,025,637 | | - | | Other income (expense) | _ | (51,463) | | (112,956) | | Total other expense, net | _ | (2,847,325) | | (682,448) | | Loss before income taxes | | (11,719,346) | | (6,523,717) | | Income tax benefit | _ | 1,280,676 | | 374,421 | | Net loss | $ | (10,438,670) | s | (6,149,296) |
| Balance as of April 9, 2021 (inception) | $ | |
|---|---|---|
| Contributions | 47,557,681 | |
| Net loss | (6,149,296) | |
| Balance as of December 31, 2021 | 41,408,385 | |
| Contributions | 35,555,980 | |
| Distributions | (250,000) | |
| Net loss | _ | (10,438,670) |
| Balance as of December 31, 2022 | Ś | 66,275,695 |
| For the year ded December 31, 2022 | (in | r the period from April 9, 2021 ception) through cember 31, 2021 | ||
|---|---|---|---|---|
| Cash flows from operating activities: | ||||
| Net loss | $ | (10,438,670) | $ | (6,149,296) |
| Adjustments to reconcile net loss to net cash used in | ||||
| operating activities: | ||||
| Amortization of goodwill and intangible assets | 10,568,470 | 2,543,033 | ||
| Depreciation of fixed assets | 29,104 | 5,840 | ||
| Amortization of deferred financing costs | 213,726 | 38,998 | ||
| Amortization of operating lease right-of-use asset | 108,253 | - | ||
| Gain on sale of unconsolidated subsidiary Loss on disposal of fixed assets | (1,025,637) 43,615 | - | ||
| Provision for bad debt | 43,615 25,950 | 32,710 | ||
| Decrease (increase) in: | 23,330 | 32,710 | ||
| Accounts receivable | (777,114) | 34,410 | ||
| Contract assets | (2,540,535) | (169,463) | ||
| Other assets | (535,234) | (216,538) | ||
| Increase (decrease) in: | 2 012 105 | 472.450 | ||
| Accounts payable and accrued expenses Contract liabilities | 2,012,196 3,647,786 | 472,458 768.118 | ||
| Operating lease liabilities | (76,533) | 700,110 | ||
| Deferred taxes | (1,269,181) | (409, 393) | ||
| Net cash used in operating activities | _ | (13,804) | (3,049,123) | |
| • | _ | (13,604) | (3,049,123) | |
| Cash flows from investing activities: | (000 774) | (5.040) | ||
| Purchase of property and equipment | (238,771) | (5,840) | ||
| Contingent consideration paid | ||||
| Proceeds from sale of unconsolidated subsidiary | (1,200,000) 1,623,174 | |||
| Net cash paid for acquisitions | (46,109,861) | (62,103,632) | ||
| Net cash used in investing activities | Ξ | (45,925,458) | (62,109,472) | |
| Cash flows from financing activities: | ||||
| Member contributions | 29,025,980 | 40,065,556 | ||
| Borrowing on long-term debt | 20,100,000 | 28,000,000 | ||
| Payment of debt issuance costs | (307,500) | (932,140) | ||
| Repayment of long-term debt | (378,894) | 2.070.502 | ||
| Borrowing on short-term debt | 3,078,592 | |||
| Repayment of short-term debt | (3,000,000) | |||
| Member distributions | (250,000) | (3,000,000) | ||
| Net cash provided by financing activities | 48,189,586 | 67,212,008 | ||
| Net change |
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the amortization of deferred financing costs for the year ended December 31, 2022, was $213,726. This figure represents the expense recognized during that period related to the gradual write-off of costs incurred to obtain financing. These costs are initially capitalized and then amortized over the term of the related debt.
For a prospective 1 800 Packouts franchisee, understanding the amortization of deferred financing costs provides insight into the company's financial management and how it accounts for borrowing expenses. Amortization is a non-cash expense, meaning it doesn't represent an actual outflow of cash during the year but rather an allocation of previously incurred costs. This can impact the company's net income and profitability metrics.
It's important to note that the amortization of deferred financing costs is a standard accounting practice. Reviewing this figure in conjunction with other financial statement items, such as long-term debt and interest expenses, can provide a more comprehensive view of 1 800 Packouts's capital structure and financing activities. Additionally, comparing this figure to previous years can reveal trends in the company's borrowing and financing strategies.