What was the total amount Beehive Homes paid to repurchase 425 shares of common stock?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
' Equity Transactions
On October 31, 2023, the Company's two founding shareholders entered into an agreement for the Company to repurchase the common stock of one of the shareholder's which was equal to 50% of the total outstanding stock of the corporation. At December 31, 2023 of the 850 shares of common stock issued and outstanding, the Company repurchased 425 shares for a total of $1,406,076 by issuing a note payable. The note payable has a face value of $1,750,000. At December 31, 2023, the present value of the future cash flow for the note payable is $1,406,076, with an unamortized discount of $343,924. At December 31, 2024, the present value of the future cash flow for the note payable is $1,289,991, with an unamortized discount of $276,000. As part of the agreement, the Company also agreed to pay the premiums of a life insurance policy owned by the former shareholder for a period of ten years. The former shareholder is the beneficiary of the policy and the amount will be treated as compensation to them over the period of the policy. Additional information on the note payable can be found within Note C to these
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, on October 31, 2023, the company repurchased 425 shares of common stock from one of its founding shareholders. This represented 50% of the total outstanding stock. The total amount Beehive Homes paid to repurchase these shares was $1,406,076, which was facilitated through the issuance of a note payable.
The note payable had a face value of $1,750,000. However, the present value of the future cash flow for the note payable was $1,406,076 as of December 31, 2023, reflecting an unamortized discount of $343,924. By December 31, 2024, the present value of the future cash flow for the note payable had decreased to $1,289,991, with the unamortized discount reduced to $276,000.
As part of the agreement to repurchase the shares, Beehive Homes also committed to paying the premiums on a life insurance policy owned by the former shareholder for a period of ten years. The former shareholder is the beneficiary of this policy, and the premium payments will be treated as compensation to them over the policy's duration. This arrangement indicates that the total consideration for the stock repurchase included both the note payable and the life insurance premiums.