What was the amount of additional paid-in capital for Benjamin Franklin Plumbing as of December 31, 2022?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
ested performance vesting stock-based compensation arrangements.
AB Assetco LLC and Subsidiaries
Notes to Consolidated Financial Statements (in thousands of dollars)
Years Ended December 31, 2024, 2023 and 2022
Class A-2 Units Issued to Certain Executives
From time to time the Partnership provides certain executives with ownership interests in the Partnership (known as Class A-2 Units) in exchange for promissory notes and rollover equity, in accordance with the Contribution, Rollover and Subscription agreement. Under the terms of this agreement, the Company's executives were provided ownership interests in the Partnership in exchange for promissory notes.
These agreements are in substance, compensation arrangements and are accounted for as instruments similar to a stock option. Compensation expense is recognized at each balance sheet date with the changes in value recorded in the consolidated statements of operations with the corresponding recognition of the noncash contribution from the Partnership in additional paid in capital in the consolidated balance sheets.
The Company elected to account for these awards using the intrinsic valuation technique which represents excess value of the employees' Class A-2 units that were exchanged for promissory notes over the exercise price (which represents the face value of the promissory notes plus accrued interest). 15,600,000 of A-2 units were granted on Septembe
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, the agreements in place are compensation arrangements and are accounted for as instruments similar to a stock option. Compensation expense is recognized at each balance sheet date. The changes in value are recorded in the consolidated statements of operations with the corresponding recognition of the noncash contribution from the Partnership in additional paid-in capital in the consolidated balance sheets.
The company elected to account for these awards using the intrinsic valuation technique which represents the excess value of the employees' Class A-2 units that were exchanged for promissory notes over the exercise price (which represents the face value of the promissory notes plus accrued interest). 15,600,000 of A-2 units were granted on September 21, 2018, and the intrinsic value of these awards on the grant date was equal to the value of the award. There were no additional grants or forfeitures of these awards during the year ended December 31, 2022.
All Class A-2 units were settled as a result of the HELOC Transaction based on the Transaction Date fair value. As a result, the Company recognized a gain of $1,080 for the year ended December 31, 2022, in stock-based compensation expense on the consolidated statements of operations. As of November 30, 2022, the amount of gain allocated to the Company by specific identification (unit holder) amounted to $253, and the amount of expense allocated based on revenue amounted to $827.