Does the Best Brains FDD disclose any related party transactions that may affect the revenue from operations?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 9 – RELATED PARTY TRANSACTIONS
All the related party transactions during the year 2023 & Balances as on Dec 31st, 2023 are reported under Audit report annexure titled - "Related Party Disclosures"
NOTE 10 - SHAREHOLDER DISTRIBUTIONS
Shareholders drawings were $ 64,700 for the year 2023. No 1099-Dividend statement has been issued for it.
NOTE 11 - SBA/PPP LOANS
The Corporation also received an SBA Loan of $150,000 on May 18, 2020 as a part of Corona virus relief package. Interest will accrue at the rate of 3.75% per annum on the funds advanced. Interest of $8,041 is paid, while no principal repayments have been made in 2023 for the same.
Best Brains, Inc. Annexure Forming Part of Notes to Financial Statements
Related Party Disclosures
Transactions with related parties during the year ended December 31st, 2023
( Amount in USD) PURCHASE OF MATERIALS /SERVICES 1,096,075.00 A.1 Best Brains India A.2 Advansoft International Inc 898,225.00 661,500.00 A.3 Advansoft India 97,375.08 A.4 A1 Kaiser A.5 Best Brains of Schaumburg, INC A.6 Adventures India Pvt. Ltd 86,000.00 SALE OF MATERIALS / SERVICES B.1 Best Brains of Schaumburg, INC 29,258.49 B.2 Best Brains- Canada 460,145.82 B.3 Nala Robotics 74,355.12
Receivables / Payables From/ To related parties as at December 31st , 2023
B.4 Best Brains Online Learning
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, the company engages in transactions with related parties. Note 9 of the financial statements indicates that all related party transactions during the year 2023 and balances as of December 31, 2023, are reported under the audit report annexure titled "Related Party Disclosures."
The annexure details specific transactions with related parties during the year ended December 31, 2023. These transactions include the purchase of materials/services from entities such as Best Brains India ($1,096,075.00), Advansoft International Inc ($898,225.00), Advansoft India ($661,500.00), A1 Kaiser ($97,375.08), Best Brains of Schaumburg, INC ($86,000.00), and Adventures India Pvt. Ltd. The annexure also shows sales of materials/services to Best Brains of Schaumburg, INC ($29,258.49), Best Brains- Canada ($460,145.82), and Nala Robotics ($74,355.12).
Additionally, the document lists receivables/payables from/to related parties as of December 31, 2023, including Best Brains Online Learning. These related-party transactions could potentially affect Best Brains' revenue and expenses. For example, the terms of material purchases from related parties could be more or less favorable than those obtainable from independent suppliers, impacting the cost of goods sold. Similarly, the pricing of services sold to related parties could influence the reported revenue. A prospective franchisee should carefully review these related-party transactions and their potential impact on the financial performance of Best Brains.