What statements are included with the financial statements of Body20's affiliate, Sequel Brands Holdings, LLC?

According to the 2025 FDD, the financial statements for Body20's affiliate, Sequel Brands Holdings, LLC, include an audited balance sheet as of April 30, 2025. Additionally, the financial statements incorporate statements of operations and member's equity, along with cash flow statements for the period from April 8, 2025 (inception) through April 30, 2025. These financial statements are included as Exhibit C to the Franchise Disclosure Document.

Because Sequel Brands Holdings, LLC, was formed in April 2025, the FDD does not include three full years of audited financial statements. This is because the company was newly formed and did not exist prior to that date. The inclusion of these statements is important for prospective Body20 franchisees because Sequel Brands Holdings, LLC, guarantees Body20's obligations under the Franchise Agreement.

The financial statements also include notes, such as Note 1, which covers the organization and description of the business, detailing Sequel Brands Holdings, LLC's formation, its role in supporting the growth of franchisors in the fitness industry, and its initial equity contribution of $1,000,000 in cash on April 30, 2025. Note 2 summarizes significant accounting policies, including the guarantee of performance, basis of presentation in accordance with U.S. GAAP, use of estimates, and cash management policies.

An independent auditor's report is included, offering an opinion on the fairness of the financial statements and outlining the responsibilities of both the management and the auditors in preparing and auditing the statements. This report confirms that the financial statements present fairly the financial position, results of operations, and cash flows of Sequel Brands Holdings, LLC, for the specified period, in accordance with accounting principles generally accepted in the United States of America.