For Clear Pest Pros, what was the reason for restating the 2022 financial statements?

According to Clear Pest Pros' 2025 Franchise Disclosure Document, the 2022 financial statements were restated to correct an error. Specifically, the restatement addresses an unidentified impairment of the Delta trade name and franchise agreement intangible assets that occurred in 2022. This means Clear Pest Pros identified an issue where the value of certain intangible assets related to the Delta trade name and franchise agreement was not properly accounted for in the original 2022 financial statements.

The restatement impacted the retained earnings at the beginning of 2023, which were adjusted to reflect the effects of the correction on the 2022 financials. The error affected specific line items within the Statement of Operations for the year ended December 31, 2022. This adjustment is important for prospective franchisees because it provides a more accurate picture of Clear Pest Pros' financial performance and position.

Furthermore, as a result of this prior period adjustment, the retained earnings as of December 31, 2022, decreased from $4,558 as originally reported, to $1,452. This change indicates that the initial valuation of the Delta trade name and franchise agreement was too optimistic, and the correction provides a more realistic view of the company's financial health. Potential franchisees should review these restated financials carefully to understand the true financial performance of Clear Pest Pros during that period and its impact on subsequent years.