What was the amount of goodwill recognized by Dryject after the purchase of membership units in 2016?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
tively based upon such periodic evaluation.
Concentrations of Credit Risk - The Company maintains its cash balances at a financial institution where balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At December 31, 2023, the Company had no insured cash balances.
- Note 2 Goodwill The accounting of the purchase of 100% of the membership units in 2016 resulted in the recognition of goodwill of $1,509,159. The Company adopted ASC 350-20-35-63 which allows private companies the option of amortizing goodwill over ten years on a straight-line basis.
- Note 3 Transfer of membership In August 2016, 100% of the ownership of the LLC was transferred to a new member. The purchase was financed with a note from Wilmington Savings Fund Society (Bank), guaranteed by the SBA, for $1,547,800 and a seller financed note of $300,000. The purchase price was $1,500,000 for 100% of the ownership of the LLC
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the accounting of the purchase of 100% of the membership units in 2016 resulted in the recognition of goodwill of $1,509,159. Dryject adopted ASC 350-20-35-63, which allows private companies the option of amortizing goodwill over ten years on a straight-line basis.
In August 2016, 100% of the ownership of the LLC was transferred to a new member. The purchase was financed with a note from Wilmington Savings Fund Society (Bank), guaranteed by the SBA, for $1,547,800 and a seller financed note of $300,000. The purchase price was $1,500,000 for 100% of the ownership of the LLC and $500,000 for the assets in DryJect Inc. The debt and cost of the financing is allocated 75% to the Company and 25% to DryJect Inc. Acquisition Corporation. The loan is collateralized by the assets of the Company and DryJect Inc. Acquisition Corporation. The note is guaranteed by the member.
This means that when Dryject was purchased in 2016, the company recorded goodwill, an intangible asset representing the value of the company beyond its tangible assets, at approximately $1.5 million. The company chose to amortize this goodwill over a 10-year period, which is an accounting practice that spreads the cost of the goodwill over its estimated useful life. This impacts Dryject's financial statements by reducing the goodwill asset each year and recognizing an amortization expense, which affects the company's reported profits.