What financial instruments does Exit's company consist of?

According to Exit's 2025 Franchise Disclosure Document, the company's financial instruments include a variety of assets and liabilities. These consist of cash, accounts receivable, notes receivable, loans receivable, advances to related parties, bank overdrafts, accounts payable and accrued liabilities, advances from related parties, notes payable and mortgage payable. These instruments reflect the range of financial transactions Exit engages in, from short-term obligations to longer-term debt arrangements.

For a prospective franchisee, understanding these financial instruments is crucial as they provide insight into the financial health and operational activities of Exit. For instance, the presence of notes and loans receivable may indicate Exit's involvement in financing arrangements with franchisees or related entities. Similarly, the existence of a mortgage payable, especially one guaranteed by Exit's parent company, EXITus Holdings, Inc., suggests the company's reliance on debt financing and its interconnectedness with its parent organization. The mortgage payable had outstanding balances of $6,860,044 and $5,226,396 at December 31, 2024 and 2023, respectively.

The FDD also notes that the carrying amounts for cash, accounts receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term maturities. However, the fair value of notes receivable, loans receivable, advances to and from related parties, and notes payable is not determinable because these items are non-interest bearing and lack comparable market data. The fair value of the mortgage payable approximates its carrying value because it bears interest at market rates for similar debt. This information is important for assessing the true economic value of Exit's assets and liabilities.

Finally, the FDD mentions that Exit is exposed to foreign exchange risk because certain revenues and expenses are incurred in Canadian dollars. While Exit does not use derivative instruments to mitigate this risk, prospective franchisees should be aware of the potential impact of currency fluctuations on Exit's financial performance. This is particularly relevant for franchisees operating in or near Canada, or those who may have cross-border transactions with Exit.