Has Exit generated losses from its operations?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
As discussed in Note 2 to the consolidated financial statements, the Company has generated recurring losses from operations, has a net capital deficiency and bank overdrafts which raised substantial doubt about its ability to continue as a going concern for a reasonable period of time. Management's plans that alleviated the substantial doubt are also described in Note 2. Our opinion is not modified with respect to this matter.
NOTE 5 – LIQUIDITY AND STOCKHOLDERS' EQUITY (DEFICIT)
The Company has historically sustained a net loss and negative working capital and, as a result, has an accumulated stockholders' deficit of $933,970, $827,221, and $758,031 as of December 31, 2024, 2023, and 2022, respectively. The accumulated stockholders' deficits reported each year, when adjusted for earnings before interest, taxes, depreciation, and amortization (EBITDA), reflect the operational performance and financial health of the company which is imperative to contextualize these deficits with broader market conditions, strategic initiatives, and operational challenges faced during these periods.
The net operating losses for United States taxes relate to losses incurred by Ah$um America, Inc. expire between the years ending December 31, 2025-2030. Net operating losses for United States taxes related to losses incurred by EXIT Realty Corp. USA do not expire, but are subject to certain limitations. Ah$um America, Inc. has total net operating losses of $6,913,151 and EXIT Realty Corp. USA has total net operating losses of $725,566. The losses are expected to expire as follows:
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Exit Realty Corp. International has generated recurring losses from operations. The document states that this, along with a net capital deficiency and bank overdrafts, raises substantial doubt about its ability to continue as a going concern for a reasonable period of time. However, management has plans to alleviate the substantial doubt.
Furthermore, Exit Realty Corp. International has historically sustained a net loss and negative working capital, resulting in accumulated stockholders' deficits of $933,970 as of December 31, 2024, $827,221 as of December 31, 2023, and $758,031 as of December 31, 2022. These deficits, when adjusted for earnings before interest, taxes, depreciation, and amortization (EBITDA), reflect the operational performance and financial health of the company.
Additionally, the FDD mentions net operating losses for United States taxes related to losses incurred by Ah$um America, Inc. expiring between 2025 and 2030, totaling $6,913,151. Net operating losses for United States taxes related to losses incurred by EXIT Realty Corp. USA do not expire but are subject to certain limitations, with a total of $725,566. This indicates that both Ah$um America, Inc. and EXIT Realty Corp. USA have incurred significant losses that have resulted in net operating loss carryforwards for tax purposes.