What is the regional rights tax effect for Exit in 2024?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
roperty and equipment | 2,125,033 | - | 20,291 | | Impairment of digital assets | - | - | (1,820,185) | | Legal settlement | (1,500,000) | - | - | | Interest | 137,304 | 78,187 | 170,816 | | Total other income (expense) | 762,337 | 78,187 | (1,629,078) | | Loss before provision for income taxes and non-controlling | | | | | interests | (389,110) | (1,814,746) | (2,480,526) | | Benefit for income taxes | (459,827) | (486,997) | (342,266) | | Consolidated net income (loss) | 70,717 | (1,327,749) | (2,138,260) | | Noncontrolling interest in subsidiary's loss | 616 | 463 | 691 | | Net income (loss) before foreign currency translation gain (loss) | 71,333 | (1,327,286) | (2,137,569) | | Foreign currency translation gain (loss), net of tax | (162,790) | 7,338 | (40,611) | | Net comprehensive loss | $ (91,457) | $ (1,319,948) | $ (2,178,180) |
EXIT REALTY CORP. INTERNATIONAL CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
| Year Ending December | 31 | Amount | |---|---|---| | 2025 | | $ 290,017 | See accompanying notes to the consolidated financial statements
EXIT REALTY CORP. INTERNATIONAL CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Cash flows from operating activities | |||
| Net income (loss) | $ 70,717 | (1,327,749) | (2,138,260) |
| Adjustments to reconcile net income (loss) to net cash (used | |||
| in) provided by operating activities | |||
| Amortization and depreciation | 65,562 | 92,338 | 125,888 |
| Credit loss (recovery) expense | - | 1,304,738 | 382,936 |
| Deferred tax expense (benefit) | (236,005) | 154,000 | (402,000) |
| Regional rights disposed | - | - | 975,000 |
| Gain on sale of property and equipment | - | - | (20,291) |
| Impairment of digital assets | - | - | 1,820,185 |
| Gain from disposal of digital assets | (2,125,033) | - | - |
| Litigation settlement accrual | 1,500,000 | - | - |
| (Increase) decrease in assets: | |||
| Trade accounts receivable | 214,735 | (1,542,684) | (109,189) |
| Prepaid expenses | 134,060 | (121,155) | 210,754 |
| Notes receivable | 471,387 | 3,433,640 | (1,610,436) |
| Increase (decrease) in liabilities: | |||
| Accounts payable and accrued liabilities | (974,870) | 1,436,092 | 487,204 |
| Income taxes receivable (payable) | 436,792 | (1,009,378) | (327,032) |
| Deferred revenue | (1,043,229) | (812,304) | 955,007 |
| Net cash (used in) provided by operating activities | (1,485,884) | 1,607,538 | 349,766 |
| Cash flows from investing activities | |||
| Purchase of property and equipment | - | (34,675) | (239,563) |
| Advances (to) from related parties | 27,997 | (86,903) | (686,962) |
| Proceeds on sale of property and equipment | - | - | 86,421 |
| Redemption (purchase of) short-term investment | (342,948) | (2,981) | 11,151 |
| Proceeds from sale of digital assets | 3,068,127 | - | - |
| Reacquisition of regional rights | - | (2,369,911) | (357,154) |
| Net c |
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the deferred tax expense (benefit) related to regional rights for the year 2024 was a benefit of $236,005. This figure is part of the adjustments made to reconcile net income (loss) to net cash used in operating activities. This means that Exit recognized a tax benefit related to deferred taxes, which positively impacted their cash flow from operations.
In 2024, Exit also had a line item for 'Regional rights disposed' listed as zero. This indicates that there were no cash flows from disposing of regional rights during that year. However, in the same period, the reacquisition of regional rights is not listed, but in 2023, Exit spent $2,369,911 to reacquire regional rights.
Furthermore, the table shows a 'Regional rights' value of ($973,740) in 2024. This amount is associated with the tax effects of temporary differences that give rise to significant portions of the net deferred tax asset. This indicates a decrease in the value of regional rights, which could be due to amortization, impairment, or other accounting adjustments. This decrease contributes to the overall deferred tax asset calculation for Exit.