e under common control that meet certain criteria. Instead, the determination of whether these legal entities under common control are consolidated is based on whether the Company controls the legal entities based on its direct voting rights in those entities.

Principles of Consolidation

The consolidated financial statements include the accounts of Goldfish Swim School Franchising, LLC and its wholly owned subsidiary, Goldfish Swim School Franchise Marketing, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash Equivalents

The Company considers all investments with an original maturity of three months or less when purchased to be cash equivalents.

Restricted Cash

The Company has restricted cash equal to the amount of unspent advertising funds on deposit. At December 31, 2023, 2022, and 2021, $394,607, $260,904, and $1,563,734, respectively, of cash is restricted for this purpose.

Notes to Consolidated Financial Statements

December 31, 2023, 2022, and 2021

Note 2 - Significant Accounting Policies (Continued)

Revenue Recognition

The Company earns revenue from its franchised schools, which includes royalties, franchise fees, brand fund

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 76)