What was the effect of reorganization on common stock for Healthsource Chiropractic?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE K – MEMBERS' AND STOCKHOLDERS' EQUITY:
On March 20, 2022 the Company finalized a tax-free reorganization under IRC Section 368. As part of the reorganization, the Company now has 1,000 Class A Units, 1,000 Class B Units, and 1,000 Class C Units; none with a par value.
As of December 31, 2024, ZCS Holdings, Inc. holds 700 Class A Units and FW – HES Holdings, LLC holds 300 Class B Units.
The remaining authorized units have not been issued and are still outstanding.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, a tax-free reorganization under IRC Section 368 was finalized on March 20, 2022. As a result of this reorganization, the company's equity structure changed from common stock to include 1,000 Class A Units, 1,000 Class B Units, and 1,000 Class C Units, all without par value.
As of December 31, 2024, ZCS Holdings, Inc. held 700 Class A Units, and FW – HES Holdings, LLC held 300 Class B Units. The remaining authorized units were not issued and remained outstanding at that time. This shift from common stock to different classes of units indicates a change in the ownership and equity distribution within Healthsource Chiropractic.
For a prospective franchisee, this reorganization and the resulting unit structure are important for understanding the ownership and control dynamics of Healthsource Chiropractic. It clarifies who the major stakeholders are (ZCS Holdings, Inc. and FW – HES Holdings, LLC) and their respective equity positions. This information can be useful in assessing the stability and strategic direction of the franchise.
The fact that some units remain unissued suggests potential future changes in equity distribution, which could impact the franchisee network. A potential franchisee may want to inquire about the company's plans for these unissued units and how future equity changes might affect franchise operations or support.