What was the cash flow from financing activities related to member contributions (distributions) for Kidokinetics in 2021?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
23, 2022, and 2021
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Cash flow from operating activities: | |||
| Net loss | $ (749,072) | $ (811,320) | $ (411,716) |
| Adjustments to reconcile net loss to | |||
| net cash used in operating activities: | |||
| Amortization | 25,446 | 22,001 | 11,191 |
| Depreciation | 11,400 | 11,400 | 1,900 |
| Amortization of right of use asset | 56,494 | 53,741 | - |
| Changes in operating assets and liabilities: | |||
| Accounts receivable | (446,453) | (498) | 2,530 |
| Deferred contract costs | (905,048) | (608,934) | - |
| Other non-current assets | - | - | (9,600) |
| Accounts payable | 394,700 | 285,300 | 60,075 |
| Accrued expenses | 97,201 | 41,609 | - |
| Credit card liability | (47,346) | 158,575 | 47,806 |
| Loans from shareholder | 3,347 | 1,498 | 18,226 |
| Operating lease liability | (57,509) | (53,016) | - |
| Deferred revenue | 1,465,557 | 884,778 | - |
| Net cash used in operating activities | (151,283) | (14,866) | (279,588) |
| Cash flows from investing activities: | |||
| Investment in leasehold improvements | - | (4,440) | (56,987) |
| Investment in intangible assets | - | (29,000) | (47,200) |
| Net cash used in investing activities | - | (33,440) | (104,187) |
| Cash flows from financing activities: | |||
| Draw on note payable | 30,000 | 76,050 | - |
| Net draws on lines of credit | 243,821 | - | - |
| Principal payments on note payable | (60,941) | (15,109) | - |
| Member contributions (distributions) | (17,133) | (20,691) | 422,077 |
| Net cash provided by financing activities | 195,747 | 40,250 | 422,077 |
| Net change in cash and cash equivalents | 44,464 | (8,056) | 38,302 |
| Cash at the beginning of the year | 32,500 | 40,556 | 2,254 |
| Cash at the end of the year | $ 76,964 | $ 32,500 | $ 40,556 |
| Supplementary disclosures of cash flows | |||
| Cash paid for interest | $ 97,922 | $ 25,021 | $ 1,943 |
| Cash paid for taxes |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the cash flow from financing activities related to member contributions (distributions) in 2021 was $422,077. This figure represents the net cash provided by financing activities, specifically from member contributions or distributions during that year.
For a prospective franchisee, understanding cash flow from financing activities is crucial as it indicates how the company is funding its operations and growth. A positive cash flow from member contributions, as seen in 2021, suggests that members invested more money into the company than was distributed back to them. This can be a sign of confidence in the company's future prospects.
However, it's important to note that this is just one aspect of the company's financial health. Franchisees should also consider other factors such as cash flow from operating and investing activities, as well as the company's overall profitability and debt levels. Reviewing these figures over several years, as provided in the FDD, can give a more comprehensive understanding of the company's financial trends and stability. It is also important to understand if these contributions are required or voluntary and what the implications are for members.
It is also important to note that in 2022 and 2023, member contributions (distributions) were negative, at ($20,691) and ($17,133) respectively. This indicates that members withdrew more money from the company than they contributed in those years. This trend should be investigated further to understand the reasons behind it and its potential impact on the company's future financial performance.