What was the retained interests balance for Kidokinetics after the conversion to LLC?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
---|-------------| | | Common Stock | | | Paid-in Members' | | | Retained | | | Total | | | | Shares | A | Mount | | Capital | | Interests | | Earnings | | Equity | | Balance at January 1, 2021 | 100 | $ | 1 | $ | 4,999 | $ | - | $ | (12,903) | $ | (7,903) | | Conversion to LLC | (100) | | (1) | | (4,999) | | 5,000 | | - | | - | | Member contributions | - | | - | | - | | 422,077 | |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the retained interests balance after the conversion to a limited liability company (LLC) was $5,000. This conversion occurred on May 4, 2021, when Kidokinetics Franchise Corp. filed articles of conversion to become Kidokinetics Franchise LLC. The conversion from a corporation to an LLC involved several adjustments to the equity accounts.
Specifically, the common stock shares decreased by 100, resulting in a $1 reduction. The paid-in members' capital also decreased by $4,999. To balance this, a $5,000 adjustment was made to retained interests. This $5,000 represents the balance of retained interests immediately following the conversion to an LLC.
This conversion and the associated adjustments are important for prospective franchisees to understand because they reflect the structural changes in the company's financial organization. The table outlines how the equity accounts were affected by the conversion, providing transparency into the company's financial history and the impact of such changes on its overall equity structure. Reviewing these figures helps potential franchisees assess the financial stability and historical performance of Kidokinetics.