What was the total equity for Kidokinetics on January 1, 2021?
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 | | | | 422,077 | | Net loss | | | - | | - | | | | (411,716) | | (411,716) | | Balance at December 31, 2021 | - | | - | | - | | 427,077 | | (424,619) | | 2,458 | | Adoption of ASC 842, Leases | - | | | | - | | - | | (1,015) | | (1,015) | | Member distributions | - | | - | | - | | (20,691) | | - | | (20,691) | | Net loss | | | - | | - | | | _ | (811,320) | _ | (811,320) | | Balance at December 31, 2022 | - | | - | | - | | 406,386 | | (1,236,954) | | (830,568) | | Member distributions | - | | - | | - | | - | | (17,133) | | (17,133) | | Net loss | | | - | | - | | - | | (749,072) | | (749,072) | | Balance at December 31, 2023 | | $ | - | $ | - | S | 406,386 | $ | (2,003,159) | $ | (1,596,773) |
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2023, 2022, and 2021
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Cash flow from oper |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the total equity on January 1, 2021, was a deficit of $7,903. This figure is derived from the beginning balances of common stock, paid-in members' capital, retained interests, and retained earnings. Specifically, Kidokinetics had 100 shares of common stock valued at $1, paid-in members' capital of $4,999, no retained interests, and a retained earnings deficit of $12,903.
This initial equity deficit indicates that, at the start of 2021, Kidokinetics's liabilities and obligations exceeded its assets. This can be a signal of financial challenges or significant initial investments that had not yet yielded positive returns. It is important to note that this was before the company converted to an LLC in May 2021, which involved adjustments to the equity structure.
For a prospective franchisee, this historical equity position is useful for understanding the financial trajectory of Kidokinetics. While the equity position changed throughout 2021, with member contributions impacting the overall equity, the initial deficit highlights the importance of reviewing the company's complete financial statements and understanding the factors that influenced its financial performance. A potential franchisee should inquire about the strategies Kidokinetics has implemented to improve its equity position and ensure long-term financial stability.
It's also worth noting that the financial statements were audited by an independent auditor, providing some assurance of their accuracy and reliability. The auditor's report indicates that the financial statements present fairly the financial position of Kidokinetics in accordance with accounting principles generally accepted in the United States of America.