What was the net increase (decrease) in cash for Ledgers in 2023?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
,914 | | Net loss | | (447,527) | (447,527) | | Balances, December 31, 2022 | 3,200,000 | (1,495,613) | 1,704,387 | | Adoption of Topic 326 | | (42,286) | (42,286) | | Net loss (Restated) | | (506,600) | (506,600) | | Balances, December 31, 2023 (Restated) | 3,200,000 | (2,044,499) | 1,155,501 | | Net loss | | (361,991) | (361,991) | | Balances, December 31, 2024 | $ 3,200,000 | $ (2,406,490) | $ 793,510 |
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Statements of Cash Flow
For the Years Ended December 31, 2024, 2023, and 2022
| 2024 | 2023 | 2022 | |||
|---|---|---|---|---|---|
| Cash flows from operating activities: | J.S | ||||
| Net loss | $ | (361,991) | $ (506,600) | $ | (447,527) |
| Adjustments to reconcile net loss to net cash | |||||
| used in operating activities: | |||||
| Change in allowance for credit losses | = | 67,468 | - | ||
| Write off of notes receivable, net of | |||||
| deferred revenue | 46,310 | 226,854 | = | ||
| Accrued interest income | (5,550) | (72,480) | (5,718) | ||
| Benefit from income taxes | (104,000) | (98,000) | (153,000) | ||
| (Increase) decrease in: | × (3) | ||||
| Royalty receivables | 112 | (3,302) | - | ||
| Notes receivable | = | 11,929 | 1,252 | ||
| Increase (decrease) in: | |||||
| Accounts payable | æ | (110,964) | 6,410 | ||
| Accrued expenses | (5,220) | 4,823 | (3,362) | ||
| Deferred revenue | (40,989) | (113,362) | (114,383) | ||
| Net cash used in operating activities | (471,328) | (593,634) | (716,328) | ||
| Cash flows from investing activities: | |||||
| (Advances to) borrowings |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the net decrease in cash for the company in 2023 was $83,334. This figure represents the overall change in Ledgers' cash position during that year, taking into account all cash inflows and outflows from operating, investing, and financing activities.
For a prospective franchisee, this information provides insight into Ledgers' financial performance and cash management. A decrease in cash could indicate that the company is facing challenges in generating or managing its cash flow, which could impact its ability to support franchisees or invest in growth initiatives. It is important to note that this is just one year's data, and it should be considered in the context of Ledgers' overall financial history and future prospects.
It is also important to note that during the year ended December 31, 2023, Ledgers' financial statements included balances for a note receivable and deferred revenue for a franchise agreement that was terminated in 2023 but not properly written off in 2023. During the year ended December 31, 2024, Ledgers identified this error and restated its financial statements to properly recognize the termination of the franchise agreement recording $219,118 in bad debt expense for the year ended December 31, 2023 and removing the $752,118 note receivable, and $533,000 deferred revenue balances at December 31, 2023. This restatement resulted in a change to the previously reported net loss for 2023, from a loss of $287,482 to a restated loss of $506,600.
Prospective franchisees should review Ledgers' financial statements and cash flow statements carefully, and ask the franchisor for more information about the factors that contributed to the decrease in cash in 2023. Understanding the reasons behind this decrease, and the steps Ledgers is taking to address it, can help franchisees assess the financial stability of the franchise system and make informed decisions about their investment.