What was the amount of borrowings from the line of credit, net of repayments, for Mrcool in 2024?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
t loss | (200,959) | (18,602) | | Member contributions (note F) | 69,421 | 0 | | Ending balance | (155,165) | (23,627) |
MRCOOL FRANCHISING, LLC STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,
| 2024 | 2023 | |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net loss | $ (200,959) | $ (18,602) |
| Adjustments to reconcile net loss to net cash | ||
| used by operating activities: | ||
| Changes in assets and liabilities: | ||
| (Increase) decrease in assets: | ||
| Accounts receivable | (299,762) | 0 |
| Inventories | (677) | 0 |
| Prepaid expenses | (83) | (1,080) |
| Increase (decrease) in liabilities: | ||
| Accounts payable | 220,304 | 0 |
| Provision for income taxes | 0 | 175 |
| Deferred revenue, current | 5,000 | 0 |
| Deferred revenue, non-current | 42,500 | 0 |
| Net cash used by operating activities | (233,677) | (19,507) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Proceeds from related party payables | 0 | 25,648 |
| Payments on related party payables | (25,379) | (5,294) |
| Member contributions | 69,421 | 0 |
| Borrowings from line of credit, net of repayments | 330,000 | 0 |
| Net cash provided by financing activities | 374,042 | 20,354 |
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the company's borrowings from its line of credit, net of repayments, amounted to $330,000 in 2024. In 2023, the corresponding value was $0. This indicates that Mrcool utilized its line of credit to a significant extent during 2024, whereas it did not need to draw on it during the previous year.
For a prospective franchisee, this information provides insight into Mrcool's financing activities and its reliance on credit. It's important to note that Mrcool maintains a $500,000 bank line of credit, with interest payable monthly at a variable rate based on the Term SOFR Rate. As of December 31, 2024, the interest rate was 8.375%. The line of credit is secured by all of Mrcool's business assets and expires on June 19, 2025.
Given that Mrcool had a net loss of $200,959 in 2024, the borrowings from the line of credit may have been used to cover operational expenses or investments during the year. A potential franchisee should consider Mrcool's financial stability and its ability to manage its debt obligations. It would be prudent to inquire about the specific purposes for which the line of credit was used and Mrcool's plans for repaying the borrowed amount.