Through what date has Stretch Zone evaluated subsequent events?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
ative expenses and contributions on behalf of the employees of $138,800 and $144,135, respectively.
NOTE L - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through April 30, 2025, which is the date the financial statements were available to be issued.
On April 18, 2025 the Company received a Second Amendment to the Senior Credit Facility and Waiver (the "Amendment and Waiver") by and among the Parent, the Company, and the Lender. The Amendment and Waiver waived the Acknowledged Events of Default for 2024 and presumed through March 31, 2025 as it related to certain covenants and the Excess Cash Flow. The Amendment and Waiver modified the Maximum Consolidated Senior Leverage Ratio. The 2024 Excess Cash Flow is $700,000, payment of which was extended to May 12, 2025. The Parent under a guaranty agreement, agreed to issue the Promissory Notes noted below for the prepayment of principal under the Senior Credit Facility of $4,300,000 on the date of this agreement.
On April 18, 2025, the Parent entered into $4,300,000 of Unsecured Subordinated Convertible Promissory Notes with a maturity date of October 19, 2026 at an applicable interest rate equal to the greater of (a) one-half of one percentage point (0.50%) below the Prime Rate or (b) three percentage poi
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the company has evaluated subsequent events through April 30, 2025. This date represents the cutoff for considering events that occurred after the balance sheet date (December 31, 2024 and 2023) but before the financial statements were available to be issued.
Subsequent event evaluation is a standard accounting practice. It helps ensure that financial statements reflect the most up-to-date information available. Events occurring after the balance sheet date can provide further insight into a company's financial condition. These events may require disclosure or adjustment to the financial statements.
In Stretch Zone's case, the subsequent events included a Second Amendment to the Senior Credit Facility and Waiver, which addressed acknowledged events of default and modified the Maximum Consolidated Senior Leverage Ratio. Additionally, the Parent company entered into Unsecured Subordinated Convertible Promissory Notes for $4,300,000 to prepay principal under the Senior Credit Facility. These events are significant as they reflect changes in Stretch Zone's financial arrangements and debt obligations after the close of the fiscal year. A prospective franchisee should be aware of these post-year-end adjustments, as they can impact the overall financial health and stability of the company.