Does Stretch Zone provide an unaudited profit and loss statement, and if so, what period does it cover?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
aining leases | atDecember 31, 2024and | 2023 | |---|---|---|---|---|
Notes to Financial Statements December 31, 2024 and 2023
NOTE A - NATURE OF BUSINESS AND LIQUIDITY
The accompanying financial statements include the accounts of Stretch Zone Franchising, LLC (the "Company"), a wholly owned subsidiary of Stretch Zone Holdings, LLC (the "Former Parent"). The Company was organized on November 15, 2015, in the state of Florida. The Company's only business is to offer and sell franchises under the Stretch Zone name and to provide support to its health clubs across the United States. Effective March 31, 2023, the Company was sold by Stretch Zone Holdings, LLC to SZ PEP Holdco, LLC, the Acquiror (the "Parent").
On March 31, 2023, the beneficial owners of the Parent entered into a securities purchase agreement with a third party effectively selling approximately an 80% interest in the Company to the third party, with those beneficial owners retaining the approximately 20% rollover interest. This transaction resulted in a change in control of the Company, which triggered the payment of the unit appreciation rights (see Note J).
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[1] Basis of presentation:
The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").
[2] Liquidity:
For the year ended December 31, 2024, the Company incurred a net loss of approximately $2,679,000, used approximately $854,000 of cash in operations and at December 31, 2024 had a working capital deficit of approximately $1,106,000. Based on the Company's business plan, the Company believes its existing resources and cash flows projected to be generated from operations can satisfy its working capital requirements and obligations for at least the next 12 months from the date of issuance. However, if performance expectations fall short or expenses exceed expectations, the Company may need to reduce expenses or raise additional capital or financing to continue operations. Failure to do so would have a material adverse impact on its financial condition. There can be no assurance tha
Source: Item 21 — ITEM -21 FINANCIAL STATEMENTS (FDD page 84)
What This Means (2025 FDD)
According to the 2025 Stretch Zone FDD, the document includes the company's financial statements with notes for the years ending December 31, 2024 and 2023. These statements are for Stretch Zone Franchising, LLC. The notes accompanying the financial statements discuss the nature of the business, including its organization in Florida on November 15, 2015, and its primary activity of offering and selling franchises under the Stretch Zone name.
Specifically, the notes detail a significant event: the sale of the company by Stretch Zone Holdings, LLC to SZ PEP Holdco, LLC on March 31, 2023. This transaction also involved a third party acquiring approximately 80% interest in the company, which triggered unit appreciation rights payments. The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.
For the year ended December 31, 2024, Stretch Zone incurred a net loss of approximately $2,679,000 and used approximately $854,000 of cash in operations. As of December 31, 2024, the company had a working capital deficit of approximately $1,106,000. While Stretch Zone believes its existing resources and projected cash flows can cover its requirements for the next 12 months, the company acknowledges the need to potentially reduce expenses or raise additional capital if performance expectations are not met. The FDD states that failure to secure additional capital could adversely impact the company's financial condition.