Attached files
TRAINING
DIRECT, LLC
FINANCIAL
STATEMENTS
SEPTEMBER
30, 2009
Contents
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Page
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Accountant's
review report
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1
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Financial
Statements
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Balance
Sheet
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As
of September 30, 2009
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2
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Statement
of Income
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For
the nine months ended September 30, 2009
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3
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Statement
of Members' Equity
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For
the nine months ended September 30, 2009
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4
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Statement
of Cash Flows
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For
the nine months ended September 30, 2009
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5
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Notes
to the financial statements
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6 - 8
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Accountant's
Review Report
To the
Board of Directors
Training
Direct, LLC
Bridgeport,
CT
I have
reviewed the accompanying balance sheet of Training Direct, LLC as of September
30, 2009, and the related statement of income, members' equity, and cash flows
for the nine months then ended, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants. All information included in these financial
statements is the representation of the management of Training Direct,
LLC.
A review
consists principally of inquiries of company personnel and analytical procedures
applied to financial data. A review is substantially less in scope than an audit
in accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, I do not express such an opinion.
Based on
my review, I am not aware of any material modifications that should be made to
the accompanying financial statements in order for them to be in conformity with
accounting principles generally accepted in the United States of
America.
/s/ Steven F. Landau, CPA
Steven F.
Landau, CPA
December
19, 2009
- 1
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BALANCE
SHEET
SEPTEMBER
30, 2009
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ASSETS
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||||
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Current
Assets
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Cash
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$ | 7,733 | ||
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Student
tuition receivable, net of allowance for uncollectables of
$8,087
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161,952 | |||
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Total
current assets
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169,685 | |||
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Property
and Equipment, at cost, net of accumulated depreciation of
$143,163
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128,323 | |||
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Other
Assets
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Security
deposits
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2,358 | |||
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Total
assets
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$ | 300,366 | ||
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LIABILITIES
AND MEMBERS' EQUITY
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Current
Liabilities
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Accounts
payable
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$ | 27,267 | ||
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Accrued
expenses payable
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17,787 | |||
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Bank
loan payable
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4,843 | |||
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Current
portion of equipment lease payable
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15,065 | |||
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Deferred
tuition revenue
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75,816 | |||
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Total
current liabilities
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140,778 | |||
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Long-Term
Liabilities - equipment lease payable
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28,922 | |||
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Members'
Equity
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130,666 | |||
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Total
liabilities and members' equity
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$ | 300,366 | ||
See
accountant's review report and accompanying notes to the financial
statements.
- 2
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STATEMENT
OF INCOME
FOR THE
NINE MONTHS ENDED SEPTMBER 30, 2009
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Revenues
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Tuition
Revenue
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$ | 846,122 | ||
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Less:
tuition refunds
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(26,252 | ) | ||
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Net
tuition revenue
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819,870 | |||
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Operating
Costs and Expenses
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Student
instructional costs
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282,284 | |||
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Recruitment
costs
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130,963 | |||
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Occupancy
costs
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52,426 | |||
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General
and administrative expenses
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293,796 | |||
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Total
operating costs and expenses
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759,469 | |||
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Operating
income before depreciation
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60,401 | |||
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Depreciation
expense
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12,009 | |||
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Net
income
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$ | 48,392 | ||
See
accountant's review report and accompanying notes to the financial
statements.
- 3
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STATEMENT
OF MEMBERS' EQUITY
FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 2009
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Balance
- January 1, 2009
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$ | 73,774 | ||
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Capital
contributions, net
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8,500 | |||
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Net
income for the nine months ended September 30, 2009
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48,392 | |||
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Balance
- September 30, 2009
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$ | 130,666 |
See
accountant's review report and accompanying notes to the financial
statements.
- 4
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STATEMENT
OF CASH FLOWS
FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 2009
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Cash
Flows from Operating Activities
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Net
income
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$ | 48,392 | ||
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Noncash
item included in net income:
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Depreciation
expense
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12,009 | |||
| 60,401 | ||||
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Changes
in operating assets and liabilities
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Decrease
(increase) in assets:
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Student
tuition receivable
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(65,725 | ) | ||
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Increase
(decrease) in liabilities:
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Accounts
payable
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(1,142 | ) | ||
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Accrued
expenses payable
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10,015 | |||
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Deferred
tuition revenue
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55,369 | |||
| (1,483 | ) | |||
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Net
cash provided by operating activities
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58,918 | |||
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Cash
Flows from Investing Activities:
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Purchase
of furniture and equipment
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(50,551 | ) | ||
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Purchase
of leasehold improvements
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(68,575 | ) | ||
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Cash
Flows from Financing Activities:
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Bank
loan payable increases
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4,843 | |||
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Equipment
lease payable increases
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48,517 | |||
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Equipment
lease repayments
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(4,530 | ) | ||
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Capital
contributions from members
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59,605 | |||
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Capital
distributions to members
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(51,105 | ) | ||
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Net
decrease in cash
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(2,878 | ) | ||
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Cash
- January 1, 2009
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10,611 | |||
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Cash
- September 30, 2009
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$ | 7,733 | ||
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Supplemental
disclosure of cash flow information:
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Cash
paid during the nine months for interest
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$ | 728 | ||
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Cash
paid during the nine months for income taxes
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$ | 0 | ||
See
accountant's review report and accompanying notes to the financial
statements.
- 5
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Training
Direct, LLC
Notes to
Financial Statements
September
30, 2009
Note 1 -
Summary of Significant Accounting Policies
Nature of
Operations
Training
Direct, LLC. (the "Company") was organized as a limited liability company (LLC)
in the State of Connecticut on January 7, 2004. The company owns and
operates Training Direct, a state licensed vocational training
school. The school provides vocational education and training
programs to its students
Revenue
Recognition
The
financial statements of the company are prepared on the accrual basis of
accounting. Tuition billed to students is recognized as revenue,
determined by the percentage of completion method.
Concentration
of Credit Risk
At
various times during the year, cash balances maintained in bank accounts may
exceed FDIC insurable limits. In the normal course of business, the company
extends unsecured credit to its students. Many students receive financial
assistance from community based and government agencies. Collection of student
accounts receivable is reasonably assured provided that the school and students
continuously comply with various financial assistance regulations.
Estimates
The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Accounts
Receivable
Accounts
Receivable are recorded net of an allowance for uncollectibles. The allowance is
estimated from historical performance and managements' experience.
Depreciation
Property
and equipment are recorded at cost. Depreciation is provided on the
straight-line method over the estimated useful lives of the respective
assets. Maintenance and repairs are charged to expense as
incurred.
Income
taxes
The
company is a limited liability company which is treated as a partnership for tax
purposes. Accordingly, the company's members are responsible for
income taxes on their proportionate share of the company's
income.
- 6
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Training
Direct, LLC
Notes to
Financial Statements
September
30, 2009
Note 2 -
Property and Equipment
The major
classifications of property and equipment, which include $48,517 of capitalized
equipment under lease obligation, are summarized below:
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Estimated
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Useful Life
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School
materials and curricula
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5
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$ | 134,250 | |||||
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Furniture,
fixtures and equipment
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7
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66,161 | ||||||
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Leasehold
improvements
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5
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71,075 | ||||||
| 271,486 | ||||||||
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Accumulated
depreciation
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(143,163 | ) | ||||||
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Net
book value
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$ | 128,323 | ||||||
Note 3 -
Lease Commitment
Through
September 30, 2009, the company leased its instructional and office
facilities located at 3851 Main Street, Bridgeport, CT under an informal month
to month verbal agreement. The agreement required monthly payments of
$2,550 and required the company to pay for repairs, maintenance, taxes, and
insurance.
On
October 9, 2009 the company moved to 3885 Main Street, Bridgeport, CT subject to
a ten year lease, with an option to renew for an additional five years. Terms of
the lease require minimum monthly payments of $5,850 plus annual increases of
three percent or the CPI annual increase, if greater. In addition, the company
must pay for repairs, maintenance, and insurance. The minimum
remaining rent payments are as follows:
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Year
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2009
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$ | 17,550 | ||
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2010
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70,727 | |||
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2011
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72,848 | |||
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2012
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75,034 | |||
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2013
- 2019
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568,605 | |||
| $ | 804,764 | |||
Note 4 -
Equipment Lease Payable
The
company is obligated under a 36 month equipment lease agreement for new office
and classroom furniture. Terms of the lease require monthly payments of
$1,488.
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Lease
payable balance
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$ | 52,367 | ||
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Deferred
interest on capitalized lease
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(8,380 | ) | ||
| 43,987 | ||||
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Current
portion
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15,065 | |||
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Long-term
portion
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$ | 28,922 |
- 7
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Training
Direct, LLC
Notes to
Financial Statements
September
30, 2009
Note 5 -
Bank Loan
The
company has a $10,000 unsecured bank line of credit. As of September
30, 2009, there was an outstanding loan balance of $4,843.
Note 6 -
Advertising
The
company expenses advertising as incurred. Advertising expense for the
nine months ended September 30, 2009 was $33,142.
Note 7 -
Significant Subsequent Event
Subsequent
to September 30, 2009 the members of Training Direct LLC signed a letter of
intent to sell all of their interest in the company. The current
management and other personnel of the company are expected to continue to
operate the school after the change of ownership occurs.
- 8
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