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Financial Report — Chronological

Updated
2026-07-11

A running, plain-language record of the group's financial status, health, strategy changes, and recommendations — written for a human reader, newest first. One entry is added at each Friday close (a standing step of the Accounting Manager's weekly file-health audit). Each entry stands on its own; read top-down for the trend, or jump to a date. The standing method behind these numbers is on the Financial Strategy page.

2026-07-11 — Superior Equipment (SEQ) — Balancing Week: 4491 rebuilt, phantom purge, first Controller pass

Status. SEQ's main checking account (Chase 4491) is now reconciled every month from January 2019 through June 2026 — 90 straight months, each tying to its bank statement to the penny with zero forced adjustments. On top of that, this week's accountant and controller passes removed roughly $21,300 of phantom entries (duplicate payroll checks, twice-entered payments, and electronic payments that were recorded but never actually left the bank). The QB balance moved from −$44,202 to −$7,937, and every dollar of the remaining gap to the bank balance ($9,651 on 7/11) is now individually named: ~$3,790 of checks written this week (real float), ~$9,347 of Ritchie Bros items awaiting a statement cross-check, ~$3,237 of old auction items in the Copart project, and ~$1,214 of stale wage checks and one small card item awaiting Brandon.

Health. Two vendors believed paid were not — the bank never executed the scheduled payments: FleetPride is owed $7,192 and Arizona Iron Supply $4,676; both belong on the next payment run. Float exposure: outstanding checks currently exceed bank cash by ~$8k, so timing of deposits vs. check-cashing matters this month. The Ask-My-Accountant queue was cut by $6,296 to $45,516; the biggest remaining blocks are 2025 Chase-2742 card charges pending a business-vs-personal ruling and the Amazon order-history itemization.

Strategy change. Standing cadence adopted (Brandon-directed): balance every account daily, reconcile monthly — the week's findings all trace to years without daily balancing. Two technical safeguards were also baked into the SOPs: reconciled-transaction edits are now known to be safe for checks but not deposits, and payment-application checks must run from the bills side (the payment-side query silently hides them — a false $1.77M scare this pass, caught and corrected in-flight; the AP application layer is in fact clean, 0 floating payments across 2024–2026).

Recommendations. (1) Pay FleetPride and Arizona Iron. (2) Decide the three stale wage checks (Mora $550, Delgado $480, Arocha $105) — void-and-reissue or treat as unclaimed wages. (3) Pull the Ritchie Bros account statement (or check STE's file) to settle whether the three never-executed EFT payments mean SEQ still owes $9,347. (4) One sitting with Brandon on the 2742 card-charge rule unlocks ~130 queue items.

2026-06-28 — Arizona Truck and Equipment (holding company) — Controller Pass

Status. Second pass on Arizona Truck and Equipment — controller lens. Books are clean post-accountant pass. All prior-period errors corrected. June 2026 fully closed. EBITDA reporting structure live.

EBITDA — YTD through June 2026 (9 months)

YTD Monthly avg
Revenue $364,500 $40,500
Operating Expenses (cash) $(313,091) $(34,788)
Net Ordinary Income = EBITDA $51,409 $5,712
Interest Expense $(64,464) $(7,163)
Non-Cash Charges (D&A) $(296,750) $(32,972)
Net Income $(309,805)

EBITDA margin: 14.1% on $364,500 revenue. The net loss is 86% non-cash (D&A $288K + D&A amort $8.75K) and 18% interest on the truck fleet note (JP2 $800K I/O). Cash economics are healthy.

Management fee rate — corrected this session. Prior rate of $11,667/month with a $38,053 period-end true-up was wrong in two ways: (1) the rate approximated the annual §197 goodwill amortization applied as a monthly charge, and (2) true-ups violate the BAAP no-offsets rule. Corrected to $7,500/entity/month flat — covers Brandon's management comp, group advisory (Dennis Wynn), and JP Note 1 carrying cost. Truck fleet capital costs (JP2 interest + MACRS depreciation) remain on Arizona Truck and Equipment's P&L during the carve-out period. All 32 historical invoices (Oct 2025–May 2026) modified in place; 4 true-up invoices deleted; June invoices added. IC Receivables restated to $67,500/entity (9 months × $7,500).

EBITDA P&L structure — live in QB. Interest Expense, Depreciation Expense, and Amortization Expense moved to QB "OtherExpense" type. Net Ordinary Income now equals EBITDA natively in the QB P&L report — no manual add-back needed.

Balance Sheet — June 30, 2026

Asset Liability / Equity
Trucks (net) $512,000 JP Note 2 (I/O) $800,000
Goodwill (net) $166,250 Accrued Payroll (Brandon) $194,174
IC Receivables $270,000 JP Note 1 $156,384
IC Clearing–Superior Equipment $(71,309) Accrued Liabilities (Dennis) $45,000
Cash $11,312 AP (Intuit) $2,500
Total Assets $888,253 Total Liabilities $1,198,058
YTD Net Loss $(309,805)

Debt service — JP Note 1 (10% APR, payoff Sept 2030)

Monthly Note 1 P+I: $3,718.33. Current balance $156,384; payoff September 2030. Note 2: $800K interest-only at $6,667/month — no principal reduction, no collateral. Combined JP debt service $10,385/month covered 3.9× by revenue.

Rate change alert: MACRS drops from $21,333 to $12,800/month in January 2027 (Yr3 19.2%). Net Income improves ~$8,533/month starting Jan 2027 — no cash impact, purely non-cash.

Open items (controller).

  1. IC Receivable settlement — $270K across 4 entities (9 months outstanding). Establish a monthly cash sweep cadence: entities wire Arizona Truck and Equipment the MGMT fee in cash each month rather than letting the receivable age. Needs Brandon decision on timing.
  2. Rent restructure (A-6) — Arizona Truck and Equipment should be the rent obligor (pays Arnett), entities pay Arizona Truck and Equipment pro-rata. Currently routed through Superior Equipment. IC Clearing–Superior Equipment $(71,309) balance will convert to formal IC loan once A-6 is live. Pending Brandon sign-off on allocation percentages.
  3. Brandon accrued payroll ($194,174) — growing $21,530/month. Superior Equipment disbursements partially offsetting; need reconciliation of cash paid vs. accrued to determine true liability.
  4. Dennis Wynn accrued ($45,000) — confirm engagement still active; if terminated, stop accruing and settle or reclassify.
  5. Intuit AP $2,500 — resolve or write off (A-2 parked).
  6. JP Note documentation — confirm signed promissory notes on file for both JP notes. Related-party disclosure required.
  7. Arizona Truck and Equipment entity compliance — confirm Arizona registration current, annual report filed.
  8. IC mirror check — verify Desert Equipment Transport/Superior Equipment/Superior Truck & Equipment/SP each carry a $67,500 payable to Arizona Truck and Equipment on their own books. To be checked when entity files are swept.

2026-06-10 — Arizona Truck and Equipment (holding company)

Status. First full forensic pass on the Arizona Truck and Equipment company file. The books are internally balanced and well-constructed (tax-basis: MACRS depreciation, Section-197 goodwill amortization, monthly officer-comp accruals). Total assets ≈ $1.03M, financed entirely by debt — two Joe Pierce seller notes ($175K + $800K) that funded the SEQ-acquisition goodwill and the truck fleet. There is no contributed equity.

Health.

  • Cash is thin by design (~$800 operating) — Arizona Truck and Equipment is a pass-through: Superior Equipment funds it monthly, it services the Joe Pierce debt and pays yard rent. Bank reconciled 1:1 to the institution.
  • Earnings ran a pre-adjustment loss of −$168K, but it is ~78% non-cash / accrued (depreciation $267K + amortization $8K + accrued unpaid comp $213K). The cash economics are far healthier than the accrual loss suggests.
  • Two intercompany balances are accumulating without settlement — affiliate management-fee receivables and a rent clearing account that Superior Equipment funds. These need periodic reclass to formal intercompany loans.

Strategy change — management fee moved to cost recovery. Arizona Truck and Equipment is a management/holding company; it should not carry a loss that its affiliate management fees were meant to cover. A backdated management-fee true-up was booked (period-matched to the May 31 close, $152,212 across the four operating affiliates), bringing Arizona Truck and Equipment to break-even through May. The only remaining negative on the YTD P&L is open June (rent + note interest already booked, with the June billing not due until the 15th). Going forward, the management fee will be trued up to actual cost at each month's close.

Recommendations (open).

  1. Set the going-forward management-fee policy — adopt the monthly break-even true-up at close (self-adjusts as MACRS depreciation steps down), rather than a fixed rate hike.
  2. Settle the intercompany balances — reclass the affiliate AR ($526K) and the Superior Equipment rent-clearing (−$71K) to formal intercompany loan accounts on a monthly cadence.
  3. Confirm reporting basis — books are tax-basis; if a lender/investor needs GAAP, goodwill amortization and depreciation method diverge and must be restated.
  4. Housekeeping — identify & clear the open $2,500 Intuit payable; standardize bank-fee posting; clean a −$0.59 inactive-account residue and a sub-penny note-payment rounding.

Work completed this pass. Daily bank cycle reconciled (book = bank = $812); 4 unrecognized bank lines posted; May Joe Pierce note amortization error corrected; missing May invoice batch + June recurring bills entered; missing May month-end accrual JEs (payroll/depreciation/ amortization) posted; backdated management-fee true-up to break-even.

2026-06-12 — Desert Equipment Transport

Status. Desert Equipment Transport's captive transport billing function is now fully established and operating. Three haul invoices posted, class system corrected, rate schedule locked at v1.0, and the job-costing framework is codified in the Desert Equipment Transport Transport Operations page.

Work completed this session.

Invoice corrections:

  • DRWY0604 — Monticello NY → Phoenix Arizona (2008 Int'l 7000, 08E62DT). Originally posted with wrong truck (Kenworth T680 description). Voided and reposted. Final: $7,500, class 08E62DT, IsPaid=true (Superior Truck & Equipment paid).
  • HAUL0611 — Van Nuys CA → Phoenix Arizona (2023 Freightliner M2, 23F63WT). $2,000 flat. Class corrected from 08E62DT → 23F63WT. Due 2026-07-12.
  • HAUL0616 — North Austin TX → Phoenix Arizona (2024 Freightliner M2, 24D53WT). $4,500 flat. Class corrected from 15D52TR → 24D53WT. Due 2026-07-16.

Class system:

  • QB class naming convention established: transported truck's stock number per haul. Enables per-truck job P&L directly from the QB class report.
  • Created classes: 23F63WT, 24D53WT, 06G34WT, 24L46WT.
  • Deactivated: 15D52TR (fixed asset — not a job class), Merced 06, San Diego 24 (location-named stubs replaced by stock-number convention).

Rate schedule v1.0 locked (authorized 2026-06-11):

  • Drive-away: $3.50/mi (one-way loaded miles)
  • Trailer haul: $5.00/mi (one-way loaded miles, bakes in empty outbound leg)
  • Monticello actual COGS $5,212 on $7,500 revenue = 30.5% margin at $3.00/mi; $3.50/mi would have yielded 40.5%. New rate applies to all future hauls.

Key technical finding — qbXML:

  • InvoiceQueryRq requires <IncludeLineItems>true</IncludeLineItems> to return line detail. Without it, InvoiceLineRet count = 0 even when lines exist and subtotals are correct. This caused a prior session to believe lines had been stripped; they were intact.

Open items (Desert Equipment Transport).

  1. Superior Truck & Equipment mirror AP bills — three bills needed in Superior Truck & Equipment QB file: DRWY0604 $7,500 (vendor=Desert Equipment Transport, already paid by Superior Truck & Equipment), HAUL0611 $2,000, HAUL0616 $4,500.
  2. San Diego haul (HAUL0615, Monday 2026-06-15) — class 24L46WT pre-created; stock number verified (VIN 2NKHHJ7X6MM443037). Post invoice after truck arrives in Phoenix.
  3. §482 comparables — screenshot from a commercial carrier for Monticello NY→Phoenix Arizona.
  4. Diesel receipts — Brandon to supply PDFs; extract PPG and backfill G:\DET - Desert Equipment Transport\Operations\Diesel Price Log\diesel_price_log.csv.
  5. HAUL0611/0616 actual COGS — pull when trip expenses are entered.
  6. Progressive Insurance remaining 10 installments — each EFT = Bill + BillPaymentCheck.
  7. Driver reimbursement $967.92 — in Ask My Accountant; reclass to correct account when paid.
  8. James Thomason paycheck — PAY0611 needs to be redone as a proper QB Paycheck (Arizona SUTA item issue).
  9. Superior Truck & Equipment lessor side of equipment lease — capitalize trailer ($25,025), rental income, Superior Truck & Equipment depreciation.
  10. Desert Equipment Transport Fixed Asset Items — two items Brandon entered in QB UI must be deleted (assets belong to Superior Truck & Equipment).