What financial instruments potentially expose C12 Group to credit risk?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company is subject to the Texas margin tax.
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Advertising: Advertising costs are expensed as incurred and amounts are insignificant.
Concentrations of Risk: Financial instruments that potentially expose the Company to credit risk consist principally of cash and trade accounts receivables. The Company occasionally maintains cash balances in financial institutions that exceed the amounts insured by the FDIC. The Company periodically assesses the financial condition of the institutions and believes that the risk of loss is minim
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the financial instruments that potentially expose the company to credit risk consist principally of cash and trade accounts receivables. The company occasionally maintains cash balances in financial institutions that exceed the amounts insured by the FDIC.
The disclosure states that C12 Group periodically assesses the financial condition of these institutions and believes that the risk of loss is minimal. As of December 31, 2024, cash balances in excess of the insured limit totaled approximately $718,000.
C12 Group also performs ongoing credit evaluations and generally requires no collateral from customers. This means that the company is extending credit to its customers without securing the debt with any assets. If these customers fail to pay, C12 Group could incur losses. However, the company believes that the risk of loss is minimal due to its ongoing credit evaluations.