What are the implications of the decrease in 'net property and equipment' from 2023 to 2024 for C12 Group?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
indings, and certain internal control related matters that we identified during the audit.
ADKF, P.C.
San Antonio, Texas
ADKF,PC
March 21, 2025
THE C12 GROUP, LLC Balance Sheets December 31, 2024 and 2023
| ASSETS | 2024 | 2023 |
|---|---|---|
| Current Assets: | ||
| Cash and cash equivalents | $ 1,641,633 | $ 1,601,398 |
| Restricted cash | 1,387,034 | 239,964 |
| Total cash | 3,028,667 | 1,841,362 |
| Accounts receivable | 865,442 | 592,343 |
| Notes receivable, current portion | 8 | 111,967 |
| Supply inventory | 184,109 | 209,905 |
| Prepaid expenses | 691,068 | 50,538 |
| Total current assets | 4,769,286 | 2,806,115 |
| Property and Equipment: | ||
| Office furniture, fixtures and equipment | 76,140 | 76,140 |
| Less accumulated depreciation | (53,480) | (42,603) |
| Net property and equipment | 22,660 | 33,537 |
| Other Assets: | ||
| Goodwill, net of accumulated amortization | 71,971 | 83,966 |
| Website and applications, net of accumulated amortization | 364,493 | 383,284 |
| Right-of-use operating leas |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the company's net property and equipment decreased from 2023 to 2024. Specifically, net property and equipment was valued at $33,537 in 2023 and decreased to $22,660 in 2024. This represents a decrease of $10,877.
This decrease could imply several things for a prospective C12 Group franchisee. It may indicate that C12 Group invested less in physical assets like office furniture, fixtures, and equipment during 2024 compared to 2023. Alternatively, it could suggest that the company depreciated its existing assets at a faster rate, or disposed of some assets. The balance sheet shows that office furniture, fixtures, and equipment remained steady at $76,140 in both years, while accumulated depreciation increased from ($42,603) to ($53,480). This indicates the decrease in net property and equipment is due to increased depreciation.
For a franchisee, this information is most useful when compared to previous years and industry benchmarks. While a decrease in net property and equipment isn't inherently negative, a franchisee might want to understand the reasons behind it. It could reflect a strategic shift towards less capital-intensive operations, which might be positive. However, it could also signal underinvestment in necessary infrastructure, which could be a concern. Further investigation into C12 Group's capital expenditure plans and asset management policies would provide a clearer picture.