Does Itan believe it is exposed to any significant credit risk with respect to its cash?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ies - The Company follows the alternative accounting standard for private companies with respect to entities under common control. As such, entities under common control have not been evaluated under the guidance in the variable interest subsections of the Financial Accounting Standards Board ("FASB") ASC 810.
Fair value measurements - The Company follows accounting standards consistent with the FASB codification which defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements for all fi
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, management does not believe the company faces significant credit risk regarding its cash holdings. The document specifies that Itan considers financial instruments with maturities of less than three months as cash equivalents and holds its cash deposits in a regional bank.
The FDD also indicates that the cash balance in the account is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per bank. As of December 31, 2024, Itan had $0 in excess of the FDIC limit, while on December 31, 2023, the excess amount was $104,387.
This information suggests that Itan takes measures to mitigate credit risk by using a well-known regional bank and remaining within FDIC insurance limits for its cash deposits. The fact that the company's cash holdings exceeded the FDIC limit in 2023, but not in 2024, could indicate a more conservative approach to cash management in the later year.