Financial Statement CPA Certified EXEMPT

Home Browse Search

Hycon Investments, LLC Notes to Financial Statements June 30, 2024 10 Note 2 Summary of Significant Accounting Policies (Continued) Warranties Many construction contracts contain warranty provisions covering defects in equipment, materials, design or workmanship that generally run from six months to one year after the customer accepts the contract. These assurance warranties are not accounted for as performance obligations. Because of the nature of the projects, including contract owner inspections of the work both during construction and prior to acceptance, the Company has not experienced material warranty costs for these short-term warranties and, therefore, do not believe an accrual for these costs is necessary. Concentrations of Risk Credit Risk The Company maintains its cash balances in two financial institutions in Florida. The balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 in each institution. These balances may at times exceed the insured limits. At June 30, 2024, the Company has total unsecured cash balances at these financial institutions of approximately $619,000. At June 30, 2024, two customers accounted for 52% of the Company’s total contracts receivable. Total contracts receivable due from these customers amounted to approximately $264,000. Major Customers During the six-month period ended June 30, 2024, one customer accounted for 28% of the Company’s total contract revenues. Total revenues derived from this customer amounted to approximately $645,000. Major Vendors At June 30, 2024, three vendors accounted for 54% of the Company’s total payables. Total accounts payable due to these vendors amounted to approximately $170,000. Risk and Uncertainties The Company has experienced, and may continue to experience, direct and indirect negative effects on its business and operations from economic, market, and regulatory conditions, including the current level of interest rates; inflationary effects on the costs of labor, materials and fuel; supply chain disruptions; uncertainty related to the implementation and pace of spending under governmental programs and initiatives related to infrastructure and other industrial investment, delays and uncertainty related to project permitting and/or other regulatory matters or uncertainty; climate, environmental and sustainability-related matters; changes in technology, tax and other incentives; potential market volatility that could negatively affect demand for future projects, and/or delay existing project timing or cause increased project costs; and public health matters. Additionally, the effects of ongoing and recent geopolitical events, such as the political unrest and military conflicts in the Middle East and Ukraine, could potentially increase volatility and uncertainty in the energy and capital markets, which could delay projects and/or negatively affect demand for future projects. The extent to which these conditions could affect the Company’s business, operations and financial results is uncertain as it will depend upon numerous evolving factors that management may not be able to accurately predict, and, therefore, any future impacts on the Company’s business, financial condition and/or results of operations cannot be quantified or predicted with specificity.