This excerpt taken from the TRXI 8-K filed Jan 11, 2007.
Summary of Significant Accounting Policies
Nature of Business:
Hi-Mark Travel Systems, Inc. (HMTS) was formed in 1993. On March 26, 2000, HMTS contributed substantially all of its assets to Hi-Mark, LLC, a Delaware limited liability company (the Company). Today, the Company is a business intelligence and data transaction company focusing primarily on the travel industry, with growing sidelines in healthcare and the airline businesses. The Company has several different types of revenue: transaction processing fees; implementation fees; software license fees; and support and maintenance fees. The Companys sales base is primarily located in the United States, but sales also extend to Europe.
Concentrations of Credit Risk:
The Company maintains cash in bank deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.
The Company extends credit to customers located primarily throughout North America based on the size of the customer, its payment history, and other factors. The Company does not require collateral for its accounts receivable. The amount of accounting loss due to credit risk if the parties to the accounts receivable failed to perform according to the terms of the agreement would be the balance of the accounts receivable less the related deferred revenue, if applicable. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information, and existing economic conditions. Past due status is based on how recently payments have been received or contractual terms, depending on the nature of the transaction. The Company recovered payments on accounts receivable previously written-off totaling approximately $53,000 for the nine-month period ended September 30, 2006 (unaudited), respectively.
Fair Value of Financial Instruments:
The Company has various financial instruments including accounts receivable, accounts payable accrued expenses, and notes payable. The carrying value of these financial instruments approximates their estimated fair values.
NOTES TO FINANCIAL STATEMENTS