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Project Hospitality, Inc. and Subsidiaries

Independent Auditor’s Report and Consolidated Financial Statements

June 30, 2019 and 2018

Project Hospitality, Inc. and Subsidiaries June 30, 2019 and 2018

Contents

Independent Auditor’s Report ............................................................................................. 1

Consolidated Financial Statements

Statements of Financial Position ........................................................................................................ 3

Statements of Activities ...................................................................................................................... 4

Statements of Functional Expenses .................................................................................................... 5

Statements of Cash Flows .................................................................................................................. 7

Notes to Financial Statements ............................................................................................................ 8

Supplementary Information

Consolidating Schedule – Statement of Financial Position Information .......................................... 25

Consolidating Schedule – Statement of Activities Information ....................................................... 26

Independent Auditor’s Report

Board of Directors


Staten Island, New York

We have audited the accompanying consolidated financial statements of Project Hospitality, Inc. and

Subsidiaries, which comprise the consolidated statements of financial position as of June 30, 2019

and 2018, and the related consolidated statements of activities, functional expenses and cash flows for

the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial

statements in accordance with accounting principles generally accepted in the United States of

America; this includes the design, implementation and maintenance of internal control relevant to the

preparation and fair presentation of consolidated financial statements that are free from material

misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our

audits. We conducted our audits in accordance with auditing standards generally accepted in the

United States of America. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the consolidated financial statements. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the consolidated financial

statements, whether due to fraud or error. In making those risk assessments, the auditor considers

internal control relevant to the entity’s preparation and fair presentation of the consolidated financial

statements in order to design audit procedures that are appropriate in the circumstances, but not for

the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of significant accounting estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion.

Board of Directors


Page 2

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material

respects, the consolidated financial position of Project Hospitality, Inc. and Subsidiaries as of June

30, 2019 and 2018, and the changes in their net assets and their cash flows for the years then ended in

accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 2 to the financial statements, in 2019, Project Hospitality, Inc. and Subsidiaries

adopted ASU 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of

Not-for-Profit Entities. Our opinion is not modified with respect to this matter.


Our audits were conducted for the purpose of forming an opinion on the consolidated financial

statements of Project Hospitality, Inc. and Subsidiaries as a whole. The supplementary information in

the Consolidating Schedule – Statement of Financial Position Information and Consolidating

Schedule – Statement of Activities Information is presented for purposes of additional analysis and is

not a required part of the consolidated financial statements. Such information is the responsibility of

management and was derived from and relates directly to the underlying accounting and other records

used to prepare the consolidated financial statements. The information has been subjected to the

auditing procedures applied in the audit of the consolidated financial statements and certain additional

procedures, including comparing and reconciling such information directly to the underlying

accounting and other records used to prepare the consolidated financial statements or to the

consolidated financial statements themselves, and other additional procedures in accordance with

auditing standards generally accepted in the United States of America. In our opinion, the

information is fairly stated in all material respects in relation to the consolidated financial statements

as a whole.

New York, New York

July 13, 2020

See Notes to Consolidated Financial Statements 3

Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Financial Position

June 30, 2019 and 2018

2019 2018

Assets

Cash and cash equivalents 2,404,354$ 5,048,225$

Investments 2,102,513 2,029,670

Accounts receivable 299,434 110,067

Due from government agencies 11,728,960 7,015,252

Contributions receivable 333,800 505,600

Assets limited as to use 48,277 45,048

Prepaid expenses and other assets 395,150 121,609

Property and equipment, net 10,630,775 10,573,795

Total assets 27,943,263$ 25,449,266$

Liabilities and Net Assets

Liabilities

Accounts payable and accrued expenses 2,980,727$ 2,090,997$

Due to government agencies 22,839 43,293

Refundable advances 578,030 461,894

Long-term debt 3,503,315 1,773,083

Capital advance 3,275,765 3,160,653

Total liabilities 10,360,676 7,529,920

Net Assets

Without donor restrictions

Undesignated 14,740,602 14,915,638

Board designated 2,040,122 1,977,409

Total net assets without donor restrictions 16,780,724 16,893,047

With donor restrictions 801,863 1,026,299

Total net assets 17,582,587 17,919,346

Total liabilities and net assets 27,943,263$ 25,449,266$


Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Activities

Years Ended June 30, 2019 and 2018

Without With Without With

Donor Donor Donor Donor

Restrictions Restrictions Total Restrictions Restrictions Total

Revenues, Gains and Other Support

Government grants 29,012,349$ -$ 29,012,349$ 26,608,713$ 26,000$ 26,634,713$

Medicaid and other program fees 5,702,545 - 5,702,545 5,045,640 - 5,045,640

Rental income 2,305,875 - 2,305,875 1,816,279 - 1,816,279

Contribution and grant 288,225 933,450 1,221,675 316,130 781,034 1,097,164

Special events 310,598 - 310,598 291,880 - 291,880

Less direct costs of special events (30,589) - (30,589) (11,420) - (11,420)

Investment return 88,755 - 88,755 65,045 - 65,045

In-kind contributions 292,987 - 292,987 171,516 - 171,516

Other income 93,823 - 93,823 3,528 - 3,528

Net assets released from restrictions 1,157,886 (1,157,886) - 1,488,611 (1,488,611) -

Total revenues, gains and other support 39,222,454 (224,436) 38,998,018 35,795,922 (681,577) 35,114,345

Expenses

Program services

Support and treatment services 9,085,869 - 9,085,869 8,621,920 - 8,621,920

Re-housing services 11,286,556 - 11,286,556 10,025,262 - 10,025,262

Homeless care and prevention services 13,942,088 - 13,942,088 12,481,495 - 12,481,495

Total program services 34,314,513 - 34,314,513 31,128,677 - 31,128,677

Supporting services

Management and general 4,685,638 - 4,685,638 4,833,245 - 4,833,245

Fundraising 334,626 - 334,626 352,167 - 352,167

Total supporting services 5,020,264 - 5,020,264 5,185,412 - 5,185,412

Total expenses 39,334,777 - 39,334,777 36,314,089 - 36,314,089

Change in Net Assets (112,323) (224,436) (336,759) (518,167) (681,577) (1,199,744)

Net Assets, Beginning of Year 16,893,047 1,026,299 17,919,346 17,411,214 1,707,876 19,119,090

Net Assets, End of Year 16,780,724$ 801,863$ 17,582,587$ 16,893,047$ 1,026,299$ 17,919,346$

2019 2018


Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Functional Expenses


Support and Homeless Care Management

Treatment Re-housing and Prevention and

Services Services Services Total General Fundraising Total Total

Salaries 5,134,726$ 3,044,649$ 5,527,855$ 13,707,230$ 2,162,795$ 242,342$ 2,405,137$ 16,112,367$

Payroll taxes and employee benefits 1,404,968 833,768 1,485,652 3,724,388 567,239 41,530 608,769 4,333,157

Total salaries and

related expenses 6,539,694 3,878,417 7,013,507 17,431,618 2,730,034 283,872 3,013,906 20,445,524

Client expenses 290,707 5,798,001 2,677,304 8,766,012 - - - 8,766,012

Insurance 69,847 80,771 114,507 265,125 61,200 1,603 62,803 327,928

Rent 711,880 272,037 316,338 1,300,255 195,373 777 196,150 1,496,405

Auto 107,957 156,480 190,459 454,896 22,101 - 22,101 476,997

Equipment lease and purchase 47,190 46,449 159,088 252,727 20,190 1,974 22,164 274,891

Utilities 76,819 99,791 305,217 481,827 49,814 1,891 51,705 533,532

Repairs and maintenance 99,916 144,806 472,311 717,033 192,237 2,692 194,929 911,962

Telephone 154,193 106,647 112,844 373,684 64,458 2,197 66,655 440,339

Supplies 66,031 78,819 90,884 235,734 67,853 11,550 79,403 315,137

Contract services 134,668 164,804 1,999,144 2,298,616 111,881 2,136 114,017 2,412,633

Professional fees 367,073 38,895 59,552 465,520 406,269 5,325 411,594 877,114

Printing and postage 7,529 12,007 15,415 34,951 20,239 9,411 29,650 64,601

Community relations - 1,300 900 2,200 28,674 7,535 36,209 38,409

Staff recruitment 6,656 4,545 8,910 20,111 50,600 200 50,800 70,911

Per diem contractors 205,641 62,664 84,177 352,482 33,768 - 33,768 386,250

Staff related expenses 26,072 22,895 39,787 88,754 87,538 172 87,710 176,464

Real estate taxes 1,594 64,059 14,893 80,546 39,648 - 39,648 120,194

Food and entertainment - - - - 3,178 33,880 37,058 37,058

Depreciation and amortization 172,333 248,758 147,383 568,474 197,716 - 197,716 766,190

Interest expense - 2,638 113,214 115,852 7 - 7 115,859

Miscellaneous 69 1,773 6,254 8,096 302,860 - 302,860 310,956

Total expenses 9,085,869 11,286,556 13,942,088 34,314,513 4,685,638 365,215 5,050,853 39,365,366

Less:

Direct costs of special events - - - - - (30,589) (30,589) (30,589)

Total expenses reported

by function on the

statement of activities 9,085,869$ 11,286,556$ 13,942,088$ 34,314,513$ 4,685,638$ 334,626$ 5,020,264$ 39,334,777$

Program Services Supporting Services

2019


Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Functional Expenses (Continued)


Support and Homeless Care Management

Treatment Re-housing and Prevention and

Services Services Services Total General Fundraising Total Total

Salaries 4,609,404$ 2,739,787$ 5,058,438$ 12,407,629$ 2,564,967$ 219,755$ 2,784,722$ 15,192,351$

Payroll taxes and employee benefits 1,369,167 801,030 1,448,601 3,618,798 826,442 70,322 896,764 4,515,562

Total salaries and

related expenses 5,978,571 3,540,817 6,507,039 16,026,427 3,391,409 290,077 3,681,486 19,707,913

Client expenses 322,540 4,874,092 2,254,520 7,451,152 - - - 7,451,152

Insurance 75,736 72,164 113,130 261,030 42,082 1,944 44,026 305,056

Rent 673,497 366,233 256,906 1,296,636 102,312 783 103,095 1,399,731

Auto 119,375 120,826 167,960 408,161 43,957 - 43,957 452,118

Equipment lease and purchase 54,144 91,878 121,035 267,057 - 1,751 1,751 268,808

Utilities 76,672 101,908 306,903 485,483 53,348 2,341 55,689 541,172

Repairs and maintenance 125,488 116,735 289,213 531,436 60,581 2,427 63,008 594,444

Telephone 172,173 93,603 128,242 394,018 67,131 858 67,989 462,007

Supplies 63,434 108,447 94,330 266,211 64,325 1,547 65,872 332,083

Contract services 115,949 144,449 1,688,171 1,948,569 64,996 5,654 70,650 2,019,219

Professional fees 379,270 15,090 115,669 510,029 421,275 2,559 423,834 933,863

Printing and postage 7,060 16,202 9,550 32,812 2,775 17,915 20,690 53,502

Community relations - - 3,076 3,076 55,454 23,781 79,235 82,311

Staff recruitment 5,136 3,796 5,396 14,328 2,226 530 2,756 17,084

Per diem contractors 153,489 79,800 94,545 327,834 99,512 - 99,512 427,346

Staff related expenses 21,426 39,007 44,653 105,086 96,300 - 96,300 201,386

Real estate taxes - 65,574 - 65,574 - - - 65,574

Food and entertainment - - - - - 11,420 11,420 11,420

Depreciation and amortization 212,960 167,186 154,800 534,946 209,162 - 209,162 744,108

Interest expense - 7,455 121,282 128,737 - - - 128,737

Miscellaneous 65,000 - 5,075 70,075 56,400 - 56,400 126,475

Total expenses 8,621,920 10,025,262 12,481,495 31,128,677 4,833,245 363,587 5,196,832 36,325,509

Less:

Direct costs of special events - - - - - (11,420) (11,420) (11,420)

Total expenses reported

by function on the

statement of activities 8,621,920$ 10,025,262$ 12,481,495$ 31,128,677$ 4,833,245$ 352,167$ 5,185,412$ 36,314,089$

Program Services Supporting Services

2018


Project Hospitality, Inc. and Subsidiaries Consolidated Statements of Cash Flows


2019 2018

Operating Activities

Change in net assets (336,759)$ (1,199,744)$

Items not requiring (providing) operating activities cash flows

Depreciation and amortization 766,190 744,108

Net realized and unrealized gains on investments (28,586) (24,899)

Noncash contributions, net of noncash expense (110,299) (102,232)

Changes in

Accounts receivable (189,367) (48,690)

Due from government agencies (4,713,708) 1,405,761

Contributions receivable 171,800 173,400

Prepaid expenses and other assets (273,541) 77,023

Accounts payable and accrued expenses 889,730 (694,209)

Due to government agencies (20,454) (247,413)

Refundable advances 116,136 (10,155)

Net cash (used in) provided by operating activities (3,728,858) 72,950

Investing Activities

Proceeds from sale of investments 672,045 3,014,793

Purchase of investments (716,302) (3,048,712)

Increase in assets limited as to use (3,229) (2,605)

Acquisitions of property and equipment (823,170) (1,874,580)

Net cash used in investing activities (870,656) (1,911,104)

Financing Activities

Principal payments on long-term debt (117,469) (10,692)

Proceeds from long-term debt 1,958,000 -

Proceeds from capital advance 115,112 564,800

Net cash provided by financing activities 1,955,643 554,108

Decrease in Cash and Cash Equivalents (2,643,871) (1,284,046)

Cash and Cash Equivalents, Beginning of Year 5,048,225 6,332,271

Cash and Cash Equivalents, End of Year 2,404,354$ 5,048,225$

Supplemental Cash Flows Information

Interest paid 5,560$ 26,505$

Contributed principal and interest on loan 223,538 223,538

Project Hospitality, Inc. and Subsidiaries Notes to Consolidated Financial Statements

June 30, 2019 and 2018

8

Note 1: Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

The consolidated financial statements of Project Hospitality, Inc. and Subsidiaries include Project

Hospitality, Inc. (PHI), Watershed Associates Inc. (Watershed), New Vision Housing Development

Fund Corporation (New Vision), Project Hospitality 385 Housing Development Fund Corporation

(PH 385 HDFC), and Castleton Housing Development Fund Corporation (Castleton), collectively

referred to as the Organization. The Organization was organized to provide counseling, food and

shelter to homeless individuals.

PHI is a New York not-for-profit organization whose mission and principal activities are to reach

out to the community members who are hungry, homeless or otherwise in need in order to work

with them to achieve self-sufficiency. PHI advocates for those in need and establishes a

comprehensive continuum of care that begins with the provision of food, clothing, and shelter and

extends to other services which include health care, mental health services, alcohol and substance

abuse treatment, HIV care, education, vocational training, legal assistance and transitional and

permanent housing.

Watershed was incorporated under the Not-for-Profit Corporation law of New York State in March

2003. Watershed’s main purpose is to provide counseling, food and shelter to homeless individuals

living on Staten Island, New York. In fulfilling this purpose and objective, Watershed holds title to

real and personal property, collects rental income, and remits the entire amount thereof, less

expenses, to PHI.

New Vision was incorporated under the Not-for-Profit Corporation law of New York State in July

2010. New Vision’s main purpose is to acquire, develop and manage housing projects for persons

of low income.

PH 385 HDFC was incorporated under the Not-for-Profit Corporation law of New York State in

September 2000. PH 385 HDFC’s main purpose is to develop a housing project for persons of low

income.

Castleton was incorporated under the Not-for-Profit Corporation law of New York State in

September 2018. Castleton’s main purpose is to develop a housing project for persons of low

income.

PHI is the sole member of Watershed, New Vision, PH 385 HDFC, and Castleton.

In September 2018, PH Castleton, Inc., a New York corporation was formed and sold $100 shares

of stock to Castleton. In December 2018, Hudson Castleton LLC, a New York limited liability

company, and PH Castleton, Inc. entered into an operating agreement of 1546 Castleton Managing

Member LLC pursuant to which the Organization agreed to jointly develop a multifamily

affordable housing project on certain real property owned by Castleton. Castleton has a 51 percent

interest in PH Castleton, Inc. PH Castleton, Inc. and 1546 Castleton Managing Member LLC had

no activity for the year ended June 30, 2019. Subsequent to year end, on November 1, 2019, the

construction loan was closed (See Note 6) and 1546 Castleton Owner LLC was formed, in which,

1546 Castleton Managing Member LLC has 0.01 percent interest.


June 30, 2019 and 2018

9

The Organization’s programmatic activities are funded primarily by grants, fee for service

arrangements, rental income from governmental agencies and contributions.

Principles of Consolidation

All material intercompany transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally

accepted in the United States of America requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and

liabilities at the date of the consolidated financial statements and the reported amounts of revenues,

expenses, gains, losses and other changes in net assets during the reporting period. Actual results

could differ from those estimates.

Cash and Cash Equivalents

The Organization considers all liquid investments with original maturities of three months or less

to be cash equivalents. At June 30, 2019, cash equivalents consisted primarily of money market

accounts with a bank.

At June 30, 2019, the Organization’s cash accounts exceeded federally insured limits by

approximately $2 million.

Investments and Investment Return

Investments in equity securities, closed-end funds, mutual funds, and real estate investment trusts

having a readily determinable fair value are carried at fair value. Investment return includes

dividend and interest; realized and unrealized gains, less external investment fees.

Investment return is reflected in the statements of activities with or without donor restrictions based

upon the existence and nature of any donor or legally imposed restrictions.

Accounts Receivable, Due from Government Agencies, and Allowance for Doubtful Accounts

The Organization records receivables based on established rates or contracts for services provided.

Receivables are charged to bad debt expense when they are determined to be uncollectible based

upon a periodic review of the accounts by management. Factors used to determine whether an

allowance should be recorded include the age of the receivable and a review of payments

subsequent to year end. There was no allowance for doubtful accounts recorded as of June 30,

2019 and 2018. Interest income is not accrued or recorded on outstanding accounts receivable.

Assets Limited as to Use

Assets limited as to use are assets set aside under the terms of certain financing agreements to be

used for capital purposes or the pay down of the outstanding long-term debt.


June 30, 2019 and 2018

10

Property and Equipment

Property and equipment acquisitions over $5,000 are stated at cost, less accumulated depreciation

and amortization. Depreciation is charged to expense using the straight-line method over the

estimated useful life of each asset. Leasehold improvements are amortized over the shorter of the

lease term or their respective estimated useful lives.

The estimated useful lives for each major depreciable classification of property and equipment are

as follows:

Buildings and improvements 5 - 40 years

Leasehold improvements 2 - 11 years

Furniture and equipment 3 - 7 years

Motor vehicles 4 - 5 years

Long-Lived Asset Impairment

The Organization evaluates the recoverability of the carrying value of long-lived assets whenever

events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset

is tested for recoverability and the undiscounted estimated future cash flows expected to result

from the use and eventual disposition of the asset is less than the carrying amount of the asset, the

asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the

carrying amount of a long-lived asset exceeds its fair value. No asset impairment was recognized

during the years ended June 30, 2019 and 2018.

Refundable Advances

Revenues from fees for programs are deferred and recognized over the periods to which the fees

relate.

Net Assets

Net assets, revenues, gains and losses are classified based on the existence or absence of donor or

grantor restrictions.

Net assets without donor restrictions are available for use in general operations and not subject to

donor or certain grantor restrictions. The governing board has designated, from net assets without

donor or certain grantor restrictions, net assets as a reserve for operating expenditures.

Net assets with donor restrictions are subject to donor or certain grantor restrictions. Some

restrictions are temporary in nature, such as those that will be met by the passage of time or other

events specified by the donor.


June 30, 2019 and 2018

11

Contributions

Contributions are provided to the Organization either with or without restrictions placed on the gift

by the donor. Revenues and net assets are separately reported to reflect the nature of those gifts –

with or without donor restrictions. The value recorded for each contribution is recognized as

follows:

Nature of the Gift Value Recognized

Conditional gifts, with or without restriction

Gifts that depend on the Organization overcoming

a donor-imposed barrier to be entitled to the funds

Not recognized until the gift becomes

unconditional, i.e., the donor-imposed

barrier is met

Unconditional gifts, with or without restriction

Received at date of gift – cash and other assets Fair value

Received at date of gift – property, equipment and

long-lived assets

Estimated fair value

Expected to be collected within one year Net realizable value

Collected in future years Initially reported at fair value determined

using the discounted present value of

estimated future cash flows technique

In addition to the amount initially recognized, revenue for unconditional gifts to be collected in

future years is also recognized each year as the present-value discount is amortized using the level-

yield method.

When a donor-stipulated time restriction ends or purpose restriction is accomplished, net assets

with donor restrictions are reclassified to net assets without donor restrictions and reported in the

consolidated statements of activities as net assets released from restrictions.

Gifts and investment income that are originally restricted by the donor and for which the restriction

is met in the same time period are recorded as revenue with donor restrictions and then released

from restriction.

In-kind Contributions

In addition to receiving cash contributions, the Organization receives in-kind contributions of

donated food from the Food Bank of New York City. The Organization records the estimated fair

value of certain in-kind donations as an expense in the consolidated financial statements, and

similarly increase contribution revenue. For the years ended June 30, 2019 and 2018, $292,987

($287,379 from Food Bank of New York City) and $171,516 from Food Bank of New York City

were received in in-kind contributions.


June 30, 2019 and 2018

12

Government Grants

Support funded by grants is recognized as the Organization performs the contracted services or

incurs outlays eligible for reimbursement under the grant agreements. Grant activities and outlays

are subject to audit and acceptance by the granting agency and, as a result of such audit,

adjustments could be required.

Revenue Recognition

Revenues are reported at the estimated net realizable amounts from residents, participants, third-

party payors and others for services rendered, including estimated retroactive adjustments under

reimbursement agreements with third-party payors. Retroactive adjustments are accrued on an

estimated basis in the period the related services are rendered and adjusted in future periods as final

settlements are determined. Laws and regulations governing mental health programs are extremely

complex and subject to interpretation. As a result, there is at least a reasonable possibility that

recorded estimates will change by a material amount in the near term. Additionally,

noncompliance with such laws and regulations could result in fines, penalties and exclusion from

Medicaid and other programs. Rental income is recognized in the month that the units were

occupied.

Income Taxes

PHI and PH 385 HDFC are exempt from income taxes under Section 501(c)(3) of the Internal

Revenue Code and a similar provision of state law. Watershed is exempt from income taxes under

Section 501(c)(2) of the Internal Revenue Code and a similar provision of state law. New Vision

was incorporated to operate as a non-profit, exempt from income taxes under section 501 of the

Internal Revenue Code, and similar provisions of state law. PH Castleton, Inc. is a for-profit

organization subject to income taxes. Subsequent to year end, in November 2019, New Vision

received its IRS determination letter indicating that it is exempt from income taxes under Section

501(c)(4). Castleton is exempt from income taxes under Section 501(c)(4). The Organization is

subject to federal income tax on any unrelated business taxable income.

The Organization files tax returns in the U.S. federal jurisdiction.

Operating Leases

Rent expense has been recorded on the straight-line basis over the life of the lease. Deferred rent is

recorded when there are material differences between the fixed payments and the rent expense.

Functional Allocation of Expenses

The costs of supporting the various programs and other activities have been summarized on a

functional basis in the consolidated statements of functional expenses. Certain costs have been

allocated among the program, management and general and fundraising categories based on the

programmatic square footage, time studies, and other methods.


June 30, 2019 and 2018

13

Note 2: Change in Accounting Principle

In 2019, the Organization adopted Accounting Standards Update (ASU) 2016-14, Not-for-Profit

Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. A summary

of the changes is as follows:

Statement of Financial Position

• The statement of financial position distinguishes between two new classes of net assets – those

with donor-imposed restrictions and those without. This is a change from the previously

required three classes of net assets – unrestricted, temporarily restricted and permanently

restricted.

Statement of Activities

• Investment return is shown net of external investment expenses. There is no longer a

requirement to include a disclosure of those netted expenses.

Notes to the Financial Statements

• Enhanced quantitative and qualitative disclosures provide additional information useful in

assessing liquidity and cash flows available to meet operating expenses for one year from the

date of the statement of financial position.

This change had no impact on previously reported total change in net assets.

Note 3: Contributions Receivable

Contributions receivable of $333,800 and $505,600 at June 30, 2019 and 2018, respectively, are all

due within one year and are restricted for specific purposes.


June 30, 2019 and 2018

14

Note 4: Property and Equipment

Property and equipment at June 30, 2019 and 2018 consists of:

2019 2018

Land 2,488,085$ 1,625,987$

Buildings and improvements 7,698,947 10,538,103

Leasehold improvements 3,206,224 1,301,529

Furniture and fixtures 2,395,273 2,354,481

Motor vehicles 68,754 63,146

Construction in progress 731,569 -

16,588,852 15,883,246

Less accumulated depreciation and amortization (5,958,077) (5,309,451)

10,630,775$ 10,573,795$

PH 385 HDFC received funding from the NYC Department of Homeless Services (NYC DHS) and

the U.S. Department of Housing and Urban Development (HUD), and Federal Home Loan Bank of

New York (FHLB) for rehabilitation of the building located at 385 Jersey St., Staten Island, NY.

The property is authorized to be used for housing needs, to promote the development of

independent living and includes innovative approaches to assist homeless persons in their transition

from homelessness. PH 385 HDFC was also awarded the Affordable Housing Program Direct

subsidy from the FHLB in the amount of $543,501. The subsidy is for fifteen years at no interest,

with no schedule of payments, and will be forgiven at the end of the term which began on

March 10, 2008 (date of occupancy). Under the term of the agreement, the property must be used

to provide housing for income eligible households for fifteen years and may not be sold or

transferred without prior notification to FHLB. If the project does not comply with the terms of the

agreement, the amount provided will be considered to be in default and the amount of subsidy

provided plus interest will be recovered.

PH 385 HDFC has a contract with the NYC DHS and is required to operate the facility in

accordance with the terms of the agreement for a period of 20 years and nine months. The

residence was established to provide housing for 30 homeless adults and ancillary services. NYC

DHS makes the monthly mortgage payments directly to the Low Income Investment Fund (LIIF)

(Note 6), as reflected in the debt service line of the contract. For June 30, 2019 and 2018, total

payments made by NYC DHS amounted to $223,538 in each of the years and that amount is

recorded as part of the government contract revenue.

Note 5: Assets Limited as to Use

In accordance with the mortgage loan agreement, mortgage and maintenance reserve accounts are

required to be maintained by PH 385 HDFC. Deposits to the funds are held by LIIF (Lender).

PH 385 HDFC is required to make quarterly deposits into the maintenance reserve account in the

amount of $625. Deposits can be used upon approval from NYC DHS and the Lender, for major

and “non-ordinary” repairs of the premises. As of June 30, 2019 and 2018, the balance was

$48,277 and $45,048, respectively.


June 30, 2019 and 2018

15

Note 6: Long-Term Debt

2019 2018

(A) Northfield Bank -$ 117,469$

(B) Deutsche Bank 120,000 120,000

(C) LIIF 1,425,315 1,535,614

(D) Corporation for Supportive Housing 1,958,000 -

3,503,315$ 1,773,083$

(A) In July 2012, Watershed obtained a loan from Northfield Bank to finance a facility on

Castleton Avenue in Staten Island, NY. The mortgage is repaid in monthly installments of

$1,396. Interest is charged and withheld at a rate of 5.5 percent annually. The mortgage

matures on June 1, 2027 and is secured by the property. During 2019, the loan was paid off.

(B) In December 2016, PHI received a grant from Deutsche Bank with a recoverable portion of

$120,000. The recoverable portion bears no interest and is to be paid in annual installments

of $40,000 on November 30, 2019, 2020 and 2021.

(C) LIIF provided the Organization a twenty-year mortgage loan of $2,291,190 with an annual

interest of 7.62 percent. The loan requires monthly interest and principal payment of

$18,626. The loan payments commenced on April 1, 2008 and mature on March 1, 2028.

The loan payments are made by NYC DHS directly to LIIF (Note 4) and are secured by the

property.

(D) 1546 Castleton Managing Member LLC and Castleton entered into a predevelopment loan in

the amount not to exceed $2,540,000 with Corporation for Supportive Housing to finance the

acquisition and predevelopment costs of the multifamily affordable housing project. The

loan bore a fixed interest rate of 6 percent and was scheduled to mature on December 1,

2020. On November 4, 2019, the loan together with accrued interest in the amount of

$2,306,226 was paid off with the proceeds of the permanent financing.

The permanent financing obtained on November 1, 2019 was as follows:

• First Building loan with JPMorgan Chase for $10,600,571 with interest rate at prime and

maturity date of June 4, 2022, which could be extended until June 4, 2023.

• First project loan with JPMorgan Chase for $2,670,067 with interest at Eurodollar or

adjusted LIBOR rate plus applicable margin and maturity date of June 4, 2022, which

could be extended until June 4, 2023.

• Second mortgage loan with the City of NY acting by and through its Department of

Housing Preservation and Development for $7,942,000 with interest rate at 0.25 percent

from closing until conversion date and 4.2 percent from conversion date until maturity

date. Maturity date is 31 months after the closing or if the conversion date occurs on or

before the construction loan maturity date, the 60th anniversary of the conversion date.


June 30, 2019 and 2018

16

Future principal payments based on new permanent financing are as follows:

2019 - 2020 2,117,004$

2020 - 2021 168,396

2021 - 2022 13,449,166

2022 - 2023 149,461

2023 - 2024 161,256

Thereafter 8,670,670

Total 24,715,953$

Note 7: Capital Advances

In September 2016, New Vision entered into an agreement with New York State Housing and

Assistance Corporation Homeless Housing and Assistance Program (HHAP), with PHI as the

sponsor, to operate a project to provide housing for homeless people at a building located at 411

Vanderbilt Avenue, Staten Island, NY. The first phase of this project included a capital advance of

up to $3,292,123 to renovate and rehabilitate the property for occupancy. HHAP may recover the

funds in the event the project ceases to be used as a shelter for the homeless within 25 years.

Provided the project continues to operate in this capacity for 25 years, the capital advance balance

will be forgiven. The capital advance does not bear interest and has no required payments. At

June 30, 2019 and 2018, $3,275,765 and $3,160,653, respectively, had been drawn on the capital

advance.

In July 2007, Watershed entered into an agreement with New York State Housing and Assistance

Corporation Homeless Housing and Assistance Program to operate a project to provide housing for

homeless people at 157 Beechwood Avenue, Staten Island, NY. New Vision received a capital

advance of $510,700. HHAP may recover the funds in the event the project ceases to be used as a

shelter for the homeless within 25 years. Provided the project continues to operate in this capacity

for 25 years, the capital advance balance will be forgiven. The capital advance does not bear

interest and has no required payments. The maturity date is August 2032. This was recognized as

revenue in previous years as the Organization expects to meet the conditions for forgiveness.

In December 2008, Watershed entered into an agreement with New York State Housing and

Assistance Corporation Homeless Housing and Assistance Program to operate a project to provide

housing for homeless people at 355 and 365 Van Pelt Avenue, Staten Island, NY. New Vision

received a capital advance of $945,082. HHAP may recover the funds in the event the project

ceases to be used as a shelter for the homeless within 25 years. Provided the project continues to

operate in this capacity for 25 years, the capital advance balance will be forgiven. The capital

advance does not bear interest and has no required payments. The maturity date is December 2035.

This was recognized as revenue in previous years as the Organization expects to meet the

conditions for forgiveness.


June 30, 2019 and 2018

17

Note 8: Operating Leases

PHI has several noncancelable operating leases for residential and administrative space, which

expire through December 1, 2028.

In addition, the Organization leases certain vehicles under various noncancelable operating lease

agreements that expire through April 1, 2022.

Future minimum lease payments under operating lease are:

Space Rental Vehicle Rental Total

2019 - 2020 4,369,173$ 43,972$ 4,413,145$

2020 - 2021 1,762,303 22,914 1,785,217

2021 - 2022 1,014,129 6,141 1,020,270

2022 - 2023 770,368 - 770,368

2023 - 2024 763,582 - 763,582

Thereafter 1,205,731 - 1,205,731

Total minimum

lease payments 9,885,286$ 73,027$ 9,958,313$

Note 9: Pension Plan and Deferred Compensation Plan

The Organization has a 403(b) defined contribution pension plan covering substantially all

employees who have completed two years of service as of December 31 of the plan year. The

Board of Directors annually determines the amount, if any, of the Organization’s discretionary

contributions to the plan. Pension expense was $168,925 and $159,412 for the years ended June

30, 2019 and 2018, respectively.

Note 10: Disclosures About Fair Value of Assets

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date. Fair value measurements

must maximize the use of observable inputs and minimize the use of unobservable inputs. There is

a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1 Quoted prices in active markets for identical assets or liabilities

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets

or liabilities; quoted prices in markets that are not active; or other inputs that are

observable or can be corroborated by observable market data for substantially the

full term of the assets or liabilities

Level 3 Unobservable inputs supported by little or no market activity and are significant to

the fair value of the assets or liabilities


June 30, 2019 and 2018

18

Recurring Measurements

The following table presents the fair value measurements of assets recognized in the accompanying

statement of financial position measured at fair value on a recurring basis and the level within the

fair value hierarchy in which the fair value measurements fall at June 30, 2019 and 2018:

Fair Value

Measurements Using

Quoted Prices in

Active Markets

for Identical

Total Assets (Level 1)

Equity securities

Energy 15,482$ 15,482$

Materials 22,838 22,838

Industrials 54,971 54,971

Consumer discretionary 49,417 49,417

Consumer staples 11,291 11,291

Health care 56,610 56,610

Financials 40,234 40,234

Information technology 95,531 95,531

Telecommunication services 19,397 19,397

Utilities 4,329 4,329

Real estate 1,856 1,856

Closed-end funds 149,321 149,321

Mutual funds

Bond funds 1,019,678 1,019,678

Equity funds 464,885 464,885

Real estate investment trusts 11,872 11,872

Total 2,017,712 2,017,712$

Cash equivalents 84,801

Total 2,102,513$

2019


June 30, 2019 and 2018

19

Fair Value

Measurements Using

Quoted Prices in

Active Markets

for Identical

Total Assets (Level 1)

Equity securities

Energy 24,482$ 24,482$

Materials 22,404 22,404

Industrials 70,545 70,545

Consumer discretionary 56,059 56,059

Consumer staples 17,471 17,471

Health care 52,688 52,688

Financials 48,617 48,617

Information technology 93,169 93,169

Telecommunication services 32,806 32,806

Utilities 2,286 2,286

Real estate 3,738 3,738

Closed-end funds 128,737 128,737

Mutual funds

Bond funds 944,518 944,518

Equity funds 436,983 436,983

Total 1,934,503 1,934,503$

Cash equivalents 95,167

Total 2,029,670$

2018

Investments

Where quoted market prices are available in an active market, securities are classified within

Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are

estimated by using quoted prices of securities with similar characteristics or independent asset

pricing services and pricing models, the inputs of which are market-based or independently sourced

market parameters, including, but not limited to, yield curves, interest rates, volatilities,

prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in

Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not

available, securities are classified within Level 3 of the hierarchy.

The methods described above may produce a fair value calculation that may not be indicative of

net realizable value or reflective of future fair values. Furthermore, while the Organization

believes its valuation methods are appropriate and consistent with other market participants, the use

of difference methodologies or assumptions to determine the fair value of certain financial

instruments could result in a different fair value measurement at the reporting date.


June 30, 2019 and 2018

20

Note 11: Net Assets with Donor Restrictions

Net assets with donor restrictions at June 30, 2019 and 2018 are available for the following

purposes:

2019 2018

Housing, food and legal 474,059$ 663,249$

Hurricane Sandy relief 327,804 355,630

IT and capacity building - 7,420

801,863$ 1,026,299$

Net Assets Released from Restrictions

Net assets were released from donor restrictions by incurring expenses satisfying the restricted

purposes or by occurrence of other events specified by donors.

2019 2018

Housing, food and legal 1,122,640$ 899,918$

Hurricane Sandy relief 27,826 126,116

IT and capacity building 7,420 462,577

1,157,886$ 1,488,611$

Note 12: Significant Estimates and Concentrations

Accounting principles generally accepted in the United States of America require disclosure of

certain significant estimates and current vulnerabilities due to certain concentrations. Those

matters include the following:

As of June 30, 2019 and 2018, 38 percent and 41 percent, respectively, of receivables was due from

Public Health Solutions, NYC DHS and NYC Department of Health and Mental Hygiene (NYC

DOHMH). In 2019 and 2018, 37 percent and 50 percent, respectively, of revenue was due from

HUD and NYC DHS. This represents a concentration of credit risk to the Organization.

Investments

The Organization invests in various investment securities. Investment securities are exposed to

various risks such as interest rate, market and credit risks. Due to the level of risk associated with

certain investment securities, it is at least reasonably possible that changes in the values of

investment securities will occur in the near term and that such change could materially affect the

amounts reported in the accompanying consolidated statements of financial position.


June 30, 2019 and 2018

21

Note 13: Commitments and Contingencies

The Organization receives substantially all its revenues for services provided for approved

participants from third-party reimbursement agencies, including Medicaid. These revenues are

based on predetermined rates based on cost reimbursement principles and are subject to audit and

retroactive adjustment by the respective third-party fiscal intermediary. As of June 30, 2019 and

2018, management has estimated no need for a reserve for potential rate adjustments.

The Organization is responsible for reporting to various third parties. These agencies, as well as

the New York State Office of the Attorney General, the Internal Revenue Service, the New York

State Office of the Medicaid Inspector General, the New York State Department of Health, the

New York State Charities Bureau, and others have the right to audit the Organization.

Litigation

The Organization is subject to claims and lawsuits that arose primarily in the ordinary course of its

activities. It is the opinion of management that the disposition or ultimate resolution of such claims

and lawsuits will not have a material adverse effect on the financial position, change in net assets

and cash flows of the Organization. Events could occur that would change this estimate materially

in the near term.

Note 14: Subsequent Events

As a result of the spread of the COVID-19 coronavirus, economic uncertainties have arisen which

may negatively affect the financial position, changes in net assets and cash flows of the

Organization. The duration of these uncertainties and the ultimate financial effects cannot be

reasonably estimated at this time.

Additionally, there has been significant volatility in the investment markets both nationally and

globally since June 30, 2019.

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic

Security Act. On May 5, 2020, the Organization received a loan in the amount of $3,512,875

pursuant to the Paycheck Protection Program. The loan is due in two years, which can be extended

to five years if agreeable with the lender, from the date of the first disbursement under the loan and

has a fixed interest rate of 1 percent per year. A portion of the loan may be forgiven; however, as

of the date of this report any amount of forgiveness is unable to be determined.

Subsequent events have been evaluated through July 13, 2020, which is the date the consolidated

financial statements were available to be issued.


June 30, 2019 and 2018

22

Note 15: Liquidity and Availability

The Organization’s financial assets available within one year of the balance sheet date for general

expenditures at June 30, 2019 are:

Financial assets

Cash and cash equivalents 2,404,354$

Investments 2,102,513

Accounts receivable 299,434

Due from government agencies 11,728,960

Contributions receivable 333,800

Total financial assets 16,869,061

Internal designations

Board-designated (2,040,122)

Donor-imposed restrictions

Restricted funds (801,863)

Financial assets available to meet cash needs

for general expenditures within one year 14,027,076$

The Organization does not intend to spend from the board-designated funds of $2,040,122, other

than amounts that may be appropriated for general expenditures as part of the Board’s annual

budget approval and appropriation. To help manage unanticipated liquidity needs, subsequent to

year end in July 2019, the Organization obtained a $2 million line of credit that it could draw upon.

The line of credit matures in August 2020. The line of credit bears interest of 5.5 percent per

annum and is secured by the assets of the Organization.

The Organization manages its liquidity and reserves following three guiding principles: operating

within a prudent range of financial soundness and stability, maintaining adequate liquid assets to

fund near-term operating needs and maintaining sufficient reserves to provide reasonable assurance

that long term obligations will be discharged. The level of liquidity reserves was managed within

the policy.


June 30, 2019 and 2018

23

Note 16: Future Changes in Accounting Principles

Revenue Recognition

The Financial Accounting Standards Board (FASB) amended its standards related to revenue

recognition. This amendment replaces all existing revenue recognition guidance and provides a

single, comprehensive revenue recognition model for all contracts with customers. The guidance

provides a five-step analysis of transactions to determine when and how revenue is recognized.

Other major provisions include capitalization of certain contract costs, consideration of the time

value of money in the transaction price and allowing estimates of variable consideration to be

recognized before contingencies are resolved in certain circumstances. The amendment also

requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash

flows arising from customer contracts, including significant judgments and changes in those

judgments and assets recognized from costs incurred to fulfill a contract. The standard allows

either full or modified retrospective adoption effective for annual periods beginning after

December 15, 2019 for nonpublic entities and any interim periods within annual reporting periods

that begin after December 15, 2020 for nonpublic entities. The Organization is in the process of

evaluating the impact the amendment will have on the financial statements.

ASU 2018-08 Grants and Contributions

On June 21, 2018, FASB issued ASU 2018-08. This standard clarifies existing guidance on

determining whether a transaction with a resource provider, e.g., the receipt of funds under a

government grant or contract, is a contribution or an exchange transaction. The guidance requires

all organizations to evaluate whether the resource provider is receiving commensurate value in a

transfer of assets transaction, and whether contributions are conditional or unconditional.

If commensurate value is received by the resource provider, the transaction would be accounted for

as an exchange transaction by applying Topic 606, Revenue from Contracts with Customers, or

other topics. The standard clarifies that a resource provider is not synonymous with the general

public. Indirect benefit received by the public as a result of the assets transferred is not equivalent

to commensurate value received by the resource provider. If commensurate value is not received

by the resource provider, i.e., the transaction is nonexchange, the recipient organization would

record the transaction as a contribution under Topic 958 and determine whether the contribution is

conditional or unconditional.

FASB expects that the new standard could result in more grants and contracts being accounted for

as contributions (often conditional contributions) than under current generally accepted accounting

principles. Because of this, it believes the clarifying guidance about whether a contribution is

conditional or unconditional, which affects the timing of revenue recognition, is important. Both

the recipient and resource provider would equally apply the guidance.

The standard is effective for reporting periods beginning on or after December 15, 2018.


June 30, 2019 and 2018

24

Accounting for Leases

FASB amended its standard related to the accounting for leases. Under the new standard, lessees

will now be required to recognize substantially all leases on the statement of financial position as

both a right-of-use asset and a liability. The standard has two types of leases for statement of

activities recognition purposes: operating leases and finance leases. Operating leases will result in

the recognition of a single lease expense on a straight-line basis over the lease term similar to the

treatment for operating leases under existing standards. Finance leases will result in an accelerated

expense similar to the accounting for capital leases under existing standards. The determination of

lease classification as operating or finance will be done in a manner similar to existing standards.

The new standard also contains amended guidance regarding the identification of embedded leases

in service contracts and the identification of lease and nonlease components in an arrangement.

The new standard is effective for annual periods beginning after December 15, 2021 and any

interim periods within annual reporting periods that begin after December 15, 2022. The

Organization is evaluating the effect the standard will have on the financial statements; however,

the standard is expected to have a material effect on the financial statements due to the recognition

of additional assets and liabilities for operating leases.

Accounting for Financial Instruments – Credit Losses

FASB amended its standards related to the accounting for credit losses on financial instruments.

This amendment introduces new guidance for accounting for credit losses on instruments including

trade receivables and finance receivables. The new standard is effective for fiscal years beginning

after December 15, 2022, including interim periods within those years. The Organization is in the

process of evaluating the effect the amendment will have on the consolidated financial statements.

25

Project Hospitality, Inc. and Subsidiaries Consolidating Schedule – Statement of Financial Position Information

June 30, 2019

Project New PH 385

Hospitality Watershed Vision HDFC Castleton Eliminations Total

Assets

Cash and cash equivalents 1,887,197$ 6,979$ 189,866$ 260,733$ 59,579$ -$ 2,404,354$

Investments 2,102,513 - - - - - 2,102,513

Accounts receivable 299,434 - - - - - 299,434

Due from government agencies 11,589,227 - - 139,733 - - 11,728,960

Due from affiliated entities 1,957,909 1,141,078 4,000 7,498 - (3,110,485) -

Contributions receivable 333,800 - - - - - 333,800

Assets limited as to use - - - 48,277 - - 48,277

Prepaid expenses and other assets 369,586 1,998 2,218 8,848 12,500 - 395,150

Notes receivable - 799,740 - - - (799,740) -

Property and equipment, net 1,258,969 269,718 3,997,550 3,336,291 1,768,247 - 10,630,775

Total assets 19,798,635$ 2,219,513$ 4,193,634$ 3,801,380$ 1,840,326$ (3,910,225)$ 27,943,263$

Liabilities and Net Assets

Liabilities

Accounts payable and accrued expenses 2,836,391$ 10,375$ 19,468$ 68,585$ 45,908$ -$ 2,980,727$

Due to government agencies 22,839 - - - - - 22,839

Refundable advances 578,030 - - - - - 578,030

Long-term debt 120,000 - - 1,425,315 2,757,740 (799,740) 3,503,315

Capital advance - - 3,275,765 - - - 3,275,765

Due to affiliated entities 1,202,722 1,095,661 194,231 617,871 - (3,110,485) -

Total liabilities 4,759,982 1,106,036 3,489,464 2,111,771 2,803,648 (3,910,225) 10,360,676

Net Assets (Deficit)

Without donor restrictions

Undesignated 12,196,668 1,113,477 704,170 1,689,609 (963,322) - 14,740,602

Board designated 2,040,122 - - - - - 2,040,122

Total without donor restrictions 14,236,790 1,113,477 704,170 1,689,609 (963,322) - 16,780,724

With donor restrictions 801,863 - - - - - 801,863

Total net assets (deficit) 15,038,653 1,113,477 704,170 1,689,609 (963,322) - 17,582,587

Total liabilities and net assets 19,798,635$ 2,219,513$ 4,193,634$ 3,801,380$ 1,840,326$ (3,910,225)$ 27,943,263$

26

Project Hospitality, Inc. and Subsidiaries Consolidating Schedule – Statement of Activities Information

Year Ended June 30, 2019

New PH 385

Watershed Vision HDFC Castleton

Without Without Without Without Without

Donor With Donor Donor Donor Donor Donor

Restrictions Restrictions Total Restrictions Restrictions Restrictions Restrictions Eliminations Total

Revenues, Gains and Other Support

Government grants 27,335,732$ -$ 27,335,732$ -$ -$ 1,676,617$ -$ -$ 29,012,349$

Medicaid and other program fees 5,731,345 - 5,731,345 - - - - (28,800) 5,702,545

Rental income 1,923,764 - 1,923,764 82,000 310,111 - - (10,000) 2,305,875

Contribution and grant 288,225 933,450 1,221,675 - - - - - 1,221,675

Special events - net 280,009 - 280,009 - - - - - 280,009

Investment return 86,208 - 86,208 64 424 2,059 - 88,755

In-kind contributions 292,987 - 292,987 - - - - - 292,987

Other income 93,823 - 93,823 - - - - - 93,823

Net assets released from restrictions 1,157,886 (1,157,886) - - - - - - -

Total revenues, gains and other support 37,189,979 (224,436) 36,965,543 82,064 310,535 1,678,676 - (38,800) 38,998,018

Expenses

Program services

Support and treatment services 9,085,869 - 9,085,869 - - - - - 9,085,869

Re-housing services 10,789,069 - 10,789,069 65,590 441,897 - - (10,000) 11,286,556

Homeless care and prevention services 12,555,698 - 12,555,698 - - 1,386,390 - - 13,942,088

Total program services 32,430,636 - 32,430,636 65,590 441,897 1,386,390 - (10,000) 34,314,513

Supporting services

Management and general 4,440,483 - 4,440,483 7,009 22,611 244,335 - (28,800) 4,685,638

Fundraising 334,626 - 334,626 - - - - 334,626

Total supporting services 4,775,109 - 4,775,109 7,009 22,611 244,335 - (28,800) 5,020,264

Total expenses 37,205,745 - 37,205,745 72,599 464,508 1,630,725 - (38,800) 39,334,777

Change in Net Assets Before Equity Transfer (15,766) (224,436) (240,202) 9,465 (153,973) 47,951 - - (336,759)

Equity transfer - - - 963,322 - - (963,322) - -

Change in Net Assets (15,766) (224,436) (240,202) 972,787 (153,973) 47,951 (963,322) - (336,759)

Net Assets, Beginning of Year 14,252,556 1,026,299 15,278,855 140,690 858,143 1,641,658 - - 17,919,346

Net Assets, End of Year 14,236,790$ 801,863$ 15,038,653$ 1,113,477$ 704,170$ 1,689,609$ (963,322)$ -$ 17,582,587$

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