$12,760,000 PUBLIC FINANCE AUTHORITY EDUCATION REVENUE BONDS (CORAL ACADEMY OF SCIENCE LAS VEGAS) SERIES 2017A

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1 NEW ISSUES FULL BOOK-ENTRY Rating: S&P: BBB- See RATING herein In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, based upon an analysis of existing laws, regulations, rulings and court decisions and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Series 2017A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of In the further opinion of Bond Counsel, interest on the Series 2017A Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Bond Counsel further observes that interest on the Series 2017B Bonds is not excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and interest on the Series 2017 Bonds is not excluded from gross income for Wisconsin state income tax purposes. Bond Counsel expresses no opinion regarding any other tax consequences relating to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. See TAX MATTERS herein. Dated: Date of Delivery $12,760,000 PUBLIC FINANCE AUTHORITY EDUCATION REVENUE BONDS (CORAL ACADEMY OF SCIENCE LAS VEGAS) SERIES 2017A $760,000 PUBLIC FINANCE AUTHORITY EDUCATION REVENUE BONDS (CORAL ACADEMY OF SCIENCE LAS VEGAS) SERIES 2017B (TAXABLE) Due: July 1 as shown on the inside front cover The Public Finance Authority (the Authority ), a unit of Wisconsin government and body corporate and politic separate and distinct from, and independent of, the State of Wisconsin (the State ), is offering its Education Revenue Bonds (Coral Academy of Science Las Vegas) Series 2017A in the aggregate principal amount of $12,760,000 (the Series 2017A Bonds or the Tax-Exempt Bonds ) and its Education Revenue Bonds (Coral Academy of Science Las Vegas) Series 2017B (Taxable) in the aggregate principal amount of $760,000 (the Series 2017B Bonds or the Taxable Bonds and, together with the Series 2017A Bonds, the Series 2017 Bonds ) pursuant to an Indenture, dated as of May 1, 2014 (the Original Indenture ), and a First Supplemental Indenture, dated as of December 1, 2017 (the Supplemental Indenture and, together with the Original Indenture, the Indenture ), by and between the Authority and U.S. Bank National Association, as trustee (the Trustee ). The Authority will loan the proceeds of the Series 2017 Bonds to Coral Academy of Science Las Vegas, a Nevada public charter school (the Borrower ) pursuant to a Loan Agreement, dated as of May 1, 2014 (the Original Loan Agreement ), and a First Supplemental Loan Agreement, dated as of December 1, 2017 (the Supplemental Loan Agreement and, together with the Original Loan Agreement, the Loan Agreement ), by and between the Authority and the Borrower. The proceeds of the Series 2017 Bonds will be used to (i) finance certain costs of the acquisition, construction, expansion, remodeling, renovation, improvement, furnishing and equipping of certain charter school educational facilities (as more fully described herein, the Series 2017 Facilities ); (ii) fund a deposit to the Reserve Account (as defined in the Indenture), (iii) fund a deposit to the Repair and Replacement Fund (as defined herein); and (iv) pay certain costs of issuance of the Series 2017 Bonds. The Series 2017 Facilities will be owned by the Borrower. The Series 2017 Bonds will be payable from the moneys held for the payment thereof by the Trustee under the Indenture, including amounts held in a Reserve Account and Loan Repayments (as defined herein) to be made by the Borrower under the Loan Agreement. The obligations of the Borrower under the Loan Agreement are secured on a parity basis with the Series 2014 Bonds (as defined herein) by an assignment and pledge of (i) amounts payable pursuant to the Loan Agreement, (ii) the Deeds of Trust (as defined herein) on certain of the Facilities, and (iii) amounts in the Reserve Account and other funds under the Indenture. Under the Loan Agreement, the Borrower will be required to make Loan Repayments (as defined herein) in amounts sufficient to pay debt service on the Series 2014 Bonds and Series 2017 Bonds, plus certain other payments. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS herein. Interest on the Series 2017 Bonds will be payable semiannually on each January 1 and July 1, commencing July 1, The Series 2017 Bonds are being issued as fully registered bonds and initially will be registered in the name of Cede & Co., as nominee for The Depository Trust Company ( DTC ). DTC will act as securities depository for the Bonds. Purchases of beneficial interests in the Bonds will be made in book-entry-only form (without physical certificates) in initial minimum denominations of $5,000 and any integral multiple of $5,000 in excess thereof. For so long as DTC or its nominee, Cede & Co., is the registered owner of the Bonds, (i) payments of the principal of and premium, if any, and interest on such Bonds will be made directly to Cede & Co. for payment to DTC participants for subsequent disbursement to the beneficial owners, and (ii) all notices, including any notice of redemption will be mailed only to Cede & Co. See APPENDIX G BOOK-ENTRY SYSTEM attached hereto. The Series 2017 Bonds are subject to optional, mandatory and extraordinary redemption prior to maturity as described under THE SERIES 2017 BONDS Redemption herein. THE SERIES 2017 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE FUNDS PLEDGED FOR THEIR PAYMENT PURSUANT TO THE INDENTURE AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY AUTHORITY MEMBER, ANY SPONSOR, ANY AUTHORITY INDEMNIFIED PERSON (AS DEFINED IN THE LOAN AGREEMENT), THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2017 BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE SERIES 2017 BONDS ARE NOT A DEBT OF THE STATE OF WISCONSIN OR ANY AUTHORITY MEMBER AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY AUTHORITY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2017 BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2017 BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF ANY AUTHORITY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2017 BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY, ANY SPONSOR OR ANY AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2017 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER. THE SERIES 2017 BONDS ARE NOT AN OBLIGATION OF THE STATE OF NEVADA OR ANY AGENCY OR POLITICAL SUBDIVISION THEREOF. This cover page contains certain information for general reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to make an informed investment decision. Investment in the Series 2017 Bonds has substantial risk for a variety of reasons as described under CERTAIN RISK FACTORS herein and under other sections of this Official Statement. The Borrower has a limited operating history. The ability of the Borrower to pay the amounts due under the Loan Agreement will be made primarily from moneys paid by the State of Nevada to the Borrower to educate students, with the amount payable based on student enrollment. No assurance can be given that the Borrower will maintain its current student enrollment, attract additional students or receive approval to amend its charter, if necessary, to serve additional students. The Borrower has no taxing powers. While the Bonds will be secured by the Facilities, there is no requirement that the market value of such properties equal or exceed the Borrower s obligations under the Loan Agreement. Furthermore, it is impossible to predict whether the Nevada Legislature will enact legislation adversely affecting the operation of or funding for charter schools. See CERTAIN RISK FACTORS herein, and APPENDIX F CHARTER SCHOOLS IN NEVADA attached hereto. The Series 2017 Bonds are offered when, as and if issued by the Authority and received by the Underwriter, subject to prior sale, modification or withdrawal of the offer without notice, and subject to the approval of legality by Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, the approval of certain matters for the Authority by von Briesen & Roper, s.c., Milwaukee, Wisconsin, the approval of certain matters for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, as Underwriter s Counsel and the approval of certain matters for the Borrower by Kutak Rock LLP, Los Angeles, California. It is expected that the Bonds in definitive form will be available for delivery through the facilities of The Depository Trust Company in New York, New York, on or about December 14, Dated: November 30, 2017

2 MATURITY SCHEDULE $12,760,000 PUBLIC FINANCE AUTHORITY EDUCATION REVENUE BONDS (CORAL ACADEMY OF SCIENCE LAS VEGAS) SERIES 2017A Maturity (July 1) Principal Amount Interest Rate Yield CUSIP (1) 2024 $120, % 3.420% 74442ECH , ECJ , ECK , ECL , ECM , ECN , ECP , ECQ , ECR9 $5,305, % Term Bonds Priced to Yield 4.330% due July 1, 2045 CUSIP 74442ECS7 (1) $5,395, % Term Bonds Priced to Yield 4.450% due July 1, 2053 CUSIP 74442ECT5 (1) $760,000 PUBLIC FINANCE AUTHORITY EDUCATION REVENUE BONDS (CORAL ACADEMY OF SCIENCE LAS VEGAS) SERIES 2017B (Taxable) $760, % Term Bonds Priced to Yield 5.000% due July 1, 2024 CUSIP 74442ECU2 (1) Yield to call at par on July 1, (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the Underwriter, the Authority, or the Borrower are responsible for the selection or correctness of the CUSIP numbers set forth herein.

3 This Official Statement does not constitute an offer to sell the Series 2017 Bonds or the solicitation of an offer to buy, nor shall there be any sale of the Series 2017 Bonds by any person in any state or other jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale in such state or jurisdiction. No dealer, salesperson or any other person has been authorized to give any information or to make any representation other than those contained herein in connection with the offering of the Series 2017 Bonds, and, if given or made, such information or representation must not be relied upon. OTHER THAN WITH RESPECT TO INFORMATION CONCERNING THE AUTHORITY UNDER THE AUTHORITY AND ABSENCE OF MATERIAL LITIGATION THE AUTHORITY HEREIN, NONE OF THE INFORMATION IN THIS OFFICIAL STATEMENT HAS BEEN SUPPLIED OR VERIFIED BY THE AUTHORITY AND THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO: (I) THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION; (II) THE VALIDITY OF THE SERIES 2017 BONDS; OR (III) THE TAX STATUS OF THE INTEREST ON THE SERIES 2017 BONDS. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of these transactions, but the Underwriter does not guarantee the accuracy or completeness of this information. IN CONNECTION WITH THE OFFERING OF THE SERIES 2017 BONDS, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2017 BONDS OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included or incorporated by reference in this Official Statement constitute forward-looking statements. Such statements generally are identifiable by the terminology used such as plan, expect, estimate, budget or other similar words. Such forward-looking statements include but are not limited to certain statements contained in the information under the headings CERTAIN RISK FACTORS, and APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER in this Official Statement. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Borrower does not plan to issue any updates or revisions to those forward-looking statements if or when its expectations or events, conditions or circumstances on which such statements are based occur.

4 TABLE OF CONTENTS Page INTRODUCTION... 1 General... 1 The Bonds... 1 Authority for Issuance... 1 Use of Proceeds... 1 Security for the Series 2017 Bonds... 2 Redemption... 2 Certain Risk Factors... 3 Miscellaneous... 3 THE SERIES 2017 BONDS... 3 General... 3 Book-Entry Only System... 4 Transfer and Exchange of Series 2017 Bonds... 4 Redemption... 4 Defeasance... 8 Additional Bonds... 9 ESTIMATED SOURCES AND USES OF FUNDS THE PROJECT Centennial Hills Project Sandy Ridge Project Nellis Project Appraisals DEBT SERVICE SCHEDULE SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Limited Obligations of the Authority Parity Nature of Obligations Payments Under the Indenture Allocation of Revenues Reserve Account Certain Financial Covenants under the Loan Agreement Deeds of Trust on the Facilities THE AUTHORITY Formation and Governance Powers Local Approval Received Governing Body Resolution Special Limited Obligations of the Authority Other Obligations Limited Involvement of the Authority CERTAIN RISK FACTORS General Economic and Other Factors Operating History; Reliance on Projections Income and Property Tax Exemption Construction Risks Key Management State of Nevada Budget Changes in Law; Annual Appropriation; Inadequate State Payments i

5 TABLE OF CONTENTS (cont d) Page No Taxing Authority/Dependence On State Payments Revocation, Non-Renewal or Expiration of Charter Risk Factors Associated with Education Other Schools/Competition for Students Limitations of Appraisals Limitations on Value of the Facilities and to Remedies Under the Deeds of Trust No Deeds of Trust on Existing Nellis Site or New Nellis Campus Environmental Risks Bankruptcy Reserve Account Tax Related Issues Incurrence of Additional Indebtedness Legal Opinions Enforcement of Remedies Claims and Insurance Coverage Risk of Noncontinued Philanthropy or Grants Failure to Provide Ongoing Disclosure Secondary Market Cautionary Statement ABSENCE OF MATERIAL LITIGATION The Authority The Borrower TAX MATTERS The Series 2017A Bonds The Series 2017B Bonds U.S. Holders Foreign Account Tax Compliance Act ( FATCA ) State Tax Exemption APPROVAL OF LEGALITY MUNICIPAL ADVISOR RATING UNDERWRITING CONTINUING DISCLOSURE FINANCIAL STATEMENTS MISCELLANEOUS APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER... A-1 APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE BORROWER FOR THE FISCAL YEAR ENDED JUNE 30, B-1 APPENDIX C SUMMARY OF PRINCIPAL BOND DOCUMENTS... C-1 APPENDIX D FORM OF OPINION OF BOND COUNSEL... D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE AGREEMENT... E-1 APPENDIX F CHARTER SCHOOLS IN NEVADA...F-1 APPENDIX G BOOK-ENTRY SYSTEM... G-1 ii

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7 OFFICIAL STATEMENT $12,760,000 PUBLIC FINANCE AUTHORITY EDUCATION REVENUE BONDS (CORAL ACADEMY OF SCIENCE LAS VEGAS) SERIES 2017A $760,000 PUBLIC FINANCE AUTHORITY EDUCATION REVENUE BONDS (CORAL ACADEMY OF SCIENCE LAS VEGAS) SERIES 2017B (TAXABLE) INTRODUCTION General This Official Statement, including the cover page, the inside cover page, and Appendices hereto (the Official Statement ), is provided to furnish information with respect to the sale and delivery of the Public Finance Authority Education Revenue Bonds (Coral Academy of Science Las Vegas) Series 2017A, in the aggregate principal amount of $12,760,000 (the Series 2017A Bonds or the Tax-Exempt Bonds ) and the Public Finance Authority Education Revenue Bonds (Coral Academy of Science Las Vegas) Series 2017B, in the aggregate principal amount of $760,000 (the Series 2017B Bonds or the Taxable Bonds and, together with the Series 2017A Bonds, the Series 2017 Bonds ), issued by the Public Finance Authority (the Authority ). The Bonds The Series 2017 Bonds, which constitute Additional Bonds (as defined herein), will be issued pursuant to an Indenture, dated as of May 1, 2014 (the Original Indenture ) and a First Supplemental Indenture, dated as of December 1, 2017 (the Supplemental Indenture and, together with the Original Indenture, the Indenture ), by and between the Authority and U.S. Bank National Association, a national banking association (the Trustee ). Interest on the Series 2017 Bonds will be payable on January 1 and July 1 of each year, commencing July 1, 2018 (each such date, an Interest Payment Date ) and the Series 2017 Bonds will be subject to optional, mandatory and extraordinary redemption prior to maturity as set forth under THE SERIES 2017 BONDS Redemption herein. The proceeds of the Series 2017 Bonds will be loaned to Coral Academy of Science Las Vegas, a Nevada public charter school (the Borrower ), pursuant to a Loan Agreement, dated as of May 1, 2014 (the Original Loan Agreement ) and a First Supplemental Loan Agreement, dated as of December 1, 2017 (the Supplemental Loan Agreement and, together with the Original Loan Agreement, the Loan Agreement ), by and between the Authority and the Borrower. See THE SERIES 2017 BONDS herein. The Series 2017 Bonds will be issued in initial minimum denominations of $5,000 and any integral multiple of $5,000 in excess thereof and in fully registered form only and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ( DTC ). Authority for Issuance The Series 2017 Bonds will be issued by the Authority pursuant to a resolution of the Authority, the Statute (as defined under THE AUTHORITY Formation and Governance herein) and the Indenture. See THE AUTHORITY herein. Use of Proceeds The proceeds of the Series 2017 Bonds will be used to (i) finance certain costs of the acquisition, construction, expansion, remodeling, renovation, improvement, furnishing and equipping of certain charter school educational facilities (as more fully described herein, the Series 2017 Facilities ); (ii) fund a deposit to the Reserve Account (as defined in the Indenture), (iii) fund a deposit to the Repair and Replacement Fund (as 1

8 defined herein); and (iv) pay certain costs of issuance of the Series 2017 Bonds. The Series 2017 Facilities will be owned by the Borrower, and used by the Borrower for its charter school operations. See APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER attached hereto, and THE PROJECT herein. Security for the Series 2017 Bonds The Series 2017 Bonds will be payable out of Payments (as defined below) under the Indenture, consisting primarily of Loan Repayments under the Loan Agreement. The obligations of the Borrower under the Loan Agreement are secured on a parity basis with the Education Revenue Bonds (Coral Academy of Science Las Vegas) Series 2014A and Education Revenue Bonds (Coral Academy of Science Las Vegas) Series 2014B (Taxable) of the Authority (collectively, the Series 2014 Bonds and, together with the Series 2017 Bonds, the Bonds ) by: (i) amounts payable pursuant to the Loan Agreement, (ii) real property described in the Deeds of Trust (as defined below) on the Facilities (as defined herein), and (iii) if necessary, the Reserve Account (as defined in the Indenture) and other funds under the Indenture. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS herein. Under the Loan Agreement, the Borrower pledges, and to the extent permitted by law, grants a security interest to the Trustee in the Borrower Revenue Fund (as defined herein) and all of the Gross Revenues (as defined herein) to secure the payment of the Loan Repayments and Additional Payments (each as defined herein) and the performance by the Borrower of its other obligations under the Loan Agreement. Parity Obligations; Prior Bonds. The Series 2017 Bonds are payable on parity with the Series 2014 Bonds, issued on May 14, 2014, in the aggregate principal amount of $9,260,000, by the Authority pursuant to the Original Indenture, dated as of May 1, 2014, of which an aggregate principal amount of $8,930,000 is currently outstanding. A portion of the proceeds of the Series 2014 Bonds were used to finance the acquisition of certain charter school facilities (the Prior Facility and, together with the Series 2017 Facilities, the Facilities ), which Prior Facility is owned by the Borrower and used by the Borrower for its charter school operations. The Prior Facility consists of buildings and campus located at 1051 Sandy Ridge Avenue, Henderson, Nevada where the Borrower has continuously operated grades 6-12 of its charter school operations since Fall 2010 (as further described in THE PROJECT Sandy Ridge Project herein, the Sandy Ridge Campus ). Additionally, the Borrower anticipates issuing additional bonds in Summer 2018, in an estimated amount of approximately $16.65 million, which would constitute Additional Bonds under the Indenture (as further described in THE SERIES 2017 Bonds herein, the Series 2018 Bonds ), for the purpose of constructing the New Nellis Campus (as defined herein) and acquiring the Tamarus Campus (as defined in Appendix A to this Official Statement). If issued, the Series 2018 Bonds are expected to be payable on parity with the Series 2014 Bonds and Series 2017 Bonds. See THE SERIES 2017 BONDS Additional Bonds and SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Parity Nature of Obligations herein. Limited Obligations. The Series 2017 Bonds are special and limited obligations of the Authority and are not a debt or liability of any Authority Member, the State of Wisconsin (the State ), or any political subdivision thereof; other than the Authority to the limited extent set forth herein. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS herein. For information regarding the Borrower, see APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER attached hereto. Redemption The Series 2017 Bonds will be subject to optional, special and mandatory redemption as described below under THE SERIES 2017 BONDS Redemption. 2

9 Certain Risk Factors The Series 2017 Bonds may not be a suitable investment for all investors. Prospective purchasers of the Series 2017 Bonds should read this entire Official Statement, including the appendices and the information under the section CERTAIN RISK FACTORS before making an investment in the Series 2017 Bonds. Miscellaneous This Official Statement contains brief descriptions of, among other things, the Series 2017 Bonds, the Indenture, the Loan Agreement and the Borrower. All references in this Official Statement to documents are qualified in their entirety by reference to such documents, and references to the Series 2017 Bonds are qualified in their entirety by reference to the form of the Series 2017 Bonds included in the Indenture. The Borrower maintains a website providing additional information about itself and its operations. The information on such website is not included as part of, or incorporated by any reference in, this Official Statement. Any capitalized terms in this Official Statement that are not defined herein will have such meaning as given to them in the Indenture. THE SERIES 2017 BONDS The following is a summary of certain provisions of the Series 2017 Bonds. Reference is made to the Series 2017 Bonds for the complete text thereof and to the Indenture for all of the provisions relating to the Series 2017 Bonds. The discussion herein is qualified by such reference. See APPENDIX C SUMMARY OF PRINCIPAL BOND DOCUMENTS attached hereto. General The Series 2017 Bonds are being issued pursuant to the Indenture in the aggregate principal amount set forth on the cover of this Official Statement. The Series 2017 Bonds will be issued as registered bonds in denominations of $5,000 or any integral multiple thereof ( Authorized Denominations ). The Series 2017 Bonds will be dated the date of issuance and will bear interest at the rates set forth on the inside cover page hereof from their dated date. Interest on the Series 2017 Bonds will be calculated on the basis of a 360-day year of twelve 30-day months and will be payable in arrears on each Interest Payment Date. The Series 2017 Bonds will mature in the amounts and in each of the years as set forth on the inside cover page hereof. The Series 2017 Bonds, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ), and will be evidenced by one Series 2017 Bond for each maturity in the total aggregate principal amount of the Series 2017 Bonds of such maturity. Registered ownership of the Series 2017 Bonds, or any portion thereof, may not thereafter be transferred except as set forth in the Indenture. So long as Cede & Co. is the registered owner of the Series 2017 Bonds, as nominee of DTC, references herein to the bondholders, holders or registered owners will mean Cede & Co. as aforesaid and will not mean the beneficial owners of the Series 2017 Bonds. The principal of and interest on the Series 2017 Bonds will be payable in lawful money of the United States of America upon surrender at the principal corporate trust office of the Trustee. The interest on any Series 2017 Bond will be payable to the person whose name appears on the registration books of the Trustee as the registered owner thereof as of the close of business on the fifteenth day of the calendar month next preceding the Interest Payment Date (the Record Date ), such interest to be paid by check mailed by first class mail, postage prepaid, on the Interest Payment Date, to the registered owner at his or her address as it appears on such registration books. Notwithstanding the foregoing, however, any Holder of all the Series 2017 Bonds and any holder of $1,000,000 or more in an aggregate principal amount of the Series 2017 Bonds will be entitled to receive payments of interest on the Series 2017 Bonds held by it by wire transfer of immediately available funds to such bank or trust company located within the United States of America as such other Holder will designate in writing to the Trustee by the first Record Date for such payment. So long as Cede & 3

10 Co. is the registered owner of the Series 2017 Bonds, principal of and interest on the Series 2017 Bonds are payable in same day funds by the Trustee to Cede & Co., as nominee for the Depository. Any interest not punctually paid or duly provided for will thereafter cease to be payable to the Bondholder on such Record Date and will be paid to the person in whose name the Series 2017 Bond is registered at the close of business on the date established by the Trustee pursuant to the Indenture as a record date for the payment of defaulted interest on the Series 2017 Bonds (each, a Special Record Date ). The Special Record Date will be fixed by the Trustee, notice thereof being given to the Bondholders not less than 10 days prior to such Special Record Date. Book-Entry Only System DTC will act as securities depository for the Series 2017 Bonds. The Series 2017 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered certificate will be issued for the Series 2017 Bonds set forth on the inside cover of this Official Statement, and will be deposited with DTC. For additional information regarding DTC and its book-entry only system, see APPENDIX G BOOK-ENTRY SYSTEM attached hereto. Transfer and Exchange of Series 2017 Bonds The registration of any Series 2017 Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of the Indenture, by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Series 2017 Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. The Trustee will require the payment by the Holder requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer, and there will be no other charge to any Holder for any such transfer. Series 2017 Bonds may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of the Series 2017 Bonds of the same maturity of other Authorized Denominations. The Trustee will require the payment by the Holder requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange, and there will be no other charge to any Holder for any such exchange. No transfer or exchange of a Series 2017 Bond will be required to be made during the period established by the Trustee for selection of Series 2017 Bonds for redemption and after a Series 2017 Bond has been selected for redemption. Redemption The Series 2017 Bonds are subject to redemption prior to stated maturity as noted below. Optional Redemption. The Series 2017A Bonds maturing on or after July 1, 2028 are subject to redemption prior to their respective stated maturities, upon the written request of the Borrower to the Trustee, from any amounts in the Redemption Fund, in whole or in part, on any date on or after July 1, 2027, at a redemption price equal to 100% of the principal amount of Series 2017A Bonds called for redemption, plus accrued interest to the date fixed for redemption, without premium. The Series 2017B Bonds are not subject to optional redemption prior to their respective stated maturities. 4

11 Extraordinary Optional Redemption from Insurance and Condemnation Proceeds. The Series 2017 Bonds are subject to redemption prior to their stated maturity, at the option of the Authority (which option will be exercised as directed by the written request of the Borrower to the Trustee) as a whole or in part on any date from moneys required to be transferred from the Insurance and Condemnation Proceeds Fund to the Special Redemption Account at a redemption price equal to the principal amount thereof together with interest accrued thereon to the date fixed for redemption, without premium. Extraordinary Mandatory Redemption due to Change of Use. The Series 2017 Bonds are subject to redemption prior to their stated maturity, as a whole or in part on any date from Loan prepayments made by the Borrower in connection with the cessation of operation of a charter school at any of the Facilities, at a redemption price equal to the principal amount thereof together with interest accrued thereon to the date fixed for redemption, without premium. Mandatory Sinking Account Redemption. The Series 2017A Term Bonds maturing July 1, 2045, are subject to redemption prior to their stated maturity date in part, by lot, from Mandatory Sinking Account Payments established pursuant to the Indenture on July 1, 2033 and on each July 1 thereafter, to and including July 1, 2045, at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date, in the years and amounts as follows: Maturity Date. Mandatory Redemption Date Series 2017A Term Bonds Maturing July 1, 2045 Principal Amount July 1, 2033 $300,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 5

12 The Series 2017A Term Bonds maturing July 1, 2053, are subject to redemption prior to their stated maturity date in part, by lot, from Mandatory Sinking Account Payments established pursuant to the Indenture on July 1, 2046 and on each July 1 thereafter, to and including July 1, 2053, at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date, in the years and amounts as follows: Maturity Date. Mandatory Redemption Date Series 2017A Term Bonds Maturing July 1, Principal Amount July 1, 2046 $565,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 The Series 2017B Term Bonds maturing July 1, 2024, are subject to redemption prior to their stated maturity date in part, by lot, from Mandatory Sinking Account Payments established pursuant to the Indenture on July 1, 2020 and on each July 1 thereafter, to and including July 1, 2024, at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date, in the years and amounts as follows: Maturity Date. Mandatory Redemption Date Series 2017B Term Bonds Maturing July 1, 2024 Principal Amount July 1, 2020 $160,000 July 1, ,000 July 1, ,000 July 1, ,000 July 1, ,000 Notice of Redemption; Conditional Notice. The Borrower will give notice of redemption in connection with extraordinary optional redemption or optional redemption to the Trustee not less than forty (40) days prior to the redemption date. Notice of redemption of any Bonds will be given by the Trustee upon the written request of the Borrower. Notice of any redemption of Bonds will be mailed postage prepaid, not less than thirty (30) nor more than sixty (60) days prior to the redemption date (i) by first class mail to the respective holders thereof at the addresses appearing on the Bond registration books described in the Indenture, and (ii) as may be further required in accordance with the Continuing Disclosure Agreement. Each notice of redemption will contain all of the following information: (a) the date of such notice; (b) the name of the Bonds and the date of issue of the Bonds; (c) the redemption date; (d) the redemption price, if available; (e) the dates of maturity of the Bonds to be redeemed; (f) (if less than all of the Bonds of any maturity are to be redeemed) the distinctive numbers of the Bonds of each maturity to be redeemed; (g) (in the case of Bonds redeemed in part only) the respective portions of the principal amount of the Bonds of each maturity to be redeemed; (h) the CUSIP number, if any, of each maturity of Bonds; (i) a statement that such Bonds must be surrendered by the Holders at the principal corporate trust office of the Trustee, or at such other place or places designated by the Trustee; and (j) notice that further interest on such Bonds, if any, will not accrue from and after the designated redemption date.

13 Such redemption notices may state that no representation is made as to the accuracy or correctness of the CUSIP numbers provided therein or on the Bonds. In addition, any notice of optional redemption may state that such redemption will be conditioned ( Conditional Notice ) upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such Series 2017A Bonds to be redeemed or upon the occurrence of such other event or condition as set forth in such Conditional Notice, and that, if such moneys will not have been so received, or if such other event or condition will have occurred or failed to occur (as the case may be), such Conditional Notice will be of no force and effect and the redemption of the Series 2017A Bonds specified in the Conditional Notice will no longer be required. The Trustee will within a reasonable time thereafter give notice, in the manner in which the original Conditional Notice was given, of the cancellation of such redemption. Effect of Notice. A certificate of the Trustee or the Borrower that notice of redemption has been given to Holders and as may be further required in the Continuing Disclosure Agreement as provided in the Indenture will be conclusive as against all parties. The actual receipt by the Holder of any Bond or any other party of notice of redemption will not be a condition precedent to redemption, and failure to receive such notice, or any defect in the notice given, will not affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest, if any, on the date fixed for redemption. When notice of redemption has been given substantially as provided for in the Indenture, and when the redemption price of the Bonds called for redemption is set aside for the purpose as described in the Indenture, the Bonds designated for redemption will become due and payable on the specified redemption date and interest, if any, will cease to accrue thereon as of the redemption date, and upon presentation and surrender of such Bonds at the place specified in the notice of redemption, such Bonds will be redeemed and paid at the redemption price thereof out of the money provided therefor. The Holders of such Bonds so called for redemption after such redemption date will look for the payment of such Bonds and the redemption premium thereon, if any, only to the escrow fund established for such purpose. All Bonds redeemed will be cancelled therewith by the Trustee and will not be reissued. Right to Rescind Notice. In the event the Borrower has cured the conditions that caused the Bonds to be subject to special redemption, the Borrower may rescind any special redemption and notice thereof on any date prior to the date fixed for redemption by causing written notice of the rescission to be given to the Holders of the Bonds so called for redemption, with a copy to the Trustee. Notice of rescission of redemption will be given in the same manner in which notice of redemption was originally given. The actual receipt by the Holder of any Bond of notice of such rescission will not be a condition precedent to rescission, and failure to receive such notice or any defect in such notice will not affect the validity of the rescission. Funds for Redemption. Prior to or on the redemption date of any Bonds there will be available in the Redemption Fund, or held in trust for such purpose as provided by law, monies for the purpose and sufficient to redeem, at the premiums payable as in the Indenture provided, the Bonds designated in said notice of redemption. Such monies so set aside in the Redemption Fund or in the escrow fund established for such purpose will be applied on or after the redemption date solely for payment of principal of and premium, if any, on the Bonds to be redeemed upon presentation and surrender of such Bonds, provided that all monies in the Redemption Fund will be used for the purposes established and permitted by law. Any interest due on or prior to the redemption date will be paid from the Redemption Fund, unless otherwise provided for to be paid from an escrow fund established for such purpose. If, after all of the Bonds have been redeemed and cancelled or paid and cancelled, there are monies remaining in the Redemption Fund or otherwise held in trust for the payment of redemption price of the Bonds, said monies will be held in or returned or transferred to the Redemption Fund for payment of any Outstanding Bonds payable from said fund; provided, however, that if said monies are part of the proceeds of refunding Bonds, said monies will be transferred to the fund created for the payment of principal of and interest on such Bonds. If no such refunding Bonds are at such time 7

14 Outstanding, said monies will be transferred to the Borrower as provided and permitted by law and the Indenture. Selection of Bonds for Redemption. When any redemption is made pursuant to any of the provisions of the Indenture and less than all of the Outstanding Bonds are to be redeemed, the Trustee will select the Bonds to be redeemed pro-rata among maturities and the Mandatory Sinking Account Payments will be reduced pro-rata. In no event will Bonds be redeemed in amounts other than whole multiples of Authorized Denominations. For purposes of redeeming Bonds in denominations greater than minimum Authorized Denominations, the Trustee will assign to such Bonds a distinctive number for each such principal amount and, in selecting Bonds for redemption by lot, will treat such amounts as separate Bonds. The Trustee will promptly notify the Authority in writing of the numbers of the Bonds selected for redemption. Outstanding under the Indenture means all Bonds theretofore, or thereupon being, authenticated and delivered to the Trustee under the Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority will have been discharged in accordance with the Indenture; and (c) Bonds for the transfer or exchange of which, or in lieu of or in substitution for which, other Bonds will have been authenticated and delivered by the Trustee pursuant to the Indenture. Defeasance Discharge of Indenture. (a) Bonds may be paid by the Authority in any of the following ways, provided that the Authority also pays or causes to be paid any other sums payable under the Indenture by the Authority: (i) by paying or causing to be paid the principal of and interest on the Bonds Outstanding as and when the same become due and payable; (ii) by depositing with the Trustee, in trust, at or before maturity, money or securities in the necessary amount (as provided in the Indenture) to pay or redeem Bonds Outstanding; or (iii) by delivering to the Trustee, for cancellation by it, all Bonds Outstanding. (b) If the Bonds are paid in part in accordance with this section as a result of a partial prepayment of the Loan pursuant to the Loan Agreement and the related redemption of a portion of the Bonds pursuant to the Indenture, the Trustee may release the Deed of Trust on the related portion of the Facilities as permitted by the Loan Agreement and in accordance with instructions from the Borrower. (c) If the Authority pays all Bonds then Outstanding as provided above and also pays or cause to be paid all other sums payable under the Indenture by the Authority, then and in that case, at the election of the Authority (evidenced by a Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and the Indenture), and notwithstanding that any Bonds have not been surrendered for payment, the Indenture and the pledge of Payments made thereunder and all covenants, agreements and other obligations of the Authority thereunder will cease, terminate, become void and be completely discharged and satisfied, except only as provided in Discharge of Liability on Bonds herein. In such event, upon request of the Authority, the Trustee will cause an accounting for such period or periods as may be requested by the Authority to be prepared and filed with the Authority and will execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee will pay over, transfer, assign or deliver to the Authority all moneys or securities or other property held by it pursuant to the Indenture which are not required for the payment of Bonds not theretofore surrendered for such payment and which are not required for the payment of fees and expenses of the Trustee. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in the Indenture) to pay any Outstanding Bond, whether upon or prior to its maturity, then all liability of the Authority in respect of such Bond will cease, terminate and be completely discharged, except only that thereafter the Holder thereof will be entitled to payment of the principal of and interest on such Bond by the Authority, and the Authority will remain liable for such payment but only out of the money or securities deposited with the Trustee as aforesaid for its 8

15 payment; provided further, however, that the provisions set forth in Payment of Bonds after Discharge of Indenture herein will apply in all events. The Authority may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered, which the Authority may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, will be deemed to be paid and retired. Deposit of Money or Securities with Trustee. Whenever in the Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the amount necessary to pay any Bonds, such amount (which may include money or securities held by the Trustee in the funds established pursuant to this Indenture) will be equal (taking into account income which will accrue from the investment thereof on the date of deposit of such funds but without taking into account any income from the subsequent reinvestment thereof) to the principal amount of such Bonds and all unpaid interest thereon to maturity, and will be: (a) lawful money of the United States of America; or (b) noncallable bonds, bills and bonds issued by the Department of the Treasury (including without limitation (1) obligations issued or held in book-entry form on the books of the Department of the Treasury and (2) the interest component of Resolution Funding Corporation strips for which separation of principal and interest is made by request to the Federal Reserve Bank of New York in book-entry form), United States Treasury Obligations State and Local Government Series and Zero Coupon United States Treasury Bonds; provided, in each case, that the Trustee will have been irrevocably instructed (by the terms of the Indenture or by Request of the Authority) to apply such money to the payment of such principal of and interest on such Bonds and provided, further, that the Authority and the Trustee will have received (i) an Opinion of Bond Counsel to the effect that such deposit will not cause interest on the Bonds to be included in the gross income of the Holder thereof for federal income tax purposes and that the Bonds to be discharged are no longer Outstanding; and (ii) a verification report of a firm of certified public accountants or other financial services firm acceptable to the Authority verifying that the money or securities so deposited or held together with earnings thereon will be sufficient to make all payments of principal of and interest on the Bonds to be discharged to and including their maturity date. Payment of Bonds after Discharge of Indenture. Notwithstanding any provision of the Indenture, and subject to applicable escheat laws, any moneys held by the Trustee in trust for the payment of the principal of or interest on any Bonds and remaining unclaimed for one year after the principal of all the Outstanding Bonds has become due and payable (whether at maturity or by declaration as provided in the Indenture), if such moneys were so held at such date, or two years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, will be repaid to the Borrower free from the trusts created by the Indenture, and all liability of the Trustee with respect to such moneys will thereupon cease; provided, however, that before the repayment of such moneys to the Borrower as aforesaid, the Trustee may (at the cost of the Borrower) first mail to the Holders of Bonds which have not yet been paid, at the addresses shown on the registration books maintained by the Trustee, a notice, in such form as may be deemed appropriate by the Trustee, with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Borrower of the moneys held for the payment thereof. Additional Bonds The Indenture provides that the Authority may at any time issue one or more Series of Additional Bonds for the purpose of financing or refinancing the construction, installation and equipping of additions, renovations, betterments, extensions or improvements to the Project (as defined in the Indenture). Additional Bonds issued for such purposes will be issued in a principal amount not to exceed, together with other moneys available therefor, the Borrower s estimate (based such information to be provided by the Borrower to the Authority) of the reasonable costs of the project to be financed or refinanced with the proceeds of the sale of such Additional Bonds, including providing amounts for the costs incidental to or connected with any such 9

16 financing and the making of any deposits into the Reserve Account (as defined herein) and any of the funds and accounts required by the provisions of the Supplemental Indenture authorizing such Series of Additional Bonds. The Loan Agreement provides that if the Borrower is not in default thereunder, the Authority may, by the adoption of an appropriate resolution or resolutions, at the request of the Borrower, authorize the issuance of Additional Bonds upon the terms and conditions provided in the Loan Agreement and in the Indenture, but in no event will the Authority be liable for not issuing such Additional Bonds. Prior to the issuance of such Additional Bonds: (a) the terms thereof, the purchase price to be paid therefor and the manner in which the proceeds therefrom are to be disbursed will have been approved in writing by the Borrower; (b) the Authority and the Borrower will have entered into an amendment to the Loan Agreement to provide that, for all purposes of the Loan Agreement, the Project will include any facilities and/or equipment being financed by the Additional Bonds (unless such Additional Bonds constitute Refunding Bonds), and to provide for any increase in the amount payable under the Loan Agreement as will be necessary to pay the principal of, redemption price, if any, and interest on the Additional Bonds as provided in the related Supplemental Indenture required by the Indenture, and to extend the term of the Loan Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of the Loan Agreement; and (c) the Authority and the Borrower will have otherwise complied with the provisions of the Indenture with respect to the issuance of such Additional Bonds. The Borrower anticipates issuing additional bonds in Summer 2018 pursuant to the Indenture and Loan Agreement in one or more series (the Series 2018 Bonds ), secured on a parity basis with the Series 2017 Bonds and the Series 2014 Bonds, in an estimated par amount of approximately $16.65 million, to finance the construction of the New Nellis Campus (as defined in THE PROJECT Nellis Project herein) and acquisition of the Tamarus Campus. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Parity Nature of Obligations and CERTAIN RISK FACTORS Incurrence of Additional Indebtedness herein. ESTIMATED SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of proceeds of the Series 2017 Bonds. Sources: Series 2017A Series 2017B Total Bond Principal $12,760, $760, $13,520, Aggregate Original Issue Premium 692, , Total Sources $13,452, $760, $14,212, Uses: Series 2017 Project Costs (1) $12,306, $12,306, Deposit to Reserve Account 790, $47, , Deposit to Repair and Replacement Fund 100, , Series 2017 Costs of Issuance (2) 255, , , Total Uses $13,452, $760, $14,212, (1) See THE PROJECT below. (2) Includes legal, printing, underwriting discount, rating agency fees, and other professional fees and other miscellaneous costs of issuance. 10

17 THE PROJECT General. The proceeds of the Series 2017 Bonds will be used to (i) finance certain costs of the acquisition, construction, expansion, remodeling, renovation, improvement, furnishing and equipping of the Series 2017 Facilities (as defined herein); (ii) fund a deposit to the Reserve Account, (iii) fund a deposit to the Repair and Replacement Fund; and (iv) pay certain costs of issuance of the Series 2017 Bonds. See ESTIMATED SOURCES AND USES OF FUNDS above. The Project comprises the Centennial Hills Project, the Sandy Ridge Project and the Nellis Project (each as described below). The following table provides an overview of each portion of the Project. SUMMARY OF THE PROJECT Project Location of Facility Description of Project Cost Centennial 7951 Deer Springs Way, Hills Project Las Vegas, Nevada Sandy Ridge Project (1) Nellis Project 1051 Sandy Ridge Avenue, Henderson, Nevada Vacant land southwest of Stafford Drive near Falk Circle, Nellis Air Force Base, Las Vegas, Nevada Purchase of Centennial Hills Site and Centennial Hills Annex (collectively, the Centennial Hills Campus ) Construction of new gymnasium on the Sandy Ridge Campus Finance predevelopment soft costs for the New Nellis Campus Interest in Facility Fee simple Use of Facility $8,400,000 ($7,075,000 Operation of Centennial Hills for Centennial Hills Site Campus, currently serving and $1,325,000 for 625 students in kindergarten Centennial Hills Annex) through grade 6 (1) $2,646,000 Fee simple Operation of Sandy Ridge Campus, currently serving 815 students in grades 6-12 (2) $1,260,798 Leasehold interest pursuant to the Ground Lease (3) Operation of New Nellis Campus, which is expected to be completed and open by Fall 2019 (3) The Centennial Hills Campus is expected to expand to serve kindergarten through grade 8 by the school year. At that time, the Centennial Hills Campus is expected to continue to serve 625 students (which is the enrollment capacity for the related Facility). The Borrower anticipates gradually adjusting the number of students served at the Centennial Hills Campus in each grade over time to maintain an enrollment of approximately 625 students. See APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER ACADEMIC AND SCHOOL OPERATIONS Enrollment, Attendance & Student Retention attached hereto. (2) The Sandy Ridge Campus is currently at its enrollment capacity of 815 students. (3) The Borrower currently operates its Nellis AFB Campus at the Existing Nellis Site (former Lomie Heard Elementary School site, an elementary school that was previously operated by the Clark County School District) which is located on the Nellis Air Force Base, pursuant to the Existing Nellis Lease (as defined below). The Borrower currently serves 704 students in pre-kindergarten through grade 6 at the Existing Nellis Site. The Borrower is currently designing a new campus (as discussed below, the New Nellis Campus ) on a different parcel of land located on the Nellis Air Force Base, which it occupies pursuant to the Ground Lease (as defined below). The New Nellis Campus is expected to be constructed in and open for operation by Fall 2019, at which time the Nellis AFB Campus will relocate to the New Nellis Campus. In the meantime, the Borrower expects to continue operating the Nellis AFB Campus at the Existing Nellis Site for school years and See Nellis Project herein and APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER ACADEMIC AND SCHOOL OPERATIONS Enrollment, Attendance & Student Retention attached hereto. Source: The Borrower. Centennial Hills Project General. In August 2016, the Borrower opened a campus at a leased charter facility located on a 2.22 acre site located 7951 West Deer Springs Way, Las Vegas, Nevada (as described herein, the Centennial Hills Site ). The Borrower currently occupies the Centennial Hills Site pursuant to a Lease Agreement, dated as of October 28, 2015, and amended by that certain First Amendment dated January 28, 2016, and that certain Second Amendment dated October 20, 2016 (as amended, the Centennial Hills Lease ), by and between the Borrower and Charter School Solutions Coral LLC, as successor lessor thereunder (the Centennial Hills Lessor ). The Borrower currently enrolls 625 students in kindergarten through grade six at the Centennial Hills Site in the school year. The Centennial Hills Site is improved with a two-story building containing a total of approximately 39,000 square feet, constructed in The previous tenant of the facility was the University of Phoenix. The existing building was constructed on a concrete slab, with interior finishes including ceramic tile, resilient tile and carpeted floors, drop-in acoustical tile ceilings, and textured sheetrock walls. On August 2, 2017, the Borrower and the Centennial Hills Lessor entered into a Purchase and Sale Agreement and Joint Escrow Instructions (the Centennial Hills Site PSA ), whereby the Centennial Hills Lessor agrees to sell, and the Borrower agrees to purchase, the Centennial Hills Site for a purchase price of 11

18 $7,075,000. The Centennial Hills Site PSA provides that closing on the purchase of the Centennial Hills Site will occur no later than December 29, On January 28, 2016, the Borrower entered into a Lease Agreement (the Centennial Hills Annex Lease ), by and between the Borrower and Red Hook Coral LLC, as successor lessor thereunder (the Centennial Hills Annex Lessor ), pursuant to which the Borrower leases a vacant parcel of land located along Sky Pointe Drive and North Cimarron Road, Las Vegas, Nevada, adjacent to the Centennial Hills Site (the Centennial Hills Annex and, together with the Centennial Hills Site, the Centennial Hills Campus ). The Centennial Hills Annex contains approximately 2.92 acres and is partially finished with a parking lot. The Borrower has no immediate plans to develop the vacant property. On August 2, 2017, the Borrower and the Centennial Hills Annex Lessor entered into a Purchase and Sale Agreement and Joint Escrow Instructions (the Centennial Hills Annex PSA ), whereby the Centennial Hills Annex Lessor agrees to sell, and the Borrower agrees to purchase, the Centennial Hills Annex Site for a purchase price of $1,325,000. The Centennial Hills Annex Lessor originally purchased the parcel for $750,000 on February 23, The Centennial Hills Annex PSA requires that closing on the purchase of the Centennial Hills Annex occur no later than December 29, The Centennial Hills Site PSA and Centennial Hills Annex PSA both contain as conditions precedent to closing that neither of the respective purchase and sale agreements have been terminated. The Centennial Hills Project includes the acquisition of the Centennial Hills Campus pursuant to the Centennial Hills Site PSA and the Centennial Hills Annex PSA. The Centennial Hills Campus currently operates kindergarten through grade six of its charter school operations at the Centennial Hills Campus with an enrollment of approximately 625 students. The Borrower expects to expand to serve kindergarten through grade 8 at the Centennial Hills Campus by the school year. At that time, the Borrower expects the Centennial Hills Campus to continue to serve 625 students, which is the enrollment capacity for such Facility. The Borrower expects to gradually adjust the number of students served in each grade over time to maintain an enrollment of approximately 625 students at the Centennial Hills Campus. See APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER ACADEMIC AND SCHOOL OPERATIONS Enrollment, Attendance & Student Retention attached hereto. Environmental Inspections. In connection with the Centennial Hills Project, the Borrower obtained a Phase I Environmental Site Assessment of the Centennial Hills Campus, which did not identify evidence of any Recognized Environmental Conditions. See CERTAIN RISK FACTORS Environmental Risks for a description of this report and its conclusions. Sandy Ridge Project General. In May 2014, with proceeds of the Series 2014 Bonds, the Borrower purchased a charter school facility located on approximately 4.98 acres of land at 1051 Sandy Ridge Avenue, Henderson, Nevada (the Sandy Ridge Campus ). The Sandy Ridge Campus was originally built to accommodate the Henderson International School-Sunridge, a private school no longer in operation. 12

19 Current Sandy Ridge Campus. Source: The Borrower. The Sandy Ridge Campus is improved with an approximately 35,944 square foot, two-story classroom building, and an approximately 8,121 square-foot auditorium. Both buildings were completed in 2000, with additions made to the classroom building in The Sandy Ridge Campus includes 26 regular classrooms, along with a greenhouse, preschool wing and library. The Borrower currently enrolls 815 students in grades six through twelve at the Sandy Ridge Campus in the school year. See APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER ACADEMIC AND SCHOOL OPERATIONS Enrollment, Attendance & Student Retention attached hereto. The Sandy Ridge Project comprises the renovation, improvement, furnishing and equipping of a new gymnasium building on the Sandy Ridge Campus. Sandy Ridge Campus site plan, including the gymnasium to be constructed with proceeds of the Series 2017 Bonds in the lower left corner of property, as indicated by the green arrow. Source: The Borrower. Site Layout and Construction. The Sandy Ridge Project will include the construction of an approximately 13,418 square foot gymnasium building. Exterior walls will be concrete masonry, with concrete base and concrete slab flooring, and a sloped metal roofing deck. The interior of the building will 13

20 include a gymnasium floor with a basketball court, two classrooms, a storage room, boys and girls locker rooms, a weightlifting room, and a foyer and concession area. The exterior will be improved with concrete sidewalks. Sandy Ridge Campus gymnasium floor plan. Source: The Borrower. Sandy Ridge Campus gymnasium exterior elevations. Source: The Borrower. Construction Agreements and Project Budget. The Borrower expects to execute a guaranteed maximum price contract with A.F. Construction Company Inc. for approximately $2,341,000 for building 14

21 renovation and site improvement in connection with the Sandy Ridge Project. Payment and performance bonds will be required to be provided by the contractor in connection with the contract. The total cost for the Sandy Ridge Project is estimated to be $2,646,000. This includes all of the development and construction costs related to the Sandy Ridge Campus described above. An estimated breakdown of the project budget is shown in the table below. Source: The Borrower. PROJECT BUDGET Sandy Ridge Campus Cost Description Amount Construction Costs $2,341,000 Soft Costs 130,000 Contingency & Other 175,000 Total Costs $2,646,000 Environmental Inspections. In connection with the issuance of the Series 2014 Bonds and the purchase of the Sandy Ridge Campus, the Borrower obtained a Phase I Environmental Site Assessment of the Sandy Ridge Campus, which did not identify evidence of Recognized Environmental Conditions. See CERTAIN RISK FACTORS Environmental Risks for a description of this report and its conclusions. Approvals; Project Timeline. All entitlements and approvals for the Sandy Ridge Project have been received. The following table sets forth the anticipated construction timeline for the Sandy Ridge Project. The process of construction of the planned improvements may be subject to delay. Normal school operations will be able to take place during construction of the Sandy Ridge Project. See CERTAIN RISK FACTORS Construction Risks. Nellis Project CURRENT DEVELOPMENT & CONSTRUCTION TIMELINE Sandy Ridge Campus Milestone Event 15 Date Execute Guaranteed Maximum Price Contract December 9, 2017 Break Ground January 2018 Complete Construction July/August 2018 Open Gymnasium August 2018 Source: The Borrower. General. In August 2016, the Borrower began operating kindergarten through grades 5 in a charter school facility located on the Nellis Air Force Base (the Base ), at 42 Baer Drive, Nellis Air Force Base Las Vegas, Nevada (the Existing Nellis Site ) pursuant to a Lease Agreement (the Existing Nellis Lease ), effective as of June 23, 2016, by and between the Borrower and the United States of America, acting by and through the Secretary of the Air Force (the Nellis Lessor ). The Existing Nellis Site is improved with a single one-story building located on the Base, composed of approximately 66,161 square feet, formerly occupied by the Lomie Heard Elementary School. The Existing Nellis Lease terminates pursuant its terms on June 23, Pursuant to the Existing Nellis Lease, the Borrower pays annual rent in the amount of $33,000, subject to annual increase in the amount of the lesser of (i) three percent and (ii) the rise in the Consumer Price Index for All Urban Consumers, as published by the U.S. Department of Labor, Bureau of Labor Statistics (the

22 Consumer Price Index ). The Borrower will pay no rent if the Nellis Lessor determines that, during any period from September 1 to May 31 of any year, 20% or more of Borrower s students at the Existing Nellis Site are a dependent of a military member or civilian employee of the Department of Defense (a Military- Connected Student ). The Existing Nellis Lease contemplated that the parties thereto were in negotiations towards a ground lease for property situated on a separate parcel (i.e. not on the Existing Nellis Site) located within the main military housing installation on the Base on which the Borrower would construct a new charter school facility, and that the Borrower would continue its charter school operations pursuant to the Existing Nellis Lease until such time as the new school was completed. The Borrower may terminate the Existing Nellis Lease at any time during the term thereof once it has completed construction of such new charter school facility. On July 31, 2017, the Borrower and the Nellis Lessor entered into that certain Ground Lease Agreement (the Ground Lease ) pursuant to which the Borrower leases approximately acres of land situated immediately southwest of Stafford Drive near its intersection with Falk Circle, on Nellis Air Force Base, Las Vegas, Nevada (the New Nellis Campus ) for an initial thirty-year term commencing July 31, 2017 (the Effective Date ) and terminating on July 31, The New Nellis Campus is a separate parcel of land from the Existing Nellis Site, located within the Base. The Borrower may, at its option, extend the term of the Ground Lease for two additional periods of five years each, and one additional period of three years, provided that the Borrower must (i) provide notice to the Nellis Lessor within 180 days prior to the expiration of the then-current Ground Lease term and (ii) not be in default under the Ground Lease. The Borrower pays annual rent under the Ground Lease in an amount equal to $26,000, subject to annual increase in the amount of the lesser of (i) three percent and (ii) the rise in the Consumer Price Index. The Borrower will pay no rent under the Ground Lease if the Nellis Lessor determines that, during any period from September 1 to May 31 of any year, 20% or more of Borrower s students at the New Nellis Campus are a Military-Connected Student, and the Borrower is not also operating at the Existing Nellis Site and paying no rent due to the enrollment of a sufficient percentage of Military-Connected Students. Furthermore, pursuant to the Ground Lease, the Borrower does not have to pay any rent from July 31, 2017 to July 31, 2019 as long as it is diligently pursuing the construction of the New Nellis Campus while also concurrently operating a K-8 school at the Existing Nellis Site. Currently, over 90% of students enrolled at the Existing Nellis Site are Military-Connected Students, and the Borrower expects over 90% of students at the New Nellis Campus going forward to be Military- Connected Students. Accordingly, the Borrower expects to continue to not be required to pay rent under the Existing Nellis Lease or the Ground Lease. The New Nellis Campus is currently vacant. The Borrower currently plans to construct, furnish and equip a charter school campus on the New Nellis Campus. The Nellis Project comprises the payment of certain soft costs related to the preparation of future construction at the New Nellis Campus, in the amount of approximately $1,260,798, including architect fees and site work. The Borrower anticipates issuing the Series 2018 Bonds in Summer 2018, in an estimated par amount of approximately $16.65 million, of which approximately $11 million is expected to be applied to finance the construction of the New Nellis Campus and approximately $3.5 million is expected to be applied for the acquisition of the Tamarus Campus. See THE SERIES 2017 BONDS Additional Bonds herein. The Borrower currently operates pre-kindergarten through grade 6 at the Existing Nellis Site, with an enrollment of 704 in the school year. The capacity of the existing charter school facilities at the Existing Nellis Site is 790. Upon completion of the planned improvements to the New Nellis Campus, expected to be completed prior to the start of the school year, the Borrower expects to operate prekindergarten through grade eight of its charter school operations at the New Nellis Campus, with an enrollment of approximately 890 students. See APPENDIX A CERTAIN INFORMATION REGARDING THE 16

23 BORROWER ACADEMIC AND SCHOOL OPERATIONS Enrollment, Attendance & Student Retention attached hereto. Appraisals General. American Property of Nevada Consultants and Appraisers, Inc. ( American Property ), appraised the sites and the buildings comprising the Centennial Hills Campus and the Centennial Hills Annex. Horizon Village Appraisal ( Horizon and, together with American Property, the Appraisers ) appraised the site and buildings comprising the Sandy Ridge Campus. In that connection, the Appraisers prepared (i) an asis market value of the fee interest in the Sandy Ridge Campus, with an effective date of December 27, 2013 (the Sandy Ridge Appraisal ); (ii) an as-is market value of the fee interest in the Centennial Hills Annex, with an effective date of April 18, 2017 (the Centennial Hills Annex Appraisal ); and (iii) an as-is market value of the fee interest in the Centennial Hills Site, with an effective date of September 26, 2017 (the Centennial Hills Site Appraisal and, together with the Sandy Ridge Appraisal and the Centennial Hills Annex Appraisal, the Appraisals ). The Centennial Hills Site Appraisal employed two different approaches: (i) the income approach, based on the principle of anticipation, and that value is the present worth of anticipated future benefits or income forecast to be derived from ownership of the property rights being appraised; and (ii) the sales comparison approach, based on the premise that an informed, prudent and rational purchaser would pay no more for a property than the cost to acquire a similar, competitive property with the same utility as of the date of valuation. The Sandy Ridge Appraisal also employed two different approaches: (i) the sales comparison approach, and (ii) the cost approach, based on the principal that a prudent purchaser would not pay more than the cost of the reproduction of a substitute property having the same utility as the subject property. The Centennial Hills Annex Appraisal employed the sales comparison approach. Appraisal Amounts. The Sandy Ridge Appraisal estimates that the as-is market value of the fee interest in the Sandy Ridge Campus, as of December 27, 2013, was $9,300,000. The Centennial Hills Annex Appraisal estimates the as-is market value of the fee interest in the Centennial Hills Annex, as of April 18, 2017, was $760,000. The Centennial Hills Site Appraisal estimates the as-is market value of the fee interest in the Centennial Hills Site, as of September 26, 2017, was $7,075,000. The following table summarizes the appraised values of the Sandy Ridge Campus and Centennial Hills Campus. THE PROJECT Appraised Value Summary Facility Property Interest Appraised Value Date of Value Sandy Ridge Campus Fee simple $9,300,000 December 27, 2013 Centennial Hills Campus Centennial Hills Site Fee simple 7,075,000 September 26, 2017 Centennial Hills Annex Fee simple 760,000 April 18, 2017 Total Appraised Value $17,135,000 Source: The Borrower. The total appraised value of the Sandy Ridge Campus and Centennial Hills Campus of $17,135,000 is equal to approximately 76.3% of the aggregate par amount of the Bonds expected to be outstanding upon the issuance of the Series 2017 Bonds (including the outstanding par amount of the Series 2014 Bonds of $8,930,000 and the par amount of the Series 2017 Bonds of $13,520,000, totaling $22,450,000 in aggregate). See CERTAIN RISK FACTORS Limitations of Appraisals herein. 17

24 Limitations. The summaries of the Appraisals contained in this section are not meant to be exhaustive, and reference should be made to such reports for a complete recital of their respective terms. Complete copies of the Appraisals are available upon request from the Underwriter. The value of each portion of the Project as estimated in the Appraisals represents only the opinion of the respective Appraiser, and only as of the effective dates. The appraised value of the Sandy Ridge Campus is over three years old. The Appraisers have not been engaged to update or revise the estimates contained in the Appraisals since their effective dates. See CERTAIN RISK FACTORS Limitations of Appraisals herein. DEBT SERVICE SCHEDULE The following table sets forth, for each year ended July 1, the amounts required each year to be paid with respect to the Bonds, assuming no prepayment other than for mandatory sinking fund redemptions. Period Ending Series 2014 Bonds Series 2017A Bonds (1) Series 2017B Bonds (1) Total Bonds July 1 Debt Service Principal Interest Principal Interest Debt Service 2018 $633, $349, $20, $1,003, , , , ,312, , , $160, , ,469, , , , , ,468, , , , , ,466, , , , , ,469, , $120, , , , ,470, , , , ,471, , , , ,469, , , , ,472, , , , ,468, , , , ,469, , , , ,468, , , , ,466, , , , ,467, , , , ,467, , , , ,470, , , , ,467, , , , ,466, , , , ,468, , , , ,468, , , , ,466, , , , ,467, , , , ,470, , , , ,471, , , , ,469, ,272, , , ,105, , , , , , , , , , , , , , , , , , , , , , , , , , , , Totals $17,757, $12,760, $15,743, $760, $165, $47,186, (1) Figures may not sum to totals due to rounding. Also, debt service is shown gross of interest earnings on the Reserve Account. 18

25 Limited Obligations of the Authority SECURITY AND SOURCES OF PAYMENT FOR THE BONDS THE SERIES 2017 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE FUNDS PLEDGED FOR THEIR PAYMENT PURSUANT TO THE INDENTURE AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY AUTHORITY MEMBER, ANY SPONSOR, ANY AUTHORITY INDEMNIFIED PERSON, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2017 BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE SERIES 2017 BONDS ARE NOT A DEBT OF THE STATE OF WISCONSIN OR ANY AUTHORITY MEMBER AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY AUTHORITY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2017 BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2017 BONDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF ANY AUTHORITY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2017 BONDS NOR THE FAITH AND CREDIT OF THE AUTHORITY, ANY SPONSOR OR ANY AUTHORITY INDEMNIFIED PERSON SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2017 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER. THE SERIES 2017 BONDS ARE NOT AN OBLIGATION OF THE STATE OF NEVADA OR ANY AGENCY OR POLITICAL SUBDIVISION THEREOF. Parity Nature of Obligations The Series 2017 Bonds are issued as Additional Bonds secured on a parity basis with the Series 2014 Bonds issued pursuant to the Indenture and any Additional Bonds which may hereafter be issued under the Indenture. The Borrower anticipates issuing the Series 2018 Bonds in June 2018, which if issued will be issued and secured on a parity basis with the Series 2014 Bonds and Series 2017 Bonds, along with any other Additional Bonds which may be hereafter issued under the Indenture. Payments Under the Indenture The Authority has executed and delivered the Indenture and absolutely assigned to the Trustee all of its rights, title and interest in and to the Payments (as defined below), the Loan Agreement (except for the right to receive any administrative fees and expenses payable to the Authority, the right to receive any indemnification and the right to receive any notices and reports), the Deeds of Trust, and all moneys and investments (excluding proceeds of the sale of Bonds) in the funds established thereunder (except the Rebate Fund) for the benefit, security and protection of all present and future registered owners of the Bonds. The Bonds are payable solely from the Payments under the Indenture and funds provided therefor in the Indenture. Payments, under the Indenture, means (i) all moneys, if any, received by the Trustee directly from the Borrower pursuant to the Loan Agreement, including Loan Repayments (as defined herein); and (ii) all income derived from the investment of any money in any fund or account established pursuant to the Indenture. 19

26 Under the Loan Agreement, Gross Revenues will be used to pay, among other things, the following (which collectively constitute the Loan Repayments ): (i) (ii) (iii) an amount equal to the aggregate amount of interest payable by the Authority on the then Outstanding Bonds; on or before the maturity of the Bonds, an amount equal to the principal amount with respect to the Bonds; and on or before any redemption date, such amounts as shall, together with any other money available therefor, be sufficient to pay all amounts, if any, required to redeem the Bonds pursuant to the Indenture, including any related redemption premium. The Loan Repayments and all other amounts provided in the Loan Agreement will be payable in such lawful money of the United States of America as at the time of payment will be legal tender for the payment of public and private debts. All deposits under the Loan Agreement will be made at the corporate trust office of the Trustee, or at such other location as will be designated in writing by the Trustee to the Borrower. The Borrower will pay, or cause to be paid, the Loan Repayments from the Gross Revenues of the Borrower, or from any other legally available funds, without any further notice thereof except as may be specifically required by the Loan Agreement. The Loan Repayments payable by the Borrower under the Loan Agreement are expected to be equal to an amount which, together with other funds in the Revenue Fund then available for the payment of principal and interest on the Bonds, will be sufficient to provide for the payment in full of the interest on, premium, if any, and principal of the Bonds as the same become due and payable. Gross Revenues, under the Indenture, means for any Fiscal Year, all of the revenues, income, cash receipts and other money received by the Borrower, or received by the Trustee on behalf of the Borrower pursuant to the Indenture, that are legally available for payment of the obligations of the Borrower under the Loan Agreement. Allocation of Revenues The Trustee will deposit the Payments to the Revenue Fund. On or before the twenty-fifth (25 th ) day of each month, the Trustee will transfer from the Revenue Fund and deposit into the following respective accounts (each of which the Trustee will establish and maintain within the Revenue Fund) and then to the Rebate Fund, the following amounts, in the following order of priority, the requirements of each such account or fund (including the making up of any deficiencies in any such account resulting from lack of revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account or fund subsequent in priority: (1) To the Interest Account, one-sixth of the aggregate amount of interest becoming due and payable on the next succeeding Interest Payment Date on all Bonds then Outstanding and all Parity Debt, until the balance in said account is equal to said aggregate amount of interest; (2) To the Principal Account, one-twelfth of the aggregate amount of principal becoming due to redeem or pay, until the balance in said Principal Account is equal to said aggregate amount of such principal and Mandatory Sinking Account Payments, plus one twelfth of the aggregate amount of principal becoming due and payable on Parity Debt; provided that from the date of delivery of the Bonds until the first Principal Payment Date with respect to the Bonds (if less than twelve months), transfers to the Principal Account will be sufficient on a monthly pro rata basis to pay the principal becoming due and payable on said Principal Payment Date; 20

27 (3) To the Reserve Account, (i) one-twelfth of the aggregate amount of each prior withdrawal from the Reserve Account for the purpose of making up a deficiency in the Interest Account or Principal Account (until deposits on account of such withdrawal are sufficient to fully restore the amount withdrawn), provided that no deposit need be made into the Reserve Account if the balance in said account is at least equal to the Reserve Account Requirement or with respect to payments on Parity Debt not secured by the Reserve Account, and (ii) in the event the balance in said account will be less than the Reserve Account Requirement due to valuation of the Eligible Securities deposited therein in accordance with the provisions of the Indenture, the amount necessary to increase the balance in said account to an amount at least equal to the Reserve Account Requirement (until deposits on account of such valuation deficiency are sufficient to increase the balance in said account to said amount); (4) To the Repair and Replacement Fund, in the event the balance in said account is less than the Repair and Replacement Fund Requirement, the amount necessary to increase the balance in said account to an amount equal to the Repair and Replacement Fund Requirement; and (5) To the Rebate Fund, such amounts as are required to be deposited therein by the Indenture (including the Tax Certificate). Any money remaining in the Revenue Fund after the foregoing transfers will be transferred on July 1 of each year by the Trustee to the Borrower, free and clear of the lien of the Indenture. See APPENDIX C SUMMARY OF PRINCIPAL BOND DOCUMENTS THE LOAN AGREEMENT attached hereto. Repair and Replacement Fund. The Trustee shall establish, maintain and hold in trust a separate fund designated as the Repair and Replacement Fund, which shall be used solely for the purposes of paying for capital items not budgeted as ordinary maintenance and repair costs related to the Facility. When (i) the amount of principal of, and premium, if any, and interest on the Outstanding Bonds is equal to or less than the sum of the balance of the Revenue Fund, the balance of the Redemption Fund and the balance of the Repair and Replacement Fund, and (ii) all other amounts owed under the Loan Agreement and the Indenture have been paid, moneys held in the Repair and Replacement Fund may be deposited into the Revenue Fund and credited against Loan Repayments required under the Loan Agreement. Under the Indenture, Repair and Replacement Fund Requirement means $100,000. Reserve Account All amounts in the Reserve Account will be used and withdrawn by the Trustee solely for the purpose of making up any deficiency in the Interest Account or Principal Account, or (together with any other moneys available therefor) for the payment or redemption of all Outstanding Bonds. Amounts on deposit in the Reserve Account will be valued by the Trustee at their fair market value each January 1 and July 1, and the Trustee will notify the Borrower of the results of such valuation. For such purpose, the Trustee may utilize and rely upon such commercially reasonable securities pricing services available to it, including those within the accounting system of the Trustee. If the amount on deposit in the Reserve Account on the first (1 st ) Business Day following such valuation is less than one hundred percent (100%) of the Reserve Account Requirement, the Borrower has agreed in the Loan Agreement to make the deposits to the Reserve Account required by the Indenture. If the amount on deposit in the Reserve Account on the first (1 st ) Business Day following such valuation is greater than the Reserve Account Requirement, the excess will be withdrawn from the Reserve Account and transferred to the Revenue Fund. Notwithstanding the foregoing, the Reserve Account may also secure Parity Debt provided that the Reserve Account is funded in an amount equal to the Reserve Account Requirement, calculated assuming that the term Bonds in the definition of Reserve Account Requirement includes the Bonds and such Parity Debt. 21

28 Reserve Account Requirement means as of any date of calculation, an amount which will be equal to the least of (a) ten percent (10%) of the proceeds of the Bonds; (b) maximum annual debt service with respect to the Bonds Outstanding, (c) one hundred twenty-five percent (125%) of average annual debt service with respect to the Bonds, or (d) for the last Bond Year only, the total debt service with respect to the Bonds Outstanding. Annual debt service and average annual debt service, for purposes of this definition, will be calculated on the basis of twelve-month periods ending on July 1 of any year in which Bonds are Outstanding. Certain Financial Covenants under the Loan Agreement Under the Loan Agreement, the Borrower covenants as follows: Days Cash on Hand Requirement. Borrower covenants and agrees to maintain equal to or greater than 60 Days Cash on Hand, calculated as of June 30 in each Fiscal Year, so long as any Bonds are Outstanding. The Borrower will require its auditor to provide to the Borrower and Trustee, by no later than December 31 of each year, a certification that the Days Cash on Hand requirement has been met as of the preceding June 30 test date. The foregoing is subject to the qualification that if applicable state or federal laws or regulations, or the rules and regulations of agencies having jurisdiction, do not permit the Borrower to accumulate such level of Days Cash on Hand, then this covenant will be deemed to be revised to conform to the then-prevailing laws, rules or regulations. If the Days Cash on Hand for any testing date is less than 60 days, then, upon the written direction of the Beneficial Owners of a majority in principal amount of the Bonds, Borrower will promptly employ an Independent Consultant acceptable to the Beneficial Owners of a majority in principal amount of the Bonds to review and analyze the operations and administration of Borrower, submit to the Trustee written reports, and make such recommendations as to the operation and administration of the Borrower as such Independent Consultant deems appropriate, including any recommendation as to a revision of the methods of operation of Borrower. Borrower agrees to consider any recommendations by the Independent Consultant and, to the fullest extent practicable and allowed by law and consistent with its covenants hereunder, to adopt and carry out such recommendations. Days Cash on Hand means: (i) the sum of cash and cash equivalents as shown on Borrower s audited financial statements for each Fiscal Year; divided by (ii) the quotient of Operating Expenses, as shown on the audited financial statements for the preceding Fiscal Year, divided by 365. Operating Expenses means fees and expenses of the Borrower, including maintenance, repair expenses, utility expenses, administrative and legal expenses, miscellaneous operating expenses, advertising costs, payroll expenses (including taxes), the cost of material and supplies used for current operations of the Borrower, the cost of vehicles, equipment leases and service contracts, taxes upon the operations of the Borrower not otherwise mentioned in the Loan Agreement, charges for the accumulation of appropriate reserves for current expenses not annually recurrent, but which are such as may reasonably be expected to be incurred in accordance with generally accepted accounting principles, all in such amounts as reasonably determined by the Borrower; provided however, Operating Expenses will not include (i) depreciation and amortization expenses; (ii) those expenses which are actually paid from any revenues of the Borrower which have not been pledged for payment of the Bonds; and (iii) expenditures for capitalized assets. Debt Service Coverage Ratio. Borrower covenants and agrees to budget for and maintain a Debt Service Coverage Ratio for each Fiscal Year of not less than 1.10:1.00. Borrower will require its auditor to provide the Trustee by no later than December 31 of each year, a certification of the Debt Service Coverage Ratio as of the end of the preceding Fiscal Year. If the Debt Service Coverage Ratio for any testing date is less than 1.10:1.00, then, upon the written direction of the Beneficial Owners of a majority in principal amount of the Bonds, Borrower will promptly employ an Independent Consultant acceptable to the Beneficial Owners of a majority in principal amount of 22

29 the Bonds to review and analyze the operation and administration of Borrower, submit to the Trustee written reports, and make such recommendations as to the operation and administration of the Borrower as such Independent Consultant deems appropriate, including any recommendation as to a revision of the methods of operation of Borrower; Borrower agrees to consider any recommendations by the Independent Consultant and, to the fullest extent practicable and allowed by law and consistent with its covenants hereunder, to adopt and carry out such recommendations. So long as the Borrower is otherwise in full compliance with the obligations under the Loan Agreement, including following, to the fullest extent practicable, the recommendations of the Independent Consultant, it will not constitute an Event of Default if the Debt Service Coverage Ratio for any Fiscal Year is less than 1.10:1.0 for such Fiscal Year (as evidenced by the Borrower s audited financial statements for such Fiscal Year). Notwithstanding the immediately preceding paragraph, it will constitute an Event of Default hereunder if the Debt Service Coverage Ratio for any Fiscal Year is less than 1.0:1.0 for such Fiscal Year (as evidenced by the Borrower s audited financial statements for such Fiscal Year). Debt Service Coverage Ratio means, for any Fiscal Year, the ratio obtained by dividing the Net Income Available for Debt Service for such Fiscal Year by the Debt Service for such period, as such ratio is certified to by an accountant of the Borrower. Net Income Available for Debt Service means, for any period of determination thereof, the Gross Revenues of the Borrower for such period (not including any insurance recoveries), plus the interest earnings on moneys held in the Reserve Account (but only to the extent that such interest earnings are transferred to the Revenue Fund) minus the total Operating Expenses of Borrower for such period but excluding (i) interest paid on indebtedness, (ii) any profits or losses which would be regarded as extraordinary items under Generally Accepted Accounting Principles, (iii) gain or loss in the extinguishment of indebtedness of Borrower, (iv) proceeds of the Bonds and any other indebtedness permitted by the Loan Agreement, and (v) proceeds of insurance policies, other than policies for business interruption insurance, maintained by or for the benefit of Borrower, the proceeds of any sale, transfer or other disposition of the Facilities or any other of Borrower s assets by the Borrower, and any condemnation or any other damage award received by or owing to the Borrower. Debt Service means, for any period of time, the sum of (a) the interest payable during such period on all Outstanding Bonds, (b) that portion of the principal amount of all Outstanding Bonds maturing on each principal payment date during such period, and (c) that portion of the principal amount of all Outstanding Bonds which are Term Bonds required to be redeemed or paid from Sinking Fund Installments during such period (together with the redemption premiums, if any, thereon). Limitations on Additional Indebtedness and Parity Debt. (a) The Borrower may incur Short-Term Indebtedness in an amount that does not exceed ten percent (10%) of the Gross Revenue of the Borrower for the most recently completed Fiscal Year. Any Short- Term Indebtedness incurred by the Borrower may not be secured by any security interest in or lien against the Facilities. (b) The Borrower may incur Long-Term Indebtedness on parity with all other Long-Term Indebtedness only as provided in the Loan Agreement. Prior to incurring or otherwise becoming liable with respect to any Long-Term Indebtedness, the Borrower will furnish to the Authority and the Trustee a certificate of the Authorized Representative of the Borrower which will: (i) incurred; state the general purpose for which such Long-Term Indebtedness is proposed to be 23

30 (ii) state the maximum aggregate principal amount of proposed Long-Term Indebtedness to be incurred, the maturity date or dates thereof, and the interest rate or rates with respect thereto; and (iii) be accompanied by an Opinion of Counsel for the Borrower to the effect that all conditions precedent specified in the Indenture and in the Loan Agreement for incurring such Long- Term Indebtedness have been satisfied. (c) The Borrower will not incur any Long-Term Indebtedness that refunds or may refund any Outstanding Bonds unless, in addition to the filing of the items described in subsection (b) above: (i) the Borrower will file with the Authority and the Trustee a report of an Independent Consultant to the effect that the proceeds of the Long-Term Indebtedness, together with any other funds deposited with the Trustee for such purpose, will be not less than an amount sufficient to pay the principal of and the redemption premium, if any, on the Outstanding Bonds to be refunded and the interest which will become due and payable thereon on or prior to the redemption date or stated maturity thereof, or that the principal of and interest on Government Obligations purchased from such proceeds or from other funds provided by the Borrower and deposited in trust with the Trustee, which Government Obligations do not permit redemption thereof at the option of the issuer thereof, when due and payable (or redeemable at the option of the holder) will provide sufficient money, together with any other money which shall have been deposited irrevocably with the Trustee for such purpose, to pay such principal, redemption premium, if any, and interest thereon; and (ii) the Borrower will file with the Authority and the Trustee an opinion of Bond Counsel to the effect that such Long-Term Indebtedness and the refunding of Outstanding Bonds with the proceeds thereof will not cause interest on any Outstanding Bonds to become includable in gross income for federal income tax purposes. (d) (i) Except as provided in paragraph (c) above and in paragraph (d)(ii) and (e) below, the Borrower will not incur any Long-Term Indebtedness unless the Borrower furnishes to the Trustee (A) a Certificate of the Borrower to the effect that the Debt Service Coverage Ratio for the most recent fiscal year totaled at least 1.10:1.0 (including such requirements for the proposed Long-Term Indebtedness but excluding such requirements for any Indebtedness to be refinanced thereby), and (B) a Certificate of the Borrower demonstrating that the Debt Service Coverage Ratio beginning after the Fiscal Year in which any improvements being financed by such proposed Long-Term Indebtedness are to be placed in service, or, if no improvements are to be financed thereby, beginning with the first Fiscal Year after the Fiscal Year in which the proposed Long-Term Indebtedness is to be incurred, will be at least 1.20:1.00 (including such requirements for the proposed Long-Term Indebtedness but excluding such requirements for any then outstanding Long- Term Indebtedness or Bonds to be refinanced by the proposed Long-Term Indebtedness) for each Fiscal Year beginning with the second Fiscal Year after the Fiscal Year in which any improvements being financed by such proposed Long-Term Indebtedness are to be placed in service, or, if no improvements are to be financed thereby, beginning with the first Fiscal Year after the Fiscal Year in which the proposed Long-Term Indebtedness is to be incurred, but before the final stated maturity of all then Outstanding Bonds. (ii) Notwithstanding the provisions of paragraph (d)(i) above, the Borrower may incur Long-Term Indebtedness: (A) if and to the extent necessary to provide additional funds for completing payment of the cost of any improvements or alterations for which any Long-Term Indebtedness will have been incurred at one time or from time to time under the Loan Agreement; or (B) for refinancing the principal amount of any outstanding Long-Term Indebtedness provided the Debt Service on Long- Term Indebtedness (including such requirements for the proposed Long-Term Indebtedness but excluding such requirements for the Long-Term Indebtedness to be refinanced thereby) for each Fiscal Year after the Fiscal Year in which the proposed Long-Term Indebtedness is to be incurred but before the final stated maturity of all then Outstanding Bonds will not exceed the amount of Debt Service that would have been required for each such Fiscal Year had such proposed Long-Term Indebtedness not been incurred. (e) The Borrower will not incur any additional Indebtedness secured in whole or in part by Liens on the Facilities or the Gross Revenues that are senior to the Deeds of Trust and the security interest in the 24

31 Gross Revenues granted by the Loan Agreement. The Borrower will not incur any Parity Debt secured in whole or in part by the Facilities or the Gross Revenues unless the Borrower has delivered evidence to the Trustee that the Debt Service Coverage Ratio for the preceding Fiscal Year was equal to or greater than 1.10:1.00 and that the projected Debt Service Coverage Ratio for the Fiscal Year in which the Parity Debt will be incurred and for one subsequent Fiscal Year taking into account such Parity Debt will be equal to or greater than If the Parity Debt involves the issuance of Additional Bonds, the Borrower also will be subject to and will satisfy any additional requirements of the Indenture relative to the issuance of Additional Bonds. The Borrower covenants that except as specifically provided in herein, the Borrower will not create, assume, incur or suffer to be created, assumed or incurred any Lien other than Permitted Liens. The Borrower may incur Indebtedness subordinate to the obligations of the Borrower under the Loan Agreement and may create Liens on the Facilities and the Gross Revenues, or other asset of the Borrower securing such subordinate Indebtedness, so long as such Indebtedness (i) is subordinate to the Deeds of Trust and obligations under the Loan Agreement and (ii) is incurred by the Borrower in the ordinary course of business and does not exceed $1,000,000. Indebtedness means all obligations for borrowed money, installment sales and capitalized lease obligations, incurred or assumed by such Person, as applicable, including Guaranties, Long-Term Indebtedness, Short-Term Indebtedness or any other obligation for payments of principal and interest with respect to money borrowed. Short-Term Indebtedness means all Indebtedness having an original maturity less than or equal to one year and not renewable at the option of the Borrower for a term greater than one year from the date of original incurrence or issuance unless, by the terms of such Indebtedness, no Indebtedness is permitted to be outstanding thereunder for a period of at least fifteen (15) consecutive days during each Fiscal Year. Guaranty means all loan commitments and all obligations of any Person guaranteeing in any manner whatever, whether directly or indirectly, any obligation of any other Person that would, if such other Person were the applicable borrower, constitute Indebtedness. Long-Term Indebtedness means Indebtedness other than Short-Term Indebtedness or Interim Indebtedness. Interim Indebtedness means all Indebtedness having an original maturity less than or equal to five years and not renewable at the option of the Borrower for a term greater than five years from the date of original incurrence of issuance. Deeds of Trust on the Facilities In connection with the issuance of the Series 2014 Bonds, the Borrower entered into that certain Deed of Trust, dated as of May 1, 2014, by the Borrower, as trustor, creating a lien on the Prior Facility that the Borrower owns in fee simple for the benefit of the Trustee, as trustee for the Holders of the Bonds. In connection with the issuance of the Series 2017 Bonds, the Borrower, as trustor, will enter into a First Amendment to Deed of Trust for the Sandy Ridge Campus and a Deed of Trust for the Centennial Hills Campus (the Deeds of Trust ), creating a lien on the Borrower s fee simple interest in such Facilities, for the benefit of the Trustee, as trustee for the Holders of the Bonds. The Deeds of Trust will secure the payment and performance of the Borrower s obligations with respect to the Loan Agreement. As further described below, no Deeds of Trust on the Existing Nellis Site or New Nellis Campus will be delivered in connection with the issuance of the Series 2017 Bonds. The Borrower will obtain, at its own cost and expense, an ALTA policy or policies of title insurance regarding the Sandy Ridge Campus and Centennial Hills Campus, or an endorsement to such policy at the time of and dated as of the date of issuance of the Series 2017 Bonds in an aggregate amount, together with such 25

32 title insurance relating to the Prior Facility, not less than the aggregate principal amount of the Bonds to be Outstanding after the issuance of the Series 2017 Bonds, payable to the Trustee, insuring the title of the Borrower to such Facilities, subject only to Permitted Liens, issued by a title insurance company qualified to do business in the State. See CERTAIN RISK FACTORS Limitations On Value of the Facilities and to Remedies Under the Deeds of Trust herein. No Deeds of Trust on Existing Nellis Site or New Nellis Campus. The Borrower will not enter into deeds of trust relating to its leasehold interests in either the Existing Nellis Site or the New Nellis Campus in connection with the issuance of the Series 2017 Bonds. In connection with the anticipated issuance of the Series 2018 Bonds, and concurrently therewith, the Borrower expects to execute and deliver a leasehold deed of trust for the benefit of the Trustee with respect to the New Nellis Campus to secure the payment and performance of the Borrower s obligations with respect to the Loan Agreement. Formation and Governance THE AUTHORITY In early 2010, both houses of the Wisconsin Legislature passed 2009 Wisconsin Act 205 ( Act 205 ), which was signed into law by the Governor of Wisconsin on April 21, Act 205 added Section to the Wisconsin Statutes (the Statute ) authorizing two or more political subdivisions to create a commission to issue bonds under the Statute. Before an agreement for the creation of such a commission could take effect, Act 205 requires that such agreement be submitted to the Wisconsin Attorney General to determine whether the agreement is in proper form and compatible with the laws of the State of Wisconsin. The Authority was formed upon execution of an Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority dated September 28, 2010 (as so amended and restated, and as may be further amended and restated from time to time, the Joint Powers Agreement ) among Adams County, Wisconsin, Bayfield County, Wisconsin, Marathon County, Wisconsin, Waupaca County, Wisconsin and the City of Lancaster, Wisconsin (each an Authority Member and, collectively, the Authority Members, which term shall include any political subdivision designated in the future as a Member of the Authority pursuant to the Joint Powers Agreement). The Joint Powers Agreement was approved by the Wisconsin Attorney General on September 30, The Statute provides that only one commission may be formed thereunder. Pursuant to the Statute, the Authority is a unit of government and a body corporate and politic separate and distinct from, and independent of, the State of Wisconsin and the Authority Members. The Authority was established by local governments, primarily for local governments, for the public purpose of providing local governments a means to efficiently and reliably finance projects that benefit local governments, nonprofit organizations and other eligible private borrowers in the State of Wisconsin and throughout the country. Powers Under the Statute, the Authority has all of the powers necessary or convenient to any of the purposes of Act 205, including the power to issue bonds, notes or other obligations or refunding obligations to finance or refinance a project, make loans to, lease property from or to, and enter into agreements with a participant or other entity in connection with financing a project. The proceeds of bonds issued by the Authority may be used for a project in the State of Wisconsin or any other state or territory of the United States, or outside the United States if a participating borrower is incorporated and maintains its principal place of business in, the United States or its territories. The Statute defines project as any capital improvement, purchase of receivables, property, assets, commodities, bonds or other revenue streams or related assets, working capital program, or liability or other insurance program, located within or outside the State of Wisconsin. 26

33 Local Approval Received Pursuant to Subsection (11)(a) of the Statute and Section 4 of the Joint Powers Agreement, financing for any capital improvement project located outside the State of Wisconsin requires approval from the governing body or highest-ranking executive or administrator of at least one political subdivision within whose boundaries the capital improvement project is located (the Authority Local Approval Requirement ). The issuance of the Series 2017 Bonds was approved on October 23, 2017 by the Board of Supervisors of Marathon County, Wisconsin, an Authority Member duly authorized to give such approval on behalf of the Authority after public notice and hearing. Based upon information provided by the Borrower, and without independent investigation, the financing of the Project and the issuance of the Series 2017 Bonds by the Authority was approved by the Board of Commissioners of Clark County, Nevada on October 17, 2017, after public notice and hearing. Such approvals were given in satisfaction of and in accordance with the requirements of Section 147(f) of the Code and the Authority Local Approval Requirement, as applicable. Governing Body The Joint Powers Agreement provides for a Board of Directors of the Authority (the Board ) consisting of seven directors (each a Director and collectively, the Directors ), a majority of whom are required to be public officials or current or former employees of a political subdivision located in the State of Wisconsin. The Directors serve staggered three-year terms. The Directors are selected by majority vote of the Board based upon nomination from the organization that nominated the predecessor Director. Four Directors are nominated by the Wisconsin Counties Association, and one Director is nominated from each of the National League of Cities, the National Association of Counties and the League of Wisconsin Municipalities (collectively, the Sponsors and each a Sponsor ). Each of the nominating organizations may also nominate an alternate Director for each Director it nominates to serve on the Board in place of and in the absence or disability of a Director. Directors and alternate Directors may be removed and replaced at any time by the Board upon recommendation of the Sponsor that nominated such Director. The Directors as of the date of this Limited Offering Memorandum are identified in the table below. There is currently one vacant Board seat (representing the nominee of the National League of Cities) and one Alternate Director (nominated by the Wisconsin Counties Association). Name Title Current Term Expires (May 31) Position William Kacvinsky Chair 2018 Former Board Chair Bayfield County, Wisconsin Jerome Wehrle Vice Chair 2018 Former Mayor City of Lancaster, Wisconsin Heidi Dombrowski Treasurer 2019 Finance Director Waupaca County, Wisconsin Allen Buechel Secretary 2019 County Executive Fond du Lac County, Wisconsin Del Twidt Director 2019 Former Board Chair Buffalo County, Wisconsin Michael Gillespie Director 2020 Former Chair Madison County, Alabama Board of Commissioners John West Alternate Director ** 2019 Board Chair Adams County, Wisconsin ** Mr. West is an alternate for Directors Buechel, Dombrowski and Twidt. The Authority has no employees and contracts with a full-service program management firm, GPM Municipal Advisors, LLC, to manage the day-to-day operations of the Authority including, but not limited to, staff and administrative support and ongoing compliance matters. All of these services provided by GPM Municipal Advisors, LLC are subject to review and approval by the Board. Resolution The Board adopted a resolution approving the issuance of the Series 2017 Bonds on October 25,

34 Special Limited Obligations of the Authority THE SERIES 2017 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE FUNDS PLEDGED FOR THEIR PAYMENT PURSUANT TO THE INDENTURE AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY AUTHORITY MEMBER, ANY SPONSOR, ANY AUTHORITY INDEMNIFIED PERSON (AS DEFINED IN THE LOAN AGREEMENT), THE STATE OF WISCONSIN, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2017 BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE SERIES 2017 BONDS ARE NOT A DEBT OF THE STATE OF WISCONSIN OR ANY AUTHORITY MEMBER AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY AUTHORITY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2017 BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2017 BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF ANY AUTHORITY MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2017 BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY, ANY SPONSOR OR ANY AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2017 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER. Other Obligations The Authority has issued, sold and delivered in the past, and expects to issue, sell and deliver in the future, obligations other than the Series 2017 Bonds, which other obligations are and will be secured by instruments separate and apart from the Indenture and the Series 2017 Bonds. The holders of such obligations of the Authority will have no claim on the security for the Series 2017 Bonds, and the owners of the Series 2017 Bonds will have no claim on the security for such other obligations issued by the Authority. Limited Involvement of the Authority The Authority has not participated in the preparation of or reviewed any appraisal for the Series 2017 Facilities or any portion of any Series 2017 Facilities or any feasibility study or other financial analysis of the Project (as defined herein) or the Series 2017 Facilities or any portion of the Series 2017 Facilities and has not undertaken to review or approve expenditures for the Project, to supervise the construction of the Series 2017 Facilities, or to review or obtain any financial statements of the Borrower. The Authority s participation in the preparation of this Official Statement has been limited to the information herein under the captions THE AUTHORITY and ABSENCE OF MATERIAL LITIGATION The Authority (collectively, the Authority Portion ) and, except for the Authority Portion, the Authority has not reviewed or approved and is not responsible for any information in this Official Statement. 28

35 CERTAIN RISK FACTORS Investment in the Series 2017 Bonds involves substantial risks. The following information should be considered by prospective investors in evaluating the Series 2017 Bonds. However, the following does not purport to be an exclusive listing of risks and other considerations which may be relevant to investing in the Series 2017 Bonds, and the order in which the following information is presented is not intended to reflect the relative importance of any such risks. Certain factors which could result in a reduction of revenues available to the Borrower and a corresponding reduction in payments made to the Authority are discussed herein. General The Series 2017 Bonds are special and limited obligations of the Authority and are not a debt or liability of any Authority Member, the State of Wisconsin, or any political subdivision or agency thereof; other than the Authority to the limited extent set forth herein. The Series 2017 Bonds are secured by and payable solely from funds payable by the Borrower under the terms and conditions of the Loan Agreement, as described herein. The Borrower believes, based upon present circumstances (i.e., executed charter contract and current and projected enrollment), that it will generate sufficient revenues to meet its obligations under the Loan Agreement; however, the Borrower s charter contract may be terminated or not renewed, or the basis of the assumptions utilized by the Borrower to formulate this belief may otherwise change. NO REPRESENTATION OR ASSURANCE CAN BE MADE THAT THE BORROWER WILL CONTINUE TO GENERATE SUFFICIENT PLEDGED REVENUES TO MEET ITS OBLIGATIONS. THE BONDS ARE NOT AN OBLIGATION OF THE STATE OF NEVADA OR ANY AGENCY OR POLITICAL SUBDIVISION THEREOF. Economic and Other Factors Future economic and other factors may adversely affect the Borrower s revenues and expenses and, consequently, the Borrower s ability to make payments under the Loan Agreement. Among the factors that could have such adverse effects are: decreases in the number of students seeking to attend the Borrower at optimum levels for each grade level; decreases in the level of payments from the State of Nevada or other student enrollment-based funding by the federal government; decline in the ability of the Borrower and its management to provide education desired and accepted by the population served; economic developments in the affected service area, including inflation and interest rates; diminishment of the standing of the Borrower in its field; revocation of the Borrower s charter contract; competition from other educational institutions, including other borrowers, private schools, and schools in their respective school districts; lessened ability of the Borrower to attract and retain qualified teachers and staff at salaries that permit payment of debt service and expenses; increased costs associated with technological advances; changes in government regulation of the education industry or in the State charter school statutes; future claims for accidents or other torts at the Borrower s site and the extent of insurance coverage for such claims; and the occurrence of natural disasters, such as floods. Operating History; Reliance on Projections See Appendix A for information regarding current and projected enrollment of the Borrower. No assurance is given that such projections will be met, or that the number of students attending the Borrower s charter school operations may not diminish in the future. The projections of revenues and expenses contained in Appendix A are based upon the number of students projected to be enrolled by the Borrower and were prepared by the Borrower and have not been independently verified by any party other than the Borrower. No feasibility studies have been conducted with respect to operations of the Series 2017 Facilities. The projections included in this Official Statement and the appendices thereto are forward-looking statements and are subject to the general qualifications and limitations described herein. The Underwriter has 29

36 not independently verified the Borrower s projections set forth in Appendix A or otherwise, and makes no representations nor gives any assurances that such projections, or the assumptions underlying them, are complete or correct. Further, the projections relate only to a limited number of fiscal years, and consequently do not cover the entire period that the Bonds will be outstanding. The projections set forth in Appendix A assume the completion of the planned improvements at the New Nellis Campus as well as the issuance of the Series 2018 Bonds (which includes the acquisition of the Tamarus Campus). If the New Nellis Campus improvements were not completed as planned, the Borrower may have to continue operating the Nellis AFB Campus at the Existing Nellis Site, which it operates pursuant to the Existing Nellis Lease. The Existing Nellis Lease will terminate by its terms on June 23, Additionally, Appendix A includes two sets of projections: one assuming the opening of the Eastgate Campus, and one assuming the Eastgate Campus is not opened (as such term is defined in APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER attached hereto). See Construction Risks herein. The Tamarus Campus is currently encumbered by two 33 foot-wide easements for a roadway and public utilities (the Tamarus Road Easements ), the rights to which are owned by the United States Government for the benefit of Clark County. The Tamarus Road Easements are situated such that they run directly through the existing building located on the Tamarus Campus. The Tamarus Lessor (as defined in Appendix A hereto) is currently in negotiations with governmental authorities to terminate the Tamarus Road Easements. The Borrower expects the Tamarus Road Easements to be terminated, however it cannot guarantee whether, nor does it know when, such termination would occur. Failure to terminate the Tamarus Road Easements could result in the issuance of a lower amount of Series 2018 Bonds (if such bonds are indeed issued) and the Borrower not acquiring the Tamarus Campus. Additionally, if Clark County were in the future to enforce its rights under the Tamarus Road Easements, it could impair the Borrower s operations of the Tamarus Campus. THE BORROWER PREPARED THE PROJECTIONS BASED ON ASSUMPTIONS ABOUT FUTURE STATE FUNDING LEVELS AND FUTURE OPERATIONS OF THE BORROWER, INCLUDING STUDENT ENROLLMENT AND EXPENSES. THERE CAN BE NO ASSURANCE THAT ACTUAL ENROLLMENT REVENUES AND EXPENSES WILL BE CONSISTENT WITH THE ASSUMPTIONS UNDERLYING SUCH PROJECTIONS. MOREOVER, NO GUARANTEE CAN BE MADE THAT THE PROJECTIONS OF REVENUES AND EXPENSES INCLUDED HEREIN WILL CORRESPOND WITH THE RESULTS ACTUALLY ACHIEVED IN THE FUTURE BECAUSE THERE CAN BE NO ASSURANCE THAT ACTUAL EVENTS WILL CORRESPOND WITH THE PROJECTIONS UNDERLYING ASSUMPTIONS. ACTUAL OPERATING RESULTS MAY BE AFFECTED BY MANY FACTORS, INCLUDING, BUT NOT LIMITED TO, INCREASED COSTS, LOWER THAN ANTICIPATED REVENUES (AS A RESULT OF INSUFFICIENT ENROLLMENT, REDUCED STATE OR FEDERAL AID PAYMENTS, OR OTHERWISE), EMPLOYEE RELATIONS, CHANGES IN TAXES, CHANGES IN APPLICABLE GOVERNMENT REGULATIONS, CHANGES IN DEMOGRAPHIC TRENDS, CHANGES IN EDUCATION COMPETITION AND CHANGES IN LOCAL OR GENERAL ECONOMIC CONDITIONS. REFER TO APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER ATTACHED HERETO TO REVIEW THE PROJECTIONS, THEIR UNDERLYING ASSUMPTIONS, AND THE OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER SIGNIFICANTLY FROM PROJECTED RESULTS. REFER TO INTRODUCTION ABOVE, FOR QUALIFICATION AND LIMITATIONS APPLICABLE TO FORWARD-LOOKING STATEMENTS. Income and Property Tax Exemption Under present State of Nevada law and rulings, the Borrower is exempt from property taxes levied by political subdivisions of the State of Nevada so long as such property is used for charter school purposes 30

37 (although such property may be subject to special assessments for local improvements to the property). The political subdivisions where the Borrower s charter school facilities are located, including the Facilities, have recognized such exemption. Construction Risks The construction of the Sandy Ridge Project, and the planned construction of the New Nellis Campus, soft costs of which are being financed with proceeds of the Series 2017 Bonds and construction of which is expected to be financed with proceeds of the Series 2018 Bonds anticipated to be issued in Summer 2018, is generally subject to all typical construction related risks. Such risks include, among others, labor disputes, defective building materials, schedule delays, shortages in various labor trades, fire or other property or casualty damage, unanticipated subsoil conditions and financial difficulties on the part of or disputes with a construction manager, key suppliers, contractors or subcontractors. There can be no assurance that construction problems of the types described above, or other problems, will not frustrate the planned completion of any part of the construction of the Sandy Ridge Campus or New Nellis Campus. Key Management The creation of, and the philosophy of teaching in, charter schools generally initially may reflect the vision and commitment of a few key persons on the board of directors and/or the upper management of the charter school or its management organization ( Key Directors/Managers ). Loss of any such Key Directors/Managers, and the inability of the Borrower to find comparable qualified replacements, could adversely affect its operations or financial results. See Appendix A for more information regarding the management and leadership of the Borrower. State of Nevada Budget Like many states, the State of Nevada has experienced financial stress due to declining revenues from time to time. Financial stress could lead the legislature to reduce education funding levels which could have a material adverse effect on the Borrower s financial results and ability to pay debt service on the Bonds. Changes in Law; Annual Appropriation; Inadequate State Payments The Nevada Legislature has amended the Charter School Law a number of times since it was first enacted. Future amendments to the law may adversely affect the Borrower by withholding a percentage of the state payments if a charter school is deemed not to be in compliance with contract or charter provisions or State of Nevada and federal laws; by decreasing the charter term from six years to some other term; by requiring a State of Nevada body to make an assessment of each school s effectiveness every year; by limiting the number of students for which State of Nevada funds are available; by mandating new facilities or programs which may increase costs beyond projections; by reducing the maximum amount payable by the State of Nevada for students enrolled by the Borrower; by revising the relative responsibilities between public schools and the State of Nevada for financing schools (including the Borrower); or by eliminating the authority for State of Nevada funding to the Borrower. In addition, the Nevada Legislature must appropriate funds for public education including district schools and the Borrower each year, and it may not appropriate sufficient funds to enable the Borrower to pay debt service on the Bonds and meet budgeted expenses. Similarly, the State of Nevada allocation per student may be reduced or may not keep pace with expenses such that the aggregate state payments to the Borrower are inadequate to allow the Borrower to pay debt service on the Bonds and its operating expenses. If the state payments are insufficient, the Borrower may be unable to make all Loan Repayments, as and when required. See APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER OPERATING AND FINANCIAL INFORMATION and APPENDIX F CHARTER SCHOOLS IN NEVADA attached hereto. 31

38 No Taxing Authority/Dependence On State Payments The Borrower may not charge tuition and has no taxing authority. The primary source of revenues for payment of the Loan Payments are payments made by the State of Nevada to the Borrower relating to the Borrower s charter school operations, which are currently based on the Borrower s quarterly average daily enrollment. The obligation of the State of Nevada to make state payments or otherwise provide funds to the Borrower is conditioned upon the availability of funds appropriated or allocated for the payment of such obligation. The State of Nevada may experience downturns in its economy and tax revenues in the future, and there is a risk that the Nevada Legislature may not appropriate funds for such payments, or may not appropriate funds in a sufficient amount, to enable the Borrower to meet its general operating expenses and to make payments under the Loan Agreement representing debt service on the Series 2017 Bonds. In addition to general State of Nevada economic conditions, State of Nevada budget considerations may also adversely affect appropriations for charter school funding. Such state payments could be reduced or not keep pace with expenses such that the Borrower s revenues are inadequate to allow it to pay its operating expenses and to make payments under the Loan Agreement. Additionally, if funds are not allocated and available for the continuance of a charter school contract, the Borrower contract may be terminated by the charter school s sponsor at the end of the period for which funds are available. No liability would accrue to the charter school s sponsor, the Nevada State Board of Education or the State of Nevada in such event, and the State of Nevada will not be obligated or liable for any future payments or any damages as a result of such termination. Any event that would cause a delay, reduction or termination of payments from the State of Nevada would likely have a material adverse effect on the ability of the Borrower to make payments under the Loan Agreement representing debt service on the Series 2017 Bonds. In the event the State of Nevada were to withhold the payment of monies from the Borrower for any reason even a reason that is ultimately determined to be invalid or unlawful it is likely the Borrower would be forced to cease operations. Revocation, Non-Renewal or Expiration of Charter The Borrower currently holds a charter contract that expires. The charter contract may be renewed. In addition, the Charter may be terminated as a result of a material breach of the Charter or State Public Charter School Authority may elect to revoke a charter contract upon the failure of the Borrower to meet academic standards. While the Borrower believes it enjoys a good relationship with the State Public Charter School Authority and does not anticipate any non-renewal or revocation of its Charter, and the Borrower has covenanted in the Loan Agreement to seek renewals, there can be no assurance that the State Public Charter School Authority will renew the Borrower s Charter upon expiration. See APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER attached hereto. Risk Factors Associated with Education There are a number of factors affecting schools in general, including the Borrower, that could have an adverse effect on the Borrower s financial position and its ability to make the payments required under the Loan Agreement. These factors include, but are not limited to, increased costs of compliance with federal or State regulatory laws or regulations, including, without limitation, laws or regulations concerning environmental quality, work safety and accommodating persons with disabilities; any unionization of the Borrower s work force with consequent impact on wage scales and operating costs of the Borrower; the inability to attract a sufficient number of students or teachers; federal requirements to provide services to special education students; unfavorable changes to existing statutes pertaining to the powers of the Borrower and legislation or regulations which may affect program funding; and disruption of the Borrower s operations 32

39 by real or perceived threats against the Borrower, its employees or students. The Borrower cannot assess or predict the ultimate effect of these factors on their operations or financial results of operations. Other Schools/Competition for Students The Borrower receives state payments based on student enrollment. The Borrower competes for students with district schools, other charter schools and private schools. There can be no assurance that the Borrower will attract and retain the number of students that are needed to produce the Pledged Revenues that are necessary to pay the debt service on the Bonds. Subjective factors such as reputational concerns could affect the ability of the Borrower to attract and retain students at levels that will provide the Borrower with revenues sufficient to pay debt service and other expenses. Among other things, the number of schools in proximity with the Borrower could increase substantially. See APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER attached hereto for information regarding other schools in the Borrower s service areas. Limitations of Appraisals Appraisals are estimates of value and not an assurance of what any particular property would bring on sale. Appraisals also are subject to numerous other limitations set forth therein. Potential investors should not assume that the appraised values set forth in THE PROJECT represent reliable estimates of what such Facilities would bring in liquidation following an Event of Default. Moreover, the appraised values for the Borrower s interest in the Facilities as reflected in the Appraisals, $17,135,000, is equal to approximately 76.3% of the aggregate par amount of the Bonds expected to be outstanding upon the issuance of the Series 2017 Bonds (including the outstanding par amount of the Series 2014 Bonds of $8,930,000 and the par amount of the Series 2017 Bonds of $13,520,000, totaling $22,450,000 in aggregate). See THE PROJECT Appraisals herein. The value of the Facilities at any given time will be directly affected by market and financial conditions that are not in the control of the parties involved in this transaction. The Facilities are designed for use as educational facilities, and there is nothing associated with the Facilities that would suggest that their value would remain stable or would increase if the general values of property in the Borrower s service areas were to decline. The Facilities also require ongoing capital repairs and improvements and, although the Borrower intends to maintain the Facilities in good condition, no assurance can be given that the Borrower will have sufficient revenue to maintain a regular capital improvements program for the Facilities in the future. Limitations on Value of the Facilities and to Remedies Under the Deeds of Trust Maintenance of Value. There can be no assurance made that, should the Borrower default in making the payments due under the Loan Agreement, the Facilities could be foreclosed upon and sold for the amounts owed under the Indenture. Hazardous Substances. While governmental taxes, assessments and charges are common claims against the value of property, other less common claims may be relevant. One of the most serious in terms of the potential reduction in the value that may be realized is a claim with regard to hazardous substances. In general, the Borrower may be required by law to remedy conditions of the Facilities relating to release of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as CERCLA or the Superfund Act, is the most well-known and widely applicable of these laws. Nevada laws with regard to hazardous substances are stringent and similar to certain federal acts. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) had or has anything to do with the creation or handling of the hazardous substance. The effect, therefore, should the Facilities be affected by a hazardous substance, is generally to reduce the marketability and value of the parcel by the cost of remedying the condition. Further, such liabilities may arise not simply from the existence of a hazardous substance but from 33

40 the method of handling the hazardous substance. Any of these potentialities could significantly affect the value of the Project that would be realized upon a default and foreclosure. See CERTAIN RISK FACTORS Environmental Risks below. Damage, Destruction or Condemnation. Although the Borrower will be required to obtain certain insurance against damage or destruction as set forth in the Loan Agreement and the Deeds of Trust, there can be no assurance that any portion of the Facilities will not suffer losses for which insurance cannot be or has not been obtained or that the amount of any such loss, or the period during which the Borrower, as a result of damage or destruction to the Facilities or other properties operated by the Borrower, cannot generate revenues, will not exceed the coverage of such insurance policies. If the Facilities, or any portion thereof, are damaged or destroyed, or are taken in a condemnation proceeding, the proceeds of insurance or any condemnation award for the Facilities, or any portion thereof, must be applied as provided in the Loan Agreement to restore or rebuild the Facilities or to redeem Bonds. There can be no assurance that the amount of revenues available to restore or rebuild the Facilities, or any portion thereof, or to redeem Bonds will be sufficient for that purpose, or that any remaining portion of the Facilities will generate revenues sufficient to pay the expenses of the Borrower and the Loan Repayments. Inability or Delay in Liquidating the Facility at an Adequate Sale Price. An Event of Default gives the Trustee the right to possession of, and the right to sell the Facilities pursuant to a foreclosure sale under the Deeds of Trust. The Facilities have been constructed or renovated for use as schools and may not be readily adaptable and marketable for other uses. Furthermore, while the Borrower considers the locations of the Facilities to be desirable for its purposes, there can be no assurance that potential purchasers will consider the locations desirable for other purposes. Accordingly, there can be no assurance that the sale of the Facilities could be accomplished rapidly, or at all. Any sale of the Facilities may require compliance with the laws of the State of Nevada. Such compliance may be difficult, time-consuming and/or expensive. Any delays in the ability of the Trustee to foreclose under the Deeds of Trust could result in delays in the payment of the Series 2017 Bonds. Further, attempts to foreclose under the Deeds of Trust or to obtain other remedies under the Deeds of Trust, the Indenture, the Loan Agreement, or any other documents relating to the Series 2017 Bonds may be met with protracted litigation and/or bankruptcy proceedings, which could cause delays, and a court may decide not to order specific performance of covenants contained in such documents. Factors That Could Affect the Security Interest in the Facilities; Superior Liens. The Trustee s security interest in the Facilities may be subordinated to the interest and claims of others in several instances. Some examples of cases of subordination of prior claims are (i) statutory liens, (ii) rights arising in favor of the United States of America or any agency thereof, (iii) present or future prohibitions against assignment in any statutes or regulations, (iv) constructive trusts, equitable liens or other rights impressed or conferred by any state or federal court in the exercise of its equitable jurisdiction, (v) federal or state bankruptcy or insolvency laws that may affect the enforceability of the Loan Agreement, (vi) rights of third parties in amounts not in the possession of the Trustee, and (vii) claims that might arise if appropriate financing or continuation statements are not filed in accordance with the Nevada Uniform Commercial Code as from time to time in effect. No Deeds of Trust on Existing Nellis Site or New Nellis Campus The Borrower will not enter into deeds of trust relating to its leasehold interests in either the Existing Nellis Site or the New Nellis Campus in connection with the issuance of the Series 2017 Bonds. Environmental Risks There are potential risks relating to liabilities for environmental hazards with respect to the ownership of any real property. If hazardous substances are found to be located on a property, owners of such property may be held liable for costs and other liabilities related to the removal of such substances which costs and 34

41 liabilities could exceed the value of the Facilities or any portion thereof. In connection with the Project, the Borrower obtained certain environmental inspections and reports described in the following paragraphs. Centennial Hills Environmental Inspection. OGI performed a Phase I Environmental Site Assessment of the Centennial Hills Campus. In that connection, OGI prepared a report dated September 25, 2017 (the Centennial Hills Phase I Report ). The Centennial Hills Phase I Report states its purpose was to accumulate data on present conditions and historical uses of the subject site and nearby properties and assess the potential adverse environmental impact that these conditions and uses may have had on the site. Recognized Environmental Conditions, as defined in the Centennial Hills Phase I Report, means the presence or likely presence of any hazardous substances or petroleum products in, on, or at a property; (i) due to a release to the environment; (ii) under conditions indicative of a release to the environment; or (iii) under conditions that pose a material threat of a future release to the environment. OGI s assessment consisted of (1) an on-site visual survey of the subject site, and cursory review of adjoining properties, to observe for Recognized Environmental Conditions; (2) review of available records including commercial database sources of government listings, topographic maps, aerial photographs, etc. to help identify Recognized Environmental Conditions associated with the subject site; (3) interviews with individuals knowledgeable about the site to obtain information indicating recognized environmental conditions associated with the subject site; (4) interviews with, or inquiries to, local government officials to obtain information indicating Recognized Environmental Conditions associated with the subject site; and (5) preparation of a written report summarizing OGI s findings. The Centennial Hills Phase I Report is subject to a number of limitations and disclaimers. The Centennial Hills Phase I Report did not identify evidence of Recognized Environmental Conditions in connection with the subject site during the course of OGI s assessment, and OGI recommended no further investigation of the subject property at the time of the Centennial Hills Phase I Report. The Centennial Hills Phase I Report speaks only as of its date, and OGI has not been asked to perform any additional assessment since the time of the assessment described in the Centennial Hills Phase I Report. Further, the Centennial Hills Phase I Report is subject to the limitations specified in such report. Potential investors may refer to the complete Centennial Hills Phase I Report for a full understanding of such limitations, and for additional information pertinent to the assessment. Copies of the Centennial Hills Phase I Report are available upon request from the Underwriter. Costs incurred by the Borrower with respect to environmental remediation or liability could adversely affect it financial conditions. See CERTAIN RISK FACTORS Limitations on Value of the Facilities and to Remedies Under the Deeds of Trust Hazardous Substances above. Sandy Ridge Environmental Inspection. OGI performed a Phase I Environmental Site Assessment of the Sandy Ridge Campus. In that connection, OGI prepared a report dated December 31, 2013 (the Sandy Ridge Phase I Report ). The Sandy Ridge Phase I Report states its purpose was to accumulate data on present conditions and historical uses of the subject site and nearby properties and assess the potential adverse environmental impact that these conditions and uses may have had on the site. Recognized Environmental Conditions, as defined in the Sandy Ridge Phase I Report, means the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, groundwater, or surface water of the property. The term includes hazardous substances or petroleum products even under conditions in compliance with laws. OGI s assessment consisted of (1) an on-site visual survey of the subject site, and cursory review of adjoining properties, to observe for Recognized Environmental Conditions; (2) review of available records including commercial database sources of government listings, topographic maps, aerial photographs, etc. to help identify Recognized Environmental Conditions associated with the subject site; (3) interviews with individuals knowledgeable about the site to obtain information indicating recognized environmental conditions 35

42 associated with the subject site; (4) interviews with, or inquiries to, local government officials to obtain information indicating Recognized Environmental Conditions associated with the subject site; and (5) preparation of a written report summarizing OGI s findings. The Sandy Ridge Phase I Report is subject to a number of limitations and disclaimers. The Sandy Ridge Phase I Report did not identify evidence of Recognized Environmental Conditions in connection with the subject site during the course of OGI s assessment, and OGI recommended no further investigation of the subject property at the time of the Sandy Ridge Phase I Report. The Sandy Ridge Phase I Report speaks only as of its date, and OGI has not been asked to perform any additional assessment since the time of the assessment described in the Sandy Ridge Phase I Report. Further, the Sandy Ridge Phase I Report is subject to the limitations specified in such report. Potential investors may refer to the complete Sandy Ridge Phase I Report for a full understanding of such limitations, and for additional information pertinent to the assessment. Copies of the Sandy Ridge Phase I Report are available upon request from the Underwriter. Costs incurred by the Borrower with respect to environmental remediation or liability could adversely affect it financial conditions. See CERTAIN RISK FACTORS Limitations on Value of the Facilities and to Remedies Under the Deeds of Trust Hazardous Substances above. Bankruptcy The rights and remedies of the Beneficial Owners of the Bonds are subject to various provisions of the Federal Bankruptcy Code (the Bankruptcy Code ). If the Borrower were to become a debtor in a bankruptcy case, its revenues and certain of its accounts receivable and other property created or otherwise acquired after the filing of such petition and for up to 90 days prior to the filing of such petition may not be subject to the security interest created under the applicable Deed of Trust for the benefit of the Beneficial Owners of the Bonds. The filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against such entity, and its property, and as an automatic stay of any act or proceeding to enforce a lien upon or to otherwise exercise control over such property. If the bankruptcy court so ordered, the property of the Borrower, including accounts receivable and proceeds thereof, could be used for the financial rehabilitation of such entity despite the security interest of the Trustee therein. While the Bankruptcy Code requires that the interest of the Trustee as lien owner be adequately protected before the collateral may be used by the Borrower, such protection could take the form of a replacement lien on assets acquired or created after the bankruptcy petition is instituted. The rights of the Trustee to enforce liens and security interests against the Borrower s assets could be delayed during the pendency of the rehabilitation proceedings. The Borrower could file a plan for the reorganization of its debts in any such proceeding which could include provisions modifying or altering the rights of creditors generally, or any class of them, secured or unsecured. The plan, when confirmed by a court, binds all creditors who had notice or knowledge of the plan and discharges all claims against the debtor provided for in the plan. No plan may be confirmed unless certain conditions are met, among which are that the plan is in the best interests of creditors, is feasible and has been accepted by each class of claims impaired thereunder. Each class of claims has accepted the plan if at least two thirds in dollar amount and more than one half in number of the class cast votes in its favor. Even if the plan is not so accepted, it may be confirmed if the court finds that the plan is fair and equitable with respect to each class of non-accepting creditors impaired thereunder and does not discriminate unfairly. Reserve Account The Indenture has established the Reserve Account for payment of principal and interest due to the Owners of the Bonds to the extent pledged revenues are insufficient to make such payments. Although the Borrower believes such reserve to be reasonable, and anticipates that pledged revenues will be sufficient to cover the debt service on the Bonds, there is no assurance that funds reserved and future pledged revenues will be sufficient to cover debt service on the Bonds. 36

43 Tax Related Issues Tax-Exempt Status of Interest on the Series 2017A Bonds. The Code imposes a number of requirements that must be satisfied for interest on state and local obligations, such as the Series 2017A Bonds, to be excludable from gross income for federal income tax purposes. These requirements include limitations on the use of Series 2017A Bond proceeds, limitations on the investment earnings of Series 2017A Bond proceeds prior to expenditure, a requirement that certain investment earnings on Series 2017A Bond proceeds be paid periodically to the United States and a requirement that the issuers file an information return with the Internal Revenue Service (the IRS ). The Authority and the Borrower have covenanted in certain of the documents referred to herein that they will comply with such requirements. Failure by any of the foregoing to comply with the requirements stated in the Code and related regulations, rulings and policies may result in the interest on the Series 2017A Bonds being included in federal gross income, retroactively to the date of issuance of the Series 2017A Bonds. Maintenance of Tax-Exempt Status. The tax status of the Series 2017A Bonds depends upon the maintenance by the Borrower of its status as an instrumentality of the State of Nevada. Alternatively, the Borrower could obtain and maintain status as an organization described in Section 501(c)(3) of the Code. The maintenance of such status is contingent on compliance with general rules promulgated in the Code and related regulations regarding the organization and operation of exempt entities, including the operation for governmental, charitable and educational purposes and avoidance of transactions which may cause the assets of either to inure to the benefit of private individuals. In recent years, the IRS has increased the frequency and scope of its audit and other enforcement activity regarding exempt organizations and, in particular, charter schools. As a result, exempt organizations are increasingly subject to a greater degree of scrutiny. The primary penalty available to the IRS under the Code with respect to an exempt entity engaged in unlawful private benefit is the revocation of exempt status. Loss of exempt status by the Borrower could potentially result in the interest on the Series 2017A Bonds and other existing and future tax-exempt debt of the Borrower, if any, being included in federal gross income, and defaults in covenants regarding the Series 2017A Bonds and other existing and future tax-exempt debt, if any, would likely be triggered. Taxable Income. In recent years, the IRS and state, county and local taxing authorities have been undertaking audits and reviews of the operations of exempt organizations with respect to their exempt activities and the generation of non-governmental income or unrelated business taxable income (together, Taxable Income ). The Borrower currently reports no Taxable Income. The Borrower may, however, participate in activities which generate Taxable Income in the future. If so, the Borrower believes such Taxable Income would be properly accounted for and reported; nevertheless, an investigation or audit could lead to a challenge which could result in taxes, interest and penalties with respect to unreported Taxable Income and in some cases could ultimately affect the exempt status of the Borrower, as well as the exclusion from gross income for federal income tax purposes of the interest on the Series 2017A Bonds. Incurrence of Additional Indebtedness The Loan Agreement permits the Borrower to incur additional indebtedness upon compliance with the provisions thereof. The incurrence of such additional indebtedness could increase the economic burden on the Borrower and thereby adversely affect the ability of the Borrower to make required payments under the Loan Agreement. In addition, in connection with the incurrence of Additional Indebtedness, the Borrower may secure Additional Indebtedness with a deed of trust on the Facilities that would be on parity with the Deeds of Trust that secure the Series 2017 Bonds. See APPENDIX C SUMMARY OF PRINCIPAL BOND DOCUMENTS Definitions and THE LOAN AGREEMENT attached hereto. As described in THE SERIES 2017 BONDS Additional Bonds herein, the Borrower expects to issue Additional Bonds pursuant to the Indenture and Loan Agreement in Summer 2018, in an estimated par 37

44 amount of approximately $16.65 million, for the construction of the New Nellis Campus and the acquisition of the Tamarus Campus. Legal Opinions The various legal opinions to be delivered concurrently with the delivery of the Series 2017 Bonds will express the professional judgment of the attorneys rendering the opinions on the legal issues explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of parties to such transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. In addition, such opinions will be qualified as to the enforceability of the various legal instruments by, among others, limitations imposed by State and federal laws, rulings and decisions affecting remedies, and by bankruptcy, reorganization or other laws affecting the enforcement of creditors rights generally. Enforcement of Remedies The remedies available to the Trustee or the Bondholders of the Series 2017 Bonds upon an Event of Default under the Indenture, the Loan Agreement or the Deeds of Trust are in many respects dependent upon judicial actions that are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, the remedies provided in the Indenture, the Loan Agreement, and the Deeds of Trust may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2017 Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by the valid exercise of the sovereign powers of the State and the constitutional powers of the United States of America, bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. Claims and Insurance Coverage Litigation could arise from the corporate and business activities of the Borrower. Such litigation may result as a result of the Borrower s status as an employer. Many of these risks are covered by insurance, but some are not. For example, claims arising from wrongful termination or sexual molestation claims and business disputes may not be covered by insurance or other sources. Such claims may, in whole or in part, constitute a significant liability of the Borrower if determined or settled adversely, as may any additional claims for other torts, accidents, or environmental enforcement actions, to the extent such claims exceed the limits of applicable insurance coverage. The Borrower covenant and agree in the Loan Agreement that they will maintain, or caused to be maintained, property, general liability and business interruption insurance with respect to the Facilities at levels set forth therein. See APPENDIX C SUMMARY OF PRINCIPAL BOND DOCUMENTS THE LOAN AGREEMENT attached hereto. Risk of Noncontinued Philanthropy or Grants In the past, the Borrower has received income from unrestricted gifts and donations or grants to supplement operating revenues to finance operations and capital needs. Gifts, grants and donations are expected to continue. However, there can be no assurance that projections of this non-operating revenue will be realized or will not decrease, adversely affecting the financial condition of the Borrower. See APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER attached hereto. 38

45 Failure to Provide Ongoing Disclosure The Borrower will enter into a Continuing Disclosure Agreement with Urban Futures, Inc., as dissemination agent, pursuant to Securities and Exchange Commission Rule 15c2-12 (the Rule ) in connection with the issuance of the Series 2017 Bonds. Any material failure to comply with the Continuing Disclosure Agreement and the Rule in the future may adversely affect the liquidity of the affected Bonds and their market price in the secondary market. Secondary Market There is no guarantee that a secondary trading market will develop for the Series 2017 Bonds. Consequently, prospective bond purchasers should be prepared to hold their Series 2017 Bonds to maturity or prior redemption. Subject to applicable securities laws and prevailing market conditions, the Underwriter intends, but is not obligated, to make a market in the Series 2017 Bonds. Cautionary Statement AN INVESTMENT IN THE SERIES 2017 BONDS INVOLVES A HIGH DEGREE OF RISK AND IS SPECULATIVE IN NATURE. Each prospective investor should carefully examine this Official Statement, and the Appendices hereto, and such investor s own financial condition in order to make a judgment as to whether the Series 2017 Bonds are an appropriate investment for such investor. The Authority ABSENCE OF MATERIAL LITIGATION To the Authority s knowledge, as of the date hereof, there is not pending or threatened, any litigation retaining or enjoining the issuance or delivery of the Series 2017 Bonds or questioning or affecting the validity of the Bonds or the proceedings or authority under which they are to be issued or which in any manner questions the right of the Authority to enter into the Indenture, Loan Agreement or any other documents related to the Series 2017 Bonds to which the Authority is a party or to secure the Series 2017 Bonds in the manner provided therein. From time to time the Authority receives inquiries and requests for documents and information pertaining to unrelated bond issues from various regulatory agencies, including the Securities & Exchange Commission, and in connection with audits by the Internal Revenue Service. The Borrower To the knowledge of the Borrower, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending against the Borrower seeking to restrain or enjoin the sale or issuance of the Series 2017 Bonds, or in any way contesting or affecting any proceedings of the Borrower taken concerning the sale thereof, the pledge or application of any moneys or security provided for the payment of the Bonds, the validity or enforceability of the documents executed by the Borrower in connection with the Bonds, the completeness or accuracy of the Official Statement or the existence or powers of the Borrower relating to the sale of the Series 2017 Bonds. The Series 2017A Bonds TAX MATTERS In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority ( Bond Counsel ), based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Series 2017A Bonds is excluded from gross income for federal income tax purposes under Section

46 of the Code. In the further opinion of Bond Counsel, interest on the Series 2017A Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. As further discussed below, legislation has been introduced which, if enacted, would repeal the alternative minimum tax for tax years beginning after December 31, A complete copy of the proposed form of opinion of Bond Counsel is set forth in APPENDIX D FORM OF OPINION OF BOND COUNSEL hereto. To the extent the issue price of any maturity of the Series 2017A Bonds is less than the amount to be paid at maturity of such Series 2017A Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Series 2017A Bonds), the difference constitutes original issue discount, the accrual of which, to the extent properly allocable to each beneficial owner thereof, is treated as interest on the Series 2017A Bonds which is excluded from gross income for federal income tax purposes. For this purpose, the issue price of a particular maturity of the Series 2017A Bonds is the first price at which a substantial amount of such maturity of the Series 2017A Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Series 2017A Bonds accrues daily over the term to maturity of such Series 2017A Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Series 2017A Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Series 2017A Bonds. Beneficial owners of the Series 2017A Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Series 2017A Bonds with original issue discount, including the treatment of beneficial owners who do not purchase such Series 2017A Bonds in the original offering to the public at the first price at which a substantial amount of such Series 2017A Bonds is sold to the public. Series 2017A Bonds purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) ( Premium Bonds ) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a beneficial owner s basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such beneficial owner. Beneficial owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Series 2017A Bonds. The Authority and the Borrower have made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Series 2017A Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Series 2017A Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Series 2017A Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel s attention after the date of issuance of the Series 2017A Bonds may adversely affect the value of, or the tax status of interest on, the Series 2017A Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Although Bond Counsel is of the opinion that interest on the Series 2017A Bonds is excluded from gross income for federal income tax purposes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the Series 2017A Bonds may otherwise affect a beneficial owner s federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax 40

47 status of the beneficial owner or the beneficial owner s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Series 2017A Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. Legislation has been introduced in Congress which, if enacted, would significantly change the income tax rates for individuals and corporations and would repeal the alternative minimum tax for tax years beginning after December 31, The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for or marketability of, the Series 2017A Bonds. Prospective purchasers of the Series 2017A Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel is expected to express no opinion. The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel s judgment as to the proper treatment of the Series 2017A Bonds for federal income tax purposes. It is not binding on the IRS or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Authority or the Borrower, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Authority and the Borrower have covenanted, however, to comply with the requirements of the Code. Bond Counsel s engagement with respect to the Bonds ends with the issuance of the Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority, the Borrower or the beneficial owners regarding the tax-exempt status of the Series 2017A Bonds in the event of an audit examination by the IRS. Under current procedures, parties other than the Authority, the Borrower and their appointed counsel, including the beneficial owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the Authority or the Borrower legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the Series 2017A Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues, may affect the market price for, or the marketability of, the Series 2017A Bonds, and may cause the Authority, the Borrower or the beneficial owners to incur significant expense. The Series 2017B Bonds Bond Counsel observes that interest on the Series 2017B Bonds is not excluded from gross income for federal income tax purposes under Section 103 of the Code. Bond Counsel expresses no opinion regarding any other tax consequences relating to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Series 2017B Bonds. The following discussion summarizes certain U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) of the Series 2017B Bonds that acquire their Series 2017B Bonds in the initial offering. The discussion below is based upon laws, regulations, rulings, and decisions in effect and available on the date hereof, all of which are subject to change, possibly with retroactive effect. Prospective investors should note that no rulings have been or are expected to be sought from the U.S. Internal Revenue Service (the IRS ) with respect to any of the U.S. federal income tax consequences discussed below, and no assurance can be given that the IRS will not take contrary positions. Further, the following discussion does not deal with U.S. tax consequences applicable to any given investor, nor does it address the U.S. tax considerations applicable to all categories of investors, some of which may be subject to special taxing rules (regardless of whether or not such investors constitute U.S. Holders), such as certain U.S. expatriates, banks, REITs, RICs, insurance companies, tax-exempt organizations, dealers or traders in securities or currencies, 41

48 partnerships, S corporations, estates and trusts, investors that hold their Series 2017B Bonds as part of a hedge, straddle or an integrated or conversion transaction, or investors whose functional currency is not the U.S. dollar. Furthermore, it does not address (i) alternative minimum tax consequences, (ii) the net investment income tax imposed under Section 1411 of the Code, or (iii) the indirect effects on persons who hold equity interests in a holder. This summary also does not consider the taxation of the Series 2017B Bonds under state, local or non-u.s. tax laws. In addition, this summary generally is limited to U.S. tax considerations applicable to investors that acquire their Series 2017B Bonds pursuant to this offering for the issue price that is applicable to such Series 2017B Bonds (i.e., the price at which a substantial amount of the Series 2017B Bonds are sold to the public) and who will hold their Series 2017B Bonds as capital assets within the meaning of Section 1221 of the Code. The following discussion does not address tax considerations applicable to any investors in the Series 2017B Bonds other than investors that are U.S. Holders. As used herein, U.S. Holder means a beneficial owner of a Series 2017B Bond that for U.S. federal income tax purposes is an individual citizen or resident of the United States, a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States or any state thereof (including the District of Columbia), an estate the income of which is subject to U.S. federal income taxation regardless of its source or a trust where a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (as defined in the Code) have the authority to control all substantial decisions of the trust (or a trust that has made a valid election under U.S. Treasury Regulations to be treated as a domestic trust). If a partnership holds Series 2017B Bonds, the tax treatment of such partnership or a partner in such partnership generally will depend upon the status of the partner and upon the activities of the partnership. Partnerships holding Series 2017B Bonds, and partners in such partnerships, should consult their own tax advisors regarding the tax consequences of an investment in the Series 2017B Bonds (including their status as U.S. Holders). Prospective investors should consult their own tax advisors in determining the U.S. federal, state, local or non-u.s. tax consequences to them from the purchase, ownership and disposition of the Series 2017B Bonds in light of their particular circumstances. U.S. Holders Interest. Interest on the Series 2017B Bonds generally will be taxable to a U.S. Holder as ordinary interest income at the time such amounts are accrued or received, in accordance with the U.S. Holder s method of accounting for U.S. federal income tax purposes. To the extent that the issue price of any maturity of the Series 2017B Bonds is less than the amount to be paid at maturity of such Series 2017B Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Series 2017B Bonds), the difference may constitute original issue discount ( OID ). U.S. Holders of Series 2017B Bonds will be required to include OID in income for U.S. federal income tax purposes as it accrues, in accordance with a constant yield method based on a compounding of interest (which may be before the receipt of cash payments attributable to such income). Under this method, U.S. Holders generally will be required to include in income increasingly greater amounts of OID in successive accrual periods. Series 2017B Bonds purchased for an amount in excess of the principal amount payable at maturity (or, in some cases, at their earlier call date) will be treated as issued at a premium. A U.S. Holder of a Series 2017B Bond issued at a premium may make an election, applicable to all debt securities purchased at a premium by such U.S. Holder, to amortize such premium, using a constant yield method over the term of such Series 2017B Bond. Sale or Other Taxable Disposition of the Series 2017B Bonds. Unless a nonrecognition provision of the Code applies, the sale, exchange, defeasance, redemption, retirement (including pursuant to an offer by the Authority) or other disposition of a Series 2017B Bond will be a taxable event for U.S. federal income tax 42

49 purposes. In such event, in general, a U.S. Holder of a Series 2017B Bond will recognize gain or loss equal to the difference between (i) the amount of cash plus the fair market value of property received (except to the extent attributable to accrued but unpaid interest on the Series 2017B Bond, which will be taxed in the manner described above) and (ii) the U.S. Holder s adjusted U.S. federal income tax basis in the Series 2017B Bond (generally, the purchase price paid by the U.S. Holder for the Series 2017B Bond, decreased by any amortized premium, and increased by the amount of any OID previously included in income by such U.S. Holder with respect to such Series 2017B Bond ). Any such gain or loss generally will be capital gain or loss. In the case of a non-corporate U.S. Holder of the Series 2017B Bonds, the maximum marginal U.S. federal income tax rate applicable to any such gain will be lower than the maximum marginal U.S. federal income tax rate applicable to ordinary income if such U.S. holder s holding period for the Series 2017B Bonds exceeds one year. The deductibility of capital losses is subject to limitations. Defeasance of the Taxable Bonds. If the Authority defeases any Series 2017B Bond, the Series 2017B Bond may be deemed to be retired and reissued for U.S. federal income tax purposes as a result of the defeasance. In that event, in general, a holder will recognize taxable gain or loss equal to the difference between (i) the amount realized from the deemed sale, exchange or retirement (less any accrued qualified stated interest which will be taxable as such) and (ii) the holder s adjusted tax basis in the Series 2017B Bond. Foreign Account Tax Compliance Act ( FATCA ) Sections 1471 through 1474 of the Code, impose a 30% withholding tax on certain types of payments made to foreign financial institutions, unless the foreign financial institution enters into an agreement with the U.S. Treasury to, among other things, undertake to identify accounts held by certain U.S. persons or U.S.- owned entities, annually report certain information about such accounts, and withhold 30% on payments to account holders whose actions prevent it from complying with these and other reporting requirements, or unless the foreign financial institution is otherwise exempt from those requirements. In addition, FATCA imposes a 30% withholding tax on the same types of payments to a non-financial foreign entity unless the entity certifies that it does not have any substantial U.S. owners or the entity furnishes identifying information regarding each substantial U.S. owner. Failure to comply with the additional certification, information reporting and other specified requirements imposed under FATCA could result in the 30% withholding tax being imposed on payments of interest and principal under the Series 2017B Bonds and sales proceeds of Series 2017B Bonds held by or through a foreign entity. In general, withholding under FATCA currently applies to payments of U.S. source interest (including OID) and will apply to (i) gross proceeds from the sale, exchange or retirement of debt obligations paid after December 31, 2016 and (iii) certain pass-thru payments no earlier than January 1, Prospective investors should consult their own tax advisors regarding FATCA and its effect on them. The foregoing summary is included herein for general information only and does not discuss all aspects of U.S. federal taxation that may be relevant to a particular holder of Series 2017B Bonds in light of the holder s particular circumstances and income tax situation. Prospective investors are urged to consult their own tax advisors as to any tax consequences to them from the purchase, ownership and disposition of Series 2017B Bonds, including the application and effect of state, local, non-u.s., and other tax laws. State Tax Exemption taxes. Bond Counsel observes that interest on the Series 2017 Bonds is not exempt from Wisconsin income APPROVAL OF LEGALITY The validity of the Series 2017 Bonds and certain other legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, the approval of certain matters for the Authority by von Briesen & Roper, s.c., as counsel to the Authority, the approval of certain matters for 43

50 the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, as Underwriter s counsel, and the approval of certain matters by Kutak Rock LLP, as special counsel to the Borrower. Bond Counsel, the Underwriter and its counsel, and Borrower s special counsel will receive compensation contingent upon the sale and delivery of the Bonds. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix D hereto. Bond Counsel does not undertake any responsibility for the accuracy, completeness or fairness of this Official Statement. MUNICIPAL ADVISOR Urban Futures Inc. (the Municipal Advisor ) has acted as Municipal Advisor to the Borrower in conjunction with the issuance of the Bonds. The Municipal Advisor has assisted the Borrower in preparation of this Official Statement and in other matters related to the planning, structuring, and issuance of the Series 2017 Bonds. The Municipal Advisor will receive compensation contingent upon the sale and delivery of the Series 2017 Bonds. The Municipal Advisor has not audited, authenticated or otherwise independently verified the information set forth in the Official Statement, or any other information related to the Series 2017 Bonds with respect to the accuracy or completeness of disclosure of such information. The Municipal Advisor makes no guaranty, warranty or other representation respecting the accuracy or completeness of this Official Statement or any other matter related to this Official Statement. RATING S&P Global Ratings ( S&P ) has assigned the Series 2017 Bonds a rating of BBB- with a Stable outlook. Such rating reflects only the view of the Rating Agency at the time such rating was issued, and neither the Authority nor the Borrower makes any representation as to the appropriateness of the rating. The Borrower furnished to the Rating Agency information and materials about the Borrower and relating to the Series 2017 Bonds. Any explanation of the significance of such rating may be obtained from the Rating Agency. Generally, rating agencies base their ratings on such information and materials and on investigations, studies and assumptions by the rating agencies. The rating is not a recommendation to buy, hold or sell the Series 2017 Bonds. There is no assurance that such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by the Rating Agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of the rating can be expected to have an adverse effect on the market price of the Series 2017 Bonds. The Borrower and the Borrower have undertaken to file notice of any formal change in any rating that relates to the Series 2017 Bonds. See APPENDIX E FORM OF CONTINUING DISCLOSURE AGREEMENT attached hereto. UNDERWRITING The Series 2017 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the Underwriter ). The Underwriter has agreed to purchase the Bonds at a price of $14,009, (being the principal amount of the Bonds, plus aggregate original issue premium of $692,184.05, less an Underwriter s discount of $202,800.00). The Bond Purchase Agreement ( Bond Purchase Agreement ) pursuant to which the Bonds are being purchased by the Underwriter provides that the Underwriter will purchase all of the Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to certain terms and conditions set forth in the Bond Purchase Agreement. The Underwriter may offer and sell the Bonds to certain dealers, institutional investors, banks, and others at prices different from the prices stated on the inside cover page of this Official Statement. The offering prices may be changed from time to time by the Underwriter. The Underwriter is not obligated to create a secondary market for the purchase or sale of the Series 2017 Bonds and there may, in fact, be no market for the Series 2017 Bonds depending upon prevailing market 44

51 conditions, the financial condition or market position of firms who make up the secondary market and the financial position and results of operations of the Borrower. THE UNDERWRITER MAKES NO WARRANTIES IN THE TRANSACTIONS CONTEMPLATED HEREIN, AND THE UNDERWRITER HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO (1) THE VALIDITY OF THE INDENTURE OR OTHER DOCUMENTS ISSUED IN CONNECTION WITH THESE TRANSACTIONS, (2) THE SUBJECT MATTER OF OPINIONS GIVEN BY COUNSEL ISSUED IN CONNECTION WITH THESE TRANSACTIONS, AND (3) INFORMATION SUPPLIED BY OTHER PARTIES TO THE TRANSACTIONS. CONTINUING DISCLOSURE The Borrower and Urban Futures, Inc., as dissemination agent (the Dissemination Agent ), will execute and deliver one or more Continuing Disclosure Agreements pursuant to which the Borrower will, for the benefit of the Beneficial Owners of the Series 2017 Bonds, periodically compile and deliver to the Dissemination Agent certain financial information and operating data relating to the operations of the Borrower, and provide notices of the occurrence of certain enumerated events. These covenants have been made to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12 (the Rule ). A form of the Continuing Disclosure Agreement is attached hereto as Appendix E. The Authority and the Borrower have determined that no financial or operating data concerning the Authority is material to an evaluation of the offering of the Bonds or to any decision to purchase, hold or sell Series 2017 Bonds and the Authority will not provide any such information. The Authority shall have no liability to the Holders of the Series 2017 Bonds or any other person with respect to the Rule. Prior Undertakings. The Borrower and U.S. Bank National Association, as dissemination agent, previously entered into a continuing disclosure agreement pursuant to the Rule in connection with the issuance of the Series 2014 Bonds which requires the filing of audited financial statements as well as annual and quarterly reports including certain financial information and operating data ( Operating Data ) related to the Borrower, as well as notices of certain events. The Borrower failed to include certain Operating Data in its annual reports for fiscal years through and its quarterly reports for fiscal years through A portion of such Operating Data that the Borrower failed to include in its quarterly reports was satisfied by the filing of certain of the Borrower s annual reports, and the remainder of outstanding Operating Data was filed on October 24, 2017 and November 2, The Borrower has since reviewed its obligations pursuant to the undertaking related to its Series 2014 Bonds and has established procedures to comply with such obligations. FINANCIAL STATEMENTS The audited financial statements of the Borrower, for the fiscal year ending June 30, 2017, included in this Official Statement as Appendix B, have been audited by Coulson & Associates, Ltd., independent certified public accountants, to the extent and for the periods indicated in their reports thereon. However, the auditors have not been requested to review this Official Statement and have not done so. 45

52 MISCELLANEOUS The foregoing and subsequent summaries and descriptions of provisions of the Series 2017 Bonds, the Indenture and the Loan Agreement and all references to other materials not purporting to be quoted in full are only brief outlines of some of the provisions thereof and do not purport to summarize or describe all of the provisions thereof, and reference is made to said documents for full and complete statements of their provisions. The appendices attached hereto are a part of this Official Statement. Copies, in reasonable quantity, of the Indenture and Loan Agreement may be obtained during the offering period upon request directed to the Underwriter. OTHER THAN WITH RESPECT TO INFORMATION CONCERNING THE AUTHORITY CONTAINED UNDER THE CAPTIONS THE AUTHORITY AND ABSENCE OF MATERIAL LITIGATION THE AUTHORITY, NONE OF THE INFORMATION IN THIS OFFICIAL STATEMENT HAS BEEN SUPPLIED OR VERIFIED BY THE AUTHORITY, AND THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (I) THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION; (II) THE VALIDITY OF THE SERIES 2017 BONDS; OR (III) THE FEDERAL INCOME TAX STATUS OF THE INTEREST ON THE SERIES 2017 BONDS OR THE STATE INCOME TAX STATUS OF THE SERIES 2017 BONDS. The distribution and use of this Official Statement has been approved by the Borrower. CORAL ACADEMY OF SCIENCE LAS VEGAS, as Borrower By: /s/ Ann Diggins President, Board of Governors 46

53 APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER A-1

54 TABLE OF CONTENTS INTRODUCTION... A-3 CORAL ACADEMY OF SCIENCE LAS VEGAS... A-3 General... A-3 Mission Statement... A-4 Academic Program and Curriculum... A-5 Recognition and Awards... A-7 Organizational Structure and Leadership Team... A-8 Borrower Board of Governors... A-9 Accreditation... A-11 ACADEMIC AND SCHOOL OPERATIONS... A-12 General... A-12 Planned Expansion Eastgate Campus... A-13 Enrollment, Attendance & Student Retention... A-14 Teacher Retention... A-18 Campus Service Areas and Competitive Schools... A-18 ACCOUNTABILITY... A-20 State Required Proficiency Exams... A-21 Academic Outcomes... A-21 Campus Administration and Staffing... A-28 Admissions, Service Area and Waitlist... A-28 OPERATING AND FINANCIAL INFORMATION... A-31 Historical Financial Results... A-31 Historical Statements of Net Position... A-32 Historical Balance Sheets... A-33 Financial Statements... A-33 Public Employees Retirement System of Nevada... A-33 Facility Leases... A-34 Outstanding Debt... A-35 No Material Litigation... A-36 PROJECTIONS AND COVERAGE RATIOS... A-36 Page A-2

55 APPENDIX A CERTAIN INFORMATION REGARDING THE BORROWER Certain statements contained in this Appendix reflect forecasts, projections and forward-looking statements. No assurance can be given that the future results discussed herein will be achieved. Actual results may differ materially from the forecasts described herein. In this respect, the words estimate, project, anticipate, expect, intend, believe and similar expressions are intended to identify forward-looking statements. All projections, forecasts, assumptions, expressions of opinions, estimates and other forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth in this Official Statement. Unless otherwise noted, all information, data, and projections in this Appendix were furnished by the Borrower. All capitalized terms in this Appendix A that are not defined herein will have such meaning as given to them in the forepart of this Official Statement. INTRODUCTION Coral Academy of Science Las Vegas ( CASLV or the Borrower ) is a pre-kindergarten through grade 12 charter school originally chartered by the State Public Charter School Authority of Nevada in 1997 and established pursuant to Sections 388A.010 through 388A.695 of the Nevada Revised Statutes, which allows for the creation and development of public charter schools to be operated within the State of Nevada (the State ). The Borrower is an unincorporated entity that is a governmental organization under Nevada law. General CORAL ACADEMY OF SCIENCE LAS VEGAS CASLV is a state sponsored tuition free public charter school located in Henderson and Las Vegas within the Las Vegas Valley; serving as a zone free, public, college-prep charter school with an emphasis in the areas of Math, Science, and Technology. The Borrower originally applied to the Nevada Department of Education to operate a charter school within Clark County on September 1, The application was approved on August 18, 2007, effective for a period of six years. CASLV opened its doors to students in the academic year as a 3 rd through 9 th grade school at a campus located at 8185 Tamarus Street in Las Vegas, Nevada (the Tamarus Campus ), with an initial enrollment of 94 students. In its fourth year of operations, with growing waiting lists, CASLV added its second and third campuses, located at 2150 Windmill Parkway and 1051 Sandy Ridge Avenue, in Henderson, Nevada (respectively, the Windmill Campus and the Sandy Ridge Campus ), increasing CASLV s enrollment to 877 in the school year. In the school year, the Borrower opened its fourth and fifth campuses located at 7951 Deer Springs Way in Las Vegas, Nevada (as further defined in the forepart of this Official Statement, the Centennial Hills Campus ) and on the Nellis Air Force Base ( Nellis AFB ), at 42 Baer Drive in Las Vegas, Nevada (the Existing Nellis AFB Campus ). With five campuses throughout the Las Vegas and Henderson area, the Borrower now serves approximately 2,925 students in the school year in pre-kindergarten through grade 12. The Borrower initially was sponsored by the State Board of Education until legislation in 2011 transferred its sponsorship to the State Public Charter School Authority the ( SPCSA ). The SPCSA renewed the Borrower s charter on April 16, 2013, effective for another six-year period. The Borrower s charter contract will terminate by its terms on June 30, There is no limit for renewals and opening additional campuses as long as the Borrower is in good standing and in compliance with the requirements of its charter. A-3

56 The following table shows the Borrower s campus locations, as well as the grades served and enrollment at each campus, for the school year. TABLE 1 CASLV Campus Locations Campus Address Grades Enrollment Centennial Hills Campus (1) 7951 Deer Springs Way, Las Vegas, Nevada K Sandy Ridge Campus (1) 1051 Sandy Ridge Avenue, Henderson, Nevada Nellis Air Force Base Campus (2) 42 Baer Drive, NAFB, Las Vegas, Nevada PreK Tamarus Campus 8185 Tamarus Street, Las Vegas, Nevada K Windmill Campus 2150 Windmill Parkway, Henderson, Nevada (1) Campuses to be acquired and/or improved with proceeds of the Series 2017 Bonds. See THE PROJECT in the forepart of this Official Statement. (2) The Borrower expects the operation of the Nellis AFB Campus to be moved to the New Nellis Campus upon completion of the New Nellis Campus. Certain preliminary costs associated with the New Nellis Campus will be financed with proceeds of the Series 2017 Bonds. See THE PROJECT Nellis Project in the forepart of this Official Statement. Source: The Borrower. Mission Statement CASLV s mission is to provide a safe, rigorous college preparatory environment that promotes social responsibility and a culturally diverse community dedicated to becoming lifelong learners bound for success. CASLV aims to create a partnership among the triad of student-teacher-parent/guardian that will provide its youth with the support necessary to reach their highest potential intellectually, socially, emotionally and physically. The educational vision and innovation crucial to accomplishing this mission are organized under two main headings: specific elements and whole-school design. The specific design elements fall into five categories: (1) rigorous curricula, instruction, and assessment; (2) leadership, governance, and staffing; (3) parent and community involvement; (4) technology; and (5) financing. Whole school design involves the comprehensive and continuing effort to realize these five essential elements in an integrated manner. It is CASLV s belief that each child has an inherent curiosity and love of learning; and that each child has a unique intelligence, level of capability, and learning style. With this in mind, CASLV aims to motivate its students and expect them to strive toward their highest levels of capability while addressing their individual learning styles, thus fostering within them a life-long love of learning. A-4

57 Academic Program and Curriculum Curriculum Philosophy. CASLV believes that the notion that science is necessary only for scientists and engineers is outdated in today s high-tech world. A solid science education is essential for students of all backgrounds, talents, interests, and abilities. All children need the knowledge and skills that make up science literacy the ability to make sense of the world around them. By helping kids learn how to observe, collect evidence, and draw conclusions, science helps students sharpen their thinking about the ideas and events they encounter in everyday life. CASLV believes that its curriculum develops student knowledge in the scientific method and encourages them to use computer technology in order to plan and organize projects, hypothesize, analyze data, and draw conclusions from tests they create. In the process, students become self-reliant, independent problem-solvers. Recognizing that educational success will be realized only when the essential underlying triad of student-teacher-parent/guardian is in harmony, the purpose of CASLV is to create a partnership that will provide its children with the support necessary to reach their highest potential intellectually, socially, emotionally, and physically. CASLV believes that a significant step toward helping students achieve their maximum potential involves providing an integrated curriculum that focuses on crossing traditional disciplinary boundaries. Therefore, the curriculum at CASLV stresses cross-disciplinary approach at every opportunity. Even so, CASLV has a science and math oriented curriculum. The curriculum concentrates on a hands-on approach to science while providing a solid education in humanities and social science. The curriculum at CASLV is designed to provide students with a solid foundation in humanities and social science as well as science and math, for it is humanities and social science that are largely responsible for conveying core cultural knowledge and values. In addition, the curriculum is based on integration of disciplines and collaborative learning; key factors in fostering a cooperative work ethic. At the core of the integrated curriculum is the perception that writing serves as an important vehicle for learning in all subject areas. Thus, at CASLV, students in all classes write frequently about what they have learned and what it means, thereby reinforcing learning and enhancing understanding. Another significant feature of the CASLV curriculum is the emphasis on collaborative learning. Success today, both in and out of school, depends on the ability to work as part of a team. Collaborative learning activities enhance this ability and are an important part of the CASLV approach to education. CASLV focuses on core knowledge and essential skills so that children may achieve the mastery upon which further learning will build. The CASLV education program also includes comprehensive health and physical education. The core CASLV grade-level outcomes meet or exceed Nevada State Standards. Differentiated Instruction. CASLV students are assigned class activities based on identified levels that are determined by teacher feedback and norm-referenced testing. Teachers differentiate instruction based on their students cognitive and social needs. In-class assessments are also used to determine the level of understanding and design individualized instruction. Teachers utilize strategies that include tiered assignments, interest centers/groups, independent projects, flexible grouping and varying questions. For students achieving significantly below grade level, educational materials that provide review and re-teaching are used. School-wide cluster grouping and within-class ability grouping strategies are employed to cater instruction to students in need. CASLV s flexible scheduling enables students who are struggling with their classwork to attend enrichment and remediation classes to fill in learning gaps. Teachers and classroom aides implement pull-out and push-in interventions to help students. One-on-one and small group tutoring sessions support class instruction in addition to extended school hour programs which are taught by full-time teachers and staff. A-5

58 Student Intervention. All students at CASLV receive support, remediation, modifications, and consultation services as they progress toward academic excellence. CASLV adheres to ongoing assessment and review of each student s Personal Education Plan. When a student is experiencing underperformance in any field, school administration addresses these areas through additional individual and group instruction, tutorials, parent/community volunteers, student interns, and peer teaching where appropriate. Every effort is made to deal with students learning problems within the context of the regular classroom, as supplemented by tutors. Tutors evaluate students strengths and weaknesses and develop strategies to teach in the most effective way. CASLV provides certain services, including but not limited to the following, in order to ensure successful remediation: Tutoring Program (Special tutoring after school, tutoring adjusted to student needs, individual attention); Mandated Homework Support, Saturday and Summer Schools; and Personal and Individualized Education Programs Parents sign a contract at the beginning of the instructional year acknowledging that they will make sure their children attend necessary intervention programs such as after-school tutoring, mandated homework support, Saturday School, or summer school. Written documentation of recommended interventions and their effects are recorded and shared with the parent/sponsor. Course Description. English, Math, Science and Social Studies are core classes at CASLV. The core curriculum standards, instructional activities, and assessments are differentiated within a grade level into the following three levels of instruction. Grade Average Level. Students gather, strengthen, and retain knowledge and information. Students are primarily expected to remember, understand, and use this acquired knowledge. Students use acquired knowledge to solve problems, design solutions and complete work. Interdisciplinary application are employed. This level requires students to use knowledge. The characteristics of the levels and students expectations are as follows: Requires use of knowledge. Requires students to actually practice steps in a procedure. Uses previous knowledge to solve problems, create a design, or communicate information. Assesses performance. Accelerated Level. In addition to grade average level expectations, student apply appropriate knowledge to new and predictable situations. Students extend and refine their acquired knowledge to be able to use that knowledge automatically and routinely to analyze and solve problems and create unique solutions. The characteristics of the levels and students expectations are as follows: Application occurs in the same way it is used by adults. Standards for performance are the same as for adult roles. Students have access to real-world resources (tools, references, etc.) Task must be completed in the same time frame as real-world. Advanced Level. In addition to accelerated level expectations, students apply appropriate knowledge to new and unpredictable situations. Students develop the competence to think in complex ways and also apply knowledge and skills they have acquired. Even when confronted with perplexing unknowns, students are able to use extensive knowledge and skill to create solutions and take actions that further develop their skills and knowledge. A-6

59 Application has uncertain results. Unknown factors involved (environment, people, time) Students have individual and unique solutions to problems. Student Assessments. CASLV has adopted the Clark County School District schedule of examinations. Students are required to take the Northwest Evaluation Association ( NWEA ) Measure of Academic Progress (as further discussed herein, MAP ) test and all Nevada Proficiency Examination Program exams including the Nevada Writing Assessment; the Iowa Test of Basic Skills; Criterion-Referenced Tests in Reading, Mathematics, and Science; the Language Proficiency Assessment; the Nevada Alternate Scales of Academic Achievement; and the National Assessment for Educational Progress if required. CASLV students take MAP assessments three times a year: at the beginning of the school year, mid-year and year-end. Students attending CASLV are assessed in each of the core curriculum skill areas by a combination of on-going teacher feedback, MAP assessments and criterion reference exams as required by the Borrower s Board of Directors and the State Board of Education. CASLV students are placed in classes to meet their achievement level every year based on these criteria. Recognition and Awards The Borrower has enjoyed industry recognition for its academic results. Notable awards, recognition and academic achievements include: Five Stars: CASLV s elementary school grades, middle school grades and high school grades were all named 5-Star Schools by the Nevada Department of Education in the school year, the last year in which such star ratings were given. U.S. News & World Report: CASLV was named among Best High Schools of 2017 (#967 national ranking out of 28,496 public high schools nationally), ranking 6 th overall in Nevada; Washington Post: CASLV was named among the most challenging high schools, ranking 2 nd in Nevada and 190 th in the nation; Congressional Award. Three students from CASLV were awarded Congressional Awards in 2017, the United States Congress award for young Americans. One CASLV student was among only 373 students from 39 states receiving a Gold Congressional Medal in % high school graduation rate with the class of 2016, with many pursuing colleges/universities cohort graduation rate of 95.7% (students started at CASLV for freshman year and earned HS diploma from CASLV or another institution). A CASLV student earned the 2017 Presidential Inauguration Youth Leadership Congress Medal of Achievement, with several other students earning a certification. In 2017, CASLV placed in two of the top five spots in every category at the 34th annual Southern Nevada Secondary MathCounts and CASLV received 1 st place in Nevada. In 2017, CASLV students won 15 awards at the University of Nevada, Las Vegas Science Fair. A-7

60 In 2016 and 2017, the CASLV Speech and Debate team qualified for the National Individual Events Tournament of Champions in Denver. In 2016, a CASLV student qualified in the final ten for the National Geographic Spelling Bee. The CASLV Elementary Science Olympiad team took 3 rd place at the 2014 Nevada State Division A Science Olympiad. Organizational Structure and Leadership Team The Borrower currently employs approximately 217 full-time equivalent ( FTE ) personnel, the large majority being school-specific staff. Ten employees serve in an administrative or support function at the Borrower s central office in Las Vegas, Nevada. below: Executive Team. Coral s executive team (the Executive Team ) member biographies are listed Ercan Aydogdu, Executive Director. Mr. Aydogdu holds a Bachelor of Science degree in Mathematics from Bosphorus University in Istanbul, Turkey, and a Master s Degree in Educational Leadership from Grand Canyon University in Phoenix, Arizona. Mr. Aydogdu has been working in the education field for 24 years. With a background in mathematics, Mr. Aydogdu has taught from Algebra all the way up to AP Calculus. Mr. Aydogdu has had experience as a mathematics teacher, Mathematics Department Chair, Dean of Students, Dean of Academics, Principal, Special Education Director and New School Projects Coordinator for school districts. Mr. Aydogdu has been serving as the Executive Director of CASLV since Mr. Aydogdu also serves as a board member of Coral Academy of Science Reno, board treasurer of the Charter Schools Association of Nevada, and board member of the Henderson Chamber of Commerce s Issues Mobilization Political Action Committee. Mr. Aydogdu is a member of Nevada Association of School Administrators and the Association for Supervision and Curriculum Development. In 2014, the Charter School Association of Nevada recognized Mr. Aydogdu as the Administrator of the year in Nevada. Candy Farthing, Chief Operating Officer. Ms. Farthing s background is in education, school leadership, and administration. Ms. Farthing s educational licenses include School Administration, K-12 Reading Specialist, Middle School Language Arts, and PreK-8th grade teaching. Ms. Farthing completed the majority of her undergraduate and graduate work at George Fox University in Newberg, Oregon. Ms. Farthing has a Masters in School Leadership and Curriculum Instruction. Ms. Farthing has 17 years of experience in the field of education, with the last 7 being in school administration roles, and 10 in the charter environment. Ms. Farthing is in her third school year with CASLV, and in her role as Chief Operating Officer she helps oversee and support all five of CASLV s campuses. Ms. Farthing continues to help streamline and enhance operations and procedures, supports the schools strategic plan and continued growth, and works closely with the executive team and site administration as they collaborate and advance CASLV s academic and school excellence to support every student. Nick Sarisahin, Chief Financial Officer. Prior to joining CASLV, Mr. Sarisahin worked as Business Manager for various charter schools. Mr. Sarisahin started as an Accounting Manager at CASLV in 2011, and was assigned as Chief Financial Officer in Mr. Sarisahin has over 10 years experience as a CFO, Accounting Manager, and Business Manager in several charter organizations. Mr. Sarisahin is a member of the association of Certified Fraud Examiners. Mr. Sarisahin has a Bachelor of Science in Business Administration from Nigde University. A-8

61 Mustafa Gunozu, Chief Academic Officer. Mr. Gunozu began a career of teaching 16 years ago to facilitate a learning environment that is engaging and exciting for all children. Mr. Gunozu has a B.A. degree in Education from Bogazici University and M.B.S. degree from the Humbolt University of Berlin. Currently, Mr. Gunozu is a doctoral student in the Educational Psychology program at University of Nevada, Las Vegas. Mr. Gunozu has worked in London and Berlin before he moved to Istanbul where he taught Education and ESL classes at a private college for five years. Since 2009 Mr. Gunozu has served as a teacher, a Site Director and currently is the Chief Academic Officer at CASLV. Mr. Gunozu is licensed to teach Psychology, English, and ESL in Nevada. Mr. Gunozu is a member of the Association for Supervision and Curriculum Development and the American Educational Research Association. Amanda Orosco, Human Resources Director. Ms. Orosco holds Bachelor s degree from the University of Nevada, Reno in Pre-Law and a Master s in Business Administration with an emphasis in Human Resource Management from the University of Nevada, Las Vegas. Ms. Orosco worked in human resource management for three years at a Fortune 500 company before taking over the Human Resource Director role at CASLV. Ms. Orosco has been with CASLV for just over a year. Borrower Board of Governors The Borrower is governed by a Board of Governors (the Board ) comprising seven members, with the Board reserving the right to change the number of members by resolution of the Board or amendment of the Board s Rules of Governance. Members of the Board hold office for two years and each member may serve for up to four full terms, at which time a member may only be re-elected after taking a one-year hiatus from the Board. Board positions are filled by the vote of a majority of the members of the Board then in office. Pursuant to statute, a majority of the members of the Board must reside in Clark County, and the Board must consist of: (i) one member who is a teacher or other person licensed pursuant to chapter 391 of the Nevada Revised Statutes or who previously held such a license and is retired (so long as their license was held in good standing); (ii) a second member who satisfies the qualifications of (i) above, or a school administrator with a license issued by another state or who previously held such a license and is retired (so long as their license was held in good standing); one parent or legal guardian of a student enrolled at CASLV who is not a teacher or administrator at CASLV; (iv) two members who possess knowledge and experience in accounting, financial services, law or human resources; and (v) at-large governing members, including other persons of good moral character such as parents, educators, community leaders and representatives of nonprofit organizations and businesses that do not have contracts with CASLV. A-9

62 Brief biographies of the seven members of the Board follow. Source: The Borrower. Ann Diggins, M.A. President. Ms. Diggins is currently the Director of Admissions and Student Affairs at the University of Nevada, Las Vegas ( UNLV ) School of Medicine. Ms. Diggins has dedicated her career to helping Nevada students choose medical fields in the state s university programs and to achieve success. Ms. Diggins has experience assisting students when preparing to apply for medical school and residency programs. Ms. Diggins has developed effective methods to help guide medical students when choosing their specialty. In addition, Ms. Diggins served as the Nevada representative to the American Association of Medical Colleges the association overseeing medical student admissions diversity initiatives for the western region from Ms. Diggins also worked with a consortium of western medical schools to increase access for Native American students to obtain careers in medicine and health care. Ms. Diggins received a B.A. degree in journalism in 1986, and a M.A. degree in counseling and educational psychology in 2001, both from the University of Nevada, Reno. James Brin Gibson, Esq. Vice President. Mr. Gibson serves as the Bureau Chief of Gaming, Business & Industry in the office of the Nevada Attorney General. As a Bureau Chief, Mr. Gibson oversees three divisions within the Attorney General s Office, including Gaming, Boards & Licensing, and Natural Resources. Prior to this appointment, Mr. Gibson was the chief of the Gaming Division and advised the Gaming Control Board and Nevada Gaming Commission on all matters. Previously, Mr. Gibson worked in the gaming and regulatory department at the law firm of Lionel Sawyer & Collins, where he was a partner. From 2011 to 2014, Mr. Gibson was a member of the Colorado River Commission, where he served by gubernatorial appointment. Mr. Gibson has also worked as an associate adjunct professor at the University of Nevada, Las Vegas Boyd School of Law where he co-taught water law. Mr. Gibson earned both his law and undergraduate degrees from Brigham Young University. Philip Zhang, CPA Treasurer. Mr. Zhang is founder of Philip Zhang CPA, Ltd., and has over 15 years of public accounting and private industry experience. Mr. Zhang s professional experience includes managing of the firm s accounting, tax and audit assurance practice as well as GAAP accounting and client support. Mr. Zhang has worked with clients in a variety of industries and backgrounds and has experience with financial analysis, and personal and business income tax planning and preparation. Prior to founding his own firm, Mr. Zhang was a partner at De Joya Griffith, LLC, Reeves, Evans, McBride & Zhang, LLP. Mr. Zhang has also worked as accountant for Farmer and Tompkins CPAs, Ltd. and as Director of Finance and A-10

63 Operations at Regent Industry. Mr. Zhang graduated from the University of Nevada, Las Vegas in 2001 and holds a Bachelor of Science in accounting. Mr. Zhang is a Certified Public Accountant of the State of Nevada as well as a Certified Fraud Examiner. Mr. Zhang is a member of the AICPA, the Nevada Society of CPA s, and the Association of Certified Fraud Examiners. Beth Kazelskis Secretary. Ms. Kazelskis received a Bachelor of Science from Western Michigan University with a major in Interior Design. Ms. Kazelskis has worked as a Project Manager for nine years in the Exhibit Industry specializing in custom exhibits. In 2001, Ms. Kazelskis left her career to focus on her first child. Since becoming a stay-at-home mother of three children Ms. Kazelskis has been actively involved in her children s education. Ms. Kazelskis has been an active member of the CASLV community during the eight years her children have attended the school. Ms. Kazelskis has volunteered many hours within the classroom and morning car line. Ms. Kazelskis has served for three years as a PTO Board Member and two years as the President. Ms. Kazelskis has hosted many annual events at CASLV including Scholastic Book Fairs, Uniform Exchange, Teacher Appreciation luncheons, Muffins with Moms, and Donuts with Dads. Arlene Hayman, M.Ed Director. Ms. Hayman received her both her Bachelor of Science and Bachelor of Education with Distinction from the University of Hawaii. Ms. Hayman possesses a Master s Degree in Curriculum and Instruction, Literacy Education, from the University of Nevada Las Vegas. Ms. Hayman has served as an elementary classroom teacher for 21 years, and spent the majority of her career working with culturally diverse students from an at-risk population. In her first year of teaching, Ms. Hayman was awarded the New Teacher of the Year Award for Primary Grades from the Clark County School District. Ms. Hayman is National Board certified and an awardee of the Presidential Award for Excellence in Math and Science Teaching, the nation s highest honor for teachers of math and science. Ms. Hayman presently teaches 3 rd grade at Morrow Elementary School in Henderson, NV. Carryn Warren, Ph.D. Director. Dr. Warren is an Associate Professor of Mathematics at the University of Nevada, Las Vegas, where she has served since Dr. Warren earned her Ph.D. in Applied and Computational Mathematics at Old Dominion University in Virginia, and a Masters of Education from the University of Nevada, Las Vegas. Feyzi Tandogan Director. Mr. Tandogan has been the Executive Director at Coral Academy of Science Reno since Mr. Tandogan served as Executive Director of CASLV between 2007 and Mr. Tandogan worked as Math Teacher, Math Department Chair, and Mathcounts coach at Coral Academy of Science Reno between 2000 and Mr. Tandogan coached Coral Academy Mathcounts, AMC (American Math Competition), and Mathleague, and his team received several Regional and State level awards during these years. Additionally, Mr. Tandogan worked as Assistant Principal at Coral Academy of Science in school year. Mr. Tandogan was a founding member of Coral Academy of Science Reno ( ) and CASLV ( ). Mr. Tandogan received a B.S. degree in Mathematics from Middle East Technical University and a M.S. degree in Mathematics from Ataturk University. Mr. Tandogan also received a M.Ed. degree in Educational Administration from University of Nevada in Accreditation CASLV is accredited by AdvancED, a non-profit non-partisan organization that conducts rigorous, on-site reviews of a variety of educational institutions and systems to ensure that all learners realize their full potential. AdvancED was created through a 2006 merger of the Pre-K-12 divisions of the North Central Association Commission on Accreditation and School Improvement and the Southern Association of Colleges and Schools Council on Accreditation and School Improvement, and expanded through the addition of the Northwest Accreditation Commission in A-11

64 ACADEMIC AND SCHOOL OPERATIONS General * Centennial Hills Campus and Nellis Air Force Base Campus are expected to expand to serve grade 7 in and grade 8 in Source: The Borrower. The Borrower currently operates the Tamarus Campus in facilities located at 8185 Tamarus Street, Las Vegas, Nevada, pursuant to a lease agreement by and between the Borrower and Happy Trails Lessor, LLC. See OPERATING AND FINANCIAL INFORMATION Facility Leases herein. The Tamarus Campus began operations in the school year. In the school year, the Borrower is serving 382 students in kindergarten through grade 2 at the Tamarus Campus. The Borrower intends to acquire the Tamarus Campus with proceeds of the Series 2018 Bonds, which are expected to be issued in June See THE SERIES 2017 Bonds Additional Bonds in the forepart of this Official Statement. The Borrower currently operates the Windmill Campus in facilities located at 2150 Windmill Parkway, Henderson, Nevada, pursuant to a lease agreement by and between the Borrower and Hunt Henderson, LLC. See OPERATING AND FINANCIAL INFORMATION Facility Leases herein. The Windmill Campus began operations in the school year. In the school year, the Borrower is serving 399 students in grades 3 through 5 at the Windmill Campus. The Borrower currently operates the Sandy Ridge Campus in facilities located at 1051 Sandy Ridge Avenue, Henderson, Nevada, in a facility owned by the Borrower. The Sandy Ridge Campus began operations in the school year. In the school year, the Borrower is serving 815 students in grades 6 through 12 at the Sandy Ridge Campus. The Borrower currently operates the Centennial Hills Campus in facilities located at 7951 Deer Springs Way, Las Vegas, Nevada, pursuant to a lease agreement by and between the Borrower and Charter School Solutions Coral LLC. The Centennial Hills Campus began operations in the school year. In the school year, the Borrower is serving 625 students in kindergarten through grade 6 at the Centennial Hills Campus. Upon the issuance of the Series 2017 Bonds, the Borrower will acquire the Centennial Hills Campus and continue its current operations there. The Centennial Hills Campus is expected to expand to serve approximately 625 students in kindergarten through grade 8 by the school year. At that time, the Borrower expects the Centennial Hills Campus to continue to serve 625 students, which is the enrollment capacity for such facility. The Borrower expects to gradually adjust the number of students served in each grade over time to maintain an enrollment of approximately 625 students. A-12

65 The Borrower currently operates the Nellis AFB Campus at the Existing Nellis Site in facilities located at 42 Baer Drive, NAFB, Las Vegas, Nevada, pursuant to a lease by and between the Borrower and the United States of America, acting by and through the Secretary of the Air Force. See OPERATING AND FINANCIAL INFORMATION Facility Leases herein. The Nellis AFB Campus began operations in the school year. The Borrower currently operates pre-kindergarten through grade 6 at the Existing Nellis Site, with an enrollment of 704 in the school year. The capacity of the existing charter school facilities at the Existing Nellis Site is 790. The Borrower expects to construct a new charter school facility on land situated on Nellis AFB leased from the United States Government pursuant to the Ground Lease (as defined in the forepart of this Official Statement) (the the New Nellis Campus ). Construction on the New Nellis Campus is expected to be completed by the school year, at which time the Borrower expects to serve approximately 890 students in pre-kindergarten through grade 8 by the school year. Throughout this Appendix A, the Borrower s operations at both the Existing Nellis Site and the New Nellis campus are referred to collectively as the Nellis AFB Campus. Planned Expansion Eastgate Campus Due to CASLV s growing waitlist, community members and parents have urged CASLV to open another campus in the Henderson, Nevada community. At its July 29, 2016 board meeting, the State Public Charter Board unanimously approved an increase of CASLV s total enrollment to 3,680 (adding 1,000 students in kindergarten through grade 12) and an expansion to another campus serving kindergarten through grade 8. See Enrollment, Attendance & Student Retention herein. To the extent necessary, the Borrower expects to seek an additional approval for increased enrollment to allow for its projected enrollment of 3,752 students in prekindergarten through grade 12 in The Borrower has entered into a lease for the use of a charter school facility in the Eastgate community of Henderson (the Eastgate Campus ). See OPERATING AND FINANCIAL INFORMATION Facility Leases herein. The planned Eastgate Campus is located on 3.4 acre parcel located at 7777 Eastgate Road, Henderson, Nevada, within the Black Mountain Industrial Center. The planned Eastgate Campus is located within an existing two-story, approximately 38,500 square foot, vacant building with 136 parking spaces that was previously occupied by the University of Phoenix. The parcel is within a Community Commercial zoning district, which allows a public or private school use with a conditional use permit (a CUP ). On October 12, 2017, the City of Henderson Planning Commission approved the Borrower s request for a CUP, which decision was appealed by a neighbor citing potential traffic concerns. On November 21, 2017, the City Council of the City of Henderson voted unanimously to uphold the Planning Commission s CUP approval. The Borrower expects the Eastgate Campus to open fully enrolled with approximately 650 students in its first school year of due to CASLV s extensive waitlist. The Borrower expects the Eastgate Campus to remain at 650 students at full capacity. See Enrollment, Attendance & Student Retention Wait List herein. CASLV plans to reconfigure its grade offerings at its existing Windmill Campus, Tamarus Campus, Centennial Hills Campus and Sandy Ridge Campus to maximize educational and facilities efficiencies. At full enrollment, CASLV expects to have approximately 3,752 students at its six campuses in Henderson and Las Vegas, Nevada. The Borrower expects additional demand for the Eastgate Campus due to its proximity to the Cadence Master Planned Community ( Cadence MPC ), an approximately 2,200 acre planned community expected to include up to 13,250 units upon completion. As of January 2017, the City of Henderson estimated the Cadence MPC was 2.9% complete, with 380 existing units and an estimated population of 883. In July 2017, Cadence MPC reported that its 500th home had been sold. A-13

66 Enrollment, Attendance & Student Retention Enrollment. The table below shows grade level enrollment for CASLV, by campus, in school years through , as well as projected enrollment by grade level through the school year. TABLE 2 CASLV Enrollment by Grade Level (1) Through Tamarus Campus Grade Level (2) (2) (2) (2) (2) Kindergarten st Grade nd Grade rd Grade th Grade th Grade Totals Windmill Campus Grade Level (2) (2) (2) (2) (2) 3 rd Grade th Grade th Grade th Grade th Grade Totals Sandy Ridge Campus Grade Level (2) (2) (2) (2) (2) 6 th Grade th Grade th Grade th Grade th Grade th Grade th Grade Totals (1) For school years through , data reflect enrollment as of October 1 in each school year. (2) The Borrower expects to open its sixth campus in the school year, and adjust enrollment across its campuses accordingly. See Planned Expansion Eastgate Campus above. Source: The Borrower. A-14

67 TABLE 2 (continued) CASLV Enrollment by Grade Level (1) Through Centennial Hills Campus (2) Grade Level (3) (3) (3) (3) (3) Kindergarten st Grade nd Grade rd Grade th Grade th Grade th Grade th Grade th Grade Totals Nellis AFB Campus (2) Grade Level (4) (4) (4) (4) Pre-K Kindergarten st Grade nd Grade rd Grade th Grade th Grade th Grade th Grade th Grade Totals (1) For school years through , data reflect enrollment as of October 1 in each school year. (2) First year of operation was (3) The Borrower expects to open its sixth campus in the school year, and adjust enrollment across its campuses accordingly. See Planned Expansion Eastgate Campus above. (4) Assumes the completion of planned construction of the New Nellis Campus, expected to be completed prior to the start of the school year. The current charter school facilities constituting the Existing Nellis Site have a capacity of 790 students. Increased enrollment of 890 is contingent on the construction of the planned New Nellis Campus. See THE PROJECT Nellis Project in the forepart of this Official Statement. Source: The Borrower. A-15

68 TABLE 2 (continued) CASLV Enrollment by Grade Level (1) Through Eastgate Campus (2) Grade Level Kindergarten st Grade nd Grade rd Grade th Grade th Grade th Grade th Grade th Grade Totals Total CASLV Grade Level Pre-K Kindergarten st Grade nd Grade rd Grade th Grade th Grade th Grade th Grade th Grade th Grade th Grade th Grade th Grade Totals 1,378 1,488 1,543 2,738 2,925 3,596 3,686 3,739 3,751 3,752 (1) For school years through , data reflect enrollment as of October 1 in each school year. (2) Expected to begin operations in the school year. See Planned Expansion Eastgate Campus above. Source: The Borrower. A-16

69 Certain student demographics for CASLV are presented in the following table, compared against similar demographics for the Clark County School District ( CCSD ). Total Students (1) Percentage FRL TABLE 3 CASLV Student Demographics Percent English Language Learner Percent Hispanic Percent Black Percent White CASLV 2, % 2.9% 18.3% 8.4% 45.3% CCSD 320, (1) Enrollment as of October 1. Source: The Borrower; Nevada Department of Education. Student Retention. The following table sets forth, for the periods shown, the percentage of students enrolled from the prior school year that returned as students in the latter school year (without regard to graduating students). TABLE 4 CASLV Historical Student Retention (1) through Retention to % to (1) Reflects enrollment as of October 1 in each year. Source: The Borrower. A-17

70 Wait List. CASLV maintains waitlists at each campus of applicants who wish to attend but exceed the available number of seats at the respective campuses. The following table sets forth the number of students at each campus who were on the wait list to enroll for the school year, as of October 25, Teacher Retention TABLE 5 CASLV Wait List by Grade Fall 2017 Grade Level Wait List Pre-Kindergarten 30 Kindergarten 1,147 1 st Grade nd Grade rd Grade th Grade th Grade th Grade th Grade 33 8 th Grade 23 9 th Grade 5 10 th Grade 2 11 th Grade 1 12 th Grade 0 Total 2,994 Source: The Borrower. The following table sets forth the rate of retention of teachers at CASLV, showing for each period the percentage of teachers teaching in the initial school year who returned to teach in the latter school year. Campus Service Areas and Competitive Schools TABLE 6 CASLV Teacher Retention through Retention to % to Source: The Borrower. Competing Schools. The following table presents a summary of the certain demographics and test results for schools located in the vicinities of the CASLV campuses that the management of CASLV regards as possible competing schools, as well as such data for the school district in which each school is located and Statewide, indicating for each school the enrollment, grades served, the percentages of English Language Learners ( ELL ), recipients of Free and Reduced Price Meals ( FRPM ) and the school s rating received in the school year under the State s Star Rating System (see Academic Outcomes Star Rating System herein). A-18

71 TABLE 7 CASLV Competing Schools Tamarus Campus, Windmill Campus and Sandy Ridge Campuses Achievement Distance Demographics School CRT Math CRT Reading ACT Score Graduation Rate Miles (2) Grades Served FRL % ELL % Tamarus, Windmill and Sandy 62% (4) ; 67% (4) ; Ridge Campuses 62% (5) (5) 64% % % 2.9% Coronado High School Bob Miller Middle School Del Webb Middle School Charles Silvestri Middle School Liberty High School Clark County School District 40 (4) ; 24 (5) 48 (4) ; 45 (5) K Nevada -- K Centennial Hills Campus Achievement Distance Demographics School CRT Math CRT Reading ACT Score Graduation Rate Miles (3) Grades Served FRL % ELL % Centennial Hills Campus 67% (4) ; 62% (4) ; 62% (5) (5) 64% % % 2.9% Somerset Sky Pointe (6) 59 (3) ; 34 (4) 63 (3) ; 51 (4) K Joseph Neal Elementary School K Ernest May Elementary School K Dean LaMar Allen Elem. School K Kay Carl Elementary School K Clark County School District 40 (4) ; 24 (5) 48 (4) ; 45 (5) K Nevada -- K (1) The Borrower s 2014 Star Rating represents the rating for the Borrower school-wide, as the State rated the Borrower based on grade-level (i.e. elementary school, middle school and high school) and not by campus. The Borrower received a Five-Star Rating at all three school levels. (2) Indicates distance from the Sandy Ridge Campus in miles. The same schools are considered by the Borrower to be competing with the Tamarus Campus, Windmill Campus and Sandy Ridge Campus. (3) Distance from the Centennial Hills Campus in miles. (4) Indicates Math/Reading scores for elementary school students. (5) Indicates Math/Reading scores for middle school students. (6) Enrollment and demographic information is for the entire Somerset Las Vegas charter, not just the Sky Pointe campus. Source: Nevada Department of Education; the Borrower. A-19

72 TABLE 7 (continued) CASLV Competing Schools Nellis AFB Campus Achievement Distance Demographics School CRT Math CRT Reading ACT Score Graduation Rate Miles (2) Grades Served FRL % ELL % Nellis AFB Campus 62% (3) ; 67% (3) ; 62% (4) (4) 64% % -- K % 2.9% Daniel Goldfarb Elem. School K JE Manch Elementary School K Zel & Mary Lowman Elementary School K DL Dickens Elementary School K Clark County School District 40 (3) ; 24 (4) 48 (3) ; 45 (4) K Nevada -- K (1) The Borrower s 2014 Star Rating represents the rating for the Borrower school-wide, as the State rated the Borrower based on grade-level (i.e. elementary school, middle school and high school) and not by campus. The Borrower received a Five-Star Rating at all three school levels. (2) Indicates distance from the Nellis AFB Campus in miles. (3) Indicates Math/Reading scores for elementary school students. (4) Indicates Math/Reading scores for middle school students. Source: Nevada Department of Education; the Borrower. ACCOUNTABILITY The State has applied for and received permission for flexibility under the federal Elementary & Secondary Education Act, reauthorized and amended in 2015 by the Every Student Succeeds Act (the ESEA ) and developed its own accountability statutes. The State s most recent federal flexibility waiver expires at the end of the school year. Prior to this date, the State Department of Education is required to develop and operationalize a new school accountability system based on the school year. The new State accountability system must meaningfully differentiate schools based on academic proficiency of State assessments, graduation rates for high school, English language proficiency, growth or other statewide academic indicator for K 8 schools, at least one other State-set indicator of school quality or student success, and 95% assessment participation rate. Rather than the Adequate Yearly Progress ( AYP ) school accountability system prescribed by ESEA, the State s current school accountability system is the Nevada School Performance Framework ( NSPF ). The NSPF is an integral component of the Educator Performance System that defines the State's shift away from AYP to a five-star classification approach, with schools earning a rating of one, two, three, four, or five stars. The NSPF includes multiple measures of student achievement and growth and aligns the designations for schools to the delivery of appropriate supports and rewards. The NSPF incorporates performance on multiple measures of achievement including proficiency, student growth, growth to target, reductions in achievement gaps, and college- and career-readiness indicators, including graduation rate and scores on national college-readiness assessments. Nevada's public schools receive an index score and a star rating under the NSPF. For elementary and middle schools, star ratings in the NSPF are based on student growth, proficiency, subgroup performance gaps, and average daily attendance. High school ratings are based on student proficiency, subgroup performance gaps, growth, graduation rates, college and career readiness, and other indicators. For all schools, the NSPF provides actionable feedback to schools and districts to help determine if current practices are aligned to improve educational outcomes for all students. A-20

73 State public schools receive an index score and a star rating under the NSPF. The index score is a score out of 100 for a school. Index scores are comprised of the total points earned across several indices. Elementary and middle school indices consist of student growth, proficiency, subgroup performance gaps and other indicators while high school indices consist of student proficiency, subpopulation performance gaps, growth, graduation, career and college readiness and other indicators. Star ratings are generally referred to as school classifications. The NSPF index score is divided into five score ranges that correspond to star ratings, where five stars is the highest rating. The basis for the five score ranges is the index scores determined using information from the school year. The overall index values for the schools at the 90th percentile then formed the basis for the point range for 5-star schools. Conversely, the schools among the lowest 5% of schools within the NSPF formed the basis for a 1-star rating. Continuing in this manner, a 4-star rating represents schools in the 75th to 89th percentile range, a 3-star rating represents schools within the 25th to 74th percentiles and 2-star schools fall between the 5th and 24th percentiles. State statute requires the State Department of Education to determine whether each public school is meeting the annual measurable objectives and performance targets established pursuant to the statewide system of accountability for public school on or before July 31 of each year. Between July 31 and September 15, the State Department of Education engages in a review of each school s preliminary rating and prepares school reports for public access. Final determinations of school ratings must be made on or before September 15. Because the State Department of Education is currently reviewing changes to the NSPF for the renewal of its ESEA flexibility waiver, no school ratings were assigned for the school year or school year. State Required Proficiency Exams All Nevada public schools are required to administer the Criterion Referenced Test ( CRT ) for grades 3-8, the Fifth and Eighth Grade Writing Assessments, the Nevada Alternative Assessment, and the English Language Proficiency Assessments. Beginning with the graduating class of 2017, the State s End of Course ( EOC ) examinations have taken the place of the High School Proficiency Examination as a graduation requirement for a Nevada standard diploma. The classes of 2017 and 2018 need to take the EOCs and no passing scores are required. The Class of 2019 will be the first class of students required to receive a passing score on the EOCs as a requirement to graduate. The class of 2020 and beyond will be required to pass an English Language Arts combined EOC and Science EOC assessment in addition to two math assessments. Academic Outcomes Star Rating System. The Nevada Department of Education is to make final determinations of school ratings on or before September 15th of each year. New school ratings will not be released until September 15, 2017, which will be determined by a new accountability system that was not previously employed during the school year from which the most recent ratings were calculated. In , the most recent school year in which star ratings were produced, CASLV was named a 5- Star School in elementary school, middle school and high school. In , 15-6% of schools state-wide received 5-Star ratings. The Nevada Department of Education has provided descriptions of each of the star rating categories as set forth below: A-21

74 1-Star. A 1-Star School has room for substantial improvement in whole school proficiency and growth and is among the lowest-achieving schools in the State based upon whole school proficiency and growth over a number of years. 2-Star. A 2-Star School has room for improvement in whole school proficiency and growth. 3-Star. A 3-Star School has some areas of success as well as some areas that need improvement relative to student proficiency and/or student growth on the State assessments. 4-Star. A 4-Star School is a higher performing school in State in student proficiency and/or student growth on the State assessments. The 4-Star School is acknowledged for its achievement with public recognition and has some autonomy and/or flexibility in school planning and decision-making. 5-Star. A 5-Star School is among the highest performing schools in the State in student proficiency and/or student growth on the State assessments. The 5-Star School is acknowledged for its achievement with public recognition and has autonomy in school planning and decision-making. Star ratings are used to develop performance plans for each school and the level of oversight correlates with the school s star rating such that the lower the star rating, the higher the level of State and/or local school district involvement in the school s operations. State Assessments. The Nevada Department of Education is required to develop and operationalize a new accountability system based on the school year, under the federal Every Student Succeeds Act. The following describes the current State mandated assessments that must be administered by the Borrower. The Nevada Board of Education is in the process of interpreting recent State legislation that will likely necessitate changes in the following assessments. Grades K-3: Measure of Academic Progress: For grades K-3 the State utilizes MAP assessments, a computer-adaptive assessment that monitors student growth and informs teachers in a way that allows them to personalize instruction. This assessment program was adopted in the State to help achieve the Read by Grade Three Act that aims to ensure all students are able to read proficiently by the end of the 3rd grade. A student taking a MAP assessment will first answer a question that is appropriate for that student s grade level, as the test continues, the questions dynamically adapt in response to the student s performance. The results of the MAP assessments are easy to understand and designed to help educators recognize each individual student s needs. Grades 3-8: Smarter Balanced Assessments: The Smarter Balanced Assessment is a computer testing system aligned with the Common Core State Standards in English language arts and mathematics and is given to students in grades 3 through 8. It was developed by a group of states known as the Smarter Balanced Assessment Consortium. The goal in implementing the Smarter Balanced Assessment is to prepare all State students for success in college and careers readiness. The online format of this assessment allows for more meaningful feedback for both teachers and parents. The computer adaptive technology makes each testing experience customized. During the test if a student answers a question correctly, the next question will be harder, an incorrect answer will be followed by an easier question. In addition to multiple choice questions, this assessment includes writing questions which allow students to demonstrate their research, writing, and problem solving skills. Grades 5, 8 & 10: Science: Federal testing regulations require all public school students in 5 th, 8 th, and 10 th grade to participate in science assessments. These assessments are computer-based tests that are administered once a year by schools in the spring. Student performance is measured against the recently adopted Nevada Academic Content Standards for Science. A-22

75 In the fifth grade students are expected to demonstrate grade-appropriate proficiency in the following areas to demonstrate understanding of the core ideas: developing and using models, planning and carrying out investigations, analyzing and interpreting data, using mathematics and computational thinking, engaging in argument from evidence, and obtaining, evaluating, and communicating information. By the eighth grade, students are expected to complete physical science, life science, earth and space science, and engineering design. Students are expected to be able to define a problem by precisely specifying criteria and constraints for solutions as well as potential impacts on society and the natural environment, systematically evaluating alternative solutions, analyzing data from tests of different solutions and combining the best ideas into an improved solution, and developing a model and iteratively testing and improving it to reach an optimal solution. Grades 7-13: End of Course Examinations: The End of Course ( EOC ) examinations are designed to measure student understanding of the courses they are enrolled in. These exams are aligned to the Nevada Academic Content Standards in ELA, mathematics, and science. The End of Course exams are administered for Math I Emphasis on Algebra I, Math II Emphasis on Geometry, Integrated Mathematics 1, Integrated Mathematics 2, English language arts I with a Focus on Reading Comprehension, English language arts II with a Focus on Writing, Science with a focus on Life Science for Graduation Cohort 2020 and beyond, ELA Combined (reading and writing) for Graduation Cohort 2020 and beyond. [REMAINDER OF PAGE LEFT BLANK] A-23

76 State Report Cards. The State prepares report cards which highlight certain academic indicators compared against a local school s district. The following figures show the report cards for CASLV, broken down by elementary school grades, middle school grades, and high school grades, compared against Clark County School District. The following information describes each of the indicators: Academic Achievement is a measure of student performance based on a single administration of the State assessment. Cut scores are set that determine the achievement level needed to be proficient on the assessment. Student Proficiency is determined by calculating the percent of students in the school who met and exceed standards on the State assessments. Points are earned based on a pooled average (total number of students proficient on all three assessments divided by total number of students taking all three assessments). English Language Proficiency is a measure of English Learners achieving English Language proficiency on the State English Language Proficiency assessment. The Nevada School Performance Framework includes Adequate Growth Percentiles to determine if English Language Learners are meeting the goal toward English Language proficiency. Students meeting their growth targets should be on track to become English proficient and exit English language status in five years. Student Engagement is a measure of Chronic Absenteeism and Climate Survey Participation. Chronic absenteeism is defined as missing 10 percent, or more, of school days for any reason, including excused, unexcused or disciplinary absences. Students who are absent due to school sponsored activities are not considered absent for the purposes of this calculation. The Climate Survey is a State survey administered to students in certain grades across the State. Schools meeting or exceeding the 55% participation threshold can receive bonus points. Student Growth is a measure of performance on the state assessments over time. Student Growth Percentile ( SGP ) is a measure of student achievement over time and compares the achievement of similar subgroups of students from one test administration to the next. An SGP from 35 to 65 is considered typical growth. Median Growth Percentile ( MGP ) is a summary of the SGP in a school. A school s MGP is determined by rank ordering all the SGPs in the school from lowest to highest and finding the median or middle number. Adequate Growth Percentile ( AGP ) describes the amount of growth a student needs to remain or become proficient on the State assessment in three years. Closing Opportunity Gaps is a measure of non-proficiency. This measure includes students who were non-proficient on the previous year s State assessment and determines if those students in the current assessment administration succeeded in meeting their Adequate Growth Percentile. This is a measure of gap between proficient and nonproficient students. Cohort Graduation Rate is determined through the cohort validation process and follows federal guidelines for reporting an adjusted cohort grauation rate. This process usually results in preliminary graduation rates in October, with disaggregated rates determined in December. Because these dates are past the required state school accountability reporting date of September 15th, the cohort rates used for this indicator lags one year behind the other accountability indicators in the school rating system. The College and Career Readiness indicator is made up of three measures: Average ACT Composite Score, Ninth and Tenth Grade Credit Sufficiency, and percent of students achieving college and career readiness status on the Math, ELA or Science End-of-Course assessments. A-24

77 FIGURE 1 CASLV ELEMENTARY SCHOOL Nevada School Rating Source: Nevada Department of Education. A-25

78 FIGURE 2 CASLV MIDDLE SCHOOL Nevada School Rating Source: Nevada Department of Education. A-26

79 FIGURE 3 CASLV HIGH SCHOOL Nevada School Rating Source: Nevada Department of Education. Advanced Placement. CASLV offers Advanced Placement ( AP ) courses and/or Honors courses to eligible students. CASLV offered 13 AP courses and 12 Honors courses in the school year. CASLV students can take a maximum of two AP courses in their sophomore year, three AP courses in their junior year and four AP courses in their senior year. A-27

80 Post-Graduate College Entrance Results. For the high school cohort graduating in the school year, approximately 95.7% of CASLV graduates report heading to a 4-year college. The comparable figure for the State of Nevada in the school year is 73.6%. Campus Administration and Staffing As of September 2017, CASLV had approximately 217 FTE employees, which consist of approximately 153 FTE teachers, 38 FTE school teaching support staff, and 26 FTE school administrative staff. Each CASLV campus is run at the campus level by a Principal. Brief biographies for the Principal of each CASLV campus follow: Emrullah Eraslan, Centennial Hills Campus. Mr. Eraslan has served as Principal of the Centennial Hills Campus since the campus opened in Prior to this, Mr. Eraslan was principal at the Windmill Campus. Noah Stevens, Nellis AFB Campus. Mr. Stevens has served as Principal of the Nellis AFB Campus since , and previously served as Dean of Student at the Sandy Ridge Campus. Yolanda Flores, Sandy Ridge Campus. Ms. Flores started as the principal of the Sandy Ridge Campus in and has worked at the campus since July Ms. Flores previously served as an administrator in alternative education in Visalia, California. Ms. Flores has also served as an administrator of independent study, online, and site-based public charter schools. Jon Yutuc, Tamarus Campus. Mr. Yutuc has served A Principal of the Tamarus Campus since Prior to this, Mr. Yutuc was Dean of Student at the Sandy Ridge Campus. Jill Dodso, Windmill Campus. Ms. Dodso has served as Principal of the Windmill Campus since August Ms. Dodson previously served as a secondary English teacher in the Clark County School District. The following tables set forth information regarding the Borrower s FTE teachers and student-teach ratio for the last two school years. TABLE 8 CASLV Employment and Staffing and Teachers Total Number of Students 2,738 2,925 Student-to-Teacher Ratio 18.1:1 19.1:1 Source: The Borrower. Admissions, Service Area and Waitlist Admissions. CASLV does not base admission on intellectual ability, measures of achievement or aptitude, athletic ability, or discriminate on the basis of ethnicity, race, religion or disability. Once enrollment has reached capacity, students are put onto a waiting list. Once students are on a waiting list they receive a letter in the mail notifying them of their status and the procedures for holding the lottery. Parents of students on a waiting list are asked to confirm whether or not their child(ren) should be left on the Wait List lottery for the subsequent school year. The lottery consists of the names of all students whose parents have filled and A-28

81 returned the application form to the school registrar. For each grade, those names are drawn at random until the number of spaces available in the class, are filled. Before enrolling students by lottery, CASLV may enroll applicants, in accordance with NRS 388A.456, who are: 1. Siblings of a pupil who is currently enrolled in CASLV. 2. Applicants enrolled, free of charge and on the basis of a lottery system, in a prekindergarten program at CASLV or any other early childhood educational program affiliated with CASLV. 3. Children of a person who (a) is employed by CASLV; (b) is a member of the committee to form CASLV; (c) is a member of the Board; or (d) resides on or is employed on Nellis AFB. 4. Applicants in a particular category of at-risk pupils meeting eligibility for enrollment prescribed by CASLV for that particular category. 5. Applicants enrolled in a public school of a school district with an enrollment that is more than 25% over the public school s intended capacity; provided that if CASLV enrolls pupils who are enrolled in such a public school before enrolling other pupils who are eligible for enrollment, CASLV must enroll such pupils who reside within 2 miles of CASLV before enrolling other such pupils. 6. Applicants residing within the school district and within 2 miles of CASLV if the charter school is located in an area that the sponsor of CASLV determines includes a high percentage of children who are at risk. If space is available after CASLV enrolls pupils pursuant to this paragraph, CASLV may enroll children who reside outside the school district but within 2 miles of CASLV if CASLV is located within an area that the sponsor determines includes a high percentage of children who are at risk. A-29

82 Services Area. The following map shows the service area for CASLV. FIGURE 4 CASLV Service Area (1) Tamarus Campus. (2) Windmill Campus. (3) Sandy Ridge Campus. (4) Centennial Hills Campus. (5) Nellis AFB Campus. (6) Eastgate Campus. See ACADEMIC AND SCHOOL OPERATIONS Planned Expansion - Eastgate Campus herein. Source: The Borrower. A-30

83 Historical Financial Results OPERATING AND FINANCIAL INFORMATION The following tables present the audited statement of activities and changes in net assets for the Borrower for fiscal years through TABLE 9 THE BORROWER Statement of Activities through REVENUES: Program Revenue Charges for Service $1,028,994 $1,135,811 $789,781 (1) $2,185,786 Government Grants 73,232 64,350 68, ,106 General Revenue Donations 118,597 62,231 86, ,453 Other Income ,983 State Funding 8,782,696 9,583,037 9,875,276 17,035,461 Uniform/Other Income 159, ,530 65, Total Revenues 10,162,719 10,995,959 10,885,055 20,078,789 EXPENSES: Instruction 5,155,638 5,378,546 6,210,312 11,008,901 Support Services 480, , ,891 1,516,992 Administration 1,272,271 1,404,052 1,670,165 2,816,942 Facilities 1,840,047 1,209,107 1,323,479 2,335,912 Interest on Long-Term Debt , , ,969 Un-allocated Depreciation 385, , , ,425 Total Expenses 9,134,323 9,523,721 10,782,504 18,568,141 Increase in Net Position $1,028,396 $1,472,238 $102,551 $1,510,648 (1) One-year decrease in Charges for Service is attributable to the Borrower outsourcing its afterschool and uniform programs. Sources: The Borrower; Audited Financial Reports for Fiscal Years through A-31

84 Historical Statements of Net Position The following table sets forth the assets, liabilities and net assets of the Borrower as of June 30 of each year for fiscal years through TABLE 10 THE BORROWER Statement of Net Position through Assets Current Assets Cash $2,796,651 $4,666,662 $4,350,600 $4,907,588 Cash Restricted 891,164 1,079,063 1,150,713 1,155,161 Receivables 166, , ,495 1,258,528 Inventory 45,050 30,143 24, Prepaid 73,065 12, ,412 77,649 Deposits 70,741 75,046 75, ,409 Total Current Assets 4,042,949 6,047,477 6,369,520 7,611,335 Non-Current Assets Capital Assets Land and Land Improvements ,137,506 Building 7,982,500 7,982,500 7,982,500 6,844,994 Bond Issue Costs 469, Computer/Technological Equipment 334, , , ,455 Furniture & Fixtures 171, , , ,865 Tenant Improvements 192, , , ,427 Vehicles 3,000 3,000 3,000 3,000 Construction in Progress ,438 Less Accumulated Depreciation (759,655) (1,101,119) (1,153,203) (1,546,628) Total Capital Assets, Net 8,393,118 7,663,589 7,762,613 8,161,057 Total Assets $12,436,067 $13,711,066 $14,132,133 $15,772,392 Deferred Outflow of Resources Contributions to pension plan in current fiscal year ,684 1,546,301 4,892,403 Liabilities Current Liabilities Accounts payable $69,928 $397,410 $430,303 $130,483 Credit Cards Payable 4,394 7,168 6,498 34,609 Accrued Bond Interest ,984 Deferred Income 187, , , ,595 Wages and Benefits Payable 550, , , ,086 Book Deposits 82,594 85, , ,990 Current Portion of Long Term Debt 55, , , ,000 Total Current Liabilities 950,053 1,341,624 1,409,481 1,928,747 Non-Current Liabilities Long Term Debt 9,204,615 9,070,000 8,930,000 8,785,000 Pension Liability -- 7,241,550 8,953,322 11,822,891 Total Non-Current Liabilities 9,204,615 16,311,550 17,883,322 20,607,891 Total Liabilities $10,154,668 $17,653,174 $19,292,803 22,536,638 Deferred Inflow of Resources Pension deferrals -- 2,065,367 1,158,416 1,390,294 Net Position Invested in Capital Assets and Related Reserve 79,667 (457,348) (156,674) (246,218) Accounts, net of related debt Unrestricted 2,201,732 (4,720,443) (4,616,111) (3,015,919) Total Net Position $2,281,399 $(5,177,791) $(4,772,785) $(3,262,137) Sources: The Borrower; Audited Financial Reports for Fiscal Years through A-32

85 Historical Balance Sheets The following table sets forth the balance sheets of the Borrower as of June 30 of each year for fiscal years through TABLE 11 THE BORROWER Balance Sheet - Governmental Funds through Assets Cash $3,687,815 $5,745,724 $5,501,312 $6,062,749 Receivables 166, , ,495 1,258,528 Inventory 45,050 30,143 24, Prepaid 73,065 12, ,412 77,649 Deposits 70,741 75,046 75, ,409 Total Assets 4,042,949 6,047,476 6,369,519 7,611,335 Liabilities Accounts Payable 69, , , ,483 Credit Cards Payable 4,394 7,168 6,498 34,609 Accrued Bond Interest ,984 Deferred Income 187, , , ,595 Wages and Benefits Payable 550, , , ,086 Book Deposits 82,594 85, , ,990 Total Liabilities 894,667 1,211,624 1,269,481 1,643,747 Fund Balance Restricted 891,164 1,079,063 1,150, ,177 Unassigned 2,257,118 3,756,789 3,949,325 5,060,411 Total Fund Balance 3,148,282 4,835,852 5,100,038 5,967,588 Total Liabilities and Fund Balance $4,042,949 $6,047,476 $6,369,519 $7,611,335 Sources: The Borrower; Audited Financial Reports for Fiscal Years through Financial Statements The audited financial statements of the Borrower for the fiscal year ended June 30, 2017 are set forth in APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE BORROWER FOR THE FISCAL YEAR ENDED JUNE 30, 2017 attached to this Official Statement. Public Employees Retirement System of Nevada The Borrower is a public employer participating in the Public Employees Retirement System of Nevada ( PERS ), a defined cost-sharing multiple-employer program, and all full-time employees are covered under the system. PERS provides pension benefits, disability benefits and death benefits. Benefits, as required by State statute, are determined by the number of years of accredited service at the time of retirement and the member s highest average compensation in any 36 consecutive months. Member contribution rates, which are actuarially determined, are established by State statute for public employees enrolled in PERS. The Borrower is enrolled in both the employer-pay and employer/employee pay plan for PERS and is, therefore, required to contribute all amounts due under the plan. The Borrower s contractually required contribution rate for the year ended June 30, 2016 was 28% of annual payroll for employer-pay plans and 14.5% for employer/employee pay plans, actuarially determined as an amount that is expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. A-33

86 The Borrower s contributions to PERS were $829,684 for fiscal year , $980,261 for fiscal year and $1,941,412 for fiscal year The Borrower estimates a contribution of $2,085,936 for fiscal year PERS has substantial unfunded liabilities. The Borrower has no liability for unfunded obligations of the PERS system as provided by NRS but is required to report their share of the net pension liability under GASB 68. As of June 30, 2016, the Borrower reported a liability of $8,953,322 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The School s proportion of the net pension liability was based on a projection of the School s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. See APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE BORROWER FOR THE FISCAL YEAR ENDED JUNE 30, 2017 attached to this Official Statement. Facility Leases Windmill Lease. The Borrower currently operates the Windmill Campus pursuant to an amended and restated lease agreement (the Windmill Lease ) by and between the Borrower and Hunt Henderson, LLC (the Windmill Lessor ). The Windmill Lease is effective as of June 1, 2013 and terminates on June 30, 2020, with the Borrower having two options to extend the term by five years each. Pursuant to the Windmill Lease, the Borrower pays rent in the monthly amount of $26,973 for the first year of the Windmill Lease, increasing 2% each year. Pursuant to the Windmill Lease, the Borrower is also liable for operating costs and any taxes levied against the Windmill Campus. Tamarus Lease. The Borrower currently operates the Tamarus Campus pursuant to a lease agreement (the Tamarus Lease ) by and between the Borrower and Happy Trails School, LLC (the Tamarus Lessor ). The Tamarus Lease is effective as of September 1, 2008 and terminates on June 30, 2018, with the Borrower having an option to extend the term by five years, through June 30, Pursuant to the Tamarus Lease, the Borrower pays rent in the monthly amount of $21,630 for the first year of the Tamarus Lease, increasing 3% each year. On July 20, 2017, the Borrower and the Tamarus Lessor entered into a Purchase and Sale Agreement With Joint Escrow Instructions (the Tamarus PSA ), whereby the Tamarus Lessor agrees to sell, and the Borrower agrees to purchase, the Tamarus Campus for a purchase price of $3,100,000. The Tamarus PSA provides that closing on the purchase of the Tamarus Campus will occur on March 30, The Borrower and the Tamarus Lessor have agreed (and the Borrower expects to enter into an amendment to the Tamarus PSA memorializing such agreement) to amend the terms of the Tamarus PSA such that the transaction will close by June 30, 2018, and the purchase price will be $3,025,000. If the closing does not occur by June 30, 2018, the Borrower will continue to pay the current rent under the Tamarus Lease on a month-to-month basis until funding for the acquisition is secured. Central Office Lease. The Borrower currently operates its central office administrative functions in premises located at 8965 S. Eastern Avenue, Las Vegas, Nevada, pursuant to a sublease agreement (the Central Office Lease ) by and between the Borrower and Dickinson Wright PLLC (the Central Office Lessor ). The Central Office Lease is effective as of September 1, 2016 and terminates on July 31, Pursuant to the Central Office Lease, the Borrower pays rent in the monthly amount of $5,080. Existing Nellis Lease and Ground Lease. The Borrower currently operates the Existing Nellis Site pursuant to a Lease Agreement (the Existing Nellis Lease ), effective as of June 23, 2016, by and between the Borrower and the United States of America, acting by and through the Secretary of the Air Force (the Nellis Lessor ). A-34

87 The Existing Nellis Lease provides that it may be terminated by the Nellis Lessor for national defense or national security purposes, at the sole discretion and determination of the Nellis Lessor, upon 60 days prior notice or, if the Nellis Lessor s determination involves what it deems an emergency, upon 10 days prior notice. The Borrower currently occupies the New Nellis Campus pursuant to a ground lease by and between the Borrower and the United States Government (as further described in the forepart of this Official Statement, the Ground Lease ). Under the Ground Lease, the Borrower acknowledges and agrees that its operations may from time to time be restricted temporarily or permanently due to the needs of national security or defense. See THE PROJECT Nellis Project in the forepart of this Official Statement for brief descriptions of the Existing Nellis Lease and the Ground Lease. Eastgate Lease. The Borrower entered into a Lease Agreement (the Eastgate Lease ) for the operation of the Eastgate Campus by and between the Borrower and 7777 Eastgate LLC (the Eastgate Lessor ). The Eastgate Lease commenced on August 19, 2017, and will terminate on June 30, 2028, with the Borrower having two options to extend the initial term for ten years each. The Eastgate Lessor will contribute an amount of $750,000 for interior building improvements, playground installation and the cost to obtain a CUP for the Borrower, which CUP was approved by the City of Henderson on November 21, If the Borrower does not receive a Certificate of Occupancy in time for the Borrower to operate the Eastgate Campus as a charter school commencing July 1, 2018, the Eastgate Lessor may either (i) terminate the Eastgate Lease, in which case the Borrower must repay the Eastgate Lessor 25% of the cost of tenant improvements paid by Eastgate Lessor, or (ii) postpone the Borrower s obligations under the Eastgate Lease by one year. See ACADEMIC AND SCHOOL OPERATIONS Planned Expansion - Eastgate Campus herein. Beginning November 7, 2017, the Borrower is responsible for paying all utilities, taxes, insurance and operating expenses (except for real property taxes, for which the Borrower will not become obligated to pay until August 1, 2018). Commencing October 1, 2018, the Borrower will also pay Base Rent under the Eastgate Lease in the amount of $52, per month, increasing by approximately 3% each year to $68, per month ending June 30, For any extension period, the monthly Base Rent will be the greater of 3% more than the prior year or an amount equal to the then-prevailing market rate for comparable buildings, determined in accordance with the Eastgate Lease. The Borrower has a right of first refusal to purchase the Eastgate Campus in the event that a bona-fide purchase offer is presented to Eastgate Lessor that Eastgate Lessor desires to accept. Outstanding Debt On May 14, 2014, the Authority issued its $8,945,000 Education Revenue Bonds Series, 2014A and $315,000 Education Revenue Bonds, Series 2014B (Taxable) (collectively, the Series 2014 Bonds ), the proceeds of which were loaned to the Borrower. Currently, the Series 2014 Bonds are outstanding in the amount of $8,930,000. The Series 2017 Bonds are payable on parity with the Series 2014 Bonds. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Parity Nature of Obligations in the forepart of this Official Statement. The Borrower intends to enter into a revolving line of credit in the amount of approximately $600,000 to provide access to liquidity. The Borrower does not anticipate borrowing against such line of credit. The Borrower may secure the line of credit to the extent permitted by the Indenture and Loan Agreement. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Certain Financial Covenants under the Loan Agreement Limitations on Additional Indebtedness and Parity Debt in the forepart of this Official Statement. A-35

88 No Material Litigation No action, suit, proceeding or investigation at law or in equity, before or by any court, governmental agency or public board or body is pending or, to the knowledge of the Borrower, threatened, affecting the validity of the Loan Agreement or the Series 2017 Bonds or contesting the existence of the Borrower or its authority to operate pursuant to its charter. The Borrower is subject to lawsuits and claims in the ordinary course of its operations. In the opinion of the management of the Borrower, the aggregate amount of the uninsured liabilities for such lawsuits and claims will not materially affect the finances of the Borrower or its charter school operations. PROJECTIONS AND COVERAGE RATIOS Notwithstanding the Borrower s history of performance with respect to its charter school operations, future financial performance of the Borrower may not equal or exceed the projections set forth in this Official Statement. No assurance is given that such projections will be met, or that the number of students enrolled with the Borrower may not diminish in the future. The projections of revenue and expenses for the Borrower contained in this Appendix A are based upon the number of students projected to be enrolled with the Borrower and were prepared by the Borrower and have not been independently verified by any party other than the Borrower. See ACADEMIC AND SCHOOL OPERATIONS Enrollment, Attendance & Student Retention herein for information regarding current and projected enrollment of the Borrower. No feasibility studies have been conducted with respect to operations of the Facilities pertinent to the Series 2017 Bonds. The projections are forward-looking statements and are subject to the general qualifications and limitations described herein. The Underwriter has not independently verified the Borrower s projections set forth in Appendix A or otherwise, and makes no representations nor gives any assurances that such projections, or the assumptions underlying them, are complete or correct. Further, the projections relate only to a limited number of fiscal years, and consequently do not cover the entire period that the Bonds will be outstanding. THE BORROWER PREPARED THE PROJECTIONS BASED ON ASSUMPTIONS ABOUT FUTURE STATE FUNDING LEVELS AND FUTURE OPERATIONS OF THE BORROWER, INCLUDING STUDENT ENROLLMENT AND EXPENSES. THERE CAN BE NO ASSURANCE THAT ACTUAL ENROLLMENT REVENUES AND EXPENSES WILL BE CONSISTENT WITH THE ASSUMPTIONS UNDERLYING SUCH PROJECTIONS. MOREOVER, NO GUARANTEE CAN BE MADE THAT THE PROJECTIONS OF REVENUES AND EXPENSES INCLUDED HEREIN WILL CORRESPOND WITH THE RESULTS ACTUALLY ACHIEVED IN THE FUTURE BECAUSE THERE CAN BE NO ASSURANCE THAT ACTUAL EVENTS WILL CORRESPOND WITH THE PROJECTIONS UNDERLYING ASSUMPTIONS. ACTUAL OPERATING RESULTS MAY BE AFFECTED BY MANY FACTORS, INCLUDING, BUT NOT LIMITED TO, INCREASED COSTS, LOWER THAN ANTICIPATED REVENUES (AS A RESULT OF INSUFFICIENT ENROLLMENT, REDUCED STATE OR FEDERAL AID PAYMENTS, OR OTHERWISE), EMPLOYEE RELATIONS, CHANGES IN TAXES, CHANGES IN APPLICABLE GOVERNMENT REGULATIONS, CHANGES IN DEMOGRAPHIC TRENDS, CHANGES IN EDUCATION COMPETITION AND CHANGES IN LOCAL OR GENERAL ECONOMIC CONDITIONS. REFER TO INTRODUCTION IN THE FOREPART OF THIS OFFICIAL STATEMENT FOR QUALIFICATION AND LIMITATIONS APPLICABLE TO FORWARD-LOOKING STATEMENTS. The following tables sets forth projected Net Income Available for Debt Service, Debt Service Coverage Ratio, and Days Cash on Hand for the Borrower for Fiscal Years through Table 12 assumes the opening of the Eastgate Campus and enrollment thereat as projected in ACADEMIC AND SCHOOL OPERATIONS Enrollment, Attendance & Student Retention herein. Table 13 assumes that the A-36

89 Eastgate Campus does not open. Both Tables 12 and 13 assume the issuance of the Series 2018 Bonds, as defined in the forepart of this Official Statement. TABLE 12 THE BORROWER PROJECTED NET INCOME AVAILABLE FOR DEBT SERVICE, DEBT SERVICE COVERAGE RATIO AND DAYS CASH ON HAND ASSUMING THE OPENING OF THE EASTGATE CAMPUS through Year Coverage Fiscal Year Ending June 30 Projected FY Projected FY Projected FY Projected FY Projected FY Enrollment Pre-Kindergarten Enrollment K-12 (1) 2,885 3,556 3,646 3,699 3,711 REVENUE Federal Support $609,783 $558,283 $558,283 $558,283 $558,283 State Sources 20,297,821 24,303,058 25,161,750 25,778,914 26,119,085 Donations / Fundraising 100, , , , ,000 Other Income 888,900 1,060,900 1,060,900 1,060,900 1,060,900 Total Revenue $21,896,504 $26,042,241 $26,900,934 $27,518,097 $27,858,268 EXPENSES Certified Salaries $8,473,806 $9,953,544 $10,053,080 $10,153,611 $10,255,147 Classified Salaries 2,131,331 2,482,644 2,507,471 2,532,546 2,557,871 Benefits 3,241,128 3,848,939 3,887,429 3,926,303 3,965,566 Material and Supplies 1,966,500 2,163,150 2,163,150 2,163,150 2,163,150 Services and Operation Expenses 2,225,242 2,520,919 2,520,919 2,519,090 2,517,206 Operating Lease 1,009, ,636 1,066,826 1,101,430 1,130,157 [A] 2014 Principal and Interest (2) 633, , , , ,844 [B] 2017 Principal and Interest 369, , , , ,750 [C] 2018 Principal and Interest (3) - 767,502 1,027,275 1,026,825 1,030,825 Total Expenses $20,051,000 $23,937,428 $24,695,493 $24,891,298 $25,086,515 [D] Net Revenue / Change in Net Assets $1,845,504 $2,104,813 $2,205,441 $2,626,799 $2,771,753 [A+B+C] [E] Add Back: Principal and Interest 1,003,591 2,079,596 2,496,619 2,495,169 2,497,419 [D/E] [F] Net Income Available for Debt Service $2,849,095 $4,184,409 $4,702,060 $5,121,968 $5,269,172 [F/E] [G] Debt Service Coverage Ratio (4) 2.84x 2.01x 1.88x 2.05x 2.11x Beginning Balance $5,967,588 $7,813,092 $9,917,905 $12,123,346 $14,750,146 Plus: Net Income 1,845,504 2,104,813 2,205,441 2,626,799 2,771,753 [H] Ending Cash Balance $7,813,092 $9,917,905 $12,123,346 $14,750,146 $17,521,898 [I] Operating Expenses 20,051,000 23,937,428 24,695,493 24,891,298 25,086,515 [H/I*365] [J] Days Cash on Hand (5) 142 days 151 days 179 days 216 days 255 days (1) Includes projected enrollment at the Borrower s planned Eastgate Campus, which is expected to open in the school year. See ACADEMIC AND SCHOOL OPERATIONS Enrollment, Attendance & Student Retention herein. (2) The Series 2017 Bonds are being issued on a parity basis with the Series 2014 Bonds. (3) In the fiscal year, the Borrower anticipates issuing approximately $16.65 million of Additional Bonds, issued on a parity basis with the Series 2014 Bonds and Series 2017 Bonds, to construct, furnish and equip a charter school campus on the New Nellis Campus and acquire the Tamarus Campus. (4) As defined under SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Certain Financial Covenants under the Loan Agreement Debt Service Coverage Ratio in the forepart of this Official Statement, Debt Service Coverage Ratio means, for any Fiscal Year, the ratio obtained by dividing the Net Income Available for Debt Service for such Fiscal Year by the Debt Service for such period, as such ratio is certified to by an accountant of the Borrower. (5) As defined under SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Certain Financial Covenants under the Loan Agreement Days Cash on Hand Requirement in the forepart of this Official Statement, Days Cash on Hand means: (i) the sum of cash and cash equivalents as shown on Borrower s audited financial statements for each Fiscal Year; divided by (ii) the quotient of Operating Expenses, as shown on the audited financial statements for the preceding Fiscal Year, divided by 365. Source: The Borrower. A-37

90 TABLE 13 THE BORROWER PROJECTED NET INCOME AVAILABLE FOR DEBT SERVICE, DEBT SERVICE COVERAGE RATIO AND DAYS CASH ON HAND ASSUMING THE EASTGATE CAMPUS DOES NOT OPEN through Year Coverage Fiscal Year Ending June 30 Projected FY Projected FY Projected FY Projected FY Projected FY Enrollment Pre-Kindergarten Enrollment K-12 (1) 2,885 2,971 3,071 3,071 3,071 REVENUE Federal Support $609,783 $558,283 $558,283 $558,283 $558,283 State Sources 20,297,821 20,330,773 21,218,324 21,428,938 21,641,657 Donations / Fundraising 100, , , , ,000 Other Income 888,900 1,060,900 1,060,900 1,060,900 1,060,900 Total Revenue $21,896,504 $22,049,957 $22,937,508 $23,148,121 $23,360,840 EXPENSES Certified Salaries $8,473,806 $8,537,360 $8,601,390 $8,665,901 $8,730,895 Classified Salaries 2,131,331 2,147,316 2,163,421 2,179,647 2,195,994 Benefits 3,241,128 3,241,128 3,241,128 3,241,128 3,241,128 Material and Supplies 1,966,500 1,966,500 1,966,500 1,966,500 1,966,500 Services and Operation Expenses 2,225,242 2,225,242 2,225,242 2,223,413 2,221,530 Operating Lease 1,009, , , , ,869 [A] 2014 Principal and Interest (2) 633, , , , ,844 [B] 2017 Principal and Interest 369, , , , ,750 [C] 2018 Principal and Interest (3) ,502 1,027,275 1,026,825 1,030,825 Total Expenses $20,051,000 $20,616,058 $21,120,380 $21,213,170 $21,304,334 [D] Net Revenue / Change in Net Assets $1,845,504 $1,433,899 $1,817,128 $1,934,951 $2,056,506 [A+B+C] [E] Add Back: Principal and Interest 1,003,591 2,079,596 2,496,619 2,495,169 2,497,419 [D/E] [F] Net Income Available for Debt Service $2,849,095 $3,513,495 $4,313,747 $4,430,119 $4,553,925 [F/E] [G] Debt Service Coverage Ratio (4) 2.84x 1.69x 1.73x 1.78x 1.82x Beginning Balance $5,967,588 $7,813,092 $9,246,991 $11,064,119 $12,999,070 Plus: Net Income 1,845,504 1,433,899 1,817,128 1,934,951 2,056,506 [H] Ending Cash Balance $7,813,092 $9,246,991 $11,064,119 $12,999,070 $15,055,576 [I] Operating Expenses 20,051,000 20,616,058 21,120,380 21,213,170 21,304,334 [H/I*365] [J] Days Cash on Hand (5) 142 days 164 days 191 days 224 days 258 days (1) Does not include enrollment at the Borrower s planned Eastgate Campus, which is expected to open in the school year. See ACADEMIC AND SCHOOL OPERATIONS Enrollment, Attendance & Student Retention herein. (2) The Series 2017 Bonds are being issued on a parity basis with the Series 2014 Bonds. (3) In the fiscal year, the Borrower anticipates issuing approximately $16.65 million of Additional Bonds, issued on a parity basis with the Series 2014 Bonds and Series 2017 Bonds, to construct, furnish and equip a charter school campus on the New Nellis Campus and acquire the Tamarus Campus. (4) As defined under SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Certain Financial Covenants under the Loan Agreement Debt Service Coverage Ratio in the forepart of this Official Statement, Debt Service Coverage Ratio means, for any Fiscal Year, the ratio obtained by dividing the Net Income Available for Debt Service for such Fiscal Year by the Debt Service for such period, as such ratio is certified to by an accountant of the Borrower. (5) As defined under SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Certain Financial Covenants under the Loan Agreement Days Cash on Hand Requirement in the forepart of this Official Statement, Days Cash on Hand means: (i) the sum of cash and cash equivalents as shown on Borrower s audited financial statements for each Fiscal Year; divided by (ii) the quotient of Operating Expenses, as shown on the audited financial statements for the preceding Fiscal Year, divided by 365. Source: The Borrower. A-38

91 APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE BORROWER FOR THE FISCAL YEAR ENDED JUNE 30, 2017 B-1

92 [THIS PAGE INTENTIONALLY LEFT BLANK]

93 CORAL ACADEMY OF SCIENCE LAS VEGAS FINANCIAL STATEMENTS REQURED SUPPLEMENTARY INFORMATION AND OTHER SUPPLEMENTARY INFORMATION JUNE 30, 2017

94 CORAL ACADEMY OF SCIENCE LAS VEGAS JUNE 30, 2017 TABLE OF CONTENTS INDEPENDENT AUDITOR'S REPORT 1-2 MANAGEMENT'S DISCUSSION AND ANALYSIS 3-8 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements: Statement ofnet Position Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation of the Balance Sheet - Governmental Funds to the Statement ofnet Position Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Fund Types Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance to the Statement ofactivities Notes to Financial Statements REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison for the General Fund School's Proportionate Share ofthe Net Pension Liability School's Schedule of Contributions OTHER SUPPLEMENTARY INFORMATION Schedule of Federal Awards 34

95 Independent Auditor's Report To the Board ofcoral Academy ofscience Las Vegas Report on the Financial Statements We have audited the accompanying financial statements ofthe governmental activities and each major fund of Coral Academy of Science Las Vegas as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the governing Board's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States ofamerica; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the 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 ofthe financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing 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 financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position ofthe governmental activities and each major fund ofcoral Academy of Science Las Vegas as ofjune 30, 2017, and the respective changes in financial position, thereof, for the year then ended in accordance with accounting principles generally accepted in the United States of America.

96 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States ofamerica require that the management's discussion and analysis, budgetary comparison information and the school's proportionate share ofthe net pension liability and the school's schedule ofcontributions on pages 3 through 8, and 30 through 34 be presented to supplement the basic financial statements. Such information, although not a part ofthe basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part offinancial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquires, the basic financial statements, and other knowledge we obtained during our audit ofthe basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Coral Academy of Science Las Vegas' basic financial statements. The accompanying schedule offederal awards is presented for purposes ofadditional analysis as required by the Nevada Department of Education, and is not a required part of the basic financial statements. The schedule offederal awards is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic 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 basic financial statements as a whole. This schedule has not been audited in accordance with requirements of the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Reno, Nevada October 30,2017

97 CORAL ACADEMY OF SCIENCE LAS VEGAS Management Discussion and Analysis This section ofcoral Academy ofscience Las Vegas' annual financial report presents our discussion and analysis of Coral Academy ofscience Las Vegas' financial performance during the fiscal year that ended June 30, Please read it in conjunction with Coral Academy ofscience Las Vegas' financial statements, which immediately follow this section. Financial Highlights Coral Academy ofscience Las Vegas completed the year with a net position of$(3,262,137), an increase of$1,51 0,648 from prior year. The negative net position is the direct effect ofa reporting requirement issued by the Governmental Accounting Standards Board (GASB) which requires entities participating in the Public Employees' Retirement System ofnevada (PERS) to report its share ofthe unfunded pension liability. The school has no liability for unfunded obligations ofthe system as provided by NRS Overall revenues were $20,078,789, an increase from prior year revenues of$9,193,734. Coml Academy of Science Las Vegas completed the year with $5,967,588 in its Governmental Fund Balance. This is an increase of$867,550 from the prior year Overview of Financial Statements This discussion and analysis is intended to serve as an introduction to Coral Academy ofscience Las Vegas' basic financial statements. Coral Academy ofscience Las Vegas' basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Govemment-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of Coml Academy of Science Las Vegas' finances, in a manner similar to a private-sector business. The statement ofnet position presents information on all ofcoral Academy of Science Las Vegas' assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of Coral Academy ofscience Las Vegas is improving or deteriorating. The statement ofactivities presents information showing how Coml Academy ofscience Las Vegas' net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless ofthe timing ofrelated cash flows. Thus revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. 3

98 CORAL ACADEMY OF SCIENCE LAS VEGAS Management Discussion and Analysis The government-wide financial statements outline functions ofcoral Academy ofscience Las Vegas that are principally supported by the State ofnevada per pupil funding. The governmental activities of Coral Academy of Science Las Vegas include instruction, support services, operation and maintenance offacilities. The government-wide financial statements can be found on pages 9 and 10 of this report. Fund Financial Statements A fund is a group ofrelated accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Coral Academy of Science Las Vegas uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Coral Academy of Science Las Vegas uses only governmental funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as government activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows of spendable resources, as well as on balances ofspendable resources available at the end ofthe fiscal year. Such information may be useful in evaluating Coral Academy ofscience Las Vegas' near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for government activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of Coral Academy of Science Las Vegas' near-term financing decision. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are on pages 12 and 14, respectively. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the General and Bond Building Funds, both of which are considered to be major funds. The basic governmental fund financial statements can be found on pages 11 and 13 ofthis report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding ofthe data provided in the government-wide and fund financial statements. The notes to the financial statements can be found starting on page 15 ofthis report. 4

99 CORAL ACADEMY OF SCIENCE LAS VEGAS Management Discussion and Analysis Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary infonnation concerning Coral Academy of Science Las Vegas' budget process. Coral Academy ofscience Las Vegas adopts an annual budget and a budgetary comparison in the supplementary infonnation section of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS Net position may serve, over time, as a useful indicator ofa government's financial position. In the case of Coral Academy of Science Las Vegas, current assets exceeded current liabilities by $5,827,588 as ofjune 30, The following presents a summary of Coral Academy of Science Las Vegas' net position for the following fiscal years. June 30, 2017 June 30, 2016 June 30, 2015 Current Assets $ 7,611,335 $ 6,369,520 $ 6,047,477 Capital Assets 8,161,057 7,762,613 7,663,589 Total Assets 15,772,392 14,132,133 13,711,066 Deferred outflows of resources 4,892,403 1,546, ,684 Current Liabilities Long-Term Liabilities Total Liabilities 1,783,747 20,752,891 22,536,638 1,409,481 17,883,322 19,292,803 1,341,624 16,311,550 17,653,174 Deferred inflows of resources 1,390,294 1,158,416 2,065,367 Net Position Non-spendable Invested in Capital Assets and Related Reserve Accounts, net of Related Debt Unrestricted Total Net Position $ 77, ,218 (3,586,004) (3,262,137) $ 453,412 (156,674) (5,069,523) (4,772,785) $ 12,803 (457,348) (4,733,246) (5,177,791) Assets increased compared to June 30, Current assets increased by $1,241,815 while capital assets increased by $398,444. The school's continued growth can be attributed to the overall increase in assets. 5

100 CORAL ACADEMY OF SCIENCE LAS VEGAS Management Discussion and Analysis Changes in Net Position Coral Academy of Science Las Vegas' total revenues for the fiscal year ended June 30, 2017 were $20,078,789. The total costs of all programs and services were $18,568,141. The following is a summary of the changes for the following fiscal years. Fiscal Fiscal Fiscal year ended year ended year ended June 30, 2017 June 30, 2016 June 30, 2015 Revenues: Program Revenue Charges for Service $ 2,185,786 $ 789,781 $ 1,135,811 Government Grants 621,106 68,548 64,350 General Revenue Donations 210,453 86,284 62,231 Other Income 25,983 State Funding 17,035,461 9,875,276 9,583,037 Uniform/Other Income 65, ,530 Total Revenues 20,078,789 10,885,055 10,995,959 Expenses: Instruction 11,008,901 6,210,312 5,378,546 Support Services 1,516, , ,645 Administration 2,816,942 1,670,165 1,404,052 Facilities 2,335,912 1,323,479 1,209,107 Interest on long-term debt 495, , ,535 Un-allocated Depreciation 393, , ,836 Total Expenses 18,568,141 10,782,504 9,523,721 Increase in Net Position $ 1,510,648 $ 102,551 $ 1,472,238 State Revenue for the School increased due to increased enrollment and increased State funding per student. Increased enrollment has led to increased expenses. FINANCIAL ANALYSIS OF CORAL ACADEMY OF SCIENCE LAS VEGAS' FUNDS As noted earlier, Coral Academy of Science Las Vegas uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. 6

101 CORAL ACADEMY OF SCIENCE LAS VEGAS Management Discussion and Analysis Governmental Funds The focus ofcoral Academy ofscience Las Vegas' governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing Coral Academy of Science Las Vegas' financing requirements. In particular, unreserved fund balance may serve as a useful measure ofcoral Academy ofscience Las Vegas' net resources available for spending at the end ofthe fiscal year. The financial performance of Coral Academy of Science Las Vegas as a whole is reflected in its governmental funds. As Coral Academy ofscience Las Vegas completed the year, its governmental funds reported a General fund balance of$5,967,588, an increase of $867,550 from the prior year. The Grant Fund balance was $0 due to spending all available grant monies. Budgetary Highlights There are a few variances from the budget to the actual results. Actual state funding exceeded the budgeted amount and donations/fundraising proved successful to the School. In terms of expenditures, instructional and facilities were less than budgeted. A schedule showing the original and final budget amounts compared to Coral Academy ofscience Las Vegas' actual financial activity is provided in this report as required supplementary information. Capital Assets and Debt Administration As of June 30, 2017, Coral Academy of Science Las Vegas had total capital assets (net of accumulated depreciation) of $8,161,057 which includes land and land improvements, building, tenant improvements, technological equipment, furniture and fixtures, vehicles, and construction in progress. This amount represents an increase (net of related depreciation) of $398,444. Total depreciation expense was $393,425. Additional information on capital assets can be found in the notes to financial statements on page 18 and page 21. On the governmental financial statements capital assets are expensed in the period they are purchased as they are not considered financial resources. 7

102 CORAL ACADEMY OF SCIENCE LAS VEGAS Management Discussion and Analysis Economic Factors and Next Year's Budget and Rates Coral Academy of Science Las Vegas' major source of revenue is the per-pupil funding from the State ofnevada. The School estimates enrollment based on applications received and a projected late signup before the start ofthe school year. The amount ofthe per-pupil funding is based on the quarterly average daily enrollment reports. For expenses, Coral Academy of Science Las Vegas typically assumes an increase of 5% to 10% over the prior year for non-contract items. The majority of Coral Academy of Science Las Vegas' expenses are teacher salaries. 8

103 CORAL ACADEMY OF SCIENCE LAS VEGAS ST ATEMENT OF NET POSITION June 30, 2017 Governmental Activities Assets Current Assets Cash 4,907,588 Cash - Restricted 1,155,161 Receivables 1,258,528 Inventory Prepaid 77,649 Deposits 212,409 Total Current Assets 7,611,335 Non-Current Assets Capital Assets Land and Land Improvements 1,137,506 Building 6,844,994 Tenant Improvements 663,427 Technological Equipment 640,455 Furniture & Fixtures 354,865 Vehicles 3,000 Construction in Progress 63,438 Less: Accumulated Depreciation (1, ) Total Capital Assets, Net 8,161,057 Total Assets 15,772,392 Deferred Outflows of Resources Contributions to pension plan in current fiscal year 4,892,403 Liabilities Current Liabilities Accounts Payable 130,483 Credit Cards Payable 34,609 Accrued Bond Interest 247,984 Deferred Income 304,595 Wages and Benefits Payable 761,086 Book Deposits 164,990 Current Portion Long-Term Debt 140,000 Total Current Liabilities 1,783,747 Non-Current Liabilities Long Term Debt 8,930,000 Pension Liability 11,822,891 Total Non-Current Liabilities 20,752,891 Total Liabilities 22,536,638 Deferred Inflows of Resources Pension deferrals 1,390,294 Net Position Non-spendable 77,649 Invested in Capital Assets and Related Reserve Accounts, net of related debt 246,218 Unrestricted (3,586,004) Total Net Position $ (3, ) The accompanying notes are an integral part of these financial statements 9

104 CORAL ACADEMY OF SCIENCE LAS VEGAS STATEMENT OF ACTIVITIES For the Year Ended June 30, 2017 Program Revenues Net (Expenses) Revenues and Change in Net Position FunctionlProgram Governmental Activities Instruction Regular Special Total Instruction Expenses $ 10,315, ,974 11,008,901 Charges For Service $ 2,185,786 2,185,786 $ Operating Grants 621, ,106 Government Activities $ (8,130,141) (71,868) (8,202,009) Total $ (8,130,141 ) (71,868) (8,202,009) Support Support Services General Administration Facilities Interest on long-term debt Depreciation Total Support 1,516,992 2,816,942 2,335, , ,425 7,559,240 (1,516,992) (2,816,942) (2,335,912) (495,969) (393,425) (7,559,240) (1,516,992) (2,816,942) (2,335,912) (495,969) (393,425) (7,559,240) Total Governmental Activities 18,568,141 2,185, ,106 (15,761,249) (J 5,761,249) Total $ 18,568,141 $ 2,185,786 $ 621,106 (15,761,249) (15,761,249) General Revenues: State Funding DonationsfFundraising Other Total General Revenues 17,035, ,453 25,983 17,271,897 17,035, ,453 25,983 17,271,897 Changes in Net Position 1,510,648 1,510,648 Net Position - beginning of year (4,772,785) (4,772,785) Net Position - end of year $ (3,262,137) $ (3,262,137) J I 1 I The accompanying notes are an integral part of these financial statements 10

105 CORAL ACADEMY OF SCIENCE LAS VEGAS BALANCE SHEET-GOVERNMENTAL FUNDS June 30, 2017 Assets Cash Receivables Inventory Prepaid Deposits General 4,907,588 1,258,528 77, ,409 Bond Building Fund 1,155,161 $ Total 6,062,749 1,258,528 77, ,409 Total Assets $ 6,456,174 $ 1,155,161 $ 7,611,335 Liabilities Accounts Payable Credit Cards Payable Accrued Bond Interest Deferred Income Wages and Benefits Payable Book Deposits Total Liabilities $ 130,483 34, , , ,990 1,395,763 $ 247, ,984 $ 130,483 34, , , , ,990 1,643,747 Fund Balance Non-spendable Restricted Unassigned Total Fund Balance 77,649 4,982,762 5,060, , ,177 77, ,177 4,982,762 5,967,588 Total Liabilities and Fund Balance $ 6,456,174 $ 1,155,161 $ 7,611,335 The accompanying notes are an integral part ofthese financial statements 11

106 CORAL ACADEMY OF SCIENCE LAS VEGAS RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION June 30,2017 Total Fund Balance - Total Governmental Funds $ 5,967,588 Amounts reported for governmental activities in the statement ofnet position are different because: All debt related to capital assets used in governmental activities are not reported as liabilities in governmental funds Debt Related to Capital Assets (9,070,000) Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds Cost of Capital Assets Accumulated Depreciation 9,707,685 (1,546,628) 8,161,057 Long-term liabilities are not due and payable in the current period and, therefore, are not reported as liabilities in the governmental funds Net pension liability (11,822,891) Deferred outflows and inflows of resources related to pensions are applicable to future periods and, therefore, are not reported in the funds Contributions to the pension plan in the current fiscal year Pension deferrals 4,892,403 (1,390,294) Net Position of Governmental Activities $ (3,262,137) The accompanying notes are an integral part of these financial statements 12

107 CORAL ACADEMY OF SCIENCE LAS VEGAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS For the year ended June 30, 2017 Revenues State Sources Donations/Fundraising Other Bond Issuance Total Revenues General $ 17,656, ,453 2,211,769 20,078,789 Bond Building Fund Total $ $ 17,656, ,453 2,211,769 20,078,789 Expenditures Instruction Regular Instruction Special Instruction Total Instruction 10,560, ,974 11,253,556 10,560, ,974 11,253,556 Support Services Administration Facilities Support Services Capital Outlay Debt Service Principal Interest Total Support Service Total Expenditures 2,816,942 2,335,912 1,516, ,868 7,461,714 18,715, , , ,969 2,816,942 2,335,912 1,516, , ,969 7,957,683 19,211,239 Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (252,433) (252,433) 252, , ,433 (252,433) Net Change in Fund Balance 1,111,086 (243,536) 867,550 Fund Balance, beginning of year 3,949,325 1,150,713 5,100,038 Fund Balance, end of year $ 5,060,411 $ 907,177 $ 5,967,588 The accompanying notes are an integral part of these financial statements 13

108 CORAL ACADEMY OF SCIENCE LAS VEGAS RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES June 30, 2017 Net Changes in Fund Balance - Total Governmental Funds $ 867,550 Amounts reported for governmental activities in the statement of activities are different because: Repayment of long-term debt and capital leases are reported in the governmental funds as expenditures but is reported as a reduction in long-term liabilities in the Statement of Activities. Debt Related to Capital Assets Repayment ofdebt Capital outlays to purchase capital assets are reported in governmental funds as expenditures. However, in the Statement of Activities, those costs are allocated over their useful lives and reported as depreciation expense. Capital Outlays Disposal of Assets Depreciation Expense Some expenses reported in the Statement ofactivities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. Change in net pension liability Change in deferred inflows of resources of pension Change in deferred outflows ofresources ofpension 791,868 (393,425) (2,869,569) (231,878) 3,346,102 Changes in Net Position of Governmental Activities $ 1,510,648 The accompanying notes are an integral part of these financial statements 14

109 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE 1 - Summary of Significant Accounting Policies: The financial statements ofcoral Academy ofscience Las Vegas have been prepared on the accrual basis ofaccounting in conformity with accounting principles generally accepted in the United States ofamerica as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Reporting Entity The Coral Academy of Science Las Vegas was organized to operate a public charter school sponsored by the State Public Charter School Authority in Las Vegas, Nevada, under Nevada Revised Statutes to Currently, Coral Academy of Science Las Vegas operates at grades K through 12 levels. Coral Academy of Science Las Vegas receives funding from state, federal and local government sources and must comply with the requirements ofthese funding source entities. However, Coral Academy of Science Las Vegas is not included in any other governmental "reporting entity" as defined in GASB pronouncements, since its Board of Directors has decision making authority, the power to designate management, and the ability to significantly influence operations and primary accountability for fiscal matters. Basis of Presentation and Basis of Accounting Government -Wide Statements GASB Statement Number 34 mandates government-wide financial statements of net position and activities, which are presented on the economic resources measurement focus and accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. It also requires that certain fixed assets be recorded at cost less accumulated depreciation, pension deferrals and liabilities be recognized and outstanding debt be included in the statement of net position. The School's basic financial statements include both government-wide (reporting the School as a whole) and fund financial statements (reporting the School's major funds). The School's general fund and bond building fund are classified as governmental activities. The Statement ofactivities presents a comparison between direct expenses and program revenue for each function ofthe School's governmental activities. Direct expenses are those that are specifically associated with a program or function. The School does not charge indirect expenses to programs or functions. Program revenue includes fees for services and grants that are restricted to a particular program. Revenue that is not classified as program revenue is presented as general revenue. 15

110 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE 1 - Summary of Significant Accounting Policies (Continued) Fund Financial Statements The accounts of the School are organized on the basis of funds, each of which is considered a separate accounting entity. The operations ofeach fund are accounted for with a separate set ofselfbalancing accounts that comprise its assets, liabilities, fund balance, revenues and expenditures. Governmental resources are ailocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Generally accepted accounting principles require that the general fund be reported as a major fund and that all other governmental funds whose assets, liabilities, revenue or expenditures exceed 10% or more of the total for all government funds also be reported as major funds. Accordingly, the School reports the following major governmental funds: Governmental and Major Funds The General Fund is Coral Academy of Science Las Vegas' primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Bond Building Fund accounts for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Coral Academy of Science Las Vegas maintains its accounting records for all governmental funds and prepares its financial statements on the modified accrual basis of accounting as required by Nevada Revised Statutes (NRS) The budget ofcoral Academy ofscience Las Vegas is also prepared on the modified accrual basis of accounting. This method provides for recognizing expenditures at the time liabilities are incurred, while revenue is recorded when "measurable and available" to finance expenditures of the fiscal period. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities ofthe current period. The School considers all revenue available if it is collected within 60 days after year-end. Most major sources of revenue reported in governmental funds are susceptible to accrual under the modified accrual basis of accounting. Interest is subject to accrual Other receipts become measurable and available when cash is received by Coral Academy of Science Las Vegas and are recognized as revenue at that time. Fund balances for governmental funds are reported in classifications that comprise a hierarchy based primarily on how amounts can be spent. These include "non-spendable" which are not expected to be converted to cash, such as inventory or prepaid items, "restricted" by conditions of law, regulation, grants or contracts with external parties, "committed" which arise from majority votes of the School's Board, "assigned" which reflect an intent by the Principal or a person assigned by the School's Board, or "unassigned" which is the residual amount. 16

111 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE 1 - Summary of Significant Accounting Policies (Continued) When both restricted and unrestricted fund balances are available for expenditures, it is the School's policy to use restricted fund balances first, then unrestricted as needed. Expenditures incurred in the unrestricted fund balances shall be reduced first from committed fund balance, then from the assigned fund balance and lastly, from the unassigned fund balance. Private-sector standards of accounting and financial reports issued prior to December 1, 1989, generally are followed in the government-wide financial statements to the extent that those standards do not conflict with or contradict guidance ofthe Governmental Accounting Standards Board. Accounting for Uncertainty in Income Taxes In June 2006, the Financial Accounting Standards Board ("F ASB") issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109, Accountingfor Income Taxes ("FIN48 "). FIN 48 (now referred to as F ASB ASC ), requires entities to disclose in their financial statements the nature of any uncertainty in their tax position. For tax-exempt entities, their tax-exempt status itself is deemed to be an uncertainty, since events could potentially occur and jeopardize the tax-exempt status. The school has not recognized any benefits from uncertain tax positions and believes it has no uncertain tax positions for which it is reasonably possible that the total amounts ofunrecognized tax benefits will significantly increase or decrease within 12 months ofthe balance sheet date ofjune 30, Cash includes demand deposits held at the banle Receivables and Payables Activities between funds that are representative oflendinglborrowing arrangements outstanding at the end ofthe fiscal year are referred to as either "due to/from other funds." Inventory Inventory is carried at original purchase cost. Deferred Outflows and Inflows of Resources In addition to assets, a separate section is reported for deferred outflows ofresources. This separate financial statement element, deferred outflows ofresources, represents a consumption ofnet position that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until then. The changes in proportion and differences between employer 17

112 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE 1 - Summary of Significant Accounting Policies (Continued) contributions and proportionate share of contributions as well as contributions made after the measurement period for pensions qualify for reporting in this category. In addition to liabilities, a separate section is reported for deferred inflows of resources. This separate financial statement element, deferred inflows ofresources, represents an acquisition ofnet position that applies to a future period and will not be recognized as an inflow ofresources (revenue) until that time. Differences between expected and actual experience and between projected and actual investment earnings on pension plan investments qualify for reporting in this category. Capital Assets Capital assets, which include land and land improvements, buildings and tenant improvements, technological equipment, furniture and fixtures, vehicles and construction in progress are reported in the government-wide financial statements. Such assets are recorded at historical cost, or estimated historical cost if purchase or constructed. Donated capital assets are recorded at the estimated fair market value at the date of donation. The costs ofnormal maintenance and repairs that do not add to the value ofthe assets or materially extend asset lives are not capitalized. Capital assets are depreciated using the straight line method over the following estimated useful lives: Buildings and Tenant Improvements Technological Equipment Furniture and Fixtures Vehicles 7-31 years 3-7 years 7-10 years 3-5 years Net PositionlFund Balances Net Position: Net position in the government-wide financial statements are classified as invested in capital assets and related reserve accounts, net ofrelated debt; restricted; and unrestricted. Restricted net position represents constraints on resources that are either externally imposed by creditors, grantors, contributors, or laws or regulations ofother governments or imposed by law through the state statute. Fund Balance: In the governmental fund financial statements, fund balance is composed of five classifications designed to disclose the hierarchy ofconstraints placed on how fund balance can be spent. 18

113 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE 1 - Summary of Significant Accounting Policies (Continued) The governmental fund types classify fund balances as follows: Non-spendable Fund Balance This classification includes amounts that cannot be spent because they are either (a) not in spendable form, such as inventory or prepaid items, or (b) legally or contractually required to be maintained intact. Restricted Fund Balance - This classification includes amounts that are restricted to specific purposes externally imposed by creditors or imposed by law. Committed Fund Balance - This classification includes the portion offund balance that can only be used for a specific purposes imposed by majority vote ofthe School's governing body (highest level ofdecision-making authority). Any changes or removal of the specific purpose requires majority action by the governing bodies that approved the original action. Assigned Fund balance - Portion of fund balance that the School intends to use for specific purposes. Unassigned Fund balance Portion of fund balance that has not been assigned to another fund or restricted, committed, or assigned to specific purposes within the general fund. Estimates The preparation offinancial statements in conformity with accounting principles generally accepted in the United States ofamerica requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Date of Management Review Management has evaluated subsequent events through October 30, 2017, which was the date the financial statements were issued, and concluded that no additional disclosures were required. Pensions For purposes ofmeasuring the net pension liability, deferred outflows ofresources, deferred inflows of resources and pension expense, information about the fiduciary net position of the State of Nevada's Public Employees' Retirement System (PERS) and additions to/deductions from PERS fiduciary net position have been determined on the same basis as they are reported by PERS. For this purpose, benefit payments (including refunds ofemployee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The effect ofthis reporting amounts to a decrease of$8,320,782 in unrestricted net position. In the fund financial statements the PERS expense is recognized as the current year contributions paid. 19

114 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE2-Cash At June 30, 2017, the school had eight bank accounts held at two institutions where they are insured by the Federal Deposit Insurance Corporation up to $250,000. Amounts exceeding the FDIC limit are insured under the State Treasurer's Pooled Collateral Program. The program established pursuant to NRS requires each depository to maintain as collateral acceptable securities having a fair market value that is at least 102 percent ofthe amount ofthe uninsured balances ofthe public money held by the depository. NOTE 3 - Accounts Receivable At June 30, 2017, accounts receivable of $1,258,528 primarily consisted of additional funds due from the State ofnevada's Department ofeducation in the amount of$i,246,036. NOTE 4 - Inventory At June 30,2017, the school had no inventory ofuniforms because the school is now using an outsourced vendor for uniforms. NOTE 5 - Prepaid At June 30, 2017, the prepaid balance of $77,649 primarily consists of amounts paid to various vendors utilized to provide services and products that are related to the next school year. NOTE 6 - Deposits At June 30, 2017, the deposit balance was $212,409, which consists of security deposits in the amount of $43,468 for the Tamarus campus, $26,973 for the Windmill campus, $137,904 for the Centennial Hills campus and other deposits in the amount of$4,064. Amounts for security deposits will be applied to the last month rent. 20

115 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE 7 - Capital Assets Capital asset balances and activities for the year ended June 30, 2017 were as follows: Beginning Balance Additions Retirements Ending Balance Governmental Activities Land and land improvements Building Tenant Improvements Technological Equipment Furniture & Fixture Vehicles Construction in progress $ 1,137,506 6,844, , , ,360 3,000 $ 440, , ,505 63,438 $ $ 1,137,506 6,844, , , ,865 3,000 63,438 Total at historical cost Less Accumulated Depreciation Governmental Activities - Capital Assets, net 8,915,816 1,153,203 $ 7,762, , ,425 $ 398,444 $ 9,707,685 1,546,628 $ 8,161,057 NOTE 8 - Long-Term Obligations On May 14, 2014, Coral Academy of Science Las Vegas, through RBC Capital Markets, LLC (the "Underwriter"), issued $8,945,000 in Public Finance Authority Education Revenue Bonds Series 2014A and $315,000 Public Finance Authority Education Revenue Bonds Series 2014B (Taxable). The net proceeds of $9,047,160 were issued to purchase the Sandy Ridge campus for $7,982,000 with related reserve amounts of $1,064,660. Long-term debt consists of the following at June 30, 2017: Date Date of Interest Amount Balance Series Issued Maturity Rate (%) Issued June 30, A 5114/2014 7/ % $ 8,945,000 $ 8,945, B 5114/ % 315, ,000 $ 9,260,000 $ 9,070,000 21

116 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE 8 - Long-Term Obligations (continued) Summary of long-term debt service requirements to maturity: Year(s) Ending June 30, Principal Interest Total Requirements , , , , , ,000 1,270,000 1,645,000 2,160, , , , , ,344 2,190,951 1,902,787 1,522,987 1,010, , , , , ,344 3,165,951 3,172,787 3,167,987 3,170, ,250, ,218 2,542,218 Total 9,070,000 * 9,323,894 $ 18,393,894 Less: Current portion Long term portion (140,000) $ 8,930,000 $ 9,323,894 *Principal amounts shown exclude bond issue costs of $212,840, annual trustee fees of$42,000 and S&P annual surveillance fees of$126,000. Additional Covenants and Agreements Days Cash on Hand Requirement: Coral Academy of Science Las Vegas has agreed to maintain 60 days cash on hand as ofjune 30 in each fiscal year commencing on June 30, 2014, and annually thereafter so long as any bonds are outstanding. As ofjune 30, 2017, Coral Academy ofscience Las Vegas had 113 days cash on hand using government-wide financial statements and 93 days cash on hand using governmental fund financial statements. Debt Service Coverage Ratio: Coral Academy ofscience Las Vegas has agreed to budget for and maintain a debt service coverage ratio for each fiscal year ofnot less than 1.10: 1.00, commencing with the fiscal year ending June 30, As ofjune 30, 2017, Coral Academy ofscience Las Vegas had a debt service coverage ratio of3.77:1.00 using government-wide financial statements and 2.14:1.00 using governmental fund financial statements. 22

117 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE 9 - Operating Leases Coral Academy of Science Las Vegas conducts its operations from four facilities which are leased from different lessors with various terms and payments. 1) The Tamarus campus lease commenced September 2008 with a base rent of$21,630 and increasing yearly at a rate of3% through June For the year ending June 30, 2017, the rate was $27,400. 2) The Windmill campus lease commenced June 2013 with a base rent of$26,973 and increasing yearly at a rate of2% through June For the year ending June 30, 2017, the rate was $29,197. 3) The Centennial Hills campus lease commenced August 2016 with a base rent of $45,968 and increasing yearly at a rate of2.5% thru July For the year ending June 30, 2017, the rate was $45,968. 4) The Nellis Air Force Base campus lease commenced September 2016 with a base rent of$33,000 and increasing yearly at a rate of 3% thru August For the year ending June 30, 2017, the rate was $0 because the campus exceeds the required 20% military-connected student enrollment, allowing for no required rent. Rent expense for the four locations for the year ending June 30, 2017 was $1,264,490. The following is a schedule of future minimum lease payments related to the campuses: June 30 Amount 2018 $ 1,293, , , , and thereafter 11,243,651 $15, The School also has multiple copier leases which are not capitalized. Equipment rent expense for the year ended June 30, 2017 was $98,928. The following is a schedule of future minimum lease payments: June 30 Amount 2018 $ 84, , , , and thereafter NOTE 10 - Pension Plan and Post-employment Obligations $ 336,000 Plan Description. The School is a public employer participating in the Public Employees Retirement System ofthe State ofnevada (PERS), a defined benefit cost-sharing multiple-employer program, and all full-time employees are covered under the system. The School has no liability for unfunded 23

118 CORAL ACADEMY OF SCIENCE LAS VEGAS Notes to Financial Statements NOTE 10 - Pension Plan and Post-employment Obligations (continued) obligations ofthe system as provided by NRS but is required to report their share ofthe net pension liability under GASB 68. Benefits Provided. Benefits, as required by the Nevada Revised Statutes (l'jrs or statute), are determined by the number of years of accredited service at time of retirement and the member's highest average compensation in any 36 consecutive months with special provisions for members entering the System on or after January 1, 2010 and July I, Benefit payments to which participants or their beneficiaries may be entitled under the plan include pension benefits, disability benefits, and survivor benefits. Monthly benefit allowances for regular members are computed at 2.50% ofaverage compensation for each accredited year of service prior to July I, For service earned on and after July 1, 2001, this factor is 2.67% of average compensation. For members entering the System on or after January 1, 2010, there is a 2.5% service time factor and for regular members entering the System on or after July 1, 2015, there is a 2.25% factor. The System offers several alternatives to the unmodified service retirement allowance which, in general, allows the retired employee to accept a reduced service retirement allowance payable monthly during his or her lifetime and various optional monthly payments to a named beneficiary after his or her death. Post-retirement increases are provided by authority ofnrs Vesting. Regular members entering the System prior to January 1,2010, are eligible for retirement at age 65 with five years ofservice, at age 60 with ten years ofservice, or at any age with thirty years of service. Regular members entering the System on or after January 1,2010, are eligible for retirement at age 65 with five years ofservice, or age 62 with ten years ofservice, or any age with thirty years of service. Regular members who entered the System on or after July 1, 2015, are eligible for retirement at age 65 with five years ofservice, or at age 62 with ten years ofservice or at age 55 with thirty years of service or at any age with years ofservice. The normal ceiling limitation on monthly benefits allowance is 75% of average compensation. However, a member who has an effective date of membership before July 1, 1985, is entitled to a benefit ofup to 90% ofaverage compensation. Regular members become fully vested as to benefits upon completion of five years of service. Contributions. The authority for establishing and amending the obligation to make contributions and member contribution rates is set by statute. New hires, in agencies which did not elect the Employer- Pay Contribution (EPC) plan prior to July 1, 1983 have the option of selecting one of two contribution plans. Contributions are shared equally by employer and employee. Employees can take a reduced salary and have contributions made by the employer (EPC) or can make contributions by a payroll deduction matched by the employer. 24