August 8, 2017 Zions First National Bank Attention: Mr. Scott Blair Co1porate Tiust Department 6001 N. 24"' Street Phoenix, Az 85016 Dear Scott: RE: The Industrial Development Authority of the County of Maricopa, Senior Living Facility Revenue Refunding Bonds (Christian Care Mesa II, Inc. Project) Series 2014A Enclosed please find the unaudited financials as of June 30, 2017. Botrnwer hereby certifies that it has reviewed its operations for the quatier and that in the course of its review has detetmined that it is in compliance with all of the tetms, provisions and conditions of the Loan Agreement and the Deed of Trust. Occupied units as of June 30, 2017 were 380 (92%). Sincerely, r~~ Chief Financial Officer
THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF MARICOPA, SENIOR LIVING FACILITY REVENUE REFUNDING BONDS (CHRISTIAN CARE MESA II, INC. PROJECT) SERIES 2014A COVERAGE CERTIFICATE as of June 30, 2017 A. Debt Sen ice Coverage Ratio 1.72 B. Days Cash on Hand 48 I, Kathleen Condon, Authorized Borrowers Representative of Christian Care Mesa II, Inc. do hereby certify that: 1. The above debt service coverage ratio and days' cash on hand calculations are tiue and accurate. 2. Check one: X Borrower has reviewed its operations for the year ended June 30, 2017 and that in the course of its review has determined that it is in compliance with all of the terms, provisions and conditions of the Loan Agreement and the Deed oftmst. or The inunediately preceding paragraph is not tiue. Date Se1ni-Annual c()verage Certificate Christian Care i'viesa II, Inc. 2014 Issue
Statement of Activities Fellowship Square Historic Mesa For period ending June 30, 2017 MTD Actual YTD Actual 1 BEDROOM REVENUE 450,928 2,690,542 2 BEDROOM REVENUE 189,885 1,179,462 ASSISTED LIVING REVENUE 23,327 189,863 HOME HEALTH SERVICES 1,609 23,875 OTHER REVENUE 1,221 6,635 FINANCIAL INCOME 1,383 5,852 DONATIONS INCOME 1,392 17,728 TOTAL REVENUES 669,745 4,113,957 SECURITY PERSONNEL 12,459 72,174 MAINTENANCE PERSONNEL 17,104 133,398 SECURITY EXPENSES 50 7,336 MAINTENANCE SUPPLIES 2,476 20,502 GROUNDS EXPENSE 7,851 39,080 RUBBISH REMOVAL 2,066 12,980 HEATING & AIR CONDITIONING 7,922 21,538 PAINTING & DECORATING 3,098 14,756 ELECTRICAL MAINTENANCE 2,980 7,679 ELEVATOR MAINTENANCE 1,624 10,159 FIRE PREVENTION MAINTENANCE 274 3,466 PLUMBING MAINTENANCE 4,510 18,925 EQUIPMENT REPLACEMENT 1,709 10,256 OTHER MAINTENANCE 2,225 7,455 TOTAL MAINTENANCE & SECURITY 66,347 379,704 HOUSEKEEPING WAGES 25,361 160,692 HOUSEKEEPING SUPPLIES 1,248 7,637 OUTSIDE JANITORIAL SERVICES 1,327 3,672 HOUSEKEEPING EQUIPMENT 0 260
Statement of Activities Fellowship Square Historic Mesa For period ending June 30, 2017 MTD Actual YTD Actual OTHER HOUSEKEEPING 1,795 8,941 TOTAL HOUSEKEEPING EXPENSES 29,731 181,202 FOOD SERVICE WAGES 91,201 579,141 FOOD EXPENSES 60,208 365,034 DIETARY SUPPLIES 5,953 35,695 FOOD SERVICE EQUIPMENT 1,574 5,073 OTHER FOOD SERVICE 1,742 12,118 TOTAL FOOD SERVICE EXPENSES 160,678 997,060 ELECTRICITY 33,291 199,094 WATER & SEWER 10,894 55,451 GAS 1,752 19,082 CABLE / SATELLITE TV 6,893 34,466 VEHICLE EXPENSE 1,741 11,890 TOTAL OPERATING EXPENSES 54,571 319,983 ACTIVITIES SUPERVISOR WAGES 3,153 19,305 ACTIVITIES STAFF WAGES 6,968 42,252 DRIVERS WAGES 5,327 35,203 CHAPLAINS WAGES 3,853 21,820 GIFT SHOP ITEMS (20) 1,436 ACTIVITIES EVENTS & SUPPLIES 8,903 57,802 TOTAL MISCELLANEOUS EXPENSES 28,183 177,818 HOME HEALTH NURSING 3,848 36,802 MEDICAL SUPPLIES 0 200 THERAPY EXPENSE 2,041 22,359 NURSING EQUIPMENT 148 148 TOTAL NURSING & MEDICAL EXPENSE 6,037 59,508
Statement of Activities Fellowship Square Historic Mesa For period ending June 30, 2017 MTD Actual YTD Actual TOTAL COST OF REVENUES 345,547 2,115,276 TOTAL GROSS OPERATING INCOME 324,199 1,998,681 MARKETING WAGES 19,308 120,298 ADVERTISING 10,027 60,853 OTHER MARKETING 11,175 69,912 TOTAL MARKETING EXPENSES 40,510 251,062 ADMINISTRATIVE WAGES 20,074 114,886 SUPPORT WAGES 18,975 108,554 OTHER PERSONNEL COSTS 294 4,748 AUDIT FEES 1,042 6,250 COMPUTER EXPENSE 7,191 43,743 DUES & SUBSCRIPTIONS 890 1,945 MANAGEMENT & BOOKKEEPING FEES 32,182 194,668 FUNDRAISING 0 2,122 INSURANCE 12,383 75,068 LEGAL FEES 155 155 MISCELLANEOUS ADMIN 0 2,879 OFFICE EXPENSE 1,988 12,935 POSTAGE 306 1,519 TELEPHONE EXPENSES 3,052 19,176 TRAVEL & MILEAGE 82 366 OTHER G & A 3,915 15,647 BOND - MORTGAGE INTEREST EXPENSE 64,137 384,821 BOND - MORTGAGE COSTS OTHER 1,827 12,461 AMORTIZATION OF DEBT SERVICE ISSUANCE 2,575 15,451 OTHER INTEREST EXPENSE 10,016 64,558
Statement of Activities Fellowship Square Historic Mesa For period ending June 30, 2017 MTD Actual YTD Actual TOTAL G&A BEFORE DEPRECIATION 181,084 1,081,953 TOTAL MARKETING AND G&A 221,594 1,333,015 NET OPERATING INCOME BEFORE DEPRECIATION 102,605 665,666 DEPRECIATION 68,943 404,907 NET OPERATING INCOME 33,662 260,759 NON-OPERATING GAIN (LOSS) 0 1,837 NET INCOME (LOSS) 33,662 262,596
Statement of Financial Position Fellowship Square Historic Mesa - 2014 Issue As of June 30, 2017 CURRENT ASSETS CASH 226,576 CASH SAVINGS & RESERVATIONS 20,725 TENANT ACCOUNTS RECEIVABLE 27,432 ACCOUNTS RECEIVABLE - HEALTHCARE 7,442 ACCOUNTS RECEIVABLE - OTHER 5,604 INVENTORY 19,739 PREPAID EXPENSES 117,958 INTERCOMPANY RECEIVABLES 71,243 DEBT SERVICE INTEREST FUND 385,727 DEBT SERVICE PRINCIPAL FUND 162,745 RESTRICTED SAVINGS 4,790 TOTAL CURRENT ASSETS 1,049,982 FIXED ASSETS (NET) LAND 2,800,000 LAND IMPROVEMENTS 267,573 BUILDINGS 8,011,459 BUILDING EQUIPMENT 661,388 COMPUTERS & EQUIPMENT 16,621 FURNITURE & FIXTURES 44,564 MOTOR VEHICLES 45,727 TOTAL FIXED ASSETS (NET) 11,847,332 LONG-TERM INVESTMENTS & RECEIVABLES 115,751 DEVELOPMENT & BOND FUNDS DEVELOPMENT COSTS 6,249 DEBT SERVICE RESERVE FUNDS 1,104,831 REPLACEMENT MAINTENANCE FUND 519,751 OTHER RESERVE FUNDS 9,733 TOTAL OPERATING RESERVE FUNDS 396,484 TOTAL TAX & INSURANCE ESCROW FUNDS 55,633 TOTAL DEVELOPMENT & BOND FUNDS 2,092,682
Statement of Financial Position Fellowship Square Historic Mesa - 2014 Issue As of June 30, 2017 TOTAL ASSETS 15,105,746 LIABILITIES AND NET ASSETS CURRENT LIABILITIES ACCOUNTS PAYABLE 324,414 ACCRUED EXPENSES 62,253 ACCRUED INTEREST 385,256 CURRENT PORTION - LONG-TERM DEBT 978,940 ACCRUED PAYROLL EXPENSES & TAXES 163,799 DEPOSITS 141,150 INTERCOMPANY PAYABLES 2,799,228 TOTAL CURRENT LIABILITIES 4,855,041 LONG-TERM LIABILITIES MORTGAGE NOTES PAYABLE 1,132,476 BONDS PAYABLE 15,801,694 OTHER LONG-TERM LIABILITIES 7,129,160 TOTAL LONG-TERM LIABILITIES 24,063,330 TOTAL LIABILITIES 26,862,558 NET ASSETS Beginning Balance - Net Assets (12,019,407) Current Year Income (Expense) 262,596 TOTAL NET ASSETS (11,756,812) TOTAL LIABILITIES AND NET ASSETS 15,105,746
STATEMENT OF CASH FLOWS Fellowship Square Historic Mesa 2014A Issue For Six Months Ended June 30, 2017 2017 Cash Flows used for Operating Activities Change in net assets (deficit) $ 262,590 Adjustments to reconcile change in net deficit to net cash from operating activities Depreciation 404,005 Interest expense attributable to amortization of debt issuance costs 15,451 Loss on disposal of fixed assets 902 Changes in assets and liabilities Tenant accounts receivable (3,566) Other receivables - interest and medical 5,348 Prepaid expenses (63,695) Inventory 13,664 Due from/to related party 13,600 Accounts payable 73,284 Accrued expenses 36,671 Tenant security and reservation deposits (7,145) Deferred revenue - prepaid rent 13,771 Net Cash (used for) from Operating Activities 764,880 Cash Flows used for Investing Activities Increase in restricted deposits under bond indenture 127,996 Purchase of property and equipment (259,810) Net Cash used for Investing Activities (131,814) Cash Flows From Financing Activities Financing activities with affiliates - Principal payments on bonds payable (315,435) Issuance of Notes Payable 41,458 Principal payments on note payable (329,705) Net Cash from Financing Activities (603,683) Net Change in Cash and Cash Equivalents 29,383 Cash and Cash Equivalents, Beginning of Year 222,709 Cash and Cash Equivalents, End of Period $ 252,092 Supplemental Disclosure of Cash Flows Information Cash paid for interest during the period $ 454,540