Exhibit 20 - CPLC Financial Statements 2020 — Marshall v. Prestamos CDFI, LLC (Dkt. 86-21, E.D. Pa. No. 5:21-cv-04337)

Summary

Exhibit 20, filed October 27, 2023 as Document 86-21 in Case 5:21-cv-04337-JMG, is the consolidated financial statements and supplementary information of Chicanos Por La Causa, Inc. and its subsidiaries and affiliates for the year ended June 30, 2020, with an independent auditors' report by CliftonLarsonAllen LLP dated December 11, 2020. The statement of financial position shows total liabilities of $170,937,420 and total net assets of $61,270,905, for total liabilities and net assets of $232,208,325, and the supplementary schedules include statements for the CPLC Borrowing Entity.

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Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 1 of 68
EXHIBIT 20
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 2 of 68
CHICANOS POR LA CAUSA, INC. AND
SUBSIDIARIES AND AFFILIATES

CONSOLIDATED FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION

YEAR ENDED JUNE 30, 2020

ClLAconnéect.com

WEALTH ADVISORY

PLAINTIFF’S OUTSOURCING
: EXHIBIT AUDIT, TAX, AND
\4 CONSULTING

Highly Confidential PRESTAMOS-00299609
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 3 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2020

INDEPENDENT AUDITORS’ REPORT 1

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 4
CONSOLIDATED STATEMENT OF ACTIVITIES 6
CONSOLIDATED STATEMENT OF FUNCTIONAL REVENUE AND EXPENSES 7
CONSOLIDATED STATEMENT OF CASH FLOWS 11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13

SUPPLEMENTARY INFORMATION

CONSOLIDATING STATEMENT OF FINANCIAL POSITION 50
CONSOLIDATING STATEMENT OF ACTIVITIES 51
STATEMENT OF FINANCIAL POSITION — CPLC BORROWING ENTITY 52
STATEMENT OF ACTIVITIES - CPLC BORROWING ENTITY 53
STATEMENT OF ACTIVITIES - CPLC COMMUNITY SCHOOLS 54
STATEMENT OF FINANCIAL POSITION — CPLC ESTANCIA LLC 55
STATEMENT OF ACTIVITIES — CPLC ESTANCIA LLC 56
STATEMENT OF FINANCIAL POSITION — CPLC FOUNTAIN VILLAS LLC 57
STATEMENT OF ACTIVITIES — CPLC FOUNTAIN VILLAS LLC 58
STATEMENT OF FINANCIAL POSITION — LA CAUSA CONSTRUCTION, LLC 59
STATEMENT OF ACTIVITIES — LA CAUSA CONSTRUCTION, LLC 60
STATEMENT OF FINANCIAL POSITION — CPLC NEW MEXICO, INC. 61
STATEMENT OF ACTIVITIES —- CPLC NEW MEXICO, INC. 62
STATEMENT OF FINANCIAL POSITION - CPLC NEVADA, INC. 63
STATEMENT OF ACTIVITIES — CPLC NEVADA, INC. 64

Highly Confidential PRESTAMOS-00299610
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 4 of 68
CiitonLarsonAien LLP
CLAsonnect.com

INDEPENDENT AUDITORS’ REPORT

Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates
Phoenix, Arizona

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Chicanos Por La Causa, Inc.
and Subsidiaries and Affiliates, which comprises the consolidated statement of financial position as of
June 30, 2020, and the related consolidated statements of activities, functional revenues and
expenses, and cash flows for the year then ended, and the related notes to the consolidated financial
statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our
audit. We did not audit the financial statements of Casa del Pueblo Il dba: Casa del Pueblo Il
Apartments; Casa Mia Senior Apartments, Inc. dba: Casa Mia Apartments; Causa Community
Development, Inc. dba: Guadalupe Barrio Nuevo; Gran Victoria Housing, LLC; Casa de Primavera
Apartments, LLC dba: Casa de Primavera; Pueblo Senior Housing, Inc. dba: Casa del Pueblo; Santa
Cruz Apartments, Inc. dba: Santa Cruz Apartments; Mountain Pointe Apartments, LP; doa Mountain
Pointe Apartments, Bella Vista Properties | Limited Partnership; Ladera Village Limited Partnership and
Villa Las Vegas Limited Partnership, wholly-owned subsidiaries, which statements reflect total assets of
$39,441,355 as of June 30, 2020, and total revenues of $10,474,590 for the year then ended. Those
statements were audited by other auditors, whose reports have been furnished to us, and our opinion,
insofar as it relates to the amounts included for Casa del Pueblo II dba: Casa del Pueblo ll Apartments;
Casa Mia Senior Apartments, Inc. dba: Casa Mia Apartments; Causa Community Development, Inc.
dba: Guadalupe Barrio Nuevo; Gran Victoria Housing, LLC; Casa de Primavera Apartments, LLC dba:
Casa de Primavera; Pueblo Senior Housing, Inc. dba: Casa del Pueblo; Santa Cruz Apartments, Inc.
dba: Santa Cruz Apartments; Mountain Pointe Apartments, LP; dba Mountain Pointe Apartments, Bella
Vista Properties | Limited Partnership; Ladera Village Limited Partnership and Villa Las Vegas Limited
Partnership, is based solely on the reports of the other auditors. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement.

A member of

Nexia (1)

intermmationa:

Highly Confidential PRESTAMOS-00299611
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 5 of 68
Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates

The financial statements of Gran Victoria Housing, LLC, Santa Cruz Apartments, Inc. dba: Santa Cruz
Apartments; Bella Vista Properties | Limited Partnership; Ladera Village Limited Partnership and Villa
Las Vegas Limited Partnership were not audited in accordance with Government Auditing Standards.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditors’ judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the consolidated financial statements in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the
overall presentation of the consolidated financial statements.

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

Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates as of

June 30, 2020, and the changes in their net assets and their cash flows for the year then ended in
accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, management adopted Accounting
Standards Update No. 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting
Guidance for Contributions Received and Contributions Made. Our opinion is not modified with respect
to that matter.

Report on Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements
as a whole. The accompanying supplementary information on pages 50 through 64 is presented for
purposes of additional analysis and is not a required part of the consolidated financial statements. Such
information is the responsibility of management and derived from and relates directly to the underlying
accounting and other records used to prepare the consolidated financial statements. The information
has been subjected to the auditing procedures applied in the audits of the consolidated financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the consolidated financial
statements or to the consolidated financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the information is fairly stated in all material respects in relation to the consolidated financial statements
as a whole.

Highly Confidential PRESTAMOS-00299612
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Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated
December 11, 2020, on our consideration of the Chicanos Por La Causa, Inc. and Subsidiaries and
Affiliates’ internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that
report is solely to describe the scope of our testing of internal control over financial reporting and
compliance and the result of that testing, and not to provide an opinion on the effectiveness of the
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates‘ internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’ internal
control over financial reporting and compliance.

Cif thoLavoorllon LLY

CliftonLarsonAllen LLP

Phoenix, Arizona
December 11, 2020

Highly Confidential PRESTAMOS-00299613
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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
JUNE 30, 2020

Total Assets

Highly Confidentia!

See accompanying Notes to Consolidated Financial Statements.

ASSETS
CURRENT ASSETS

Cash and Cash Equivalents $ 30,426,491
Restricted Cash 395,623
Cash Held for Loan Programs 2,692,990

Receivables:
Grants and Contracts, Net 6,996,214
Interest Receivable 264,017
Other Receivables, Net 303,018
Notes Receivable, Current 2,013,539
Prepaid Expenses 226,248
Total Current Assets 43,318,140

LONG-TERM ASSETS

Notes Receivable, Net 41,219,877
Real Estate Properties - Rental, Net 101,731,158
Property and Equipment, Net 19,525,162
Related Party Receivables, Net 1,191,020
Real Estate Held for Sale 413,238,133
Investments in Debt and Equity Securities 3,762,069
Investments in Affiliated Entities - Cost Method 2,970,156
Investments in Affiliated Entities - Equity Method 729,675
Deposits and Funded Reserves 3,542,513
Other Assets 980 422
Total Long-Term Assets 188,890,185

$ 232,208,325

PRESTAMOS-00299614
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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
JUNE 30, 2020

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

Accounts Payable and Accrued Expenses $ 11,534,288
Lines of Credit - Current Portion 1,301,023
Mortgages Payable and Other Debt, Current 10,870,989
Other Liabilities 1,665,647

Total Current Liabilities 25,371,947

LONG-TERM LIABILITIES

Lines of Credit, Long-Term Portion 18,945,463
Deferred Revenue, Long-Term Portion 2,855,156
Mortgages Payable and Other Debt, Net 123,764,854
Total Long-Term Liabilities 145,565,473
Total Liabilities 170,937,420
NET ASSETS
Without Donor Restrictions 58,774,037
With Donor Restrictions 2,496,868
Total Net Assets 61,270,905
Total Liabilities and Net Assets $ 232,208,325

See accompanying Notes to Consolidated Financial Statements.

Highly Confidential PRESTAMOS-00299615
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 9 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF ACTIVITIES

YEAR ENDED JUNE 30, 2020

REVENUES
Contract Revenues:
Grants and Contracts
Cost Reimbursement
Fee for Service
Total Contract Revenues
Noncontract Revenues:
Rental Income
Development Fees
Client Fees
Donations
Fundraising
In-Kind
Sales of Inventory
Other Revenues
Total Noncontract Revenues
Other Revenues:
Gain on Sale of Assets
Investment Income (Loss)
Interest Income
Total Other Revenues
Net Assets Released from Restrictions
Total Revenues

OPERATING EXPENSES
Program Services
General and Administrative
Fundraising
Total Operating Expenses

NONOPERATING ACTIVITY
Loss on Sale of Assets, Net
Impairment Loss on Real Estate

Net Nonoperating Activity

CHANGE IN NET ASSETS
Net Assets - Beginning of Year

NET ASSETS - END OF YEAR

Without Donor With Donor

Restrictions Restrictions Total
$ 10,467,531 $ 1,225,000 $ 11,692,531
23,921,142 - 23,921,142
25,647,797 - 25,647,797
60,036,470 1,225,000 61,261,470
18,769,961 - 18,769,961
1,736,638 - 1,736,638
1,728,653 - 1,728 653
1,243,544 - 1,243 544
674,677 - 674,677
739,772 - 739,772
2,083,916 - 2,083 916
1,815,209 - 1,815,209
28,792,370 - 28,792,370
16,805,248 - 16,805,248
(106,672) - (106,672)
1,703,529 - 1,703,529
18,402,105 - 18,402,105
2,259,030 (2,259,030) -
109,489,975 (1,034,030) 108,455,945
78,851,914 - 78,851,914
12,670,470 - 12,670,470
1,690,905 - 1,690,905
93,213,289 - 93,213,289
(356,081) - (356,081)
(18,373) = (18,373)
(374,454) - (374,454)
15,902,232 (1,034,030) 14,868,202
42,871,805 3,530,898 46,402,703
$ 58,774,037 $ 2,496,868 $ 61,270,905

See accompanying Notes to Consolidated Financial Statements.

Highly Confidential

PRESTAMOS-00299616
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 10 of 68
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Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 14 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES

CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2020

CASH FLOWS FROM OPERATING ACTIVITIES
Change in Net Assets
Adjustment to Reconcile Net Assets to Net Cash Provided by
Operating Activities:
Depreciation
Realized/Unrealized Loss on Investments
Change in Allowance for Doubtful Accounts and Provision for Loan Loss
Gain on Sale of Assets, Net
Impairment Loss on Real Estate
Amortization of Loan Issuance Costs
Forgivable Loan Principal Reduction
(Increase) Decrease in Assets:
Grants and Contracts, Net
Interest Receivable
Other Receivables, Net
Prepaid Expenses
Related Party Receivables, Net
(Increase) Decrease in Liabilities:
Accounts Payable and Accrued Expenses
Deferred Revenue
Other Liabilities
Net Cash Provided by Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Real Estate and Property and Equipment
Proceeds from Sale of Real Estate and Property and Equipment
Purchases of Investments
Proceeds from Sales of Investments
Purchases of Real Estate Held for Sale
Proceeds from Sales of Real Estate
Change in Deposits and Funded Reserves
Payments Received from Notes Receivable
Issuances of Notes Receivable
Change in Other Assets

Net Cash Provided by Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Mortgages and Other Debt Borrowings
Payments on Mortgages and Other Debt
Debt Issuance Costs
Proceeds from Lines of Credit

Net Cash Provided by Financing Activities

NET INCREASE IN CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents - Beginning of Year

CASH AND CASH EQUIVALENTS - END OF YEAR

See accompanying Notes to Consolidated Financial Statements.

Highly Confidential

$ 14,868,202

5,432,779
122,635
574,352

(16,449,167)
18,373
266,949

(51,643)

(1,731,981)
(123,424)
(182,381)
292,123
(45,633)

845,496
(140,660)

(466,372)
3,229,648

(6,481,341)
22,381,188
(3,071,040)
2,048,893
(6,549,402)
4,723,500
859,305
3,989,626
(24,237,815)
124,832
(9,212,254)

23,381,373
(16,846,228)
(15,963)
18,116,568
__ 24,635,750 _

18,653,144
14,861,960

$_33,518,104_

PRESTAMOS-00299621
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 15 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
YEAR ENDED JUNE 30, 2020

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid for Interest $ 5,620,729

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
AND FINANCING ACTIVITIES

Real Estate Held for Sale Transferred to Rental Real Estate $ 532,705
Purchase of Property Through Debt Issuance $ (1,769,022)
Repayment of Debt Through Sale of Property $ 30,827,468
Cash and Cash Equivalents Consist of the Following:
Cash and Cash Equivalents $ 30,426,491
Restricted Cash 395,623
Cash Held for Loan Programs 2,692,990
Total Cash and Cash Equivalents $33,515,104

See accompanying Notes to Consolidated Financial Statements.

Highly Confidential PRESTAMOS-00299622
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 16 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Chicanos Por La Causa, Inc. (CPLC or the Organization) is an Arizona statewide community
development corporation (CDC) with operations in Nevada, New Mexico and Texas,
committed to building stronger, healthier communities as a lead advocate, coalition builder,
and direct service provider. CPLC promotes positive change and self-sufficiency to enhance
the quality of life for the benefit of those they serve. The objective of CPLC and its
subsidiaries and affiliates (collectively referred to as CPLC or Organization) is the
accumulation of a sufficient capital asset base to continually advance the mandate for self-
sufficiency, as stated in Title VII of the Community Services Act of 1974 (Title VII). CPLC
receives substantially all of its revenue from government contracts and rental income from
its real estate properties.

Principles of Consolidation

The accompanying consolidated financial statements include the financial statements of
CPLC and its subsidiaries, Futuro Investments Corp. (FIC); Tiempo, Inc. (Tiempo); La
Causa Realty, LLC (LCR); La Causa Development, LLC (LCD); Futuro Camion Services,
LLC; Liberty-Irvington, LLC; Friendship Community Mental Health Center (FCMHC);
Prestamos CDFI, LLC (PC); La Causa Construction (LCC); San Marina Apartments, LLC;
San Marina Affordable Apartments, LLC (SM); Casa Loma Affordable Apartments, LLC
(CL); Glenrosa Affordable Apartments, LLC (GA or La Buena Vida); Hazelwood Affordable
Apartments, LLC (HA or Starlight); Bella Vista Management LLC and Bella Vista Properties |
Limited Partnership; Villa Las Vegas Limited Partnership; Ladera Village Limited
Partnership; Mountain Pointe Apartments LIHTC, LLC and Mountain Pointe Apartments, LP;
CPLC Donation Partners, LLC (DP); CPLC Housing Partners, LLC; Casa de Primavera
Apartments, LLC (COP); Gran Victoria Housing, LLC (GV); CPLC Estancia, LLC; CPLC
Housing & Health, LLC; Central and Grant Plaza, LLC; CPLC Fountain Villas, LLC;
Chicanos por la Causa Land Bank, LLC; CPLC Holding and Asset Management Company,
LLC; CPLC Land Bank Manager, LLC; Futuro Equity Fund, LLC; CPLC NM Community
Stabilization Partners, LLC (CS); CPLC Pickle House, LLC; 59™ Avenue and Roosevelt,
LLC; Nuevas Vistas on Main, LLC (Mesa Royal); CPLC 1551 W. Van Buren, LLC; CPLC
Pastor Court, LLC; Vista Village on Van Buren, LLC (Travel Inn); CPLC Shouse, LLC; CPLC
25" and Bell LLC; La Causa Development Nevada, LLC; La Causa Realty Nevada, LLC
;CPLC Main and Country LLC and Main and Country Club, LLC, CPLC Prestamos, Mesa
Royale East Motel LLC, CPLC Southwest Charter Schools, LLC, CPLC Broadway
Revitalization LLC and CPLC Mesa 5" Place LLC.

Also included in the accompanying consolidated financial statements are the assets,
liabilities, and net assets of eleven affiliates which are under common control, and in which
CPLC possess an economic interest. These include CPLC Community Schools (CCS);
Santa Cruz Apartments, Inc. (SC); Causa Community Development, Inc. (CCD); Pueblo
Senior Housing, Inc. (PSH); Casa Del Pueblo Il, Inc. (PSH Il); Casa Mia Senior Apartments,
Inc. (CM); CPLC New Mexico, Inc.; and CPLC Nevada, Inc. (CPLC Nevada); CPLC Action
Fund, CPLC Health Inc. (ARZA Home Health LLC) and CPLC Texas Inc. SC owns the
Santa Cruz apartment complex; CCD owns the Guadalupe Barrio Nuevo apartment
complex; and PSH owns the Casa Del Pueblo apartment complex. All significant inter-
organization transactions and accounts have been eliminated in consolidation.

Highly Confidential PRESTAMOS-00299623
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 17 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Principles of Consolidation (Continued)

The consolidated financial statements of Chicanos Por La Causa, Inc. and Subsidiaries and
Affiliates have been prepared on the accrual basis of accounting. The significant accounting
policies followed are described below to enhance the usefulness of the consolidated
financial statements to the reader.

Basis of Presentation

The accompanying consolidated financial statements are prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States
of America (GAAP) applicable to nonprofit organizations. The Organization's consolidated
financial statements are prepared to focus on the Organization as a whole and to present
balances and transactions according to the existence or absence of donor-imposed
restrictions.

Net Assets

Net assets, revenues, gains, and losses are classified based on the existence or absence of
donor or grantor-imposed restrictions. Accordingly, net assets and changes therein are
classified and reported as follows:

Net Assets Without Donor Restrictions — Net assets available for use in general
operations and not subject to donor (or certain grantor) restrictions. The governing board
has designated, from net assets without donor restrictions, net assets for an operating
reserve and board-designated endowment.

Net Assets With Donor Restrictions — Net assets subject to donor- (or certain grantor-)
imposed restrictions. Some donor-imposed restrictions are temporary in nature, such as
those that will be met by the passage of time or other events specified by the donor.
Other donor-imposed restrictions are perpetual in nature, where the donor stipulates that
resources be maintained in perpetuity. Donor-imposed restrictions are released when a
restriction expires, that is, when the stipulated time has elapsed, when the stipulated
purpose for which the resource was restricted has been fulfilled, or both.

We report contributions restricted by donors as increases in net assets without donor
restrictions if the restrictions expire (that is, when a stipulated time restriction ends, or
purpose restriction is accomplished) in the reporting period in which the revenue is
recognized. All other donor-restricted contributions are reported as increases in net
assets with donor restrictions. When a restriction expires, net assets with donor
restrictions are reclassified to net assets without donor restrictions and reported in the
consolidated statement of activities as net assets released from restrictions.

Cash and Cash Equivalents

The Organization considers all cash and highly liquid financial instruments with original
maturities of three months or less to be cash and cash equivalents. Restricted cash consists
of funds held for the Classroom Site Fund, for use solely at school sites. These funds are
available for teacher compensation increases, employment related expenses and
maintenance and operations purposes including classroom size reduction

Highly Confidential PRESTAMOS-00299624
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 18 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Cash Held for Loan Programs

CPLC receives loans and grant funds from various sources to be used for loans to new or
existing small businesses or as cash reserves for loan losses. These loans are included in
mortgages payable in the accompanying consolidated statement of financial position. The
funds are maintained in separate bank accounts. As of June 30, 2020, CPLC had
$2,126,603 in these accounts as cash designated for lending that are to be used to fund
additional loans and $566,387, as cash held for loan loss reserves.

Grants and Contracts Receivable

Grants and contracts receivable consist primarily of amounts due from state and federal
agencies for the provision of services; accordingly, credit risk is limited. Receivables are
stated at the amount management expects to collect. Management provides for probable
uncollectible amounts through a decrease to earnings and an increase to the allowance for
uncollectible accounts based on its assessment of the current status of individual
receivables. The allowance for uncollectible receivables was $352,367 as of June 30, 2020.

CPLC recognizes contributions when cash, securities or other assets; an unconditional
promise to give; or a notification of a beneficial interest is received. Conditional promises to
give that is, those with a measurable performance or other barrier and a right of return are
not recognized until the conditions on which they depend have been met. Federal and state
contracts and grants are conditioned upon certain performance requirements and the
incurrence of allowable qualifying expenses. Consequently, at June 30, 2020, conditional
contributions approximating $4,189,423, of which no amounts had been received in
advance, have not been recognized in the accompanying consolidated financial statements.

Notes Receivable

Notes receivable consists of loans made to small businesses. They are reported at their
outstanding unpaid principal balance adjusted for the notes allowance for notes receivable
credit losses.

{Interest income is accrued on the unpaid principal balance. The accrual of interest on loans
is discontinued at the time the loan is 90 days delinquent unless the credit is well secured
and in process of collection. Past due status is based on contractual terms of the loan.
Loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or
interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged-off
is reversed against interest income. The interest on these loans is accounted for on the
cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned
to accrual status when all the principal and interest amounts contractually due are brought
current and future payments are reasonably assured.

The Organization has determined that the accounting for nonrefundable fees and costs
associated with originating or acquiring loans does not have a material effect on its
consolidated financial statements. As such, these fees and costs have been recognized
during the period they are collected and incurred, respectively.

Highly Confidential PRESTAMOS-00299625
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 19 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Allowance for Notes Receivable Credit Losses

The allowance for notes receivable credit losses is established as losses are estimated to
have occurred through a provision for loan losses charged to earnings. Loan losses are
charged against the allowance when management believes the uncollectibility of a loan
balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for notes receivable credit losses is evaluated on a regular basis by
management and is based upon management’s periodic review of the collectability of the
loans in light of historical experience, the nature and volume of the loan portfolio, adverse
situations that may affect the borrower's ability to repay, estimated value of any underlying
collateral and prevailing economic conditions. This evaluation is inherently subjective as it
requires estimates that are susceptible to significant revision as more information becomes
available.

The allowance consists of allocated and general components. The allocated component
relates to loans that are classified as impaired. For those loans that are classified as
impaired, an allowance is established when the discounted cash flows (or collateral value or
observable market price) of the impaired loan is lower than the carrying value of that loan.
The general component covers nonimpaired loans and is based on historical loss rates for
each portfolio segment, adjusted for the effects of qualitative or environmental factors that
are likely to cause estimated credit losses as of the evaluation date to differ from the
portfolio segment’s historical loss experience. Qualitative factors include consideration of the
following: changes in lending policies and procedures; changes in economic conditions;
changes in the nature and volume of the portfolio; changes in the experience, ability and
depth of lending management and other relevant staff; changes in the volume and severity
of past due, nonaccrual and other adversely graded loans; changes in the loan review
system; changes in the value of the underlying collateral for collateral-dependent loans; and
concentrations of credit and the effect of other external factors such as competition and
legal and regulatory requirements.

Investments in Limited Liability Companies

The Organization is the sole member of six limited liability companies (LLCs): Casa De
Encanto Operating Company, LLC; Casa De Flores Operating Company, LLC; Guadalupe
Huerta Operating Company, LLC; Rosa Linda Operating Company, LLC; Mountain Pointe
Apartments LIHTC Phase Il, LLC and Highland Manager, LLC. These LLCs have virtually no
assets or liabilities as of June 30, 2020. These LLCs manage the general partnership
interest for Casa De Encanto Senior Apartments LIHTC, LP; Casa De Flores Senior
Apartments LIHTC, LP; Guadalupe Huerta Senior Apartments LIHTC, LP; Rosa Linda
Senior Apartments LIHTC, LP; Mountain Pointe Apartments Phase II, LP and Highland at
Vista, LLC. The LLCs have 0.01% general partner interest in each of the Partnerships, and
have minimal assets, liabilities, revenue, and expenses.

In October 2017, the Organization invested $412,871 into Courtyard at Encanto, LLC, which
is the owner of a 160-unit multifamily apartments. The investment represented 15%
ownership of the LLC.

Highly Confidential PRESTAMOS-00299626
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 20 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Investments in Affiliated Entities

The equity method of accounting is used when the Organization has 20% to 50% interest in
other entities. Under the equity method, original investments are recorded at cost and
adjusted for the Organization’s share of undistributed earnings or losses of these entities.
Nonmarketable investments in which the Organization has less than a 20% interest and in
which it does not have the ability to exercise significant influence over the investee are
initially recorded at cost, and periodically reviewed for impairment.

Investments in Debt and Equity Securities

The Organization records investment purchases at cost, or if donated, at fair value on the
date of donation. Thereafter, investments are reported at their fair values in the consolidated
statement of financial position. Net investment return/(loss) is reported in the consolidated
statement of activities and consists of interest and dividend income, realized and unrealized
capital gains and losses, less investment management and custodial fees.

Real Estate Held for Sale

Real estate held for sale is stated at lower of cost or market and includes foreclosed
properties, land under development, developed lots, direct and indirect costs of housing
construction and interest, and overhead costs incurred during the development period. Cost
is determined by the specific identification method.

Real Estate Properties and Property and Equipment

The Organization records real estate properties and property and equipment additions over
$5,000 at cost, or if donated, at fair value on the date of donation. Depreciation and
amortization are computed using the straight-line method over the estimated useful lives of
the assets ranging from five to forty years, or in the case of capitalized leased assets or
leasehold improvements, the lesser of the useful lives of the assets or the lease terms.
When assets are sold or otherwise disposed of, the cost and related depreciation or
amortization are removed from the accounts, and any resulting gain or loss is included in the
consolidated statement of activities. Costs of maintenance and repairs that do not improve
or extend the useful lives of the respective assets are expensed currently.

The Organization reviews the carrying values of real estate property and property and
equipment for impairment whenever events or circumstances indicate that the carrying value
of an asset may not be recoverable from the estimated future cash flows expected to result
from its use and eventual disposition. When considered impaired, an impairment loss is
recognized to the extent carrying value exceeds the fair value of the asset. During the year
ended June 30, 2020, the Organization recognized an impairment loss of $18,373.

Deposits and Funded Reserves

Deposits and funded reserves are assets whose use is limited and are held by trustees
under third-party debt agreements. Deposits consist of escrow and security deposits, and
reserves are required for property replacements and repairs.

Highly Confidential PRESTAMOS-00299627
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 21 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Debt Issuance Costs

Debt issuance costs are amortized over the period the related obligation is outstanding
using the straight-line method, which approximates the effective interest method. Debt
issuance costs are included within long-term debt on the consolidated statement of financial
position. Amortization of debt issuance costs is included in interest expense.

Deferred Revenue

Each month, the Organization receives block payment funding for behavioral health services
from the Regional Behavioral Health Authority (RBHA) in Maricopa County. These funds are
considered earned if total service claims generated equal or exceed the block payments. If
service claims are insufficient, the RBHA has the contractual right to recoup the fund or
characterize the deficiency as deferred revenue with an authorization to use the funding in
the next fiscal year. For the year ended June 30, 2020, the Organization has a service claim
deficiency balance of $2,127 838.

Prestamo CDFI, LLC participated in Paycheck Protection Program (PPP) lending, which was
based on the Coronavirus Aid Relief and Economic Security Act (the “CARES” act) in the
last quarter of fiscal year 2020. For each approved PPP loan, the Small Business
Administration (SBA) covered a percentage of the loan principal balance as a loan
processing fee to the organization. The fee is amortized through the term of each PPP loan.
As of June 30, 2020, the Organization received $748,661 from SBA, $21,343 was
recognized as loan fee revenue and $727,318 was recorded as deferred revenue.

Revenue and Revenue Recognition

Revenue is recognized when earned. Program service fees and payments under cost-
reimbursable contracts received in advance are deferred to the applicable period in which
the related services are performed, or expenditures are incurred, respectively.

Management Fee Revenue

Management fee revenue consists primarily of development fees related to property
acquisition and construction development and property management activities for real estate
and New Market Tax Credit Community Development Entity (CDE) Sponsor Fees and CDE
Asset Management Fees earned from the Sub-CDEs. Management fees related to charges
to real estate properties are eliminated in consolidation. CDE Sponsor Fees are recognized
when an investor makes a qualified equity investment in a Sub-CDE or is otherwise earned
in accordance with the terms of the individual CDE Fee Agreement. CDE Asset
Management Fees are recognized as services are performed and collectability is reasonably
assured.

Rental Income Revenue Recognition

Rental income revenue consists primarily of rental receipts from tenants and Section 8
housing subsidy payments and/or mortgage guarantees under CPLC’s contracts with the
U.S. Department of Housing and Urban Development (HUD). Revenue is recognized
monthly in accordance with the lease agreement or contract. As of June 30, 2020, amounts
due from tenants and/or HUD are included within grants and contracts receivables.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Rental Income Revenue Recognition (Continued)

These receivables are evaluated by management on an annual basis accordingly, an
allowance for doubtful accounts was setup. As of June 30, 2020, the allowance for doubtful
accounts balance was $56,245.

Donated Services and In-Kind Contributions

Volunteers contribute significant amounts of time to our program services, administration,
and fundraising and development activities; however, the consolidated financial statements
do not reflect the value of these contributed services because they do not meet recognition
criteria prescribed by accounting principles generally accepted in the United States of
America. Contributed goods are recorded at fair value at the date of donation. The
Organization records donated professional services at the respective fair values of the
services received. The Organization received airtime and production costs valued at
$739,772 for the year ended June 30, 2020. The revenues and expenses for these
contributions are recorded in management and general in the consolidated statement of
functional revenue and expenses.

Advertising and Marketing Costs

Advertising and marketing costs are charged to operations when incurred. Advertising and
marketing costs charged to operations were $1,086,798 for the year ended June 30, 2020.

Benefits

The Organization has a partially self-insured health benefit program covering medical and
prescription claims. The plan includes a stop-loss provision that insures claims exceeding
$175,000.

The Plan offers health benefits to regular, full-time employees working 30 or more hours per
week and their beneficiaries and covered dependents once a 90-day waiting period is met.
The cost of health care services is recognized as a deduction in the period in which it is
provided to participants. Liabilities for health claims incurred but not reported are estimated
based on historical claims and industry trends.

Functional Allocation of Expenses

The costs of program and supporting services activities have been summarized on a
functional basis in the consolidated statement of activities. The consolidating statement of
functional revenues and expenses presents the natural classification detail of revenues and
expenses by function. Accordingly, certain costs have been allocated among the programs
and supporting services benefited. The allocation methods used are subject to a degree of
estimation by management. Directly identifiable expenses are charged to program and
supporting services. Salary and related expenses related to more than one function are
charged to program and supporting services on the basis of direct time and effort reporting.
Management and general expenses include those expenses that are not directly identifiable
to any other specific function but provide for the overall support and direction of the
Organization.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use of Estimates in the Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make a number
of estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Income Taxes

CPLC, SC, CCD, PSH, PSH Il, CPLC SW, CM, CPLC New Mexico, CCS, CPLC Nevada,
CPLC Health Inc. CPLC Texas Inc. and CPLC Action Fund are organized as nonprofit
corporations and have been recognized by the Internal Revenue Service (IRS) as exempt
from federal income taxes under Section 501(a) of the Internal Revenue Code (IRC) as
organizations described in Section 501(c)(3) and Section 501(c)(4) and have been
determined not to be private foundations. Accordingly, contributions to them qualify for the
charitable contribution deduction under Section 170(b)(1)(A). Each entity is annually
required to file a Return of Organization Exempt from Income Tax with the IRS.

GV, CPLC Nevada, PC, SM, CL, GA, HA, COP, DP, Chicanos por la Causa Land Bank,
LLC; CPLC Holding and Asset Management Company, LLC; CPLC Land Bank Manager,
LLC; CPLC Housing & Health, LLC; CPLC Villas, LLC, San Marina Apartments, LLC; 597H
Avenue and Roosevelt, LLC; Nuevas Vistas on Main, LLC (Mesa Royal); CPLC 1551 W.
Van Buren, LLC; Vista Village on Van Buren, LLC; CPLC Shouse, LLC; CPLC 25" and Bell
LLC; CPLC Southwest Charter Schools, LLC, CPLC Broadway Revitalization LLC and
CPLC Mesa 5" Place LLC are organized as Limited Liability companies whose sole member
is CPLC. CPLC Estancia and CPLC Fountain Villas are organized as a Limited Liability
whose sole member is CPLC Housing & Health, LLC. Futuro Equity Fund is organized as an
LLC whose sole member is PC. For income tax purposes, they are disregarded entities and
are treated as departments of CPLC. Bella Vista Properties | LP is organized as a limited
partnership whose sole partner is CS. For income tax purposes, it is a disregarded entity
and treated as a department of CS. Villa Las Vegas, NM; Bella Vista Management, LLC;
Ladera Village, LLC, and CS are organized as Limited Liability Companies whose sole
member is CPLC New Mexico, Inc. Accordingly, the disregarded LLCs are exempt from
income taxes under the applicable sections of the IRC and the Arizona Revised Statutes. In
addition, the entities are generally subject to income tax on net income that is derived from
business activities that are unrelated to their exempt purposes. CPLC and affiliates have
determined it does not have any taxable unrelated business income and they have not filed
Exempt Organization Business Income Tax Returns.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes (Continued)

FIC, a for-profit company, files a consolidated income tax return with its subsidiaries,
Tiempo, Futuro Camion Servicios, LLC; LCC; LCD; LCD Nevada; LCR; LCR NV; Liberty-
Irvington, LLC; Central and Grant Plaza, LLC; CPLC Main and Country Club LLC; Main and
Country Club LLC Mesa Royale East Motel LLC, are organized as Limited Liability
Companies whose sole member is FIC. For income tax purposes, they are disregarded
entities and are treated as departments of FIC. Friendship Community Mental Health
Center, Inc.; and CPLC Prestamos are each separately taxable corporations and are
responsible for filing their own income tax returns.

The Organizations have sustained operating losses in previous and current years from its
for-profit subsidiaries and have loss carryforwards aggregating approximately $2.43 million
dollars. Capital loss carryforwards ($524,081) expire in 2022. Net operating losses
($2.43 million) expire in years through 2038. There are also charitable contribution
carryovers of approximately $1 million that expire in years through 2022. The loss
carryforwards generate a deferred tax asset that may be realized in future years. It is the
opinion of management that it is more likely than not that some portion or all of the deferred
tax asset will not be realized. The Organization has elected to record a valuation allowance
to reduce any deferred tax assets to zero as of June 30, 2020.

The Organization believes that it has appropriate support for any income tax positions taken
and, as such, does not have any uncertain tax positions that are material to the consolidated
financial statements. The entities would recognize future accrued interest and penalties
related to unrecognized tax benefits and liabilities in income tax expense if such interest and
penalties are incurred.

Change in Accounting Principle

In 2020, the Organization adopted Financial Accounting Standards Board (FASB)
Accounting Standards Update (ASU) 208-08, Not-for-Profit-Entities (Topic 958): Clarifying
the Scope and Accounting Guidance for Contributions Received and Contributions Made.
There was no material impact on the Organization’s financial position or change in net
assets upon adoption of the new standard.

NOTE 2 LIQUIDITY AND AVAILABILITY

Financial assets available for general expenditure, that is, without donor or other restrictions
limiting their use, within one year of the consolidated statement of financial position date,
comprise the following:

Cash and Cash Equivalents $ 30,426,491
Receivables 7,563,249
investments in Debt and Equity Securities 3,762,069
Less: Net Assets With Donor Restrictions, Net of
Restricted Cash (2,101,245)
Total $ 39,650,564

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 2 LIQUIDITY AND AVAILABILITY (CONTINUED)

In addition to cash on hand, the Organization has a $3.5 million operating line of credit with
Wells Fargo bank which is available for general operating expenditures. As of June 30,
2020, the line of credit had an outstanding balance of $1,301,023.

As part of the Organization’s liquidity management plan, the Organization invests cash in
excess of daily requirements in short-term investments, CDs, and money market funds.

NOTE 3 FAIR VALUE MEASUREMENTS AND DISCLOSURES

Fair value measurement applies to reported balances that are required or permitted to be
measured at fair value under an existing accounting standard. The Organization
emphasizes that fair value is a market-based measurement, not an entity-specific
measurement. Therefore, a fair value measurement should be determined based on the
assumptions that market participants would use in pricing the asset or liability and
establishes a fair value hierarchy. The fair value hierarchy consists of three levels of inputs
that may be used to measure fair value as follows:

Level 71 — Quoted prices (unadjusted) in active markets for identical assets or liabilities
that we can access at the measurement date.

Leve/ 2 — Inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly or indirectly. These include quoted prices for similar
assets or liabilities in active markets, quoted prices for identical or similar assets or
liabilities in markets that are not active, inputs other than quoted prices that are
observable for the asset or liability, and market-corroborated inputs.

Level 3 — Valuation is based on unobservable inputs that are supported by little or no
market activity and that are significant to the fair value of the assets or liabilities. Level 3
assets and liabilities may include financial instruments whose value is determined using
pricing models, discounted cash flow methodologies, or similar techniques, as well as
instruments for which the determination of fair value requires significant management
judgment or estimation.

In some cases, the inputs used to measure the fair value of an asset or a liability might be
categorized within different levels of the fair value hierarchy. In those cases, the fair value
measurement is categorized in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement. Assessing the significance of
a particular input to entire measurement requires judgment, taking into account factors
specific to the asset or liability.

The categorization of an asset within the hierarchy is based upon the pricing transparency of

the asset and does not necessarily correspond to our assessment of the quality, risk or
liquidity profile of the asset or liability.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE3 FAIR VALUE MEASUREMENTS AND DISCLOSURES (CONTINUED) |

The following table summarizes the valuation of CPLC’s assets and liabilities subject to
measurements at fair value on a recurring basis as of June 30, 2020:

Level 1 Level 2 Level 3 Total

Fixed Income Securities $ 92,714 $ - $ - $ 92,714
Government and Agency

Securities 580,105 - - 580,105

Corporate Bonds - 520,666 - 520,666

Equities - Common Stock 2,351,872 - - 2,351,872

Mutual Funds 200,555 . - 200,555

Arizona Community Foundation - - 16,157 16,157

Total Investments at
Fair Value $ 3,225,246 $ 520,666 $ 16,157 $ 3,762,069

The following table presents the fair value hierarchy for the balances of financial assets
measured at fair value on a nonrecurring basis as of June 30, 2020:

Level 1 Level 2 Level 3 Total
Real Estate Held for Sale $ - $ - $ 276,720 $ 276,720
impaired Loans - - 204,115 204,115
Total Assets at
Fair Value $ - $ - $ 480,835 $ 480,835

The fair value of impaired loans is estimated based on either the loan’s obtainable market
price of the fair value of the collateral if the loan is collateral dependent or the discounted
cash flows of future payments. Each method contains significant unobservable inputs and
thus is classified as Level 3 fair value measurement.

A portion of the real estate held for sale is based on what the local markets are currently
offering for assets with similar characteristics, less costs to sell, which CPLC classifies as
Level 3 fair value measurement. The most common approach is through appraisals which
are evaluated for various factors including age of the appraisal, age of comparables
included in the appraisal, and known changes in the market and in the collateral.

A summary of unobservable inputs for Level3 assets measured at fair value on a
nonrecurring basis as of June 30, 2020, are as follows:

Range
Valuation Unobservable (Weighted
Technique Inputs Average)
Real Estate Held for Sale Collateral Discount from 10% to 100%
Valuation Market Values 10%
Impaired Loans Collateral Discount from 90% to 100%
Valuation Market Values 90%

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 4 RELATED PARTY ACCOUNTS RECEIVABLE

Related party receivables consist of amounts due from low income housing real estate
projects that CPLC has invested in or nonprofit organizations which CPLC holds
membership in. These receivables primarily result from development fees earned at the
inception of these projects and funds advanced to the projects. Related party receivables
are stated at the amount management expects to collect and management provides an
allowance for uncollectible accounts. The allowance for uncollectible related party
receivables was $104,886 as of June 30, 2020.

Casa de Encanto $ 104,795
Casa de Flores 5,728
Rosa Linda/Gene Rice 615,810
Guadalupe Huerta 8,151
Mountain Pointe Phase II 391,001
Courtyard at Encanto 19,789
Other Related Party Receivables 150,632
Total Related Party Accounts Receivable 1,295,906
Less: Allowance (104,886)
Related Party Accounts Receivable, Net $1,191,020

The above accounts receivable are unsecured and have no repayment terms.

NOTE 5 REAL ESTATE PROPERTIES

Santa Cruz Apartments, organized by SC, has 132 units and is not a HUD property. Vue
Nineteen 01 Apartments (289 units) and Grandes Cortez Apartments (151 units), organized
under Gran Victoria LLC, are market rate properties. Casa de Primavera (COP) and Casa
Del Pueblo Il (CDP II), projects of CPLC, operate apartment complexes of 162 and 38 units,
respectively, under Section 202 of The National Housing Act of 1959. Casa Del Pueblo,
organized by PSH, has 58 units and is operated under Section 811 of National Housing Act
as amended. Guadalupe Barrio Nuevo Apartments, organized by CCD, has 60 units and is
operated under Section 207 of the National Housing Act of 1959 and are HUD properties.
Casa Mia Senior Apartments has 64 units and is operated under Section 202 of the National
Affordable Housing Act, as amended.

The projects are regulated by HUD as to rent charges and operating methods and require
maintaining various deposits and reserves in restricted cash accounts. These items are
included in deposits and funded reserves in the accompanying consolidated statement of
financial position. COP, CDP Il, CCD, PSH and Casa Mia have executed rental assistance
contracts with HUD whereby HUD provides financial assistance to enable certain private
housing to be available to individuals who are elderly, handicapped or low income.

San Marina Affordable Apartments, LLC; Casa Loma Affordable Apartments, LLC; Glenrosa
Affordable Apartments, LLC; and Hazelwood Affordable Apartments, LLC were purchased

using funds provided under the Neighborhood Stabilization Program Part Il. San Marina
Affordable Apartments was sold in March 2020.

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NOTE 5

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

REAL ESTATE PROPERTIES (CONTINUED)

During fiscal year 2015, the limited partner of one low-income tax credit apartments
transferred 99.99% ownership to CPLC New Mexico, Inc. upon completion of the 15-year
compliance period. The apartments are Bella Vista Apartments (40 units) located in Taos,
New Mexico.

During 2016, CPLC obtained low interest rate financing from United Health Care to
purchase two additional multifamily properties, CPLC Estancia Apartments and CPLC
Fountain Villas Apartments. Both apartments are located in the Phoenix Maryvale area and
are part of the CPLC community service center program to restore and stabilize the
economic environment for the local area.

During fiscal year 2017, the limited partners of two low income tax credit apartments
transferred 99.99% ownership to CPLC and CPLC New Mexico, Inc. upon completion of the
15-year compliance period. The two apartments are Mountain Pointe Apartments (108 units
located in Nogales, Arizona) and Villa Las Vegas Apartments (60 units located in Las
Vegas, New Mexico).

During fiscal year 2020, the limited partners of Ladera Village Apartments transfer 99.99%
ownership to CPLC New Mexico, Inc. upon completion of the 15-year compliance period of
low-income tax credit. The property has 60 units and is located in Farmington, New Mexico.

In January 2020, CPLC sold a property consisting of multifamily apartments, and recognized
a gain of $207,992. The apartments were purchased in February 2018 and were still being
renovated when sold, under CPLC’s programs to support economic development.

In March 2020, CPLC sold San Marina Apartments, which were a part of CPLC’s economic
development programs. The sale resulted in a recognition of a gain of $15,949,838 reported
in other revenues gain on sale of assets.

The Organization owns different commercial buildings purchased through grants, private
mortgages or a combination of both. The buildings are leased to internal programs or to third
parties. The Organization also owns single-family rental homes that are leased to unrelated
third-party residents.

Real estate properties consisted of the following at June 30, 2020:

Cost and Donated Value:

Land $ 18,727,087
Buildings and Improvements 128 401,927
Furniture, Fixtures and Equipment 5,575,115
Construction in Progress 5,980,213

Total Cost and Donated Value 158 684 342

Less: Accumulated Depreciation
Real Estate Properties, Net

(56,953,184)

$ 101,731,158

Depreciation expense on real estate properties charged to operations was $4,877,163 for

the year ended June 30, 2020.

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NOTE 5

NOTE 6

NOTE 7

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

REAL ESTATE PROPERTIES (CONTINUED)

At June 30, 2020, construction in progress consists of renovations of current facilities and
development of new facilities. The Organization capitalized $755,579 of interest incurred on
construction in progress during the year ended June 30, 2020.

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2020:

Cost and Donated Value:

Land $ 1,046,533
Buildings and Improvements 5,928 369
Furniture, Fixtures and Equipment 4,461,477
Vehicles 4,013,444
Construction in Progress 14,627,072
Total Cost and Donated Value 30,076,895
Less: Accumulated Depreciation (10,551,733)
Property and Equipment, Net $ 19,525,162

Depreciation expense on property and equipment charged to operations was $555,616 for
the year ended June 30, 2020.

At June 30, 2020, construction in progress consisted of renovations of current facilities and
development of new facilities. The Organization capitalized $228,581 of interest incurred on
construction in progress during the year ended June 30, 2020.

NOTES RECEIVABLE

Prestamos CDF], LLC (PC) notes receivable are summarized as follows as of June 30,

Micro Loans $ 1,628,644
Business Loans 28,720,684
Paycheck Protection Program (PPP) 15,839,680
Residential Mortgage 70,367
Citizenship Loans (Pilot Program) 14,056
Total Loans 46,273,431
Intercompany Loans (Eliminated in Consolidation) (2,553,924)
Allowance for Loan Losses (826,942)
Loans, Net Intercompany and Allowance $ 42,892,565
Current Portion of Loans $ 1,753,641

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 7 NOTES RECEIVABLE (CONTINUED)

The following table presents the activity in the allowance for loan losses by portfolio
segment for PC for the year ended June 30, 2020 and the balance in the allowance for loan
losses and the recorded investment in loans by portfolio segment based on impairment
method for PC as of June 30, 2020:

Citizenship
Micro Business Residential Loan
Loans Loans. Mortgage (Pilot Program) PPP Total
Allowance for Credil Losses:
Balance at Beginning of Year 5 5445 § 500,810 § 1,428 § - § - § 507,683
Charge-Offs - (141,619) - - - (141,619)
Recoveries 77 988 - - - - 77,988
Provisions (60,343) 443.254 {21) - - 382.890
Balance at End of Year $ 23,090. _$ 802445 $ 1407. $ - _$ -. .$ 826,942
Individually Evaluated for
Impairment $ 12,333 $ 110,987 §$ - § - § - $ 123,320
Collectively Evaluated for
Impairment 10,757 691,458 1,407 - - 703,622
Balance at End of Year $ 23.090 $ 802.445 § 1407 _$ - _§$ - $ 826.942
Loans and Financing
Receivables:
Individually Evaluated for
impairment $ 40,126 § 710,466 $ - § - § - $ 760,592
Collectively Evaluated for
Impairment 1,588,518 28,010,218 70,367 14,056 15,839,680 45,522,839
Balance at End of Year $_ _1628.644 $ 28720684 $§ 70,367 _$ 14.056. _$ 15.839680 _$ 46.273.431

Credit Quality Indicators

PC categorizes loans into risk categories based on relevant information about the ability of
borrowers to service their debt such as: current financial information, historical payment
experience, collateral adequacy, credit documentation, public information, and current
economic trends, among other factors. PC analyzes loans individually by classifying the
loans as to credit risk. This analysis typically includes micro, business, and residential loans.
This analysis is performed on an ongoing basis as new information is obtained. PC uses the
following definitions for risk ratings:

Pass — Loans classified as pass represent loans that are evaluated and are performing
under the stated terms. Pass rated assets are analyzed by the paying capacity, the
current net worth, and the value of the loan collateral of the obligor.

Non-Pass -— Loans classified as Non-Pass possess weaknesses that require
management attention, such as being inadequately protected by the current net worth,
paying capacity of the obligor, or by the collateral pledged. Non pass loans must have a
well-defined weakness or weaknesses that jeopardize the repayment of the debt as
originally contracted. They are characterized by the distinct possibility that PC may
sustain a loss if the deficiencies are not correct. Loans in this category are allocated a
specific reserve based on the estimated discounted cash flows from the loan (or
collateral value less cost to sell for collateral dependent loans) or are charged off if
deemed uncollectible.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 7 NOTES RECEIVABLE (CONTINUED)

Credit Risk Profile by Internally Assigned Grade — Micro Loans, Business Loans, and
Residential Mortgage

A loan is considered impaired when, based on current information and events, it is probabie
that Prestamos will be unable to collect all the scheduled payments of principal or interest
when due according to the contractual terms of the loan agreement. Factors considered by
management in determining impairment include payment status, collateral value, and the
probability of collecting scheduled principal and interest payments when they are due. Loans
that experience insignificant payment delays and payments shortfalls generally are not
classified as impaired. Management determines the significance of payment delays and
payments shortfalls on case by case basis, taking into consideration all of the circumstance
surrounding the loan and the borrower, including the length of the delay, the reason for the
delay, the borrower's prior payments record, and the amount if the shortfall in relation to the
principal and interest owed.

Under certain circumstances, Prestamos will provide borrowers relief through loan
restructuring. A restructuring of debts constitutes a troubled debt restructuring (TDR) if
Prestamos for economic or legal reasons related to the borrower’s financial difficulties grants
concessions to the borrower that would not otherwise consider. TDR concession can include
reduction of interest rates, extension of maturity dates, or payment reduction. Prestamos
considers all aspects of the restructuring to determine whether it has granted a concession
to the borrower. An insignificant delay in payment resulting from a restructuring is not
deemed to be a concession and would not be considered TDR.

On March 22, 2020, Interagency statement of Loan Modifications and Reporting for
Financial Institutions Working with Customers Affected by the Coronavirus (interagency
release) was issued and later revised on April 7, 2020. The Interagency Release seeks to
provide relief when structuring loan modification with the borrowers impacted by COVID-19.
In order to qualify the modification must be related to COVID-19, the loan was current at the
time the modification was implemented, and the modification period must be six months or
less. Under the interagency release, these loan modifications are not considered to be
TDR’s.

Based on the most recent analysis performed, the risk category of loans by class of loans
for PC as of June 30, 2020 was as follows:

Pass Non Pass
Micro Loans $ 1,221,255 $ 407,389
Business Loans 27,118,719 1,601,965
Paycheck Protection Program (PPP) 15,839,680 -
Residential Mortgage 70,367 -
Citizenship Loans (Pilot Program) 14,056 -
Total $ 44,264,077 $ 2,009,354

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 7 NOTES RECEIVABLE (CONTINUED)

Credit Risk Profile by Internally Assigned Grade — Micro Loans, Business Loans, and
Residential Mortgage (Continued)

The following table summarizes the aging of the past due loans by loan class within the
portfolio segments as of June 30, 2020:

Still Accruing
30 to 89 Days Over 90 Days Nonaccrual
Past Due Past Due Balance
Micro Loans $ - $ - $ 21,923
Business Loans - - 480,466
Residential Mortgage - - -
Total $ - $ - $ 502,389
The following table summarizes individually impaired loans by class of loans as of June 30,
Unpaid Average Interest
Recorded Principal Recorded Income
Investments Balance (1) Investment Recognized
Micro Loans $ 40,126 $ 40,126 $ 40,126 $
Business Loans 710,466 710,466 710,466
Total $ 750,592 $ 750,592 $ 750,592 $

(1) Represents the borrower's loan obligation, gross of any previously charge-off amounts.

Impaired loans also include loans modified in a troubled debt restructuring (TDR) where
concessions have been granted to borrowers experiencing financial difficulties. These
concessions could include a reduction in interest rate on the loan, payment extensions,
forgiveness of principal, forbearance or other actions intended to maximize collections.

There were no TDR during the year ended June 30, 2020.

CPLC Consolidated Portfolio
Other notes receivable consisted of the following at June 30, 2020:

Assured Engineering Concepts, LLC (Related Party) $ 14,000
Tierra Del Sol 245,898
Victoria Foundation 767,949
Other 80,953
Total Other Notes Receivable 1,108,800
Less: Allowance (767,949)
Other Notes Receivable, Net $ 340,851
Current Portion of Other Notes Receivable $ 259,898

There was no change in the allowance account on the above business loans during the year
ended June 30, 2020.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 7 NOTES RECEIVABLE (CONTINUED)

CPLC Consolidated Portfolio (Continued)
CPLC consolidated portfolio consists of the following:

Prestamos CDFI, LLC Portfolio $ 46,273,431
Other Notes Receivable 1,108 800
Total Notes Receivable 47,382,231
Intercompany Loans (Eliminated in Consolidation) (2,553,924)
Allowance for Loan Losses (826,942)
Allowance for Other Notes Receivable (767 ,949)

Notes Receivable, Net Intercompany

and Allowances $ 43,233,416
Current Portion of Loans $ 1,753,641
Current Portion of Other Notes Receivable 259 898

Notes Receivable, Current $ 2,013,539
NOTE 8 INVESTMENTS IN DEBT AND EQUITY SECURITIES
Investments consisted of the following at June 30, 2020:
Fixed Income Securities $ 92,714
Government and Agency Securities 580,105
Corporate Bonds 520,666
Equities - Common Stock 2,351,872
Mutual Funds 200,555
Arizona Community Foundation 16,157
Total Investments $ 3,762,069

NOTE9 EQUITY METHOD INVESTMENTS

The Organization owns interests in low-income housing real estate projects and other

limited liability companies and accounts for these interests using the equity method of
accounting.

Summarized below is financial information for equity method investments as of and for the
year ended June 30, 2020:

Assured Engineering $ 174,505
Mi Escuelita 40,328
NALCAB Network Investors, LLC 510,657
Other 4,185
Total $ 729,675

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 10 LINES OF CREDIT

The Organization has a $3,500,000 line of credit with Wells Fargo, unsecured. Borrowings
under the line bear interest equal to prime rate (3.25% at June 30, 2020). Interest is payable
monthly and the line of credit matures in December 2020, and as of June 30, 2020 had an
outstanding balance of $1,301,023.

The Organization obtained a line of credit from Local Initiatives Support Corporation in the
amount of $5,500,000. The loan is secured by real property, bears interest at 5%, and is due
at maturity in September 2021. The line of credit is used to fund construction of real estate
project in Dayton Nevada and had an outstanding balance of $4,866,193 at June 30, 2020.

The Organization obtained a Paycheck Protection Program Liquidity Facility (PPPLF)
advance agreement with Federal Reserve Bank in May 2020. The Paycheck Protection
Program Liquidity Facility (PPPLF) was established by the Federal Reserve to extend credit
to eligible financial institutions that originate PPP loans, taking the loans as collateral at face
value. The advance is used to fund PPP lending based on the Coronavirus Aid, Relief, and
Economic Security Act (the CARES Act).

The advance is secured by PPP loans guaranteed by the Small Business Administration
(SBA) and bears interest at 0.35%. The maturity of an advance will equate to the maturity
date of the PPP loan pledged to secure the advance. The maturity can be accelerated if the
underlying PPP loan goes into default and the Organization sells the PPP loan to the SBA to
realize on the SBA guarantee or if PPP loan is forgiven by SBA and the Organization
receives reimbursement from SBA. No advance may be made after September 30, 2020. As
of June 30, 2020, the outstanding advance balance was $14,079,270.

During the year ended June 30, 2020, the Organization paid off a line of credit with State
Farm that had a $2,500,000 outstanding balance at June 30, 2019.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT
Mortgages payable and other debi consisted of the following at June 30, 2020:

Description

Casa Mia Senior Apartments, Inc., Federal Housing

and Urban Development (HUD) Capital Advance Program

Mortgage Note, collateralized by real property. So long

as Casa Mia meets the requirements outlined in the

agreement, the note bears no interest and no monthly

payments are required. The note is due April 1, 2046.

Should Casa Mia default, the entire amount of the note

could become due with interest accruing at 5.25%. $ 5,601,900

Casa Mia Senior Apartments, Inc., mortgage agreement

with the City of Phoenix, collateralized by real property.

The note bears no interest and Casa Mia receives a

5.00% principal credit annually, until fully amortized in

2026, provided it complies with the note agreement.

Should Casa Mia default, the entire amount of the note

could become due with no interest accruing. 146,494

Casa de Primavera Apartments, LLC (COP) mortgage

agreement with Greystone, collateralized by substantially

all the assets of COP, payable in monthly installments

of $20,596 including interest of 4.00% maturing in

November 2048. 4,192,375

Note payable to State Farm for Buckeye Commerce,

with a borrowing limit up to $5,200,000 and collateralized

by real property deed of trust and assignment of rents

and leases. In April 2018, the loan was modified as 0%

interest rate with $50,000 monthly principal payments and

various additional principal as defined in the loan modification,

maturing in April 2021. 1,625,081

Note payable to State Farm for Buckeye Commerce,

collateralized by real property deed of trust and

assignment of rents and leases. !n April 2018, the loan was

modified as 0% interest rate with $5,000 monthly principal

payments and $559,045 final payment in April 2021. 604,045

Causa Community Development (Guadalupe Barrio Nuevo)

entered into an insured mortgage loan under Section 207

pursuant to Section 223(f) of the National Housing Act, as

amended. The mortgage is currentiy serviced by Bellwether

Enterprise Real Estate Capital, LLC, payable in monthly

interest and principal payments of $15,295, bearing 3.92%

interest rate and maturing in June 2053. 3,395,113

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Santa Cruz note payable to Hunt Mortgage Capital, LLC,

secured by the security instrument and other loan

documents, payable in monthly principal and interest

payments of $10,828 beginning May 2017, including

interest of 4.65%, with a balloon payment of $1,710,472

in April 2027. $ ©61,994,903

Note payable to Wells Fargo, collateralized by real
estate, payable in monthly installments of $27,803
including interest at 4.15%, maturing May 2024. 3,511,000

Causa Community Development (CCD) second mortgage

agreement with HUD, collateralized by substantially all

assets of CCD, payable in annual installments in the

amount of 75% of surplus cash, as defined, including

annually accrued interest at 4.00%, maturing in February

2034. 706,040

Note payable to Arizona Department of Housing for the

Corazon Building, secured by certain real property,

noninterest bearing. If certain use restrictions associated

with the real property are followed, the principal balance

will be forgiven in January 2028, 550,000

Note payable to City of Phoenix Housing Department,

secured by the Corazon Building, noninterest bearing.

If certain use restrictions associated with the real property

are followed, the principal balance will be forgiven in May

2050. 550,000

Note payable to U.S. Small Business Administration

(SBA) for Prestamos from the Microloan Revolving Trust

Fund (MRTF) for SBA VII, secured by cash held for loan

programs and select notes receivable, payable in monthly

installments of principal and interest at .875% commencing

in May 2012, maturing in July 2021. The loan agreement

requires Prestamos to act as a financial intermediary by

using the proceeds of the loan for lending to existing

small businesses. 63,934

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Note payable to U.S. Small Business Administration (SBA)

for Prestamos from the Microloan Revolving Trust Fund

(MRTF) for SBA | NV, secured by cash held for loan

programs and select notes receivable, payable in monthly

installments of principal and interest at 1% commencing in

July 2012, maturing in June 2021. The loan agreement

requires Prestamos to act as a financial intermediary by

using the proceeds of the loan for lending to existing

small businesses. $ 38,750

Note payable to U.S. Small Business Administration

(SBA) for Prestamos from the Microloan Revolving Trust

Fund (MRTF) for SBA VIII, secured by cash held for loan

programs and select notes receivable, payable in monthly

installments of principal and interest at .125% commencing

in November 2013, maturing in November 2023. The loan

agreement requires Prestamos to act as a financial

intermediary by using the proceeds of the loan for lending

to existing small businesses. 380,920

Note payable to National Bank of Arizona for Prestamos,

unsecured, quarterly interest payments of 3.00%,

automatically renews annually until its maturity in December

2023. 200,000

Note payable to National Bank of Arizona for Prestamos,
unsecured, interest at 2.00% paid quarterly, automatically
renews annually until its maturity in December 2023. 150,000

Causa Community Development third mortgage agreement

with HUD, collateralized by substantially all the assets of

CCD (Guadalupe Barrio Nuevo), payable in full at the

option of HUD including annually accrued interest at

4.00%, maturing in February 2034. 75,761

Note payable to Northern Trust Bank for the Corazon
Building, secured by deeds of trust of real property,
interest free and due in full on February 2024. 325,000

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NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2020

Description

Note payable to SCF Arizona, secured by loans originated
from the funds and guaranteed by CPLC. Up to $10 million
can be drawn down on loan. Interest only payments due
quarterly at interest rates of 3%. Note matures in August 2024.

Note payable to Kansas State Bank, secured by deeds of

trust of real property, payable in monthly installments of interest
only at a rate of 4.29% from July 2013 through November 2013.
Principal and interest payments began December 2013. Variable
interest rate at weekly average yield (one year) plus 3.5% with
Initial rate of 3.61% starting in June 2020. Loan matures in
November 2033. This note is for the Maryvale property.

Note payable to City of Phoenix Housing Department,
secured by the De Colores Building, noninterest bearing.

lf certain use restrictions associated with the real property
are followed, the principal balance of the loan is being
forgiven in equal amounts annually through December 2022.

Note payable to Kansas State Bank, secured by deed of
trust of real property and assignment of rental income,
from Central and Grant property payable in monthly
installments of principal and interest at a rate of 4.59%
maturing in May 2035.

Mortgage note payable to The United Presbyterian Church.
The note has no maturity date, bears no interest and no
monthly payments are required, as long as CPLC New
Mexico maintains the requirements outlined in the note
agreement. The mortgage note would become payable in
the event of a sale of the building or the building is not
used for its intended purpose. Should CPLC New Mexico
default, the entire amount of the note could become due
with interest accruing at 8.00%.

Note payable to First Bank, secured by deeds of trust of
real property, payable in monthly installments of interest
only until February 2016, at which time monthly principal
and interest payments of $3,648 commenced with
principal due at maturity at a rate of 4.10%, maturing in
February 2025. This note is for the Hazelwood multi-family
housing property.

$ 6,900,000

1,794,886

87,495

938,177

250,000

470,027

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Bella Vista note payable to Pacific Life Insurance, secured

by certain real property and equipment, payable in monthly

installments of $5,056 including interest at 8.97% through

May 2031. $ 421,368

Bella Vista note payable to New Mexico Finance Authority

secured by certain real property, requiring interest-only

payments of $321 at the annual rate of 1.00% per annum.

Maturity of the loan occurs at the sale, refinance, or

transfer of the property or on April 10, 2030. 385,000

Capitalized lease, collateralized by equipment, payable in
monthly installments of $15,275 including interest at
1.74%, maturing in October 2021. 256,339

Note payable to First Bank, secured by Casa Loma

Apartments, payable in monthly installments of principal and

interest of $5,563, at an interest rate of 4.10%, with a balloon

payment due April 2026. 926,251

Note payable to United Health Care, secured by all assets

and income of CPLC Fountain Villas, LLC, interest bearing at

1-3.00% during the term of this note. Interest accruing monthly

with principal and interest balance due upon maturity in April

2023. 6,451,659

Note payable to United Health Care, secured by all assets

and income of CPLC Estancia, LLC, interest bearing at 1-3.00%

during the term of this note. Interest accruing monthly with

principal and interest balance due upon maturity in November

2022, 14,303,219

Note payable to Western Alliance Bank for Prestamos,

unsecured, interest at 3.00% paid quarterly, maturing in

September 1, 2020 and on September 1st of each year thereafter

maturity date shall automatically be extended for one year unless

the lender cancel such automatic maturity extension. 2,000,000

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020 a

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Note payable to U.S. Small Business Administration

(SBA) for Prestamos from the Microloan Revolving Trust

Fund (MRTF) for SBA X, secured by cash held for loan

programs and select notes receivable, payable in monthly

installments of principal and interest at .375% commencing

in November 2016, maturing in October 2025. The loan

agreement requires Prestamos to act as a financial

intermediary by using the proceeds of the loan for lending

to existing small businesses. $ 764,210

Note payable to Kansas State Bank for the refinance of Glenrosa

Affordable Apartments, LLC, collateralized by substantially all

the assets of Glenrosa and is payable in monthly installments

of $5,823, until June 2021, then $5,903 until maturity date,

including interest of 4.89%, maturing in September 2042. 945,961

Note payable to Wells Fargo, collateralized by the MHS

Yuma Building and payable in monthly installments of

$16,120 including interest of LIBOR plus 1.50% variable

interest rate, maturing in November 2023, 323,049

Note payable to Kansas State Bank for Maryvale project,

collateralized by deed of trust on real property, payable in

monthly principal and interest payments of $2,722,

beginning in June 2017, including interest of 4.59% through

May 2022, then 4.62% through maturity, maturing in May 2027. 192,266

Note payable to Kansas State Bank for Central and Grant

Project, collateralized by deed of trust, assignment of rents,

and a business loan, payable in monthly principal, and

interest payments of $2,558, beginning in June 2017,

including interest of 4.59%, maturing in May 2027. 180,517

Gran Victoria note payable to Berkeley Point Capital, LLC,

secured by the security instrument and other loan

documents, payable in monthly principal and interest

payments of $101,257 beginning In July 2017, including

interest of 4.63%, with a balloon payment due in June 2027. 18,749,762

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Highly Confidential

Description

Villa Las Vegas mortgage note payable to South West Capital

Bank, collateralized by substantially all of the rental

property and equipment of the project, payable in monthly

principal and interest payments of $3,285, including

interest of 7.50%, maturing in September 2020. $ 304,403

Villa Las Vegas mortgage note payable to New Mexico

Mortgage Finance Authority, secured by a deed of trust

and land use restrictions agreement on the property,

payable in interest only payments in the amount of 1.00%

of the outstanding principal plus accrued and unpaid

interest, with interest accruing at 5.57%. Thé entire

principal amount of the loan plus all accrued interest will

be due and payable in full upon the earlier occurrence of

the sale, refinance, or transfer of the property or on July

2041. 575,000

Equity Equivalent (EQ2) unsecured loan to Dignity Health

to finance real estate activities associated with the

acquisition and rehabilitation of affordable multi-family

housing for CPLC’s Neighborhood Stabilization Program

and real estate operations. Interest bearing 1.0% to 2.0%

during the term of this note, with maturity in August 2024. 3,000,000

Equity Equivalent (EQ2) unsecured loan to Wells Fargo to

operate and manage activities in support of low to

moderate-income households and financially underserved.

Quarterly interest payments accruing at 2.00% per annum.

Quarterly principal payments of $250,000 become effective

the fifth anniversary with equal payments due until maturity

in January 2024. 1,000,000

Equity Equivalent (EQ2) unsecured loan to BBVA Compass

to operate and manage activities in support of low to

moderate-income households and financially underserved.

Quarterly interest payments accruing at 2.25% per annum,

until maturity in April 2028. 2,500,000

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NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2020

Description

Seller Carry-back loan related to the purchase of real
property in Mesa, AZ payable in annual installments of
$105,063 accruing interest at 4.00% maturing in April 2030.

Prestamos CDF, LLC note payable to Wells Fargo, secured by
collateral assignment of loan documents, interest at 1.07% paid
quarterly commencing March 5, 2018 and maturing December

Prestamos CDFI, LLC note payable to Wells Fargo, secured by
collateral assignment of loan documents, interest at 1.07% paid
quarterly commencing March 5, 2018 and maturing December

Prestamos CDFI, LLC EQ2 unsecured loan to Wells Fargo
Community Investment Holdings, with quarterly interest
payments at 2.00% per annum until January 2028. then
additional quarterly principal payments (8) of $187,500
commence until liability is paid in full (January 2030).

Mountain Pointe Apartments, LP entered into an insured
loan under Section 207 pursuant to Section 223(f) of the
National Housing Act, as amended. The loan is serviced by
Bellwether Enterprise Real Estate Capital, LLC, payable in
monthly installments of $14,719 including interest of 3.92%
per annum, maturing June 1, 2053.

Note payable to Local Initiatives Support Corporation,
collateralized by deed of trust, payable in monthly
installments of interest at 6.00% with various principal
payments due upon the stage of real estate development.
Loan maturity is January 2021. This loan is for mobile
home project in Mesa, AZ.

Note payable to Arizona Bank and Trust related to Nevada real
estate project, payable in monthly installments of interest at
3.75% with principal balance due February 2022.

Note payable to Raza Development Fund, Inc., collateralized
by deed of trust on real property located at 15th Avenue and
Van Buren, payable in monthly installments of interest at 5.91%
with principal balance due at maturity in October 2037.

933,730

4,060,800

1,939,200

1,500,000

3,267,358

2,125,000

1,775,000

384,756

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Note payable to Local Initiatives Support Corporation,

collateralized by deed of trust on real property located at Central

and Broadway, payable in monthly installments of interest at

6.00% with various principal payment due upon the stage of real

estate development. Loan maturity is in August 2021. $ 1,687,500

Note payable to Arizona Community Foundation, unsecured
with principal balance due at maturity in September 2021. 75,000

Note payable to Dignity Health, unsecured, payable quarterly
at 1.00% from October 2020 until October 2022, at 2.00%
thereafter with principal balance due at maturity in October 2025. 4,000,000

Note payable to Calvert Impact Capital, Inc., unsecured, interest

payable monthly at 5-treasury rate plus 340 basis points (6.02%)

for five years, after which monthly principal and interest payments

commence through maturity December 2023. 5,000,000

Note payable to City of Phoenix from federal HOME program

with $2 million maximum loan amount, collateralized by deed

of trust on real property, with 0% interest rate. $50,000 principal

payment will start on the 1st day of September 2020 and

continuing on the ist day of September each year thereafter if

surplus cash is available. The entire outstanding principal

balance is due January 1, 2059. 1,229,644

Note payable to Kansas State Bank, collateralized by deed

of trust on office building located at Mesa, AZ, with interest rate

at 5.19% through October 2023, then change to weekly average

yield on US Treasure securities adjustment to maturity of one

year plus 3.5% from November, 2023 to Maturity. Monthly

principal and interest payment until maturity in October 30, 2038. 686,400

Note payable to Kansas State Bank, collateralized by deed

of trust on real property located at Mesa, AZ, with monthly

interest only payments at 5.19% until December 2020, then

monthly principal and interest payments at 5.19% from January

2021 to December 2023, then weekly average yield on US

treasury securities (one year) plus 3.50% from January 2024

through maturity in December 2040. 2,500,000

Note payable to US Bancorp Community Development Corporation
for Prestamos, unsecured, with quarterly interest only payments
at 3.0% and principal balance due at maturity in July 2021. 1,000,000

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Note payable to the New World Foundation, unsecured, 0%

interest loan, with principal payments in four equal quarterly

installments commencing September 2028. This loan is eligible

for loan forgiveness after meeting certain defined benchmarks

over the term of the loan. $ 2,000,000

Note payable to State Bank of Arizona, unsecured, interest at
3.50% payable in one lump sum of principal and accrued
interest on March 20, 2024. 250,000

Note payable to Arizona Bank and Trust Corporation, secured by

deed of trust and tangible asset of a Motel purchased in Mesa,

AZ, with monthly interest and principal payments at 4.25% until

January 2022, and the remaining balance due in February 2022. 3,112,500

Notes payable to City of Mesa from federal HOME program with

$1,443,339 maximum Joan amount, collateralized by deed of trust

on real property, with 0% interest rate. The loan shall be repaid

either from the sales proceeds received from the sales of the

units to qualified income eligible homebuyers, or at the end of the

ferm of 20 years from each residential unit. 240,000

Note payable to Arizona Bank and Trust related to Pickle House
and 445 Mesa Projects, payable in monthly installments of
interest at 3.75% with principal balance due February 2022. 4,300,002

Note payable to Western Alliance Bank for Prestamos with

$3,000,000 maximum loan amount, unsecured, quarterly interest

only payment at 3.0% and all outstanding principal plus all

accrued unpaid interest in November 2024 with right for additional

60 months extension under some conditions. 1,001,000

Note payable to U.S. Small Business Administration (SBA) for

Prestamos from the Microloan Revolving Trust Fund (MRTF) for

SBA X! in the maximum amount of $1,250,000, secured by cash

held for loan programs and select notes receivable, no payment

and 0% interest rate for the first twelve month, then monthly

installment of principal and interest at 0.5% thereafter, maturing in

November 2027. The loan agreement requires Prestamos to act

as a financial intermediary by using the proceeds of the loan for

lending to existing small business. 500,000

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Note payable to Blue Cross and Blue Shield of Arizona for

Prestamos. The loan is for Pay Check Protection loan lending.

0% interest rate for the first six months, then 3% for the remaining

term. $4,000,000 initia! principal is due in November 2020. The

remaining principal balance and the accrued but unpaid interest

are payable in six equal quarterly installments starting February

2020 and ended May 2022. $ 5,000,000

Notes payable to New Mexico Mortgage Finance Authority with

monthly installment of $10,943 at 6.29% and due in November

2044. It is for Ladera! Village Apartments located in New Mexico.

The United State Department of Housing and Urban

Development (HUD) will endorse the loan under section 542(e) of

the Housing and Community Development Act of 1992 and the

regulations set forth at 24 CFR part 266, in effect on the date of

endorsement (90% loan guarantee). 1,638,856

Notes payable to New Mexico Mortgage Finance Authority in the
original amount of $500,000 with a 5.09% Interest compounded
monthly on unpaid principal and interest balances. Interest only
payment should be made in the amount of $416 per month at an
interest rate of 1% until maturity. Maturity of the loan occurs at the
sale, refinance, or transfer of the property or on September 2034.
It is for Laderal Village Apartment located in New Mexico.

500,000

Total Mortgages and Other Debt 135,537,651
Less: Unamortized Debt Issuance Costs (901,808)
Less: Current Maturities (10,870,989)
Total $ 123,764,854

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Future maturities of mortgages payable and other debt are as follows:

Year Ending June 30, Amount
2021 $ 10,870,989
2022 14,878,125
2023 2,552,807
2024 26,179,344
2025 13,226,374
Thereafter 60,644,124
Forgivable Loans 7,185,888
Total Future Maturities $ 135,537,651

The Organization is required to maintain certain net asset, liquidity, and indebtedness ratios,
and must comply with other general covenants of the loan agreements.

The Organization entered into a loan agreement with the United States Department of
Agriculture (USDA) in December 2016 for $15,000,000. The loan is secured by select notes
receivable. Principal and interest at 2.38% to be paid monthly. The note matures in
December 2056. No amounts were advanced or due on the note, and the note had an
outstanding balance of $-0- at June 30, 2020.

NOTE 12 RETIREMENT PLAN

CPLC sponsors a 401(k) plan covering employees who meet specified age and service
requirements. Contributions to the plan are participant directed. Employer contributions are
made annually at the discretion of the board of directors. During the year ended June 30,
2020, CPLC paid contributions totaling $440,494 the plan.

NOTE 13 OPERATING LEASES

CPLC leases various buildings and office equipment under several operating lease
agreements expiring through 2023. Minimum future rental payments under noncancelable
operating leases having remaining terms in excess of one year at June 30, 2020 are:

Year Ending June 30, Amount
2021 $ 670,227
2022 550,563
2023 297,455
2024 146,855
Thereafter 56,000
Total $ 1,750,636

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 13 OPERATING LEASES (CONTINUED)

In the normal course of business, operating leases are generally renewed or replaced by
other leases. Total rental expense for operating leases with terms in excess of one month
was approximately $703,114 for the year ended June 30, 2020.

CPLC leases office space to various third parties under operating leases that expire through
2022. Future minimum lease receipts to be received under these agreements as of June 30,
2020 are as follows:

Year Ending June 30, Amount
2021 $ 1,179,852
2022 963,697
2023 631,474
2025 155,969
Thereafter 2,545 545
Total $ 5 902,748

NOTE 14 COMMITMENTS AND CONTINGENCIES

Five of the HUD properties have a housing assistance payments contract (HAP). The HAP
contract is a rent assistance program for low-income families (or persons) as provided by
the Section 8 Program of the National Housing Act of 1959. Eligible low-income tenants pay
30% of their income as rent, while HUD pays the difference between this rental amount and
“contract rents” (as defined). CPLC can request from HUD an amount equal to 80% of
contract rent during periods that the unit is vacant if certain conditions are met, but not to
exceed 60 days. If a unit continues to be vacant after the 60-day period, CPLC may submit
a claim and receive additional housing assistance payments on a semi-annual basis if
certain conditions are met as outlined in the HAP contract.

The HAP contracts expire beginning in 2020 through 2033 as follows:

Casa de Primavera Apartments March 31, 2033
Casa Del Pueblo March 31, 2021
Casa Del Pueblo II January 31, 2021
Guadalupe Barrio Nuevo June 1, 2038
Casa Mia Senior Apartments April 30, 2021

Management intends to renew the HAP contracts as they expire. The rental income from
these contracts represents approximately 17% of total rental income from real estate for the
year ended June 30, 2020. It is uncertain whether the contracts will be extended. HUD is
contemplating several changes, which may have a significant financial impact on the
properties. Management cannot reasonably estimate the ramifications, if any, of these
uncertainties.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 14 COMMITMENTS AND CONTINGENCIES (CONTINUED)

CPLC guarantees the debt of a nonconsolidated real estate venture. The debtor holds the
deed of trust on the underlying real property. Payments on the debt are due in monthly
installments and the debt matures in 2034. CPLC would be obligated to perform under this
guarantee if the real estate venture failed to pay principal and interest payments to the
lender as due. CPLC’s guarantee on the performance of the debt was approximately
$462,468 as of June 30, 2020. As of June 30, 2020, the real estate venture was current with
their debt payments.

CPLC participates in a number of federal and state-assisted grant and contract programs
which are subject to financial and compliance audits. The audits of these programs for, or
including, the year ended June 30, 2020 remain subject to review. Accordingly, CPLC’s
compliance with applicable grant or contract requirements may be established at some
future date. The amount, if any, of expenditures or fees for units of service which may be
disallowed by the granting or contracting agencies cannot be determined at this time,
although the CPLC’s management expects such amounts, if any, to be immaterial.

CPLC is guarantor of a line of credit for a nonprofit organization, Help-New Mexico. At
June 30, 2020, the borrowing limit was $1,000,000, and the outstanding balance was
$358 882.

In the normal course of business, CPLC is subject to various lawsuits. It is the opinion of
management that the resolution of such lawsuits will not have a material adverse effect on
the consolidated financial statements taken as a whole. Accordingly, no provision has been
made in the accompanying consolidated financial statements for losses, if any, that might
result from the ultimate outcome of these matters.

NOTE 15 NET ASSETS WITH DONOR RESTRICTIONS

Net assets with donor restrictions are restricted for the following purposes or periods.

Capital Magnet Fund $ 687,335
Arizona Complete Health 111,465
Walmart Grant 19,099
United Healthcare 62,121
Blue Cross Blue Shield 75,000
Broadway Redevelopment 262,786
Kresge Foundation 100,000
Prop 301 Plan 395,623
Housing Counseling 85,000
City Group Foundation Grant 98,439
Supportive Housing Program 600,000

Tota! $ 2,496 868

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 16 ENDOWMENT

CPLC’s board of directors has interpreted the Arizona Uniform Prudent Management of
Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original
gift as of the gift date of the donor-restricted endowment funds, unless there are explicit
donor stipulations to the contrary. At June 30, 2020, there were no such donor stipulations.
As a result of this interpretation, CPLC classifies as endowment net assets (a) the original
value of gifts donated to the Endowment, (b) the original value of subsequent gifts donated
to the Endowment, and (c) accumulations to the endowment made in accordance with the
direction of the applicable donor gift instrument at the time the accumulation is added. The
remaining portion of the donor-restricted endowment is classified as net assets with donor
restrictions until those amounts are appropriated for expenditure by the Organization in a
manner consistent with the standard of prudence prescribed by UPMIFA.

CPLC considers the following factors in making a determination to appropriate or
accumulate donor-restricted endowment funds:

The duration and preservation of the fund

The purposes of the organization and the donor-restricted endowment fund
General economic conditions

The possible effect of inflation and deflation

The expected total return from income and the appreciation of investments
Other resources of the organization

The investment policies of the organization

The changes in endowment net assets by fund for the year ended June 30, 2020 are as
follows:

Without Donor With Donor
Restriction Restrictions Total

Endowment Net Assets -

Beginning of Year $ = $ 124,110 $ 124,110
Contributions - . -
Investment Return:

Investment Income - - -
Net Appreciation - - -
Releases - (124,110) (124,110)
Endowment Net Assets -
End of Year $ = $ - $ -

The endowment allows for the corpus to be distributed annually through 2021.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 16, ENDOWMENT (CONTINUED)

Investment and Spending Policies

CPLC has adopted investment and spending policies for the Endowment that attempt to
provide a predictable stream of funding for operations while seeking to maintain the
purchasing power of the endowment assets. Over time, long-term rates of return should be
equal to an amount sufficient to maintain the purchasing power of the Endowment assets, to
provide the necessary capital to fund the spending policy, and to cover the costs of
managing the Endowment investments. The target minimum rate of return is the Consumer
Price Index plus 5% on an annual basis. Actual returns in any given year may vary from this
amount. To satisfy this long-term rate-of- return objective, the investment portfolio is
structured on a total-return approach through which investment returns are achieved
through both capital appreciation (realized and unrealized) and current yield (interest and
dividends). A significant portion of the funds are invested to seek growth of principal over
time.

CPLC’s annual appropriations are at the discretion of the board of directors.

NOTE 17 DONATED PROFESSIONAL SERVICES AND MATERIALS

CPLC received donated professional services for production and on-air media in the amount
of $641,345 and other donated professional services and materials in the amount of
$102,653 for the year ended June 30, 2020.

NOTE 18 NEW ACCOUNTING STANDARDS

In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, to
improve revenue recognition guidance. The ASU affects any entity that enters into contracts
with customers to transfer goods or services or enters into contracts for the transfer of
nonfinancial assets. The ASU does not impact existing guidance on accounting for
contributions but is applicable to exchange transactions. The core principle of the guidance
is that an entity should recognize revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. Revenue recognition will go
through a five step process: 1) identify the contract with a customer, 2) identify the
performance obligations in the contract, 3) determine the transaction price, 4) allocate the
transaction price to the performance obligations, and 5) recognize revenue when (or as) the
organization satisfies the performance obligation. The Organization is currently evaluating
the impact of adopting ASU 2014-09 and has not determined the effect to the consolidated
financial statements. The Organization will be required to adopt the new standard for its
fiscal year beginning July 1, 2020. The standard requires retroactive application.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 18 NEW ACCOUNTING STANDARDS (CONTINUED)

In February 2016, the FASB issued ASU 2016- 02, Leases, to improve financial reporting
about leasing transactions (Topic 842). The ASU affects all lease transactions. Lessors will
classify leases as either a sales-type, direct financing, or operating lease. In a sales-type
lease, the lessor transfers control of the underlying asset to the lessee. At lease
commencement, the lessor should derecognize the leased asset and record its net
investment in the lease. The net investment in the lease consists of a lease receivable and
the unguaranteed residual asset. In a direct financing lease, the lessor should derecognize
the leased asset underlying the lease and record a net investment in the lease at lease
commencement. The net investment in the lease should be measured in the same manner
as a sales-type lease adjusted for selling profit and initial direct costs. An operating lease is
neither a sale nor financing of an asset. The lessor should keep the asset underlying the
lease on its balance sheet and continue to depreciate the asset based on its useful life.
Rental revenue should be recognized on a straight-line basis. CPLC has several leasing
transactions. The amendments in this update are effective for years beginning after
December 15, 2021. The Organization is currently evaluating the impact of adopting ASU
2016-02 and has not determined the effect to the consolidated financial statements. The
standard requires a modified retrospective approach to implementation.

In June 2016, the FASB approved ASU 2016-13, Financial Instruments — Credit Losses
(Topic 326): Measurement of Credit Losses on Financial Instruments. The main objective of
the ASU is to provide financial statement users with more decision-useful information about
the expected credit losses on financial instruments and other commitments to extend credit
held by a reporting entity at each reporting date. To achieve this objective, the amendments
in the ASU replace the incurred loss impairment methodology in accounting principles
generally accepted in the United States of America with a methodology that reflects
expected credit losses and requires consideration of a broader range of reasonable and
supportable information to inform credit loss estimates. This ASU is effective for the fiscal
year beginning after December 15, 2022. Early adoption is permitted for the fiscal year
beginning after December 15, 2018, including interim periods within the fiscal year. The
Organization will evaluate the impact of ASU 2016-13 on its consolidated financial
statements.

NOTE 19 SUBSEQUENT EVENTS
Subsequent to year-end, the Organization entered into the following agreements:
In July 2020, Prestamos CDFI LLC was awarded a grant from City of North Las Vegas in the
amount of $722,711 to provide financial and technical assistant to small business located in
City of North Las Vegas.
In July 2020, Prestamos CDFI LLC was awarded a $55,000,000 New Market Tax Credit
allocation from the United State Department of Treasure. The program attracts private
capital into low-income communities by permitting individual and corporate investors to

receive a tax credit against their federal income tax in exchange for making investments on
qualified projects within economically distressed communities.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 18 SUBSEQUENT EVENTS (CONTINUED)

In October 2020, Prestamos CDFI LLC was awarded a grant from Small Business
Administration in the amount of $200,000 to provide training and technical assistance to
economically disadvantaged entrepreneurs in rural areas and support to entrepreneurship in
HUB zones and Opportunity zones.

In October 2020, Prestamos CDFI LLC was awarded a grant from Department of Health and
Human Service, Office of Community Service in the amount of $800,000 to provide
affordable capital support to small business entrepreneurs in distressed areas (Mohave
County, AZ).

In October 2020, Prestamos CDF LLC was award a grant from City of Glendale AZ in the
amount of $300,000 to provide capital and technical support to small businesses
experiencing hardship related to the Covid-19 pandemic in City of Glendale.

In July 2020, Prestamos secured a $7,500,000 line of credit at 0.5% interest rate with Bank
of America to provide lending to small businesses under the Community Advantage
Program and the Paycheck Protection Program administered by the United States Small
Business Administration (SBA). The SBA guarantees payment of all or a portion of each
SBA loan.

In July 2020, Prestamos purchased $4,074,761 loan portfclio from a company filed
bankruptcy under chapter 11. The portfolio contains performing loans, nonperforming loans
and community advantage loans, in which a portion is guaranteed by SBA.

In August 2020, CPLC was awarded a five-year grant with Department of Health and
Human Services, Office of Head Start in the amount of $13,952,357. It continues on the
Head Start program.

In July 2020, CPLC Nevada Inc. was award two grants from Office of Community Service in
the amount of $ 695,437 for LUCES Supportive Housing Program in Nevada.

In October 2020, CPLC issued payment to pay off the note payable with Local Initiatives
Support Corporations in the amount of $1,687,500. The note is for Central and Broadway
project.

Management evaluated subsequent events through December 11, 2020, the date the
consolidated financial statements were available to be issued. Events or transactions
occurring after June 30, 2020, but prior to December 11, 2020, that provided additional
evidence about conditions that existed at June 30, 2020, have been recognized in the
consolidated financial statements for the year ended June 30, 2020. Events or transactions
that provided evidence about conditions that did not exist at June 30, 2020, but arose before
the consolidated financial statements were available to be issued have not been recognized
in the consolidated financial statements for the year ended June 30, 2020.

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATING STATEMENT OF FINANCIAL POSITION

JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

ASSETS

CURRENT ASSETS
Cash and Cash Equivalents
Restricted Cash
Cash Held for Loan Programs
Receivables:
Grants and Contracts, Net
intercompany Receivables
Interest Receivable
Other Receivables, Net
Notes Receivable, Current
Prepaid Expenses
Total Current Assets

LONG-TERM ASSETS
Notes Receivable, Net
Real Estate Properties - Rental, Net
Property and Equipment, Net
Related Party Receivables, Net
Real Estate Held for Sale
Investments in Debt and Equity Securities
Investments in Affiliated Entities - Cost Method
Investments in Affiliated Entities - Equity Method
Deposits and Funded Reserves
Other Assets
Total Long-Term Assets

Total Assets
LIABILITIES AND NET ASSETS

CURRENT LIABILITIES
Accounts Payable and Accrued Expenses
Intercompany Payables
Lines of Credit, Current Portion
Mortgages Payable and Other Debt, Current
Other Liabilities
Total Current Liabilities

LONG-TERM LIABILITIES
Lines of Credit
Deferred Revenue, Long-Term Portion
Mortgages Payable and Other Debt, Net
Total Long-Term Liabilities

Total Liabilities

NET ASSETS
Without Donor Restrictions
With Donor Restrictions
Contributions
Distributions
Total Net Assets

Total Liabilities and Net Assets

Highly Confidential

CPLC CPLC and
Prestamos Community Multifamily Other Consolidating
CDF, LLC Schools Properties Subsidiaries Eliminations Total

$ 1,780,407 $ 209,810 §$ 4,621,484 §$ 23,814,690 $ - $ 30,426,491

- 395,623 - - . 395,623

2,692,990 - - - - 2,692,990

511,951 54,945 145,544 6,283,774 - 6,996,214

162,732 9,935 1,093,174 14,387,545 (15,653,386) .

264,017 - - - - 264,017

- 303,018 - 303,018

1,753,644 - - 259,898 - 2,013,539

667 7,151 92,322 126,108 - 226,248

7,166,405 677 564 5,952,524 45,175,033 {15,653,386) 43,318,140

43,692,848 - 3,777,692 (6,250,663) 41,219,877

- - 62,990,221 40,751,023 (2,010,086) 101,731,158

112,170 73,674 56,589 19,282,729 - 19,525,162

- - 37,253 1,153,767 - 1,181,020

- 13,238,133 - 13,238,133

- - 3,762,069 - 3,762,069

1,064,099 - 14,271,603 (12,365,546) 2,970,156

729,675 - - - - 729,675

- - 3,025,461 617,052 - 3,542,513

- - 607,022 373,400 - 980,422

45,598,792 73,674 66,716,546 97,127 468 {20,626,295) 188,890,185

S$ 52.765.197_ $ 751,238 S$ 72,669,070 $ 142,302,501 _$ (36,279,681) $ 232,208.325

s 231,217 § 122,323 $ 2,897,337 $ 8,283,411 $ ~ $ 11,534,288

402,604 1,535,557 2,308,204 11,407,021 (15,653,386) -

- - - 2,700,414 (1,399,391) 1,301,023

4,689,682 - 2,895,414 3,285,893 10,870,989

146,911 : 985,062 §33,674 - 1,665,647

5,470,414 1,657,880 9,086,017 26,210,413 (17,052,777) 25,371,947

14,079,270 - 4,866,193 - 18,945,463

727,318 - . 2,127 838 - 2,855, 156

23,058,132 - 67,742,138 37,814,857 (4,851,273) 123,764,854
37,865,720 - 67,742,138 44,808,888 (4,851,273) 145,565,473 ¢

43,336,134 1,657,880 76,828,155 71,019,304 (21,904,050) 170,937,420

9,429,063 (1,302,265) 7,461,373 69,909,287 (14,983,386) 70,514,072

. 395,623 : 2,101,244 - 2,496,867

- 693,900 - (693,900) -

- - (12,314,358) (727,331) 1,301,655 (11,740,034)

9.429,063 (906,642) (4.159.085) 71,283,200 (14,375,631) 61.270.965

52.765.197_ _§ 751.238 S 72.669.070 $ 142.302.501_ _$ {36.279.681) _$ 232,208.325

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES

REVENUES
Contract Revenues:

Grants and Contracts
Cost Reimbursement
Fee for Service
Total Contract Revenues

Noncontract Revenues:
Rental Income
Development Fees
Client Fees
Donations
Fundraising
In-Kind
Sales of Inventory
Other Revenues
Total Noncontract Revenues

Other Revenues:
Gain on Sale of Asset
Intercompany Dividend Income
Investment Income (Loss)
interest Income
Total Other Revenues

Tolal Revenues

OPERATING EXPENSES
Salaries and Wages
Payroll Taxes
Fringe Benefits
Contractor Expenses
Professional Fees
Management Fees
Slaff Development
Property Administration
Travel
Advertising and Marketing
Administrative Costs
Occupancy
Insurance and Taxes
Utility Expenses.
Repairs and Mainienance
Office Expenses
Fumiture and Fixtures
Technology and Cammunication
Cansumahle Suppiles
Monetary Assistance
Miscellaneaus
Program Construction
Danated Materials and Services
Depreciation
Interest Expense
Bad debt Expense

Total Operating Expenses

NONOPERATING ACTIVITY
Gain (Lass) on Disposal of Assets, Net
Impairment Loss on Real Estate
Net Nonoperating Activity

Total Expenses

CHANGE IN NET ASSETS

Highly Confidential

YEAR ENDED JUNE 30, 2020

(SEE INDEPENDENT AUDITORS’ REPORT)

CONSOLIDATING STATEMENT OF ACTIVITIES

CPLC CPLC and
Prestamos Community Muttfamily Other
CDFI, LLC Schools Properties Subsidiaries Eliminations Total
2,588,775 2,400,792 3,750 6,698,214 - §$ 11,692,531
654,569 . : 24,796,784 (1,530,211) 23,921,142
: : : 27,654,398 (2,006,601) 25,647,797
3,244,344 2,400,792 3,750 59,149,396 (3,536,612) 61,261,470
- 28,800 17,235,414 3,309,014 (1,803,267) 18,768,961
= - : 2,169,924 (433,286) 1,736,638
750,089 - 1,743,048 1,449,956 (2,214,440) 1,728,653
147,500 16,168 194,433 1,829,956 (944,513) 1,243,544
- - - 674,677 - 674,677
- - 739,772 . 739,772
- - - 11,794,054 (9,710,138) 2,083,916
16,800 30,377, 1,653,214 7.339.862 @ 225,044) 3,815,209
914,389 75,345 20,826,109 29,307,215 _ {22 330 688) 28,792,370
42,585 - 16,220,653 - 542,010 16,805,248
° - : 1,301,655 (1,301,655) .
39,964 : : 88,364 (235,000) (106,672)
1.942.184 : 2,975 97,579 (339.209) 1,703,529
2,024,733 - 16,223,628 1,487,598 (1,333,854) 1B,402,105
6,183,466 2476137 37,053,487 89,944 209 (27,201,354) 108,455,945
1,361,434 908,096 3,731,907 33,903,836 . 39,905,273
115,102 59,292 384,956 2,515,012 - 3,074,362
106,371 134,622 634,179 4,703,906 - 5.579,078
- - : 8,174,487 (1,271,653) 6,902,834
358,825 316,109 405,297 5,094,147 (2,187,788) 3,986,590
262,545 - 1,137,557 491,218 (1,776,636) 114,684
66,866 7,901 38,383 523,778 : 636,928
- - 118,359 (20) - 118,339
61,056 1,530 52,434 927,347 - 1,042,367
16,599 18,887 306,863 744,449 . 1,086,798
360,784 320,541 170,638 6,350,746 (7,182,042) 20,667
93,066 364,962 35,100 2,115,924 (1,803,267) 805,785
22,221 6,953 1,354,799 1,735,016 : 3,118,989
7,092 32,258 2,924,360 780,019 . 3,743,729
7,032 - 2,651,605 883,548 - 3,542,185
38,768 12,955 75,915 404,621 . 532,259
17,554 - 128 124,461 - 142,143
98,291 60,991 170,645 1,465,652 : 1,795,579
1,284 22,936 10,614 1,542,892 - 1,577,926
460,796 9,535 108,966 2,910,874 (944,513) 2,544,658
26,383 31,949 10,018,941 348,275 (10,177,443) 254,105
- - - 1,846,364 (1,530,211) 416,153
- - : 743,998 - 743,998
- 19,481 3,499,165 2,113,339 (199,206) 5,432,779
563,349 - 4,252,062 1,144,527 (339,209) 5,620,729
414,776 15,099 79,803 64,674 . 574,352
4.460.194 2,943,097 32,162,876 81,653,090 (27.405.968) 93,213,289
: : (572,246) 216,165 (356,081)
- - - (18,373) - (18,373)
- : : (590.619) 216,165 (374 454)
4,460,194 2,343,097 32,162,876 82,243,709 (27,622,133) 93,587,743
1,723,272 133.040 4.890.611 7,700,500 420779 -$ 14,868 202

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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF FINANCIAL POSITION — CPLC BORROWING ENTITY

YEAR ENDED JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

CPLC Totals before
CPLC Commercial Eliminations Eliminations Total
CURRENT ASSETS
Cash and Cash Equivalents $ 416,063 $ 197,131 $ 613,194 $ - $ 613,194
Receivables: -
Grants and Contracts, Net 3,041,236 150,506 3,191,742 - 3,191,742
Intercompany Receivables 1,715,818 6,421 1,722,239 (1,722,239) -
Accounts Receivable from Affiliates 11,223,175 - 11,223,175 - 11,223,175
Other Receivables 1,159,730 - 1,159,730 - 1,159,730
Note Receivable, Current 259,898 - 259,898 - 259,898
Prepaid Expenses 416,736 3,707 120,443 - 120,443
Total Current Assets 17,932,656 357,765 18,290,421 (1,722,239) 16,568,182
LONG-TERM ASSETS
Notes Receivable, Net 3,680,156 - 3,680,156 (1,010,571) 2,669,585
Real Estate Properties - Rental, Net - 27,358,605 27,358,605 - 27,358,605
Praperty and Equipment - Net 18,399,308 - 18,399,308 - 18,399,308
Real Estate Held for Sale 5,867,166 - 5,867,166 - 5,867,166
Investments in Debt and Equity Securities 3,735,981 - 3,735,981 - 3,735,981
Investments in Affiliated Entities - Cost Method 12,335,673 - 12,335,673 - 12,335,673
Deposits and Funded Reserves 44,447 103,821 148 268 - 148,268
Other Assels - 24 933 24,933 - 24,933
Total Long-Term Assets 44,062,731 27 487,359 71,550,090 (1,010,571) 70,539,519
Total Assets $ 61,995,387 $ 27,845,124 $ 89,840,511 $ (2,732,810) $ 87,107,701
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 5,258,890 $ 206,852 $ 5,465,742 $ - $ 5,465,742
Intercompany Payables 6,421 1,715,818 1,722,239 (1,722,239) -
Accounts Payable to Affiliates 902,246 880,286 1,782,532 - 1,782,532
Deferred Revenue - Current Portion - - - - -
Lines of Credit - Current Portion 1,861,674 - 1,861,674 - 1,861,674
Mortgages Payable and Other Debt, Current 783,614 2,489,244 3,272,858 - 3,272,858
Other Liabilities 434,036 32,179 466,215 - 466,215
Total Current Liabilities 9 246,881 5,324,379 14,571,260 (1,722,239) 12,849,021
LONG-TERM LIABILITIES
Deferred Revenue, Long-Term Portion 1,611,692 - 1,611,692 - 1,611,692
Mortgages Payable and Other Debl, Net 19,968,202 11,064,865 31,033,067 (1,010,571) 30,022,496
Total Long-term Liabilities 21,579,894 11,064,865 32,644,759 (1,010,571) 31,634,188
Total Liabilities 30,826,775 16,389,244 47,216,019 (2,732,810) 44,483,209
NET ASSETS
Without Donor Restrictions 29,113,543 11,455,880 40,569,423 - 40,569,423
With Donor Restrictions 2,055,069 - 2,055,069 - 2,055,069
Total Net Assels 31,168,612 11,455,880 42,624,492 - 42,624,492

Total Liabilities and Net Assets

Baa]

61,995,387 $ 27,845,124 $89,840,511 $ (2,732,810) $ 87,107,701

Highly Confidential PRESTAMOS-00299662
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 56 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF ACTIVITIES - CPLC BORROWING ENTITY

YEAR ENDED JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

CPLC Totals before
CPLC Commercial Eliminations Eliminations Total
REVENUES
Contract Revenues:
Grants and Contracts $ 4,951,118 $ - $ 4,951,118 $ - $ 4,951,118
Cost Reimbursement 24,700,280 - 24,700,280 - 24,700,280
Fee for Service 13,652,299 - 13,652,299 - 13,652,299
Total Contract Revenues 43,303,697 - 43,303,697 - 43,303,697
Noncontract Revenues:
Rental Income 47,036 2,564,998 2,612,034 (1,803,267) 808,767
Development Fees 1,828,286 - 1,828,286 - 1,828,286
Client Fees 1,264,004 - 1,264,004 - 1,264,004
Donations 1,365,693 - 1,365,693 - 1,365,693
Fundraising 671,677 - 671,677 - 671,677
In-kind 698,747 - 698,747 - 698,747
Sales of Inventory (6,878,940) - (6,878,940) - (6,878,940)
Other Revenues 7,273,244 33,563 7,306,807 - 7,306,807
Total Noncontract Revenues 6,269,747 2,598,561 8,868,308 (1,803,267) 7,065,041
Other Revenues
Dividend Income 87,636 - 87,636 - 87,636
Investment Income (Loss) 1,436,786 - 1,436,786 - 1,436,786
Interest Income 97,414 105 97,519 (43,658) 53,861
Total Other Revenues 1,621,836 105 1,621,941 (43,658) 1,578,283
Tolal Revenues 51,195,280 2,598,666 53,793,946 (1,846,925) 51,947,021
OPERATING EXPENSES
Salaries and Wages 31,185,944 184,151 31,370,095 - 31,370,095
Payroll taxes 2,274,000 16,617 2,290,617 - 2,290,617
Fringe benefits 4,495,265 24,053 4,519,318 - 4,519,318
Professional fees 2,127,895 39,190 2,167,085 - 2,167,085
Management fees 18,398 308,140 326,538 - 326,538
Staff Development 495,052 590 495,642 - 495,642
Property Administration - (20) (20) - (20)
Travel 789,005 - 789,005 - 789,005
Advertising and marketing 709,685 1,529 711,214 - 711,214
Administrative Costs 5,768,113 - 5,768,113 - 5,768,113
Occupancy 1,920,945 - 1,920,945 (1,803,267) 117,678
Insurance and Taxes 744,008 603,974 1,347,982 - 1,347,982
Utility Expenses 535,233 198,445 733,678 - 733,678
Repairs and Mainlenance 445 599 348,161 793,760 - 793,760
Office Expenses 355,397 - 355,397 - 355,397
Furniture and Fixtures 99 978 - 99,978 - 99,978
Technology and Communications 1,333,868 26,016 1,359,884 - 1,359,884
Consumable Supplies 1,516,918 - 1,516,918 - 1,516,918
Monetary Assistance 2,338,010 - 2,338,010 ~ 2,338,010
Miscellaneous 254,556 312 254,868 - 254 ,868
Program Construction 28,012 - 28,012 - 28,012
Donated Materials and Services 702,973 - 702,973 - 702,973
Depreciation 661,958 1,085,562 1,747,520 - 1,747,520
Interest Expense 456,140 510,918 967,058 (43,658) 923,400
Bad Debt Expense (Recovery) 642,656 40,607 683,263 - 683,263
Tolal Operating Expenses 59,899,608 3,388,245 63,287,853 (1,846,925) 61,440,928
NONOPERATING ACTIVITY
Gain/Loss on Sale of Assets, Net (6,348) (18,228) (24,576) - (24,576)
Contributions to Affiliates (676,920) (62,074) (738,994) - (738,994)
Impairment Loss on Real Estate (18,373) - (18,373) - (18,373)
Net Nonoperating Activity (701,641) (80,302) (781,943) - (781,943)
Total Expenses 60,601,249 3,468,547 64,069,796 (1,846,925) 62,222,871
CHANGES IN NET ASSETS $ (9,405,969) $ (869,881) $ (10,275,850) $ = $ (10,275,850)

Highly Confidential PRESTAMOS-00299663
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 57 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF ACTIVITIES —- CPLC COMMUNITY SCHOOLS

YEAR ENDED JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

Total CPLC
Toltecalli High Envision High Community
School school Schools
REVENUE
Grants and Contracts $ 1,788,004 $ 612,788 $ 2,400,792
Rental Income 14,400 14,400 28,800
Donation 16,168 - 16,168
Other Revenue 15,048 15,329 30,377
Total Revenue 1,833,620 642,517 2,476,137
OPERATING EXPENSES .
Salaries and Wages 608,631 299,465 908,096
Payroll Taxes 41,965 17,327 59,292
Fringe Benefits 88,372 46,250 134,622
Professional Fees 209,618 106,491 316,109
Staff Development 6,344 1,557 7,901
Travel 1,357 173 1,530
Advertising and Marketing 4,416 14,471 18,887
Administrative Costs 207,560 112,981 320,541
Occupancy 202,958 162,004 364,962
Insurance and Taxes 2,497 4,456 6,953
Utility Expenses 24,565 7,693 32,258
Office Expenses 5,328 7,627 12,955
Technology and Communication 44,513 16,478 60,991
Consumable Supplies 12,301 10,635 22,936
Monetary Assistance 5,440 3,095 8,535
Miscellaneous 25,791 6,158 31,949
Depreciation 10,124 9,357 19,481
Bad Debt Expense (Recovery) 9,740 5,359 15,099
Total Operating Expenses 1,511,520 831,577 2,343,097
CHANGE IN NET ASSETS $ 322,100 $ (189,060) $ 133,040

Highly Confidential PRESTAMOS-00299664
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 58 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF FINANCIAL POSITION — CPLC ESTANCIA LLC

JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 133,635
Grants and Contracts Receivable, Net 25,244
Prepaid Expenses 1,262
Total Current Assets 160,141
LONG-TERM ASSETS
Real Estate Properties - Rental, Net 12,827 834
Other Assets, Net 131,952
Total Long-Term Assets 12,959,786
Total Assets $ 13,119,927

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

Accounts Payable and Accrued Expenses $ 147,740
Intercompany Payables 108,963
Other Liabilities 207,078
Total Current Liabilities 463,781
LONG-TERM LIABILITIES
Mortgages Payable and Other Debt 14,303,219
Total Liabilities 14,767,000
NET ASSETS (DEFICITS)
Without Donor Restrictions (1,647,073)
Total Liabilities and Net Assets (Deficits) $ 13,119,927

Highly Confidential PRESTAMOS-00299665
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 59 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES

STATEMENT OF ACTIVITIES — CPLC ESTANCIA LLC

YEAR ENDED JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

REVENUE
Noncontract Revenue:
Rental Income
Other Revenues
Total Noncontract Revenue

Other Revenues:
Investment Income

Total Revenues

OPERATING EXPENSES
Salaries and Wages
Payroll Taxes
Fringe Benefits
Professional Fees
Management Fees
Staff Development
Property Administration
Travel
Advertising and Marketing
Insurance and Taxes
Utility Expenses
Repairs and Maintenance
Office Expenses
Technology and Communication
Miscellaneous
Depreciation
Interest Expense
Bad Debt Expense
Total Operating Expenses

CHANGE IN NET ASSETS (DEFICITS)

Highly Confidential

$ 2,463,289
309,737
2,173,026

2,773,055

403,421
42,184
64,714
48,399

220,361

6,041
12,590
5,510
74,901

155,288

563,587

7,447
10,788

172,996

505,208

290,832
18,542

3,095,647

$ (322,592)

PRESTAMOS-00299666
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 60 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF FINANCIAL POSITION — CPLC FOUNTAIN VILLAS LLC

JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 199,619
Grants and Contracts Receivable, Net 9,624
Prepaid Expenses 616
Total Current Assets 209,859
LONG-TERM ASSETS
Real Estate Properties - Rental, Net 5,639,105
Deposits and Funded Reserves 197,385
Other Assets, Net 31,614
Total Long-Term Assets 5,868,104
Total Assets $ 6,077,963
LIABILITIES AND NET ASSETS (DEFICITS)
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 57,783
Intercompany Payables 18,495
Other Liabilities 50,900
Total Current Liabilities 127,178
LONG-TERM LIABILITIES
Mortgages Payable and Other Debt 6,451,659
Total Liabilities 6,578,837
NET ASSETS (DEFICITS)
Without Donor Restrictions (500,874)
Total Liabilities and Net Assets (Deficits) $ 6,077,963

Highly Confidential

PRESTAMOS-00299667
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 61 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF ACTIVITIES — CPLC FOUNTAIN VILLAS LLC

YEAR ENDED JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

REVENUE
Noncontract Revenue:
Rental Income
Other Revenue
Total Noncontract Revenue

Other Revenue:
Investment Income

Total Revenue

OPERATING EXPENSES
Salaries and Wages
Payroll Taxes
Fringe Benefits
Professional Fees
Management Fees
Staff Development
Property Administration
Travel
Advertising and Marketing
Insurance and Taxes
Utility Expenses
Repairs and Maintenance
Office Expenses
Technology and Communication
Miscellaneous
Depreciation
Interest Expense
Bad Debt Expense
Total Operating Expenses

CHANGE IN NET ASSETS (DEFICITS)

Highly Confidential

$ 924,928
102,082
1,027,010

1,027,148

106,277
11,695
15,577
17,144
81,747

3,568
2,219
8,710

63,873
226,076
167,185
1,447
4,341
60,938
247,099
131,184
1,154,336

$ (127,188)

PRESTAMOS-00299668
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 62 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF FINANCIAL POSITION — LA CAUSA CONSTRUCTION, LLC

JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 313,387
Accounts Receivable 1,765,023
Intercompany Receivables 865,120
Other Receivables 297,055
Total Assets $3,240,585

LIABILITIES AND NET ASSETS (DEFICITS)

CURRENT LIABILITIES

Accounts Payable and Accrued Expenses $ 934,472
Intercompany Payables 2,959,178
Total Liabilities 3,493,650
NET ASSETS (DEFICITS)
Without Donor Restrictions (253,065)
Total Liabilities and Net Assets (Deficits) $3,240,585

Highly Confidential PRESTAMOS-00299669
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 63 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF ACTIVITIES —- LA CAUSA CONSTRUCTION, LLC

YEAR ENDED JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

REVENUE
Fee for Service Revenue:
Construction Revenue
Total Revenue

OPERATING EXPENSES
Salaries and Wages
Payroll Taxes
Fringe Benefits
Contractor Expense
Professional Fees
Staff Development
Travel
Administrative Costs
Occupancy
Insurance and Taxes
Utility Expenses
Office Expenses
Technology and Communication
Miscellaneous
Bad Debt Expense
Total Operating Expenses

CHANGE IN NET ASSETS (DEFICITS)

Highly Confidential

$10,106,538
10,106,538

619,413
58,049
76,052

8,174,487
32,947
12,753
13,934

147,465
14,202
96,672
(7,128)
12,606
4,914
3,417
213,226
9,473,009

$ 633,529

PRESTAMOS-00299670
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 64 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF FINANCIAL POSITION —
CPLC NEW MEXICO, INC.

JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 127,797
Grants and Contracts Receivable, Net 632,805
Notes Receivable 97,536
Prepaid Expenses 665
Total Current Assets 858,803
LONG-TERM ASSETS
Property and Equipment 802,316
Investments
Investments in Affiliated Entities - Equity Method 1,578,756
Total Long-Term Assets 2,381,072
Total Assets $ 3,239,875
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 483,659
Intercompany Payables 2,000,679
Total Current Liabilities 2,484 338
LONG-TERM LIABILITIES
Mortgages Payable and Other Debt, Net 250,000
Totai Liabilities 2,734,338
NET ASSETS
Without Donor Restrictions 505,537
Total Liabilities and Net Assets $ 3,239,875

Highly Confidential PRESTAMOS-00299671
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 65 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF ACTIVITIES —
CPLC NEW MEXICO, INC.

YEAR ENDED JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

REVENUE
Contract Revenue:

Grants and Contracts $ 114,750
Fee for Service 3,147 457
Total Contract Revenue 3,262,207
Noncontract Revenue:
Rental Income 2,199
Client Fees 84,155
Donations 397,255
Unrealized Loss in Investment in Affiliated Entities 24,335
Total Noncontract Revenue 507 ,944
Other Revenue:
Investment Income (209,403)
Dividend Income 75,000
Total Other Revenue (134,403)
Total Revenue 3,635,748
OPERATING EXPENSES
Salaries and Wages 496,879
Payroll Taxes 43,205
Fringe Benefits 31,797
Professional Fees 2,638,043
Staff Development 6,097
Travel 66,314
Advertising and Marketing 13,136
Administrative Costs 135,899
Occupancy 81,561
Insurance and Taxes 28,167
Utility Expenses 12,305
Repairs and Maintenance 5,275
Office Expenses 3,081
Furniture and Fixtures 254
Technology and Communication 18,178
Consumable Supplies 3,049
Miscellaneous 10,466
Depreciation 96,029
Bad Debt Expense (2)
Total Operating Expenses 3,649,733
NONOPERATING ACTIVITY
Loss on Sale of Assets, Net =
CHANGE IN NET ASSETS $ (13,985)

Highly Confidential

PRESTAMOS-00299672
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 66 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF FINANCIAL POSITION — CPLC NEVADA, INC.

JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT}

ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 273,292
Grants and Contracts Receivable, Net 642,081
intercompany Receivables 25,771
Other Assets 4,800
Prepaid Expenses 5,000
Total Current Assets 950,944
LONG-TERM ASSETS
Property and Equipment 17,623
Investments in Affiliated Entities - Equity Method 383,262
Total Long-Term Assets 400,885
Total Assets $ 1,351,829

LIABILITIES AND NET ASSETS (DEFICITS)

CURRENT LIABILITIES

Accounts Payable and Accrued Expenses $ 225,627
Intercompany Payables 1,154,341
Total Current Liabilities 1,379,968

NET ASSETS (DEFICITS)
Without Donor Restrictions (28,139)

Total Liabilities and Net Assets (Deficits) ‘ $ 1,351,829

Highly Confidential PRESTAMOS-00299673
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 67 of 68
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
STATEMENT OF ACTIVITIES — CPLC NEVADA, INC.

YEAR ENDED JUNE 30, 2020
(SEE INDEPENDENT AUDITORS’ REPORT)

Highly Confidential

REVENUE
Contract Revenue:
Grants and Contracts $ 1,522,346
Cost Reimbursement 94 217
Fee for Service 3,050
Total Contract Revenue 1,619,613
Noncontract Revenue:
Client Fees 1,679
Donation 12,008
Fundraising 3,000
In-Kind 41,025
Other Revenue 10,398
Total Noncontract Revenue 68,110
Total Revenue 1,687,723
OPERATING EXPENSES
Salaries and Wages 792 331
Payroll Taxes 66,588
Fringe Benefits 36,144
Professional Fees 45,935
Staff Development 3,822
Travel 23,722
Advertising and Marketing 16,905
Administrative Costs 114,693
Occupancy 42,355
Insurance and Taxes 2,218
Utility Expenses 4,030
Repairs and Maintenance 427
Office Expenses 20,011
Furniture and Fixtures 22,877
Technology and Communication 37,824
Consumable Supplies 7,610
Monetary Assistance 165,851
Miscellaneous 1,962
In-Kind 41,025
Depreciation 504
Bad Debt Expense (Recovery) 1,407
Total Operating Expense/Recovery 1,448,241
CHANGE IN NET ASSETS (DEFICITS) $ 239,482

PRESTAMOS-00299674
Case 5:21-cv-04337-JMG     Document 86-21     Filed 10/27/23     Page 68 of 68
A member of

iivesiinent aGuisaty senvicss are offerad thirnuah CiiftonLarsonAlien Wealth Advisors 12 C, @exla
an SEC-reyisterad investrsent advisor 1 CiitoniarsonAlies LLP Internationa!

Highly Confidential = a . PRESTAMOS-00299675


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