Anewentry, Inc. is a nonprofit corporation established in 2004 and located in Austin, Texas and surrounding areas within Travis County. Anewentry, Inc. exists to provide community reentry and personal integrity support for individuals rebuilding from losses associated with homelessness, incarceration and addiction. Anewentry, Inc. is supported by contributions, program service fees, and contracts with the U.S. Department of Veterans Affairs, Texas Department of State Health Services, Integral Care, Travis County, and the City of Austin. In 2023, Anewentry, Inc. established ANE Webberville, LLC to develop and operate a property to be known as The Webberville Trauma Transformation Center, located in Austin, Texas. ANE Webberville, LLC is managed by its sole member, Anewentry, Inc. The IRS considers this LLC to be a “disregarded entity” and as such, ANE Webberville, LLC is not required to file a tax return separate from Anewentry, Inc. The financial statements of Anewentry, Inc. and ANE Webberville, LLC (collectively, Anewentry) have been consolidated. All intercompany transactions have been eliminated.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING Anewentry uses the accrual basis of accounting. Revenue is recorded when considered earned, rather than when received. Expenses are recorded when incurred regardless of when paid. FINANCIAL STATEMENT PRESENTATION Net assets are classified based on the existence or absence of donor 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 restrictions. Net Assets With Donor Restrictions Net assets subject to donor imposed restrictions. Some donor 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. ESTIMATES The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates. CONTRIBUTIONS Contributions received are recorded as with donor restriction or without donor restriction at fair value on the date of donation depending on the existence and/or nature of any restrictions. Net assets with donor restrictions are reclassified to net assets without donor restrictions upon satisfaction of the time or purpose restrictions. Donor restricted contributions whose restrictions are met in the same reporting period are reported as unrestricted support. Contributed nonfinancial assets are utilized rather than monetized. Anewentry considers contributions receivable to be fully collectible. Accordingly, no allowance for doubtful accounts is required. SUBSEQUENT EVENTS Anewentry has evaluated subsequent events as of the date of the Independent Auditor’s Report, the date the consolidated financial statements were available to be issued. REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers consists of private, federal, state, and local government fee-for-service contracts. Under these contracts Anewentry provides transitional and emergency housing, respite and residential treatment stabilization services to veterans and other qualified individuals. Revenue is earned over time as services are provided to individuals and billed based on the set daily fee for each bed that is occupied. The fee varies depending on the contract and type of services provided. Fees are invoiced monthly and typically paid within 30 days of billing. In general, revenue recognized does not have a significant financing component because payments terms are relatively short. Anewentry considers contracts receivable to be fully collectible. Accordingly, no allowance for doubtful accounts is required. FIXED ASSETS Fixed assets with a useful life of at least 1 year are capitalized at cost if purchased or fair value if contributed. Depreciation is computed using the straight-line method based on the estimated useful life of 5 years for vehicles, 15 years for furniture and equipment and 40 years for buildings. INCOME TAXES Anewentry, Inc. is exempt from income taxes under IRS Code Section 501(c)(3), except to the extent it has unrelated business activities. Accordingly, no provision has been made for Federal income taxes in the accompanying consolidated financial statements. ADVERTISING In accordance with Anewentry’s policies, advertising costs are expensed as they are incurred. FUNCTIONAL EXPENSE ALLOCATION The consolidated financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, expenses require allocation on a reasonable basis that is consistently applied. The expenses that are allocated include payroll, contract services, rent, repairs and maintenance, utilities, insurance, interest, and other. Payroll is allocated based on management’s estimates of time and effort related to employee job functions. Rent is allocated based on estimated usage of space. All other expenses are allocated based on management’s review and evaluation of individual transactions and accounts.
Governmental fee-for-service contracts $144,069 Foundation grants 13,609 Program fee-for-service 10,920 $168,598
Financial assets available for general expenditure, within one year of the consolidated statement of financial position date, comprise the following: Cash $523,261 Accounts receivable 168,598 Less: amounts unavailable due to donor imposed restrictions (48,279) $643,580 As part of Anewentry’s liquidity management, financial assets are structured to be available as general expenditures, liabilities, and other obligations come due. The policy is that monthly revenues are to cover monthly expenses. Monthly revenues and expenditures are deposited in and deducted from Anewentry’s operating accounts. See Note 7 for a description of Anewentry’s notes payable.
Land $1,570,176 Buildings 829,824 Construction in progress 163,220 Furniture and equipment 11,250 Vehicles 9,789 Accumulated depreciation (9,229) $2,575,030 Anewentry’s land, buildings, and construction in progress are for two facilities that must be used for medium-term recovery housing with inpatient treatment facilities for homeless individuals with substance abuse issues to increase the supply of decent, safe, sanitary housing primarily for homeless individuals but also available for low-income, very low-income, extremely low-income individuals who are experiencing substance abuse issues.
DISAGGREGATION OF REVENUE For the two years ended 31 December 2023, revenue recognized over time totaled $3,049,402 and consists of private, federal, state, and local government fee-for-service contracts to provide transitional and emergency housing, respite and residential treatment services to veterans and other qualified individuals. CONTRACT BALANCES Contract receivables consist of Anewentry’s right to payment from customers for daily occupation fees earned during the year. Balances of contract receivables at 31 December 2023 and 2021 were $154,989 and $154,950, respectively.
For the two years ended 31 December 2023, nonfinancial contributions recognized within the statement of activities include $35,199 in contributed legal services and $34,389 in forgiven interest. Contributed legal services were utilized in support of program activities, including the formation of ANE Webberville, LLC as well as administration and compliance related to the use of loan funds. Legal services are valued at the estimated fair value of comparable services. Forgivable interest is earned annually as Anewentry remains in compliance with its loan. Forgivable interest is used for program activities incurred using ANE Webberville LLC’s subaward loan from Travis County and is valued at the estimated fair value in the consolidated financial statements based on current rates for similar loans. All contributed nonfinancial assets received during the two years ended 31 December 2023 were without donor restrictions.
In April 2022, Anewentry obtained a $500,000 loan from the Small Business Administration. The loan is secured by Anewentry’s assets and accrues interest at the rate of 2.75% per annum. Principal and interest are due in monthly installments of $2,244, starting 30 months from the date of the loan through 6 April 2052, when all remaining principal and accrued interest is due. In August 2023, ANE Webberville, LLC was subawarded a $3,580,000 loan from Travis County for the development of The Webberville Trauma Transformation Center project. The loan carries a 0% interest through maturity, as long as Anewentry is in compliance with the loan agreement. The loan is set to mature 1 October 2063, subject to automatically extend for 20 year periods if Anewentry maintains compliance. If Anewentry has an event of default, the maturity date may accelerate and interest will begin to accrue at a rate of 10%. The loan is collateralized by real property. Debt maturities: 2024 $0 2025 0 2026 0 2027 8,454 2028 13,410 Thereafter 2,956,256 $2,978,120
Balances of net assets with donor restrictions as of 31 December 2023: Supportive housing $23,579 Capacity grant - technical assistance 23,100 Client care needs 1,600 $48,279 Satisfaction of donor restrictions for the two years ended 31 December 2023: Supportive housing program $36,299 Capacity grant - technical assistance 11,900 Cooking equipment 3,600 Client care needs 3,400 Recovery services for individuals 1,200 $56,399
In 2023, ANE Webberville, LLC executed a development agreement with Capital A Housing for its Webberville Trauma Transformation Center project. The agreed-upon contract price is $223,868. As of year end, the remaining contract balance is $167,901.
Program Administrative Total Payroll $2,382,885 $264,765 $2,647,650 Contract services 386,991 135,202 522,193 Rent 153,959 17,107 171,066 Repairs and maintenance 134,490 14,943 149,433 Utilities 114,278 12,698 126,976 Interest 52,607 5,845 58,452 Groceries 46,290 0 46,290 Insurance 32,554 3,617 36,171 Advertising and marketing 34,760 0 34,760 Client care 19,318 0 19,318 Other 70,504 82,626 153,130 $3,428,636 $536,803 $3,965,439
As of 31 December 2023, Anewentry held bank balances of $208,757 in excess of FDIC coverage limits. Anewentry received 79% of its income for 2022 and 2023 from four clients. As of year end, accounts receivables from three clients accounted for 85% of the total receivable balance.
During the two years ended 31 December 2023, Anewentry adopted Accounting Standards Update (ASU) 2020-07, Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The new guidance requires nonprofit entities to present contributed nonfinancial assets as a separate line item in the statement of activities, apart from contributions of cash and other financial assets. The standard also increases the disclosure requirements for contributed nonfinancial assets, including disaggregating by category the types of contributed nonfinancial assets a nonprofit has received. Adoption of this standard did not have a significant impact on the consolidated financial statements, with the exception of increased disclosure.
Under the provisions of the CARES Act signed into law on 27 March 2020 and the subsequent extension of the CARES Act, Anewentry was eligible for a refundable employee retention credit subject to certain criteria. Anewentry recognized a $407,517 employee retention credit during the two years ended 31 December 2023.
Anewentry receives federal loans and governmental grants that are subject to grantor review. Should Anewentry not comply with the terms of the loans and grants or should any costs be determined to be ineligible, Anewentry will be responsible for reimbursing the grantor for these amounts. Management believes any liability for reimbursement which could arise as the result of noncompliance would not be material to the financial position of Anewentry.