The Wright House Wellness Center dba ASHwell (ASHwell) began operation in 1988 to address the health issues of persons living with HIV/AIDS. Although the initial program focused primarily on the needs of gay, white men living with HIV/AIDS, ASHwell has changed over the years to include and target those populations at greatest risk of contracting sexually transmitted diseases (STD) - people of color (especially men who have sex with men and women) and recreational drug users in the lower income areas of Austin, Texas. As medical treatment for HIV/AIDS has changed from a focus on delaying death to managing illness and improving quality of life and productivity, ASHwell’s services have changed to emphasize wellness strategies, treatment adherence, and disease prevention. In 2018, ASHwell opened clinic services to provide care and prescribe drugs for patients with HIV and STD at no charge. Revenues come from government awards, contributions, and the drug pricing program. ASHwell’s programs and services include the following: I. HIV Case Management HIV Case Management activities include: Client intake and assessment; information and referral; assistance accessing community resources; social support provided by professional case managers and/or supervised interns. Goals of the HIV Case Management program are to assist clients to: access and maintain primary medical care, adhere to HIV medical treatment, maintain/increase quality of life, increase education and awareness of HIV/AIDS issues, identify and decrease barriers to services, increase continuity of care and coordination of services, and increase self- sufficiency, ultimately to the point where case management services are no longer needed. II. Clinic ASHwell is qualified to operate as a 340B provider under Section 340B(a)(4) of the Public Health Service Act, namely as both an STI/STD treatment and prevention provider as well as a Ryan White services provider. ASHwell provides medical care for PrEP (Pre-Exposure Prophylaxis to prevent HIV infection), HIV and HCV treatment, and STI/STD screening and treatment. All direct care services, including provider visits and testing, are provided at no charge. Additionally, team members work with health insurance and manufacturer programs to ensure clients receive the prescribed medications at no/low cost. Client eligibility is not dependent on ability to pay, legal status, etc. Unlike other agency programs, eligibility is NOT limited to the Austin Transitional Grant Area (TGA) (Travis, Williamson, Bastrop, Caldwell, and Hays counties).
BASIS OF ACCOUNTING ASHwell prepares its financial statements on the accrual basis of accounting whereby revenues and expenses are recognized in the period earned or incurred. REVENUE RECOGNITION Revenue and accounts receivable are recorded when earned. Revenue from drug pricing services is recognized when the services are performed. Revenue earned under governmental cost- reimbursement contracts is recognized as services are performed under the contracts, which is 7 when the related costs have been incurred. ASHwell considers all receivables to be fully collectible; accordingly, no allowance for doubtful accounts has been recorded. A significant portion of ASHwell’s revenue is derived from cost-reimbursable federal and local awards, which are conditioned upon certain performance requirements and/or the occurrence of allowable qualifying expenses. ASHwell was awarded cost-reimbursable grants of $1,215,646 that have not been recognized at 31 December 2025 because qualifying expenditures have not been incurred. Contributions are recognized when cash, securities or other assets, or an unconditional promise to give is received. Conditional promises to give are not recognized until the conditions on which they depend have been substantially met. FINANCIAL STATEMENT PRESENTATION 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. 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. FIXED ASSETS Fixed assets are recorded at cost (or fair value if donated). ASHwell capitalizes fixed assets with a useful life of more than one year and a cost equal to or greater than $3,000. Depreciation is computed using the straight-line method based on the estimated useful life of the asset, ranging from 3 to 40 years. FEDERAL INCOME TAXES ASHwell is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code, except on net income derived from unrelated business activities. ASHwell’s policy is to record interest and penalties related to income taxes as interest and other expense, respectively. At year-end, no interest or penalties have been or are required to be accrued. Additionally, no provision for federal income taxes has been made in the accompanying financial statements. ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. 8 SUBSEQUENT EVENTS ASHwell has evaluated subsequent events as of the date of the Independent Auditor’s Report, the date the financial statements were available to be issued. LEASES ASHwell determines if an arrangement is or contains a lease at inception. Leases are included in right of use (ROU) assets and operating lease obligations in the statement of financial position. ROU assets and lease obligations reflect the present value of the future minimum lease payments over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term. ASHwell does not report ROU assets and lease liabilities for its short-term leases (leases with a term of 12 months or less). Instead, the lease payments of those leases are reported as lease expense as rent payments are made. Non-lease components, such as common area maintenance charges, are separated from lease components based on the terms of the related lease. Variable lease costs, such as insurance and property taxes, and non-lease components are expensed as incurred within the occupancy account. FUNCTIONAL ALLOCATION OF EXPENSES The 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 occupancy, which is allocated on a square footage basis, as well as personnel, payroll processing fees, supplies and equipment, and other, which are allocated on the basis of estimates of time and effort. Travel and staff development, contracted services, communications, assistance to clients, depreciation, and advertising and marketing are allocated based on knowledge of individual expenses.
Land $2,945,354 Construction in progress 430,276 Building 3,942,048 Furniture and equipment 144,881 Leasehold improvements 452,392 Software 15,068 Vehicles 202,650 Accumulated depreciation (531,557) $7,601,112
ASHwell evaluated current contracts to determine which met the criteria of a lease. The ROU assets represent the ASHwell’s right to use the underlying assets for the lease term, and the lease obligations represent ASHwell’s obligation to make lease payments arising from the leases. The ROU asset and lease obligation, which arise from one operating lease, was calculated based on the present value of future lease payments over the lease terms. A discount rate of 3.25% was applied the lease to calculate the lease obligation based on the ASHwell’s estimated incremental borrowing rate. ASHwell leases one office space under an operating lease that expires in March 2026. In June 2026 this lease was extended through 31 October 2026 with the same terms. Future maturities of lease liabilities are presented in the following table, for the years ending 31 December: 2026 $36,900 Less: present value discount (1,162) $35,738 For the two years ended 31 December 2024, ASHwell was unable to pay the scheduled operating lease obligation payments for the second floor office space amounting to $436,855, plus the related interest payments of $113,635 and operating expenses of $253,131. ASHwell closed on the purchase of the building in June 2025. This building purchase resulted in a gain from the release of the accrued operating expenses. The net difference between the ROU asset and the accrued interest and lease obligation immediately before the purchase was recorded to the carrying value of the purchased building. As of 31 December 2025, the ROU asset related to the operating lease was as follows: Cost $141,829 Less: accumulated amortization (106,091) $35,738 Total occupancy expense: Operating lease cost $301,914 Proportionate share of basic costs and overtime HVAC 117,937 Other operating costs 74,375 $494,226 Supplemental cash flow information related to leases: Cash paid for amounts included in the measurement of lease obligations: Operating cash flows from operating leases $304,557
ASHwell received 14% of its total revenue from two governmental agencies. Additionally, 77% of the federal and local government awards receivable balance at year-end is due from these two agencies. Additionally, 10% of total revenue was from one foundation. At year-end, cash deposits in financial institutions exceeded FDIC coverage by $1,664,908.
ASHwell receives grants for specific purposes that are subject to grantor review. Such reviews could result in a request for reimbursement by the grantor if unallowable costs are identified. Management believes all significant terms and conditions have been met. ASHwell has received claims of wrongful terminations from three former employees which are in review by the Equal Employment Opportunity Commission. There are currently no specific dollar amounts requested and the probability of an unfavorable outcome cannot be determined at this time. Counsel retained by a former employee has asserted, in general terms only, claims said to arise under California law. This employee has demanded $175,000 in settlement. ASHwell intends to defend this matter if it cannot be resolved by an early settlement. ASHwell is unable to determine the likelihood of an unfavorable outcome from this claim and is unable to estimate the amount of any potential loss at this time
Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest in undistributed net assets held by Bingo Unit $60,642 N/A $60,642 N/A The carrying value of the interest in the undistributed share of net assets held by Bingo Unit represents ASHwell’s proportionate share of the undistributed net assets of the Bingo Unit, as reported in the Bingo Unit’s unaudited financial statements.
In accordance with the Texas Charitable Bingo Enabling Act and the Texas Administrative Code, ASHwell began participation in the North Lamar Bingo Unit (Bingo Unit) with 3 other nonprofit organizations in late 2015. Additional organizations were added in 2016 and 2020. The 6 organizations equally share revenue, expenses and the net assets of the Bingo Unit. The “interest in undistributed net assets held by Bingo Unit” in the amount of $60,642 represents ASHwell’s interest in the net assets of the Bingo Unit as of year-end. The 6 organizations have also authorized a designated agent to be responsible for the activities of the Bingo Unit. The Bingo Unit files quarterly reports with the Texas State Comptroller. The Bingo Unit is a high volume cash operation run entirely by the designated agent. ASHwell puts forth little or no effort into the operation and received quarterly distributions totaling $5,500 during the year. There was no change in the carrying value of the “interest in undistributed net assets held by Bingo Unit” recorded in the statement of financial position. Income from the Bingo Unit is subject to Federal income taxes as unrelated business income.
ASHwell provides a 401(k) defined contribution plan to its employees. ASHwell contributes a matching contribution of 4% to 5% of each eligible employee’s compensation to the plan. Contributions to the plan by ASHwell were $95,066 for the year
Advertising costs are expensed as incurred.
Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the statement of financial position date, comprise the following: Cash $2,188,446 Federal and local government awards receivable 460,970 Accounts receivable 600,194 Less: amounts unavailable for general expenditure within one year due to donor restrictions (1,156,500) $2,093,110 As part of ASHwell’s liquidity management, it has a policy to structure its financial assets to be available as its 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 ASHwell’s operating accounts. See Note 13 for additional information related to ASHwell’s net assets.
Contract receivables consist of the ASHwell’s right to payment from customers for services that have been provided. The balances of contract receivables at 31 December 2025 and 2024 were $600,194 and $440,630, respectively. The following table disaggregates ASHwell’s revenue based on the timing of satisfaction of performance obligations for the year ended 31 December 2025. Performance obligations satisfied at a point in time $7,158,729 Revenue recognized at a point of time includes fees from the drug pricing program, which are recognized at the date the service transfers to the customer. Typically, control of the service is deemed to transfer at the date at which the service is provided. Payment is typically due upon completion of the services. Transaction prices vary depending on the service provided
Satisfaction of purpose restrictions during the year: Capacity Building $200,000 Balance of net assets with donor restrictions at year-end: Capacity Building $1,150,000 Laptop computers 6,500 $1,156,500
During 2018, ASHwell began participating in the federal 340B drug pricing program. ASHwell operates a medical clinic at no cost to its patients. ASHwell’s nurse practitioner writes prescriptions and refers clinic patients to five contracted pharmacies (Avita, Walgreens, SCL 340BCare Services, Verity and Cardea Services, and CVS/Wellpartner), where patients purchase prescription drugs at a discounted price. The pharmacies bill the patient or the patients’ insurance for the prescription drug sale and collect payment for the sale. The expenses of the program are the cost of drugs sold and administrative fees that both the participating pharmacies and ASHwell earn. Per terms of the contract with Avita, Avita sells the prescription drugs, pays for the cost of drugs sold, receives a pharmacy management fee, and remits the net revenue to ASHwell. Per terms of the contracts with Walgreens, SCL 340BCare Services, Verity and Cardea Services, and CVS/Wellpartner, these pharmacies sell the prescription drugs, receive a pharmacy management fee, and remit the net revenue to ASHwell. ASHwell is billed for the cost of drugs sold, and the prescription drugs are shipped directly to the pharmacies. Additionally, ASHwell is billed an administrative fee by SCL 340BCare Services. ASHwell does not receive or distribute any prescription drugs. Activity for the program was: Activity Avita Walgreens SCL 340BCare Services Verity and Cardea Services CVS/ Wellpartner Total Prescription drug sales $19,217,264 $216,577 $0 $678,071 $1,169,533 $21,281,445 Cost of drugs sold paid by pharmacy (10,491,961) 0 0 0 0 (10,491,961) Pharmacy management fees (2,472,903) (28,903) 0 0 (236,757) (2,738,563) Drug program revenue 6,252,400 187,674 0 678,071 932,776 8,050,921Administrative fees paid to SCL 340BCare Services 0 0 (59,386) 0 0 (59,386) $6,252,400 $187,674 ($59,386) $678,071 $932,776 Cost of drugs sold paid by ASHwell for pharmacies other than Avita (832,806) $7,158,729
In April 2026, ASHwell obtained a loan for $400,000 with an interest rate of 10% and payments of $50,000, due monthly, beginning in August 2026 until the loan is repaid in full
On 9 June 2025, ASHwell obtained a loan for $5,000,000 from a financial institution with a fixed interest rate of 6.75%. Repayment of the loan begins in October 2025 with monthly payments of $37,819 due through June 2028 when the balance is due in full. This loan is secured by the building and land. $4,971,696 On 9 June 2025, ASHwell obtained a loan for $2,000,000 from PeopleFund with a fixed interest rate of 6.50%. The loan requires interest only payments for 5 years and then becomes due in full. This loan is secured by a second lien on the building and land. 2,000,000 $6,971,696 Future maturities on the notes payable at December 31: 2026 $119,239 2027 126,283 2028 4,726,174 2029 0 2030 2,000,000 $6,971,696 Total interest costs incurred and charged to expense during the year were $236,402.
Clinic HIV Case Management Total Program Administrative Fundraising Total Personnel $2,661,833 $1,742,889 $4,404,722 $691,392 $281,249 $5,377,363 Clinic services 1,939,765 0 1,939,765 0 0 1,939,765 Contracted services 266,186 96,347 362,533 199,858 200,549 762,940 Occupancy 457,001 25,812 482,813 11,413 0 494,226 Depreciation 126,138 44,340 170,478 19,606 0 190,084 Supplies and equipment 36,683 40,945 77,628 95,406 9,329 182,363 Travel and staff development 36,052 16,402 52,454 91,825 26,656 170,935 Assistance to clients 11,078 118,421 129,499 90 600 130,189 Payroll processing fees 54,161 35,463 89,624 14,068 5,723 109,415 Advertising and marketing 338 412 750 240 104,869 105,859 Communications 7,510 957 8,467 28,940 0 37,407 Other 224,446 80,956 305,402 60,826 71,763 437,991 $5,821,191 $2,202,944 $8,024,135 $1,213,664 $700,738 $9,938,537