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COLLECTIVE IMPACT IN NEW HANOVER
COUNTY, INC. AND AFFILIATES
COMBINED FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
Year Ended June 30, 2023
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COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
June 30, 2023
TABLE OF CONTENTS
INDEPENDENT AUDITOR’S REPORT
COMBINED FINANCIAL STATEMENTS
Combined Statement of Financial Position Exhibit A
Combined Statement of Activities and Changes in Net Assets Exhibit B
Combined Statement of Cash Flows Exhibit C
Notes to Combined Financial Statements Pages 1-10
COMBINING SUPPLEMENTARY INFORMATION
Combining Schedule of Financial Position Schedule 1
Combining Schedule of Activities and Changes in Net Assets Schedule 2
Combining Schedule of Cash Flows Schedule 3
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INDEPENDENT AUDITOR’S REPORT
The Board of Directors
Collective Impact in New Hanover County, Inc. and Affiliates
Wilmington, North Carolina
Opinion
We have audited the accompanying combined financial statements of the Collective Impact in New Hanover County,
Inc. and Affiliates (“the Organizations”), which comprise the combined statement of financial position, as of June 30,
2023, and the related combined statements of activities and changes in net assets and cash flows for the year then ended,
and the related notes to the combined financial statements.
In our opinion, the accompanying combined financial statements referred to above present fairly, in all material
respects, the financial position of the Organizations, as of June 30, 2023, and the combined statements of activities and
changes in its net assets and cash flows for the year then ended, in accordance with accounting principles generally
accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Combined Financial Statements section of our report. We are required to be independent of the Organizations and to
meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Combined Financial Statements
Management is responsible for the preparation and fair presentation of the combined financial statements, in accordance
with accounting principles generally accepted in the United States of America, and for the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the combined financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, which raise substantial doubt about the Organizations’ ability to continue as a
going concern within one year after the date that the combined financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Combined Financial Statements
Our objectives are to obtain reasonable assurance about whether the combined financial statements, as a whole, are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not absolute assurance and, therefore, is not a guarantee that
an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement
when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the combined financial statements.
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Page 2
In performing an audit in accordance with generally accepted auditing standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the combined financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial
statements.
• Obtain an understanding of internal control relevant to the audit 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
Organizations’ internal control. Accordingly, no such opinion is expr essed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the combined financial
statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, which raise
substantial doubt about the Organizations’ ability to continue as a going concern for a reasonable period of
time.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified
during the audit.
Reporting on Combining Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the combined financial statements, as a whole. The
accompanying combining Schedules 1 through 3 are presented for purposes of additional analysis of the combined
financial statements, and are not a required part of the combined financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying accounting and other records
used to prepare the combined financial statements. The information has been subjected to the auditing procedures
applied in the audit of the combined financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other reco rds used to prepare the combined
financial statements, or to the combined financial statements themselves, and other additional procedures, in
accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining
supplementary information is fairly stated in all material respects, in relation to the combined financial statements, as
a whole.
DMJPS PLLC
Certified Public Accountants
Greensboro, North Carolina
April 15, 2024
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COLLECTIVE IMPACT IN NEW HANOVER
COUNTY, INC. AND AFFILIATES
COMBINED FINANCIAL STATEMENTS
Year Ended June 30, 2023
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Current Assets
Cash and cash equivalents 4,217,547$
Accounts receivable, net of allowance 243,175
Inventory 1,000
Prepaid expenses 63,331
Receivable, joint venture 17,894
Total Current Assets 4,542,947
Fixed Assets 13,839,713
Other Assets
Restricted cash:
Funds held by Property Management Company 7,705
Tenant security deposits held by Property Management Company 62,224
Total restricted cash 69,929
Utility deposits 1,508
Notes and loans receivable 419,608
Investment in joint venture (7,144)
Total Other Assets 483,901
Total Assets 18,866,561$
Current Liabilities
Accounts payable and accrued expenses 96,715$
Accrued salaries and wages 26,402
Accrued interest 6,750
Deferred revenue, current 497,225
Note payable - current portion 25,898
Other liabilities 45,070
Total Current Liabilities 698,060
Noncurrent Liabilities
Tenant security deposits 62,224
Notes payable 2,925,465
Total Noncurrent Liabilities 2,987,689
Total Liabilities 3,685,749
Net Assets and Unrestricted Members' Equity
Without donor restrictions:
Net assets without donor restrictions 1,224,504
Unrestricted members' equity, non-controlling interest 13,956,308
Total net assets without donor restrictions 15,180,812
Total Net Assets and Members' Equity 15,180,812
Total Liabilities and Net Assets 18,866,561$
See auditor's report and notes to combined financial statements.
Exhibit A
LIABILITIES AND NET ASSETS
COLLECTIVE IMPACT IN NEW HANOVER
COMBINED STATEMENT OF FINANCIAL POSITION
June 30, 2023
ASSETS
COUNTY, INC. AND AFFILIATES
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Without Donor With Donor
Restrictions Restrictions Total
Revenue
Contributions 561,204$ -$ 561,204$
Service contracts 303,600 - 303,600
Management fees 10,400 - 10,400
Rent income 886,437 - 886,437
Interest income 16,382 - 16,382
Grant revenue 984,467 - 984,467
Other income 22,806 - 22,806
Equity in net loss of joint venture (11,979) - (11,979)
Net assets released from restriction 37,500 (37,500) -
Total revenue without donor restrictions 2,810,817$ (37,500)$ 2,773,317$
Expenses
Salaries and benefits 1,299,185 - 1,299,185
Professional services 64,808 - 64,808
Advertising and promotion 6,288 - 6,288
Office expenses 10,255 - 10,255
Information technology 43,403 - 43,403
Occupancy 1,225 - 1,225
Travel and meetings 15,795 - 15,795
Contract services 93,001 - 93,001
Community programs 13,504 - 13,504
Professional development 5,122 - 5,122
Healthy opportunity pilot expenses (657) - (657)
Bank fees 482 - 482
Other expenses 10,003 - 10,003
Other administrative expenses 191,454 - 191,454
Operating and maintenance 483,756 - 483,756
Property taxes and insurance 205,526 - 205,526
Depreciation 412,583 - 412,583
Interest expense 79,148 - 79,148
Total Expenses 2,934,881 - 2,934,881
Other Income (Expense)
Loss on sale of assets (111,708) - (111,708)
Total Change in Net Assets (235,772) (37,500) (273,272)
Net Assets, beginning 15,416,584 37,500 15,454,084
Net Assets, ending 15,180,812$ -$ 15,180,812$
See auditor's report and notes to combined financial statements.
Exhibit B
COLLECTIVE IMPACT IN NEW HANOVER
COMBINED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
Year Ended June 30, 2023
COUNTY, INC. AND AFFILIATES
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Cash Flows from Operating Activities
Change in net assets (273,272)$
Adjustments to reconcile change in net assets to net cash
used in operating activities:
Equity in earnings (loss) from joint venture 11,979
Depreciation 412,583
Loss on sale of assets 111,708
(Increase) decrease in operating assets:
Accounts and pledges receivables (200,162)
Inventory (1,000)
Prepaid expenses (5,845)
Receivable, joint venture (11,191)
Utility deposits 1,973
Notes and loans receivable (419,608)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses 11,292
Accrued salaries and wages (32)
Accrued interest (7,500)
Tenant security deposits (13,376)
Deferred revenue (18,177)
Other liabilities 45,070
Net Cash Used In Operating Activities (355,558)
Cash Flows from Investing Activities
Acquisition of fixed assets (1,873,845)
Proceeds from sale of fixed assets 2,518,475
Net Cash Provided by Investing Activities 644,630
Cash Flows from Financing Activities
Proceeds from notes payable 1,122,000
Payments on notes payable (20,637)
Net Cash Provided by Financing Activities 1,101,363
Net Increase in Cash, Cash Equivalents, and Restricted Cash 1,390,435
Cash, Cash Equivalents, and Restricted Cash, beginning 2,897,041
Cash, Cash Equivalents, and Restricted Cash, ending 4,287,476$
Reconciliation of cash, cash equivalents, and restricted cash reported
on the combined statement of financial position to cash, cash equivalents,
and restricted cash shown above:
Cash and cash equivalents 4,217,547$
Restricted deposits and funded reserves 69,929
Cash and Cash Equivalents 4,287,476$
Supplementary Disclosure of Cash Flow Information
Cash payments for interest 86,648$
See auditor's report and notes to combined financial statements.
Exhibit C
COLLECTIVE IMPACT IN NEW HANOVER
COMBINED STATEMENT OF CASH FLOWS
Year Ended June 30, 2023
COUNTY, INC. AND AFFILIATES
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COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Collective Impact in New Hanover County, Inc.
The Collective Impact in New Hanover County, Inc. (“Cape Fear Collective”) was organized in North Carolina
in 2019 as a nonprofit 501(c)(3) organization. The Organization was formed to drive equitable system change
in Southeastern North Carolina by collaborating with community partners to leverage local assets, illuminate
actionable insights, and catalyze innovative programming. The Organization established the following entities
in order to utilize private sector capital to further the tax -exempt, charitable purpose of the Organization.
Cape Fear Collective Ventures, LLC
Cape Fear Collective Ventures, LLC is a North Carolina limited liability company. Cape Fear Collective is the
sole member.
Cape Fear Collective Impact Opportunity 1, LLC
Cape Fear Collective Impact Opportunity 1, LLC is a North Carolina limited liability company organized for
the purpose of investing in the acquisition, rehabilitation, or new construction of Qualified Housing Projects in
New Hanover and Pender County, North Carolina. Cape Fear Collective Impact Opportunity 1, LLC has Class
A and Class B membership interests. Class B members are nonvoting, except as set forth in the operating
agreement. Cape Fear Collective is the sole Class A member.
Cape Fear Collective Impact Opportunity 2, LLC
Cape Fear Collective Impact Opportunity 2, LLC is a North Carolina limited liability company organized for
the purpose of investing in the acquisition, rehabilitation, or new construction of Qualified Housing Projects in
New Hanover and Pender County, North Carolina. Cape Fear Collective Impact Opportunity 2, LLC has Class
A and Class B membership interests. Class B members are nonvoting, except as set forth in the operating
agreement. Cape Fear Collective Ventures, LLC , which is wholly-owned by Cape Fear Collective, is the sole
Class A member.
Cape Fear Collective Capital, LLC
Cape Fear Collective Capital, LLC is a North Carolina limited liability company. Cape Fear Collective is the
sole member.
Cape Fear Affordable Housing, LLC
Cape Fear Affordable Housing, LLC is a North Carolina limited liability company. Cape Fear Collective
Capital, LLC, which is wholly-owned by Cape Fear Collective, is the sole member.
Mission Driven Motors, LLC
Mission Driven Motors, LLC is a North Carolina limited liability company. Cape Fear Collective Capital, LLC,
which is wholly-owned by Cape Fear Collective, is the sole member.
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COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [cont’d]
Basis of Presentation
The accompanying combined financial statements incorporate the accounts of the following entities
(collectively, “the Organizations”):
• Collective Impact in New Hanover County, Inc.
• Cape Fear Collective Ventures, LLC
• Cape Fear Collective Impact Opportunity 1, LLC
• Cape Fear Collective Impact Opportunity 2, LLC
• Cape Fear Collective Capital, LLC
• Cape Fear Affordable Housing, LLC
• Mission Driven Motors, LLC
The above listed entities are related through common ownership or manageme nt. The interest owned by the
unaffiliated members is referred to in the accompanying combined financial statements as the non -controlling
interest and represents the unaffiliated members’ proportionate share of equity and net results from operations.
All significant inter-organization balances and transactions have been eliminated.
The combined financial statements are prepared on the accrual basis of accounting in accordance with U.S.
generally accepted accounting principles. The accrual method records revenue when earned and expenses when
incurred. As a result, receivables are recorded as assets, and obligations due are shown as liabilities.
Net Assets
The Organizations report information regarding their financial position and activities according to two (2) net
asset categories as follows:
Net assets without donor restrictions: Net assets that are not subject to donor-imposed restrictions and may be
expended for any purpose in performing the primary objectives of the Organizations. The Org anizations’ Board
may designate assets without restrictions for specific operational purposes from time to time.
Net assets with donor restrictions: Net assets subject to stipulations imposed by donors and grantors, some
donor restrictions are temporary in nature; those restrictions will be met by actions of the Organizations, or by
the passage of time. Other donor restrictions may be perpetual in nature, whereby the donor has stipulated the
funds be maintained in perpetuity.
Cash, Cash Equivalents, Restricted Cash, and Funded Reserves
For purposes of reporting the combined statement of cash flows, the Organizations include all cash investment
and certificates of deposit with a maturity of three (3) months or less as cash, cash equivalents, restricted cash,
and funded reserves. Restricted cash includes funds held by the property management company and tenant
security deposits.
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COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [cont’d]
Investment in Joint Venture
In January 2022, Cape Fear Collective Capital, LLC entered into an agreement with Brick Capital Community
Development Corporation to form a joint venture, Brick Capital and Cape Fear Collective Housing Initiative,
LLC, to further the tax-exempt, charitable purposes of the joint venture’s members by promoting affordable
housing to low-income individuals in the Lee County region of North Carolina and to engage in ot her charitable
activities consistent with the charitable mission of its members. Cape Fear Collective Capital, LLC has a 50%
member interest in the joint venture and accounts for its investment in the joint venture using the equity method.
Accounts Receivable
Accounts receivable are primarily comprised of amounts due to the Organizations for program services and
rent. The Organizations determine the past due status of receivables based on the contractual terms of the
original agreement or invoice, timing for payment and past due amounts, collection history, and other economic
factors. Interest is not normally charged on overdue accounts. The Organizations write off receivables when
they become uncollectible.
Refundable Advances, Grants
Conditional grants are recognized as revenue at the time the conditions of the grant are substantially met. Any
conditional grant amounts received for which the conditions have not yet been met are recorded as refundable
advances.
Property and Equipment
The Organizations capitalize acquisitions of property and equipment, including software purchases, at cost.
The cost of maintenance and repairs is expensed as incurred. Expenditures which materially increase the
property lives of the assets are capitalized. Upon retirement or other disposition of depreciable properties, the
cost and related accumulated depreciation are removed from the property accounts and any gain or loss is
reflected in income.
Depreciation is provided over the estimated useful lives of th e individual assets by the straight-line method.
The estimated useful loves used in the computation of depreciation are as follows:
Computer equipment 3 years
Buildings and building improvements 5 to 27.5 years
Accounting principles generally accepted in the United States of America require that long -lived assets and
certain identifiable tangible assets held and used by an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amounts of an asset may not be recoverable. The
Organizations did not identify any long-lived assets as being impaired during the year ended June 30, 2023.
Advertising
Advertising costs are charged to operations when incurred. Advertising costs expensed were $6,288 in 2023.
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COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [cont’d]
Revenue Recognition
The Organizations present its combined financial statements using the accrual basis of accounting, recognizing
revenue when earned and expenses when incurred. The Organizations derive revenue from grants,
contributions, service contracts, management fees, and rental income. Program ser vice revenue is recognized
when the services are performed. Contributions are recognized when cash, securities or other assets,
unconditional promises to give, or notification of a beneficial interest is received. Grants are reported as
contributions if the transaction is nonreciprocal and as program revenue if the transaction is reciprocal.
Conditional promises to give are not recognized until the conditions on which they depend have been
substantially met.
Program services have identified performance ob ligation(s) or are satisfied over time. Payment is due as
services are rendered. Program revenue collected in advance is reported as deferred revenue.
Service contracts – The Organizations provide data science expertise and support services. Revenue is
recognized based on the identified performance obligations within the agreement. Unearned revenue amounts
are reported as deferred revenue.
Management fees – The Organizations provide company management services for the LLCs in which the
Organizations are a member. Revenue is recognized based on the period for which services are provided.
Unearned revenue amounts are reported as deferred revenue. Management fees between the combined entities
have been eliminated.
Grant revenue that is nonreciprocal and unconditional is recognized as support revenue upon the awarding of
the grant as increases in net assets with or without donor restrictions, depending on the existence and/or nature
of any donor restrictions. When the time restriction expires or the Organiz ations incur expenditures in
compliance with purpose restrictions, revenue is released from restriction. Conditional grants are recognized
as revenue at the time the conditions of the grant are substantially met. Any conditional grant amounts received
for which the conditions have not yet been met are recorded as refundable advances.
Contributions and promises to give are reported as increases in net assets with or without donor restrictions,
depending in the existence and/or nature of any donor restricti ons. Support that is restricted by the donor is
reported as an increase in net assets without donor restrictions if the restriction expires in the reporting period
in which the support is recognized, All other donor-restricted support is reported as an increase in net assets
with donor restrictions, When a restriction expires (that is, when a stipulated time restriction ends or purpose
restriction is accomplished), net assets with donor restrictions are reclassified to net assets without donor
restrictions and reported in the combined statement of activities and changes in net assets as net assets released
from restrictions,
Rental income is recognized as rentals become due. Rental payments secured in advance are deferred until
earned. All leases between the Organizations and the tenants are short-term operating leases.
Deferred revenue consists of monies received for exchange activities that have been received for a future period
but not yet recognized as revenue based on the Organizations’ revenue recog nition policy. The Organizations
record deferred revenue when cash has been received, but the corresponding revenue has not yet been earned .
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COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [cont’d]
Use of Estimates
The preparation of combined financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
combined financial statements and the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Income Tax Status
The Organizations are a not-for-profit organizations that are exempt from federal and state income taxes under
Section 501(c)(3) of the Internal Revenue Code and the North Carolina Department of Revenue. Contributions
to the Organizations are tax deductible. Any federal or state income taxes associated with the combined LLCs
are the responsibility of the individual members. Therefore, no provision for income taxes has been made in
the accompanying combined financial statements.
It is the Organizations’ policy to evaluate all tax positions to identify any that may be considered uncertain. All
identified material tax positions are assessed and measured by a more-likely-than-not threshold to determine if
the tax position is uncertain and what, if any, the effect of the uncertain position may have on the combined
financial statements. No material uncertain tax positions were identified for 2023. Any changes in the amount
of a tax position will be recognized in the period the change occurs.
As of June 30, 2023, and including the previous three (3) years considering extensions, the Organizations’
income tax returns are open and subject to examination by tax authorities with relevant jurisdiction. Should
such an examination take place, management does not anticipate any significant issues related to the open
years.
2. CONCENTRATION OF CREDIT RISK
The Organizations occasionally maintain deposits in excess of federally insured limits. The Organizations
maintain its cash balances in reputable financial institutions in th e United States of America, and accounts are
insured by the Federal Deposit Insurance Corporation up to $250,000 at each financial institution. At June 30,
2023, the Organizations’ uninsured cash balances were:
Collective Impact in New Hanover County, Inc. $ 701,833
Cape Fear Collective Impact Opportunity 1, LLC 1,035,724
Cape Fear Collective Impact Opportunity 2, LLC 736,516
Cape Fear Affordable Housing, LLC 215,824
Cape Fear Collective Capital, LLC 374
$ 2,690,271
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COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
3.SERVICE CONTRACTS
The Organizations provide data science expertise, including data analytic dashboards and related support
services. Revenue is recognized when the performance obligations of providing the services are met. Unearned
revenue amounts are reported as deferred revenue. The beginning and ending contract balances were as follows:
June 30, July 1,
2023 2022
Receivables $ 121,405 $ 3,991
Deferred revenue (advances and deposits) $ --- $ 173,735
4.PROPERTY, EQUIPMENT, AND SOFTWARE
Property and equipment consisted of the following, as of June 30, 2023:
Cape Fear
Collective LLCs Total
Land $ --- $ 4,799,625 $ 4,799,625
Buildings --- 8,504,634 8,504,634
Building improvements --- 983,421 983,421
Office equipment 2,214 --- 2,214
Software 125,000 --- 125,000
127,214 14,287,680 14,414,894
Less: accumulated depreciation 34,255 540,926 575,181
Total property and equipment, net $ 92,959 $ 13,746,754 $13,839,713
Depreciation expense for the year ended June 30, 2023, was $412,583.
5.LIQUIDITY
The Organizations’ financial assets available for general expenditure, that is, without donor or other restrictions
limiting their use within one year of the combined statements of support, revenue and expenses date, are as
follows:
Cape Fear
Collective LLCs Total
Cash and cash equivalents $ 1,107,204 $ 3,110,343 $ 4,217,547
Accounts receivable 92,954 150,221 243,175
Receivable, joint venture 13,025 4,869 17,894
Total financial assets available to meet
expenditures within the next twelve
(12) months $ 1,213,183 $ 3,265,433 $ 4,478,616
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Page 7
COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
6. NET ASSETS
Net assets with donor restrictions
As of June 30, 2023, there were no net assets with donor restrictions as to purpose or the passage of time .
Equity transactions
Both Cape Fear Collective Impact Opportunity 1, LLC and Cape Fear Collective Impact Opportunity 2, LLC
have Class A and B membership interests with Cape Fear Collective as the sole Class A member, which is
combined and included in net assets without donor restrictions within the accompanying combined financial
statements. Class B members are nonvoting except as set forth in the respective operating agreements. Class B
member interests are shown as non-controlling interests within the accompanying combined financial
statements.
Cape Fear Collective Impact Opportunity 1, LLC
During the year ended June 30, 2023, no additional Class B member units were issued.
Preferred return – Class B member interests include a preferred return. The preferred return means, with
respect to each holder of Class B units, an amount equal to twenty dollars ($20) per Class B unit on or before
December 31, 2021, and accruing after December 31, 2021, at a rate of 2% per annum (prorated for any partial
year), compounding quarterly, on the initial capital contribution per Class B unit of $1,000 plus any accrued
but unpaid preferred return. The preferred return with respect to any capital contribution shall accrue from and
after the date the associated capital contribution is made to the Organizations.
Redemption rights – Class B member interests include redemption rights based on a quarterly redemption rights
based on a quarterly redemption schedule starting March 1, 2021. The redemption price per Class B unit starts
at $1,020 and after December 31, 2021, increases by 0.05% each quarter. On any redemption date prior to
December 1, 2023, the Organizations may, but are not required to, redeem any or all of the Class B units at the
applicable redemption price. Beginning on December 1, 2023, and on each redemption date thereafter, ending
on December 1, 2025, the Organizations must use any and all available ca sh in excess of $500,000 through
December 1, 2024 and $250,000 thereafter, excluding any amounts restricted with respect to its permissible
use under the terms of an agreement. As of June 30, 2023, no Class B units have been redeemed.
Cape Fear Collective Impact Opportunity 2, LLC
Effective January 25, 2022, Class B members made all scheduled contributions per the operating agreement.
Preferred return – Class B member interests include a preferred return. The preferred return means, with
respect to each holder of Class B units, an amount equal to twenty dollars ($20) per Class B unit on or before
January 31, 2023, and accruing after January 31, 2023, at a rate of 2% per annum (prorated for any partial
year), compounding quarterly, on the initial capital contribution per Class B unit of $1,000 plus any accrued
but unpaid preferred return. The preferred return with respect to any capital contribution shall accrue from and
after the date the associated capital contribution is made to the Organizations.
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Page 8
COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
6.NET ASSETS [cont’d]
Cape Fear Collective Impact Opportunity 2, LLC [cont’d]
Redemption rights – Class B member interests include redemption rights based on a quarterly redemption rights
based on a quarterly redemption schedule starting April 30, 2022. The redemption price per Class B unit starts
at $1,020 and after January 31, 2023, increases by 0.05% each quarter. On any quarterly redemption date, the
Organizations may, but are not required to, redeem any or all of the Class B units at the applicable redemption
price; provided, however on the redemption dates of January 31, 2025; January 31, 2027; and January 31, 2029,
the Organizations must use any and all available cash to redeem Class B units. Available cash means the
aggregate amount of unrestricted cash on hand or in bank, money market, or similar accounts of the
Organizations in excess of an amount equal to 10% of the book value of all the Organizations’ property (not
reduced for depreciation or amortization), including cash, as of each applicable date that available cash must
be determined. As of June 30, 2023, no Class B units have been redeemed.
7.DEBT
During the year ended June 30, 2022, the Organizations issued multiple promissory notes, under Collective
Capital, LLC, totaling $1,850,000. The promissory notes have a term of five (5) years with maturity dates
ranging from August to December 2026. Interest accrues on the principal amount of the notes in an amount of
2% per annum, payable semi-annually. During the year ended June 30, 2023, interest expense on the note
payables totaled $37,000. As of June 30, 2023, accrued interest totaled $6,750. The principal amount of the
notes are payable at maturity in the year ending June 30, 2027.
The Organizations also have note payable to a bank,
payable in monthly installments of $6,236 including
interest at 4.5%, matures July 2047. Secured by real
property. $ 1,101,363
Less: current portion (25.898)
$ 1,075,465
Long-term debt maturities are as follows:
2024 $ 25.898
2025 27,087
2026 28,332
2027 29,633
2028 30,995
Thereafter 986,418
$ 1,101,363
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Page 9
COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
8.INVESTMENT IN JOINT VENTURE
The following summarizes the condensed financial activity of the Joint Venture, as of and for the year ended
June 30, 2023:
Total assets $ 508,460
Total liabilities 522,748
Net assets $ (14,288)
Revenue $ 5,000
Net loss $ (23,958)
The Organizations’ interest is as follows:
Share of net loss $ (11,979)
9.PAID TIME OFF
The Organizations’ policy does not allow employees to accrue time-off with no compensation for PTO upon
termination.
10.FUNCTIONAL EXPENSES
The combined financial statements report certain categories of expenses that are attributable to one or more
program or supporting functions of the Organizations. Accordingly, certain costs have been allocated among
program and supporting services. Expenses that can be identified with a specific program and support service
are allocated directly. Other expenses are allocated by function based on estimates of employees’ time incurred
and usage of resources.
Supporting Services
Administrative Fundraising Program Total
Salaries and benefits $ 194,878 $ 38,975 $ 1,065,332 $ 1,299,185
Professional services 64,808 --- --- 64,808
Advertising and promotion 4,653 --- 1,635 6,288
Office expenses 10,255 --- --- 10,255
Information technology 7,813 --- 35,590 43,403
Occupancy 184 36 1,005 1,225
Travel and meetings 1,421 1,422 12,952 15,795
Contract services 2,790 930 89,281 93,001
Community programs --- --- 13,504 13,504
Professional development 5,122 --- --- 5,122
Healthy opportunity pilot --- --- (657)(657)
Bank fees 482 --- --- 482
Other expenses 10,003 --- --- 10,003
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Page 10
COLLECTIVE IMPACT IN NEW HANOVER COUNTY, INC.
AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2023
10. FUNCTIONAL EXPENSES [cont’d]
Supporting Services
Administrative Fundraising Program Total
Other administrative expenses $ 191,454 $ --- $ --- $ 191,454
Operating and maintenance --- --- 486,756 486,756
Property taxes and insurance 10,276 2,055 193,195 205,526
Depreciation 4,126 --- 408,457 412,583
Interest expense --- --- 79,148 79,148
$ 508,265 $ 43,418 $ 2,383,198 $ 2,934,881
11. SUBSEQUENT EVENTS
Management has evaluated events and transactions for potential recognition or disclosure through April 15,
2024, which is the date the combined financial statements were available to be issued. No material subsequent
events required recognition or addition al disclosures in these combined financial statements.
12. NOTES RECEIVABLE
At June 30, 2023, the Company has a note receivable from a related party in the amount of $265,000. The
note bears interest at 4.00% and matures on April 1, 2024 at which time the unpaid principal balance and all
accrued unpaid interest will be due and payable.
The Company also has a note receivable from an unrelated party in the amount of $150,000. The note bears
interest at 4.00% and matures on December 31, 2023 at which time the unpaid principal balance and all
accrued unpaid interest will be due and payable.
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COMBINING SUPPLEMENTARY INFORMATION
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Cape Fear
Collective Affordable Mission Driven Collective Impact Impact Collective Eliminating
501(c)(3)Housing Motors Capital Opportunity 1 Opportunity 2 Ventures Subtotal Entries Total
ASSETS
Current Assets
Cash and cash equivalents $ 1,107,204 473,636$ 62,193$ 250,374$ 1,295,102$ 1,029,018$ 20$ 3,110,343$ 4,217,547$
Accounts receivable, net 92,954 850 138,917 - 30 10,424 - 150,221 243,175
Inventory - - - - - 1,000 - 1,000 1,000
Prepaid expenses 2,012 7,503 - - 9,783 44,033 - 61,319 63,331
Receivable, joint venture 13,025 - - 4,869 - - - 4,869 17,894
Interfund receivables (payables) 399,814 (670,582) (286,711) 1,065,161 (82,738) (372,421) (52,523) (399,814) -
Total Current Assets 1,615,009 (188,593) (85,601) 1,320,404 1,222,177 712,054 (52,503) 2,927,938 4,542,947
Other Assets
Restricted cash:
Funds held by Property Management Company - 1,000 - - 5,980 725 - 7,705 7,705
Tenant security deposits held by
Property Management Company - 9,199 - - 11,044 41,981 - 62,224 62,224
Total restricted cash - 10,199 - - 17,024 42,706 - 69,929 69,929
Utility deposits - - - - 1,453 55 - 1,508 1,508
Notes & loans receivable - - - 419,608 - - - 419,608 419,608
Investment in joint venture - - - (7,144) - - - (7,144) (7,144)
- 10,199 - 412,464 18,477 42,761 - 483,901 483,901
Fixed assets, net of accumulated
depreciation and amortization 92,959 1,332,565 - - 2,372,889 10,041,300 - 13,746,754 13,839,713
Total Assets 1,707,968$ 1,154,171$ (85,601)$ 1,732,868$ 3,613,543$ 10,796,115$ (52,503)$ 17,158,593$ -$ 18,866,561$
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts payable and accrued expenses 12,231$ 12,601$ (540)$ 1,048$ 14,279$ 56,196$ 900$ 84,484$ 96,715$
Accrued salaries and wages 26,402 - - - - - - - 26,402
Accrued interest - - - 6,750 - - - 6,750 6,750
Deferred revenue, current 497,225 - - - - - - - 497,225
Other liabilities 45,070 - - - - - - - 45,070
Total Current Liabilities 580,928 12,601 (540) 7,798 14,279 56,196 900 91,234 672,162
Noncurrent Liabilities -
Tenant security deposits - 9,199 - - 11,044 41,981 - 62,224 62,224
Notes payable - 1,101,363 - 1,850,000 - - - 2,951,363 2,951,363
Total Noncurrent Liabilities - 1,110,562 - 1,850,000 11,044 41,981 - 3,013,587 3,013,587 -
Total Liabilities 580,928 1,123,163 (540) 1,857,798 25,323 98,177 900 3,104,821 - 3,685,749
Net Assets and Unrestricted Members' Equity
Without donor restrictions:
Net assets without donor restrictions 1,127,040 31,008 (85,061) (124,930) 287,058 42,792 (53,403) 97,464 1,224,504
Unrestricted members' equity (deficit), non-controlling 3,301,162 10,655,146 13,956,308 13,956,308
Total net assets without donor restrictions #31,008 (85,061) (124,930) 3,588,220 10,697,938 (53,403) 14,053,772 15,180,812
Total Net Assets and Members' Equity 1,127,040 31,008 (85,061) (124,930) 3,588,220 10,697,938 (53,403) 14,053,772 15,180,812
Total Liabilities and Net Assets 1,707,968$ 1,154,171$ (85,601)$ 1,732,868$ 3,613,543$ 10,796,115$ (52,503)$ 17,158,593$ 18,866,561$
See auditor's report.
Limited Liability Companies
Schedule 1
COLLECTIVE IMPACT IN NEW HANOVER
COUNTY, INC. AND AFFILIATES
COMBINING SCHEDULE OF FINANCIAL POSITION
June 30, 2023
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Without Donor With Donor Affordable Mission Driven Collective Impact Impact Collective Eliminating Combined
Restrictions Restrictions Subtotal Housing Motors Capital Opportunity 1 Opportunity 2 Ventures Subtotal Entries Totals
Revenue
Contributions 561,204$ -$ 561,204$ -$ -$ -$ -$ -$ -$ -$ -$ 561,204$
Service contracts 303,600 - 303,600 - - - - - - - - 303,600
Management fees 351,400 - 351,400 - - - - - - - (341,000) 10,400
Rent income - - - 126,127 - - 141,541 618,769 - 886,437 - 886,437
Interest income 10,343 - 10,343 430 48 4,879 407 275 - 6,039 - 16,382
Grant revenue 984,467 - 984,467 76,509 - - - 84,059 - 160,568 (160,568) 984,467
Other income 25 - 25 - 10,455 - - 12,326 - 22,781 - 22,806
Equity in net earnings (loss) of joint venture - - - - - (11,979) - - - (11,979) - (11,979)
Net assets released from restriction 37,500 (37,500) - - - - - - - - - -
Total revenue, gains, and
other support 2,248,539 (37,500) 2,211,039 203,066 10,503 (7,100) 141,948 715,429 - 1,063,846 (501,568) 2,773,317
Expenses
Salaries and benefits 1,299,185 - 1,299,185 - - - - - - - - 1,299,185
Professional services 64,808 - 64,808 - - - - - - - - 64,808
Advertising and promotion 6,288 - 6,288 - - - - - - - - 6,288
Office expenses 10,255 - 10,255 - - - - - - - - 10,255
Information technology 43,403 - 43,403 - - - - - - - - 43,403
Occupancy 1,225 - 1,225 - - - - - - - - 1,225
Travel and meetings 15,795 - 15,795 - - - - - - - - 15,795
Contract services 93,001 - 93,001 - - - - - - - - 93,001
Community programs 13,504 - 13,504 - - - - - - - - 13,504
Professional development 5,122 - 5,122 - - - - - - - - 5,122
Healthy opportunity pilot expenses (657) - (657) - - - - - - - - (657)
Bank fees 482 - 482 - - - - - - - - 482
Grants awarded 160,568 - 160,568 - - - - - - - (160,568) -
Other expenses 10,003 - 10,003 - - - - - - - - 10,003
Management fee, company administration - - - 12,000 5,200 19,800 81,000 223,000 - 341,000 (341,000) -
Other administrative expenses - - - 11,567 80,314 3,230 44,159 48,398 3,786 191,454 - 191,454
Operating and maintenance - - - 47,576 656 1,022 127,754 306,353 395 483,756 - 483,756
Property taxes and insurance 8,674 - 8,674 25,874 - - 41,773 129,205 - 196,852 - 205,526
Depreciation 25,738 - 25,738 38,496 - - 78,054 270,295 - 386,845 - 412,583
Interest expense - - - 42,148 - 37,000 - - - 79,148 - 79,148
Total Expenses 1,757,394 - 1,757,394 177,661 86,170 61,052 372,740 977,251 4,181 1,679,055 (501,568) 2,934,881
Other Income (Expense)
Gain (loss) on sale of fixed assets - - - 28,041 - - 43,430 (183,179) - (111,708) - (111,708)
Change in Net Assets 491,145 (37,500) 453,645 53,446 (75,667) (68,152) (187,362) (445,001) (4,181) (726,917) - (273,272)
Net Assets (Deficit), beginning 635,895 37,500 673,395 (22,438) (9,394) (56,778) 3,775,582 11,142,939 (49,222) 14,780,689 - 15,454,084
Net Assets (Deficit), ending 1,127,040$ -$ 1,127,040$ 31,008$ (85,061)$ (124,930)$ 3,588,220$ 10,697,938$ (53,403)$ 14,053,772$ -$ 15,180,812$
See auditor's report.
Cape Fear Collective 501(c)3 Limited Liability Companies
Schedule 2
COLLECTIVE IMPACT IN NEW HANOVER
COUNTY, INC. AND AFFILIATES
COMBINING SCHEDULE OF ACTIVITIES AND CHANGES IN NET ASSETS
Year Ended June 30, 2023
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Cape Fear Affordable Mission Driven Collective Impact Impact Collective Eliminating Combined
Collective Housing Motors Capital Opportunuity 1 Opportunity 2 Ventures Subtotal Entries Totals
Cash Flows from Operating Activities
Change in net assets before other changes 453,645$ 53,446$ (75,667)$ (68,152)$ (187,362)$ (445,001)$ (4,181)$ (726,917)$ -$ (273,272)$
Adjustments to reconcile change in net assets to net cash
provided by (used in) operating activities:
Equity in (income) loss from joint venture - - - 11,979 - - - 11,979 - 11,979
Depreciation 25,738 38,496 - - 78,054 270,295 - 386,845 - 412,583
(Gain) loss on sale of fixed assets - (28,041) - - (43,430) 183,179 - 111,708 - 111,708
(Increase) decrease in operating assets:
Accounts and pledges receivables (51,463) (850) (138,917) 1,522 (30) (10,424) - (148,699) - (200,162)
Inventory - - - - (1,000) - (1,000) - (1,000)
Prepaid expenses (974) (7,499) - - 4,055 (1,427) - (4,871) - (5,845)
Receivable, joint venture (10,425) - - (766) - - - (766) - (11,191)
Utility deposits - - - - 1,973 - - 1,973 - 1,973
Notes and loans receivable - - - (419,608) - - - (419,608) - (419,608)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses 620 11,676 (6,848) (3,548) 8,674 (182) 900 10,672 - 11,292
Accrued salaries and wages (32) - - - - - - - - (32)
Accrued interest - - - (7,500) - - - (7,500) - (7,500)
Tenant security deposits - 9,199 - - (1,491) (21,084) - (13,376) - (13,376)
Deferred revenue (18,177) - - - - - - - - (18,177)
Other liabilities 45,070 - - - - - - - - 45,070
Net Cash Provided by (Used in) Operating Activities 444,002 76,427 (221,432) (486,073) (139,557) (25,644) (3,281) (799,560) - (355,558)
Cash Flows from Investing Activities
Acquisition of fixed assets - (1,231,259) - - (33,041) (609,545) - (1,873,845) - (1,873,845)
Proceeds from sale of fixed assets - 433,503 - - 1,159,765 925,207 - 2,518,475 - 2,518,475
Net Cash Provided by (Used in) Investing Activities - (797,756) - - 1,126,724 315,662 - 644,630 - 644,630
Cash Flows from Financing Activities
Capital contributions, non-controlling interest - - - - - - - - - -
Proceeds from notes payable - 1,122,000 - - - - - 1,122,000 - 1,122,000
Payments on notes payable - (20,637) - - - - - (20,637) - (20,637)
Interfund receivables (payables)(142,832) 102,765 283,625 (419,220) (4,540) 176,951 3,251 142,832 - -
Net Cash Provided by (Used in) Financing Activities (142,832) 1,204,128 283,625 (419,220) (4,540) 176,951 3,251 1,244,195 - 1,101,363
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 301,170 482,799 62,193 (905,293) 982,627 466,969 (30) 1,089,265 - 1,390,435
Cash, Cash Equivalents, and Restricted Cash, beginning 806,034 1,036 - 1,155,667 329,499 604,755 50 2,091,007 - 2,897,041
Cash, Cash Equivalents, and Restricted Cash, ending 1,107,204$ 483,835$ 62,193$ 250,374$ 1,312,126$ 1,071,724$ 20$ 3,180,272$ -$ 4,287,476$
Reconciliation of cash, cash equivalents, and restricted cash
reported on the combined statement of financial position to
cash, cash equivalents, and restricted cash shown above:
Cash and cash equivalents 1,107,204$ 473,636$ 62,193$ 250,374$ 1,295,102$ 1,029,018$ 20$ 3,110,343$ -$ 4,217,547$
Restricted deposits and funded reserves - 10,199 - - 17,024 42,706 - 69,929 - 69,929
Cash and Cash Equivalents 1,107,204$ 483,835$ 62,193$ 250,374$ 1,312,126$ 1,071,724$ 20$ 3,180,272$ -$ 4,287,476$
Supplemental Disclosure of Cash Flow Information
Cash payments for interest -$ 42,148$ -$ 44,500$ -$ -$ -$ 86,648$ -$ 86,648$
See auditor's report.
Limited Liability Companies
Schedule 3
COLLECTIVE IMPACT IN NEW HANOVER
COUNTY, INC. AND AFFILIATES
COMBINING SCHEDULE OF CASH FLOWS
Year Ended June 30, 2023
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