PREGNANCY ASSISTANCE CENTER NORTH, INC ......4 PREGNANCY ASSISTANCE CENTER NORTH, INC. STATEMENTS OF FINANCIAL POSITION December 31, 2019 and 2018 2019 2018 ASSETS CURRENT ASSETS Cash

PREGNANCY ASSISTANCE CENTER NORTH, INC.

FINANCIAL STATEMENTS

WITH INDEPENDENT AUDITOR’S REPORT

December 31, 2019 and 2018

Contents

Page

Independent Auditor’s Report 2

Statements of Financial Position 4

Statements of Activities 5

Statement of Functional Expenses 6

Statements of Cash Flows 8

Notes to Financial Statements 9

2

Independent Auditor’s Report Board of Directors Pregnancy Assistance Center North, Inc. The Woodlands, Texas Report on the Financial Statements

We have audited the accompanying financial statements of Pregnancy Assistance Center North, which comprise the statements of financial position as of December 31, 2019 and 2018, and the statements of activities, statements of functional expenses and statements of cash flows for the years then ended and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these 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 the financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

10515 Saddlehorn Trail, Houston, Texas 77064 Phone 281-890-3042

3

Independent Auditor’s Report (continued) An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including assessment of the risks of material misstatement of the 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 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 the significant accounting estimates made by management, as well as evaluating the overall presentation of the 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 financial statements referred to above present fairly, in all material respects, the financial position of Pregnancy Assistance Center North as of December 31, 2019 and 2018, and the changes in net assets, and the functional expenses, and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

May 30, 2020 Houston Texas

4


STATEMENTS OF FINANCIAL POSITION

December 31, 2019 and 2018

2019 2018

ASSETS

CURRENT ASSETS

Cash 335,595$ 281,785$

Prepaid Expenses 1,994 2,022

TOTAL CURRENT ASSETS 337,589.00 283,807

FIXED ASSETS

Property, Plant, and Equipment - Net 620,081 655,527

OTHER ASSETS

Rental Lease and Utility Deposit 4,464 4,464

TOTAL ASSETS 962,134$ 943,798$

LIABILITIES

CURRENT LIABILITIES

Accounts Payable 6,712$ 6,330$

TOTAL CURRENT LIABILITIES 6,712 6,330

NET ASSETS

With Donor Restrictions 50,143 85,536

Without Donor Restrictions 905,279 851,932

TOTAL NET ASSETS 955,422 937,468

TOTAL LIABILITIES AND NETASSETS 962,134$ 943,798$

See independent auditor's report and notes to financial statements

5


STATEMENTS OF ACTIVITIES

For the years ended December 31, 2019 and 2018

2019 2018

CHANGE IN NET ASSETS WITHOUT DONOR RESTRICTIONS

REVENUES AND GAINS:

Contributions/Fundraising 1,027,270$ 934,838$

Thrift Store 156,835 144,793

Grants 41,250 79,324

Other Income 5,200 3,746

TOTAL REVENUE AND GAINS WITHOUT DONOR RESTRICTIONS 1,230,555 1,162,701

NET ASSETS RELEASED FROM RESTRICTIONS

Satisfaction of program restrictions 71,748 96,889

TOTAL REVENUES, GAINS, AND OTHER SUPPORT

WITHOUT DONOR RESTRICTIONS 1,302,303 1,259,590

EXPENSES AND LOSSES:

Program Expenses 914,430 906,684

General & Administrative 118,475 111,840

Thrift Store 110,897 131,589

Fundraising Expense - Note 3 105,154 115,955

Total Expenses 1,248,956 1,266,068

TOTAL EXPENSES AND LOSSES 1,248,956 1,266,068

INCREASE (DECREASE) IN NET ASSETS WITHOUT DONOR RESTRICTIONS 53,347 (6,478)

Changes in Net Assets with Donor Restrictions

Contributions 36,355 97,960

Net assets released from restrictions 71,748 96,889

Increase (Decrease) in Net Assets With Donor Restrictions (35,393) 1,071

Decrease in Total Net Assets 17,954 (5,407)

Net Assets, Beginning of Year 937,468 942,875

Net Assets, End of Year 955,422$ 937,468$


6


STATEMENT OF FUNCTIONAL EXPENSES

For the year ended December 31, 2019

Program Mangt & Thrift

Services General Fundraising Store Total

Advertising 3,141$ -$ -$ 2,654$ 5,795$

Affiliation Fees 2,334 2,334

Audit 6,956 6,956

Cleaning & Maintenance 10,902 1,920 5,607 18,429

Compensation 408,258 63,094 93,164 81,391 645,907

Conferences & Training 5,445 5,445

Cost of Direct Benefit to Donors 116,017 116,017

Credit Card Fees 6,163 2,515 8,678

Events 3,165 3,165

Educational & Counseling 27,632 27,632

Equipment Rental & Maintenance 17,923 8,132 106 26,161

Marketing and Mailings 6,073 6,073

Insurance 18,189 2,053 277 5,157 25,676

Office Supplies & Expense 5,008 6,181 11,189

Postage 1,899 1,899

Utilities 14,334 1,570 3,557 19,461

Rent 136,553 8,460 145,013

Repairs & Maintenance 17,228 17,228

Supplies 5,208 53 3,711 8,972

Sonogram & Testing Supplies 42,267 42,267

Well Women Expenses 24,367 24,367

Telephone 8,351 4,239 1,140 13,730

Depreciation 43,265 3,990 2,778 50,033

Other 8,008 3,765 2,475 2,281 16,529

914,430$ 118,475$ 105,154$ 110,897$ 1,248,956$


7


STATEMENT OF FUNCTIONAL EXPENSES

For the year ended December 31, 2018

Program Mangt & Thrift

Services General Fundraising Store Total

Advertising 2,728$ -$ 5,283$ 3,072$ 11,083$

Affiliation Fees 2,222 - - - 2,222

Audit - 6,100 - - 6,100

Cleaning & Maintenance 13,569 1,436 - 3,411 18,416

Compensation 422,349 63,056 89,533 100,171 675,109

Conferences & Training 8,294 - - 2,988 11,282

Cost of Direct Benefit to Donors 127,121 - - - 127,121

Events - 240 9,645 - 9,885

Educational & Counseling 24,482 - - - 24,482

Equipment Rental & Maintenance 17,797 9,528 - - 27,325

Mailings - - 11,213 - 11,213

Insurance 17,860 2,118 281 4,950 25,209

Office Supplies & Expense 5,825 3,035 - - 8,860

Postage - 2,000 - 7 2,007

Utilities 13,061 1,055 - 2,927 17,043

Rent 136,637 8,011 - - 144,648

Repairs & Maintenance 2,398 540 - 2,713 5,651

Supplies 3,083 271 - 4,058 7,412

Sonogram & Testing Supplies 51,125 - - - 51,125

Well Women Expenses 17,666 - - - 17,666

Telephone 9,522 3,980 - 1,139 14,641

Depreciation 15,291 1,330 - 916 17,537

Other 15,654 9,140 - 5,237 30,031

906,684$ 111,840$ 115,955$ 131,589$ 1,266,068$


8


STATEMENTS OF CASH FLOWS

For the years ended December 31, 2019 and 2018

2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES:

Change in net assets 17,954$ (5,407)$

Adjustments to Reconcile Change in Net Assets

to Net Cash used by Operating Activities

Depreciation 50,031 17,537

(Increase) Decrease in Prepaid Expenses 27 1,218

Increase (Decrease) in Accounts Payable 382 (3,429)

NET CASH FROM OPERATING ACTIVITIES 68,394 9,919

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Building Improvement and other assets (14,584) 13,318

NET CASH FROM INVESTING ACTIVITIES (14,584) (13,318)

NET INCREASE (DECREASE) IN CASH 53,810 (3,399)

Cash, Beginning of Year 281,785 285,184

Cash, End of Year 335,595$ 281,785$


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PREGNANCY ASSISTANCE CENTER NORTH, INC. NOTES TO FINANCIAL STATEMENTS

December 31, 2019 Note 1 – Organization

Pregnancy Assistance Center North, Inc. (The Center) was incorporated in 1987 under the Texas Non- Profit Corporation Act. The Center is a Christian, non-profit organization that provides practical assistance to women/men in unexpected pregnancy situations without charge or obligation. The Center provides pregnancy testing, STD testing, consultations, professional counseling, childbirth and relationship classes, an educational program (Vouch for Success – VFS), support groups, training in life skills and well-women exams. The Center also provides free food, clothing, diapers and formula to clients in need. Through the programs, which are responsibility based, clients may earn vouchers to exchange for layette items such as cribs, car seats and baby furniture. In April, 1996, the Center became a Care Net affiliate. Care Net is a national organization dedicated to equipping crisis pregnancy centers to offer high quality, biblically based client services. Note 2 – Summary of Significant Accounting Policies Basis of Statements The financial statements of the Center are prepared using the accrual basis of accounting. Contributions are recognized when a donor makes an unconditional promise to give and expenses are recognized when incurred. Cost Allocation The financial statements report certain categories of expenses that are attributable to more than one program or supporting function. Therefore, these expenses require allocation on a reasonable basis that is consistently applied. The expenses that are allocated include compensation and benefits, which are allocated on the basis of estimates of time and effort, as well as depreciation, occupancy and property insurance, which are allocated on a square footage basis.

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PREGNANCY ASSISTANCE CENTER NORTH, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2019

Note 2 – Summary of Significant Accounting Policies - Continued Contributions Contributions received are recorded as net assets with donor restrictions or net assets without donor restrictions depending on the existence or nature of any donor restrictions. General Fixed Assets Property and equipment are recorded at cost. Depreciation is calculated using the straight- line method with assets depreciated over the following useful lives: Furniture and Fixtures 5 years Office Equipment 3-5 years Building 39 years Federal Income Taxes Pregnancy Assistance Center North, Inc. is a nonprofit corporation as defined by section 501(c)(3) of the Internal Revenue Code and, accordingly, is exempt from federal and state income taxes. Pregnancy Assistance Center North, Inc. is up to date with all of its tax filings. Tax years ended December 31, 2017, 2018, and 2019 are open to examination by the Internal Revenue Service. Donated Services Client services are provided primarily by trained volunteers. The value of time and effort contributed by such individuals is not reflected in these financial statements. Non-Cash Donations The Center receives various non-cash donations including formula, diapers, and clothes. The value of the non-cash donations is immaterial and are not reflected in the financial statements. Cash equivalents and Cash Cash equivalents are highly liquid investments with a maturity date no longer than 90 days.

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PREGNANCY ASSISTANCE CENTER NORTH, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2019 Note 2 – Summary of Significant Accounting Policies - Continued Credit Risk The Center maintains bank accounts at two banks. Accounts at an institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At December 31, 2019 and 2018 the Center had no uninsured bank balance. Note 3 – Fundraising Income & Expenses Fundraising income and expenses are derived from the development dinner held annually by the Center and various other fundraising events. Income includes amounts paid by participants of the events as well as amounts donated by sponsors to offset costs incurred by these events. Expenses reflect the total costs incurred for these events and are not reduced by the donations described above. Note 4 – Fixed Assets

Fixed assets as of December 31, 2019 and 2018 are as follows:

2019 2018

Building and Improvements 631,037$ 631,037$

Land 117,300 117,300

Furniture and Fixtures 135,712 136,276

Equipment 98,001 129,962

Box Truck 9,775 9,775

991,825 1,024,350

Less - Accumulated Depreciation 371,744 368,823

Total Fixed Assets 620,081$ 655,527$

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December 31, 2019 Note 5 – Commitments

The Center leases office space, copiers and a postage machine under non-cancelable operating leases. The Center also has a maintenance agreement on its ultrasound machines which is non-cancelable. Expenses for the year ended December 31, 2019 amounted to $ 175,084 and the year ended December 31, 2018 amounted to $134,650. The leases and maintenance agreement expire February 14, 2023. The future minimum lease and maintenance agreement commitments are as follows: Year ended December 31, 2020 $ 179,127 Year ended December 31, 2021 171,051 Year ended December 31, 2022 147,794 Year ended December 31, 2023 23,808 Note 6 – Restrictions on Net Assets Net assets with donor restrictions as of December 31, 2019 and 2018 are available for the following purposes:

2019 2018

Subject of expenditure for specified purposes:

Care -$ 649$

Mobil Clinic 18,980 31,872

Joshua 1.9 - 3,975

Pro U - 5,899

Security 2,120 17,881

Ultrasound 29,043 20,260

Medical WW Designation - 5,000

Total Net Assets with Donor Restrictions 50,143$ 85,536$

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December 31, 2019 Note 7 - Liquidity and availability of Financial Assets

The following reflects the Organization’s financial assets as of the statement of financial position date, reduced by amounts not available for general use because of donor-imposed restrictions within one year of the statement of financial position date.

2019 2018

Financial assets at year end 335,595$ 281,785$

Less financial assets unavailable for general

expenditures within one year due to:

Net assets with donor restrictions - See note 6 50,143 85,536

Financial assets available to meet cash needs

for general expenditures within one year 285,452$ 196,249$

Note 8 – Use of Estimates The preparation of the 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 those estimates. Note 9 – Subsequent Events Subsequent events have been evaluated through May 30, 2020, which is the date the financial statements were issued. Note 10 – New Accounting Pronouncements

The effects of accounting pronouncements that have been issued but have not yet taken effect are not believed to be material to the financial statements.

Documents

PREGNANCY ASSISTANCE CENTER NORTH, INC ......4 PREGNANCY ASSISTANCE CENTER NORTH, INC. STATEMENTS OF FINANCIAL POSITION December 31, 2019 and 2018 2019 2018 ASSETS CURRENT ASSETS Cash