ALZHEIMER'S FAMILY SERVICES CENTER Alzheimer’s Family Services Center - Alzheimer's Family Services Center (the Organization) is the most trusted resource for families in Orange

ALZHEIMER'S FAMILY SERVICES CENTER (A NON-PROFIT CORPORATION)

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2016

(WITH COMPARATIVE TOTALS FOR THE YEAR ENDED JUNE 30, 2015)

with

INDEPENDENT AUDITORS' REPORT THEREON


INDEX

Page Independent Auditors’ Report 1 - 2 Statements of Financial Position 3 Statements of Activities 4 Statements of Functional Expenses 5 Statements of Cash Flows 6 Notes to Financial Statements 7 - 17


STATEMENTS OF FINANCIAL POSITION

JUNE 30,

The accompanying notes are an integral part of these financial statements

3

2016 2015

CURRENT ASSETSCash and cash equivalents 1,252,627$ $ 1,868,040 Accounts receivable 209,517 213,789 Pledges receivable 16,986 88,000 Grants receivable 91,588 86,010 Prepaid expenses 28,219 24,362

1,598,937 2,280,201

LONG-TERM ASSETSInvestments 764,317 - Property and equipment, net 215,222 166,868

2,578,476$ 2,447,069$

CURRENT LIABILITIESAccounts payable 83,365$ $ 100,836 Accrued expenses 152,670 269,255

236,035 370,091

NET ASSETS

Unrestricted 2,188,774 1,967,330 Temporary restricted 153,667 109,648

2,342,441 2,076,978

2,578,476$ 2,447,069$

ASSETS

LIABILITIES AND NET ASSETS


STATEMENTS OF ACTIVITIES

YEARS ENDED JUNE 30,


4

2015Temporarily Summarized

Unrestricted Restricted Total TotalREVENUE AND SUPPORT

Client fees 1,354,257$ -$ 1,354,257$ 1,351,085$ Medi-Cal fees 547,387 - 547,387 505,683Government grants 476,943 - 476,943 448,890Corporation and foundation grants 1,607,168 166,986 1,774,154 2,189,560Contributions 213,763 - 213,763 123,848In-kind facility rent 296,349 - 296,349 280,500Special events, net - - - 133,451Food program funding 41,191 - 41,191 41,313Other revenue 17,400 - 17,400 456Interest and dividends 14,896 - 14,896 236 Net assets released from restrictions 122,967 (122,967) - -

4,692,321 44,019 4,736,340 5,075,022

EXPENSESProgram services 3,801,354 - 3,801,354 3,752,779 Supporting services 350,391 - 350,391 304,432 Fundraising 319,132 - 319,132 319,782

4,470,877 - 4,470,877 4,376,993

CHANGE IN NET ASSETS 221,444 44,019 265,463 698,029

NET ASSETS, beginning of year 1,967,330 109,648 2,076,978 1,378,949

NET ASSETS, end of year 2,188,774$ 153,667$ 2,342,441$ 2,076,978$

2016


STATEMENTS OF FUNCTIONAL EXPENSES



5

2015

Program Supporting Summarized

Services Services Fundraising Total TotalSalaries 1,892,850$ 183,860$ 162,330$ 2,239,040$ 2,138,586$ Payroll taxes and benefits 428,816 41,652 36,775 507,243 431,397

Total personnel expenses 2,321,666 225,512 199,105 2,746,283 2,569,983 Transportation 472,493 - - 472,493 568,169Facility rent in-kind 250,529 24,335 21,485 296,349 280,500Outside services 117,643 - - 117,643 139,782Repair and maintenance 74,132 7,201 6,358 87,691 119,579Utilities and waste pick-up 60,106 5,838 5,155 71,099 65,337Depreciation 53,213 5,169 4,564 62,946 59,518Insurance - workers' compensation 49,585 4,816 4,252 58,653 50,604Information technology 44,171 4,290 3,788 52,249 26,456Administration costs 40,951 3,978 3,512 48,441 40,294Food 47,246 - - 47,246 49,723Miscellaneous costs 38,975 3,786 3,342 46,103 54,574Insurance - general 36,678 3,563 3,145 43,386 34,096Accounting and legal - 38,206 - 38,206 45,453Telephone 29,996 2,914 2,572 35,482 22,425Equipment expenses 28,202 2,739 2,419 33,360 26,146Dues and subscriptions 25,500 2,477 2,187 30,164 28,217Office supplies and expenses 23,748 2,307 2,037 28,092 26,024Community relations/marketing - - 26,422 26,422 25,381Fundraising - - 26,034 26,034 35,243Travel 13,128 1,275 1,126 15,529 7,895Supplies 14,080 - - 14,080 17,098Training 10,597 1,029 909 12,535 13,047Education 12,203 - - 12,203 19,537Activity center expenses 11,142 - - 11,142 10,778Patient care 10,754 - - 10,754 7,110Bank charges - 10,141 - 10,141 7,005Activity center/outings transport 6,225 - - 6,225 6,324Postage and delivery 4,705 457 404 5,566 4,291Janitorial and building expense 2,130 207 183 2,520 7,693Recruiting 1,556 151 133 1,840 2,378Payroll service expense - - - - 4,878Loss on disposal of fixed asset - - - - 1,455

3,801,354$ 350,391$ 319,132$ 4,470,877$ 4,376,993$

2016


STATEMENTS OF CASH FLOWS



6

2016 2015

CASH FLOWS FROM OPERATING ACTIVITIESChange in net assets 265,463$ 698,029$ Adjustments to reconcile change in net assets to net cash

from operating activities:Depreciation and amortization 62,946 59,518 Loss on disposal of asset - 1,455

Changes in operating assets and liabilities:Accounts receivable, net 4,272 58,825 Pledges receivable 71,014 (59,417) Grants receivable (5,578) 23,760 Prepaid expenses (3,857) 626 Deposits - 500 Accounts payable and accrued expenses (134,056) 56,813 Deferred revenue - (444,218)

Net cash flows from operating activities 260,204 395,891

CASH FLOWS FROM INVESTING ACTIVITIESPurchases of property and equipment (111,300) (44,961) Purchases of investments (750,000) - Re-investment of interest (14,317) -

Net cash flows from investing activities (875,617) (44,961)

Net change in cash and cash equivalents (615,413) 350,930

Cash and cash equivalents, beginning of year 1,868,040 1,517,110

Cash and cash equivalents, end of year 1,252,627$ 1,868,040$


NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2016

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NOTE 1 - ORGANIZATION About Alzheimer’s Family Services Center - Alzheimer's Family Services Center (the Organization) is the most trusted resource for families in Orange County who live between the promise of a cure for dementia and the daily reality of caring for a memory impaired loved one. The Organization provides compassionate direct care for patients with dementia, and supportive services for family caregivers that help preserve quality of life, wellness, and wellbeing. Our mission - The Organization’s mission is to improve the quality of life for families challenged by Alzheimer's disease, or another dementia, through services tailored to meet individual needs. History - Founded in 1980 as the South Coast Institute for Applied Gerontology, a California nonprofit corporation, for the care of people with Alzheimer's disease and other age related afflictions in Orange County, the organization changed its name in September 1994 to Adult Day Services of Orange County and expanded its services to include adult day health care as well as social day care. In June 2007, the organization changed its name again to Alzheimer's Family Services Center to better reflect the Organization's mission and continued service expansion, as well as make it easier for families to find the Organization's services. The Organization is licensed by the California Department of Public Health and certified as a Medi-Cal provider by the Department of Aging, Adult Day Health Care Branch. The Organization holds a dual license, under which it is able to provide both adult day health and social day care services. The Organization is also a state-designated Alzheimer's Day Care Resource Center. As such, the Organization focuses on providing services to persons with Alzheimer's disease or a related dementia, particularly those with moderate-to-severe dementia, and their families. Program services - The Organization offers direct care, educational, and supportive services to address the needs of individuals with Alzheimer’s disease or another dementia and their families. Direct care services, including adult day health and social day care strive to maximize each participant’s cognitive and phychosocial functioning. Social day care encompasses a core set of recreational and therapeutic activities, such as music, art therapy, reminiscence, memory enhancement, discussion groups, exercises and emergency medical care in a supervised, secure environment. Adult day health care includes these core services plus daily nursing care, social work, physical, occupational, and speech therapy exercises (maintenance and restorative), nutritional counseling, psychiatric and/or psychological services, and transportation. Optional adult day health care services the Organization may offer with prior approval include podiatry, optometry screening and advice, dental screening, and any other services to meet the Organization’s objectives.



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NOTE 1 - ORGANIZATION, Continued Participant services are determined through an initial multidisciplinary assessment which forms the basis of the individual care plan, with reassessment every six months. When the family does not have the desire or resources to transport the participant, the Organization arranges for transportation through the Orange County Transportation Authority, the Organization’s contracted transportation providers, or other available means, and in the case of adult day health care only, covers the cost. All participants receive breakfast, lunch, and a snack. In addition, to further assist families enrolled at the Organization and increase knowledge about Alzheimer’s disease in the broader community, the agency provides educational and supportive services. Educational services include a variety of workshops and classes targeting caregivers, at–risk seniors, and healthcare professionals. Finally, the Organization also offers information and referral, and in some cases limited care management services, to callers and caregiver support groups open to the community at large. FY 2015-16 service accomplishments - Throughout fiscal year 2015-16, the Organization provided:

21,000 patient days of care for 253 individuals affected by Alzheimer’s disease or another dementia, including medical, therapeutic, nutritional, personal care, and transportation services.

2,024 hours of care management by a licensed social worker to 759 caregivers of enrolled patients

855 hours of care management to 457 caregiver inquiries, including information, referral, and telephone counseling.

28 support group sessions facilitated by a Masters-leveled clinician, reaching 55 unduplicated caregivers.

14 hours of short-term counseling for 4 family caregivers. 70 hours of community-based healthy brain aging education for 140 unduplicated

individuals through the Mind Booster program. 7,300 individuals reached across Southern California via 45 community-based events. 221 patient days of Saturday care through the Organization’s new weekend Adult Day

Program. 24,663 one-way specialized transportation trips tailored to the needs of dementia patients.

Throughout the year, we also helped a growing number of veterans, given our unique contract through the Department of Veterans Affairs, to provide adult day health care and caregiver support services to veterans and their families.



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NOTE 1 - ORGANIZATION, Continued The Need For a Solution Today - Since 1980, we have served the growing number of families who are affected by the Alzheimer’s epidemic in Orange County, a community that is aging at a faster rate than the rest of California and the rest of the nation. Less than 20 years from now, the number of seniors and family caregivers affected by the disease will more than double from 150,000 to nearly 400,000 individuals. The impact of the Alzheimer’s epidemic is a growing challenge and public health concern given the rising incidence of the disease in our community, the devastating emotional and financial losses to families, the massive economic burden on our already taxed healthcare system, and the substantial costs to local businesses as a result of declining worker productivity for employed caregivers. The Organization is committed to serving both dementia patients and their family caregivers, who are the primary source of care for individuals with dementia. Our services are grounded in the latest research and clinical guidelines for dementia care, and include:

MIND BOOSTERS SERIES - A four-week evidence-based educational intervention that equips older adults in the community with the tools needed to maximize and maintain their brain health, learn prevention and risk management strategies for cognitive decline, and gain information about aging memory loss. .

NEW CONNECTIONS CLUB - The Organization’s early-stage track of adult day health care programming provides medical, rehabilitative, psychosocial, and nutritional benefits based on an individualized plan of care within the context of a stimulating recreational program.

FRIENDSHIP CLUB - The Organization’s adult day health care program for individuals as they transition into the moderate-to-severe stages of dementia.

SATURDAY RESPITE PROGRAM - An adult day program (social model) to offered Saturdays from 9 a.m. to 3 p.m. (closed Sundays) that meets the therapeutic and supervisory needs of frail, older adults, who may otherwise be left at home unsupervised.

INTENSIVE CARE MANAGEMENT SUPPORT - The Organization assign a social worker and a nurse to each family caregiver who has a loved one enrolled in our adult day health care. These professional become “partners in caring” and can be called upon as needed to troubleshoot issues in care.

INDIVIDUALIZED ASSESSMENTS - All participants enrolling in our adult day care programs receive comprehensive three-day assessments to measure baseline psychosocial and health functioning.



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NOTE 1 - ORGANIZATION, Continued

INFORMATION, REFERRALS, AND LINKAGES TO APPROPRIATE COMMUNITY RESOURCES - Upon calling the Organization, every caregiver is connected with a case manager who will listen, provide answers, problem-solve, and link the family to appropriate and diverse resources.

CAREGIVER SUPPORT GROUPS - Caregivers community-wide have access to a free support group offered twice monthly at the Organization, and facilitated by one of our master’s level clinicians. Support groups represent an important vehicle for caregivers to gain knowledge, skills and support from their peers as well as professional leaders.

CAREGIVER DEPRESSION SCREENINGS - The Organization provides depression screenings and assessment of family caregivers based on clinical need.

SHORT-TERM COUNSELING SERVICES - Short-term counseling provides an "extra boost" when a caregiver needs focused support to develop and implement solutions for problems in care.

COMMUNITY OUTREACH - Community outreach services are designed to improve community health by addressing the lack of accurate information about dementia diagnosis, treatment, and available care-related services among at-risk seniors, families, health care professionals, and the community at-large.

Through these services we help (1) introduce families to the multiplicity of services they need to provide care for a loved one affected by dementia in the home environment, from the time of diagnosis to the advanced stages of the disease, (2) promote the cognitive, physical, and emotional well-being of older adults who have been diagnosed with Alzheimer's or another dementia through specialized, affordable adult day care services, and (3) increase community awareness of dementia care options available to families through targeted outreach efforts. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Funding - The Organization is primarily funded through private and government grants, contributions, and private and government subsidized fees for care services. Hoag Memorial Hospital Presbyterian’s (“Hoag Hospital”) support includes contributions for facilities, maintenance, transportation costs and the executive director’s and dementia education specialist’s salaries and benefits. Hoag Hospital’s support represents approximately 31% of total revenue and other support. If the Organization’s relationship with Hoag Hospital were to be terminated, it would likely cause a significant impact on the Organization’s operations. Hoag Hospital has committed to continue their support through June 2019.



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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Basis of presentation - The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified and reported as follows:

Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations. These assets are available to support the Organization’s activities and operations at the discretion of the Board of Directors. Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that will be met either by actions of the donor, the Organization, and/or the passage of time. Permanently restricted net assets - Net assets subject to donor-imposed stipulations that the corpus be maintained permanently by the Organization. The donors of these assets permit the Organization to use all or part of the income or gains earned on related investments for general (unrestricted) or specific (temporarily restricted) purposes.

Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Contributions and pledges - Contributions and pledges are recognized at fair value when the donor makes an unconditional promise to give to the Organization. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. The Organization uses the allowance method to determine uncollectible unconditional promises receivable. The allowance is based on prior years’ experience and management’s analysis of specific promises made. Estimates - The preparation of 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 disclosures of contingent assets and liabilities at the date of the financial statements and reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.



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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Fair value of financial instruments - Financial instruments primarily consist of accounts receivable, pledges receivable, grants receivable, and investments. The Organization estimates that the fair value of its financial instruments at June 30, 2016 does not differ materially from its aggregate carrying value recorded in the accompanying statements of financial position. Considerable judgment is required in interpreting market data to develop the estimates of fair value and, accordingly, the estimates are not necessarily indicative of the amounts that the Organization could realize in a current market exchange. Fair value measurements - The Organization defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Organization measures fair value under a framework that provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Investments - Investments in marketable securities are classified as available-for-sale and reported at fair value as determined by quoted market prices in an active market. Realized gains and losses (computed by the specific identification method) and unrealized gains and losses are included in the statement of activities. Interest and dividend income are recorded on the accrual basis of accounting. Concentration of credit risk - The assets that potentially subject the Organization to concentrations of credit risk consist of cash and cash equivalents, accounts receivable, and investments. Cash and cash equivalents - For the purpose of reporting cash flows, cash and cash equivalents include operating cash held in banks, money market funds, and investments with an original maturity of three months or less. The Organization maintains its cash balances in financial institutions, the balances of which may, at times, exceed federally insured limits.



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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Client fees, Medi-Cal fees, and accounts receivable - Accounts receivable include client fees and Medi-Cal fees for services rendered prior to June 30, 2016. Due to the complexities of the Medi-Cal program, Medi-Cal fees are recorded at net realizable value. As such, revenue is net of allowances for doubtful accounts, discounts, scholarships, and other courtesy or policy discounts. The Organization uses the allowance method to determine the collectability of its receivables. Based on prior years’ experience and management’s analysis of the receivable, the Organization believes that all receivables will be fully collected. Grants receivable and revenue - The Organization receives a majority of its total grant revenue from foundations, corporations, and governmental agencies. Governmental agencies pay the Organization based on units of service provided or reimbursable costs as defined by the grants. The compensation and reimbursements recorded under these grants are subject to audit. Management believes that material adjustments will not result from subsequent audits, if any, of costs reflected in the accompanying financial statements. The Organization uses the allowance method to determine the collectability of its grants. Based on prior years’ experience and management’s analysis of the grants, the Organization believes that all grants will be fully invoiced and collected within the contracted grant period and, as such, no allowance for uncollectible amounts has been recorded as of June 30, 2016. Any unexpended funds are reverted to the grantor at the close of the grant period. The Organization charges any unexpended funds to a loss on settlement, which offsets with net assets released from restrictions in the period in which that determination is made. Property and equipment - Property and equipment are recorded at cost with the exception of donated equipment, which is stated at fair market value at the date of receipt. The Organization capitalizes all expenditures for property and equipment in excess of an amount preauthorized by management. Leasehold improvements are capitalized at cost and are amortized over the shorter of the lease term or the estimated useful life of the related asset. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets. When property and equipment is retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and the resulting gain or loss is credited or charged to operations. Normal repairs and maintenance are expensed as incurred. Expenditures which materially adapt, improve, or alter the nature of the underlying assets are capitalized.



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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Long-lived assets - The Organization analyzes its long-lived assets for potential impairment. Impairment losses are recorded on long-lived assets when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the net carrying amount of the assets. In such cases, the carrying value of assets to be held and used are adjusted to their estimated fair value, less estimated selling expenses. During the year ended June 30, 2016, the Organization recognized no impairment losses on its long-lived assets. Contributed goods and services - Contributions of services are recognized in the financial statements (as in-kind revenue and a corresponding in-kind expense) if the services enhance or create non-financial assets or require specialized skills, and are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Numerous unpaid volunteers (approximately 4,500 hours) have made significant contributions of their time to the different program services. The value of these contributions is not reflected in these statements since they do not meet the criteria for recognition as contributed services. The Organization received donated legal advice, website maintenance, and other professional services from corporations. Management estimates that fair market value of these services was $48,581 for the year ended June 30, 2016, which is included in contributions and administrative and legal expenses. Expense allocation - The costs of providing various programs and other activities have been summarized on a functional basis in the statements of activities and in the statements of functional expenses. Accordingly, certain costs have been allocated among program services, supporting services, and fundraising based on estimated usage. Usage is calculated using an appropriate methodology such as percentage of staff time. Income taxes - The Organization is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code and the corresponding provisions of the California Revenue and Taxation Code. Accordingly, no provision for income taxes is included in the accompanying financial statements. The Organization is subject, however, to Federal and California income taxes on unrelated business income as stipulated in the Internal Revenue Code. The Organization recognizes the impact of tax positions in the financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. To date, the Organization has not recorded any uncertain tax positions. The Organization recognizes potential accrued interest and penalties related to uncertain tax positions in income tax expense. During the year ended June 30, 2016, the Organization did not recognize any amount in potential interest and penalties associated with uncertain tax positions.



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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued As of June 30, 2016, the Organization’s federal tax returns since the 2012 tax year and state tax returns since the 2011 tax year remain open for examination by the tax jurisdictions. No tax returns are currently being examined by any taxing authorities. Risks and uncertainties - Certain of the Organization’s services are governed by grants and contracts from governmental agencies and private sources. There can be no assurance that the Organization will be able to obtain future grants as deemed necessary by management, although management believes that there is no current indication that grants and contracts are in jeopardy. The loss of certain of the current grants, or the inability to obtain future grants, could have an adverse effect on the Organization’s financial position and results of operations. Failure of the Organization to comply with applicable regulatory requirements can result in, among other things, loss of funding, warning letters, fines, injunctions, and civil penalties. Reclassifications and comparative totals - Certain amounts presented in previous financial statements have been reclassified to conform to current presentation. The financial statements include certain prior year summarized comparative information in total, but not by net asset class. In addition, the notes to the financial statements do not contain the financial information on a comparative basis. Such summarized information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Organization’s financial statements for the year ended June 30, 2016 from which the summarized information was derived. Subsequent events - Subsequent events have been evaluated by the Organization through September 28, 2016, which is the date these financial statements were issued, and no subsequent events have arisen, other than those described in these financial statements, that would require disclosure. NOTE 3 - INVESTMENTS The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy. Certificate of deposit - Valued at quoted market prices in an exchange and active market, which represent the net asset value of shares held by the Organization at year-end (Level 1).



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NOTE 3 - INVESTMENTS, Continued The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future values. Furthermore, although the Organization believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment as of June 30, 2016 consists of:

Leasehold improvements 233,180$ Computer equipment 125,598Office furniture and fixtures 88,068Communication and healthcare equipment 57,243

504,089 Less: accumulated depreciation and amortization (288,867)

215,222$ NOTE 5 - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consist of the following as of June 30, 2016:

Purposes/Programs July 1, 2015 Additions Releases June 30, 2016

Various purposes 109,648$ 16,986$ (99,045)$ 27,589$ Innovation in Dementia - 100,000 - 100,000 Mind Boosters - 50,000 (23,922) 26,078

109,648$ 166,986$ (122,967)$ 153,667$



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NOTE 6 - IN-KIND RELATED PARTY FACILITY LEASES Huntington Beach - The Organization has an operating lease agreement with Hoag Hospital for its Huntington Beach facility. The lease requires monthly rents of $24,162 through September 30, 2016, with annual incremental rent increases each year thereafter through September 30, 2020. The lease includes a provision whereby the base monthly rents are abated by Hoag Hospital. The Organization assumes responsibility for operating the facility in accordance with all terms and conditions of the lease. The Organization is also responsible for utilities, liability insurance, and repairs and maintenance expenses. The estimated fair value of the rent was $288,099 for the year ended June 30, 2016. Costa Mesa - The Organization has an operating lease with a board member for an education and outreach facility in Costa Mesa. The month-to-month lease requires no payments, and management is currently considering a long-term lease. Management estimates the fair market value of the rent was $8,250 during the year ending June 30, 2016. NOTE 7 - COMMITMENTS AND CONTINGENCIES Legal - The Organization may be involved from time to time in various claims, lawsuits and disputes with third parties, and/or government agencies, actions involving allegations or discrimination or breach of contract actions incidental in the normal operations of the business. The Organization is currently not involved in any litigation which management believes could have a material adverse effect on its financial position or results of operations. Indemnities and guarantees - The Organization has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions. The Organization indemnifies its directors, officers, employees and agents to the maximum extent permitted under the laws of the State of California. In connection with its facility lease, the Organization has indemnified its lessor for certain claims arising from the use of the facility. The duration of the guarantees and indemnities varies, and in many cases is indefinite. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Organization could be obligated to make. Historically, the Organization has not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying statement of financial position.



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NOTE 8 - EMPLOYEE RETIREMENT PLAN The Organization maintains a defined contribution retirement plan, referred to as the Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE IRA, or the Plan). The Organization contributed $31,894 to the Plan on behalf of eligible employees during the year ended June 30, 2016.

Documents

ALZHEIMER'S FAMILY SERVICES CENTER Alzheimer’s Family Services Center - Alzheimer's Family Services Center (the Organization) is the most trusted resource for families in Orange