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NOTES TO FINANCIAL STATEMENTS NOTE 5- THIRD-PARTY RATE ADJUSTMENTS Client service revenue, included ii� program service fees, was derived under federal and state third-party reimbursement programs along with other third-party insurance companies that pay less than 100% of the Organization's fee. The Organization is contractually obligated to write-off the remaining amount. The gross and net revenue breakdown is as follows in 2004: Mental Hea�tE� Services Gross client service revenue Contractual allowances and write-offs Net client service revenue Northwest Educational and Therapeutic Services (NET Services) Gross client service revenue Contractual allowances Net client service revenue NOTE 6- LINE OF CREDIT ��a�� [ 15 3,0�0�� .5 3�3_�?� � J'�'.�� (13�,��3} � �3�,�E�. The Organization has available a$100,000 line of credit with Wells Fargo Bank, secured by a security agreement and all assets of the Organization, expiring May 31, 2006. The interest rate is a base rate plus 1% (5.25% at December 31, 2004). As ofDecember 31,2004, there were no borrowings under the line of credit. NOTE 7 - LONG-TERM DEBT Mortgage note payable to Wells Fargo Bank Minnesota, N.A., payable in monthly installments of $7,671, including interest at 6% until June 1, 2008, when the outstanding balance is payable in full. The note is secured by the building and subordinated to certain lease agreements. Note payable for vans to Wells �arga Bank Minnesota, N.A., payable in monthly installments of $2,214, including interest at 4.5% until September 2006, when the outstanding balance is payable in full. The note is secured by vehicles. Note was paid in full subsequent to year-end. Less current portion Net long-term debt, less current portion 5��,�� C ��,�� R93,?i35 - {6�,3 �3j S �?5.?�s� (continued on next page) G �