IS43 Supportive Housing Investment Opportunity

Answer: Payroll and Direct Costs include salaries for clinical staff (nurses, case managers, peer counselors), housing aides, and facility managers. Misc Management and Administrative covers executive oversight, compliance, HR, and accounting services provided by IS43 Consulting. Supplies Costs include medical supplies, PPE, food, hygiene kits, and basic furnishings for residents.

Answer: Yes, the Corona facility has a 12-single and 2-double bed capacity (14-patient capacity in total), based on the number of bedspaces available and licensed for supportive housing use. All spaces are designated for substance abuse recovery and reintegration.

Answer: Initial payments are pending due to Medicaid credentialing and retroactive billing cycles, which implies that we have 'potential receivables' and there are no actual aging reports yet. Delays are expected in the first 90–120 days post-launch. The first month of operation was May and there was a gradual buildup of occupancy with September occupancy reaching 14 patients. The May expected receivables is $10,000 and for September, over $200,000. From our (projected) ageing analysis (attached) only the May receivables are in excess of 90 days and the balance (the majority of the receivables) are still within 90 days. So out of $527,000 in receivables only $10,000 are above 90 days. IS43 has structured bridge financing and reserves to manage early cash flow gaps.

Answer: Margins are driven by high per diem reimbursement rates ($450–$500/day), direct relationships with agencies and employees that eliminates brokers and associated costs, lean staffing models with cross-trained personnel, in-house ancillary services reducing third-party costs, and preventive maintenance and centralized procurement lowering capex. As we scale up the operations, the compliance costs will increase but this will be offset with lower operational costs, so most likely the margins of 45%+ will be maintained. The PnL projections was modeled according to a worst-case scenario of 85% occupancy to factor in variance in operating/financial conditions.

Answer: IS43 has a written linkage agreement with a national agency that refers patients to our active facility, including planned expansion facilities. Most importantly, the agency supplies bed assignments that details patient name, age, level of care, payee, and duration of their housing, typically a minimum of 6 months, up to 12 months. In rare cases we will extend bed assignments as needed in rare cases of relapse.

Answer: The first Baltimore facility is a 6-bedroom supportive housing unit for Veterans through the Maryland VA. It will operate under the IS43 Ancillary Services umbrella and is part of a broader expansion plan to reach 80+ beds across 7 facilities by December 2026.

Answer: IS43 benchmarks against Volunteers of America, Services for the Underserved, and Housing Works. Its edge lies in its premium transitional care model, single-occupancy setup (preferred by Medicaid), integrated ancillary services, licensure for higher reimbursement tiers, and focus on substance abuse and reintegration, a niche underserved by larger operators.

Answer: Medicaid: ~70%, VA: ~20%, Private insurers/self-pay: ~10%. Medicaid has the highest volume but moderate delay risk. VA payments are more predictable and faster (within 30 days of invoicing). Private insurers pose higher denial risk due to documentation requirements.

While the probability of unpaid receivables risks is low based on the nature of the contracts and precedence, IS43 budgets a 5–10% reserve for bad debt and claw backs. The finance team monitors compliance risk and adjusts reserves quarterly based on audit trends and payer behavior.

The IS43 team comprises of licensed clinical directors, nurses, case managers and facility managers with multiple years of experience in the healthcare industry. Detail information about these members of the team are proprietary and intentionally withheld. Their presence in the IS43 team ensures regulatory and operational compliance. We have also engaged external advisors with healthcare and Medicaid billing expertise.

Currently licensed by OASAS for supportive housing under state and city programs and ancillary services (e.g., outpatient counseling, case management). Seeking Medicaid provider status in additional states and behavioral health clinic licensure for future expansion.

Yes. IS43 has modeled Medicaid reimbursement rates in NY, MD, and MI and also be the type of services offered and agency involved. Projections are most favorable in NYC and Baltimore, where rates and demand are highest. Expansion plans prioritize states with higher per diem rates and supportive housing incentives.

Answer: IS43 bills through Managed Care Organizations (MCOs) under negotiated rates. The premium care offered, single-occupancy model, clinical wraparound services, and ancillary offerings justify the higher reimbursement tier. Documentation includes facility licensure, care plans, and staffing ratios.

Answer: IS43 has modeled downside scenarios including 15% rate cuts. Our models show that even if Medicaid reimbursement is cut by up to 15% and the topline reduced by 15% the EBDITA margins will still be ≥35%. Resilience strategies include cost containment via shared services, diversified payer mix, scalable staffing, contingency reserves, and access to bridge capital.