2026-02-14T11:22:02-06:00 2025-03-31 351178661 BLUE & CO LLC 250 WEST MAIN STREET SUITE 2900 LEXINGTON KY 40507 990 2024-04-01 610673339 KENTUCKY HIGHLANDS INVESTMENT CORP KENT 6068645175 PO BOX 1738 LONDON KY 407431738 BRENDA MCDANIEL CFO 6068645175 2026-02-10 1 1 M MELINDA KARNS P00743346 8592531100 2026-02-10 2024 2025-03-06 01:10:19Z JERRY RICKETT PO BOX 1738 LONDON KY 407431738 8186145 0 X WWW.KHIC.ORG X 1968 KY TO PROVIDE AND RETAIN EMPLOYMENT OPPORTUNITIES IN SOUTHEASTERN KENTUCKY THROUGH SOUND INVESTMENTS AND MANAGEMENT ASSISTANCE. 15 15 23 0 0 0 10013481 2685169 9787484 4942318 355265 331332 185748 227326 20341978 8186145 194913 88679 0 0 3858224 4013987 0 0 0 2542358 2662852 6595495 6765518 13746483 1420627 136294056 136639479 58878284 58188638 77415772 78450841 X KHIC'S PURPOSE IS TO PLAN, PROMOTE, INITIATE, AND COORDINATE COMMUNITY, ECONOMIC, AND SOCIAL DEVELOPMENT EFFORTS. KHIC HAS USED A VENTURE CAPITAL APPROACH YIELDING NOTABLE POSITIVE RESULTS. IT HAS A STRONG BASE OF CAPITAL WITH A PORTFOLIO THAT ALLOWS IT TO BE SELF-SUSTAINING, A DEDICATED AND EXPERIENCED STAFF, A COMMITTED AND SUPPORTIVE BOARD OF DIRECTORS, AND A CLEAR DEFINITION OF ITS MISSION AND METHOD. KHIC'S STRATEGY IS TO DEVELOP AN ENVIRONMENT WHERE ENTREPRENEURSHIP WILL THRIVE. IT DOES SO BY PROVIDING BOTH FINANCIAL SUPPORT AND MANAGEMENT ASSISTANCE TO NEW AND EXISTING BUSINESSES. IT ALSO SEEKS TO INTRODUCE AND DEVELOP ENTREPRENEURIAL TALENT BOTH FROM WITHIN THE REGION AND FROM AREAS OUTSIDE THE REGION. 0 0 5623070 88679 5169644 KENTUCKY HIGHLANDS INVESTMENT CORPORATION (KHIC), LONDON, KENTUCKY WAS FOUNDED IN 1968 AS JOB START CORPORATION AS A PART OF THE WAR ON POVERTY. KHIC STARTED WITH A NINE COUNTY SERVICE AREA AND HAS EXPANDED TO TWENTY-TWO COUNTIES. THESE COUNTIES HAVE CHRONICALLY HIGH RATES OF UNEMPLOYMENT AND POVERTY. THIS HILLY, RURAL AREA HAS ONLY NINE POPULATION CENTERS WITH MORE THAN 5,000 RESIDENTS. BUT WITH TECHNOLOGY, GOOD HIGHWAYS, LOYAL EMPLOYEES AND LOWER COST OF LIVING IT IS AN INCREASINGLY ATTRACTIVE AREA FOR NEW BUSINESSES.AT MARCH 31,2025, KHIC HAS PROVIDED $735 MILLION IN FINANCING TO 1,171 BORROWERS, INCLUDING 537 SMALL FARM BORROWERS, AND CREATED 21,028 JOBS WHILE MAINTAINING 8,612. KHIC HAS BEEN A VIBRANT CATALYST FOR CHANGE IN ITS TARGET AREA. HOWEVER, KHIC'S PRIMARY CONCERN FOR THE AREA IS POVERTY. THE POVERTY RATE IN THE TARGETED INVESTMENT AREA AVERAGED 23.6 PERCENT IN 2024 AND MEDIAN FAMILY INCOME WAS ONLY $55,000. UNEMPLOYMENT IS CONSISTENTLY HIGHER IN THE AREA BY SEVERAL PERCENTAGE POINTS THAN FOR THE STATE OR THE NATION. UNEMPLOYMENT IN 2024 IS 6.8% WHICH IS 179% OF THE NATIONAL RATE OF 3.8%. IN 2003, KHIC EXPANDED ITS SERVICE AREA TO INCLUDE AN ADDITIONAL TEN CONTIGUOUS COUNTIES ALL EVIDENCING EXTREME POVERTY, LOW EDUCATIONAL ATTAINMENT, AND HIGH UNEMPLOYMENT AS WELL AS OTHER ASPECTS OF PERSISTENT ECONOMIC DISTRESS. KHIC'S SERVICE AREA INCLUDES 134 HIGH-POVERTY CENSUS TRACTS WITH GREATER THAN 20% POVERTY; 61 GREATER THAN 30%; 12 GREATER THAN 40% AND 4 GREATER THAN 50%. KHIC SERVES 5% OF THE NATION'S RURAL PERSISTENT POVERTY COUNTIES.SINCE ITS FOUNDING, KHIC HAS BEEN INVOLVED IN A VARIETY OF BUSINESS LENDING RELATED TO REAL ESTATE DEVELOPMENT, INCLUDING LENDING FOR COMMUNITY FACILITIES, MANUFACTURING AND INDUSTRIAL PLANT DEVELOPMENT, AND OFFICE SPACE. KHIC HAS DEVELOPED CLOSE TO $13 MILLION IN INDUSTRIAL REAL ESTATE PROJECTS DIRECTLY AND HAS PROVIDED APPROXIMATELY $100 MILLION IN FINANCING TO COMPANIES FOR INDUSTRIAL AND COMMERCIAL REAL ESTATE DEVELOPMENT. AS LEAD AGENCY FOR THE KENTUCKY HIGHLANDS EMPOWERMENT ZONE (KHEZ), KHIC HAS SUCCESSFULLY MANAGED MILLIONS OF DOLLARS OF FEDERAL, STATE AND LOCAL RESOURCES, LEVERAGING MORE THAN $150 MILLION OF PRIVATE RESOURCES ON BEHALF OF THE COMMUNITIES THROUGHOUT THE EMPOWERMENT ZONE AND RESULTING IN MORE THAN 4,100 NET NEW JOBS FROM KHEZ INVESTMENTS. KENTUCKY HIGHLANDS PROVIDES AN OPPORTUNITY TO BUSINESSES IN ITS FOOTPRINT TO RECEIVE SOPHISTICATED FINANCIAL SERVICES OTHERWISE UNAVAILABLE IN IN THE AREA. ACCESS TO FINANCING, ACCESS TO TRAINING, ACCESS TO NATIONAL LEVEL PROGRAMS ARE THE KEY ATTRIBUTES WHICH DIFFER KENTUCKY HIGHLANDS AND ITS STAFF. MOST INDIVIDUALS ARE LONG TIME EMPLOYEES, FAMILIAR WITH THE REGION AND ITS CONSTITUENTS, AND PASSIONATE ABOUT THE ECONOMIC ASPIRATIONS OF ITS CITIZENS AND BUSINESSES.ON JANUARY 7, 2014, PRESIDENT OBAMA NAMED KENTUCKY HIGHLANDS INVESTMENT CORPORATION, IN PARTNERSHIP WITH EIGHT COUNTIES IN SOUTHEASTERN KENTUCKY, AS THE FIRST RURAL PROMISE ZONE IN THE NATION. PROMISE ZONE IS A FEDERAL DESIGNATION OF A GEOGRAPHIC AREA CONTAINING NO MORE THAN 200,000 IN POPULATION AND THAT 20% OR MORE OF THE POPULATION LIVES IN POVERTY. THE INITIATIVE AIMS TO REVERSE FACTORS THAT LEAD TO POVERTY THROUGH A STRATEGIC ALIGNMENT OF FEDERAL AGENCIES WORKING TOGETHER IN CONCERT WITH BOTTOM-UP STRATEGIC DEVELOPMENT PLANS AT THE LOCAL ANDREGIONAL LEVEL. THE DESIGNATION ENDED ON JANUARY 7, 2024 BUT THE RELATIONSHIPS ESTABLISHED DURING THE DESIGNATION WILL REMAIN. ULTIMATELY, THE IMPLEMENTATION OF THE KENTUCKY HIGHLADNDS PROMISE ZONE STRATEGIC PLAN OPENED AVENUES TO A MORE DIVERSIFIED AND VIBRANT ECONOMY THAT IS LESS DEPENDENT UPON THE COAL MINING INDUSTRY. DEVELOPMENT OF HUMAN CAPITAL WAS AT THE CORE OF THE INITIATIVE. 5623070 0 1 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 1 0 0 0 0 0 0 0 1 1 0 0 1 56 0 1 23 1 0 0 0 0 0 0 0 0 0 0 0 0 X 15 15 0 0 0 0 0 0 0 1 1 0 0 0 1 1 1 1 1 1 1 0 KY X X BRENDA MCDANIEL 6068645175 PO BOX 1738 LONDON KY 40743 X BILL BERTRAM DIRECTOR 1.00 X 4950 0 0 SAMUEL BROWN DIRECTOR 1.00 X 4500 0 0 JANE CARTER DIRECTOR 1.00 X 4500 0 0 RICHARD FOLEY DIRECTOR 1.00 X 4500 0 0 CLARENCE BO GREEN DIRECTOR 1.00 X 4050 0 0 GAYLE HOUSE DIRECTOR 1.00 X 4500 0 0 JENNIFER JONES DIRECTOR 10.00 X 2250 0 0 GREENE KEITH DIRECTOR 1.00 X 4950 0 0 LONNIE RILEY DIRECTOR 1.00 X 3600 0 0 WILLIAM SINGLETON DIRECTOR 1.00 X 13200 0 0 WILLIAM SMITH DIRECTOR 1.00 X 4050 0 0 SERENA STRATTON DIRECTOR 1.00 X 3600 0 0 PAULA LITTLE DIRECTOR 1.00 X 4950 0 0 AMY ELLIS DIRECTOR 1.00 X 4050 0 0 SHANE GABBARD DIRECTOR 1.00 X 3150 0 0 JERRY RICKETT PRESIDENT/CEO 40.00 X 504125 0 78903 BRENDA MCDANIEL EXEC. VICE PRESIDENT/CFO 40.00 X 475965 0 79899 MARK BOLINGER VICE PRESIDENT OF BUSINESS 40.00 X 283920 0 69735 RUBY ADAMS SECRETARY 40.00 X 66348 0 35773 EDGAR DAVIS BUSINESS DEVELOPMENT SPECI 40.00 X 176699 0 53092 RAY MONCRIEF FORMER OFFICER 40.00 X 0 90000 0 1577857 90000 317402 4 1 1 0 0 1898241 786928 2685169 INTEREST INCOME FROM P 523000 3842910 3842910 INTEREST FROM WORKING 523000 741256 741256 MANAGEMENT FEES (NET O 541610 358152 358152 4942318 331332 331332 165377 0 165377 165377 165377 MISCLLANEOUS 900099 61949 61949 61949 8186145 5169644 0 331332 88679 88679 1409075 1113169 295906 1521259 1201795 319464 309555 244548 65007 595536 470473 125063 178562 141064 37498 2452 2452 44822 44822 231164 182620 48544 32766 25885 6881 101402 80108 21294 79412 62735 16677 337081 266294 70787 100765 79604 21161 67523 53343 14180 1210844 1210844 174510 174510 53441 42218 11223 FEES AND LICENSES 158496 125212 33284 BAD DEBT EXPENSE 29100 29100 MISCELLANEOUS EXPENSES 26420 20872 5548 DUES AND SUBSCRIPTIONS 12654 9997 2657 6765518 5623070 1142448 0 1 -3 31067644 36652701 498641 480685 6072926 6271437 6613446 2140947 4647009 4472499 93825577 88441693 182258 320467 136294056 136639479 1329982 2712448 12056 57548302 55464134 58878284 58188638 X 77415772 78450841 0 0 0 0 77415772 78450841 136294056 136639479 X 1420627 -385558 X X 0 1 X 0 0 RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 382134 382134 6009226 1918861 4090365 222086 222086 0 4472499 EQUITY INVESTMENTS 9494246 F DEBT INVESTMENTS 78947447 F 88441693 7354227 0 7354227 831918 831918 8186145 6765518 0 6765518 0 6765518 PART XI, LINE 4B - OTHER ADJUSTMENTS: INTERCOMPANY TRANSFERS 831,918. 1 KENTUCKY HIGHLANDS REAL ESTATE CORPORATION PO BOX 1738 LONDON KY 40743 610899617 88679 0 CASH PASS-THROUGH GRANT FROM JP MORGAN CHASE FOUNDATION TO PROVIDE FUNDS FOR REMODELING AND IMPROVEMENTS TO REAL PROPERTY LOCATED IN KHIC'S SERVICE AREA. 1 X X X X X 0 0 1 0 0 1 0 1 0 JERRY RICKETT PRESIDENT/CEO 357125 0 122113 0 24887 0 44555 0 34348 0 583028 0 0 0 BRENDA MCDANIEL EXEC. VICE PRESIDENT/CFO 355395 0 112293 0 8277 0 44555 0 35344 0 555864 0 0 0 MARK BOLINGER VICE PRESIDENT OF BUSINESS 224167 0 58117 0 1636 0 34965 0 34770 0 353655 0 0 0 EDGAR DAVIS BUSINESS DEVELOPMENT SPECI 145611 0 29403 0 1685 0 18131 0 34961 0 229791 0 0 0 PART I, LINE 3 A COMPENSATION COMMITTEE CONSISTING OF BOARD MEMBERS IS APPOINTED BY THE BOARD CHAIRMAN. THE COMMITTEE REVIEWS AND SETS POLICY REGARDING COMPENSATION. IN ADDITION, THE ORGANIZATION PARTICIPATES IN AN ANNUAL COMPDATA SURVEY AND THE SALARIES OF ALL EMPLOYEES REVIEWED FOR COMPARABILITY USING INFORMATION PROVIDED BY COMPDATA AND OTHER SOURCES. ADDITIONALLY, THE COMPENSATION COMMITTEE REVIEWS THE PERFORMANCE OF THE PRESIDENT AND CEO IN RELATION TO THE STRATEGIC PLAN AND GOALS OF THE ORGANIZATION WHICH IS APPROVED ANNUALLY BY THE BOARD OF DIRECTORS. THE COMPARABLE SALARIES RELATE TO VENTURE FUND MANAGERS, CFO'S, ETC. ON SEPTEMBER 13, 1989, THE IRS ISSUED A FAVORABLE DETERMINATION OF THE TOTAL COMPENSATION ARRANGEMENT (INCLUDING INCENTIVE COMPENSATION). IN ADDITION, IN 2025 THE ORGANIZATION HIRED A THIRD PARTY COMPENSATION CONSULTANT TO DETERMINE THE REASONABLENESS OF THE COMPENSATION OF THE OFFICERS, EXECUTIVES AND KEY EMPLOYEES. THE CONSULTANTS DETERMINED THE ORGANIZATION'S SALARIES AND BENEFITS WERE REASONABLE AND CONSISTENT WITH IRS GUIDANCE OUTLINED IN IRC 4958. A COMPENSATION STUDY WAS COMPLETED IN 2025. PART I, LINE 6 ON SEPTEMBER 13, 1989, THE ORGANIZATION RECEIVED A FAVORABLE IRS DETERMINATION REGARDING ITS INCENTIVE COMPENSATION PLAN. THE PLAN PROVIDES FOR TWO BONUS POOLS. ALL EMPLOYEES ARE ELIGIBLE TO BE CHOSEN FOR PARTICIPATION. THE FIRST POOL IS BASED ON THE LESSER OF 20% OF SALARIES OF EMPLOYEES CHOSEN FOR PARTICIPATION OR PROGRAM SERVICE INTEREST INCOME (NET OF EXPENSE) AND PROGRAM SERVICE RENTAL INCOME. THE SECOND POOL IS BASED ON 20% OF REALIZED GAINS ON THE SALE OF PROGRAM SERVICE INVESTMENTS. THE TOTAL BONUS POOL IS ALLOCATED TO THE FOLLOWING GROUPS: GROUP I - EXECUTIVE OFFICERS GROUP II - SENIOR INVESTMENT OFFICERS SELECTED FOR PARTICIPATION BY THE CEO GROUP III - INVESTMENT ANALYSTS SELECTED FOR PARTICIPATION BY THE CEO GROUP IV - ADMINISTRATIVE SUPPORT PERSONNEL SELECTED FOR PARTICIPATION BY THE CEO PART I, LINE 7 THE ORGANIZATION PAID BONUSES EQUAL TO ONE SEMI-MONTHLY PAY-PERIOD BASE COMPENSATION TO ALL EMPLOYEES. THE BONUSES WERE DETERMINED BY THE BOARD OF DIRECTORS. RAY MONCRIEF FORMER OFFICER 90000 CONSULTING 0 FORM 990, PART VI, SECTION B, LINE 11B THE FORM 990 IS REVIEWED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS PRIOR TO FILING. ANY COMMENTS/QUESTIONS ARE ADDRESSED AND THE RETURN IS FILED AFTER RESOLUTION. FORM 990, PART VI, SECTION B, LINE 12C ANY CONFLICTS OF INTEREST ARE DISCLOSED AT BOARD OF DIRECTORS MEETINGS AND RECORDED IN THE MINUTES, TO BE FOLLOWED UP BY THE BOARD CHAIRMAN AND/OR PRESIDENT. FORM 990, PART VI, SECTION B, LINE 15 A COMPENSATION COMMITTEE CONSISTING OF BOARD MEMBERS IS APPOINTED BY THE BOARD CHAIRMAN. THE COMMITTEE REVIEWS AND SETS POLICY REGARDING COMPENSATION. IN ADDITION, THE ORGANIZATION PARTICIPATES IN AN ANNUAL COMPDATA SURVEY AND THE SALARIES OF ALL EMPLOYEES REVIEWED FOR COMPARABILITY USING INFORMATION PROVIDED BY COMPDATA AND OTHER SOURCES. ADDITIONALLY, THE COMPENSATION COMMITTEE REVIEWS THE PERFORMANCE OF THE PRESIDENT AND CEO IN RELATION TO THE STRATEGIC PLAN AND GOALS OF THE ORGANIZATION WHICH IS APPROVED ANNUALLY BY THE BOARD OF DIRECTORS. THE COMPARABLE SALARIES RELATE TO VENTURE FUND MANAGERS, CFO'S, ETC. ON SEPTEMBER 13, 1989, THE IRS ISSUED A FAVORABLE DETERMINATION OF THE TOTAL COMPENSATION ARRANGEMENT (INCLUDING INCENTIVE COMPENSATION). IN ADDITION, IN 2016 THE ORGANIZATION HIRED A THIRD PARTY COMPENSATION CONSULTANT TO DETERMINE THE REASONABLENESS OF COMPENSATION FOR OFFICERS, EXECUTIVES AND KEY EMPLOYEES. THE CONSULTANTS DETERMINED THE ORGANIZATION'S SALARIES AND BENEFITS WERE REASONABLE AND CONSISTENT WITH IRS GUIDANCE OUTLINED IN IRC 4958. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC UPON REQUEST. FORM 990, PART VII THE SALARIES AND FRINGE BENEFITS REPORTED ON THIS FORM 990 REPRESENT 100% OF THE ORGANIZATION'S COSTS; HOWEVER, $330,174 +/- OF THOSE COSTS ARE CHARGED TO SUBSIDIARY / INVESTEE COMPANIES FOR SERVICES PROVIDED TO THEM. FORM 990, PART XI, LINE 9: PROVISION FOR LOAN LOSS RESERVE -385,558. FORM 990, PART XI, LINE 2C THERE WAS NO CHANGE IN THE PROCESS FROM PRIOR YEARS. FORM 990, PART XII, LINE 3B: THE 990-T IS BEING FILED BUT NO UBIT IN EXCESS OF $1,000 EXISTS. KENTUCKY HIGHLANDS COMMUNITY DEVELOPMENT CORPORATION PO BOX 1738 LONDON KY 407431738 611253192 TO PROMOTE THE TAX-EXEMPT MISSION OF KENTUCKY HIGHLANDS INVESTMENT CORP. KY 501(C)(3) 11, TYPE I 1 CENTRAL APPALACHIAN RURAL INVESTMENT CORPORATION PO BOX 1738 LONDON KY 407431738 204870639 TO PROMOTE THE TAX-EXEMPT MISSION OF KENTUCKY HIGHLANDS INVESTMENT CORP. KY 501(C)(3) 11, TYPE I N/A 0 APPALACHIAN FUND MANAGEMENT INC PO BOX 1738 LONDON KY 407431738 611399975 TO PROMOTE THE TAX-EXEMPT MISSION OF KENTUCKY HIGHLANDS INVESTMENT CORP. KY 501(C)(3) 11, TYPE I N/A 0 MERITUS VENTURES LP PO BOX 1738 LONDON KY 407431738 204862339 VENTURE CAPITAL - RBIC DE CENTRAL APPALACHIAN RURAL INVESTMENT CORPORATION RELATED 4214 -633531 0 1 0.13990 APPALACHIAN MICRO EQUITY FUND LLC PO BOX 1738 LONDON KY 407431738 813094121 SMALL BUSINESS INVESTMENTS KY RELATED 11937 466813 0 1 0.50000 SOMERSET CENTER HOTEL LP PO BOX 21950 OWENSBORO KY 42304 471194300 HOTEL KY RELATED 46150 194893 0 0 0.09000 KENTUCKY HIGHLANDS DEVELOPMENT CORPORATION PO BOX 1738 LONDON KY 40743 610988883 ECONOMIC DEVELOPMENT/HOLDING COMPANY KY C -51076 6264712 1.00000 0 KENTUCKY HIGHLANDS MANAGEMENT COMPANY PO BOX 1738 LONDON KY 40743 611160436 MANAGEMENT SERVICES KY C -3360 57406 1.00000 0 MOUNTAIN VENTURES INC PO BOX 1738 LONDON KY 40743 610951041 VENTURE CAPITAL KY C -31391 1257874 1.00000 0 KENTUCKY HIGHLANDS REAL ESTATE CORP PO BOX 1738 LONDON KY 40743 610899617 REAL ESTATE RENTAL KY C -3542 3062575 1.00000 0 PATRIOT INDUSTRIES INC PO BOX 9091 MONTICELLO KY 426330909 611319181 MANUFACTURING/CUT AND SEW KY C 82678 2005166 0.65490 0 SUMTER CORPORATION PO BOX 1738 LONDON KY 40743 463642311 MANUFACTURING KY C -102604 360829 0.65000 0 1 1 1 0 0 0 0 0 0 0 0 1 0 1 1 0 0 0 0 PATRIOT INDUSTRES INC A 409471 FMV INTEREST RATE MERITUS VENTURES LP L 167104 MANAGEMENT FEES - CONTRACTUAL KENTUCKY HIGHLANDS COMMUNITY DEVELOPMENT CORP O 245983 COST REIMBURSEMENT KENTUCKY HIGHLANDS REAL ESTATE CORP O 75677 COST REIMBURSEMENT MOUNTAIN VENTURES INC O 5461 COST REIMBURSEMENT KENTUCKY HIGHLANDS COMMUNITY DEVELOPMENT CORP C 831918 SUPPORT FROM SUPPORTING ORG. KENTUCKY HIGHLANDS DEVELOPMENT CORP O 3053 COST REIMBURSEMENT