THEATRE MEMPHIS COMBINED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION JUNE 30,2017 AND 2016

Transcription

1 COMBINED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION JUNE 30,2017 AND 2016

2 COMBINED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

3 CONTENTS Page FINANCIAL STATEMENTS Independent Auditor's Report Combined Statements of Financial Position Combined Statements of Activities Combined Statements of Cash Flows o o o 0 o o o o o 0 o 0 o Notes to Combined Financial Statements 0 SUPPLEMENTARY INFORMATION o o o o o o o o o o o o o o o o o o o o o o o o. 0 o Combining Statements of Financial Position Combining Statements of Activities 0 o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o 20-21

4 Whitehorn Tankersley & ~ Davis, PLLC CERTIFIED PUBLIC ACCOUNTANTS 670 Oakleaf Office Lane Memphis, TN (901) (901) FAX INDEPENDENT AUDITOR'S REPORT To The Board of Directors Theatre Memphis Memphis, Tennessee We have audited the accompanying combined fmancial statements oftheatre Memphis (a nonprofit organization) which comprise the combined statements of financial position as of June 30, 2017 and 2016, and the related combined statements of activities and cash flows for the years then ended, and the related notes to the combined financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these combined 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 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 combined financial statements based on our audits. We conducted our audits 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 combined financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor's judgment, including the 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 combined fmancial 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 significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AICPA DIVISION OF FIRMS: PRIVATE COMPANIES PRACTICE SECTION TENNESSEE SOCIETY OF CERTIFIED PUBliC ACCOUNTANTS

5 2 Opinion In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position oftheatre Memphis as of June 30,2017 and 2016, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Report on Supplementary Information Our audits were conducted for the purpose of forming an opinion on the combined financial statements as a whole. The combining statements of financial position and combining statements of activities on pages are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the combined financial statements. The information has been subjected to the auditing procedures applied in the audit of the combined financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the combined financial statements or to the financial statements themselves, and other procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion the information is fairly stated in all material respects in relation to the combined financial statements taken as a whole. November 6, 2017 Memphis, Tennessee

6 3 COMBINED STATEMENTS OF FINANCIAL POSITION ASSETS JUNE CURRENT ASSETS Cash and cash equivalents.... Restricted cash.... Other receivables.... Promises to give.... Prepaid expenses.... TOTAL CURRENT ASSETS.... PROPERTY AND EQUIPMENT - net of accumulated depreciation.... $ 1,522,661 4,906 1,527,567 10,670 17, ,140 $ 1,375, ,379,904 4,553 36,183 21,938 1,442, TOTAL ASSETS $ $ 1, LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ Accrued expenses.... Deferred revenue.... TOTAL CURRENT LIABILITIES ,239 13, ,688 $ 35,239 7, NET ASSETS Unrestricted Undesign.ated.... Board designated.... Temporarily restricted.... TOTAL NET ASSETS.... 1,373, ,673, ,988,449 1,011, ,000 1,311, , TOTAL LIABILITIES AND NET ASSETS... $ 2, $ 1, See notes to combined financial statements

7 4 COMBINED ST,f\TEMENTS OF ACTIVITIES YEAR ENDED JUNE UNRESTRICTED NET ASSETS Support and revenue Support $ 1,083,217 Revenue ,3 56 In-kind donations ,789 Total support and revenue $ 1,656, , Reclassifications Net assets released from restrictions - satisfaction of time and purpose restriction.... Total reclassifications.... Total support and revenue and reclassifications... Functional expenses before depreciation Program.... General and administrative.... Fundraising Total functional expenses before depreciation.... CHANGE IN UNRESTRICTED NET ASSETS BEFORE DEPRECIATION.... DEPRECIATION Program General and administrative.... Total depreciation.... CHANGE IN UNRESTRICTED NET ASSETS , , , , , , , ,228 See notes to combined financial statements

8 5 COMBINED STATEMENTS OF ACTIVITIES- CONTINUED YEAR ENDED JUNE TEMPORARILY RESTRICTED NET ASSETS Support and revenue Support... 0 Loss on uncollectible promises to give 0 Total support and revenue o o. o o $ ,320 $ (5,000) 45,320 27, Reclassifications Net assets released from restrictions Total reclassifications (40,294) (40,294) ( ) ( ) CHANGE IN TEMPORARILY RESTRICTED NET ASSETS... o o o o o o o. o ( ) CHANGE IN NET ASSETS o o o , ,696 NET ASSETS - beginning of year... o o o o o o ,990 NET ASSETS -end of year o o o o o $ 1.988,449 $ See notes to combined financial statements

9 6 COMBINED STATEMENTS OF CASH FLOWS YEAR ENDED JUNE CASH FLOWS FROM OPERATING ACTIVITIES Cash received from contributors and grantors.... Cash received from customers and others.... Cash paid to suppliers and employees.... Income tax.es paid.... Interest paid NET CASH PROVIDED BY OPERATING ACTIVITIES. o. o $ 1,148,084 $ 2,215, , ,235 (1,397,026) (1,484,673) (1,023) (1,830) (2,874) 452, CASH FLOWS FROM INVESTING ACTIVITIES Payments for purchase of furniture and equipment NET CASH (USED) BY INVESTING ACTIVITIES... CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds (payments) on line of credit NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES o o o o o o o o o o o o (304,645) (304,645) (85.394) (85.394) ( ) (195,937) NET CHANGE IN CASH AND CASH EQUIVALENTS o 147,663 1,102,676 CASH AND CASH EQUIVALENTS AT BEGINNING OFYEAR... o.o 1,379, CASH AND CASH EQUIVALENTS AT END OF YEAR o. $ $ See notes to combined financial statements

10 7 THEATRE MEMPIDS COMBINED STATEMENTS OF CASH FLOWS- CONTINUED RECONCILIATION OF CHANGE IN NET ASSETS TO NET CASH PROVIDED BY OPERATING ACTIVITIES YEAR ENDED JUNE CHANGE IN NET ASSETS... $ 366,763 $ 889,696 ADJUSTMENTS TO RECONCILE CHANGE IN NET ASSETS TO NET CASH PROVIDED BY OPERATING ACTIVITIES Depreciation.... Loss on uncollectible promises to give.... Loss on disposition of property and equipment.... (Increase) decrease in assets: Other receivables.... Promises to give.... Prepaid expenses.... Increase (decrease) in liabilities: Accounts payable and accrued expenses.... Deferred revenue ,001 5, (6,11.7) 14,100 9,261 12,819 (13,966) 53,542 (3,538) 530,567 (9,456) (57,714) (19,090) NET CASH PROVIDED BY OPERATING ACTIVITIES..... $ $ See notes to combined financial statements

11 8 NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED JUNE 30,2017 AND 2016 NOTE 1 - DESCRIPTION OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF ACTIVITIES- Theatre Memphis ("Theatre") located in Memphis, Tennessee, was organized in 1920 under the laws of Tennessee for the purpose of providing outstanding theatrical experiences to enrich the lives of our audiences and participants through the production of plays, outreach and educational programming. BASIS OF ACCOUNTING - The financial statements of the Theatre have been prepared on the accrual basis of accounting, in accordance with accounting principles generally accepted in the United States of America and include the combined accounts of Theatre Memphis and Stage Set, a related supporting agency of the Theatre. All significant inter-agency balances have been eliminated. Financial statement presentation follows the recommendations of the Financial Accounting Standards Board Accounting Standards Codification ("F ASB ASC") Not-for-Profit Organizations - Presentation of Financial Statements. The Theatre reports information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. Temporarily restricted net assets at each year end are generally available for use during future fiscal years. RESTRICTED CASH- Restricted cash represents monies which were received to provide theatrerelated performers and their families with assistance in the payment of medical bills. As these monies were given for a specific purpose, they are restricted for use solely for that purpose. The Emergency Needs for the Theater Acting Community (ENTAC) fund provides limited financial assistance when a member of the Memphis acting community is unable to meet immediate, essential expenses because of a temporary hardship related to an emergency situation. A temporary hardship is one caused by a defined, time-limited, specific event such as a death of a family member, a fire, serious illness or critical injury. Funds are not available to cover longer-standing financial problems. An application process is required. PROMISES TO GIVE - Unconditional promises to give are recognized as revenues or gains in the period received and as assets, decreases of liabilities, or expenses depending upon the form of the benefits received. Conditional promises to give are recognized when the conditions on which they depend are substantially met. The Theatre uses the allowance method to determine uncollectible unconditional promises receivable. The allowance, if any, is based upon prior years' experience and management's analysis of specific promises made. No allowance was considered necessary at June 30,2017 or The Theatre board has adopted the following policies to provide guidance/policy over current and future contributions:

12 9 THEATRE MEMPIDS NOTES TO COMBINED FINANCIAL STATEMENTS- CONTINUED YEARS ENDED JUNE 30,2017 AND 2016 NOTE 1 - DESCRIPTION OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED PROMISES TO GIVE- continued POLICY Operating Reserve Policy Maintenance Reserve Policy Investment Policy Gift Acceptance Policy Conflict of Interest Policy ADOPTION/ REVISION DATE February 3, 2014 June 29, 2015 August 26, 1997 June 26,2013 September 8, 2014 CHILD PROTECTION POUCY- The Theatre adopted a Child Protection Policy in 2016 in order to provide a safe and secure environment for the children who participate in their programs and activities. Their goal is to protect the children from incidents of misconduct or inappropriate behavior while also protecting their staff and volunteers (workers) from false accusations. CASH AND CASH EQUIVALENTS- The Theatre considers all cash accounts, which are riot subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with initial maturities of three months or less to be cash equivalents. PROPERTY AND EQUIPMENT- Property and equipment purchased are recorded at cost. Donated furniture and equipment are recorded at their estimated fair market values at the date of receipt. Expenditures for additions, major renewals and betterments greater than $1,000 are capitalized and those for maintenance and repairs are charged to expense as incurred. Depreciation is computed on the straight-line basis over the estimated useful life of the depreciable assets. MARKETING COSTS - Marketing costs are generally expensed in the year incurred and totaled $48,877 (in-kind $8,589) and $56,432 (in-kind $24,895) for the years ended Jurie 30, 2017 and 2016, respectively. ESTIMATES - The presentation 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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. REVENUE RECOGNITION AND CONTRIBUTED SUPPORT- Support received is recorded as unrestricted, temporarily restricted, or permanently restricted revenue depending on the existence and/or nature of any donor restrictions. Accordingly, the Theatre has elected to show restricted contributions whose restrictions are met in the same reporting period as unrestricted support.

13 10 NOTES TO COMBINED FINANCIAL STATEMENTS- CONTINUED YEARS ENDED JUNE 30,2017 AND 2016 NOTE 1 - DESCRIPTION OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED REVENUE RECOGNITION AND CONTRIBUTED SUPPORT- continued- Contributions that are subject to time or use restrictions are required to be reported as temporarily restricted support and are then reclassified to unrestricted net assets upon expiration of the restrictions. BARTER TRANSACTIONS- The Theatre generally enters into several barter transactions. The substance of these transactions is that the Theatre receives print advertising in exchange for performance admissions and advertising in the Theatre's program. IN-KIND DONATIONS- In-kind donations are recognized at their fair market value if they (a) create or enhance long-lived assets or (b) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Additionally, the Theatre receives a significant amount of contributed time from general volunteers. The value of the general volunteer contributed time has not been determined and is not reflected in the accompanying financial statements since it does not meet the two recognition criteria described above. DEFERRED REVENUE - Subscriptions are recognized as revenues during the fiscal year that coincides with the play season. Subscriptions remitted in advance of the play season are accounted for as deferred revenue. TAX STATUS- The Internal Revenue Service has issued a determination letter indicating that the Theatre qualifies as a tax -exempt organization under Section 501 ( c )(3) of the Internal Revenue Code. It has been classified as an organization that is nota private foundation under Section 509 (a)(2) of the Internal Revenue Code. The Theatre follows the provisions off ASB ASC , Accounting for Income Taxes, which requires the computation of any current income tax assets or liabilities only consider tax positions that are more likely than not (defined as a greater than 50% chance) to be sustained if the taxing authorities examined the positions. The Theatre is subject to income tax examination by taxing authorities for years ending after June 30, CONCENTRATIONS- The Theatre maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Theatre has not experienced any losses in such accounts nor does management of the Theatre believe there is any significant credit risk on cash and cash equivalents. The Theatre is supported primarily through donor contributions (including board members and management), government grants, ticket sales and local arts council funding. The local arts council funding comprised approximately 8% and 7% of the Theatre's total revenue and support for the years ended June 30, 2017 and 2016, respectively. The Theatre depends heavily on grants and contributions for its revenue. The ability of the Theatre's grantors and contributors to continue making grants comparable to the present level depends upon many factors, including current and

14 11 NOTES TO COMBINED FINANCIAL STATEMENTS- CONTINUED YEARS ENDED JUNE 30,2017 AND 2016 NOTE 1 - DESCRIPTION OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED CONCENTRATIONS- continued- economic conditions. While the Theatre's boaid of directors believes it has the resources to continue its programs, its ability to do so and the extent to which it continues may be dependent upon the above factors. SUBSEQUENT EVENTS - The Theatre management evaluates subsequent events through the auditor's report date, which is the date the financial statements are available for issuance. RECLASSIFICATIONS- For comparability, certain prior year amounts have been reclassified where appropriate to conform with the financial statement presentation in the current year. NOTE 2- FAIR VALUE MEASUREMENTS FASB ASC , Fair Value Measurements, establishes a fair value hierarchy that prioritizes the inputs for valuation techniques used to measure fair value. This hierarchy consists of three broad levels. Levell inputs are based on unadjusted quoted market prices within active markets. Level2 inputs are based on quoted prices for similar assets in active or inactive markets. Level 3 inputs are all other financial instruments without an active market or inactive market and for which no significant observable inputs are available. No Level 1 or 2 inputs were available to the Theatre. Fair values of assets measured on a recurring basis at June 30, 2017 and 2016 are as follows: June 30, 2017 Promises to give June 30, 2016 Promises to give Fair Value $ $ Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level3) $ $ All assets above have been valued using a market value approach and there have been no changes in valuation techniques and related inputs.

15 12 NOTES TO COMBINED FINANCIAL STATEMENTS- CONTINUED YEARS ENDED JUNE 30,2017 AND 2016 NOTE 2- FAIR VALUE MEASUREMENTS- CONTINUED The reconciliation of the changes in unconditional promises to give at fair value on a recurring basis using significant unobservable inputs (Level3) is as follows: Unconditional Promises to Give Balance, June 30, Contributions and (collections) net.... Collection of prior uncollectible promise to give.... Balance, June 30, Contributions and (collections) net.... Balance, June 30, $ 566,750 (555,567) ,183 (19,100) $ NOTE 3 - PROMISES TO GIVE Unconditional promises to give comprised the following: JUNE ArtsMemphis challenge pledges.... $ 7,750 $ 15,750 Debt elimination pledges.... 5,000 Other.... 9,333 15,433 Total promises to give.... $ 17 ~083 $ 36 ~ 183 At June 30, 2017, promises to give are all due in the fiscal year ending June 30, 2018.

16 13 NOTES TO COMBINED FINANCIAL STATEMENTS- CONTINUED YEARS ENDED JUNE 30,2017 AND 2016 NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment consist' of the following major classifications: JUNE Building and improvements $ Marquee and signage.... Production equipment.... Furniture, fixtures and equipment.... Heating and air conditioning equipment.... Vehicle.... Ticketing system.... Accumulated depreciation.... 2,521,869 76, , ,610 84,323 4, ,227,992 ( ) $ 2,265,369 59, , ,223 84,323 4,500 57,020 2,953,178 (2, ) $ 625,140 $ Depreciation expense for the years ended June 30, 2017 and 2016 totaled $64,001 and $53,542, respectively. NOTE 5 - INDEBTEDNESS LINE OF CREDIT- The Theatre maintains a $150,000 renewable, unsecured revolving line of credit from a local bank which expires March 31, 2019 and is generally renewed upon expiration of the term. The line bears interest at the bank's base rate plus fifty basis points, but not less than 4% per annum, with interest payable monthly. There was no outstanding balance on the line of credit at either June 30, 2017 or Interest expense for the years ended June 30, 2017 and 2016, totaled $0 and $2,874, respectively.

17 14 NOTES TO COMBINED FINANCIAL STATEMENTS- CONTINUED YEARS ENDED JUNE 30,2017 AND 2016 NOTE 6 - NET ASSETS Temporarily restricted net assets comprised the following: JUNE J eniam Foundation - architectural services.... $ 50,000 $ Arts Memphis challenge.... 7,750 15,750 Promises to give - debt elimination.... 5,000 Jeniam Foundation- "Maintenance Reserve" , ,000 Jeniam Foundation- production equipment.... 6,870 Bernsen scholarships.... 3,960 3,980 Other.... 3,438 28,522 $ 315)48 $ 310~122 The Theatre board has adopted a maintenance reserve policy for the use of the indicated funds for significant maintenance and replacements. Board designated net assets represent those amounts identified for the operating reserve fund. These funds are intended to be used to sustain operations under various situations and in compliance with the Theatre's operating reserve fund policy. NOTE 7- IN-KIND DONATIONS AND BARTER TRANSACTIONS The Theatre records in-kind donations received in the course of daily operations. The Theatre is built on land leased from the Memphis Park Commission for $1,200 per year until No amounts have been recognized in the statement of activities for the fair value of the Theatre's use of the land because the value is not readily determinable. The amounts reflected in the accompanying financial statements as in-kind donations of $11,789 and $27,995 for 2017 and 2016, respectively, are offset by like amounts in expenses for each year. In-kind donations comprised the following: JUNE Advertising and marketing.... Other.... $ 8,589 3,200 $ $ 24, $ 27,995

18 15 NOTES TO COMBINED FINANCIAL STATEMENTS- CONTINUED YEARS ENDED JUNE 30,2017 AND 2016 NOTE 8 - LEASE COMMITMENTS The Theatre "leases the land on which its building is located under an operating lease from the Memphis Park Commission. The lease provides for monthly rent payments and expires December 31, 2069 ($63,000 total remaining payments). The Theatre also leases various office equipment under operating leases which expire in various years through June 30, Future minimum lease payments under the operating leases with an initial lease term of one year or greater are as follows: YEAR ENDING JUNE30 AMOUNT $ Thereafter ,554 20,554 15,944 2,108 1,200 57,000 Total $ Rent expense totaled $21,030 in 2017 and NOTE 9 - RETIREMENT PLAN The Theatre sponsors a 401 (k) Qualified Retirement Plan to provide retirement benefits for employees who meet certain eligibility requirements. There was no retirement benefit expense for years ended June 30,2017 and NOTE 10- INCOME TAXES The Theatre's advertising revenue is considered unrelated to its exempt purpose; accordingly, the Theatre is subject to federal and state income tax on this net unrelated business income. The Theatre incurred $1,023 and $1,830 in tax expense for years ended June 30, 2017 and 2016, respectively.

19 16 NOTES TO COMBINED FINANCIAL STATEMENTS- CONTINUED YEARS ENDED JUNE 30,2017 AND 2016 NOTE 10- INCOME TAXES- CONTINUED Total income tax expense comprised the following: JUNE Federal $ 604 $ 1,130 State Franchise and Excise $ 1,023 $ 1,830 NOTE 11- GRANTS J eniam II, a local private foundation, notified the Theatre in prior years of a grant to be annually awarded from a donor advised fund at the Community Foundation of Greater Memphis which was combined with a previously established donor advised fund at ArtsMemphis. The fund is to distribute up to 5% of the principal to the Theatre annually for use in operations. The Theatre received $17,760 and $16,344 for the years ended June 30, 2017 and 2016, respectively. During 2016, Jeniam II donated $400,000, with $250,000 placed in a maintenance reserve fund to be used for significant maintenance/replacements and $50,000 for the purchase of production-related equipment. The remaining $100,000 was used in accordance with the Theatre board's June 29, 2015 adopted resolution to increase cash flow and eliminate the use of all deferred revenue cash proceeds during the Theatre's non-production time in between theatre seasons. NOTE 12- RELATED PARTIES The Theatre normally receives contributions, sponsorships and ticket sales from members of its Board of Directors and management. Included in support and revenue in the accompanying statements of activities are approximately $310,000 and $112,000 of such support and revenue during 2017 and 2016, respectively. In addition, included in promises to give in the statement of financial position at June 30,2017 and 2016 are $7,750 and $15,500 due from board members and/or management. NOTE 13- SIGNIFICANT FUTURE ACCOUNTING STANDARD CHANGES In February 2016, the Financial Accounting Standards Board ("F ASB") issued Accounting Standards Update ("ASU") Leases, which requires changes to the accounting for leases. Under the

20 17 NOTES TO COMBINED FINANCIAL STATEMENTS- CONTINUED YEARS ENDED JUNE 30, 2017 AND 2016 NOTE 13- SIGNIFICANT FUTURE ACCOUNTING STANDARD CHANGES CONTINUED ASU, the recognition, measurement and presentation of expenses and cash flows arising from a lease will depend primarily on whether the lessee is expected to consume more than an insignificant portion of the economic benefits embedded in the underlying asset. A right-of-use asset and liability to make lease payments will be recognized on the balance sheet for substantially all leases (except short-term leases.) The enactment of this ASU may have an impact on the Company's accounting and financial reporting. Management has not yet determined the effect on its financial statements of this ASU when implemented. For non-public business entities, the pronouncement is effective for annual periods beginning after December 15, 2019 with early adoption permitted. The FASB has also issued ASU Presentation of Financial Statements ofnot-for-profit Entities. Under this ASU, net asset classes will be revised, all nonprofits will be required to present expenses on a functional basis, and new liquidity and availability disclosures are required, among other items. The ASU is effective for fiscal years beginning after December 15, 2017 and early implementation is allowed, but only if all aspects of the ASU are adopted. Management has not yet considered the effects of implementation ofthis ASU.

21 SUPPLEMENTARY INFORMATION

22 18 COMBINING STATEMENT OF FINANCIAL POSITION JUNE 30, 2017 General Fund Stage Set Total ASSETS CURRENT ASSETS Cash and cash equivalents.... Restricted cash.... Accounts receivable.... Promises to give- current portion Prepaid expenses.... Total Current Assets $ 1,519, ,524,597 10,670 17, $ 2,970 2, $ 1,522,661 4,906 1,527,567 10,670 17, ,997 PROPERTY AND EQUIPMENT - net of accumulated depreciation TOTAL ASSETS $ 2.190,167 $ $ 2.193,137 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable.... Accrued expenses.... Deferred revenue.... Total Current Liabilities $ 42,239 13, ,688 $ $ 42,239 13, NET ASSETS Unrestricted Undesignated.... Board designated.... Temporarily restricted.... Total Net Assets.... 1,370, ,670, ) ,479 2,970 2, ,373, ,673, ) TOTAL LIABILITIES AND NET ASSETS.... $ 2l190)67 ~ ~ 2J93)37 See notes to combined financial statements

23 19 COMBINING STATEMENT OF FINANCIAL POSITION JUNE 30, 2016 General Fund Stage Set Total ASSETS CURRENT ASSETS Cash and cash equivalents... 0 Restricted cash Accounts receivable 0 Promises to give - current portion 0 Prepaid expenses.. 0 Total Current Assets $ 1,372, ,377,129 4,553 36, ,803 $ 2,775 2, $ 1,375,268 4,636 1,379,904 4,553 36, ,578 PROMISES TO GIVE, less current portion o o o o o o PROPERTY AND EQUIPMENT- net of accumulated depreciation , ,943 TOTAL ASSETS... o o o... o $ 1.824,746 $ $ 1.827,521 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Note payable bank - line of credit 0 Accounts payable 0 Accrued expenses 0 Deferred revenue 0 Total Current Liabilities $ 35,239 7, $ $ 35,239 7, ,835 NET ASSETS Unrestricted Undesignated. 0. Board designated 0 Temporarily restricted 0 Total Net Assets ,008, ,000 1,308, ) ,775 2, ,011, ,000 1,311, , TOTAL LIABILITIES AND NET ASSETS. 0 o o o o o o o. 0. o. o ~ 1~ ~ 2~775 $ 1,827,521 See notes to combined fmancial statements

24 20 COMBINING STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 General Fund Stage Set Total UNRESTRICTED NET ASSETS Support and revenue Support.... Revenue.... In-kind donations.... Total support and revenue.... Reclassifications.... Functional expenses before depreciation and inventory costs Program.... General and administrative.... Fundraising Total functional expenses.... PERMANENT TRANSFERS.... CHANGE IN UNRESTRICTED NET ASSETS BEFORE DEPRECIATION..... DEPRECIATION Program.... General and administrative.... Total depreciation.... CHANGE IN UNRESTRICTED NET ASSETS.... TEMPORARILY RESTRICTED NET ASSETS Support and revenue and reclassifications Support.... Loss on uncollectible promises to give.... Reclassifications.... Total support and revenue and reclassifications.... CHANGE IN TEMPORARILY RESTRICTED NET ASSETS.... $ 1,080, , , , , , , ,542 50,320 (5,000) (40.294) CHANGE IN NET ASSETS ,568 NET ASSETS- beginning of year NET ASSETS- end of year $ $ 2, ,841 (875) $ 1,083, , , , , , ,320 (5,000) (40.294) 5, , $ $ 1, See notes to combined financial statements

25 21 COMBINING STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 General Fund Stage Set Total UNRESTRICTED NET ASSETS Support and revenue Support.... Revenue.... In-kind donations.... Total support and revenue Reclassifications.... Functional expenses before depreciation and inventory costs Progratn.... General and administrative.... Fundraising.... Total functional expenses.... PERMANENT TRANSFERS.... CHANGE IN UNRESTRICTED NET ASSETS BEFORE DEPRECIATION.... DEPRECIATION Program.... General and administrative.... Total depreciation CHANGE IN UNRESTRICTED NET ASSETS.... TEMPORARILY RESTRICTED NET ASSETS Support and revenue and reclassifications Support.... Reclassifications.... Total support and revenue and reclassifications.... CHANGE IN TEMPORARILY RESTRICTED NET ASSETS.... $ 1,654, , , , ,930 28,612 53, ,848 ( ) ( ) ( ) CHANGE IN NET ASSETS ,837 NET ASSETS- beginning of year NET ASSETS- end ofyear $ L618 ~ 911 $ 2, (3,025) (1.141 ) (1.141 ) $ 1,656, , , , l098l770 24,930 28, ,045,228 27,848 (1 83,380) ( ) (1 55,532) (1,141) 889, L990 $ $ See notes to combined fmancial statements