NOW I LAY ME DOWN TO SLEEP FINANCIAL STATEMENTS. June 30, Together With Independent Auditor s Report

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1 FINANCIAL STATEMENTS Together With Independent Auditor s Report

2 TABLE OF CONTENTS INDEPENDENT AUDITOR'S REPORT 1 STATEMENT OF FINANCIAL POSITION 2 STATEMENT OF ACTIVITIES 3 STATEMENT OF FUNCTIONAL EXPENSES 4 STATEMENT OF CASH FLOWS 5 NOTES TO FINANCIAL STATEMENTS 6-9

3 INDEPENDENT AUDITOR'S REPORT The Board of Directors Now I Lay Me Down to Sleep Centennial, Colorado We have audited the accompanying statement of financial position of Now I Lay Me Down to Sleep (a nonprofit corporation) as of, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these 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 financial statements based on our audit. We conducted our audit 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 financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on 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 financial 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 financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of as of, and the changes in its net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. October 13, HEIDER, TANNER & DIRKS, INC. Denver, Colorado

4 STATEMENT OF FINANCIAL POSITION ASSETS Cash and cash equivalents - unrestricted $ 83,462 Cash and cash equivalents - restricted 19,000 Accounts receivable 4,703 Contributions receivable 6,000 Prepaid expenses and deposits 26,148 Property and equipment 8,949 Total assets $ 148,262 LIABILITIES AND NET ASSETS Liabilities Accounts payable $ 25,206 Payroll liabilities 27,106 Deferred revenue 250 Deferred lease incentive 2,894 Commitments - Total liabilities 55,456 Net Assets: Unrestricted 67,806 Temporarily restricted 25,000 Total net assets 92,806 Total liabilities and net assets $ 148,262 The accompanying notes are an integral part of the financial statements. -2-

5 STATEMENT OF ACTIVITIES For the year ended REVENUE AND OTHER SUPPORT Temporarily Unrestricted Restricted Total Contributions $ 445,990 $ 15,000 $ 460,990 Special events 268,938 10, ,938 (less) direct expenses (134,508) - (134,508) Care package - 25,267 25,267 Merchandise sales 24,605-24,605 Other income In-kind contributions 8,340,000-8,340,000 Net assets released from restrictions 35,838 (35,838) - EXPENSE Total revenue and other support 8,981,280 14,429 8,995,709 Program services Donated photography services 8,340,000-8,340,000 Other program services 463, ,026 Total program expense Supporting services 45,617-45,617 Management and general 158, ,178 Fundraising Total expense 9,006,821-9,006,821 CHANGE IN NET ASSETS (25,541) 14,429 (11,112) NET ASSETS, beginning of year, as previously stated 106,544 10, ,115 PRIOR YEAR ADJUSTMENT (13,197) - (13,197) NET ASSETS, beginning of year, as restated 93,347 10, ,918 NET ASSETS, end of year $ 67,806 $ 25,000 $ 92,806 The accompanying notes are an integral part of the financial statements. -3-

6 STATEMENT OF FUNCTIONAL EXPENSES For the year ended Supporting Services Program Management Services & General Fundraising Total Salaries $ 277,277 $ 17,618 $ 92,997 $ 387,892 Payroll taxes and benefits 34,722 2,204 11,478 48,404 Photography 8,340, ,340,000 Office operations 4, ,821 7,447 Postage 7, ,775 14,428 Printing and copying 5, ,697 25,450 Contract services 17, ,031 Rent 29,953 2,754 1,721 34,428 Care packages 20, ,998 Marketing 13, ,730 19,751 Conferences 5, ,666 Meetings 7,242 10, ,904 Computers and internet 8, ,102 14,722 Dues and subscriptions 1, ,068 Bank charges - 5,562 1,482 7,044 Telephone and telecommunications 6, ,504 Staff development 6, ,193 Insurance 4, ,708 Training and education Volunteer appreciation and recruitment 3, ,224 All other 1, ,668 9,089 8,794,864 44, ,595 8,997,104 Depreciation 8, ,717 Total Expenses $ 8,803,026 $ 45,617 $ 158,178 $ 9,006,821 The accompanying notes are an integral part of the financial statements. -4-

7 STATEMENT OF CASH FLOWS For the year ended CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ (11,112) Adjustments to reconcile change in net assets to cash provided by operating activities Depreciation expense 9,717 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable 282 (Increase) decrease in contributions receivable (3,000) (Increase) decrease in prepaid expenses and deposits (14,511) Increase (decrease) in accounts payable 21,095 Increase (decrease) in payroll liabilities 5,815 Increase (decrease) in deferred lease incentive (3,498) Increase (decrease) in deferred revenue (8,000) CASH USED BY OPERATING ACTIVITIES (3,212) NET DECREASE IN CASH (3,212) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 105,674 CASH AND CASH EQUIVALENTS, END OF YEAR $ 102,462 The accompanying notes are an integral part of these financial statements

8 NOTES TO FINANCIAL STATEMENTS NOTE 1 - NATURE OF ACTIVITIES Now I Lay Me Down to Sleep ( NILMDTS) ) was organized in 2005 in the State of Colorado. NILMDTS offers the gift of healing, hope and honor to parents experiencing the death of a baby through the overwhelming power of remembrance portraits. Professional-level photographers volunteer their time to capture the only moments parents spend with their babies and gift the beautiful heirloom portraits free of charge. These priceless images serve as an important step in the healing recovery for bereaved families. NILMDTS remembrance photography validates the existence and presence of these precious babies by honoring their legacy. NILMDTS recruits, trains, and mobilizes professional quality photographers around the world. Through NILMDTS, medical personnel are given a meaningful option to offer bereaved parents by creating remembrance portraiture for their babies. Through further engagement in the organization, such as the NILMDTS Remembrance Walk and online support, families become a part of a compassionate and supportive community. Parents gain a sense of inclusiveness, alleviating the alienation and perception of being alone in their pregnancy or infant loss journey. NILMDTS is operated as a nonprofit organization exempt from federal income taxes under Section 50l(c)(3) of the Internal Revenue Code ("the code"), and is not a private foundation under 509(a) of the code. NILMDTS is primarily supported by contributions, special events, and in-kind donations of professional photography services. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of Accounting The financial statements of NILMDTS have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. b. Basis of Presentation NILMDTS is required to report 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. Unrestricted Net Assets consists of assets, public support and program revenues, which are available and used for operations and programs. Contributions are considered available for unrestricted use unless specifically restricted by the donor. Temporarily Restricted Net Assets includes funds with donor-imposed restrictions, which permit the organization to expend the assets as specified and is satisfied either by the passage of time or by actions of the organization. Resources of this nature originate from gifts, grants, bequests, contracts and investment income earned on restricted funds. Permanently Restricted Net Assets includes resources which have a permanent donor-imposed restriction which stipulates that the assets are to be maintained permanently, but permits the organization to expend part or all of the income derived from the donated assets. c. Cash and Cash Equivalents NILMDTS considers all unrestricted cash and highly liquid investments with an initial maturity of three months or less to be cash equivalents. -6-

9 NOTES TO FINANCIAL STATEMENTS NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) d. Accounts and Contributions Receivable Management considers all grants, accounts and notes receivable to be collectible; thus, no allowance for uncollectible accounts has been recorded. e. Capitalization and Depreciation All expenditures for furniture and equipment in excess of $500 is capitalized. The fair value of donated assets is similarly capitalized. Depreciation of furniture and equipment is provided over the estimated useful lives of the respective assets on a straight-line basis. f. Donations NILMDTS reports gifts of cash and other assets as restricted support if they are received with donor stipulations that limit the use of donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Gifts of land, buildings, and equipment are reported as unrestricted support unless the explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent donor stipulations regarding how long those long-lived assets must be maintained, NILMDTS reports expirations of donor restrictions when the donated or acquired long-lived assets are placed in service. g. Functional Expenses The costs attributable to program services and expenses associated with fundraising have been reported in the accompanying financial statements on a functional basis. Accordingly, certain costs have been allocated among the program expenses, management and general expenses, and fundraising expenses based on estimates made by management. h. Income Taxes NILMDTS is a tax-exempt organization as defined by Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision has been made for income taxes in the accompanying financial statements. NILMDTS follows FASB ASC 740 Income Taxes, which requires entities to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority. NILMDTS has evaluated tax positions taken related to its tax-exempt status, and none are considered to be uncertain; therefore, no amounts have been recognized as of. i. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. -7-

10 NOTES TO FINANCIAL STATEMENTS j. In-Kind Contributions Contributions of goods and services to NILMDTS and the corresponding expense are reported at fair value, if the criteria for financial statement recognition are met. Donations of fixed assets are recorded at their fair market value at the time of donation, and they are reported as unrestricted support if there are no restrictions on use of the assets. k. Subsequent Events Management has evaluated subsequent events through October 13, 2017, the date the financial statements were available to be issued. NOTE 3 - PROPERTY AND EQUIPMENT Property and equipment consist of the following: Office equipment $ 51,258 Website and improvements 36,721 Less: accumulated depreciation (79,030) $ 8,949 Depreciation expense for the year ended was $9,717. NOTE 4 - LEASE COMMITMENTS NILMDTS entered into a lease for office space during the year ended June 30, 2015, which expires March 31, The future minimum payments on this lease are as follows: Year ending June 30: 2018 $ 27,681 Rent expense for the year ended was $34,428. NOTE 5 - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consist of contributions receivable and other donations that are restricted by time or by the donor for certain activities. The following is a summary of changes in temporarily restricted net assets for the year ended : 6/30/16 Additions Releases 6/30/17 Purpose restrictions: Care packages $ 10,571 25,267 (35,838) Expansion of programs 10,000 10,000 Sponsorships 9,000 9,000 Total purpose restrictions 10,571 44,267 (35,838) 19,000 Time restrictions 6,000 6,000 Total $ 10,571 50,267 (35,838) 25,000 NOTE 6 - IN-KIND CONTRIBUTIONS During the year ended, NILMDTS recognized in-kind contributions of 4,170 professional photography sessions valued at $2,000 per session, which totaled $8,340,000. NILMDTS also received $2,000 of in-kind printing services related to special events. In addition, NILMDTS received volunteer services not meeting the criteria for recognition and accordingly, their value was not recorded. -8-

11 NOTE 7 - PRIOR YEAR ADJUSTMENT NOW I LAY ME DOWN TO SLEEP NOTES TO FINANCIAL STATEMENTS During the year ended June 30, 2016, NILMDTS entered into an operating agreement with interested parties in the Republic of Ireland (the Ireland Office ) to establish a program for the same purposes as those established within the United States. The operating agreement established the terms, financial requirements and operating procedures to be required of the Ireland Office, and through which the volunteers and employees, if any, of the Ireland Office would be permitted to use any NILMDTS trademarks, trade names and materials. Activity of the Ireland Office was consolidated with the NILMDTS financial statements for the year ended June 30, Upon further consideration of terms of the operating agreement, it has been determined that the financial statements of the Ireland Office should not be consolidated with those of NILMDTS. A prior year adjustment has been made to remove net assets of the Ireland Office. -9-