VOX TEEN COMMUNICATIONS, INC. FINANCIAL ST A TEMENTS JUNE 30, 2017 AND With Independent Auditor's Report Thereon

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1 FINANCIAL ST A TEMENTS JUNE 30, 2017 AND 2016 With Independent Auditor's Report Thereon

2 CERTIFIED PUBLIC: ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT To the Board of Directors of VOX Teen Communications, Inc. We have audited the accompanying financial statements of VOX Teen Communications, Inc. ("YOX") (a nonprofit organization), which comprise the statements of financial position as of June 30, 2017 and 2016, and the related statements of activities, functional expenses, and cash flows for the years 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 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 audits to obtain reasonable assurance about whether the financial statements are free from 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 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 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 ofvox 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. JA:tfot/ Morrow, Georgia October 18, Jonesboro Road, Suite looa, Morrow, GA p f

3 STATEMENTS OF FINANCIAL POSITION JUNE 30, 2017 AND 2016 ASSETS 2017 CURRENT ASSETS Cash $ 110,037 $ Contributions receivable 10,260 Pre pa ids 839 TOTAL CURRENT ASSETS 121, 136 FIXED ASSETS Leasehold improvements Equipment Accumulated depreciation (1 26,81 3) TOTAL FIXED ASSETS OTHER ASSETS Security deposit TOTAL ASSETS $ $ ,005 55, ,591 91, ,487 (125,635) 6, LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 2,402 $ Accrued liabilities TOTAL CURRENT LIABILITIES 2,402 1,753 2,422 4, 175 LONG TERM LIABILITIES Accrued rent expense 34, I I TOTAL LIABILITIES 36,515 NET ASSETS Unrestricted 99,539 TOTAL NET ASSETS 99,539 TOTAL LIABILITIES AND NET ASSETS $ 136,054 $ , ,311 The accompanying notes are an integral part of these financial statements. 2

4 VOX TEEN COMM UNI CATIONS, INC. STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED JUNE 30, 2017 AND CHANGES IN NET ASSETS REVENUES, GAINS AND OTHER SUPPORTS Contributions $ 164,504 $ 160,875 Government grants 124, ,108 Foundation grants 53,500 90,531 Fundraisers 53,321 53,482 Less direct benefit to donors (17,130) (l 7,955) Fee for service 28,450 17,629 United Way 24,298 32,938 Inkind donations 6 61 I TOTAL REVENUES, GAINS AND OTHER SUPPORTS 437, ,219 EXPENSES Program activities 432, ,671 Management and general 31,785 29,003 Fundraising ,198 TOT AL EXPENSES 508, ,872 CHANGE IN NET ASSETS (71, IOI) 14,347 NET ASSETS AT THE BEGINNING OF THE YEARS 170, ,293 NET ASSETS AT THE END OF THE YEARS $ 99!539 $ l The accompanying notes are an integral part of these financial statements. 3

5 STATEMENTS OF FUNCTIONAL EXPENSES FOR THE YEARS ENDED JUNE 30, 2017 AND 2016 Program Management and general Fundraising Totals Salaries Contracted services Rent Payroll taxes and benefits Teen stipends Teen transportation I field trips Parking Legal and professional Teen snacks and meals Equipment expense Printing Insurance Administrative and general Postage and shipping Telephone Supplies Depreciation Volunteers $ 196,006 $ 148,126 $ 14,001 $ 9,875 $ 23,334 $ 70,987 65, ,345 6,175 60,703 68,964 4,336 4,598 7,227 44,016 26,858 3,144 1,790 5,240 14,0 I 0 10,640 12,614 9,730 7,008 7, ,800 6,500 4,717 5,972 3,948 18, , ,624 4,530 3,098 4, , , ,674 2, ,523 2, ,174 2, , , ,583 2,400 3,065 I, , $ 233,341 $ 164,584 77,263 70,106 72,266 76,627 52,400 29,842 14,0 I 0 I 0,640 12,614 9,730 8,232 8,478 6,800 6,500 4,717 5,972 4,700 20,460 4,624 4,530 3,715 4,547 3,644 1,368 3,565 2,397 3,004 2,555 2,690 3,643 I, 178 1, TOT AL EXPENSES $ 432,239 $ 379,671 $ 31,785 $ 29,003 $ 44,712 $ $ 508,763 $_ The accompanying notes are an integral part of these financial statements. 4

6 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2017 AND CASH FLOWS FROM OPERA TING ACTIVITIES Change in net assets $ (71, 101) $ Adjustments to reconcile change in net assets to net cash used in operating activities Depreciation and amortization 1, 178 Decrease (increase) in operating assets Accounts receivable 45,585 Prepaid expenses (125) Increase (decrease) in operating liabilities: Accounts payable 649 Accrued rent expenses (6,383) Accrued expenses (2,422) NET CASH FLOWS USED IN OPERATING ACTIVITIES (32,592) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (2, 76) NET CASH USED IN INVESTING ACTIVITIES 2 76) ,347 1,849 (22,095) (4) 1,753 (4,909) (6,637) (3,420) (3,420) NET CASH FLOWS FROM FINANCING ACTIVITIES NET CHANGE IN CASH (34,968) CASH AT THE BEGINNING OF THE YEARS 145,005 CASH AT THE END OF THE YEARS $ 11 Q,Q3Z $ (I 0,057) 155, ,005 The accompanying notes are an integral part of these financial statements. 5

7 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows. Nature of business VOX Teen Communications, Inc. ("VOX") was organized in 1993 as a nonprofit corporation. VOX provides after school programs for Atlanta area teenagers focusing on skill development and community building. Basis of accounting The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP"). VOX classifies its net assets and revenues and expenses, gains and losses based on the existence or absence of donorimposed restrictions. Accordingly, net assets of the VOX and changes therein are classified and reported as follows: Unrestricted net assets net assets not subject to donor imposed restrictions. emporarily restricted net assets net assets subject to donorimposed stipulations that may or will be met either by actions of VOX and/or the passage of time. Revenues are reported as increases in unrestricted net assets unless the use of the related assets is limited by donorimposed restrictions. Expenses are reported as decreases in unrestricted net assets. Expirations of temporary restrictions on net assets are reported as reclassifications between the applicable classes of net assets. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are reported. Estimates Management of the VOX makes estimates and assumptions related to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare the financial statements in conformity with GAAP. Actual results could differ from these estimates. 6

8 NOTES TO FINANCIAL STATEMENTSContinued 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and cash equivalents For financial statement purposes, highly liquid investments with original maturities of three months or less when purchased are reported as cash and cash equivalents. For the years ended June 30, 2017 and 2016, VOX had no cash equivalents. Fixed assets Fixed assets are stated on the basis of cost with the exception of donated items, which are stated at fair market value at the date of donation. Expenditures for renewals and improvements are charged to the property accounts. Expenditures such as maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to operations. The cost and related accumulated depreciation are removed from the accounts for equipment sold or retired. Acquisitions that have an estimated useful life greater than one year are capitalized and are depreciated on the straightline basis using useful lives ranging from five to ten years. Donated materials and services Contributed services are reflected on the financial statements at the fair value of the services received. The contributions of services are recognized if the services received create or enhance nonfinancial assets or require specialized skills that are provided by individuals possessing such skills and would typically be purchased if not provided by the donation. Donated materials and equipment are reflected as contributions on the accompanying financial statements at their estimated fair values at the date of receipt. Inkind materials donated were $4,211 and $4,211 for the years ended June 30, 2017 and 2016, respectively. Inkind services donated were $2,400 and $2,400 for the years ended June 30, 2017 and 2016, respectively. Functional allocation of expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the statements of activities. Accordingly, certain costs have been allocated among program activities, management and general, and fundraising expenses. Unconditional promises to give All unconditional promises to give are considered to be available for unrestricted use unless specifically restricted by the donor. Promises to give with payment dates in future periods, promises to give restricted by the donor for specific purposes, or amounts received that are designated for future periods are reported as temporarily restricted net support that increases that net asset class. 7

9 NOTES TO FINANCIAL STATEMENTSContinued 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Unconditional promises to give are recorded at the present value of estimated future cash flows. The discounts on those amounts are computed using a riskfree interest rate applicable to the year in which the promise is received. Amortization of the discount is included in contribution revenues. VOX considers all of the pledges to be collectible at June 30, 2017 and Accordingly, no provision is made for uncollectible amounts. Income taxes VOX qualifies as a taxexempt organization under Section 501(c)(3) of the Internal Revenue Code and, accordingly, is only subject to federal or state income taxes on specific types of income from activities that are unrelated to its exempt purpose. VOX had no income from unrelated activities and has no income taxes due as of June 30, 2017 and YOX's application of ASC 740 regarding uncertain tax positions had no effect on its financial position as management believes YOX has no material unrecognized income tax benefits, including any potential risk of loss of its notforprofit tax status. VOX would account for any potential interest or penalties related to possible future liabilities for unrecognized income tax benefits as income tax expense. VOX is no longer subject to examination by federal, state or local tax authorities for periods before COMMITMENTS AND CONTIGENCIES VOX has a lease for office space in downtown Atlanta. The lease expires August 31, The future minimum lease payments under the terms of the agreement are as follows: 2018 $ 76, , , ,822 Total $ VOX's rent expense was $72,266 and $76,627 for the years ended June 30, 2017 and 2016, respectively. 8

10 3. SUBSEQUENT EVENTS VOX TEEN COMMUNICATIONS, INC. NOTES TO FINANCIAL STATEMENTS Continued Subsequent events have been evaluated through October 18, 2017, which is the date the financial statements were available to be issued. 9