TEAM RUBICON GLOBAL, LTD. FINANCIAL STATEMENTS. December 31, 2017 and 2016

Transcription

1 FINANCIAL STATEMENTS

2 C O N T E N T S Independent Auditor s Report... 1 Statements of Financial Position... 2 Statements of Activities... 3 Statements of Functional Expenses... 4 Statements of Cash Flows... 5 Notes to Financial Statements... 6

3 INDEPENDENT AUDITOR S REPORT To the Board of Directors Team Rubicon Global, Ltd. Washington, DC We have audited the accompanying financial statements of Team Rubicon Global, Ltd., which comprise the statements of financial position as of, 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 audit 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 statements of financial position of Team Rubicon Global, Ltd. as of, 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. Wegner CPAs, LLP Madison, Wisconsin June 1, 2018 New York Office: 230 Park Avenue, 3 rd Floor New York, NY P: (212) F: (262) Washington DC Office: 419 N Lee Street Alexandria, VA P: (703) Wisconsin Office: 2921 Landmark Place Suite 300 Madison, WI P: (608) F: (608) info@wegnercpas.com (888)

4 STATEMENTS OF FINANCIAL POSITION ASSETS Cash $ 1,702,542 $ 977,289 Accounts receivable - 2,397 Due from related party (note 8) - 57,601 Unconditional promises to give 1,175,227 2,045,000 Prepaid expenses 4,311 2,543 Investments 12,307 10,553 Furniture and equipment - net 15,296 19,582 Total assets $ 2,909,683 $ 3,114,965 LIABILITIES Accounts payable $ 21,192 $ 31,793 Accrued payroll 13,576 12,200 Accrued vacation - 3,796 Due to related party (note 8) 350, ,000 Total liabilites 384, ,789 NET ASSETS Unrestricted 459, ,590 Temporarily restricted 2,065,670 2,510,586 Total net assets 2,524,915 2,717,176 Total liabilities and net assets $ 2,909,683 $ 3,114,965 See accompanying notes. 2

5 STATEMENTS OF ACTIVITIES Years ended UNRESTRICTED NET ASSETS SUPPORT AND REVENUE Contributions $ 539,643 $ 998,075 Donated services 571, ,530 TRx setup and management fees - 93,355 Investment return (1,423) (673) Total unrestricted support and revenue 1,109,742 1,694,287 EXPENSES Program services 2,757,195 1,282,814 Management and general 295, ,968 Fundraising 55,251 83,056 Total expenses 3,108,423 1,542,838 Net assets released from restrictions 2,251,336 - Change in unrestricted net assets 252, ,449 TEMPORARILY RESTRICTED NET ASSETS Contributions 1,806,420 2,510,586 Net assets released from restrictions (2,251,336) - Change in temporarily restricted net assets (444,916) 2,510,586 Change in net assets (192,261) 2,662,035 Net assets - beginning of year 2,717,176 55,141 Net assets - end of year $ 2,524,915 $ 2,717,176 See accompanying notes. 3

6 STATEMENTS OF FUNCTIONAL EXPENSES Years ended Program Management 2017 Services and General Fundraising Total Personnel $ 898,462 $ 79,479 $ 51,215 $ 1,029,156 Professional fees 691,161 63, ,691 Travel 610,821 27,515 3, ,065 Incident management 180, ,011 Occupancy 36,530 64, ,363 Information technology 77,210 6, ,639 Supplies 49,849 5,802-55,651 Meals and entertainment 40,522 2, ,536 Advertising 36,091 1,243-37,334 TRx revolving fund 34, ,656 Governance 29,138 3,327-32,465 Recruiting - 26,667-26,667 Deployment support 25, ,000 Dues and subscriptions 14,665 4,559-19,224 Office expense 13,438 5,328-18,766 Insurance 15,816 2,469-18,285 Depreciation 3, ,286 Miscellaneous 476 1,152-1,628 Total expenses $ 2,757,195 $ 295,977 $ 55,251 $ 3,108,423 Program Management 2016 Services and General Fundraising Total Personnel $ 246,470 $ 139,800 $ 80,519 $ 466,789 Professional fees 604,100 28, ,981 Travel 248, ,806 Information technology 82,561 1,080 1,157 84,798 Deployment support 32, ,500 Meals and entertainment 24, ,797 Supplies 14,937 1, ,718 Advertising 10, ,969 TRx manual 8, ,775 Dues and subscriptions 3,963 1, ,647 Insurance 2,841 1,753-4,594 Miscellaneous 2, ,696 Depreciation - 1,768-1,768 Total expenses $ 1,282,814 $ 176,968 $ 83,056 $ 1,542,838 See accompanying notes. 4

7 STATEMENTS OF CASH FLOWS Years ended CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ (192,261) $ 2,662,035 Adjustments to reconcile change in net assets to net cash flows from operating activities Depreciation 4,286 1,768 Donated stock (3,177) (11,226) Unrealized loss on investments 1, (Increase) decrease in assets Accounts receivable 2,397 7,250 Due from related party 57,601 (57,601) Unconditional promises to give 869,773 (1,951,336) Prepaid expenses (1,768) (1,168) Increase (decrease) in liabilities Accounts payable (10,601) 11,385 Accrued payroll 1,376 12,200 Accrued vacation (3,796) 3,796 Net cash flows from operating activities 725, ,844 CASH FLOW FROM INVESTING ACTIVITIES Purchases of furniture and equipment - (17,799) Dividends retained in investments (269) (68) Net cash flows from investing activities (269) (17,867) Net change in cash 725, ,977 Cash - beginning of year 977, ,312 Cash - end of year $ 1,702,542 $ 977,289 SUPPLEMENTAL DISCLOSURES Noncash investing activities Donated stock $ 3,177 $ 11,226 See accompanying notes. 5

8 NOTES TO FINANCIAL STATEMENTS Team Rubicon Global, Ltd. (TRG) was founded in December TRG supports the TR Network by fostering the establishment and development of Team Rubicon country units and by facilitating the TR Network to provide effective provision of humanitarian aid in the wake of disasters and in so doing help veterans find purpose and community. NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation TRG is required to report information regarding its financial position and activities according to three classes of net assets: Unrestricted net assets Net assets that are not restricted by donors. Designations are voluntary board-approved segregations of unrestricted net assets for specific purposes, projects, or investments. Temporarily restricted net assets Net assets whose use has been limited by donor-imposed time restrictions or purpose restrictions. Permanently restricted net assets Net assets that have been restricted by donors to be maintained by TRG in perpetuity. Accounts Receivable TRG considers all receives to be fully collectible. Accordingly, no allowance for doubtful accounts has been developed. Promises to Give Unconditional promises to give are recognized as revenue in the period received and as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Conditional promises to give are recognized only when the conditions on which they depend are substantially met and the promises become unconditional. Investments TRG carries investments in marketable equity securities with readily determinable fair values at their fair values in the statements of financial position. Unrealized gains and losses are included in the change in net assets in the accompanying statements of activities. Furniture and Equipment Furniture and equipment are carried at cost or, if donated, at the approximate fair value at the date of donation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. TRG has a capitalization policy of $5,000. 6

9 NOTES TO FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Contributions Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire (that is, when a stipulated time restriction ends or purpose restriction is accomplished) in the reporting period in which the revenue is recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets, depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. Donated Services Donated services are recognized as contributions if the services (a) create or enhance nonfinancial assets or (b) require specialized skills, are performed by people with those skills, and would otherwise be purchased by TRG. Volunteers may also provide services throughout the year that are not recognized as contributions in the financial statements as recognition criteria are not met. Expense Allocation The costs of providing various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the program services and supporting activities benefited, as follows: Program Services Team Rubicon Global (TRG) is the hub of a spoke network of Team Rubicon country organizations that recruit, train, equip and deploy military veterans into natural disasters. TRG launches new Team Rubicons, coordinates and supports international operations, maintains brand control, sets operating standards, and establishes strategic relationships with foreign governments, multinational institutions, and non-governmental organizations on behalf of the entire network. Supporting Activities Supporting activities consist of management and general functions, such as strategic planning and financial management of TRG, and fundraising. Advertising Advertising costs are expensed as incurred. Advertising expense for 2017 and 2016 was $37,334 and $10,969. Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenue and expenses. Actual results could differ from those estimates. Income Tax Status TRG is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. 7

10 NOTES TO FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Date of Management s Review Management has evaluated subsequent events through June 1, 2018, the date which the financial statements were available to be issued. NOTE 2 PROMISES TO GIVE Unconditional promises to give at are as follows: Restricted for implementation and support team $ 750,000 $ - Restricted for subsequent years' activities 425,227 2,045,000 $ 1,175,227 $ 2,045,000 Receivable in less than one year $ 675,227 $ 2,045,000 Receivable in one to five years 500,000 - Total unconditional promises to give $ 1,175,227 $ 2,045,000 NOTE 3 CONCENTRATIONS OF CREDIT RISK TRG maintains its cash balances in one financial institution. The balance is insured by the Federal Deposit Insurance Corporation up to $250,000. At, TRG's uninsured cash balances totaled approximately $1,449,800 and $472,800. NOTE 4 DONATED SERVICES AND USE OF FACILITIES Donated services and use of facilities for 2017 and 2016 consisted of the following: Program services $ 524,722 $ 553,299 Management and general 46,800 50,231 Total donated services $ 571,522 $ 603,530 Donated in-kind legal fees for 2017 and 2016 consisted of $199,682 and $313,863, allocated to program services in the amount of $182,873 and $299,070, and to management and general in the amount of $16,809 and $14,793. 8

11 NOTES TO FINANCIAL STATEMENTS NOTE 5 INVESTMENTS Investments at consisted of the following: Money market $ 187 $ 68 Equities 12,120 10,485 Investments $ 12,307 $ 10,553 Investment return for 2017 and 2016 consisted of the following: Dividends $ 269 $ 68 Unrealized loss (1,692) (741) Investment return $ (1,423) $ (673) NOTE 6 FURNITURE AND EQUIPMENT Furniture and equipment at consisted of the following: Furniture and equipment $ 21,431 $ 21,431 Less accumulated depreciation 6,135 1,849 Furniture and equipment - net $ 15,296 $ 19,582 Depreciation expense for 2017 and 2016 was $4,286 and $1,768. NOTE 7 FAIR VALUE MEASUREMENTS Fair values of assets measured on a recurring basis as of consisted of the following: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs 2017 Fair Value (Level 1) (Level 2) (Level 3) Equities $ 12,307 $ 12,307 $ - $ - 9

12 NOTES TO FINANCIAL STATEMENTS NOTE 7 FAIR VALUE MEASUREMENTS (continued) Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs 2016 Fair Value (Level 1) (Level 2) (Level 3) Equities $ 10,553 $ 10,553 $ - $ - Fair values for equities are determined by reference to quoted market prices and other relevant information generated by market transactions. NOTE 8 RELATED PARTIES As of, TRG had five related parties in the United States, United Kingdom, Canada, Australia, and Norway. Team Rubicon United States created TRG as the global coalition of the Team Rubicon network, and TRG created Team Rubicon United Kingdom, Team Rubicon Australia, Team Rubicon Canada, and Team Rubicon Norway. TRG resources the standup and sustainment for overseas TR units for both business and field operations. All related entities have independent boards of directors. Due to related party at was $350,000 due to Team Rubicon United States for the IDEO project. Repayment of this amount depends on TRG s revenue. The agreement states when annual revenue reaches $1.5M, this amount is to be paid in 6 quarterly installments. When annual revenue reaches $2M, the amount is due in 2 quarterly installments, or immediately if two payments have already been made. However, TRG and Team Rubicon United States are currently working on a new repayment plan. Due from related party at December 31, 2016 was $57,601 due from Team Rubicon United Kingdom for setup charges and annual fees. NOTE 9 TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets at December 31, 2017 are available for the following: Time restrictions $ 1,175,227 $ 2,045,000 Program activities 729,391 - Disaster relief operations 121, ,000 Haiti relief fund 21,969 68,285 Team Rubicon network information technology 17, ,301 Temporarily restricted net assets $ 2,065,670 $ 2,510,586 NOTE 10 RETIREMENT PLAN TRG maintains a 401(k) retirement plan. Employees are eligible to participate after completing 6 months of service. TRG matches 100% of employees elective deferral amounts up to a 4% ceiling. The employer match is 50% vested after one year and 100% vested after two years of completed service. Retirement expense for 2017 and 2016 was $18,761 and $0. 10