Report of Independent Auditors and Financial Statements for. Seattle Biomedical Research Center dba Center for Infectious Disease Research

Transcription

1 Report of Independent Auditors and Financial Statements for Seattle Biomedical Research Center dba Center for Infectious Disease Research June 30, 2015 and 2014

2 To the Board of Trustees Seattle Biomedical Research Center dba Center for Infectious Disease Research Report on Financial Statements REPORT OF INDEPENDENT AUDITORS We have audited the accompanying financial statements of Seattle Biomedical Research Center dba Center for Infectious Disease Research (the Center), which comprise the statements of financial position as of June 30, 2015 and 2014, and the related statements of activities 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. Auditors 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 auditors 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. 1

3 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 Seattle Biomedical Research Center dba Center for Infectious Disease Research as of June 30, 2015 and 2014, 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. Seattle, Washington October 26,

4 STATEMENTS OF FINANCIAL POSITION JUNE 30, 2015 AND CURRENT ASSETS Cash and cash equivalents $ 5,677,249 $ 5,002,119 Investments (Note 2) 25,766,290 Grants and accounts receivable 5,155,690 6,349,990 Contributions receivable, net current (Note 3) 64,200 83,044 Prepaid expenses and other assets 683, ,070 Total current assets 37,346,444 11,811,223 NON CURRENT ASSETS Security Deposit 1,801, ,306 Other non current assets 82, ,067 Investment in affliate (Note 4) 182,312 35,655 Property and equipment, net (Note 5) 7,220,422 8,421,037 Total non current assets 9,286,656 9,424,065 Total assets $ 46,633,100 $ 21,235,288 CURRENT LIABILITIES Accounts payable $ 2,367,255 $ 3,315,789 Accrued expenses 1,253,480 1,560,944 Restricted advances on grant awards 4,765,557 4,824,725 Total current liabilities 8,386,292 9,701,458 DEFERRED RENT LIABILITY (Note 7) 194, ,110 Total liabilities 8,580,767 10,317,568 NET ASSETS Unrestricted 37,381,411 10,149,200 Temporarily restricted (Note 10) 670, ,520 Total net assets 38,052,333 10,917,720 Total liabilities and net assets $ 46,633,100 $ 21,235,288 See accompanying notes. 3

5 STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015 Temporarily Unrestricted Restricted 2015 Total SUPPORT AND REVENUE Grants and contracts federal $ 23,417,934 $ $ 23,417,934 Grants and contracts nonfederal 7,958,337 7,958,337 Contributions 109, , ,187 Rental, interest, program and other 2,463, ,463,530 Net assets released from restriction (Note 10) 292,624 (292,624) 34,241,586 (97,598) 34,143,988 EXPENSES Research program 30,610,600 30,610,600 Education program 370, ,469 Management and administrative 3,387,811 3,387,811 Real Estate 2,522,568 2,522,568 Fundraising 107, ,243 36,998,691 36,998,691 EXCESS (DEFICIENCY) OF SUPPORT AND REVENUE OVER EXPENSE (2,757,105) (97,598) (2,854,703) INVESTMENT RETURN IN EXCESS OF AMOUNT DESIGNATED FOR CURRENT OPERATIONS UNDER SPENDING POLICY (Note 2 and 4) 29,989,316 29,989,316 CHANGE IN NET ASSETS 27,232,211 (97,598) 27,134,613 NET ASSETS Beginning of year 10,149, ,520 10,917,720 End of year $ 37,381,411 $ 670,922 $ 38,052,333 4 See accompanying notes.

6 STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2014 Temporarily Unrestricted Restricted 2014 Total SUPPORT AND REVENUE Grants and contracts federal $ 26,890,232 $ $ 26,890,232 Grants and contracts nonfederal 6,664,682 6,664,682 Contributions 64, , ,730 Special events, net of direct expenses of $92, , ,220 Investment return designated for current operations (Note 4) 1,019,833 1,019,833 Rental, interest, program and other 1,252,578 1,252,578 Net assets released from restriction (Note 10) 2,231,942 (2,231,942) Total support and revenue 38,629,175 (2,088,900) 36,540,275 EXPENSES Research program 34,199,501 34,199,501 Education program 302, ,073 Management and administrative 2,921,777 2,921,777 Real estate 1,714,766 1,714,766 Fundraising 618, ,093 Total expenses 39,756,210 39,756,210 CHANGE IN NET ASSETS (1,127,035) (2,088,900) (3,215,935) NET ASSETS Beginning of year 11,276,235 2,857,420 14,133,655 End of year $ 10,149,200 $ 768,520 $ 10,917,720 See accompanying notes. 5

7 STATEMENTS OF CASH FLOWS YEAR ENDED JUNE 30, 2015 AND CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ 27,134,613 $ (3,215,935) Adjustments to reconcile change in net assets to cash flows (used in) provided by operating activities Depreciation and amortization 1,509,806 1,786,489 Change in fair value of interest rate swap agreement (8,916) Change on security deposit (981,263) (820,306) Loss on sale of property and equipment 44,371 94,338 Investment in affiliate earnings (27,715,919) (1,019,833) Unrealized gain/losses from investment 494,444 Donated equipment (1,700) Change in deferred rent liability (421,635) (246,259) (Increase) decrease in assets: Grants and accounts receivable 1,194,300 84,395 Prepaid expenses and other assets (306,945) (4,225) Related party notes receivable 64,714 10,390 Pledges receivable 18, ,585 Increase (decrease) in liabilities: Accounts payable (948,534) 1,783,713 Accrued expenses (307,464) (3,539,878) Restricted advances on grant awards (59,168) 557,894 Net cash (used in) provided by operating activities (279,836) (4,421,248) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of property and equipment 62,762 6,550 Purchases of property and equipment (416,324) (1,182,146) Distributions from affiliate 27,569,262 1,254,880 Purchase of Investments (26,260,734) Net cash provided by investing activities 954,966 79,284 CASH FLOWS FROM FINANCING ACTIVITIES Repayment on long term borrowings (465,000) NET CHANGE IN CASH AND CASH EQUIVALENTS 675,130 (4,806,964) CASH AND CASH EQUIVALENTS Beginning of year 5,002,119 9,809,083 End of year $ 5,677,249 $ 5,002,119 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid (received) for income taxes $ (191,207) $ Cash paid for interest $ $ 13,280 6 See accompanying notes.

8 Note 1 General Information and Summary of Significant Accounting Policies General Seattle Biomedical Research Institute dba Center for Infectious Disease Research (the Center) is a private not for profit organization incorporated in 1976, to develop vaccines and drugs to prevent and treat the world s most devastating infectious diseases, including HIV/AIDS, tuberculosis, malaria and other parasite caused afflictions. In April 2015, the Center changed its dba name from Seattle BioMed to the Center for Infectious Disease Research in an effort to increase public engagement with its mission. For more information on the work of the Center, please visit Federal Tax Status The Internal Revenue Service has determined the Center to be exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. The Center pays income tax on its unrelated business income, if any, and files income tax returns with the US Government which are subject to examination based on applicable laws and regulations. The U.S. federal statute of limitations remains open for returns filed for fiscal years ending in 2012 through Basis of Presentation The Center follows the provisions of accounting principles generally accepted in the United States (U.S. GAAP) for not for profit organizations regarding the classification of net assets. Under these provisions, net asset and revenues, expenses, gains and losses are classified based on the existence or absence of donor imposed restrictions. Accordingly, the net assets of the Center and changes therein are classified and reported as follows: Unrestricted Net Assets Net assets that are not subject to donor imposed stipulations. As of June 30, 2015 and 2014, the Center had no unrestricted net assets designated for specified use. Temporarily Restricted Net Assets Net assets subject to donor imposed restrictions that will be met either by actions of the Center and/or the passage of time (Note 10). Permanently Restricted Net Assets Net assets subject to donor imposed restrictions that the Center maintains them permanently. As of June 30, 2015 and 2014, the Center had no permanently restricted net assets. Revenues are reported as increases in unrestricted net assets, unless use of the related assets is limited by donor imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets, unless their uses are restricted by explicit donor restriction or by law. Expirations of temporary restrictions on net assets (i.e., the donor stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported on the statement of activities as net assets released from restriction. 7

9 Note 1 General Information and Summary of Significant Accounting Policies (Continued) Revenue Recognition: Grants and Contracts A substantial portion of the Center s revenue is derived from governmental and private grant awards that are restricted to specific program or project support. Current grant revenue is recognized as expenditures are made or liabilities are incurred in connection with fulfilling the specific restricted purposes of the award. Cash received in excess of grant expenditures is accounted for as restricted advances. Expenses incurred, which are not yet reimbursed, are accounted for as grants receivable. Contributions Contributions received, including unconditional promises to give, are recognized as revenues in the period received at their fair values. Contributions subject to donor imposed restrictions for use in a future period or for a specific purpose are reported either as temporarily or permanently restricted, depending on the nature of the donor s restriction. When a donor restriction expires or is fulfilled, temporarily restricted assets are reclassified to unrestricted net assets and reported on the statement of activities as net assets released from restrictions. Contributions of equipment or other long term assets are recognized when pledged or received, whichever is earlier, and recorded at estimated fair values. Donated supplies and services are not significant, and have not been reflected in the accompanying financial statements. Interest Income Interest income is recognized on operating assets including cash and cash equivalents, securities on deposit and loans to employees. The Center earned $3,910 and $3,811 in interest income for the years ended June 30, 2015 and 2014, respectively, and is included in Rental, interest, program and other income on the statement of activities. Rental Income and fees The Center subleases excess operating space associated with its long term building leases to third party tenants. Income recognized from subtenants includes rental income and associated operating and parking fees. The Center recognized $2,274,798 and $866,261 in rental income and fees for the years ended June 30, 2015 and 2014, respectively, included in Rental, interest, program and other income on the statement of activities. Cash and Cash Equivalents For purposes of the statement of cash flows, the Center considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents held within the investment portfolio pursuant to the Center s investment policy are included in Investments on the statement of financial position. 8

10 Note 1 General Information and Summary of Significant Accounting Policies (Continued) Investments The Center s investments are recorded at fair value on the statements of financial position, and the realized and unrealized gains and losses on investments are reported on the Statement of Activities as Investment Return. All investments are initially recorded at acquisition cost when purchased. Investments in equity securities with readily determinable fair values and investments in debt securities are reported at fair value based on quoted market prices (see Note 2). All other investments, for which quoted market prices are not available, are also reported at estimated fair value based on valuations provided by the external investment managers and the management of the investees. The Center reviews and evaluates the values provided by the investment managers and agrees with the valuation methods and assumptions used in determining the fair value of the alternative investments. Those estimated fair values may differ significantly from the values that would have been used had a ready market for these investments existed. The Center did not hold any investments for which quoted market prices are not available at the period ending June 30, 2015 or The Center s Investments are managed by independent professional investment managers subject to oversight by a committee of the Board of Trustees (the Board ). Grants and accounts receivables Receivables are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to change in net assets and a credit to a valuation allowance based on its assessment of the current status of individual accounts. The Center recorded no allowance for doubtful accounts at June 30, 2015 and Balances outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to grants, contracts, or accounts receivable. Contributions Receivable Contributions receivable consists of unconditional promises to give. Contributions coming due within a one year period are recorded as contributions receivable and are included in current assets on the Statement of Financial Position. Contributions due more than one year in the future are reported in other non current assets on the Statement of Financial Position and as Contributions in the Statement of Activities at their present value using a discounted cash flow model. Amortization of the discount is reported as Contributions in the statement of activities. Conditional promises to give are not recorded as revenue until the donor imposed conditions have been met. An allowance for estimated uncollectible contributions receivable is recorded based on management s judgment and analysis of the creditworthiness of the donors, past collection experience, and other relevant factors. Accounts are written off against allowances when deemed uncollectible. The Center has recorded an allowance for uncollectable contributions in the amount of $0 and $15,000 for 2015 and 2014, respectively (see Note 3). 9

11 Note 1 General Information and Summary of Significant Accounting Policies (Continued) Security Deposit The Center secures its building leases with a standby letter of credit from Key Bank in the amount of $1,801,569, and $820,306 at June 30, 2015 and 2014, respectively which was secured by a certificate of deposit in the same amount issued by Key Bank (see Note 6). Other Non Current Assets Included in other non current assets at June 30, 2015 and 2014 is $82,353 and $93,078, respectively in notes receivable from an employee of the Center. The loan is reported at its outstanding principal balances plus accrued interest. The loan accrues interest a fixed rate of 2.4% at June 30, 2015 and 2014 and interest is calculated using the simple interest method on principal amounts outstanding. The loan and accrued interest is forgivable 10.0% each year over ten years starting in December 2012 and is deemed compensation to the employee in the year forgiven. The loan plus all accrued interest is payable upon termination of the employee s employment. Other non current asset at June 30, 2014 include non current contributions receivable of $7,333 (see Note 3) and pre paid expense of $46,656 associated with building lease in place at June 30, 2014 (see Note 7). Property and Equipment Property and equipment are recorded at cost if property is purchased by the Center directly, and fair value if received through donation. The Center s capitalization threshold is $5,000. The Center charges ordinary maintenance to operations as incurred. The book value of Property and equipment transferred as a result of program relocation to another institution is written off. Depreciation and amortization are computed using the straight line method over the shorter of the estimated useful lives or lease term, if applicable, of assets ranging from 3 to 30 years. Depreciation expense for the years ended June 30, 2015 and 2014 was $1,509,806 and $1,786,489 respectively. A portion of the Center s equipment is subject to U.S. government grant administration policy, under which the federal government has retained the right to request a transfer of title to another grantee; however, this right is rarely exercised. Allocation of Functional Expenses The costs of conducting research programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP 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 Statement of Financial Position and and reported amounts of revenues and expenses during the periods reported on the statement of activities. Actual results could differ from those estimates. 10

12 Note 1 General Information and Summary of Significant Accounting Policies (Continued) Reclassifcation of Prior Year Balances: Certain prior year balances have been reclassified to conform with current year presentation. Subsequent Events The Center has evaluated subsequent events through October 26, 2015, the date which the financial statements were available to be issued. Note 2 Investments Fair Value Measurements The Organization applies the provisions of Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The ASC describes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Center invests in mutual fund accounts that are measured at fair value on a recurring basis as follows as of June 30, 2015: Fair Value Measurements as of June 30, 2015 Level 1 Level 2 Level 3 Total Fixed Income $ 9,306,930 $ $ $ 9,306,930 Domestic Equities 9,256,066 9,256,066 International Equities 6,259,351 6,259,351 Real Estate Investment Trust 943, ,943 Total $ 25,766,290 $ $ $ 25,766,290 Investment Policy The Center has adopted an investment policy the objectives of which are to invest to provide a relatively predictable and growing stream of quarterly distributions in support the Institute s mission (the Spending Amount, see below) and to preserve the real purchasing power of the investments after inflation, costs and spending. 11

13 Note 2 Investments (Continued) Investments are diversified and standards for return, asset allocation and diversification are determined from a strategic perspective and measured over full market cycles, or at a minimum on a rolling threeyear basis. The Center incurs only those costs that are appropriate and reasonable in relation to Investment assets. No part of investment currently constitutes an endowment fund within the meaning of UPMIFA. The Fund is, accordingly, not legally subject to the provisions of UPMIFA at RCW that govern appropriation for expenditure or accumulation of endowment funds. The Center nevertheless deems it appropriate and prudent to apply those provisions. The amount available for spending at the beginning of each fiscal quarter is calculated by multiplying a quarterly spending rate, the percentage of the Investment to be distributed quarterly, times the average of the previous twelve fiscal quarters beginning period value. The quarterly spending rate may be adjusted by the Board quarterly and is currently 1.25% percent (5% per year). Return on Investment is reported under Investment Return on the Statement of Activities was recorded for the period ended June 30, 2015 is as follows: Interest Income $ 260,734 $ Unrealized Gain/(Loss) on Investment (494,444) $ (233,710) $ Note 3 Contributions Receivable Unconditional promises to give (pledges receivable) at June 30 are due as follows: Receivable in less than one year $ 64,200 $ 83,044 Receivable in one to five years 24,000 Total pledges receivable 64, ,044 Less allowance for doubtful accounts (15,000) Less discount to net present value (6.0%) (1,667) Pledges receivable, net $ 64,200 $ 90,377 12

14 Note 4 Investment in Affiliate The Center invested in a limited partnership, 307 Westlake LLC (the LLC), in order to develop, construct and lease a biomedical research facility in Seattle, Washington (the Building ). Construction was completed and the building occupied in March At June 30, 2014, the Center had a 49% member interest in the LLC. In February 2015, the LLC sold the Building to a third party purchaser. As a partner in the LLC, the Center received 49% of the proceeds from this sale. The Center uses the equity method of accounting for its investment in the LLC. Accordingly, the Center recognized $30,223,026 (including $2,507,106 in net restructure payments and a $1,109,992 write off of the cost that, in a prior year, the Center paid to purchase a previous members LLC share, both in connection with the sale of the Building) and $1,019,883 as its share of the LLC s income as Investment return in excess of amount designated for current operations under spending policy in the statement of activities, and an increase in the investment in Affiliate in the Statement of Financial Position for the years ended June 30, 2015 and 2014, respectively. During the years ended June 30, 2015 and 2014, the Center received distributions from the LLC of $27,569,262 and $1,254,880, respectively, which were recorded as decreases in Investment in Affiliate in the Statement of Financial position in those periods. Summarized condensed financial information (unaudited) of the LLC is as follows for the years ended BALANCE SHEET Property at cost, net depreciation and amortization $ $ 22,199,485 Other assets 502,835 1,226,607 Notes payable 25,199,442 Other liabilities 130, ,181 Members equity 372,059 (2,192,531) STATEMENTS OF OPERATIONS Revenues $ 3,752,058 $ 5,990,674 Net income 58,828,390 2,081,394 The Center expects that the LLC will be dissolved and the Members equity will be distributed to members. 13

15 Note 5 Property and Equipment Property and equipment consisted of the following as of June 30: Leasehold improvements $ 11,549,091 $ 11,579,956 Furniture and fixtures 852, ,995 Equipment 11,056,755 12,561,319 Construction in process 1, ,469 23,459,656 25,022,739 Less accumulated depreciation and amortization (16,239,234) (16,601,702) $ 7,220,422 $ 8,421,037 Note 6 Long Term Debt The Center entered into a Credit Agreement with Key Bank in December 2002 for a $6.2 million, tenyear term loan to construct tenant improvements in the Building. The loan was fully drawn during the year ended June 30, In February, 2014, the Center paid off the remaining outstanding balance of the loan, and terminated an associated interest rate swap held with Key Bank. Note 7 Lease Obligations The Center entered into a long term operating lease agreement for the 1 st, 4 th and 5 th floors of the Building ( Original Lease ). The Original Lease had a ten year term commencing March 2004, and options to extend for four periods of five years each. Effective April 01, 2014, the Organization exercised its first option to extend the Original Lease through March 31, In March 2007, the Center entered into an agreement to assume a lease of the 2 nd and 3 rd floors of the Building through June 30, 2017 ( Assumed Lease ). On February 11, 2015, the Center effectively terminated the Original and Assumed Leases with the LLC and entered into a new ten year lease agreement with options to extend for two periods of five years each for the 1 st, 2 nd, 4 th and 5 th floors of the Building ( New Lease ) with the third party purchaser of the Building (see Note 4). As of June 30, 2015, the New Lease requires monthly lease payments of $379,497. Rent under the new lease will increase 3% annually during the term of the lease. Rent expense is recognized on a straight line basis over the life of the lease. The difference between rent recognized and rent paid is reported on the statement of financial position as deferred rent. A deferred rent liability, representing rent recognized in excess of rent paid totaled $194,475 and $616,110 at June 30, 2015 and 2014, respectively. 14

16 Note 7 Lease Obligations (Continued) In November 2014 the Center entered into a sublease with a subtenant until June 2017, but that may be terminated by the subtenant at any time after March 31, 2016 with 120 days advance notice. The subtenant s performance under the sublease is secured by a $200,000 cash security deposit. The Center s future rental commitments and amounts expected to be received pursuant to subleases are as follows as of June 30, 2015: For the year ending June 30, 2015 Lease Payments Sublease Payments CDIR Lease Obligations 2016 $ 4,603,934 $ (1,794,032) $ 2,809, ,734,283 (1,774,253) 2,960, ,860,795 3,860, ,976,619 3,976, ,095,917 4,095,917 Thereafter 20,784,049 20,784,049 $ 42,055,597 $ (3,568,285) $ 38,487,312 Note 8 Commitments and Contingencies Restricted grants and contributions require the fulfillment of certain conditions as set forth in funding agreements. Failure to fulfill the conditions could result in the return of the funds to grantors and contributors. Although this is a possibility, the Center s management considers the contingency remote. The Center has qualified for Washington State deferred sales and use taxes on specific assets used for research and development purposes. The sales and use tax liability is forgiven over an eight year period as long as the assets are continued to be used for research and development purposes. The Center receives a substantial amount of its support from federal governmental agencies. Amounts received are subject to audit and adjustments by the grantor agencies. Any disallowed cost, including amounts already collected, may constitute a liability for the Center. The amounts of expenditures, if any, that may be disallowed by the grantor are recorded at the time that such amounts can be reasonably determined, normally upon notification by the governmental agency. Note 9 Concentrations Cash The Center frequently maintains significant cash and cash equivalent balances with financial institutions that are in excess of Federal Deposit Insurance Corporation (FDIC) limits. 15

17 Note 9 Concentrations (Continued) Revenues and Related Receivables The Center received grants from government agencies of $23,417,934 which represents 69% of total operating support and revenue for the year ended June 30, The Center had related grants receivable of $5,155,689 which represents 98% of total grants and accounts receivable at June 30, The Center received grants from government agencies of $26,890,232 which represents 74% of total support and revenue for the year ended June 30, The Center had related grants receivable of $4,811,045 which represents 76% of total grants and accounts receivable at June 30, The Center recognized nonfederal grant revenue from one organization of $4,790,464 which represents 61% of total grants and contracts nonfederal for the year ended June 30, The Center recognized nonfederal grant revenue from one organization of $5,772,155 which represents 87% of total grants and contracts nonfederal for the year ended June 30, Note 10 Temporarily Restricted Net Assets Temporarily restricted net assets are available for the following purposes or periods at June 30: Malaria vaccine $ 23,530 $ 30,450 TB drug development 45,300 72,361 Infrastructure operating 524, ,680 BioQuest educational program 78,009 63,084 Time restrictions and other 68,945 Total temporarily restricted net assets $ 670,922 $ 768,520 Net assets released from restrictions for the year ended June 30, 2015 were as follows: Purpose restriction accomplished Time $ 68,945 Malaria vaccine 45,020 TB drug development 28,375 HIV/Viral Vaccines 496 Infrastructure operating 9,697 BioQuest educational program 140,091 $ 292,624 16

18 Note 11 Retirement Plans The Center has a qualified defined contribution retirement plan covering substantially all employees. Contributions to the plan are based on a graduated schedule based on age and years of service ranging from five to ten percent of each employee s annual salary, with 3% vesting automatically. The remaining two to seven percent of annual salary vest in full upon completion of one year of employment. Total employer contributions for the years ended June 30, 2015 and 2014 were $958,858 and $1,074,432, respectively. Non vested terminated employee refunds for the years ended June 30, 2015 and 2014 were $3,358 and $7,371, respectively. 17