THE GREEN BELT MOVEMENT INTERNATIONAL - NORTH AMERICA FINANCIAL STATEMENTS AND AUDITORS' REPORT DECEMBER 31, 2015 AND 2014

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1 FINANCIAL STATEMENTS AND AUDITORS' REPORT DECEMBER 31, 2015 AND 2014

2 Index Independent Auditors' Report 1 Statements of financial position as of December 31, 2015 and Statements of activities for the years ended December 31, 2015 and Statements of cash flows for the years ended December 31, 2015 and Statement of functional expenses for the year ended December 31, 2015 with comparative totals for Page Notes to financial statements 6 10

3 INDEPENDENT AUDITORS' REPORT To: The Board of Directors of The Green Belt Movement International - North America We have audited the accompanying financial statements of The Green Belt Movement International - North America (a nonprofit organization), which comprise the statements of financial position as of December 31, 2015 and 2014, and the related statements of activities, cash flows, and functional expenses 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 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 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 of The Green Belt Movement International - North America as of December 31, 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. New York, NY November 9, Skody Scot & Company, CPAS, P.C.

4 STATEMENTS OF FINANCIAL POSITION DECEMBER 31, 2015 AND 2014 ASSETS Cash $ 413,284 $ 455,339 Government grants receivable 7,633 Contributions receivable 40,000 Prepaid expenses 165 1,418 Kenya advances 34,758 7,032 Total assets $ 455,840 $ 503,789 LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued expenses $ 12,147 $ 16,238 Refundable advances 143, ,182 Total liabilities 155, ,420 Commitments and contingencies (see notes) Net Assets: Unrestricted 249, ,580 Temporarily restricted 50,712 77,789 Permanently restricted Total net assets 300, ,369 Total liabilities and net assets $ 455,840 $ 503,789 See accompanying notes to financial statements

5 STATEMENTS OF ACTIVITIES YEARS ENDED DECEMBER 31, 2015 AND 2014 Support and Revenues: Unrestricted: Contributions $ 479,520 $ 329,069 Contributions in-kind 7,809 Government grants 328, ,419 Interest income Other income Release of restricted assets 36,000 10,292 Temporarily restricted: Contributions 8,923 54,872 Release of restricted assets (36,000) (10,292) Total support and revenues 817, ,938 Expenses: Program Expenses: Tree planting and community development 745, ,145 Total program expenses 745, ,145 Supporting Services: Management and general 51,227 50,220 Fundraising 1,350 Total expenses 796, ,715 Increase/(Decrease) In Net Assets: Unrestricted 48,110 (18,357) Temporarily restricted (27,077) 44,580 Permanently restricted Increase/(decrease) in net assets 21,033 26,223 Net assets, beginning of year 279, ,146 Net assets, end of year $ 300,402 $ 279,369 See accompanying notes to financial statements

6 STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2015 AND 2014 Cash flows from operating activities: Increase/(decrease) in net assets $ 21,033 $ 26,223 Adjustments for non-cash items included in operating activities Changes in assets and liabilities: Accounts payable and accrued expenses (4,091) (234) Refundable advances (64,891) 31,814 Government grants receivable (7,633) 22,179 Contributions receivable 40,000 (40,000) Prepaid expenses 1,253 (1,249) Kenya advances (27,726) (7,032) Net cash provided/(used) by operating activities (42,055) 31,701 Cash flows from investing activities Cash flows from financing activities Net increase/(decrease) in cash (42,055) 31,701 Cash at beginning of year 455, ,638 Cash at end of year $ 413,284 $ 455,339 See accompanying notes to financial statements

7 STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED DECEMBER 31, 2015 WITH COMPARATIVE TOTALS FOR 2014 Program Supporting Tree Planting and Community Management Total Total Development and General Expenses Expenses Consultants and contractors $ 144,380 $ 7,882 $ 152,262 $ 271,775 Grants to foreign affiliate 598, , ,206 Insurance 3,717 3,717 3,663 Licenses and fees 3,494 3,494 2,959 Office supplies and expenses 1,063 1,063 2,096 Postage and delivery 1,332 1,332 1,414 Professional fees 25,875 25,875 33,520 Rent and utilities 4,200 4,200 4,200 Telephone and communications Travel and meetings 2,414 3,304 5,718 6,754 Website maintenance Total expenses $ 745,588 $ 51,227 $ 796,815 $ 638,715 See accompanying notes to financial statements

8 NOTES TO FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies The Organization The Green Belt Movement International - North America (the Organization), a notfor-profit organization, was incorporated in the State of California on May 18, The Organization is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for federal, state or local income taxes has been recorded. The Organization does not believe its financial statements include any uncertain tax positions. The Organization primarily receives its support from contributions and grants. The Organization was created to further Green Belt Movement s (foreign affiliate) goals on an international scale. The primary purpose of the Organization is to empower communities, particularly women, to conserve the environment and improve livelihoods. The Organization seeks to accomplish its mission through its Tree Planting and Community Development program. This program provides funds to the Green Belt Movement (foreign affiliate) to encourage women in Kenya to work together to grow seedlings and plant trees to bind the soil, store rainwater, provide food and firewood, and receive a small monetary token for their work. Professor Wangari Maathai founded the Green Belt Movement (foreign affiliate), a Kenyan registered non-governmental organization, in 1977 under the auspices of the National Council of Women of Kenya to respond to the needs of rural Kenyan women who reported that their streams were drying up, their food supply was less secure, and they had to walk further and further to get firewood for fuel and fencing. In addition to the Green Belt Movement, the Organization is related to the Green Belt Movement International - Europe which is a registered charity in the United Kingdom. All three organizations share a common purpose and common board members. Basis of Accounting The financial statements of the Organization have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. Basis of Presentation In accordance with GAAP the Organization 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. In addition, the Organization is required to present a statement of cash flows

9 NOTES TO FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies (Continued) Use of 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 revenues and expenses. Actual results could differ from those estimates. Cash and Cash Equivalents For the purposes of the statements of financial position and the statements of cash flows, the Organization considers as cash equivalents money market funds and all highly liquid resources, such as investments in certificates of deposit, with an original maturity of three months or less. At December 31, 2015 and 2014, the Organization did not have any resources that were considered cash equivalents. Expense Allocation The costs of providing various programs and other activities have been summarized on a functional basis in the statements of activities and in the statement of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. The Organization allocates consulting fees based on estimated time and other expenses are allocated based on usage. The Organization classifies expenses, which are not directly related to a specific program, as Management and General expenses. Revenue Recognition All contributions are considered available for the Organization s general programs unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted by the donor are reported as temporarily or permanently restricted support and increases in the respective class of net assets. Contributions received with temporary restrictions that are met in the same reporting period are reported as unrestricted support and increase unrestricted net assets. Investment income and gains restricted by donors are reported as increases in unrestricted net assets if the restrictions are met (either a stipulated time period ends or a purpose restriction is accomplished) in the reporting period in which the income and gains are recognized. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. In accordance with grant provisions, grants are recorded as revenue when earned, either through expenditure or accomplishment of a specific goal or benchmark. All unreimbursed expenses as of the period-end are recorded as grant receivable and all advanced funds not expended are recorded as refundable advances

10 NOTES TO FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies (Continued) Property and Equipment The Organization capitalizes certain property and equipment with estimated lives of three years or more. Property and equipment are stated at cost, less accumulated depreciation. Depreciation of equipment is computed by the straight-line method over estimated useful lives ranging from three to five years. Expenditures for repairs and maintenance are expensed as incurred and major renewals and betterments are capitalized. Note 2 - Property and Equipment Property and equipment by major class consisted of the following at December 31, 2015 and 2014: Equipment $ 33,266 $ 33,266 Less: Accumulated depreciation ( 33,266) ( 33,266) $ - $ - Note 3 - Contributions in-kind Significant services and facilities are donated to the Organization by various individuals and organizations. Only those items whose value can be objectively determined or meet the criteria for being recognized as contributions in accordance with GAAP are included in the accompanied financial statements. For the years ended December 31, 2015 and 2014, $0 and $7,809, respectively, was received and reported as contributions in-kind on the statements of activities and consisted of donated accounting and legal fees. Directors and officers have made a significant contribution of their time to develop the Organization and its program. No amounts have been recognized in the accompanying statements of activities for these contributions because the criteria for recognition of such efforts under GAAP have not been satisfied. Note 4 - Grants to Foreign Affiliate The Organization grants funds to the Green Belt Movement (Foreign Affiliate). The Foreign Affiliate is a Kenyan non-governmental organization organized for the purpose described in Note 1. Starting in 2014, the Foreign Affiliate provides details of grant usage to the Organization and any unspent grants are recorded by the Organization as Kenya Advances in the statements of financial position. During the years ended December 31, 2015 and 2014, the Organization expensed grants in the amount of $598,794 and $311,206, respectively, to its Foreign Affiliate to support the Tree Planting and Community Development program in Kenya

11 NOTES TO FINANCIAL STATEMENTS Note 5 - Commitments and Contingencies The Organization leases space on a month-to-month basis. Total rent expense charged to operations for the years ended December 31, 2015 and 2014 was $4,200 and $4,200, respectively. Institutional cash balances do not include transactions which are outstanding and have not cleared their accounts. Balances that exceed the Federal Deposit Insurance Corporation or are uninsured are summarized for the years ended December 31, 2015 and 2014 as follows: Institution balances $ 408,401 $ 463,065 Less: Amounts covered ( 250,000) ( 250,000) Uninsured amounts $ 158,401 $ 213,065 Note 6 - Restrictions on Net Assets As of December 31, 2015 and 2014, temporarily restricted net assets are available in future years for the following purposes: Tree planting $ 40,574 $ 67,651 Climate change 2,025 2,025 COP travel 8,100 8,100 Wangari Maathai memorial fund Note 7 - Concentration of Revenue Sources For the year ended December 31, 2015, approximately 78% of the Organization s total revenue was provided by one major contributor and one governmental grantor. For the year ended December 31, 2014, approximately 75% of the Organization s total revenue, excluding in-kind contributions, was provided by one major contributor and one governmental grantor. It is always possible that benefactors, grantors or contributors might be lost in the near term. In the event this funding ceases, the Organization s ability to continue as a going concern would be greatly diminished. Note 8 - Government Grants During the year ended December 31, 2013, the Organization was awarded a three year grant by US Department of State. Total expenditures under the grant during the years ended December 31, 2015 and 2014 amounted to $328,910 and $272,419, respectively

12 NOTES TO FINANCIAL STATEMENTS Note 9 - Subsequent Events Subsequent events were evaluated for potential additional disclosures and corrections through November 9, 2016, which is the date the financial statements were available to be issued