NATIONAL OVARIAN CANCER COALITION, INC. FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT

Transcription

1 FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT (WITH SUMMARIZED COMPARATIVE INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2015, RESTATED)

2 TABLE OF CONTENTS AND 2015 Page INDEPENDENT AUDITORS REPORT FINANCIAL STATEMENTS Statement of Financial Position... 3 (With Summarized Comparative Totals at December 31, 2015, Restated) Statement of Activities and Changes in Net Assets... 4 (With Summarized Comparative Totals for the Year Ended December 31, 2015, Restated) Statement of Functional Expenses... 5 (With Summarized Comparative Totals for the Year Ended December 31, 2015, Restated) Statement of Cash Flows... 6 (With Summarized Comparative Totals for the Year Ended December 31, 2015, Restated) NOTES TO FINANCIAL STATEMENTS

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5 STATEMENT OF FINANCIAL POSITION (With Summarized Comparative Totals at December 31, 2015, Restated) ASSETS (Restated) Current Assets Cash and cash equivalents $ 1,038,203 $ 1,748,078 Investments 331, ,911 Contributions receivable 10,100 7,741 Inventory 308, ,170 Prepaid expenses 12,388 41,733 Total Current Assets 1,700,835 2,771,633 Property and Equipment Furniture, fixtures, and equipment 145, ,024 Less accumulated depreciation and amortization (134,809) (123,874) Net Property and Equipment 10,215 21,150 Other assets Rent and security deposits 15,482 14,084 TOTAL ASSETS $ 1,726,532 $ 2,806,867 LIABILITIES AND NET ASSETS Current Liabilities Accounts payable $ 75,434 $ 60,810 Wages payable 67,709 50,576 Accrued vacation 52,861 53,964 Deferred revenue 30,982 95,687 Total Current Liabilities 226, ,037 Net Assets Unrestricted 1,449,546 2,415,830 Temporarily restricted 50, ,000 Total Net Assets 1,499,546 2,545,830 TOTAL LIABILITIES AND NET ASSETS $ 1,726,532 $ 2,806,867 The accompanying notes are an integral part of these financial statements. 3

6 STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED (With Summarized Comparative Totals for the Year Ended December 31, 2015, Restated) Temporarily Total Unrestricted Restricted Total (Restated) Revenues and Support Awareness events (includes in-kind income $ 2,536,907 45,000 $ 2,581,907 $ 3,283,979 of $165,516 in 2016 and $297,059 in 2015) Less: cost of direct benefits to participants (118,114) - (118,114) (345,265) (includes in-kind expenses of $118,114 in 2016 and $246,694 in 2015) Individual contributions 648, , ,296 Corporation contributions 153, ,983 46,698 Conference revenue 153, ,470 - Special events 92,951-92, ,581 Less: cost of direct benefits to participants (24,063) - (24,063) (1,871) (includes in-kind expenses of $24,063 in 2016 and $45,853 in 2015) Outside fundraisers 83,383-83,383 97,052 Tote bag donations ,979,430 Investment income ,875 3,527,536 45,000 3,572,536 6,108,775 Net assets released from restriction 125,000 (125,000) - - Total Revenues and Support 3,652,536 (80,000) 3,572,536 6,108,775 Expenses Program services Run/Walk to Break the Silence on Ovarian Cancer 1,758,767-1,758,767 2,028,545 Take Early Action and Live (TEAL) 1,122,241-1,122,241 1,330,523 Faces of Hope 754, ,984 1,353,110 Total Program Services 3,635,992-3,635,992 4,712,178 Supporting services 414, , ,423 Fundraising services 567, , ,314 Total Expenses 4,618,820-4,618,820 5,597,915 Increase (Decrease) in Net Assets (966,284) (80,000) (1,046,284) 510,860 Net Assets, beginning of year, restated 2,415, ,000 2,545,830 2,034,970 Net Assets, end of year $ 1,449,546 $ 50,000 $ 1,499,546 $ 2,545,830 The accompanying notes are an integral part of these financial statements. 4

7 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEARS ENDED (With Summarized Comparative Totals for the Year Ended December 31, 2015, Restated) Program Services Run/Walk to Break 2015 the Silence on Total Ovarian Cancer Early Awareness Faces of Hope Total Supporting Fundraising Total (Restated) Salaries & Wages $ 633,160 $ 293,051 $ 161,813 $ 1,088,024 $ 144,241 $ 189,730 $ 1,421,995 $ 1,497,193 Employee Benefits 53,668 24,840 13,715 92,223 12,369 16, , ,003 Payroll Taxes 61,454 28,443 15, ,602 13,528 17, ,924 84,149 Rent & Utilities 42, ,177 10, ,437 10,158 13, , ,871 Contract Labor 285, ,712 6, ,023 19,680 12, , ,083 Website and Internet 3,616 3, , ,289 10,177 18,857 Advertising & Communications 51,124 66,656 3, , , ,341 35,276 Maintenance & Repair 1, , , ,126 Postage & Shipping 32,386 20,248 6,517 59,151 2,242 2,664 64, ,968 Printing & Copying 35,020 11,888 5,018 51, ,265 57, ,495 Telecommunications 15,204 26,971 4,683 46,858 3,641 4,789 55, ,291 Supplies & Materials 30,799 34,334 4,884 70,017 9,743 9,132 88,892 89,117 Permits, Licenses, and Fees 6, , ,087 35,294 67,670 Run Walk Event Costs 230, , ,885 60,543 Special Events Costs 1,425-6,403 7,828 - (7,205) ,484 Other Meetings & Conferences 36, ,976 15, ,396 11,271 11, , ,275 Dues & Subscriptions 32,789 9,957 8,346 51,092 15,361 27,767 94,220 28,900 Insurance 11,464 5,306 2,930 19,700 8,391 3,611 31, ,000 Research Support - 16, , , ,000 80,654 Professional Fees 2,112 2, ,940 80, ,431 26,544 Credit Card Charges 75, ,809 80, ,044 9,268 Depreciation 4,811 2,227 1,230 8,268 1,152 1,515 10,935 10,168 Inventory Adjustment 105, , , , ,160 1,319,620 Inventory Distribution 5,604 5,603 5,603 16, ,810 65,360 $ 1,758,767 $ 1,122,241 $ 754,984 $ 3,635,992 $ 414,841 $ 567,987 $ 4,618,820 $ 5,597,915 The accompanying notes are an integral part of these financial statements. 5

8 STATEMENT OF CASH FLOWS FOR THE YEARS ENDED (With Summarized Comparative Totals for the Year Ended December 31, 2015, Restated) (Restated) Cash Flows From Operating Activities Change in Net Assets $ (1,046,284) $ 510,860 Adjustments to reconcile change in net assets to net cash used by operating activities: Depreciation 10,935 10,168 Loss on investments 81 1,202 Changes in operating assets and liabilities Contributions receivable (2,359) (7,741) Inventory 333,856 (594,450) Deposits (1,398) 354 Prepaids 29,345 (29,144) Accounts payable 14,624 6,244 Wages payable 16,030 (3,704) Deferred revenue (64,705) 39,177 Net Cash Used by Operating Activities (709,875) (67,034) Cash Flows From Investing Activities Purchase of equipment - (7,865) Proceeds from sale of investments - 249,967 Net Cash Provided by Investing Activities - 242,102 Net Increase (Decrease) in Cash (709,875) 175,068 Cash, beginning of year Cash, end of year 1,748,078 1,573,010 $ 1,038,203 $ 1,748,078 The accompanying notes are an integral part of these financial statements. 6

9 NOTE 1: ORGANIZATION National Ovarian Cancer Coalition, Inc. ("NOCC" or the "Organization") is a nonprofit public benefit corporation. The Organization's mission is to promote education and awareness about ovarian cancer. NOCC is committed to improving the survival rate and quality of life for women with ovarian cancer. The Organization currently provides program services nationwide. It is funded through contributions from the public and private sectors. Program Structure Programs and services that promote the Organization's mission consist of the following core areas: Take Early Action and Live (TEAL) (formerly Awareness and Education) Program purpose is to promote education and prevent ovarian cancer Run/Walk to Break the Silence on Ovarian Cancer (formerly Outreach and Conferences) Program purpose is to raise awareness about ovarian cancer Faces of Hope (formerly Survivorship) Program purpose is survivorship, quality of life, and research Programs and services are aimed at the Organization's identified target audiences: General public Survivors Caregivers Loved ones Healthcare/Corporate Take Early Action and Live (TEAL) Initiative NOCC's education and awareness programs urging people to TEAL: Take Early Action and Live. Signature Programs are Health Fairs, Speaker s Bureau, September Awareness, Third-Party Community Fundraising Events, and Chapter Activities as well as the production and distribution of educational literature about ovarian cancer, treatment, and quality of life issues. Run/Walk to Break the Silence on Ovarian Cancer The Organization's signature event raises awareness of ovarian cancer, honors survivors, and pays tribute to those lost to the disease. The Organization's Run/Walks encompass all parts of its mission and support its nationwide and local activities. Faces of Hope The Organization's survivorship and quality of life program provides current information, hope, and support to women with ovarian cancer, their families and loved ones. 7

10 NOTE 1: ORGANIZATION (CONTINUED) Faces of Hope (Continued) The signature program is TEAL Totes/Packets. Chapters receive a list of American College of Surgeons (ACoS) and National Cancer Institute (NCI) accredited facilities within a 50 mile radius of their location based on each facility s annual ovarian cancer caseload. Each Chapter works closely with the Faces of Hope Coordinator to build and/or strengthen the relationship with local facilities and arrange for them to distribute the TEAL Totes/Packets to their newly diagnosed ovarian cancer patients. The Faces of Hope Coordinator works directly with facilities where there is not a current chapter. Research in Action Initiative sm The Organization has affirmed its commitment to funding research with the Research in Action Initiative Alliance Sm. In collaboration with Stand Up To Cancer, Ovarian Cancer National Alliance and Ovarian Cancer Resource Fund, National Ovarian Cancer Coalition, Inc. is committed to supporting the new Ovarian Cancer Dream Team, and the promise of leading- edge, ovarian cancer research. Notable Organization activities during the year ending December 31, 2016 were (Unaudited); Take Early Action and Live (TEAL) 162 Health fairs 88 Speaker s bureau presentation 50 Other community events Run/Walk to Break the Silence on Ovarian Cancer 23 Run/Walks raised awareness 1,130 survivors were honored 1,376 volunteers supported the cause 1,209 teams fought for the cause 20,463 participated to break silence on ovarian cancer Faces of Hope 158 Volunteer events/chapter meeting 123 Other community events 1,027 TEAL Totes distributed to 568 TEAL Packets were provided to ACoS/NCI accredited facilities to women newly diagnosed with ovarian women newly diagnosed with cancer ovarian cancer 8

11 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Organization s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (US GAAP) and have been consistently applied in the preparation of the financial statements. Comparative Financial Information The financial statements include certain prior-year summarized comparative information in total but not by net asset class or functional expenses categories. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Organization s financial statements for the year ended December 31, 2015, from which the summarized information was derived. Use of Estimates Management uses estimates and assumptions in preparing the financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and reported revenues and expenses. Significant estimates used in preparing these financial statements include those assumed in recording depreciation and the allocation of functional expenses. Actual results could differ from those estimates. Basis of Presentation Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets and changes therein are classified as follows: Permanently Restricted Net Assets - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Organization. Generally, the donors of these assets permit the Organization to use all or part of the income earned on related investments for general or specific purposes. Temporarily Restricted Net Assets - Net assets subject to donor-imposed stipulations that may or will be met by actions of the Organization and/or the passage of time. Unrestricted Net Assets - Net assets not subject to donor-imposed stipulations. Board designated net assets are considered unrestricted net assets in which the board has internally designated stipulations for purposes of the various programs held. Revenues are reported as increases in unrestricted net assets unless the use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Expirations of temporarily restricted net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between the applicable classes of net assets. 9

12 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation (Continued) Contributions are recognized as revenues in the period unconditional promises to give are received. Contributions of assets other than cash are recorded at their estimated fair value, on the date of donation. Cash and Cash Equivalents The Organization considers all highly liquid instruments, including certificates of deposit with an original maturity of ninety days or less, to be cash equivalents. The Organization places cash which, at times, may exceed federally-insured limits with high-credit quality financial institutions. The Organization has not experienced any losses on such assets. Investments Investments, which consist of money market funds, are reported at their fair values in the Statement of Financial Position. Increases or decreases in fair value are recorded as unrealized gains and losses and are reflected on the Statement of Activities and Changes in Net Assets along with all realized gains and losses under the caption Investment Income. Donated Assets and Services Donated equipment and other donated goods are recorded at their estimated fair value as of the date of the donation. Contributed services, which require a specialized skill and which the Organization would have paid for if not donated, are recorded at the estimated fair value at the time the services are rendered. The Organization also receives donated services that do not require specific expertise but which are nonetheless central to the Organization's operations. Tote bag inventory Donated tote bags inventory consists of donated tote bags received but not distributed as of the year end. The donated tote bags are valued based on fair value at December 31, 2016 (See Note 4). Property and Equipment Property and equipment are stated at cost if purchased, or at fair value at the date the equipment was donated. Major expenditures and those which substantially increase useful lives of the assets are capitalized. Maintenance, repairs, and replacements, which do not improve or extend the lives of the respective assets, are charged to operations when incurred. When property and equipment is sold or otherwise disposed of, the asset is removed, and any gain or loss is included in operations. Depreciation has been calculated using the straight-line method based on the estimated useful lives of the assets as follows: Furniture, fixtures, and equipment 3-10 years 10

13 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes The Organization is exempt from federal income taxes under Section 501(a) of the Internal Revenue Code (IRC) of 1986, as amended, as an organization described in Section 501 (c)(3) of the IRC. The Organization has been classified as an organization that is not a private foundation under IRC Section 509(a)(2), and as such, contributions to the Organization qualify for deductions as charitable contributions. However, income generated from activities unrelated to the Organization s exempt purpose is subject to tax under IRC Section 511. Accounting for Uncertainty in Income Taxes Management has concluded that any tax positions that would not meet the more-likely-than-not criterion of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic , Accounting for Income Taxes, would be immaterial to the financial statements taken as a whole. Accordingly, the accompanying financial statements do not include any provision for uncertain tax positions, and no related interest or penalties have been recorded in the statement of activities or accrued in the statement of financial position. Federal and state tax returns of the entity are generally open to examination by the relevant taxing authorities for a period of three years from the date the returns are filed. Accrued Vacation The Organization s employees are entitled to paid vacation depending upon the length of service. Accrued vacation represents vacation earned, but not taken. The accrued vacation balance as of December 31, 2016 and 2015 was $52,861 and $53,964, respectively. Contributions in-kind Donated equipment and other donated goods are recorded at their estimated fair value as of the date of donation. Contributed services, which require a specialized skill and which the Organization would have paid for it if not donated, are recorded at the estimated fair value at the time the services are rendered. The Organization also receives donated services that do not require specific expertise but which are nonetheless central to the Organization s operations. Functional Allocation of Expenses The costs of providing the various program and other activities have been summarized on a functional basis in the accompanying Statement of Activities. Accordingly, certain costs have been allocated among the program and supporting services benefited. Fair Value Measurements FASB ASC 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value. That framework provides the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). 11

14 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fair Value Measurements (Continued) The asset or liability s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Following is a description of the valuation methodology used for assets measured at fair value. There has been no change in the methodology used at December 31, 2016 and Money market funds: Money market funds are valued at the closing price reported in an active market in which the securities are traded. The preceding method described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Organization believes its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The provisions of ASC Topic 820 did not have an impact on the Organization s nonfinancial assets and nonfinancial liabilities that are not permitted or required to be measured at fair value on a recurring basis. Contribution Receivables and Promise to Give Contributions are recognized when a donor makes a promise to give to the Organization that is, in substance, unconditional. 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 recognized. All other donor-restricted contributions are reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restrictions. When a restriction expires or is satisfied, temporarily restricted net assets are reclassified to unrestricted net assets. Unconditional promises to give that are due more than one year beyond the statement of financial position date are discounted to a net present value using an estimated discount factor for risk-free borrowing. Contributions receivable are considered past due when payments are not made under the terms of the contribution agreement. There were no past due contributions receivable at December 31, 2016 and no provision was made for uncollectible receivables as of that date. Contributions receivable are considered uncollectible and written off to uncollectible pledges when the donor withdraws the contribution commitment or fails to provide a reasonable revised schedule of contributions. 12

15 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Advertising The Organization's policy is to expense marketing and advertising as the costs are incurred. Marketing and advertising expenses for the years ended December 31, 2016 and 2015 totaled $261,934 and $196,126, respectively. Date of Management s Review The Organization has evaluated subsequent events through September 21, 2017, the date the financial statements were available to be issued. NOTE 3: INVESTMENTS Investments at December 31, 2016 and 2015 consisted of the following: Money Market funds $ 331,944 $ 331,911 Investment income for the years ended December 31, 2016 and 2015 are summarized as follows: Interest and dividends $ 66 $ 3,077 Unrealized gain (loss) 15 (1,202) $ 81 $ 1,875 NOTE 4: DONATED TOTE BAGS INVENTORY Inventory consists of donated tote bags received but not distributed as of December 31, 2016 and The donated bags were valued based on the standard retail price of $37 per bag with ribbon embroidery and $30 per bag without ribbon embroidery at the time of contribution. In 2015, it was determined the value of the bags was overstated and inventory was adjusted to fair value of $10 per bag. The adjustment for the decrease in fair value was $1,319,620 in In 2016, it was determined that tote bag distribution in 2015 was overstated and thereby understating inventory balance as of December 31, 2015 by $219,170. This error was corrected in 2016, see Note 12. The remaining inventory valuation was further reduced to $5 per bag in 2016 due to decreased value and slow distribution. The adjustment for the decrease in fair value was $317,160 in The inventory balance as of December 31, 2016 and 2015 was $308,200 and $423,000 respectively. NOCC plans to distribute the tote bags during future Awareness events. 13

16 NOTE 5: PROPERTY AND EQUIPMENT Property and equipment at December 31, 2016 and 2015 consisted of the following: Fixtures, furnishings, and equipment $ 145,024 $ 145,024 Accumulated depreciation (134,809) (123,874) Net property and equipment $ 10,215 $ 21,150 NOTE 6: TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the following purposes or periods as of December 31, 2016 and 2015: Research $ 30,000 $ 30,000 Conferences and webinars 20, ,000 $ 50,000 $ 130,000 Temporarily restricted net assets released from restriction for the years ended December 31, 2016 and 2015 were; Research $ - $ 100,000 Conferences and webinars 125,000 30,000 $ 125,000 $ 130,000 NOTE 7: JOINT COSTS During the year ended December 31, 2016 and 2015, the Organization conducted activities that included requests for contributions, as well as program components. Those activities included digital media campaigns where the target group was provided information about the Organization and also requests were made for contributions. The costs of conducting those activities included a total of $59,500 and $155,966 of joint costs, for the year ended December 31, 2016 and 2015, which are not specifically attributable to particular components of the activities (joint costs). NOTE 8: OPERATING LEASES Headquarters - Dallas, Texas In August 2008, the Board approved and moved the Organization's headquarters from Boca Raton, Florida to Dallas, Texas under a five year office lease agreement at a rate of $4,487 per month for the first year and an increase of 1% to 2% per year thereafter until October 31, On May 22, 2013, the Organization exercised the option to extend the lease for a term of five years with monthly rent ranging from $4,605 in 2014 to $4,841 in

17 NOTE 8: OPERATING LEASES (CONTINUED) Regional Office - Chicago, Illinois Effective February 1, 2012 and expiring in February 1, 2017, the Organization entered into a fiveyear office lease agreement at a rate of $1,473 per month for the first year and an increase of 3% per year thereafter. This lease was extended on December 27, 2016 to be effective February 1, 2017 and expiring February 1, 2021 at a rate of $1,503 per month for the first year and an increase of 2.5% per year thereafter. Regional Office - Pittsburgh, Pennsylvania Effective May 2015, the Organization renewed its office lease agreement for its Pennsylvania division, at a rate of $647 per month, through April Regional Office - Arlington, Massachusetts Effective September 2007, the Organization entered into an office lease agreement for its Massachusetts division. On November 24, 2014, the Organization exercised the option to renew the lease for three years, starting November 1, 2014, at a rate of $1,450 per month. There is an option to renew this lease for additional three years. Regional Office Irvine, California The Organization leases office space with automatic annual renewals. In 2014, the monthly rate was $2,160. The monthly rate during the year ended December 31, 2016 was $2,000. Regional Office - New York, New York The Organization leases office space for a monthly rate of $1,300 which expired on February 28, If a new lease was not signed, the base rate increased by 10%, as was the case in Future minimum lease payments under the noncancellable leases are approximately as follows: Year ending December 31, 2017 $ 133, , , , and Thereafter 19,879 Total $ 273,207 Rental expense for the years ended December 31, 2016 and 2015 was $174,098 and $173,310 respectively. 15

18 NOTE 9: OVARIAN CANCER DREAM TEAM FUNDING CONDITIONAL COMMITMENT During the year ended December 31, 2014, the Organization entered into a conditional Memorandum of Understanding ("MOU") outlining a desire to jointly fund a dream team dedicated to ovarian cancer research ("Ovarian Cancer Dream Team"). The total funding level of the Ovarian Cancer Dream Team is anticipated to be $6,000,000 over a four year period. The organizations wishing to jointly fund the Ovarian Cancer Dream Team include National Ovarian Cancer Coalition, Inc. ($1,500,000), Ovarian Cancer National Alliance ($1,500,000) and Ovarian Cancer Research Fund ($3,000,000). Payments to help fund the Ovarian Cancer Dream Team are contingent upon satisfactory progress and achievement of applicable milestones and deliverables of the Ovarian Cancer Dream Team. During the year ended December 31, 2016, the Organization made a payment of $375,000. Under the terms of the MOU, National Ovarian Cancer Coalition, Inc. wishes to provide the following funding over a two year period as follows: 2017 $ 375, ,000 Total $ 750,000 NOTE 10: RETIREMENT PLAN The Organization has a 401(k) retirement plan in which the employer matches employee contributions equal to 50% of the first 6% of eligible deferred compensation per pay period after three consecutive months of employment. Employer matching contributions are 100% vested immediately. Employees over the age 18 are immediately eligible for the plan. Employer contributions to the employee accounts for the year ended December 31, 2016 and 2015 was $24,036 and $19,218. NOTE 11: FAIR VALUE MEASUREMENTS Fair values of assets measured on a recurring basis at December 31, 2016 are as follows: Fair Value Measurements at Reporting Date Using: Fair Value Quoted Prices in Active markets for Identical Assets/Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Money market funds $ 331,944 $ 331,944 $ - $ - 16

19 NOTE 12: RESTATEMENT OF FINANCIAL STATEMENTS Subsequent to the issuance of the Organization s 2015 financial statement, management determined that the value of the distributed bags released from inventory in 2015 was overstated thereby understating donated tote bags balance as of December 31, The value of the tote bag inventory was adjusted resulting in an increase in inventory and net assets of $219,170 as of December 31,