FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
CONTENTS Independent Auditors Report... 1-2 Financial Statements Statement of Assets and Net Assets Cash Basis...3 Statement of Support, Revenue and Expenses Cash Basis...4 Notes to Financial Statements... 5-8 Supplementary Information Schedule of Functional Expenses Cash Basis...9
To the Board of Directors of Hairy Cell Leukemia Foundation Report on the Financial Statements INDEPENDENT AUDITORS REPORT We have audited the accompanying financial statements of Hairy Cell Leukemia Foundation (the "Organization"), which comprise the statement of assets and net assets cash basis as of December 31, 2015, and the related statement of support, revenue and expenses cash basis for the year 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 the cash basis of accounting as described in Note 1; this includes determining that the cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for 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 audit. We conducted our audit 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 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1 Marcum LLP n 111 S. Pfingsten Road n Suite 300 n Deerfield, Illinois 60015 n Phone 847.282.6300 n Fax 847.282.6301 n www.marcumllp.com
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the assets and net assets of Hairy Cell Leukemia Foundation as of December 31, 2015, and its support, revenue and expenses for the year then ended in accordance with the cash basis of accounting as described in Note 1. Basis of Accounting We draw attention to Note 1 of the financial statements, which describes the basis of accounting. The financial statements are prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matter Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The schedule of functional expenses cash basis, which is the responsibility of management, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Deerfield, IL December 20, 2016 2
STATEMENT OF ASSETS AND NET ASSETS - CASH BASIS DECEMBER 31, 2015 Assets Cash $ 434,155 Total Assets $ 434,155 Net Assets Net assets, unrestricted $ 359,155 Net assets, temporarily restricted 75,000 Total Net Assets $ 434,155 The accompanying notes are an integral part of these financial statements. 3
STATEMENT OF SUPPORT, REVENUE AND EXPENSES - CASH BASIS Temporarily Unrestricted Restricted Total Revenue and Other Support Contribution income $ 649,379 $ -- $ 649,379 Grant income -- 75,000 75,000 Total Revenue and Other Support 649,379 75,000 724,379 Expenses Program expenses 425,891 -- 425,891 Supporting expenses 17,852 -- 17,852 Fundraising expenses 4,717 -- 4,717 Total Expenses 448,460 -- 448,460 Other Income and Expense Realized loss on sale of investments (581) -- (581) Investment income 276 -- 276 Total Other Income and Expense (305) -- (305) Increase in Net Assets 200,614 75,000 275,614 Net Assets - Beginning 158,541 -- 158,541 Net Assets - Ending $ 359,155 $ 75,000 $ 434,155 The accompanying notes are an integral part of these financial statements. 4
NOTES TO FINANCIAL STATEMENTS NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Hairy Cell Leukemia Foundation (the "Organization") is a Not-for-Profit organization established in 1984 in the State of Illinois. The Organization is dedicated to improving outcomes for patients by advancing research into the causes and treatment of hairy cell leukemia, as well as by providing educational resources and comfort to all those affected by hairy cell leukemia. BASIS OF ACCOUNTING The accompanying financial statements have been prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Under that basis, the Organization recognizes revenues when received and expenses when paid. All transactions are recognized as either cash receipts or disbursements, and noncash transactions are not recognized in the financial statements. The cash basis differs from accounting principles generally accepted in the United States of America primarily because the effects of receivables and payables at the date of the financial statement are not included in the financial statements. CASH BALANCES IN EXCESS OF INSURED AMOUNTS The Organization maintains its cash in accounts which, at times, may exceed federally insured limits. The Organization has not experienced any losses due to these limits. REVENUE RECOGNITION Contributions are reported at fair value when received. All contributions are available for unrestricted use unless explicit donor stipulations specify how or when the contributions may be used. Contributions that are subject to donor-imposed restrictions that are met in the same year as the contributions are made are recognized and reported as unrestricted support and included in changes in unrestricted net assets. 5
NOTES TO FINANCIAL STATEMENTS NOTE 2 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) CLASSES OF NET ASSETS The accounts of the Organization are maintained in accordance with the principles of fund accounting, whereby resources are classified for accounting and reporting purposes into net assets established according to their nature and purposes. Unrestricted Net Assets Represents the portion of expendable funds that are available for the daily operations of the Organization, which are not limited by donor restriction on use. Temporarily Restricted Net Assets Consist of donor-restricted contributions received with specific time or purpose restrictions. Upon satisfaction of time or purpose restrictions, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of support, revenue and expenses cash basis as net assets released from restrictions. As of December 31, 2015, there are $75,000 of temporarily restricted net assets to be used toward the patient data registry. INCOME TAXES The Organization is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. In addition, the Organization has been determined by the Internal Revenue Service not to be a private foundation within the meaning of Section 509(a) of the Internal Revenue Code. Therefore, the Organization has made no provision for income taxes in the accompanying financial statements. Management evaluates tax positions taken by the Organization and recognizes a tax liability (or asset) if the Organization has taken uncertain positions that more likely than not would not be sustained upon examination by the Internal Revenue Service. Management has analyzed the tax positions taken by the Organization, and has concluded that as of December 31, 2015, there are no uncertain tax positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Organization is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. 6
NOTES TO FINANCIAL STATEMENTS NOTE 2 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FUNCTIONAL ALLOCATION OF EXPENSES The costs of providing the various programs and other activities have been summarized on a functional basis on the statement of support, revenue and expenses cash basis. Accordingly, certain costs have been allocated among program, supporting services and fundraising. DATE OF MANAGEMENT S REVIEW The Organization evaluated all significant events or transactions that occurred through December 20, 2016, the date that the financial statements were available to be issued. NOTE 2 - GRANT EXPENSE During 2015, the Organization granted funds of $314,525, which includes $84,000 of research grants and $230,525 of grants toward the development of the patient data registry. NOTE 3 - CONCENTRATIONS Approximately 74% of the Organization s revenue and other support was provided by three contributors. NOTE 4 - RELATED PARTY TRANSACTIONS For the year ended December 31, 2015, the Organization received donations from members of the Board of Directors of approximately $198,000. 7
NOTES TO FINANCIAL STATEMENTS NOTE 5 - LEASE On November 1, 2015, the Organization entered into a lease agreement for office space. The lease expires on October 31, 2016, and shall continue until either party gives three months written notice of its intention to terminate. Rent expense for the year ended December 31, 2015 was $4,200. Future minimum payments due on the lease agreement are $15,000 for the year ending December 31, 2016. NOTE 6 - COMMITMENT As of January 1, 2015, the Organization entered into a grant agreement with The Ohio State University, which committed a total of $379,750 toward the development of the patient data registry. The Organization owes $181,375 of this amount as of December 31, 2015. 8
SCHEDULE OF FUNCTIONAL EXPENSES - CASH BASIS Program Supporting Fundraising Total Grant expense $ 314,525 $ -- $ -- $ 314,525 Consulting fees 22,250 2,500 250 25,000 Legal fees 1,601 -- -- 1,601 Office expense 5,563 3,615 2,627 11,805 Information technology 480 120 -- 600 Meetings and events 68,591 -- -- 68,591 Salaries 9,234 2,639 1,319 13,192 Payroll taxes 707 202 101 1,010 Accounting fees -- 6,500 -- 6,500 Rent 2,940 840 420 4,200 Insurance -- 1,436 -- 1,436 Total Expenses $ 425,891 $ 17,852 $ 4,717 $ 448,460 See independent auditors' report. 9