CHARLESTON, SOUTH CAROLINA AUDITED FINANCIAL STATEMENTS FOR THE YEARS ENDED
American Institute of CPAs Public Company Accounting Oversight Board SC Association of CPAs To the Board of Directors of Pet Helpers, Inc. Charleston, South Carolina INDEPENDENT AUDITORS' REPORT We have audited the accompanying statements of financial position of the Pet Helpers, Inc. which comprise the statement of financial position as of December 31, 2015, and the related statements of activities, functional expenses and cash flows 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 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 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. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Pet Helpers, Inc. as of December 31, 2015, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matter The financial statements of Pet Helpers, Inc. as of December 31, 2014, were audited by other auditors whose report dated May 14, 2015, expressed an unmodified opinion on those statements. Mount Pleasant, South Carolina July 5, 2016 Glaser and Company, LLC 1040 Anna Knapp Boulevard, Mount Pleasant, SC 29464 www.glasercompany.com P 843.849.0655 F 843.849.0612
STATEMENTS OF FINANCIAL POSITION ASSETS 2015 2014 Current Assets Cash and cash equivalents $ 134,386 $ 505,232 Other receivables 31,403 3,152 Unconditional promises to give, current 32,689 73,080 Inventory 37,761 9,715 Prepaid and other assets 749 - Total current assets 236,988 591,179 Non-Current Assets Investments, fair value 1,705,370 1,632,366 Unconditional promises to give, noncurrent 20,803 - Cash value life insurance 18,736 18,190 Other assets 1,500 1,885 Property and equipment, net of accumulated depreciation 3,712,952 3,822,313 Total non-current assets 5,459,361 5,474,754 Total assets $ 5,696,349 $ 6,065,933 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 62,150 $ 52,140 Accrued payroll and taxes 16,877 13,042 Deferred income - 69,000 Notes payable, current portion 94,645 91,885 Total current liabilities 173,672 226,067 NONCURRENT LIABILITIES Notes payable, net of current portion 1,660,190 1,751,983 Total noncurrent liabilities 1,660,190 1,751,983 Total Liabilities 1,833,862 1,978,050 Net Assets Unrestricted 3,218,849 3,429,245 Temporarily restricted 643,638 658,638 Total net assets 3,862,487 4,087,883 Total liabilities and net assets $ 5,696,349 $ 6,065,933 See accompanying notes to the financial statements. 2
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2015 Temporarily Unrestricted Restricted Total Support and Revenue Contributions $ 1,110,871 $ - $ 1,110,871 Contributions - ReTail 57,500-57,500 In-kind contributions 35,403-35,403 Grants 184,163-184,163 Adoption income 183,219-183,219 Clinic income 233,275-233,275 Special events, net of $92,782 of expenses 111,957-111,957 Boutique sales, net of $9,233 cost of sales 32,117-32,117 Investment return, net of investment fees of $13,038 (27,783) - (27,783) Total support and revenue 1,920,722-1,920,722 Net assets released from restriction 15,000 (15,000) - Total support and revenue and net assets released from restriction 1,935,722 (15,000) 1,920,722 Expenses Program services 1,535,855-1,535,855 Supporting services: General and administrative services 284,460-284,460 Fundraising services 325,803-325,803 Total supporting services 610,263-610,263 Total expenses 2,146,118-2,146,118 Decrease in net assets (210,396) (15,000) (225,396) Net assets at beginning of year 3,429,245 658,638 4,087,883 Net assets at end of year $ 3,218,849 $ 643,638 $ 3,862,487 See accompanying notes to the financial statements. 3
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2014 Temporarily Unrestricted Restricted Total Support and Revenue Contributions $ 940,134 $ - $ 940,134 Contributions - ReTail 44,600-44,600 In-kind contributions 102,376-102,376 Grants 134,399-134,399 Adoption income 216,537-216,537 Clinic income 162,425-162,425 Special events, net of $194,019 of expenses 199,903-199,903 Investment return, net of investment fees of $12,494 88,997-88,997 Total support and revenue 1,889,371-1,889,371 Net assets released from restriction - - - Total support and revenue and net assets released from restriction 1,889,371-1,889,371 Expenses Program services 1,611,928-1,611,928 Supporting services: General and administrative services 189,638-189,638 Fundraising services 94,821-94,821 Total supporting services 284,459-284,459 Total expenses 1,896,387-1,896,387 Decrease in net assets (7,016) - (7,016) Net assets at beginning of year 3,436,261 658,638 4,094,899 Net assets at end of year $ 3,429,245 $ 658,638 $ 4,087,883 See accompanying notes to the financial statements. 4
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED Cash Flows from Operating Activities: 2015 2014 Decrease in net assets $ (225,396) $ (7,016) Adjustments to reconcile decrease in net assets to net cash provided by (used for) operating activities: Depreciation 121,980 132,231 Realized and unrealized (gain) loss on investments 76,744 (88,997) Bad debts 5,002 158,104 Decrease (increase) in assets: Unconditional promises to give 14,586 8,016 Other receivables (28,251) 22,694 Other assets (28,956) (27) Increase (decrease) in liabilities: Accounts payable 10,700 (94,088) Accrued payroll and taxes 3,835 4,976 Deferred membership revenue (69,000) 69,000 Net cash (used for) provided by operating activities (118,756) 204,893 Cash Flows from Investing Activities: Purchase of investments (1,045,963) (1,789,143) Proceeds from sale of investments 895,525 1,742,541 Purchase of property and equipment (12,619) (16,142) Net cash used for investing activities (163,057) (62,744) Cash Flows from Financing Activities: Payments on long-term debt (89,033) (151,776) Net cash used for financing activities (89,033) (151,776) Net decrease in cash and cash equivalents (370,846) (9,627) Cash and cash equivalents, beginning of year 505,232 514,859 Cash and cash equivalents, end of year $ 134,386 $ 505,232 Supplemental Disclosure of Cash Flow Information Cash paid for interest $ 54,691 $ 57,405 See accompanying notes to the financial statements. 5
STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2015 Supporting Services Total Program General and Services Administrative Fundraising Total Personnel costs $ 752,061 $ 145,051 $ 90,621 $ 987,733 Other employee benefits 3,873 17,425 441 21,739 Payroll taxes 74,966 21,085 9,282 105,333 Contract labor 4,420-27,057 31,477 Professional fees 25,415 23,268 744 49,427 Direct mail campaign - - 159,100 159,100 Supplies 7,725 3,290 260 11,275 Telephone 14,325 4,121 1,123 19,569 Postage and Shipping 4,775 562 281 5,618 Storage 1,269 762 69 2,100 Travel 6,956 818 409 8,183 Staff meetings 3,034 4,032 3,157 10,223 Interest 45,540 5,133 4,018 54,691 In-kind expense 35,403 - - 35,403 Insurance 20,317 2,172 1,630 24,119 Repairs and maintenance 21,417 3,387 2,226 27,030 Bank fees 449 15,094 4,841 20,384 Advertising 55,469 590 2,951 59,010 Animal care - kennel 151,879 - - 151,879 Animal care - clinic 112,705 - - 112,705 Utilities 47,340 5,801 2,500 55,641 Technology 29,751 9,982 5,128 44,861 Bad debt expense - 5,002-5,002 Other 6,900 4,771 9,965 21,636 Depreciation 109,866 12,114-121,980 Total expenses $ 1,535,855 $ 284,460 $ 325,803 $ 2,146,118 See accompanying notes to the financial statements. 6
STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2014 Supporting Services Total Program General and Services Administrative Fundraising Total Personnel costs $ 728,607 $ 85,718 $ 42,860 $ 857,185 Other employee benefits 37,886 4,457 2,229 44,572 Payroll taxes 60,411 7,107 3,554 71,072 Professional fees 45,526 5,356 2,678 53,560 Supplies 20,296 2,388 1,194 23,878 Telephone 11,460 1,348 674 13,482 Postage and Shipping 4,542 534 268 5,344 Occupancy 6,428 756 378 7,562 Printing and publication 2,184 257 128 2,569 Travel 2,646 311 156 3,113 Staff meetings 3,919 461 231 4,611 Interest 48,794 5,741 2,870 57,405 In-kind expense 87,020 10,238 5,118 102,376 Insurance 33,749 3,971 1,985 39,705 Repairs and maintenance 21,874 2,573 1,287 25,734 Bank fees 17,564 2,066 1,034 20,664 Advertising 12,526 1,474 736 14,736 Animal care - kennel 49,654 5,842 2,920 58,416 Animal care - clinic 91,956 10,818 5,409 108,183 Utilities 45,030 5,298 2,649 52,977 Technology 27,218 3,202 1,601 32,021 Bad debt expense 134,388 15,810 7,906 158,104 Other 5,854 689 344 6,887 Depreciation 112,396 13,223 6,612 132,231 Total expenses $ 1,611,928 $ 189,638 $ 94,821 $ 1,896,387 See accompanying notes to the financial statements. 7
NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities Pet Helpers, Inc. (the Organization ) is a private, nonprofit 501(c)(3) corporation registered in the State of South Carolina. The Organization is an animal adoption center and low cost spay/neuter clinic that serves communities across the Lowcountry. The Organization's mission is to end euthanasia of all adoptable animals by keeping all animals until adopted, providing the public with low cost spay/neuter surgeries, raising awareness through humane education and pursuing animal cruelty prosecution; and initiating animal welfare legislation. 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 Accounting Standards Condification ("ASC") 958-205, Presentation of Financial Statements, the Organization reports 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. Unrestricted Net Assets Net assets without donor imposed restrictions and currently available for program and supporting services. 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. Permanently Restricted Net Assets Net assets restricted by donors to be maintained permanently by the Organization. There were no permanently restricted net assets as of December 31, 2015 or 2014. Use of Estimates The preparation of financial statements 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 financial statements. The preparation of financial statements also requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the allowance for doubtful accounts, the estimated useful lives of property and equipment, the fair market value of donated supplies and services, and the allocation of expenses by function. It is at least reasonably possible that the estimates used will change within the near term. Cash and Cash Equivalents For the purpose of the statements of cash flows, the Organization considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. Unconditional Promises to Give and Contributions Unconditional promises to give are recognized as contributions in the year pledges are made, and as assets, decreases in liabilities or expenses depending on the form of contributions received. Conditional promises to give are recognized when the conditions on which they depend are substantially met. The Organization uses the allowance method to account for uncollectible promise to give. The allowance is based on management's estimate of the collectability of the promises and historical experience. 8
NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Other Receivables The Organization may from time to time have grant receivables from grantors and miscellaneous other receivables. Investments Investments purchased by the Organization are initially recorded at cost and donated investments are recorded at their fair value on the date they are received as a donation. Subsequent to their acquisition, investments in marketable securities with readily determinable values are adjusted to their fair value as of the date of the statements of financial position. Realized and unrealized gains and losses are reflected in the statements of activities. Investments are exposed to various risks such as significant world events, interest rate, credit, and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the fair value of investments will occur in the near term and that such changes could materially affect the amounts reported in the statements of financial position. Investment income is recorded net of investment expenses. Realized gains or losses on investments are determined by comparison of specific cost of acquisition to proceeds at the time of disposal. Unrealized gains or losses are calculated by comparing cost to market values at the statements of financial position date. 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. Inventory Inventory is stated at the lower of cost or net realizable value and consists of pet medical medications and supplies. Inventory is utilized on a first-in-first-out (FIFO) method. Property and Equipment The Organization capitalizes all expenditures for property and equipment in excess of $1,000. Purchased property and equipment are carried at cost or, if donated, at the approximate fair value at the date of donation. Depreciation is computed on a straight-line basis over the appropriate estimated useful lives from 3 to 39 years. Revenue Recognition In accordance with ASC 958-50, Accounting for Contributions Received and Contributions Made, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted supporting depending on the existence and/or nature of any donor restrictions. The Organization reports contributions as restricted support if they are received with donor stipulations that limit the use of the donation. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restriction. It is the Organization's policy to record restricted contributions received and released in the same year as unrestricted support. The Organization did not receive any permanently restricted contributions or assets in 2015 and 2014. Functional Expenses The basis for charging expenses to the program services is based on management s assessment of the expenditures related to the Organization s activities. The Organization allocates all program expenditures not directly chargeable to a specific program based on management s estimation of the time and resources spent on a program. 9
NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Income Tax Status The Organization is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. In addition, the Organization qualifies for the charitable deduction under Section 170(b)(1)(a) and has been classified as an organization that is not a private foundation. The Organization had no tax liability on unrelated business income during the years ended December 31, 2015 and 2014. Management has evaluated the tax positions of the Organization and does not believe that any uncertain tax positions or unrecognized tax benefits exist for the years ended December 31, 2015 and 2014. The Organization currently has no unrelated business income. Accordingly, no provision for income taxes has been recorded. With few exceptions, the Organization is no longer subject to income tax examinations by the Internal Revenue Service, state and local authorities for years before 2012. Fair Value of Financial Instruments The carrying amount of cash, investments, insurance policies and investments in equity are stated at approximate fair value at December 31, 2015 and 2014, due to the terms and relatively short maturity of these instruments. Donated Assets and Services The Organization records the value of donated goods or services when there is an objective basis available to measure their value. The Organization reflects donated materials and equipment as contributions in the accompanying statements at their estimated fair values at the date of receipt. Assets donated with explicit restrictions are reported as restricted contributions. Absent donor stipulations regarding the length of time such assets must be maintained, the Organization reports expirations of donor restrictions when the asset is placed in service. A considerable number of unpaid volunteers have made significant contributions of their time and performed a variety of tasks that assist the Organization with its operation and do not meet the two recognition criteria described above. Accordingly, the value of this donated time is not reflected in the financial statements. Reclassifications Certain balances were reclassified to conform to current year presentation. Net assets and change in net assets were not impacted by this reclassification. Recent Accounting Pronouncements ASU 2015-3 SIMPLYFYING THE PRESENTION OF DEBT ISSUANCE COSTS In April 2015, the FASB issued Accounting Standards Update - No. 2015-3 Interest - Imputation of Interest - Subtopic 835-30 - Simplifying the Presentation of Debt Issuance Costs. The FASB received feedback that having different balance sheet presentation requirements for debt issuance costs and debt discount and premium creates unnecessary complexity. Recognizing debt issuance costs as a deferred charge (that is, an asset) also is different from the guidance in International Financial Reporting Standards (IFRS), which requires that transaction costs be deducted from the carrying value of the financial liability and not recorded as separate assets. Additionally, the requirement to recognize debt issuance costs as deferred charges conflicts with the guidance in FASB Concepts Statement No. 6, Elements of Financial Statements, which states that debt issuance costs are similar to debt discounts and in effect reduce the proceeds of borrowing, thereby increasing the effective interest rate. Concepts Statement 6 further states that debt issuance costs cannot be an asset because they provide no future economic benefit. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the 10
NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The Organization does not expect any reclassification of debt issuance costs in its financial statements in accordance with this update in future years. The amendments in this Update are effective for the Organization in financial statements issued for fiscal years beginning after December 15, 2015. 2. UNCONDITIONAL PROMISES TO GIVE Unconditional promises to give consisted of the following at December 31: 2015 2014 Unconditional promises to give $ 75,689 $ 96,005 Less: Allowance for uncollectible promises to give (22,197) (22,925) Unconditional promises to give, net $ 53,492 $ 73,080 Gross amounts receivable at December 31: 2016 $ 32,689 2017 10,000 2018 10,000 2019 10,000 2020 10,000 Thereafter 3,000 $ 75,689 The Organization has not calculated a discount on long-term pledges receivable historically. Management considers differences between this approach and those required by accounting principles generally accepted in the United States of America as immaterial to the financial statements as a whole. 3. INVESTMENTS Investments held by the Organization are cash and cash equivalents, mutual funds, equity securities, realestate investment trust and corporate and U.S. debt securities. 2015 2014 Cost Market Cost Market Money market funds $ 5,205 $ 5,205 $ 27,316 $ 27,316 Certificates of deposit 50,000 52,348 50,000 51,253 Mutual funds 761,589 700,401 613,207 611,774 Stock and equities 814,886 812,995 681,551 699,111 Fixed income securities - - 9,692 9,692 Real-estate investment trust 134,421 134,421 233,220 233,220 $ 1,766,101 $ 1,705,370 $ 1,614,986 $ 1,632,366 11
3. INVESTMENTS - continued PET HELPERS, INC. NOTES TO THE FINANCIAL STATEMENTS Investment income consists of the following for the years ended December 31: 2015 2014 Realized and unrealized gains (losses) $ (76,744) 50,239 Dividends and interest 61,999 51,252 Investment fees (13,038) (12,494) 4. FAIR VALUE OF FINANCIAL INSTRUMENTS AND ASSETS $ (27,783) $ 88,997 ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 Quoted prices in active markets for identical assets or liabilities. Observable inputs other than Level 1 prices, such as quoted prices for similar assets Liabilities; quoted market prices for identical or similar assets or liabilities in 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. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial instruments measured at fair value on a recurring basis are as follows at December 31: 2015 Level 1 Level 2 Level 3 Total Money market funds $ 5,205 $ - $ - $ 5,205 Certificates of deposit - 52,348-52,348 Mutual funds 700,401 - - 700,401 Stock and equities 812,995 - - 812,995 Real-estate investment trust - 134,421-134,421 Life insurance contract - 18,736-18,736 $ 1,518,601 $ 205,505 $ - $ 1,724,106 12
NOTES TO THE FINANCIAL STATEMENTS 4. FAIR VALUE OF FINANCIAL INSTRUMENTS AND ASSETS - continued 2014 Level 1 Level 2 Level 3 Total Money market funds $ 27,316 $ - $ - $ 27,316 Certificates of deposit - 51,253-51,253 Mutual funds 611,774 - - 611,774 Stock and equities 699,111 - - 699,111 Corporate bonds 9,692 - - 9,692 Real-estate investment trust - 233,220-233,220 Life insurance contract - 18,190-18,190 5. PROPERTY AND EQUIPMENT $ 1,347,893 $ 302,663 $ - $ 1,650,556 Major classifications of property and equipment as of December 31 are summarized below: 2015 2014 Land $ 275,741 $ 275,741 Leasehold improvements 3,217 3,217 Buildings 4,385,288 4,374,050 Vehicles 15,000 15,000 Computers and equipment 64,563 63,182 Construction in progress 34,410 34,410 Total 4,778,219 4,765,600 Accumulated depreciation (1,065,267) (943,287) Net property and equipment $ 3,712,952 $ 3,822,313 Depreciation expense for the years ended December 31, 2015 and 2014 was $121,980 and $132,230, respectively. 6. NOTES PAYABLE 2015 2014 Mortgage note payable to commercial bank in monthly installments of $12,261, including interest at the one month LIBOR rate plus 2.75%. At December 31, 2015 and 2014, the interest rate was 3.178% and 2.907%, respectively. The note is due in May 2022 as a balloon payment and is secured by the Organization's land and buildings. $ 1,754,835 $ 1,843,868 Less: current portion (94,645) (91,885) $ 1,660,190 $ 1,751,983 13
6. NOTES PAYABLE - continued PET HELPERS, INC. NOTES TO THE FINANCIAL STATEMENTS Future maturities of long-term debt are as follows at December 31: 2016 $ 94,645 2017 97,488 2018 100,416 2019 103,432 2020 106,539 Thereafter 1,252,315 $ 1,754,835 Interest expense incurred by the Organization for the years ended December 31, 2015 and 2014 was $54,691 and $57,405 respectively. 7. COMPENSATED ABSENCES Beginning on July 1, 2010, the Organization allows full-time employees to earn personal leave benefits, computed on a schedule that permits a maximum accrual of no more than 15 days in total. Employees are encouraged to use personal leave in the year earned and may not carry over any balances unless they receive approval in writing from the Executive Director. The Organization has not accrued a liability at December 31, 2015 and 2014. 8. ADVERTISING Cost of promotions and advertising are expensed as incurred. Advertising and promotion expense total $31,118 and $14,736 for the year ended December 31, 2015 and 2014, respectively. 9. TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets as of December 31, 2015 and 2014 are available for the following purposes: 2015 2014 Spay and neuter program $ - $ 15,000 New building campaign 643,638 643,638 10. CONCENTRATION OF CREDIT RISK $ 643,638 $ 658,638 The Organization places its cash with financial institutions. These consist of cash and money market accounts, which potentially subject the Organization to credit risk for the amounts in excess of federally insured limits of $250,000. At December 31, 2015, the Organization s cash exceeded federally insured limits by $227,182. The accounts with brokerage firms are insured in accordance with the Securities Investor Protection Corporation (SIPC). The initial $500,000 of invested funds (including cash account up to $250,000) is covered by the SIPC. As these are investments, the insurance is not for losses due to market fluctuations. Credit risk for promises to give is concentrated as well because substantially all of the balance is from one primary donor. 14
NOTES TO THE FINANCIAL STATEMENTS 11. CONTINGENCIES The Organization participates in and receives funds from a local bingo hall. The scheduled bingo nights are held in the Organization's name. Employees for the Organization and bingo hall are reported under the Organization s employer identification number for payroll and workman s compensation insurance. Funds the Organization receives are a percentage of monies collected by the SC Department of Revenue on the sale of bingo cards and a percentage from net earnings of the bingo hall. 12. RELATED PARTIES During the years ended December 31, 2015 and 2014, the board of directors provided contributions to the Organization in the form of cash and stock in the amounts of $50,288 and $73,685, respectively. The Organization entered into a collaboration arrangement with Charleston Animal Society to share in the distribution of profits of the Animal Helpers Retail Store, LLC on a 50/50 basis. One of the board members of the Organization also serves on the board of the retail store. The Organization received $57,500 and $44,600, respectively, in 2015 and 2014 from the retail store. At December 31, 2015 and 2014, the Organization had issued employee advances of $1,556 and $1,776, respectively. During 2014, The Executive Director hired their spouse who served as the Head Veterinarian of the clinic for a period of time. In addition, the Executive Director hired her daughters to assist the Organization. 13. SUBSEQUENT EVENTS In accordance with ASC 855, Subsequent Events, the Organization evaluated subsequent events through July 5, 2016, the date these financial statements were available to be issued. There were no material subsequent events that required recognition or additional disclosure in these consolidated financial statements, except those described below. On April 21, 2016, the Organization acquired ownership to ReTail Restore, a separate legal entity, for $70,000. The Organization had previously jointly run the ReTail Restore with the Charleston Animal Society for both organizations' mutual benefit. Subsequent to purchase, the Organization will own 100% of this entity and it will continue to be run for the benefit of the Organization and its mission. 15