KINGDOM HARVEST - SIGNED FINANCIAL STMTS 2014

KINGDOM HARVEST, INC.


Financial Statements

with


Independent Auditors' Report


Deceillber 31 , 2014

(With Corresponding Totals for December 31,2013)

KMETZ NUTTALL ELWELL GRAHAM, PLLC

Certified Public Accountants

Independent Auditors' Report

To the Board of Directors
Kingdom Harvest, Inc.

Report on the Financial Statements

We have audited the accompanying financial statements of Kingdom Harvest, Inc. (a nonprofit
organization) which comprise the statement of financial position as of December 31, 2014, 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.

Auditor's 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 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.

2800 Ocean Drive Vera Beach, Florida 32963 T: 772.231 .6902 F: 772.231.4099

www.knegcpa.com


Michael L. Kmetz, CPA. PFS Scott A Nu ttall, CPA, CFP Brian J. Elwell, CPA Patrick K. Graham, CPA, MA Aurelius J. (Reese) Brackin s,CPA

Teresa M. LaSota, CPA David P. Reisinger, CPA James F. McGuigan, Jr.,CPA Sherri Kolodziejcza k, CPA, CGMA

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Kingdom Harvest, Inc. as of December 31, 2014, and the changes in its net assets
and its cash flows for the year then ended in conformity with accounting principles generally accepted in
the United States of America.

Report on Summarized Comparative Information

We have previously audited the Organization's 2013 financial statements, and we expressed an
unmodified audit opinion on those audited financial statements in our report dated March 6, 2014. In our
opinion, the summarized comparative information presented herein as of and for the year ended
December 3 I, 2013, is consistent, in all material respects, with the audited financial statements from
which it has been derived.

Kmetz, Nuttall, Elwell, Graham, PLLC
Certified Public Accountants

March 26, 2015

Kingdom Harvest, Inc.

Statement of Financial Position

December 31, 2014

(With corresponding totals as of December 31,2013)


2014 2013

Assets $ 491,922 $ 745,296
Current Assets: 612,005 591,007
Cash
77,312 24 ,452
Inventory
52,045 4,510
Accounts receivable

Prepaid expenses
1,233,284 1,365,265

Total current assets 5,138,847 5,134,961
33,500 41,125
Other Assets:
Property and equipment, net
5,172,347 5,176,086
Deposits

$ 6,405,631 $ 6,541,352
Total other assets
$ 130,014 $ 149.307
Total assets 49,831 96.042

Liabilities and Net Assets 254,383 298,849
Current Liabilities: 8,397 7,753
Accounts payable and accrued expenses

Credit cards payable
442,625 551,951
Current portion of notes payable

Current portion of capital lease obligations
3,988,844 3,924.832
(254,383) (298,849)
Total current liabilities
22 ,317 30,070
Long-Term Debt: (8,397) (7,753)
Notes payable
Less current portion of notes payable 3,748,381 3,648,300
Capital lease obligations
Less current portion of capital lease obligations $ 4, 191,006 $ 4,200,251

Total long-term debt 2,189,625 2,329, 101
25,000 12,000
Total liabilities
2,214,625 2,341,101
Net Assets:
Unrestricted
$ 6,405,631 $ 6,541,352
Temporarily restricted


Total net assets

Total liabilities and net assets

See accompanying notes to financial statements.

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Kingdom Harvest, Inc.

Statement of Activities

For the year ended December 31, 2014

(With corresponding totals as of December 31, 2013)


Revenue Unrestricted 2014 Total 2013
Food center sales and redistribution income Temporarily All Funds
Public support $ 5,769,711 $ 5,769,711 Combined
Grant revenue 1,929,662 Restricted 1,954,662
Thrift store sales 402,093 $ 402,093 $ 5,451,570
Other revenue 143,592 143,592 2,040,272
Net assets released from restrictions 12,000 25,000 600,000
8,257,058 8,270,058 561,511
Total revenue ( 12,000) 79,558
7,489,703 13,000 7,489,703
Expenses 8,732,911
Program services: 343,655 13,000 343,655
Education and support 563,177 12,000 563,177 6,197,206
Supporting services: 906,832 $ 25,000 906,832
Management and general 8,396,534 8,396,534 580,141
Fundraising
(139,476) (126,476) 435,966
2,329,101 2,341,101 1,016,107
Total supporting services
$ 2,189,625 $ 2,214,625 7,213,313
1,519,598
Total expenses
821,504
$ 2,341,101
Change in net assets
Net assets, beginning of year

Net assets, end of year

See accompanying notes to financial statements.

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Kingdom Harvest, Inc. 2014 2013
Statement of Functional Expenses
For the year ended December 31, 2014 Program Services Supporting Services Total All Programs
(With corresponding totals as of December 31,2013) Combined
Education Management Fundraising $ 3,276,298
Employee costs and benefits and Support and General 2,295,273 $ 2,776,264
Purchased food and freight 316,408 2,010,502
Rent $ 2,794,802 $ 186,320 $ 295,176 333,830 490,755
Repairs and maintenance 2,295,273 253,125 248,896
Utilities 292,695 19,513 4,200 310,660 240,287
Insurance 312,966 20,864 1,229 379,004 211,617
Depreciation 236,153 15,744 197,157 206,872
Transportation and travel 291,244 19,416 159,598 129,509 172,204
Miscellaneous expense 355,316 23,688 80,245 159,598 125,562
Direct fundraising costs 184,835 12,322 92,066 120,325
Professional fees 121,415 88,540 104,693
Telephone and communications 8,094 96,151 90,288
Taxes and Licenses 86,312 117,582 82,863
Printing and reproduction 83,006 5,754 158,513 80,646
Interest expense 90,142 5,534 39,612 69,878
Direct program expenses 35,003 6,009 42,228 46,109
Office expense 148,606 2,334 44,005 45,390
Meals and entertainment 39,612 9,907 9,132 32,487
Bank and credit card charges 39,589 19,254 21,021
Postage 23,173 2,639 19,287 20,433 16,337
Subcontract services 1,545 11,803 11,091
Advertising 8,561 3,442 6,353 3,534
Other 18,051 571 $ 563,177 2,976
19,156 1,203 $ 8,396,534
Total expenses 7,838 1,277 $ 7,210,597
5,956
See accompanying notes to financial statements. 523
$ 7,489,703 397

$ 343,655

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Kingdom Harvest, Inc. 2014 2013
Statement of Cash Flows
For the year ended December 31, 2014 $ (126,476) $ 1,519,598
(With corresponding totals as of December 3 J, 2013)
379,004 (600,000)
Cash flows from operating activities: 206,872
Change in net assets (20,998)
Adjustments to reconcile increase in net assets to (52,860) (202,521)
net cash flows provided by operating activities: (47,535) (24,452)
Capital grant contribution (4,510)
Depreciation 7,625 (32,825)
Changes in assets and liabilities: (19,293) 24,878
Inventory
Accounts receivable 119,468 887,040
Prepaid Expenses
Deposits (292,890) (437,846)
Accounts payable and accrued expenses (292,890) (437,846)

Net cash provided by operating activities (46,211) 82,576
(7,753) (8,492)
Cash flows from investing activities: 97,766 8,599
Purchase of property and equipment (56,773)
(123,754)
Net cash used for investing activities 25,910
(79,952)
Cash flows from financing activities: 475,104
Credit card payable, net change (253,374) 270,192
Payments made on capital lease obligation 745,296
Proceeds from debt $ 745,296
Payments made on notes payable $ 491,922

Net cash provided by (used for) financing activities $ 158,513 $ 69,878

Net increase(decrease) in cash and cash equivalents 90,000 3,019,836
Cash and cash equivalents, beginning of year 600,000
825,000
Cash and cash equivalents, end of year (825,000)

Supplement disclosure for cash flow information
Cash paid during the year for:

Interest paid
Noncash financing transactions:

Acquisition of debt in purchase of property
CDBG capital grant used for purchase of property
Acquisition of debt in refinance
Disposition of debt in refinance

See accompanying notes to financial statements.

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Kingdom Harvest, Inc.
Notes to Financial Statements
For the year ended December 31,2014

Note 1- Organization and Programs

Organization and Purpose
Kingdom Harvest, Inc. (the "Organization") is a not-for-profit corporation organized under the
laws of the state of Florida in July, 2003 . The Organization commenced operations in Vero
Beach, Florida on October I, 2003, under the tax exempt status of its affiliate, Full Gospel
Fellowship of Churches and Ministers International, Inc. The Organization was granted tax
exempt status under Internal Revenue Code Section 501(c)(3) on March 10, 2008. The
Organization's primary purpose is to help individuals in need of temporary and permanent
assistance through education services and distribution of surplus goods through various locations
in the Florida counties of Indian River, St. Lucie and Orange. Kingdom Harvest, Inc. operates as
Harvest Food & Outreach Center on the Treasure Coast and as Community Food & Outreach
Center in Central Florida.

Overview of Programs
The Cost Share Grocery Program serves families who are at 200% of the federal poverty level or
below. Clients receive a membership card (free of charge) which allows them to utilize this
program. During 2014, over 50% of the food available through this program is purchased by
Kingdom Harvest, Inc. Clients make a contribution towards the cost of the food which offsets
the cost of fuel and handling.

The Crisis Program is for clients facing crisis situations . Eligible clients meet with crisis center
staff that evaluate and address their immediate needs, provide them access to emergency food,
referral and casework services. All clients must complete an in-person intake with staff.

In partnership with the Department of Children and Families, Kingdom Harvest, Inc. hosts the
ACCESS Florida lobbies in St. Lucie and Indian River counties. Clients may apply for and check
the status of their food stamps, Medicaid and temporary cash assistance. These lobbies are
manned by Department of Children and Families staff and applicants must come in person to
access this service.

The Organization also provides educatbnal opportunities on a variety of topics which include
money management, nutrition, employment skills, computer literacy and healthy relations. All of
the classes are offered to the general public and free of charge. Classes are facilitated by staff,
local agencies and volunteers with specific expertise. The Passport to Prosperity program is our
long term education program for adults.

The Summer Read and Feed program runs for eight consecutive weeks and is designed to offer a
holistic approach to battling summer food insecurity in households with school aged children.
While many feeding programs exist for children eligible for free and reduced lunches during the
summer months, they are more geographically widespread and not all are tied into educational or
summer camp programs. What makes this program unique is the focus on not only the child, but
the entire household. It is also unique because this program goes beyond a traditional feeding
program; it provides books and school supplies as an incentive for participation and also
education opportunities for both children and adults.

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Kingdom Harvest, Inc.

Notes to Financial Statements (continued)


Note 2 - Summary of Significant Accounting Policies

Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting.


Basis of Presentation

Contributions received are recorded as unrestricted or temporarily restricted support, depending

on the existence and/or nature of any donor restrictions. Support that is restricted by the donor is

reported as an increase in unrestricted net assets if the restriction expires in the reporting period

in which the support is recognized. All other donor-restricted support is reported as an increase

in temporarily or permanently restricted net assets, depending on the nature of the restriction.

When a 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 statement of activities as net assets released from restrictions.


Inventory

The Organization has no objective basis to determine the value of thrift store inventory which is

wholly received from donors. Donated thrift items in inventory at year end are valued at their

estimated retail selling price. Donated thrift inventory is not priced on an item-by-item basis but

rather based on overall estimates of inventory turns .


Inventory includes products held in grocery and thrift locations. For grocery locations,

contributed food items are valued at estimated average wholesale value of donated products.

Purchased food items are stated at the lower of cost (first-in, first-out method) or market. The

distributed inventory expense includes spoilage and shrinkages.


Property and Equipment

Property and equipment acquisitions greater than $500 are capitalized and are stated at cost.

Donated property and equipment is recorded at the fair market value at the date of the gift.

Depreciation is provided using straight-line and accelerated methods over the estimated useful

life of the asset, which ranges from 5-40 years.


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 has been determined not to be a private foundation

within the meaning of Section 509(a) of the Code.


Revenue Recognition

The value of contributed food and thrift items is not readily determinable at the time of donation.

Such contributions are therefore recognized as sales revenue as the contributed items are

purchased by the consumer. Thus the statement of activities does not reflect, as a deduction from

grocery and thrift store sales, a cost of goods sold for contributed inventory sales.


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Kingdom Harvest, Inc.

Notes to Financial Statements (continued)


Note 2 - Summary of Significant Accounting Policies (continued)

Contributed Services
The Organization receives a significant amount of donated services from unpaid volunteers who
assist in fundraising, administration and program services. However, these amounts have not
been recognized in the accompanying financial statements because they do not meet the criteria
for recognition under ASC Topic, 958-605-50-1, Not-for-Profit Entities, Contributed Services
Disclosures (formerly SFAS No. 116).

Functional Allocation of Expenses
The cost of providing the various programs and other activities has been summarized on a
functional basis in the statement of functional expenses. Accordingly, certain costs have been
allocated among the programs and supporting services benefited.

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those estimates.

Prior Period Information
The financial statements include certain prior year corresponding totals intended to be read only
in relation to the current period figures. The corresponding information was derived from the
Organization's financial statements for the year ended December 31, 2013 and does not herein
include sufficient detail to constitute a presentation in conformity with accounting principles
generally accepted in the United States of America. Additionally, the prior year corresponding
figures may reflect certain reclassifications of amounts to conform to current year presentations.

Note 3 - Concentrations of Credit Risk

The Organization maintains cash in financial institutions which are insured by the Federal
Deposit Insurance Corporation ("FDIC"). The FDIC deposit insurance limit is currently
$250,000 per depositor, per insured bank. As of December 31, 2014, the Organization has
deposits held at one financial institution which exceed the insurance limit by $186,859. The
Organization has not experienced any losses on such amounts and does not believe it is exposed
to any significant risk with respect to such balances.

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Kingdom Harvest, Inc.

Notes to Financial Statements (continued)


Note 4 - Property and Equipment, net

The following is a summary of property and equipment at December 31,2014: $ 1,660,127
122,723
Land
Land improvements 3,362,679
Building and improvements 632,693
Machinery and equipment 206,384
Vehicles 81,536
Office equipment 20,095
Furniture and fixtures 4,525
Storage containers
6,090,762
Accumulated depreciation
(951,915)

$ 5,138,847

The net carrying value of property and equipment held under mortgage and specific security
agreements, as described in Note 6, totals $4,959,350 at December 31,2014.

Note 5 - Credit Cards Payable

The Organization finances certain operating purchases under unsecured revolving credit card
agreements. The agreements provide for a grace period on current month purchases with interest
accruing after the grace period at annual percentage rates ranging from 19.99% to 29.99%.
Unused credit available under these agreements approximates $140,844 as of December 31,
2014 .

Note 6 - Notes Payable

The following is a summary of long term debt as of December 31, 2014:

Seacoast National Bank, $8,599 vehicle financing, dated April 9, 2013, payable in
monthly installments of principle and interest in the amount of $256 . Interest accrues at
4.5%. Note matures on April 19,2016.

Seacoast National Bank, $90,000 business loan dated January 10, 2014. Loan is secured
with all inventory, chattel paper, accounts, equipment and general intangibles. Payable
in 48 monthly principal and interest payments in the amount of $2,055. Interest accrues
at 4.5%. Note matures on February 10, 2018 .

Seacoast National Bank, $500,000 line of credit dated June 30, 2014. Underlying
promissory note requires interest only payments through June 30, 2015 with monthly
principal and interest payments continuing thereafter until final payment due at maturity
on June 30, 2020. Interest accrues at 4.75%. Secured by mortgage on property located
in Vero Beach, Florida.

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Kingdom Harvest, Inc.

Notes to Financial Statements (conlinued)


Note 6 - Notes Payable (continued)

Northern Trust Company, $113,791 secured loan dated December 2 I, 2014. Loan is
secured with all inventory, chattel paper, accounts, equipment and general intangibles.
Payable in 47 monthly installments of$2,371 principal plus accrued interest. Interest
accrues variable at Wall Street Journal Prime (3.25% at December 3 1,2014). Final
payment of $2,3 77 principal plus accrued interest due on or before December 21, 2018.

Seacoast National Bank, $197,000 equipment and construction loan dated November 22,
2013. Loan is secured with walk-in freezer and all inventory, chattel paper, accounts,
equipment and general intangibles. Balance of $119,836 drawn at December 31, 2013,
payable in 3 monthly interest only payments beginning December 22,2013, then 57
monthly installments of principal and interest in the amount of $3,942. Interest accrues
at 5.5%. Note matures on November 22,2018.

Related Party $157,500 subordinated mortgage loan dated August 5, 2013, payable in
monthly installments of principal and interest in the amount of $2,858. Interest accrued
at 4.0%. The mortgage note matures on August 5, 2018. This second mortgage loan was
used to purchase formerly leased land and building in Ft. Pierce, Florida.

City of Orlando, $400,000 mortgage note dated November 7, 2013. The loan is made
through the federal Community Development Block Grant and does not accrue interest.
The note matures with forgiveness of all principal on September 30, 2019, subject to full
compliance with restrictive use and other covenants under the CDBG agreement. The
mortgage loan was used to purchase formerly leased land and building in Orlando,
Florida.

Seacoast National Bank, $825,000 first mortgage loan dated June 10,2013, payable in
monthly installments of principal and interest in the amount of $5,020. Interest accrues
at 3.99%. The mortgage note matures on June 10,2023. The mortgage loan was used to
refinance the 2011 purchase ofland and building used as a thrift shop in Vero Beach,
Florida.

Seacoast National Bank $892,500 mortgage loan dated August 5, 2013, payable in
monthly installments of principal and interest in the amount of$6,788. Interest accrues
at 4.35%. The mortgage note matures on August 5, 2028. This first mortgage loan was
used to purchase formerly leased land and building in Ft. Pierce, Florida.

Bank of America, $1,450,000 mortgage loan dated November 12, 2013, payable in
monthly installments of principal and interest in the amount of $9,026. Interest accrues
at 4.25% the mortgage note matures with balloon payment of principal and all accrued
interest on November 12, 2023. The mortgage loan contains restrictive financial and
other covenants under which there are no known events of default at December 31, 2014.
The mortgage loan was used to purchase formerly leased land and building in Orlando,
Florida.

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Kingdom Harvest, Inc.
Notes to Financial Statements (continued)

Note 6 - Notes Payable (continued)

The following is a schedule showing the balances of each loan at December 31, 2014:

Bank of America - Orlando mortgage 1,399,186
Seacoast National Bank - St. Lucie County mortgage 834,835
Seacoast National Bank - Indian River County mortgage 783,564
City of Orlando (CDBG) - mortgage 400,000
Related party - second mortgage 119,235
Seacoast National Bank - equipment financing 166,052
Northern Trust Company - secured loan 113,791
Seacoast National Bank - line of credit 97,766
Seacoast National Bank - equipment financing 70,445
Seacoast National Bank - vehicle financing 3,970

$ 3,988,844

Principal maturities are as follows: 254,383
271,666
December 31, 2015 282,258
December 31, 2016 258,441
December 31, 2017 2,922,096
December 31, 2018
December 3 I, 2019 and thereafter $ 3,988,844

Note 7 - Related Party Transactions

The Organization is under mortgage agreement with a Director on the Organization's Indian River
County Board. The Organization is indebted to such director and spouse under a $157,500 mortgage
loan dated August 5, 2013. The loan is under formal contract terms and is included in notes payable at
note 6.

Note 8- Capital Leases

The Organization leases various fixtures and equipment under capital lease. The assets and
liabilities under the capital lease are recorded at the lower of present value of the minimum lease
payments or the fair value of the assets. The assets are depreciated over the lower of their related
lease terms or their estimated productive lives. Net carrying amount of assets under capital lease
at December 31, 2014 is $20,714.

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Kingdom Harvest, Inc.

Notes to Financial Statements (continued)


Note 8- Capital Leases (continued)

The following is a schedule of the minimum annual lease payments for the years ending
December 31 :

2015 $ 8,397

2016 9,094
2017 4,826

$ 22,317

Note 9 - Operating Leases as Lessee '

The Organization leases real property located in Vero Beach, Florida, for use as a distribution
facility, under a non-cancelable lease, expiring on January 31, 2019. Currently, the monthly
lease payment amounts to $7,000. Lease expense for the year ended December 31, 2014
amounts to $84,000.

Future annual lease payments under this lease are as follows: 96,000
108,000
2015 120,000
2016 120,000
2017
2018 10,000
2019
$ 454,000

The Organization leases real property located in Vera Beach, Florida, for use as a life assistance
Center, under a non-cancelable lease, expiring on March 31, 2019. Currently, the monthly lease
payment amounts to $3,500. Lease expense for the year ended December 31,2014 amounts to
$42,000. A portion of this space is sublet to an unrelated organization.

Future annual lease payments under this lease are as follows: 42,000
42,000
2015 42,000
2016 42,000
2017 10,500
2018
2019 $ 178,500

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Kingdom Harvest, Inc.

Notes to Financial Statements (continued)


Note 9 - Operating Leases as Lessee (continued)

In May, 2012, the Organization entered into two 3-year leases, each expiring April 30, 2015, for
real property located in Vero Beach, Florida, for use as administrative office suites. Each lease
is cancelable individuaIly with a 6-month notice. For the year ended December 31, 2014, the
monthly lease payments were approximately $700 per lease, or $1,400 per month. Lease expense
for the year ended December 31, 2014 amounted to $16,800. During 2014, one of the leases was
cancelled effective March 2015.

Future annual lease payments under this lease are as follows: 4,200
2015 $ 4,200

The Organization leases real property located in Vero Beach, Florida for use as a distribution
facility under a non-cancelable lease, expiring November 30, 2016. The lease has an option to
renew six additional two year terms, of which the fifth option was exercised during the year
ended December 31, 2014. For the year ended December 31, 2014, the monthly lease payments
were approximately $2,350. Lease expense for the year ended December 31, 2014 amounts to
$28,206.

Future annual lease payments under this lease are as follows: $ 29,419
$ 26,968
2015
2016 $ 56,387

In October 2013, the Organization entered into a five year, non-cancelable lease, commencing in
2014 and expiring December 31, 2018, for real property located in Vero Beach, Florida for use as
a regional distribution warehouse. A deposit of last month's rent totaling $13,125 continues to be
held at December 31, 2014. The lease has an option to renew one additional five year term.
Lease expense for the year ended December 31, 2014 amounts to $157,500.

Future annual lease payments under this lease are as follows: 163,800
170,352
2015 177,166
2016 184,253
2017
2018 $ 695,571

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Kingdom Harvest, Inc.

Notes to Financial Statements (continued)

Note 10 - Operating Leases as Lessor

During 20 13, the Organization acquired properties subject to existing lease agreements with
tenants utilizing space not currently used in the Organization's operations. One tenant was
acquired in the purchase of the Ft. Pierce location which leases 200 square feet of parking lot
space under a 60 month term at $500 per month expiring July 2016. There are two options for
the lessee to renew at established increased rates.
Four tenants utilize space at the Orlando locations. Three are currently at month to month terms.
Two require a 30-day notice for termination and provide for rental receipts of $1 ,000 per month
and $700 per month. One requires a 90-day notice for termination and provides for rental
receipts of $1,500 per month. No security deposits are held on these month to month
agreements. The remaining lease extends through December 31, 2015 and provides for rent at
$1,700 per month, increasing to $1,900 per month in January 2015. A $2,000 security deposit is
held under this lease.
Note 11 - Income Tax Reporting
Management of the Organization considers the likelihood of changes by taxing authorities in its
filed tax returns and recognizes a liability for or discloses potential significant changes that
management believes are more likely than not to occur, including changes to the Organization'S
status as a not-for-profit entity. Management believes the Organization met the requirements to
maintain its tax-exempt status and has no unrecorded tax liability. The Organization's tax
returns for the past three years are subje,ct to examination by taxing authorities, and may change
upon examination

Note 12 - Disclosure of Subsequent Events
Management has evaluated subsequent events through March 26, 2015, the date the financial
statements were available to be issued . Management is not aware of any events subsequent to the
statement of financial position date which would require additional adjustments to, or disclosure
in, the accompanying financial statement.

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