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BIKE & BUILD, INC. OCTOBER 31, 2015 AND 2014
TABLE OF CONTENTS
EXHIBIT
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS
Statements of Financial Position
Statements of Activities
Statements of Functional Expenses
Statements of Cash Flows
Notes to Financial Statements
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7
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St. ClairCPAs,P.c.
To the Board of Directors Bike & Build, Inc. Philadelphia, Pennsylvania
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of Bike & Build, Inc. (a nonprofit organization), which comprise the statement of financial position as of October 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.
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 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 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.
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An indcpenden l member of B K R 28 South Centre Street • Merchantville, New Jersey 08109 • (Pl 856.482.5600 • (Fl 856.665.3618 • www.stclaircpa.com
101 West Elm Street • Suite 500 • Conshohocken, Pennsylvania 19428 • (Pl 610.862.1998 • (Fl 610.862.3200 • info @stclaircpa.com
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bike & Build, Inc. as of October 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.
Prior Period Financial Statements
The financial statements of Bike & Build, Inc. as of October 31, 2014, were audited by other auditors whose report dated January 19, 2015, expressed an unmodified opinion on those statements.
Merchantville, New Jersey January 4, 2016
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Certified Public Accountants
BIKE & BUILD, INC. STATEMENTS OF FINANCIAL POSITION OCTOBER 31, 2015 AND 2014
ASSETS
CURRENT ASSETS Cash and cash equivalents Prepaid expenses
TOTAL CURRENT ASSETS
SECURITY DEPOSIT
PROPERTY AND EQUIPMENT, net
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES Accrued expenses Deferred revenue
TOTAL CURRENT LIABILITIES
NET ASSETS Unrestricted
Operations Board designated
Temporarily restricted
TOTAL NET ASSETS
TOTAL LIABILITIES AND NET ASSETS
See accompanying notes.
$
$
$
$
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2015 2014
208,149 $ 91,106 18,537 13,355
226,686 104,461
1,700 1,700
155,138 110,926
383,524 $ 217,087
45,789 $ 8,940 2,200
47,989 8,940
204,839 165,644 80,188 24,083
285,027 189,727 50,508 18,420
335,535 208,147
383,524 $ 217,087
BIKE & BUILD, INC. STATEMENTS OF ACTIVITIES YEARS ENDED OCTOBER 31, 2015 AND 2014
UNRESTRICTED NET ASSETS
UNRESTRICTED REVENUES AND SUPPORT Contributions Apparel sales Application fees In-kind contributions Other income Net assets released from restrictions
TOTAL UNRESTRICTED REVENUES AND OTHER SUPPORT
EXPENSES Program services Management and general Fundraising
TOTAL EXPENSES
INCREASE (DECREASE) IN UNRESTRICTED NET ASSETS
TEMPORARILY RESTRICTED NET ASSETS Contributions Net assets released from restrictions
INCREASE IN TEMPORARILY RESTRICTED NET ASSETS
TOTAL INCREASE (DECREASE) IN NET ASSETS
NET ASSETS, BEGINNING
NET ASSETS, ENDING
See accompanying notes.
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$
$
2015 2014
1,488,248 $ 1,422,075 37,575 31,683 65,855 63,630 46,023 8,073 11,609 5,198 22,844 35,097
1,672,154 1,565,756
1,268,892 1,322,250 271,444 214,306
36,518 43,008 1,576,854 1,579,564
95,300 (13,808)
54,932 48,821 (22,844) (35,097)
32,088 13,724
127,388 (84)
208,147 208,231
335,535 $ 208,147
BIKE & BUILD, INC. STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED OCTOBER 31, 2015
Program Services
PERSONNEL Salaries $ 145,261 Payroll taxes 12,345 Employee benefits 5,996
163,602
OTHER EXPENSES Advertising 2,336 Auto
Fuel 28,636 Insurance 30,949 Other 4,564 Repairs and maintenance Storage
Bank charges Contributions 637,311 Depreciation 47,015 Fundraising Insurance 16,225 License and permits Miscellaneous Occupancy 5,810 Office supplies Payroll service fees Postage and delivery 1,245 Professional development Professional fees Program activities 737 Technology expense 14,383 Telephone and internet Travel 5,976 Trips 310,103
1,105,290
TOTAL EXPENSES $ 1,268,892
See accompanying notes.
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Management and Total
General Fundraising Expenses
$ 104,717 $ 14,308 $ 264,286 9,048 1,216 22,609 8,667 1,184 15,847
122,432 16,708 302,742
5,449 7,785
1,507 30,143 1,629 32,578 3,871 8,435
11,709 11,709 12,150 12,150 35,341 35,341
637,311 3,175 50,190
8,471 8,471 1,441 111 17,777 4,149 4,149 2,454 2,454
15,111 2,324 23,245 960 960
2,722 2,722 2,240 1,493 4,978 3,149 3,149
44,136 44,136 737
832 1,691 16,906 2,436 271 2,707
5,976 310,103
149,012 19,810 1,274,112
$ 271,444 $ 36,518 $ 1,576,854
BIKE & BUILD, INC. STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED OCTOBER 31, 2014
Program Services
PERSONNEL Salaries $ 165,608 Payroll taxes 8,229 Employee benefits 4,999
178,836
OTHER EXPENSES Advertising 2,899 Auto
Fuel 33,959 Insurance 41,013 Other Repairs and maintenance Storage
Bank charges Contributions 613,264 Depreciation 51,192 Insurance 40,946 License and permits Miscellaneous Occupancy 5,485 Office supplies Payroll service fees Postage and delivery 516 Professional fees Program activities 916 Technology expense 9,054 Telephone and internet Travel 7,781 Trips 336,389
1,143,414
TOTAL EXPENSES $ 1,322,250
See accompanying notes.
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Management and Total
General Fundraising Expenses
$ 78,550 $ 18,395 $ 262,553 6,978 1,634 16,841 4,239 993 10,231
89,767 21,022 289,625
11,597 14,496
1,787 35,746 2,159 43,172
10,974 10,974 12,743 12,743 10,600 10,600 32,750 32,750
613,264 10,863 5,285 67,340
994 233 42,173 4,223 4,223 1,244 1,244
14,260 2,194 21,939 679 679
2,669 2,669 3,221 826 4,563 7,775 7,775
916 5,171 1,581 15,806 2,427 270 2,697
7,781 336,389
124,539 21,986 1,289,939
$ 214,306 $ 43,008 $ 1,579,564
BIKE & BUILD, INC. STATEMENTS OF CASH FLOWS YEARS ENDED OCTOBER 31, 2015 AND 2014
CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets Adjustments to reconcile increase (decrease) in net assets to net cash
provided by operating activities Depreciation Loss on disposal of property and equipment
(Increase) decrease in Prepaid expenses
Increase (decrease) in Accrued expenses Deferred revenue
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment
NET CASH USED BY INVESTING ACTIVITIES
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING
CASH AND CASH EQUIVALENTS, ENDING
See accompanying notes.
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$
$
2015 2014
127,388 $ (84)
50,190 38,214 49,638
(5,182) 23,264
21,149 (13,315) 2,200
195,745 97,717
(78,702) (49,478)
(78,702) (49,478)
117,043 48,239
91,106 42,867
208,149 $ 91,106
BIKE & BUILD, INC. NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2015 AND 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Activities
Bike & Build, Inc. (the Organization) was incorporated as a not-for-profit organization and has been located in Pennsylvania since 2008. The Organization coordinates cross-country bike trips in an effort to raise funds for and communal awareness of affordable housing issues and to enable the Organization to provide grants to affordable housing organizations. These trips also act as a catalyst to build homes, foster the spirit of volunteerism, and empower young adults.
Basis of Accounting
The Organization's policy is to prepare its financial statements using the accrual basis of accounting, which is in accordance with accounting principles generally accepted in the United States of America.
Basis of Presentation
Financial statement presentation follows the recommendations of F ASB ASC 958, Presentation of Financial Statements for Not-for-Profit Organizations. Under FASB ASC 958, the Organization is required to report information regarding its financial position and activities according to three (3) classes of net assets: (1) unrestricted net assets, (2) temporarily restricted net assets, and (3) permanently restricted net assets.
Unrestricted - Net assets which are free of donor-imposed restrictions; all revenues, gains and losses that are not changes in permanently or temporarily restricted net assets.
Temporarily Restricted - Net assets whose use by the Organization is limited by donor-imposed stipulations that either expire by passage of time or that can be fulfilled or removed by actions of the Organization pursuant to those stipulations.
Permanently Restricted - Net assets whose use by the Organization is limited by donor-imposed stipulations that neither expire with the passage of time nor can be fulfilled or otherwise removed by actions of the Organization.
The Organization has temporarily restricted and unrestricted net assets at October 31, 2015 and 2014.
Expenses are reported as decreases in unrestricted net assets. Expirations of temporary restrictions on net assets (where the donor-stipulated purpose has been fulfilled) are reported as net assets released from restrictions.
Cash and Cash Equivalents
The Organization considers all liquid investments with maturities of three (3) months or less at the time of purchase to be cash equivalents.
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BIKE & BUILD, INC. NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2015 AND 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property and Equipment and Depreciation
It is the Organization's policy to capitalize property and equipment whose cost is greater than $500. Lesser amounts are expensed. Purchased property and equipment are recorded at cost. Donated property and equipment are recorded at fair market value as of the date of donation. When assets are disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is recorded in the statement of activities. Depreciation is computed using the straight-line method over the estimated useful lives ranging from three (3) to seven (7) years.
Contributions
Contributions are recognized in the period pledged as unrestricted contributions if specified for the current period and there are no donor-imposed restrictions. Contributions specified for future periods or with donor-imposed restrictions are recognized in the period pledged as temporarily restricted contributions. When a restriction expires (either 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.
Apparel Sales
The Organization's apparel items are sold primarily to registered cyclists. Revenue from apparel sales is recognized at the time of sale to the cyclists. Management has elected to expense the cost of the related apparel as a program expense when purchased because the Organization's logo is showcased on all apparel, and as such, Management believes the apparel services as a means of increasing the public awareness of the Organization while cyclists ride across the country.
Application Fees
The Organization recognizes application fees at the time cyclists' applications are reviewed and approved. These application fees are only refundable if, due to unforeseen circumstances, successful applicants are unable to participate in planned rides.
In-Kind Contributions and Expenses
Donations of property, equipment, materials, and other assets are recorded as support at their estimated fair value at the date of donation. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Donated property, equipment materials, and other assets were $11,493 and $8,073 for the years ended October 31, 2015 and 2014, respectively.
The Organization recognizes donated services that create or enhance nonfinancial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Donated services were $34,530 and $-0- for the years ended October 31, 2015 and 2014, respectively.
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BIKE & BUILD, INC. NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2015 AND 2014
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
The Organization is a nonprofit organization as described in Section 501(c) (3) of the Internal Revenue Code and is exempt from federal and state income taxes. No provision for income taxes is made in the accompanying financial statements, as the Organization has no activities subject to taxable unrelated business income tax. The Organization is not a private foundation.
Through October 31, 2015, the Organization recognized no uncertain tax positions nor accrued interest and penalties associated with uncertain tax positions.
The Organization's federal and state income tax returns are subject to possible examination by the taxing authorities until the expiration of the related statutes of limitations on those tax returns. In general, the federal and state income tax returns have a three year statute of limitations.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Expense Allocations
The costs of providing various programs and other activities have been summarized on a functional basis in the statement of activities and in the statement of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefitted.
Advertising
All costs associated with advertising are expensed in the period incurred. Advertising expense was $7,785 and $14,496 for the years ended October 31, 2015 and 2014, respectively.
Fair Value Instruments
The carrying value of the Organization's cash and cash equivalents, prepaid expenses, and accrued expenses approximate market value as of October 31, 2015 and 2014 due to the short-term nature of the instruments.
Reclassifications
Certain 2014 amounts have been reclassified to conform with the current year presentation. These reclassifications have no effect on previously reported net assets.
NOTE2 CONCENTRATION OF CREDIT RISK
The Organization maintains its cash balances in bank accounts, which may, at various times during the year, exceed the threshold for insurance provided by the Federal Deposit Insurance Corporation (FDIC). The Organization believes it is not exposed to any significant credit risk on its cash.
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BIKE & BUILD, INC. NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2015 AND 2014
NOTE3 PROPERTY AND EQUIPMENT
Property and equipment consists of the following as of October 31:
Transportation equipment Leasehold improvements Office equipment and technology
Less accumulated depreciation
2015
$ 244,213 2,750
73,547
320,510 165,372
$ 155,138
2014
$ 204,013 2,750
19,345
226,108 115,182
$ 110,926
Depreciation expense was $50,190 and $38,214 for the years ended October 31, 2015 and 2014, respectively.
NOTE4 RESTRICTIONS ON NET ASSETS
Temporarily restricted net assets consist of the following as of October 31:
Contributions received for the Chris Weber Memorial Fund Contributions received for the Scholarship Fund Contributions received for the WanninkhofFoundation
NOTES COMMITMENTS
$
$
2015
3,681 35,025 11,802
50,508
$
$
2014
5,035 13,385
18,420
The Organization leases its office and storage facilities under operating leases that expire at various dates through July 2017. Rental expense paid in connection with the operating leases totaled $32,703 and $29,300 for the years ended October 31, 2015 and 2014, respectively.
Future minimum lease payments are as follows:
NOTE6
Year Ending October 31: 2016 2017
SUBSEQUENT EVENTS
$ 33,900 27,200
$ 61,100
The Organization evaluated all events and transactions that occurred after October 31, 2015 (the financial statement date) through January 4, 2016, the date that the financial statements were available to be issued. During this period, the Organization had no material recognizable subsequent events.
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