FINANCIAL STATEMENTS FOR THE YEAR ENDED Goranson and Associates, Inc.
TABLE OF CONTENTS INDEPENDENT AUDITOR S REPORT 1-2 Page FINANCIAL STATEMENTS: Statement of Financial Position 3-4 Statement of Activities 5 Statement of Functional Expenses 6 Statement of Cash Flows 7 Notes to Financial Statements 8-18
INDEPENDENT AUDITOR S REPORT To the Board of Directors California Farmlink Santa Cruz, California We have audited the accompanying financial statements of California Farmlink (a nonprofit organization), which comprise the statement of financial position as of December 31, 2014, and the related statements of activities 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. Goranson and Associates, Inc. 717 College Avenue, First Floor, Santa Rosa, CA 95404 Phone: 707/542-1256 Fax 707/978-3090
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of California Farmlink as of December 31, 2014, 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. Report on Summarized Comparative Information We have previously audited the California Farmlink s financial statements for the year ended December 31, 2013, and we expressed an unmodified audit opinion on those audited financial statements in our report dated April 17, 2014. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2013, is consistent, in all material respects, with the audited financial statements from which it has been derived. Goranson and Associates, Inc. June 4, 2015 Santa Rosa, California Goranson and Associates, Inc.
STATEMENT OF FINANCIAL POSITION December 31, 2014 (with summarized comparative totals for December 31, 2013) ASSETS 2014 2013 Current assets: Cash and cash equivalents: Operating $ 444,228 $ 649,908 Loan fund, including loss reserve 1,295,579 192,689 Total cash and cash equivalents 1,739,807 842,597 Short-term cash investments 496,118 242,778 Accounts receivable 139,945 629,844 Prepaid expenses and deposits 7,811 - Loans receivable, current portion, net of loan loss provision of $87,869 (2014) and $110,980 (2013) 824,551 491,702 Total current assets 3,208,232 2,206,921 Fixed assets Net furniture and equipment 19,509 - Other assets Government-backed loan securities 19,114 63,056 Total assets $ 3,246,855 $ 2,269,977 The accompanying notes are an integral part of these financial statements - 3 -
STATEMENT OF FINANCIAL POSITION December 31, 2014 (with summarized comparative totals for December 31, 2013) LIABILITIES AND NET ASSETS 2014 2013 Current liabilities: Accounts payable and accrued expenses $ 32,722 $ 55,798 Custodial liability 82,049 15,000 Deferred Revenue - 600,000 Total current liabilities 114,771 670,798 Long-term liabilities: Notes payable 1,720,132 1,125,000 Total liabilities 1,834,903 1,795,798 Net Assets: Unrestricted operating (126,758) 170,758 Temporarily restricted 1,538,710 303,421 Total net assets 1,411,952 474,179 Total liabilities and net assets $ 3,246,855 $ 2,269,977 The accompanying notes are an integral part of these financial statements - 4 -
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED (with summarized comparative totals for the year ended December 31, 2013) Temporarily 2014 2013 Unrestricted Restricted Total Total SUPPORT AND REVENUE: Contributions and grants $ 412,477 $ 1,610,629 $ 2,023,106 $ 839,645 Program revenue 11,532-11,532 10,383 Interest income 41,673-41,673 29,885 Loan fee income 27,687-27,687 16,384 Other revenue - - - 1,748 Net assets released from restriction 375,340 (375,340) - - Total support and revenue 868,709 1,235,289 2,103,998 898,045 EXPENSES: Program expense: Farmlink Land Access program 343,772 343,772 316,569 Farm Opportunities Loan program 374,617 374,617 267,758 Individual Development Accounts 235,244 235,244 144,766 Total program expenses 953,633 953,633 729,093 Supporting expenses: Management and general 100,970 100,970 92,750 Fundraising 118,622 118,622 102,842 Total supporting expenses 219,592 219,592 195,592 Total expenses 1,173,225 1,173,225 924,685 CHANGE IN NET ASSETS (304,516) 1,235,289 930,773 (26,640) NET ASSETS, BEGINNING 177,758 303,421 481,179 507,819 NET ASSETS, ENDING $ (126,758) $ 1,538,710 $ 1,411,952 $ 481,179 The accompanying notes are an integral part of these financial statements - 5 -
STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED (with summarized comparative totals for the year ended December 31, 2013) Individual Farm Development Farmlink Opportunities Account Land Access Total Management 2014 2013 Loan Program Program Program Program and General Fundraising Total Total Personnel $ 242,187 $ 46,981 $ 258,954 $ 548,122 $ 39,376 $ 108,274 $ 695,772 $ 406,766 Program partners - - - - - - - 152,580 Professional fees 39,330 164,527 53,029 256,886 14,257 $ 8,194 279,337 138,433 Accounting fees 9,836 11,618 6,651 28,105 3,179-31,284 41,707 Advertising 150-500 650 5,804-6,454 12,374 Conferences and training 250 556 1,251 2,057 3,064-5,121 10,810 Occupancy 9,303 491 6,602 16,396 10,709 1,227 28,332 12,737 Printing and duplication 32 250 2,228 2,510 110-2,620 1,460 Travel 18,604 3,194 7,215 29,013 7,124 905 37,042 19,172 Communications 750 125 4,321 5,196 3,318-8,514 7,159 Postage and shipping 76-140 216 253-469 747 Supplies and equipment 473 76 700 1,249 5,331 22 6,602 10,578 Insurance - - - - 6,000-6,000 5,738 Interest expense 30,664 - - 30,664 - - 30,664 14,957 Loan loss reserve 22,684 - - 22,684 - - 22,684 73,050 Service fees - 7,426-7,426 5-7,431 - Depreciation - - - - 1,178-1,178 - Other operating expense 278-2,181 2,459 1,262-3,721 16,417 Total expenses $ 374,617 $ 235,244 $ 343,772 $ 953,633 $ 100,970 $ 118,622 $ 1,173,225 $ 924,685 The accompanying notes are an integral part of these financial statements - 6 -
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED (with summarized comparative totals for the year ended December 31, 2013) 2014 2013 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 930,773 $ (26,640) Adjustments to reconcile change in net assets to cash from operations: Depreciation 1,178 - (Increase) decrease in: Accounts receivable 489,899 (507,456) Prepaids and deposits (7,811) - Increase (decrease) in: Accounts payable and accrued expenses (23,076) (143,630) Deferred revenue (600,000) 600,000 Custodial obligations 67,049 15,000 Net cash provided (used) by operating activities 858,012 (62,726) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (20,687) - (Increase) decrease in notes receivable (351,963) (273,844) Increase in short-term investments (209,398) 368,643 Net cash provided (used) by investing activities (582,048) 94,799 CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt 595,132 200,000 NET INCREASE (DECREASE) IN CASH 871,096 232,073 CASH, beginning of year 842,597 610,524 CASH, end of year $ 1,713,693 $ 842,597 Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 30,664 $ 16,023 The accompanying notes are an integral part of these financial statements - 7 -
NOTE 1 ORGANIZATION Established in 1999, California FarmLink (FarmLink) has developed a statewide program of economic development support for beginning, limited-resource, immigrant and underserved farmers, and became a certified Community Development Financial Institution in 2013. In the last five years, FarmLink has helped more than 1,500 farmers in forty counties to start and grow farm businesses with education, financing and land access support. FarmLink staff work from three regional offices serving the Central Coast, North Coast and Central Valley, providing farmers with direct technical assistance as well as workshops and classes in collaboration with farm incubators and training programs to engage and grow the next generation of organic farmers. To help farmers access land and capital, grow their businesses, and create jobs, FarmLink works in two program areas: 1. A Land Access Program helps farmers find land; develop and negotiate strong farm lease and purchase agreements; links farmers with a network of land opportunities; and cultivates landowners to work with beginning farmers. FarmLink is also a recognized expert in farm succession planning, and has developed a network of trustworthy farm estate planning attorneys, CPAs, land trusts and family communication specialists who work with farm families to transition farms to the next generation. The Land Access program results in 25 to 30 new land tenure agreements (farm leases, purchases or business successions) per year. 2. The Farm Opportunities Loan Program provides flexibly structured financing to underserved, low-income, immigrant and beginning farmers across the state for operating, equipment and farm mortgage loans. FarmLink s loan program serves borrowers who would otherwise have a difficult time securing financing due to: 1) limited history as entrepreneurs; 2) limited traditional collateral; 3) limited credit history; 4) need for small loans; 5) language or cultural barriers; and 6) non-traditional business models. A core element of FarmLink's lending is one-on-one technical assistance to help farmers successfully manage business financing, and build long-term financial viability in the mainstream economy. We help farmers learn about operating, infrastructure, and land loans; prepare for taxes; develop cash-flow projections; and build, maintain and repair credit. Public and private funding support FarmLink s work. - 8 -
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accounting and reporting policies of FarmLink conform to accounting principles generally accepted in the United States of America (US GAAP). The financial statements are prepared on the accrual basis of accounting. Unrestricted Net Assets Net assets that are not subject to donor-imposed restrictions. These also may be designated for specific purposes by action of the Board of Directors. Temporarily Restricted Net Assets Net assets that are subject to donor-imposed stipulations that may be fulfilled by actions of FarmLink to meet the stipulations or that become unrestricted at the date specified by the donor. Permanently Restricted Net Assets Net assets subject to donor-imposed stipulations that they be retained and invested permanently by FarmLink to use all or part of the investment return on these net assets for specified or unspecified purposes. FarmLink does not have any permanently restricted net assets at December 31, 2014. Net assets released from restriction - Temporarily restricted net assets are released to unrestricted net assets when the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed. Other Basis of Presentation Program Revenues or support are reported as increases in unrestricted net assets unless subject to donor-imposed restrictions. If temporary restrictions are fulfilled in the same time period the revenue or support is received, FarmLink reports the revenue or support as unrestricted. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets of liabilities are reported as increases or decreases in unrestricted net assets unless restricted by explicit donor stipulation or by law. - 9 -
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued Cash and Cash Equivalents - Cash equivalents consist primarily of money market accounts and other investments with an original maturity of 90 days or less. Interest rates range from 0.02 1.0 percent. Concentrations of Credit Risk FarmLink maintains cash balances at local financial institutions insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At times during the year, FarmLink held cash and cash equivalent balances in excess of federally insured limits. The amount in excess of the FDIC limit totaled $931,126 at December 31, 2014. Fair Value Measures FarmLink reports its fair value measures by using a fair value hierarchy defined by generally accepted accounting principles (GAAP) that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). The three level of the fair value hierarchy under GAAP are: Level 1 Unadjusted quoted prices in active markets accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Prices for valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (inputs are supported by little or no market activity). Investments- Investments are made up money market accounts and are reported at their fair values in the statement of financial position. The fair value of the accounts are based upon quoted prices in active markets (Level 1 measurements). Realized and unrealized gains and losses are included in the change in net assets and are included in the statement of activities as net realized and unrealized gains on investments. Interest rates range from.02 to one percent for all money market accounts. - 10 -
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued Accounts Receivable - Accounts receivable consist primarily of amounts owed from grants and contracts. Grant and contract receivables are subject to review by the issuing agencies and, consequently certain costs could be disallowed. Management is of the opinion that any adjustments made during these reviews would be immaterial. Loan Fund - In 2005, FarmLink began developing a farm loan fund to provide financing to growers. The organization identified a lack of access to financing as one of the top obstacles faced by small and low-income farmers. For five years FarmLink operated the loan program in collaboration with other lending institutions: FarmLink raised funds and loaned those funds to the other lending institutions who acted as the lender of record to make loans to small farmers. FarmLink obtained its own lending license from the Department of Corporations at the end of 2010, secured guaranteed lender status from the USDA Farm Service Agency in 2011 and has been making direct loans to growers since the fall of 2011. In 2013, FarmLink received the certification from the US Treasury as a Community Development Financial Institution (CDFI). A CDFI is a specialized financial institution that works in market niches that are underserved by traditional financial institutions. With this certification, FarmLink is eligible for accessing financial and technical award assistance from the CDFI Fund to advance its mission. Loans Receivable - Loans receivable are stated as the unpaid principal balance, less the allowance for loan losses and deferred loan fees net of deferred loans costs. Loan origination fees, offset by certain direct loan origination costs, are deferred and recognized over the contractual life of the loan as a yield adjustment. Loan Loss Reserve - The loan loss reserve is calculated annually on a risk assessment analysis performed by the loan officer and management as it fits with specific criteria developed to assess each loan. The current loan loss reserve is calculated at $87,869. Custodial Liability - FarmLink services loans for Feed the Hunger Foundation and maintains a liability of the amounts due to the Foundation on an ongoing basis. - 11 -
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued 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 the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates that are particularly susceptible to significant change relate to the determination of the allowance for losses on loans. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in local economic conditions. Donated Services and Items - Many people have contributed significant amounts of time to the activities of FarmLink without compensation. The financial statements do not reflect the value of those contributed services, because, although clearly substantial, no reliable basis exists for determining an appropriate valuation. Allocation of Expenditures - FarmLink charges all direct expenditures to the appropriate programs. Indirect expenditures eligible to be charged to cost reimbursement programs are allocated to all funds, subject to contractual limits. Indirect costs which are not eligible to be charged to cost reimbursement programs are allocated prorata among the remaining programs Income Taxes - FarmLink is exempt from Federal and State Income taxes under Internal Revenue Code Section 501(c)(3) and California Franchise Tax Board Code Section 23701d. Therefore, no provision for income taxes has been made in the accompanying financial statements. In addition, the Internal Revenue Service has determined FarmLink is not a private foundation within the meaning of Section 509(a) of the Internal Revenue Code. Management of FarmLink considers the likelihood of changes by taxing authorities in its filed tax returns and recognizes a liability for or discloses potential significant changes if management believes it is more likely than not for a change to occur, including changes to FarmLink status as a not-for-profit entity. Management believes FarmLink met the requirements to maintain its taxexempt status and has not income subject to unrelated business income tax; therefore no provision for income taxes has been provided in these financial statements. FarmLink tax returns for the past three years are subject to examination by tax authorities, and may change upon examination. - 12 -
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued Summarized Financial Information The financial statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly such information should be read in conjunction with FarmLink s financial statements for the year ended December 31, 2013, from which the summarized information was derived. NOTE 3 FAIR VALUE MEASUREMENTS AND INVESTMENTS The following table presents the assets and liabilities recognized in the accompanying statements of financial position that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which those fair value measurements fall at December 31, 2014: Total Level 1 Money market accounts $ 496,118 $ 496,118 Investment earnings are as follows for the year ended December 31, 2014: Interest income $ 41,674 NOTE 4 ACCOUNTS RECEIVABLE Accounts receivable at December 31, 2014 consists of the following: Northern American Development Bank $ 79,677 California Department of Food and Agriculture 22,199 USDA Rural Business Development Grants 24,418 USDA Extension Risk Management Education 13,652 Total $ 139,946-13 -
NOTE 5 NOTES RECEIVABLE Notes receivable at December 31, 2014 consist of the following: Cal Coastal Loan Program Direct Loan Program Total Commercial loans $ 19,114 $ 912,420 $ 931,534 FarmLink s loan portfolio is collateralized predominately by farm equipment, real estate, and crops throughout the North and Central Coast areas of California. As a result, these portfolios consist of similar collateral types in the same region. Although FarmLink has a diversified portfolio, a substantial portion of its debtors ability to honor their contracts is dependent upon the economy of this region of California. FarmLink assesses loans individually and classifies a loan as supervised (impaired) when the accrual of interest has been discontinued, or management has serious doubts about the future collectability of principle interest, even though the loans may be currently performing. Collection procedures may be pursued either through foreclosure, demand on FSA guarantee, or both. CDFI Activities Sales Of Loans FarmLink to date has not been party to the sale of any loan, neither purchaser or seller. Gains or losses resulting from sales of loans are recorded at the time of sale and are determined by the difference between: (i) the net sales proceeds plus the estimated fair value of any interests retained in the loans, and (ii) the carrying value of the assets sold. The CDFI did not have any loans serviced for others at December 31, 2014 Troubled Debt Restructuring A loan is considered a troubled debt restructuring ("TDR") when the CDFI, for economic or legal reasons related to the borrower s financial difficulties, provides the borrower certain concessions that it would not normally consider. The concessions are provided with the objective of maximizing the recovery of the CDFI investment. The CDFI did not have any loans in its portfolio considered to be troubled debt restructurings for the period ending December 31, 2014 Impaired Loans The CDFI considers a loan to be impaired when it is deemed probable by management that the CDFI will be unable to collect all contractual interest and contractual principal payments in accordance with the terms of the original loan agreement. The CDFI includes among impaired loans all loans that: (i) are contractually delinquent 90 days or more; (ii) meet the - 14 -
NOTE 5 NOTES RECEIVABLE, continued Imapired Loans, continued - definition of a troubled debt restructuring; (iii) are classified in part or in whole as either doubtful or loss; and (iv) have been placed on non-accrual status. The CDFI may also classify other loans as impaired based upon their specific circumstances. Loans identified as impaired are evaluated and have a specific loss allowance applied to adjust the loan to fair value, or the impaired amount is charged off. The CDFI accounts for impaired loans at the value of outstanding principal. Payments received on impaired non-accrual loans may be allocated between principal and interest or may be recorded entirely as a reduction in principal based upon management s opinion of the ultimate risk of loss on the individual loan. Interest income on other impaired loans is recognized on an accrual basis. The CDFI of impaired loans at December 31, 2014. Allowance For Loan Losses The CDFI maintains an allowance for loan losses to absorb probable losses inherent in the loan portfolio. The allowance is based on ongoing assessments of the probable estimated inherent losses. Loans are charged against the allowance when management believes the principal to not be recoverable. The allowance is increased by the provision for loan losses. The provision for loan losses is charged against quarterly operating results. The allowance is decreased by the amount of charge-offs, net of recoveries. While allocations of the allowance for loan losses may be made for specific loans, the entire allowance for loan losses is available for any loan that should be charged off. The CDFI s methodology for assessing the appropriateness of the allowance consists of several key elements, which include the formula (or general) allowance. The determination of the general allowance for loans that are collectively evaluated for impairment is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the CDFI, its peers or a combination thereof since the CDFI inception in 2013. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. - 15 -
NOTE 5 NOTES RECEIVABLE, continued These loss factors are inherently subjective and are driven by the repayment risk associated with each portfolio segment described below. Land and Farm Mortgages Trends in real estate values significantly impact the credit quality of these loans, as property values determine the value of collateral risk. Operating Loans- Farm Loans secured by crop production and livestock are especially vulnerable to two risk factors that are largely outside the control of the CDFIand borrowers: commodity prices and weather conditions. Equipment Loans Farm These loans possess a lower inherent risk of loss than real estate portfolio segments because these loans are generally underwritten to existing cash flows of operating farm businesses. Debt coverage is provided by business cash flows and economic trends influenced by key economic indicators are closely correlated to the credit quality of these loans. NOTE 6 ACCRUED PERSONAL LEAVE Accumulated unpaid employee leave benefits are recognized as liabilities of FarmLink. Accrued personal leave at December 31, 2014 is $15,343. NOTE 7 NOTES PAYABLE The notes payable are monies used to fund the Farm Opportunities Loan Program. The notes payable detail is as follows at December 31, 2014: Note payable from Wells Fargo Bank, interest only payable quarterly at two percent, due, June 2015 $ 250,000 Note payable from Rabobank, interest only payable quarterly at two percent, due, February 2018 950,000 Note payable from Bank of the West, Inc., no interest; due, March 2016 35,000-16 -
NOTE 7 NOTES PAYABLE, continued Note payable totaling $500,000 from U.S. Department of Agriculture, principal and interest payments commence September 2011, at two percent interest, due September 2031. 485,132 $ 1,720,132 Future maturities are as follows at December 31: 2014 $ 255,979 2015 6,094 2016-2017 - Thereafter 1,055,677 NOTE 8 TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consist of the following at December 31, 2014: Farm Opportunities Loan Program $ 1,538,710 NOTE 9 LEASE COMMITMENTS FarmLink leases office space for its headquarters in Santa Cruz. Monthly rent was $1,000 a new lease was signed August 2014 ending July 2015, monthly rent is $1,357. FarmLink also leases an office space in Sebastopol month to month basis, monthly payments are $160. The total rent expense for the year ended December 31, 2014 is $23,687. Future annual payments are as follows: 2015 $ 9,499-17 -
NOTE 10 CONTINGENCIES Grant awards require the fulfillment of certain conditions as set forth in the grant instrument. Failure to fulfill the conditions could result in the return of the funds to the grantor. FarmLink deems this contingency remote because they have complied with all the terms of the grants and made every effort to fulfill all of the provisions and objectives. Nonprofit organizations are especially vulnerable to such inherent risks when their revenue base is substantially predicated on continuing and new grants from governmental agencies. FarmLink received approximately fifty-nine percent of its total revenue from government agency grants for the year ended December 31, 2014. The continued growth and existence of this organization is significantly affected by these sources of revenue. NOTE 11 SUBSEQUENT EVENTS FarmLink has evaluated subsequent events through June 4, 2015 the date the financial statements were available to be issued, and determined that there were no events occurring subsequent to December 31, 2014that would have a material impact on FarmLink s results of operations or financial position. - 18 -