AUDITED FINANCIAL STATEMENTS OF

LIVELIHOOD BASIX, INC.

(A NOT-FOR-PROFIT CORPORATION)

YEARS ENDED MARCH 31, 2015 AND 2014

SCIARABBA WALKERttF

CERTI FI E D PUBLIC ACCOUNTANTS

BUSINESS CONSULTANTS

To the Board of Directors Livelihood BASIX, Inc. Ithaca, New York 14850

INDEPENDENT AUDITOR'S REPORT

We have audited the accompanying financial statements of Livelihood BASIX, Inc. (a not-for­profit corporation), which comprise the statements of financial position as of March 31, 2015 and 2014, and the related statements of activities and cash flows for the years 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.

410 East Upland Road Ithaca, New York 14850 607-272-5550 I 607-273-6357 (Fax)

839 State Route 13 Cortland, New York 13045

www.swcllp.com

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Livelihood BASIX, Inc., as of March 31, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

j~t/dk1//I! Sciarabba Walker & Co., LLP

Ithaca, New York June 23, 2015

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LIVELIHOOD BASIX, INC. STATEMENTS OF FINANCIAL POSITION

MARCH31,

CURRENT ASSETS: Cash and cash equivalents Accounts receivable Support receivable Advances-contract services

TOT AL CURRENT ASSETS

OTHER ASSETS: Certificate of deposit

TOT AL ASSETS

ASSETS

2015

$ 1,761,078 2,060

1,763,726 576,732

4,103,596

10,000

$ 4,113,596

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES: Accounts payable Accrued salaries and payroll taxes Gapi contract payable

TOT AL CURRENT LIABILITIES

NET ASSETS: Unrestricted Temporarily restricted

SDC Grant Ford Foundation grant

Total temporarily restricted TOT AL NET ASSETS

TOTAL LIABILITIES AND NET ASSETS

See accompanying notes.

$

$

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2015

2,768 3,674

23 ,831 30,273

821,611

2,919,412 342,300

3,261 ,712 4,083,323

4,113,596

2014

$ 706,946

2,333,520 265,817

3,306,283

10,000

$ 3,316,283

$

$

2014

6,755 2,020

8,775

591 ,891

2,715,617

2,715,617 3,307,508

3,316,283

LIVELIHOOD BASIX, INC STATEMENTS OF ACTIVITIES

Years Ended March 31, 2015 2014

UNRESTRICTED NET ASSETS: EARNED INCOME:

Interest income $ 1,663 $ 1,109 TOT AL EARNED INCOME 1,663 1,109

CONTRIBUTED INCOME: Other income 30,740 328,247 Other contributions 2,005 4,000

TOT AL CONTRIBUTED INCOME 32,745 332,247

RECLASSIFICATIONS: Net assets released from restrictions 1,340,891 884,383

TOTAL UNRESTRICTED SUPPORT AND RECLASSIFICATIONS 1,375,299 1,217,739

PROGRAM EXPENSES: Contract services- ALP's 1,084,272 670,756

Less: fees paid to Livelihood BASIX ( 100,771) ( 36,815) Travel 57,924 68,365 Retainer expenses 46,560 32,000 Other program expenses 33,186 36,991

TOTAL PROGRAM EXPENSES 1,121,171 771,297 General and administration expenses 24,408 34,336

TOT AL EXPENSES 1,145,579 805,633

CHANGE IN UNRESTRICTED NET ASSETS 229,720 412,106

TEMPORARILY RESTRICTED NET ASSETS: Ford Foundation grant 350,000 SDC grant 1,536,986 3,600,000

Grant income 1,886,986 3,600,000 RECLASSIFICATIONS:

Net assets released from restrictions ( 1,340,891) ( 884,383) NET CHANGE IN TEMPORARILY

RESTRICTED NET ASSETS 546,095 2,715,617

NET CHANGE IN NET ASSETS 775,815 3,127,723

NET ASSETS, beginning of year 3,307,508 179,785

NET ASSETS, end of year $ 4,083,323 $ 3,307,508

See accompanying notes. - 4 -

LIVELIHOOD BASIX, INC STATEMENTS OF CASH FLOWS

Years Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ Adjustments to reconcile change in net assets

to net cash provided by operating activities: Changes in accounts receivable Changes in unconditional promises to give Changes in advances-contract services Changes in accounts payable Changes in accrued salaries and payroll taxes Changes in contracts payable

( (

2015

775,815

569,794 312,975)

3,987) 1,654

23,831 NET CASH PROVIDED BY OPERA TING ACTIVITIES 1,054,132

CASH FLOWS FROM INVESTING ACTIVITIES: Cash paid for certificate of deposit

NET CASH USED IN INVESTING ACTIVITIES

2014

$ 3,127,723

80,432 ( 2,333,520) ( 265,817) ( 1,153)

2,020

609,685

( 10,000) ( 10,000)

NET CHANGE IN CASH AND CASH EQUIVALENTS 1,054,132 599,685

CASH, beginning of year 706,946 107,261

CASH, end of year $ 1,761,078 $ 706,946

See accompanying notes. - 5 -

LIVELIHOOD BASIX, INC NOTES TO FINANCIAL STATEMENTS

Years Ended March 31, 2015 and 2014

A. Summary of Significant Accounting Policies

Nature of Organization - Livelihood BASIX, Inc. (LBI) is a not-for-profit organization located in Ithaca, NY, whose purpose is to provide high quality and deeply committed global technical assistance to promote and transform the lives of the poor. LBI is currently working on projects in various countries in Africa.

Income Taxes - LBI is exempt from federal income tax under Internal Revenue Code Section 501(c)(3). LBI accounts for income taxes in accordance with FASB Accounting Standards Codification (ASC) 740, Income Taxes. The guidance regarding uncertainty in income taxes prescribes a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.

Cash and Cash Equivalents - For cash flow purposes, LBI considers all unrestricted highly liquid investments with a maturity of 3 months or less when purchased to be cash equivalents.

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.

Financial Statement Presentation - LBI 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.

Promises to Give - Contributions are recognized when the donor makes a promise to give to LBI that is, in substance, unconditional. Promises to give are recorded at the time the promise to give is made, at the present value of the expected future contribution. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. LBI uses the allowance method to determine uncollectible unconditional promise receivables. The allowance is based on prior years' experience and management's analysis of specific promises made. The allowance was $0 as of March 31, 2015 and 2014.

B. Concentration of Credit Risk

At times during the year; LBI will have bank deposits in excess of the FDIC insured limits.

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C. Restrictions on Net Assets

Temporarily restricted net assets are available for the following purposes or periods:

African Livelihoods Partnership Friends of PRADAN

D. Promises to Give

2016 $ 2,919,412

342,300

The promises to give of $1,763,726 as of March 31, 2015 are considered a reasonable estimate of their fair value at March 31, 2015.

E. Related Parties

In 2015, LBI had four related-party transactions as a result of the ALPs project as mandated by the donor:

1. An amount of $608,077 in direct and indirect funding to BASICS Ltd., two of whose Board members are Directors in LBI.

2. An amount of $25,000 in direct and indirect funding to the Center for Innovation, whose Vice President and Chief Technology Officer is a Director in LBI.

3. An amount of $125,795 in direct and indirect funding to PAMIGA, whose General Manager is a Director in LBI.

4. An amount of $5,305 in direct and indirect funding to The Livelihood School, whose Dean is a Director in LBI.

In 2014, LBI had three related-party transactions as a result of the ALPs project as mandated by the donor:

1. An amount of $517,365 in direct and indirect funding to BASICS Ltd., two of whose Board members are Directors in LBI.

2. An amount of $197,456 in direct and indirect funding to PAMIGA, whose General Manager is a Director in LBI.

3. An amount of $107,530 in direct and indirect funding to The Livelihood School, whose Dean is a Director in LBI.

F. Concentrations

In 2015, 88 percent of LBI' s revenue was from two donors. In 2014, 98 percent of LB I's revenue was from one donor.

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G. Released from Restrictions

The following funds were released from restrictions in 2015 and 2014:

2015 2014 SDC grant

Project expenses-ALP's $ 1,060,272 $ 670,756 Overhead contribution 190,995 145,262 ALP's cell 24,000 Travel expenses 57,924 68,365

Total SDC grant 1,333, 191 884,383 Ford Foundation grant

Overhead contribution 7,700 Total Ford Foundation grant 7,700

Total $ 1,340,891 $ 884,383

H. Subsequent Events

Management has evaluated subsequent events through June 23 , 2015, the date when the financial statements were available to be issued, and there are no subsequent events that require disclosure.

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