Global Brigades 2016 Audited Financial Statements

GLOBAL BRIGADES, INC.

Financial Statements

For the Years Ended December 31, 2016 and 2015

Table of Contents

Independent Auditor’s Report

Financial Statements: Statements of Financial Position

Statements of Activities

Statements of Functional Expenses

Statements of Cash Flows

Notes to the Financial Statements

Page 1 ‐ 2

3 4 ‐ 5 6 ‐ 7 8 9 ‐ 14

T: 425-454-4919 T: 800-504-8747 F: 425-454-4620 10900 NE 4th St Suite 1400 Bellevue WA 98004 clarknuber.com

Independent Auditor’s Report

To the Board of Directors Global Brigades, Inc. Fresno, California

We have audited the accompanying financial statements of Global Brigades, Inc. (the Organization), which comprise the statements of financial position as of December 31, 2016 and 2015, and the related statements of activities, functional expenses, 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 audits. We conducted our audits 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 principles used and the reasonableness of significant 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 qualified audit opinion.

Basis for Qualified Opinion

As described in Note 1 and Note 8, the Organization has excluded from its financial statements the accounts and activities of two entities meeting the definition for consolidation that, in our opinion, should be consolidated with the Organization to conform with accounting principles generally accepted in the United States of America. Had the accounts and activities of these two entities been consolidated with the Organization, as of December 31, 2016, total assets would have increased by approximately $604,600, total liabilities would have increased by approximately $191,800, and total net assets would have increased by approximately $412,800 on a consolidated basis. Total revenues would have increased by approximately $476,400, and total expenses would have increased by approximately $282,100 on a consolidated basis for the year ended December 31, 2016. As of December 31, 2015, total assets would have increased by approximately $222,200, total liabilities would have increased by approximately $11,200, and total net assets would have increased by approximately $211,000 on a consolidated basis. Total revenues would have increased by approximately $56,300, and total expenses would have increased by approximately $13,300 on a consolidated basis for the year ended December 31, 2015. This information has not been subjected to the auditing procedures applied in the audits of the Organization’s financial statements as of and for the years ended December 31, 2016 and 2015, and accordingly, we do not express an opinion or provide any assurance on it.

Qualified Opinion In our opinion, except for the effects on the Organization’s financial statements of not consolidating certain entities as described in the Basis for Qualified Opinion paragraph, the financial statements referred to above present fairly, in all material respects, the financial position the Organization as of December 31, 2016 and 2015, 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.

Certified Public Accountants January 24, 2018

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GLOBAL BRIGADES, INC.

Statements of Financial Position December 31, 2016 and 2015

2016

2015

Assets Cash and cash equivalents Pledges receivable Prepaid expenses and other assets Accounts receivable from related parties Notes receivable from related parties, net Investment in GBVI

$ 3,527,182 0 1,823,014 86,725 181,433 109,103

$ 2,888,572 45,500 2,362,000 36,503 427,712 94,588

Total Assets

$ 5,727,457

$ 5,854,875

Liabilities: Accounts payable Grants and accounts payable to related parties Accrued liabilities

$ 33,847 43,142 52,263

$ 86,051 111,055 24,588

Total Liabilities

129,252

221,694

Net Assets: Unrestricted Temporarily restricted

1,450,636 4,147,569

1,050,843 4,582,338

Total Net Assets

5,598,205

5,633,181

Total Liabilities and Net Assets

$ 5,727,457

$ 5,854,875

Liabilities and Net Assets

See accompanying notes. ‐ 3 ‐

GLOBAL BRIGADES, INC.

Statement of Activities For the Year Ended December 31, 2016

Unrestricted

Temporarily Restricted

Total

Operating Support and Revenue: Contributions Interest and other Net assets released from restriction

$ 9,389,893 11,382 4,439,565

$ 4,004,796

Total Operating Support and Revenue

13,840,840

(434,769)

Expenses: Program General and administrative Fundraising

12,395,369 683,185 376,963

Total Expenses

13,455,517

‐

13,455,517

Change in Net Assets From Operating Activities

385,323

(434,769)

(49,446)

Nonoperating Activities: Gain on investment in GBVI

$ 13,394,689 11,382

(4,439,565) 13,406,071

12,395,369 683,185 376,963

14,470

14,470

Change in Net Assets From Nonoperating Activities

14,470

‐

14,470

Change in Net Assets

399,793

(434,769)

(34,976)

Net assets, beginning of year

1,050,843

4,582,338

5,633,181

Net Assets, End of Year

$ 1,450,636

$ 4,147,569

$ 5,598,205

See accompanying notes. ‐ 4 ‐

GLOBAL BRIGADES, INC.

Statement of Activities For the Year Ended December 31, 2015

Unrestricted

Temporarily Restricted

Total

Operating Support and Revenue: Contributions Interest and other Net assets released from restriction

$ 10,076,780 6,250 3,986,417

$ 4,427,181

Total Operating Support and Revenue

14,069,447

440,764

Expenses: Program General and administrative Fundraising

12,512,204 652,461 396,371

Total Expenses

13,561,036

‐

13,561,036

Change in Net Assets From Operating Activities

508,411

440,764

949,175

Nonoperating Activities: Gain on investment in GBVI Loss on note receivable from related party

20,784 (171,170)

Change in Net Assets From Nonoperating Activities

(150,386)

Change in Net Assets

358,025

440,764

798,789

Net assets, beginning of year

692,818

4,141,574

4,834,392

Net Assets, End of Year

$ 1,050,843

$ 4,582,338

$ 5,633,181

$ 14,503,961 6,250

(3,986,417) 14,510,211

12,512,204 652,461 396,371

20,784 (171,170) ‐

(150,386)

See accompanying notes. ‐ 5 ‐

GLOBAL BRIGADES, INC.

Statement of Functional Expenses For the Year Ended December 31, 2016

Supporting Services

Program Grants to other organizations Grants for travel Salaries Airfare and transportation Media and public relations Merchant credit card fees Insurance Accounting fees Payroll tax Other Employee benefits Meals and lodging Information technology Supplies Advertising and marketing Telephone Organizational expenses Association dues Bank service charges Fuel Conferences Postage and shipping Printing and copying

$ 6,757,267 4,961,147 358,385 215,231

Total Expenses

$ 12,395,369

General and Administrative $ ‐

Fundraising $ ‐

352,500 201,733 163,584

26,490 20,779 11,172 37,185

84,349 79,160 31,403 31,711 33,515 20,578 16,542 11,646 9,794 8,023 6,953 4,860

4,408 3,305 2,051 1,746 $ 683,185

See accompanying notes. ‐ 6 ‐

$ 376,963

Total Supporting Services

Total

$ ‐ ‐ 352,500 ‐ 201,733 163,584 84,349 79,160 31,403 31,711 33,515 ‐ 20,578 16,542 11,646 9,794 8,023 6,953 4,860 ‐ ‐ 2,051 1,746

$ 6,757,267 4,961,147 710,885 215,231 201,733 163,584 84,349 79,160 57,893 52,490 44,687 37,185 20,578 16,542 11,646 9,794 8,023 6,953 4,860 4,408 3,305 2,051 1,746

$ 1,060,148

$ 13,455,517

GLOBAL BRIGADES, INC.

Statement of Functional Expenses For the Year Ended December 31, 2015

Supporting Services

Program Grants to other organizations Grants for travel Salaries Merchant credit card fees Employee benefits Association dues Accounting fees Airfare and transportation Payroll tax Information technology Meals and lodging Grant writing fees Media and public relations Insurance Telephone Organizational expenses Advertising and marketing Supplies Other Printing and copying Conferences Bank service charges Postage and shipping Fuel Total Expenses

General and Administrative

$ 6,721,865 5,455,802 227,228

$ ‐

9,334

28,001 119,295 62,870

Fundraising $ ‐

341,000 360,655

45,420 14,417

29,501 37,125

36,182 17,740 13,275 12,140 5,840 5,048 4,701 3,341 2,814 2,276 1,956 1,303 988 919 $ 12,512,204

$ 652,461

See accompanying notes. ‐ 7 ‐

$ 396,371

Total Supporting Services

Total

$ ‐ ‐ 341,000 360,655 28,001 119,295 62,870 ‐ 29,501 37,125 ‐ 17,740 13,275 12,140 5,840 5,048 4,701 3,341 2,814 2,276 ‐ 1,303 988 919

$ 6,721,865 5,455,802 568,228 360,655 37,335 119,295 62,870 45,420 43,918 37,125 36,182 17,740 13,275 12,140 5,840 5,048 4,701 3,341 2,814 2,276 1,956 1,303 988 919

$ 1,048,832

$ 13,561,036

GLOBAL BRIGADES, INC.

Statements of Cash Flows For the Years Ended December 31, 2016 and 2015

2016 Cash Flows From Operating Activities: Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities‐ Noncash investing gains and losses: Gain on investment in GBVI Loss on note receivable from related party Change in assets and liabilities: Pledges receivable Prepaid expenses and other assets Accounts receivable from related parties Undeposited funds Accounts payable Grants and accounts payable to related parties Accrued liabilities

2015

$ (34,976)

$ 798,789

(14,470) 0

(20,784) 171,170

45,500 538,986 (50,222) (52,204) (67,913) 27,675

(45,500) 456,897 55,383 2,473 (56,789) 30,788 18,925

Net Cash Provided by Operating Activities

392,376

1,411,352

Cash Flows From Investing Activities: Payments received on notes receivable from related parties Advances made on notes receivable from related parties

246,234 ‐

122,288 (200,000)

Net Cash Provided (Used) by Investing Activities

246,234

(77,712)

Net Change in Cash and Cash Equivalents

638,610

1,333,640

Cash and cash equivalents, beginning of year

2,888,572

1,554,932

Cash and Cash Equivalents, End of Year

$ 3,527,182

$ 2,888,572

See accompanying notes. ‐ 8 ‐

GLOBAL BRIGADES, INC.

Notes to the Financial Statements For the Years Ended December 31, 2016 and 2015

Note 1 ‐ Organization and Basis of Presentation

Organization ‐ Global Brigades, Inc. (the Organization) is an international nonprofit that empowers communities to meet their health and economic goals through university volunteers and local teams. Through student‐led brigades, participating student and professional volunteers empower communities in developing countries with sustainable solutions that improve quality of life and environment, while respecting local culture. The Organization was established in 2007 and is one of the world’s largest student‐let volunteer relief organizations.

Basis of Presentation ‐ The Organization works with Global Brigades affiliates (the Affiliates) located in South and Central America and Africa to achieve its mission. The Affiliates are separate legal entities with independent boards of directors.

Global Brigades Association (the Association) is the governing organization of all Global Brigades entities worldwide. Its board of directors consists of one member from each of the Affiliates and from the Organization. The Affiliates and the Association are not controlled by the Organization. Global Brigades Ventures, Inc. (GBVI) is a California corporation created to manage travel logistics for each brigade. The Organization owns 40% of the voting stock of GBVI; therefore, the Organization’s investment in GBVI is accounted for under the equity method of accounting (Note 2).

During the year ended December 31, 2016, the Organization created a wholly owned subsidiary in Honduras, Global Brigades Logistics, SA, that had no activity during the year.

Global Brigades Nicaragua and Global Brigades Foundation Panama are incorporated in Nicaragua and Panama, respectively. The Organization controls these two entities through majority voting rights of the entities’ respective boards and has economic interest as defined by accounting principles generally accepted in the United States of America (U.S. GAAP). The Organization has elected not to present consolidated financial statements that include the accounts and activities of Global Brigades Nicaragua and Global Brigades Foundation Panama as of and for the years ended December 31, 2016 and 2015. The effect on the Organization’s financial statements had the accounts and activities of these two entities been consolidated is reflected in Note 8.

The Affiliates, the Association, GBVI, Global Brigades Logistics, SA, Global Brigades Nicaragua and Global Brigades Foundation Panama (collectively, the related parties) are not consolidated with the Organization for financial reporting purposes.

Note 2 ‐ Significant Accounting Policies

Basis of Accounting ‐ The financial statements of the Organization are presented on the accrual basis of accounting. Net assets, revenues, gains, and losses are classified based on the existence or absence of donor‐imposed restrictions.

Accordingly, the net assets of the Organization and changes therein are classified and reported as follows:

Unrestricted Net Assets ‐ Net assets that are not subject to donor‐imposed restrictions.

Temporarily Restricted Net Assets ‐ Net assets subject to donor‐imposed restrictions that will be met either by actions of the Organization and/or the passage of time. Temporarily restricted net assets consist primarily of contributions received to fund specific brigades in a future period.

Permanently Restricted Net Assets ‐ Support received in the form of endowment or sustaining funds which can never be spent. The Organization had no permanently restricted net assets at December 31, 2016 and 2015.

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GLOBAL BRIGADES, INC.

Notes to the Financial Statements For the Years Ended December 31, 2016 and 2015

Note 2 ‐ Continued

Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor‐imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on assets and liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets (i.e., the donor‐stipulated purpose has been fulfilled or the stipulated time period has lapsed) are reported as reclassifications between the applicable classes of net assets, except for contributions with restrictions that are satisfied in the same year, which are reported as unrestricted.

Revenue Recognition ‐ Contributions received for specific brigades are generally nonrefundable. Therefore, contributions received each year are recognized as temporarily restricted contribution revenue. Unused temporarily restricted net assets are released for unrestricted use after they have been on hand for more than one year.

The Organization works with university chapters to raise funds for each brigade. At the time the brigade is established, the chapter determines an approximate amount it intends to raise. Unpaid amounts from these estimates are considered conditional pledges and are, therefore, not recognized until they are received.

Cash and Cash Equivalents ‐ Cash and cash equivalents consist of checking and money market accounts. The Organization holds all of its cash and cash equivalents with one financial institution. All transactions of the Organization are conducted in the U.S. dollar. The Organization holds no foreign bank accounts or accounts in foreign currencies.

Pledges Receivable ‐ Pledges receivable, unconditional promises to give, that are expected to be collected within one year are recorded at net realizable value. Unconditional pledges that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. An allowance for doubtful accounts is determined by management based on a reasonable estimate of collectability and past experience. Management determined an allowance was not necessary at December 31, 2016 and 2015.

Prepaid Expenses and Other Assets ‐ Prepaid expenses consist of travel and other costs paid related to brigades that will occur after year end.

Accounts Receivable From Related Parties ‐ Accounts receivable from related parties consist of payments made by the Organization on behalf of the related parties in the normal course of operations. The Organization will be reimbursed for these payments generally within 30 days (Note 3).

Notes Receivable From Related Parties ‐ Notes receivable from Related parties consists of loans made by the Organization to Global Brigades Related parties. The notes are reported at the lower of their outstanding principal balances plus accrued interest or impaired value (Note 3).

Investment in GBVI ‐ The Organization holds 40% of the issued and outstanding shares of BGVI, and certain staff and board members of the Organization participate on the board of GBVI. Therefore, the Organization accounts for its investment in GBVI under the equity method of accounting. Accordingly, the Organization adjusts the value of its investment in GBVI on the statements of financial position and recognizes its share of BGVI’s results of operations as gain or loss on investment in GBVI on the statements of activities. The gain on its investment in GBVI totaled $14,470 and $20,784 for the years ended December 31, 2016 and 2015, respectively. GBVI stock is closely held, and its financial statements are unaudited.

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GLOBAL BRIGADES, INC.

Notes to the Financial Statements For the Years Ended December 31, 2016 and 2015

Note 2 ‐ Continued

Grants and Accounts Payable to Related Parties ‐ The Organization supports brigades with Global Brigades Related parties through grants awarded by the Organization to cover travel and other brigade expenses (Note 3). Accounts payable to Related parties consist of dues and fees paid by the Organization to the Related parties (Note 3).

Operating Activities ‐ The statement of activities includes a measure of change in net assets from operating activities.

Nonoperating activities include gains and losses on the Organization’s investment in GBVI and notes receivable from Related parties.

Concentrations of Credit Risk ‐ Financial instruments that potentially subject the Organization of concentrations of credit risk consist of cash and cash equivalents and notes receivable from Related parties. The Organization has cash balances that are in excess of federal deposit insurance corporation limits. Notes receivable from related parties are reviewed for impairment by management.

Federal Income Tax ‐ The Organization is a California Nonprofit Public Benefit Corporation and is tax‐exempt under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision has been made for federal income tax in the accompanying financial statements. The Organization files tax returns with the U. S. government and the State of California.

The Organization may be subject to income tax examinations for the current year and certain prior years based on the applicable laws and regulations.

Use of Estimates ‐ The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results may differ from such estimates.

Functional Allocation of Expenses ‐ The costs of providing the various programs and other activities have been summarized on a functional basis in the statements of activities and the statements of functional expenses. Accordingly, certain costs have been allocated among the program, general and administrative, and fundraising categories based on the benefits derived.

Gifts‐in‐Kind ‐ A substantial number of volunteers have donated significant amounts of their time to support the Organization’s programs and fundraising campaigns. In addition, goods are donated to be used in various brigades; however, these goods are generally provided directly to the brigade site. The donated services and goods do not meet the criteria for recognition in accordance with U.S. GAAP. Therefore, they are not reflected in these financial statements.

Property and Equipment ‐ The Organization capitalizes property and equipment with a cost or fair value, if donated, over $10,000. Property and equipment are depreciated on the straight‐line basis over their estimated useful lives. The Organization has no capitalized property and equipment at December 31, 2016 and 2015.

Reclassifications ‐ Certain reclassifications have been made to the 2015 amounts to conform to the 2016 presentation. The reclassifications have no effect on the previously reported total assets, liabilities, net assets, or change in net assets for 2015.

‐ 11 ‐

GLOBAL BRIGADES, INC.

Notes to the Financial Statements For the Years Ended December 31, 2016 and 2015

Note 3 ‐ Related Party Transactions

Notes Receivable From Related Parties ‐ Outstanding notes receivable from related parties, net, make up approximately 3% and 7% of the Organization’s total assets at December 31, 2016 and 2015, respectively. The notes are generally collateralized by the tangible and intangible assets of each related party. Interest rates on the notes are generally determined by market rates and range from 2.5% ‐ 5.0%. An allowance for doubtful accounts is established based on prior collection experience, current economic factors and management’s review of individual loan balances. Balances are written off through a charge to the allowance if the note is determined to be uncollectible. During the year ended December 31, 2015, management determined that one of the notes receivable was likely uncollectible and recorded an allowance for doubtful accounts totaling $171,170 which is included as a nonoperating loss on the statement of activities. Interest on this loan is no longer accrued.

Related party notes receivable and the allowance for doubtful accounts are as follows at December 31:

2016 2015

Notes receivable from related parties in‐ South America Central America Africa

$ 181,433 171,170

$ 227,711 200,001 171,170

352,603

598,882

Less allowance for doubtful accounts

(171,170)

(171,170)

Related Party Notes Receivable, Net

$ 181,433

$ 427,712

Other than the loan for which an allowance has been recorded, no loans are past due at December 31, 2016 and 2015.

Principal payments on the notes are scheduled to be paid as follows:

For the Year Ending December 31, 2016 2017 2018 2020

$ 48,647 51,136 53,752 27,898

Related Party Notes Receivable, Net

$ 181,433

Grants Payable to Related Parties and Grants to Other Organizations ‐ The Organization awards grants to a number of Global Brigades related parties (Note 1) to carry‐out each brigade. Related parties receiving grants consist of: Global Brigades Honduras, Global Brigades Nicaragua, Global Brigades Panama and Global Brigades Ghana. For the years ended December 31, 2016 and 2015, grants awarded to these entities totaled $6,757,267 and $6,721,865, respectively. Grants payable to related parties totaled $43,142 and $89,743 as of December 31, 2016 and 2015, respectively, and will be paid within one year at December 31, 2016 and 2015, respectively.

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GLOBAL BRIGADES, INC.

Notes to the Financial Statements For the Years Ended December 31, 2016 and 2015

Note 3 ‐ Continued

Fees and Dues Paid to Related Parties ‐ The Organization utilized GBVI to manage travel logistics for each brigade during the year ended December 31, 2015. Fees paid to GBVI totaled $280,360 for the year ended December 31, 2015. Accounts payable due to GBVI totaled $6,420 at December 31. 2015. During the year ended December 31, 2016, the Organization managed travel logistics internally. Therefore, no fees were paid to GBVI to manage travel logistics and there was no outstanding payable due to GBVI at December 31, 2016. Dues paid to Global Brigades Association totaled $6,953 and $119,295 for the years ended December 31, 2016 and 2015, respectively. There was no outstanding payable due to Global Brigades Association at December 31, 2016. Accounts payable due to Global Brigades Association totaled $14,892 at December 31. 2015.

Accounts Receivable From Related Parties ‐ The Organization is reimbursed for expenses it pays on behalf of the related parties in the normal course of operations. Amounts due from the related parties totaled $86,725 and $36,427 at December 31, 2016 and 2015, respectively, and are expected to be received within 30 days of year end. An allowance for doubtful accounts was deemed unnecessary by management at December 31, 2016 and 2015.

Note 4 ‐ Temporarily Restricted Net Assets

Temporarily restricted net assets totaled $4,147,569 at December 31, 2016, and were available for specific brigades scheduled to occur after year end. Temporarily restricted net assets totaled $4,582,338 at December 31, 2015, of which $4,536,838 was available for specific brigades scheduled to occur after year end and $45,500 was restricted for other program use. Net assets released from restriction for totaled $4,439,565 and $3,986,417 during the years ended December 31, 2016 and 2015, respectively.

Note 5 ‐ Retirement Plan

The Board of Directors implemented a policy during the year ended December 31, 2015, in which the Organization may provide a contribution to employees’ Individual Retirement Accounts (IRAs), subject to annual approval of the Compensation Committee. No contributions were approved for the year ended December 31, 2016. Approved contributions totaled approximately $16,000 for the year ended December 31, 2015.

Note 6 ‐ Commitments and Contingencies

Operating Leases ‐ The Organization entered into two short term operating leases for space during the year ended December 31, 2016. The lease terms ended November 2, 2016 and December 31, 2016, respectively. The Organization also entered into a sublease for office space for a one‐year term, effective October 3, 2016. Rent under this lease is $1,000 per month. Rent expense for all three leases totaled $14,761 for the year ended December 31, 2016. There were no leases in effect during the year ended December 31, 2015.

Contingencies ‐ In the normal course of business, the Organization has various claims in process and other contingencies. In management’s opinion, the outcome from these matters will not materially impact the Organization’s financial position or results of activities.

Line of Credit ‐ In April 2016, the Organization obtained a revolving line of credit with a bank for a maximum of $250,000.

Interest on outstanding draws against the line of credit accrues at 3.25% above Prime rate. The line of credit is secured by all pledges receivable, and it expires on the “final availability date.” Draws on the line of credit may be used only to provide working capital for the Organization. There were no draws outstanding on the line of credit at December 31, 2016. ‐ 13 ‐

GLOBAL BRIGADES, INC.

Notes to the Financial Statements For the Years Ended December 31, 2016 and 2015

Note 7 ‐ Subsequent Events

The Organization has evaluated subsequent events through January 24, 2018, the date on which the financial statements were available to be issued.

Subsequent to December 31, 2016, Global Brigades Association was dissolved. As a result, the Organization became the sole member of Global Brigades Ventures.

Subsequent to December 31, 2016, a company limited by guarantee in Ghana was registered, of which the Organization is the sole member.

Note 8 ‐ Related Entities Consolidation Impact

During the year ended December 31, 2016, management determined the Organization controls two entities, Global Brigades Nicaragua (GB Nicaragua) and Global Brigades Foundation Panama (GB Panama). The Organization also has economic interest in these entities (Note 1). In accordance with U.S. GAAP, the accounts and activities of these entities should be consolidated with the Organization’s financial statements. Management elected to forego presenting consolidated financial statements as of and for the years ended December 31, 2016 and 2015.

The financial statements of GB Nicaragua and GB Panama as of and for the year ended December 31, 2016, had been audited by other auditors. However, the amounts presented below were not subjected to the auditing procedures applied in the audits of the Organization’s financial statements as of and for the years ended December 31, 2016 and 2015.

The table below summarizes the estimated effects on the Organization’s financial statements had the accounts and activities GB Nicaragua and GB Panama been consolidated (unaudited).

As of and for the Year Ended December 31, 2016 (Unaudited) The Inter‐Entity Organization GB Nicaragua GB Panama Eliminations

Net Effect

Consolidated Total

Total assets Total liabilities Total net assets

$ 5,727,457 129,252 5,598,205

$ 317,635 211,704 105,931

$ 383,706 76,788 306,918

$ (96,677) (96,677)

$ 604,664 191,815 412,849

$ 6,332,121 321,067 6,011,054

Total revenues Total expenses Total change in net assets

13,420,541 13,455,517

2,273,500 2,214,349

1,750,427 1,615,316

(3,547,570) (3,547,570)

476,357 282,095

13,896,898 13,737,612

(34,976)

59,151

135,111

194,262

159,286

As of and for the Year Ended December 31, 2015 (Unaudited) The Inter‐Entity Organization GB Nicaragua GB Panama Eliminations

Net Effect

Consolidated Total

Total assets Total liabilities Total net assets

$ 5,854,875 221,694 5,633,181

$ 40,412 1,164 39,248

$ 381,807 210,000 171,807

$ (200,000) $ (200,000)

$ 222,219 11,164 211,055

$ 6,077,094 232,858 5,844,236

Total revenues Total expenses Total change in net assets

14,359,825 13,561,036

2,199,283 2,156,234

1,531,535 1,531,535

(3,674,508) (3,674,508)

56,310 13,261

14,416,135 13,574,297

798,789

43,049

43,049

841,838

‐ 14 ‐