Independent Adoption Center, Inc.

Audited Financial Statements

For Year Ended December 31, 2013

Rubian Moss, CPA

A Professional Corporation
 Independent Adoption Center, Inc.

Financial Statements

Year ended December 31, 2013

Contents

Independent Auditors Report............................................................................... 1

Financial Statements
Statement of Financial Position........................................................................ 2
Statement of Activities...................................................................................... 3
Statement of Cash Flows.................................................................................. 4
Statement of Functional Expenses.................................................................... 5
Notes to Financial Statements........................................................................... 7
 Independent Auditors Report
Board of Directors
Independent Adoption Center, Inc.
Concord, California

We have audited the accompanying financial statements of he Independent Adoption Center, Inc., a nonprofit tax-exempt
corporation, which comprise the statement of financial position as of December 31, 2013 and the related statements of
activities, cash flows, and functional expenses for the year then ended, and the related notes to the financial statements.
Managements 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.
Auditors 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 auditors 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 entitys 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 entitys 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 statement.
We believe that our audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
Independent Adoption Center, Inc. as of December 31, 2013 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.

Walnut Creek, California

May 2, 2014

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 Independent Adoption Center, Inc.

Statement of Financial Position

As of December 31, 2013

Assets
Current assets:
Cash and cash equivalents $ 1,173,540
Accounts receivable, net (Note 2) 717,399
Prepaid expenses 183,655
Total current assets 2,074,594
Fixed assets, net (Note 3) 63,197
Deposits 46,445
Total assets $ 2,184,236

Liabilities and net assets

Current liabilities:
Accounts payable and accrued liabilities $ 159,365
Accrued vacations 172,943
Deferred revenue 28,180
Total current liabilities 360,488

Net assets 1,823,748

Total liabilities and net assets $ 2,184,236

See accompanying notes.

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 Independent Adoption Center, Inc.

Statement of Activities

For the year ended December 31, 2013

Support and revenue

Support:
Foundations and corporations $ 32,041
Individual donations 6,155
Total support 38,196

Revenue:
Client fees 5,562,860
Domestic homestudy fees 395,026
Counseling fees 85,665
Birth Parent expense funding 129,761
Post adoption fees 31,995
Other revenue 5,775
Investment income 13,412
Client refunds (530,150)
Total revenue 5,694,344
Total support and revenue 5,732,540

Expenses
Program:
Concord 2,309,106
Los Angeles 743,773
Connecticut 18,863
Indiana 366,103
Georgia 502,531
North Carolina 468,945
Texas 297,390
New York 390,644
Florida 83,356
Total program expenses 5,180,711

Support:
Management and general 701,513
Fundraising 1,588
Total support expenses 703,101
Total expenses 5,883,812

Change in net assets (151,272)

Net assets, beginning of year 1,975,020
Net assets, end of year $ 1,823,748

See accompanying notes.

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 Independent Adoption Center, Inc.

Statement of Cash Flows

For the year ended December 31, 2013

Cash flows from operating activities:

Change in net assets $ (151,272)
Adjustments to reconcile change in net assets
to net cash provided by operating activities:
Depreciation 25,087
Decrease in accounts receivable 171,181
Increase in prepaid expenses (3,880)
Increase in deposits (2,892)
Increase in accounts payable and accrued liabilities 18,328
Increase in accrued vacations 23,979
Decrease in deferred revenue (17,850)
Net cash provided by operating activities 62,681

Investing activities
Acquisition of fixed assets (14,878)
Net cash used in investing activities (14,878)

Net change in cash 47,803

Cash, beginning of year 1,125,737
Cash, end of year $ 1,173,540

See accompanying notes.

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 Independent Adoption Center, Inc.

Statement of Functional Expenses

For the year ended December 31, 2013

Los North
Concord Angeles Connecticut Indiana Georgia Carolina Texas

Salaries $ 941,126 $ 374,233 $ - $ 147,338 $ 235,853 $ 206,774 $ 98,977

Payroll taxes 159,482 - - - 604 1,575 3
Employee benefits 138,174 23,738 - 27,242 35,739 25,275 13,480
Total personnel expenses 1,238,782 397,971 - 174,580 272,196 233,624 112,460
Professional services 209,729 90,353 2,300 10,966 5,756 39,105 13,063
Advertising 103,936 72,055 - 71,354 72,464 72,384 73,919
Insurance 81,895 - - - - - 229
Interest - - - - - - -
Client education 19,674 14,610 - 4,056 3,565 3,350 2,466
Board expense - - - - - - -
Birth Parent expense 54,805 2,037 - 9,504 35,836 18,908 10,058
Rent 197,429 54,819 11,446 17,747 29,871 30,627 29,968
Office expense 37,864 7,182 1,395 23,015 8,684 11,314 2,378
Service fees 55,127 361 43 252 829 162 223
Equipment rental 35,062 10,337 - 9,035 8,183 4,172 4,140
Telephone 17,997 10,242 3,526 12,949 5,232 6,736 6,491
Printing 4,862 594 - 2,067 2,104 554 367
Postage 53,040 6,130 92 4,604 8,599 6,350 2,114
Dues and subscriptions 3,452 432 - 1,638 939 875 482
Travel 39,458 48,435 61 9,653 19,308 18,174 24,720
Information technology 26,393 8,053 - 3,374 1,436 9,855 1,252
Staff development 7,154 1,791 - 995 2,766 1,011 2,472
Staff appreciation 23,279 863 - 943 1,134 1,346 238
Agency services 2,375 618 - 1,281 1,030 649 1,364
Outreach 75,138 16,890 - 8,090 22,599 9,749 8,986
Depreciation 21,655 - - - - - -
Bad debt - - - - - - -
Total $ 2,309,106 $ 743,773 $ 18,863 $ 366,103 $ 502,531 $ 468,945 $ 297,390

See accompanying notes.

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 Independent Adoption Center, Inc.

Statement of Functional Expenses (continued)

For the year ended December 31, 2013

Total Management Total

New York Florida Program and General Fundraising Support Total

Salaries $ 150,070 $ 21,539 $ 2,175,910 $ 383,985 $ - $ 383,985 $ 2,559,895

Payroll taxes 1,542 184 163,390 28,834 - 28,834 192,224
Employee benefits 14,221 1,840 279,709 49,361 - 49,361 329,070
Total personnel expenses 165,833 23,563 2,619,009 462,180 - 462,180 3,081,189
Professional services 13,283 6,883 391,438 12,525 - 12,525 403,963
Advertising 76,478 20,379 562,969 - - - 562,969
Insurance - - 82,124 14,492 - 14,492 96,616
Interest - - - 727 - 727 727
Client education 7,555 105 55,381 - - - 55,381
Board expense - - - 4,285 - 4,285 4,285
Birth Parent expense 3,606 - 134,754 - - - 134,754
Rent 40,272 7,277 419,456 74,021 - 74,021 493,477
Office expense 7,404 2,181 101,417 17,902 - 17,902 119,319
Service fees 441 167 57,605 10,167 - 10,167 67,772
Equipment rental 791 - 71,720 12,656 - 12,656 84,376
Telephone 4,990 1,840 70,003 12,353 - 12,353 82,356
Printing 972 642 12,162 2,147 - 2,147 14,309
Postage 682 415 82,026 14,475 - 14,475 96,501
Dues and subscriptions 412 162 8,392 1,481 - 1,481 9,873
Travel 50,484 17,965 228,258 - - - 228,258
Information technology 232 59 50,654 8,938 - 8,938 59,592
Staff development 447 780 17,416 3,074 - 3,074 20,490
Staff appreciation 641 21 28,465 5,022 - 5,022 33,487
Agency services 1,263 66 8,646 1,526 - 1,526 10,172
Outreach 14,858 851 157,161 - 1,588 1,588 158,749
Depreciation - - 21,655 3,822 - 3,822 25,477
Bad debt - - - 39,720 - 39,720 39,720
Total $ 390,644 $ 83,356 $ 5,180,711 $ 701,513 $ 1,588 $ 703,101 $ 5,883,812

See accompanying notes.

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 Independent Adoption Center, Inc.

Notes to Financial Statements

For the year ended December 31, 2013

1. Organization and Summary of Significant Accounting Policies

Organization
Independent Adoption Center, Inc. (IAC) is a California nonprofit public benefit corporation incorporated
on October 27, 1982. IACs primary mission is to offer guidance, education, and counseling in the field of
infertility, reproductive alternatives, and adoption, and to provide full service adoption and foster care
services. Specifically, IAC provides group and private counseling and educational programs to prospective
parents facing infertility problems and considering medical treatments, adoption, or other forms of
reproductive alternatives, and facilitate private adoptions, licensed full-service agency adoption, foster care,
and pre-adoption and post-adoption services.

Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of accounting in accordance
with accounting principles generally accepted in the United States of America.

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.

Functional Allocation of Operating Expenses

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

Income Taxes
The Internal Revenue Service and the California Franchise Tax Board have determined that IAC is exempt
from federal and state income taxes under Internal Revenue Code Section 501(c)(3) and the California
Revenue and Taxation Code Section 23701(d). IAC did not have any taxable unrelated business income
during the year ended December 31, 2013.

Cash and Cash Equivalents

Cash consists of checking and savings accounts in large financial institutions. Financial instruments that
potentially subject IAC to concentrations of credit risk include cash and cash equivalents. Cash deposits are
generally federally insured in limited amounts. Cash is stated at fair market value.

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 Independent Adoption Center, Inc.

Notes to Financial Statements (continued)

1. Organization and Summary of Significant Accounting Policies (continued)

Net Assets
IAC reports gifts of cash as restricted support if they are received with donor stipulations that limit the use of
the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or
purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets
and reported in the statement of activities and changes in net assets as net assets released from restrictions.

IAC reports information regarding their financial position and activities according to three classifications of
net assets: unrestricted, temporarily restricted, and permanently restricted net assets.

At December 31, 2013, IAC had no temporarily or permanently restricted net assets.

Contributions
All contributions are considered to be available for unrestricted use unless specifically restricted by the
donor. Amounts received that are designated for future periods or are restricted by the donor for specific
purposes are reported as temporarily restricted net support that increase that net asset class. Unconditional
promises to give, which do not state a due date, are presumed to be time-restricted by the donor until received
and are reported as temporarily restricted net assets.

A donor restriction expires when a stipulated time restriction ends, when an unconditional promise with an
implied time restriction is collected, or when a specific purpose restriction is accomplished. Upon expiration,
temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the statement of
activities as net assets released from restrictions. Restricted contributions received in the same year in which
the restrictions are met are reported as unrestricted contributions.

2. Accounts Receivable
Accounts receivable at December 31, 2013 consist of the following:

Amount
Adoption fees $ 815,299
Allowance for doubtful accounts (97,900)
Net $ 717,399

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 Independent Adoption Center, Inc.

Notes to Financial Statements (continued)

3. Fixed Assets
IAC follows the practice of capitalizing, at cost, all expenditures for fixed assets with a capitalization
threshold of $500. Donated equipment is recorded at its estimated fair market value. Depreciation is
computed on a straight-line basis over the useful lives of the assets, which ranges from three to ten years.

Fixed assets at December 31, 2013 consist of the following:

Amount
Furniture and equipment $ 162,820
Accumulated depreciation (99,623)
Net $ 63,197

Depreciation expense for the year ended December 31, 2013 was $25,087.

4. Operating Leases
IAC leases office space, parking spaces, and equipment under the following lease agreements:

IAC leases office space at 2300 Clayton Road, Suite 1150, Concord, California for a starting monthly rent of
$17,723. The lease expires on July 31, 2022. The lease expense for the year ended December 31, 2013 was
$214,084.

IAC leases office space and parking spaces at 5777 West Century Boulevard, Suite 1450, Los Angeles,
California for a starting monthly rent of $5,870. The lease expires on November 30, 2014. The lease expense
for the year ended December 31, 2013 was $64,493.

IAC leased office space at 2118 Walsh Avenue, Suite 200, Santa Clara, California for a starting monthly rent
of $550. The lease expired on December 31, 2013. The lease expense for the year ended December 31, 2013
was $6,600.

IAC leases office space at 11030 Raven Ridge Road, Suite 109, Raleigh, North Carolina for a starting
monthly rent of $2,804. The lease expires on July 31, 2015. The lease expense for the year ended December
31, 2013 was $36,031.

IAC leases office space at 5162 E. Stop 11 Road, Suite 1, Indianapolis, Indiana for a monthly rent of $1,870.
The lease expires on March 31, 2018. The lease expense for the year ended December 31, 2013 was $20,879.

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 Independent Adoption Center, Inc.

Notes to Financial Statements (continued)

4. Operating Leases (continued)

IAC leases office space at 2060 East Exchange Place, Suite 140-160, Tucker, Georgia for a starting monthly
rent of $2,801. The lease expires on November 30, 2016. The lease expense for the year ended December 31,
2013 was $35,142.

IAC leases office space at 5050 Quorum Drive, Suite 700, Dallas, Texas for a starting monthly rent of $792.
The lease expires on May 31, 2014. The lease expense for the year ended December 31, 2013 was $6,389.

IAC leases office space at 5555 West Loop South, Suite 308, Bellaire, Texas for a starting monthly rent of
$2,005. The lease expires on December 31, 2014. The lease expense for the year ended December 31, 2013

IAC leases office space at 3030 N. Rocky Point Drive W, Suite 150, Tampa, Florida for a starting monthly
rent of $1,100. The lease expires on April 30, 2014. The lease expense for the year ended December 31, 2013
was $8,562.

IAC leases office space at 79 Madison Avenue, 7th Floor, New York, New York for a starting monthly rent
of $5,750. The lease expires on May 31, 2014. The lease expense for the year ended December 31, 2013 was
$47,379.

IAC leases three copier/printers from The Swenson Group for a monthly rent of $3,744. The lease expires on
November 30, 2018. The lease expense for the year ended December 31, 2013 was $45,288.

IAC leases other copiers, printers, and postage meters from various vendors. The combined lease expense for
the year ended December 31, 2013 was $49,272.

The following is a schedule, by year, of future minimum lease payments at December 31, 2013:

Year Amount

Minimum lease payments 2014 $ 529,488

Minimum lease payments 2015 367,085
Minimum lease payments 2016 336,401
Minimum lease payments 2017 309,202
Minimum lease payments 2018 288,993
Minimum lease payments Thereafter 918,391
$ 2,749,560

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 Independent Adoption Center, Inc.

Notes to Financial Statements (continued)

5. Subsequent Events
IAC has evaluated all subsequent events through May 2, 2014, the date through which the financial
statements were available to be issued. There were no subsequent events that require recognition or
disclosure in the financial statements.

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