Blood:WaterMission,Inc.FinancialStatementsSeptember30,2013

TableofContents

IndependentAuditorsReport........................................................................................................1StatementofFinancialPosition.......................................................................................................3StatementofActivitiesandChangesinNetAssets.........................................................................4StatementofCashFlows.................................................................................................................5StatementofFunctionalExpenses..................................................................................................6NotestoFinancialStatements........................................................................................................7Note1DescriptionandPurposeoftheOrganization...............................................................8Note2SummaryofSignificantAccountingPolicies..................................................................8Note3CreditRisk...................................................................................................................10Note4OperatingLease..........................................................................................................10Note5Commitments.............................................................................................................10Note6RetirementPlan..........................................................................................................10Note7SubsequentEvents.....................................................................................................11

1 0 4 W O O D M O N T B O U L E V A R D , S U I T E 1 2 0 N A S H V I L L E , T E N N E S S E E 3 7 2 0 5 P H O N E : ( 6 1 5 ) 2 7 9 - 0 0 8 8 F A X : ( 6 1 5 ) 2 7 9 - 9 5 9 9

M c K e r l e y N o o n a n . c o m

IndependentAuditorsReportTotheBoardofDirectorsofBlood:WaterMission,Inc.Nashville,TNReportontheFinancialStatementsWe have audited the accompanying financial statements of Blood:Water Mission, Inc. (theOrganization)which comprise the statementsof financialpositionasof September30,2013,andtherelated statementsofactivities,cashflowsandfunctionalexpensesfortheyearthenendedandtherelatednotestothefinancialstatements.ManagementsResponsibilityfortheFinancialStatementsManagement is responsible for the preparation and fair presentation of these financialstatementsinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludesthedesign,implementation,andmaintenanceofinternalcontrolrelevantto the preparation and fair presentation of financial statements that are free frommaterialmisstatement,whetherduetofraudorerror.AuditorsResponsibilityOurresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconducted our audit in accordancewith auditing standards generally accepted in theUnitedStates of America. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement.An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditorsjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entitys preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of theentitys internal control. Accordingly, we express no such opinion. An audit also includesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofsignificantaccountingestimatesmadebymanagement,aswellasevaluating theoverallpresentationofthefinancialstatements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

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OpinionInouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancialpositionofasofSeptember30,2013,andthechangesinitsnetassetsanditscashflowsfortheyearthenendedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.McKerley&Noonan,P.C.January15,2014

204205.1135849M&N Sig

Blood:WaterMission,Inc.StatementofFinancialPosition

September30,2013

Assets

CurrentAssets:CashinBank 261,959$GrantsReceivable 30,000MiscellaneousReceivable 484MerchandiseInventory 7,398

TotalCurrentAssets 299,841

FixedAssets:OfficeFurnitureandEquipment 95,575LeaseholdImprovements 16,445Software 20,000Less:AccumulatedDepreciation (63,401)

NetFixedAssets 68,619

OtherAssetsDeposits 10,960

10,960

TotalAssets 379,420$

LiabilitiesandNetAssets

CurrentLiabilities:AccountsPayableandAccruedExpenses 66,188$

TotalCurrentLiabilities 66,188

NetAssets:UnrestrictedNetAssets 237,627TemporarilyRestrictedNetAssets 75,605

TotalNetAssets 313,232

TotalLiabilitiesandNetAssets 379,420$

SeeNotestotheFinancialStatements 3

Blood:WaterMission,Inc.StatementofActivitiesandChangesinNetAssets

FortheYearendedSeptember30,2013

TemporarilyUnrestricted Restricted Total

RevenuesandSupport:Contributions 2,835,556$ 726,109$ 3,561,665$InterestIncome 549 549MerchandiseNet 7,191 7,191NetAssetsReleasedfromRestriction 675,504 (675,504)

TotalRevenuesandSupport 3,518,800 50,605 3,569,405

Expenses:ProgramServices 2,083,903 2,083,903SupportingServices:

GeneralandAdministrative 439,231 439,231Fundraising 1,295,485 1,295,485TotalExpenses 3,818,618 3,818,618

ChangeinNetAssets (299,818) 50,605 (249,213)

NetAssets,BeginningoftheYear 537,445 25,000 562,445NetAssetsEndoftheYear 237,627$ 75,605$ 313,232$

SeeNotestotheFinancialStatements 4

Blood:WaterMission,Inc.StatementofCashFlows

FortheYearEndedSeptember30,2013

CashFlowsfromOperatingActivities:ChangeinNetAssets (249,213)$AdjustmentstoReconcileChangeinNetAssetstoNetCashProvidedbyOperatingActivities:

Depreciation 12,552LossonDisposalofAssets 26,136IncreaseinGrantReceivable (30,000)DecreaseinMiscellaneousReceivable 53IncreaseinMerchandiseInventory (7,398)IncreaseinDeposits (7,178)IncreaseinAccountsPayableandAccruedExpenses 3,660

TotalAdjustments (2,175)NetCashUsedforOperatingActivities (251,388)

CashFlowsfromInvestingActivitiesProceedsfromsaleofFixedAssets 13,305PurchaseofFixedAssets (57,009)

NetCashUsedforInvestingActivities (43,704)

NetDecreaseinCash (295,092)

Cash,BeginningoftheYear 557,051

Cash,EndofYear 261,959$

SupplementalCashFlowInformation:InterestPaid $

SeeNotestotheFinancialStatements 5

Blood:WaterMission,Inc.StatementofFunctionalExpenses

FortheYearEndedSeptember30,2013

SupportingServicesProgram GeneralandServices Administrative Fundraising Total

HumanResources 694,892$ 209,779$ 406,446$ 1,311,117$ProgramSupport 1,172,855 1,172,855Advertising&Promotion 1,274 251,511 252,785HouseConcerts&ArtistFees 2,213 196,267 198,480Travel 59,702 23,865 81,470 165,037VisionTrips 10,552 94,965 105,517OtherExpenses 39,825 30,374 21,647 91,847Technology 3,518 56,063 17,755 77,336ProfessionalFees 22,913 46,324 69,237Banquets&Celebrations 58,810 58,810Bank&CreditCardFees 6,196 50,131 56,327Occupancy 24,508 12,254 12,254 49,015Printing&Reproduction 3,691 37,316 41,007Meals&Entertainment 15,222 7,126 14,961 37,309Creative 24,212 10,376 34,588Postage&Delivery 15,395 6,842 11,974 34,211ContractServices 23,203 23,203Insurance 3,743 13,270 17,013DepreciationExpense 6,778 1,506 4,268 12,552OfficeSupplies 339 7,902 2,131 10,372

TotalFunctionalExpenses 2,083,903$ 439,231$ 1,295,485$ 3,818,618$

SeeNotestotheFinancialStatements 6

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Blood:WaterMission,Inc.NotestoFinancialStatements

September30,2013

Blood:WaterMission,Inc.NotestoFinancialStatements

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NOTE1DESCRIPTIONANDPURPOSEOFTHEORGANIZATIONBlood:Water Mission, Inc. (the Organization) is a nonprofit grassroots organization thatempowerscommunitiestoworktogetheragainsttheHIV/AIDSandwatercrisesinAfrica.AlloftheOrganizationsincomeisderivedfromdonationsfromindividuals,churches,companies,andfoundations.

NOTE2SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESThe financial statements of the Organization have been prepared on the accrual basis ofaccountingwhichmeansthatrevenuesarerecognizedwhenearnedandexpensesarerecordedwhen incurred. ThesignificantaccountingpoliciesoftheOrganizationaredescribedbelowtoenhancetheusefulnessofthefinancialstatementstothereader.UseofEstimatesThe preparation of financial statements in accordance with generally accepted accountingprinciples requiresmanagement tomakeestimatesandassumptions thataffect the reportedamountofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedateofthe financial statements and the reported amounts of revenue and expenses during thereportingperiod.Actualresultscoulddifferfromthoseestimates.FinancialStatementPresentationFor financial statement presentation, the Organization reports its financial informationaccording to three classes of net assets (unrestricted net assets, temporarily restricted netassets and permanently restricted net assets) based on the existence or absence of donorimposedrestrictions.

UnrestrictedNetAssetsUnrestricted net assets are donations that are not subject to donorimposedstipulations. Monies received without restriction or released from restriction aregenerallyusedforadditional funding forprograms inAfricaandto financethenormaldaytodayoperationsoftheOrganization.TemporarilyRestrictedNetAssetsTemporarily restricted net assets are donations that are subject to donorimposedstipulations thatmayorwillbemet,eitherbyactionsof theOrganizationand/or thepassage of time. When a restriction expires, temporarily restricted net assets arereclassifiedtounrestrictednetassetsandreportedinthestatementofactivitiesasnetassets released from restrictions. At September 30, 2013, there was $75,605 oftemporarilyrestrictedassetsrelatedtoagrantandcontributionsforprogramsinAfrica.

Blood:WaterMission,Inc.NotestoFinancialStatements(Continued)

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PermanentlyRestrictedNetAssetsPermanentlyrestrictednetassetsaredonationssubjecttodonorimposedstipulationsthat they bemaintained permanently by theOrganization. Generally, the donors ofthese assetspermit theOrganization touse allorpartof the income earnedon anyrelated investmentsforgeneralorspecificpurposes. AsofSeptember30,2013,therewerenopermanentlyrestrictednetassets.

DonatedServicesDonatedservicesthatrequirespecializedskillsandwouldbepurchased ifnotprovidedbythedonorarerecognizedassupportandexpensesbasedonthefairvalueoftheservicesreceived.FromtimetotimetheOrganizationreceivesdonatedservices fromprofessionalmusicians forwhich the value is difficult to estimate; the value of those services are not reflected in thefinancialstatements norare thenumerousvolunteerhourscontributedby theorganizationsgrassrootssupporters.CashandCashEquivalentsFor purposes of the statement of financial position and the statement of cash flows, cashconsistsofcashandotherhighly liquidresourceswithanoriginalmaturityofthreemonthsorlesswhenpurchased.FixedAssetsFixedassetsarerecordedatcostandaredepreciatedusingthestraightlinemethodbasedonthefollowingestimatedusefullivesoftheassets.

LeaseholdImprovements 15yearsFurniture&Equipment 57yearsIntangibles(Software) 3years

Significant additions and betterments are capitalized. Expenditures formaintenance, repairsandminor renewals are charged to expense as incurred. Depreciation expense for the yearendedSeptember30,2013amountedto$12,552.MerchandiseInventoryMerchandiseinventoryconsistsofitempurchasedforresaleandarestatedatlowerofcostormarketdeterminedbythefirstinfirstout(FIFO)method.ClassificationofExpensesExpensesareclassifiedfunctionallyasameasureofserviceeffortsandaccomplishments.Directexpenses, incurredforasinglefunction,areallocatedentirelytothatfunction. Jointexpensesapplicable to more than one function are allocated on the basis of objectively summarizedinformationormanagementestimates.

Blood:WaterMission,Inc.NotestoFinancialStatements(Continued)

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IncomeTaxesThe Organization is recognized as a taxexempt organization under Section 501(c)(3) of theInternal Revenue Code, and therefore, no provision for federal or state income taxes isapplicable.TheOrganizationhasadoptedtheguidanceinASC740onaccountingforuncertaintyinincometaxes. ForalltaxpositionstakenbytheOrganization,managementbelieves it isclearthatthelikelihood is greater than 50 percent that the full amount of the tax positions takenwill beultimatelyrealized.Withfewexceptions,theOrganizationisnolongersubjecttoU.S.federaltaxexaminationsbytaxauthoritiesforyearsbefore2010.TheOrganizationincurrednointerestorpenaltiesduringtheyearendedSeptember30,2013.

NOTE3CREDITRISKDuring2013,theOrganizationmaintainedatvarioustimescashbalancesinexcessof$250,000inhigh creditqualitybanks,which are insuredby the FederalDeposit InsuranceCorporation(FDIC)upto$250,000.

NOTE4OPERATINGLEASEInMayof2013 theOrganizationentered intoa lease foroffice space fora termof sixtytwomonths.TheOrganizationalsohasotherminor leases for smallequipment. Totalexpenseof$48,829wasincurredbytheOrganizationforoperatingleasesduringtheyearendedSeptember30,2013.FuturecommitmentsforoperatingleasesforeachyearendedSeptember30areasfollows:

2014 2015 2016 2017 2018LeaseCommitment $67,800 $68,018 $68,818 $68,608 $58,090

NOTE5COMMITMENTSTheOrganization has entered into nonbindingmemorandums of understanding (MOU)withseveral strategicpartners for thepurposeofaccomplishing theOrganizationsgoals inAfrica.TheseMOUsdocumenttheexpectedcostsofeachproject,thetimeframes involved,andthedesiredresults.

NOTE6RETIREMENTPLANTheOrganizationhasaSimpleIRAretirementplaninwhichallemployeeswhohavereceivedatleast$5,000incompensationduringanyoneprioryearsandreasonablyexpectedtoreceiveat

Blood:WaterMission,Inc.NotestoFinancialStatements(Continued)

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least$5,000incompensationinthecurrentyearareeligible.Employeesmaycontributepretaxdeferralsup to$11,500 for the year. TheOrganizationmatches thosedeferralsup to3%ofcompensation. The Organization made $13,824 of matching contributions during the yearendedSeptember30,2013.

NOTE7SUBSEQUENTEVENTSManagement has evaluated subsequent events through January 15, 2014, the date that thefinancialstatementswereavailabletobeissued.