KOPERNIK SOLUTIONS
Financial Statements
December 31, 2018

KOPERNIK SOLUTIONS
Table of Contents
December 31, 2018

Independent Accountants’ Review Report(i)Financial Statements:
Statement of Financial Position

1

Statement of Activities

2Statement of Functional Expenses

3

Statement of Cash Flows4

Notes to Financial Statements

5 – 11

40 Wall Street Suite 3602 New York, NY 10005 (212) 751-8337 Fax (646) 417-6851 www.fhllp.com

INDEPENDENT ACCOUNTANTS’ REVIEW REPORTTo the Board of Directors ofKopernik Solutions
New York, New YorkWe have reviewed the accompanying financial statements of Kopernik Solutions (a nonprofit organization),
which comprise the statement of financial position as of December 31, 2018, and the related statements ofactivities, functional expenses and cash flows for the year then ended, and the related notes to the financial
statements. A review includes primarily applying analytical procedures to management’s financial data andmaking inquiries of management. A review is substantially less in scope than an audit, the objective of which isthe expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express
such an opinion.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements inaccordance with accounting principles generally accepted in the United States of America; this includes thedesign, implementation, and maintenance of internal control relevant to the preparation and fair presentation offinancial statements that are free from material misstatement whether due to fraud or error.
Accountants’ Responsibility
Our responsibility is to conduct the review engagement in accordance with Statements on Standards for
Accounting and Review Services promulgated by the Accounting and Review Services Committee of the
AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reportingwhether we are aware of any material modifications that should be made to the financial statements for them to
be in accordance with accounting principles generally accepted in the United States of America. We believethat the results of our procedures provide a reasonable basis for our conclusion.
Accountants’ Conclusion
Based on our review, we are not aware of any material modifications that should be made to theaccompanying financial statements in order for them to be in accordance with accounting principles generally
accepted in the United States of America.
Effect of Adopting New Accounting Standard
As discussed in Note 1 to the financial statements, in 2018 Kopernik Solutions adopted new accounting
guidance, Accounting Standards Update 2016-14, Presentation of Financial Statements of Not-for-Profit
Entities.

Fasten Halberstam LLP
New York, New York
October 23, 2019(i)

KOPERNIK SOLUTIONSStatement of Financial Position
December 31, 2018ASSETS
Current assets
Cash
Investments
Grants receivable
Prepaid expenses and other assets$

Total current assets

1,371,147

Fixed assets, net
Total assets
LIABILITIES AND NET ASSETS
Current liabilities
Accounts payable and accrued expenses
Grants payable

61,391
1,296,463
6,250
7,043

1,165
$

1,372,312$

11,297
5,262

Total liabilities

16,559Total net assets

1,355,753

Total liabilities and net assets$

See Accompanying Notes and Independent Accountants' Review Report-1-

1,372,312

KOPERNIK SOLUTIONSStatement of Activities
For the Year Ended December 31, 2018

Without
Donor
Restrictions
Revenues
General contributions
GrantsProgram service revenue
Interest income
In-kind support$

128,206 $14,458150,149
176
11,250304,239

With Donor
Restrictions
-

Total
$

128,206
14,458150,149
176
11,250304,239

Net assets released from restrictions

366,086(366,086)-

Total revenues

670,325(366,086)

304,239

951,965-

951,965

87,59127,803
115,394-

87,59127,803
115,394

Total expenses

1,067,359-

1,067,359

Change in net assets from operations(397,034)(366,086)(763,120)

12,151-

12,151

Change in net assets(409,185)(366,086)(775,271)

Net Assets - Beginning of year

1,764,938

366,086

2,131,024

Expenses
Program services
Supporting services
Management and generalFundraising
Total supporting services

Other expense
Investment loss

Net Assets - Ending of year$

1,355,753 $-$See Accompanying Notes and Independent Accountants' Review Report-2-

1,355,753

KOPERNIK SOLUTIONSStatement of Functional Expenses
For the Year Ended December 31, 2018

Supporting Services
ProgramServices
GrantsAdvertising
Conference and travel
Consulting fees
Contracted services
Depreciation
Fees
Foreign exchange loss
Information technology
Licenses, dues and fees
Officers' compensation and benefits
Expenses before in-kind$

Services (in-kind)
Total expenses$

Management
and GeneralFundraising

Total
Supporting
Services713,239 $
5,760
118,41737,087101
2266,089940,715$
2,198
35,329
1,164
2,845
1,047
2,635
8,819
33,55487,591

$
2,981
4,843
6,439
4,949
92
8,499
27,803

$
2,981
7,041
41,768
1,164
7,794
1,047
2,727
8,819
42,053
115,394

11,250---951,965 $

87,591 $27,803 $115,394 $See Accompanying Notes and Independent Accountants' Review Report
-3-

Total
713,239
2,981
12,801
118,41778,855
1,164
7,895
1,047
2,749
8,819
108,142
1,056,109
11,2501,067,359

KOPERNIK SOLUTIONSStatement of Cash Flows
For the Year Ended December 31, 2018

Cash flows from operating activities:
Change in net assets$

Adjustments to reconcile change in net assets to net cash
provided by (used in) operating activities:
Net realized and unrealized loss (gain) on investments
Depreciation
Changes in operating assets and liabilities:
Grants receivable
Prepaid expenses and other assets
Accounts payable and accrued expenses
Grants payable
Deferred revenue(775,271)

12,151
1,164
359,836
16,008(19,110)(34,205)(2,539)Net cash used in operating activities(441,966)

Cash flows from investing activities:
Purchase of investments(250,000)

Net cash used in investing activities(250,000)

Net decrease in cash

(691,966)

Cash at beginning of year

753,357

Cash at end of year$

See Accompanying Notes and Independent Accountants' Review Report-4-

61,391

KOPERNIK SOLUTIONS
Notes to Financial Statements
December 31, 2018
1.

PRINCIPAL
BUSINESSACTIVITY AND
SUMMARY OF
SIGNIFICANTACCOUNTINGPOLICIES:

Nature of Organization
Kopernik Solutions (the “Organization”) is a not-for-profit organization incorporated on
September 18, 2009 in New York State. The Organization was formed for the
charitable purpose of providing developmental assistance to poor and disadvantaged
communities in the world through the use of technology or innovative products,
services and solutions designed to improve the quality of their lives.
Support for the Organization’s programs is derived from foundation grants andgeneral contributions. The Organization is exempt from federal income taxes as anorganization (not a private foundation) formed for charitable purposes under Section
501(c)(3) of the Internal Revenue Code. Donors may deduct contributions made to
the Organization within Internal Revenue Code requirements.
Basis of Accounting
The Organization prepares its financial statements in accordance with generally
accepted accounting principles promulgated in the United States of America (U.S.
GAAP) for not-for-profit organizations on an accrual basis. The significant accounting
and reporting policies used by the Organization are described below.
New Accounting Pronouncements
In May 2014, the FASB issued a new revenue recognition standard entitled Revenue
from Contracts with Customers under Accounting Standards Update 2014-09. The
core principle of the new guidance is that an entity should recognize revenue to depict
the transfer of promised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled in exchange for those goods orservices. New disclosures about the nature, amount, timing and uncertainty ofrevenue and cash flows arising from contracts with customers are also required. The
standard is effective for nonpublic entities for annual reporting periods beginning after
December 15, 2018, with early adoption permitted. Entities must adopt the new
guidance using one of two retrospective application methods. Although, theOrganization has not yet adopted ASU 2014-09, it is currently evaluating the standard
to determine the impact of its adoption on the financial statements.
In August 2016, the FASB issued ASU 2016-14, Presentation of Financial Statements
for Not for Profit Entities (“ASU 2016-14”). The new standard looks to improve thecurrent net asset classification requirements and the information presented infinancial statements and notes about a not-for-profit entity’s liquidity, financial
performance, and cash flows. The main provisions of this update, which amend therequirements for financial statements and notes, require not-for-profit entities topresent on the face of the statement of financial position amounts for two classes of
net assets at the end of the period, rather than for the currently required threeclasses. Other amendments include improved quantitative and qualitative disclosuresin the footnotes. The amendments in this update are effective for annual financial
statements issued for fiscal years beginning after December 15, 2017, and for interim
periods within fiscal years beginning after December 15, 2018. The Organization
adopted this update in the financial statements during 2018.
Net Assets
Net assets and revenues, and gains and losses are classified based on the existenceor absence of donor-imposed restrictions. Accordingly, the net assets of theOrganization and changes therein are classified as follows:-5-

KOPERNIK SOLUTIONS
Notes to Financial Statements
December 31, 2018
PRINCIPAL
BUSINESSACTIVITY AND
SUMMARY OF
SIGNIFICANTACCOUNTINGPOLICIES(continued):

Net assets without donor restrictions: Net assets that are not subject to donorimposed restrictions and may be used for any purpose in performing the main
objectives of the Organization. The Organization’s board may designate assets
without restrictions for specific operational purposes from time to time.
Net assets with donor restrictions: Net assets subject to terms imposed by donors,
and grantors. Some donor restrictions are temporary in nature; those restrictions will
be met by actions of the Non-Profit Organization or by the passage of time. Other
donor restrictions are perpetual in nature, whereby the donor has specified the funds
be maintained in perpetuity.
Cash Equivalents
Cash equivalents are short term, interest bearing, highly liquid investments withoriginal maturities of three months or less, unless the investments are held formeeting restrictions of a capital or endowment nature.
The Organization maintains all of its cash, aside from petty cash, in a financial
institution. The financial institution is FDIC insured up to $250,000 per depositor. At
times, the Organization’s cash balance may exceed the FDIC’s insured limits. This
exposes the Organization to potential risk of loss in the event of the financial
institution becomes insolvent.
Contributions (Grants) Receivable
Contributions receivable are unconditional promises to give that are recognized ascontributions when the promise is received. Contributions receivable that are
expected to be collected in less than one year are reported at net realizable value.
Contributions receivable that are expected to be collected in more than one year arerecorded at fair value at the date of promise. That fair value is computed using apresent value technique applied to anticipated cash flows. Amortization of theresulting discount is recognized as additional contribution revenue. The allowance foruncollectible contributions receivable is determined based on management’s
evaluation of the collectability of individual promises. Promises that remain
uncollected more than one year after their due dates are written off unless the donors
indicate that payment is merely postponed. All contributions and grants receivable are
expected by management to be collected during the next year.
Property and Equipment
Land, buildings, property and equipment are reported in the statement of financial
position at cost, if purchased, and at fair value at the date of donation, if donated. All
land and buildings are capitalized. Equipment is capitalized if it has a cost of $3,000
or more and a useful life when acquired of more than 1 year. Repairs andmaintenance that do not significantly increase the useful life of the asset are
expensed as incurred. Depreciation is computed using the straight-line method overthe estimated useful lives of the assets.
Revenue
Revenue is reported as increases in net assets without donor restrictions unless its
use is limited by donor-imposed restrictions. Expenses are reported as decreases in
net assets without donor restrictions. If an expense is incurred for a purpose for which
net assets with donor restrictions are available, a donor-imposed restriction is fulfilled
to the extent of the expense incurred. When a donor restriction expires, that is, when
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KOPERNIK SOLUTIONS
Notes to Financial Statements
December 31, 2018
PRINCIPAL
BUSINESSACTIVITY AND
SUMMARY OF
SIGNIFICANTACCOUNTINGPOLICIES(continued):a stipulated time restriction ends or purpose restriction is accomplished, net assets
with donor restrictions are reclassified to net assets without donor restrictions andreported as release from restrictions in the statement of activities. Gains or losses oninvestments are reported as increases or decreases in net assets without donor
restrictions unless their use is restricted by donors or by law.
Foreign Currency
Assets and liabilities denominated in foreign currencies are translated into U.S.
dollars, the reporting currency at exchange rates in effect at the consolidated
statement of financial position date, and revenue and expenses are translated at
rates which approximate those in effect on transactions dates. Net transaction andtranslation gains and losses are included as foreign currency exchange gain or loss inthe accompanying statement of activities.
Gifts-in-Kind (Non-Cash Contributions)
The Organization periodically receives contributions in a form other than cash orinvestments. If the Organization receives a non-cash contribution, the contributed
asset is recognized as an asset at its estimated fair value at the date of gift, provided
that the value of the asset and its estimated useful life meets the Organization's
capitalization policy. Donated supplies are recorded as contributions at the date of gift
and as expenses when the donated items are placed into service or distributed.
Advertising Costs
Advertising costs are expensed as incurred. Advertising expense for the year ended
December 31, 2018 amounted to $2,981.
Expense Recognition and Allocation
The cost of providing the Organization's programs and other activities is summarized
on a functional basis in the statement of activities and statement of functional
expenses. Expenses that can be identified with a specific program or support service
are charged directly to that program or support service. Costs common to multiple
functions have been allocated among the various functions benefited. General andadministrative expenses include those costs that are not directly identifiable with any
specific program, but which provide for the overall support and direction of theOrganization. Fundraising costs are expensed as incurred, even though they may
result in contributions received in future years. The Organization generally does notconduct its fundraising activities in conjunction with its other activities.
Income Taxes
The Organization is a not-for-profit organization that is exempt from federal income
taxes under Section 501(c)(3) of the Internal Revenue Code, except on net income
derived from unrelated business activities. At December 31, 2018, the Organization
has determined that no income taxes are due for its activities. Accordingly, no
provision for income taxes has been recorded in the accompanying financial
statements. Management annually reviews its tax positions and has determined that
there are no material uncertain tax positions that require recognition in the financial
statements.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of-7-

KOPERNIK SOLUTIONS
Notes to Financial Statements
December 31, 2018
PRINCIPAL
BUSINESSACTIVITY AND
SUMMARY OF
SIGNIFICANTACCOUNTINGPOLICIES(continued):assets and liabilities and disclosure of contingent 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.
Reclassifications
Certain balances and amounts in the prior year financial statements have been
reclassified to conform to the current period financial statement presentation. These
reclassifications have no effect on previously reported net income.
Subsequent EventsThe Organization has evaluated subsequent events through October 23, 2019, thedate these financial statements were available to be issued. There were no material
subsequent events that required recognition or additional disclosure in these financial
statements.

2.

GRANTSRECEIVABLE:

Grants receivable are expected by management to be collected during the next year.
Management has determined that the grants receivable are fully collectible; therefore,
no allowance for uncollectible accounts is considered necessary at December 31,
2018.

3.

FIXED ASSETS:

Fixed assets, at cost, consists of the following:

Furniture, fixtures and equipment
Less: Accumulated depreciation
Fixed assets, net

4.

RESTRICTED NET The Organization had no net assets with donor restrictions at December 31, 2018.
ASSETS:
The details for the net assets for the year ending December 31, 2018, are as follows:

Name
Exxonmobil
Foundation
Awareness
Raising
Total

5.

Depreciation
Period3 Years

Amount$3,494(2,329)$1,165IN-KINDSERVICES:

Restriction Details
Funds restricted for use in a
future period
Funds for awareness raising tourin Australia in a future period

Balance
Beginningof Year

Net Assets
Net Assets
Releasedwith Donorfrom
Restrictions Restrictions

BalanceEnd of Year$ 350,000$$

16,086$ 366,086$-$ (350,000)-(16,086)-$ (366,086)

-

$

-

In-kind contributions are reflected as contributions at their fair value at date of
donation and are reported as support without restrictions unless explicit donor
stipulations specify how donated assets must be used. For the year ending
December 31, 2018, the Organization benefited from donated technology services
which were valued by the Organization at $11,250. The donated services were
utilized in the Organization’s program services.

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KOPERNIK SOLUTIONS
Notes to Financial Statements
December 31, 2018
6.

VOLUNTEERSERVICES:

The volunteer services the Organization receives are essential to helping fulfill its
mission. Although substantial, these services do not meet the criteria for recording as
revenue and expense under accounting principles generally accepted in the UnitedStates of America.

7.

INVESTMENTS:

The framework for measuring fair value provides a fair value hierarchy that prioritizes
the inputs to valuation techniques used to measure fair value. The hierarchy gives thehighest priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The threelevels of the fair value hierarchy under FASB ASC 820 are described as follows:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for
identical assets or liabilities in active markets that the Organization has the ability toaccess.
Level 2: Inputs other than quoted prices included within Level 1 that are observablefor the asset or liability, either directly or indirectly, such as:Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability;
Inputs that are derived principally from or corroborated by observable market
data by correlation or other means.

If the asset or liability has a specified (contractual) term, the Level 2 input must be
observable for substantially the full term of the asset or liability.
Level 3: Inputs to the valuation methodology are unobservable and significant to thefair value measurement.
When available, the Organization measures fair value using level 1 inputs because
they generally provide the most reliable evidence of fair value. However, level 1
inputs are not available for many of the assets and liabilities that a not-for-profit
organization is required to measure at fair value (for example, unconditional promises
to give and in-kind contributions). The primary uses of fair value measures in the
Organization’s financial statements are the recurring measurement of investments.
Mutual Funds consist of investments in securities that are freely tradable and listed on
major securities exchanges at their last reported sales price as of the valuation date.
To the extent these securities are actively traded and valuation adjustments are notapplied, they are categorized in Level 1 of the fair value hierarchy. Securities tradedon inactive markets or valued by reference to similar instruments are generally
categorized in Level 2 of the fair value hierarchy.
There were no significant transfers between the levels during the year. The following
table summarizes the levels in the fair value hierarchy of the Organization's
investments at December 31, 2018:-9-

KOPERNIK SOLUTIONS
Notes to Financial Statements
December 31, 2018
INVESTMENTS(continued):

Mutual funds – bonds
Mutual funds – stocks
Total investments

Total$1,037,171
259,292$1,296,463

Level 1
$1,037,171
259,292$1,296,463

Level 2$

Level 3
-

$

$
$

-

The composition of the investment return reported in the statement of activities is asfollows:
Investment income
Net realized gains (losses)
Net unrealized losses (gains)
Total investment return

8.

$

$

33,895
9,761(55,807)(12,151)

AFFILIATED
Kopernik Solutions works with affiliated organizations in Indonesia and Japan, which
ORGANIZATIONS: are governed by separate boards of directors in those countries. These affiliates,
although not commonly controlled, share an overall mission to reduce poverty
through the distribution of simple technology to people in need in developing
countries.
Yayasan Kopernik is registered as an Indonesian Foundation (Yayasan) with theIndonesian Ministry of Law and Human Rights. Kopernik Japan is registered as a
General Incorporated Association in Japan. Neither affiliate is controlled by, or incontrol of, the Organization and therefore, the accompanying financial statements do
not include the accounts of Yayasan Kopernik or Kopernik Japan. Transactions with
Yayasan Kopernik and Kopernik Japan are included as part of operations as program
activities (see note 10).

9.

LIQUIDITY AND
AVAILABILITY:

The Organization manages its liquidity and reserves following three guiding
principles: operating within a prudent range of financial soundness and stability,
maintaining adequate liquid assets to fund near-term operating needs andmaintaining sufficient reserves to provide reasonable assurance that long-term
obligations will be discharged. The Organization endeavors to structure its financial
assets to be available and liquid as its general expenditures, liabilities, and otherobligations become due. During the year ended December 31, 2018, the level ofliquidity and reserves was managed within the policy requirements.
The following represents the Organization's financial assets at December 31, 2018:
Financial assets at year-end:
Cash
Investments
Grants receivable
Prepaid expenses and other assets
Total financial assets available to meet general
expenditures over the next twelve months- 10 -$

61,391
1,296,463
6,250
7,043

$

1,371,147

KOPERNIK SOLUTIONS
Notes to Financial Statements
December 31, 2018
10. RELATED PARTY The Organization’s Indonesian affiliate, Yayasan Kopernik, is a legally separate
TRANSACTIONS: entity and not under common control. The Organization has made grants to
Yayasan to further the Organization’s mission. Grants in the amount of $713,239
were made to Yayasan during the year ending December 31, 2018.
Two of the directors of the Organization are owners of PT Kopernik, an Indonesiancompany. During 2018, the Organization paid approximately $80,100 for services
rendered by PT Kopernik. These payments are included as part of program activities.

11. CONCENTRATION For the year ended December 31, 2018, one donor’s contribution accounted for
OF DONOR RISK: more than 15% of the Organization’s donations.

12. CONTINGENCIES: The Organization received funds from a cost reimbursement contract that has a
co-finance (matching) provision, which are subject to audit by the grantee.
Management believes these matters will not have a significant effect on the
Organization’s financial position

13. RISKS AND
Substantially all of the grants were made to an organization located in Indonesia.
UNCERTAINTIES: The Organization’s activities are subject to various political, economic, and otherrisks and uncertainties inherent in the countries in which the Organization
operates. Among other risks, the Organization’s operations are subject to the risksof restrictions on transfer of funds; export duties, quotas, and embargoes;
domestic and international customs and tariffs; changing taxation policies; foreignexchange restrictions; and political conditions and governmental regulations.

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