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COMBINED FINANCIAL STATEMENTS

EPILEPSY FOUNDATION AND THE

EPILEPSY RESEARCH FOUNDATION

FOR THE YEARS ENDED

JUNE 30, 2013 AND 2012

EPILEPSY FOUNDATION AND THE EPILEPSY RESEARCH FOUNDATION

CONTENTS

PAGE NO.

INDEPENDENT AUDITOR'S REPORT 2 - 3

EXHIBIT A - Combined Statements of Financial Position, as of June 30, 2013 and2012 4 - 5

EXHIBIT B - Combined Statements of Activities and Changes in Net Assets, forthe Years Ended June 30, 2013 and 2012 6 - 7

EXHIBIT C - Combined Statement of Functional Expenses, for the Year EndedJune 30, 2013 8 - 9

EXHIBIT D - Combined Statement of Functional Expenses, for the Year EndedJune 30, 2012 10 - 11

EXHIBIT E - Combined Statements of Cash Flows, for the Years EndedJune 30, 2013 and 2012 12

NOTES TO COMBINED FINANCIAL STATEMENTS 13 - 25

SUPPLEMENTAL INFORMATION

SCHEDULE 1 - Combining Schedules of Financial Position, as of June 30, 2013 and2012 26 - 29

SCHEDULE 2 - Combining Schedule of Activities and Change in Net Assets, for theYear Ended June 30, 2013 30 - 31

SCHEDULE 3 - Combining Schedule of Activities and Change in Net Assets, for theYear Ended June 30, 2012 32 - 33

1

INDEPENDENT AUDITOR'S REPORT

To the Board of DirectorsEpilepsy Foundation and theEpilepsy Research FoundationLandover, Maryland

We have audited the accompanying combined statements of financial position of the EpilepsyFoundation and the Epilepsy Research Foundation (collectively, the Foundation), which comprisethe combined statements of financial position as of June 30, 2013 and 2012, and the related combinedstatements of activities and changes in net assets, functional expenses and cash flows for the years thenended, and the related notes to the combined financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these combined financialstatements 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 preparationand fair presentation of combined financial statements that are free from material misstatement, whetherdue to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these combined financial statements based on ouraudits. We conducted our audits in accordance with auditing standards generally accepted in the UnitedStates of America. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the combined financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the combined financial statements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of material misstatement of the combined financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considersinternal control relevant to the entity’s preparation and fair presentation of the combined financialstatements in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, weexpress no such opinion. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of significant accounting estimates made by management, as well asevaluating the overall presentation of the combined financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

4550 MONTGOMERY AVENUE · SUITE 650 NORTH · BETHESDA, MARYLAND 20814(301) 951-9090 · FAX (301) 951-3570 · WWW.GRFCPA.COM

___________________________

MEMBER OF CPAMERICA INTERNATIONAL, AN AFFILIATE OF HORWATH INTERNATIONAL

MEMBER OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS' PRIVATE COMPANIES PRACTICE SECTION

2

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all materialrespects, the combined financial position of the Foundation as of June 30, 2013 and 2012, andthe combined changes in their net assets and their combined cash flows for the years then ended inaccordance with accounting principles generally accepted in the United States of America.

Other Matter

Our audit was conducted for the purpose of forming an opinion on the combined financialstatements as a whole. The Combining Schedules of Financial Position and Combining Schedules ofActivities and Change in Net Assets on pages 26 - 33 are presented for purposes of additional analysisand are not a required part of the combined financial statements. Such information is the responsibility ofmanagement and was derived from and relates directly to the underlying accounting and other recordsused to prepare the combined financial statements. The information has been subjected to the auditingprocedures applied in the audit of the combined financial statements and certain additional procedures,including comparing and reconciling such information directly to the underlying accounting and otherrecords used to prepare the combined financial statements or to the combined financial statementsthemselves, and other additional procedures in accordance with auditing standards generally accepted inthe United States of America. In our opinion, the information is fairly stated in all material respects inrelation to the combined financial statements as a whole.

January 24, 2014

3


COMBINED STATEMENTS OF FINANCIAL POSITIONAS OF JUNE 30, 2013 AND 2012

ASSETS

2013 2012CURRENT ASSETS

Cash and cash equivalents $ 1,032,903 $ 267,907

Receivables:Due from Affiliates 216,671 187,686Government grants receivable 1,757,767 1,240,680Contributions receivable, net of allowance for doubtful accounts of

$166,424 in 2013 and $221,459 in 2012 (Note 3) 2,228,147 1,775,594

Total receivables 4,202,585 3,203,960

Prepaid expenses 216,656 144,129Inventory 23,195 37,920

Total current assets 5,475,339 3,653,916

INVESTMENTS (Notes 2,13 and 15) 8,454,909 12,431,965

FIXED ASSETS

Furniture and equipment 558,088 546,392Computer software 2,854,201 2,589,774Leasehold improvements 124,199 124,199

3,536,488 3,260,365Less: Accumulated depreciation and amortization (3,030,124) (2,839,134)

Net fixed assets 506,364 421,231

NON-CURRENT ASSETS

Contributions receivable, net of current portion (Note 3) 398,750 56,750Beneficial interest in perpetual trusts (Notes 13 and 14) 3,265,535 3,042,515

Total non-current assets 3,664,285 3,099,265

TOTAL ASSETS $ 18,100,897 $ 19,606,377

See accompanying notes to combined financial statements. 4

EXHIBIT A

LIABILITIES AND NET ASSETS

2013 2012CURRENT LIABILITIES

Line of credit (Note 15) $ - $ 315,000Accounts payable and accrued liabilities (Note 7) 2,545,355 2,457,717Due to Affiliates 624,162 514,396Grants payable (Note 12) 1,839,898 2,403,811Deferred revenue 125,169 28,078

Total current liabilities 5,134,584 5,719,002

LONG-TERM LIABILITIES

Grants payable, net of current portion (Note 12) 168,750 775,936

Total liabilities 5,303,334 6,494,938

NET ASSETS

Unrestricted 3,760,935 2,473,123Temporarily restricted (Note 4) 4,735,492 6,560,200Permanently restricted (Notes 6 and 14) 4,301,136 4,078,116

Total net assets 12,797,563 13,111,439

TOTAL LIABILITIES AND NET ASSETS $ 18,100,897 $ 19,606,377



COMBINED STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETSFOR THE YEARS ENDED JUNE 30, 2013 AND 2012

2013

UnrestrictedTemporarilyRestricted

PermanentlyRestricted Total

REVENUE

Contributions $ 5,167,731 $ 1,821,902 $ - $ 6,989,633Epilepsy Therapy Project contribution

(Note 17) 208,133 250,000 - 458,133Government grants (Note 8) 5,448,005 - - 5,448,005Affiliate fees 482,363 - - 482,363Sales of materials, net of direct expenses

of $43,602 in 2013 and $53,527 in 2012 10,509 - - 10,509Special events, net of direct expenses of

$864,060 in 2013 and $566,909 in 2012 450,382 - - 450,382Investment income (Note 2) 803,853 83,910 - 887,763Miscellaneous revenue 13,836 153,113 - 166,949Donated clothing poundage revenue, net of

direct expenses of $149,847 in 2013(Note 18) (135,199) - - (135,199)

Advertising 142,053 - - 142,053Change in value of split interest

agreements (17,846) 5,985 223,020 211,159Rescindments of research grants - 39,940 - 39,940Net assets released from donor

restrictions (Note 5) 4,179,558 (4,179,558) - -

Total revenue 16,753,378 (1,824,708) 223,020 15,151,690

EXPENSES

Program Services:Research 3,518,013 - - 3,518,013Public Health Education 2,457,434 - - 2,457,434Professional Education and Training 53,230 - - 53,230Community Services 4,992,282 - - 4,992,282Patient Services 862,710 - - 862,710

Total program services 11,883,669 - - 11,883,669

Supporting Services:Management and General 1,610,393 - - 1,610,393Fundraising 1,971,504 - - 1,971,504

Total supporting services 3,581,897 - - 3,581,897

Total expenses 15,465,566 - - 15,465,566

Changes in net assets 1,287,812 (1,824,708) 223,020 (313,876)

Net assets at beginning of year 2,473,123 6,560,200 4,078,116 13,111,439

NET ASSETS AT END OF YEAR $ 3,760,935 $ 4,735,492 $ 4,301,136 $12,797,563


EXHIBIT B

2012



$ 4,055,300 $ 828,730 $ 250 $ 4,884,280

- - - -3,731,107 - - 3,731,107

458,371 - - 458,371

51,334 - - 51,334

379,584 - - 379,584251,899 20,104 - 272,003

1,296 55,939 - 57,235

- - - -- - - -

(14,622) (3,710) (179,265) (197,597)- 199,699 - 199,699

4,614,246 (4,614,246) - -

13,528,515 (3,513,484) (179,015) 9,836,016

3,996,572 - - 3,996,5721,989,773 - - 1,989,773

134,199 - - 134,1993,819,657 - - 3,819,657

717,586 - - 717,586

10,657,787 - - 10,657,787

2,013,171 - - 2,013,1711,315,414 - - 1,315,414

3,328,585 - - 3,328,585

13,986,372 - - 13,986,372

(457,857) (3,513,484) (179,015) (4,150,356)

2,930,980 10,073,684 4,257,131 17,261,795

$ 2,473,123 $ 6,560,200 $ 4,078,116 $ 13,111,439


ResearchPublic Health

Education

Professional Education and

TrainingCommunity

Services

Salaries 240,487$ 730,692$ -$ 1,467,725$ Temporary personnel 27,010 24,732 - - Employee benefits (Note 9) 46,064 157,738 - 316,208

Total salary and benefit expenses 313,561 913,162 - 1,783,933

Professional fees and contract services 136,012 780,098 28,474 475,260 Membership 680 830 - 46,333 Supplies and materials 2,077 175,831 237 15,605 Telephone 10,942 13,519 151 26,762 Postage and shipping 1,443 106,150 852 18,323 Occupancy (Note 7) 202,346 149,422 3,228 304,481 Equipment maintenance 42,584 4,478 48 4,559 Printing and publications 6,818 117,756 5,070 132,440 Travel and meetings 82,691 162,198 14,476 417,245 Payments to Affiliates - - - 1,701,431 Awards and grants 2,485,343 - - 431 Miscellaneous 1,944 3,291 31 2,943 Bad debt expense (Note 10) 190,000 - - - Depreciation and amortization 41,572 30,699 663 62,536

3,204,452 1,544,272 53,230 3,208,349

TOTAL 3,518,013$ 2,457,434$ 53,230$ 4,992,282$

Program Services


COMBINED STATEMENT OF FUNCTIONAL EXPENSESFOR THE YEAR ENDED JUNE 30, 2013


Patient Services

Total Program Services

Management and General Fundraising

Total Supporting

Services Total Expenses

425,829$ 2,864,733$ 892,276$ 579,678$ 1,471,954$ 4,336,687$ - 51,742 16,209 6,788 22,997 74,739

94,538 614,548 197,131 127,673 324,804 939,352

520,367 3,531,023 1,105,616 714,139 1,819,755 5,350,778

95,440 1,515,284 243,207 497,576 740,783 2,256,067 948 48,791 3,991 9,129 13,120 61,911

5,763 199,513 16,107 247,284 263,391 462,904 5,278 56,652 13,560 12,543 26,103 82,755 8,668 135,436 3,248 242,225 245,473 380,909

52,453 711,930 97,923 133,717 231,640 943,570 930 52,599 32,720 1,794 34,514 87,113

93,828 355,912 15,603 18,316 33,919 389,831 35,904 712,514 41,313 65,488 106,801 819,315

- 1,701,431 - - - 1,701,431 31,838 2,517,612 - - - 2,517,612

516 8,725 16,989 4,666 21,655 30,380 - 190,000 - - - 190,000

10,777 146,247 20,116 24,627 44,743 190,990

342,343 8,352,646 504,777 1,257,365 1,762,142 10,114,788

862,710$ 11,883,669$ 1,610,393$ 1,971,504$ 3,581,897$ 15,465,566$

EXHIBIT C

Supporting Services


ResearchPublic Health

Education

Professional Education and

TrainingCommunity

Services

Salaries 111,838$ 589,597$ 10,929$ 1,287,334$ Temporary personnel 450 12,820 - 29,716 Employee benefits (Note 9) 24,381 152,663 2,335 323,902

Total salary and benefit expenses 136,669 755,080 13,264 1,640,952

Professional fees and contract services 116,580 404,275 18,377 378,678 Membership 623 1,523 - 48,160 Supplies and materials 2,316 258,433 73 6,014 Telephone 12,782 12,455 408 21,742 Postage and shipping 907 153,007 1,608 6,119 Occupancy (Note 7) 253,235 126,078 8,503 242,025 Equipment maintenance 47,776 1,364 42 1,845 Printing and publications 3,992 115,558 60,871 122,969 Travel and meetings 52,303 78,690 30,194 351,686 Payments to Affiliates - 30,000 (2,500) 903,614 Awards and grants 2,969,236 - - - Miscellaneous 11,424 9,135 380 11,052

Bad debt expense (Note 10) 300,000 - - - Depreciation and amortization 88,729 44,175 2,979 84,801

3,859,903 1,234,693 120,935 2,178,705

TOTAL 3,996,572$ 1,989,773$ 134,199$ 3,819,657$

Program Services


COMBINED STATEMENT OF FUNCTIONAL EXPENSESFOR THE YEAR ENDED JUNE 30, 2012


Patient Services

Total Program Services

Management and General Fundraising

Total Supporting

Services Total Expenses

410,218$ 2,409,916$ 866,392$ 522,598$ 1,388,990$ 3,798,906$ 3,225 46,211 30,818 2,703 33,521 79,732

98,203 601,484 219,205 123,382 342,587 944,071

511,646 3,057,611 1,116,415 648,683 1,765,098 4,822,709

23,343 941,253 459,659 170,211 629,870 1,571,123 1,948 52,254 2,843 7,861 10,704 62,958

793 267,629 11,331 144,409 155,740 423,369 5,445 52,832 12,741 8,816 21,557 74,389 6,708 168,349 1,981 143,765 145,746 314,095

45,468 675,309 115,716 95,900 211,616 886,925 440 51,467 21,852 410 22,262 73,729

44,157 347,547 12,004 2,415 14,419 361,966 22,381 535,254 8,822 28,405 37,227 572,481 26,449 957,563 - 31,561 31,561 989,124 10,762 2,979,998 - - - 2,979,998 2,115 34,106 14,872 3,774 18,646 52,752

- 300,000 194,559 - 194,559 494,559 15,931 236,615 40,376 29,204 69,580 306,195

205,940 7,600,176 896,756 666,731 1,563,487 9,163,663

717,586$ 10,657,787$ 2,013,171$ 1,315,414$ 3,328,585$ 13,986,372$

EXHIBIT D

Supporting Services


EXHIBIT E


COMBINED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED JUNE 30, 2013 AND 2012

2013 2012CASH FLOWS FROM OPERATING ACTIVITIES

Changes in net assets $ (313,876) $ (4,150,356)

Adjustments to reconcile changes in net assets to net cash used by operating activities:

Depreciation and amortization 190,990 306,195Bad debt 190,000 300,000Change in allowance for doubtful accounts (55,035) 194,559Unrealized (gain) loss on investments (3,722) 219,491Realized gain on investments (618,425) (174,129)Change in value of beneficial interest in perpetual trusts (223,020) 179,265Contribution of permanently restricted net assets - (250)

(Increase) decrease in:Receivables (1,475,590) 482,782Prepaid expenses (72,527) (88,209)Inventory 14,725 14,330

Increase (decrease) in:Accounts payable and accrued liabilities 87,638 733,802Due to Affiliates 109,766 92,679Grants payable (1,171,099) 72,918Deferred revenue 97,091 (8,684)

Net cash used by operating activities (3,243,084) (1,825,607)

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of fixed assets (276,123) (261,987)Purchases of investments (2,115,757) (404,571)Proceeds from sales of investments 6,714,960 2,208,224

Net cash provided by investing activities 4,323,080 1,541,666

CASH FLOWS FROM FINANCING ACTIVITIES

(Payments) proceeds from line of credit (315,000) 315,000Contribution of permanently restricted net assets - 250

Net cash (used) provided by financing activities (315,000) 315,250

Net increase in cash and cash equivalents 764,996 31,309

Cash and cash equivalents at beginning of year 267,907 236,598

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,032,903 $ 267,907


Interest Paid $ 2,345 $ 9,768



NOTES TO COMBINED FINANCIAL STATEMENTSJUNE 30, 2013 AND 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION

Organization -

The Epilepsy Foundation is a non-profit organization, incorporated under the laws of the Stateof Delaware. The Epilepsy Foundation was established to promote research into the causesand treatments of epilepsy, to support educational and vocational programs for persons withepilepsy, and to provide educational information about epilepsy to the general public. TheEpilepsy Foundation is responsible for national programs and the dissemination of information,technical and administrative assistance to its Affiliates, and the development of program andoperational standards for its affiliates. The Affiliates, which are separately incorporated andgranted tax exemption, are responsible for delivering programs, information and services at thelocal level. The accompanying combined financial statements do not include the activities of theAffiliates.

The Epilepsy Research Foundation (the Research Foundation) was organized in June 2003 asa Commonwealth of Virginia not-for-profit corporation, to be a supporting organization to boththe Epilepsy Foundation and The Epilepsy Therapy Project, to facilitate joint fundraising effortsand develop an innovative research program. The Research Foundation's Board of Directors iscomposed of four members appointed by the Epilepsy Foundation's Board of Directors and fourmembers appointed by The Epilepsy Therapy Development Project's Board of Directors.

Basis of presentation -

The accompanying combined financial statements are presented on the accrual basis ofaccounting, and in accordance with FASB ASC 958-810, Not-for-Profit Entities, Consolidation.

Principles of combination -

These financial statements combine the accounts of the Epilepsy Foundation and the EpilepsyResearch Foundation (collectively, the Foundation) pursuant to the criterion established byFASB ASC 958-810, Not-for-Profit Entities, Consolidation. Under FASB ASC 958-810,combination is required if a separate not-for-profit organization has control (i.e., major votinginterest) and significant economic interest in that other organization. All significant inter-company accounts and transactions have been eliminated in combination.

Cash and cash equivalents -

The Foundation considers all cash and other highly liquid investments with initial maturities ofthree months or less to be cash equivalents.

Bank deposit accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up toa limit of $250,000. At times during the year, the Foundation maintains cash balances in excessof the FDIC insurance limits. Management believes the risk in these situations to be minimal.

Investments -

Investments are recorded at their readily determinable fair value. Realized and unrealized gainsand losses are included in investment income in the Combined Statements of Activities andChanges in Net Assets.

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION(Continued)

Fixed assets -

Fixed assets are stated at cost. Fixed assets costing in excess of $500 are capitalized anddepreciated on a straight-line basis over the estimated useful lives of the related assets,generally three to five years. Leasehold improvements are depreciated over the life of the lease.The cost of maintenance and repairs is recorded as expenses are incurred.

Income taxes -

Both the Epilepsy Foundation and the Epilepsy Research Foundation are exempt from Federalincome taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provisionfor income taxes has been made in the accompanying combined financial statements. Neitheris a private foundation.

The Foundation files income tax and informational returns in the United States Federal andMaryland jurisdictions. These returns are generally subject to examination by tax authorities forthe last three years.

Uncertain tax positions -

For the years ended June 30, 2013 and 2012, the Epilepsy Foundation and the EpilepsyResearch Foundation have documented their consideration of FASB ASC 740-10, IncomeTaxes, that provides guidance for reporting uncertainty in income taxes and has determinedthat no material uncertain tax positions qualify for either recognition or disclosure in the financialstatements.

The Federal Form 990, Return of Organization Exempt from Income Tax, is subject toexamination by the Internal Revenue Service, generally for three years after it is filed.

Inventory -

Inventory consists of publications and educational materials on hand at the end of the year,which are recorded at the lower of cost or market value using the weighted average method ofinventory.

Split interest agreements -

A split interest agreement is created when a donor contributes assets directly to a non-profitorganization or places them in a trust, in which the non-profit organization has a beneficialinterest but is not the sole beneficiary.

A summary of the types of irrevocable split interest agreements which the Epilepsy Foundationhas recorded are as follows:

Perpetual Trusts - The Epilepsy Foundation is a beneficiary under several perpetual trusts.

While the Epilepsy Foundation cannot spend its interest in the corpus of these perpetual

trusts, it does receive annual distributions which can be spent based on the donor’s intent.

The fair value of the Epilepsy Foundation’s interest in the trust assets is recorded as a

permanently restricted contribution at the time its interest becomes irrevocable. Changes in

the perpetual trust's value are recorded on the Combined Statements of Activities and

Changes in Net Assets as a change in value of split interest agreements.

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Split interest agreements (continued) -

Pooled Income - The Epilepsy Foundation maintains a pooled income fund. Donors can

contribute to the fund and receive the income earned until their death, at which time the

assets are available to the Epilepsy Foundation. Donations to the pooled income fund are

recorded at their fair value when received, discounted for the estimated time period until the

donor’s death. The difference between the fair value of the assets when received and the

revenue recognized is recorded as deferred revenue, which is then amortized over the life

expectancy of the donors. At June 30, 2013 and 2012, the market value of the pooled

income fund investments was $309,472 and $290,578, respectively. Furthermore, the

related deferred revenue was $20,471 and $26,456 as of June 30, 2013 and 2012,

respectively.

Charitable Gift Annuities - Donors contribute assets to the Epilepsy Foundation in exchange

for distributions of a fixed amount annually for life. A liability is recorded at the present value

of future cash flows expected to be paid to the donor. The difference between the fair value

of the assets when received and the related liability is recognized as contribution revenue.

At June 30, 2013 and 2012, the market value of the charitable gift annuity investments was

$107,856 and $119,767, respectively. Furthermore, the related liability was $93,034 and

$97,881 as of June 30, 2013 and 2012, respectively, which is recorded under accounts

payable and accrued liabilities on the Combined Statements of Financial Position.

Grants payable -

Unconditional grant obligations are recognized once an award letter has been approved.

Net asset classification -

The net assets are reported in three self-balancing groups as follows:

Unrestricted net assets include unrestricted revenue and contributions received without

donor-imposed restrictions. These net assets are available for the operation of the

Foundation and include both internally designated and undesignated resources.

Temporarily restricted net assets include revenue and contributions subject to donor-

imposed stipulations that will be met by the actions of the Foundation and/or the passage of

time. When a restriction expires, temporarily restricted net assets are reclassified to

unrestricted net assets and reported in the Combined Statements of Activities and Changes

in Net Assets as net assets released from restrictions.

Permanently restricted net assets represent funds restricted by the donor to be

maintained in-perpetuity by the Foundation.

Contributions and grants -

Contributions and grants are recorded as revenue in the year notification is received from thedonor. Contributions and grants are recognized as unrestricted support only to the extent ofactual expenses incurred in compliance with the donor-imposed restrictions and satisfaction oftime restrictions.

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Contributions and grants (continued) -

Contributions and grants received in excess of expenses incurred are shown as temporarilyrestricted net assets in the accompanying combined financial statements.

The Foundation receives funding under grants and contracts from the U.S. government, andother grantors for direct and indirect program costs. This funding is subject to contractualrestrictions, which must be met through incurring qualifying expenses for particular programs.Accordingly, such grants are considered exchange transactions and are recorded asunrestricted income to the extent that related expenses are incurred in compliance with thecriteria stipulated in the grant agreements.

Grants and support receivable represents amounts due from funding organizations forreimbursable expenses incurred in accordance with the grant agreements. Grant fundingreceived in advance of incurring the related expenses is recorded as a refundable advance.

Use of estimates -

The preparation of combined financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities at the date of thecombined financial statements and the reported amounts of revenue and expenses during thereporting period. Accordingly, actual results could differ from those estimates.

Functional allocation of expenses -

The costs of providing the various programs and other activities have been summarized on afunctional basis in the Combined Statements of Activities and Changes in Net Assets.Accordingly, certain costs have been allocated among the programs and supporting servicesbenefited.

Reclassification -

Certain amounts in the prior year's combined financial statements have been reclassified toconform to the current year's presentation.

Investment risks and uncertainties -

The Foundation invests in various investment securities. Investment securities are exposed tovarious risks such as interest rates, market and credit risks. Due to the level of risk associatedwith certain investment securities, it is at least reasonably possible that changes in the values ofinvestment securities will occur in the near term and that such changes could materially affectthe amounts reported in the combined financial statements.

Fair value measurement -

The Foundation adopted the provisions of FASB ASC 820, Fair Value Measurement. FASBASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fairvalue hierarchy based on the quality of inputs (assumptions that market participants would usein pricing assets and liabilities, including assumptions about risk) used to measure fair value,and enhances disclosure requirements for fair value measurements. The Foundation accountsfor a significant portion of their financial instruments at fair value or considers fair value in theirmeasurement.

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2. INVESTMENTS

Investments consisted of the following at June 30, 2013 and 2012:

2013 2012Fair Value Fair Value

Equity mutual funds $ 4,481,637 $ 7,634,665Fixed income mutual funds 3,817,024 4,642,954Money market funds 19,124 17,222Shares of NeuroGenomeX, Inc. 137,124 137,124

TOTAL INVESTMENTS $ 8,454,909 $ 12,431,965

Included in investment income are the following:

2013 2012

Interest and dividends $ 265,616 $ 317,365Unrealized gain (loss) 3,722 (219,491)Realized gain 618,425 174,129

TOTAL INVESTMENT INCOME $ 887,763 $ 272,003

3. CONTRIBUTIONS RECEIVABLE

Contributions receivable represent unconditional promises to give and are stated at their netrealizable value. Management has established an allowance for doubtful accounts for thosereceivables it does not believe to be collectible. No additional provision for uncollectible pledgeswas deemed necessary for the year ended June 2013. An additional provision for uncollectiblepledges for $194,559 was recorded during the year ended June 30, 2012. Contributions receivable(net of allowance for doubtful accounts) that are to be collected within one year for the years endedJune 30, 2013 and 2012 are $2,228,147 and $1,775,594, respectively, and are presented as acurrent asset on the accompanying Combined Statements of Financial Position. Contributionsreceivable between one and five years for the years ended June 30, 2013 and 2012 totaled$398,750 and $56,750, respectively, and are presented as a non-current asset.

Contributions are due as follows at June 30, 2013 and 2012:

2013 2012

Less than one year $ 2,394,571 $ 1,997,053One to five years 398,750 56,750

Total 2,793,321 2,053,803Less: Reserve for uncollectible grants (166,424) (221,459)

CONTRIBUTIONS RECEIVABLE, NET $ 2,626,897 $ 1,832,344

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4. TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets consisted of the following at June 30, 2013 and 2012:

2013 2012

Research $ 3,368,282 $ 5,556,261Public Health Education 643,307 45,000Community Services 75,869 300,938Patient Services 281,356 390,911Pooled Income Fund 283,621 267,090Other 83,057 -

$ 4,735,492 $ 6,560,200

5. NET ASSETS RELEASED FROM RESTRICTIONS

The following temporarily restricted net assets were released from donor restrictions by incurringexpenses or by the passage of time which satisfied the restricted purposes specified by thedonors:

2013 2012

Research $ 3,518,013 $ 3,996,572Public Health Education - 176,000Community Services 225,068 395,813Patient Services 426,554 45,861Pooled Income Fund 9,923 -

$ 4,179,558 $ 4,614,246

6. PERMANENTLY RESTRICTED NET ASSETS

Permanently restricted net assets consisted of the following at June 30, 2013 and 2012:

2013 2012

Perpetual Trusts: $ 1,800,490 $ 1,675,307Unrestricted Activities 961,259 890,647Individuals or Organizations in Louisville,

Kentucky 503,786 476,561Unrestricted Activities 99,567 99,569Research 915,784 915,782National Epilepsy Library 20,000 20,000Women with Epilepsy 250 250

$ 4,301,136 $ 4,078,116

18



7. LEASE COMMITMENT

The Foundation leases office space under an operating lease, with a remaining noncancellableterm in excess of one year. The office lease includes five months of discounted rent in the firstyear, and provides for escalation of three percent annually. Rent expense is recognized on astraight-line basis over the term of the lease. Accordingly, the difference between the actualmonthly payments and the rent expense being recognized for financial statement purposes isrecorded as a deferred rent liability on the Combined Statements of Financial Position.

As of June 30, 2013 and 2012, there was $382,478 and $451,435, respectively, in deferred rentrecorded in accounts payable and accrued liabilities in the accompanying combined financialstatements. Rent expense for the years ended June 30, 2013 and 2012 was $858,108 and$818,050, respectively.

Subsequent to year end, a revised lease agreement was negotiated, extending the term of thelease through 2021, but decreasing the amount of space leased.

Year Ending June 30,

2014 $ 576,4042015 493,3292016 500,9042017 328,7422018 276,794

Thereafter 957,331

$ 3,133,504

8. CONTINGENCY

The Foundation receives grants from various agencies of the United States Government. Suchgrants are subject to audit under the provisions of OMB Circular A-133. The ultimate determinationof amounts received under the United States Government grants is based upon the allowance ofcosts reported to and accepted by the United States Government as a result of the audits. Audits inaccordance with the provisions of OMB Circular A-133 have been completed for all required fiscalyears through 2013. Audits through June 30, 2012 have been accepted by the United StatesGovernment. For the year ended June 30, 2013, there exists a contingency that could require arefund of amounts received in excess of allowable costs. Management is of the opinion that nomaterial liability will result from such audits.

9. PENSION PLAN

The Foundation has a 401(k) Thrift Plan under which the Foundation contributes six percent ofeach qualified employee's salary, plus up to a two percent matching contribution. Under the termsof this plan, all employees who meet minimum service and age requirements are eligible toparticipate. The Foundation's contributions to the pension plan for the years ended June 30, 2013and 2012 were $195,856 and $130,629, respectively.

19



10. PLEDGE DE-OBLIGATION

During the years ended June 30, 2013 and 2012, the Foundation received notice from donors thatpreviously pledged funds totaling $190,000 and $300,000 were being de-obligated. These fundswere reduced from grants receivable on the accompanying Statements of Financial Position.

11. ALLOCATION OF JOINT COSTS

For the years ended June 30, 2013 and 2012, the Foundation incurred joint costs of $733,360 and$647,827, respectively, related to educational information included in its fundraising appeals. Ofthose costs, $476,988 and $238,636, respectively, were allocated to fundraising expenses and$256,372 and $409,191, respectively, were allocated to Public Health Education for the years thenended.

12. GRANTS PAYABLE

The Foundation awards research grants to researchers based on the merit of proposals submittedto a review committee. Researchers who accept Foundation grants are required to report theamount expended as well as the results and conclusions of their work. The grants are awarded tothe universities or other organizations to which the researchers are associated. The amounts owedto universities or other organizations were $2,008,648 and $3,179,747 at June 30, 2013 and 2012,respectively.

Grants are due as follows at June 30, 2013 and 2012:

2013 2012

Less than one year $ 1,839,898 $ 2,403,811One to five years 168,750 775,936

TOTAL GRANTS PAYABLE $ 2,008,648 $ 3,179,747

13. FAIR VALUE MEASUREMENT

In accordance with FASB ASC 820, Fair Value Measurement, the Foundation has categorized theirfinancial instruments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices inactive markets for identical assets or liabilities (Level 1) and the lowest priority to unobservableinputs (Level 3). If the inputs used to measure the financial instruments fall within different levels ofhierarchy, the categorization is based on the lowest level input that is significant to the fair valuemeasurement of the instrument. Investments recorded in the Combined Statements of FinancialPosition are categorized based on the inputs to valuation techniques as follows:

Level 1. These are investments where values are based on unadjusted quoted prices for identicalassets in an active market the Foundation has the ability to access.

Level 2. These are investments where values are based on quoted prices for similar instruments inactive markets, quoted prices for identical or similar instruments in markets that are not active, ormodel-based valuation techniques that utilize inputs that are observable either directly or indirectlyfor substantially the full-term of the investments.

20



13. FAIR VALUE MEASUREMENT (Continued)

Level 3. Inputs to the valuation methodology are unobservable and significant to the fair valuemeasurement.

Following is a description of the valuation methodology used for investments measured at fairvalue. There have been no changes in the methodologies used at June 30, 2013 and 2012.

Money market funds - Fair value is equal to the reported net asset value of the fund.

Mutual funds - The fair value is equal to the reported net asset value of the fund, which is the

price at which additional shares can be obtained.

Shares of NeuroGenomeX, Inc. - These instruments do not have a readily determinable fair

value. The fair values used are generally determined by the general partner or management

of the entity and are based on appraisals or other estimates that require varying degrees of

judgment. Inputs used in determining fair value may include the cost and recent activity

concerning the company performance.

The table below summarizes, by level within the fair value hierarchy, the Foundation's investmentsas of June 30, 2013:

Level 1 Level 2 Level 3Total

June 30, 2013Asset Class:

Equity mutual funds $ 4,481,637 $ - $ - $ 4,481,637Fixed income mutual funds 3,817,024 - - 3,817,024Money market funds 19,124 - - 19,124Shares of NeuroGenomeX, Inc. - - 137,124 137,124Beneficial Interest in Perpetual Trusts - - 3,265,535 3,265,535

TOTAL $ 8,317,785 $ - $ 3,402,659 $ 11,720,444

The table below summarizes, by level within the fair value hierarchy, the Foundation's investmentsas of June 30, 2012:

Level 1 Level 2 Level 3Total

June 30, 2012Asset Class:

Equity mutual funds $ 7,634,665 $ - $ - $ 7,634,665Fixed income mutual funds 4,642,954 - - 4,642,954Money market funds 17,222 - - 17,222Shares of NeuroGenomeX, Inc. - - 137,124 137,124Beneficial Interest in Perpetual Trusts - - 3,042,515 3,042,515

TOTAL $ 12,294,841 $ - $ 3,179,639 $ 15,474,480

21



13. FAIR VALUE MEASUREMENT (Continued)

Level 3 Financial Assets

The following table provides a summary of changes in fair value of the Foundation's financialassets for the years ended June 30, 2013 and 2012:

Investments

BeneficialInterest inPerpetual

Trusts

Beginning balance as of June 30, 2011 $ 137,124 $ 3,221,780Unrealized and realized gains - (179,265)

Balance as of June 30, 2012 137,124 3,042,515Unrealized and realized losses - 223,020

BALANCE AS OF JUNE 30, 2013 $ 137,124 $ 3,265,535

14. ENDOWMENT

The Foundation's endowment consists of donor-restricted endowment funds. As required byGAAP, net assets associated with endowment funds are classified and reported based on donor-imposed restrictions. The Board of Directors has interpreted the State Prudent Management ofInstitutional Funds Act (SPMIFA) as requiring the preservation of the fair value of the original gift asof the gift date of the donor-restricted endowment funds absent explicit donor stipulations to thecontrary. As a result of this interpretation, the Foundation classifies as permanently restricted netassets (a) the original value of gifts donated to the permanent endowment, (b) the original value ofsubsequent gifts to the permanent endowment, and (c) accumulations to the permanentendowment made in accordance with the direction of the applicable donor gift instrument at thetime the accumulation is added to the fund. The remaining portion of the donor-restrictedendowment fund that is not classified in permanently restricted net assets is classified astemporarily restricted net assets until those amounts are appropriated for expenditure by theFoundation in a manner consistent with the standard of prudence prescribed by SPMIFA. Inaccordance with SPMIFA, the Foundation considers the following factors in making adetermination to appropriate or accumulate donor-restricted endowment funds:

The duration and preservation of the fund;

The purpose of the organization and the donor-restricted endowment fund;

General economic conditions and the possible effect of inflation and deflation;

The expected total return from income and the appreciation of investments; and

Investment policies of the organization

Endowment net asset composition by type of fund as of June 30, 2013:



Donor-Restricted Endowment Funds $ - $ - $ 1,035,601 $ 1,035,601Beneficial Interest in Perpetual Trusts - - 3,265,535 3,265,535

TOTAL FUNDS $ - $ - $ 4,301,136 $ 4,301,136

22



14. ENDOWMENT (Continued)

Changes in endowment net assets for the year ended June 30, 2013:



Endowment net assets, beginning of year $ - $ - $ 4,078,116 $ 4,078,116

Investment return:Investment income - 22,968 - 22,968Net appreciation (realized and unrealized) - (5,851) 223,020 217,169

Total investment return - 17,117 223,020 240,137

Appropriation of endowment assets forexpenditure - (17,117) - (17,117)

ENDOWMENT NET ASSETS, END OF YEAR $ - $ - $ 4,301,136 $ 4,301,136

Endowment net asset composition by type of fund as of June 30, 2012:



Donor-Restricted Endowment Funds $ - $ - $ 1,035,601 $ 1,035,601Beneficial Interest in Perpetual Trusts - - 3,042,515 3,042,515

TOTAL FUNDS $ - $ - $ 4,078,116 $ 4,078,116

Changes in endowment net assets for the year ended June 30, 2012:



Endowment net assets, beginning of year $ - $ - $ 4,257,131 $ 4,257,131

Investment return:Investment income - 25,974 - 25,974Net appreciation (realized and unrealized) - (6,617) (179,265) (185,882)

Total investment return - 19,357 (179,265) (159,908)

Contributions - - 250 250

Appropriation of endowment assets forexpenditure - (19,357) - (19,357)

ENDOWMENT NET ASSETS, END OF YEAR $ - $ - $ 4,078,116 $ 4,078,116

23



14. ENDOWMENT (Continued)

Funds with Deficiencies -

From time to time, the fair value of assets associated with individual donor-restrictedendowment funds may fall below the level that the donor or SPMIFA requires the Foundation toretain as fund of perpetual duration. In accordance with GAAP, deficiencies of this nature arereported in unrestricted net assets. As of June 30, 2013 and 2012, there were no deficiencies.Deficiencies of this type can be the result of unfavorable market fluctuations occurring after theinvestment of permanently restricted contributions and continued appropriations for certainprograms that was deemed prudent by the Board of Directors.

Return Objectives and Risk Parameters -

The Foundation has adopted investment and spending policies for endowment assets thatattempt to provide a predictable stream of funding to programs supported by its endowmentwhile seeking to maintain the purchasing power of the endowment assets. Endowment assetsinclude those assets of donor-restricted funds that the Foundation must hold in-perpetuity.

Under this policy, as approved by the Board of Directors, the endowment assets are investedwith the Foundation's other investments in a manner that is intended to provide a reasonableannual growth of principal with preservation of principal as its primary goal and generation ofincome as a secondary goal.

Strategies Employed for Achieving Objectives -

To satisfy its long-term rate-of-return objectives, the Foundation invests in a mixture of cash,equity, and fixed income funds, with a target of 70% equity and 30% fixed income funds, aminimum of 40% and 25%, respectively, and no more than 10% cash, 75% equity and 60%fixed income.

Spending Policy and How the Investment Objectives Relate to Spending Policy -

The Foundation tries to maximize the spending objectives of the endowment fund, by spendingas much of the investment earnings as prudent and practical in any given year.

15. LINE OF CREDIT

The Foundation had a $1,500,000 line of credit with a financial institution, which was closed as ofAugust 2012. The interest rate on the line of credit was the 30 day LIBOR rate plus 75 basis points(.94% at June 30, 2012) with a minimum floor of 4%. The line of credit was secured by theFoundation's brokerage account with the same institution. As of June 30, 2012, the balanceoutstanding on the line of credit was $315,000.

16. CONTRIBUTED SERVICES

During the years ended June 30, 2013 and 2012, the Foundation benefited from donated serviceswhich allow the Foundation to provide greater resources towards various programs. During theyear ended June 30, 2012, the Foundation determined that the difficulties encountered establishingan objective basis to measure the value of such services makes the practice of disclosing thesehours at an approximate value too cumbersome, and as a result the value of contributed serviceshas not been recorded for the years ended June 30, 2013 or 2012.

24



17. MERGER

During December 2012, the Epilepsy Foundation merged with the Epilepsy Therapy Project, a501(c)(3) corporation headquartered in Herndon, Virginia. The merger was approved by the Boardof Directors of each organization. The Epilepsy Foundation was the surviving organization. Themerger was recorded as a contribution of $458,133 on the Combined Statements of Activities andChanges in Net Assets.

18. DONATED CLOTHING PURCHASE AGREEMENT

During April 2013, the Foundation signed a two-year agreement with TVI, Inc. for the by-poundpurchase of donated clothing and household items by TVI, Inc. The Foundation also signed anagreement with Apogee Retail, LLC, with the duration May 1, 2013 to April 30, 2014, for the by-pound purchase of donated clothing and household items. As part of these agreements, theFoundation pays any related shipping and postage costs.

19. SUBSEQUENT EVENTS

In preparing these combined financial statements, the Foundation has evaluated events andtransactions for potential recognition or disclosure through January 24, 2014, the datethe combined financial statements were issued.

25


Epilepsy Foundation

Epilepsy Research

Foundation Eliminations Total

CURRENT ASSETS

Cash and cash equivalents 1,032,903$ -$ -$ 1,032,903$

Receivables:Due from Affiliates 216,671 - - 216,671 Due from the Foundation - 2,781,996 (2,781,996) - Government grants receivable 1,757,767 - - 1,757,767 Contributions receivable, net of allowance for doubtful accounts of $166,424 in 2013 and $221,459 in 2012 2,228,147 - - 2,228,147

Total receivables 4,202,585 2,781,996 (2,781,996) 4,202,585

Prepaid expenses 216,656 - - 216,656 Inventory 23,195 - - 23,195

Total current assets 5,475,339 2,781,996 (2,781,996) 5,475,339

INVESTMENTS 8,317,785 137,124 - 8,454,909

FIXED ASSETS

Furniture and equipment 558,088 - - 558,088 Computer software 2,854,201 - - 2,854,201 Leasehold improvements 124,199 - - 124,199

3,536,488 - - 3,536,488 Less: Accumulated depreciation and

amortization (3,030,124) - - (3,030,124)

Net fixed assets 506,364 - - 506,364

NON-CURRENT ASSETS

Contributions receivable, net of current portion 398,750 - - 398,750

Beneficial interest in perpetual trusts 3,265,535 - - 3,265,535

Total non-current assets 3,664,285 - - 3,664,285

TOTAL ASSETS 17,963,773$ 2,919,120$ (2,781,996)$ 18,100,897$

2013


COMBINING SCHEDULES OF FINANCIAL POSITIONAS OF JUNE 30, 2013 AND 2012

26

Epilepsy Foundation

Epilepsy Research


267,907$ -$ -$ 267,907$

187,686 - - 187,686 - 2,432,707 (2,432,707) -

1,240,680 - - 1,240,680

531,939 1,243,655 - 1,775,594

1,960,305 3,676,362 (2,432,707) 3,203,960

144,129 - - 144,129 37,920 - - 37,920

2,410,261 3,676,362 (2,432,707) 3,653,916

12,294,841 137,124 - 12,431,965

546,392 - - 546,392 2,589,774 - - 2,589,774

124,199 - - 124,199

3,260,365 - - 3,260,365

(2,839,134) - - (2,839,134)

421,231 - - 421,231

56,750 - - 56,750 3,042,515 - - 3,042,515

3,099,265 - - 3,099,265

18,225,598$ 3,813,486$ (2,432,707)$ 19,606,377$

2012

SCHEDULE 1

27

Epilepsy Foundation

Epilepsy Research


CURRENT LIABILITIES

Line of credit -$ -$ -$ -$ Accounts payable and accrued liabilities 2,545,355 - - 2,545,355 Due to Affiliates 624,162 - - 624,162 Due to the Foundation 2,781,996 - (2,781,996) - Grants payable 1,494,195 345,703 - 1,839,898 Deferred revenue 125,169 - - 125,169

Total current liabilities 7,570,877 345,703 (2,781,996) 5,134,584

LONG-TERM LIABILITIES

Grants payable, net of current portion 133,750 35,000 - 168,750

Total liabilities 7,704,627 380,703 (2,781,996) 5,303,334

NET ASSETS

Unrestricted 3,760,935 - - 3,760,935 Temporarily restricted 2,197,075 2,538,417 - 4,735,492 Permanently restricted 4,301,136 - - 4,301,136

Total net assets 10,259,146 2,538,417 - 12,797,563

TOTAL LIABILITIES ANDNET ASSETS 17,963,773$ 2,919,120$ (2,781,996)$ 18,100,897$

2013


COMBINING SCHEDULES OF FINANCIAL POSITIONAS OF JUNE 30, 2013 AND 2012

28

Epilepsy Foundation

Epilepsy Research


315,000$ -$ -$ 315,000$ 2,457,717 - - 2,457,717

514,396 - - 514,396 2,432,707 - (2,432,707) - 1,970,888 432,923 - 2,403,811

28,078 - - 28,078

7,718,786 432,923 (2,432,707) 5,719,002

238,193 537,743 - 775,936

7,956,979 970,666 (2,432,707) 6,494,938

2,473,123 - - 2,473,123 3,717,380 2,842,820 - 6,560,200 4,078,116 - - 4,078,116

10,268,619 2,842,820 - 13,111,439

18,225,598$ 3,813,486$ (2,432,707)$ 19,606,377$

SCHEDULE 1(Continued)

2012

29

UnrestrictedTemporarily Restricted

Permanently Restricted Total

REVENUE

Contributions 5,167,731$ 1,821,902$ -$ 6,989,633$ Epilepsy Therapy Project contribution 208,133 250,000 - 458,133 Government grants 5,448,005 - - 5,448,005 Affiliate fees 482,363 - - 482,363 Sales of materials, net of direct expenses

of $43,602 in 2013 10,509 - - 10,509 Special events, net of direct expenses of

$864,060 in 2013 450,382 - - 450,382 Investment income 803,853 83,910 - 887,763 Miscellaneous revenue 13,836 153,113 - 166,949 Donated clothing poundage revenue, net of

direct expenses of $149,847 (135,199) - - (135,199) Advertising 142,053 - - 142,053 Change in value of split interest agreements (17,846) 5,985 223,020 211,159 Rescindments of research grants - - - - Net assets released from donor restrictions 3,835,215 (3,835,215) - -

Total revenue 16,409,035 (1,520,305) 223,020 15,111,750

EXPENSES

Program Services:Research 3,173,670 - - 3,173,670 Public Health Education 2,457,434 - - 2,457,434 Professional Education and Training 53,230 - - 53,230 Community Services 4,992,282 - - 4,992,282 Patient Services 862,710 - - 862,710


Supporting Services:Management and General 1,610,393 - - 1,610,393 Fundraising 1,971,504 - - 1,971,504


Total expenses 15,121,223 - - 15,121,223

Change in net assets 1,287,812 (1,520,305) 223,020 (9,473)


NET ASSETS AT END OF YEAR 3,760,935$ 2,197,075$ 4,301,136$ 10,259,146$


COMBINING SCHEDULE OF ACTIVITIES AND CHANGE IN NET ASSETSFOR THE YEAR ENDED JUNE 30, 2013

Epilepsy Foundation

30

SCHEDULE 2


Permanently Restricted Total Unrestricted

Temporarily Restricted


-$ -$ -$ -$ 5,167,731$ 1,821,902$ -$ 6,989,633$ - - - - 208,133 250,000 - 458,133 - - - - 5,448,005 - - 5,448,005 - - - - 482,363 - - 482,363

- - - - 10,509 - - 10,509

- - - - 450,382 - - 450,382 - - - - 803,853 83,910 - 887,763 - - - - 13,836 153,113 - 166,949

- - - - (135,199) - - (135,199) - - - - 142,053 - - 142,053 - - - - (17,846) 5,985 223,020 211,159 - 39,940 - 39,940 - 39,940 - 39,940

344,343 (344,343) - - 4,179,558 (4,179,558) - -

344,343 (304,403) - 39,940 16,753,378 (1,824,708) 223,020 15,151,690

344,343 - - 344,343 3,518,013 - - 3,518,013 - - - - 2,457,434 - - 2,457,434 - - - - 53,230 - - 53,230 - - - - 4,992,282 - - 4,992,282 - - - - 862,710 - - 862,710

344,343 - - 344,343 11,883,669 - - 11,883,669

- - - - 1,610,393 - - 1,610,393 - - - - 1,971,504 - - 1,971,504

- - - - 3,581,897 - - 3,581,897

344,343 - - 344,343 15,465,566 - - 15,465,566

- (304,403) - (304,403) 1,287,812 (1,824,708) 223,020 (313,876)

- 2,842,820 - 2,842,820 2,473,123 6,560,200 4,078,116 13,111,439

-$ 2,538,417$ -$ 2,538,417$ 3,760,935$ 4,735,492$ 4,301,136$ 12,797,563$

Epilepsy Research Foundation Combined

31



REVENUE

Contributions 4,055,300$ 828,707$ 250$ 4,884,257$ Government grants 3,731,107 - - 3,731,107 Affiliate fees 458,371 - - 458,371 Sales of materials, net of direct expenses

of $53,527 in 2012 51,334 - - 51,334 Special events, net of direct expenses of

$566,909 in 2012 379,584 - - 379,584 Investment income 251,899 20,104 - 272,003 Miscellaneous revenue 1,296 55,939 - 57,235 Change in value of split interest agreements (14,622) (3,710) (179,265) (197,597) Rescindments of research grants - - - - Net assets released from donor restrictions 3,662,536 (3,662,536) - -

Total revenue 12,576,805 (2,761,496) (179,015) 9,636,294

EXPENSES

Program Services:Research 3,044,862 - - 3,044,862 Public Health Education 1,989,773 - - 1,989,773 Professional Education and Training 134,199 - - 134,199 Community Services 3,819,657 - - 3,819,657 Patient Services 717,586 - - 717,586


Supporting Services:Management and General 2,013,171 - - 2,013,171 Fundraising 1,315,414 - - 1,315,414


Total expenses 13,034,662 - - 13,034,662

Change in net assets (457,857) (2,761,496) (179,015) (3,398,368)


NET ASSETS AT END OF YEAR 2,473,123$ 3,717,380$ 4,078,116$ 10,268,619$

Epilepsy Foundation


COMBINING SCHEDULE OF ACTIVITIES AND CHANGE IN NET ASSETSFOR THE YEAR ENDED JUNE 30, 2012

32

SCHEDULE 3


Permanently Restricted Total Unrestricted

Temporarily Restricted


-$ 23$ -$ 23$ 4,055,300$ 828,730$ 250$ 4,884,280$ - - - - 3,731,107 - - 3,731,107 - - - - 458,371 - - 458,371

- - - - 51,334 - - 51,334

- - - - 379,584 - - 379,584 - - - - 251,899 20,104 - 272,003 - - - - 1,296 55,939 - 57,235 - - - - (14,622) (3,710) (179,265) (197,597) - 199,699 - 199,699 - 199,699 - 199,699

951,710 (951,710) - - 4,614,246 (4,614,246) - -

951,710 (751,988) - 199,722 13,528,515 (3,513,484) (179,015) 9,836,016

951,710 - - 951,710 3,996,572 - - 3,996,572 - - - - 1,989,773 - - 1,989,773 - - - - 134,199 - - 134,199 - - - - 3,819,657 - - 3,819,657 - - - - 717,586 - - 717,586

951,710 - - 951,710 10,657,787 - - 10,657,787

- - - - 2,013,171 - - 2,013,171 - - - - 1,315,414 - - 1,315,414

- - - - 3,328,585 - - 3,328,585

951,710 - - 951,710 13,986,372 - - 13,986,372

- (751,988) - (751,988) (457,857) (3,513,484) (179,015) (4,150,356)

- 3,594,808 - 3,594,808 2,930,980 10,073,684 4,257,131 17,261,795

-$ 2,842,820$ -$ 2,842,820$ 2,473,123$ 6,560,200$ 4,078,116$ 13,111,439$

Epilepsy Research Foundation Combined

33

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