Independent Auditors’ Reports as Required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and Government Auditing Standards and Related Information GAY MEN’S HEALTH CRISIS, INC. AND AFFILIATES For the year ended December 31, 2018 GAY MEN’S HEALTH CRISIS, INC. AND AFFILIATES TABLE OF CONTENTS Page(s) Report of Independent Certified Public Accountants 1 - 2 Consolidated Financial Statements: Consolidated Statement of Financial Position as of December 31, 2018 3 Consolidated Statement of Activities for the year ended December 31, 2018 4 Consolidated Statement of Functional Expenses for the year ended December 31, 2018 5 Consolidated Statement of Cash Flows for the year ended December 31, 2018 6 Notes to Consolidated Financial Statements 7 - 19 Uniform Guidance Supplementary Information: Schedule of Expenditures of Federal Awards for the year ended December 31, 2018 20 - 21 Notes to Schedule of Expenditures of Federal Awards for the year ended December 31, 2018 22 Report of Independent Certified Public Accountants on Internal Control over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards 23 - 24 Report of Independent Certified Public Accountants on Compliance for each Major Federal Program and on Internal Control Over Compliance Required by the Uniform Guidance 25 - 26 Schedule of Findings and Questioned Costs for the year ended December 31, 2018: Section I - Summary of Auditor’s Results 27 Section II - Financial Statement Findings 28 Section III - Federal Award Findings and Questioned Costs 28 GRANT THORNTON LLP REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 757 Third Avenue, 9th Floor New York, NY 10017 D 212.599.0100 F 212.370.4520 To the Board of Directors Gay Men’s Health Crisis, Inc. and Affiliates: Report on the financial statements We have audited the accompanying consolidated financial statements of Gay Men’s Health Crisis, Inc. and Affiliates (collectively, the “Organization”), which comprise the consolidated statement of financial position as of December 31, 2018, and the related consolidated statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the consolidated financial statements. Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Organization’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. GT.COM Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd (GTIL). GTIL and each of its member firms are separate legal entities and are not a worldwide partnership. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Gay Men’s Health Crisis, Inc. and Affiliates as of December 31, 2018, and the changes in their net assets and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of matter regarding going concern The accompanying consolidated financial statements have been prepared assuming that the Organization will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Organization has experienced decreases in net assets and its line of credit matures on August 31, 2020. These conditions, along with other matters described in Note 2, raise substantial doubt about the Organization’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter. Other matters Supplementary information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audits of the consolidated financial statements and certain additional procedures. These additional procedures included comparing and reconciling the information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole. Other reporting required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report, dated June 26, 2020, on our consideration of the Organization’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization’s internal control over financial reporting and compliance. New York, New York June 26, 2020 GAY MEN’S HEALTH CRISIS, INC. AND AFFILIATES Consolidated Statement of Financial Position As of December 31, 2018 ASSETS Cash and cash equivalents $ 720,646 Government grants and contracts receivable 6,194,231 Medicaid receivable, net 454,231 Contributions receivable, net 1,681,195 Other receivables 1,398,910 Prepaid expenses and other assets 756,721 Leasehold improvements, furniture and equipment, net 4,878,322 Security deposit 4,057,144 Restricted cash 430,843 Total assets $ 20,572,243 LIABILITIES AND NET ASSETS LIABILITIES Accounts payable and accrued expenses $ 4,755,793 Deferred rent and rent incentives 2,671,884 Government contract advances 1,192,363 Note payable 352,567 Capital lease 932,763 Line of credit 3,400,000 Total liabilities 13,305,370 Commitments and contingencies NET ASSETS Without donor restrictions 7,005,488 With donor restrictions 261,385 Total net assets 7,266,873 Total liabilities and net assets $ 20,572,243 The accompanying notes are an integral part of this consolidated financial statement. - 3 - GAY MEN’S HEALTH CRISIS, INC. AND AFFILIATES Consolidated Statement of Activities For the year ended December 31, 2018 Without Donor With Donor Restrictions Restrictions Total SUPPORT AND REVENUE Support: Contributions - general $ 4,582,643 $ 581,790 $ 5,164,433 Contributed services and in-kind support 578,118 - 578,118 Special events revenue, net of direct costs 1,317,314 - 1,317,314 Total support 6,478,075 581,790 7,059,865 Revenue: Government grants and contracts