Financial StatementsYear Ended

December 31 ,2018

American Thyroid Association, lnc,

(lcnificd l)Lrblic

American Thyroid Association, Inc.

Gontents

lndependent Auditors' Report

Financial Statements

Statement of Financial Position

Statement of Activities

Statement of Functional Expenses

Statement of Cash Flows

Notes to Financial Statements

Supplementary lnformation

Schedule of Publication Revenue and Expenses

Comparison to Budget

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21

oCertifiecl Public

I ndependent Auditors' Report

Board of DirectorsAmerican Thyroid Association, !nc.

We have audited the accompanying financial statements of the American Thyroid Association,lnc. (a nonprofit organization) which comprises the statement of financial position as of December31 ,2018, and the related statements of activities, functional expenses and cash flows for the yearthen ended, and the related notes to the financial statements.

M a n ag e m ent's Respo n si b i I ity fo r th e F i n a n c i a I Stafemenfs

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; thisincludes the design, implementation, and maintenance of internal control relevant to the preparationand fair presentation of financial statements that are free from material misstatement, whether dueto fraud or error.

Au d ito rs' Respo n si b i I ity

Our responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with auditing standards generally accepted in the United Statesof America. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the flnancial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditois judgment,including the assessment of the risks of material misstatement of the financial statements, whetherdue to fraud or error. ln making those risk assessments, the auditor considers internal controlrelevant to the entity's preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the etfectiveness of the entity's internalcontrol. Accordingly, we expressno such opinion. An audit also includes evaluating the appropriateness of accounting policies usedand the reasonableness of significant accounting estimates made by management, as well asevaluating the overall presentation of the financial statements.

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

Opinion

ln our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of American Thyroid Association, lnc. as of December 31, 2018, and thechanges in its net assets and its cash flows for the year then ended in accordance with accountingprinciples generally accepted in the United States of America.

1500 King Street, Suite 301, Alexondrio, Virginio 22314-2730703.548.1055 Fox: 703.548.2282

1

Report on Supplementary lnformation

Our audit was conducted for the purpose of forming an opinion on the financial statements as awhole. The schedules of publication revenue and expenses, and comparison to budget on pages 21

and22are presented for purposes of additional analysis and are not a required part of the financialstatements. Such information is the responsibility of management and was derived from and relatesdirectly to the underlying accounting and other records used to prepare the financial statements.The information has been subjected to the auditing procedures applied in the audit of the financialstatements and certain additionalprocedures, including comparing and reconciling such informationdirectly to the underlying accounting and other records used to prepare the flnancialstatements orto the financial statements themselves, and other additional procedures in accordance with auditingstandards generally accepted in the United States of America. ln our opinion, the information isfairly stated in all material respects in relation to the financial statements as a whole.

Other Matters

Effect of Adopting New Accounting Standard

As discussed in Note 2 to the financial statements, management has adopted AccountingStandards Update (ASU) No. 2016-14, Not for Profit Entities (Topic 958) Presentation ofFinancialsfafemenfs of Not-For-Profit Entities. Our opinion is not modified with respect to thatmatter.

D&UlV Urr"to4^?

Alexandria, VirginiaAugust 2,2019

2

American Thyroid Association, lnc.

Statement of Financial Position

December 31,2018

AssetsCurrent assets

Cash and cash equivalentsReceivablesPrepaid expenses

Total current assetsProperty and equipment, net

Investments

Other assetsDepositsThyroid libraryTrademarks, net

Liabilities and Net AssetsCurrent liabilities

Accounts payable and accrued expensesDeferred revenueDeferred rent

Total current liabilities

Long-term Iiabilities, less current maturitiesDeferred rentDeferred compensation

Tota! long-term Iiabilities

Total Iiabilities

Net assetsWithout donor restrictionsWithout donor restrictions, board designated

Total net assets without donor restrictions

With donor restrictions

Total net assets

$ 1,551,300184,53422 898

1,758,732

51,258

7,006,951

19,68618,865

,049

$ 8,898,541

$ 322,809386,1 60

5 857

714,826

9,229165 000

174,229

889 055

606,5912,908,625

3,515,216

4,494,270

8,009,486

$ 8,898,541

43

The accompanying notes are an integral part of these financial statements

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American Thyroid Association, lnc.

Statement of Cash Flows

Year Ended December 31,2018

Cash flows from operating activitiesChange in net assetsAdjustments to reconcile to net cash fromoperating activities:

Depreciation and amortizationLoss on disposal of property and equipmentNon-cash contributions received - securitiesCash receipts resulting from sale of donated financial assetsNet realized gain on investmentsNet unrealized loss on investmentsChange in:

ReceivablesPrepaid expensesDepositsAccounts payable and accrued expensesDeferred revenueDeferred rentDeferred compensation

Net cash flows from operating activities

Cash flows from investing activitieslnvestment purchases and reinvestmentsProceeds from sale of investmentsTrademark costsPurchase of property and equipment

Net cash flows from investing activities

Net change in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

$ (151,831)

30,7293,088

(16,494)16,429

(81,403)638,377

(14,989)(1,280)(3,644)

(149,303)(73,866)

(5,857)68 000

258 057

(1,807,735)1,355,906

(3,739)(8,964)

464,532)

(206,47 5)

1 757 775

$ 1-551-3AA

The accompanying notes are an integral part of these financial statements

6

American Thyroid Association, lnc.

Notes to Financial Statements

December 31,2018

1. Organization and Nature of Activities

The American Thyroid Association, lnc. ("the Association" or "the ATA') is a nonprofitorganization incorporated under the laws of the State of New York and is exempt from federalincome taxes under lnternal Revenue Code Section 501(c)(3). The Association is organized andoperated exclusively for charitable, scientific, and educational purposes, including the study anddissemination of knowledge regarding the basic and clinical aspects of thyroid biology andpathophysiology. Sources of revenue include grants for research and education, member dues,donations, publications and meetings.

2. Summary of Significant Accounting Policies

Basis of Accounting

The financial records are maintained on the accrual basis of accounting, whereby revenues arerecognized when they are earned and expenses are recognized when they are incurred. TheAssociation records contributions when they are unconditionally promised or received.

lmplementation of New Accounting Standards Update (ASU)

Effective January 1, 2018, the Association implemented ASU 2016-14, Not for Profit Entities(Topic 958) Presentation of Financial Statements of Not-For-Profit Entities, which is effective for allfiscal years beginning after December 31,2017. The update addresses the complexity andunderstandability of net asset classification, deficiencies in information about liquidity andavailability of resources, and the lack of consistency in the type of information provided aboutexpenses and investment return. Under the new ASU, the classes of net assets are reduced to twoclasses of net assets: net assets without donor restrictions and net assets with donorrestrictions. The standard also requires the presentation of expenses incurred in carrying out theAssociation's activities an analysis of expenses by both their naturaland functionalclassification. Asa result of this implementation, unrestricted net assets have been renamed net assets withoutdonor restrictions and temporarily restricted and permanently restricted net assets have beencombined into a single net asset class called net assets with donor restrictions. See Note 5. Theassociation has adjusted the presentation of these statements accordingly.

Basis of Presentation

The financial statements of the Association have been prepared in accordance with U.S. generallyaccepted accounting principles (U.S. GAAP), which requires the Association to report informationregarding its financial position and activities according to the following net asset classifications.

Net assets without donor restrictions: Net assets that are not subject to donor-imposedrestrictions and may be expended for any purpose in performing the primary objectives of theorganization. These net assets may be used at the discretion of the Association's managementand the board of directors. They include Board-designated net assets which may be earmarkedfor future programs, investment, contingencies, purchase or construction of property andequipment, or other uses.

Net assets with donor restrictions. Net assets subject to stipulations imposed by donors, andgrantors. Some donor restrictions are temporary in nature; the restrictions may be related tosupport of particular operating activities, or use in a specified future period. Those restrictions

7

will be met by actions of the Association, or by the passage of time. Other donor restrictions areperpetual in nature, where the donor has stipulated the funds be maintained in perpetuity.

Donor restricted contributions are reported as increases in net assets with donor restrictions.When a restriction expires, net assets are reclassified from net assets with donor restrictions tonet assets without donor restrictions in the statement of activities.

To ensure compliance with limitations and restrictions placed on the use of resources available tothe Association, the accounts are maintained in accordance with the principles of fund accounting.Accordingly, the assets, liabilities and fund balances of the Association are reported in fund groupsas follows:

Net assets without donor restrictions

Operatinq Fund

The Operating Fund supports programs of the Association including education, research, publicand professional awareness, program support, and the administrative and infrastructureoperations necessary to support these programs for the benefit of the public.

Board Designated Funds

The Board has designated $2,908,625 of unrestricted funds at December 31 , 2018 as follows:$2,656,266 to serve as an operational and other reserve; $161,908 to be spent for clinicalinitiatives; $47,887 for a registry project, and $42,564 to be spent on patient education. Thesefunds are invested in money market funds with a net asset value of $1 per share (included incash and cash equivalents) as well as equity and debt securities.

Net assets with donor restrictions

lmaoe Library Proiect

ATA received funds supporting an initiative to provide an imaging library available to themedical community on the ATA website.

Samuel Refetoff Fund

ln honor of the 50th anniversary of the discovery of Resistance to Thyroid Hormone (RTH), andto honor and recognize the leadership of Dr Samuel Refetoff in the RTH field, the ATAestablished the Samuel Refetoff Fund in 2018. The goals of the fund are to support fellows,trainees, youth investigators, the RTH Symposium, and the ATA research awards. Whendonations reach $100,000 the fund will become a permanent endowment. The fund allows forthe release of an administrative fee of 10o/o of donations received during the year.

Endowment Appreciation

Absent donor-imposed restrictions, unspent investment returns from donor restrictedendowments are subject to the Organization's investment spending policy described in Note 9.

Campaiqn for Thvroid Discoverv Fund :

The Campaign for Thyroid Discovery Endowment was established in 1999 to assure andstrengthen the future of the ATA's scientific and educational programs. Funds are dedicated tosponsoring research and attracting physicians and scientists to the field and to supportingestablished investigators and young researchers in their quest to advance thyroidology.

New Hamoshire Charitable Foundation Fund

The New Hampshire Charitable Foundation Fund supports research grants to be made by theATA related to the effects of hypothyroid conditions on women who are pregnant, preventivetesting of hypothyroid conditions on women of childbearing age, and preventive procedures andeducation to reduce cases of maternal hypothyroid condition on babies. Should medical

8

science find a definitive cure and/or treatment for these conditions, the ATA's board of directorshas the discretion to use the funds to support other types of thyroid research. These funds arepart of the ATA's existing research endowment and administered by the board of directors inaccordance with board approved policies.

Endowment Fund

The Endowment Fund was established to ensure the future of the American ThyroidAssociation's scientific and educational programs for its members, and includes support fortheVan Meter and Paul Starr Awards.

Sidnev H lnqbar Fund

The Sidney H lngbar Fund (lngbar Fund) supports ventures consonant with the lngbar traditionof excellence in education and research in thyroidology and the lngbar lectureship. The Fundsupports an annual lectureship award recognizing outstanding academic achievements in thefield of thyroidology consistent with the innovation and vision that epitomized Dr. lngbar'sbrilliant investigative career. lt is conferred upon an established investigator who has mademajor contributions in thyroid-related research over many years.

Arthur Bauman Fund

The Arthur Bauman Fund (Bauman Fund) supports the presentation of advances of clinicalinvestigation in thyroidology and promotes participation by younger members of the scientificcommunity in the annual meeting. The Arthur Bauman Clinical Symposium is presented at eachannual meeting. The Fund donors have agreed to support a named program activity during theRidgway Trainee Conference at the annual meeting. Funds will be taken from earnings only andnot corpus. Funds may be added to the Ridgway Legacy Fund corpus or used for theoperations of the Ridgway conference per designation by the Board of Directors.

Clark T Sawin owment Fund

The Clark T Sawin Endowment Fund (Sawin Fund) supports The ClarkT Sawin History ResourceCenter, an online thyroid history and archive resource, and the history vignette at the annualmeeting.

Universitv of southern california Thvroid Research Group Fellows Fund

The University of Southern California Thyroid Research Group Fellows Fund (USC FellowsFund) was established to support fellows' attendance at ticketed program events of the annualmeeting of the Association. The Fund donors have agreed to support a named program activityduring the Ridgway Trainee Conference at the annual meeting. Funds will be taken fromearnings only and not corpus. Funds may be added to the Ridgway Legacy Fund corpus orused for the operations of the Ridgway conference per designation by the Board of Directors.

Stanbury Pathophvsioloqv Fund

The Stanbury Pathophysiology Fund (Stanbury Fund) was established to perpetually fund theannual award of the Stanbury medal for contributions to thyroid pathophysiology.

Braverman Fund

This fund was established to support a Lewis E. Braverman Distinguished Lectureship Award tobe presented at each annual meeting of the ATA. The award is given to an individual who hasdemonstrated a passion for mentoring and a dedication to advancing the understanding ofthyroid disease. The fund allows for the release of an administrative fee of lOo/o of donationsreceived during the year. The Fund donors have agreed to support a named program activityduring the Ridgway Trainee Conference at the annual meeting. Funds will be taken fromearnings only and not corpus. Funds may be added to the Ridgway Legacy Fund corpus orused for the operations of the Ridgway conference per designation by the Board of Directors.

9

Ridqwav Leoacv Fund

This fund was established to support the E. Chester "Chip" Ridgway Trainee Conference to beheld at each annual meeting of the ATA. The fund allows for the release of an administrative feeof 10% of donations received during the year.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of demand deposits at banks, cash, money marketaccounts, and money market funds. The money market funds seek to preserve the daily net assetvalue of the investment at $1 per share as quoted in an active market while providing maximumcurrent income. The money market fund invests exclusively in short-term U.S. Treasury securitiesor in repurchase agreements backed by these securities. The Association considers all cashaccounts, which are not subject to withdrawal restrictions or penalties, and all principal and incomecash balances in the investment accounts, to be cash equivalents.

Receivables

The Association classifies all receivables as current assets, and provides an allowance for doubtfulaccounts based upon a review of outstanding receivables, historical collection information andexisting economic conditions. Receivables deemed uncollectible are expensed based on creditevaluation and the specific circumstances of the parties involved.

Receivables as of December 31,2018 include $13,387for meeting support, $38,013fordonations,$57,532 for 2018 journal royalties, $40,922 for membership dues and publication subscriptions,$5,000 for publication support, $28,750 for research grant funding, $675 for a payroll tax refund,and $255 for manuscript fees. Management has determined all accounts are collectible and,therefore, there is no allowance for doubtful accounts at December 31, 2018.

tnvestments

The Association's investments are reported at fair value, which is based on quoted market prices ordealer quotes. Unrealized and realized gains and losses are included in the statement of activitiesas changes in net assets. lnvestments are exposed to certain risks, such as interest rate, creditand overall market volatility. Due to the level of risk associated with certain investment securitiesand the volatility in the capital markets, changes in the value of investment securities could occur inthe near term and those values could materially differ from the amounts reported in theaccompanying financial statements.

Fair Value of Financial lnstruments

As of December 31 ,2018, the carrying value of cash and cash equivalents, receivables, accountspayable and accrued expenses approximated their fair value, based on the short-term maturities ofthese instruments.

Thyroid Library

The library consists of donated books and are recorded based on a written appraisal from a bookstore owner. Management believes that that the economic benefit of the library is used up so slowlythat the estimated useful lives are extraordinarily long and, therefore, the books are notdepreciated. Because of their cultural, aesthetic, or historical value, these assets are protected andpreserved in a manner greater than that for similar assets without such cultural, aesthetic, orhistorical value.

Property and Equipment

Property and equipment are stated at cost and depreciation is calculated on a straight-line basisover their estimated useful lives which currently range from 3 to 7 years. lt is the Association'spolicy to capitalize assets purchased at a cost greater than $1 ,000.

10

Donated Assets

Donated assets are recorded at their estimated fair market value at the time of the donation.

Trademark

The Association registered its logo (a thyroid shape within a circle), its name (American ThyroidAssociation), and two of its online publication names (Clinical Thyroidology and Thyroid) with theUnited States Patent and Trademark Office though 2019. The cost of $55,471 associated with theseapplications are capitalized on the statement of financial position as Trademarks at December 31,2018 and amortized over a ten-year period. Accumulated amortization was $12,422 at December31,2018.Subsequent to year end, the trademarks were renewed through June 2029.

Deferred Revenue

All member dues received prior to December 31 but relating to the subsequent year, are recordedas deferred revenue in the accompanying statement of financialposition. Exhibitorfees collected inadvance of the next year's annual meeting and publication subscriptions for future years are alsoincluded in deferred revenue.

At December 31, 2018, deferred revenue consisted of membership dues of $308,247, meetingrevenue of $3,649, and publication revenue of $74,264.

Deferred Rent

The Association received a lease incentive from the landlord in the form of a constructionallowance. The incentive and the escalating rent provisions are amortized on a straightline basisover the life of the lease.

Support, Revenues and Expenses

Contributions are recognized as without or with donor restrictions depending on existence and/ornature of donor restrictions and are recorded when received. Support that is restricted by the donoris reported as an increase in net assets with donor restrictions depending on the nature of the donorrestriction. When a restriction expires by the incurrence of donor specified expenses, these netassets are reclassified to net assets without donor restrictions and reported in the statements ofactivities as net assets released from restriction. Donated assets are recognized as contributionrevenue at their estimated fair market value on the date of the donation.

Estimates

The preparation of financial statements requires management to make estimates and assumptionsthat affect the amounts reported in the financial statements and accompanying notes. Actualresults could differ from those estimates.

Goncentration of Credit Risk

The Association maintains cash in bank deposit accounts that may at times exceed Federal Depositlnsurance Corporation (FDIC) insurance limits. As of December 31 ,2018, bank deposits exceededFDIC limits by $674,877. The Association has not experienced any losses as a result of theconcentration, and management believes it is not exposed to any significant credit risk.

The Association maintains a concentration of cash and investment accounts with brokerageinstitutions which are members of the Securities lnvestor Protection Corporation (SIPC). Thefinancial institutions carry excess insurance above the SIPC limit.

lncome Taxes

Under applicable provisions of the lnternal Revenue Code Section 501(cX3) and the Codes of theCommonwealth of Virginia, and the State of New York, the Association is exempt from taxes onincome, other than unrelated business income, and property. There was no taxable unrelated

11

business income for the year ended December 31, 2018. The Association believes that it hasappropriate support for any tax positions taken, and therefore, does not have any uncertain taxpositions that are material to the financial statements.

Advertising

Advertising is expensed as incurred. There were no advertising expenses for the year.

Functional Expenses

The cost of providing program and other activities have been summarized on a functional basis inthe statement of activities. Accordingly, certain costs have been allocated among the program andsupporting services benefited. Such allocations are determined by management on an equitablebasis.

The expenses that are allocated include:

SE Method of AllocationSalaries and related expensesSuppliesTelephone and communicationssOccupancylnformation technologyDepreciation and amortizationlnsuranceTaxes and licenses

Subsequent Events

ln preparing these financial statements, the Association has evaluated events and transactions forpotential recognition or disclosure through August 2,2019, the date the financial statements wereavailable to be issued.

3. Gash and Cash Equivalents

A summary of cash and cash equivalents as of December 31 ,2018 is as follows:

Without Withdonor donor

restrictions restrictions Total

Time and effortTime and effortTime and effortTime and effortTime and effortTime and effortTime and effortTime and effort

Checking accountsMoney market accountsMoney market funds

$ 618,179 $724,140208,981

$ 618,179724,140208,981

Total

Fair value approximates cost.

$ 1.551.300 $ $ 1,5s1,300

12

4. Liquidity and Availability

The following represents the Association's financial assets at December 31 , 2018

Financial assets at year end:

Cash and cash equivalents $

Accounts receivable :

lnvestments

1,551,300

184,534

7,006,951

Totalfinancial assets at year end

Less amounts not available to be used within one year:

Donor-im posed restrictions:

Restricted by donor with purpose restrictions

Resricted by donor for investment in perpetuity

Board designations:

Operational and other reserve

Specific projects

Financial assets available to meet general expendituresover the next twelve months

$ 8,742,785

$ t,33g,gg0

ATA's cash flows vary from month to month depending upon the timing of membership renewalsand event registrations. Sufficient liquid assets are maintained in bank checking and money marketaccounts to meet its financial obligations. ATA has $1 ,735,834 of financial assets available withinone year of the balance sheet date consisting of cash of $1 ,551 ,300 and receivables of $184,534.None of these financial assets are subject to donor or other contractual restrictions that make themunavailable for general expenditure within one year of the balance sheet date. The receivables willbe collected within one year. ATA also has investments of $2,512,682 which could be used in theevent of an unanticipated liquidity need.

The Association's lnvestment Policy Statement designates three levels of funding:

Working Gapital Account: funding designated for current year operating expenditures notincluding direct annual meeting costs, comprised of 100% unrestricted funds. The funds areinvested in cash and cash equivalents, including notes or CDs with less than 12-month maturity.Based on the 2018 actual operating activity, 12 months of expenses were approximately $2.3million. At the end of 2018, working capital funds available in liquid assets were $2.1 million.

Operating Reserves Account: used for a shortfall in working capital, not to exceed two years'anticipated budget needs comprised of 100% unrestricted funds. The funds are invested asfollows:

. Cash and cash equivalents - no more than 50%

. Fixed income - no more than 100%

. Equities - no more lhan 20%

As of the end of 2018, the operating reserve was $2.2 million.

lnvestment Reserve Account: includes both restricted and unrestricted funds, invested forlong-term growth with a 5+ year timeframe. The funds are invested as follows:

. Cash and cash equivalents - no more than 10%

. Fixed income - no more than 50%

. Equities - no more lhan 7Oo/o

As of the end of 2018, the investment reserve was $4.5 million.

(1 ,107,078)(3,387,1e2)

(2,656,266)

(252,359)

13

The Association's funds are held in banks insured by the FDIC, as well as by multiple investmenthouses which are insured by SIPC. The investment mix is monitored regularly by the Association'sBoard, Executive Director, and an external unrelated advisor.

5. Net Assets

Net assets are reclassified as of January 1 ,2018 to conform with the current accounting standard.

Under As adjusted underFASB No. 117 Reclassifications ASU No.2016-14

Net assets:

Unrestricted

Temporarily restrictedPermanently restrictedWithout donor restrictionsWith donor restrictions

Total net assets $ 8,161,317 $ $ 8,1 61 ,317

Net assets with donor restrictions consisted of the following at December 31, 2018.

$ 3,482,271 $

1,415,667

3,263,379

(3,482,271) $(1 ,415,667)(3,263,37e)3,482,2714,679,046

3,482,2714,679,046

Beginningbalance Additions Reductions

Endingbalance

Purpose restriction:lmage library project

Samuel Refetoff Fund

Endowment appreciation

lnvestment in perpetuity:Campaign for Thyroid DiscoveryFund

New Hampshire CharitableFoundation Fund

Endowment Fund

Sidney H lngbar Fund

Arthur Bauman Fund

Clark T Sawin Endowment FundUSC Thyroid Research GroupFellows Fund

Stanbury Pathophysiology Fund

Braverman Fund

Ridgway Legacy Fund

1,414,167

1,415,667 28,257 336,846 1,107,078

1 ,803,120 1 ,803,120

$ 1,500 $

28,257 65

336,781

$ 1,500

28,1921,077,386

$

406,015321,74082,24586,32550,000

40,000

61,713249,546162,675

1,000

2,560120,253

406,015321,740

82,24587,32550,000

40,000

61,713252,106282,928

3,263,379 123,813 3,387,192

Board designated net assets were $2,908,625 at December 31 , 2018 and are included in netassets without donor restrictions.

14

6. !nvestments and Fair Value Measurements

The fair market value of investments, with a cost basis of $7,058,871 , at December 31 , 2018 were

Without Withdonor donor

restrictions restrictions Total

Equity securitiesDebt securities

$ 682,7511,829,932

$ 4,1 19,065376,203

$ 4,900,8162,206,135

Total $ 2,512,683 $ 4,494,268 $ 7,006,951

lnvestments with permanent donor restrictions include equity securities of $3,010,989 and debtssecurities of $376,203.

U.S. generally accepted accounting principles define fair value as the exchange price that would bereceived for an asset or paid to transfer a liability in the principal or most advantageous market forthe asset or liability in an orderly transaction between market participants on the measurement date.U.S. generally accepted accounting principles also establish a fair value hierarchy that prioritizesobservable and unobservable inputs used to measure fair value into three broad levels.

Level 1: lnputs are unadjusted quoted prices in active markets for identical assets or liabilitiesthat the Association has access to on the measurement date. The quoted prices provide themost reliable evidence, except when a significant event occurs that may affect the fair valuemeasurement.

Level 2: lnputs are quoted prices in markets that are not active or other inputs that areobservable or can be corroborated by observable market data for substantially the full term ofthe assets or liabilities. Observable inputs other than Level 1 quoted prices such as quotedprices for similar assets or liabilities or interest rate and yield curves.

Level 3: Unobservable inputs that are supported by little or no market activity and that aresignificant to the fair value of the asset or liabilities.

The following table summarizes investments, by level, for items measured at fair value on arecurring basis at December 31,2018:

Levell Level2 Level3 Total

Equity securitiesCommon stocksPreferred stocksMutual funds

Debt securitiesUS Treasury securitiesGovernment-backed securitiesCorporate bondsBond mutual funds 1,874,844

$ gt 8,078 $109,781

4,372,958

121,816209,474

$ $ 318,078109,781

4,372,958

121,816209,474

1,874,844

$ 7,006,951$ 7,006,951 $ $

15

Net investment return for 2018 consisted of the following

lnterest and dividend incomeNet realized gains (losses)

Total interest, dividends and net realized losses

Net unrealized gains (losses)

lnvestment advisory fees

Net investment return

Withoutdonor

restrictions

withdonor

restrictions Total

$ 124,168 $

2g,g96112,36851,507

$ 236,53681,403

154,064(244,289)

(16,857)

163,875(394,088)

(22,907)

317,939(638,377)

(39,764)

$ (107,082) $ (253,120) $ (360,202)

7. Property and equipment

Property and equipment consisted of the following at December 31, 2018:

Accumulated Depreciation Estimated Life:

Cost Depreciation Expense (ygqfs)

Furniture, fixtures, and equipmentComputer hardwareComputer softwareWebsite and databaselmprovements

Total

$ 35,5s634,51014,97230,80443,703

$ 26,195 $21,71611,63720,46128,278

3,1 05348

3,3341 3,1 34

6,1 70

5-7

3-53

3

7

$ 159,545 $ 108,287 $ 26,091

lntellectual Property

Trademarks costing $55,472 at December 31, 2018 are amortized over a five-year period.

Accumulated amortization was $12,422 at December 31, 2018.

Depreciation and amortization for the year ended December 31,2018 were $26,091 and $4,638,respectively, totaling $30,729.

A loss on the disposal of property and equipment of $3,088 is included in occupancy on thestatement of functional expenses.

8. Publications and Gommunications

2017-2018

ln 2017, the ATA sent written notice to the publishers, of interest to renegotiate the Thyroid@)ournalcontract. Several strategy meetings and multiple conference calls have been held in 2017'2018with ATA leadership, a publications consultant and specialized publications attorneys to draftstrong, best practice contracts for Thyroid and the additional journals, Clinical Thyroidology@ andVideoEndocrinologytM. Two face to face meetings with publisher personnel were held, one in

November 2017 in Falls Church, VA and one in New York City in May 2018. Trademark for thejournal Thyroid were secured in 2017 in the USA and the EU; and in 2018 in China. A contract foreach of the three journals was submitted to the publisher on August 3,2018 and negotiations wereconcluded on January 17 ,2019. Contracts with a term of January 1 ,2019 through December 31 ,

2023 were agreed to, with provisions regarding ownership of the publications, trademarks, andfinancial agreements between the publisher and ATA.

16

2018-2019

American Thyroid Association owns the name of the journal Thyroid. The publisher owns thecopyright on the content of the Thyroid journal. The publisher is responsible for subscriptionsolicitation, sale of advertising space, reprints, back volumes and electronic products. TheAssociation entered into an agreement with the Editor in Chief of Thyroid effective January 1 ,2013through January 1 ,2018. Effective October 22,2016, the agreement was extended through January1, 2020. The Association earns royalty income from the publication of Thyroid Journal bundle.

On June 16,2013, the Association entered into an agreement with its Publisher to publish twoadditionaljournals electronically: the ATA's existing ClinicalThyroidology, and the newly launchedVideoEndocrinology. The ATA retains its ownership of ClinicalThyroidology. ATAand the publisherjointly own VideoEndocrinology. The Association earns royalty income from the publication of thesetwo journals for the use of the ATA trademark, logo and other materials. All journal editors areselected by the ATA with contracts through January 1,2022. The Association continues to publishClinical Thyroidology for the Public for patients and the public who joined Friends of the ATA.

Publications and communications support and revenue of $455,1 52 includes subscription revenueof $167,918 from Thyroid, editorial support of $66,600, manuscript fees of $66,225, and net royaltyincome of $154,409. See Schedule of Publication revenue and expenses.

9. Restricted Net Assets and Endowments

The Association's endowments consist of individual donor-restricted endowment funds establishedfor a variety of purposes as described in Footnote 2. Net assets associated with endowment fundsare classified and reported based on the existence or absence of donor-imposed restrictions.

lnterpretation of Relevant Law

The Board of Directors of the Association has interpreted the Uniform Prudent Management oflnstitutional Funds Act as requiring the preservation of the fair value of the original gift as of the gift

date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. Asa result of the interpretation, the Association classifies as permanently restricted net assets (a) theoriginal value of the gifts donated to the permanent endowment, (b) the originalvalue of subsequentgifts to the permanent endowment, and (c) accumulations to the permanent endowment made in

accordance with the direction of the applicable donor gift instrument. The remaining portion of thedonor-restricted endowment fund that is not classified in permanently restricted net assets isclassified as temporarily restricted net assets until those amounts are appropriated for expenditureby the organization. The Association considers the following factors in making a determination to

appropriate or accu m u late donor-restricted endowment fu nds:

1. The duration and preservation of the fund;2. The purposes of the Association and the donor-restricted endowment fund;3. General economic conditions;4. The possible effect of inflation and deflation;5. The expected total return from income and the appreciation of investments;6. Other resources of the Association; and7 . The investment policies of the Association.

17

Net Assets with Donor Restrictions Composition by Type and Fund

Purpose restrictionlmage library projectRefetoff FundEndowment appreciation

lnvestment in perpetuityCampaign for Thyroid Discovery FundNew Hampshire Charitable Foundation FundEndowment FundSidney H lngbar FundArthur Bauman FundClark T Sawin Endowment FundUSC Thyroid Research Group Fellows FundStanbury Pathophysiology FundBraverman FundRidgway Legacy Fund

December 31 2018

1 107 078

1 ,803,120406,015321,740

82,24587,32550,00040,00061,713

252,106282 928

Total

$ 1,415,667 $ 3,263,379 $ 4,679,046

$

$

3 387 192

Total net assets with donor restrictions $ 4,494,270

The income from the investment in perpetuity is expendable to support operations.

Changes in Endowment Net Assets for the Year Ended December 31, 2018

Purpose lnvestmentrestriction in perpetuity

Endowment net assets, beginning of year

lnvestment income:lnterest and dividends

Net realized gains (losses)

Net unrealized gains (losses)

Advisory fees

Total investment income

Reclassification to investment inperpetuity

Contributions and grants

Net assets released from restrictions

Endowment net assets, end of year

112,368

51,507(394,088)

(22,907)

112,368

51,507(394,088)(22,907)

(253,120)

(81,662)28,257(2,065)

91,66242,152

(253,120)

70,409(2,065)

$ 1,107,077 $ 3,387,193 $ 4,494,270

All investment returns on donor restricted funds are accumulated until appropriated for expenditure.lnvestment advisory fees allocated to donor restricted net assets were $22,907, resulting in a netinvestment return of $253,120 for the year.

18

1,50028,192

1,077 ,386

Funds with Deficiencies

From time to time, the fair value of assets associated with individual donor-restricted endowmentfunds may fall below the level that the donor requires the Association to retain as a fund ofperpetual duration. ln accordance with GAAP, deficiencies of this nature are reported in net assetswithout donor restrictions. There were no funds with deficiencies as of December 31, 2018.

Return Objectives and Risk Parameters

The Association has adopted investment and spending policies for endowment assets that attemptto provide a predictable stream of funding to programs supported by its endowmentwhile seeking tomaintain the purchasing power of the endowment assets. Endowment assets include those assetsof donor-restricted funds that the Association must hold in perpetuity or for a donor.specified period.Under this policy, as approved by the Board of Directors, the endowment assets are invested in a

manner that is intended to maximize the return on investments while taking an appropriate(conservative/moderate) amount of investment risk and to increase the principal at least at aminimum annual return of the current rate of inflation of the long term while maintaining a prudentdiversification of the investment assets.

Strategies Employed for Achieving Objective

To satisfy its long{erm rate-of-return objectives, the Association relies on a total return strategy inwhich investment returns are achieved through both capital appreciation (realized and unrealized)and current yield (interest and dividends). The Association targets a diversified asset allocation thatutilizes fixed-income and equity-based investments to achieve its longterm objectives withinprudent risk constraints.

Spending Policy and How the tnvestment Objectives Relate to Spending Policy

The Association's investment policy includes an endowment spending rate of up to 4% calculatedas a percentage of the moving average of the market value of the three preceding year-end marketvalues of the endowment funds. ln establishing this policy, the Association considered the long-termexpected return on its endowment. This is consistent with the Association's objective to maintainthe purchasing power of the endowment assets held in perpetuity as well as to provide additionalgrowth through new gift and investment return.

10. Retirement Plan

The Association has a a01(k) discretionary contribution plan that covers all eligible employees. TheAssociation contributes 3o/o of the participant's compensation and matches up to 3% of theparticipant's contribution, vesting immediately. A discretionary profit-sharing contribution is made atthe discretion of the Association's Board of Directors. The Association's contributions totaled$71,681 for the year.

The Association maintains a tax-exempt organization eligible 457(b) Plan. Participation in the planis restricted to "top hat" employees as understood in Title 1 of ERISA. The Association'scontributions totaled $18,500 for 2018.

The Association maintains a Tax-Exempt Organization Eligible 457(f) Plan by personnel contractwith the executive director. Participation in the plan is restricted to "top hat" employees asunderstood in Title 1 of ERISA.

11. Leases

The Association leases office space under an 87-month operating lease for office space whichexpires January 31 ,2021. The landlord agreed to contribute towards the Association's constructioncosts in the amount of $29,358. This construction allowance is deferred and amortized on astraight-line basis over the life of the lease as a reduction to rent expense.

'19

Minimum future lease obligations for years ending December 31 are.

2019 $ 32,9742020 33,8812021 2,888

$ 69,743

Rent expense for the year ended December 31,2018 was $25,652.

12. Meetings, Workshops and Symposia Commitments

The Association has entered into contracts for meetings, workshops and symposia to be held in thefuture in various cities as follows:

Commitment as ofDate Conference Location December 31 2018

2019 October Annualmeeting Chicago. lL $ 433,415

2020 May Spring meeting NewYork, NY 124,374

2022 Odober Annual Meeting Montreal, QC, Canada 1,043

2023 September AnnualMeeting Washington, DC 80,535

2024 Odober Annual meeting Chicago. lL 27,731

The Association secures event cancellation insurance to cover the meetings in the current year.

13. Subsequent Events

ln May 2019, the Association's trademarks for its logo (a thyroid shape within a circle), its name(American Thyroid Association), and two of its online publication names (Clinical Thyroidology andThyroid) were renewed through June 2019 with the United States Patent and Trademark Office.

20

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Comparison to Budget

Year Ended December 31 2018

Actual Budget

Support and RevenueCIVE grantsMeeting registrationOther meeting revenueResearch grantsPublications and communicationsMember dueslndividual and corporate donations[Vlember donationsDonated investmentsI nvestment income (loss)

Total support and revenue

ExpensesProgram expenses

Scientific meetingsPublic, patient and professional awarenessPublicationsResearch

Total program expenses

Management and generalFundraising

Total expenses

Change in net assets

See independent auditors' report.

3 128 497 3,315,257

$ (1 51 ,831) $ (47,588)

$ 295,000 $1 ,053,159

550,609201,250455,152518,663166,92979,61216,494

(360,202)

245,000978,239658,765250,000501,239496,608

96,94035,030

5,848

976 666

1,275,170510,408486,855448 254

2,720,687

311,36796,443

3 267 669

1,504,692606,315437,215481 722

3,029,944

241,96783 346

22

2,