Years ended June 30, 2007 & 2006

CONTENTS

Independent Accountants' Report

Board of Directors
National Association of Trade Exchanges
Mentor, Ohio

We have compiled the accompanying statement of net assets income tax basis of National Association of Trade Exchanges as of June 30, 2007 and 2006, and the related statement of activities-income tax basis and cash flows-tax basis for the years then ended, in accordance with Statements on Standards Accounting and Review Services issued by the American Institute of Certified Public Accountants.

A compilation is limited to presenting in the form of financial statements information that is the representative of management. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express and (sic) opinion or any other form of assurance on them.

(signed) Ray, Foley, Hensley & Company, PLLC

August 7, 2007

Queries to NATE Treasurer, Keith Nally, Genesis Trade, 870 Corporate Drive Suite 200, Lexington KY 40503

Statement of Net Assets - Income Tax Basis

ASSETS

 2007 2006
 $$
Cash-Checking 51,805 33,865
Cash-Money Market 13,662 13,344
Certificate of Deposits 124,349 149,125
Investments 29,430 27,142
BANC Trade Dollars 305,095 252,201
Inventory 10,000 –
Prepaid Convention Expenses 1,000 13,624
          TOTAL ASSETS                    $535,341                    $489,301
     

LIABILITIES

    
  $ $
Deposits - Credit Line 20,670 16,550
     

NET ASSETS

    
          UNRESTRICTED NET ASSETS $514,671 $472,751
     
          TOTAL LIABILITIES AND NET ASSETS                    $535,341                    $489,301

See accompanying notes and accountants' compilation report

Statement of Activities - Income Tax Basis

For years ended June 30

UNRESTRICTED NET ASSETS

 2007 2006
 $$
Revenue & Support  
          Transaction Fees 105,014 125,328
          Convention Revenue 42,132 –
          Membership Dues 27,225 30,938
          CTB 300

–
          Interest Income 10,839 3,640
          TOTAL UNRESTRICTED REVENUE & SUPPORT 185,510 159,906
   

EXPENSES

    
Program Services  
          Conventions 60,128 –
          Trade Account Administration – 25,000
          Bad Debt Expense – 390
          Printing & Publication – 1,355
          Management Fees 30,000 21,000
          Members Enhanced Services 9,861 19,439
          Bank & Credit Card Charges 4,150 3,283
          Website Development & Maintenance 2,730 18,213
          Communications 1,800 2,016
          TOTAL PROGRAM SERVICES 108,669 90,696
Management & General 34,921 30,129
          TOTAL EXPENSES 143,590 120,825
   

INCREASE (DECREASE) IN UNRESTRICTED NET ASSETS

 41,920 39,081

Net Assets at Beginning of Year

 472,751 433,670

Net Assets at End of Year

                    $514,671                    $472,751
See accompanying notes and accountants' compilation report

Statement of Cash Flows – Income Tax Basis

For years ended June 30

CASH FLOWS FROM OPERATING ACTIVITIES

 2007 2006
  $41,920 $39,081
Increase (Decrease) in net assets
     Adjustment to reconcile change in net assets to net cash    
          Increase (Decrease) in BANC Trade Dollars (52,984) (35,565)
          (Increase) in Investments (2,288) (512)
          (Increase) Decrease in prepaid convention expenses 12,624 (13,624)
          (Increase) Decrease in Inventory (10,000) –
          Increase in Deposits 4,120 5,050
   
NET INCREASE IN CASH & CASH EQUIVALENTS (6,518) (5,570)
   
BEGINNING CASH & CASH EQUIVALENTS 196,334 201,904
   
ENDING CASH & CASH EQUIVALENTS             $189,816             $196,334

Notes to Financial Statements

For years ended June 30

1. Summary of Significant Accounting Policies

Organization
National Association of Trade Exchanges (NATE) was incorporated in Missouri in 1987. NATE is a non-profit 501 (c) (6) trade association and is dedicated to furthering the sound financial, fiscal and ethical practices of independent, commercial bartering enterprises, along with enhancing the financial position of industry and association members and their clients.
NATE generates its revenue and support from educational conventions, membership dues, publications, sponsorships, and transaction fees thru the BANC.
Basis of Accounting
NATE uses the cash basis of accounting for both income tax and financial reporting. Revenues are recorded when payments are received and expenses recorded when paid. This is a comprehensive basis of accounting other than generally accepted accounting principles.
Basis of Presentation
Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
BANC
Barter Association National Currency (BANC) purpose is to serve the members of NATE and the Barter Industry by providing a credible medium of exchange and an efficient accounting system that will enhance intercity bartering activity between reciprocal trading partners. The BANC strives to create a stable Barter currency to promote trading and goodwill among its members.
BANC Trade Dollars
BANC Trade Dollars represent barter dollars collected in lieu of cash from exchange members for convention, publications, sponsorship, and transaction fees through the BANC, these amounts will be used in lieu of cash for future operating expenses.
BANC Trade Dollars that can not be used are written-off as a charge to operating expense in the period as determined by management and the Board of Directors.
Cash and Cash Equivalents
For the purpose of the statement of cash flows, NATE considers all short-term debit securities with a maturity of three-months or less to be cash equivalents. NATE does not include BANC Trade Dollars as cash or cash equivalents.
Property and Equipment
Acquisitions of property and equipment in excess of $500 are capitalized. Property and equipment are carried at cost or, if donated, at the approximate fair value at the date of donation. Depreciation is computed using primarily the straight-line method.
Income Taxes
NATE is exempt from federal and state income taxes under Internal Revenue Code Section 501 (c) (6).
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect certain reported amounts of disclosures. Accordingly actual results could differ from those estimates.

2. Concentration of Credit Risk

The association maintains cash balances at one bank. The cash account at banks are insured by the FDIC for up to $100,000. Amounts in excess of insured limits were $24,349 and $96,304 at June 30, 2007 and 2006 respectively.


Financial Statements 2005, 2004


Statement of Net Assets - Income Tax Basis

ASSETS

 2005 2004
  $ $
Cash-Checking 42,563 10,553
Cash-Money Market13,216 52,921
Certificate of Deposits146,125 101,869
Investments26,630 25,707
BANC Trade Dollars216,636 217,687
Prepaid Convention Expenses– 29,813
          TOTAL ASSETS $445,170 $438,550
    

LIABILITIES

   
 $ $
Deposits - Credit Line11,500 –
Prepaid - Credit Line– 2,975
          TOTAL LIABILITIES $11,500 $2,975
    

NET ASSETS

  
          UNRESTRICTED NET ASSETS $433,670 $435,575

See accompanying notes and accountants' compilation report

Statement of Activities - Income Tax Basis

For years ended June 30

UNRESTRICTED NET ASSETS

2005 2004
 $$
Revenue & Support  
          Transaction Fees 136,824135,530
          Convention Revenue 93,78228,490
          Membership Dues 37,87038,115
          Publication Revenue 21,555–
          CTB 900

–
          Interest Income 3,9743,164
          TOTAL UNRESTRICTED REVENUE & SUPPORT 294,905205,299
   

EXPENSES

  
Program Services  
          Conventions 132,17036,914
          Trade Account Administration 31,78038,445
          Bad Debt Expense 7,326423
          Printing & Publication 19,7762,199
          Management Fees 21,00021,000
          Sales Genie USA Directories 6,6006,000
          Bank & Credit Card Charges 5,8804,137
          Website Development & Maintenance 5,60017,400
          Communications 2,4595,145
          Advertisement & Promotions 24,67820,084
          Monkman Fund 3,500–
          TOTAL PROGRAM SERVICES 260,769151,747
Management & General36,04132,389
          TOTAL EXPENSES 296,810184,136
   

INCREASE (DECREASE) IN UNRESTRICTED NET ASSETS

(1,905)21,163

Net Assets at Beginning of Year

435,575414,412

Net Assets at End of Year

$433,670 $435,575
See accompanying notes and accountants' compilation report

Statement of Cash Flows – Income Tax Basis

For years ended June 30

CASH FLOWS FROM OPERATING ACTIVITIES

2005 2004
 $$
Increase (Decrease) in net assets(1,905) 21,163
     Adjustment to reconcile change in net assets to net cash   
          Increase (Decrease) in BANC Trade Dollars 1,051(6,173)
          (Increase) in Investments (923)(25,707)
          (Increase) Decrease in prepaid convention expenses 29,813(29,813)
          Increase (Decrease) in prepaid convention income (2,975)2,975
          Increase in Deposits 11,500–
   
NET INCREASE IN CASH & CASH EQUIVALENTS36,561(37,555)
   
BEGINNING CASH & CASH EQUIVALENTS165,343202,898
   
ENDING CASH & CASH EQUIVALENTS201,904165,343

Notes to Financial Statements

For years ended June 30, 2005 & 2004

1. Summary of Significant Accounting Policies

Organization
National Association of Trade Exchanges (NATE) was incorporated in Missouri in 1987. NATE is a non-profit 501 (c) (6) trade association and is dedicated to furthering the sound financial, fiscal and ethical practices of independent, commercial bartering enterprises, along with enhancing the financial position of industry and association members and their clients.
NATE generates its revenue and support from educational conventions, membership dues, publications, sponsorships, and transaction fees thru the BANC.
Basis of Accounting
NATE uses the cash basis of accounting for both income tax and financial reporting. Revenues are recorded when payments are received and expenses recorded when paid. This is a comprehensive basis of accounting other than generally accepted accounting principles.
Basis of Presentation
Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
BANC
Barter Association National Currency (BANC) purpose is to serve the members of NATE and the Barter Industry by providing a credible medium of exchange and an efficient accounting system that will enhance intercity bartering activity between reciprocal trading partners. The BANC strives to create a stable Barter currency to promote trading and goodwill among its members.
BANC Trade Dollars
BANC Trade Dollars represent barter dollars collected in lieu of cash from exchange members for convention, publications, sponsorship, and transaction fees through the BANC, these amounts will be used in lieu of cash for future operating expenses.
BANC Trade Dollars that can not be used are written-off as a charge to operating expense in the period as determined by management and the Board of Directors.
Cash and Cash Equivalents
For the purpose of the statement of cash flows, NATE considers all short-term debit securities with a maturity of three-months or less to be cash equivalents. NATE does not include BANC Trade Dollars as cash or cash equivalents.
Property and Equipment
Acquisitions of property and equipment in excess of $500 are capitalized. Property and equipment are carried at cost or, if donated, at the approximate fair value at the date of donation. Depreciation is computed using primarily the straight-line method.
Income Taxes
NATE is exempt from federal and state income taxes under Internal Revenue Code Section 501 (c) (6).
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect certain reported amounts of disclosures. Accordingly actual results could differ from those estimates.

2. Concentration of Credit Risk

The association maintains cash balances at one bank. The cash account at banks are insured by the FDIC for up to $100,000. Amounts in excess of insured limits were $101,904 and $65,343 at June 30, 2005 and 2004 respectively.