Page 303 - Onboarding May 2017

APPLE SUPPLY CHAIN CO-OP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2015 and 2014

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Subsequent Events: Management has performed an analysis of the activities and transactions
subsequent to December 31, 2015 to determine the need for any adjustments to and disclosures within
the audited financial statements for the period ended December 31, 2015. Management has performed
their analysis through March 25, 2016, the date the financial statements were available to be issued.

NOTE 2 - INVESTMENTS AT EQUITY

The Co-op has a 50% investment in Centralized Supply Chain Services, LLC, which is carried at cost,
adjusted for the Co-op’s proportionate share of its earnings and losses, which are allocated to the Co-op
based upon the Co-op’s proportionate share of activity conducted by Centralized Supply Chain Services,
LLC.

Following is a summary of financial position and results of operations of Centralized Supply Chain
Services, LLC for the years ended December 31, 2015 and 2014:

2015 2014

Current assets $ 6,219,282 $ 5,185,019
Computers and equipment, net 63,495 601

$ 6,282,777 $ 5,185,620

Current liabilities $ 3,432,272 $ 2,568,035
Members’ equity 2,850,505 2,617,585

$ 6,282,777 $ 5,185,620

Net revenues $ 14,307,522 $ 13,178,819

Net earnings $ 4,766,710 $ 3,764,493

Centralized Supply Chain Services, LLC has a $1,000,000 line of credit with its primary bank. Apple
Supply Chain Co-op and Pancake Supply Chain Co-op are Guarantors of this line of credit. For the years
ended December 31, 2015 and 2014, there were no borrowings on the line of credit.

NOTE 3 - INCOME TAXES

The provision for income taxes for the year ended December 31, 2015 and 2014 consists of the following:

2015 2014
Current
Federal $ 5,910 $ 1,129
State 3,191 1,210

$ 9,101 $ 2,339

Effective rates vary from expected marginal rates due to the deductibility of patronage dividends.

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