American Printing House For The Blind, Inc.

AMERICAN PRINTING HOUSE FOR THE BLIND, INC. Consolidated Statements of Functional Expenses Year ended September 30, 2019 Program Program A Cost of materials and production Labor costs Supplies Dues and subscriptions Travel Professional service fees Legal fees Public relations Public education Utilities and telephone Postage Equipment rental and maintenance Insurance Depreciation Rent Other Total expenses by function - - 228,958 8,501 449 3,101 3,074 Program B 2,121 300 1,221 12,156 2,500 4,287 16,800 283,468 Total 13,699,475 11,015,571 901,590 21,105 323,844 2,327,644 23,970 18,443 997 350,671 180,657 939,205 25,020 330,567 44,084 30,202,843 Fund-Raising 13,699,475 11,244,529 910,091 21,554 326,945 2,330,718 23,970 20,564 1,297 350,671 181,878 951,361 27,520 334,854 16,800 44,084 30,486,311 - - - 313,711 4,310 4,702 4,930 158,162 General and Administrative Development 2,317 675 803 21,044 8,207 442 519,303 - - - 70,421 772 287 134 883 239 102 159 1,677 1,624 86 76,384 Program A: APH Museum Program B: Production and support expenses related to producing products for the blind and visually impaired. See accompanying notes. 6 Access Explorer 4,178,883 67,278 24,452 78,678 507,001 142,387 55,327 39,556 49,044 26,823 677,141 47,532 489,603 (16,800) 328,427 6,695,332 - - Total 5,444 13,699,475 16,205,545 993,168 52,650 435,108 3,112,997 167,698 120,745 41,630 400,677 231,422 1,641,976 75,052 824,752 378,483 604,048 38,381,378 398,001 10,717 1,655 24,421 116,233 1,341 42,298 3,643 295

AMERICAN PRINTING HOUSE FOR THE BLIND, INC. Consolidated Statements of Functional Expenses, continued Year ended September 30, 2018 Program Program A Cost of materials and production Labor costs Supplies Dues and subscriptions Travel Professional service fees Legal fees Public relations Public education Utilities and telephone Postage Equipment rental and maintenance Insurance Depreciation Rent Other Total expenses by function - - 209,730 5,792 827 138 10,126 Program B 2,537 1,917 8 681 18,562 2,500 4,360 16,800 50 274,028 Total 10,795,188 10,219,402 1,070,184 12,163 215,472 2,357,881 68,958 28,415 2,078 337,043 154,272 895,200 24,955 291,494 62,918 26,535,623 Fund-Raising 10,795,188 10,429,132 1,075,976 12,990 215,610 2,368,007 68,958 30,952 3,995 337,051 154,953 913,762 27,455 295,854 16,800 62,968 26,809,651 - - 44,000 258,189 1,662 4,425 8,422 258,086 1,223 573 876 23,142 8,514 395 609,507 Program A: APH Museum Program B: Production and support expenses related to producing products for the blind and visually impaired. See accompanying notes. 7 General and Administrative Development - - - 58,208 302 360 426 1,849 263 123 188 1,748 1,828 85 65,380 Total 4,144,045 83,218 26,811 76,476 407,822 24,244 180,024 20,122 52,252 36,327 619,229 48,224 437,076 (16,800) 303,260 10,839,188 14,889,574 1,161,158 44,586 300,934 3,035,764 93,202 212,462 24,813 390,367 216,170 1,543,333 75,679 732,930 366,708 6,442,330 33,926,868

AMERICAN PRINTING HOUSE FOR THE BLIND, INC. Consolidated Statements of Cash Flows Years ended September 30, 2019 and 2018 2019 Cash flows from operating activities: Cash received from customers Cash paid to suppliers, employees, and others Cash received from gifts and bequests Interest and dividends Other income and support 2018 29,951,293 27,251,651 (40,947,586) (32,767,567) 1,412,129 1,959,332 3,646,765 2,912,250 1,466,800 1,695,451 Net cash (used in) provided by operating activities Cash flows from investing activities: Proceeds from sales of marketable securities Purchase of marketable securities Purchase of property and equipment Software development costs Net cash provided by (used in) investing activities Cash flows from financing activities: Payments of annuity obligations (4,470,599) 1,051,117 24,167,225 (22,532,453) (759,540) (118,492) 20,303,088 (20,290,465) (438,437) - 756,740 (425,814) (60,166) (63,809) (3,774,025) (Decrease) increase in cash and cash equivalents 561,494 8,158,498 Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year See accompanying notes. 8 4,384,473 7,597,004 8,158,498

AMERICAN PRINTING HOUSE FOR THE BLIND, INC. Notes to Consolidated Financial Statements 1. Nature of Organization The American Printing House for the Blind, Inc. (APH) is a non-for-profit manufacturer and distributor of products and services for people who are blind or visually impaired. APH’s primary products include Braille and large type printed materials, recorded books in digital formats, specialized electronic equipment, and educational aids. These products are distributed to schools and agencies to educate blind or visually impaired students, individuals, and the National Library Service. In October 2018, APH obtained control of a newly formed entity called Access Explorer, Inc. (AE). AE will be taxed as a "C" corporation. The new entity was formed for the purpose of developing mapping technology for various venues. The consolidated financial statements include the accounts of American Printing House for the Blind, Inc. and its wholly owned subsidiary, Access Explorer, Inc. (collectively, the Organization). Significant intercompany transactions and accounts have been eliminated. 2. Summary of Significant Accounting Policies The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The following is a summary of the significant accounting policies consistently followed by the Organization in the preparation of its consolidated financial statements. For the year ended September 30, 2019, Accounting Standards Update (ASU) 2016-14, Presentation of Financial Statements of Not-for-Profit Entities, became effective and was adopted by the Organization. This standard changed the presentation and disclosure requirements for not-forprofit entities to provide more relevant information about their resources (and the changes in those resources) including qualitative and quantitative requirements in the following areas: 1) net asset classes; 2) investment return; 3) expenses; 4) liquidity and availability of resources; and 5) presentation of operating cash flows. The 2018 consolidated financial statements have been reformatted and various amounts have been reclassified to conform to the 2019 presentation with no impact on total assets, liabilities, net assets or changes in net assets. 9

AMERICAN PRINTING HOUSE FOR THE BLIND, INC. Notes to Consolidated Financial Statements, continued 2. Summary of Significant Accounting Policies, continued Basis of Presentation Net assets and support, revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified and reported as follows: Net assets without donor restrictions - include the portion of expendable funds that are not subject to donor-imposed stipulations and include the following: Board-Designated - Accessible Textbook Program: These net assets represent funds designated by the Board of Trustees for the accessible textbook program. Although the Board could release or revise the designation in the future, to the extent not externally restricted, there is no intent to do so. Invested in Property and Equipment: These net assets represent cumulative resources expended for property and equipment, less accumulated depreciation recorded. Undesignated: These net assets represent the portion of expendable funds available in operation of the Organization. Funded Status of Benefit Plan: This represents the underfunded status of the Organization's defined benefit pension plan (see Note 12). Net assets with donor restrictions - net assets subject to donor-imposed restrictions. Some donor-imposed restrictions are temporary in time, such as those that will be met by the passage of time or other events specified by the donor. Other donor-imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity. Donor-imposed restrictions are released when a restriction expires, that is, when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both. The investment return on net assets with donor restriction may be restricted or unrestricted according to the donor's wishes. When a donor restriction expires, net assets with donor restrictions are classified to net assets without donor restrictions and reported on the consolidated statements of activities as net assets released from restrictions. The Organization treats donor-restricted contributions whose restrictions are met in the same reporting period as unrestricted support. Cash and Cash Equivalents Cash equivalents include all highly liquid investments with an original maturity of three months or less. Cash balances may exceed insured limits for federal deposit insurance. Management considers it very unlikely that any loss will result from the cash balance in excess of federal insurance limits. 10

AMERICAN PRINTING HOUSE FOR THE BLIND, INC. Notes to Consolidated Financial Statements, continued 2. Summary of Significant Accounting Policies, continued Accounts Receivable and Other Receivable Accounts receivable consist of amounts due from customers for sales of the Organization’s products. The other receivable is an advance made to a vendor of the Organization for development of a new product. The receivable is being repaid to the Organization based upon sales of the new product. The Organization provides an allowance for bad debts based upon the anticipated collectibility of each specific account. An allowance for bad debts is recorded to the extent it is probable that a portion or all of a particular account will not be collected. In evaluating the collectibility of accounts receivable, the Organization considers a number of factors, including historical loss rates, the age of the accounts, changes in collection patterns, the status of ongoing disputes with third-party payers, and general industry conditions. Actual collections of accounts receivable in subsequent periods may require changes in the estimated provision. Changes in the estimate are charged or credited to expenses in the period of change. Receivables are considered past due based upon invoice terms, and are written off when deemed uncollectible. The Organization does not charge interest on past due accounts. Inventories Inventories are stated at the lower of cost or market on the first-in, first-out identification method. Labor and overhead included in work-in-process and finished goods inventories are valued at standard hourly cost rates which approximate actual costs incurred. The Organization’s reserve for obsolete inventory is based on the historical demand for product sales relative to inventory levels on hand at period end, adjusted for known changes in forecasted demand, if necessary. Investment Valuation and Income Recognition Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 6 for further discussion of fair value measurements. Receipts of donated investments are recorded at the quoted market value of the investments at the time of receipt. The Organization invests in fixed income securities, including government and corporate bonds, in publicly-traded stocks and mutual funds, and in other investment vehicles such as hedge funds. These investments are subject to the risks common to financial markets, including interest rate risks, credit risks, and overall market risks. Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in the values of investments will occur in the near term and that such changes could materially affect the amounts reported in the consolidated statements of financial position. 11

AMERICAN PRINTING HOUSE FOR THE BLIND, INC. Notes to Consolidated Financial Statements, continued 2. Summary of Significant Accounting Policies, continued Investment Valuation and Income Recognition, continued Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Gain (loss) on investments includes the Organization’s gains and losses on investments bought and sold as well as held during the year. Property and Equipment Property and equipment are stated at cost. Depreciation is computed on the straight-line basis over reasonably estimated useful lives of the various classes of assets. Revenue Recognition The Organization recognizes revenue upon transfer of title of products as goods are shipped. Shipping and handling costs incurred by the Organization are included in costs of products distributed and sold. Functional Allocation of Expenses The costs of providing the various programs and other activities of the Organization are summarized on a functional basis in the accompanying consolidated statements of activities and functional expenses. Directly identifiable expenses are charged to the applicable program or supporting services. Certain expenses are not directly identifiable with any other specific function, but provide for the overall support and direction of the Organization, and require allocation between functions on a reasonable basis that is consistently applied. The expenses that are allocated include labor costs and facility expenses (such as utilities and telephone, equipment rental and maintenance, and depreciation). Labor costs are allocated based upon the time the respective individual dedicates to program activities, fund-raising, development and administrative duties. Facility expenses are allocated on a square footage basis. Donated Goods and Services Property, materials, and other in-kind assets received as donations are recorded and reflected in the accompanying financial statements at their estimated fair values at the date of receipt. Research and Development Research and development costs of APH are expensed when incurred. Research and development costs related to the development of AE's software are capitalized. Capitalization of costs commenced when technological feasibility was established and will cease when the product is available for general release to customers. 12

AMERICAN PRINTING HOUSE FOR THE BLIND, INC. Notes to Consolidated Financial Statements, continued 2. Summary of Significant Accounting Policies, continued Advertising Costs Advertising costs are expensed when incurred. Advertising costs totaled 54,294 and 29,745 for the years ended September 30, 2019 and 2018, respectively. Income Taxes APH is a not-for-profit entity exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code (IRC). Although APH is exempt from income taxes, any income generated from activities unrelated to the Organization’s exempt purpose is subject to tax under IRC Section 511. APH generated no material unrelated business income for the years ended September 30, 2019 and 2018. AE will file Federal, state and local income tax returns as a C-corporation. Deferred taxes for AE are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Reclassifications Certain amounts in the 2018 consolidated financial statements have been reclassified, with no effect on changes in net assets, to be consistent with the classifications adopted for the year ended September 30, 2019. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The core principle of ASU 2014-09 is to recognize revenues when a customer obtains control of a good or service, in an amount that reflects the consideration to which an entity is expected to be entitled for those goods or services. Additionally, the ASU will require enhanced qualitative and quantitative disclosures regarding customer contracts. The standard will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either a full retrospective or modified retrospective with cumulative effect transition method. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 by one year. The updated standard will be effective for the Organization for the year ending September 30, 2020. The Organization has not yet selected a transition method and is currently evaluating the effect that t

Consolidated Financial Statements: Statements of Financial Position 3. Statements of Activities 4 -5. Statements of Functional Expenses 6 -7. Statements of Cash Flows 8. Notes to Consolidated Financial Statements 9 -30. Notes to the Schedule of Expenditures of Federal AwardsReport of Independent Auditors on Internal Control Over 33