Diabetes Research & Wellness Foundation

According to the Diabetes Research & Wellness Foundation audit of December 31, 2021 (Note 14, Financial Condition):

"During the years ended December 31, 2021 and 2020 the Foundation experienced a decrease [in net assets] of $854,133 and an increase in net assets of $881,866, respectively and cash flow from operations of $7,137 and $34,257, respectively. Additionally, the Foundation experienced decreases in net assets during the years ended December 31, 2019 and 2018 of $657,612 and $289,847, respectively, and cash flow from operations of $(166,344) and $81,073, respectively.

"Contributing to these decreases were continued declines of funding through grants and contributions and in the contributions from direct mail campaigns. Management, taking these factors into account, made a decision to continue funding core programs and also took steps to reduce operating expenditures to remain viable into the future. This included reducing staff through attrition and evaluating the direct mail campaign to retain only the most profitable campaigns. In addition, management renegotiated fee terms.

"In August 2022, the Foundation received repayment of a French receivable in the amount of $453,164. See Note 11 [cited separately, below].

"The Foundation's officers and directors are committed to the long-term viability of the organization and the Foundation can request support when needed from the Diabetes Wellness Network affiliates [see Note 11, cited separately, below] to ensure ongoing operations. Additionally, the Foundation has low overhead and is able to control mailing costs, including changing suppliers if necessary and all grant commitments are payable as funds are available. The Foundation is often the beneficiary of bequests. While the timing of these bequests is often not known in advance, the bequests provide a supplemental source of income in addition to normal fundraising activities.

"Management expects the Foundation to continue as a going concern. The [audited] financial statements do not include any adjustments that might be necessary should the Foundation be unable to continue as a going concern."

According to the Diabetes Research & Wellness Foundation audit of December 31, 2021 (Note 5, Paycheck Protection Program):

"Beginning around March 2020, COVID-19 has been declared a global pandemic as it continues to spread rapidly. Business continuity, including supply chains and consumer demand across a broad range of industries and countries were severely impacted for months as governments and their citizens take significant and unprecedented measures to mitigate the consequences of the pandemic. Management is carefully monitoring the situation and evaluating its options during this time. No adjustments have been made to these [audited] financial statements as a result of this uncertainty.

"On March 27, 2020, and as a result of COVID 19, the Coronavirus Aid, Relief and Economic Security Act (or CARES Act) became part of U.S. Law. One of the provisions of the CARES Act is the Paycheck Protection Program (PPP), which is intended to provide loans to businesses to guarantee payroll and other costs to help businesses remain viable and allow their workers to pay their bills. The Foundation applied for and on May 7, 2020 received a $81,100 PPP loan. The interest rate is 1% with maturity two years from the date of the loan. ... Payments are deferred until a determination of the amount of forgiveness is made by the SBA [Small Business Administration]. ... In May 2021, the loan was fully forgiven and recognized as revenue in the [audited] statement of activities for the year ended December 31, 2021."

According to the Diabetes Research & Wellness Foundation audit of December 31, 2021 (Note 11, Diabetes Wellness Network):

"The Foundation has agreements with other non-profit related organizations to which they provide technical and material assistance. The Foundation and these organizations serve a common purpose... Additionally, the Foundation provides accounting and administrative services to these organizations.

"Total receipts for these services were $3,764,984 and accounted for 77% of total revenues of the Foundation for the year ended December 31, 2021. These receipts consist of $537,000 in management fees and $3,227,984 for purchased materials for the other entities that are reimbursed with no mark-up or profit."

[...]

"As a result of a foreign court, the Foundation has experienced significant delays in receiving payments for the services and goods provided to a French nonprofit, Association Pour La Diabete (a related entity). In 2013, the French court released a partial payment of $749,465 on this receivable. While the Foundation will pursue all avenues to collect the remaining balance, the foreign court's lack of attention has added uncertainty as to the collectability of the balance. This uncertainty and the Foundation's inability to obtain information from the foreign court resulted in the Foundation providing for an allowance of $453,164 against this receivable. During late 2019, the French court started the final process to allow the French nonprofit to pay the Foundation $453,164. In October 2021, the French court ordered payment of the funds and the $453,164 allowance was reversed. In August 2022, the Foundation received payment of $453,164."

According to the Diabetes Research & Wellness Foundation audit of December 31, 2021 (Note 10, Concentrations, Revenues and Receivables):

"For the years ended December 31, 2021 and 2020, 23% and 28%, respectively, of the Foundation's total support was received from Diabetes Research and Wellness Foundation (Sweden). For the years ended December 31, 2021 and 2020, 31% and 20%, respectively, of the Foundation's total support was received from Diabetes Research and Wellness Foundation (Finland). For the years ended December 31, 2021 and 2020, 13% and 10%, respectively, of the Foundation's total support was received from Diabetes Research and Wellness Foundation (Norway)..."

According to the Diabetes Research & Wellness Foundation 2021 tax filing, the Foundation reports re: the existence of a family or business relationship among officers, directors, trustees, or key employees (IRS Form 990, Schedule O re: Part VI, Section A, line 2):

"W. Michael Gretschel (President) is the father of Christian Gretschel (Officer/Director) and of Andrea Stancik (Officer/Executive Director)."

[The Foundation reports having six voting members on its governing body at year-end 2021, with five voting members reported as being independent (IRS Form 990, Part VI, Section A, lines 1a & 1b).]

Also according to the Foundation's 2021 tax filing, the Foundation reports for Business Transactions Involving Interested Persons, a transaction in the amount of $103,388 involving Andrea Stancik, "Daughter of Officer." The transaction is described as: "Compensation as Executive Director" (IRS Form 990, Schedule L, Parts IV & V).

According to the Diabetes Research & Wellness Foundation audit of December 31, 2021 (Note 13, Commitments):

"In 2015, the Foundation made an unrestricted conditional cumulative grant of $2,000,000 to Spring Point Project, a separate 501(c)(3) non-profit organization that has shared board members with the Foundation. The commitment is payable in quarterly installments through 2021. The Foundation paid $175,000 on the commitment during the year ended December 31, 2021 and intends to pay the remaining amount as funds become available. During the years ended December 31, 2021 and 2020 the Foundation incurred grant expense of $3,336 and $200,000, respectively. As of December 31, 2021 the remaining obligation is $78,336. Spring Point Project expects to enter into discussions for the sale of the Source Animal Facility asset to the Foundation at below market price following satisfaction of its outstanding loan obligations with assistance of funding from this commitment. This commitment is not recorded in the accompanying [audited] financial statements as the grant is subject to an annual progress report, to the satisfaction of the directors of the Foundation, and that adequate funds are available within the Foundation."