SOS Children's Villages - USA

According to the Report of Independent Auditors in connection with the SOS Children's Villages - USA audit of December 31, 2020 regarding Emphasis of Matter-Going Concern:

"The accompanying [audited] financial statements have been prepared assuming that the Organization will continue as a going concern. As discussed in Note 12 to the financial statements [cited below], the Organization has suffered recurring losses from operations, and has stated that substantial doubt exists about the Organization's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans regarding these matters are also described in Note 12. The financial statements do not include any adjustments that might result from the outcome of this uncertainty..."

According to the SOS Children's Villages - USA audit of December 31, 2020 (Note 12, Going Concern):

"The accompanying [audited] financial statements have been prepared assuming that the Organization will continue as a going concern. ...[T]he Organization's management has evaluated and determined that there are conditions and events that raise substantial doubt about its ability to continue as a going concern within one year after the financial statements' issuance date [December 8, 2021]. The Organization has suffered recurring losses from operations which raises doubt about the Organization's ability to continue as a going concern for one year from the date of these financial statements were available to be issued. Management along with the Board of Directors have evaluated the financial condition of the Organization and have implemented the following plan:

• Reduction of operating expenses
• Negotiations to reduce or forgive significant obligations

However, there can be no assurance that the Organization will be successful in achieving its plan."

According to the SOS Children's Villages - USA audit of December 31, 2020 (Note 11, Paycheck Protection Program):

"In April 2020, the Organization received a loan pursuant to the Paycheck Protection Program (the Program)...under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, for an aggregate amount of $340,500 (the PPP Loan). The PPP Loan bears an annual interest rate of 1%, and is unsecured and guaranteed by the Small Business Administration (SBA). The Organization elected to account for this PPP loan in accordance with the...conditional contribution model. To the extent that the proceeds are used to pay qualified expenses, and other employment criteria required by the Program have been met by the Organization, the PPP Loan may be subject to forgiveness under the Program upon the Organization's request after a 'covered period' of 24 weeks. Any unforgiven portion of the PPP Loan is payable over the terms of the agreement with a deferral of payments for 10 months after the end of the covered period.

"Under the conditional contribution model, the PPP loan forgiveness is recognized as revenue when conditions are substantially met. Management has determined that all conditions including eligibility and terms of the loan agreement have been substantially met as of December 31, 2020. Additionally, the Organization received notification of SBA forgiveness of the loan on February 17, 2021. For the year ended December 31, 2020, the Organization recorded contribution revenue...of $340,500."

According to the SOS Children's Villages - USA audit of December 31, 2020 (Note 13, Subsequent Events):

"In February 2021, the Organization submitted an application to the SBA, which it approved, for a second loan made in association with the federally authorized Paycheck Protection Program (the Program). The Organization received a loan in the amount of $327,000 in connection with the Program. The loan was forgiven by the SBA on October 7, 2021. "