2022 & 2021 Audited Financial Statements

SEEDS OF PEACE, INC. FINANCIAL STATEMENTS AND AUDITORS' REPORT

DECEMBER 31, 2022 AND 2021

SEEDS OF PEACE, INC. TABLE OF CONTENTS

PAGE INDEPENDENT AUDITORS' REPORT FINANCIAL STATEMENTS Statements of financial position as of December 31, 2022 and 2021

1-2

3

Statements of activities for the years ended December 31, 2022 and 2021

4

Statement of expenses by function and natural classification for the year ended December 31, 2022

5

Statement of expenses by function and natural classification for the year ended December 31, 2021

6

Statements of cash flows for the years ended December 31, 2022 and 2021

7

Notes to financial statements

8 - 18

INDEPENDENT AUDITORS’ REPORT To:

The Board of Directors of Seeds of Peace, Inc.

Opinion We have audited the financial statements of Seeds of Peace, Inc. (a nonprofit organization), which comprise the statements of financial position as of December 31, 2022 and 2021, and the related statements of activities, expenses by function and natural classification, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of Seeds of Peace, Inc. as of December 31, 2022 and 2021, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Seeds of Peace, Inc. and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Seeds of Peace, Inc.’s ability to continue as a going concern for one year after the date that the financial statements are issued.

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Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they could reasonably be expected to influence the judgment made by a reasonable user based on these financial statements.

In performing an audit in accordance with GAAS, we:



Exercise professional judgment and maintain professional skepticism throughout the audit.



Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.



Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Seeds of Peace, Inc.’s internal control.

Accordingly, no such opinion is expressed.



Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.



Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Seeds of Peace, Inc.’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Skody Scot & Company, CPAS, P.C. New York, NY March 6, 2024

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SEEDS OF PEACE, INC. STATEMENTS OF FINANCIAL POSITION DECEMBER 31, 2022 AND 2021 2022

2021

$ 1,067,303 33,909 92,385 169,144 89,030 2,521 14,865 193,756 401,249 54,554 239,029 109

$ 2,036,206 64,866 554,996 501,258 38,248 14,865 285,659 128,841 59,383 239,271 109

8,305 350,988

11,373 408,375

$ 2,717,147

$ 4,343,450

ASSETS Cash and cash equivalents: Unrestricted Restricted for compensating balance Investments Contributions receivable, net Grants receivable Other receivables Inventory Prepaid expenses Property and equipment, net Intangible assets, net Construction in progress Right-of-use asset - operating lease Security deposits Endowment: Cash equivalents Investments Total assets

LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued expenses Line of credit Lease liability - operating lease Total liabilities

$

574,786 250,000 241,082

$

356,171 -

1,065,868

356,171

Net Assets: Without donor restrictions With donor restrictions

781,627 869,652

2,308,780 1,678,499

Total net assets

1,651,279

3,987,279

$ 2,717,147

$ 4,343,450

Commitments and contingencies (see notes)

Total liabilities and net assets

See accompanying notes to the financial statements.

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SEEDS OF PEACE, INC. STATEMENTS OF ACTIVITIES YEARS ENDED DECEMBER 31, 2022 AND 2021

Support and Revenues: Contributions (non-event) Camp fees Government grants Investment and other income

Without Donor Restrictions

2022 With Donor Restrictions

$

$

Special events: Event related revenue and support Less: related costs

3,272,507 795,308 372,821 (104,929)

100,396 (60,455)

Total $

3,372,903 795,308 372,821 (165,384)

Without Donor Restrictions

2021 With Donor Restrictions

$

$

4,201,722 386,886 1,170,523 36,956

361,741 20,432

Total $

4,563,463 386,886 1,170,523 57,388

1,113,058 (214,461)

-

1,113,058 (214,461)

20,193 (15,267)

-

20,193 (15,267)

898,597

-

898,597

4,926

-

4,926

748,201 100,587 6,083,092

(748,201) (100,587) (808,847)

5,274,245

553,255 82,788 6,437,056

(553,255) (82,788) (253,870)

6,183,186

1,599,040 907,732 1,160,439 826,302 486,243 683,275

-

1,599,040 907,732 1,160,439 826,302 486,243 683,275

1,117,879 896,696 716,369 362,223 376,290 679,160

-

1,117,879 896,696 716,369 362,223 376,290 679,160

5,663,031

-

5,663,031

4,148,617

-

4,148,617

Supporting Services: Management and general Fundraising

1,413,924 533,290

-

1,413,924 533,290

1,405,752 597,478

-

1,405,752 597,478

Total expenses

7,610,245

-

7,610,245

6,151,847

-

6,151,847

Increase/(Decrease) In Net Assets

(1,527,153)

(808,847)

(2,336,000)

285,209

(253,870)

31,339

Net assets, beginning of year

2,308,780

1,678,499

3,987,279

2,023,571

1,932,369

3,955,940

Net special event income and support Net assets released from restriction: Satisfaction of purpose restrictions Expiration of time restrictions Total support and revenues Expenses: Program Expenses: Seeds of Peace Camp Middle East Multi-regional US programs South Asia (SA) Program administration Total program expenses

Net assets, end of year

$

781,627

$

869,652

$

1,651,279

See accompanying notes to the financial statements.

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$

2,308,780

$

1,678,499

$

3,987,279

SEEDS OF PEACE, INC. STATEMENT OF EXPENSES BY FUNCTION AND NATURAL CLASSIFICATION YEAR ENDED DECEMBER 31, 2022 Seeds of Peace Camp Compensation and related expenses: Salaries Payroll taxes Employee benefits & pension Total Direct expenses: Awards Bad debt Camp apparel Credit card fees Currency translation costs Depreciation and amortization Design fees Dues, books and subscriptions Equipment and vehicle rentals Field trips Insurance Kitchen food and supplies Laundry License, fees and permits Meals, entertainment and hospitality Medical supplies and expenses Miscellaneous Office expenses Outside consultants Postage and delivery Printing, photos & publications Professional services Promotion Property taxes Rent Repairs and maintenance - facilities Repairs and maintenance - other Scholarships and education Security Sports, games and other activities Storage Supplies Telephone & communications Travel, hotels and conferences Utilities and trash removal Website Total direct expenses Total expenses

$

510,718 39,353 51,964

Middle East $

418,219 25,718 65,752

MultiRegional $

Program Expenses US South Programs Asia (SA)

301,652 22,407 32,786

$

302,377 23,671 59,261

$

56,827 4,353 3,281

Program Admin. $

Total

321,326 22,418 33,527

$ 1,911,119 137,920 246,571

Supporting Services Management & General Fundraising $

775,880 55,719 138,155

$

Total Expenses

294,010 22,285 45,308

$ 2,981,009 215,924 430,034

602,035

509,689

356,845

385,309

64,461

377,271

2,295,610

969,754

361,603

3,626,967

12,705 933 54,037 1,346 33,235 11,189 110,377 93,594 14,065 19,834 558 781 2,415 6,253 58,536 2,392 600 4,922 4,447 32,260 65,490 5,770 277,500 42,235 6,063 16,509 5,592 77,023 36,344 -

6 3,479 1,156 45 1,572 1,141 17,575 74 3,007 4,356 118,941 36 2,746 56,377 363 48,632 46,122 3,998 2,778 6,325 79,006 308 -

8,150 9 55 13,114 450 3,684 2,659 182 8,231 4,532 37,736 1,087 2,804 16,499 374,502 4,079 43,339 6,907 4,311 10,982 7 5,277 9,215 3,111 220,915 21,757

711 3,461 36 1,968 1,307 40,894 4,679 64 786 39,131 489 2,222 821 21,355 136,800 1,666 2,010 182,593 -

17,025 476 2 166 125 4,457 6,906 963 404 639 236,254 8 1,498 420 10,092 11,698 5,162 2,355 108,319 14,813

4,818 37,705 370 56 187 50,772 84,444 241 828 27,512 2,382 67,944 8,894 1,092 1,046 2,566 8,647 6,500 -

25,175 13,416 4,409 4,046 68,307 450 9,850 36,105 11,371 159,978 93,594 14,065 31,641 103,725 7,771 8,694 79,305 911,808 7,245 51,233 96,138 22,416 32,260 160,611 65,490 14,671 460,422 51,510 6,063 1,092 36,376 21,959 676,503 43,152 36,570

62,971 457 29,304 2,984 3,240 92,219 14,859 533 601 4,683 68,621 34,259 1,015 110 15,000 130 221 100,693 573 1,000 6,909 3,788 -

7,282 2,420 233 2,777 403 307 1,399 6,329 1,550 24,047 53,429 3,474 27,177 3,439 1,802 9,565 2,520 1,568 842 21,124 -

25,175 62,971 13,416 12,148 6,466 97,844 450 15,611 39,345 11,371 252,600 93,901 14,065 47,899 110,587 8,372 14,927 171,973 999,496 11,734 78,520 114,577 24,348 32,481 270,869 65,490 17,764 460,422 53,078 6,063 1,092 38,218 28,868 701,415 43,152 36,570

997,005

398,043

803,594

440,993

421,782

306,004

3,367,421

444,170

171,687

3,983,278

683,275

$ 5,663,031

$ 1,413,924

533,290

$ 7,610,245

$ 1,599,040

$

907,732

$

1,160,439

$

826,302

$

486,243

$

See accompanying notes to the financial statements.

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$

SEEDS OF PEACE, INC. STATEMENT OF EXPENSES BY FUNCTION AND NATURAL CLASSIFICATION YEAR ENDED DECEMBER 31, 2021

Seeds of Peace Camp Compensation and related expenses: Salaries Payroll taxes Employee benefits & pension Total Direct expenses: Awards Bad debt Camp apparel Credit card fees Currency translation costs Depreciation and amortization Dues, books and subscriptions Equipment and vehicle rentals Field trips Insurance Kitchen food and supplies Laundry License, fees and permits Meals, entertainment and hospitality Medical supplies and expenses Miscellaneous Office expenses Outside consultants Postage and delivery Printing, photos & publications Professional fees Promotion Property taxes Rent Repairs and maintenance - facilities Repairs and maintenance - other Scholarships and education Security Sports, games and other activities Storage Supplies Telephone & communications Travel, hotels and conferences Utilities and trash removal Website Total direct expenses Total expenses

$

429,979 33,527 34,013

Middle East $

443,818 27,431 70,679

MultiRegional $

Program Expenses US South Programs Asia (SA)

348,925 27,561 53,088

$

233,867 18,191 60,711

$

31,489 2,401 4,600

Program Admin. $

Total

346,675 25,335 36,305

$ 1,834,753 134,446 259,396

Supporting Services Management & General Fundraising $

738,770 55,851 115,865

$

Total Expenses

344,277 26,987 57,441

$ 2,917,800 217,284 432,702

497,519

541,928

429,574

312,769

38,490

408,315

2,228,595

910,486

428,705

3,567,786

15,387 184 25,240 3,607 23,763 25,547 89,579 73,122 19,308 5,265 886 4,418 850 7,281 14,064 1,360 191 2,249 33,335 37,482 18,301 109,200 36,638 4,656 8,053 7,662 23,498 29,234 -

994 101 7,956 1,393 257 1,233 1,411 603 19,100 17 3,950 2,009 135,211 11 1,109 64,481 44,240 606 2,851 3,035 4,248 7,027 52,294 631 -

38 10,933 4,586 306 121 2,323 698 10,895 488 110 8,639 153,283 1,546 8,161 12,217 313 28,538 34 2,356 1,276 19,653 20,281

699 2,869 100 2,819 338 263 40 10,374 5,000 232 11,269 434 6,725 1,105 6,152 1,035 -

48,000 178 80 5,090 422 212 4,749 246,330 1,870 152 7,692 148 3,905 3,302 15,657 13

2 239 10,756 2,740 713 22,603 84,574 686 511 29,772 113,256 639 1,000 59 2,120 1,175 -

48,000 16,559 986 8,074 40,435 8,789 24,069 26,901 106,888 73,122 19,308 14,734 31,566 5,636 5,162 55,655 638,462 3,835 9,972 108,340 2,714 33,335 204,995 37,482 20,014 118,776 39,821 4,656 1,000 19,726 27,539 113,312 29,865 20,294

82,769 15 20,218 6,729 5,117 79,136 14,232 9,098 76,813 6,244 1,186 3,205 173 182,874 181 241 6,239 796 -

10,181 452 233 1,301 1,276 106 2,139 22,653 60,939 6,502 22,486 13,250 1,792 15,352 2,440 549 170 6,952 -

48,000 82,769 16,559 11,182 8,526 60,886 16,819 29,186 26,901 186,024 73,122 19,308 30,242 31,672 5,636 16,399 155,121 705,645 11,523 32,458 124,795 4,679 33,335 403,221 37,482 22,635 118,776 39,821 4,656 1,000 20,516 33,948 121,060 29,865 20,294

620,360

354,768

286,795

49,454

337,800

270,845

1,920,022

495,266

168,773

2,584,061

679,160

$ 4,148,617

$ 1,405,752

597,478

$ 6,151,847

$ 1,117,879

$

896,696

$

716,369

$

362,223

$

376,290

$

See accompanying notes to the financial statements.

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$

SEEDS OF PEACE, INC. STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022 AND 2021 2022

2021

Cash flows from operating activities: Increase/(decrease) in net assets

$ (2,336,000)

$

31,339

Adjustments for non-cash items included in operating activities: Depreciation and amortization Loss/(gain) on investments Donation of investments Bad debt Amortization of pledge discount Discount on pledges Amortization of right-of-use asset

97,844 224,903 (284,418) 62,971 (49,660) 61,498

60,886 4,948 (138,428) 82,769 (26,112) 3,788 -

Changes in assets and liabilities: Contributions receivable Grants receivable Other receivables Inventory Prepaid expenses Security deposits Accounts payable & accrued expenses Payment of operating lease

372,541 412,228 35,727 91,903 218,615 (59,445)

81,471 (479,269) (23,983) 259 (82,870) 616 88,438 -

(1,151,293)

(396,148)

34,913 (10,396) (126,152)

129,247 (20,342) (245,159)

(101,635)

(136,254)

250,000

-

Net cash provided/(used) by financing activities

250,000

-

Net increase/(decrease) in cash and cash equivalents

(1,002,928)

(532,402)

Cash and cash equivalents at beginning of year

2,112,445

2,644,847

Net cash provided/(used) by operating activities Cash flows from investing activities: Sale of investments Purchase of investments Purchase of property, equipment and intangibles Net cash provided/(used) by investing activities Cash flows from financing activities: Loan proceeds

Cash and cash equivalents at end of year

$

1,109,517

$

2,112,445

Supplemental information: Recognition of right-of-use asset and lease liability Interest paid

$

300,527 1,887

$

-

See accompanying notes to the financial statements.

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS

1.

Nature of Activities and Summary of Significant Accounting Policies Organization: Seeds of Peace, Inc., (hereafter referred to as the Organization) is a not-for-profit corporation, incorporated in the State of Delaware on March 8, 1993.

The primary purpose of the Organization is to empower young leaders from regions of conflict with the leadership skills required to advance reconciliation and coexistence.

As young teens, they live together in a summer camp for three weeks to learn conflict management skills. After attending camp, the Organization provides participants with follow-up leadership training and dialogue through their college years, and after college, a graduate program to maintain cross-border network and dialogue.

Tax exempt status: The Organization has been granted tax-exempt status by the Internal Revenue Service under Internal Revenue Code Section 501(c)(3) on July 2, 1993. Accordingly, no provision for federal, state or local income taxes has been recorded. The Organization does not believe its financial statements include any uncertain tax positions.

Programs and services provided: The Organization’s six major program areas include the following: Seeds of Peace Camp – Summer leadership development program in Maine for teenagers and educators from communities divided by conflict; Middle East – Local initiatives for Camp alumni from Egypt, Israel, Jordan, and Palestine designed to reinforce relationships and build leadership skills; MultiRegional – Convening fellowship programs in the Middle East, South Asia, and the United States for Camp alumni and other change-makers designed to accelerate their impact as they work to transform conflict; US Programs – Local initiatives for Camp alumni from the United States designed to reinforce relationships and build leadership skills; South Asia (SA) – Local initiatives for Camp alumni from Afghanistan, India, and Pakistan designed to reinforce relationships and build leadership skills; and Program Administration – Provides program administration and review of all program activities.

Major sources of income: The Organization derives most of its income from contributions from individuals, corporations, foundations, government grants, program service revenue and special events.

Basis of accounting: The financial statements of the Organization have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities.

Estimates and assumptions: Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS

1.

Nature of Activities and Summary of Significant Accounting Policies (continued) Net assets: Net assets, revenues, gains and losses are classified based on the existence or absence of donor or grantor-imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows: Net Assets Without Donor Restrictions - Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions. This classification includes net assets designated by the board or management for a specified purpose.

Net Assets With Donor Restrictions - Net assets subject to donor (or certain grantor) imposed restrictions. Some donor-imposed restrictions are temporary in nature, 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 (endowment), where the donor stipulates that resources be maintained in perpetuity.

Cash equivalents: For purposes of the statements of financial position and the statements of cash flows, the Organization considers as cash equivalents money market funds and all highly liquid resources, such as certificates of deposit with an original maturity, to the Organization, of three months or less.

Inventory: Inventory of merchandise purchased by, or donated to, the Organization for sale at the camp store, or auction at one of its special events, is valued at the lower of cost or market.

Property, equipment and intangibles: The Organization capitalizes certain property, equipment and intangibles with estimated lives of three years or more.

Property, equipment and intangibles are stated at cost or donated value, less accumulated depreciation and amortization. Depreciation and amortization are computed on the straight-line and accelerated basis over the respective assets’ estimated useful lives of five to ten years. Expenditures for maintenance and repairs are charged to current operations.

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS

1.

Nature of Activities and Summary of Significant Accounting Policies (continued) Revenue recognition: The Organization recognizes contributions when cash and other financial assets, nonfinancial assets/services, or unconditional promises to give are received. Conditional promises to give, which have a measurable performance or other barrier and a right of return, are not recognized until the conditions on which they depend have been met. Amounts received prior to the meeting of these conditions are reported as refundable advances in the statements of financial position. At December 31, 2022 and 2021, the Organization did not have any conditional pledges that were not recognized.

All contributions are considered available for the Organization’s general programs unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted for a purpose by the donor are reported as support with donor restrictions and increases in net assets with donor restrictions. Contributions received with restrictions that are met in the same reporting period are reported as support without donor restrictions and increases in net assets without donor restrictions.

Investment income and gains are reported based upon the existence or absence of a donor restriction. Restricted investment income is reported as increases in net assets without donor restrictions if any applicable restrictions are met in the reporting period in which the income and gains are recognized. When a restriction expires, net assets with donor restrictions are reclassified to net assets without donor restrictions.

The Organization receives grants from governmental agencies. Depending upon the terms of the grant, it can be either an exchange transaction or a contribution. In accordance with grant provisions, the grant can be an expense reimbursement grant which requires that approved expenses be incurred prior to reimbursement by the grantor. Other grants permit advances of grant funds or full payment of grant funds at the start of the grant. If the grant is an exchange type grant, all unreimbursed expenses, for approved purposes, as of year-end are recorded as receivables and any unexpended advances are recorded as either refundable advances or deferred income. If the grant is a contribution, it is recognized in accordance with the contribution recognition policy described above.

Camp fees revenue relate to fees received in exchange for attending camp and all of the services provided during the campers’ time there. Camp fees are recognized at the conclusion of the camp when obligations are satisfied and benefits are transferred. Camp fees paid in advance are deferred to the period in which the related performance obligations are satisfied.

The Organization receives special events revenue which contains both an exchange component and a conditional contribution component. Both components are recognized when the event takes place. Any event revenue received in advance of the event is recorded as deferred income.

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS

1.

Nature of Activities and Summary of Significant Accounting Policies (continued) Receivables: Receivables that are expected to be collected within one year are recorded at their net realizable value. Receivables that are expected to be collected in future years are recorded at the present value of estimated future cash flows.

Receivables are written-off as bad debts in the year deemed uncollectible and are reported as such in the statements of expenses by function and natural classification.

Investments: All marketable debt and equity securities and mutual funds are measured at fair value on a recurring basis and are reported at their fair market values as of December 31, 2022 and 2021 in the statements of financial position.

The Organization initially records the investments it receives as a donation at the fair value as of the dates the investments are donated to the Organization and thereafter carries such investments at current fair values.

Functional expense allocation: The costs of providing various programs and other activities have been summarized on a functional basis in the statements of activities and in the statements of expenses by function and natural classification.

Accordingly, certain costs have been allocated among the programs and supporting services benefited. The expenses that are allocated include salaries and related expenses and outside consultants based on estimated time and effort and all other expenses based on usage. The Organization classifies expenses, which are not directly related to a specific program, as Management and General expenses.

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS

2.

Fair Value Measurement of Investments The Financial Accounting Standards Board (FASB) requires enhanced disclosures about investments that are measured and reported at fair value. FASB establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Investments measured and reported at fair value are classified and disclosed in one of the following categories: Level 1: Investments falling within Level 1 of the fair value hierarchy are valued using inputs based upon quoted prices in active markets for identical investments.

Investments that are typically included in Level 1 are listed equity securities, publicly traded mutual funds, and exchange traded funds.

Level 2: Investments falling within Level 2 of the fair value hierarchy are valued using significant observable inputs other than prices quoted in active markets. Examples of Level 2 inputs are model-driven prices, quoted prices for similar investments in active markets, and quoted prices for identical or similar investments in inactive markets.

Investments that are typically included in Level 2 are municipal bonds, corporate bonds, and government debt securities.

Level 3: Investments falling within Level 3 of the fair value hierarchy are valued using methodology that is unobservable and significant to the fair value measurement. Level 3 inputs require significant management judgment or estimation. Investments that are typically included in this category are investments in limited partnerships, and investments in private companies or unregistered securities.

The investment’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

As of December 31, 2022 and 2021, all of the Organization’s investments were Level 1 investments.

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS

3.

Cash and Cash Equivalents As of December 31, 2022 and 2021, the components of cash and cash equivalents are as follows: Unrestricted cash Money market funds: Unrestricted Restricted for endowment Restricted for compensating balance Total

2022

2021

$ 1,010,639

$ 1,304,774

56,664 8,305 33,909 $ 1,109,517

731,432 11,373 64,866 $ 2,112,445

Cash and cash equivalents include cash that is reserved as a compensating balance for a line of credit as part of a lease stipulation as well as cash that is restricted for an endowment.

4.

Receivables Long term pledges are discounted as of December 31, 2022 and 2021 at various rates that were in effect at the date the pledge was received. As of December 31, 2022 and 2021, receivables are expected to be realized in the following periods: 2022

5.

In one year or less In two years or less

$

Less: unamortized discount

( $

2021

247,155 $ 1,110,621 15,000 35,000 262,155 1,145,621 1,460) ( 51,119) 260,695 $ 1,094,502

Property, Equipment and Intangibles Property, equipment and intangibles by major class consisted of the following at December 31, 2022 and 2021: 2022 2021 Depreciable: Furniture and fixtures $ 39,540 $ 39,540 Equipment & software 245,287 245,287 Leasehold improvements 1,138,086 798,663 Website design 169,029 143,029 Less: accumulated depreciation and amortization Non-Depreciable: Construction in Progress

(1,136,139) (1,038,295) $ 455,803 $ 188,224 $

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-

$ 239,271

SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS 6.

Investments The Organization’s investments are stated at fair values, based on quoted prices in active markets (all Level 1 Measurements), and consist of marketable securities and mutual funds. Fair values and unrealized appreciation/(depreciation) at December 31, 2022 and 2021 are summarized as follows: 2022 2021 Fair market values $ 443,373 $ 408,375 Less: Cost ( 622,736) ( 362,835) Unrealized appreciation/ (depreciation) $( 179,363) $ 45,540

7.

Endowment As required by Generally Accepted Accounting Principles, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. The Organization’s endowment is comprised of one donor restricted fund (Fund) which was established to provide investment future program support. When amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by New York Prudent Management of Institutional Funds Act (NYPMIFA), the Organization reclassifies net assets with donor restrictions to net assets without donor restrictions.

The Organization follows the provisions of NYPMIFA, which allows appropriation or accumulation of so much of the donor-restricted endowment as is prudent for the uses, benefits, purposes, and duration for which the fund is established, subject to the intent of the donor as expressed in the gift instrument. As a result, appropriations below the historic dollar value of the fund’s original gift instrument are permitted unless: the donor of an endowment fund established before September 17, 2010, who is available, opts to retain the historic dollar value limit, or the donor of an endowment fund received after September 17, 2010, includes an explicit prohibition on spending below historic dollar value.

In deciding whether to appropriate from an endowment fund, the Organization’s Board of Directors must act in good faith, with the care that an ordinary prudent person in a like position would exercise under similar circumstances. In addition, the following factors must be considered prior to appropriation: (1) the duration and preservation of the Fund (2) the purposes of the Organization and the donor-restricted Fund (3) general economic conditions (4) the possible effect of inflation and deflation (5) the expected total return from income and the appreciation of the investments (6) other resources of the Organization (7) alternatives to expenditure of the Fund, giving due consideration to the effect that such alternatives may have on the Organization (8) the Organization’s investment policies

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS 7.

Endowment (continued) Investment Return Objectives, Risk Parameters and Strategies. The Organization has adopted investment and spending policies, approved by the Board of Directors, for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment funds while also maintaining the purchasing power of those endowment assets over the long-term. Accordingly, the investment process seeks to achieve an after-cost total real rate of return, including investment income, with acceptable levels of risk.

Endowment assets are invested in a mix that is intended to result in a consistent inflation-protected rate of return that has sufficient liquidity to make an annual distribution, if appropriate, while growing the funds if possible. Therefore, the Organization expects its endowment assets, over time, to produce an average rate of return of approximately 1% annually. Actual returns in any given year may vary from this amount. Investment risk is measured in terms of the total endowment fund; investment assets and allocation between asset classes and strategies are managed in order not to expose the fund to unacceptable levels of risk.

Spending Policy. The donor restriction states that annual distributions from the investment account can be made to support the facilitator training course in Jerusalem.

For the first five years, the aggregate distribution is not allowed to exceed the greater of $20,000 or 5% of the total fair market value of the account. After these five years have ended, the aggregate distribution cannot exceed the greater of $25,000 or 7% of the total fair market value of the account. The Organization expects the current spending policy to allow its endowment funds to grow at a nominal average rate of 1% annually, which is consistent with the Organization’s objective to maintain the purchasing power of the endowment assets as well as to provide additional real growth through investment return.

Changes and composition of endowment net assets for the years ended December 31, 2022 and 2021 are as follows: 2022 Donor restricted endowment, beginning of year $ 419,748 Investment return ( 60,455) Donor restricted endowment, end of year $ 359,293

8.

2021 $ 399,316 20,432 $ 419,748

Pension Plan On February 1, 2002, the Organization adopted a salary reduction, 401(K) retirement plan that is funded by voluntary employee contributions and discretionary employer contributions. The plan was converted to a tax-deferred 403(b) plan in 2010. Organization contributions to the plan amounted to $16,000 and $18,000 for the years ended December 31, 2022 and 2021, respectively

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS 9.

Leases On March 17, 2022, the Organization incurred a lease liability by entering into a noncancellable operating lease agreement to obtain a right-of-use asset (ROU asset).

The lease is set to expire in 2025. The lease liability and ROU asset represent the present value of the Organization’s lease obligations and the value of its right to use the leased office space over the remaining term of the lease. Since the lease does not contain a stated interest rate, the lease payments are discounted using the Organizations’s incremental borrowing rate on the lease commencement date.

As of December 31, 2022, the minimum aggregate annual lease commitments are as follows: Year ended December 31, 2023 2024 2025 Total lease payments Less: imputed interest (7%) Present value of lease liabilities

$

( $

109,803 112,915 37,988 260,706 19,624) 241,082

Total rent expenses charged to operations for the years ended December 31, 2022 and 2021 was $270,869 and $403,221, respectively.

The Organization has elected to apply the short-term lease exception to all leases with a term of one year or less.

Camp lease: The Organization leases property located in Pleasant Lake, Otisfield, Maine, under a short-term, non-cancelable operating lease that expired on March 30, 2023. The lease was extended for one year on April 1, 2023. The Lessor has agreed to forgo receiving rent during the lease period as long as the Organization continues to maintain and make capital improvements on the property. The Organization expects to continue paying to maintain and improve the property and therefore the use of the space is not considered to be donated.

10.

Concentrations Insurance coverage: The Organization maintains its cash, cash equivalents, and investments in various accounts. The Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to $250,000 per financial institution. The Securities Investor Protection Corporation insures cash and securities, including money market funds, up to $500,000 per financial institution. At times, the balances of the accounts have exceeded the insured limits during the years ended December 31, 2022 and 2021.

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS 11.

Liquidity and Availability of Financial Assets The Organization regularly monitors liquidity required to meet its operating needs and other obligations as they come due. In the event of an unanticipated liquidity need, the Organization also could draw upon $250,000 of an available line of credit (as further discussed in Note 12).

For purposes of analyzing resources available to meet general expenditures over a 12month period, the Organization considers all expenditures related to its ongoing activities to be general expenditures. Amounts available for general expenditures over a 12-month period include donor-restricted amounts that are available for ongoing programmatic and support expenditures.

The following reflects the Organization’s financial assets, as of December 31, 2022 and 2021, reduced by amounts not available for general use within one year because of contractual, donor-imposed, or internal restrictions and designations: Financial assets Cash and cash equivalents Receivables, net Investments Total financial assets

$

Less those unavailable for general expenditures within one year: Cash restricted for compensating balance ( Cash restricted for endowment ( Investments restricted for endowment ( Receivables scheduled to be collected in more than one year ( Financial assets available to meet cash needs for general expenditures within one year $ 12.

2022

2021

1,109,517 260,695 443,373 1,813,585

$ 2,112,445 1,094,502 408,375 3,615,322

33,909) 8,305) 350,988)

( ( (

64,866) 11,373) 408,375)

13,540)

(

27,293)

1,406,843

$ 3,103,415

Loans and Notes Payable The Organization has a $250,000 credit line with a financial institution and is secured by all present and future personal property and fixtures of the Organization. Interest is to be paid monthly on the outstanding balance based on two percent above the prime rate in effect. During the year ended December 31, 2021 the credit line was unused.

As of December 31, 2022, the outstanding loan balance was $250,000.

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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS

13.

Government Grants The Organization was awarded various government grants to support its programs.

All of the revenue recognized under the grants during the years ended December 31, 2022 and 2021 came from Federal grantors.

14.

Net Assets With Donor Restrictions As of December 31, 2022 and 2021, net assets with donor restrictions are available as follows: 2022 Subject to passage of time or purpose: Campership, Seeds and other Multinational programming Scholarships, internships mediation and education 2022 operations 2023 operations 2024 operations

$

Endowment: Subject to spending policy and appropriation Total 15.

2021

165,590 162,898

$

253,034 698,519

$

154,578 12,293 15,000 510,359

179,318 100,587 12,293 15,000 $ 1,258,751

$

359,293 869,652

419,748 $ 1,678,499

Revenue from Contracts with Customers All of the revenue derived from contracts with customers during 2022 and 2021 was fully earned in the same annual reporting period. Detail of revenue from contracts with customers during the years ended December 31, 2022 and 2021 is as follows: Camp fees and miscellaneous Special events - exchange component

16.

2022 $ 795,308 214,461

2021 $ 386,886 15,267

Subsequent Events Management has evaluated subsequent events through March 6, 2024, the date the financial statements were available to be issued, to evaluate whether any such events warrant adjustment to any reported amounts or inclusion of additional disclosures. No such adjustments or disclosures were judged to be necessary.

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