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        <Explanation>PART X, LINE 2: THE ORGANIZATION IS EXEMPT FROM FEDERAL INCOME AND CALIFORNIA FRANCHISE TAXES UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE AND THE CORRESPONDING SECTIONS OF THE CALIFORNIA REVENUE AND TAXATION CODE. IN ACCORDANCE WITH FINANCIAL ACCOUNTING STANDARDS BOARD ("FASB") ACCOUNTING STANDARDS CODIFICATION ("ASC") TOPIC NO. 740, "UNCERTAINTY IN INCOME TAXES" ("ASC 740") (FORMERLY FASB INTERPRETATION NO. ("FIN") 48, "ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES " AN INTERPRETATION OF FASB STATEMENT 109"), THE ORGANIZATION RECOGNIZES THE IMPACT OF TAX POSITIONS IN THE FINANCIAL STATEMENTS IF THAT POSITION IS MORE LIKELY THAN NOT TO BESUSTAINED ON AUDIT, BASED ON THE TECHNICAL MERITS OF THE POSITION. TO DATE, THE ORGANIZATION HAS NOT RECORDED ANY UNCERTAIN TAX POSITIONS. DURING THE YEAR ENDED DECEMBER 31, 2012, THE ORGANIZATION PERFORMED AN EVALUATION OF UNCERTAIN TAX POSITIONS AND DID NOT NOTE ANY MATTERS THAT WOULD REQUIRE RECOGNITION IN THE FINANCIAL STATEMENTS OR WHICH MAY HAVE AN EFFECT ON ITS TAX-EXEMPT STATUS. AS OF DECEMBER 31, 2012, THE OPEN TAX YEARS FOR THE FEDERAL JURISDICTION FOR THE ORGANIZATION WERE 2009 TO 2012 AND FOR THE STATE JURISDICTION WERE 2008 TO 2012.</Explanation>
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        <ReturnReference>FORM 990, PART VI, SECTION B, LINE 11</ReturnReference>
        <Explanation>THE AUDIT COMMITTEE MEETS WITH THE AUDITORS TO REVIEW AND DISCUSS A DRAFT OF FORM 990 AND APPROVES FORM 990 IN ITS FINAL FORM BEFORE PRESENTING IT TO THE BOARD OF DIRECTORS FOR REVIEW.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION B, LINE 12C</ReturnReference>
        <Explanation>THE PROCESS FOR MONITORING AND ENFORCING COMPLIANCE WITH THE ORGANIZATION'S POLICY IS FOR ALL EMPLOYEES TO REVIEW AND SIGN OUR "CONFLICT OF INTEREST POLICY" ANNUALLY.</Explanation>
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      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION B, LINE 15</ReturnReference>
        <Explanation>SALARY SCALE IS DETERMINED BY REVIEWING AND ANALYZING THE SALARY STRUCTURE OF COMPARABLE NON-PROFIT ORGANIZATIONS IN ADDITION TO REFERRING TO THE NON-PROFIT DIRECTOR'S COMPENSATION SURVEY REPORT. OTHER KEY EMPLOYEE SALARIES ARE REVIEWED AND VOTED ON BY BOARD MEMBERS AS PART OF THE ANNUAL BUDGET PROCESS OR AS NEEDED DURING THE YEAR.</Explanation>
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      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION C, LINE 19</ReturnReference>
        <Explanation>FORM 1023 AND ALL OTHER INFORMATIONAL RETURN DOCUMENTS ARE AVAILABLE TO THE PUBLIC EITHER THROUGH WWW.GUIDESTAR.ORG OR UPON WRITTEN REQUEST.</Explanation>
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