Structured Employment Economic Development Corporation

“The general counsel serves as an advisor to directors and key employees regarding potential conflicts, both during the annual recertification process and as they arise. As necessary, the general counsel brings matters pertaining to key employees, officers, and directors to the president for discussion with the board; advises when directors must remove themselves from voting on organization matters; and, with the president, makes determinations on matters pertaining to potential conflicts concerning staff members who are not key employees.”

“Barbara gunn, the chief executive officer and president of seedco, entered into a board approved employment contract on march 29, 2010. This agreement stipulated that ms. Gunn be paid an initial base compensation amount of $345,000. The contract had an initial term of three years with successive one-year periods of extension options which renew automatically unless terminated by either party in writing. In march of 2012, ms. Gunn voluntary reduced her annual base salary to $284,000. In march 2013, her salary was increased to $300,000 at the discretion of the seedco board of directors. In december of 2013, the 2014 seedco operating budget was approved by the board of directors and included a 3% salary increase to all staff hired on or before september 30, 2013. This action increased ms. Gunn's base annual base salary to $309,000. The seedco board of directors has elected to not terminate the extension options that commenced on march 30, 2013, march 30, 2014 and march 30, 2015. In calendar year 2015, ms. Gunns annual base salary was $325,796. As detailed in seedcos 2015 audited financial statements issued by bdo, for the year ended december 31, 2015, seedco reported a decrease in net assets of approximately $4 million and experienced deteriorating liquidity. Due to seedcos financial condition, ms. Gunn voluntarily reduced her salary to $140,000 effective january 15, 2016. Her salary was then increased to $200,000 effective july 1, 2016. Her effective base salary as reported on her 2016 w-2 was $182,837.39. Ms. Gunn retired from her position on december 31, 2016.”

“The organization makes its governing documents, conflict of interest policy and financial statements available to the public upon request.”

“For the year ended 31, 2016, Seedco reported a decrease in net assets of approximately $2.4 million and has experienced deteriorating liquidity. In response to Seedcos financial condition, management has executed a turnaround plan in 2016 with four key elements: (1) Significant reductions in administrative costs through an administrative services agreement with Acacia Network, Inc.; (2) Closure of programs that had limited financial viability; (3) Expansion of Seedcos proprietary EarnBenefits Online technology and (4) New business development with funding from both public and private funders. FORM 990, PART VI, SECTION B, LINE 11B: FORM 990 IS PREPARED BY A NATIONALLY RENOWNED ACCOUNTING FIRM IN CONJUNCTION WITH THE ORGANIZATION'S FINANCIAL DEPARTMENT. DRAFT FORM 990 IS REVIEWED BY THE ORGANIZATION'S CFO AND THEN PROVIDED TO ALL MEMBERS OF THE BOARD OF DIRECTORS IN DRAFT VIA ELECTRONIC MAIL, WITH AN OPPORTUNITY FOR THEM TO COMMENT OR MAKE INQUIRY BEFORE IT IS FILED WITH THE INTERNAL REVENUE SERVICE.”

“SEEDCO USED ALL ORDINARY BUSINESS CARE AND PRUDENCE TO MEET ITS FEDERAL TAX OBLIGATIONS IN FILING THE 2016 990 BUT WAS NEVERTHELESS UNABLE TO DO SO. Seedco used all ordinary business care and prudence to meet its federal tax obligations in filing the 2016 990 but was nevertheless unable to do so. The delay was due to a SIGNIFICANT TRANSITION IN SEEDCOS ACCOUNTING OPERATIONS AND FISCAL STAFF. IN JULY 2016, SEEDCO ENTERED INTO AN ADMINISTRATIVE SERVICES AGREEMENT WITH ACACIA NETWORK, INC. ("ACACIA") TO OUTSOURCE CERTAIN SERVICES THAT RESULTED IN SIZABLE DECREASES IN BOTH ADMINISTRATIVE PERSONNEL AND NON-PERSONNEL COSTS. ACACIA IS A VERY LARGE HEALTH AND HUMAN SERVICES AGENCY, WITH A 2016 OPERATING BUDGET OF MORE THAN $300 MILLION. AFTER MORE THAN A YEAR OF THE ADMINISTRATIVE SERVICES AGREEMENT, ON SEPTEMBER 6, 2017, SEEDCO COMPLETED A FORMAL AFFILIATION WITH ACACIA. AS A RESULT OF THE ADMINISTRATIVE SERVICES AGREEMENT AND NOW THE FORMAL AFFILIATION, SEEDCO HAS SIGNIFICANTLY REDUCED ITS MANAGEMENT AND GENERAL COSTS AND LEVERAGES ACACIAS PURCHASING POWER AND ECONOMIES OF SCALE. ACACIA NOW MANAGES SEEDCOS HUMAN RESOURCES, INFORMATION TECHNOLOGY, FISCAL AND PAYROLL SYSTEMS. HOWEVER, THE TRANSITION FROM SEEDCOS ACCOUNTING SYSTEM (FINANCIAL EDGE) TO ACACIAS ACCOUNTING SYSTEM (FUND EZ) CAUSED SIGNIFICANT DELAYS IN THE PREPARATION OF ALL MATERIALS FOR THE 2016 AUDIT. IN ESSENCE, SEEDCO HAD 9 MONTHS OF RECORDS IN ONE SYSTEM (FINANCIAL EDGE) AND 3 MONTHS OF RECORDS IN A SECOND SYSTEM (FUND EZ). IN ADDITION TO CHANGING ACCOUNTING SYSTEMS MID-WAY THROUGH THE YEAR, SEEDCO ALSO CHANGED ITS PAYROLL SYSTEM, SHIFTING FROM ADP TOTAL SOURCE, WHICH WAS USED FOR THE FIRST 9 MONTHS OF THE YEAR, TO ADP WORKFORCE NOW, WHICH WAS USED FOR THE FINAL 3 MONTHS OF THE YEAR. WHILE BOTH PAYROLL SYSTEMS ARE UNDER THE ADP UMBRELLA, THE SYSTEMS ARE NOT INTEGRATED WITHIN THE ADP DATABASE. LASTLY, AS SEEDCO COMPLETED THE TRANSITION TO ACACIAS SYSTEM, THERE WAS SIGNIFICANT TRANSITION AMONG THE FINANCIAL STAFF, CAUSING ADDITIONAL DELAYS. WE ARE EXTREMELY CONFIDENT THIS DELAY IN FILING THE 2016 990 WAS AN ISOLATED EVENT, AS SEEDCOS OPERATIONS HAVE BEEN FULLY INTEGRATED INTO ACACIAS OPERATIONS FOR THE ENTIRETY OF THE 2017 CALENDAR YEAR AND WILL CONTINUE TO BE INTEGRATED GOING FORWARD. CONTINUE TO BE INTEGRATED GOING FORWARD.”