Hearthstone Senior Communities Inc.

“There are no committees with the authority to act on behalf of the governing body.”

“The form 990 is reviewed by the board president and the consulting company. The return is made available to all voting board members before it is filed with the irs.”

“The organization's conflict of interest policy is contained in the employee handbook. The policy extends to the organization's officers and directors. The organization's board of directors monitors and enforces compliance with the conflict of interest policy through its annual disclosure process. The board reviews actual conflicts that are identified and prohibits officers and directors from voting on matters where actual conflicts exist.”

“The board of directors has the authority to fix the compensation of the organization's executive director as well as other officers and key employees. The compensation levels are set based on consultation with the consulting company. All parties are independent with respect to the compensation decisions. Compensation levels are set based on current market conditions, the economy and funding sources.”

“The organization makes its governing documents and financial statements available to the public upon request.”

“On may 4, 2018, hearthstone transferred two of its 60-bed facilities, university east rehabilitation center and university west rehabilitation center (the "university facilities"), to a new operator. Hearthstone's board of directors approved the transfer because of continuing losses in the university facilities that were impeding the sustainability of hearthstone's mission.”

“Activities: program service expenses 6,015. Management and general expenses 0. Fundraising expenses 0. Total expenses 6,015. Consulting: program service expenses 2,778,021. Management and general expenses 842,120. Fundraising expenses 0. Total expenses 3,620,141. Housekeeping & laundry: program service expenses 2,517,789. Management and general expenses 0. Fundraising expenses 0. Total expenses 2,517,789. Lab & x-ray: program service expenses 286,428. Management and general expenses 0. Fundraising expenses 0. Total expenses 286,428. Medical & social services: program service expenses 274,072. Management and general expenses 14,699. Fundraising expenses 0. Total expenses 288,771. Other contract services: program service expenses 723,530. Management and general expenses 131,623. Fundraising expenses 0. Total expenses 855,153. Rehabilitation: program service expenses 11,255,563. Management and general expenses 0. Fundraising expenses 0. Total expenses 11,255,563. Financial service consulting: program service expenses 0. Management and general expenses 3,014,390. Fundraising expenses 0. Total expenses 3,014,390. Food service: program service expenses 5,647,205. Management and general expenses 14,214. Fundraising expenses 0. Total expenses 5,661,419.”

“Loss on transfer of operations -699,007.”

“Oversight of audit and selection of independent accountant: the responsibility for oversight of the audit and selection of an independent accountant is assumed by the governing body. This process has not changed in any way from the prior year.”

“On may 4, 2018, hearthstone transferred two of its 60-bed facilities, university east rehabilitation center and university west rehabilitation center (the "university facilities"), to a new operator. Hearthstone's board of directors approved the transfer because of continuing losses in the university facilities that were impeding the sustainability of hearthstone's mission. The transfer agreements provided, among other things, for hearthstone to transfer, without consideration, the operations and ownership rights of the property and equipment associated with the university facilities. The property and equipment had an approximate carrying value of $370,000 at the time of transfer. In addition, in connection with the transfer agreements, hearthstone was required to payout all employee vacation time liability as of the closing date. Hearthstone's accrued vacation balance for the university facilities was approximately $51,000 at the time of transfer. Lastly, the transfer agreements required hearthstone to pay 50% of the costs to install generators at each of the university facilities. Hearthstone paid approximately $290,000 to install generators at each of the university facilities. For the years ended december 31, 2018 and 2017, the university facilities incurred losses of approximately $1,955,000 and $624,000, respectively.”