Patrick McLaughlin, Starfish Board President 

As detailed in recent postings, the decision by the  Chinese provincial government to return the orphans in our care to their orphanage of origin is creating measurable changes on how we will operate on a go-forward basis. To that end, I am providing an update on where we go from here.

 First and foremost is the fact that we don't anticipate the provincial government returning the children to Starfish.  As we speak, our facility in Xi'an is empty except for Naomi Kerwin (Executive Director) and a few part time staff.  All of the nannies, cooks, cleaners, etc. have received severance packages that are both compliant with the law and designed to ensure our former staff leave us on a positive note.  We also provided Lunar New Year bonuses as is Chinese custom.

The absence of children to care for will now require us to seek other sources of children which may entail moving our operations elsewhere in China.  I cannot provide specifics on where it will be located and what form we will operate for the simple reason of just having started the search in the broadest of terms.  I assure you that I will share all relevant information on this matter as it develops.

In the spirit of being transparent regarding our financial position, please see key points below:

• Our cash position remains very strong with $250,000 US in our US bank accounts. This figure includes a general fund of $110,000, $80,000 reserve fund and a $60,000 new building fund.  To offer perspective, the general fund equals approximately four months of typical operations that support about 35 children
• It is important to note that the new building fund is a result of the donations made in China to Amanda specifically directed to building a new foster home/orphanage.
• Our coffers also benefited from two significant corporate grants via Boeing Corporate citizenship for $50,000 and $10,000 from the Collette Foundation.
• Our expenses have dropped dramatically in light of the recent events. Our intention is to "sit tight" with our funds with a full expectation of investing those funds into the future operations and execution of Amanda's mission to provide life-saving surgeries to high-risk babies, nurturing them back to health, and provide for their adoptions. 
• There are no outstanding liabilities of any material nature.

I cannot close this financial update without addressing donations made to Starfish.  We realize that when you donate to Starfish, you do so not only with your wallet but also with your heart. Your support of Starfish and the babies has changed the lives of the innocent children we serve. Without your contributions, the work and we do would never be possible.  I ask for your continued donations to further strengthen our finances which will allow all of us to participate in a bright future for Starfish.

Sincerely, Patrick McLaughlin