FINANCIAL STATEMENTS

AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION

CONTENTS

PAGE NO. INDEPENDENT AUDITORS' REPORT Statements of Financial Position, as of December 31, 2010 and 2009 Statements of Activities and Changes in Net Assets, for the Years Ended December 31, 2010 and 2009 Statement of Functional Expenses, for the Year Ended December 31, 2010 Statement of Functional Expenses, for the Year Ended December 31, 2009 Statements of Cash Flows, for the Years Ended December 31, 2010 and 2009 2

EXHIBIT A -

EXHIBIT B -

4-5

EXHIBIT C -

EXHIBIT D -

EXHIBIT E -

8 9 - 15

NOTES TO FINANCIAL STATEMENTS

GELMAN, ROSENBERG & FREEDMAN

CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT

To the Board of Directors American Council for Voluntary International Action Washington, D.C. We have audited the accompanying statements of financial position of the American Council for Voluntary International Action (InterAction) as of December 31, 2010 and 2009, and the related statements of activities and changes in net assets, functional expenses and cash flows for the years then ended. These financial statements are the responsibility of InterAction's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of InterAction's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of InterAction as of December 31, 2010 and 2009, and its changes in net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated June 14, 2011 on our consideration of InterAction's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of InterAction's internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on InterAction's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audits.

June 14, 2011

4550 MONTGOMERY AVENUE SUITE 650 NORTH BETHESDA, MARYLAND 20814 (301) 951-9090 FAX (301) 951-3570 WWW.GRFCPA.COM ___________________________ MEMBER OF CPAMERICA INTERNATIONAL, AN AFFILIATE OF HORWATH INTERNATIONAL MEMBER OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS' PRIVATE COMPANIES PRACTICE SECTION

EXHIBIT A AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2010 AND 2009

ASSETS 2010 CURRENT ASSETS Cash and cash equivalents Investments (Notes 2 and 9) U.S. Government grants receivable Foundation grants receivable Other receivables Prepaid expenses Total current assets PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS Furniture Leasehold improvements Less: Accumulated depreciation and amortization Net property, equipment and leasehold improvements NONCURRENT ASSETS Security deposits TOTAL ASSETS LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable Accrued employee benefits Deferred membership dues Deferred publications Refundable advance Total current liabilities NET ASSETS Unrestricted Temporarily restricted (Note 3) Total net assets TOTAL LIABILITIES AND NET ASSETS $ 1,417,599 1,198,970 2,616,569 2,906,828 $ 1,188,469 3,530,825 4,719,294 5,164,156 3 $ 16,835 231,870 12,617 28,937 290,259 $ 7,879 344,847 2,000 5,192 84,944 444,862 $ 74,014 2,906,828 $ 74,014 5,164,156 269,401 97,852 367,253 (304,831) 62,422 269,401 97,852 367,253 (252,106) 115,147 $ 1,384,869 899,081 239,161 24,989 57,709 164,583 2,770,392 $ 1,352,272 802,007 2,645,143 15,336 160,237 4,974,995 2009

See accompanying notes to financial statements.

AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

Unrestricted REVENUE U.S. Government grants (Notes 7 and 8) $ Foundations Member contributions Membership dues Publications Forum, meetings and workshops Interest Other income Net assets released from donor restrictions (Note 4) Total revenue EXPENSES Program Services: Member Services Federal and Non-Federal Awards Legislative Activities Total program services Supporting Services: General and Administrative Fundraising Total supporting services Total expenses Changes in net assets before other item OTHER ITEM Unrealized and realized gains on investments (Note 2) Changes in net assets Net assets at beginning of year NET ASSETS AT END OF YEAR $ 93,763 229,130 1,188,469 1,417,599 1,722,580 4,799,845 97,206 6,619,631 1,238,559 24,548 1,263,107 7,882,738 135,367 1,594,105 45,629 2,536,532 186,491 404,185 20,180 12,810 3,218,173 8,018,105

2010 Temporarily Restricted $ $ 886,318 (3,218,173) (2,331,855)

Total 1,594,105 886,318 45,629 2,536,532 186,491 404,185 20,180 12,810 5,686,250

(2,331,855)

1,722,580 4,799,845 97,206 6,619,631 1,238,559 24,548 1,263,107 7,882,738 (2,196,488)

(2,331,855) 3,530,825 $ 1,198,970 $

93,763 (2,102,725) 4,719,294 2,616,569

See accompanying notes to financial statements.

EXHIBIT B

Unrestricted $ 1,880,598 44,961 2,170,689 111,146 275,772 26,935 37,573 3,492,607 8,040,281

2009 Temporarily Restricted $ $ 814,638 (3,492,607) (2,677,969)

Total 1,880,598 814,638 44,961 2,170,689 111,146 275,772 26,935 37,573 5,362,312

1,777,283 5,308,838 85,370 7,171,491 978,602 51,948 1,030,550 8,202,041 (161,760)

(2,677,969)

1,777,283 5,308,838 85,370 7,171,491 978,602 51,948 1,030,550 8,202,041 (2,839,729)

161,398 (362) 1,188,831 $ 1,188,469 $

(2,677,969) 6,208,794 3,530,825 $

161,398 (2,678,331) 7,397,625 4,719,294

See accompanying notes to financial statements.

EXHIBIT C AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2010

Member Services Salaries Fringe benefits (Note 6) Consulting and professional fees Temporary help Computer technical support Telephone Office supplies Postage Printing and duplication Subscriptions and publications Travel, hotels and meals Meetings and conferences Legal and audit fees Bank charges Other Insurance Occupancy (Note 5) Depreciation and amortization Furniture and equipment Repairs, maintenance and equipment rental Education and training Subgrants Sub-total Allocation of management and general TOTAL

Federal and NonFederal Legislative General and Total Awards Activities Administrative Fundraising Expenses 59,041 $ 20,869 1,048 2,880 487 8 1,922 9,625 1,321 5 97,206 97,206 $ 473,315 $ 167,341 100,834 46,972 (10,530) 8,431 10,736 2,360 7,475 3,324 3,114 16,936 66,124 16,801 7,351 42,145 760,703 52,725 1,329 38,691 1,816,177 (577,618) 1,238,559 $ 17,907 $3,329,549 6,330 1,177,018 176 118 17 24,548 783,468 46,972 113,549 59,167 34,244 119,433 28,234 394,776 497,512 72,789 16,986 14,569 42,145 794,721 52,725 27,559 111,312 3,173 162,837 7,882,738 -

$ 687,188 $ 2,092,098 $ 242,921 739,557 179,013 24,722 22,235 15,291 23,393 13,509 125,080 364,096 800 1,820 10,421 1,612 10,479 1,722,580 502,573 10,530 77,340 25,591 16,568 86,643 1,776 265,261 116,475 5,865 185 5,398 34,018 26,230 62,200 1,561 152,358 4,222,227 577,618

$1,722,580 $ 4,799,845 $

24,548 $7,882,738

See accompanying notes to financial statements.

EXHIBIT D AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2009

Member Services Salaries $ Fringe benefits (Note 6) Consulting and professional fees Temporary help Computer technical support Telephone Office supplies Postage Printing and duplication Subscriptions and publications Travel, hotels and meals Meetings and conferences Legal and audit fees Bank charges Other Insurance Occupancy (Note 5) Depreciation and amortization Furniture and equipment Repairs, maintenance and equipment rental Education and training Subgrants Sub-total Allocation of management and general TOTAL

Federal and NonFederal Awards

Legislative General and Total Activities Administrative Fundraising Expenses 53,400 $ 14,611 7,500 3,102 756 1,201 1,453 802 2,469 76 85,370 85,370 $ 470,237 $ 128,660 63,478 46,895 (12,538) 8,987 6,370 1,589 9,173 800 1,618 22,068 54,070 5,914 7,999 28,000 722,685 67,379 550 46,667 2,030 1,682,631 (704,029) 978,602 $ 40,788 $3,724,354 11,160 1,019,008 51,948 453,216 46,895 82,728 50,481 23,958 346,421 21,078 455,557 725,077 54,131 6,314 4,920 28,000 764,875 67,379 52,174 72,973 8,546 193,956 8,202,041 -

804,174 $2,355,755 $ 220,027 644,550 106,490 21,342 20,135 7,112 39,356 3,002 34,142 423,020 61 (3,079) 11,362 12,189 2,238 75,712 1,777,283 275,748 12,538 49,297 23,220 14,056 296,439 16,474 417,328 279,913 400 42,190 40,262 14,117 4,278 118,244 4,604,809 704,029

$ 1,777,283 $5,308,838 $

51,948 $8,202,041

See accompanying notes to financial statements.

EXHIBIT E AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

2010 CASH FLOWS FROM OPERATING ACTIVITIES Changes in net assets Adjustments to reconcile changes in net assets to net cash provided (used) by operating activities: Depreciation and amortization Realized (gains) losses on sales of investments Unrealized gains on investments (Increase) decrease in: U.S. Government grants receivable Foundation grants receivable Other receivables Prepaid expenses Security deposits Increase (decrease) in: Accounts payable Accrued employee benefits Deferred membership dues Deferred publications Refundable advance Net cash provided (used) by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of investments Purchases of investments Net cash provided (used) by investing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year CASH AND CASH EQUIVALENTS AT END OF YEAR $ 436,160 (439,471) (3,311) 32,597 1,352,272 1,384,869 $ 52,725 (30,651) (63,112) (239,161) 2,620,154 (42,373) (4,346) 8,956 (112,977) 10,617 23,745 (84,944) 35,908

2009

$ (2,102,725) $ (2,678,331)

67,379 296,572 (457,970) 74,041 2,337,289 66,318 (33,594) (876) (33,290) (104,586) (38,000) 5,192 47,302 (452,554)

1,318,108 (670,474) 647,634 195,080 1,157,192 1,352,272

See accompanying notes to financial statements.

AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 AND 2009

1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION Organization The American Council for Voluntary International Action (InterAction) was incorporated on August 23, 1984 under the laws of the State of New York. InterAction is the largest coalition of U.S.-based international nongovernmental organizations (NGOs) focused on the worlds poor and most vulnerable people. With more than 190 members operating in every developing country, InterAction works to overcome poverty, exclusion and suffering by advancing social justice and dignity for all. Basis of presentation The accompanying financial statements are presented on the accrual basis of accounting, and in accordance with FASB ASC 958, Not-for-Profit Entities. Recently issued accounting standards In June 2009, the Financial Accounting Standards Board (FASB) issued FASB ASC 105, Generally Accepted Accounting Principles, which establishes the FASB Accounting Standards Codification as the sole source of authoritative generally accepted accounting principles. Pursuant to the provisions of FASB ASC 105, InterAction has updated references to GAAP in its financial statements issued for the years ended December 31, 2010 and 2009. The adoption of FASB ASC 105 did not impact InterActions financial position or results of operations Income taxes InterAction is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes has been made in the accompanying financial statements. InterAction is not a private foundation. Uncertain tax positions In June 2006, the Financial Accounting Standards Board (FASB) released FASB ASC 740-10, Income Taxes, that provides guidance for reporting uncertainty in income taxes. For the years ended December 31, 2010 and 2009, InterAction has documented its consideration of FASB ASC 740-10 and determined that no material uncertain tax positions qualify for either recognition or disclosure in the financial statements. Cash and cash equivalents InterAction considers all cash and other highly liquid investments with initial maturities of three months or less to be cash equivalents.

AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 AND 2009

1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (Continued) Grants receivable Grants receivable approximate fair value. Management considers all amounts to be fully collectible. Accordingly, an allowance for doubtful accounts has not been established. Property, equipment and leasehold improvements All purchases of furniture and equipment in excess of $1,500 are capitalized and stated at cost. Furniture and equipment are depreciated using the straight-line method of depreciation, over the useful life of the assets, generally three to five years. Leasehold improvements are capitalized and amortized over the life of the lease. Furniture and equipment purchased with grant funds are recorded as an expense and charged directly to the grant, which provided funding for the purchases. Membership dues Membership dues are billed to members annually. The dues are recognized as revenue over the membership period, which is on a calendar year basis. Dues received, which are applicable to the following fiscal year, are presented as deferred dues in the accompanying financial statements. Contributions and grants Contributions and grants are recognized as unrestricted support only to the extent of actual expenses incurred in compliance with the donor-imposed restrictions. Contributions and grants received in excess of expenses incurred are shown as temporarily restricted net assets in the accompanying financial statements. Investments Investments at December 31, 2010 and 2009, consisted of mutual funds. Investments are recorded at market value. Gains and losses, due to market fluctuations and from the sale or redemption of investments, are recorded as unrealized and realized gains and losses in the accompanying Statements of Activities and Changes in Net Assets. Risks and uncertainties InterAction invests in various investment securities. Investment securities are exposed to various risks such as interest rates, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the accompanying financial statements.

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AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 AND 2009

1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (Continued) Fair value measurement InterAction adopted the provisions of FASB ASC 820, Fair Value Measurements and Disclosures. FASB ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs (assumptions that market participants would use in pricing assets and liabilities, including assumptions about risk) used to measure fair value, and enhances disclosure requirements for fair value measurements. InterAction accounts for a significant portion of its financial instruments at fair value or considers fair value in their measurement. Net asset classification The net assets are reported in two self-balancing groups as follows: Unrestricted net assets include unrestricted revenue and contributions received without donor-imposed restrictions. These net assets are available for the operation of InterAction and include both internally designated and undesignated resources. Temporarily restricted net assets include revenue and contributions subject to donorimposed stipulations that will be met by the actions of InterAction and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statements of Activities and Changes in Net Assets as net assets released from restrictions. Functional allocation of expenses The costs of InterAction's programs and administration have been summarized on a functional basis in the accompanying Statements of Activities and Changes in Net Assets. Accordingly, certain costs have been allocated among the programs benefited. Allocation of indirect costs During 2010 and 2009, indirect costs were allocated to Federal grants based upon actual rates of 44.21% and 39.57%, respectively. The indirect rate is calculated using a base of salaries, benefits and consultant expenses. Indirect costs have been allocated to non-Federal grants to the extent the donors have provided for the recovery of such costs. Use of estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

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AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 AND 2009

1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL INFORMATION (Continued) Concentration of credit risk At times during the year, InterAction maintains cash balances at financial institutions in excess of Federal Deposit Insurance Corporation (FDIC) limits. Management believes the risk in these situations to be minimal.

2.

INVESTMENTS Investments consisted of the following at December 31, 2010 and 2009: Cost Mutual Funds $ 2010 Market Value $ 899,081 $ Cost 2009 Market Value $ 802,007

763,113

729,151

Included in the accompanying Statements of Activities and Changes in Net Assets are unrealized and realized gains on investments of $93,763 and $161,398 for 2010 and 2009, respectively. These gains have been presented as an other item in the Statements of Activities and Changes in Net Assets as this activity is not a direct result from InterAction's operations. 3. TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consisted of the following at December 31, 2010 and 2009: 2010 The Bill and Melinda Gates Foundation - Agenda for U.S. Foreign Assistance IFAD 2009 Hewlett Foundation UNFPA - E Learning 2009-2010 UNFPA 2008-2010 Connect USA - Partner Vetting System Child Sponsorship Strategic Impact Team - Other Project Sphere Project UN OCHA Better World 2010 WFDA Exxon Water Aid America Rockefeller Foundation Youth Alliance Haiti Mapping - FedEx Cost Recovery Project TOTAL TEMPORARILY RESTRICTED NET ASSETS $ 879,987 24,806 37,820 19,211 29,673 3,104 475 25,000 4,672 2,635 96,349 35,000 35,138 5,100 1,198,970 $ 2009 3,131,652 139,529 131,595 50,000 26,516 23,120 19,211 6,985 2,217 3,530,825

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AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 AND 2009

4.

NET ASSETS RELEASED FROM RESTRICTIONS The following is a summary of net assets, which were released from donor restrictions by incurring expenses which satisfied the donor-specified restrictions at December 31, 2010 and 2009: 2010 The Bill and Melinda Gates Foundation - Agenda for U.S. Foreign Assistance IFAD 2009 Hewlett Foundation UNFPA 2008-2010 Connect USA - Partner Vetting System Strategic Impact Team - Other Project Better World 2010 WFDA Exxon UN OCHA WFDA - Exxon Water Aid America Rockefeller Foundation IFP Development Financing Haiti Mapping 2010 - FedEx UNFPA E Learn Aid Effectiveness UNMDG - Task Force TOTAL NET ASSETS RELEASED FROM RESTRICTIONS $ 2,328,609 114,723 135,490 77,098 25,300 10,363 4,865 3,651 1,083 214,862 100,000 119,234 82,895 3,218,173 $ 2009 2,825,961 40,351 68,405 93,735 6,880 30,000 94,770 2,286 330,219 3,492,607

5.

LEASE COMMITMENT During 2007, InterAction signed an amended lease for additional office space. The amended lease expires December 30, 2012. On that date, InterAction has the option to extend the lease until November 30, 2016. The lease provides for an annual rental increase of 3%. The lease also requires InterAction to pay its proportionate share of the building's real estate taxes and operating expenses. Following is a schedule of minimum lease payments required under the non-cancelable operating lease as of December 31, 2010: Year Ended December 31, 2011 2012 $ $ 793,132 816,926 1,610,058

Occupancy expense for the years ended December 31, 2010 and 2009 totaled $794,721 and $732,810, respectively.

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AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 AND 2009

6.

RETIREMENT PLANS InterAction has a non-contributory defined contribution pension plan in accordance with Section 401(a) of the Internal Revenue Code. The plan covers all employees who meet certain age and employment requirements. Currently, InterAction contributes a percentage of each eligible employee's annual compensation. All contributions vest immediately. Total retirement expense under this plan were $284,440 and $355,730 for the years ended December 31, 2010 and 2009, respectively, and is included in fringe benefits in the accompanying Statements of Functional Expenses. InterAction also administers a 403(b) tax-deferred annuity plan on behalf of its employees. There were no employer contributions made during 2010 and 2009.

7.

CONTINGENCY The funds which InterAction receives from U.S. Government grants are subject to audit under the provisions of OMB Circular A-133. The ultimate determination of amounts received under the U.S. Government grants is based upon the allowance of costs reported to and accepted by the U.S. Government as a result of the audits. Audits in accordance with the provisions of OMB Circular A133 have been completed for all required fiscal years through 2010. Until such audits have been accepted by the U.S. Government, there exists a contingency to refund any amount received in excess of allowable costs. Management is of the opinion that no material liability will result from such audits.

8.

FUTURE COMMITMENTS FROM USAID InterAction receives program funding from the United States Agency for International Development (USAID). As of December 31, 2010, InterAction has received awards from USAID totaling $3,481,077, of which $2,165,019 has been obligated and disbursed. As of December 31, 2010, InterAction has an unobligated balance of $1,316,058. Total USAID awards received and obligations have not been included in the accompanying financial statements.

9.

FAIR VALUE MEASUREMENTS In accordance with FASB ASC 820, Fair Value Measurements and Disclosures, InterAction has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Investments recorded in the Statements of Financial Position are categorized based on the inputs to valuation techniques as follows: Level 1. These are investments where values are based on unadjusted quoted prices for identical assets in an active market that InterAction has the ability to access.

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AMERICAN COUNCIL FOR VOLUNTARY INTERNATIONAL ACTION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 AND 2009

9.

FAIR VALUE MEASUREMENTS (Continued) Level 2. These are investments where values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full-term of the investments. Level 3. These are investments where values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect assumptions of management about assumptions market participants would use in pricing the investments. These investments include non-readily marketable securities that do not have an active market. Financial assets recorded in the Statements of Financial Position are categorized based on the inputs to the valuation technique as follows for the years ended December 31, 2010 and 2009: 2010 Level 1 Asset Category (Investments): Mutual Funds $ 899,081 $ Level 2 $ 2009 Level 1 Asset Category (Investments): Mutual Funds $ 802,007 $ Level 2 $ Level 3 $ Total 802,007 Level 3 $ Total 899,081

10.

SUBSEQUENT EVENTS In preparing these financial statements, InterAction has evaluated events and transactions for potential recognition or disclosure through June 14, 2011, the date the financial statements were issued.

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