Refocus Ministries

“Client Note 1 - NOTES TO TAX RETURN - EMBEZZELMENT LOSSES AND RECOVERIES IN 2000 REFOCUS INVESTED IN LIMITED PARTNERSHIPS WHICH WERE ALMOST ENTIRELY LOST THROUGH PONZI SCHEMES AS OUTLINED BELOW. THE CURRENT YEAR INCOME REFLECTS A RETURN OF THAT EMBEZZELMENT LOSS WHICH WAS RECEIVED FROM A RECEIVERSHIP DURING 2005. (BELOW IS THE EMBEZZELMENT LOSS BACKGROUND AS REPORTED ON THE 2003 990T FILED BY REFOCUS) REFOCUS INVESTED IN THREE INVESTMENTS WHICH WERE LINKED TO A PONZI SCHEME BY IPIC, THE SETZER FAMILY AND OTHER RELATED COMPANIES AND PEOPLE. IT IS EXTREMELY DOUBTFUL THAT REFOCUS WILL RECEIVE ANY MONEY FROM EITHER THE CIVIL SUITS OR RECEIVERSHIP WHICH HAVE BEEN FILED. THE BASIS OF THE LOST BUSINESS ACTIVITY INVESTMENTS ARE SHOWN BY THE PURCHASES OF STOCK THROUGH AMBER ENTERPRISES (NOW KNOWN AS WEALTH FOR THE NATIONS). LOST BUSINESS INVESTMENTS WERE $60,000, $53,000 AND $54,235 - INFORMATION IS ATTACHED FOR EACH LOSS.IF REFOCUS SHOULD BY SOME MIRACLE RECEIVE ANY MONEY FROM ANY OF THESE INVESTMENT BUSINESSES THROUGH THE RECEIVERSHIP OR ANY OTHER MEANS, THEY WILL OF COURSE REPORT IT ON A TIMELY FILED FORM 990T IN THE YEAR RECEIVED.THE NET OPERATING LOSSS RESULTING FROM THIS THEFT DEDUCTION IS BEING CARRIED BACK TO 2002 (THE ONLY OTHER YEAR REFOCUS HAS HAD ANY BUSINESS INCOME TO REPORT) BUT THE BALANCE WILL BE RETAINED TO CARRY FORWARD IF IT IS NEEDED TO OFFSET BUSINESS INCOME ON A FORM 990T IN THE FUTURE BEFORE IT EXPIRES.”

“Advertising and Promotion $116”

“Office Expenses $566”

“Travel $763”

“Interest $722”

“Depreciation $302”

“Insurance $67”

“Repairs - iowa property $6324”

“Utilities and telephone $3828”

“PEOPLE ASSISTANCE $1810”

“MEMBERSHIP DUES $1474”

“WEBSITES $1242”

“MINISTERS SUPPLIES $544”

“Machinery and Equipment - Beginning $29790 Machinery and Equipment - Ending $29487”

“Miscellaneous - Beginning $0 Miscellaneous - Ending $-3000”

“Notes and Loans Receivable - Beginning $29068 Notes and Loans Receivable - Ending $26314”