Lab Central Inc.

PART X, LINE 2:

“Labcentral is exempt from federal income taxes under section 501(c)(3) of the internal revenue code having received favorable determination of its status from the irs in a letter dated june 26, 2014. Mainstpbc is required to file corporate income tax returns under federal and massachusetts tax law even if there is no activity. Massachusetts also requires all corporations to pay a minimum tax if actual tax is lower than the minimum. Labcentral entered into a laboratory management agreement with pfizer (see note 2) that has been determined to be an unrelated business activity and required labcentral to file form 990-t exempt organization business income tax return for 2019. Labcentral has generated net taxable income and has provided for federal and state income taxes. For federal and state income taxes, deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and the tax basis of assets and liabilities. Deferred income taxes are based upon prescribed rates and enacted laws applicable to periods in which differences are expected to reverse. The company follows accounting guidance regarding recognition, measurement, presentation, and disclosure of uncertain tax positions in the financial statements. Tax positions taken or expected to be taken in the course of preparing the company's tax returns, including the position that the company qualifies as a tax exempt entity, are required to be evaluated to determine whether the tax positions are "more-likely-than-not" to be upheld under regulatory review. Management has analyzed the tax positions taken by the company, and has concluded that as of december 31, 2020, there are no uncertain tax positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The company's income tax returns are subject to review and examination by federal and state taxing authorities. Beginning with the year ended december 31, 2017, the company is open to audit under the applicable statutes of limitations by the internal revenue service and state taxing authorities. The company's policy is to recognize any interest and penalties related to tax matters as an expense when paid. No interest or penalties were recorded during 2020 and 2019.”