Hampton Roads Educational Telecommunications Association Inc.

“The endowment assets are controlled by the board of directors and invested in a manner intended to produce a real return, net of inflation and investment management costs, of at least 5% over the long term. Annual distributions from the endowment pool used to fund operations equal four percent of a trailing twelve-quarter moving average of the endowment pool fair market value for the period ending on december 31 of the previous year.”

“WHRO is an organization described in Section 501(c)(3) of the Internal Revenue Code and is exempt from federal and state income taxes. Exempt organizations are subject to tax on income from regularly conducted trade or business activities that are not substantially related to WHRO's exempt purpose. WHRO has net operating loss carryforwards of approximately $1,912,000 and 1,447,000 related to its unrelated business income at June 30, 2022 and 2021, respectively. Approximately $1,202,000 of these loss carryforwards will begin to expire in tax year 2028 and $710,000 are unlimited. Deferred tax assets were $492,124 and $372,518 at June 30, 2022 and 2021, respectively. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Management has recorded a valuation allowance of $492,124 and $372,518 at June 30, 2022 and 2021, respectively. The increase in the valuation allowance was $119,606 and $41,230 for the year ended June 30, 2022 and 2021, respectively. Returns are generally subject to examinations for three years from the date filed. This period of limitations has expired for tax years prior to 2018. Management continually evaluates tax positions reflected in WHRO's tax filings and does not believe that any material uncertain tax positions exist.”

“The net ($1,422,929) reported on part xi line 2d consists of the sum of (i) gifts in-kind ($211,016); (ii) losses from sales and dispositions of real and depreciable assets ($1,462); (iii) the change in value of a split interest agreements ($416,004); (iv) rental expenses of ($797,523); and (v) pledge bad debt expense $3,076.”

“The net $1,006,925 reported on part xii line 2d consists of the sum of (i) gifts in-kind $211,016, (ii) losses from sales and dispositions of real property and depreciable assets $1,462, (iii) rental expenses of $797,523, nd (iv) pledge bad debt expense of $3,706.”