The Alfred and Adele Davis Academy Inc.

“Endowment assets include those assets of donor restricted funds the the academy must hold in perpetuity or for a donor-specified period(s) as well as board-designated funds. The Academy's endowments are invested in pooled funds through the Jewish Federation of Greater Atlanta ("JFGA"). The Academy adopted its investment policy for the endowment accounts using a moderate investment model provided by JFGA. JFGA's investment objective is to earn a long-term rate of return that is approximately 4.5% greater than the rate of inflation as measured by the CPI. The investment policy's risk parameters minimize downside volatility while maximizing return at an acceptable risk level through diversification of assets. The investment policy also contains specifications as to which types of investments will be permitted. The Academy has adopted a spending policy under which spending of income earned by the unrestricted endowment accounts is discretionary, based on the needs of the Academy and the approval of the Academy's Board of Trustees. Endowment funds created through restricted gifts from donors are to be managed according to the wishes of the donors. However, only up to 3% of annual gains will be distributed. Unless otherwise stipulated by the donors, all principal is to be kept intact, and only the earnings are to be used for the restricted purpose of the fund.”

“The Academy qualifies as a tax-exempt organization under Section 501(3) of the Internal Revenue Code and, therefore, has no provision for income taxes. However, income from certain activities not directly related to the Academy's tax exempt purpose is subject to taxation as unrelated business income. During the years ended June 30, 2017 and 2016, the Academy incurred no income tax expense related to unrelated business income. The Academy qualifies for the charitable contribution deduction under Section 170(b)(1)(A) and has been classified as an organization that is not a private foundation under Section 509(a)(2). The Academy annually evaluates all federal and state income tax positions. This process includes an analysis of whether these income tax positions the Academy takes meet the definition of an uncertain tax position under the Income Taxes Topic of the Financial Accounting Standards Codification. In the normal course of business, the Academy is subject to examination by the federal and state taxing authorities. In general, the Academy is no longer subject to tax examinations for tax years ending before June 30, 2014.”

“83,813 Direct Rental Expenses 50,763 + Direct Fundraising Expenses 86,803 + Expenses, netted with Revenue -------------------------- 221,379 =”

“1,548,390 Tuition Assistance 550 + Booster Club - Concessions 316 + GAAP Expense, Net of Revenue -------------------------- 1,549,256 =”

“83,813 Direct Rental Expenses 50,763 + Direct Fundraising Expenses 23,097 + Bad Debt Recovery 86,803 + Expenses, netted with revenue -------------------------- 244,479 =”

“1,548,390 Tuition Assistance 550 + Booster Club - Concessions 316 + GAAP Expense, Net of Revenue -------------------------- 1,549,256 =”