Communicare Inc.

“Generally accepted accounting principles prescribe a comprehensive model for how an organization should measure, recognize, present and disclose in its financial statements uncertain tax positions that an organization has taken or expects to take on a tax return. There is no impact on the organization's financial statements as a result of the implementation of these accounting principles.”

“Workshop sales - reported on communicare industries 990 net assets released from restrictio”

“Salaries and benefits - reported on communicare industries 990 assistance paid to communicare industries”

“The women's transitional housing facility was financed by a grant from the kentucky housing corporation for $257,000, and use of this facility is restricted to transitional programs for 30 years in lieu of repayment of the grant (expiring in 2032). Various properties were financed by capital advances from hud. The terms of these advances are for the properties to provide housing to low income persons with disabilities for a set number of years. If the properties comply with this stipulation, these capital advances will not have to be repaid and do not bear interest. Failure to keep the housing available for low-income, disabled persons could result in hud's billing the organization for the entire capital advance outstanding plus interest since the date of the first advance. These commitments are collateralized by mortgages on these properties.”

“Communicare and the affiliates are not-for-profit corporations as described in section 501(c)(3) of the internal revenue code and are exempt from federal income taxes on related income pursuant to section 501(a) of the code. As such, communicare and the affiliates are generally exempt from income taxes. However, communicare are the affiliates are required to file federal form 990 - return of organization exempt from income tax which is an informational return only. Accounting priniciples generally accepted in the united states of america require management to evaluate tax positions taken by the organization and recornize a tax liability if the organization has taken an uncertain tax position that more than likely would not be sustained upon examination by various federal and state taxing authorities. Management has analyzed the tax positions taken by the organization, and has concurred that as of june 30, 2018 and 2017, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the accompanying consolidated financial statements. The organization is subject to routine audits by taxing jurisdictions. However, as of the date the financial statementswere issued, there were no audits for any tax periods in progess.”