Student Alternatives Program Incorporated

“Eliminating intercompany rent revenues from the audited consolidated income statement to reflect the Form 990 revenues of SAPI and their four charter schools in Laredo,Rio Grande Valley, El Paso and Lubbock.”

“Eliminating intercompany rent expenses from the audited consolidated income statement to reflect the Form 990 expenses of SAPI and their four charter schools in Laredo,Rio Grande Valley, El Paso and Lubbock.”

“Income Taxes The Organization is a not-for-profit organization and is exempt from federal income taxes under Section 501(c)(3); and, 501(c)(2) for CDBC, of the IRC, except to the extent it has unrelated business income. No such provision has been made to the accompanying consolidated financial statements. The Organization is subject to routine audits by taxing jurisdictions; however, there are currently no audits in progress. The Organization believes it is no longer subject to income tax examinations for years prior to 2021. As of August 31, 2024, there are no taxes or tax returns due to the IRS. The subsidiary ABC, is a for-profit corporation subject to federal income tax and Texas franchise tax. ABC follows FASB ASC Topic 740, Income Taxes, in reporting deferred income taxes which requires that a company recognize deferred tax liabilities and assets for the expected future income tax consequences of events that have been recognized in the companys consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. There were no deferred tax assets/liabilities recognized at August 31, 2024. ABCs tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally 3 years after the filing of the tax return. ABC determined that its tax position will more than likely be sustained upon examination by the Internal Revenue Service or other State taxing authorities. There were no penalties or interest related to income taxes recorded during the year ended August 31, 2024.”