Theatre Three Incorporated

“FORM 990, SCHEDULE D, PART X, LINE 2 FOLLOWING IS THE TEXT FROM THE FOOTNOTES OF THE ORGANIZATION'S AUDITED FINANCIAL STATEMENTS: The Theatre is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code (the "IRC"), and files an annual Form 990, Return of Organization Exempt from Income Tax. As a tax-exempt organization, the Theatre is subject to federal excise tax and unrelated business income tax. Accounting for uncertainty in income tax provisions contained within GAAP requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Theatre's tax returns to determine whether the tax positions are more likely than not of being sustained by the applicable tax authority. Tax positions not deemed to meet the more likely than not threshold would be recorded as a tax benefit or expense in the current year. A reconciliation is not provided herein, as the beginning and ending amounts of unrecognized benefits are zero, with no interim additions, reductions, or settlements. The Theatre is relying on its tax-exempt status and its adherence to all applicable laws and regulations to preserve that status. However, the conclusions regarding accounting for uncertainty in income taxes will be subject to review and may be adjusted at a later date based on factors including, but not limited to, ongoing analysis of tax laws, regulations, and interpretations thereof. The Theatre recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense. The Theatre's informational returns are generally subject to examination for three years after the later of the due date or date of filing. As a result, the Theatre is no longer subject to income tax examinations by tax authorities for years prior to fiscal year 2011.”

“Schedule d, part v, line 4 the theatre uses its endowment funds for facilities related expenses.”