Umuc Ventures Inc.

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“The Internal Revenue Service (IRS) has issued a determination letter to UMUC Ventures that it is exempt from income tax under section 501(a) as an entity described in Section 501(c)(3) of the Internal Revenue Code (the Code). Further, the determination letter states that UMUC Ventures is not a private foundation since it is a supporting organization for UMUC. UMUC Ventures is exempt from taxes on income related to its exempt purpose. UMUC Ventures is subject to taxes on income unrelated to its exempt purpose (UBI). Such income consists primarily of income derived from data analytics. HelioCampus and AccelerED are subject to corporate income taxes on their operations and account for income taxes in accordance with ASC 740, Income Taxes, which provides for an asset and liability approach to accounting for income taxes. The Organization recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Organization's consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets will not be realized. The Organization accounts for uncertain tax positions in accordance with the provisions of ASC 740-10, Accounting for Uncertainty in Income Taxes, which states that a company must recognize the tax benefit associated with the tax positions taken for tax return purposes when it is more-likely-than-not that the position will be sustained. The Organization believes that it has no unrecognized uncertain tax positions or any related penalties and interest to accrue as of June 30, 2017. Tax years 2016 through 2017 remain subject to examination by the IRS.”