The Company received a notice
from the Internal Revenue Service dated November 29, 2012 that the service has completed its examination of the Companys
Federal income tax return for period ended April 30, 2010. The examination resulted in a no change in reported tax.
The determination does not include any partnerships in which the Company has an interest.
On December 10, 2012 Career
Education Corp. (a major tenant of a partnership in which the Company owns a 50% interest) filed a Form 8-K with the SEC.
In the filing it identifies the partnership building in Cranston as one of 23 locations they are closing. Career Education
anticipates that a majority of the campus closures will be completed by the second quarter of 2014. The filing refers to
the remaining lease obligations of the 23 locations and the expected cost to it. Under the lease which does not end until
December 31, 2018, Career Education pays approximately $1,525,000 annually plus real estate taxes of approximately $280,000 annually.
The Company anticipates that the rent will continue to be paid through the end of the lease, and the Company has ample time
to find a replacement tenant.