12.	SUBSEQUENT EVENTS

On July 9, 2018, New England Institute of Technology at Palm Beach, Inc. (“NEIT”), a wholly-owned subsidiary of the Company entered into a commercial contract (the “Sale Agreement”) with Elite Property Enterprise, LLC (the “Buyer”), pursuant to which NEIT has agreed to sell to the Buyer the real property owned by NEIT located at 1126 53^rd Court North, Mangonia Park, Palm Beach County, Florida (the “Florida Property”) and the improvements and certain personal property located thereon, for a cash purchase price of $2,550,000. The Sale Agreement contains customary representations, warranties, covenants and conditions to closing for agreements of this type. At the closing, NEIT will pay a real estate brokerage fee equal to 5% of the gross sales price and other customary closing costs and expenses. The Company expects to close on the sale on or about August 23, 2018. The Company will record a $0.4 million loss on sale of the asset at the time of closing. Pursuant to the provisions of the Company’s Credit Agreement with its lender, Sterling National Bank, the net cash proceeds of the sale of the Florida Property will be deposited into an account with the lender to serve as additional security for loans and other financial accommodations provided to the Company and its subsidiaries under the credit agreement.

On July 11, 2018, the Company and its wholly-owned subsidiaries (collectively with the Company, the “Borrowers”) entered into a third amendment (the “Third Amendment”) of the Credit Agreement between the Borrowers and the Bank pursuant to which if the Florida Property is sold, NEIT must deposit the net proceeds of such sale into a non-interest bearing cash collateral account to be held at and by the Bank as additional collateral for the loans outstanding under the Credit Facility rather than applying the net proceeds of the sale to repay outstanding principal amounts under the revolving lease as previously required and reducing availability under the loans required under the terms of the Third Amendment, the Bank reserves the right to apply the funds held in such cash collateral account to the repayment of the outstanding principal balance of the loans outstanding under the Credit Facility. The Third Amendment further provides that if the sale of the Florida Property is not completed by August 23, 2018, NEIT will be required to grant to the Bank a first mortgage lien on the Florida Property.

As previously disclosed, our Lincoln College of New England campus at Southington, Connecticut was notified in correspondence dated May 14, 2018, by the New England Association of Schools and Colleges (“NEASC”), the college’s institutional accreditor, that its Commission on Institutions of Higher Education directed the school to show cause why it should not be placed on probation for, among other reasons, the Commission’s belief that the school may not meet seven of NEASC’s Standards of Accreditation. We responded to the show-cause directive and attended an in-person hearing at the NEASC Commission meeting on June 28, 2018, advocating our belief that the areas noted in the May 14, 2018, correspondence from NEASC have previously been satisfied as documented to NEASC.

On July 26, 2018, LCNE received correspondence stating the school had been placed on probation by the NEASC Commission at its June 28, 2018, meeting based on its determination the school does not meet its Standards relating to Planning and Evaluation; Organization and Governance; the Academic Program; Students; Teaching, Learning and Scholarship; Institutional Resources; and Educational Effectiveness. Further, based on those areas of non-compliance with the Standards, the NEASC Commission has directed the school to show cause at its meeting on September 21, 2018, why its accreditation should not be withdrawn. Our school representatives will attend the in-person hearing on September 21, 2018, and will also provide NEASC with a response to the letter placing our school on probation by September 4, 2018. This schools revenue, net loss and ending population as of December 31, 2017 was $8.4 million, $1.6 Million, and 397, respectively.