3.	Statements of Net Assets in Liquidation

Net assets in liquidation at

December 31, 2019

would result in estimated liquidating distributions of approximately

$21.16

per common share. This is an increase of

$3.05

from the

December 31, 2018

net assets in liquidation of

$18.11

per common share.

The increase in net assets in liquidation results from an increase in the real estate value of

$12.1

million (

$8.14

per share) of the properties that are the subject of the purchase and sale agreements with BSL St. James LLC and Sound Cortlandt, LLC (see note

), respectively, and other adjustments to the remaining properties partially offset by an increase in the expense reserve (the estimated costs in excess of receipts) per share by

$7.5

million (

$5.09

per share). The increase in the expense reserve is mainly the result of an extension in the estimated liquidation timeline of

months attributable to the pursuit of entitlements (and the associated costs), entitlement costs and an increase to the retention bonus payments and selling costs as a result of the increase in real estate value.

The cash balance at the end of the liquidation period (currently estimated to be

December 31, 2021,

although the estimated completion of the liquidation period

may

change), excluding any interim distributions, is estimated based on the

December 31, 2019

cash balance of

$2.2

million with adjustments for the following items which are estimated through

December 31, 2021:

The estimated cash receipts from the operation of the Company’s properties net of rental property related expenditures as well as costs expected to be incurred to preserve or improve the net realizable value of the properties at their estimated gross sales proceeds.

Net proceeds from the sale of all the Company’s real estate holdings.

The general and administrative expenses and or liabilities associated with operations and the liquidation of the Company including severance, director and officer liability inclusive of post liquidation tail policy coverage, and financial and legal fees to complete the liquidation.

Costs for the pursuit of entitlement of the Flowerfield and Cortlandt Manor properties, to maximize value.

Retention bonus amounts based on the net realizable value of the real estate under the Retention Bonus Plan (See Note

Proceeds from the draw downs on the Company’s credit facilities to fund tenant improvements and working capital and costs to repay such outstanding debt.

The Company estimates the net realizable value of its real estate assets by using income and market valuation techniques. The Company

may

estimate net realizable values using market information such as broker opinions of value, appraisals, and recent sales data for similar assets or discounted cash flow models, which primarily rely on Level

inputs, as defined under FASB ASC Topic

No.

820,

Fair Value Measurement. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows

may

include contractual rental revenues, projected future rental revenues and expenses and forecasted common area capital and tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations. To the extent the Company underestimates forecasted cash outflows (tenant improvements, lease commissions and operating costs) or overestimates forecasted cash inflows (rental revenue rates), the estimated net realizable value of its real estate assets could be overstated.

The Company is pursuing various avenues to maximize total value during the liquidation process so that we can maximize distributions to our shareholders. The Company estimates that it will incur approximately

$1.8

million (included in the statement of net assets as part of the estimated liquidation and operating costs net of receipts, See Note

) in land entitlement costs from

January 2020

through the end of the liquidation period, currently estimated to conclude on or about

December 31, 2021,

in an effort to obtain entitlements, including special permits. The Company believes the commitment of these resources will enable the Company to position the properties for sale with all entitlements necessary to maximize the Flowerfield and Cortlandt Manor property values. During the year ended

December 31, 2019,

the Company incurred approximately

$1.4

million of land entitlement costs, consisting predominately of engineering fees. The Company believes the remaining balance of

$1.8

million (an aggregate of approximately

$556,000

which Company vendors have agreed to defer until the

first

post subdivision property lot is sold) will be incurred from

January 2020

through the end of the liquidation period. The Company does

not

intend to develop the properties but rather to commit resources to position the properties for sale in a timely manner with all entitlements necessary to achieve maximum pre-construction values. The costs and time frame to achieve the entitlements could change due to a range of factors including a shift in the value of certain entitlements making it more profitable to pursue a different mix of entitlements and the dynamics of the real estate market. As a result, the Company has focused and will continue to focus its land entitlement efforts on achieving the highest and best use. During the process of pursuing such entitlements, the Company

may

entertain offers from potential buyers who

may

be willing to pay premiums for the properties that the Company finds more acceptable from a timing or value perspective than completing the entitlement processes itself. The value of the real estate reported in the statement of net assets as of

December 31, 2019 (

predicated on current asset values) includes some but

not

all of the potential value impact that

may

result from the land entitlement efforts. There can be

assurance that our value enhancement efforts will result in property value increases that exceed the costs we incur in such efforts, or even any increase at all.

The net assets in liquidation at

December 31, 2019 (

$31,369,637

) and

2018

(

$26,846,670

) results in estimated liquidating distributions of approximately

$21.16

and

$18.11,

respectively, per common share (based on

1,482,680

shares outstanding), based on estimates and other indications of sales value (predicated on current asset values including the purchase prices set forth in the purchase and sale agreements with BSL St. James LLC and Sound Cortlandt, LLC, respectively, for the properties that are subject of such agreements) which includes some but

not

all of the potential sales proceeds that

may

result directly or indirectly from our land entitlement efforts. Some of the additional value that

may

be derived from the land entitlement efforts is

not

included in the estimated liquidating distributions as of

December 31, 2019

because the amount of such additional value that

may

result from such efforts are too difficult to predict with sufficient certainty. The Company believes the land entitlement efforts will enhance estimated distributions per share through the improved values (a large amount of which has already been included in the reported value for real estate held for sale) from the sales of the Flowerfield and Cortlandt Manor properties net of the costs to achieve the improved values and other expenses. This estimate of liquidating distributions includes projections of costs and expenses to be incurred during the period required to complete the plan of liquidation. There is inherent uncertainty with these projections, and they could change materially based on the timing of the sales, change in values of the Cortlandt Manor and/or Flowerfield properties (whether market driven or resulting from the land entitlement efforts) net of any bonuses (if such values exceed the minimum values required to pay bonuses under the retention bonus plan), favorable or unfavorable changes in the land entitlement costs, the performance of the underlying assets, the market for commercial real estate properties generally and any changes in the underlying assumptions of the projected cash flows.