Liquidity

As of June 30, 2015, the Company has a working capital deficit of approximately $5,761,000 because we had to reclass our line of credit as a current liability. The line of credit provides for certain financial covenants and ratios measured quarterly which include a current ratio, leverage ratio, and interest coverage ratio requirements. The Company is out of compliance with our current ratio and our leverage ratio as of June 30, 2015. We are in the process of requesting an amended lending agreement or waiver from Citibank although there can be no assurances that it will be granted. Unless and until such amendment or waiver is granted, Citibank could require us to pay off the note and we would need to secure alternative financing in the debt or equity market which, may or may not be available. Citibank is in a first lien position on all of our properties. We are current on all interest payments but expect our current borrowing base of $11,000,000 to be lowered. We have a positive net operating cash flow despite a net loss for the six months ended June 30, 2015.